1.Short title; table of contents
(a)This title may be cited as the Small Business Jobs and Credit Act of 2010
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Small Business Lending Fund
Sec. 101. Purpose.
Sec. 102. Definitions.
Sec. 103. Small Business Lending Fund.
Sec. 104. Additional authorities of the Secretary.
Sec. 105. Considerations.
Sec. 106. Reports.
Sec. 107. Oversight and audits.
Sec. 108. Credit reform; Funding.
Sec. 109. Termination and continuation of authorities.
Sec. 110. Preservation of authority.
Sec. 111. Assurances.
Sec. 112. Study and report with respect to women-owned, veteran-owned, and minority-owned businesses.
Sec. 113. Temporary amortization authority.
Sec. 114. Sense of Congress.
Title II—State Small Business Credit Initiative
Sec. 201. Short title.
Sec. 202. Definitions.
Sec. 203. Federal funds allocated to States.
Sec. 204. Approving States for participation.
Sec. 205. Approving State capital access programs.
Sec. 206. Approving collateral support and other innovative credit access and guarantee initiatives for small businesses and manufacturers.
Sec. 207. Reports.
Sec. 208. Remedies for State program termination or failures.
Sec. 209. Implementation and administration.
Sec. 210. Regulations.
Sec. 211. Oversight and audits.
Title III—Small business early-stage investment program
Sec. 301. Short title.
Sec. 302. Small business early-stage investment program.
Sec. 303. Regulations.
Sec. 304. Prohibitions on earmarks.
Title IV—Miscellaneous
Sec. 401. Budgetary effects.
Title V—Tax provisions
Sec. 500. Short title; etc.
Subtitle A—Small business tax incentives
Part 1—General provisions
Sec. 501. Temporary exclusion of 100 percent of gain on certain small business stock.
Part 2—Limitations and reporting on certain penalties
Sec. 511. Limitation on penalty for failure to disclose certain information.
Sec. 512. Annual reports on penalties and certain other enforcement actions.
Part 3—Other provisions
Sec. 521. Increase in amount allowed as deduction for start-up expenditures.
Sec. 522. Nonrecourse small business investment company loans from the Small Business Administration treated as amounts at risk.
Sec. 523. Benefits under the Small Business Borrower Assistance Program excluded from gross income.
Subtitle B—Revenue provisions
Sec. 531. Required minimum 10-year term, etc., for grantor retained annuity trusts.
Sec. 532. Crude tall oil ineligible for cellulosic biofuel producer credit.
Sec. 533. Time for payment of corporate estimated taxes.
Title VI—Plain Writing Act
Sec. 601. Short title.
Sec. 602. Purpose.
Sec. 603. Definitions.
Sec. 604. Responsibilities of Federal agencies.
Sec. 605. Reports to Congress.
Title VII—Sense of Congress on agriculture and farming small business loans
Sec. 701. Sense of Congress.
Title VIII—Small Business Borrower Assistance Program
Sec. 801. Short title.
Sec. 802. Small Business Borrower Assistance Program.
<enum>I</enum><header>Small Business Lending Fund</header>
<section id="HED85DB753036491BAF7D1CA9215A5102"><enum>101.</enum><header>Purpose</header><text display-inline="no-display-inline">The purpose of this title 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.</text></section>
<section id="H63EF820F524C4546AF1367375F437591"><enum>102.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title:</text>
<paragraph id="H959EBCBCD5C44923917EF6C89387E696"><enum>(1)</enum><header>Appropriate committees of Congress</header><text>The term <quote>appropriate committees of Congress</quote> means—</text>
<subparagraph id="H347127F080BC43369F18070F1ED58EDD"><enum>(A)</enum><text>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</text></subparagraph>
<subparagraph id="H2BEBA816636D4426A954854C8473A392"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="H8160822F7E244C07918C46878EC50ED1"><enum>(2)</enum><header>Appropriate Federal banking agency</header><text>The term <quote>appropriate Federal banking agency</quote> has the meaning given such term under section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)).</text></paragraph>
<paragraph id="HEAC43581D9314296AD968EAB93D72930"><enum>(3)</enum><header>Bank holding company</header><text>The term <quote>bank holding company</quote> 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)).</text></paragraph>
<paragraph id="HEC06544219444B489BF1E4E783835802"><enum>(4)</enum><header>Call report</header><text>The term <quote>call report</quote> means—</text>
<subparagraph id="H4C9EFC7AB033490EBC4AC931B25BA959"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="HA97706D3A7404DB7A3EB5456C0228639"><enum>(B)</enum><text>the Office of Thrift Supervision Thrift Financial Report; </text></subparagraph>
<subparagraph id="H6F8808A95F5B42129811E56D4A72F2A6"><enum>(C)</enum><text>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); </text></subparagraph>
<subparagraph id="H2995583C063A4CC0974811727F370C0E"><enum>(D)</enum><text display-inline="yes-display-inline">standard reports of Condition and Income submitted by Community Development Financial Institution loan funds to the Community Development Financial Institutions Fund; and</text></subparagraph>
<subparagraph id="HD301ABED19DE4280B3E78F14B883D904"><enum>(E)</enum><text display-inline="yes-display-inline">with respect to an eligible institution for which no report exists that is described under subparagraph (A), (B), or (C), such other report or set of information as the Secretary, in consultation with the Administrator of the Small Business Administration, may prescribe.</text></subparagraph></paragraph>
<paragraph id="H888F2FBD628B4A5C9410AC2C5876698B"><enum>(5)</enum><header>CDCI</header><text>The term <quote>CDCI</quote> 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.</text></paragraph>
<paragraph id="HA739E0450401473B994D67A4F4D553D9"><enum>(6)</enum><header>CDCI investment</header><text>The term <quote>CDCI investment</quote> 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.</text></paragraph>
<paragraph id="H802CD9FBF7F644CFAA17A4A3AB16BD68"><enum>(7)</enum><header>CPP</header><text>The term <quote>CPP</quote> means the Capital Purchase Program created by the Secretary under the Troubled Asset Relief Program established by the Emergency Economic Stabilization Act of 2008.</text></paragraph>
<paragraph id="H9DDAAA472A0E47F8AEEF801047E9FCFF"><enum>(8)</enum><header>CPP investment</header><text>The term <quote>CPP investment</quote> 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.</text></paragraph>
<paragraph id="H2117BA8664FE4A7AB6661B35B50891E1"><enum>(9)</enum><header>Eligible institution</header><text>The term <quote>eligible institution</quote> means—</text>
<subparagraph id="H14BC84639A994FB9B9DD93BB26BD2342"><enum>(A)</enum><text>any insured depository institution, which—</text>
<clause id="HA43E135D24DF4FB2B317E26DD23C8E71"><enum>(i)</enum><text>is not controlled by a bank holding company or savings and loan holding company that is also an eligible institution;</text></clause>
<clause id="H9D59B0F0E35646B7955620CCABD4601F"><enum>(ii)</enum><text>has total assets of equal to or less than $10,000,000,000, as reported in the call report as of the end of the fourth quarter of calendar year 2009; and</text></clause>
<clause id="H176C015B6F134AC6A48063FA6F589B33"><enum>(iii)</enum><text>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;</text></clause></subparagraph>
<subparagraph id="HFD74A831B33849258E970BA4EFE65060"><enum>(B)</enum><text display-inline="yes-display-inline">any bank holding company which has total consolidated assets of equal to or less than $10,000,000,000; </text></subparagraph>
<subparagraph id="H271E49F87D3B402DA1B59C27AEB64FB3"><enum>(C)</enum><text display-inline="yes-display-inline">any savings and loan holding company which has total consolidated assets of equal to or less than $10,000,000,000; </text></subparagraph>
<subparagraph id="H64DA1AD3796141B5939EDC54B08C7BF0"><enum>(D)</enum><text display-inline="yes-display-inline">any community development financial institution loan fund which has total assets of equal to or less than $10,000,000,000; and</text></subparagraph>
<subparagraph id="HA18DDD40AB304C3C864E70A3B4458D8E"><enum>(E)</enum><text display-inline="yes-display-inline">any small business lending company that has total assets of equal to or less than $10,000,000,000.</text></subparagraph></paragraph>
<paragraph id="H621D8A553D4A450DBC925520F8719A9E"><enum>(10)</enum><header>Fund</header><text>The term <quote>Fund</quote> means the Small Business Lending Fund established by section 4(a)(1) of this title.</text></paragraph>
<paragraph id="H23D98F032E554BFAB232119BD6D5F6C1"><enum>(11)</enum><header>Insured depository institution</header><text>The term <quote>insured depository institution</quote> has the meaning given such term under section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(2)).</text></paragraph>
<paragraph id="H4DADEE1DC5C34295A5A0803CF0EDB1DF"><enum>(12)</enum><header>Program</header><text>The term <quote>Program</quote> means the Small Business Lending Fund Program authorized by section 4(a)(2) of this title.</text></paragraph>
<paragraph id="H91BD07770AB2437EBE9BA8CF1AC0627F"><enum>(13)</enum><header>Savings and loan holding company</header><text>The term <quote>savings and loan holding company</quote> 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)).</text></paragraph>
<paragraph id="HF6BAFE26DFE844528E2D497418A3B9BF"><enum>(14)</enum><header>Secretary</header><text>The term <quote>Secretary</quote> means the Secretary of the Treasury.</text></paragraph>
<paragraph id="H530C622CCE914B3EA7DE453BBAA5D4E9"><enum>(15)</enum><header>Small business lending</header>
<subparagraph id="H0D7ACA73282C4884B868180DD86BFA3A"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <quote>small business lending</quote> means small business lending, as defined by and reported in an eligible institution’s quarterly call report, where each loan comprising such lending is made to a small business and is one of the following types:</text>
<clause id="H3EB6ECD31906429ABA9EF17025222353"><enum>(i)</enum><text>Commercial and industrial loans.</text></clause>
<clause id="H9AABE36E7DE14F8198005D8BE8F2FFE5"><enum>(ii)</enum><text>Owner-occupied nonfarm, nonresidential real estate loans.</text></clause>
<clause id="H059D62C7CE144D31B4C5409A47834660"><enum>(iii)</enum><text>Loans to finance agricultural production and other loans to farmers.</text></clause>
<clause id="HD5B22E1D4B0C4D9288CC284074FA14A8"><enum>(iv)</enum><text>Loans secured by farmland.</text></clause>
<clause id="H859B34A5A1B74DE4BF56E794C8328F5E"><enum>(v)</enum><text display-inline="yes-display-inline">Nonowner-occupied commercial real estate loans.</text></clause>
<clause id="HE15920C1ADE84108842FA0D081DBF607"><enum>(vi)</enum><header>Construction, land development, and other land loans</header>
<subclause id="HADCC422637BD49549E3006A2BEEF98D6"><enum>(I)</enum><header>In general</header><text>Loans secured by real estate—</text>
<item id="HFEF31C3153E24DD9BAC141BAF42F4652"><enum>(aa)</enum><text>that are made to finance—</text>
<subitem id="H5F61B57E4C30439CA279DA4CB1239D77"><enum>(AA)</enum><text display-inline="yes-display-inline">land development that is preparatory to erecting new structures, including improving land, laying sewers, and laying water pipes; or</text></subitem>
<subitem id="HF78EB7B915644A148D6DF2632CA6D23A"><enum>(BB)</enum><text display-inline="yes-display-inline">the on-site construction of industrial, commercial, residential, or farm buildings;</text></subitem></item>
<item id="H3D56A7B3BB204FE38CDD2BF471135DF4"><enum>(bb)</enum><text display-inline="yes-display-inline">that is vacant land, except land known to be used or usable for agricultural purposes, such as crop and livestock production;</text></item>
<item id="H941279A681E747E7BA5A1DEE95176C65"><enum>(cc)</enum><text display-inline="yes-display-inline">the proceeds of which are to be used to acquire and improve developed or undeveloped property; or</text></item>
<item id="H4A313D04CEE14785AB0758A5AA3EE20F"><enum>(dd)</enum><text display-inline="yes-display-inline">that are made under title I or title X of the National Housing Act.</text></item></subclause>
<subclause id="HFD1FC8F7FFBC4E29BADA33F02CB40CEE" display-inline="no-display-inline"><enum>(II)</enum><header>Construction industry requirement</header><text display-inline="yes-display-inline">Subclause (I) shall only apply to loans that are extended to small business concerns in the construction industry, as such term is defined by the Secretary in consultation with the Administrator of the Small Business Administration.</text></subclause>
<subclause id="HCF5AA00A6E16449E85B35902C805E8BE"><enum>(III)</enum><header>Construction defined</header><text display-inline="yes-display-inline">For purposes of this clause, the term <quote>construction</quote> includes the construction of new structures, additions or alterations to existing structures, and the demolition of existing structures to make way for new structures.</text></subclause></clause></subparagraph>
<subparagraph id="HE4E0F378F8274185A99CEDA281C90BED"><enum>(B)</enum><header>Treatment of holding companies</header><text>In 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.</text></subparagraph></paragraph>
<paragraph id="H5DC7158EAC334DE4BA20FC4299AFD6D0"><enum>(16)</enum><header>Minority-owned and women-owned business</header><text display-inline="yes-display-inline">The terms <quote>minority-owned business</quote> and <quote>women-owned business</quote> shall have the meaning given the terms <quote>minority-owned business</quote> and <quote>women’s business</quote>, respectively, under section 21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1441A(r)(4)).</text></paragraph>
<paragraph id="HA8C0186B16494589972EC8629D0490BC"><enum>(17)</enum><header>CDFI; Community development financial institution</header><text display-inline="yes-display-inline">The terms <quote>CDFI</quote> and <quote>community development financial institution</quote> have the meaning given the term <quote>community development financial institution</quote> under the Riegle Community Development and Regulatory Improvement Act of 1994.</text></paragraph>
<paragraph id="HFBB559E7FFCC448396260760B214CB9F"><enum>(18)</enum><header>CDLF; Community development loan fund</header><text display-inline="yes-display-inline">The terms <quote>CDLF</quote> and <quote>community development loan fund</quote> mean any entity that—</text>
<subparagraph id="HB2E0DCC4B8DD4B60AEFDA4BE512BADB3"><enum>(A)</enum><text>is certified by the Department of the Treasury as a community development financial institution loan fund;</text></subparagraph>
<subparagraph id="H0BF0C9C63B794D3198EE2DDB6E9F9510"><enum>(B)</enum><text>is exempt from taxation under the Internal Revenue Code of 1986; and</text></subparagraph>
<subparagraph id="H1E4764D72E784CA1883772049F7A8B62"><enum>(C)</enum><text>has assets under $10,000,000,000 as of the fourth quarter of calendar year 2009.</text></subparagraph></paragraph>
<paragraph id="H2FDB797A9B4F42CE880AF3AF0EB7BD5C" display-inline="no-display-inline"><enum>(19)</enum><header>Small business</header><text display-inline="yes-display-inline">The term <quote>small business</quote> has the meaning given the term <quote>small business concern</quote> under section 3 of the Small Business Act (15 U.S.C. 632).</text></paragraph>
<paragraph id="H9AE3FC2E385D40D68424B359E105EFF9"><enum>(20)</enum><header>Small business lending company</header><text>The term <quote>small business lending company</quote> has the meaning given such term under section 3(r)(1) of the Small Business Act (15 U.S.C. 632(r)(1)).</text></paragraph>
<paragraph id="H0B7F4D06D1C24DACA8801809C9F0F29B"><enum>(21)</enum><header>Veteran-owned business</header>
<subparagraph id="H244162A180EE4595AB83A175F5C6FC1E"><enum>(A)</enum><text>The term <quote>veteran-owned business</quote> means a business—</text>
<clause id="H55A960E81895478191F91B81D8A4F679"><enum>(i)</enum><text>more than 50 percent of the ownership or control of which is held by 1 or more veterans;</text></clause>
<clause id="H0D9FE29F72C247779B924309436FF5E6"><enum>(ii)</enum><text>more than 50 percent of the net profit or loss of which accrues to 1 or more veterans; and</text></clause>
<clause id="HE523A8DF5A1C4D46822F20DF7E287639"><enum>(iii)</enum><text>a significant percentage of senior management positions of which are held by veterans.</text></clause></subparagraph>
<subparagraph id="H5FE6BEFD6AAB4169A96C3C20820E7CA3"><enum>(B)</enum><text>For purposes of this paragraph, the term <quote>veteran</quote> has the meaning given such term in section 101(2) of title 38, United States Code.</text></subparagraph></paragraph></section>
<section id="HF74F6E2D5D8D49A3B1904C4F9F0099B7"><enum>103.</enum><header>Small Business Lending Fund</header>
<subsection id="H3874CD2E64FF46E886EC6324368FE5AB"><enum>(a)</enum><header>Fund and program</header>
<paragraph id="H34452E0817A243F2BC3ED0059EA44C57"><enum>(1)</enum><header>Fund established</header><text>There is established in the Treasury of the United States a fund to be known as the <quote>Small Business Lending Fund</quote>, which shall be administered by the Secretary.</text></paragraph>
<paragraph id="H9186B54173FA4B4B98BBA41F3991AE27"><enum>(2)</enum><header>Programs authorized</header><text>The Secretary is authorized to establish the Small Business Lending Fund Program for using the Fund consistent with this title.</text></paragraph></subsection>
<subsection id="HF7F604ECAA334FB990C780FF201E3784"><enum>(b)</enum><header>Use of Fund</header>
<paragraph id="H137BD09869B043D7B616AB2DB2F36512"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Subject 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 title. For purposes of this paragraph and with respect to an eligible institution, the term <quote>other financial instruments</quote> 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.</text></paragraph>
<paragraph id="H4D49159BD90D49FAB6045ED1218193F8"><enum>(2)</enum><header>Maximum purchase limit</header><text>The aggregate amount of purchases (and commitments to purchase) made pursuant to paragraph (1) may not exceed $30,000,000,000.</text></paragraph>
<paragraph id="H9E304A131BBB40B18CD70A9E4EB26D38"><enum>(3)</enum><header>Proceeds used to pay down public debt</header><text display-inline="yes-display-inline">All 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. </text></paragraph>
<paragraph id="HA60EBC2E29474C19B6982E7D6BE93D01"><enum>(4)</enum><header>Limitation on purchases from CDLFs</header>
<subparagraph id="H3352B4B1A2424CAD86F96CFD69F6D11F"><enum>(A)</enum><header>In general</header><text>Not more than 1 percent of the value of purchases made by the Secretary in carrying out the Program may be used to make purchases from community development loan funds.</text></subparagraph>
<subparagraph id="HAB33A995651F4E19870A6AF15D397598"><enum>(B)</enum><header>Eligibility standards</header><text display-inline="yes-display-inline">The 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 may include net asset ratio to total assets, ratio of loan loss reserves to loans and leases 90 days or more delinquent (including loans sold with full recourse), positive net income measured on a 3-year rolling average, operating liquidity ratio, ratio of loans and leases 90 days or more delinquent (including loans sold with full recourse) to total equity plus loan loss reserves or any other measures deemed appropriate. In addition, CDLFs participating in the Program shall submit audited financial statements to the Secretary, have a clean audit opinion, and have at least three years of operating experience.</text></subparagraph></paragraph></subsection>
