I
One Hundred Eleventh Congress of the United States of America At the Second SessionBegun and held at the City of Washington on Tuesday, the fifth day of January, two thousand and ten
H. R. 5297

AN ACT
To create the Small Business Lending Fund Program 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.

1.Short titleThis Act may be cited as the Small Business Jobs Act of 2010.
2.Table of contentsThe table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—Small businesses
Sec. 1001. Definitions.
Subtitle A—Small business access to credit
Sec. 1101. Short title.
PART I—Next Steps for Main Street Credit Availability
Sec. 1111. Section 7(a) business loans.
Sec. 1112. Maximum loan amounts under 504 program.
Sec. 1113. Maximum loan limits under microloan program.
Sec. 1114. Loan guarantee enhancement extensions.
Sec. 1115. New Markets Venture Capital company investment limitations.
Sec. 1116. Alternative size standards.
Sec. 1117. Sale of 7(a) loans in secondary market.
Sec. 1118. Online lending platform.
Sec. 1119. SBA Secondary Market Guarantee Authority.
PART II—Small Business Access to Capital
Sec. 1122. Low-interest refinancing under the local development business loan program.
PART III—Other matters
Sec. 1131. Small business intermediary lending pilot program.
Sec. 1132. Public policy goals.
Sec. 1133. Floor plan pilot program extension.
Sec. 1134. Guarantees for bonds and notes issued for community or economic development purposes.
Sec. 1135. Temporary express loan enhancement.
Sec. 1136. Prohibition on using TARP funds or tax increases.
Subtitle B—Small business trade and exporting
Sec. 1201. Short title.
Sec. 1202. Definitions.
Sec. 1203. Office of International Trade.
Sec. 1204. Duties of the Office of International Trade.
Sec. 1205. Export assistance centers.
Sec. 1206. International trade finance programs.
Sec. 1207. State Trade and Export Promotion Grant Program.
Sec. 1208. Rural export promotion.
Sec. 1209. International trade cooperation by small business development centers.
Subtitle C—Small business contracting
PART I—Contract bundling
Sec. 1311. Small Business Act.
Sec. 1312. Leadership and oversight.
Sec. 1313. Consolidation of contract requirements.
Sec. 1314. Small business teams pilot program.
PART II—Subcontracting integrity
Sec. 1321. Subcontracting misrepresentations.
Sec. 1322. Small business subcontracting improvements.
PART III—Acquisition process
Sec. 1331. Reservation of prime contract awards for small businesses.
Sec. 1332. Micro-purchase guidelines.
Sec. 1333. Agency accountability.
Sec. 1334. Payment of subcontractors.
Sec. 1335. Repeal of Small Business Competitiveness Demonstration Program.
PART IV—Small business size and status integrity
Sec. 1341. Policy and presumptions.
Sec. 1342. Annual certification.
Sec. 1343. Training for contracting and enforcement personnel.
Sec. 1344. Updated size standards.
Sec. 1345. Study and report on the mentor-protege program.
Sec. 1346. Contracting goals reports.
Sec. 1347. Small business contracting parity.
Subtitle D—Small business management and counseling assistance
Sec. 1401. Matching requirements under small business programs.
Sec. 1402. Grants for SBDCs.
Subtitle E—Disaster loan improvement
Sec. 1501. Aquaculture business disaster assistance.
Subtitle F—Small Business Regulatory Relief
Sec. 1601. Requirements providing for more detailed analyses.
Sec. 1602. Office of advocacy.
Subtitle G—Appropriations provisions
Sec. 1701. Salaries and expenses.
Sec. 1702. Business loans program account.
Sec. 1703. Community Development Financial Institutions Fund program account.
Sec. 1704. Small business loan guarantee enhancement extensions.
TITLE II—Tax provisions
Sec. 2001. Short title.
Subtitle A—Small business relief
PART I—Providing access to capital
Sec. 2011. Temporary exclusion of 100 percent of gain on certain small business stock.
Sec. 2012. General business credits of eligible small businesses for 2010 carried back 5 years.
Sec. 2013. General business credits of eligible small businesses in 2010 not subject to alternative minimum tax.
Sec. 2014. Temporary reduction in recognition period for built-in gains tax.
PART II—Encouraging investment
Sec. 2021. Increased expensing limitations for 2010 and 2011; certain real property treated as section 179 property.
Sec. 2022. Additional first-year depreciation for 50 percent of the basis of certain qualified property.
Sec. 2023. Special rule for long-term contract accounting.
PART III—Promoting entrepreneurship
Sec. 2031. Increase in amount allowed as deduction for start-up expenditures in 2010.
Sec. 2032. Authorization of appropriations for the United States Trade Representative to develop market access opportunities for United States small- and medium-sized businesses and to enforce trade agreements.
PART IV—Promoting small business fairness
Sec. 2041. Limitation on penalty for failure to disclose reportable transactions based on resulting tax benefits.
Sec. 2042. Deduction for health insurance costs in computing self-employment taxes in 2010.
Sec. 2043. Removal of cellular telephones and similar telecommunications equipment from listed property.
Subtitle B—Revenue provisions
PART I—Reducing the tax gap
Sec. 2101. Information reporting for rental property expense payments.
Sec. 2102. Increase in information return penalties.
Sec. 2103. Report on tax shelter penalties and certain other enforcement actions.
Sec. 2104. Application of continuous levy to tax liabilities of certain Federal contractors.
PART II—Promoting retirement preparation
Sec. 2111. Participants in government section 457 plans allowed to treat elective deferrals as Roth contributions.
Sec. 2112. Rollovers from elective deferral plans to designated Roth accounts.
Sec. 2113. Special rules for annuities received from only a portion of a contract.
PART III—Closing unintended loopholes
Sec. 2121. Crude tall oil ineligible for cellulosic biofuel producer credit.
Sec. 2122. Source rules for income on guarantees.
PART IV—Time for payment of corporate estimated taxes
Sec. 2131. Time for payment of corporate estimated taxes.
TITLE III—State Small Business Credit Initiative
Sec. 3001. Short title.
Sec. 3002. Definitions.
Sec. 3003. Federal funds allocated to States.
Sec. 3004. Approving States for participation.
Sec. 3005. Approving State capital access programs.
Sec. 3006. Approving collateral support and other innovative credit access and guarantee initiatives for small businesses and manufacturers.
Sec. 3007. Reports.
Sec. 3008. Remedies for State program termination or failures.
Sec. 3009. Implementation and administration.
Sec. 3010. Regulations.
Sec. 3011. Oversight and audits.
TITLE IV—Additional small business provisions
Subtitle A—Small Business Lending Fund
Sec. 4101. Purpose.
Sec. 4102. Definitions.
Sec. 4103. Small business lending fund.
Sec. 4104. Additional authorities of the Secretary.
Sec. 4105. Considerations.
Sec. 4106. Reports.
Sec. 4107. Oversight and audits.
Sec. 4108. Credit reform; funding.
Sec. 4109. Termination and continuation of authorities.
Sec. 4110. Preservation of authority.
Sec. 4111. Assurances.
Sec. 4112. Study and report with respect to women-owned, veteran-owned, and minority-owned businesses.
Sec. 4113. Sense of Congress.
Subtitle B—Other provisions
PART I—Small business export promotion initiatives
Sec. 4221. Short title.
Sec. 4222. Global business development and promotion activities of the Department of Commerce.
Sec. 4223. Additional funding to improve access to global markets for rural businesses.
Sec. 4224. Additional funding for the ExporTech program.
Sec. 4225. Additional funding for the market development cooperator program of the Department of Commerce.
Sec. 4226. Hollings Manufacturing Partnership Program; Technology Innovation Program.
Sec. 4227. Sense of the Senate concerning Federal collaboration with States on export promotion issues.
Sec. 4228. Report on tariff and nontariff barriers.
PART II—Medicare fraud
Sec. 4241. Use of predictive modeling and other analytics technologies to identify and prevent waste, fraud, and abuse in the Medicare fee-for-service program.
TITLE V—Budgetary provisions
Sec. 5001. Determination of budgetary effects.
ISmall businesses
1001.DefinitionsIn this title—
(1)the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively; and
(2)the term small business concern has the meaning given that term under section 3 of the Small Business Act (15 U.S.C. 632).
ASmall business access to credit
1101.Short titleThis subtitle may be cited as the Small Business Job Creation and Access to Capital Act of 2010.
INext Steps for Main Street Credit Availability
1111.Section 7(a) business loans
(a)AmendmentSection 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended—
(1)in paragraph (2)(A)—
(A)in clause (i), by striking 75 percent and inserting 90 percent; and
(B)in clause (ii), by striking 85 percent and inserting 90 percent; and
(2)in paragraph (3)(A), by striking $1,500,000 (or if the gross loan amount would exceed $2,000,000 and inserting $4,500,000 (or if the gross loan amount would exceed $5,000,000.
(b)Prospective repealEffective January 1, 2011, section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended—
(1)in paragraph (2)(A)—
(A)in clause (i), by striking 90 percent and inserting 75 percent; and
(B)in clause (ii), by striking 90 percent and inserting 85 percent; and
(2)in paragraph (3)(A), by striking $4,500,000 and inserting $3,750,000.
1112.Maximum loan amounts under 504 programSection 502(2)(A) of the Small Business Investment Act of 1958 (15 U.S.C. 696(2)(A)) is amended—
(1)in clause (i), by striking $1,500,000 and inserting $5,000,000;
(2)in clause (ii), by striking $2,000,000 and inserting $5,000,000;
(3)in clause (iii), by striking $4,000,000 and inserting $5,500,000;
(4)in clause (iv), by striking $4,000,000 and inserting $5,500,000; and
(5)in clause (v), by striking $4,000,000 and inserting $5,500,000.
1113.Maximum loan limits under microloan programSection 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended—
(1)in paragraph (1)(B)(iii), by striking $35,000 and inserting $50,000;
(2)in paragraph (3)—
(A)in subparagraph (C), by striking $3,500,000 and inserting $5,000,000; and
(B)in subparagraph (E), by striking $35,000 each place that term appears and inserting $50,000; and
(3)in paragraph (11)(B), by striking $35,000 and inserting $50,000.
1114.Loan guarantee enhancement extensions
(a)FeesSection 501 of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5; 123 Stat. 151) is amended by striking September 30, 2010 each place that term appears and inserting December 31, 2010.
(b)Loan guaranteesSection 502(f) of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5; 123 Stat. 153) is amended by striking May 31, 2010 and inserting December 31, 2010.
1115.New Markets Venture Capital company investment limitationsSection 355 of the Small Business Investment Act of 1958 (15 U.S.C. 689d) is amended by adding at the end the following:

(e)Investment limitations
(1)DefinitionIn this subsection, the term covered New Markets Venture Capital company means a New Markets Venture Capital company—
(A)granted final approval by the Administrator under section 354(e) on or after March 1, 2002; and
(B)that has obtained a financing from the Administrator.
(2)LimitationExcept to the extent approved by the Administrator, a covered New Markets Venture Capital company may not acquire or issue commitments for securities under this title for any single enterprise in an aggregate amount equal to more than 10 percent of the sum of—
(A)the regulatory capital of the covered New Markets Venture Capital company; and
(B)the total amount of leverage projected in the participation agreement of the covered New Markets Venture Capital..
1116.Alternative size standardsSection 3(a) of the Small Business Act (15 U.S.C. 632(a)) is amended by adding at the end the following:

(5)Alternative size standard
(A)In generalThe Administrator shall establish an alternative size standard for applicants for business loans under section 7(a) and applicants for development company loans under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.), that uses maximum tangible net worth and average net income as an alternative to the use of industry standards.
(B)Interim ruleUntil the date on which the alternative size standard established under subparagraph (A) is in effect, an applicant for a business loan under section 7(a) or an applicant for a development company loan under title V of the Small Business Investment Act of 1958 may be eligible for such a loan if—
(i)the maximum tangible net worth of the applicant is not more than $15,000,000; and
(ii)the average net income after Federal income taxes (excluding any carry-over losses) of the applicant for the 2 full fiscal years before the date of the application is not more than $5,000,000..
1117.Sale of 7(a) loans in secondary marketSection 5(g) of the Small Business Act (15 U.S.C. 634(g)) is amended by adding at the end the following:

(6)If the amount of the guaranteed portion of any loan under section 7(a) is more than $500,000, the Administrator shall, upon request of a pool assembler, divide the loan guarantee into increments of $500,000 and 1 increment of any remaining amount less than $500,000, in order to permit the maximum amount of any loan in a pool to be not more than $500,000. Only 1 increment of any loan guarantee divided under this paragraph may be included in the same pool. Increments of loan guarantees to different borrowers that are divided under this paragraph may be included in the same pool..
1118.Online lending platformIt is the sense of Congress that the Administrator of the Small Business Administration should establish a website that—
(1)lists each lender that makes loans guaranteed by the Small Business Administration and provides information about the loan rates of each such lender; and
(2)allows prospective borrowers to compare rates on loans guaranteed by the Small Business Administration.
1119.SBA Secondary Market Guarantee AuthoritySection 503(f) of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5; 123 Stat. 155) is amended by striking on the date 2 years after the date of enactment of this section and inserting 2 years after the date of the first sale of a pool of first lien position 504 loans guaranteed under this section to a third-party investor.
IISmall Business Access to Capital
1122.Low-interest refinancing under the local development business loan program
(a)RefinancingSection 502(7) of the Small Business Investment Act of 1958 (15 U.S.C. 696(7)) is amended by adding at the end the following:

(C)Refinancing not involving expansions
(i)DefinitionsIn this subparagraph—
(I)the term borrower means a small business concern that submits an application to a development company for financing under this subparagraph;
(II)the term eligible fixed asset means tangible property relating to which the Administrator may provide financing under this section; and
(III)the term qualified debt means indebtedness—
(aa)that—
(AA)was incurred not less than 2 years before the date of the application for assistance under this subparagraph;
(BB)is a commercial loan;
(CC)is not subject to a guarantee by a Federal agency;
(DD)the proceeds of which were used to acquire an eligible fixed asset;
(EE)was incurred for the benefit of the small business concern; and
(FF)is collateralized by eligible fixed assets; and
(bb)for which the borrower has been current on all payments for not less than 1 year before the date of the application.
(ii)AuthorityA project that does not involve the expansion of a small business concern may include the refinancing of qualified debt if—
(I)the amount of the financing is not more than 90 percent of the value of the collateral for the financing, except that, if the appraised value of the eligible fixed assets serving as collateral for the financing is less than the amount equal to 125 percent of the amount of the financing, the borrower may provide additional cash or other collateral to eliminate any deficiency;
(II)the borrower has been in operation for all of the 2-year period ending on the date of the loan; and
(III)for a financing for which the Administrator determines there will be an additional cost attributable to the refinancing of the qualified debt, the borrower agrees to pay a fee in an amount equal to the anticipated additional cost.
(iii)Financing for business expenses
(I)Financing for business expensesThe Administrator may provide financing to a borrower that receives financing that includes a refinancing of qualified debt under clause (ii), in addition to the refinancing under clause (ii), to be used solely for the payment of business expenses.
(II)Application for financingAn application for financing under subclause (I) shall include—
(aa)a specific description of the expenses for which the additional financing is requested; and
(bb)an itemization of the amount of each expense.
(III)Condition on additional financingA borrower may not use any part of the financing under this clause for non-business purposes.
(iv)Loans based on jobs
(I)Job creation and retention goals
(aa)In generalThe Administrator may provide financing under this subparagraph for a borrower that meets the job creation goals under subsection (d) or (e) of section 501.
(bb)Alternate job retention goalThe Administrator may provide financing under this subparagraph to a borrower that does not meet the goals described in item (aa) in an amount that is not more than the product obtained by multiplying the number of employees of the borrower by $65,000.
(II)Number of employeesFor purposes of subclause (I), the number of employees of a borrower is equal to the sum of—
(aa)the number of full-time employees of the borrower on the date on which the borrower applies for a loan under this subparagraph; and
(bb)the product obtained by multiplying—
(AA)the number of part-time employees of the borrower on the date on which the borrower applies for a loan under this subparagraph; by
(BB)the quotient obtained by dividing the average number of hours each part time employee of the borrower works each week by 40.
(v)NondelegationNotwithstanding section 508(e), the Administrator may not permit a premier certified lender to approve or disapprove an application for assistance under this subparagraph.
(vi)Total amount of loansThe Administrator may provide not more than a total of $7,500,000,000 of financing under this subparagraph for each fiscal year..
(b)Prospective repealEffective 2 years after the date of enactment of this Act, section 502(7) of the Small Business Investment Act of 1958 (15 U.S.C. 696(7)) is amended by striking subparagraph (C).
(c)Technical correctionSection 502(2)(A)(i) of the Small Business Investment Act of 1958 (15 U.S.C. 696(2)(A)(i)) is amended by striking subparagraph (B) or (C) and inserting clause (ii), (iii), (iv), or (v).
IIIOther matters
1131.Small business intermediary lending pilot program
(a)In generalSection 7 of the Small Business Act (15 U.S.C. 636) is amended by striking subsection (l) and inserting the following:

(l)Small Business Intermediary Lending Pilot Program
(1)DefinitionsIn this subsection—
(A)the term eligible intermediary—
(i)means a private, nonprofit entity that—
(I)seeks or has been awarded a loan from the Administrator to make loans to small business concerns under this subsection; and
(II)has not less than 1 year of experience making loans to startup, newly established, or growing small business concerns; and
(ii)includes—
(I)a private, nonprofit community development corporation;
(II)a consortium of private, nonprofit organizations or nonprofit community development corporations; and
(III)an agency of or nonprofit entity established by a Native American Tribal Government; and
(B)the term Program means the small business intermediary lending pilot program established under paragraph (2).
(2)EstablishmentThere is established a 3-year small business intermediary lending pilot program, under which the Administrator may make direct loans to eligible intermediaries, for the purpose of making loans to startup, newly established, and growing small business concerns.
(3)PurposesThe purposes of the Program are—
(A)to assist small business concerns in areas suffering from a lack of credit due to poor economic conditions or changes in the financial market; and
(B)to establish a loan program under which the Administrator may provide loans to eligible intermediaries to enable the eligible intermediaries to provide loans to startup, newly established, and growing small business concerns for working capital, real estate, or the acquisition of materials, supplies, or equipment.
(4)Loans to eligible intermediaries
(A)ApplicationEach eligible intermediary desiring a loan under this subsection shall submit an application to the Administrator that describes—
(i)the type of small business concerns to be assisted;
(ii)the size and range of loans to be made;
(iii)the interest rate and terms of loans to be made;
(iv)the geographic area to be served and the economic, poverty, and unemployment characteristics of the area;
(v)the status of small business concerns in the area to be served and an analysis of the availability of credit; and
(vi)the qualifications of the applicant to carry out this subsection.
(B)Loan limitsNo loan may be made to an eligible intermediary under this subsection if the total amount outstanding and committed to the eligible intermediary by the Administrator would, as a result of such loan, exceed $1,000,000 during the participation of the eligible intermediary in the Program.
(C)Loan durationLoans made by the Administrator under this subsection shall be for a term of 20 years.
(D)Applicable interest ratesLoans made by the Administrator to an eligible intermediary under the Program shall bear an annual interest rate equal to 1.00 percent.
(E)Fees; collateralThe Administrator may not charge any fees or require collateral with respect to any loan made to an eligible intermediary under this subsection.
(F)Delayed paymentsThe Administrator shall not require the repayment of principal or interest on a loan made to an eligible intermediary under the Program during the 2-year period beginning on the date of the initial disbursement of funds under that loan.
(G)Maximum participants and amountsDuring each of fiscal years 2011, 2012, and 2013, the Administrator may make loans under the Program—
(i)to not more than 20 eligible intermediaries; and
(ii)in a total amount of not more than $20,000,000.
(5)Loans to small business concerns
(A)In generalThe Administrator, through an eligible intermediary, shall make loans to startup, newly established, and growing small business concerns for working capital, real estate, and the acquisition of materials, supplies, furniture, fixtures, and equipment.
(B)Maximum loanAn eligible intermediary may not make a loan under this subsection of more than $200,000 to any 1 small business concern.
(C)Applicable interest ratesA loan made by an eligible intermediary to a small business concern under this subsection, may have a fixed or a variable interest rate, and shall bear an interest rate specified by the eligible intermediary in the application of the eligible intermediary for a loan under this subsection.
(D)Review restrictionsThe Administrator may not review individual loans made by an eligible intermediary to a small business concern before approval of the loan by the eligible intermediary.
(6)TerminationThe authority of the Administrator to make loans under the Program shall terminate 3 years after the date of enactment of the Small Business Job Creation and Access to Capital Act of 2010..
(b)Rulemaking authorityNot later than 180 days after the date of enactment of this Act, the Administrator shall issue regulations to carry out section 7(l) of the Small Business Act, as amended by subsection (a).
(c)Availability of fundsAny amounts provided to the Administrator for the purposes of carrying out section 7(l) of the Small Business Act, as amended by subsection (a), shall remain available until expended.
1132.Public policy goalsSection 501(d)(3) of the Small Business Investment Act of 1958 (15 U.S.C. 695(d)(3)) is amended—
(1)in subparagraph (J), by striking or at the end;
(2)in subparagraph (K), by striking the period at the end and inserting , or; and
(3)by adding at the end the following:

(L)reduction of rates of unemployment in labor surplus areas, as such areas are determined by the Secretary of Labor..
1133.Floor plan pilot program extension
(a)In generalSection 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended—
(1)by redesignating paragraph (32), relating to increased veteran participation, as added by section 208 of the Military Reservist and Veteran Small Business Reauthorization and Opportunity Act of 2008 (Public Law 110–186; 122 Stat. 631), as paragraph (33); and
(2)by adding at the end the following:

(34)Floor plan financing program
(A)DefinitionIn this paragraph, the term eligible retail good—
(i)means a good for which a title may be obtained under State law; and
(ii)includes an automobile, recreational vehicle, boat, and manufactured home.
(B)ProgramThe Administrator may guarantee the timely payment of an open-end extension of credit to a small business concern, the proceeds of which may be used for the purchase of eligible retail goods for resale.
(C)AmountAn open-end extension of credit guaranteed under this paragraph shall be in an amount not less than $500,000 and not more than $5,000,000.
(D)TermAn open-end extension of credit guaranteed under this paragraph shall have a term of not more than 5 years.
(E)Guarantee percentageThe Administrator may guarantee—
(i)not less than 60 percent of an open-end extension of credit under this paragraph; and
(ii)not more than 75 percent of an open-end extension of credit under this paragraph.
(F)Advance rateThe lender for an open-end extension of credit guaranteed under this paragraph may allow the borrower to draw funds on the line of credit in an amount equal to not more than 100 percent of the value of the eligible retail goods to be purchased..
(b)SunsetEffective September 30, 2013, section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended—
(1)by striking paragraph (34); and
(2)by redesignating paragraph (35), as added by section 1206 of this Act, as paragraph (34).
1134.Guarantees for bonds and notes issued for community or economic development purposesThe Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4701 et seq.) is amended by inserting after section 114 (12 U.S.C. 4713) the following:

114A.Guarantees for bonds and notes issued for community or economic development purposes
(a)DefinitionsIn this section, the following definitions shall apply:
(1)Eligible community development financial institutionThe term eligible community development financial institution means a community development financial institution (as described in section 1805.201 of title 12, Code of Federal Regulations, or any successor thereto) certified by the Secretary that has applied to a qualified issuer for, or been granted by a qualified issuer, a loan under the Program.
(2)Eligible community or economic development purposeThe term eligible community or economic development purpose—
(A)means any purpose described in section 108(b); and
(B)includes the provision of community or economic development in low-income or underserved rural areas.
(3)GuaranteeThe term guarantee means a written agreement between the Secretary and a qualified issuer (or trustee), pursuant to which the Secretary ensures repayment of the verifiable losses of principal, interest, and call premium, if any, on notes or bonds issued by a qualified issuer to finance or refinance loans to eligible community development financial institutions.
(4)LoanThe term loan means any credit instrument that is extended under the Program for any eligible community or economic development purpose.
(5)Master servicer
(A)In generalThe term master servicer means any entity approved by the Secretary in accordance with subparagraph (B) to oversee the activities of servicers, as provided in subsection (f)(4).
(B)Approval criteria for master servicersThe Secretary shall approve or deny any application to become a master servicer under the Program not later than 90 days after the date on which all required information is submitted to the Secretary, based on the capacity and experience of the applicant in—
(i)loan administration, servicing, and loan monitoring;
(ii)managing regional or national loan intake, processing, or servicing operational systems and infrastructure;
(iii)managing regional or national originator communication systems and infrastructure;
(iv)developing and implementing training and other risk management strategies on a regional or national basis; and
(v)compliance monitoring, investor relations, and reporting.
(6)ProgramThe term Program means the guarantee Program for bonds and notes issued for eligible community or economic development purposes established under this section.
(7)Program administratorThe term Program administrator means an entity designated by the issuer to perform administrative duties, as provided in subsection (f)(2).
(8)Qualified issuer
(A)In generalThe term qualified issuer means a community development financial institution (or any entity designated to issue notes or bonds on behalf of such community development financial institution) that meets the qualification requirements of this paragraph.
(B)Approval criteria for qualified issuers
(i)In generalThe Secretary shall approve a qualified issuer for a guarantee under the Program in accordance with the requirements of this paragraph, and such additional requirements as the Secretary may establish, by regulation.
(ii)Terms and qualificationsA qualified issuer shall—
(I)have appropriate expertise, capacity, and experience, or otherwise be qualified to make loans for eligible community or economic development purposes;
(II)provide to the Secretary—
(aa)an acceptable statement of the proposed sources and uses of the funds; and
(bb)a capital distribution plan that meets the requirements of subsection (c)(1); and
(III)certify to the Secretary that the bonds or notes to be guaranteed are to be used for eligible community or economic development purposes.
(C)Department opinion; timing
(i)Department opinionNot later than 30 days after the date of a request by a qualified issuer for approval of a guarantee under the Program, the Secretary shall provide an opinion regarding compliance by the issuer with the requirements of the Program under this section.
(ii)TimingThe Secretary shall approve or deny a guarantee under this section after consideration of the opinion provided to the Secretary under clause (i), and in no case later than 90 days after receipt of all required information by the Secretary with respect to a request for such guarantee.
(9)SecretaryThe term Secretary means the Secretary of the Treasury.
(10)ServicerThe term servicer means an entity designated by the issuer to perform various servicing duties, as provided in subsection (f)(3).
(b)Guarantees authorizedThe Secretary shall guarantee payments on bonds or notes issued by any qualified issuer, if the proceeds of the bonds or notes are used in accordance with this section to make loans to eligible community development financial institutions—
(1)for eligible community or economic development purposes; or
(2)to refinance loans or notes issued for such purposes.
(c)General Program requirements
(1)In generalA capital distribution plan meets the requirements of this subsection, if not less than 90 percent of the principal amount of guaranteed bonds or notes (other than costs of issuance fees) are used to make loans for any eligible community or economic development purpose, measured annually, beginning at the end of the 1-year period beginning on the issuance date of such guaranteed bonds or notes.
(2)Relending accountNot more than 10 percent of the principal amount of guaranteed bonds or notes, multiplied by an amount equal to the outstanding principal balance of issued notes or bonds, minus the risk-share pool amount under subsection (d), may be held in a relending account and may be made available for new eligible community or economic development purposes.
(3)Limitations on unpaid principal balancesThe proceeds of guaranteed bonds or notes under the Program may not be used to pay fees (other than costs of issuance fees), and shall be held in—
(A)community or economic development loans;
(B)a relending account, to the extent authorized under paragraph (2); or
(C)a risk-share pool established under subsection (d).
(4)RepaymentIf a qualified issuer fails to meet the requirements of paragraph (1) by the end of the 90-day period beginning at the end of the annual measurement period, repayment shall be made on that portion of bonds or notes necessary to bring the bonds or notes that remain outstanding after such repayment into compliance with the 90 percent requirement of paragraph (1).
(5)Prohibited usesThe Secretary shall, by regulation—
(A)prohibit, as appropriate, certain uses of amounts from the guarantee of a bond or note under the Program, including the use of such funds for political activities, lobbying, outreach, counseling services, or travel expenses; and
(B)provide that the guarantee of a bond or note under the Program may not be used for salaries or other administrative costs of—
(i)the qualified issuer; or
(ii)any recipient of amounts from the guarantee of a bond or note.
(d)Risk-Share poolEach qualified issuer shall, during the term of a guarantee provided under the Program, establish a risk-share pool, capitalized by contributions from eligible community development financial institution participants an amount equal to 3 percent of the guaranteed amount outstanding on the subject notes and bonds.
(e)Guarantees
(1)In generalA guarantee issued under the Program shall—
(A)be for the full amount of a bond or note, including the amount of principal, interest, and call premiums;
(B)be fully assignable and transferable to the capital market, on terms and conditions that are consistent with comparable Government-guaranteed bonds, and satisfactory to the Secretary;
(C)represent the full faith and credit of the United States; and
(D)not exceed 30 years.
(2)Limitations
(A)Annual number of guaranteesThe Secretary shall issue not more than 10 guarantees in any calendar year under the Program.
(B)Guarantee amountThe Secretary may not guarantee any amount under the Program equal to less than $100,000,000, but the total of all such guarantees in any fiscal year may not exceed $1,000,000,000.
(f)Servicing of transactions
(1)In generalTo maximize efficiencies and minimize cost and interest rates, loans made under this section may be serviced by qualified Program administrators, bond servicers, and a master servicer.
(2)Duties of Program administratorThe duties of a Program administrator shall include—
(A)approving and qualifying eligible community development financial institution applications for participation in the Program;
(B)compliance monitoring;
(C)bond packaging in connection with the Program; and
(D)all other duties and related services that are customarily expected of a Program administrator.
(3)Duties of servicerThe duties of a servicer shall include—
(A)billing and collecting loan payments;
(B)initiating collection activities on past-due loans;
(C)transferring loan payments to the master servicing accounts;
(D)loan administration and servicing;
(E)systematic and timely reporting of loan performance through remittance and servicing reports;
(F)proper measurement of annual outstanding loan requirements; and
(G)all other duties and related services that are customarily expected of servicers.
(4)Duties of master servicerThe duties of a master servicer shall include—
(A)tracking the movement of funds between the accounts of the master servicer and any other servicer;
(B)ensuring orderly receipt of the monthly remittance and servicing reports of the servicer;
(C)monitoring the collection comments and foreclosure actions;
(D)aggregating the reporting and distribution of funds to trustees and investors;
(E)removing and replacing a servicer, as necessary;
(F)loan administration and servicing;
(G)systematic and timely reporting of loan performance compiled from all bond servicers’ reports;
(H)proper distribution of funds to investors; and
(I)all other duties and related services that are customarily expected of a master servicer.
(g)Fees
(1)In generalA qualified issuer that receives a guarantee issued under this section on a bond or note shall pay a fee to the Secretary, in an amount equal to 10 basis points of the amount of the unpaid principal of the bond or note guaranteed.
(2)PaymentA qualified issuer shall pay the fee required under this subsection on an annual basis.
(3)Use of feesFees collected by the Secretary under this subsection shall be used to reimburse the Department of the Treasury for any administrative costs incurred by the Department in implementing the Program established under this section.
(h)Authorization of appropriations
(1)In generalThere are authorized to be appropriated to the Secretary, such sums as are necessary to carry out this section.
(2)Use of feesTo the extent that the amount of funds appropriated for a fiscal year under paragraph (1) are not sufficient to carry out this section, the Secretary may use the fees collected under subsection (g) for the cost of providing guarantees of bonds and notes under this section.
(i)Investment in guaranteed bonds ineligible for Community Reinvestment Act purposesNotwithstanding any other provision of law, any investment by a financial institution in bonds or notes guaranteed under the Program shall not be taken into account in assessing the record of such institution for purposes of the Community Reinvestment Act of 1977 (12 U.S.C. 2901).
(j)Administration
(1)RegulationsNot later than 1 year after the date of enactment of this section, the Secretary shall promulgate regulations to carry out this section.
(2)ImplementationNot later than 2 years after the date of enactment of this section, the Secretary shall implement this section.
(k)TerminationThis section is repealed, and the authority provided under this section shall terminate, on September 30, 2014..
1135.Temporary express loan enhancement
(a)In generalSection 7(a)(31)(D) of the Small Business Act (15 U.S.C. 636(a)(31)(D)) is amended by striking $350,000 and inserting $1,000,000.
(b)Prospective repealEffective 1 year after the date of enactment of this Act, section 7(a)(31)(D) of the Small Business Act (15 U.S.C. 636(a)(31)(D)) is amended by striking $1,000,000 and inserting $350,000.
1136.Prohibition on using TARP funds or tax increases
(a)In generalExcept as provided in subsection (b), nothing in section 1111, 1112, 1113, 1114, 1115, 1116, 1117, 1118, 1122, or 1131, or an amendment made by such sections, shall be construed to limit the ability of Congress to appropriate funds.
(b)TARP funds and tax increases
(1)In generalAny covered amounts may not be used to carry out section 1111, 1112, 1113, 1114, 1115, 1116, 1117, 1118, 1122, or 1131, or an amendment made by such sections.
(2)DefinitionIn this subsection, the term covered amounts means—
(A)the amounts made available to the Secretary of the Treasury under title I of the Emergency Economic Stabilization Act of 2008 S.C. 5201 et seq.) to purchase (under section 101) or guarantee (under section 102) assets under that Act; and
(B)any revenue increase attributable to any amendment to the Internal Revenue Code of 1986 made during the period beginning on the date of enactment of this Act and ending on December 31, 2010.
BSmall business trade and exporting
1201.Short titleThis subtitle may be cited as the Small Business Export Enhancement and International Trade Act of 2010.
1202.Definitions
(a)DefinitionsIn this subtitle—
(1)the term Associate Administrator means the Associate Administrator for International Trade appointed under section 22(a)(2) of the Small Business Act, as amended by this subtitle;
(2)the term Export Assistance Center means a one-stop shop referred to in section 2301(b)(8) of the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 4721(b)(8)); and
(3)the term rural small business concern means a small business concern located in a rural area, as that term is defined in section 1393(a)(2) of the Internal Revenue Code of 1986.
(b)Technical and conforming amendments
(1)DefinitionsSection 3 of the Small Business Act (15 U.S.C. 632) is amended by adding at the end the following:

(t)Small business development centerIn this Act, the term small business development center means a small business development center described in section 21.
(u)Region of the AdministrationIn this Act, the term region of the Administration means the geographic area served by a regional office of the Administration established under section 4(a)..
(2)Conforming amendmentSection 4(b)(3)(B)(x) of the Small Business Act (15 U.S.C. 633(b)(3)(B)(x)) is amended by striking Administration district and region and inserting district and region of the Administration.
1203.Office of International Trade
(a)EstablishmentSection 22 of the Small Business Act (15 U.S.C. 649) is amended—
(1)by striking Sec. 22. (a) There and inserting the following:

22.Office of International Trade
(a)Establishment
(1)OfficeThere; and
(2)in subsection (a)—
(A)in paragraph (1), as so designated, by striking the period and inserting “for the primary purposes of increasing—

(A)the number of small business concerns that export; and
(B)the volume of exports by small business concerns.; and
(B)by adding at the end the following:

(2)Associate AdministratorThe head of the Office shall be the Associate Administrator for International Trade, who shall be responsible to the Administrator..
(b)Authority for Additional Associate AdministratorSection 4(b)(1) of the Small Business Act (15 U.S.C. 633(b)(1)) is amended—
(1)in the fifth sentence, by striking five Associate Administrators and inserting Associate Administrators; and
(2)by adding at the end the following: One such Associate Administrator shall be the Associate Administrator for International Trade, who shall be the head of the Office of International Trade established under section 22..
(c)Discharge of International Trade Responsibilities of AdministrationSection 22 of the Small Business Act (15 U.S.C. 649) is amended by adding at the end the following:

(h)Discharge of International Trade Responsibilities of AdministrationThe Administrator shall ensure that—
(1)the responsibilities of the Administration regarding international trade are carried out by the Associate Administrator;
(2)the Associate Administrator has sufficient resources to carry out such responsibilities; and
(3)the Associate Administrator has direct supervision and control over—
(A)the staff of the Office; and
(B)any employee of the Administration whose principal duty station is an Export Assistance Center, or any successor entity..
(d)Role of Associate Administrator in carrying out international trade policySection 2(b)(1) of the Small Business Act (15 U.S.C. 631(b)(1)) is amended in the matter preceding subparagraph (A)—
(1)by inserting the Administrator of before the Small Business Administration; and
(2)by inserting through the Associate Administrator for International Trade, and before in cooperation with.
(e)Implementation dateNot later than 90 days after the date of enactment of this Act, the Administrator of the Small Business Administration shall appoint an Associate Administrator for International Trade under section 22(a) of the Small Business Act (15 U.S.C. 649(a)), as added by this section.
1204.Duties of the Office of International Trade
(a)Amendments to section 22Section 22 of the Small Business Act (15 U.S.C. 649) is amended—
(1)by striking subsection (b) and inserting the following:

(b)Trade distribution networkThe Associate Administrator, working in close cooperation with the Secretary of Commerce, the United States Trade Representative, the Secretary of Agriculture, the Secretary of State, the President of the Export-Import Bank of the United States, the President of the Overseas Private Investment Corporation, Director of the United States Trade and Development Agency, and other relevant Federal agencies, small business development centers engaged in export promotion efforts, Export Assistance Centers, regional and district offices of the Administration, the small business community, and relevant State and local export promotion programs, shall—
(1)maintain a distribution network, using regional and district offices of the Administration, the small business development center network, networks of women's business centers, the Service Corps of Retired Executives authorized by section 8(b)(1), and Export Assistance Centers, for programs relating to—
(A)trade promotion;
(B)trade finance;
(C)trade adjustment assistance;
(D)trade remedy assistance; and
(E)trade data collection;
(2)aggressively market the programs described in paragraph (1) and disseminate information, including computerized marketing data, to small business concerns on exporting trends, market-specific growth, industry trends, and international prospects for exports;
(3)promote export assistance programs through the district and regional offices of the Administration, the small business development center network, Export Assistance Centers, the network of women's business centers, chapters of the Service Corps of Retired Executives, State and local export promotion programs, and partners in the private sector; and
(4)give preference in hiring or approving the transfer of any employee into the Office or to a position described in subsection (c)(9) to otherwise qualified applicants who are fluent in a language in addition to English, to—
(A)accompany small business concerns on foreign trade missions; and
(B)translate documents, interpret conversations, and facilitate multilingual transactions, including by providing referral lists for translation services, if required.;
(2)in subsection (c)—
(A)by striking (c) The Office and inserting the following:

(c)Promotion of sales opportunitiesThe Associate Administrator;
(B)by redesignating paragraphs (1) through (8) as paragraphs (2) through (9), respectively;
(C)by inserting before paragraph (2), as so redesignated, the following:

(1)establish annual goals for the Office relating to—
(A)enhancing the exporting capability of small business concerns and small manufacturers;
(B)facilitating technology transfers;
(C)enhancing programs and services to assist small business concerns and small manufacturers to compete effectively and efficiently in foreign markets;
(D)increasing the ability of small business concerns to access capital; and
(E)disseminating information concerning Federal, State, and private programs and initiatives;;
(D)in paragraph (2), as so redesignated, by striking mechanism for and all that follows through (D) assisting and inserting the following:
mechanism for—
(A)identifying subsectors of the small business community with strong export potential;
(B)identifying areas of demand in foreign markets;
(C)prescreening foreign buyers for commercial and credit purposes; and
(D)assisting;
(E)in paragraph (3), as so redesignated, by striking assist small businesses in the formation and utilization of and inserting assist small business concerns in forming and using;
(F)in paragraph (4), as so redesignated—
(i)by striking local and inserting district;
(ii)by striking existing;
(iii)by striking Small Business Development Center network and inserting small business development center network; and
(iv)by striking Small Business Development Center Program and inserting small business development center program;
(G)in paragraph (5), as so redesignated—
(i)in subparagraph (A), by striking Gross State Produce and inserting Gross State Product;
(ii)in subparagraph (B), by striking SIC each place it appears and inserting North American Industry Classification System; and
(iii)in subparagraph (C), by striking small businesses and inserting small business concerns;
(H)in paragraph (6), as so redesignated, by striking the period at the end and inserting a semicolon;
(I)in paragraph (7), as so redesignated—
(i)in the matter preceding subparagraph (A)—
(I)by inserting concerns after small business; and
(II)by striking current and inserting up to date;
(ii)in subparagraph (A), by striking Administration's regional offices and inserting regional and district offices of the Administration;
(iii)in subparagraph (B) by striking current;
(iv)in subparagraph (C), by striking current; and
(v)by striking small businesses each place that term appears and inserting small business concerns;
(J)in paragraph (8), as so redesignated, by striking and at the end;
(K)in paragraph (9), as so redesignated—
(i)in the matter preceding subparagraph (A)—
(I)by striking full-time export development specialists to each Administration regional office and assigning; and
(II)by striking person in each district office. Such specialists and inserting individual in each district office and providing each Administration regional office with a full-time export development specialist, who;
(ii)in subparagraph (B)—
(I)by striking current; and
(II)by striking with and inserting in;
(iii)in subparagraph (D)—
(I)by striking Administration personnel involved in granting and inserting personnel of the Administration involved in making; and
(II)by striking and at the end;
(iv)in subparagraph (E)—
(I)by striking small businesses' needs and inserting the needs of small business concerns; and
(II)by striking the period at the end and inserting a semicolon;
(v)by adding at the end the following:

(F)participate, jointly with employees of the Office, in an annual training program that focuses on current small business needs for exporting; and
(G)develop and conduct training programs for exporters and lenders, in cooperation with the Export Assistance Centers, the Department of Commerce, the Department of Agriculture, small business development centers, women's business centers, the Export-Import Bank of the United States, the Overseas Private Investment Corporation, and other relevant Federal agencies;; and
(vi)by striking small businesses each place that term appears and inserting small business concerns; and
(L)by adding at the end the following:

(10)make available on the website of the Administration the name and contact information of each individual described in paragraph (9);
(11)carry out a nationwide marketing effort using technology, online resources, training, and other strategies to promote exporting as a business development opportunity for small business concerns;
(12)disseminate information to the small business community through regional and district offices of the Administration, the small business development center network, Export Assistance Centers, the network of women's business centers, chapters of the Service Corps of Retired Executives authorized by section 8(b)(1), State and local export promotion programs, and partners in the private sector regarding exporting trends, market-specific growth, industry trends, and prospects for exporting; and
(13)establish and carry out training programs for the staff of the regional and district offices of the Administration and resource partners of the Administration on export promotion and providing assistance relating to exports.;
(3)in subsection (d)—
(A)by redesignating paragraphs (1) through (5) as clauses (i) through (v), respectively, and adjusting the margins accordingly;
(B)by striking (d) The Office and inserting the following:

(d)Export financing programs
(1)In generalThe Associate Administrator; and
(C)by striking To accomplish this goal, the Office shall work and inserting the following:

(2)Trade finance specialistTo accomplish the goal established under paragraph (1), the Associate Administrator shall—
(A)designate at least 1 individual within the Administration as a trade finance specialist to oversee international loan programs and assist Administration employees with trade finance issues; and
(B)work;
(4)in subsection (e), by striking (e) The Office and inserting the following:

(e)Trade RemediesThe Associate Administrator;
(5)by amending subsection (f) to read as follows:

(f)Reporting requirementThe Associate Administrator shall submit an annual report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives that contains—
(1)a description of the progress of the Office in implementing the requirements of this section;
(2)a detailed account of the results of export growth activities of the Administration, including the activities of each district and regional office of the Administration, based on the performance measures described in subsection (i);
(3)an estimate of the total number of jobs created or retained as a result of export assistance provided by the Administration and resource partners of the Administration;
(4)for any travel by the staff of the Office, the destination of such travel and the benefits to the Administration and to small business concerns resulting from such travel; and
(5)a description of the participation by the Office in trade negotiations.;
(6)in subsection (g), by striking (g) The Office and inserting the following:

(g)StudiesThe Associate Administrator; and
(7)by adding after subsection (h), as added by section 1203 of this subtitle, the following:

(i)Export and trade counseling
(1)DefinitionIn this subsection—
(A)the term lead small business development center means a small business development center that has received a grant from the Administration; and
(B)the term lead women's business center means a women's business center that has received a grant from the Administration.
(2)Certification programThe Administrator shall establish an export and trade counseling certification program to certify employees of lead small business development centers and lead women's business centers in providing export assistance to small business concerns.
(3)Number of certified employeesThe Administrator shall ensure that the number of employees of each lead small business development center who are certified in providing export assistance is not less than the lesser of—
(A)5; or
(B)10 percent of the total number of employees of the lead small business development center.
(4)Reimbursement for certification
(A)In generalSubject to the availability of appropriations, the Administrator shall reimburse a lead small business development center or a lead women's business center for costs relating to the certification of an employee of the lead small business center or lead women's business center in providing export assistance under the program established under paragraph (2).
(B)LimitationThe total amount reimbursed by the Administrator under subparagraph (A) may not exceed $350,000 in any fiscal year.
(j)Performance measures
(1)In generalThe Associate Administrator shall develop performance measures for the Administration to support export growth goals for the activities of the Office under this section that include—
(A)the number of small business concerns that—
(i)receive assistance from the Administration;
(ii)had not exported goods or services before receiving the assistance described in clause (i); and
(iii)export goods or services;
(B)the number of small business concerns receiving assistance from the Administration that export goods or services to a market outside the United States into which the small business concern did not export before receiving the assistance;
(C)export revenues by small business concerns assisted by programs of the Administration;
(D)the number of small business concerns referred to an Export Assistance Center or a small business development center by the staff of the Office;
(E)the number of small business concerns referred to the Administration by an Export Assistance Center or a small business development center; and
(F)the number of small business concerns referred to the Department of Commerce, the Department of Agriculture, the Department of State, the Export-Import Bank of the United States, the Overseas Private Investment Corporation, or the United States Trade and Development Agency by the staff of the Office, an Export Assistance Center, or a small business development center.
(2)Joint performance measuresThe Associate Administrator shall develop joint performance measures for the district offices of the Administration and the Export Assistance Centers that include the number of export loans made under—
(A)section 7(a)(16);
(B)the Export Working Capital Program established under section 7(a)(14);
(C)the Preferred Lenders Program, as defined in section 7(a)(2)(C)(ii); and
(D)the export express program established under section 7(a)(34).
(3)Consistency of trackingThe Associate Administrator, in coordination with the departments and agencies that are represented on the Trade Promotion Coordinating Committee established under section 2312 of the Export Enhancement Act of 1988 (15 U.S.C. 4727) and the small business development center network, shall develop a system to track exports by small business concerns, including information relating to the performance measures developed under paragraph (1), that is consistent with systems used by the departments and agencies and the network..
(b)ReportNot later than 60 days after the date of enactment of this Act, the Administrator shall submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives on any travel by the staff of the Office of International Trade of the Administration, during the period beginning on October 1, 2004, and ending on the date of enactment of the Act, including the destination of such travel and the benefits to the Administration and to small business concerns resulting from such travel.
1205.Export assistance centers
(a)Export assistance centersSection 22 of the Small Business Act (15 U.S.C. 649), as amended by this subtitle, is amended by adding at the end the following:

(k)Export assistance centers
(1)Export finance specialists
(A)Minimum number of export finance specialistsOn and after the date that is 90 days after the date of enactment of this subsection, the Administrator, in coordination with the Secretary of Commerce, shall ensure that the number of export finance specialists is not less than the number of such employees so assigned on January 1, 2003.
(B)Export finance specialists assigned to each region of the AdministrationOn and after the date that is 2 years after the date of enactment of this subsection, the Administrator, in coordination with the Secretary of Commerce, shall ensure that there are not fewer than 3 export finance specialists in each region of the Administration.
(2)Placement of export finance specialists
(A)PriorityThe Administrator shall give priority, to the maximum extent practicable, to placing employees of the Administration at any Export Assistance Center that—
(i)had an Administration employee assigned to the Export Assistance Center before January 2003; and
(ii)has not had an Administration employee assigned to the Export Assistance Center during the period beginning January 2003, and ending on the date of enactment of this subsection, either through retirement or reassignment.
(B)Needs of exportersThe Administrator shall, to the maximum extent practicable, strategically assign Administration employees to Export Assistance Centers, based on the needs of exporters.
(C)Rule of constructionNothing in this subsection may be construed to require the Administrator to reassign or remove an export finance specialist who is assigned to an Export Assistance Center on the date of enactment of this subsection.
(3)GoalsThe Associate Administrator shall work with the Department of Commerce, the Export-Import Bank of the United States, and the Overseas Private Investment Corporation to establish shared annual goals for the Export Assistance Centers.
(4)OversightThe Associate Administrator shall designate an individual within the Administration to oversee all activities conducted by Administration employees assigned to Export Assistance Centers.
(l)DefinitionsIn this section—
(1)the term Associate Administrator means the Associate Administrator for International Trade described in subsection (a)(2);
(2)the term Export Assistance Center means a one-stop shop for United States exporters established by the United States and Foreign Commercial Service of the Department of Commerce pursuant to section 2301(b)(8) of the Omnibus Trade and Competitiveness Act of 1988 (15 U.S.C. 4721(b)(8));
(3)the term export finance specialist means a full-time equivalent employee of the Office assigned to an Export Assistance Center to carry out the duties described in subsection (e); and
(4)the term Office means the Office of International Trade established under subsection (a)(1)..
(b)Study and report on filling gaps in high-and-Low-Export volume areas
(1)Study and reportNot later than 6 months after the date of enactment of this Act, and every 2 years thereafter, the Administrator shall—
(A)conduct a study of—
(i)the volume of exports for each State;
(ii)the availability of export finance specialists in each State;
(iii)the number of exporters in each State that are small business concerns;
(iv)the percentage of exporters in each State that are small business concerns;
(v)the change, if any, in the number of exporters that are small business concerns in each State—
(I)for the first study conducted under this subparagraph, during the 10-year period ending on the date of enactment of this Act; and
(II)for each subsequent study, during the 10-year period ending on the date the study is commenced;
(vi)the total value of the exports in each State by small business concerns;
(vii)the percentage of the total volume of exports in each State that is attributable to small business concerns; and
(viii)the change, if any, in the percentage of the total volume of exports in each State that is attributable to small business concerns—
(I)for the first study conducted under this subparagraph, during the 10-year period ending on the date of enactment of this Act; and
(II)for each subsequent study, during the 10-year period ending on the date the study is commenced; and
(B)submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report containing—
(i)the results of the study under subparagraph (A);
(ii)to the extent practicable, a recommendation regarding how to eliminate gaps between the supply of and demand for export finance specialists in the 15 States that have the greatest volume of exports, based upon the most recent data available from the Department of Commerce;
(iii)to the extent practicable, a recommendation regarding how to eliminate gaps between the supply of and demand for export finance specialists in the 15 States that have the lowest volume of exports, based upon the most recent data available from the Department of Commerce; and
(iv)such additional information as the Administrator determines is appropriate.
(2)DefinitionIn this subsection, the term export finance specialist has the meaning given that term in section 22(l) of the Small Business Act, as added by this title.
1206.International trade finance programs
(a)Loan limits
(1)Total amount outstandingSection 7(a)(3)(B) of the Small Business Act (15 U.S.C. 636(a)(3)(B)) is amended by striking $1,750,000, of which not more than $1,250,000 and inserting $4,500,000 (or if the gross loan amount would exceed $5,000,000), of which not more than $4,000,000.
(2)ParticipationSection 7(a)(2) of the Small Business Act (15 U.S.C. 636(a)(2)) is amended—
(A)in subparagraph (A), in the matter preceding clause (i), by striking subparagraph (B) and inserting subparagraphs (B), (D), and (E);
(B)in subparagraph (D), by striking Notwithstanding subparagraph (A), in and inserting In; and
(C)by adding at the end the following:

(E)Participation in international trade loanIn an agreement to participate in a loan on a deferred basis under paragraph (16), the participation by the Administration may not exceed 90 percent..
(b)Working capitalSection 7(a)(16)(A) of the Small Business Act (15 U.S.C. 636(a)(16)(A)) is amended—
(1)in the matter preceding clause (i), by striking in— and inserting —;
(2)in clause (i)—
(A)by inserting in after (i); and
(B)by striking or at the end;
(3)in clause (ii)—
(A)by inserting in after (ii); and
(B)by striking the period at the end and inserting , including any debt that qualifies for refinancing under any other provision of this subsection; or; and
(4)by adding at the end the following:

(iii)by providing working capital..
(c)CollateralSection 7(a)(16)(B) of the Small Business Act (15 U.S.C. 636(a)(16)(B)) is amended—
(1)by striking Each loan and inserting the following:

(i)In generalExcept as provided in clause (ii), each loan; and
(2)by adding at the end the following:

(ii)ExceptionA loan under this paragraph may be secured by a second lien position on the property or equipment financed by the loan or on other assets of the small business concern, if the Administrator determines the lien provides adequate assurance of the payment of the loan..
(d)Export working capital programSection 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended—
(1)in paragraph (2)(D), by striking not exceed and inserting be; and
(2)in paragraph (14)—
(A)by striking (A) The Administration and inserting the following: “Export working capital program.—

(A)In generalThe Administrator;
(B)by striking (B) When considering and inserting the following:

(C)ConsiderationsWhen considering;
(C)by striking (C) The Administration and inserting the following:

(D)MarketingThe Administrator; and
(D)by inserting after subparagraph (A) the following:

(B)Terms
(i)Loan amountThe Administrator may not guarantee a loan under this paragraph of more than $5,000,000.
(ii)Fees
(I)In generalFor a loan under this paragraph, the Administrator shall collect the fee assessed under paragraph (23) not more frequently than once each year.
(II)Untapped creditThe Administrator may not assess a fee on capital that is not accessed by the small business concern..
(e)Participation in Preferred Lenders ProgramSection 7(a)(2)(C) of the Small Business Act (15 U.S.C. 636(a)(2)(C)) is amended—
(1)by redesignating clause (ii) as clause (iii); and
(2)by inserting after clause (i) the following:

(ii)Export-Import Bank lendersAny lender that is participating in the Delegated Authority Lender Program of the Export-Import Bank of the United States (or any successor to the Program) shall be eligible to participate in the Preferred Lenders Program..
(f)Export Express ProgramSection 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by adding at the end the following:

(35)Export Express Program
(A)DefinitionsIn this paragraph—
(i)the term export development activity includes—
(I)obtaining a standby letter of credit when required as a bid bond, performance bond, or advance payment guarantee;
(II)participation in a trade show that takes place outside the United States;
(III)translation of product brochures or catalogues for use in markets outside the United States;
(IV)obtaining a general line of credit for export purposes;
(V)performing a service contract from buyers located outside the United States;
(VI)obtaining transaction-specific financing associated with completing export orders;
(VII)purchasing real estate or equipment to be used in the production of goods or services for export;
(VIII)providing term loans or other financing to enable a small business concern, including an export trading company and an export management company, to develop a market outside the United States; and
(IX)acquiring, constructing, renovating, modernizing, improving, or expanding a production facility or equipment to be used in the United States in the production of goods or services for export; and
(ii)the term express loan means a loan in which a lender uses to the maximum extent practicable the loan analyses, procedures, and documentation of the lender to provide expedited processing of the loan application.
(B)AuthorityThe Administrator may guarantee the timely payment of an express loan to a small business concern made for an export development activity.
(C)Level of participation
(i)Maximum amountThe maximum amount of an express loan guaranteed under this paragraph shall be $500,000.
(ii)PercentageFor an express loan guaranteed under this paragraph, the Administrator shall guarantee—
(I)90 percent of a loan that is not more than $350,000; and
(II)75 percent of a loan that is more than $350,000 and not more than $500,000..
(g)Annual listing of export finance lendersSection 7(a)(16) of the Small Business Act (15 U.S.C. 636(a)(16)) is amended by adding at the end the following:

(F)List of export finance lenders
(i)Publication of list requiredThe Administrator shall publish an annual list of the banks and participating lending institutions that, during the 1-year period ending on the date of publication of the list, have made loans guaranteed by the Administration under—
(I)this paragraph;
(II)paragraph (14); or
(III)paragraph (34).
(ii)Availability of listThe Administrator shall—
(I)post the list published under clause (i) on the website of the Administration; and
(II)make the list published under clause (i) available, upon request, at each district office of the Administration..
(h)ApplicabilityThe amendments made by subsections (a) through (f) shall apply with respect to any loan made after the date of enactment of this Act.
1207.State Trade and Export Promotion Grant Program
(a)DefinitionsIn this section—
(1)the term eligible small business concern means a small business concern that—
(A)has been in business for not less than the 1-year period ending on the date on which assistance is provided using a grant under this section;
(B)is operating profitably, based on operations in the United States;
(C)has demonstrated understanding of the costs associated with exporting and doing business with foreign purchasers, including the costs of freight forwarding, customs brokers, packing and shipping, as determined by the Associate Administrator; and
(D)has in effect a strategic plan for exporting;
(2)the term program means the State Trade and Export Promotion Grant Program established under subsection (b);
(3)the term small business concern owned and controlled by women has the meaning given that term in section 3 of the Small Business Act (15 U.S.C. 632);
(4)the term socially and economically disadvantaged small business concern has the meaning given that term in section 8(a)(4)(A) of the Small Business Act (15 U.S.C. 6537(a)(4)(A)); and
(5)the term State means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa.
(b)Establishment of programThe Associate Administrator shall establish a 3-year trade and export promotion pilot program to be known as the State Trade and Export Promotion Grant Program, to make grants to States to carry out export programs that assist eligible small business concerns in—
(1)participation in a foreign trade mission;
(2)a foreign market sales trip;
(3)a subscription to services provided by the Department of Commerce;
(4)the payment of website translation fees;
(5)the design of international marketing media;
(6)a trade show exhibition;
(7)participation in training workshops; or
(8)any other export initiative determined appropriate by the Associate Administrator.
(c)Grants
(1)Joint reviewIn carrying out the program, the Associate Administrator may make a grant to a State to increase the number of eligible small business concerns in the State that export or to increase the value of the exports by eligible small business concerns in the State.
(2)ConsiderationsIn making grants under this section, the Associate Administrator may give priority to an application by a State that proposes a program that—
(A)focuses on eligible small business concerns as part of an export promotion program;
(B)demonstrates success in promoting exports by—
(i)socially and economically disadvantaged small business concerns;
(ii)small business concerns owned or controlled by women; and
(iii)rural small business concerns;
(C)promotes exports from a State that is not 1 of the 10 States with the highest percentage of exporters that are small business concerns, based upon the latest data available from the Department of Commerce; and
(D)promotes new-to-market export opportunities to the People’s Republic of China for eligible small business concerns in the United States.
(3)Limitations
(A)Single applicationA State may not submit more than 1 application for a grant under the program in any 1 fiscal year.
(B)Proportion of amountsThe total value of grants under the program made during a fiscal year to the 10 States with the highest number of exporters that are small business concerns, based upon the latest data available from the Department of Commerce, shall be not more than 40 percent of the amounts appropriated for the program for that fiscal year.
(4)ApplicationA State desiring a grant under the program shall submit an application at such time, in such manner, and accompanied by such information as the Associate Administrator may establish.
(d)Competitive basisThe Associate Administrator shall award grants under the program on a competitive basis.
(e)Federal shareThe Federal share of the cost of an export program carried out using a grant under the program shall be—
(1)for a State that has a high export volume, as determined by the Associate Administrator, not more than 65 percent; and
(2)for a State that does not have a high export volume, as determined by the Associate Administrator, not more than 75 percent.
(f)Non-Federal ShareThe non-Federal share of the cost of an export program carried using a grant under the program shall be comprised of not less than 50 percent cash and not more than 50 percent of indirect costs and in-kind contributions, except that no such costs or contributions may be derived from funds from any other Federal program.
(g)Reports
(1)Initial reportNot later than 120 days after the date of enactment of this Act, the Associate Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report, which shall include—
(A)a description of the structure of and procedures for the program;
(B)a management plan for the program; and
(C)a description of the merit-based review process to be used in the program.
(2)Annual reportsThe Associate Administrator shall submit an annual report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives regarding the program, which shall include—
(A)the number and amount of grants made under the program during the preceding year;
(B)a list of the States receiving a grant under the program during the preceding year, including the activities being performed with grant; and
(C)the effect of each grant on exports by eligible small business concerns in the State receiving the grant.
(h)Reviews by inspector general
(1)In generalThe Inspector General of the Administration shall conduct a review of—
(A)the extent to which recipients of grants under the program are measuring the performance of the activities being conducted and the results of the measurements; and
(B)the overall management and effectiveness of the program.
(2)ReportNot later than September 30, 2012, the Inspector General of the Administration shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding the review conducted under paragraph (1).
(i)Authorization of appropriationsThere is authorized to be appropriated to carry out the program $30,000,000 for each of fiscal years 2011, 2012, and 2013.
(j)TerminationThe authority to carry out the program shall terminate 3 years after the date on which the Associate Administrator establishes the program.
1208.Rural export promotionNot later than 6 months after the date of enactment of this Act, the Administrator, in consultation with the Secretary of Agriculture and the Secretary of Commerce, shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report that contains—
(1)a description of each program of the Administration that promotes exports by rural small business concerns, including—
(A)the number of rural small business concerns served by the program;
(B)the change, if any, in the number of rural small business concerns as a result of participation in the program during the 10-year period ending on the date of enactment of this Act;
(C)the volume of exports by rural small business concerns that participate in the program; and
(D)the change, if any, in the volume of exports by rural small businesses that participate in the program during the 10-year period ending on the date of enactment of this Act;
(2)a description of the coordination between programs of the Administration and other Federal programs that promote exports by rural small business concerns;
(3)recommendations, if any, for improving the coordination described in paragraph (2);
(4)a description of any plan by the Administration to market the international trade financing programs of the Administration through lenders that—
(A)serve rural small business concerns; and
(B)are associated with financing programs of the Department of Agriculture;
(5)recommendations, if any, for improving coordination between the counseling programs and export financing programs of the Administration, in order to increase the volume of exports by rural small business concerns; and
(6)any additional information the Administrator determines is necessary.
1209.International trade cooperation by small business development centersSection 21(a) of the Small Business Act (15 U.S.C. 648(a)) is amended—
(1)by striking (2) The Small Business Development Centers and inserting the following:

(2)Cooperation to provide international trade services
(A)Information and servicesThe small business development centers; and
(2)in paragraph (2)—
(A)in subparagraph (A), as so designated, by inserting (including State trade agencies), after local agencies; and
(B)by adding at the end the following:

(B)Cooperation with State trade agencies and Export Assistance CentersA small business development center that counsels a small business concern on issues relating to international trade shall—
(i)consult with State trade agencies and Export Assistance Centers to provide appropriate services to the small business concern; and
(ii)as necessary, refer the small business concern to a State trade agency or an Export Assistance Center for further counseling or assistance.
(C)DefinitionIn this paragraph, the term Export Assistance Center has the same meaning as in section 22..
CSmall business contracting
IContract bundling
1311.Small Business ActSection 3 of the Small Business Act (15 U.S.C. 632), as amended by section 1202, is amended by adding at the end the following:

(v)Multiple award contractIn this Act, the term multiple award contract means—
(1)a multiple award task order contract or delivery order contract that is entered into under the authority of sections 303H through 303K of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253h through 253k); and
(2)any other indefinite delivery, indefinite quantity contract that is entered into by the head of a Federal agency with 2 or more sources pursuant to the same solicitation..
1312.Leadership and oversight
(a)In generalSection 15 of the Small Business Act (15 U.S.C. 644) is amended by adding at the end the following:

(q)Bundling Accountability Measures
(1)Teaming requirementsEach Federal agency shall include in each solicitation for any multiple award contract above the substantial bundling threshold of the Federal agency a provision soliciting bids from any responsible source, including responsible small business concerns and teams or joint ventures of small business concerns.
(2)Policies on Reduction of Contract Bundling
(A)In generalNot later than 1 year after the date of enactment of this subsection, the Federal Acquisition Regulatory Council established under section 25(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 4219(a)) shall amend the Federal Acquisition Regulation issued under section 25 of such Act to—
(i)establish a Government-wide policy regarding contract bundling, including regarding the solicitation of teaming and joint ventures under paragraph (1); and
(ii)require that the policy established under clause (i) be published on the website of each Federal agency.
(B)Rationale for contract bundlingNot later than 30 days after the date on which the head of a Federal agency submits data certifications to the Administrator for Federal Procurement Policy, the head of the Federal agency shall publish on the website of the Federal agency a list and rationale for any bundled contract for which the Federal agency solicited bids or that was awarded by the Federal agency.
(3)ReportingNot later than 90 days after the date of enactment of this subsection, and every 3 years thereafter, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding procurement center representatives and commercial market representatives, which shall—
(A)identify each area for which the Administration has assigned a procurement center representative or a commercial market representative;
(B)explain why the Administration selected the areas identified under subparagraph (A); and
(C)describe the activities performed by procurement center representatives and commercial market representatives..
(b)Technical correctionSection 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended by striking Administrator of the Office of Federal Procurement Policy each place it appears and inserting Administrator for Federal Procurement Policy.
(c)Report
(1)In generalNot later than 180 days after the date of enactment of this Act, the Comptroller General of the United States shall submit to Congress a report regarding the procurement center representative program of the Administration.
(2)ContentsThe report submitted under paragraph (1) shall—
(A)address ways to improve the effectiveness of the procurement center representative program in helping small business concerns obtain Federal contracts;
(B)evaluate the effectiveness of procurement center representatives and commercial marketing representatives; and
(C)include recommendations, if any, on how to improve the procurement center representative program.
(d)Electronic procurement center representative
(1)In generalNot later than 1 year after the date of enactment of this Act, the Administrator shall implement a 3-year pilot electronic procurement center representative program.
(2)ReportNot later than 30 days after the pilot program under paragraph (1) ends, the Comptroller General of the United States shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding the pilot program.
1313.Consolidation of contract requirements
(a)In generalThe Small Business Act (15 U.S.C. 631 et seq.) is amended—
(1)by redesignating section 44 as section 45; and
(2)by inserting after section 43 the following:

44.Consolidation of contract requirements
(a)DefinitionsIn this section—
(1)the term Chief Acquisition Officer means the employee of a Federal agency designated as the Chief Acquisition Officer for the Federal agency under section 16(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(a));
(2)the term consolidation of contract requirements, with respect to contract requirements of a Federal agency, means a use of a solicitation to obtain offers for a single contract or a multiple award contract to satisfy 2 or more requirements of the Federal agency for goods or services that have been provided to or performed for the Federal agency under 2 or more separate contracts lower in cost than the total cost of the contract for which the offers are solicited; and
(3)the term senior procurement executive means an official designated under section 16(c) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(c)) as the senior procurement executive for a Federal agency.
(b)PolicyThe head of each Federal agency shall ensure that the decisions made by the Federal agency regarding consolidation of contract requirements of the Federal agency are made with a view to providing small business concerns with appropriate opportunities to participate as prime contractors and subcontractors in the procurements of the Federal agency.
(c)Limitation on use of acquisition strategies involving consolidation
(1)In generalSubject to paragraph (4), the head of a Federal agency may not carry out an acquisition strategy that includes a consolidation of contract requirements of the Federal agency with a total value of more than $2,000,000, unless the senior procurement executive or Chief Acquisition Officer for the Federal agency, before carrying out the acquisition strategy—
(A)conducts market research;
(B)identifies any alternative contracting approaches that would involve a lesser degree of consolidation of contract requirements;
(C)makes a written determination that the consolidation of contract requirements is necessary and justified;
(D)identifies any negative impact by the acquisition strategy on contracting with small business concerns; and
(E)certifies to the head of the Federal agency that steps will be taken to include small business concerns in the acquisition strategy.
(2)Determination that consolidation is necessary and justified
(A)In generalA senior procurement executive or Chief Acquisition Officer may determine that an acquisition strategy involving a consolidation of contract requirements is necessary and justified for the purposes of paragraph (1)(C) if the benefits of the acquisition strategy substantially exceed the benefits of each of the possible alternative contracting approaches identified under paragraph (1)(B).
(B)Savings in administrative or personnel costsFor purposes of subparagraph (A), savings in administrative or personnel costs alone do not constitute a sufficient justification for a consolidation of contract requirements in a procurement unless the expected total amount of the cost savings, as determined by the senior procurement executive or Chief Acquisition Officer, is expected to be substantial in relation to the total cost of the procurement.
(3)Benefits to be consideredThe benefits considered for the purposes of paragraphs (1) and (2) may include cost and, regardless of whether quantifiable in dollar amounts—
(A)quality;
(B)acquisition cycle;
(C)terms and conditions; and
(D)any other benefit.
(4)Department of Defense
(A)In generalThe Department of Defense and each military department shall comply with this section until after the date described in subparagraph (C).
(B)RuleAfter the date described in subparagraph (C), contracting by the Department of Defense or a military department shall be conducted in accordance with section 2382 of title 10, United States Code.
(C)DateThe date described in this subparagraph is the date on which the Administrator determines the Department of Defense or a military department is in compliance with the Government-wide contracting goals under section 15..
(b)Technical and conforming amendmentSection 2382(b)(1) of title 10, United States Code, is amended by striking An official and inserting Subject to section 44(c)(4), an official.
1314.Small business teams pilot program
(a)DefinitionsIn this section—
(1)the term Pilot Program means the Small Business Teaming Pilot Program established under subsection (b); and
(2)the term eligible organization means a well-established national organization for small business concerns with the capacity to provide assistance to small business concerns (which may be provided with the assistance of the Administrator) relating to—
(A)customer relations and outreach;
(B)team relations and outreach; and
(C)performance measurement and quality assurance.
(b)EstablishmentThe Administrator shall establish a Small Business Teaming Pilot Program for teaming and joint ventures involving small business concerns.
(c)GrantsUnder the Pilot Program, the Administrator may make grants to eligible organizations to provide assistance and guidance to teams of small business concerns seeking to compete for larger procurement contracts.
(d)Contracting opportunitiesThe Administrator shall work with eligible organizations receiving a grant under the Pilot Program to recommend appropriate contracting opportunities for teams or joint ventures of small business concerns.
(e)ReportNot later than 1 year before the date on which the authority to carry out the Pilot Program terminates under subsection (f), the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the effectiveness of the Pilot Program.
(f)TerminationThe authority to carry out the Pilot Program shall terminate 5 years after the date of enactment of this Act.
(g)Authorization of appropriationsThere are authorized to be appropriated for grants under subsection (c) $5,000,000 for each of fiscal years 2010 through 2015.
IISubcontracting integrity
1321.Subcontracting misrepresentationsNot later than 1 year after the date of enactment of this Act, the Administrator, in consultation with the Administrator for Federal Procurement Policy, shall promulgate regulations relating to, and the Federal Acquisition Regulatory Council established under section 25(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(a)) shall amend the Federal Acquisition Regulation issued under section 25 of such Act to establish a policy on, subcontracting compliance relating to small business concerns, including assignment of compliance responsibilities between contracting offices, small business offices, and program offices and periodic oversight and review activities.
1322.Small business subcontracting improvementsSection 8(d)(6) of the Small Business Act (15 U.S.C. 637(d)(6)) is amended—
(1)in subparagraph (E), by striking and at the end;
(2)in subparagraph (F), by striking the period at the end and inserting ; and; and
(3)by adding at the end, the following:

(G)a representation that the offeror or bidder will—
(i)make a good faith effort to acquire articles, equipment, supplies, services, or materials, or obtain the performance of construction work from the small business concerns used in preparing and submitting to the contracting agency the bid or proposal, in the same amount and quality used in preparing and submitting the bid or proposal; and
(ii)provide to the contracting officer a written explanation if the offeror or bidder fails to acquire articles, equipment, supplies, services, or materials or obtain the performance of construction work as described in clause (i)..
IIIAcquisition process
1331.Reservation of prime contract awards for small businessesSection 15 of the Small Business Act (15 U.S.C. 644), as amended by this Act, is amended by adding at the end the following:

(r)Multiple award contractsNot later than 1 year after the date of enactment of this subsection, the Administrator for Federal Procurement Policy and the Administrator, in consultation with the Administrator of General Services, shall, by regulation, establish guidance under which Federal agencies may, at their discretion—
(1)set aside part or parts of a multiple award contract for small business concerns, including the subcategories of small business concerns identified in subsection (g)(2);
(2)notwithstanding the fair opportunity requirements under section 2304c(b) of title 10, United States Code, and section 303J(b) of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253j(b)), set aside orders placed against multiple award contracts for small business concerns, including the subcategories of small business concerns identified in subsection (g)(2); and
(3)reserve 1 or more contract awards for small business concerns under full and open multiple award procurements, including the subcategories of small business concerns identified in subsection (g)(2)..
1332.Micro-purchase guidelinesNot later than 1 year after the date of enactment of this Act, the Director of the Office of Management and Budget, in coordination with the Administrator of General Services, shall issue guidelines regarding the analysis of purchase card expenditures to identify opportunities for achieving and accurately measuring fair participation of small business concerns in purchases in an amount not in excess of the micro-purchase threshold, as defined in section 32 of the Office of Federal Procurement Policy Act (41 U.S.C. 428) (in this section referred to as micro-purchases), consistent with the national policy on small business participation in Federal procurements set forth in sections 2(a) and 15(g) of the Small Business Act (15 U.S.C. 631(a) and 644(g)), and dissemination of best practices for participation of small business concerns in micro-purchases.
1333.Agency accountabilitySection 15(g)(2) of the Small Business Act (15 U.S.C. 644(g)(2)) is amended—
(1)by inserting (A) after (2);
(2)by striking “Goals established” and inserting the following:

(B)Goals established;
(3)by striking Whenever and inserting the following:

(C)Whenever;
(4)by striking For the purpose of and inserting the following:

(D)For the purpose of;
(5)by striking The head of each Federal agency, in attempting to attain such participation and inserting the following:

(E)The head of each Federal agency, in attempting to attain the participation described in subparagraph (D).
(6)in subparagraph (E), as so designated—
(A)by striking (A) contracts and inserting (i) contracts; and
(B)by striking (B) contracts and inserting (ii) contracts; and
(7)by adding at the end the following:

(F)
(i)Each procurement employee or program manager described in clause (ii) shall communicate to the subordinates of the procurement employee or program manager the importance of achieving small business goals.
(ii)A procurement employee or program manager described in this clause is a senior procurement executive, senior program manager, or Director of Small and Disadvantaged Business Utilization of a Federal agency having contracting authority. .
1334.Payment of subcontractorsSection 8(d) of the Small Business Act (15 U.S.C. 637(d)) is amended by adding at the end the following:

(12)Payment of subcontractors
(A)DefinitionIn this paragraph, the term covered contract means a contract relating to which a prime contractor is required to develop a subcontracting plan under paragraph (4) or (5).
(B)Notice
(i)In generalA prime contractor for a covered contract shall notify in writing the contracting officer for the covered contract if the prime contractor pays a reduced price to a subcontractor for goods and services upon completion of the responsibilities of the subcontractor or the payment to a subcontractor is more than 90 days past due for goods or services provided for the covered contract for which the Federal agency has paid the prime contractor.
(ii)ContentsA prime contractor shall include the reason for the reduction in a payment to or failure to pay a subcontractor in any notice made under clause (i).
(C)PerformanceA contracting officer for a covered contract shall consider the unjustified failure by a prime contractor to make a full or timely payment to a subcontractor in evaluating the performance of the prime contractor.
(D)Control of fundsIf the contracting officer for a covered contract determines that a prime contractor has a history of unjustified, untimely payments to contractors, the contracting officer shall record the identity of the contractor in accordance with the regulations promulgated under subparagraph (E).
(E)RegulationsNot later than 1 year after the date of enactment of this paragraph, the Federal Acquisition Regulatory Council established under section 25(a) of the Office of Federal Procurement Policy Act (41 U.S.C. 421(a)) shall amend the Federal Acquisition Regulation issued under section 25 of such Act to—
(i)describe the circumstances under which a contractor may be determined to have a history of unjustified, untimely payments to subcontractors;
(ii)establish a process for contracting officers to record the identity of a contractor described in clause (i); and
(iii)require the identity of a contractor described in clause (i) to be incorporated in, and made publicly available through, the Federal Awardee Performance and Integrity Information System, or any successor thereto..
1335.Repeal of Small Business Competitiveness Demonstration Program
(a)In generalThe Business Opportunity Development Reform Act of 1988 (Public Law 100–656) is amended by striking title VII (15 U.S.C. 644 note).
(b)Effective date and applicabilityThe amendment made by this section—
(1)shall take effect on the date of enactment of this Act; and
(2)apply to the first full fiscal year after the date of enactment of this Act.
IVSmall business size and status integrity
1341.Policy and presumptionsSection 3 of the Small Business Act (15 U.S.C. 632), as amended by section 1311, is amended by adding at the end the following:

(w)Presumption
(1)In generalIn every contract, subcontract, cooperative agreement, cooperative research and development agreement, or grant which is set aside, reserved, or otherwise classified as intended for award to small business concerns, there shall be a presumption of loss to the United States based on the total amount expended on the contract, subcontract, cooperative agreement, cooperative research and development agreement, or grant whenever it is established that a business concern other than a small business concern willfully sought and received the award by misrepresentation.
(2)Deemed certificationsThe following actions shall be deemed affirmative, willful, and intentional certifications of small business size and status:
(A)Submission of a bid or proposal for a Federal grant, contract, subcontract, cooperative agreement, or cooperative research and development agreement reserved, set aside, or otherwise classified as intended for award to small business concerns.
(B)Submission of a bid or proposal for a Federal grant, contract, subcontract, cooperative agreement, or cooperative research and development agreement which in any way encourages a Federal agency to classify the bid or proposal, if awarded, as an award to a small business concern.
(C)Registration on any Federal electronic database for the purpose of being considered for award of a Federal grant, contract, subcontract, cooperative agreement, or cooperative research agreement, as a small business concern.
(3)Certification by signature of responsible official
(A)In generalEach solicitation, bid, or application for a Federal contract, subcontract, or grant shall contain a certification concerning the small business size and status of a business concern seeking the Federal contract, subcontract, or grant.
(B)Content of certificationsA certification that a business concern qualifies as a small business concern of the exact size and status claimed by the business concern for purposes of bidding on a Federal contract or subcontract, or applying for a Federal grant, shall contain the signature of an authorized official on the same page on which the certification is contained.
(4)RegulationsThe Administrator shall promulgate regulations to provide adequate protections to individuals and business concerns from liability under this subsection in cases of unintentional errors, technical malfunctions, and other similar situations..
1342.Annual certificationSection 3 of the Small Business Act (15 U.S.C. 632), as amended by section 1341, is amended by adding at the end the following:

(x)Annual certification
(1)In generalEach business certified as a small business concern under this Act shall annually certify its small business size and, if appropriate, its small business status, by means of a confirming entry on the Online Representations and Certifications Application database of the Administration, or any successor thereto.
(2)RegulationsNot later than 1 year after the date of enactment of this subsection, the Administrator, in consultation with the Inspector General and the Chief Counsel for Advocacy of the Administration, shall promulgate regulations to ensure that—
(A)no business concern continues to be certified as a small business concern on the Online Representations and Certifications Application database of the Administration, or any successor thereto, without fulfilling the requirements for annual certification under this subsection; and
(B)the requirements of this subsection are implemented in a manner presenting the least possible regulatory burden on small business concerns..
1343.Training for contracting and enforcement personnel
(a)In generalNot later than 1 year after the date of enactment of this Act, the Federal Acquisition Institute, in consultation with the Administrator for Federal Procurement Policy, the Defense Acquisition University, and the Administrator, shall develop courses for acquisition personnel concerning proper classification of business concerns and small business size and status for purposes of Federal contracts, subcontracts, grants, cooperative agreements, and cooperative research and development agreements.
(b)Policy on prosecutions of small business size and status fraudSection 3 of the Small Business Act (15 U.S.C. 632), as amended by section 1342, is amended by adding at the end the following:

(y)Policy on prosecutions of small business size and status fraudNot later than 1 year after the date of enactment of this subsection, the Administrator, in consultation with the Attorney General, shall issue a Government-wide policy on prosecution of small business size and status fraud, which shall direct Federal agencies to appropriately publicize the policy..
1344.Updated size standards
(a)Rolling review
(1)In generalThe Administrator shall—
(A)during the 18-month period beginning on the date of enactment of this Act, and during every 18-month period thereafter, conduct a detailed review of not less than 1/3 of the size standards for small business concerns established under section 3(a)(2) of the Small Business Act (15 U.S.C. 632(a)(2)), which shall include holding not less than 2 public forums located in different geographic regions of the United States;
(B)after completing each review under subparagraph (A) make appropriate adjustments to the size standards established under section 3(a)(2) of the Small Business Act to reflect market conditions;
(C)make publicly available—
(i)information regarding the factors evaluated as part of each review conducted under subparagraph (A); and
(ii)information regarding the criteria used for any revised size standards promulgated under subparagraph (B); and
(D)not later than 30 days after the date on which the Administrator completes each review under subparagraph (A), submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives and make publicly available a report regarding the review, including why the Administrator—
(i)used the factors and criteria described in subparagraph (C); and
(ii)adjusted or did not adjust each size standard that was reviewed under the review.
(2)Complete review of size standardsThe Administrator shall ensure that each size standard for small business concerns established under section 3(a)(2) of the Small Business Act (15 U.S.C. 632(a)(2)) is reviewed under paragraph (1) not less frequently than once every 5 years.
(b)RulesNot later than 1 year after the date of enactment of this Act, the Administrator shall promulgate rules for conducting the reviews required under subsection (a).
1345.Study and report on the mentor-protege program
(a)In generalThe Comptroller General of the United States shall conduct a study of the mentor-protege program of the Administration for small business concerns participating in programs under section 8(a) of the Small Business Act (15 U.S.C. 637(a)), and other relationships and strategic alliances pairing a larger business and a small business concern partner to gain access to Federal Government contracts, to determine whether the programs and relationships are effectively supporting the goal of increasing the participation of small business concerns in Government contracting.
(b)Matters To Be studiedThe study conducted under this section shall include—
(1)a review of a broad cross-section of industries; and
(2)an evaluation of—
(A)how each Federal agency carrying out a program described in subsection (a) administers and monitors the program;
(B)whether there are systems in place to ensure that the mentor-protege relationship, or similar affiliation, promotes real gain to the protege, and is not just a mechanism to enable participants that would not otherwise qualify under section 8(a) of the Small Business Act (15 U.S.C. 637(a)) to receive contracts under that section; and
(C)the degree to which protege businesses become able to compete for Federal contracts without the assistance of a mentor.
(c)Report to CongressNot later than 180 days after the date of enactment of this Act, the Comptroller General shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the results of the study conducted under this section.
1346.Contracting goals reportsSection 15(h)(2) of the Small Business Act (15 U.S.C. 644(h)(2)) is amended by striking submit them and all that follows through the following: and inserting submit to the President and the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives the compilation and analysis, which shall include the following:.
1347.Small business contracting parity
(a)DefinitionsIn this section—
(1)the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively; and
(2)the terms HUBZone small business concern, small business concern , small business concern owned and controlled by service-disabled veterans, and small business concern owned and controlled by women have the same meanings as in section 3 of the Small Business Act (15 U.S.C. 632).
(b)Contracting improvements
(1)Contracting opportunitiesSection 31(b)(2)(B) of the Small Business Act (15 U.S.C. 657a(b)(2)(B)) is amended by striking shall and inserting may.
(2)Contracting goalsSection 15(g)(1) of the Small Business Act (15 U.S.C. 644(g)(1)) is amended in the fourth sentence by inserting and subcontract after not less than 3 percent of the total value of all prime contract.
(3)Mentor-protege programsThe Administrator may establish mentor-protege programs for small business concerns owned and controlled by service-disabled veterans, small business concerns owned and controlled by women, and HUBZone small business concerns modeled on the mentor-protege program of the Administration for small business concerns participating in programs under section 8(a) of the Small Business Act (15 U.S.C. 637(a)).
(c)Small business contracting programs paritySection 31(b)(2) of the Small Business Act (15 U.S.C. 657a(b)(2)) is amended—
(1)in the matter preceding subparagraph (A), by striking Notwithstanding any other provision of law—;
(2)in subparagraph (A)—
(A)in the matter preceding clause (i), by striking a contracting and inserting Sole source contracts.—A contracting; and
(B)in clause (iii), by striking the semicolon at the end and inserting a period;
(3)in subparagraph (B)—
(A)by striking a contract opportunity shall and inserting Restricted competition.—A contract opportunity may; and
(B)by striking ; and and inserting a period; and
(4)in subparagraph (C), by striking not later and inserting Appeals.—Not later.
DSmall business management and counseling assistance
1401.Matching requirements under small business programs
(a)Microloan programSection 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended—
(1)in paragraph (3)(B)—
(A)by striking As a condition and inserting the following:

(i)In generalSubject to clause (ii), as a condition;
(B)by striking the Administration and inserting the Administrator; and
(C)by adding at the end the following:

(ii)Waiver of non-Federal share
(I)In generalUpon request by an intermediary, and in accordance with this clause, the Administrator may waive, in whole or in part, the requirement to obtain non-Federal funds under clause (i) for a fiscal year. The Administrator may waive the requirement to obtain non-Federal funds under this clause for successive fiscal years.
(II)ConsiderationsIn determining whether to waive the requirement to obtain non-Federal funds under this clause, the Administrator shall consider—
(aa)the economic conditions affecting the intermediary;
(bb)the impact a waiver under this clause would have on the credibility of the microloan program under this subsection;
(cc)the demonstrated ability of the intermediary to raise non-Federal funds; and
(dd)the performance of the intermediary.
(III)Limitations
(aa)In generalThe Administrator may not waive the requirement to obtain non-Federal funds under this clause if granting the waiver would undermine the credibility of the microloan program under this subsection.
(bb)SunsetThe Administrator may not waive the requirement to obtain non-Federal funds under this clause for fiscal year 2013 or any fiscal year thereafter.; and
(2)in paragraph (4)(B)—
(A)by striking As a condition and all that follows through the Administration shall require and inserting the following:

(i)In generalSubject to clause (ii), as a condition of a grant made under subparagraph (A), the Administrator shall require; and
(B)by adding at the end the following:

(ii)Waiver of non-Federal share
(I)In generalUpon request by an intermediary, and in accordance with this clause, the Administrator may waive, in whole or in part, the requirement to obtain non-Federal funds under clause (i) for a fiscal year. The Administrator may waive the requirement to obtain non-Federal funds under this clause for successive fiscal years.
(II)ConsiderationsIn determining whether to waive the requirement to obtain non-Federal funds under this clause, the Administrator shall consider—
(aa)the economic conditions affecting the intermediary;
(bb)the impact a waiver under this clause would have on the credibility of the microloan program under this subsection;
(cc)the demonstrated ability of the intermediary to raise non-Federal funds; and
(dd)the performance of the intermediary.
(III)Limitations
(aa)In generalThe Administrator may not waive the requirement to obtain non-Federal funds under this clause if granting the waiver would undermine the credibility of the microloan program under this subsection.
(bb)SunsetThe Administrator may not waive the requirement to obtain non-Federal funds under this clause for fiscal year 2013 or any fiscal year thereafter..
(b)Women's business center programSection 29(c) of the Small Business Act (15 U.S.C. 656(c)) is amended—
(1)in paragraph (1), by striking As a condition and inserting Subject to paragraph (5), as a condition; and
(2)by adding at the end the following:

(5)Waiver of non-Federal share relating to technical assistance and counseling
(A)In generalUpon request by a recipient organization, and in accordance with this paragraph, the Administrator may waive, in whole or in part, the requirement to obtain non-Federal funds under this subsection for the technical assistance and counseling activities of the recipient organization carried out using financial assistance under this section for a fiscal year. The Administrator may waive the requirement to obtain non-Federal funds under this paragraph for successive fiscal years.
(B)ConsiderationsIn determining whether to waive the requirement to obtain non-Federal funds under this paragraph, the Administrator shall consider—
(i)the economic conditions affecting the recipient organization;
(ii)the impact a waiver under this clause would have on the credibility of the women's business center program under this section;
(iii)the demonstrated ability of the recipient organization to raise non-Federal funds; and
(iv)the performance of the recipient organization.
(C)Limitations
(i)In generalThe Administrator may not waive the requirement to obtain non-Federal funds under this paragraph if granting the waiver would undermine the credibility of the women's business center program under this section.
(ii)SunsetThe Administrator may not waive the requirement to obtain non-Federal funds under this paragraph for fiscal year 2013 or any fiscal year thereafter..
(c)Prospective repealsEffective October 1, 2012, the Small Business Act (15 U.S.C. 631 et seq.) is amended—
(1)in section 7(m) (15 U.S.C. 636(m))—
(A)in paragraph (3)(B)—
(i)by striking Intermediary contribution.— and all that follows through Subject to clause (ii), as and inserting Intermediary contribution.—As; and
(ii)by striking clause (ii); and
(B)in paragraph (4)(B)—
(i)by striking Contribution.— and all that follows through Subject to clause (ii), as and inserting Contribution.—As; and
(ii)by striking clause (ii); and
(2)in section 29(c) (15 U.S.C. 656(c))—
(A)in paragraph (1), by striking Subject to paragraph (5), as and inserting As; and
(B)by striking paragraph (5).
1402.Grants for SBDCs
(a)In generalThe Administrator may make grants to small business development centers under section 21 of the Small Business Act (15 U.S.C. 648) to provide targeted technical assistance to small business concerns seeking access to capital or credit, Federal procurement opportunities, energy efficiency audits to reduce energy bills, opportunities to export products or provide services to foreign customers, adopting, making innovations in, and using broadband technologies, or other assistance.
(b)Allocation
(1)In generalSubject to paragraph (2), and notwithstanding the requirements of section 21(a)(4)(C)(iii) of the Small Business Act (15 U.S.C. 648(a)(4)(C)(iii)), the amount appropriated to carry out this section shall be allocated under the formula under section 21(a)(4)(C)(i) of that Act.
(2)Minimum fundingThe amount made available under this section to each State shall be not less than $325,000.
(3)Types of usesOf the total amount of the grants awarded by the Administrator under this section—
(A)not less than 80 percent shall be used for counseling of small business concerns; and
(B)not more than 20 percent may be used for classes or seminars.
(c)No non-Federal share requiredNotwithstanding section 21(a)(4)(A) of the Small Business Act (15 U.S.C. 648(a)(4)(A)), the recipient of a grant made under this section shall not be required to provide non-Federal matching funds.
(d)DistributionNot later than 30 days after the date on which amounts are appropriated to carry out this section, the Administrator shall disburse the total amount appropriated.
(e)Authorization of appropriationsThere is authorized to be appropriated to the Administrator $50,000,000 to carry out this section.
EDisaster loan improvement
1501.Aquaculture business disaster assistanceSection 3 of the Small Business Act (15 U.S.C. 632), as amended by section 1343, is amended by adding at the end the following:

(z)Aquaculture business disaster assistanceSubject to section 18(a) and notwithstanding section 18(b)(1), the Administrator may provide disaster assistance under section 7(b)(2) to aquaculture enterprises that are small businesses..
FSmall Business Regulatory Relief
1601.Requirements providing for more detailed analysesSection 604(a) of title 5, United States Code, is amended—
(1)in paragraph (1), by striking succinct;
(2)in paragraph (2), by striking summary each place it appears and inserting statement;
(3)by redesignating paragraphs (3), (4), and (5) as paragraphs (4), (5), and (6), respectively; and
(4)by inserting after paragraph (2) the following:

(3)the response of the agency to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the proposed rule, and a detailed statement of any change made to the proposed rule in the final rule as a result of the comments;.
1602.Office of advocacy
(a)In GeneralSection 203 of Public Law 94–305 (15 U.S.C. 634c) is amended—
(1)in paragraph (4), by striking and at the end;
(2)in paragraph (5), by striking the period and inserting ; and; and
(3)by adding at the end the following:

(6)carry out the responsibilities of the Office of Advocacy under chapter 6 of title 5, United States Code..
(b)Budgetary Line Item and Authorization of AppropriationsTitle II of Public Law 94–305 (15 U.S.C. 634a et seq.) is amended by striking section 207 and inserting the following:

207.Budgetary line item and authorization of appropriations
(a)Appropriation RequestsEach budget of the United States Government submitted by the President under section 1105 of title 31, United States Code, shall include a separate statement of the amount of appropriations requested for the Office of Advocacy of the Small Business Administration, which shall be designated in a separate account in the General Fund of the Treasury.
(b)Administrative OperationsThe Administrator of the Small Business Administration shall provide the Office of Advocacy with appropriate and adequate office space at central and field office locations, together with such equipment, operating budget, and communications facilities and services as may be necessary, and shall provide necessary maintenance services for such offices and the equipment and facilities located in such offices.
(c)Authorization of AppropriationsThere are authorized to be appropriated such sums as are necessary to carry out this title. Any amount appropriated under this subsection shall remain available, without fiscal year limitation, until expended..
GAppropriations provisions
1701.Salaries and expenses
(a)AppropriationThere is appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2010, $150,000,000, to remain available until September 30, 2012, for an additional amount for the appropriations account appropriated under the heading salaries and expenses under the heading Small Business Administration, of which—
(1)$50,000,000 is for grants to small business development centers authorized under section 1402;
(2)$1,000,000 is for the costs of administering grants authorized under section 1402;
(3)$30,000,000 is for grants to States for fiscal year 2011 to carry out export programs that assist small business concerns authorized under section 1207;
(4)$30,000,000 is for grants to States for fiscal year 2012 to carry out export programs that assist small business concerns authorized under section 1207;
(5)$2,500,000 is for the costs of administering grants authorized under section 1207;
(6)$5,000,000 is for grants for fiscal year 2011 under the Small Business Teaming Pilot Program under section 1314; and
(7)$5,000,000 is for grants for fiscal year 2012 under the Small Business Teaming Pilot Program under section 1314.
(b)ReportNot later than 60 days after the date of enactment of this Act, the Administrator shall submit to the Committee on Appropriations of the Senate and the Committee on Appropriations of the House of Representatives a detailed expenditure plan for using the funds provided under subsection (a).
1702.Business loans program account
(a)In generalThere is appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2010, for an additional amount for the appropriations account appropriated under the heading business loans program account under the heading Small Business Administration—
(1)$8,000,000, to remain available until September 30, 2012, for fiscal year 2011 for the cost of direct loans authorized under section 7(l) of the Small Business Act, as added by section 1131 of this title, including the cost of modifying the loans;
(2)$8,000,000, to remain available until September 30, 2012, for fiscal year 2012 for the cost of direct loans authorized under section 7(l) of the Small Business Act, as added by section 1131 of this title, including the cost of modifying the loans;
(3)$6,500,000, to remain available until September 30, 2012, for administrative expenses to carry out the direct loan program authorized under section 7(l) of the Small Business Act, as added by section 1131 of this title, which may be transferred to and merged with the appropriations account appropriated under the heading salaries and expenses under the heading Small Business Administration; and
(4)$15,000,000, to remain available until September 30, 2011, for the cost of guaranteed loans as authorized under section 7(a) of the Small Business Act, including the cost of modifying the loans.
(b)DefinitionIn this section, the term cost has the meaning given that term in section 502 of the Congressional Budget Act of 1974.
1703.Community Development Financial Institutions Fund program accountThere is appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2010, for an additional amount for the appropriations account appropriated under the heading Community Development Financial Institutions Fund program account under the heading DEPARTMENT OF THE TREASURY, $13,500,000, to remain available until September 30, 2012, for the costs of administering guarantees for bonds and notes as authorized under section 114A of the Riegle Community Development and Regulatory Improvement Act of 1994, as added by section 1134 of this Act.
1704.Small business loan guarantee enhancement extensions
(a)Extension of programs
(1)In generalThere is appropriated, out of any funds in the Treasury not otherwise appropriated, for an additional amount for Small Business Administration—Business Loans Program Account, $505,000,000, to remain available through December 31, 2010, for the cost of—
(A)fee reductions and eliminations under section 501 of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5; 123 Stat. 151), as amended by this Act; and
(B)loan guarantees under section 502 of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5; 123 Stat. 152), as amended by this Act.
(2)CostFor purposes of this subsection, the term cost has the same meaning as in section 502 of the Congressional Budget Act of 1974 (2 U.S.C. 661a).
(b)Administrative expensesThere is appropriated for an additional amount, out of any funds in the Treasury not otherwise appropriated, for administrative expenses to carry out sections 501 and 502 of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5), $5,000,000, to remain available until expended, which may be transferred and merged with the appropriation for Small Business Administration—Salaries and Expenses.
IITax provisions
2001.Short titleThis title may be cited as the Creating Small Business Jobs Act of 2010.
ASmall business relief
IProviding access to capital
2011.Temporary exclusion of 100 percent of gain on certain small business stock
(a)In generalSubsection (a) of section 1202 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(4)100 percent exclusion for stock acquired during certain periods in 2010In the case of qualified small business stock acquired after the date of the enactment of the Creating Small Business Jobs Act of 2010 and before January 1, 2011—
(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 amendmentParagraph (3) of section 1202(a) of the Internal Revenue Code of 1986 is amended—
(1)by inserting certain periods in before 2010 in the heading, and
(2)by striking before January 1, 2011 and inserting on or before the date of the enactment of the Creating Small Business Jobs Act of 2010.
(c)Effective dateThe amendments made by this section shall apply to stock acquired after the date of the enactment of this Act.
2012.General business credits of eligible small businesses for 2010 carried back 5 years
(a)In generalSection 39(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(4)5-year carryback for eligible small business credits
(A)In generalNotwithstanding subsection (d), in the case of eligible small business credits determined in the first taxable year of the taxpayer beginning in 2010—
(i)paragraph (1) shall be applied by substituting each of the 5 taxable years for the taxable year in subparagraph (A) thereof, and
(ii)paragraph (2) shall be applied—
(I)by substituting 25 taxable years for 21 taxable years in subparagraph (A) thereof, and
(II)by substituting 24 taxable years for 20 taxable years in subparagraph (B) thereof.
(B)Eligible small business creditsFor purposes of this subsection, the term eligible small business credits has the meaning given such term by section 38(c)(5)(B)..
(b)Conforming amendmentSection 39(a)(3)(A) of the Internal Revenue Code of 1986 is amended by inserting or the eligible small business credits after credit).
(c)Effective dateThe amendments made by this section shall apply to credits determined in taxable years beginning after December 31, 2009.
2013.General business credits of eligible small businesses in 2010 not subject to alternative minimum tax
(a)In generalSection 38(c) of the Internal Revenue Code of 1986 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:

(5)Special rules for eligible small business credits in 2010
(A)In generalIn the case of eligible small business credits determined in taxable years beginning in 2010—
(i)this section and section 39 shall be applied separately with respect to such credits, and
(ii)in applying paragraph (1) to such credits—
(I)the tentative minimum tax shall be treated as being zero, and
(II)the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the eligible small business credits).
(B)Eligible small business creditsFor purposes of this subsection, the term eligible small business credits means the sum of the credits listed in subsection (b) which are determined for the taxable year with respect to an eligible small business. Such credits shall not be taken into account under paragraph (2), (3), or (4).
(C)Eligible small businessFor purposes of this subsection, the term eligible small business means, with respect to any taxable year—
(i)a corporation the stock of which is not publicly traded,
(ii)a partnership, or
(iii)a sole proprietorship,if the average annual gross receipts of such corporation, partnership, or sole proprietorship for the 3-taxable-year period preceding such taxable year does not exceed $50,000,000. For purposes of applying the test under the preceding sentence, rules similar to the rules of paragraphs (2) and (3) of section 448(c) shall apply.
(D)Treatment of partners and S corporation shareholdersCredits determined with respect to a partnership or S corporation shall not be treated as eligible small business credits by any partner or shareholder unless such partner or shareholder meets the gross receipts test under subparagraph (C) for the taxable year in which such credits are treated as current year business credits..
(b)Technical amendmentSection 55(e)(5) of the Internal Revenue Code of 1986 is amended by striking 38(c)(3)(B) and inserting 38(c)(6)(B).
(c)Conforming amendments
(1)Subclause (II) of section 38(c)(2)(A)(ii) of the Internal Revenue Code of 1986 is amended by inserting the eligible small business credits, after the New York Liberty Zone business employee credit,.
(2)Subclause (II) of section 38(c)(3)(A)(ii) of such Code is amended by inserting , the eligible small business credits, after the New York Liberty Zone business employee credit.
(3)Subclause (II) of section 38(c)(4)(A)(ii) of such Code is amended by inserting the eligible small business credits and before the specified credits.
(d)Effective dateThe amendments made by subsection (a) shall apply to credits determined in taxable years beginning after December 31, 2009, and to carrybacks of such credits.
2014.Temporary reduction in recognition period for built-in gains tax
(a)In generalSubparagraph (B) of section 1374(d)(7) of the Internal Revenue Code of 1986 is amended to read as follows:

(B)Special rules for 2009, 2010, and 2011No tax shall be imposed on the net recognized built-in gain of an S corporation—
(i)in the case of any taxable year beginning in 2009 or 2010, if the 7th taxable year in the recognition period preceded such taxable year, or
(ii)in the case of any taxable year beginning in 2011, if the 5th year in the recognition period preceded such taxable year.The preceding sentence shall be applied separately with respect to any asset to which paragraph (8) applies..
(b)Effective dateThe amendment made by this section shall apply to taxable years beginning after December 31, 2010.
IIEncouraging investment
2021.Increased expensing limitations for 2010 and 2011; certain real property treated as section 179 property
(a)Increased limitationsSubsection (b) of section 179 of the Internal Revenue Code of 1986 is amended—
(1)by striking shall not exceed and all that follows in paragraph (1) and inserting “shall not exceed—

(A)$250,000 in the case of taxable years beginning after 2007 and before 2010,
(B)$500,000 in the case of taxable years beginning in 2010 or 2011, and
(C)$25,000 in the case of taxable years beginning after 2011., and
(2)by striking exceeds and all that follows in paragraph (2) and inserting “exceeds—

(A)$800,000 in the case of taxable years beginning after 2007 and before 2010,
(B)$2,000,000 in the case of taxable years beginning in 2010 or 2011, and
(C)$200,000 in the case of taxable years beginning after 2011..
(b)Inclusion of certain real propertySection 179 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(f)Special rules for qualified real property
(1)In generalIf a taxpayer elects the application of this subsection for any taxable year beginning in 2010 or 2011, the term section 179 property shall include any qualified real property which is—
(A)of a character subject to an allowance for depreciation,
(B)acquired by purchase for use in the active conduct of a trade or business, and
(C)not described in the last sentence of subsection (d)(1).
(2)Qualified real propertyFor purposes of this subsection, the term qualified real property means—
(A)qualified leasehold improvement property described in section 168(e)(6),
(B)qualified restaurant property described in section 168(e)(7) (without regard to the dates specified in subparagraph (A)(i) thereof), and
(C)qualified retail improvement property described in section 168(e)(8) (without regard to subparagraph (E) thereof).
(3)LimitationFor purposes of applying the limitation under subsection (b)(1)(B), not more than $250,000 of the aggregate cost which is taken into account under subsection (a) for any taxable year may be attributable to qualified real property.
(4)Carryover limitation
(A)In generalNotwithstanding subsection (b)(3)(B), no amount attributable to qualified real property may be carried over to a taxable year beginning after 2011.
(B)Treatment of disallowed amountsExcept as provided in subparagraph (C), to the extent that any amount is not allowed to be carried over to a taxable year beginning after 2011 by reason of subparagraph (A), this title shall be applied as if no election under this section had been made with respect to such amount.
(C)Amounts carried over from 2010If subparagraph (B) applies to any amount (or portion of an amount) which is carried over from a taxable year other than the taxpayer's last taxable year beginning in 2011, such amount (or portion of an amount) shall be treated for purposes of this title as attributable to property placed in service on the first day of the taxpayer's last taxable year beginning in 2011.
(D)Allocation of amountsFor purposes of applying this paragraph and subsection (b)(3)(B) to any taxable year, the amount which is disallowed under subsection (b)(3)(A) for such taxable year which is attributed to qualified real property shall be the amount which bears the same ratio to the total amount so disallowed as—
(i)the aggregate amount attributable to qualified real property placed in service during such taxable year, increased by the portion of any amount carried over to such taxable year from a prior taxable year which is attributable to such property, bears to
(ii)the total amount of section 179 property placed in service during such taxable year, increased by the aggregate amount carried over to such taxable year from any prior taxable year.For purposes of the preceding sentence, only section 179 property with respect to which an election was made under subsection (c)(1) (determined without regard to subparagraph (B) of this paragraph) shall be taken into account..
(c)Revocability of electionParagraph (2) of section 179(c) of the Internal Revenue Code of 1986 is amended by striking 2011 and inserting 2012.
(d)Computer software treated as 179 propertyClause (ii) of section 179(d)(1)(A) is amended by striking 2011 and inserting 2012.
(e)Effective dates
(1)In generalExcept as provided in paragraph (2), the amendments made by this section shall apply to property placed in service after December 31, 2009, in taxable years beginning after such date.
(2)ExtensionsThe amendments made by subsections (c) and (d) shall apply to taxable years beginning after December 31, 2010.
2022.Additional first-year depreciation for 50 percent of the basis of certain qualified property
(a)In generalParagraph (2) of section 168(k) of the Internal Revenue Code of 1986 is amended—
(1)by striking January 1, 2011 in subparagraph (A)(iv) and inserting January 1, 2012, and
(2)by striking January 1, 2010 each place it appears and inserting January 1, 2011.
(b)Conforming amendments
(1)The heading for subsection (k) of section 168 of the Internal Revenue Code of 1986 is amended by striking January 1, 2010 and inserting January 1, 2011.
(2)The heading for clause (ii) of section 168(k)(2)(B) of such Code is amended by striking Pre-January 1, 2010 and inserting Pre-January 1, 2011.
(3)Subparagraph (D) of section 168(k)(4) of such Code is amended by striking and at the end of clause (ii), by striking the period at the end of clause (iii) and inserting a comma, and by adding at the end the following new clauses:

(iv)January 1, 2011 shall be substituted for January 1, 2012 in subparagraph (A)(iv) thereof, and
(v)January 1, 2010 shall be substituted for January 1, 2011 each place it appears in subparagraph (A) thereof..
(4)Subparagraph (B) of section 168(l)(5) of such Code is amended by striking January 1, 2010 and inserting January 1, 2011.
(5)Subparagraph (C) of section 168(n)(2) of such Code is amended by striking January 1, 2010 and inserting January 1, 2011.
(6)Subparagraph (D) of section 1400L(b)(2) of such Code is amended by striking January 1, 2010 and inserting January 1, 2011.
(7)Subparagraph (B) of section 1400N(d)(3) of such Code is amended by striking January 1, 2010 and inserting January 1, 2011.
(c)Effective dateThe amendments made by this section shall apply to property placed in service after December 31, 2009, in taxable years ending after such date.
2023.Special rule for long-term contract accounting
(a)In generalSection 460(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(6)Special rule for allocation of bonus depreciation with respect to certain property
(A)In generalSolely for purposes of determining the percentage of completion under subsection (b)(1)(A), the cost of qualified property shall be taken into account as a cost allocated to the contract as if subsection (k) of section 168 had not been enacted.
(B)Qualified propertyFor purposes of this paragraph, the term qualified property means property described in section 168(k)(2) which—
(i)has a recovery period of 7 years or less, and
(ii)is placed in service after December 31, 2009, and before January 1, 2011 (January 1, 2012, in the case of property described in section 168(k)(2)(B))..
(b)Effective dateThe amendment made by this section shall apply to property placed in service after December 31, 2009.
IIIPromoting entrepreneurship
2031.Increase in amount allowed as deduction for start-up expenditures in 2010
(a)Start-up expendituresSubsection (b) of section 195 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(3)Special rule for taxable years beginning in 2010In the case of a taxable year beginning in 2010, paragraph (1)(A)(ii) shall be applied—
(A)by substituting $10,000 for $5,000, and
(B)by substituting $60,000 for $50,000..
(b)Effective dateThe amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2009.
2032.Authorization of appropriations for the United States Trade Representative to develop market access opportunities for United States small- and medium-sized businesses and to enforce trade agreements
(a)In generalThere are authorized to be appropriated to the Office of the United States Trade Representative $5,230,000, to remain available until expended, for—
(1)analyzing and developing opportunities for businesses in the United States to access the markets of foreign countries; and
(2)enforcing trade agreements to which the United States is a party.
(b)RequirementsIn obligating and expending the funds authorized to be appropriated under subsection (a), the United States Trade Representative shall—
(1)give preference to those initiatives that the United States Trade Representative determines will create or sustain the greatest number of jobs in the United States or result in the greatest benefit to the economy of the United States; and
(2)consider the needs of small- and medium-sized businesses in the United States with respect to—
(A)accessing the markets of foreign countries; and
(B)the enforcement of trade agreements to which the United States is a party.
IVPromoting small business fairness
2041.Limitation on penalty for failure to disclose reportable transactions based on resulting tax benefits
(a)In generalSubsection (b) of section 6707A of the Internal Revenue Code of 1986 is amended to read as follows:

(b)Amount of penalty
(1)In generalExcept as otherwise provided 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 transaction (or which would have resulted from such transaction if such transaction were respected for Federal tax purposes).
(2)Maximum penaltyThe amount of the penalty under subsection (a) with respect to any reportable transaction shall not exceed—
(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 penaltyThe amount of the penalty under subsection (a) with respect to any transaction shall not be less than $10,000 ($5,000 in the case of a natural person)..
(b)Effective dateThe amendment made by this section shall apply to penalties assessed after December 31, 2006.
2042.Deduction for health insurance costs in computing self-employment taxes in 2010
(a)In generalParagraph (4) of section 162(l) of the Internal Revenue Code of 1986 is amended by inserting for taxable years beginning before January 1, 2010, or after December 31, 2010 before the period.
(b)Effective dateThe amendments made by this section shall apply to taxable years beginning after December 31, 2009.
2043.Removal of cellular telephones and similar telecommunications equipment from listed property
(a)In generalSubparagraph (A) of section 280F(d)(4) of the Internal Revenue Code of 1986 (defining listed property) is amended by adding ‘and’ at the end of clause (iv), by striking clause (v), and by redesignating clause (vi) as clause (v).
(b)Effective dateThe amendment made by this section shall apply to taxable years beginning after December 31, 2009.
BRevenue provisions
IReducing the tax gap
2101.Information reporting for rental property expense payments
(a)In generalSection 6041 of the Internal Revenue Code of 1986, as amended by section 9006 of the Patient Protection and Affordable Care Act, is amended by redesignating subsections (h) and (i) as subsections (i) and (j), respectively, and by inserting after subsection (g) the following new subsection:

(h)Treatment of rental property expense payments
(1)In generalSolely for purposes of subsection (a) and except as provided in paragraph (2), a person receiving rental income from real estate shall be considered to be engaged in a trade or business of renting property.
(2)ExceptionsParagraph (1) shall not apply to—
(A)any individual, including any individual who is an active member of the uniformed services or an employee of the intelligence community (as defined in section 121(d)(9)(C)(iv)), if substantially all rental income is derived from renting the principal residence (within the meaning of section 121) of such individual on a temporary basis,
(B)any individual who receives rental income of not more than the minimal amount, as determined under regulations prescribed by the Secretary, and
(C)any other individual for whom the requirements of this section would cause hardship, as determined under regulations prescribed by the Secretary..
(b)Effective dateThe amendments made by subsection (a) shall apply to payments made after December 31, 2010.
2102.Increase in information return penalties
(a)Failure To file correct information returns
(1)In generalSubsections (a)(1), (b)(1)(A), and (b)(2)(A) of section 6721 of the Internal Revenue Code of 1986 are each amended by striking $50 and inserting $100.
(2)Aggregate annual limitationSubsections (a)(1), (d)(1)(A), and (e)(3)(A) of section 6721 of such Code are each amended by striking $250,000 and inserting $1,500,000.
(b)Reduction where correction within 30 days
(1)In generalSubparagraph (A) of section 6721(b)(1) of the Internal Revenue Code of 1986 is amended by striking $15 and inserting $30.
(2)Aggregate annual limitationSubsections (b)(1)(B) and (d)(1)(B) of section 6721 of such Code are each amended by striking $75,000 and inserting $250,000.
(c)Reduction where correction on or before August 1
(1)In generalSubparagraph (A) of section 6721(b)(2) of the Internal Revenue Code of 1986 is amended by striking $30 and inserting $60.
(2)Aggregate annual limitationSubsections (b)(2)(B) and (d)(1)(C) of section 6721 of such Code are each amended by striking $150,000 and inserting $500,000.
(d)Aggregate annual limitations for persons with gross receipts of not more than $5,000,000
(1)In generalParagraph (1) of section 6721(d) of the Internal Revenue Code of 1986 is amended—
(A)by striking $100,000 in subparagraph (A) and inserting $500,000,
(B)by striking $25,000 in subparagraph (B) and inserting $75,000, and
(C)by striking $50,000 in subparagraph (C) and inserting $200,000.
(2)Technical amendmentParagraph (1) of section 6721(d) of such Code is amended by striking such taxable year and inserting such calendar year.
(e)Penalty in case of intentional disregardParagraph (2) of section 6721(e) of the Internal Revenue Code of 1986 is amended by striking $100 and inserting $250.
(f)Adjustment for inflationSection 6721 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(f)Adjustment for inflation
(1)In generalFor each fifth calendar year beginning after 2012, each of the dollar amounts under subsections (a), (b), (d) (other than paragraph (2)(A) thereof), and (e) shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) determined by substituting calendar year 2011 for calendar year 1992 in subparagraph (B) thereof.
(2)RoundingIf any amount adjusted under paragraph (1)—
(A)is not less than $75,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and
(B)is not described in subparagraph (A) and is not a multiple of $10, such amount shall be rounded to the next lowest multiple of $10..
(g)Failure To furnish correct payee statementsSection 6722 of the Internal Revenue Code of 1986 is amended to read as follows:

6722.Failure to furnish correct payee statements
(a)Imposition of penalty
(1)General ruleIn the case of each failure described in paragraph (2) by any person with respect to a payee statement, such person shall pay a penalty of $100 for each statement with respect to which such a failure occurs, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $1,500,000.
(2)Failures subject to penaltyFor purposes of paragraph (1), the failures described in this paragraph are—
(A)any failure to furnish a payee statement on or before the date prescribed therefor to the person to whom such statement is required to be furnished, and
(B)any failure to include all of the information required to be shown on a payee statement or the inclusion of incorrect information.
(b)Reduction where correction in specified period
(1)Correction within 30 daysIf any failure described in subsection (a)(2) is corrected on or before the day 30 days after the required filing date—
(A)the penalty imposed by subsection (a) shall be $30 in lieu of $100, and
(B)the total amount imposed on the person for all such failures during any calendar year which are so corrected shall not exceed $250,000.
(2)Failures corrected on or before August 1If any failure described in subsection (a)(2) is corrected after the 30th day referred to in paragraph (1) but on or before August 1 of the calendar year in which the required filing date occurs—
(A)the penalty imposed by subsection (a) shall be $60 in lieu of $100, and
(B)the total amount imposed on the person for all such failures during the calendar year which are so corrected shall not exceed $500,000.
(c)Exception for de minimis failures
(1)In generalIf—
(A)a payee statement is furnished to the person to whom such statement is required to be furnished,
(B)there is a failure described in subsection (a)(2)(B) (determined after the application of section 6724(a)) with respect to such statement, and
(C)such failure is corrected on or before August 1 of the calendar year in which the required filing date occurs,for purposes of this section, such statement shall be treated as having been furnished with all of the correct required information.
(2)LimitationThe number of payee statements to which paragraph (1) applies for any calendar year shall not exceed the greater of—
(A)10, or
(B)one-half of 1 percent of the total number of payee statements required to be filed by the person during the calendar year.
(d)Lower limitations for persons with gross receipts of not more than $5,000,000
(1)In generalIf any person meets the gross receipts test of paragraph (2) with respect to any calendar year, with respect to failures during such calendar year—
(A)subsection (a)(1) shall be applied by substituting $500,000 for $1,500,000,
(B)subsection (b)(1)(B) shall be applied by substituting $75,000 for $250,000, and
(C)subsection (b)(2)(B) shall be applied by substituting $200,000 for $500,000.
(2)Gross receipts testA person meets the gross receipts test of this paragraph if such person meets the gross receipts test of section 6721(d)(2).
(e)Penalty in case of intentional disregardIf 1 or more failures to which subsection (a) applies are due to intentional disregard of the requirement to furnish a payee statement (or the correct information reporting requirement), then, with respect to each such failure—
(1)subsections (b), (c), and (d) shall not apply,
(2)the penalty imposed under subsection (a)(1) shall be $250, or, if greater—
(A)in the case of a payee statement other than a statement required under section 6045(b), 6041A(e) (in respect of a return required under section 6041A(b)), 6050H(d), 6050J(e), 6050K(b), or 6050L(c), 10 percent of the aggregate amount of the items required to be reported correctly, or
(B)in the case of a payee statement required under section 6045(b), 6050K(b), or 6050L(c), 5 percent of the aggregate amount of the items required to be reported correctly, and
(3)in the case of any penalty determined under paragraph (2)—
(A)the $1,500,000 limitation under subsection (a) shall not apply, and
(B)such penalty shall not be taken into account in applying such limitation to penalties not determined under paragraph (2).
(f)Adjustment for inflation
(1)In generalFor each fifth calendar year beginning after 2012, each of the dollar amounts under subsections (a), (b), (d)(1), and (e) shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) determined by substituting calendar year 2011 for calendar year 1992 in subparagraph (B) thereof.
(2)RoundingIf any amount adjusted under paragraph (1)—
(A)is not less than $75,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and
(B)is not described in subparagraph (A) and is not a multiple of $10, such amount shall be rounded to the next lowest multiple of $10..
(h)Effective DateThe amendments made by this section shall apply with respect to information returns required to be filed on or after January 1, 2011.
2103.Report on tax shelter penalties and certain other enforcement actions
(a)In generalThe Commissioner of Internal Revenue, in consultation with the Secretary of the Treasury, 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 preceding year under each of the following provisions of the Internal Revenue Code of 1986:
(1)Section 6662A (relating to accuracy-related penalty on understatements with respect to reportable transactions).
(2)Section 6700(a) (relating to promoting abusive 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 maintain lists of advisees with respect to reportable transactions).
(b)Additional informationThe report required 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 reportable 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.
(c)Date of reportThe first report required under subsection (a) shall be submitted not later than December 31, 2010.
2104.Application of continuous levy to tax liabilities of certain Federal contractors
(a)In generalSubsection (f) of section 6330 of the Internal Revenue Code of 1986 is amended by striking or at the end of paragraph (2), by inserting or at the end of paragraph (3), and by inserting after paragraph (3) the following new paragraph:

(4)the Secretary has served a Federal contractor levy,.
(b)Federal contractor levySubsection (h) of section 6330 of the Internal Revenue Code of 1986 is amended—
(1)by striking all that precedes any levy in connection with the collection and inserting the following:

(h)Definitions related to exceptionsFor purposes of subsection (f)—
(1)Disqualified employment tax levyA disqualified employment tax levy is; and
(2)by adding at the end the following new paragraph:

(2)Federal contractor levyA Federal contractor levy is any levy if the person whose property is subject to the levy (or any predecessor thereof) is a Federal contractor..
(c)Conforming amendmentThe heading of subsection (f) of section 6330 of the Internal Revenue Code of 1986 is amended by striking Jeopardy and State refund collection and inserting Exceptions.
(d)Effective dateThe amendments made by this section shall apply to levies issued after the date of the enactment of this Act.
IIPromoting retirement preparation
2111.Participants in government section 457 plans allowed to treat elective deferrals as Roth contributions
(a)In generalSection 402A(e)(1) of the Internal Revenue Code of 1986 is amended by striking and at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting , and, and by adding at the end the following:

(C)an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A)..
(b)Elective deferralsSection 402A(e)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

(2)Elective deferralThe term elective deferral means—
(A)any elective deferral described in subparagraph (A) or (C) of section 402(g)(3), and
(B)any elective deferral of compensation by an individual under an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A)..
(c)Effective dateThe amendments made by this section shall apply to taxable years beginning after December 31, 2010.
2112.Rollovers from elective deferral plans to designated Roth accounts
(a)In generalSection 402A(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(4)Taxable rollovers to designated Roth accounts
(A)In generalNotwithstanding sections 402(c), 403(b)(8), and 457(e)(16), in the case of any distribution to which this paragraph applies—
(i)there shall be included in gross income any amount which would be includible were it not part of a qualified rollover contribution,
(ii)section 72(t) shall not apply, and
(iii)unless the taxpayer elects not to have this clause apply, any amount required to be included in gross income for any taxable year beginning in 2010 by reason of this paragraph shall be so included ratably over the 2-taxable-year period beginning with the first taxable year beginning in 2011.Any election under clause (iii) for any distributions during a taxable year may not be changed after the due date for such taxable year.
(B)Distributions to which paragraph appliesIn the case of an applicable retirement plan which includes a qualified Roth contribution program, this paragraph shall apply to a distribution from such plan other than from a designated Roth account which is contributed in a qualified rollover contribution (within the meaning of section 408A(e)) to the designated Roth account maintained under such plan for the benefit of the individual to whom the distribution is made.
(C)Coordination with limitAny distribution to which this paragraph applies shall not be taken into account for purposes of paragraph (1).
(D)Other rulesThe rules of subparagraphs (D), (E), and (F) of section 408A(d)(3) (as in effect for taxable years beginning after 2009) shall apply for purposes of this paragraph..
(b)Effective dateThe amendments made by this section shall apply to distributions after the date of the enactment of this Act.
2113.Special rules for annuities received from only a portion of a contract
(a)In generalSubsection (a) of section 72 of the Internal Revenue Code of 1986 is amended to read as follows:

(a)General rules for annuities
(1)Income inclusionExcept as otherwise provided in this chapter, gross income includes any amount received as an annuity (whether for a period certain or during one or more lives) under an annuity, endowment, or life insurance contract.
(2)Partial annuitizationIf any amount is received as an annuity for a period of 10 years or more or during one or more lives under any portion of an annuity, endowment, or life insurance contract—
(A)such portion shall be treated as a separate contract for purposes of this section,
(B)for purposes of applying subsections (b), (c), and (e), the investment in the contract shall be allocated pro rata between each portion of the contract from which amounts are received as an annuity and the portion of the contract from which amounts are not received as an annuity, and
(C)a separate annuity starting date under subsection (c)(4) shall be determined with respect to each portion of the contract from which amounts are received as an annuity..
(b)Effective dateThe amendment made by this section shall apply to amounts received in taxable years beginning after December 31, 2010.
IIIClosing unintended loopholes
2121.Crude tall oil ineligible for cellulosic biofuel producer credit
(a)In generalClause (iii) of section 40(b)(6)(E) of the Internal Revenue Code of 1986, as added by the Health Care and Education Reconciliation Act of 2010, is amended—
(1)by striking or at the end of subclause (I),
(2)by striking the period at the end of subclause (II) and inserting , or,
(3)by adding at the end the following new subclause:

(III)such fuel has an acid number greater than 25., and
(4)by striking unprocessed in the heading and inserting certain.
(b)Effective dateThe amendments made by this section shall apply to fuels sold or used on or after January 1, 2010.
2122.Source rules for income on guarantees
(a)Amounts sourced within the United StatesSubsection (a) of section 861 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(9)GuaranteesAmounts received, directly or indirectly, from—
(A)a noncorporate resident or domestic corporation for the provision of a guarantee of any indebtedness of such resident or corporation, or
(B)any foreign person for the provision of a guarantee of any indebtedness of such person, if such amount is connected with income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States..
(b)Amounts sourced without the United StatesSubsection (a) of section 862 of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (7), by striking the period at the end of paragraph (8) and inserting ; and, and by adding at the end the following new paragraph:

