SEC. 206. APPROVING COLLATERAL SUPPORT AND OTHER 
INNOVATIVE CREDIT ACCESS AND GUAR-
ANTEE INITIATIVES FOR SMALL BUSINESSES 
AND MANUFACTURERS. 
(a) APPLICATION.—A participating State that estab-
lishes a new, or has an existing, credit support program 
that meets the eligibility criteria in subsection (c) may 
apply to the Secretary to have the State other credit sup-
port program approved as eligible for Federal contribu-
tions to, or for the account of, the State program. 
(b) APPROVAL.—The Secretary shall approve such 
State other credit support program as eligible for Federal 
contributions to, or for the account of, the program if— 
(1) the Secretary determines that the State sat-
isfies the requirements of paragraphs (1) through 
(3) of section 205(b); 
(2) the Secretary determines that the State 
other credit support program meets the eligibility 
criteria in subsection (c); 
(3) the Secretary determines the State other 
credit support program to be eligible based on the 
additional considerations in subsection (d); and 
(4) within 9 months after the date of enactment 
of this title, the State has filed with Treasury a 
complete application for Treasury approval.
(c) ELIGIBILITY CRITERIA FOR STATE OTHER CRED-
IT SUPPORT PROGRAMS.—For a State other credit sup-
port program to be approved under this section, it must 
be a program of the State that— 
(1) can demonstrate that, at a minimum, 1 dol-
lar of public investment by the State program will 
cause and result in 1 dollar of new private credit; 
(2) can demonstrate a reasonable expectation 
that, when considered with all other State programs 
of the State, such State programs together have the 
ability to use amounts of new Federal contributions 
to, or for the account of, all such programs in the 
State to cause and result in amounts of new small 
business lending at least 10 times the new Federal 
contribution amount; 
(3) for those State other credit support pro-
grams that provide their credit support through 1 or 
more financial institution lenders, requires the finan-
cial institution lenders to have a meaningful amount 
of their own capital resources at risk in their small 
business lending; and 
(4) uses Federal funds allocated under this title 
to extend credit support that— 
(A) targets an average borrower size of 
500 employees or less;
(B) does not extend credit support to bor-
rowers that have more than 750 employees; 
(C) targets support towards loans with an 
average principal amount of $5,000,000 or less; 
and 
(D) does not extend credit support to loans 
that exceed a principal amount of $20,000,000. 
(d) ADDITIONAL CONSIDERATIONS.—In making a de-
termination that a State other credit support program is 
eligible for Federal contributions to, or for the account 
of, the State program, the Secretary shall take into ac-
count the following additional considerations: 
(1) The anticipated benefits to the State, its 
businesses, and its residents to be derived from the 
Federal contributions to, or for the account of, the 
approved State other credit support program, includ-
ing the extent to which resulting small business 
lending will expand economic opportunities. 
(2) The operational capacity, skills, and experi-
ence of the management team of the State other 
credit support program. 
(3) The capacity of the State other credit sup-
port program to manage increases in the volume of 
its small business lending.
(4) The internal accounting and administrative 
controls systems of the State other credit support 
program, and the extent to which they can provide 
reasonable assurance that funds of the State pro-
gram are safeguarded against waste, loss, unauthor-
ized use, or misappropriation. 
(5) The soundness of the program design and 
implementation plan of the State other credit sup-
port program. 
(e) FEDERAL CONTRIBUTIONS TO APPROVED STATE 
OTHER CREDIT SUPPORT PROGRAMS.—A State other 
credit support program approved under this section will 
be eligible for receiving Federal contributions to, or for 
the account of, the State program in an amount consistent 
with the schedule describing the apportionment of allo-
cated Federal funds among State programs delivered by 
the State to the Secretary under the allocation agreement. 
(f) MINIMUM PROGRAM REQUIREMENTS FOR STATE 
OTHER CREDIT SUPPORT PROGRAMS.— 
(1) FUND TO PRESCRIBE.—The Secretary shall, 
by regulation or other guidance, prescribe Program 
requirements for approved State other credit support 
programs. 
(2) CONSIDERATIONS
FOR
FUND.—In pre-
scribing minimum Program requirements for ap-
proved State other credit support programs, the Sec-
retary shall take into consideration, to the extent the 
Secretary determines applicable and appropriate, the 
minimum Program requirements for approved State 
capital access programs in section 205(e). 
SEC. 207. REPORTS. 
(a) QUARTERLY USE-OF-FUNDS REPORT.— 
(1) IN GENERAL.—Not later than 30 days after 
the beginning of each calendar quarter, beginning 
after the first full calendar quarter to occur after 
the date the Secretary approves a State for partici-
pation, the participating State shall submit to the 
Secretary a report on the use of Federal funding by 
the participating State during the previous calendar 
quarter. 
(2) REPORT CONTENTS.—The report shall— 
(A) indicate the total amount of Federal 
funding used by the participating State; 
(B) include a certification by the partici-
pating State that— 
(i) the information provided in accord-
ance with subparagraph (A) is accurate; 
(ii) funds continue to be available and 
legally committed to contributions by the 
State to, or for the account of, approved
State programs, less any amount that has 
been contributed by the State to, or for the 
account of, approved State programs sub-
sequent to the State being approved for 
participation in the Program; and 
(iii) the participating State is imple-
menting its approved State program or 
programs in accordance with this title and 
regulations issued pursuant to section 210. 
(b) ANNUAL REPORT.—Not later than March 31 of 
each year, beginning March 31, 2011, each participating 
State shall submit to the Secretary an annual report that 
shall include the following information: 
(1) The number of borrowers that received new 
loans originated under the approved State program 
or programs after the State program was approved 
as eligible for Federal contributions. 
(2) The total amount of such new loans. 