<subsection id="H10BAE82CA7FE49B0A3068AAE71CFAEE9"><enum>(c)</enum><header>Credits to the fund</header><text>There shall be credited to the Fund amounts made available pursuant to section 9, to the extent provided by appropriations Acts.</text></subsection>
<subsection id="H7B725F619B2F43F7A37BBFB94D55D21B"><enum>(d)</enum><header>Terms</header>
<paragraph id="H72C7DA8F4E8F4B1FB82422AC753EA482"><enum>(1)</enum><header>Application</header>
<subparagraph id="HF8A1B682AB5046B2B91B1AA2CFD78567"><enum>(A)</enum><header>Institutions with assets of $1,000,000,000 or less</header><text>Eligible 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.</text></subparagraph>
<subparagraph id="H037267562F4D4B1D93F31F407C4FB8D1"><enum>(B)</enum><header>Institutions with assets of more than $1,000,000,000 and less than $10,000,000,000</header><text>Eligible 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.</text></subparagraph>
<subparagraph id="H1945A4631EBE4EF7ACFD388FFBA7BC0F"><enum>(C)</enum><header>Treatment of holding companies</header><text>In 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.</text></subparagraph>
<subparagraph id="HB0A5D862B4BC44DA84BA25B748DAC437"><enum>(D)</enum><header>Treatment of applicants that are institutions controlled by holding companies</header><text>If 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 paragraph, the term <quote>control</quote> 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 paragraph, the term <quote>control</quote> 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)).</text></subparagraph>
<subparagraph id="H5C0C4A37D3A84DE98ADAB79EFE74D645"><enum>(E)</enum><header>Requirement to provide a small business lending plan</header><text display-inline="yes-display-inline">At 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. This plan shall be confidential supervisory information.</text></subparagraph>
<subparagraph id="HBE474DCBE762475DA4CC3E8FD755DC3A"><enum>(F)</enum><header>Treatment of applicants that are community development loan funds</header><text display-inline="yes-display-inline">Eligible institutions that are community development loan funds may apply to receive a capital investment from the Fund in an amount not exceeding 10 percent of total assets, as reported in the call report immediately preceding the date of application.</text></subparagraph>
<subparagraph id="H9171E58B042248D8A7D1B0CA3039095A"><enum>(G)</enum><header>Election to include other nonfarm, nonresidential real estate loans in amount of small business lending</header><text display-inline="yes-display-inline">At the time that an applicant submits an application to the Secretary for a capital investment under the Program, the applicant may notify the Secretary that it elects to have included in the determination of the amount of its small business lending, for purposes of the computations made under paragraph (4), the amount of lending reported as other nonfarm, nonresidential real estate loans in its quarterly call report, but for purposes of this subparagraph, other nonfarm, nonresidential real estate loans shall not include a loan having an original amount greater than $10,000,000. If an applicant makes the election under this subparagraph, the amount of lending reported as other nonfarm, nonresidential real estate loans shall be included in the determination of the amount of its small business lending for purposes of the computations made under paragraph (4).</text></subparagraph></paragraph>
<paragraph id="H8F1AF2595D324BDA8CB9048CAA391E55"><enum>(2)</enum><header>Consultation with regulators</header><text>For each eligible institution that applies to receive a capital investment under the Program, the Secretary shall—</text>
<subparagraph id="HBFF6A8810FFD44E6AE27C03ECA5F263F"><enum>(A)</enum><text display-inline="yes-display-inline">consult with the appropriate Federal banking agency or, in the case of an eligible institution that is a non-depository 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;</text></subparagraph>
<subparagraph id="H961F586CAE1244E98CB08A803A5476E6"><enum>(B)</enum><text display-inline="yes-display-inline">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</text></subparagraph>
<subparagraph id="H24473F6CCEA44FF39D063386C19BC8CB"><enum>(C)</enum><text display-inline="yes-display-inline">in the case of a community development financial institution loan fund, consult with the Community Development Financial Institution Fund.</text></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H75FB8873AE0D499CB5791C3C4F7EDC3A"><enum>(3)</enum><header>Ineligibility of institutions on FDIC problem bank list</header>
<subparagraph id="H48B47A09A62A49CD8514D3000250BC4C"><enum>(A)</enum><header>In general</header><text>An eligible institution may not receive any capital investment under the Program if—</text>
<clause id="H14E1A3C48182485280353D0D36B06753"><enum>(i)</enum><text>such institution is on the FDIC problem bank list; or</text></clause>
<clause id="H8D43A5CBDA1948B59781DF55B36EF099"><enum>(ii)</enum><text>such institution has been removed from the FDIC problem bank list for less than 90 days.</text></clause></subparagraph>
<subparagraph id="H958A8E9EEE1142128F564C5A7D0CC8D7" display-inline="no-display-inline"><enum>(B)</enum><header>Construction</header><text display-inline="yes-display-inline">Nothing 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.</text></subparagraph>
<subparagraph id="HB5724C3A3F134EB7B889F6A9BDAADF23"><enum>(C)</enum><header>FDIC problem bank list defined</header><text display-inline="yes-display-inline">For purposes of this subparagraph, the term <quote>FDIC problem bank list</quote> means the list of institutions with 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.</text></subparagraph></paragraph>
<paragraph id="H3655BB1E16FE4A26B59C7D8A841A939F"><enum>(4)</enum><header>Incentives to lend</header>
<subparagraph id="HBAC8AB6A9C3C476F87DCEC011DB285F4"><enum>(A)</enum><header>Requirements on preferred stock and other financial instruments</header><text>Any preferred stock or other financial instrument issued to Treasury by an eligible institution receiving a capital investment under the Program shall provide that—</text>
<clause id="H81B446CB646E4195845E666EA518E3CD"><enum>(i)</enum><text>the rate at which dividends or interest are payable shall be 5 percent per annum initially;</text></clause>
<clause id="H6A4619A2661848979E08A12CB1AA6213"><enum>(ii)</enum><text display-inline="yes-display-inline">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 enactment of this title, minus adjustments from each quarterly balance in respect of—</text>
<subclause id="HDB346AF91F2144BB8F7FCBF8DB66C658"><enum>(I)</enum><text>net loan charge offs with respect to small business lending; and</text></subclause>
<subclause id="HC2B17F9C37934E25AC3DFBF08B573454"><enum>(II)</enum><text>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</text></subclause></clause>
<clause id="H410EB07D03AF40308C35B800F99FB23D"><enum>(iii)</enum><text>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—</text>
<subclause id="HA0CED3A0C773483C9BBD7B6F924F1DF7"><enum>(I)</enum><text>if the amount of small business lending has increased by less than 2.5 percent, the dividend or interest rate shall be 5 percent;</text></subclause>
<subclause id="H84A57E11C07E4865B9743812E9082E96"><enum>(II)</enum><text>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;</text></subclause>
<subclause id="H9DCB341E55964B4AAF9A738EB98C85D4"><enum>(III)</enum><text>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;</text></subclause>
<subclause id="H985D5450533D483FBD335BEBF2AC9B63"><enum>(IV)</enum><text>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</text></subclause>
<subclause id="H364E804D15FA47178517056C621993F0"><enum>(V)</enum><text>if the amount of small business lending has increased by 10 percent or greater, the dividend or interest rate shall be 1 percent.</text></subclause></clause></subparagraph>
<subparagraph id="H7D49293F2D0B474E8B23A0A1D6E02E89"><enum>(B)</enum><header>Basis of initial rate</header><text>The 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.</text></subparagraph>
<subparagraph id="H221334BAC51C4E708390711E9DDEBEDF"><enum>(C)</enum><header>Timing of rate adjustments</header><text>Any 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.</text></subparagraph>
<subparagraph id="HB72602077D104571835E747188049AA7"><enum>(D)</enum><header>Rate following initial 2-year period</header><text>Generally, 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 4<fraction>½</fraction>-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 4<fraction>½</fraction>-year period that begins on the date of the investment.</text></subparagraph>
<subparagraph id="HEB6D8728FDB04931B43E963D6D64E502"><enum>(E)</enum><header>Rate following initial 4<fraction>½</fraction>-year period</header><text>The 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 4<fraction>½</fraction>-year period that begins on the date of the capital investment under the Program.</text></subparagraph>
<subparagraph id="H079304F867C5455E88E2B458E1BF3D26"><enum>(F)</enum><header>Limitation on rate reductions with respect to certain amount</header><text>The 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.</text></subparagraph>
<subparagraph id="H11366D79E63343559703CC0F9938D1B0"><enum>(G)</enum><header>Rate adjustments for S corporation</header><text>Before 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 <quote>S corporation</quote> has the same meaning as in section 1361(a) of the Internal Revenue Code of 1986.</text></subparagraph>
<subparagraph id="H99956049005E4290A5A24773E62C91FA"><enum>(H)</enum><header>Repayment deadline</header><text>The capital investment received by an eligible institution under the Program shall be evidenced by preferred stock or other financial instrument that—</text>
<clause id="HF4C1799788DC48EEB5F3D6047E348D0F"><enum>(i)</enum><text display-inline="yes-display-inline">includes, as a term and condition, that the capital investment will—</text>
<subclause id="H488EBCCBCCBA42CFBC77B46854505BC5"><enum>(I)</enum><text>be repaid not later than the end of the 10-year period beginning on the date of the capital investment under the Program; or</text></subclause>
<subclause id="HAD90B5565A6F4A9993FE925F0CDDB238"><enum>(II)</enum><text>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</text></subclause></clause>
<clause id="HC48A6049C5C141BDBE2D635AC9F6BE7E" display-inline="no-display-inline"><enum>(ii)</enum><text>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).</text></clause></subparagraph>
<subparagraph id="HEA71D4131D45449AA090617FDC8E4243" display-inline="no-display-inline"><enum>(I)</enum><header>Requirements on financial instruments issued by a community development financial institution loan fund</header><text display-inline="yes-display-inline">Any equity equivalent capital issued to the Treasury by a Community Development Financial Institution 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.</text></subparagraph>
<subparagraph id="H0917C50725084A999FC4AFC027D044FE"><enum>(J)</enum><header>Incentives contingent on an increase in the number of loans made</header><text display-inline="yes-display-inline">For any quarter during the first 4<fraction>½</fraction>-year period following the date on which an eligible institution receives a capital investment under the Program, other than the first such quarter, in which the institution’s change in the amount of small business lending relative to the baseline is positive, if the number of loans made by the institution does not increase by 2.5 percent for each 2.5 percent increase of small business lending, then the rate at which dividends and interest shall be payable during the following quarter on preferred stock or other financial instruments issued to the Treasury by the eligible institution shall be—</text>
<clause id="HF505460F12DF403B876923466DA60DA5" display-inline="no-display-inline"><enum>(i)</enum><text display-inline="yes-display-inline">5 percent, if such quarter is within the 2-year period following the date on which the eligible institution receives the capital investment under the Program; or</text></clause>
<clause id="H0D575AE0241E42EB95877651AEF5B932"><enum>(ii)</enum><text>7 percent, if such quarter is after such 2-year period.</text></clause></subparagraph>
<subparagraph id="H65A4E8DDB8D141999C3F871909BE0508" display-inline="no-display-inline"><enum>(K)</enum><header>Alternative computation</header><text>An eligible institution may choose to compute their small business lending amount by computing the amount of small business lending, as if the definition of such term did not require that the loans comprising such lending be made to small business. Any eligible institution choosing to compute their small business lending in this manner shall certify that all lending included by the institution for purposes of computing the increase in lending under this paragraph was made to small businesses.</text></subparagraph></paragraph>
<paragraph id="H7001B44C2F014866AF50545179BD984B"><enum>(5)</enum><header>Additional incentives to repay</header><text>The Secretary may, by regulation or guidance issued under section 104(8), establish repayment incentives in addition to the incentive in paragraph (4)(E) that will apply to new capital investments in a manner that the Secretary determines to be consistent with the purposes of this title.</text></paragraph>
<paragraph id="H156BD54E0CA044BA8212C1ADF3BDFE45"><enum>(6)</enum><header>Capital purchase program refinance</header>
<subparagraph id="HFEC92869B91B453C8FE7A99B4C4D71F6"><enum>(A)</enum><header>In general</header><text>The Secretary shall, in a manner that the Secretary determines to be consistent with the purposes of this title, 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.</text></subparagraph>
<subparagraph id="HCA578A31737C4E09B22B3D55F05FC681"><enum>(B)</enum><header>Prohibition on participation by non-paying CPP participants</header><text display-inline="yes-display-inline">Subparagraph (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.</text></subparagraph></paragraph>
<paragraph display-inline="no-display-inline" id="H2302B8BB93C74C0489614428F1D95007"><enum>(7)</enum><header>Outreach to minorities, women, and veterans</header><text display-inline="yes-display-inline">The 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—</text>
<subparagraph id="H3E742B1E5F8F44239A289B90B6504BE9"><enum>(A)</enum><text display-inline="yes-display-inline">represent or work within or are members of minority communities;</text></subparagraph>
<subparagraph id="HFEBD609F9664466C9DE092D6ECA297D9"><enum>(B)</enum><text>represent or work with or are women; and</text></subparagraph>
<subparagraph id="H3B86732896B141CCA7221D5B27CE14B2"><enum>(C)</enum><text>represent or work with or are veterans.</text></subparagraph></paragraph>
<paragraph id="H84DAADC23C104D3F8AAB9F5F3CEC9E10"><enum>(8)</enum><header>Additional terms</header><text>The Secretary may, by regulation or guidance issued under section 5(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 title.</text></paragraph>
<paragraph id="H5FA4137B8A78417086B5D56879BE5D00"><enum>(9)</enum><header>Minimum underwriting standards</header><text display-inline="yes-display-inline">The 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. In the case of a community development financial institution loan fund, the Community Development Financial Institutions Fund shall within 60 days issue regulations defining minimum underwriting standards that must be used for loans made by the eligible institution using such funds.</text></paragraph>
<paragraph id="HC7A1408C9EA64685B067E57E7E940C33"><enum>(10)</enum><header>Reporting</header><text display-inline="yes-display-inline">Each eligible institution receiving a capital investment under the Program shall issue a quarterly report to the Secretary detailing the percentage of new loans to small businesses the institution makes that are—</text>
<subparagraph id="H49594E49E2124FE78D9C8E3AAD4DEC00"><enum>(A)</enum><text display-inline="yes-display-inline">guaranteed by the Small Business Administration;</text></subparagraph>
<subparagraph id="HD980B366BA2D411D91638252945F674B"><enum>(B)</enum><text>made to Small Business Investment Companies;</text></subparagraph>
<subparagraph id="H77018CFFB0F84EBC81D5C59239F87865"><enum>(C)</enum><text>other loans made to small business concerns (as defined under the Small Business Act), if the internal reporting of the concern distinguishes the size of businesses to which loans are made; and</text></subparagraph>
<subparagraph id="HE3F3A0D399DD43699DB5F5A29CDEAEFB"><enum>(D)</enum><text display-inline="yes-display-inline">other loans made to entities that the internal reporting of the concern classifies as a small business.</text></subparagraph></paragraph></subsection>
<subsection id="H7EBA50FB61E94BD6A3C961E1BED9C462" display-inline="no-display-inline"><enum>(e)</enum><header>Notification to customers</header><text display-inline="yes-display-inline">Any eligible institution receiving funds under the Program shall—</text>
<paragraph id="H186E67229B074B9892929EC2ED9C1798"><enum>(1)</enum><text>disclose on every applicable loan transaction that the loan is being made possible by the Program; and</text></paragraph>
<paragraph id="H4E5EFDFCAF1A4376B1E5036459C82EAC"><enum>(2)</enum><text>if such institution has an established internet website, such institution shall make available on its internet website—</text>
<subparagraph id="H51C9D97DF4D940EDB5728DC88D4B19D8"><enum>(A)</enum><text>the written reports made by the Secretary pursuant to paragraphs (1) and (2) of section 7; and</text></subparagraph>
<subparagraph id="H55CF8F27E57D4415BF5B01CB3B3F1F52"><enum>(B)</enum><text>a statement that the institution, as a participant in the Program, is seeking to make small business loans to qualified borrowers and may not discriminate on the basis of any factor prohibited under the Equal Credit Opportunity Act, including the race, color, religion, national origin, sex, marital status, or age.</text></subparagraph></paragraph></subsection></section>
<section id="H8C956A2375D248FC9A070F2356821381"><enum>104.</enum><header>Additional authorities of the Secretary</header><text display-inline="no-display-inline">The Secretary may take such actions as the Secretary deems necessary to carry out the authorities in this title, including, without limitation, the following:</text>
<paragraph id="H592CC71E7262444E88C50F3EB3174704"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H0227FFDA6DE047528BCC398CA91F8A85"><enum>(2)</enum><text>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 title 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 title, to perform reasonable duties related to this title.</text></paragraph>
<paragraph id="H0FC30321F3AE46B4889D7B6FFD0DC80C"><enum>(3)</enum><text>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 title.</text></paragraph>
<paragraph id="H0949FAEBB0FB45D0B6B3538B9E7558DD"><enum>(4)</enum><text>Subject to section 4(b)(3), the Secretary may manage any assets purchased under this title, including revenues and portfolio risks therefrom.</text></paragraph>
<paragraph id="HD66861D210584F48959FEE27A28DBED3"><enum>(5)</enum><text>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 title, upon terms and conditions and at a price determined by the Secretary.</text></paragraph>
<paragraph id="H09EB9D2ABF3D44AD9CE6670F445D1A4A"><enum>(6)</enum><text>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 title.</text></paragraph>
<paragraph id="H71BEB9FDE8BB459F81AD610414A1CF66"><enum>(7)</enum><text>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.</text></paragraph>
