[Congressional Record Volume 156, Number 90 (Wednesday, June 16, 2010)]
[House]
[Pages H4513-H4542]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               SMALL BUSINESS JOBS AND CREDIT ACT OF 2010

  The SPEAKER pro tempore. Pursuant to House Resolution 1436 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 5297.

                              {time}  1035


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 5297) to create the Small Business Lending Fund Program to direct 
the Secretary of the Treasury to make capital investments in eligible 
institutions in order to increase the availability of credit for small 
businesses, and for other purposes, with Mr. Pastor of Arizona in the 
chair.
  The Clerk read the title of the bill.
  The CHAIR. Pursuant to the rule, the bill is considered read the 
first time.
  General debate shall not exceed 1 hour, with 30 minutes equally 
divided and controlled by the chair and ranking minority member of the 
Committee on Financial Services and 30 minutes equally divided and 
controlled by the chair and ranking minority member of the Committee on 
Small Business.
  The gentlewoman from Illinois (Ms. Bean) and the gentleman from Texas 
(Mr. Neugebauer) and the gentlewoman from New York (Ms. Velazquez) and 
the gentleman from Missouri (Mr. Graves) each will control 15 minutes.
  The Chair recognizes the gentlewoman from Illinois.
  Ms. BEAN. Mr. Chairman, I yield myself 5 minutes.

[[Page H4514]]

  Mr. Chairman, our Nation's economic rebirth relies upon the ability 
of our community businesses to innovate, develop, and market solutions 
that deliver measurable value to their customers. Their success drives 
the majority of new jobs in our Nation. They are the engine of 
innovation, and their resiliency to reinvent their business models and 
adapt to emerging growth markets is critical. It's their creativity 
that drives 13 times more patents per employee than larger firms. They 
are the cornerstones of our economy and our communities. Beyond the 
goods and services and the jobs they provide, they invest in the bricks 
and mortar/real estate in our communities. They have supply chains that 
depend on their business. They do charitable giving, and they mentor 
young people in their communities.
  Congress has done much to address the challenges small businesses 
face. Among the $288 billion in tax breaks in the Recovery Act were 
crucial small business tax provisions, such as accelerated bonus 
depreciation and an expansion of the net operating loss carryback that 
has already rebated $2.8 billion to businesses across our Nation.
  U.S. manufacturing is growing, we're adding new jobs every month in 
2010, and GPD is now trending positively, moving from a negative 6 to 
positive 6 in the year following the Recovery Act and it's now holding 
at 3 percent. But as I talk with small businesses in my district and 
across the Nation, the issue that has continued to be an obstacle to 
business expansion and diversification is access to credit.
  The financial crisis of 2008 severely tightened small business access 
to credit and affordable terms. When businesses can't access financing, 
they're prevented from entering into new contracts, buying new 
equipment, hiring new employees, and other expansions. In the worst 
cases, business owners must cut payrolls, go into bankruptcy, or close 
their doors for good. Congress has taken steps to alleviate that 
problem. The Recovery Act included valuable changes to the SBA loan 
programs, reducing fees for lenders and borrowers on the 7(a) and 504 
loan programs and increasing government guarantees to attract more 
capital. As a result, weekly SBA loan approval volumes have increased 
by over 90 percent.
  The improvements to SBA loan programs and other measures we've taken 
have helped, but much more needs to be done. Earlier this year, 
commercial and industrial loans declined for the seventh straight 
quarter, down more than 17 percent from 2009, and banks are receiving 
mixed messages. On the one hand, Congress and the administration are 
urging them to lend more; on the other, bank regulators are telling 
them to hold back on lending. In fact, our colleague, Mr. Price, has an 
amendment expressing a sense of Congress on that point.
  In addition, banks have greater risk aversion due to their exposure 
on their balance sheets--stemming especially from the instability of 
the commercial real estate sector. That brings us to this important 
bill on the floor today. The Financial Services Committee has held 
several hearings on the restriction of credit for small business. The 
bill before us today builds on those hearings and was considered in the 
open process the committee is known for.
  During markup of the bill, the committee adopted 15 amendments, 
including seven Republican amendments, and today we will consider 17 
additional amendments, the vast majority of which are to the Financial 
Services portion of the bill.
  The Small Business Lending Fund Act is a significant step to boost 
small business lending through our community banks. This legislation 
builds on the effective financial stabilization measures Congress has 
previously taken by establishing a new $30 billion small business loan 
fund to provide additional capital to community banks that increase 
lending to small businesses. This $30 billion investment on which the 
government will be collecting dividends and earning a profit per the 
CBO estimates can be leveraged by banks into over $300 billion in new 
small business loans. This is an important investment by the Federal 
Government in our small business that brings tremendous returns.
  The terms of the capital provided to banks are performance based; the 
more a bank increases its small business lending, the lower the 
dividend rate is for the SBLF capital. If a bank decreases its small 
business lending, it will be penalized with higher dividend rates.
  This legislation includes strong safeguards to ensure that banks 
adequately utilize available funds to increase lending to small 
businesses, not for other lending or to improve their balance sheet. 
There will be oversight consistently throughout the program, plus it 
requires that the capital be invested only in strong financial 
institutions at little risk of default and the best positioned to 
increase small business lending.
  It's important for Americans to understand that although this fund 
has a maximum value of $30 billion, it is estimated to make a profit 
for taxpayers in the long run. And the money will ultimately go not to 
banks, but to the small businesses and their communities that they lend 
to. As our financial system stabilizes and our community banks 
recapitalize, these funds will be repaid to Treasury with full 
repayment required over the next 10 years.
  Also included in the Financial Services portion of this bill is the 
State Small Business Credit Initiative championed by our colleague, Mr. 
Peters. The underlying bill provides $2 billion in funding for new or 
existing State lending programs.
  The CHAIR. The time of the gentlewoman has expired.
  Ms. BEAN. I yield myself 1 additional minute.
  This program provides funding for States to expand or create lending 
programs that use small amounts of public resources to generate private 
bank financing and are designed to address critical reasons why banks 
are having trouble making increased investments now--lack of adequate 
capital reserves on the part of lenders and collateral shortfalls on 
the part of borrowers.
  The State Small Business Credit Initiative is required to leverage 
$10 of private funding for every $1 of government funding. Many of the 
existing capital access programs leverage 30 private dollars for every 
1 government dollar. By supporting existing programs and using an easy-
to-replicate model, this program will be quickly ramped up to increase 
small business lending which will retain and create jobs.
  Small businesses are the job creators of our Nation. Supporting their 
ability to grow and innovate is key to a robust and stable economic 
recovery. I commend the leadership of Chairman Frank and Chairwoman 
Velazquez in bringing this package to the floor, which will provide 
critical support to the half of all American workers who either own or 
work for a small business.
  Mr. Chairman, I reserve the balance of my time.
  Mr. NEUGEBAUER. Mr. Chairman, I yield myself such time as I may 
consume.
  I rise today in opposition to H.R. 5297. My opposition is not a 
question of whether or not I support small businesses, it's a question 
of whether or not this bill will actually help small businesses. 
Unfortunately, my conclusion is that this bill will not help them, but 
will cost the taxpayers another $33 billion--by the way, $33 billion 
that we don't have.