(3) Breakdowns by industry type, loan size, an-
nual sales, and number of employees of the bor-
rowers that received such new loans. 
(4) The zip code of each borrower that received 
such a new loan.
(2) CAUSAL EVENTS.—The events referred to in 
paragraph (1) are— 
(A) termination by a participating State of 
its participation in the Program; 
(B) failure on the part of a participating 
State to submit complete reports under section 
207 on a timely basis; or 
(C) noncompliance by the State with the 
terms of the allocation agreement between the 
Secretary and the State. 
(b) DEALLOCATED
AMOUNTS
TO
BE
REALLO-
CATED.—If, after 13 months, any portion of the amount 
of Federal funds allocated to a participating State is 
deemed by the Secretary to be no longer allocated to the 
State after actions taken by the Secretary under sub-
section (a)(1), the Secretary shall reallocate that portion 
among the participating States, excluding the State whose 
allocated funds were deemed to be no longer allocated, as 
provided in section 203(b). 
SEC. 209. IMPLEMENTATION AND ADMINISTRATION. 
(a) GENERAL AUTHORITIES AND DUTIES.—The Sec-
retary shall— 
(1) consult with the Administrator of the Small 
Business Administration and the appropriate Fed-
eral banking agencies on the administration of the 
Program; 
(2) establish minimum national standards for 
approved State programs; 
(3) provide technical assistance to States for 
starting State programs and generally disseminate 
best practices; 
(4) manage, administer, and perform necessary 
program integrity functions for the Program; and 
(5) ensure adequate oversight of the approved 
State programs, including oversight of the cash 
flows, performance, and compliance of each approved 
State program. 
(b) APPROPRIATIONS.—There is hereby appropriated 
to the Secretary, out of funds in the Treasury not other-
wise appropriated, $2,000,000,000 to carry out the Pro-
gram, including to pay reasonable costs of administering 
the Program. 
(c) TERMINATION OF SECRETARY’S PROGRAM AD-
MINISTRATION FUNCTIONS.—The authorities and duties 
of the Secretary to implement and administer the Program 
shall terminate at the end of the 7-year period beginning 
on the date of enactment of this title.
SEC. 210. REGULATIONS. 
The Secretary, in consultation with the Administrator 
of the Small Business Administration, shall issue such 
regulations and other guidance as the Secretary deter-
mines necessary or appropriate to implement this title in-
cluding, but not limited to, to define terms, to establish 
compliance and reporting requirements, and such other 
terms and conditions necessary to carry out the purposes 
of this title. 
SEC. 211. OVERSIGHT AND AUDITS. 
(a) INSPECTOR GENERAL OVERSIGHT.—The Inspec-
tor General of the Department of the Treasury shall con-
duct, supervise, and coordinate audits and investigations 
of the use of funds made available under the Program. 
(b) GAO AUDIT.—The Comptroller General of the 
United States shall perform an annual audit of the Pro-
gram and issue a report to the appropriate committees 
of Congress, as such term is defined under section 3(1), 
containing the results of such audit. 
(c) REQUIRED CERTIFICATION.— 
(1) 
FINANCIAL
INSTITUTIONS
CERTIFI-
CATION.—With respect to funds received by a par-
ticipating State under the Program, any financial in-
stitution that receives a loan, a loan guarantee, or 
other financial assistance using such funds after the 
date of the enactment of this title must certify that
such institution is in compliance with the require-
ments of section 103.121 of title 31, Code of Fed-
eral Regulations, a regulation that, at a minimum, 
requires financial institutions, as that term is de-
fined in 31 U.S.C. 5312(a)(2) and (c)(1)(A), to im-
plement reasonable procedures to verify the identity 
of any person seeking to open an account, to the ex-
tent reasonable and practicable, maintain records of 
the information used to verify the person’s identity, 
and determine whether the person appears on any 
lists of known or suspected terrorists or terrorist or-
ganizations provided to the financial institution by 
any government agency. 
(2) SEX
OFFENSE
CERTIFICATION.—With re-
spect to funds received by a participating State 
under the Program, any private entity that receives 
a loan, a loan guarantee, or other financial assist-
ance using such funds after the date of the enact-
ment of this title shall certify to the participating 
State that the principals of such entity have not 
been convicted of a sex offense against a minor (as 
such terms are defined in section 111 of the Sex Of-
fender Registration and Notification Act (42 U.S.C. 
16911)).
(d) PROHIBITION ON PORNOGRAPHY.—None of the 
funds made available under this title may be used to pay 
the salary of any individual engaged in activities related 
to the Program who has been officially disciplined for vio-
lations of subpart G of the Standards of Ethical Conduct 
for Employees of the Executive Branch for viewing, 
downloading, or exchanging pornography, including child 
pornography, on a Federal Government computer or while 
performing official Federal Government duties. 
TITLE 
III—SMALL 
BUSINESS 
EARLY-STAGE 
INVESTMENT 
PROGRAM 
SEC. 301. SHORT TITLE. 
This title may be cited as the ‘‘Small Business Early- 
Stage Investment Program Act of 2010’’. 
SEC. 302. SMALL BUSINESS EARLY-STAGE INVESTMENT 
PROGRAM. 
Title III of the Small Business Investment Act of 
1958 (15 U.S.C. 681 et seq.) is amended by adding at 
the end the following: 
‘‘PART D—SMALL BUSINESS EARLY-STAGE 
INVESTMENT PROGRAM 
‘‘SEC. 399A. ESTABLISHMENT OF PROGRAM. 
‘‘The Administrator shall establish and carry out an 
early-stage investment program (hereinafter referred to in
this part as the ‘program’) to provide equity investment 
financing to support early-stage small businesses in ac-
cordance with this part. 