<paragraph id="HB8A917EF197348FBA8C0B387113B552B"><enum>(8)</enum><text>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 title.</text></paragraph></section>
<section id="H089E4DCC545A4AB3867054C301D506A5"><enum>105.</enum><header>Considerations</header><text display-inline="no-display-inline">In exercising the authorities granted in this title, the Secretary shall take into consideration—</text>
<paragraph id="H9B7F7E5C950C46438A5C9A22AD8737C1"><enum>(1)</enum><text>increasing the availability of credit for small businesses;</text></paragraph>
<paragraph display-inline="no-display-inline" id="H5CD32E134631429FA5A17DE19AF145B6"><enum>(2)</enum><text display-inline="yes-display-inline">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;</text></paragraph>
<paragraph id="H85671DC28FF5450B8C084E1F32409843"><enum>(3)</enum><text>protecting and increasing American jobs;</text></paragraph>
<paragraph id="HFB603BC26C1A4E08ABF71F4DD0EA8AB2" display-inline="no-display-inline"><enum>(4)</enum><text display-inline="yes-display-inline">increasing the opportunity for small business development in areas with high unemployment rates that exceed the national average; </text></paragraph>
<paragraph id="H4820DE84BC3246458FC008D04548C4E4"><enum>(5)</enum><text>ensuring that all eligible institutions may apply to participate in the program established under this title, without discrimination based on geography;</text></paragraph>
<paragraph id="HA6F6A88F2A35445C8AC8213D8D6E450F"><enum>(6)</enum><text>providing transparency with respect to use of funds provided under this title;</text></paragraph>
<paragraph id="H68C298766D9E456891FA4288A6B7375E"><enum>(7)</enum><text>minimizing the cost to taxpayers of exercising the authorities; </text></paragraph>
<paragraph id="H9EEDE53F0CFC4EBAA12DD36AA06C7F29"><enum>(8)</enum><text>promoting and engaging in financial education to would-be borrowers; and</text></paragraph>
<paragraph id="H192E974B7C5740EDAD93F5703177632A"><enum>(9)</enum><text display-inline="yes-display-inline">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.</text></paragraph></section>
<section id="H7AF1F094A4F940A2A4535A461B874DD0"><enum>106.</enum><header>Reports</header><text display-inline="no-display-inline">The Secretary shall provide to the appropriate committees of Congress—</text>
<paragraph id="HC6B1A31B981647B39677D1F3EEBC548D"><enum>(1)</enum><text>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 title;</text></paragraph>
<paragraph id="H4AA1FCB7A1A94ABFA0025C09658EC4B7"><enum>(2)</enum><text display-inline="yes-display-inline">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</text></paragraph>
<paragraph id="H5A66AE101A4E423B8A7901BE82C3A370"><enum>(3)</enum><text display-inline="yes-display-inline">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 detailing how eligible institutions participating in the Program have used the funds such institutions received under the Program.</text></paragraph></section>
<section id="HB60B15622BDF46C8B0A2C59E4AED298E"><enum>107.</enum><header>Oversight and audits</header>
<subsection id="H0614B9D616FC440ABD8DEA8713689873"><enum>(a)</enum><header>Inspector General oversight</header><text display-inline="yes-display-inline">The 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).</text></subsection>
<subsection id="HC70E93F1CCFA4F4CA3AC2519004DF43A" display-inline="no-display-inline"><enum>(b)</enum><header>Office of Small Business Lending Fund Program Oversight</header>
<paragraph id="H6762F55B7E8A470689E8B4F3E3046A9E"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">There is hereby established within the Office of the Inspector General of the Department of the Treasury a new office to be named the <quote>Office of Small Business Lending Fund Program Oversight</quote> to provide oversight of the Program.</text></paragraph>
<paragraph id="H6A93424DE04A4773B8144BFEB4090EBD"><enum>(2)</enum><header>Leadership</header><text display-inline="yes-display-inline">The 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.</text></paragraph>
<paragraph id="HE93BF9B236134FC196632B57FCCC6BF9"><enum>(3)</enum><header>Reporting</header>
<subparagraph id="H3D6C846C242E463890AEE70CA3F83BDB"><enum>(A)</enum><header>In general</header><text>The 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. </text></subparagraph>
<subparagraph id="H3E119EAE11904A24B37640BDD1C68921"><enum>(B)</enum><header>Recommendations</header><text>With respect to any deficiencies identified in a report under subparagraph (A), the Secretary shall either—</text>
<clause id="H40904CD136CC4574A1EDF377A079ECF0"><enum>(i)</enum><text>take actions to address such deficiencies; or</text></clause>
<clause id="H62B6957C2FC94CDE841FAD6A6220A2D4"><enum>(ii)</enum><text>certify to the appropriate committees of Congress that no action is necessary or appropriate.</text></clause></subparagraph></paragraph>
<paragraph id="H7A2425D95C684B569F2516BE67D667D3" display-inline="no-display-inline"><enum>(4)</enum><header>Coordination</header><text display-inline="yes-display-inline">The 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.</text></paragraph>
<paragraph id="H60B6E1A80C6B45818F47DA92284823E5"><enum>(5)</enum><header>Termination</header><text>The 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.</text></paragraph>
<paragraph id="HE2EF018DBEAC42A8B7163C4783C45985"><enum>(6)</enum><header>Definitions</header><text>For purposes of this subsection:</text>
<subparagraph id="H2B9CF3F028D542B187CA46C022FA7A1F"><enum>(A)</enum><header>Office</header><text display-inline="yes-display-inline">The term <quote>Office</quote> means the Office of Small Business Lending Fund Program Oversight established under paragraph (1).</text></subparagraph>
<subparagraph id="H655D920E328C451F96238E3EE1B926CF"><enum>(B)</enum><header>Inspector General</header><text display-inline="yes-display-inline">The term <quote>Inspector General</quote> means the Inspector General of the Department of the Treasury.</text></subparagraph></paragraph></subsection>
<subsection id="H6481F79BF98245A39BF1FB3DCFB59B74"><enum>(c)</enum><header>GAO audit</header><text display-inline="yes-display-inline">The 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.</text></subsection>
<subsection id="HEA6C9BDF11D14DB89F8C56EFF7D7FFAB"><enum>(d)</enum><header>Required certifications</header>
<paragraph id="H7ADEDB9686354EDABA9D685E13163291"><enum>(1)</enum><header>Eligible institution certification</header><text display-inline="yes-display-inline">Each eligible institution that participate 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.</text></paragraph>
<paragraph id="HEB4415AF619044198DB1CBDF7DEEEA74"><enum>(2)</enum><header>Loan recipients</header><text display-inline="yes-display-inline">With 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 title 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)).</text></paragraph></subsection>
<subsection id="HA07F1B5519154CABB69B9B7AF1398964" display-inline="no-display-inline"><enum>(e)</enum><header>Prohibition on pornography</header><text display-inline="yes-display-inline">None of the funds made available under this title may be used to pay the salary of any individual engaged in activities related to the Program who has been officially disciplined for 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.</text></subsection></section>
<section id="H46B5F3689E8C4C0F8E005E64E749C29B"><enum>108.</enum><header>Credit reform; Funding</header>
<subsection id="HF0771361FCF948269307AF39E2E4AB02"><enum>(a)</enum><header>Credit reform</header><text>The cost of purchases of preferred stock and other financial instruments made as capital investments under this title shall be determined as provided under the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).</text></subsection>
<subsection id="HEF089E88F3B2464692F0410427436E05"><enum>(b)</enum><header>Funds made available</header><text display-inline="yes-display-inline">There 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.</text></subsection></section>
<section id="HA1E3E087334A4878A832783E671EAF98"><enum>109.</enum><header>Termination and continuation of authorities</header>
<subsection id="HE6C6AF87E1DC4DED9DA95C25EA9A1022"><enum>(a)</enum><header>Termination of investment authority</header><text>The authority to make capital investments in eligible institutions, including commitments to purchase preferred stock or other instruments, provided under this title shall terminate 1 year after the date of enactment of this title.</text></subsection>
<subsection id="H288E420452A64B0283ECD0B4F08C971D"><enum>(b)</enum><header>Continuation of other authorities</header><text>The authorities of the Secretary in section 104 shall not be limited by the termination date in subsection (a).</text></subsection></section>
<section id="HB646C203D2A8423083D88D1255978C94"><enum>110.</enum><header>Preservation of authority</header><text display-inline="no-display-inline">Nothing in this title may be construed to limit the authority of the Secretary under any other provision of law.</text></section>
<section id="H2B20BE68CEC94052A23E16FEB200E49D"><enum>111.</enum><header>Assurances</header>
<subsection id="HB4E969860C69432296ABB1F5E1CCE3DF"><enum>(a)</enum><header>Small Business Lending Fund separate from TARP</header><text>The 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.</text></subsection>
<subsection id="H3FB2C0A48B4546728699774C85DFCC71"><enum>(b)</enum><header>Change in law</header><text>If, 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.</text></subsection></section>
<section id="H6064F72FD2D1464EAB888BE4E00AA3A8"><enum>112.</enum><header>Study and report with respect to women-owned, veteran-owned, and minority-owned businesses</header>
<subsection id="H2A27D019F3B842BCA17977EF8068DC22"><enum>(a)</enum><header>Study</header><text display-inline="yes-display-inline">The Secretary shall conduct a study to determine the number of women-owned businesses, veteran-owned businesses, and minority-owned businesses that receive assistance as a result of the Program (including determining the percentage of the total number of all businesses that receive assistance that such number represents), including—</text>
<paragraph id="HF59DE2D5CD5A47DCBB53C50E7CD4D605"><enum>(1)</enum><text display-inline="yes-display-inline">efforts, including technical assistance and outreach that institutions have employed under the Program to provide loans to minority-, veteran-, and women-owned small businesses;</text></paragraph>
<paragraph id="H7E031AFCC0AC49A391CE027B41EF3316"><enum>(2)</enum><text>loan applications received;</text></paragraph>
<paragraph id="HEA962EFFD1C7434C9B33F1043EF2DB01"><enum>(3)</enum><text>loan applications approved; and</text></paragraph>
<paragraph id="H745367B27BB44DC99FCC3ACC1F77BB17"><enum>(4)</enum><text>and any other relevant data related to such transactions to promote the purposes of the Program as the Secretary may require.</text></paragraph></subsection>
<subsection id="HE52A30AB70364E988171290881AC9BED"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">Not 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.</text></subsection>
<subsection id="HB0E2BEB59A6942F29B1D64F8AF427805"><enum>(c)</enum><header>Information provided to the Secretary</header><text>Eligible 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.</text></subsection></section>
<section id="H87C9B456B64841F3958A4DC014ABD025" display-inline="no-display-inline" section-type="subsequent-section"><enum>113.</enum><header>Temporary amortization authority</header>
<subsection id="H45D86DFE891146859CA4F67FB237A2AF"><enum>(a)</enum><header>Purpose</header><text display-inline="yes-display-inline">The purpose this section is to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to amortize losses or write-downs in order to increase the availability of credit for small businesses.</text></subsection>
<subsection id="H3D1BADE665344D98969533B6F7500D33"><enum>(b)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of capital calculation under the Financial Institutions Examination Council’s Consolidated Reports of Condition, an eligible institution may choose to amortize any loss or write-down, on a quarterly straight line basis over a period determined under subsection (c), beginning with the month in which such loss or write-down occurs, resulting from the application of FASB Statement 114 or 144 to—</text>
<paragraph id="HCC611345C72B475B89D53C19A7579C91"><enum>(1)</enum><text>other real estate owned (as defined under section 34.81 of title 12, Code of Federal Regulation), or</text></paragraph>
<paragraph id="H994D763BB7B84CAF8457C089A86A935D"><enum>(2)</enum><text>an impared loan secured by real estate,</text></paragraph><continuation-text continuation-text-level="subsection">provided that the institution discloses the difference in the amount of the institution’s capital, when calculated taking into account the temporary amortization, from the amount of the institution’s capital when calculated without taking into account the temporary amortization on the Financial Institutions Examination Council’s Consolidated Reports of Condition.</continuation-text></subsection>
<subsection id="H2A517CD9342D4BE3B31C7B2DF0081DD1"><enum>(c)</enum><header>Amortization requirements</header><text display-inline="yes-display-inline">During the initial 2-year period referred to in section 4(d)(4), an eligible institution’s amortization period shall be adjusted to reflect the following schedule based on the institution’s change in the amount of small business lending relative to the baseline:</text>
<paragraph id="H25A5288FBF2F48DE858AA58350694BAD"><enum>(1)</enum><text>If the amount of small business lending has increased by less than 2.5 percent, the amortization period shall be 6 years.</text></paragraph>
<paragraph id="H45BAAF51C5EA412BBF882EFFB9BA5F86"><enum>(2)</enum><text>If the amount of small business lending has increased by 2.5 percent or greater, but by less than 5.0 percent, the amortization period shall be 7 years.</text></paragraph>
<paragraph id="H546131A8AAF143CC8F1E832DCDB9D6B1"><enum>(3)</enum><text>If the amount of small business lending has increased by 5.0 percent or greater, but by less than 7.5 percent, the amortization period shall be 8 years.</text></paragraph>
<paragraph id="H1C300223131748CCB9183876FD606381"><enum>(4)</enum><text>If the amount of small business lending has increased by 7.5 percent or greater, but by less than 10.0 percent, the amortization period shall be 9 years.</text></paragraph>
<paragraph id="H50BB7D7C604A4D82937F8BE78A147D43"><enum>(5)</enum><text>If the amount of small business lending has increased by 10 percent or greater, the amortization period shall be 10 years.</text></paragraph></subsection>
<subsection id="H245936A7ECB047ADA783E7528AA92824"><enum>(d)</enum><header>Minimum underwriting standards</header><text display-inline="yes-display-inline">The appropriate Federal banking agency for an eligible institution that chooses to amortize any loss or write-down as permitted under subsection (b) shall, within 60 days of the date of the enactment of this title, issue regulations defining minimum underwriting standards that must be used for loans made by the eligible institution.</text></subsection>
<subsection id="HCFEA3B4FDFDF4BC9A1091C62169786FE"><enum>(e)</enum><header>Effective date</header><text display-inline="yes-display-inline">The provisions of this section shall apply to loan origination that occurred on or after January 1, 2003, and before January 1, 2008.</text></subsection></section>
<section id="H99AAC8A9FC574365AABB217345FA3F7B" display-inline="no-display-inline" section-type="subsequent-section"><enum>114.</enum><header>Sense of Congress</header><text display-inline="no-display-inline">It 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.</text></section>
<enum>II</enum><header>State Small Business Credit Initiative</header>
<section id="H162C62F2ED2B4C6AAA36347C6088025E" section-type="subsequent-section"><enum>201.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote>State Small Business Credit Initiative Act of 2010</quote>.</text></section>
<section id="HBF13830566224CC5916423DC313E22B3"><enum>202.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title, the following definitions shall apply:</text>
<paragraph id="HABBF5030EA604CC4835AE5E6CE1C469C"><enum>(1)</enum><header>Appropriate Federal banking agency</header><text>The term <term>appropriate Federal banking agency</term>—</text>
<subparagraph id="HEECBC45FE4FB4DE0B02B280484ECFC1D"><enum>(A)</enum><text>has the same meaning as in section 3 of the Federal Deposit Insurance Act; and</text></subparagraph>
<subparagraph id="H18D1D1A0377148499B39F22C00E9C703"><enum>(B)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HDF3D6020E7D54B1B806B5726751BDD8D"><enum>(2)</enum><header>Enrolled loan</header><text>The term <term>enrolled loan</term> 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.</text></paragraph>
<paragraph id="H3B4EC1205C134E69AEC400E603A40C93"><enum>(3)</enum><header>Federal contribution</header><text>The term <term>Federal contribution</term> 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 203.</text></paragraph>
<paragraph id="H1BEEEF68660547A286774071AA3388F1"><enum>(4)</enum><header>Financial institution</header><text>The term <term>financial institution</term> 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.</text></paragraph>
<paragraph id="HB29D40D7A0C04C6CBA21501BE589D1AE"><enum>(5)</enum><header>Participating state</header><text>The term <term>participating State</term> means any State that has been approved for participation in the Program under section 204.</text></paragraph>
<paragraph id="H696B1B076E3F4ED0B3316071CA9AF11C"><enum>(6)</enum><header>Program</header><text>The term <term>Program</term> means the State Small Business Credit Initiative established under this title.</text></paragraph>
<paragraph id="HA7E31A7EC7504EBF95B57F5CC3AE8B5D"><enum>(7)</enum><header>Qualifying loan or swap funding facility</header><text>The term <term>qualifying loan or swap funding facility</term> means a contractual arrangement between a participating State and a private financial entity under which—</text>
<subparagraph id="H88E6CD7C96AB41F285C4701341F5575A"><enum>(A)</enum><text>the participating State delivers funds to the entity as collateral;</text></subparagraph>
<subparagraph id="H14411C3130474D10889FE47DE10D1751"><enum>(B)</enum><text>the entity provides funding from the arrangement back to the participating State; and</text></subparagraph>
<subparagraph id="H753ED9B701C646B788E7E95C325560F9"><enum>(C)</enum><text>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.</text></subparagraph></paragraph>
<paragraph id="HA77A57A0C011481DABD5D9B5874E6317"><enum>(8)</enum><header>Reserve fund</header><text>The term <term>reserve fund</term> means a fund, established by a participating State, dedicated to a particular financial institution lender, for the purposes of—</text>
<subparagraph id="H995051EB25514D92A116DC7EB6909A37"><enum>(A)</enum><text>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;</text></subparagraph>
<subparagraph id="H0E367CCA67DF452FA575F06DC787D588"><enum>(B)</enum><text>depositing contributions made by the participating State, including State contributions made with Federal contributions; and</text></subparagraph>
<subparagraph id="H8F38F7AD0DD143ADAD85DE18CE8DFC49"><enum>(C)</enum><text>covering losses on enrolled loans by disbursing accumulated funds.</text></subparagraph></paragraph>
<paragraph id="H2F1AE9A849E64BB592975AF8F2D036B8"><enum>(9)</enum><header>State</header><text>The term <term>State</term> means—</text>
<subparagraph id="H206A19295D814C6F9CB75D7FCBFC333A"><enum>(A)</enum><text>a State of the United States;</text></subparagraph>