                              {time}  1045

  As a former small business owner, as well as a former lender, I 
understand firsthand the need for small business to have access to 
credit. Access to credit has tightened, but demand for credit from 
worthy borrowers has also declined.
  What small businesses really need more than anything in the current 
economic environment is more certainty so they can invest and can plan 
for the future. What they have gotten from Congress is more and more 
uncertainty.
  Small businesses will face a costly tax penalty if they can't comply 
with the added cost of the new health care law. One business owner in 
my district told me he had plans to expand and to create jobs, but he 
has put those on hold now because his business would not grow over 51 
employees and then be subject to the new law.
  Small businesses are worried about how much their energy costs will 
go up under the proposals of cap-and-tax

[[Page H4515]]

bills. Finally, they have no idea how much their taxes will be next 
year. Not only are they worried about new taxes to pay for more 
government spending, but they know that taxes will also go up 
automatically if Congress does not do anything to address the expiring 
tax provisions.
  No wonder small businesses are in a holding pattern and are not 
creating new jobs, and this bill does nothing to provide any certainty 
for small businesses. Rather than doing something that creates more 
certainty for small businesses to grow and to add jobs in this economy, 
the majority is repeating the same failed initiatives that have helped 
our national debt grow to $13 trillion in the past 2 years. This bill 
follows the model of the TARP program, minus the stronger oversight, 
and it puts another $30 billion into banks in the hopes that lending to 
small businesses will increase.
  In the words of Neil Barofsky, the Special Inspector General who 
oversees the TARP, ``In terms of its basic design,'' he says, ``its 
participants, its application process, from an oversight perspective, 
the Small Business Lending Fund would essentially be an extension of 
the TARP's Capital Purchase Program.''
  From the Congressional Oversight Panel for TARP, chaired by Elizabeth 
Warren, she says, ``The SBLF's prospects are far from certain. The SBLF 
also raises questions about whether, in light of the Capital Purchase 
Program's poor performance in improving credit access, any capital 
infusion program can successfully jump-start small business lending.''
  This bill allows for another $33 million in spending that will be 
added to the government's credit card. The CBO tells us that the bank 
lending portion will ultimately cost taxpayers $3.4 billion when market 
risk is taken into account.
  We have had record bank failures, including the failures of four 
banks that were TARP recipients. When those TARP recipient banks 
failed, the taxpayers' investments of $2.6 billion were essentially 
wiped out. More than 100 banks that have received TARP funds so far 
have missed their dividend payments. These missed dividend payments 
have cost the taxpayers almost $200 million. It turns out that many of 
these banks that received TARP funds were far from healthy.
  Do we really think there will be no more bank failures or missed 
dividend payments among banks that receive funds out of this new TARP 
program? We know there will be, and the CBO says there will be, which 
will lead to more losses for the taxpayers.
  This fund is just like the TARP's Capital Purchase Program, except 
for the stronger oversight. I am extremely disappointed that the Rules 
Committee blocked a sensible amendment that would have improved the 
oversight of this new lending fund by bringing it under the oversight 
of the Special Inspector General for TARP. SIGTARP has developed 
significant experience in looking out for the taxpayers when it comes 
to the TARP program. SIGTARP's expertise should be used for this fund 
to protect the taxpayers.
  H.R. 5297 will lead to more losses for taxpayers and to no more 
improvement in credit for small businesses. A lack of credit is not 
even the largest problem facing these small businesses. According to 
the National Federation of Independent Business, the top problem facing 
small businesses is the lack of sales and demand. If businesses are not 
confident they will have customers, they are not going to borrow; they 
are not going to expand, and they are not going to add jobs.
  This $33 billion bill is not going to help increase demand from small 
business customers. Instead, we need the government to step back and to 
stop prolonging the uncertainty that is crowding out economic growth in 
our country. The sad thing is that there are things that Congress could 
actually be doing to help small businesses. Instead, the majority has 
chosen to bring up bills that will cost the taxpayers billions and that 
will do nothing to help the small businesses. They have denied our side 
the ability to offer substantial amendments.
  I think it was appalling, quite honestly, Mr. Chairman, that the 
majority awarded themselves 66 amendments to this bill and that they 
awarded the Republicans one. Now, if that is the bipartisanship that 
this leadership is talking about, I don't think the American people are 
buying that that is bipartisan, because many of the amendments that we 
offered, Mr. Chairman, were to add additional protections for the 
taxpayers. Obviously, the majority is not interested in protecting the 
taxpayers' investments with this $33 billion. By the way, this is $33 
billion that we don't have.
  I am hoping that the majority is going to tell us this morning where 
the proposal of the $33 billion is going to come from. Well, I can tell 
you where it is going to come from. We are going to charge it to our 
children and to our grandchildren. You know what? I think we've just 
about reached the limit on the amount of money we should charge to our 
children and to our grandchildren.
  So, Mr. Chairman, I am going to urge my colleagues to insist that we 
do better for small businesses. We must do something for small 
businesses, but this is not the answer, and I am going to encourage my 
colleagues to vote ``no.''
  I reserve the balance of my time.
  Ms. BEAN. I yield 1 minute to the gentleman from Connecticut (Mr. 
Larson).
  Mr. LARSON of Connecticut. I rise in support of the bill for the 
purpose of engaging in a colloquy with Congresswoman Bean.
  I want to bring attention to the important role that banks at the $25 
billion asset cap play in this economy, particularly in lending to 
small businesses.
  The State of Connecticut has three such banks within the $10 to $25 
billion range in terms of asset caps. These banks are on the ground, 
lending to small businesses in my district. They are the biggest SBA 
lenders and are the biggest lenders to minority businesses. They also 
fulfill a niche opportunity for so many manufacturers in my State as 
well.
  While I understand that the asset cap could not be raised to include 
these banks in this bill, I would ask that Congresswoman Bean and 
Chairman Frank work with me, with the Treasury, and with the other body 
to ensure that these banks can be included in this program as this 
legislation goes forward.
  Ms. BEAN. I thank the congressman for his concerns, and I have 
similar concerns.
  In my home State of Illinois, we also have institutions that would 
like to participate but would be unable to because of the asset cap. I 
know Chairman Frank agrees on this point.
  I reserve the balance of my time.
  Mr. NEUGEBAUER. Mr. Chairman, one of the things that is interesting 
is that this program is designed to put more capital into the banking 
system.
  According to the Federal Reserve's April survey of senior loan 
officers, three factors that exerted the greatest influence on banks' 
business lending practices over the past 3 months were competitive 
pressures, the economic outlook, and the tolerance for risk in the 
business loan market. Lack of capital was not mentioned as one of the 
driving forces for lending decisions that are being made.
  So, basically, Mr. Chairman, what this bill tries to do is to solve a 
problem that, according to the Federal Reserve, doesn't exist. There is 
plenty of capital, but there is this competitive pressure, this 
economic outlook, and this tolerance for risk.
  Going back to my earlier point, when I traveled around the 19th 
Congressional District, I talked to a number of lenders. At the same 
time, I visited businesses in their communities. What I learned during 
that process is that many of the small businesses just said, 
Congressman, things are just too uncertain right now. We don't know 
what Congress is going to do with taxes. We don't know what they're 
going to do with this energy bill. We don't know exactly. We are trying 
to figure out how this new health care bill is going to impact our 
businesses, how it is going to impact our bottom lines.
  Then I went over and talked to the lenders. Many of the lenders are 
sitting on record amounts of cash and capital in their banks. They are 
looking as hard as they can for good lending opportunities. What they 
said is, Unfortunately, some of our customers are not creditworthy. The 
economy has hurt their sales, and so it wouldn't be