‘‘SEC. 399B. ADMINISTRATION OF PROGRAM. 
‘‘The program shall be administered by the Adminis-
trator acting through the Associate Administrator de-
scribed under section 201. 
‘‘SEC. 399C. APPLICATIONS. 
‘‘(a) IN GENERAL.—Any existing or newly formed in-
corporated body, limited liability company, or limited part-
nership organized and chartered or otherwise existing 
under Federal or State law for the purpose of performing 
the functions and conducting the activities contemplated 
under the program and any manager of any small business 
investment company may submit to the Administrator an 
application to participate in the program. 
‘‘(b) REQUIREMENTS FOR APPLICATION.—An appli-
cation to participate in the program shall include the fol-
lowing: 
‘‘(1) A business plan describing how the appli-
cant intends to make successful venture capital in-
vestments in early-stage small businesses and direct 
capital to small business concerns in targeted indus-
tries or other business sectors.
‘‘(2) Information regarding the relevant venture 
capital investment qualifications and backgrounds of 
the individuals responsible for the management of 
the applicant. 
‘‘(3) A description of the extent to which the 
applicant meets the selection criteria under section 
399D. 
‘‘(c) APPLICATIONS FROM MANAGERS
OF SMALL 
BUSINESS INVESTMENT COMPANIES.—The Administrator 
shall establish an abbreviated application process for ap-
plicants that are managers of small business investment 
companies that are licensed under section 301 and that 
are applying to participate in the program. Such abbre-
viated process shall incorporate a presumption that such 
managers satisfactorily meet the selection criteria under 
paragraphs (3) and (5) of section 399D(b). 
‘‘SEC. 399D. SELECTION OF PARTICIPATING INVESTMENT 
COMPANIES. 
‘‘(a) IN GENERAL.—Not later than 90 days after the 
date on which the Administrator receives an application 
from an applicant under section 399C, the Administrator 
shall make a determination to conditionally approve or dis-
approve such applicant to participate in the program and 
shall transmit such determination to the applicant in writ-
ing. A determination to conditionally approve an applicant
shall identify all conditions necessary for a final approval 
and shall provide a period of not less than one year for 
satisfying such conditions. 
‘‘(b) SELECTION CRITERIA.—In making a determina-
tion under subsection (a), the Administrator shall consider 
each of the following: 
‘‘(1) The likelihood that the applicant will meet 
the goals specified in the business plan of the appli-
cant. 
‘‘(2) The likelihood that the investments of the 
applicant will create or preserve jobs, both directly 
and indirectly. 
‘‘(3) The character and fitness of the manage-
ment of the applicant. 
‘‘(4) The experience and background of the 
management of the applicant. 
‘‘(5) The extent to which the applicant will con-
centrate investment activities on early-stage small 
businesses. 
‘‘(6) The likelihood that the applicant will 
achieve profitability. 
‘‘(7) The experience of the management of the 
applicant with respect to establishing a profitable in-
vestment track record.
‘‘(8) The extent to which the applicant will con-
centrate investment activities on small business con-
cerns in targeted industries. 
‘‘(c) FINAL APPROVAL.—For each applicant provided 
a conditional approval under subsection (a), the Adminis-
trator shall provide final approval to participate in the 
program not later than 90 days after the date the appli-
cant satisfies the conditions specified by the Administrator 
under such subsection or, in the case of applicants whose 
partnership or management agreements conform to mod-
els approved by the Administrator, the Administrator shall 
provide final approval to participate in the program not 
later than 30 days after the date the applicant satisfies 
the conditions specified under such subsection. If an appli-
cant provided conditional approval under subsection (a) 
fails to satisfy the conditions specified by the Adminis-
trator in the time period designated under such sub-
section, the Administrator shall revoke the conditional ap-
proval. 
‘‘SEC. 399E. EQUITY FINANCINGS. 
‘‘(a) IN GENERAL.—The Administrator may make 
one or more equity financings to a participating invest-
ment company. 
‘‘(b) EQUITY FINANCING AMOUNTS.—
‘‘(1) NON-FEDERAL
CAPITAL.—An equity fi-
nancing made to a participating investment company 
under the program may not be in an amount that 
exceeds the amount of the capital of such company 
that is not from a Federal source and that is avail-
able for investment on or before the date on which 
an equity financing is drawn upon. Such capital may 
include legally binding commitments with respect to 
capital for investment. 
‘‘(2) LIMITATION ON AGGREGATE AMOUNT.— 
The aggregate amount of all equity financings made 
to a participating investment company under the 
program may not exceed $100,000,000. 
‘‘(c) EQUITY FINANCING PROCESS.—In making an 
equity financing under the program, the Administrator 
shall commit an equity financing amount to a partici-
pating investment company and the amount of each such 
commitment shall remain available to be drawn upon by 
such company— 
‘‘(1) for new-named investments during the 5- 
year period beginning on the date on which each 
such commitment is first drawn upon; and 
‘‘(2) for follow-on investments and management 
fees during the 10-year period beginning on the date 
on which each such commitment is first drawn upon,
with not more than 2 additional 1-year periods avail-
able at the discretion of the Administrator. 
‘‘(d) COMMITMENT OF FUNDS.—The Administrator 
shall make commitments for equity financings not later 
than 2 years after the date funds are appropriated for the 
program. 
‘‘SEC. 399F. INVESTMENTS IN EARLY-STAGE SMALL BUSI-
NESSES. 
‘‘(a) IN GENERAL.—As a condition of receiving an 
equity financing under the program, a participating in-
vestment company shall make all of the investments of 
such company in small business concerns, of which at least 
50 percent shall be early-stage small businesses. 