<subparagraph id="HFE1E78330B9B4DEC9F496E598B61B418"><enum>(B)</enum><text display-inline="yes-display-inline">the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of Northern Mariana Islands, Guam, American Samoa, and the United States Virgin Islands;</text></subparagraph>
<subparagraph id="H25D83CFB6B4C4C658DAF0166A644753B"><enum>(C)</enum><text>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</text></subparagraph>
<subparagraph id="HC89592EF71A3450D955ED946B248276B"><enum>(D)</enum><text>under the circumstances described in section 204(d), a municipality of a State of the United States to which the Secretary has given a special permission under section 204(d).</text></subparagraph></paragraph>
<paragraph id="H439F4927E8824D13AF779292F7BA0F44"><enum>(10)</enum><header>State capital access program</header><text>The term <term>State capital access program</term> means a program of a State that—</text>
<subparagraph id="HE62BC29879524073B3B4EC54BCD25D82"><enum>(A)</enum><text>uses public resources to promote private access to credit; and</text></subparagraph>
<subparagraph id="H804C68CB14AE449FA10FD81294BFB9EE"><enum>(B)</enum><text>meets the eligibility criteria in section 205(c).</text></subparagraph></paragraph>
<paragraph id="H810C1D4C3EEF4ED9ADD2B7DAEDE3A53B"><enum>(11)</enum><header>State other credit support program</header><text>The term <term>State other credit support program</term>—</text>
<subparagraph id="H9FCBFA4BE8EF4E9888CB3C25E0234DF3"><enum>(A)</enum><text>means a program of a State that—</text>
<clause id="H7AC32964B0BE419998D1471507928D70"><enum>(i)</enum><text>uses public resources to promote private access to credit;</text></clause>
<clause id="H274B3D7B7DA849D989CF86C7EF0F08F0"><enum>(ii)</enum><text>is not a State capital access program; and</text></clause>
<clause id="HA2FBE760F6874B0784C83418FD32AAD6"><enum>(iii)</enum><text>meets the eligibility criteria in section 206(c); and</text></clause></subparagraph>
<subparagraph id="H603A957819BC4EEE896E97D736093776"><enum>(B)</enum><text display-inline="yes-display-inline">includes, collateral support programs, loan participation programs, State-run venture capital fund programs, and credit guarantee programs.</text></subparagraph></paragraph>
<paragraph id="HF0183AD95AA2480A95E7CA56C6420CDC"><enum>(12)</enum><header>State program</header><text>The term <term>State program</term> means a State capital access program or a State other credit support program.</text></paragraph>
<paragraph id="H24007AD98E3F4268810CCFE32C9FB0A2"><enum>(13)</enum><header>Secretary</header><text>The term <term>Secretary</term> means the Secretary of the Treasury.</text></paragraph></section>
<section id="H5B94FC3D2DB24410B7FB1EF9B33CCC19"><enum>203.</enum><header>Federal funds allocated to States</header>
<subsection id="H119A0ABDF53941079567D4F698C6AB45"><enum>(a)</enum><header>Program established; Purpose</header><text>There is established the State Small Business Credit Initiative (hereinafter in this title referred to as the <quote>Program</quote>), 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.</text></subsection>
<subsection id="HF3A9EA31410C4EFC896FEEB8FC4788B0"><enum>(b)</enum><header>Allocation formula</header><text></text>
<paragraph id="H939EBCA0FD5045E5974CE298A1862D14"><enum>(1)</enum><header>In general</header><text>Not later than 30 days after the date of enactment of this title, 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—</text>
<subparagraph id="H9FD00E30766B41198BA2C52ABFBA2D90"><enum>(A)</enum><text>would receive under the 2009 allocation, as determined under paragraph (2); and</text></subparagraph>
<subparagraph id="H4999E5BC9C8B465BBAA5BBC13B7BEF10"><enum>(B)</enum><text>would receive under the 2010 allocation, as determined under paragraph (3).</text></subparagraph></paragraph>
<paragraph id="H3CA95378F6034CFF961942AF83909E4F"><enum>(2)</enum><header>2009 allocation formula</header>
<subparagraph id="H4AE4B8F924ED4118AD642513BCA2F0A5"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The 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.</text></subparagraph>
<subparagraph id="HCAAAABD3A702446D950531B5218303A9"><enum>(B)</enum><header>Minimum allocation</header><text display-inline="yes-display-inline">The 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.</text></subparagraph>
<subparagraph id="H4A0B95BBA16247C9BF0B35FEF3D2CDED"><enum>(C)</enum><header>2008 State employment decline defined</header><text>For purposes of this paragraph and with respect to a State, the term <quote>2008 State employment decline</quote> means the excess (if any) of—</text>
<clause id="HFC9897CA26C44BB0AE0B0B6E9DDDE055"><enum>(i)</enum><text display-inline="yes-display-inline">the number of individuals employed in such State determined for December 2007; over</text></clause>
<clause id="HF135DE8D1FFB465E90CFC6FCC941479E"><enum>(ii)</enum><text>the number of individuals employed in such State determined for December 2008.</text></clause></subparagraph></paragraph>
<paragraph id="H426D571B1C5F48448F07CB14CBBBDDBC"><enum>(3)</enum><header>2010 allocation formula</header>
<subparagraph id="HAD3361C211104A9E958431C9FD08D399"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The 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.</text></subparagraph>
<subparagraph id="HA19F953206724CE993AB98E07CC49D4F"><enum>(B)</enum><header>Minimum allocation</header><text>The 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.</text></subparagraph>
<subparagraph id="H885354F60CB14DC8ADFF99EB22BE7A4F"><enum>(C)</enum><header>2009 unemployment number defined</header><text>For purposes of this paragraph and with respect to a State, the term <quote>2009 unemployment number</quote> means the number of individuals within such State who were determined to be unemployed by the Bureau of Labor Statistics for December 2009.</text></subparagraph></paragraph></subsection>
<subsection id="H9102D7CA52574F79966C0AC10B176547"><enum>(c)</enum><header>Availability of allocated amount</header><text>The amount allocated by the Secretary to each participating State under subsection (b) shall be made available to the State as follows:</text>
<paragraph id="H03A967CF26DB44D887C5A015FC4A75C1"><enum>(1)</enum><header>Allocated amount generally to be available to State in one-thirds</header>
<subparagraph id="H7B1952F427FB4C7C8BB430B46C68606D"><enum>(A)</enum><header>In general</header><text>The Secretary shall—</text>
<clause id="H84B5ED529BF74B6CA28899540989010C"><enum>(i)</enum><text>apportion the participating State’s allocated amount into one-thirds;</text></clause>
<clause id="H031779A4462341438499881B9823D957"><enum>(ii)</enum><text>transfer to the participating State the first one-third when the Secretary approves the State for participation under section 204; and</text></clause>
<clause id="H9194C376813146A0AD20DD1D5A6A6A86"><enum>(iii)</enum><text>transfer to the participating State each successive one-third when the State has certified to the Secretary that it has expended, transferred, or obligated 80 percent of the last transferred one-third for Federal contributions to, or for the account of, State programs.</text></clause></subparagraph>
<subparagraph id="H5289A600984E4CD9B2A307CEA147D235"><enum>(B)</enum><header>Authority to withhold pending audit</header><text>The Secretary may withhold the transfer of any successive one-third pending results of a financial audit.</text></subparagraph>
<subparagraph id="H05F921B4935544D0AE38F7F6A0D2AE51"><enum>(C)</enum><header>Transfers contingent on Inspector General audits</header>
<clause id="HC5B7EC3C2A8C4972BB50AE19A65779D7"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Before a transfer to a participating State of the second one-third or the last one-third, the Inspector General of the Department of the Treasury shall carry out an audit of the participating State’s use of amounts already received.</text></clause>
<clause id="H27B4393AA0A44FC0AC2FEE97667A7E1E"><enum>(ii)</enum><header>Penalty for misstatement</header><text>Any 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.</text></clause>
<clause id="H2FD5972D8AAD438A9CCC04C6EF5353A4"><enum>(iii)</enum><header>Municipalities</header><text>For purposes of this subparagraph, the term <quote>participating State</quote> shall include a municipality given special permission to participate in the Program, pursuant to section 204(d).</text></clause></subparagraph>
<subparagraph id="H24E5CAF0A6094C6586BA32F1D5F27447" display-inline="no-display-inline"><enum>(D)</enum><header>Exception</header>
<clause id="H273206B819E94BA4B02C6566603E8456"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">The 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.</text></clause>
<clause id="H2BCAD9C8FA0343D48D7F5047A976F011"><enum>(ii)</enum><header>Recoupment triggered by intentional misstatement</header><text display-inline="yes-display-inline">If, in any audit of a report issued by a participating State that receives a single transfer pursuant to clause (i), the Secretary or the Inspector General of the Department of the Treasury determines that such State intentionally misstated information in such report, the participating State shall be required to fully repay all amounts received by the State under the Program, and such amounts shall be paid into the general fund of the Treasury for reduction of the public debt.</text></clause></subparagraph></paragraph>
<paragraph id="HF91319C89B2E4F19AFF22912A2E7BA0B"><enum>(2)</enum><header>Transferred amounts</header><text>Each 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).</text></paragraph>
<paragraph id="H948B045C036D4D4FA87550921BFB7B2A"><enum>(3)</enum><header>Use of transferred funds</header><text>Each participating State may use funds transferred to it under this section only—</text>
<subparagraph id="HF5666726A40241CCBFB4F9A6A8B80B72"><enum>(A)</enum><text>for making Federal contributions to, or for the account of, an approved State program;</text></subparagraph>
<subparagraph id="HF2BDE40B26494A1691A198BFC0700A25"><enum>(B)</enum><text>as collateral for a qualifying loan or swap funding facility;</text></subparagraph>
<subparagraph id="H6584A4BB3C2C48E487B150435D202163"><enum>(C)</enum><text>in the case of the first one-third 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 one-third; or</text></subparagraph>
<subparagraph id="H51FC14E377284F25A4840D535F2696F0"><enum>(D)</enum><text>in the case of each successive one-third 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 one-third.</text></subparagraph></paragraph>
<paragraph id="HA3FC89FD39F64FF1AC580DECAD4DA055"><enum>(4)</enum><header>Termination of availability of amounts not transferred within 2 years of participation</header><text>Any 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.</text></paragraph>
<paragraph id="H122CB84D577141658534D660C94611B6" display-inline="no-display-inline"><enum>(5)</enum><header>Transferred amounts not assistance</header><text display-inline="yes-display-inline">The amounts transferred to a participating State under this section shall not be considered <quote>assistance</quote> for purposes of subtitle V of title 31, United States Code.</text></paragraph>
<paragraph id="H0E14C3C54089408BA8F7C15289013034"><enum>(6)</enum><header>Definitions</header><text>For purposes of this section—</text>
<subparagraph id="HD09F645196F042B88B59B644C769988B"><enum>(A)</enum><text>the term <term>allocated amount</term> means the total amount of Federal funds allocated by the Secretary under subsection (b) to the participating State; and</text></subparagraph>
<subparagraph id="H1A638CD7C6294680812CB3E5BA86E6F8"><enum>(B)</enum><text>the term <term>one-third</term> means—</text>
<clause id="H500D045207F046FD859377A375393C3C"><enum>(i)</enum><text>in the case of the first and second one-thirds, an amount equal to 33 percent of a participating State’s allocated amount; and</text></clause>
<clause id="H85250CA7B18F4B3E8D34AC150CF4DE23"><enum>(ii)</enum><text>in the case of the last one-third, an amount equal to 34 percent of a participating State’s allocated amount.</text></clause></subparagraph></paragraph></subsection></section>
<section id="H3BC549E4C59E44F8B556EF0493B70381"><enum>204.</enum><header>Approving States for participation</header>
<subsection id="HC1CAAB4F04BE4880994C2FEFE363F2B5"><enum>(a)</enum><header>Application</header><text>Any 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.</text></subsection>
<subsection id="HE963FFCEC6F24833B40F01490A7455C4"><enum>(b)</enum><header>General approval criteria</header><text>The Secretary shall approve a State to be a participating State, if—</text>
<paragraph id="H88D0DEF4900B4C30B7722F9AA12DC339"><enum>(1)</enum><text>a specific department, agency, or political subdivision of the State has been designated to implement a State program and participate in the Program;</text></paragraph>
<paragraph id="H068B5BA37E654819933BAA27D785284B"><enum>(2)</enum><text>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;</text></paragraph>
<paragraph id="HB8A6D1C5EEA046AF84FF937C954E0738"><enum>(3)</enum><text>the State has filed an application with the Secretary for approval of a State capital access program under section 205 or approval as a State other credit support program under section 206, in each case within the time period provided in the respective section; and</text></paragraph>
<paragraph id="H24E8E7ABA26C4BA1A4DE9B5DD8C28D02"><enum>(4)</enum><text>the State and the Secretary have executed an allocation agreement that—</text>
<subparagraph id="H09E09E7122DD4BFEB254B398686C5F09"><enum>(A)</enum><text>conforms to the requirements of this title;</text></subparagraph>
<subparagraph id="H70F2E94E51E245078C3F61BF84D27C80"><enum>(B)</enum><text>ensures that the State program complies with such national standards as are established by the Secretary under section 209(a)(2);</text></subparagraph>
<subparagraph id="H25A56CA62482430880CEB051576C6E20"><enum>(C)</enum><text>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;</text></subparagraph>
<subparagraph id="H0AE29D5712BF4063BBDEBB785349D8B6"><enum>(D)</enum><text>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</text></subparagraph>
<subparagraph id="HD8A903F6A53A4733A7DF643F281360D2"><enum>(E)</enum><text>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.</text></subparagraph></paragraph></subsection>
<subsection id="HBD493D87B625494484AC502BFFC6DB46"><enum>(c)</enum><header>Contractual arrangements for implementation of State programs</header><text>A 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—</text>
<paragraph id="H96D9094E8A5740D6B4B2304B457A8D9C"><enum>(1)</enum><text>an existing, approved State program administered by another State; or</text></paragraph>
<paragraph id="H0996970499D44C5A9A7B9550B047885E"><enum>(2)</enum><text>an authorized agent of, or entity supervised by, the State, including for-profit and not-for-profit entities.</text></paragraph></subsection>
<subsection id="H1FA8EF29CB9D4CB5A1349E75ACE5AABE"><enum>(d)</enum><header>Special permission</header><text></text>
<paragraph id="H7517F32851194C5E98C8C4B4FF4A30C9"><enum>(1)</enum><header>Circumstances when a municipality may apply directly</header><text>If a State does not, within 60 days after the date of enactment of this title, 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 title, 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.</text></paragraph>
<paragraph id="HA19D036B1B2540CA8FAD0D0AED1D89DC"><enum>(2)</enum><header>Timing requirements applicable to municipalities applying directly</header><text>To qualify for the special permission, a municipality of a State must, within 12 months after the date of enactment of this title, file with the Secretary a complete application for approval by the Secretary of a State program.</text></paragraph>
<paragraph id="H8EC00E84DC5C4E09BEC83C937A15CAD0"><enum>(3)</enum><header>Notices of intent and applications from more than 1 municipality</header><text>A 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.</text></paragraph>
<paragraph id="H6626C1E2454F464792A2C96836EC164C"><enum>(4)</enum><header>Approval criteria</header><text>The general approval criteria in paragraphs (2) and (4) shall apply.</text></paragraph>
<paragraph id="H089C64FB9F3D47A5B6492D835FEC4B6E"><enum>(5)</enum><header>Allocation to municipalities</header><text></text>
<subparagraph id="HB702660F57684A55BB9A67D5FCBB4768"><enum>(A)</enum><header>If more than 3</header><text>If 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.</text></subparagraph>
<subparagraph id="HDA1F5BAEA82348D7BE3EB9AA97E934EF"><enum>(B)</enum><header>If 3 or fewer</header><text>If 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.</text></subparagraph></paragraph>
<paragraph id="HE5FB40C888694739AA1AAC2B5C91DC14"><enum>(6)</enum><header>Apportionment of allocated amount among participating municipalities</header><text>If 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.</text></paragraph>
<paragraph id="HD777DCC2E7BC4A77BFD9C9F808215268"><enum>(7)</enum><header>Approving State programs for municipalities</header><text>If the Secretary approves municipalities to be participating municipalities under this subsection, the Secretary shall take into account the additional considerations in section 206(d) in making the determination under section 205 or 206 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.</text></paragraph></subsection></section>
<section id="H7A4208653C1F449F82A4974F47A6C985"><enum>205.</enum><header>Approving State capital access programs</header>
<subsection id="H8109BC67545748A3A8159E70B04EAFA6"><enum>(a)</enum><header>Application</header><text>A 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.</text></subsection>
<subsection id="HD17DAD08C68B4761ACEE61A822DD1B1F"><enum>(b)</enum><header>Approval</header><text>The Secretary shall approve such State capital access program as eligible for Federal contributions to the reserve fund if—</text>
<paragraph id="H32662C6A2DF24295A0775DCB54E2281F"><enum>(1)</enum><text>within 60 days after the date of enactment of this title, the State has filed with the Secretary a notice of intent to apply for approval by the Secretary of a State capital access program;</text></paragraph>
<paragraph id="HFBAB7A547FD745F28A02E8D817F4FF47"><enum>(2)</enum><text>within 9 months after the date of enactment of this title, the State has filed with the Secretary a complete application for approval by the Secretary of a capital access program;</text></paragraph>
<paragraph id="H90949E1607064121B6CF3D4162C25039"><enum>(3)</enum><text>the State satisfies the requirements of subsections (a) and (b) of section 204; and</text></paragraph>
<paragraph id="H83C83CCB8ACD4430A359993E0D725E58"><enum>(4)</enum><text>the State capital access program meets the eligibility criteria in subsection (c).</text></paragraph></subsection>
<subsection id="H0E45FF6F452E4FB5AA13D91F07CF7CF7"><enum>(c)</enum><header>Eligibility criteria for State capital access programs</header><text>For a State capital access program to be approved under this section, it must be a program of the State that—</text>
<paragraph id="HB99D7E86875940A9965CC88A03CCCEC4"><enum>(1)</enum><text>provides portfolio insurance for business loans based on a separate loan-loss reserve fund for each financial institution;</text></paragraph>
<paragraph id="H205E3930A1CC439F93BE30B1F6F2323E"><enum>(2)</enum><text>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;</text></paragraph>
<paragraph id="HC929E65B35CC471C9248096BEA18FC86"><enum>(3)</enum><text>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</text></paragraph>