[[Page H4516]]

prudent to loan those businesses more money. Others said, Our good 
customers, customers who are creditworthy, are not coming to us and 
borrowing any money because, again, of this uncertainty.
  So, again, our opposition to this bill is that it is not really 
addressing the real issue in our economy, which is needing to bring 
some certainty and to leave the capital in the companies, to leave the 
capital in the economy, instead of the Federal Government's continuing 
to create uncertainty and taking money out of the economy.
  I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself such time as I may 
consume.
  Small businesses, which represent 99.7 percent of firms, are key to 
the recovery of the U.S. economy. Through innovation and hard work, 
they are able to not only create jobs but to also build the foundation 
for future growth. We saw this after the recession of the early 1990s. 
As we emerge from the latest downturn, small firms will again lead the 
way.
  This downturn has affected every facet of the global economy. Most of 
the focus has been on repairing the residential housing market and 
homeowners in particular. It is important to note that this has greatly 
impacted small businesses as well. Through the Recovery Act, we were 
able to help them, providing more than $28 billion in assistance 
through the SBA. H.R. 5297 builds on this by establishing additional 
lending initiatives that will give small businesses even greater 
financing options.
  This legislation, Mr. Chairman, also recognizes that capital markets 
are changing dramatically. Credit standards are stricter, and small 
businesses are now looking not only to loans and to credit cards to 
finance their operations, but they are also looking to equity 
investment to turn their ideas into reality. This has become even more 
pronounced as asset values have declined, leaving entrepreneurs with 
less collateral to borrow against.
  Unfortunately, small firms' access to venture capital and to equity 
investment has declined. Last year, such investments plummeted from $28 
billion in 2008 to only $17 billion last year. This is due, in part, to 
the previous administration's decision to terminate the SBA's largest 
pure equity financing program--the Small Business Investment Company 
Participating Securities program. This has left many entrepreneurs who 
need equity investment to fulfill their business plans without a source 
of such financing.
  As a result, it has become more difficult to start a new business and 
to create the jobs that come with such activity. This is seen in data 
from the Bureau of Labor Statistics, which show that self-employment 
declined by 7.5 percent between 2007 and 2009. Less entrepreneurship is 
never a good thing, but during a recession, it is particularly 
problematic as small firms generate two-thirds of net new jobs.
  In order to address this, title III creates a $2 billion investment 
fund at the SBA. Under this program, the agency will provide matching 
funds to qualified privately managed investment companies, which will, 
in turn, invest in small companies. To ensure that the public and 
private sectors' interests are aligned, the SBA's funding would be 
provided at a 1-to-1 ratio of private investment capital.
  Funds from the program will only be given to investment companies 
that have a proven record of returning a profit to its investors. These 
managers must have experience in investing in small, early-stage 
companies. They must have the ability to provide leadership as these 
entrepreneurial endeavors grow. In selecting investment firms to 
participate in the program, the SBA will give a special preference to 
Small Business Investment Companies, which already have substantial 
experience in financing small firms. In exchange for receiving funds, 
participating investment funds must convey an equity interest to the 
SBA, similar to that of which individual investors will receive.