‘‘(b) EVALUATION OF COMPLIANCE.—With respect to 
an equity financing amount committed to a participating 
investment company under section 399E, the Adminis-
trator shall evaluate the compliance of such company with 
the requirements under this section if such company has 
drawn upon 50 percent of such commitment. 
‘‘SEC. 399G. PRO RATA INVESTMENT SHARES. 
‘‘Each investment made by a participating invest-
ment company under the program shall be treated as com-
prised of capital from equity financings under the program 
according to the ratio that capital from equity financings
under the program bears to all capital available to such 
company for investment. 
‘‘SEC. 399H. EQUITY FINANCING INTEREST. 
‘‘(a) EQUITY FINANCING INTEREST.— 
‘‘(1) IN GENERAL.—As a condition of receiving 
an equity financing under the program, a partici-
pating investment company shall convey an equity fi-
nancing interest to the Administrator in accordance 
with paragraph (2). 
‘‘(2) EFFECT OF CONVEYANCE.—The equity fi-
nancing interest conveyed under paragraph (1) shall 
have all the rights and attributes of other investors 
attributable to their interests in the participating in-
vestment company, but shall not denote control or 
voting rights to the Administrator. The equity fi-
nancing interest shall entitle the Administrator to a 
pro rata portion of any distributions made by the 
participating investment company equal to the per-
centage of capital in the participating investment 
company that the equity financing comprises. The 
Administrator shall receive distributions from the 
participating investment company at the same times 
and in the same amounts as any other investor in 
the company with a similar interest. The investment 
company shall make allocations of income, gain, loss,
deduction, and credit to the Administrator with re-
spect to the equity financing interest as if the Ad-
ministrator were an investor. 
‘‘(b) MANAGER PROFITS.—As a condition of receiv-
ing an equity financing under the program, the manager 
profits interest payable to the managers of a participating 
investment company under the program shall not exceed 
20 percent of profits, exclusive of any profits that may 
accrue as a result of the capital contributions of any such 
managers with respect to such company. Any excess of 
this amount, less taxes payable thereon, shall be returned 
by the managers and paid to the investors and the Admin-
istrator in proportion to the capital contributions and eq-
uity financings paid in. No manager profits interest (other 
than a tax distribution) shall be paid prior to the repay-
ment to the investors and the Administrator of all contrib-
uted capital and equity financings made. 
‘‘(c) DISTRIBUTION REQUIREMENTS.—As a condition 
of receiving an equity financing under the program, a par-
ticipating investment company shall make all distributions 
to all investors in cash and shall make distributions within 
a reasonable time after exiting investments, including fol-
lowing a public offering or market sale of underlying in-
vestments.
‘‘SEC. 399I. FUND. 
‘‘There is hereby created within the Treasury a sepa-
rate fund for equity financings which shall be available 
to the Administrator subject to annual appropriations as 
a revolving fund to be used for the purposes of the pro-
gram. All amounts received by the Administrator, includ-
ing any moneys, property, or assets derived by the Admin-
istrator from operations in connection with the program, 
shall be deposited in the fund. All expenses and payments, 
excluding administrative expenses, pursuant to the oper-
ations of the Administrator under the program shall be 
paid from the fund. 
‘‘SEC. 399J. APPLICATION OF OTHER SECTIONS. 
‘‘To the extent not inconsistent with requirements 
under this part, the Administrator may apply sections 
309, 311, 312, 313, and 314 to activities under this part 
and an officer, director, employee, agent, or other partici-
pant in a participating investment company shall be sub-
ject to the requirements under such sections. 
‘‘SEC. 399K. ANNUAL REPORTING. 
‘‘The Administrator shall report on the performance 
of the program in the annual performance report of the 
Administration. 
‘‘SEC. 399L. DEFINITIONS. 
‘‘In this part, the following definitions apply:
‘‘(1) EARLY-STAGE
SMALL
BUSINESS.—The 
term ‘early-stage small business’ means a small busi-
ness concern that— 
‘‘(A) is domiciled in a State; and 
‘‘(B) has not generated gross annual sales 
revenues exceeding $15,000,000 in any of the 
previous 3 years. 
‘‘(2) PARTICIPATING INVESTMENT COMPANY.— 
The term ‘participating investment company’ means 
an applicant approved under section 399D to par-
ticipate in the program. 
‘‘(3) TARGETED INDUSTRIES.—The term ‘tar-
geted industries’ means any of the following business 
sectors: 
‘‘(A) Agricultural technology. 
‘‘(B) Energy technology. 
‘‘(C) Environmental technology. 
‘‘(D) Life science. 
‘‘(E) Information technology. 
‘‘(F) Digital media. 
‘‘(G) Clean technology. 
‘‘(H) Defense technology. 
‘‘(I) Photonics technology.
‘‘SEC. 399M. APPROPRIATION. 
‘‘From funds not otherwise appropriated, there is 
hereby appropriated $1,000,000,000 to carry out the pro-
gram. 
‘‘SEC. 399N. CERTIFICATION. 
‘‘(a) IMMIGRATION CERTIFICATION.— 
‘‘(1) 
PARTICIPATING
INVESTMENT
COMPA-
NIES.—Each participating investment company that 
receives an equity financing under this part after the 
date of the enactment of this part must, if applica-
ble, certify that such company is in compliance with 
the requirements of section 103.121 of title 31, Code 
of Federal Regulations, a regulation that, at a min-
imum, requires financial institutions, as that term is 
defined in 31 U.S.C. 5312(a)(2) and (c)(1)(A), to 
implement reasonable procedures to verify the iden-
tity of any person seeking to open an account, to the 
extent reasonable and practicable, maintain records 
of the information used to verify the person’s iden-
tity, and determine whether the person appears on 
any lists of known or suspected terrorists or ter-
rorist organizations provided to the financial institu-
tion by any government agency. 