<paragraph id="HA1BB9D97D7DA408EA6569BD6DFE092FA"><enum>(4)</enum><text>provides its portfolio insurance solely for loans that meet both the following requirements:</text>
<subparagraph id="H3AD299B5110E407E943B736DB71EE77E"><enum>(A)</enum><text>The borrower has 500 employees or less at the time that the loan is enrolled in the Program.</text></subparagraph>
<subparagraph id="HB512E3F953424E628C5A9F04C69A8871"><enum>(B)</enum><text>The loan amount does not exceed $5,000,000.</text></subparagraph></paragraph></subsection>
<subsection id="H641B5606162D4ABFAE0D55AD1B3A634B"><enum>(d)</enum><header>Federal contributions to approved State capital access programs</header><text>A 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.</text></subsection>
<subsection id="HC9508C222B0E4AC185B07C4694998907"><enum>(e)</enum><header>Minimum program requirements for State capital access programs</header><text>The Secretary shall, by regulation or other guidance, prescribe Program requirements that meet the following minimum requirements:</text>
<paragraph id="HE3857CFEBFB947A18986A721E8999000"><enum>(1)</enum><header>Experience and capacity</header><text>The 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 non depository 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.</text></paragraph>
<paragraph id="H37AA0DBA58BD421190A0DE77A0CAEF5C"><enum>(2)</enum><header>Investment authority</header><text>Subject 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.</text></paragraph>
<paragraph id="HECDC0B17AE244042A3687F7C9F2C0638"><enum>(3)</enum><header>Loan terms and conditions to be determined by agreement</header><text>A 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.</text></paragraph>
<paragraph id="HE95A80EB9E7243AB8BDAB8A5E124A495"><enum>(4)</enum><header>Lender capital at-risk</header><text>A loan to be filed for enrollment in the State capital access program must require the financial institution lender to have a meaningful amount of its own capital resources at risk in the loan.</text></paragraph>
<paragraph id="H91CBBC3CFB034255B4506D5604622FB5"><enum>(5)</enum><header>Premium charges minimum and maximum amounts</header><text>The 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.</text></paragraph>
<paragraph id="H18AD6F94464646EAB65C895070851B05"><enum>(6)</enum><header>State contributions</header><text>In 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.</text></paragraph>
<paragraph id="H196E8E52ACFD471BB80F20935A546DB3"><enum>(7)</enum><header>Loan purpose</header>
<subparagraph id="H4BCA4404B7D2484EAD5AA53DF8F91B04"><enum>(A)</enum><header>Particular loan purpose requirements and prohibitions</header><text>In connection with the filing of a loan for enrollment in an approved State capital access program, the financial institution lender—</text>
<clause id="H980BA93D091A488CB99FF872B5BB95DC"><enum>(i)</enum><text>shall obtain an assurance from each borrower that—</text>
<subclause id="HAFD5DAFF04CD4BE6950819BC403F2A70"><enum>(I)</enum><text>the proceeds of the loan will be used for a business purpose;</text></subclause>
<subclause id="HEE156CBD2D21492395524E2B68DB5736"><enum>(II)</enum><text>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</text></subclause>
<subclause id="H83FDE355C2894DE189E78F4C25443A93"><enum>(III)</enum><text>the borrower is not—</text>
<item id="H4D3508931CA64E7DAC14FDB5C6A550D8"><enum>(aa)</enum><text display-inline="yes-display-inline">an executive officer, director, or principal shareholder of the financial institution lender;</text></item>
<item id="H4D4A125EBFA94E01AA03790BA0244819"><enum>(bb)</enum><text>a member of the immediate family of an executive officer, director, or principal shareholder of the financial institution lender; or</text></item>
<item id="H40B75726AC6542AE8F0525C8B7BFC34F"><enum>(cc)</enum><text>a related interest of any such executive officer, director, principal shareholder, or member of the immediate family;</text></item></subclause></clause>
<clause id="H8EE6847E92E349E8B884E3EFCC885DA1"><enum>(ii)</enum><text>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;</text></clause>
<clause id="H4859A88847324B2DAF0B74F8CBBA6D64"><enum>(iii)</enum><text>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</text></clause>
<clause id="H15EB871FA7FA4E39AD390A75F2CFFD5D"><enum>(iv)</enum><text>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.</text></clause></subparagraph>
<subparagraph id="HE05220BF38BC4A979606CE03C05D7593"><enum>(B)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this subsection, the terms <term>executive officer</term>, <term>director</term>, <term>principal shareholder</term>, <term>immediate family</term>, and <quote>related interest</quote> 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.</text></subparagraph></paragraph>
<paragraph id="HDA9D2F8702A04C0B9AFFA58EB7BEDDD2" display-inline="no-display-inline"><enum>(8)</enum><header>Capital access for small businesses in underserved communities</header><text display-inline="yes-display-inline">At 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.</text></paragraph></subsection></section>
<section id="HD89C0B220B104C49A6972C6D5472F602"><enum>206.</enum><header>Approving collateral support and other innovative credit access and guarantee initiatives for small businesses and manufacturers</header>
<subsection id="HA2352D8E07BE4610B14790C425B61C77"><enum>(a)</enum><header>Application</header><text>A 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.</text></subsection>
<subsection id="HDF46DEE0D8094EEE9F5E4DAA2F8EF9F2"><enum>(b)</enum><header>Approval</header><text>The Secretary shall approve such State other credit support program as eligible for Federal contributions to, or for the account of, the program if—</text>
<paragraph id="HA52934D7C086437CAEB81B5CC171D48E"><enum>(1)</enum><text>the Secretary determines that the State satisfies the requirements of paragraphs (1) through (3) of section 205(b);</text></paragraph>
<paragraph id="HD2B96708957F4D72AD5B62EA838159D9"><enum>(2)</enum><text>the Secretary determines that the State other credit support program meets the eligibility criteria in subsection (c);</text></paragraph>
<paragraph id="HAE7138F870474E4CA822AC6EF87603A1"><enum>(3)</enum><text>the Secretary determines the State other credit support program to be eligible based on the additional considerations in subsection (d); and</text></paragraph>
<paragraph id="H6F20DE2674F649969137DA8D0CEEBF64"><enum>(4)</enum><text>within 9 months after the date of enactment of this title, the State has filed with Treasury a complete application for Treasury approval.</text></paragraph></subsection>
<subsection id="H9BF3CC37EFA4455696A861E95C66FF86"><enum>(c)</enum><header>Eligibility criteria for State other credit support programs</header><text>For a State other credit support program to be approved under this section, it must be a program of the State that—</text>
<paragraph id="H92E5CF1AE0CE4D20A1F94CFF93FEC19B"><enum>(1)</enum><text>can demonstrate that, at a minimum, 1 dollar of public investment by the State program will cause and result in 1 dollar of new private credit;</text></paragraph>
<paragraph id="H3691166596E64DB4A2E95F2BA0601235"><enum>(2)</enum><text>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;</text></paragraph>
<paragraph id="HCEA63431ECC14AF8B8EB8D1259173884"><enum>(3)</enum><text>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</text></paragraph>
<paragraph id="HD74308CF97C64EB1B83A84349214C591"><enum>(4)</enum><text display-inline="yes-display-inline">uses Federal funds allocated under this title to extend credit support that—</text>
<subparagraph id="HFEEAAB3B411E4647B404240CD485DEA9"><enum>(A)</enum><text>targets an average borrower size of 500 employees or less;</text></subparagraph>
<subparagraph id="HD9B1D5B2EA604FF3844DADA42CBED90F"><enum>(B)</enum><text>does not extend credit support to borrowers that have more than 750 employees;</text></subparagraph>
<subparagraph id="HA45A702420984C96A87397AF23F3B09E"><enum>(C)</enum><text>targets support towards loans with an average principal amount of $5,000,000 or less; and</text></subparagraph>
<subparagraph id="H466E2D129C9E48C0B3B5561BC09B311D"><enum>(D)</enum><text>does not extend credit support to loans that exceed a principal amount of $20,000,000.</text></subparagraph></paragraph></subsection>
<subsection id="H0A9218620CBB496FA3A5D55925061DC9"><enum>(d)</enum><header>Additional considerations</header><text>In 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:</text>
<paragraph id="H2DE62F301A6B4F2A9C1959FE09E76E1D"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H54833AFD87714B74A78B1F07D28F18F6"><enum>(2)</enum><text>The operational capacity, skills, and experience of the management team of the State other credit support program.</text></paragraph>
<paragraph id="H0F47CD0BEFC2451C946DE0A9EEB50F2B"><enum>(3)</enum><text>The capacity of the State other credit support program to manage increases in the volume of its small business lending.</text></paragraph>
<paragraph id="HFC384401FA324158BB1A3FB10781C148"><enum>(4)</enum><text>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.</text></paragraph>
<paragraph id="HB9C265FF04C14FF4A0A951E9A93B756C"><enum>(5)</enum><text>The soundness of the program design and implementation plan of the State other credit support program.</text></paragraph></subsection>
<subsection id="H6925117298AA41DEA5112174DD3D0373"><enum>(e)</enum><header>Federal contributions to approved State other credit support programs</header><text>A State other credit support program approved under this section will be eligible for receiving Federal contributions to, or for the account of, the State program in an amount consistent with the schedule describing the apportionment of allocated Federal funds among State programs delivered by the State to the Secretary under the allocation agreement.</text></subsection>
<subsection id="H9167720C1AB44F6893634821B9750A37"><enum>(f)</enum><header>Minimum program requirements for State other credit support programs</header>
<paragraph id="HB543A908EAA64855904AE473D1A47CDA"><enum>(1)</enum><header>Fund to prescribe</header><text>The Secretary shall, by regulation or other guidance, prescribe Program requirements for approved State other credit support programs.</text></paragraph>
<paragraph id="H9FD11A9ACE2A4C6594AFBCB44D287E59"><enum>(2)</enum><header>Considerations for fund</header><text>In 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 205(e).</text></paragraph></subsection></section>
<section id="H9FEA493523884153916EFC4C64B87944"><enum>207.</enum><header>Reports</header>
<subsection id="HF595AD78F62B44679DC4E8F763BD8706"><enum>(a)</enum><header>Quarterly use-of-funds report</header>
<paragraph id="H6AB113ADFA9C451A98BA8E735D508254"><enum>(1)</enum><header>In general</header><text>Not later than 30 days after the beginning of each calendar quarter, beginning after the first full calendar quarter to occur after the date the Secretary approves a State for 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.</text></paragraph>
<paragraph id="H2FE597F27164408982FFBECD86141D84"><enum>(2)</enum><header>Report contents</header><text>The report shall—</text>
<subparagraph id="H10ABB5F3DE104A4AB8ACFDDD361E3490"><enum>(A)</enum><text>indicate the total amount of Federal funding used by the participating State;</text></subparagraph>
<subparagraph id="HF9A62BB652B648659385AE92784E4FFD"><enum>(B)</enum><text>include a certification by the participating State that—</text>
<clause id="HD2A2F2000C114A96B54F1669D70EEBCC"><enum>(i)</enum><text>the information provided in accordance with subparagraph (A) is accurate;</text></clause>
<clause id="H3F51896B0142411AB38CAD676C266A1C"><enum>(ii)</enum><text>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</text></clause>
<clause id="H9D362F3CF3C241E483940320109134E2"><enum>(iii)</enum><text>the participating State is implementing its approved State program or programs in accordance with this title and regulations issued pursuant to section 210.</text></clause></subparagraph></paragraph></subsection>
<subsection id="HCD2332A15BB64731A57183FC49130032"><enum>(b)</enum><header>Annual report</header><text>Not later than March 31 of each year, beginning March 31, 2011, each participating State shall submit to the Secretary an annual report that shall include the following information:</text>
<paragraph id="HDD364C79EA29416DA6FB984AEEA05360"><enum>(1)</enum><text>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.</text></paragraph>
<paragraph id="H2BEE00EBC03C48508FD70975E85DB262"><enum>(2)</enum><text>The total amount of such new loans.</text></paragraph>
<paragraph id="HE46FB6A546074541AD1DF2946CEFA99D"><enum>(3)</enum><text>Breakdowns by industry type, loan size, annual sales, and number of employees of the borrowers that received such new loans.</text></paragraph>
<paragraph id="H345D67AF4D6740238A178DBC60DA7AB6"><enum>(4)</enum><text>The zip code of each borrower that received such a new loan.</text></paragraph>
<paragraph id="HE4B46D07DE0C46DD8D5E4137170377EC"><enum>(5)</enum><text>Such other data as the Secretary, in the Secretary’s sole discretion, may require to carry out the purposes of the Program.</text></paragraph></subsection>
<subsection id="H83938862604B4A67B94B15129C79389E"><enum>(c)</enum><header>Form</header><text>The reports and data filed pursuant to subsections (a) and (b) shall be in such form as the Secretary, in the Secretary’s sole discretion, may require.</text></subsection>
<subsection id="HFBFF52936C304A64B516231F0E79F0ED"><enum>(d)</enum><header>Termination of reporting requirements</header><text>The 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.</text></subsection></section>
<section id="H3B1062097B874EA99E785FEDFE78FC86"><enum>208.</enum><header>Remedies for State program termination or failures</header>
<subsection id="H48F0D47E80254D448CCE2A299029D526"><enum>(a)</enum><header>Remedies</header><text></text>
<paragraph id="HE653A686F7BD407D8CA782E73BB4EFB4"><enum>(1)</enum><header>In general</header><text>If any of the events listed in paragraph (2) occur, the Secretary, in the Secretary’s discretion, may—</text>
<subparagraph id="H4A0A26A9C6B34588ABB9FC90ED3E125F"><enum>(A)</enum><text>reduce the amount of Federal funds allocated to the State under the Program; or</text></subparagraph>
<subparagraph id="H76FAB92719A74EF7928C450006AEEC9C"><enum>(B)</enum><text>terminate any further transfers of allocated amounts that have not yet been transferred to the State.</text></subparagraph></paragraph>
<paragraph id="H459D0938EB444726818F0EDFAD0BE316"><enum>(2)</enum><header>Causal events</header><text>The events referred to in paragraph (1) are—</text>
<subparagraph id="H4CC37925E4FD430C8D1FB510FDC7E3E7"><enum>(A)</enum><text>termination by a participating State of its participation in the Program;</text></subparagraph>
<subparagraph id="H15D808C47B264AC0A32C7D339A214AC7"><enum>(B)</enum><text>failure on the part of a participating State to submit complete reports under section 207 on a timely basis; or</text></subparagraph>
<subparagraph id="H25C0A587D9AF4E2588F064E39138D1E4"><enum>(C)</enum><text>noncompliance by the State with the terms of the allocation agreement between the Secretary and the State.</text></subparagraph></paragraph></subsection>
<subsection id="HF767D6652C0C48C9A37092B9E5040B2B"><enum>(b)</enum><header>Deallocated amounts to be reallocated</header><text>If, after 13 months, any portion of the amount of Federal funds allocated to a participating State is deemed by the Secretary to be no longer allocated to the State after actions taken by the Secretary under 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 203(b).</text></subsection></section>
<section id="HFB0C09829D0E4FDC86D6E24E74C98FE4"><enum>209.</enum><header>Implementation and administration</header>
<subsection id="HE756504F38F847859EC7B67FBEDFDADF"><enum>(a)</enum><header>General authorities and duties</header><text>The Secretary shall—</text>
<paragraph id="H8522F86FEA7A4196A3E6022C675DBE02"><enum>(1)</enum><text>consult with the Administrator of the Small Business Administration and the appropriate Federal banking agencies on the administration of the Program;</text></paragraph>
<paragraph id="H9A349697F93442CEA8C008ED3D1EC335"><enum>(2)</enum><text>establish minimum national standards for approved State programs;</text></paragraph>
<paragraph id="HE4D3BD3016E5484EA789ED7F7476AB24"><enum>(3)</enum><text>provide technical assistance to States for starting State programs and generally disseminate best practices;</text></paragraph>
<paragraph id="H60A1BE7066CE42FBAC66A2FF1B0CFE15"><enum>(4)</enum><text>manage, administer, and perform necessary program integrity functions for the Program; and</text></paragraph>
<paragraph id="HDB40ED9ED9D24101B5FA98EE26DD26B9"><enum>(5)</enum><text>ensure adequate oversight of the approved State programs, including oversight of the cash flows, performance, and compliance of each approved State program.</text></paragraph></subsection>
<subsection id="H958F0AEB9BE04443AFFCC18D2836896D"><enum>(b)</enum><header>Appropriations</header><text display-inline="yes-display-inline">There is hereby appropriated to the Secretary, out of funds in the Treasury not otherwise appropriated, $2,000,000,000 to carry out the Program, including to pay reasonable costs of administering the Program.</text></subsection>
<subsection id="H5C02A8B30C694EA1851E90A5A9DC875B"><enum>(c)</enum><header>Termination of secretary’s program administration functions</header><text>The authorities and duties of the Secretary to implement and administer the Program shall terminate at the end of the 7-year period beginning on the date of enactment of this title.</text></subsection></section>
<section id="H925C7265024D4445B98A27B6023AAEA9"><enum>210.</enum><header>Regulations</header><text display-inline="no-display-inline">The 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, but not limited to, to define terms, to establish compliance and reporting requirements, and such other terms and conditions necessary to carry out the purposes of this title.</text></section>
<section id="H98870BE844EB47BFBA9301634545401F"><enum>211.</enum><header>Oversight and audits</header>
<subsection id="HD556415540EC48D8A4F719601B173DE9"><enum>(a)</enum><header>Inspector General oversight</header><text display-inline="yes-display-inline">The 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.</text></subsection>
<subsection id="H2C6DB9537FAE4FD48A11B7D9DBCB9DB7"><enum>(b)</enum><header>GAO audit</header><text display-inline="yes-display-inline">The Comptroller General of the United States shall perform an annual audit of the Program and issue a report to the appropriate committees of Congress, as such term is defined under section 3(1), containing the results of such audit.</text></subsection>
<subsection id="H13D2B23AD20F4E6C97CF95DD4F6FC5AA"><enum>(c)</enum><header>Required certification</header>
<paragraph id="HD6DF6CA9E2DE495290B838668C128C32"><enum>(1)</enum><header>Financial institutions certification</header><text display-inline="yes-display-inline">With 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 title 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.</text></paragraph>
<paragraph id="HC482A11DA6794AF08B7739D9FA663474"><enum>(2)</enum><header>Sex offense certification</header><text>With 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 title shall certify to the participating State that the principals of such entity have not been convicted of a sex offense against a minor (as such terms are defined in section 111 of the Sex Offender Registration and Notification Act (42 U.S.C. 16911)).</text></paragraph></subsection>