                              {time}  1100

  The equity interest shall entitle the SBA to a repayment of its 
investment and a proportion of any profits made by the investment 
company. As a result, the government is on a level playing field with 
private-sector investors, and the taxpayer stands to benefit from the 
growth and success of these small companies.
  By giving entrepreneurs access to $2 billion in equity investment, we 
will provide them the resources to grow and create the types of long-
term employment gains we need. It goes without saying that the 
groundbreaking, innovative firms that rely on such investment tend to 
be some of our most prolific job creators. Between 2006 and 2008, these 
companies created eight times more jobs than other businesses. That is 
exactly the kind of job growth Americans need right now.
  Mr. Chairman, I support this legislation.
  I reserve the balance of my time.
  Mr. GRAVES of Missouri. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, today, I rise in opposition to H.R. 5297, the Small 
Business Lending Fund Act. Although my colleagues on the other side of 
the aisle claim that this bill would improve small business access to 
much-needed capital, I am not convinced. In fact, there is virtually no 
guarantee that small businesses will benefit whatsoever from the 
funding in this bill.
  Nothing in Title 1 of the bill assures that banks will lend the 
capital, much less to small businesses. Title 2 authorizes lending by 
State programs to businesses that the Small Business Administration 
would consider large. And only Title 3 of this bill is targeted to 
assist small businesses. Nevertheless, the overall bill is badly 
flawed, and I can't support it, nor can I support the excessive small 
business assistance spending in Title 3.
  Now more than ever, our Nation is relying on small businesses to 
create jobs and to lead us in our economic recovery. But without 
sufficient access to credit or capital, small businesses can't expand 
operations or hire new employees. There's little doubt that efforts to 
bail out banks and other major financial institutions has not led to 
improved access to capital by small businesses.
  Last session, I strongly supported H.R. 3854. It was a comprehensive, 
bipartisan revision to the capital access programs overseen by the 
Small Business Administration. That bill, unlike the one before us 
today, would have improved access to needed capital by small 
businesses.
  Incorporated into that bill was H.R. 3738, which provided a 
streamlined process to enable qualified venture capitalists to 
bootstrap their investment with additional Federal moneys to provide 
needed early-stage equity capital to small businesses. Successful 
operators would pay back the Federal Government before they took their 
own profits. Although the legislation came with a relatively modest 
price tag of $200 million, its benefits were sure to far outweigh the 
cost. Moreover, if the program did not succeed, the cost of failure was 
going to be very modest.
  That certainly isn't the case today with the bill we have before us. 
The cost has increased by 500 percent without any previous testing of 
its potential to succeed. This will pile unnecessary risk or costs onto 
taxpayers at a time when we're dealing with record debt and 
unsustainable deficit spending. Even if Title 3 of this bill--the small 
business portion--even if Title 3 stood alone, given the dramatic 
increase in costs, I couldn't support it. But yet here it is. It 
remains attached to a bill that has even greater costs--and costs that 
are fully not paid for in the short term.
  So let's lay this out. We still do not have a budget for fiscal year 
2011. Our national debt has reached a new record high of $13 trillion. 
And the administration and the majority in the House continue to rely 
on unsustainable borrowing and spending to keep things running. When 
you consider the complete chaos our fiscal house is in, the idea of 
more spending seems foolish. Completely foolish. But that's what's 
being proposed by this legislation today, and I refuse to support it.
  If my colleagues want to get serious about supporting small 
businesses and encouraging their growth, there are lots of ways to do 
so, and I'm very happy to help. But H.R. 5297 is yet another ill-
conceived effort that, at the end of the day, will only further punish 
American entrepreneurs.
  With that, Mr. Chairman, I reserve the balance of my time.

[[Page H4517]]

  Ms. BEAN. Mr. Chairman, I yield 2 minutes to the gentleman from Texas 
(Mr. Hinojosa).
  Mr. HINOJOSA. Mr. Chairman, I rise in strong support of H.R. 5297, 
the Small Business Lending Fund Act of 2010. This legislation will help 
small businesses survive and thrive in the current economic climate by 
providing the Secretary of the Treasury temporary authority to make 
capital investments up to $30 billion to banks and savings associations 
with assets of less than $10 billion and to their parent holding 
companies, provided they also have assets of less than $10 billion.
  Mr. Chairman, H.R. 5297 increases the availability of credit for 
small businesses. It provides funding to eligible institutions that 
serve small businesses that are minority- and women-owned and that also 
serve low-and moderate-income, minority, and other underserved or rural 
communities. This legislation ensures that all eligible institutions 
may apply to participate in the program established under this title, 
without discrimination based on geography, which is very important to 
the great State of Texas.
  H.R. 5297 requires eligible institutions receiving capital 
investments under the program to provide outreach in languages other 
than English describing the availability and application process to 
receiving loans from eligible institutions through the use of print, 
radio, television, or electronic media outlets which target 
organizations, trade associations, and individuals that represent or 
work within or are members of minority communities.
  The Small Business Lending Fund Act of 2010 contains provisions 
promoting financial education and literacy and would-be borrowers.
  The CHAIR. The time of the gentleman has expired.
  Ms. BEAN. Mr. Chairman, I yield 30 additional seconds to the 
gentleman from Texas.
  Mr. HINOJOSA. Most importantly, this legislation protects and 
increases American jobs.
  Mr. Chairman, H.R. 5297 will help small businesses, community banks, 
the low- and moderate-income, minorities, and other underserved or 
rural communities, and all of our constituents. It will help our great 
country move further down the road towards economic recovery and 
expansion. I strongly urge my colleagues to support this important and 
timely piece of legislation.