‘‘(2) EARLY-STAGE SMALL BUSINESSES.—Each 
early-stage small business that receives funds from 
a participating investment company that receives an
equity financing under this part after the date of the 
enactment of this part must, if applicable, certify 
that such company is in compliance with the require-
ments of section 103.121 of title 31, Code of Fed-
eral Regulations, a regulation that, at a minimum, 
requires financial institutions, as that term is de-
fined in 31 U.S.C. 5312(a)(2) and (c)(1)(A), to im-
plement reasonable procedures to verify the identity 
of any person seeking to open an account, to the ex-
tent reasonable and practicable, maintain records of 
the information used to verify the person’s identity, 
and determine whether the person appears on any 
lists of known or suspected terrorists or terrorist or-
ganizations provided to the financial institution by 
any government agency. 
‘‘(b) SEX OFFENDER CERTIFICATION.— 
‘‘(1) 
PARTICIPATING
INVESTMENT
COMPA-
NIES.—Each participating investment company that 
receives an equity financing under this part after the 
date of the enactment of this part shall certify to the 
Administrator that the principals of such company 
have not been convicted of a sex offense against a 
minor (as such terms are defined in section 111 of 
the Sex Offender Registration and Notification Act 
(42 U.S.C. 16911)).
‘‘(2) EARLY-STAGE SMALL BUSINESSES.—Each 
early-stage small business that receives funds from 
a participating investment company that receives an 
equity financing under this part after the date of the 
enactment of this part shall certify to the Adminis-
trator that the principals of such business have not 
been convicted of a sex offense against a minor (as 
such terms are defined in section 111 of the Sex Of-
fender Registration and Notification Act (42 U.S.C. 
16911)). 
‘‘(c) PORNOGRAPHY CERTIFICATION.—None of the 
funds made available under this part may be used to pay 
the salary of any individual engaged in activities related 
to the provisions of this part who has been officially dis-
ciplined for violations of subpart G of the Standards of 
Ethical Conduct for Employees of the Executive Branch 
for viewing, downloading, or exchanging pornography, in-
cluding child pornography, on a Federal Government com-
puter or while performing official Federal Government du-
ties.’’. 
SEC. 303. REGULATIONS. 
Not later than 180 days after the date of enactment 
of this Act, the Administrator shall issue regulations to 
carry out this title and the amendments made by this title.
SEC. 304. PROHIBITIONS ON EARMARKS. 
None of the funds appropriated for the program es-
tablished under part D of title III of the Small Business 
Investment Act of 1958, as added by this Act, may be 
used for a Congressional earmark as defined in clause 9(e) 
of rule XXI of the Rules of the House of Representatives. 
TITLE IV—MISCELLANEOUS 
SEC. 401. BUDGETARY EFFECTS. 
The budgetary effects of this Act, for the purpose of 
complying with the Statutory Pay-As-You-Go Act of 2010, 
shall be determined by reference to the latest statement 
titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 
Act, submitted for printing in the Congressional Record 
by the Chairman of the House Budget Committee, pro-
vided that such statement has been submitted prior to the 
vote on passage. 
TITLE V—TAX PROVISIONS 
SEC. 500. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This title may be cited as the 
‘‘Small Business Jobs Tax Relief Act of 2010’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this title an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
Subtitle A—Small Business Tax 
Incentives 
PART 1—GENERAL PROVISIONS 
SEC. 501. TEMPORARY EXCLUSION OF 100 PERCENT OF 
GAIN ON CERTAIN SMALL BUSINESS STOCK. 
(a) IN GENERAL.—Subsection (a) of section 1202 is 
amended by adding at the end the following new para-
graph: 
‘‘(4) SPECIAL
100
PERCENT
EXCLUSION.—In 
the case of qualified small business stock acquired 
after March 15, 2010, and before January 1, 
2012— 
‘‘(A) paragraph (1) shall be applied by 
substituting ‘100 percent’ for ‘50 percent’, 
‘‘(B) paragraph (2) shall not apply, and 
‘‘(C) paragraph (7) of section 57(a) shall 
not apply.’’. 
(b) CONFORMING AMENDMENTS.—Paragraph (3) of 
section 1202(a) is amended— 
(1) by striking ‘‘after the date of the enactment 
of this paragraph and before January 1, 2011’’ and 
inserting ‘‘after February 17, 2009, and before 
March 16, 2010’’; and
100 
(2) by striking ‘‘SPECIAL RULES FOR 2009 AND 
2010’’ in the heading and inserting ‘‘SPECIAL
PERCENT EXCLUSION’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to stock acquired after March 15, 
2010. 
PART 2—LIMITATIONS AND REPORTING ON 
CERTAIN PENALTIES 
SEC. 511. LIMITATION ON PENALTY FOR FAILURE TO DIS-
CLOSE CERTAIN INFORMATION. 
(a) IN GENERAL.—Subsection (b) of section 6707A 
is amended to read as follows: 
‘‘(b) AMOUNT OF PENALTY.— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the amount of the penalty 
under subsection (a) with respect to any reportable 
transaction shall be 75 percent of the decrease in 
tax shown on the return as a result of such trans-
action (or which would have resulted from such 
transaction if such transaction were respected for 
Federal tax purposes). 
‘‘(2) MAXIMUM PENALTY.—The amount of the 
penalty under subsection (a) with respect to any re-
portable transaction for any taxable year shall not 
exceed—
101 
‘‘(A) in the case of a listed transaction, 
$200,000 ($100,000 in the case of a natural 
person), or 
‘‘(B) in the case of any other reportable 
transaction, $50,000 ($10,000 in the case of a 
natural person). 