<subsection id="H0FD7BEB2F7AF4D159B6575CC46015C74" display-inline="no-display-inline"><enum>(d)</enum><header>Prohibition on pornography</header><text display-inline="yes-display-inline">None of the funds made available under this title may be used to pay the salary of any individual engaged in activities related to the Program who has been officially disciplined for 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.</text></subsection></section>
<enum>III</enum><header>Small business early-stage investment program</header>
<section id="HB8D0349E01C24E7995CC9C48FEB1CACA"><enum>301.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote>Small Business Early-Stage Investment Program Act of 2010</quote>.</text></section>
<section id="HE10BBBE7DA5F45C8A91E39292CDCBA8E"><enum>302.</enum><header>Small business early-stage investment program</header><text display-inline="no-display-inline">Title III of the Small Business Investment Act of 1958 (15 U.S.C. 681 et seq.) is amended by adding at the end the following:</text>
<quoted-block style="OLC" display-inline="no-display-inline" id="HA0831C0AE67A4D4EA16569A89676F44D">
<part id="H3BB192950B944FB9B0EFC3D365D201BC"><enum>D</enum><header>Small business early-stage investment program</header>
<section id="HD036DBF7086846699E42BF850A622A7E"><enum>399A.</enum><header>Establishment of program</header><text display-inline="no-display-inline">The Administrator shall establish and carry out an early-stage investment program (hereinafter referred to in this part as the <quote>program</quote>) to provide equity investment financing to support early-stage small businesses in accordance with this part.</text></section>
<section id="HFF1B631E48AD40AAA8D6916B68171215"><enum>399B.</enum><header>Administration of program</header><text display-inline="no-display-inline">The program shall be administered by the Administrator acting through the Associate Administrator described under section 201.</text></section>
<section id="HA5965B3DFBAE45ECAEEDBB6B4AA6CB8C"><enum>399C.</enum><header>Applications</header>
<subsection id="H70A021B6CF9046AEBFFBEF3C99B53AA1"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Any existing or newly formed incorporated body, limited liability company, or limited partnership organized and chartered or otherwise existing under Federal or State law for the purpose of performing the functions and conducting the activities contemplated under the program and any manager of any small business investment company may submit to the Administrator an application to participate in the program.</text></subsection>
<subsection id="H095B22E94B12414198B49AE5776DDE5D"><enum>(b)</enum><header>Requirements for application</header><text>An application to participate in the program shall include the following:</text>
<paragraph id="H644385FC72EF4D48B879A1BB888F354F"><enum>(1)</enum><text display-inline="yes-display-inline">A business plan describing how the applicant intends to make successful venture capital investments in early-stage small businesses and direct capital to small business concerns in targeted industries or other business sectors.</text></paragraph>
<paragraph id="H9243DC2829E84FC3B13B46BA7DEBD0E5"><enum>(2)</enum><text>Information regarding the relevant venture capital investment qualifications and backgrounds of the individuals responsible for the management of the applicant.</text></paragraph>
<paragraph id="H9159851CFBDC40EFBE1E0959670D09B6"><enum>(3)</enum><text>A description of the extent to which the applicant meets the selection criteria under section 399D.</text></paragraph></subsection>
<subsection id="H43C926852B5B4496A746BA44A85DECDD"><enum>(c)</enum><header>Applications from managers of small business investment companies</header><text display-inline="yes-display-inline">The Administrator shall establish an abbreviated application process for applicants that are managers of small business investment companies that are licensed under section 301 and that are applying to participate in the program. Such abbreviated process shall incorporate a presumption that such managers satisfactorily meet the selection criteria under paragraphs (3) and (5) of section 399D(b).</text></subsection></section>
<section id="H8266900221A146CEA45E0A34A37B384F"><enum>399D.</enum><header>Selection of participating investment companies</header>
<subsection id="HD5848131F4204F5B8F1ADB576F373D55"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Not later than 90 days after the date on which the Administrator receives an application from an applicant under section 399C, the Administrator shall make a determination to conditionally approve or disapprove such applicant to participate in the program and shall transmit such determination to the applicant in writing. A determination to conditionally approve an applicant shall identify all conditions necessary for a final approval and shall provide a period of not less than one year for satisfying such conditions.</text></subsection>
<subsection id="H3980A0E6A43E4257844031EBFC7CCEC6"><enum>(b)</enum><header>Selection criteria</header><text>In making a determination under subsection (a), the Administrator shall consider each of the following:</text>
<paragraph id="H03A1612FF5D54D92AFC5910E8F3743CD"><enum>(1)</enum><text display-inline="yes-display-inline">The likelihood that the applicant will meet the goals specified in the business plan of the applicant.</text></paragraph>
<paragraph id="H8F9C098431414FD3B5D32C5C45217437"><enum>(2)</enum><text>The likelihood that the investments of the applicant will create or preserve jobs, both directly and indirectly.</text></paragraph>
<paragraph id="H2EAF796659784464B2D935720AE6E86B"><enum>(3)</enum><text>The character and fitness of the management of the applicant.</text></paragraph>
<paragraph id="HC53797EADE404AF59B3092AF63A1F6F3"><enum>(4)</enum><text>The experience and background of the management of the applicant.</text></paragraph>
<paragraph id="HA85A75D2E2B0484E8186A220A5E31086"><enum>(5)</enum><text>The extent to which the applicant will concentrate investment activities on early-stage small businesses.</text></paragraph>
<paragraph id="HA375BA0C346D4F5B9FC48ED8F340F241"><enum>(6)</enum><text>The likelihood that the applicant will achieve profitability.</text></paragraph>
<paragraph id="HF49D532D989E4BBF82E5DF3DC40B5D7F"><enum>(7)</enum><text>The experience of the management of the applicant with respect to establishing a profitable investment track record.</text></paragraph>
<paragraph id="H4035B9699D774FF1BD9F419C434939DD"><enum>(8)</enum><text display-inline="yes-display-inline">The extent to which the applicant will concentrate investment activities on small business concerns in targeted industries.</text></paragraph></subsection>
<subsection id="HA5DA4906833D430DBA167A446043DFFB"><enum>(c)</enum><header>Final approval</header><text display-inline="yes-display-inline">For each applicant provided a conditional approval under subsection (a), the Administrator shall provide final approval to participate in the program not later than 90 days after the date the applicant satisfies the conditions specified by the Administrator under such subsection or, in the case of applicants whose partnership or management agreements conform to models approved by the Administrator, the Administrator shall provide final approval to participate in the program not later than 30 days after the date the applicant satisfies the conditions specified under such subsection. If an applicant provided conditional approval under subsection (a) fails to satisfy the conditions specified by the Administrator in the time period designated under such subsection, the Administrator shall revoke the conditional approval.</text></subsection></section>
<section id="HC88DE8E111B747FCA7396BF3FD07A42F"><enum>399E.</enum><header>Equity financings</header>
<subsection id="HE619C6C6DA59473D8DEF80CC1F896E75"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Administrator may make one or more equity financings to a participating investment company.</text></subsection>
<subsection id="HCEB7DC8264404265A2155E0119C453BD"><enum>(b)</enum><header>Equity financing amounts</header>
<paragraph id="H8F6DC26AF2E94D73A348C524F213348A"><enum>(1)</enum><header>Non-Federal capital</header><text display-inline="yes-display-inline">An equity financing made to a participating investment company under the program may not be in an amount that exceeds the amount of the capital of such company that is not from a Federal source and that is available for investment on or before the date on which an equity financing is drawn upon. Such capital may include legally binding commitments with respect to capital for investment.</text></paragraph>
<paragraph id="H6B29DB866513439A8862DBAE7FA1136C"><enum>(2)</enum><header>Limitation on aggregate amount</header><text>The aggregate amount of all equity financings made to a participating investment company under the program may not exceed $100,000,000.</text></paragraph></subsection>
<subsection id="HF35EAE845BF14EA4AFE61305847412B9"><enum>(c)</enum><header>Equity financing process</header><text display-inline="yes-display-inline">In making an equity financing under the program, the Administrator shall commit an equity financing amount to a participating investment company and the amount of each such commitment shall remain available to be drawn upon by such company—</text>
<paragraph id="HABE81803703E4C699E7466DCF0B81ED3"><enum>(1)</enum><text>for new-named investments during the 5-year period beginning on the date on which each such commitment is first drawn upon; and</text></paragraph>
<paragraph id="HE173C1B3BC934838AE64911D7A25FBC7"><enum>(2)</enum><text display-inline="yes-display-inline">for follow-on investments and management fees during the 10-year period beginning on the date on which each such commitment is first drawn upon, with not more than 2 additional 1-year periods available at the discretion of the Administrator.</text></paragraph></subsection>
<subsection id="H95AFE7A585F146A8A23D2DD83F6CC906"><enum>(d)</enum><header>Commitment of funds</header><text display-inline="yes-display-inline">The Administrator shall make commitments for equity financings not later than 2 years after the date funds are appropriated for the program.</text></subsection></section>
<section id="H21546BC32F0E4A45B0952DBD819C76D1"><enum>399F.</enum><header>Investments in early-stage small businesses</header>
<subsection id="H31B933D80B5440379B2C2201EA6BB65D"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">As a condition of receiving an equity financing under the program, a participating investment company shall make all of the investments of such company in small business concerns, of which at least 50 percent shall be early-stage small businesses.</text></subsection>
<subsection id="HBA023D477AA840BAB6521C8F559CE1EA"><enum>(b)</enum><header>Evaluation of compliance</header><text>With respect to an equity financing amount committed to a participating investment company under section 399E, the Administrator shall evaluate the compliance of such company with the requirements under this section if such company has drawn upon 50 percent of such commitment.</text></subsection></section>
<section id="H80C8006A7C6C4BE0B730109DAAF36ADA"><enum>399G.</enum><header>Pro rata investment shares</header><text display-inline="no-display-inline">Each investment made by a participating investment company under the program shall be treated as comprised of capital from equity financings under the program according to the ratio that capital from equity financings under the program bears to all capital available to such company for investment.</text></section>
<section id="HC6245B2264B445BBB992D658CBAF32DC"><enum>399H.</enum><header>Equity financing interest</header>
<subsection id="HFC74DE7AD46E40F8BC702A34C54C0C5A"><enum>(a)</enum><header>Equity financing Interest</header>
<paragraph id="HC5094619A2B6455D9D22B3976AC3BA10"><enum>(1)</enum><header>In general</header><text>As a condition of receiving an equity financing under the program, a participating investment company shall convey an equity financing interest to the Administrator in accordance with paragraph (2).</text></paragraph>
<paragraph id="HDA6DD665A68B4F2ABAB77ACE34F94ED0"><enum>(2)</enum><header>Effect of conveyance</header><text>The equity financing interest conveyed under paragraph (1) shall have all the rights and attributes of other investors attributable to their interests in the participating investment company, but shall not denote control or voting rights to the Administrator. The equity financing interest shall entitle the Administrator to a pro rata portion of any distributions made by the participating investment company equal to the percentage of capital in the participating investment company that the equity financing comprises. The Administrator shall receive distributions from the participating investment company at the same times and in the same amounts as any other investor in the company with a similar interest. The investment company shall make allocations of income, gain, loss, deduction, and credit to the Administrator with respect to the equity financing interest as if the Administrator were an investor.</text></paragraph></subsection>
<subsection id="H89C470814C8E43B99136EBCDFF41BF81"><enum>(b)</enum><header>Manager profits</header><text display-inline="yes-display-inline">As a condition of receiving an equity financing under the program, the manager profits interest payable to the managers of a participating investment company under the program shall not exceed 20 percent of profits, exclusive of any profits that may accrue as a result of the capital contributions of any such managers with respect to such company. Any excess of this amount, less taxes payable thereon, shall be returned by the managers and paid to the investors and the Administrator in proportion to the capital contributions and equity financings paid in. No manager profits interest (other than a tax distribution) shall be paid prior to the repayment to the investors and the Administrator of all contributed capital and equity financings made.</text></subsection>
<subsection id="H318EA357E673483CA41D598220BEA726"><enum>(c)</enum><header>Distribution requirements</header><text>As a condition of receiving an equity financing under the program, a participating investment company shall make all distributions to all investors in cash and shall make distributions within a reasonable time after exiting investments, including following a public offering or market sale of underlying investments.</text></subsection></section>
<section id="H2321FE7BCEB347F781FC1101998A368C"><enum>399I.</enum><header>Fund</header><text display-inline="no-display-inline">There is hereby created within the Treasury a separate fund for equity financings which shall be available to the Administrator subject to annual appropriations as a revolving fund to be used for the purposes of the program. All amounts received by the Administrator, including any moneys, property, or assets derived by the Administrator from operations in connection with the program, shall be deposited in the fund. All expenses and payments, excluding administrative expenses, pursuant to the operations of the Administrator under the program shall be paid from the fund.</text></section>
<section id="HC00DBCF450984796A76F506355A9820F"><enum>399J.</enum><header>Application of other sections</header><text display-inline="no-display-inline">To the extent not inconsistent with requirements under this part, the Administrator may apply sections 309, 311, 312, 313, and 314 to activities under this part and an officer, director, employee, agent, or other participant in a participating investment company shall be subject to the requirements under such sections.</text></section>
<section id="H923A010769974C0EA1ADFC40F192FB4B"><enum>399K.</enum><header>Annual reporting</header><text display-inline="no-display-inline">The Administrator shall report on the performance of the program in the annual performance report of the Administration. </text></section>
<section id="H7DCF06D9807449B78159FF0C095C3DA7"><enum>399L.</enum><header>Definitions</header><text display-inline="no-display-inline">In this part, the following definitions apply:</text>
<paragraph id="H017C0933F805465392A92CE7CC910DA9"><enum>(1)</enum><header>Early-stage small business</header><text>The term <term>early-stage small business</term> means a small business concern that—</text>
<subparagraph id="HD0E918A4AAC44E1984A1398A8C68F10B"><enum>(A)</enum><text>is domiciled in a State; and</text></subparagraph>
<subparagraph id="H0DB63EBB492E478AA0345965DC4BBF00"><enum>(B)</enum><text display-inline="yes-display-inline">has not generated gross annual sales revenues exceeding $15,000,000 in any of the previous 3 years.</text></subparagraph></paragraph>
<paragraph id="H98067F06B9E543DB92F29E49C6006CE0" display-inline="no-display-inline"><enum>(2)</enum><header>Participating investment company</header><text display-inline="yes-display-inline">The term <term>participating investment company</term> means an applicant approved under section 399D to participate in the program.</text></paragraph>
<paragraph id="H6FB26944099247E888FFA3D1E0542F6B"><enum>(3)</enum><header>Targeted industries</header><text>The term <term>targeted industries</term> means any of the following business sectors:</text>
<subparagraph id="H85F1926F02944C80BF9EFECFE11C161F"><enum>(A)</enum><text>Agricultural technology.</text></subparagraph>
<subparagraph id="H347A1252C25349A29E79E4A07525A380"><enum>(B)</enum><text>Energy technology.</text></subparagraph>
<subparagraph id="H1E435AFD9E2246F9BAD5C50773F94EC6"><enum>(C)</enum><text>Environmental technology.</text></subparagraph>
<subparagraph id="H9094387604F442049792FD262A3816E4"><enum>(D)</enum><text>Life science.</text></subparagraph>
<subparagraph id="H0D76E329BDA6438DBADC47B3DD898D37"><enum>(E)</enum><text>Information technology.</text></subparagraph>
<subparagraph id="H4632F3601AD44DE7A3A9F1A634BD4523"><enum>(F)</enum><text>Digital media.</text></subparagraph>
<subparagraph id="H712F32853EE74052A7616A618C87785F"><enum>(G)</enum><text>Clean technology.</text></subparagraph>
<subparagraph id="H521B2279097D4754B731F3146D61905E"><enum>(H)</enum><text>Defense technology.</text></subparagraph>
<subparagraph id="H4225DBF4D4CA4A3C84DE714B83C657C6"><enum>(I)</enum><text>Photonics technology.</text></subparagraph></paragraph></section>
<section id="H731D163A0286491EA96C86C7B6CB5C30" display-inline="no-display-inline" section-type="subsequent-section"><enum>399M.</enum><header>Appropriation</header><text display-inline="no-display-inline">From funds not otherwise appropriated, there is hereby appropriated $1,000,000,000 to carry out the program.</text></section>
<section id="H9A42B10DEDE0430DA54D1BADE7208BA2"><enum>399N.</enum><header>Certification</header>
<subsection id="H2FDF34B962C44C588B7A9C19990D38C7"><enum>(a)</enum><header>Immigration certification</header>
<paragraph id="H8AB4E58746F440F6B17777B0D9131F5B"><enum>(1)</enum><header>Participating investment companies</header><text display-inline="yes-display-inline">Each participating investment company that receives an equity financing under this part after the date of the enactment of this part must, if applicable, certify that such company is in compliance with the 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.</text></paragraph>
<paragraph id="HB9903BA6806341D39543447A23107E1A"><enum>(2)</enum><header>Early-stage small businesses</header><text display-inline="yes-display-inline">Each early-stage small business that receives funds from a participating investment company that receives an equity financing under this part after the date of the enactment of this part must, if applicable, certify that such company is in compliance with the 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.</text></paragraph></subsection>