                                              National Association


                                      of REALTORS',

                                    Washington, DC, June 15, 2010.
     U.S. House of Representatives,
     Washington, DC.
       Dear Representative: On behalf of the 1.1 million members 
     of National Association of REALTORS', and their 
     affiliates, I ask for your support of H.R. 5297, the ``Small 
     Business Lending Fund Act of 2010,'' introduced by 
     Representative Frank (D-MA). This bill will create the Small 
     Business Lending Fund Program (SBLFP) that would increase the 
     availability of credit to our nation's commercial real estate 
     and small business sectors.
       Nearly $1.4 trillion of commercial real estate loans will 
     mature over the next several years, with a very limited 
     capacity to refinance. If not addressed, the swelling wave of 
     maturities could place further stress on already fragile 
     financial markets and slow our nation's economic recovery. In 
     addition to addressing the issues facing the commercial real 
     estate industry, improving access to capital for small 
     businesses--widely acknowledged as a critical part of growing 
     the American economy--is also greatly needed. In fact, the 
     percentage of small business owners holding a business loan 
     or credit line fell almost 20 percent last year. 
     Unappreciated is the fact that a significant portion of 
     commercial real estate is owned, leased, and operated by 
     small businesses.
       Unlike the Troubled Asset Relief Program (TARP), the SBLFP 
     contains lending provisions that help ensure community banks 
     have both the incentive and greater capacity to increase 
     total loans to small businesses by decreasing the dividend 
     cost on the capital investment as lending grows.
       Additionally, we support Amendment #4 (Minnick, D-ID), 
     which would allow commercial real estate loans for properties 
     for lease to be eligible in the SBLFP. As H.R. 5297 is 
     currently written, only owner-occupied commercial real estate 
     loans qualify for this program, which excludes commercial 
     real estate loans on properties for lease--a significant 
     portion of small businesses that need refinancing assistance.
       In order to help spur small business hiring and growth, NAR 
     urges you to pass this important legislation.
           Sincerely,

                                        Vicki Cox Golder, CRB,

                              2010 President, National Association
     of REALTORS'
                                  ____

                                     Independent Community Bankers


                                                   of America,

                                    Washington, DC, June 15, 2010.
     To: Members of the U.S. House of Representatives


                               memorandum

     Subject: House vote on the Small Business Lending Fund Act 
         (H.R. 5297)

       On behalf of the nearly 5,000 members of the Independent 
     Community Bankers of America (ICBA), we express strong 
     support for the Small Business Lending Fund Act of 2010 (H.R. 
     5297) and urge House passage.
       The Act will boost the flow of credit to small businesses 
     by leveraging the role of our nation's community banks. 
     Community banks are prolific lenders to small business with 
     the experience, expertise and grassroots relationships 
     necessary to quickly deploy the funds to creditworthy 
     borrowers. Notably, the Small Business Lending Fund's (the 
     Fund's) $30 billion in capital can be leveraged by community 
     banks to support $300 billion in additional small business 
     lending, creating new jobs and sustaining the economic 
     recovery.
       As the Act goes to the House floor, we take this 
     opportunity to share our views on amendments that would 
     improve it and those that would undermine its goal of 
     increased small business lending by discouraging community 
     bank and small business participation.
     Amendments Supporting Greater Small Business Lending
       ICBA supports amendments that will further the goal of 
     greater small business lending including:
       Amendment No. 4 (offered by Reps. Minnick, Simpson, Kosmas, 
     Quigley and Marchant): ICBA supports this amendment because 
     it would broaden eligibility for the program by including 
     non-owner occupied commercial real estate and provide greater 
     credit options to small business.
       Amendment No. 5 (offered by Reps. Perlmutter, Gutierrez, 
     Klein and Kagen): ICBA supports this amendment because it 
     would further incentivize community banks to participate in 
     the Fund and create greater lending capacity and flexibility 
     to better serve struggling borrowers by allowing them to 
     amortize their loan losses over 10 years.
       Amendment No. 6 (offered by Rep. Tom Price): ICBA supports 
     this amendment because it highlights the mixed messages that 
     community banks get from their regulators: Community banks 
     are encouraged to increase lending but at the same time 
     punished with aggressive write-downs of performing loans.
       Amendment No. 10 (offered by Reps. Miller and Baca): ICBA 
     supports this amendment because it broadens the definition of 
     small business loans to include construction, land 
     development, and other land loans in domestic offices. These 
     loans will help expand economic activity and employment.
       Amendment No. 12 (offered by Reps. Jackson Lee and Cao): 
     ICBA supports this amendment because it would support hard 
     hit community banks and the small businesses they serve in 
     the Gulf Coast states impacted by the oil spill disaster.
       Amendment No. 15 (offered by Rep. Braley): ICBA supports 
     this amendment because the documents used to obtain a benefit 
     or service under the program should be clear and user-
     friendly so interested parties can make best use of the 
     program.
       Amendment No. 16 (offered by Rep. Loebsack): ICBA supports 
     this amendment because it further highlights the importance 
     of agricultural operations, farms, and rural communities in 
     our national economy.
     Amendment Raising Serious Concern
       The SBLF is a voluntary program for interested community 
     banks. ICBA wants to ensure that it is workable for community 
     banks and small business borrowers alike. ICBA opposes 
     amendments that would make the program too costly or create a 
     difficult compliance burden. Amendments in this category 
     include:
       Amendment No. 3 (offered by Rep. Nye): ICBA opposes this 
     amendment because it would increase the compliance burden on 
     lenders through the addition of unnecessary complexity and 
     unworkable provisions thereby discouraging participation and 
     small business credit.
       Amendments No. 7 (offered by Rep. Green) and No. 8 (offered 
     by Reps. Driehaus, Connolly, and Moore): ICBA opposes these 
     amendments because they would increase reporting requirements 
     and other compliance costs and burdens. These added layers of 
     regulation will discourage participation and reduce available 
     small business loans.
       Amendment No. 11 (offered by Rep. Michaud): ICBA believes 
     that the program should remain focused on community banks and 
     traditional debt financing as the most established and 
     effective source of small business lending.
       The outcome of these amendments is critical to the success 
     of the Fund. As you cast your votes, please consider which 
     amendments will further the fundamental goal of the program--
     increased access to credit for small businesses, which can 
     only be achieved through broad, voluntary participation of 
     community banks--and which will undermine this goal.
       Thank you for your consideration.
     James D. MacPhee,
       Chairman.
     Salvatore Marranca,
       Chairman-Elect.
     Jeffrey L. Gerhart,
       Vice Chairman.
     Jack A. Hartings,
       Treasurer.
     Wayne A. Cottle,
       Secretary.
     R. Michael Menzies, Sr.,
       Immediate Past Chairman.
     Camden R. Fine,
       President and CEO.