‘‘(3) MINIMUM PENALTY.—The amount of the 
penalty under subsection (a) with respect to any 
transaction for any taxable year shall not be less 
than $10,000 ($5,000 in the case of a natural per-
son).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to penalties assessed after Decem-
ber 31, 2006. 
SEC. 512. ANNUAL REPORTS ON PENALTIES AND CERTAIN 
OTHER ENFORCEMENT ACTIONS. 
(a) IN GENERAL.—The Commissioner of Internal 
Revenue, in consultation with the Secretary of the Treas-
ury, shall submit to the Committee on Ways and Means 
of the House of Representatives and the Committee on 
Finance of the Senate an annual report on the penalties 
assessed by the Internal Revenue Service during the pre-
ceding year under each of the following provisions of the 
Internal Revenue Code of 1986:
102 
(1) Section 6662A (relating to accuracy-related 
penalty on understatements with respect to report-
able transactions). 
(2) Section 6700(a) (relating to promoting abu-
sive tax shelters). 
(3) Section 6707 (relating to failure to furnish 
information regarding reportable transactions). 
(4) Section 6707A (relating to failure to include 
reportable transaction information with return). 
(5) Section 6708 (relating to failure to main-
tain lists of advisees with respect to reportable 
transactions). 
(b) ADDITIONAL
INFORMATION.—The report re-
quired under subsection (a) shall also include information 
on the following with respect to each year: 
(1) Any action taken under section 330(b) of 
title 31, United States Code, with respect to any re-
portable transaction (as defined in section 6707A(c) 
of the Internal Revenue Code of 1986). 
(2) Any extension of the time for assessment of 
tax enforced, or assessment of any amount under 
such an extension, under paragraph (10) of section 
6501(c) of the Internal Revenue Code of 1986.
103 
(c) DATE OF REPORT.—The first report required 
under subsection (a) shall be submitted not later than De-
cember 31, 2010. 
PART 3—OTHER PROVISIONS 
SEC. 521. INCREASE IN AMOUNT ALLOWED AS DEDUCTION 
FOR START-UP EXPENDITURES. 
(a) IN GENERAL.—Subsection (b) of section 195 is 
amended by adding at the end the following new para-
graph: 
‘‘(3) INCREASED
LIMITATION
FOR
TAXABLE 
YEARS BEGINNING IN 2010 OR 2011.—In the case of 
any taxable year beginning in 2010 or 2011, para-
graph (1)(A)(ii) shall be applied— 
‘‘(A) 
by 
substituting 
‘$20,000’ 
for 
‘$5,000’, and 
‘‘(B) 
by 
substituting 
‘$75,000’ 
for 
‘$50,000’.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2009.
104 
SEC. 522. NONRECOURSE SMALL BUSINESS INVESTMENT 
COMPANY LOANS FROM THE SMALL BUSI-
NESS 
ADMINISTRATION 
TREATED 
AS 
AMOUNTS AT RISK. 
(a) IN GENERAL.—Subparagraph (B) of section 
465(b)(6) is amended to read as follows: 
‘‘(B) QUALIFIED
NONRECOURSE
FINANC-
ING.—For purposes of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘quali-
fied nonrecourse financing’ means any fi-
nancing— 
‘‘(I) which is qualified real prop-
erty financing or qualified SBIC fi-
nancing, 
‘‘(II) except to the extent pro-
vided in regulations, with respect to 
which no person is personally liable 
for repayment, and 
‘‘(III) which is not convertible 
debt. 
‘‘(ii) QUALIFIED REAL PROPERTY FI-
NANCING.—The term ‘qualified real prop-
erty 
financing’ 
means 
any 
financing 
which—
105 
‘‘(I) is borrowed by the taxpayer 
with respect to the activity of holding 
real property, 
‘‘(II) is secured by real property 
used in such activity, and 
‘‘(III) is borrowed by the tax-
payer from a qualified person or rep-
resents a loan from any Federal, 
State, or local government or instru-
mentality thereof, or is guaranteed by 
any Federal, State, or local govern-
ment. 
‘‘(iii) QUALIFIED SBIC FINANCING.— 
The term ‘qualified SBIC financing’ means 
any financing which— 
‘‘(I) is borrowed by a small busi-
ness investment company (within the 
meaning of section 301 of the Small 
Business Investment Act of 1958), 
and 
‘‘(II) is borrowed from, or guar-
anteed by, the Small Business Admin-
istration under the authority of sec-
tion 303(b) of such Act.’’.
106 
(b) CONFORMING AMENDMENTS.—Subparagraph (A) 
of section 465(b)(6) is amended— 
(1) by striking ‘‘in the case of an activity of 
holding real property,’’; and 
(2) by striking ‘‘which is secured by real prop-
erty used in such activity’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to loans and guarantees made after 
the date of the enactment of this Act. 
SEC. 523. BENEFITS UNDER THE SMALL BUSINESS BOR-
ROWER ASSISTANCE PROGRAM EXCLUDED 
FROM GROSS INCOME. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 is amended by adding at the end the following new 
section: 
‘‘SEC. 139F. BENEFITS UNDER THE SMALL BUSINESS BOR-
ROWER ASSISTANCE PROGRAM. 
‘‘(a) IN GENERAL.—Gross income shall not include 
any amount paid on behalf of a borrower by the Adminis-
trator of the Small Business Administration under the 
Small Business Borrower Assistance program established 
under section 402 of the Small Business Assistance Fund 
Act of 2010 (as in effect immediately after the date of 
the enactment of such Act).
108 
(b) CLERICAL AMENDMENTS.—The table of sections 
for part III of subchapter B of chapter 1 is amended by 
adding at the end the following new item: 
‘‘Sec. 139F. Benefits under the Small Business Borrower Assistance Pro-
gram.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to payments made after the date 
of the enactment of this Act. 