<subsection id="H90FB6B06F4D54201A8CD4643FF92CAB2"><enum>(b)</enum><header>Sex offender certification</header>
<paragraph id="H5CDFF286C38641DBB91896E9DD5182C3"><enum>(1)</enum><header>Participating investment companies</header><text display-inline="yes-display-inline">Each participating investment company that receives an equity financing under this part after the date of the enactment of this part shall certify to the Administrator that the principals of such company have not been convicted of a sex offense against a minor (as such terms are defined in section 111 of the Sex Offender Registration and Notification Act (42 U.S.C. 16911)).</text></paragraph>
<paragraph id="H9FDF9837F53C4DCBA999FC8147741ABF"><enum>(2)</enum><header>Early-stage small businesses</header><text display-inline="yes-display-inline">Each early-stage small business that receives funds from a participating investment company that receives an equity financing under this part after the date of the enactment of this part shall certify to the Administrator 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)).</text></paragraph></subsection>
<subsection id="H25E6DABB72994316A80433A7BA9F3B56"><enum>(c)</enum><header>Pornography certification</header><text display-inline="yes-display-inline">None of the funds made available under this part may be used to pay the salary of any individual engaged in activities related to the provisions of this part who has been officially 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.</text></subsection></section></part><after-quoted-block>.</after-quoted-block></quoted-block></section>
<section id="H0504F1A64EEB4AFEB34DC5AE977403AC"><enum>303.</enum><header>Regulations</header><text display-inline="no-display-inline">Not later than 180 days after the date of enactment of this Act, the Administrator shall issue regulations to carry out this title and the amendments made by this title.</text></section>
<section id="H8C381193798E4684B87F50C25A0744DA"><enum>304.</enum><header>Prohibitions on earmarks</header><text display-inline="no-display-inline">None of the funds appropriated for the program established under part D of title III of the Small Business Investment Act of 1958, as added by this Act, may be used for a Congressional earmark as defined in clause 9(e) of rule XXI of the Rules of the House of Representatives.</text></section>
<enum>IV</enum><header>Miscellaneous</header>
<section id="HEA276E8A600D40EE8A086ACCDDF2D89F"><enum>401.</enum><header>Budgetary effects</header><text display-inline="no-display-inline">The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled <quote>Budgetary Effects of PAYGO Legislation</quote> for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.</text></section>
<enum>V</enum><header>Tax provisions</header>
<section display-inline="no-display-inline" id="HDA1CCCA7FE0F467FA2E849E9846159B0" section-type="subsequent-section"><enum>500.</enum><header>Short title; etc</header>
<subsection commented="no" id="H0F0E232AB7334A1D9D3BBB08F8E8128F"><enum>(a)</enum><header>Short title</header><text display-inline="yes-display-inline">This title may be cited as the <quote><short-title>Small Business Jobs Tax Relief Act of 2010</short-title></quote>.</text></subsection>
<subsection id="H2DA7400DB563491DBF9890232B06859A"><enum>(b)</enum><header>Amendment of 1986 Code</header><text>Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.</text></subsection></section>
<subtitle id="HF882E5FFE82D40B5BD91AEF70E36E22F"><enum>A</enum><header>Small business tax incentives</header>
<part id="H76EA82F632F8406D8095DDA324FAE0DE"><enum>1</enum><header>General provisions</header>
<section id="H01C81C7C7FF642D08E38DD3C08B84D2D"><enum>501.</enum><header>Temporary exclusion of 100 percent of gain on certain small business stock</header>
<subsection id="H8737445E9F8644F98045E97A0A481523"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (a) of section 1202 is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HACA3465A0FD6407CBE76D3894EF6E8C1" style="OLC">
<paragraph id="HAB67D28C07CE4294A3A6143DF5C1BA90"><enum>(4)</enum><header>Special 100 percent exclusion</header><text display-inline="yes-display-inline">In the case of qualified small business stock acquired after March 15, 2010, and before January 1, 2012—</text>
<subparagraph id="HAC7030DECB7749AFB0D2E45463F9C00C"><enum>(A)</enum><text>paragraph (1) shall be applied by substituting <quote>100 percent</quote> for <quote>50 percent</quote>,</text></subparagraph>
<subparagraph id="HB2861A013C1940DFBA981E6596031DAD"><enum>(B)</enum><text>paragraph (2) shall not apply, and</text></subparagraph>
<subparagraph id="H44F35D3BCB0C46CCBBA2B1D8BD1FFC29"><enum>(C)</enum><text>paragraph (7) of section 57(a) shall not apply.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection commented="no" id="H615FA564CD0A4D8AB3C0DC7335527DB9"><enum>(b)</enum><header>Conforming amendments</header><text>Paragraph (3) of section 1202(a) is amended—</text>
<paragraph commented="no" id="H24914AD5558A4239B62F749D665B730D"><enum>(1)</enum><text>by striking <quote>after the date of the enactment of this paragraph and before January 1, 2011</quote> and inserting <quote>after February 17, 2009, and before March 16, 2010</quote>; and</text></paragraph>
<paragraph commented="no" id="HEA5A87E7591040C397AFFFE56730D48A"><enum>(2)</enum><text>by striking <quote><header-in-text level="paragraph" style="OLC">Special rules for 2009 and 2010</header-in-text></quote> in the heading and inserting <quote><header-in-text level="paragraph" style="OLC">Special 75 percent exclusion</header-in-text></quote>.</text></paragraph></subsection>
<subsection commented="no" id="H696B8002C6B440A2AC1E3DC14DCAD64B"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to stock acquired after March 15, 2010.</text></subsection></section></part>
<part id="H9AC4791081044297B0D35DA9F602F4AC"><enum>2</enum><header>Limitations and reporting on certain penalties</header>
<section display-inline="no-display-inline" id="H74294319800E4DA7A71D1C94E1C5C39E" section-type="subsequent-section"><enum>511.</enum><header>Limitation on penalty for failure to disclose certain information</header>
<subsection id="H91768103389D487CB4C8B99355A00224"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (b) of section 6707A is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HA8D8C8120F46401790B7A81306D79BC6" style="OLC">
<subsection id="H40457E02B1FC4E148ED7772F92E76034"><enum>(b)</enum><header>Amount of penalty</header>
<paragraph id="H71E4700978484CFBABB1638BAE79D408"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">Except 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).</text></paragraph>
<paragraph id="HBBD2DC0EC9E245F898471A3F08FB6431"><enum>(2)</enum><header>Maximum penalty</header><text>The amount of the penalty under subsection (a) with respect to any reportable transaction for any taxable year shall not exceed—</text>
<subparagraph id="H55100F8EA8DC434F9C751198CE0543B8"><enum>(A)</enum><text>in the case of a listed transaction, $200,000 ($100,000 in the case of a natural person), or</text></subparagraph>
<subparagraph id="HDA44294CBE1147FA826219F4D43DE9D5"><enum>(B)</enum><text>in the case of any other reportable transaction, $50,000 ($10,000 in the case of a natural person).</text></subparagraph></paragraph>
<paragraph id="H9BBA8D0BEA6E49228D405E7D4ACB646C"><enum>(3)</enum><header>Minimum penalty</header><text>The amount of the penalty under subsection (a) with respect to any transaction for any taxable year shall not be less than $10,000 ($5,000 in the case of a natural person).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H66DFF5724FBB45A99590CA5858EC0257"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to penalties assessed after December 31, 2006.</text></subsection></section>
<section commented="no" display-inline="no-display-inline" id="HEB888863FC9849C1A43BCA36DA8409D6" section-type="subsequent-section"><enum>512.</enum><header>Annual reports on penalties and certain other enforcement actions</header>
<subsection commented="no" id="H604CEC0D5DBB48B69DFA766FEFE70073"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The 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:</text>
<paragraph commented="no" id="H428D478720094E1A92EBC1FB1CD15403"><enum>(1)</enum><text>Section 6662A (relating to accuracy-related penalty on understatements with respect to reportable transactions).</text></paragraph>
<paragraph commented="no" id="H8015128B09DF4C288D5F879172E96D56"><enum>(2)</enum><text>Section 6700(a) (relating to promoting abusive tax shelters).</text></paragraph>
<paragraph commented="no" id="H7F3E4358623041869DF3B129870A480F"><enum>(3)</enum><text>Section 6707 (relating to failure to furnish information regarding reportable transactions).</text></paragraph>
<paragraph commented="no" id="HB94EEB6986B14110A0DB1671027B765C"><enum>(4)</enum><text>Section 6707A (relating to failure to include reportable transaction information with return).</text></paragraph>
<paragraph commented="no" id="H38083187AF3A423C9203256550F36C03"><enum>(5)</enum><text>Section 6708 (relating to failure to maintain lists of advisees with respect to reportable transactions).</text></paragraph></subsection>
<subsection commented="no" id="H82D7D42A764F413ABE98B8F4ADA270D9"><enum>(b)</enum><header>Additional information</header><text>The report required under subsection (a) shall also include information on the following with respect to each year:</text>
<paragraph commented="no" id="HD221546397F44B31A62DE22482F9714B"><enum>(1)</enum><text>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).</text></paragraph>
<paragraph commented="no" id="H15622B09A9E1489198343EFC0EE1B752"><enum>(2)</enum><text>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.</text></paragraph></subsection>
<subsection commented="no" id="H9348A7D57EB4442EB1E73FBAFB2FC572"><enum>(c)</enum><header>Date of report</header><text>The first report required under subsection (a) shall be submitted not later than December 31, 2010.</text></subsection></section></part>
<part id="H86394B13F2BA45638D6CF07E0417A1B4"><enum>3</enum><header>Other provisions</header>
<section display-inline="no-display-inline" id="H0467DF4E78214F83A17E218C281AAB7C" section-type="subsequent-section"><enum>521.</enum><header>Increase in amount allowed as deduction for start-up expenditures</header>
<subsection id="H746021E965D3453DBC465725F9EE1A01"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (b) of section 195 is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HB31619B439DA49E492ED9DE80D2E8E4F" style="OLC">
<paragraph id="H9B1939234E5E4D7FA7DDAB421EEC732D"><enum>(3)</enum><header>Increased limitation for taxable years beginning in 2010 or 2011</header><text display-inline="yes-display-inline">In the case of any taxable year beginning in 2010 or 2011, paragraph (1)(A)(ii) shall be applied—</text>
<subparagraph id="HE6829853AEF14D79A4513DB9C36A9483"><enum>(A)</enum><text>by substituting <quote>$20,000</quote> for <quote>$5,000</quote>, and</text></subparagraph>
<subparagraph id="HC2687E46A7054ACFA88500BCC6D65B8F"><enum>(B)</enum><text>by substituting <quote>$75,000</quote> for <quote>$50,000</quote>.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HB1A2AF5853C44D28844F89DEE3B269C0"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after December 31, 2009.</text></subsection></section>
<section display-inline="no-display-inline" id="H5D7C9ECD388E400C9EB33D312D790ABB" section-type="subsequent-section"><enum>522.</enum><header>Nonrecourse small business investment company loans from the Small Business Administration treated as amounts at risk</header>
<subsection id="H5998A72018194CCBBFC675AE09221A36"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subparagraph (B) of section 465(b)(6) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H6FB83A9B8CA34F8982EDBA31A1DB6946" style="OLC">
<subparagraph id="H7EAA19A131504A91BB5D1CDBC63C1691"><enum>(B)</enum><header>Qualified nonrecourse financing</header><text display-inline="yes-display-inline">For purposes of this paragraph—</text>
<clause id="H175EFC17293447929C690413E425F976"><enum>(i)</enum><header>In general</header><text>The term <term>qualified nonrecourse financing</term> means any financing—</text>
<subclause id="HA34A6B98FAFC422AB31E56A0CC8751C2"><enum>(I)</enum><text>which is qualified real property financing or qualified SBIC financing,</text></subclause>
<subclause id="HE8980565CDEF4D28BD6B7C2DDD833F1B"><enum>(II)</enum><text>except to the extent provided in regulations, with respect to which no person is personally liable for repayment, and</text></subclause>
<subclause id="H48F236992306426A9A50FDC95DF2EF5C"><enum>(III)</enum><text>which is not convertible debt.</text></subclause></clause>
<clause id="H78FBE55BA98843AE9D2E779CA72B9D91"><enum>(ii)</enum><header>Qualified real property financing</header><text>The term <term>qualified real property financing</term> means any financing which—</text>
<subclause id="H0AE17A255F4B4714B395CD63275FED3C"><enum>(I)</enum><text display-inline="yes-display-inline">is borrowed by the taxpayer with respect to the activity of holding real property,</text></subclause>
<subclause id="H6CD0EA62D59D49EAA106DD9767EBBFCF"><enum>(II)</enum><text>is secured by real property used in such activity, and</text></subclause>
<subclause id="H9F448F4F7CD046E1B0EE88C5C68CA5E6"><enum>(III)</enum><text display-inline="yes-display-inline">is borrowed by the taxpayer from a qualified person or represents a loan from any Federal, State, or local government or instrumentality thereof, or is guaranteed by any Federal, State, or local government.</text></subclause></clause>
<clause id="HA3E0603F8D8548B3BB1A94201493562B"><enum>(iii)</enum><header>Qualified SBIC financing</header><text>The term <term>qualified SBIC financing</term> means any financing which—</text>
<subclause id="HD4F8E68AF94C4F139C8CFEA304341C46"><enum>(I)</enum><text>is borrowed by a small business investment company (within the meaning of section 301 of the Small Business Investment Act of 1958), and</text></subclause>
<subclause id="HD50B40509C344ED383659636A2742FFE"><enum>(II)</enum><text>is borrowed from, or guaranteed by, the Small Business Administration under the authority of section 303(b) of such Act.</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="H76AEFF2326634CF99D5A0F805018D50A"><enum>(b)</enum><header>Conforming amendments</header><text>Subparagraph (A) of section 465(b)(6) is amended—</text>
<paragraph id="HD88414ECF33149C19B58532737E34803"><enum>(1)</enum><text>by striking <quote>in the case of an activity of holding real property,</quote>; and</text></paragraph>
<paragraph id="H3E1133C54C2D45B086AF9D3386A8E148"><enum>(2)</enum><text>by striking <quote>which is secured by real property used in such activity</quote>.</text></paragraph></subsection>
<subsection id="H28495F3BC11B44708C45F328C7A9A543"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to loans and guarantees made after the date of the enactment of this Act.</text></subsection></section>
<section display-inline="no-display-inline" id="H43613022EE7F4D54B47562021C98BB63" section-type="subsequent-section"><enum>523.</enum><header>Benefits under the Small Business Borrower Assistance Program excluded from gross income</header>
<subsection id="H83BDF68A00004873A13E92BB4A29D70E"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Part III of subchapter B of chapter 1 is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H00D99AA37E7E42A092479A790346728F" style="OLC">
<section id="H1C0228B9B09B4FC3A0F9C655E0691B78"><enum>139F.</enum><header>Benefits under the Small Business Borrower Assistance Program</header>
<subsection id="H9D75D242AA5449139737F04B8532768C"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Gross income shall not include any amount paid on behalf of a borrower by the Administrator of the Small Business Administration under the Small Business Borrower Assistance program established under section 402 of the Small Business Assistance Fund Act of 2010 (as in effect immediately after the date of the enactment of such Act).</text></subsection>
<subsection id="H3ED90DDB73F74B228A6435FD77F01486"><enum>(b)</enum><header>Denial of double benefit</header><text display-inline="yes-display-inline">Notwithstanding any other provision of this subtitle, with respect to the person for whose benefit a payment described in subsection (a) is made—</text>
<paragraph id="H8E0F4BB105CF46F8A9A44D7B4247389F"><enum>(1)</enum><header>Interest</header><text>No deduction shall be allowed for interest to the extent the liability for such interest is covered by such payment.</text></paragraph>
<paragraph id="H598C8EBEBB384B8E850B40EA1DE46061"><enum>(2)</enum><header>Payments of principal</header><text>If any payment is applied to reduce the principal of the loan to which such payment relates—</text>
<subparagraph id="H63B81063141549068E682D5EEAA27762"><enum>(A)</enum><header>Allocation among financed expenditures</header><text>Such payment shall be allocated pro rata among the expenditures financed with such loan.</text></subparagraph>
<subparagraph id="H15BBE94ED4B94FA782227E99E486F266"><enum>(B)</enum><header>Credits and deductible expenses</header><text>No deduction or credit shall be allowed for, or by reason of, any such expenditure to the extent of the amount of the payment allocated to such expenditure under subparagraph (A).</text></subparagraph>
<subparagraph id="H8A65B42A5EF84A49A2FB8B7C46EDF7EC"><enum>(C)</enum><header>Adjustment of basis</header><text>The adjusted basis of any property acquired with such expenditure shall be reduced to the extent of the amount of the payment allocated to such expenditure under subparagraph (A).</text></subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HA23829BC04C14E1FA63592A88E603345"><enum>(b)</enum><header>Clerical amendments</header><text display-inline="yes-display-inline">The table of sections for part III of subchapter B of chapter 1 is amended by adding at the end the following new item:</text>
<quoted-block display-inline="no-display-inline" id="H826543E7C31A496FA54C943AFCCFE4F3" style="OLC">
<toc container-level="quoted-block-container" idref="H00D99AA37E7E42A092479A790346728F" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H1C0228B9B09B4FC3A0F9C655E0691B78" level="section">Sec. 139F. Benefits under the Small Business Borrower Assistance Program.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection>
<subsection id="HB1E38AD6DE694C43BF28D11CF4CC4323"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to payments made after the date of the enactment of this Act.</text></subsection></section></part></subtitle>
<subtitle id="HDE81D38FE23743FCAE763A99A38F294E"><enum>B</enum><header>Revenue provisions</header>
<section display-inline="no-display-inline" id="H0BA849516EE44EACB98846463A56F05A" section-type="subsequent-section"><enum>531.</enum><header>Required minimum 10-year term, etc., for grantor retained annuity trusts</header>
<subsection id="HE273F856B68A4A8EBCA81B5142AA9099"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (b) of section 2702 is amended—</text>
<paragraph id="HA40F556CAC0C461D9157DC7B54E83CF7"><enum>(1)</enum><text>by redesignating paragraphs (1), (2) and (3) as subparagraphs (A), (B), and (C), respectively, and by moving such subparagraphs (as so redesignated) 2 ems to the right;</text></paragraph>
<paragraph id="HADD77288CF704046841ED73F4F490B69"><enum>(2)</enum><text>by striking <quote>For purposes of</quote> and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="HBCA74F88C4E746B294D939F9147C6B21" style="OLC">