[[Page H4518]]

     
                                  ____
                                     Washington, DC, May 14, 2010.

                  Conference of State Bank Supervisors


   State Regulators Support Administration's Small Business Lending 
                               Proposals

                            (By Neil Milner)

       The Conference of State Bank Supervisors (CSBS) supports 
     the Obama Administration's small business lending proposals 
     to stimulate small business stability and growth.
       The proposals--the Small Business Lending Fund and the 
     State Small Business Credit Initiative--will provide much-
     needed access to capital to support small business lending, 
     the lifeblood of our national economy.
       The Administration's proposals will provide capital 
     injections to fund new small business loans to financial 
     institutions with assets less than $10 billion. In the past 
     few years, the government has gone to extraordinary lengths 
     to prop up our capital markets by providing assistance to the 
     nation's largest institutions. CSBS is pleased the 
     Administration is taking the next steps to promote a full 
     economic recovery by assisting those institutions which 
     largely did not contribute to the economic crisis and have 
     played such a pivotal role in our recovery to date.
       Further, CSBS is pleased the proposals are independent 
     initiatives separate from the TARP program. By separating the 
     small business proposals from TARP, we believe the programs 
     will enjoy wider participation and greater success.
       We encourage Congress to coordinate with the Department of 
     the Treasury to rapidly implement these much needed 
     initiatives to assist community banks as they continue to 
     support small businesses around the country.

  Mr. NEUGEBAUER. Mr. Chairman, I continue to reserve the balance of my 
time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself such time as I may 
consume.
  I want to use this time to respond to those who are making the 
assessment that this money, that there are not safeguards into this 
legislation to make sure that the money goes to small businesses. 
First, banks must apply to the Treasury to receive funds, with a 
detailed plan on how to increase small business lending at their 
institution. This language was included at my insistence that we need 
to make sure that small businesses will get the benefit of this 
legislation.
  Second, this capital, repayment of the government loans will be at a 
dividend rate starting at 5 percent per year. This rate will be lowered 
by 1 percent for every 2.5 percent increase in small business lending 
over 2009 levels. It can go as low as a total dividend rate of just 1 
percent if the bank increases its business lending by 10 percent or 
more, incentivizing banks to do the right thing. To ensure that banks 
actually use the funding they receive, the rate will increase--and 
there are penalties--to 7 percent if the bank fails to increase its 
small business lending at their institution within 2 years. To ensure 
that all federal funds are paid back within 5 years, the dividend rate 
will increase to 9 percent for all banks, irrespective of their small 
business lending, after 4\1/2\ years.
  Let me just make it clear: What the CBO estimates through what they 
provided to the Congress and telling us, CBO estimates that this 
provision will save taxpayers $1 billion over 10 years, as banks are 
expected to pay back this loan over 10 years, with interest.
  I reserve the balance of my time.
  Mr. GRAVES of Missouri. Mr. Chairman, I don't have any other speakers 
on this.
  I just might comment on this bill. One of the frustrating things 
about our economic recovery right now, and we continue to hear over and 
over and over again, that small businesses are uncertain about what the 
future is. They don't know what's going to happen with cap-and-trade 
and what's going to happen with the energy tax, particularly those 
businesses that are using a lot of energy to produce whatever it is. 
They're uncertain about what's going to happen with this health care 
bill and all the mandates that are coming out. They're uncertain about 
what's going to happen with their taxes. They're uncertain about what's 
going to happen with the amassing debt that's taking place, because 
somebody is going to have to pay for it. And this administration 
continues to look at small businesses to be able to provide that.
  So here we come along with a bill that supposedly is supposed to help 
small businesses, which the way it is right now, there's no guarantee 
whatsoever that that money is going to be loaned to small businesses. 
As the bill stands right now, a commercial loan could qualify, any 
commercial loan could qualify if it's a loan less than a million 
dollars.
  The fact of the matter is, Mr. Chairman, there's no guarantee. 
There's no guarantee.
  Small businesses are the ones that need help. And the fact of the 
matter is, too, that if the government would just get out of the way, 
then small businesses would lead us back into this economic recovery. 
They provide 7 out of every 10 jobs in this country, and they are the 
ones that are going to lead us. But nobody is going to expand and 
nobody is going to add any new productivity, any new hires, until they 
know what's going to go on and what's going to be around the corner. 
With this administration, they don't know what's going to happen to 
them.
  I reserve the balance of my time.
  Ms. BEAN. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from 
Michigan (Mr. Peters).
  Mr. PETERS. I rise today in support of H.R. 5297. Small businesses 
create two in every three new jobs in this country. Creating an 
environment that allows small businesses to innovate and grow is the 
single most important objective necessary to reduce unemployment and 
lead our Nation to full economic recovery.
  I have held a field hearing and roundtables with small business 
owners and have traveled door-to-door in downtowns in my district, and 
the one thing that I hear over and over again is many entrepreneurs are 
ready to invest and create jobs again, but they cannot secure the 
capital necessary to start or grow their business. Some, like Karen 
Teegarden, owner of a small advertising firm in Oakland County, told me 
that because she could not get a simple line of credit to meet some 
short-term payroll needs, she was forced to lay off workers.
  It is no secret why small businesses are struggling. Wall Street 
banks have admitted that they have reduced their investments in 
Michigan as well as other States. And small local lenders don't have 
enough capital to lend. I have been fighting for the past year for 
action to help solve this problem, and the bill before us today will 
create a $30 billion fund to promote small business lending. Small 
local lenders can leverage this funding into $300 billion in loans for 
small businesses. But because local lenders will pay the investment 
back with interest, the nonpartisan CBO says the taxpayers will earn a 
projected $1 billion.
  It's not often that a single action can create a multitude of jobs 
across this country and reduce the deficit at the same time. Enacting 
this bill will do just that. In Michigan, our manufacturers are 
struggling particularly hard to get access to credit. As their assets 
decline in value, they have less collateral to post, and this makes 
banks less likely to lend to them, even if they can show that they are 
thriving.
  The Michigan Collateral Support Program helps lenders, small 
manufacturers and the State pool default risk to help these companies 
secure the capital they need to create new jobs. Thirty States have 
similar programs, and a provision of this bill that I wrote would allow 
States to strengthen their existing programs and allow other States to 
create them.
  Washington's top priority must be to help create an environment that 
allows our small businesses to succeed and to create jobs. This 
legislation helps one of the primary obstacles facing our small 
businesses, and passing this bill is critical.
  Mr. NEUGEBAUER. I reserve the balance of my time.