Subtitle B—Revenue Provisions 
SEC. 531. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR 
GRANTOR RETAINED ANNUITY TRUSTS. 
(a) IN GENERAL.—Subsection (b) of section 2702 is 
amended— 
(1) by redesignating paragraphs (1), (2) and 
(3) as subparagraphs (A), (B), and (C), respectively, 
and by moving such subparagraphs (as so redesig-
nated) 2 ems to the right; 
(2) by striking ‘‘For purposes of’’ and inserting 
the following: 
‘‘(1) IN GENERAL.—For purposes of’’; 
(3) by striking ‘‘paragraph (1) or (2)’’ in para-
graph (1)(C) (as so redesignated) and inserting 
‘‘subparagraph (A) or (B)’’; and 
(4) by adding at the end the following new 
paragraph:
109 
‘‘(2) ADDITIONAL
REQUIREMENTS
WITH
RE-
SPECT
TO
GRANTOR
RETAINED
ANNUITIES.—For 
purposes of subsection (a), in the case of an interest 
described in paragraph (1)(A) (determined without 
regard to this paragraph) which is retained by the 
transferor, such interest shall be treated as de-
scribed in such paragraph only if— 
‘‘(A) the right to receive the fixed amounts 
referred to in such paragraph is for a term of 
not less than 10 years, 
‘‘(B) such fixed amounts, when determined 
on an annual basis, do not decrease relative to 
any prior year during the first 10 years of the 
term referred to in subparagraph (A), and 
‘‘(C) the remainder interest has a value 
greater than zero determined as of the time of 
the transfer.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transfers made after the date 
of the enactment of this Act. 
SEC. 532. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC 
BIOFUEL PRODUCER CREDIT. 
(a) IN GENERAL.—Clause (iii) of section 40(b)(6)(E) 
is amended— 
(1) by striking ‘‘or’’ at the end of subclause (I),
110 
(2) by striking the period at the end of sub-
clause (II) and inserting ‘‘, or’’, 
(3) by adding at the end the following new sub-
clause: 
‘‘(III) such fuel has an acid num-
ber greater than 25.’’, and 
(4) by striking ‘‘UNPROCESSED’’ in the heading 
and inserting ‘‘CERTAIN’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to fuels sold or used on or after 
January 1, 2010. 
SEC. 533. TIME FOR PAYMENT OF CORPORATE ESTIMATED 
TAXES. 
The percentage under paragraph (2) of section 561 
of the Hiring Incentives to Restore Employment Act in 
effect on the date of the enactment of this Act is increased 
by 7.75 percentage points. 
TITLE VI—PLAIN WRITING ACT 
SEC. 601. SHORT TITLE. 
This title may be cited as the ‘‘Plain Writing Act of 
2010’’. 
SEC. 602. PURPOSE. 
The purpose of this title is to improve the effective-
ness and accountability of Federal agencies to the public
111 
by promoting clear Government communication that the 
public can understand and use. 
SEC. 603. DEFINITIONS. 
In this title: 
(1) AGENCY.—The term ‘‘agency’’ means the 
Department of the Treasury and the Small Business 
Administration. 
(2) COVERED DOCUMENT.—The term ‘‘covered 
document’’— 
(A) means any document that— 
(i) is relevant to obtaining any Fed-
eral Government benefit or service pro-
vided under title I, II, or III; 
(ii) provides information about any 
Federal Government benefit or service pro-
vided under title I, II, or III; or 
(iii) explains to the public how to com-
ply with a requirement the Federal Gov-
ernment administers or enforces under title 
I, II, or III; 
(B) includes (whether in paper or elec-
tronic form) a letter, publication, form, notice, 
or instruction; and 
(C) does not include a regulation.
112 
(3) PLAIN WRITING.—The term ‘‘plain writing’’ 
means writing that the intended audience can read-
ily understand and use because that writing is clear, 
concise, well-organized, and follows other best prac-
tices of plain writing. 
SEC. 604. RESPONSIBILITIES OF FEDERAL AGENCIES. 
(a) PREPARATION FOR IMPLEMENTATION OF PLAIN 
WRITING REQUIREMENTS.— 
(1) IN
GENERAL.—Not later than 9 months 
after the date of enactment of this title, the head of 
each agency shall— 
(A) designate 1 or more senior officials 
within the agency to oversee the agency imple-
mentation of this title; 
(B) communicate the requirements of this 
title to the employees of the agency; 
(C) train employees of the agency in plain 
writing; 
(D) establish a process for overseeing the 
ongoing compliance of the agency with the re-
quirements of this title; 
(E) create and maintain a plain writing 
section of the agency’s website that is accessible 
from the homepage of the agency’s website; and
113 
(F) designate 1 or more agency points-of- 
contact to receive and respond to public input 
on— 
(i) agency implementation of this title; 
and 
(ii) the agency reports required under 
section 605. 
(2) WEBSITE.—The plain writing section de-
scribed under paragraph (1)(E) shall— 
(A) inform the public of agency compliance 
with the requirements of this title; and 
(B) provide a mechanism for the agency to 
receive and respond to public input on— 
(i) agency implementation of this title; 
and 
(ii) the agency reports required under 
section 605. 
(b) REQUIREMENT TO USE PLAIN WRITING IN NEW 
DOCUMENTS.—Beginning not later than 1 year after the 
date of enactment of this title, each agency shall use plain 
writing in every covered document of the agency that the 
agency issues or substantially revises. 
(c) GUIDANCE.—In carrying out the provisions of this 
title, agencies may follow the guidance of—
115 
this Act, particularly small- and mid-size farms and 
agriculture operations; and 
(2) attention should be given to ensuring there 
is adequate small business credit and financing 
availability under this Act in the agriculture and 
farming sectors. 