(9)amounts received, directly or indirectly, from a foreign person for the provision of a guarantee of indebtedness of such person other than amounts which are derived from sources within the United States as provided in section 861(a)(9)..
(c)Conforming amendmentClause (ii) of section 864(c)(4)(B) of the Internal Revenue Code of 1986 is amended by striking dividends or interest and inserting dividends, interest, or amounts received for the provision of guarantees of indebtedness.
(d)Effective dateThe amendments made by this section shall apply to guarantees issued after the date of the enactment of this Act.
IVTime for payment of corporate estimated taxes
2131.Time for payment of corporate estimated taxesThe 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 36 percentage points.
IIIState Small Business Credit Initiative
3001.Short titleThis title may be cited as the State Small Business Credit Initiative Act of 2010.
3002.DefinitionsIn this title, the following definitions shall apply:
(1)Appropriate committees of CongressThe term appropriate committees of Congress means—
(A)the Committee on Small Business and Entrepreneurship, the Committee on Agriculture, Nutrition, and Forestry, the Committee on Banking, Housing, and Urban Affairs, the Committee on Finance, the Committee on the Budget, and the Committee on Appropriations of the Senate; and
(B)the Committee on Small Business, the Committee on Agriculture, the Committee on Financial Services, the Committee on Ways and Means, the Committee on the Budget, and the Committee on Appropriations of the House of Representatives.
(2)Appropriate Federal banking agencyThe term appropriate Federal banking agency—
(A)has the same meaning as in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)); and
(B)includes the National Credit Union Administration Board in the case of any credit union the deposits of which are insured in accordance with the Federal Credit Union Act.
(3)Enrolled loanThe term enrolled loan means a loan made by a financial institution lender that is enrolled by a participating State in an approved State capital access program in accordance with this title.
(4)Federal contributionThe term Federal contribution means the portion of the contribution made by a participating State to, or for the account of, an approved State program that is made with Federal funds allocated to the State by the Secretary under section 3003.
(5)Financial institutionThe term financial institution means any insured depository institution, insured credit union, or community development financial institution, as those terms are each defined in section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4702).
(6)Participating StateThe term participating State means any State that has been approved for participation in the Program under section 3004.
(7)ProgramThe term Program means the State Small Business Credit Initiative established under this title.
(8)Qualifying loan or swap funding facilityThe term qualifying loan or swap funding facility means a contractual arrangement between a participating State and a private financial entity under which—
(A)the participating State delivers funds to the entity as collateral;
(B)the entity provides funding from the arrangement back to the participating State; and
(C)the full amount of resulting funding from the arrangement, less any fees and other costs of the arrangement, is contributed to, or for the account of, an approved State program.
(9)Reserve fundThe term reserve fund means a fund, established by a participating State, dedicated to a particular financial institution lender, for the purposes of—
(A)depositing all required premium charges paid by the financial institution lender and by each borrower receiving a loan under an approved State program from that financial institution lender;
(B)depositing contributions made by the participating State, including State contributions made with Federal contributions; and
(C)covering losses on enrolled loans by disbursing accumulated funds.
(10)StateThe term State means—
(A)a State of the United States;
(B)the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of Northern Mariana Islands, Guam, American Samoa, and the United States Virgin Islands;
(C)when designated by a State of the United States, a political subdivision of that State that the Secretary determines has the capacity to participate in the Program; and
(D)under the circumstances described in section 3004(d), a municipality of a State of the United States to which the Secretary has given a special permission under section 3004(d).
(11)State capital access programThe term State capital access program means a program of a State that—
(A)uses public resources to promote private access to credit; and
(B)meets the eligibility criteria in section 3005(c).
(12)State other credit support programThe term State other credit support program—
(A)means a program of a State that—
(i)uses public resources to promote private access to credit;
(ii)is not a State capital access program; and
(iii)meets the eligibility criteria in section 3006(c); and
(B)includes, collateral support programs, loan participation programs, State-run venture capital fund programs, and credit guarantee programs.
(13)State programThe term State program means a State capital access program or a State other credit support program.
(14)SecretaryThe term Secretary means the Secretary of the Treasury.
3003.Federal funds allocated to States
(a)Program established; purposeThere is established the State Small Business Credit Initiative, to be administered by the Secretary. Under the Program, the Secretary shall allocate Federal funds to participating States and make the allocated funds available to the participating States as provided in this section for the uses described in this section.
(b)Allocation formula
(1)In generalNot later than 30 days after the date of enactment of this Act, the Secretary shall allocate Federal funds to participating States so that each State is eligible to receive an amount equal to the average of the respective amounts that the State—
(A)would receive under the 2009 allocation, as determined under paragraph (2); and
(B)would receive under the 2010 allocation, as determined under paragraph (3).
(2)2009 allocation formula
(A)In generalThe Secretary shall determine the 2009 allocation by allocating Federal funds among the States in the proportion that each such State's 2008 State employment decline bears to the aggregate of the 2008 State employment declines for all States.
(B)Minimum allocationThe Secretary shall adjust the allocations under subparagraph (A) for each State to the extent necessary to ensure that no State receives less than 0.9 percent of the Federal funds.
(C)2008 State employment decline definedIn this paragraph and with respect to a State, the term 2008 State employment decline means the excess (if any) of—
(i)the number of individuals employed in such State determined for December 2007; over
(ii)the number of individuals employed in such State determined for December 2008.
(3)2010 allocation formula
(A)In generalThe Secretary shall determine the 2010 allocation by allocating Federal funds among the States in the proportion that each such State's 2009 unemployment number bears to the aggregate of the 2009 unemployment numbers for all of the States.
(B)Minimum allocationThe Secretary shall adjust the allocations under subparagraph (A) for each State to the extent necessary to ensure that no State receives less than 0.9 percent of the Federal funds.
(C)2009 Unemployment number definedIn this paragraph and with respect to a State, the term 2009 unemployment number means the number of individuals within such State who were determined to be unemployed by the Bureau of Labor Statistics for December 2009.
(c)Availability of allocated amountThe amount allocated by the Secretary to each participating State under subsection (b) shall be made available to the State as follows:
(1)Allocated amount generally to be available to State in one-thirds
(A)In generalThe Secretary shall—
(i)apportion the participating State's allocated amount into thirds;
(ii)transfer to the participating State the first 1/3 when the Secretary approves the State for participation under section 3004; and
(iii)transfer to the participating State each successive 1/3 when the State has certified to the Secretary that it has expended, transferred, or obligated 80 percent of the last transferred 1/3 for Federal contributions to, or for the account of, State programs.
(B)Authority to withhold pending auditThe Secretary may withhold the transfer of any successive 1/3 pending results of a financial audit.
(C)Inspector General audits
(i)In generalThe Inspector General of the Department of the Treasury shall carry out an audit of the participating State's use of allocated Federal funds transferred to the State.
(ii)Recoupment of misused transferred funds requiredThe allocation agreement between the Secretary and the participating State shall provide that the Secretary shall recoup any allocated Federal funds transferred to the participating State if the results of the an audit include a finding that there was an intentional or reckless misuse of transferred funds by the State.
(iii)Penalty for misstatementAny participating State that is found to have intentionally misstated any report issued to the Secretary under the Program shall be ineligible to receive any additional funds under the Program. Funds that had been allocated or that would otherwise have been allocated to such participating State shall be paid into the general fund of the Treasury for reduction of the public debt.
(iv)MunicipalitiesIn this subparagraph, the term participating State shall include a municipality given special permission to participate in the Program, under section 3004(d).
(D)ExceptionThe Secretary may, in the Secretary's discretion, transfer the full amount of the participating State's allocated amount to the State in a single transfer if the participating State applies to the Secretary for approval to use the full amount of the allocation as collateral for a qualifying loan or swap funding facility.
(2)Transferred amountsEach amount transferred to a participating State under this section shall remain available to the State until used by the State as permitted under paragraph (3).
(3)Use of transferred fundsEach participating State may use funds transferred to it under this section only—
(A)for making Federal contributions to, or for the account of, an approved State program;
(B)as collateral for a qualifying loan or swap funding facility;
(C)in the case of the first 1/3 transferred, for paying administrative costs incurred by the State in implementing an approved State program in an amount not to exceed 5 percent of that first 1/3; or
(D)in the case of each successive 1/3 transferred, for paying administrative costs incurred by the State in implementing an approved State program in an amount not to exceed 3 percent of that successive 1/3.
(4)Termination of availability of amounts not transferred within 2 years of participationAny portion of a participating State's allocated amount that has not been transferred to the State under this section by the end of the 2-year period beginning on the date that the Secretary approves the State for participation may be deemed by the Secretary to be no longer allocated to the State and no longer available to the State and shall be returned to the General Fund of the Treasury.
(5)Transferred amounts not assistanceThe amounts transferred to a participating State under this section shall not be considered assistance for purposes of subtitle V of title 31, United States Code.
(6)DefinitionsIn this section—
(A)the term allocated amount means the total amount of Federal funds allocated by the Secretary under subsection (b) to the participating State; and
(B)the term 1/3 means—
(i)in the case of the first 1/3 and second 1/3, an amount equal to 33 percent of a participating State's allocated amount; and
(ii)in the case of the last 1/3, an amount equal to 34 percent of a participating State's allocated amount.
3004.Approving States for participation
(a)ApplicationAny State may apply to the Secretary for approval to be a participating State under the Program and to be eligible for an allocation of Federal funds under the Program.
(b)General approval criteriaThe Secretary shall approve a State to be a participating State, if—
(1)a specific department, agency, or political subdivision of the State has been designated to implement a State program and participate in the Program;
(2)all legal actions necessary to enable such designated department, agency, or political subdivision to implement a State program and participate in the Program have been accomplished;
(3)the State has filed an application with the Secretary for approval of a State capital access program under section 3005 or approval as a State other credit support program under section 3006, in each case within the time period provided in the respective section; and
(4)the State and the Secretary have executed an allocation agreement that—
(A)conforms to the requirements of this title;
(B)ensures that the State program complies with such national standards as are established by the Secretary under section 3009(a)(2);
(C)sets forth internal control, compliance, and reporting requirements as established by the Secretary, and such other terms and conditions necessary to carry out the purposes of this title, including an agreement by the State to allow the Secretary to audit State programs;
(D)requires that the State program be fully positioned, within 90 days of the State's execution of the allocation agreement with the Secretary, to act on providing the kind of credit support that the State program was established to provide; and
(E)includes an agreement by the State to deliver to the Secretary, and update annually, a schedule describing how the State intends to apportion among its State programs the Federal funds allocated to the State.
(c)Contractual arrangements for implementation of State programsA State may be approved to be a participating State, and be eligible for an allocation of Federal funds under the Program, if the State has contractual arrangements for the implementation and administration of its State program with—
(1)an existing, approved State program administered by another State; or
(2)an authorized agent of, or entity supervised by, the State, including for-profit and not-for-profit entities.
(d)Special permission
(1)Circumstances when a municipality may apply directlyIf a State does not, within 60 days after the date of enactment of this Act, file with the Secretary a notice of its intent to apply for approval by the Secretary of a State program or within 9 months after the date of enactment of this Act, file with the Secretary a complete application for approval of a State program, the Secretary may grant to municipalities of that State a special permission that will allow them to apply directly to the Secretary without the State for approval to be participating municipalities.
(2)Timing requirements applicable to municipalities applying directlyTo qualify for the special permission, a municipality of a State shall be required, within 12 months after the date of enactment of this Act, to file with the Secretary a complete application for approval by the Secretary of a State program.
(3)Notices of intent and applications from more than 1 municipalityA municipality of a State may combine with 1 or more other municipalities of that State to file a joint notice of intent to file and a joint application.
(4)Approval criteriaThe general approval criteria in paragraphs (2) and (4) shall apply.
(5)Allocation to municipalities
(A)If more than 3If more than 3 municipalities, or combination of municipalities as provided in paragraph (3), of a State apply for approval by the Secretary to be participating municipalities under this subsection, and the applications meet the approval criteria in paragraph (4), the Secretary shall allocate Federal funds to the 3 municipalities with the largest populations.
(B)If 3 or fewerIf 3 or fewer municipalities, or combination of municipalities as provided in paragraph (3), of a State apply for approval by the Secretary to be participating municipalities under this subsection, and the applications meet the approval criteria in paragraph (4), the Secretary shall allocate Federal funds to each applicant municipality or combination of municipalities.
(6)Apportionment of allocated amount among participating municipalitiesIf the Secretary approves municipalities to be participating municipalities under this subsection, the Secretary shall apportion the full amount of the Federal funds that are allocated to that State to municipalities that are approved under this subsection in amounts proportionate to the population of those municipalities, based on the most recent available decennial census.
(7)Approving State programs for municipalitiesIf the Secretary approves municipalities to be participating municipalities under this subsection, the Secretary shall take into account the additional considerations in section 3006(d) in making the determination under section 3005 or 3006 that the State program or programs to be implemented by the participating municipalities, including a State capital access program, is eligible for Federal contributions to, or for the account of, the State program.
3005.Approving State capital access programs
(a)ApplicationA participating State that establishes a new, or has an existing, State capital access program that meets the eligibility criteria in subsection (c) may apply to Secretary to have the State capital access program approved as eligible for Federal contributions to the reserve fund.
(b)ApprovalThe Secretary shall approve such State capital access program as eligible for Federal contributions to the reserve fund if—
(1)within 60 days after the date of enactment of this Act, the State has filed with the Secretary a notice of intent to apply for approval by the Secretary of a State capital access program;
(2)within 9 months after the date of enactment of this Act, the State has filed with the Secretary a complete application for approval by the Secretary of a capital access program;
(3)the State satisfies the requirements of subsections (a) and (b) of section 3004; and
(4)the State capital access program meets the eligibility criteria in subsection (c).
(c)Eligibility criteria for State capital access programsFor a State capital access program to be approved under this section, that program shall be required to be a program of the State that—
(1)provides portfolio insurance for business loans based on a separate loan-loss reserve fund for each financial institution;
(2)requires insurance premiums to be paid by the financial institution lenders and by the business borrowers to the reserve fund to have their loans enrolled in the reserve fund;
(3)provides for contributions to be made by the State to the reserve fund in amounts at least equal to the sum of the amount of the insurance premium charges paid by the borrower and the financial institution to the reserve fund for any newly enrolled loan; and
(4)provides its portfolio insurance solely for loans that meet both the following requirements:
(A)The borrower has 500 employees or less at the time that the loan is enrolled in the Program.
(B)The loan amount does not exceed $5,000,000.
(d)Federal contributions to approved State capital access programsA State capital access program approved under this section will be eligible for receiving Federal contributions to the reserve fund in an amount equal to the sum of the amount of the insurance premium charges paid by the borrowers and by the financial institution to the reserve fund for loans that meet the requirements in subsection (c)(4). A participating State may use the Federal contribution to make its contribution to the reserve fund of an approved State capital access program.
(e)Minimum program requirements for State capital access programsThe Secretary shall, by regulation or other guidance, prescribe Program requirements that meet the following minimum requirements:
(1)Experience and capacityThe participating State shall determine for each financial institution that participates in the State capital access program, after consultation with the appropriate Federal banking agency or, in the case of a financial institution that is a nondepository community development financial institution, the Community Development Financial Institution Fund, that the financial institution has sufficient commercial lending experience and financial and managerial capacity to participate in the approved State capital access program. The determination by the State shall not be reviewable by the Secretary.
(2)Investment authoritySubject to applicable State law, the participating State may invest, or cause to be invested, funds held in a reserve fund by establishing a deposit account at the financial institution lender in the name of the participating State. In the event that funds in the reserve fund are not deposited in such an account, such funds shall be invested in a form that the participating State determines is safe and liquid.
(3)Loan terms and conditions to be determined by agreementA loan to be filed for enrollment in an approved State capital access program may be made with such interest rate, fees, and other terms and conditions, and the loan may be enrolled in the approved State capital access program and claims may be filed and paid, as agreed upon by the financial institution lender and the borrower, consistent with applicable law.
(4)Lender capital at-riskA loan to be filed for enrollment in the State capital access program shall require the financial institution lender to have a meaningful amount of its own capital resources at risk in the loan.
(5)Premium charges minimum and maximum amountsThe insurance premium charges payable to the reserve fund by the borrower and the financial institution lender shall be prescribed by the financial institution lender, within minimum and maximum limits that require that the sum of the insurance premium charges paid in connection with a loan by the borrower and the financial institution lender may not be less than 2 percent nor more than 7 percent of the amount of the loan enrolled in the approved State capital access program.
(6)State contributionsIn enrolling a loan in an approved State capital access program, the participating State may make a contribution to the reserve fund to supplement Federal contributions made under this Program.
(7)Loan purpose
(A)Particular loan purpose requirements and prohibitionsIn connection with the filing of a loan for enrollment in an approved State capital access program, the financial institution lender—
(i)shall obtain an assurance from each borrower that—
(I)the proceeds of the loan will be used for a business purpose;
(II)the loan will not be used to finance such business activities as the Secretary, by regulation, may proscribe as prohibited loan purposes for enrollment in an approved State capital access program; and
(III)the borrower is not—
(aa)an executive officer, director, or principal shareholder of the financial institution lender;
(bb)a member of the immediate family of an executive officer, director, or principal shareholder of the financial institution lender; or
(cc)a related interest of any such executive officer, director, principal shareholder, or member of the immediate family;
(ii)shall provide assurances to the participating State that the loan has not been made in order to place under the protection of the approved State capital access program prior debt that is not covered under the approved State capital access program and that is or was owed by the borrower to the financial institution lender or to an affiliate of the financial institution lender;
(iii)shall not allow the enrollment of a loan to a borrower that is a refinancing of a loan previously made to that borrower by the financial institution lender or an affiliate of the financial institution lender; and
(iv)may include additional restrictions on the eligibility of loans or borrowers that are not inconsistent with the provisions and purposes of this title, including compliance with all applicable Federal and State laws, regulations, ordinances, and Executive orders.
(B)DefinitionsIn this paragraph, the terms executive officer, director, principal shareholder, immediate family, and related interest refer to the same relationship to a financial institution lender as the relationship described in part 215 of title 12 of the Code of Federal Regulations, or any successor to such part.
(8)Capital access for small businesses in underserved communitiesAt the time that a State applies to the Secretary to have the State capital access program approved as eligible for Federal contributions, the State shall deliver to the Secretary a report stating how the State plans to use the Federal contributions to the reserve fund to provide access to capital for small businesses in low- and moderate-income, minority, and other underserved communities, including women- and minority-owned small businesses.
3006.Approving collateral support and other innovative credit access and guarantee initiatives for small businesses and manufacturers
(a)ApplicationA participating State that establishes 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 support program approved as eligible for Federal contributions to, or for the account of, the State program.
(b)ApprovalThe 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 satisfies the requirements of paragraphs (1) through (3) of section 3005(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 Act, the State has filed with Treasury a complete application for Treasury approval.
(c)Eligibility criteria for State other credit support programsFor a State other credit support program to be approved under this section, that program shall be required to be a program of the State that—
(1)can demonstrate that, at a minimum, $1 of public investment by the State program will cause and result in $1 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 programs that provide their credit support through 1 or more financial institution lenders, requires the financial 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 borrowers 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 considerationsIn making a determination 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 account 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, including the extent to which resulting small business lending will expand economic opportunities.
(2)The operational capacity, skills, and experience of the management team of the State other credit support program.
(3)The capacity of the State other credit support 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 program are safeguarded against waste, loss, unauthorized use, or misappropriation.
(5)The soundness of the program design and implementation plan of the State other credit support program.
(e)Federal contributions to approved State other credit support programsA 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 allocated 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 prescribeThe Secretary shall, by regulation or other guidance, prescribe Program requirements for approved State other credit support programs.
(2)Considerations for fundIn prescribing minimum Program requirements for approved State other credit support programs, the Secretary 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 3005(e).
3007.Reports
(a)Quarterly use-of-funds report
(1)In generalNot 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 participation, 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 contentsEach report under this subsection shall—
(A)indicate the total amount of Federal funding used by the participating State; and
(B)include a certification by the participating State that—
(i)the information provided in accordance 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 subsequent to the State being approved for participation in the Program; and
(iii)the participating State is implementing its approved State program or programs in accordance with this title and regulations issued under section 3010.
(b)Annual reportNot 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, annual sales, and number of employees of the borrowers that received such new loans.
(4)The zip code of each borrower that received such a new loan.
(5)Such other data as the Secretary, in the Secretary's sole discretion, may require to carry out the purposes of the Program.
(c)FormThe reports and data filed under subsections (a) and (b) shall be in such form as the Secretary, in the Secretary's sole discretion, may require.
(d)Termination of reporting requirementsThe requirement to submit reports under subsections (a) and (b) shall terminate for a participating State with the submission of the completed reports due on the first March 31 to occur after 5 complete 12-month periods after the State is approved by the Secretary to be a participating State.
3008.Remedies for State program termination or failures
(a)Remedies
(1)In generalIf any of the events listed in paragraph (2) occur, the Secretary, in the Secretary's discretion, may—
(A)reduce the amount of Federal funds allocated to the State under the Program; or
(B)terminate any further transfers of allocated amounts that have not yet been transferred to the State.
(2)Causal eventsThe 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 3007 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 reallocatedIf, 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 subsection (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 3003(b).
3009.Implementation and administration
(a)General authorities and dutiesThe Secretary shall—
(1)consult with the Administrator of the Small Business Administration and the appropriate Federal 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)AppropriationsThere is hereby appropriated to the Secretary, out of funds in the Treasury not otherwise appropriated, $1,500,000,000 to carry out the Program, including to pay reasonable costs of administering the Program.
(c)Termination of Secretary's program administration functionsThe 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 Act.
(d)Expedited contractingDuring the 1-year period beginning on the date of enactment of this Act, the Secretary may enter into contracts without regard to any other provision of law regarding public contracts, for purposes of carrying out this title.
3010.RegulationsThe Secretary, in consultation with the Administrator of the Small Business Administration, shall issue such regulations and other guidance as the Secretary determines necessary or appropriate to implement this title including to define terms, to establish compliance and reporting requirements, and such other terms and conditions necessary to carry out the purposes of this title.
3011.Oversight and audits
(a)Inspector General oversightThe Inspector General of the Department of the Treasury shall conduct, supervise, and coordinate audits and investigations of the use of funds made available under the Program.
(b)GAO auditThe Comptroller General of the United States shall perform an annual audit of the Program and issue a report to the appropriate committees of Congress containing the results of such audit.
(c)Required certification
(1)Financial institutions certificationWith respect to funds received by a participating State under the Program, any financial institution that receives a loan, a loan guarantee, or other financial assistance using such funds after the date of the enactment of this Act shall certify that such institution is in compliance with the requirements of section 103.121 of title 31, Code of Federal Regulations, a regulation that, at a minimum, requires financial institutions, as that term is defined in section 5312 (a)(2) and (c)(1)(A) of title 31, United States Code, to implement reasonable procedures to verify the identity 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 identity, and determine whether the person appears on any lists of known or suspected terrorists or terrorist organizations provided to the financial institution by any government agency.
(2)Sex offense certificationWith respect to funds received by a participating State under the Program, any private entity that receives a loan, a loan guarantee, or other financial assistance using such funds after the date of the enactment of this Act 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 Offender Registration and Notification Act (42 U.S.C. 16911)).
(d)Prohibition on pornographyNone 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 violations 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.
IVAdditional small business provisions
ASmall Business Lending Fund
4101.PurposeThe purpose of this subtitle is to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to the Secretary of the Treasury to make capital investments in eligible institutions in order to increase the availability of credit for small businesses.
4102.DefinitionsFor purposes of this subtitle:
(1)Appropriate committees of CongressThe term appropriate committees of Congress means—
(A)the Committee on Small Business and Entrepreneurship, the Committee on Agriculture, Nutrition, and Forestry, the Committee on Banking, Housing, and Urban Affairs, the Committee on Finance, the Committee on the Budget, and the Committee on Appropriations of the Senate; and
(B)the Committee on Small Business, the Committee on Agriculture, the Committee on Financial Services, the Committee on Ways and Means, the Committee on the Budget, and the Committee on Appropriations of the House of Representatives.
(2)Appropriate Federal banking agencyThe term appropriate Federal banking agency has the meaning given such term under section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)).
(3)Bank holding companyThe term bank holding company has the meaning given such term under section 2(a)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(2)(a)(1)).
(4)Call reportThe term call report means—
(A)reports of Condition and Income submitted to the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation;
(B)the Office of Thrift Supervision Thrift Financial Report;
(C)any report that is designated by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or the Office of Thrift Supervision, as applicable, as a successor to any report referred to in subparagraph (A) or (B);
(D)reports of Condition and Income as designated through guidance developed by the Secretary, in consultation with the Director of the Community Development Financial Institutions Fund; and
(E)with respect to an eligible institution for which no report exists that is described under subparagraph (A), (B), (C), or (D), such other report or set of information as the Secretary, in consultation with the Administrator of the Small Business Administration, may prescribe.
(5)CDCIThe term CDCI means the Community Development Capital Initiative created by the Secretary under the Troubled Asset Relief Program established by the Emergency Economic Stabilization Act of 2008.
(6)CDCI investmentThe term CDCI investment means, with respect to any eligible institution, the principal amount of any investment made by the Secretary in such eligible institution under the CDCI that has not been repaid.
(7)CDFI; community development financial institutionThe terms CDFI and community development financial institution have the meaning given the term community development financial institution under the Riegle Community Development and Regulatory Improvement Act of 1994.
(8)CDLF; community development loan fundThe terms CDLF and community development loan fund mean any entity that—
(A)is certified by the Department of the Treasury as a community development financial institution loan fund;
(B)is exempt from taxation under the Internal Revenue Code of 1986; and
(C)had assets less than or equal to $10,000,000,000 as of the end of the fourth quarter of calendar year 2009.
(9)CPPThe term CPP means the Capital Purchase Program created by the Secretary under the Troubled Asset Relief Program established by the Emergency Economic Stabilization Act of 2008.
(10)CPP investmentThe term CPP investment means, with respect to any eligible institution, the principal amount of any investment made by the Secretary in such eligible institution under the CPP that has not been repaid.
(11)Eligible institutionThe term eligible institution means—
(A)any insured depository institution, which—
(i)is not controlled by a bank holding company or savings and loan holding company that is also an eligible institution;
(ii)has total assets of equal to or less than $10,000,000,000, as reported in the call report of the insured depository institution as of the end of the fourth quarter of calendar year 2009; and
(iii)is not directly or indirectly controlled by any company or other entity that has total consolidated assets of more than $10,000,000,000, as so reported;
(B)any bank holding company which has total consolidated assets of equal to or less than $10,000,000,000, as reported in the call report of the bank holding company as of the end of the fourth quarter of calendar year 2009;
(C)any savings and loan holding company which has total consolidated assets of equal to or less than $10,000,000,000, as reported in the call report of the savings and loan holding company as of the end of the fourth quarter of calendar year 2009; and
(D)any community development financial institution loan fund which has total assets of equal to or less than $10,000,000,000, as reported in audited financial statements for the fiscal year of the community development financial institution loan fund that ends in calendar year 2009.
(12)FundThe term Fund means the Small Business Lending Fund established under section 4103(a)(1).
(13)Insured depository institutionThe term insured depository institution has the meaning given such term under section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(2)).
(14)Minority-owned and women-owned businessThe terms minority-owned business and women-owned business shall have the meaning given the terms minority-owned business and women's business, respectively, under section 21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1441A(r)(4)).
(15)ProgramThe term Program means the Small Business Lending Fund Program authorized under section 4103(a)(2).
(16)Savings and loan holding companyThe term savings and loan holding company has the meaning given such term under section 10(a)(1)(D) of the Home Owners' Loan Act (12 U.S.C. 1467a(a)(1)(D)).
(17)SecretaryThe term Secretary means the Secretary of the Treasury.
(18)Small business lending
(A)In generalThe term small business lending means lending, as defined by and reported in an eligible institutions' quarterly call report, where each loan comprising such lending is one of the following types:
(i)Commercial and industrial loans.
(ii)Owner-occupied nonfarm, nonresidential real estate loans.
(iii)Loans to finance agricultural production and other loans to farmers.
(iv)Loans secured by farmland.
(B)ExclusionNo loan that has an original amount greater than $10,000,000 or that goes to a business with more than $50,000,000 in revenues shall be included in the measure.
(C)Treatment of holding companiesIn the case of eligible institutions that are bank holding companies or savings and loan holding companies having one or more insured depository institution subsidiaries, small business lending shall be measured based on the combined small business lending reported in the call report of the insured depository institution subsidiaries.
(19)Veteran-owned business
(A)The term veteran-owned business means a business—
(i)more than 50 percent of the ownership or control of which is held by 1 or more veterans;
(ii)more than 50 percent of the net profit or loss of which accrues to 1 or more veterans; and
(iii)a significant percentage of senior management positions of which are held by veterans.
(B)For purposes of this paragraph, the term veteran has the meaning given such term in section 101(2) of title 38, United States Code.
4103.Small business lending fund
(a)Fund and program
(1)Fund establishedThere is established in the Treasury of the United States a fund to be known as the Small Business Lending Fund, which shall be administered by the Secretary.
(2)Programs authorizedThe Secretary is authorized to establish the Small Business Lending Fund Program for using the Fund consistent with this subtitle.
(b)Use of fund
(1)In generalSubject to paragraph (2), the Fund shall be available to the Secretary, without further appropriation or fiscal year limitation, for the costs of purchases (including commitments to purchase), and modifications of such purchases, of preferred stock and other financial instruments from eligible institutions on such terms and conditions as are determined by the Secretary in accordance with this subtitle. For purposes of this paragraph and with respect to an eligible institution, the term other financial instruments shall include only debt instruments for which such eligible institution is fully liable or equity equivalent capital of the eligible institution. Such debt instruments may be subordinated to the claims of other creditors of the eligible institution.
(2)Maximum purchase limitThe aggregate amount of purchases (and commitments to purchase) made pursuant to paragraph (1) may not exceed $30,000,000,000.
(3)Proceeds used to pay down public debtAll funds received by the Secretary in connection with purchases made pursuant to paragraph (1), including interest payments, dividend payments, and proceeds from the sale of any financial instrument, shall be paid into the general fund of the Treasury for reduction of the public debt.
(4)Limitation on purchases from CDLFs
(A)In generalNot more than 1 percent of the maximum purchase limit of the Program, pursuant to paragraph (2), may be used to make purchases from community development loan funds.
(B)Eligibility standardsThe Secretary, in consultation with the Community Development Financial Institutions Fund, shall develop eligibility criteria to determine the financial ability of a CDLF to participate in the Program and repay the investment. Such criteria shall include the following:
(i)Ratio of net assets to total assets is at least 20 percent.
(ii)Ratio of loan loss reserves to loans and leases 90 days or more delinquent (including loans sold with full recourse) is at least 30 percent.
(iii)Positive net income measured on a 3-year rolling average.
(iv)Operating liquidity ratio of at least 1.0 for the 4 most recent quarters and for one or both of the two preceding years.
(v)Ratio of loans and leases 90 days or more delinquent (including loans sold with full recourse) to total equity plus loan loss reserves is less than 40 percent.
(C)Requirement to submit audited financial statementsCDLFs participating in the Program shall submit audited financial statements to the Secretary, have a clean audit opinion, and have at least 3 years of operating experience.
(c)Credits to the fundThere shall be credited to the Fund amounts made available pursuant to section 4108, to the extent provided by appropriations Acts.
(d)Terms
(1)Application
(A)Institutions with assets of $1,000,000,000 or lessEligible institutions having total assets equal to or less than $1,000,000,000, as reported in a call report as of the end of the fourth quarter of calendar year 2009, may apply to receive a capital investment from the Fund in an amount not exceeding 5 percent of risk-weighted assets, as reported in the call report immediately preceding the date of application, less the amount of any CDCI investment and any CPP investment.
(B)Institutions with assets of more than $1,000,000,000 and less than or equal to $10,000,000,000Eligible institutions having total assets of more than $1,000,000,000 but less than $10,000,000,000, as of the end of the fourth quarter of calendar year 2009, may apply to receive a capital investment from the Fund in an amount not exceeding 3 percent of risk-weighted assets, as reported in the call report immediately preceding the date of application, less the amount of any CDCI investment and any CPP investment.
(C)Treatment of holding companiesIn the case of an eligible institution that is a bank holding company or a savings and loan holding company having one or more insured depository institution subsidiaries, total assets shall be measured based on the combined total assets reported in the call report of the insured depository institution subsidiaries as of the end of the fourth quarter of calendar year 2009 and risk-weighted assets shall be measured based on the combined risk-weighted assets of the insured depository institution subsidiaries as reported in the call report immediately preceding the date of application.
(D)Treatment of applicants that are institutions controlled by holding companiesIf an eligible institution that applies to receive a capital investment under the Program is under the control of a bank holding company or a savings and loan holding company, then the Secretary may use the Fund to purchase preferred stock or other financial instruments from the top-tier bank holding company or savings and loan holding company of such eligible institution, as applicable. For purposes of this subparagraph, the term control with respect to a bank holding company shall have the same meaning as in section 2(a)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1841(2)(a)(2)). For purposes of this subparagraph, the term control with respect to a savings and loan holding company shall have the same meaning as in 10(a)(2) of the Home Owners' Loan Act (12 U.S.C. 1467a(a)(2)).
(E)Requirement to provide a small business lending planAt the time that an applicant submits an application to the Secretary for a capital investment under the Program, the applicant shall deliver to the appropriate Federal banking agency, and, for applicants that are State-chartered banks, to the appropriate State banking regulator, a small business lending plan describing how the applicant's business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach, where appropriate. In the case of eligible institutions that are community development loan funds, this plan shall be submitted to the Secretary. This plan shall be confidential supervisory information.
(F)Treatment of applicants that are community development loan fundsEligible institutions that are community development loan funds may apply to receive a capital investment from the Fund in an amount not exceeding 5 percent of total assets, as reported in the audited financial statements for the fiscal year of the eligible institution that ends in calendar year 2009.
(2)Consultation with regulatorsFor each eligible institution that applies to receive a capital investment under the Program, the Secretary shall—
(A)consult with the appropriate Federal banking agency or, in the case of an eligible institution that is a nondepository community development financial institution, the Community Development Financial Institution Fund, for the eligible institution, to determine whether the eligible institution may receive such capital investment;
(B)in the case of an eligible institution that is a State-chartered bank, consider any views received from the State banking regulator of the State of the eligible institution regarding the financial condition of the eligible institution; and
(C)in the case of a community development financial institution loan fund, consult with the Community Development Financial Institution Fund.
(3)Consideration of matched private investments
(A)In generalFor an eligible institution that applies to receive a capital investment under the Program, if the entity to be consulted under paragraph (2) would not otherwise recommend the eligible institution to receive the capital investment, the Secretary, in consultation with the entity to be so consulted, may consider whether the entity to be consulted would recommend the eligible institution to receive a capital investment based on the financial condition of the institution if the conditions in subparagraph (B) are satisfied.
(B)ConditionsThe conditions referred to in subparagraph (A) are as follows:
(i)Capital sourcesThe eligible institution shall receive capital both under the Program and from private, nongovernment investors.
(ii)Amount of capitalThe amount of capital to be received under the Program shall not exceed 3 percent of risk-weighted assets, as reported in the call report immediately preceding the date of application, less the amount of any CDCI investment and any CPP investment.
(iii)TermsThe amount of capital to be received from private, nongovernment investors shall be—
(I)equal to or greater than 100 percent of the capital to be received under the Program; and
(II)subordinate to the capital investment made by the Secretary under the Program.
(4)Ineligibility of institutions on FDIC problem bank list
(A)In generalAn eligible institution may not receive any capital investment under the Program, if—
(i)such institution is on the FDIC problem bank list; or
(ii)such institution has been removed from the FDIC problem bank list for less than 90 days.
(B)ConstructionNothing in subparagraph (A) shall be construed as limiting the discretion of the Secretary to deny the application of an eligible institution that is not on the FDIC problem bank list.
(C)FDIC problem bank list definedFor purposes of this paragraph, the term FDIC problem bank list means the list of depository institutions having a current rating of 4 or 5 under the Uniform Financial Institutions Rating System, or such other list designated by the Federal Deposit Insurance Corporation.
(5)Incentives to lend
(A)Requirements on preferred stock and other financial instrumentsAny preferred stock or other financial instrument issued to Treasury by an eligible institution receiving a capital investment under the Program shall provide that—
(i)the rate at which dividends or interest are payable shall be 5 percent per annum initially;
(ii)within the first 2 years after the date of the capital investment under the Program, the rate may be adjusted based on the amount of an eligible institution's small business lending. Changes in the amount of small business lending shall be measured against the average amount of small business lending reported by the eligible institution in its call reports for the 4 full quarters immediately preceding the date of enactment of this Act, minus adjustments from each quarterly balance in respect of—
(I)net loan charge offs with respect to small business lending; and
(II)gains realized by the eligible institution resulting from mergers, acquisitions or purchases of loans after origination and syndication; which adjustments shall be determined in accordance with guidance promulgated by the Secretary; and
(iii)during any calendar quarter during the initial 2-year period referred to in clause (ii), an institution's rate shall be adjusted to reflect the following schedule, based on that institution's change in the amount of small business lending relative to the baseline—
(I)if the amount of small business lending has increased by less than 2.5 percent, the dividend or interest rate shall be 5 percent;
(II)if the amount of small business lending has increased by 2.5 percent or greater, but by less than 5.0 percent, the dividend or interest rate shall be 4 percent;
(III)if the amount of small business lending has increased by 5.0 percent or greater, but by less than 7.5 percent, the dividend or interest rate shall be 3 percent;
(IV)if the amount of small business lending has increased by 7.5 percent or greater, and but by less than 10.0 percent, the dividend or interest rate shall be 2 percent; or
(V)if the amount of small business lending has increased by 10 percent or greater, the dividend or interest rate shall be 1 percent.
(B)Basis of initial rateThe initial dividend or interest rate shall be based on call report data published in the quarter immediately preceding the date of the capital investment under the Program.
(C)Timing of rate adjustmentsAny rate adjustment shall occur in the calendar quarter following the publication of call report data, such that the rate based on call report data from any one calendar quarter, which is published in the first following calendar quarter, shall be adjusted in that first following calendar quarter and payable in the second following quarter.
(D)Rate following initial 2-year periodGenerally, the rate based on call report data from the eighth calendar quarter after the date of the capital investment under the Program shall be payable until the expiration of the 41/2-year period that begins on the date of the investment. In the case where the amount of small business lending has remained the same or decreased relative to the institution's baseline in the eighth quarter after the date of the capital investment under the Program, the rate shall be 7 percent until the expiration of the 41/2-year period that begins on the date of the investment.
(E)Rate following initial 41/2 -year periodThe dividend or interest rate paid on any preferred stock or other financial instrument issued by an eligible institution that receives a capital investment under the Program shall increase to 9 percent at the end of the 41/2-year period that begins on the date of the capital investment under the Program.
(F)Limitation on rate reductions with respect to certain amountThe reduction in the dividend or interest rate payable to Treasury by any eligible institution shall be limited such that the rate reduction shall not apply to a dollar amount of the investment made by Treasury that is greater than the dollar amount increase in the amount of small business lending realized under this program. The Secretary may issue guidelines that will apply to new capital investments limiting the amount of capital available to eligible institutions consistent with this limitation.
(G)Rate adjustments for s corporationBefore making a capital investment in an eligible institution that is an S corporation or a corporation organized on a mutual basis, the Secretary may adjust the dividend or interest rate on the financial instrument to be issued to the Secretary, from the dividend or interest rate that would apply under subparagraphs (A) through (F), to take into account any differential tax treatment of securities issued by such eligible institution. For purpose of this subparagraph, the term S corporation has the same meaning as in section 1361(a) of the Internal Revenue Code of 1986.
(H)Repayment deadlineThe capital investment received by an eligible institution under the Program shall be evidenced by preferred stock or other financial instrument that—
(i)includes, as a term and condition, that the capital investment will—
(I)be repaid not later than the end of the 10-year period beginning on the date of the capital investment under the Program; or
(II)at the end of such 10-year period, be subject to such additional terms as the Secretary shall prescribe, which shall include a requirement that the stock or instrument shall carry the highest dividend or interest rate payable; and
(ii)provides that the term and condition described under clause (i) shall not apply if the application of that term and condition would adversely affect the capital treatment of the stock or financial instrument under current or successor applicable capital provisions compared to a capital instrument with identical terms other than the term and condition described under clause (i).
(I)Requirements on financial instruments issued by a community development financial institution loan fundAny equity equivalent capital issued to the Treasury by a community development loan fund receiving a capital investment under the Program shall provide that the rate at which interest is payable shall be 2 percent per annum for 8 years. After 8 years, the rate at which interest is payable shall be 9 percent.
(6)Additional incentives to repayThe Secretary may, by regulation or guidance issued under section 4104(9), establish repayment incentives in addition to the incentive in paragraph (5)(E) that will apply to new capital investments in a manner that the Secretary determines to be consistent with the purposes of this subtitle.
(7)Capital purchase program refinance
(A)In generalThe Secretary shall, in a manner that the Secretary determines to be consistent with the purposes of this subtitle, issue regulations and other guidance to permit eligible institutions to refinance securities issued to Treasury under the CDCI and the CPP for securities to be issued under the Program.
(B)Prohibition on participation by non-paying cpp participantsSubparagraph (A) shall not apply to any eligible institution that has missed more than one dividend payment due under the CPP. For purposes of this subparagraph, a CPP dividend payment that is submitted within 60 days of the due date of such payment shall not be considered a missed dividend payment.
(8)Outreach to minorities, women, and veteransThe Secretary shall require eligible institutions receiving capital investments under the Program to provide linguistically and culturally appropriate outreach and advertising in the applicant pool describing the availability and application process of receiving loans from the eligible institution that are made possible by the Program through the use of print, radio, television or electronic media outlets which target organizations, trade associations, and individuals that—
(A)represent or work within or are members of minority communities;
(B)represent or work with or are women; and
(C)represent or work with or are veterans.
(9)Additional termsThe Secretary may, by regulation or guidance issued under section 4104(9), make modifications that will apply to new capital investments in order to manage risks associated with the administration of the Fund in a manner consistent with the purposes of this subtitle.
(10)Minimum underwriting standardsThe appropriate Federal banking agency for an eligible institution that receives funds under the Program shall within 60 days issue guidance regarding prudent underwriting standards that must be used for loans made by the eligible institution using such funds.
4104.Additional authorities of the SecretaryThe Secretary may take such actions as the Secretary deems necessary to carry out the authorities in this subtitle, including, without limitation, the following:
(1)The Secretary may use the services of any agency or instrumentality of the United States or component thereof on a reimbursable basis, and any such agency or instrumentality or component thereof is authorized to provide services as requested by the Secretary using all authorities vested in or delegated to that agency, instrumentality, or component.
(2)The Secretary may enter into contracts, including contracts for services authorized by section 3109 of title 5, United States Code.
(3)The Secretary may designate any bank, savings association, trust company, security broker or dealer, asset manager, or investment adviser as a financial agent of the Federal Government and such institution shall perform all such reasonable duties related to this subtitle as financial agent of the Federal Government as may be required. The Secretary shall have authority to amend existing agreements with financial agents, entered into during the 2-year period before the date of enactment of this Act, to perform reasonable duties related to this subtitle.
(4)The Secretary may exercise any rights received in connection with any preferred stock or other financial instruments or assets purchased or acquired pursuant to the authorities granted under this subtitle.
(5)Subject to section 4103(b)(3), the Secretary may manage any assets purchased under this subtitle, including revenues and portfolio risks therefrom.
(6)The Secretary may sell, dispose of, transfer, exchange or enter into securities loans, repurchase transactions, or other financial transactions in regard to, any preferred stock or other financial instrument or asset purchased or acquired under this subtitle, upon terms and conditions and at a price determined by the Secretary.
(7)The Secretary may manage or prohibit conflicts of interest that may arise in connection with the administration and execution of the authorities provided under this subtitle.
(8)The Secretary may establish and use vehicles, subject to supervision by the Secretary, to purchase, hold, and sell preferred stock or other financial instruments and issue obligations.
(9)The Secretary may, in consultation with the Administrator of the Small Business Administration, issue such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities or purposes of this subtitle.
4105.ConsiderationsIn exercising the authorities granted in this subtitle, the Secretary shall take into consideration—
(1)increasing the availability of credit for small businesses;
(2)providing funding to minority-owned eligible institutions and other eligible institutions that serve small businesses that are minority-, veteran-, and women-owned and that also serve low- and moderate-income, minority, and other underserved or rural communities;
(3)protecting and increasing American jobs;
(4)increasing the opportunity for small business development in areas with high unemployment rates that exceed the national average;
(5)ensuring that all eligible institutions may apply to participate in the program established under this subtitle, without discrimination based on geography;
(6)providing transparency with respect to use of funds provided under this subtitle;
(7)minimizing the cost to taxpayers of exercising the authorities;
(8)promoting and engaging in financial education to would-be borrowers; and
(9)providing funding to eligible institutions that serve small businesses directly affected by the discharge of oil arising from the explosion on and sinking of the mobile offshore drilling unit Deepwater Horizon and small businesses in communities that have suffered negative economic effects as a result of that discharge with particular consideration to States along the coast of the Gulf of Mexico.
4106.ReportsThe Secretary shall provide to the appropriate committees of Congress—
(1)within 7 days of the end of each month commencing with the first month in which transactions are made under the Program, a written report describing all of the transactions made during the reporting period pursuant to the authorities granted under this subtitle;
(2)after the end of March and the end of September, commencing September 30, 2010, a written report on all projected costs and liabilities, all operating expenses, including compensation for financial agents, and all transactions made by the Fund, which shall include participating institutions and amounts each institution has received under the Program; and
(3)within 7 days of the end of each calendar quarter commencing with the first calendar quarter in which transactions are made under the Program, a written report detailing how eligible institutions participating in the Program have used the funds such institutions received under the Program.
4107.Oversight and audits
(a)Inspector General OversightThe Inspector General of the Department of the Treasury shall conduct, supervise, and coordinate audits and investigations of the Program through the Office of Small Business Lending Fund Program Oversight established under subsection (b).
(b)Office of small business lending fund program oversight
(1)EstablishmentThere is hereby established within the Office of the Inspector General of the Department of the Treasury a new office to be named the Office of Small Business Lending Fund Program Oversight to provide oversight of the Program.
(2)LeadershipThe Inspector General shall appoint a Special Deputy Inspector General for SBLF Program Oversight to lead the Office, with commensurate staff, who shall report directly to the Inspector General and who shall be responsible for the performance of all auditing and investigative activities relating to the Program.
(3)Reporting
(A)In generalThe Inspector General shall issue a report no less than two times a year to the Congress and the Secretary devoted to the oversight provided by the Office, including any recommendations for improvements to the Program.
(B)RecommendationsWith respect to any deficiencies identified in a report under subparagraph (A), the Secretary shall either—
(i)take actions to address such deficiencies; or
(ii)certify to the appropriate committees of Congress that no action is necessary or appropriate.
(4)CoordinationThe Inspector General, in maximizing the effectiveness of the Office, shall work with other Offices of Inspector General, as appropriate, to minimize duplication of effort and ensure comprehensive oversight of the Program.
(5)TerminationThe Office shall terminate at the end of the 6-month period beginning on the date on which all capital investments are repaid under the Program or the date on which the Secretary determines that any remaining capital investments will not be repaid.
(6)DefinitionsFor purposes of this subsection:
(A)OfficeThe term Office means the Office of Small Business Lending Fund Program Oversight established under paragraph (1).
(B)Inspector generalThe term Inspector General means the Inspector General of the Department of the Treasury.
(c)GAO AuditThe Comptroller General of the United States shall perform an annual audit of the Program and issue a report to the appropriate committees of Congress containing the results of such audit.
(d)Required Certifications
(1)Eligible institution certificationEach eligible institution that participates in the Program must certify that such institution is in compliance with the requirements of section 103.121 of title 31, Code of Federal Regulations, a regulation that, at a minimum, 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 identity 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 identity, and determine whether the person appears on any lists of known or suspected terrorists or terrorist organizations provided to the financial institution by any government agency.
(2)Loan recipientsWith respect to funds received by an eligible institution under the Program, any business receiving a loan from the eligible institution using such funds after the date of the enactment of this Act shall certify to such eligible institution 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 Offender Registration and Notification Act (42 U.S.C. 16911)).
(e)Prohibition on PornographyNone of the funds made available under this subtitle may be used to pay the salary of any individual engaged in activities related to the Program who has been officially disciplined for violations 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.
4108.Credit reform; funding
(a)Credit ReformThe cost of purchases of preferred stock and other financial instruments made as capital investments under this subtitle shall be determined as provided under the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
(b)Funds Made AvailableThere are hereby appropriated, out of funds in the Treasury not otherwise appropriated, such sums as may be necessary to pay the costs of $30,000,000,000 of capital investments in eligible institutions, including the costs of modifying such investments, and reasonable costs of administering the program of making, holding, managing, and selling the capital investments.
4109.Termination and continuation of authorities
(a)Termination of Investment AuthorityThe authority to make capital investments in eligible institutions, including commitments to purchase preferred stock or other instruments, provided under this subtitle shall terminate 1 year after the date of enactment of this Act.
(b)Continuation of Other AuthoritiesThe authorities of the Secretary under section 4104 shall not be limited by the termination date in subsection (a).
4110.Preservation of authorityNothing in this subtitle may be construed to limit the authority of the Secretary under any other provision of law.
4111.Assurances
(a)Small Business Lending Fund Separate From TARPThe Small Business Lending Fund Program is established as separate and distinct from the Troubled Asset Relief Program established by the Emergency Economic Stabilization Act of 2008. An institution shall not, by virtue of a capital investment under the Small Business Lending Fund Program, be considered a recipient of the Troubled Asset Relief Program.
(b)Change in LawIf, after a capital investment has been made in an eligible institution under the Program, there is a change in law that modifies the terms of the investment or program in a materially adverse respect for the eligible institution, the eligible institution may, after consultation with the appropriate Federal banking agency for the eligible institution, repay the investment without impediment.
4112.Study and report with respect to women-owned, veteran-owned, and minority-owned businesses
(a)StudyThe Secretary shall conduct a study of the impact of the Program on women-owned businesses, veteran-owned businesses, and minority-owned businesses.
(b)ReportNot later than one year after the date of enactment of this Act, the Secretary shall submit to Congress a report on the results of the study conducted pursuant to subsection (a). To the extent possible, the Secretary shall disaggregate the results of such study by ethnic group and gender.
(c)Information Provided to the SecretaryEligible institutions that participate in the Program shall provide the Secretary with such information as the Secretary may require to carry out the study required by this section.
4113.Sense of congressIt is the sense of Congress that the Federal Deposit Insurance Corporation and other bank regulators are sending mixed messages to banks regarding regulatory capital requirements and lending standards, which is a contributing cause of decreased small business lending and increased regulatory uncertainty at community banks.
BOther provisions
ISmall business export promotion initiatives
4221.Short titleThis part may be cited as the Export Promotion Act of 2010.
4222.Global business development and promotion activities of the Department of Commerce
(a)Increase in employees with responsibility for global business development and promotion activities
(1)In generalDuring the 24-month period beginning on the date of the enactment of this Act, the Secretary of Commerce shall increase the number of full-time departmental employees whose primary responsibilities involve promoting or facilitating participation by United States businesses in the global marketplace and facilitating the entry into, or expansion of, such participation by United States businesses. In carrying out this subsection, the Secretary shall ensure that—
(A)the cohort of such employees is increased by not less than 80 persons; and
(B)a substantial portion of the increased cohort is stationed outside the United States.
(2)Enhanced focus on United States small- and medium-sized businessesIn carrying out this subsection, the Secretary shall take such action as may be necessary to ensure that the activities of the Department of Commerce relating to promoting and facilitating participation by United States businesses in the global marketplace include promoting and facilitating such participation by small and medium-sized businesses in the United States.
(3)Authorization of appropriationsThere are authorized to be appropriated to the Secretary for each of the fiscal years 2011 and 2012 such sums as may be necessary to carry out this section.
(b)Additional funding for global business development and promotion activities of the Department of Commerce
(1)In generalThere are authorized to be appropriated to the Secretary of Commerce for the period beginning on the date of the enactment of this Act and ending 18 months thereafter, $30,000,000 to promote or facilitate participation by United States businesses in the global marketplace and facilitating the entry into, or expansion of, such participation by United States businesses.
(2)RequirementsIn obligating and expending the funds authorized to be appropriated by paragraph (1), the Secretary of Commerce shall give preference to activities that—
(A)assist small- and medium-sized businesses in the United States; and
(B)the Secretary determines will create or sustain the greatest number of jobs in the United States and obtain the maximum return on investment.
4223.Additional funding to improve access to global markets for rural businesses
(a)In generalThere are authorized to be appropriated to the Secretary of Commerce $5,000,000 for each of the fiscal years 2011 and 2012 for improving access to the global marketplace for goods and services provided by rural businesses in the United States.
(b)RequirementsIn obligating and expending the funds authorized to be appropriated by subsection (a), the Secretary of Commerce shall give preference to activities that—
(1)assist small- and medium-sized businesses in the United States; and
(2)the Secretary determines will create or sustain the greatest number of jobs in the United States and obtain the maximum return on investment.
4224.Additional funding for the ExporTech program
(a)In generalThere are authorized to be appropriated to the Secretary of Commerce $11,000,000 for the period beginning on the date of the enactment of this Act and ending 18 months thereafter, to expand ExporTech, a joint program of the Hollings Manufacturing Partnership Program and the Export Assistance Centers of the Department of Commerce.
(b)RequirementsIn obligating and expending the funds authorized to be appropriated by subsection (a), the Secretary of Commerce shall give preference to activities that—
(1)assist small- and medium-sized businesses in the United States; and
(2)the Secretary determines will create or sustain the greatest number of jobs in the United States and obtain the maximum return on investment.
4225.Additional funding for the market development cooperator program of the department of commerce
(a)In generalThere are authorized to be appropriated to the Secretary of Commerce for the period beginning on the date of the enactment of this Act and ending 18 months thereafter, $15,000,000 for the Manufacturing and Services unit of the International Trade Administration—
(1)to establish public-private partnerships under the Market Development Cooperator Program of the International Trade Administration; and
(2)to underwrite a portion of the start-up costs for new projects carried out under that Program to strengthen the competitiveness and market share of United States industry, not to exceed, for each such project, the lesser of—
(A)1/3 of the total start-up costs for the project; or
(B)$500,000.
(b)RequirementsIn obligating and expending the funds authorized to be appropriated by subsection (a), the Secretary of Commerce shall give preference to activities that—
(1)assist small- and medium-sized businesses in the United States; and
(2)the Secretary determines will create or sustain the greatest number of jobs in the United States and obtain the maximum return on investment.
4226.Hollings Manufacturing Partnership Program; Technology Innovation Program
(a)Hollings manufacturing partnership programSection 25(f) of the National Institute of Standards and Technology Act (15 U.S.C. 278k(f)) is amended by adding at the end the following:

(7)Global marketplace projectsIn making awards under this subsection, the Director, in consultation with the Manufacturing Extension Partnership Advisory Board and the Secretary of Commerce, may—
(A)take into consideration whether an application has significant potential for enhancing the competitiveness of small and medium-sized United States manufacturers in the global marketplace; and
(B)give a preference to applications for such projects to the extent the Director deems appropriate, taking into account the broader purposes of this subsection..
(b)Technology innovation programIn awarding grants, cooperative agreements, or contracts under section 28 of the National Institute of Standards and Technology Act (15 U.S.C. 278n), in addition to the award criteria set forth in subsection (c) of that section, the Director of the National Institute of Standards and Technology may take into consideration whether an application has significant potential for enhancing the competitiveness of small- and medium-sized businesses in the United States in the global marketplace. The Director shall consult with the Technology Innovation Program Advisory Board and the Secretary of Commerce in implementing this subsection.
4227.Sense of the Senate concerning Federal collaboration with States on export promotion issuesIt is the sense of the Senate that the Secretary of Commerce should enhance Federal collaboration with the States on export promotion issues by—
(1)providing the necessary training to the staff at State international trade agencies to enable them to assist the United States and Foreign Commercial Service (established by section 2301 of the Export Enhancement Act of 1988 (15 U.S.C. 4721)) in providing counseling and other export services to businesses in their communities; and
(2)entering into agreements with State international trade agencies for those agencies to deliver export promotion services in their local communities in order to extend the outreach of United States and Foreign Commercial Service programs.
4228.Report on tariff and nontariff barriersNot later than 90 days after the date of the enactment of this Act, the Secretary of Commerce, in consultation with the United States Trade Representative and other appropriate entities, shall report to Congress on the tariff and nontariff barriers imposed by Colombia, the Republic of Korea, and Panama with respect to exports of articles from the United States, including articles exported or produced by small- and medium-sized businesses in the United States.
IIMedicare fraud
4241.Use of predictive modeling and other analytics technologies to identify and prevent waste, fraud, and abuse in the Medicare fee-for-service program
(a)Use in the Medicare fee-for-service programThe Secretary shall use predictive modeling and other analytics technologies (in this section referred to as predictive analytics technologies) to identify improper claims for reimbursement and to prevent the payment of such claims under the Medicare fee-for-service program.
(b)Predictive analytics technologies requirementsThe predictive analytics technologies used by the Secretary shall—
(1)capture Medicare provider and Medicare beneficiary activities across the Medicare fee-for-service program to provide a comprehensive view across all providers, beneficiaries, and geographies within such program in order to—
(A)identify and analyze Medicare provider networks, provider billing patterns, and beneficiary utilization patterns; and
(B)identify and detect any such patterns and networks that represent a high risk of fraudulent activity;
(2)be integrated into the existing Medicare fee-for-service program claims flow with minimal effort and maximum efficiency;
(3)be able to—
(A)analyze large data sets for unusual or suspicious patterns or anomalies or contain other factors that are linked to the occurrence of waste, fraud, or abuse;
(B)undertake such analysis before payment is made; and
(C)prioritize such identified transactions for additional review before payment is made in terms of the likelihood of potential waste, fraud, and abuse to more efficiently utilize investigative resources;
(4)capture outcome information on adjudicated claims for reimbursement to allow for refinement and enhancement of the predictive analytics technologies on the basis of such outcome information, including post-payment information about the eventual status of a claim; and
(5)prevent the payment of claims for reimbursement that have been identified as potentially wasteful, fraudulent, or abusive until such time as the claims have been verified as valid.
(c)Implementation requirements
(1)Request for proposalsNot later than January 1, 2011, the Secretary shall issue a request for proposals to carry out this section during the first year of implementation. To the extent the Secretary determines appropriate—
(A)the initial request for proposals may include subsequent implementation years; and
(B)the Secretary may issue additional requests for proposals with respect to subsequent implementation years.
(2)First implementation yearThe initial request for proposals issued under paragraph (1) shall require the contractors selected to commence using predictive analytics technologies on July 1, 2011, in the 10 States identified by the Secretary as having the highest risk of waste, fraud, or abuse in the Medicare fee-for-service program.
(3)Second implementation yearBased on the results of the report and recommendation required under subsection (e)(1)(B), the Secretary shall expand the use of predictive analytics technologies on October 1, 2012, to apply to an additional 10 States identified by the Secretary as having the highest risk of waste, fraud, or abuse in the Medicare fee-for-service program, after the States identified under paragraph (2).
(4)Third implementation yearBased on the results of the report and recommendation required under subsection (e)(2), the Secretary shall expand the use of predictive analytics technologies on January 1, 2014, to apply to the Medicare fee-for-service program in any State not identified under paragraph (2) or (3) and the commonwealths and territories.
(5)Fourth implementation yearBased on the results of the report and recommendation required under subsection (e)(3), the Secretary shall expand the use of predictive analytics technologies, beginning April 1, 2015, to apply to Medicaid and CHIP. To the extent the Secretary determines appropriate, such expansion may be made on a phased-in basis.
(6)Option for refinement and evaluationIf, with respect to the first, second, or third implementation year, the Inspector General of the Department of Health and Human Services certifies as part of the report required under subsection (e) for that year no or only nominal actual savings to the Medicare fee-for-service program, the Secretary may impose a moratorium, not to exceed 12 months, on the expansion of the use of predictive analytics technologies under this section for the succeeding year in order to refine the use of predictive analytics technologies to achieve more than nominal savings before further expansion. If a moratorium is imposed in accordance with this paragraph, the implementation dates applicable for the succeeding year or years shall be adjusted to reflect the length of the moratorium period.
(d)Contractor selection, qualifications, and data access requirements
(1)Selection
(A)In generalThe Secretary shall select contractors to carry out this section using competitive procedures as provided for in the Federal Acquisition Regulation.
(B)Number of contractorsThe Secretary shall select at least 2 contractors to carry out this section with respect to any year.
(2)Qualifications
(A)In generalThe Secretary shall enter into a contract under this section with an entity only if the entity—
(i)has leadership and staff who—
(I)have the appropriate clinical knowledge of, and experience with, the payment rules and regulations under the Medicare fee-for-service program; and
(II)have direct management experience and proficiency utilizing predictive analytics technologies necessary to carry out the requirements under subsection (b); or
(ii)has a contract, or will enter into a contract, with another entity that has leadership and staff meeting the criteria described in clause (i).
(B)Conflict of interestThe Secretary may only enter into a contract under this section with an entity to the extent that the entity complies with such conflict of interest standards as are generally applicable to Federal acquisition and procurement.
(3)Data accessThe Secretary shall provide entities with a contract under this section with appropriate access to data necessary for the entity to use predictive analytics technologies in accordance with the contract.
(e)Reporting requirements
(1)First implementation year reportNot later than 3 months after the completion of the first implementation year under this section, the Secretary shall submit to the appropriate committees of Congress and make available to the public a report that includes the following:
(A)A description of the implementation of the use of predictive analytics technologies during the year.
(B)A certification of the Inspector General of the Department of Health and Human Services that—
(i)specifies the actual and projected savings to the Medicare fee-for-service program as a result of the use of predictive analytics technologies, including estimates of the amounts of such savings with respect to both improper payments recovered and improper payments avoided;
(ii)the actual and projected savings to the Medicare fee-for-service program as a result of such use of predictive analytics technologies relative to the return on investment for the use of such technologies and in comparison to other strategies or technologies used to prevent and detect fraud, waste, and abuse in the Medicare fee-for-service program; and
(iii)includes recommendations regarding—
(I)whether the Secretary should continue to use predictive analytics technologies;
(II)whether the use of such technologies should be expanded in accordance with the requirements of subsection (c); and
(III)any modifications or refinements that should be made to increase the amount of actual or projected savings or mitigate any adverse impact on Medicare beneficiaries or providers.
(C)An analysis of the extent to which the use of predictive analytics technologies successfully prevented and detected waste, fraud, or abuse in the Medicare fee-for-service program.
(D)A review of whether the predictive analytics technologies affected access to, or the quality of, items and services furnished to Medicare beneficiaries.
(E)A review of what effect, if any, the use of predictive analytics technologies had on Medicare providers.
(F)Any other items determined appropriate by the Secretary.
(2)Second year implementation reportNot later than 3 months after the completion of the second implementation year under this section, the Secretary shall submit to the appropriate committees of Congress and make available to the public a report that includes, with respect to such year, the items required under paragraph (1) as well as any other additional items determined appropriate by the Secretary with respect to the report for such year.
(3)Third year implementation reportNot later than 3 months after the completion of the third implementation year under this section, the Secretary shall submit to the appropriate committees of Congress, and make available to the public, a report that includes with respect to such year, the items required under paragraph (1), as well as any other additional items determined appropriate by the Secretary with respect to the report for such year, and the following:
(A)An analysis of the cost-effectiveness and feasibility of expanding the use of predictive analytics technologies to Medicaid and CHIP.
(B)An analysis of the effect, if any, the application of predictive analytics technologies to claims under Medicaid and CHIP would have on States and the commonwealths and territories.
(C)Recommendations regarding the extent to which technical assistance may be necessary to expand the application of predictive analytics technologies to claims under Medicaid and CHIP, and the type of any such assistance.
(f)Independent evaluation and report
(1)EvaluationUpon completion of the first year in which predictive analytics technologies are used with respect to claims under Medicaid and CHIP, the Secretary shall, by grant, contract, or interagency agreement, conduct an independent evaluation of the use of predictive analytics technologies under the Medicare fee-for-service program and Medicaid and CHIP. The evaluation shall include an analysis with respect to each such program of the items required for the third year implementation report under subsection (e)(3).
(2)ReportNot later than 18 months after the evaluation required under paragraph (1) is initiated, the Secretary shall submit a report to Congress on the evaluation that shall include the results of the evaluation, the Secretary's response to such results and, to the extent the Secretary determines appropriate, recommendations for legislation or administrative actions.
(g)Waiver authorityThe Secretary may waive such provisions of titles XI, XVIII, XIX, and XXI of the Social Security Act, including applicable prompt payment requirements under titles XVIII and XIX of such Act, as the Secretary determines to be appropriate to carry out this section.
(h)Funding
(1)AppropriationOut of any funds in the Treasury not otherwise appropriated, there is appropriated to the Secretary to carry out this section, $100,000,000 for the period beginning January 1, 2011, to remain available until expended.
(2)Reservations
(A)Independent evaluationThe Secretary shall reserve not more than 5 percent of the funds appropriated under paragraph (1) for purposes of conducting the independent evaluation required under subsection (f).
(B)Application to medicaid and chipThe Secretary shall reserve such portion of the funds appropriated under paragraph (1) as the Secretary determines appropriate for purposes of providing assistance to States for administrative expenses in the event of the expansion of predictive analytics technologies to claims under Medicaid and CHIP.
(i)DefinitionsIn this section:
(1)Commonwealths and territoriesThe term commonwealth and territories includes the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any other territory or possession of the United States in which the Medicare fee-for-service program, Medicaid, or CHIP operates.
(2)CHIPThe term CHIP means the Children's Health Insurance Program established under title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.).
(3)MedicaidThe term Medicaid means the program to provide grants to States for medical assistance programs established under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).
(4)Medicare beneficiaryThe term Medicare beneficiary means an individual enrolled in the Medicare fee-for-service program.
(5)Medicare fee-for-service programThe term Medicare fee-for-service program means the original medicare fee-for-service program under parts A and B of title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.).
(6)Medicare providerThe term Medicare provider means a provider of services (as defined in subsection (u) of section 1861 of the Social Security Act (42 U.S.C. 1395x)) and a supplier (as defined in subsection (d) of such section).
(7)SecretaryThe term Secretary means the Secretary of Health and Human Services, acting through the Administrator of the Centers for Medicare & Medicaid Services.
(8)StateThe term State means each of the 50 States and the District of Columbia.
VBudgetary provisions
5001.Determination of budgetary effectsThe 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 Senate Budget Committee, provided that such statement has been submitted prior to the vote on passage.
 Speaker of the House of Representatives.Vice President of the United States and President of the Senate.