                              {time}  1115

  Ms. BEAN. I yield 1 minute to the majority leader.
  Mr. HOYER. I appreciate the gentlelady from Illinois (Ms. Bean) for 
yielding.
  I want to first thank the chair of the Small Business Committee, 
Congresswoman Velazquez, for the work that she has done on this bill 
and for others who have worked on this bill.
  As I'm sure has been said many times on this floor but bears 
repeating, small businesses are the job-creating engine of our economy. 
They employ more than half of all employees in the private sector, and 
they've created 64 percent of net new jobs over the past 15 years. So 
ensuring that small businesses have the resources they need to

[[Page H4519]]

keep innovating, growing and creating jobs is essential if we're going 
to sustain the economic recovery. And small businesses have been at the 
heart of Democrats' recovery strategy ever since this Congress convened 
in the midst of the greatest economic crisis since the Great 
Depression, indeed, the deepest recession we've seen in three-quarters 
of a century.
  The Recovery Act, which cut taxes for 98 percent of Americans and is 
responsible for some 2 million jobs, gave small businesses tax credits 
for hiring many unemployed workers and helped them make the capital 
investments that are essential to their growth. Since the Recovery Act, 
we've expanded Small Business Administration lending, created further 
tax credits for hiring unemployed workers, and offered immediate and 
long-term tax credits to help small businesses afford employee health 
care. And yesterday, the House passed the Small Business Jobs Tax 
Relief Act, which will exempt 100 percent of small business capital 
gains from taxation and increase the amount of startup expenses small 
business owners can deduct from their taxes, all designed to allow 
small businesses to grow and expand. That means more investment in 
small businesses, and more entrepreneurs willing and able to start 
businesses of their own and hire workers to staff it.
  Today, ladies and gentlemen of the House, we can take another step to 
help small businesses and workers, establishing a $30 billion fund to 
expand lending to small businesses looking to make new investments in 
growth at no cost to the taxpayer. Ladies and gentlemen, I know that 
those of you who have been not only in your own districts but in your 
States and throughout the country know that every small businessman and 
-woman in America who wants to expand has a singular complaint, and 
that is that they cannot access capital. That's what this bill is 
about. This bill, the Small Business Lending Fund Act, invests capital 
in community and small banks that were not the problem that caused this 
financial meltdown, investing in those community and small banks under 
terms that become more favorable to those banks as they make more loans 
to small businesses. In other words, carrots for giving money to small 
business.
  The CBO tells us that all of the money in the Small Business Lending 
Fund will be repaid with interest and that taxpayers will actually make 
$1 billion profit over the next decade. Now, that's not too hard to 
believe, I think, when you understand that in terms of the dollars that 
the Bush administration asked us to put on the table to stabilize the 
economy back in 2008, that to the extent that the money has now been 
paid back--not all of it yet--but to the extent that we have gotten 
repayment, we have made some 12 percent on that money. Unfortunately, 
45 percent of small businesses seeking loans to expand or even just 
stay afloat were turned down last year, and you can imagine how those 
denials led directly to unemployment.
  This bill, ladies and gentlemen of the House, can go a long way 
towards opening up the flow of credit that helps create jobs. That's 
what this is about, allowing small businesses to expand, grow their 
businesses, hire more people, pay good salaries and benefits, and get 
our economy moving. I urge my colleagues to support this bill and to 
help our small businesses create jobs. I want to congratulate once 
again the chair of the Small Business Committee, Nydia Velazquez, for 
her leadership. I thank Ms. Bean from Illinois for her leadership on 
these issues, and I thank our Republican friends, who I hope will join 
us in supporting this effort to make sure that small businesses have 
the capital they need to grow our economy.
  Mr. GRAVES of Missouri. Mr. Chairman, I yield back the balance of my 
time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself the balance of my time.
  Mr. Chairman, the face of American small business is changing--and 
rapidly. Twenty years ago, entrepreneurs were likely to rely on loans 
and credit cards to start up or expand their businesses. This met the 
needs of most entrepreneurs, but today's startup costs have grown 
dramatically. This has caused many small companies to turn to equity 
investment, particularly those in high-growth, technology-based sectors 
which show the greatest promise to create new jobs. For these firms, 
their assets are not buildings or machinery; they are people, ideas and 
skills. For this new generation, the old method of securing capital, 
through debt, is no longer sufficient by itself.
  In a world where revolutionary new products are conceived in dorm 
rooms, and companies are launched in garages, new ways of meeting 
businesses' capital needs are needed. Through the Small Business Early 
Stage Investment program, this bill recognizes this fundamental shift 
and takes steps to meet the capital needs of our new businesses. Our 
Nation's entrepreneurs have led us out of every previous recession, and 
they can do so again, but only if we give them the right tools. This 
legislation will make loans more affordable for existing businesses so 
they can grow and add to their payrolls. And for the enterprises just 
getting off the ground, it will reinvigorate investment in cutting-edge 
startups.
  A vote for this bill is a vote in favor of the American traditions of 
innovation and entrepreneurship. I urge my colleagues to vote with the 
small businesses in their district; vote ``yes.''
  I yield back the balance of my time.
  Mr. NEUGEBAUER. Mr. Chairman, I yield myself such time as I may 
consume.
  I appreciate the majority leader coming and telling us that this 
won't cost the taxpayers any money. We have asked the majority for an 
updated CBO score on this bill with the revisions, and we have not seen 
that yet. So we don't actually know that for certain. But what we do 
know is that from the TARP program, there were losses incurred in the 
TARP program. And this program has been identified by people who are 
very familiar with the TARP program as another TARP program, except 
some people want to call this TARP II, TARP Jr. But by and large, this 
is another TARP program.
  You know, there is no question today that all of us realize that 
small businesses are the number one job creator in our country. Mr. 
Chairman, in fact, I am a small businessman. I came to Congress not 
from being a lifelong politician, but from creating jobs in this 
country, of making payrolls. I have made a payroll. I have borrowed 
money. I have actually been a lender. And if you really want to get the 
economy going back in America, as the majority has tried throwing money 
at the problem--and I would have thought that they would have learned 
by now that all this money, the trillions of dollars that they have 
thrown at the economy hasn't created any jobs. We still have almost 10 
percent of the American people who are unemployed in this country 
today. The numbers show that 17 percent of the American people are 
either unemployed or underemployed, so throwing money at the problem 
isn't the answer.
  If you want to create jobs in America, I will tell you how you create 
jobs in America. Number one, you bring some certainty in America. Right 
now the American people are questioning what the future of their 
country is. They are seeing record deficits by this administration. 
This year alone, if we had a budget--we don't know what the deficit is 
going to be this year because, one, we haven't passed any appropriation 
bills in this Congress.
  And, secondly, the leadership of the majority hasn't brought a budget 
to the floor, and maybe they are not going to because they don't want 
their Members to have to take a vote on a budget that's going to say: 
for every dollar we're going to spend, we are going to have to borrow 
42 cents. I am sure they would be embarrassed. And it would be more 
embarrassing if you voted for a budget like that.
  But the way you bring certainty to the country is, one, we are going 
to have to start cutting back our spending and reducing these deficits. 
Leaving money in the economy. As a small businessman, when I had the 
capital in my business, and the government wasn't taxing away my 
capital, I was able to take that capital and leverage it, and go to my 
lender, be a responsible borrower, and it would be prudent to lend to 
me, and we could expand our business that way.
  The other thing is, yesterday this body had an opportunity to do 
something for small business, and that was to repeal the mandate for 
health care