TITLE 
VIII—SMALL 
BUSINESS 
BORROWER ASSISTANCE PRO-
GRAM 
SEC. 801. SHORT TITLE. 
This title may be cited as the ‘‘Small Business Assist-
ance Fund Act of 2010’’. 
SEC. 802. SMALL BUSINESS BORROWER ASSISTANCE PRO-
GRAM. 
(a) IN GENERAL.—The Administrator shall carry out 
a program to be called the ‘‘Small Business Borrower As-
sistance Program’’ to provide payments of principal and 
interest on qualifying small business loans. 
(b) AUTOMATIC ENROLLMENT; COMMITMENT
OF 
FUNDS.— 
(1) IN
GENERAL.—To the extent funds are 
available under the Program, each borrower that re-
ceives a qualifying small business loan after the date 
on which the Administrator issues regulations pursu-
ant to subsection (e) shall be automatically enrolled
116 
in the Program, unless the borrower requests other-
wise, and the Administrator shall commit an amount 
to each borrower equal to 6 percent of the principal 
disbursed amount of such borrower’s qualifying 
small business loan. 
(2) ONE YEAR WINDOW FOR PARTICIPATING IN 
PROGRAM.—Notwithstanding paragraph (1), a bor-
rower may only be enrolled in the Program if the 
borrower is approved for a qualifying small business 
loan before the end of the 1-year period following 
the date on which the Administrator issues final reg-
ulations pursuant to subsection (e). 
(3) TERMINATION OF PARTICIPATION IN CER-
TAIN
CIRCUMSTANCES.—In any instance in which 
the Administrator determines that a borrower par-
ticipating in the Program has committed fraud or 
made a material misrepresentation related to such 
participation, the Administrator may terminate such 
borrower’s participation in the Program and ban 
such borrower from any future participation in the 
Program. 
(c) DISBURSEMENT OF FUNDS.— 
(1) IN GENERAL.—A borrower enrolled in the 
Program may submit a request for the payment of
117 
committed funds by a method to be developed by the 
Administrator. 
(2) MULTIPLE DISBURSEMENTS PERMITTED.— 
A borrower enrolled in the Program may request 
multiple payments under paragraph (1), as long as 
the aggregate amount of such payments does not ex-
ceed the amount committed to such borrower under 
subsection (b). 
(d) TERMS.— 
(1) 
PAYMENTS
ONLY
TO
LENDER
OR 
SERVICER.—Payments made by the Administrator 
under the Program shall only be made to the lender 
or servicer of a qualifying small business loan to be 
applied against outstanding principal or interest, 
and may not be made to the borrower. 
(2) PROGRAM PARTICIPATION ONLY PERMITTED 
DURING FIRST 2 YEARS.— 
(A) IN GENERAL.—Payments made by the 
Administrator under the Program may only be 
made with respect to a payment of interest or 
principal due on a qualifying small business 
loan within the 2-year period following the date 
on which such loan is disbursed. 
(B) UNEXPENDED COMMITTED FUNDS.—
118 
(i) IN GENERAL.—With respect to any 
funds committed to a borrower enrolled in 
the Program that remain unexpended at 
the end of the 2-year period described 
under subparagraph (A), such funds shall 
be paid to the lender or servicer of the bor-
rower’s loan and applied to the principal of 
such loan. 
(ii) EXCEPTION.—In any case in 
which the amount of committed funds that 
remain unexpended is greater than the re-
maining principal of a borrower’s loan, the 
amount of any excess shall be returned to 
the Treasury. 
(e) RULEMAKING.—Not later than 180 days after the 
date of the enactment of this section, the Administrator 
shall issue regulations necessary to carry out this section. 
(f) CONTRACTING WITH AGENTS.—The Adminis-
trator may contract with one or more entities as necessary 
to carry out the provisions of the Program. The Secretary 
of the Treasury is authorized to designate financial insti-
tutions, including any bank, savings association, or trust 
company, as financial agents of the Federal Government 
to carry out the authorities of this section, and such insti-
tutions shall perform all such reasonable duties related to
119 
the Program as financial agents of the Federal Govern-
ment as the Secretary may require. In engaging any such 
third parties to carry out the Program, the Administrator 
or the Secretary shall seek to involve small businesses in 
the provision of the core direct services required under the 
engagement. 
(g) DEFINITIONS.—For purposes of this section: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Small Busi-
ness Administration. 
(2) PROGRAM.—The term ‘‘Program’’ means 
the Small Business Borrower Assistance Program 
established under subsection (a). 
(3) QUALIFYING SMALL BUSINESS LOAN.—The 
term ‘‘qualifying small business loan’’ means any 
loan, up to $300,000, made to a small business con-
cern and guaranteed under section 7(a) of the Small 
Business Act (15 U.S.C. 636(a)), other than a loan 
made pursuant to section 7(a)(31) of such Act, a re-
volving credit line, or any other revolving loan. 
(4) SMALL
BUSINESS
CONCERN.—The term 
‘‘small business concern’’ has the meaning given 
such term under section 3 of the Small Business Act 
(15 U.S.C. 632).
120 
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
hereby authorized to be appropriated to the Administrator 
$300,000,000 to carry out this section. 
Passed the House of Representatives June 17, 2010. 
Attest: 
Clerk.
111TH CONGRESS 
2D SESSION 
H. R. 5297 
AN ACT 
To create the Small Business Lending Fund Pro-
gram to direct the Secretary of the Treasury to 
make capital investments in eligible institutions 
in order to increase the availability of credit for 
small businesses, to amend the Internal Revenue 
Code of 1986 to provide tax incentives for small 
business job creation, and for other purposes.