<paragraph id="HBAD537B3AE684F5FB50F61C5D3DD70EF"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">For purposes of</text></paragraph><after-quoted-block>; </after-quoted-block></quoted-block></paragraph>
<paragraph id="H2B0F11F478FF4F9782F41CF6141F4C58"><enum>(3)</enum><text>by striking <quote>paragraph (1) or (2)</quote> in paragraph (1)(C) (as so redesignated) and inserting <quote>subparagraph (A) or (B)</quote>; and</text></paragraph>
<paragraph id="H9925F0CC51BA4C92BDB20152EEE0DD8F"><enum>(4)</enum><text>by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HB88FE7D10C07440DB603397C714930CD" style="OLC">
<paragraph id="H2850DA907BC441DB8F52292C34F464A0"><enum>(2)</enum><header>Additional requirements with respect to grantor retained annuities</header><text>For purposes of subsection (a), in the case of an interest described in paragraph (1)(A) (determined without regard to this paragraph) which is retained by the transferor, such interest shall be treated as described in such paragraph only if—</text>
<subparagraph id="HD1901762F38442D2B53F803C1E6115EF"><enum>(A)</enum><text>the right to receive the fixed amounts referred to in such paragraph is for a term of not less than 10 years,</text></subparagraph>
<subparagraph id="H5C8C96920DB345369C4DDC736131089D"><enum>(B)</enum><text>such fixed amounts, when determined on an annual basis, do not decrease relative to any prior year during the first 10 years of the term referred to in subparagraph (A), and</text></subparagraph>
<subparagraph id="H8EEBFAF52F704AF996B42609DFFFCEFD"><enum>(C)</enum><text>the remainder interest has a value greater than zero determined as of the time of the transfer.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection>
<subsection id="HDA87FDF298664032A9B27E33611A436A"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to transfers made after the date of the enactment of this Act.</text></subsection></section>
<section display-inline="no-display-inline" id="H257019D000DF4E7281E54CEF4AF19B35" section-type="subsequent-section"><enum>532.</enum><header>Crude tall oil ineligible for cellulosic biofuel producer credit</header>
<subsection id="H1F55B8FF1A514C298D68547701850312"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Clause (iii) of section 40(b)(6)(E) is amended—</text>
<paragraph id="H75AC311185534316B80B28D951FAE90B"><enum>(1)</enum><text>by striking <quote>or</quote> at the end of subclause (I),</text></paragraph>
<paragraph id="H238354993A874D45A787F09C3DA38DED"><enum>(2)</enum><text>by striking the period at the end of subclause (II) and inserting <quote>, or</quote>,</text></paragraph>
<paragraph id="H30FAD787DFA143259CC9C84361E7999C"><enum>(3)</enum><text>by adding at the end the following new subclause:</text>
<quoted-block display-inline="no-display-inline" id="HD6B307EA7868478183662550D76BBBBB" style="OLC">
<subclause id="H5842C77B2D9A4A20B204A51916AD96D6"><enum>(III)</enum><text display-inline="yes-display-inline">such fuel has an acid number greater than 25.</text></subclause><after-quoted-block>, and</after-quoted-block></quoted-block></paragraph>
<paragraph id="H5DE5479A5492490F82CACC7A6050E81D"><enum>(4)</enum><text>by striking <quote><header-in-text level="clause" style="OLC">unprocessed</header-in-text></quote> in the heading and inserting <quote><header-in-text level="clause" style="OLC">certain</header-in-text></quote>.</text></paragraph></subsection>
<subsection id="HE6A9B374897B4C0EBDFFE6143F8284B4"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to fuels sold or used on or after January 1, 2010.</text></subsection></section>
<section display-inline="no-display-inline" id="HAE9D501873FF48EE95E65D2D2EA14015" section-type="subsequent-section"><enum>533.</enum><header>Time for payment of corporate estimated taxes</header><text display-inline="no-display-inline">The percentage under paragraph (2) of section 561 of the Hiring Incentives to Restore Employment Act in effect on the date of the enactment of this Act is increased by 7.75 percentage points.</text></section></subtitle>
<enum>VI</enum><header>Plain Writing Act</header>
<section id="H4504AC6716A14FC1A4B45DE8255A7D9F"><enum>601.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Plain Writing Act of 2010</short-title></quote>.</text></section>
<section id="H01ACC40FEAC04095943D51405D4903E7"><enum>602.</enum><header>Purpose</header><text display-inline="no-display-inline">The purpose of this title is to improve the effectiveness and accountability of Federal agencies to the public by promoting clear Government communication that the public can understand and use.</text></section>
<section id="H69E980F42EC4427DB5C53FFEBE7E147E"><enum>603.</enum><header>Definitions</header><text display-inline="no-display-inline">In this title:</text>
<paragraph id="HB61DCB30CFA646F09674C6C861903C4C"><enum>(1)</enum><header>Agency</header><text>The term <quote>agency</quote> means the Department of the Treasury and the Small Business Administration.</text></paragraph>
<paragraph id="HD406B856925A454B8E1A716A0210CB71"><enum>(2)</enum><header>Covered document</header><text>The term <quote>covered document</quote>—</text>
<subparagraph id="H6E6C0E302C1B40E4BE2E0816C23D1043"><enum>(A)</enum><text>means any document that—</text>
<clause id="HF398E5A2526D403E82F2946B1B304B7D"><enum>(i)</enum><text>is relevant to obtaining any Federal Government benefit or service provided under title I, II, or III; </text></clause>
<clause id="H3C96FAFBFC2D416A9B7C7694AF972DE8"><enum>(ii)</enum><text display-inline="yes-display-inline">provides information about any Federal Government benefit or service provided under title I, II, or III; or</text></clause>
<clause id="HA625128A863B4FE2A5370BFF845560FD"><enum>(iii)</enum><text display-inline="yes-display-inline">explains to the public how to comply with a requirement the Federal Government administers or enforces under title I, II, or III;</text></clause></subparagraph>
<subparagraph id="H7284BE79D6884C9AA948A6B8D0903C8A"><enum>(B)</enum><text>includes (whether in paper or electronic form) a letter, publication, form, notice, or instruction; and</text></subparagraph>
<subparagraph id="H9677154880DD4F06A808B5A7CCFCEFD2"><enum>(C)</enum><text>does not include a regulation.</text></subparagraph></paragraph>
<paragraph id="H5692D306C18544DCADF7926028138CA4"><enum>(3)</enum><header>Plain writing</header><text>The term <quote>plain writing</quote> means writing that the intended audience can readily understand and use because that writing is clear, concise, well-organized, and follows other best practices of plain writing.</text></paragraph></section>
<section id="HF3AC6E930B7249F8B8D3AFBEB3EBD096"><enum>604.</enum><header>Responsibilities of Federal agencies</header>
<subsection id="HD55418CE070D48DC8BE2E8B7EC9B00FD"><enum>(a)</enum><header>Preparation for Implementation of Plain Writing Requirements</header>
<paragraph id="H08F46B872AFE496293AE0D117EBAAF81"><enum>(1)</enum><header>In general</header><text>Not later than 9 months after the date of enactment of this title, the head of each agency shall—</text>
<subparagraph id="H38DE7635AB1047F383C1A1DBA1771F40"><enum>(A)</enum><text>designate 1 or more senior officials within the agency to oversee the agency implementation of this title;</text></subparagraph>
<subparagraph id="HAE99389B4A3E4F3481C8E22C560D0EDC"><enum>(B)</enum><text>communicate the requirements of this title to the employees of the agency;</text></subparagraph>
<subparagraph id="H0F2A6922C39D4816AF0BCFC93FD84A23"><enum>(C)</enum><text>train employees of the agency in plain writing;</text></subparagraph>
<subparagraph id="HD7BCF37B6E764D95B42C9C3FF7E77B97"><enum>(D)</enum><text>establish a process for overseeing the ongoing compliance of the agency with the requirements of this title;</text></subparagraph>
<subparagraph id="HB815FF9EDE2E415DB9D1EEF3AF16448A"><enum>(E)</enum><text>create and maintain a plain writing section of the agency’s website that is accessible from the homepage of the agency’s website; and</text></subparagraph>
<subparagraph id="H33333A1202AB4D7C93C891D9D898C203"><enum>(F)</enum><text>designate 1 or more agency points-of-contact to receive and respond to public input on—</text>
<clause id="H383DE7C5DDFC4A818C48A44BC9323D4C"><enum>(i)</enum><text>agency implementation of this title; and</text></clause>
<clause id="H7EEE8CCA80D442539367361EFD584385"><enum>(ii)</enum><text>the agency reports required under section 605.</text></clause></subparagraph></paragraph>
<paragraph id="H07C3AA9D945B46718B590033915AC664"><enum>(2)</enum><header>Website</header><text>The plain writing section described under paragraph (1)(E) shall—</text>
<subparagraph id="H8ADB3E6E4E4C4B17AFD09C627DF01AFD"><enum>(A)</enum><text>inform the public of agency compliance with the requirements of this title; and</text></subparagraph>
<subparagraph id="H839854CF6B6448C5A10DAF275900767A"><enum>(B)</enum><text>provide a mechanism for the agency to receive and respond to public input on—</text>
<clause id="HAE3171B996D94A0E812E640D745DE266"><enum>(i)</enum><text>agency implementation of this title; and</text></clause>
<clause id="H4B7D5C2533764409A0EFCDF7C299508C"><enum>(ii)</enum><text>the agency reports required under section 605.</text></clause></subparagraph></paragraph></subsection>
<subsection id="H4B400E074CD04A9EB85739D1A7B68061"><enum>(b)</enum><header>Requirement to use plain writing in new documents</header><text>Beginning not later than 1 year after the date of enactment of this title, each agency shall use plain writing in every covered document of the agency that the agency issues or substantially revises.</text></subsection>
<subsection id="H30260E50A0CD47F18E6129F90F444FF7"><enum>(c)</enum><header>Guidance</header><text>In carrying out the provisions of this title, agencies may follow the guidance of—</text>
<paragraph id="H8B5BA42B197A48AEBDA4070BC51B363D"><enum>(1)</enum><text>the writing guidelines developed by the Plain Language Action and Information Network; or</text></paragraph>
<paragraph id="H208A46F0DF894ABEABAC6C381B2DE9C0"><enum>(2)</enum><text>guidance provided by the head of the agency.</text></paragraph></subsection></section>
<section id="H96DF2BCCDCCE4A34BA96043DB72A9875"><enum>605.</enum><header>Reports to Congress</header>
<subsection id="HE18DD75B3C28428EBD3497A9598EAC8C"><enum>(a)</enum><header>Initial report</header><text>Not later than 9 months after the date of enactment of this title, the head of each agency shall publish on the plain writing section of the agency’s website a report that describes the agency plan for compliance with the requirements of this title.</text></subsection>
<subsection id="H7D396F0A361646648F03FA9DACF05183"><enum>(b)</enum><header>Annual compliance report</header><text>Not later than 18 months after the date of enactment of this title, and annually thereafter, the head of each agency shall publish on the plain writing section of the agency’s website a report on agency compliance with the requirements of this title.</text></subsection></section>
<enum>VII</enum><header>Sense of Congress on agriculture and farming small business loans</header>
<section id="H2C8E10F3A8074B6291310E7C29117651"><enum>701.</enum><header>Sense of Congress</header><text display-inline="no-display-inline">It is the sense of the Congress that—</text>
<paragraph id="HEBCD5A0DB745468D9D72823CD4E7D026"><enum>(1)</enum><text display-inline="yes-display-inline">agriculture operations, farms, and rural communities should receive equal consideration through lending activities for small businesses in this Act, particularly small- and mid-size farms and agriculture operations; and</text></paragraph>
<paragraph id="HF0998A9425AE4399926D44E3E0BEEC25"><enum>(2)</enum><text>attention should be given to ensuring there is adequate small business credit and financing availability under this Act in the agriculture and farming sectors.</text></paragraph></section>
<enum>VIII</enum><header>Small Business Borrower Assistance Program</header>
<section id="HBC304902EFDA442ABC6ECF15D55DDCB6"><enum>801.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote>Small Business Assistance Fund Act of 2010</quote>. </text></section>
<section id="HDA492685B9AC4111A34E0EEEC67E89E0"><enum>802.</enum><header>Small Business Borrower Assistance Program</header>
<subsection id="H8F536975A0C14842848EC03F70259069"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Administrator shall carry out a program to be called the <quote>Small Business Borrower Assistance Program</quote> to provide payments of principal and interest on qualifying small business loans.</text></subsection>
<subsection id="H13B9AE4321CD4C22884540620969E70A"><enum>(b)</enum><header>Automatic enrollment; Commitment of funds</header>
<paragraph id="H0762045E4E4741D2AA33CA43C49C0442"><enum>(1)</enum><header>In general</header><text>To the extent funds are available under the Program, each borrower that receives a qualifying small business loan after the date on which the Administrator issues regulations pursuant to subsection (e) shall be automatically enrolled in the Program, unless the borrower requests otherwise, and the Administrator shall commit an amount to each borrower equal to 6 percent of the principal disbursed amount of such borrower’s qualifying small business loan.</text></paragraph>
<paragraph id="H823BE3A546A24AFEB7EA533AC041568C"><enum>(2)</enum><header>One year window for participating in Program</header><text display-inline="yes-display-inline">Notwithstanding paragraph (1), a borrower may only be enrolled in the Program if the borrower is approved for a qualifying small business loan before the end of the 1-year period following the date on which the Administrator issues final regulations pursuant to subsection (e).</text></paragraph>
<paragraph id="HE4698080747942A3A513F26A24051281"><enum>(3)</enum><header>Termination of participation in certain circumstances</header><text>In any instance in which the Administrator determines that a borrower participating in the Program has committed fraud or made a material misrepresentation related to such participation, the Administrator may terminate such borrower’s participation in the Program and ban such borrower from any future participation in the Program.</text></paragraph></subsection>
<subsection id="HCFFD76A6C56A43F498A4AF866D3B4435"><enum>(c)</enum><header>Disbursement of funds</header>
<paragraph id="H9E5749E2B6EC4E43A6C16E52563436F1"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A borrower enrolled in the Program may submit a request for the payment of committed funds by a method to be developed by the Administrator.</text></paragraph>
<paragraph id="HB396349B7B174AD1A97D9365188B6DDD"><enum>(2)</enum><header>Multiple disbursements permitted</header><text>A borrower enrolled in the Program may request multiple payments under paragraph (1), as long as the aggregate amount of such payments does not exceed the amount committed to such borrower under subsection (b).</text></paragraph></subsection>
<subsection id="H1D6D3BAAE7E14064AC0D7B023A097223"><enum>(d)</enum><header>Terms</header>
<paragraph id="HE9EC24EF8F94436DB1A5FA96714E7F1C"><enum>(1)</enum><header>Payments only to lender or servicer</header><text display-inline="yes-display-inline">Payments made by the Administrator under the Program shall only be made to the lender or servicer of a qualifying small business loan to be applied against outstanding principal or interest, and may not be made to the borrower.</text></paragraph>
<paragraph id="H9CBFBEAC321448008C070FD5AB15DB9C"><enum>(2)</enum><header>Program participation only permitted during first 2 years</header>
<subparagraph id="H8BA462E7A7F145C28695B5FB10D9F09C"><enum>(A)</enum><header>In general</header><text>Payments made by the Administrator under the Program may only be made with respect to a payment of interest or principal due on a qualifying small business loan within the 2-year period following the date on which such loan is disbursed.</text></subparagraph>
<subparagraph id="H837C26A353564C119BAE124C50B003F0"><enum>(B)</enum><header>Unexpended committed funds</header>
<clause id="H123F2879411E4159B1A1D4B8295E70BB"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">With respect to any funds committed to a borrower enrolled in the Program that remain unexpended at the end of the 2-year period described under subparagraph (A), such funds shall be paid to the lender or servicer of the borrower’s loan and applied to the principal of such loan.</text></clause>
<clause id="HA5F66E0C684F43EF92B0F8740F113849"><enum>(ii)</enum><header>Exception</header><text>In any case in which the amount of committed funds that remain unexpended is greater than the remaining principal of a borrower’s loan, the amount of any excess shall be returned to the Treasury.</text></clause></subparagraph></paragraph></subsection>
<subsection id="HCB69C8DD7D3F49FC8FCE09655941FA03"><enum>(e)</enum><header>Rulemaking</header><text>Not later than 180 days after the date of the enactment of this section, the Administrator shall issue regulations necessary to carry out this section.</text></subsection>
<subsection id="HB8657B3886E64FAB864DA85D8561B358"><enum>(f)</enum><header>Contracting with agents</header><text display-inline="yes-display-inline">The Administrator may contract with one or more entities as necessary to carry out the provisions of the Program. The Secretary of the Treasury is authorized to designate financial institutions, including any bank, savings association, or trust company, as financial agents of the Federal Government to carry out the authorities of this section, and such institutions shall perform all such reasonable duties related to the Program as financial agents of the Federal Government as the Secretary may require. In engaging any such third parties to carry out the Program, the Administrator or the Secretary shall seek to involve small businesses in the provision of the core direct services required under the engagement.</text></subsection>
<subsection id="H619CFECC5A724875A9EB6D14A6F4EE05"><enum>(g)</enum><header>Definitions</header><text>For purposes of this section:</text>
<paragraph id="HA1B2AF47837A47BD83BC3A47DD36A712"><enum>(1)</enum><header>Administrator</header><text>The term <quote>Administrator</quote> means the Administrator of the Small Business Administration. </text></paragraph>
<paragraph id="HD85C2085FCA64BBC80F341CD0263C209"><enum>(2)</enum><header>Program</header><text display-inline="yes-display-inline">The term <quote>Program</quote> means the Small Business Borrower Assistance Program established under subsection (a).</text></paragraph>
<paragraph id="H9652881CE3EF483783384492E384E887"><enum>(3)</enum><header>Qualifying small business loan</header><text display-inline="yes-display-inline">The term <quote>qualifying small business loan</quote> means any loan, up to $300,000, made to a small business concern and guaranteed under section 7(a) of the Small Business Act (15 U.S.C. 636(a)), other than a loan made pursuant to section 7(a)(31) of such Act, a revolving credit line, or any other revolving loan.</text></paragraph>
<paragraph id="HAFFFBD72B57C4630B66968BBCA93E7C6"><enum>(4)</enum><header>Small business concern</header><text>The term <quote>small business concern</quote> has the meaning given such term under section 3 of the Small Business Act (15 U.S.C. 632).</text></paragraph></subsection>
<subsection id="H1528D52FAED745E1AD3B4C96FA665347" display-inline="no-display-inline"><enum>(h)</enum><header>Authorization of appropriations</header><text display-inline="yes-display-inline">There is hereby authorized to be appropriated to the Administrator $300,000,000 to carry out this section.</text></subsection></section>
Passed the House of Representatives June 17, 2010.Lorraine C. Miller,Clerk.