[[Page H4520]]

that was in the Democrats' health care bill. Unfortunately, there was 
not enough votes, but some of our Democratic colleagues understand the 
same thing we do: if you want to bring certainty, create jobs in 
America, you take that off the backs of small businesses.
  So, really, I wish that this bill would do something for small 
businesses in this country because small businesses are the lifeblood 
and the engine for our country. Unfortunately, this bill will not do 
anything for small businesses; but it will put the taxpayers, again, at 
risk to underwrite and to invest in banks.
  You know, I figured this: it's simple back there in Lubbock, Texas, 
that, you know, if somebody wants to invest their dollars in a bank, 
let them invest their dollars in a bank. Don't take the money away from 
the taxpayers and invest it because the government thinks that they 
know what is a better program. So, again, I urge my colleagues to vote 
for small business, but not this bill. This bill doesn't help small 
business.
  And with that, I yield back the balance of my time.
  Ms. BEAN. I yield myself the balance of time.
  Well, first I would like to address some of the points our colleague 
from Missouri suggested, that all we need to do for business is less 
Federal action and less regulation. And on that point, I would have to 
agree, the minority has delivered--less action and less regulation, a 
culture of deregulation that led to the financial crisis and the recent 
oil spill in the gulf. But this bill isn't about regulation. It's about 
credit.
  And I would then like to move to the point of my colleague from Texas 
who suggested that this bill adds $33 billion to the national debt. 
That's disingenuous, as the gentleman knows. This is not a $30 billion 
cost, according to the nonpartisan CBO. The legislation, in fact, will 
reduce the deficit. Now, these funds are an investment, and there are 
clear safeguards that ensure that taxpayers are repaid with interest. 
Also, his concern for small businesses fearing higher taxes is 
unwarranted, as taxes are, in fact, at historic lows; and in the 
Recovery Act, of the $288 billion in tax cuts, many of those went to 
our community businesses.
  He also cited the NFIB to claim that access to credit is not a 
serious problem, yet the NFIB's own data shows that only 40 percent of 
small business owners attempting to borrow last year had all of their 
credit needs met, and nearly one-quarter of would-be borrowers, 25 
percent, had none of their credit needs met. Now, he did suggest that 
some businesses--or he suggested all businesses--are just in a holding 
pattern, when the reality is, some of them are, and that's not who this 
legislation is directed to. There are many others who have started to 
see their pipeline build and their forecasts develop and are seeking to 
expand their operations and hire people, and they need that access to 
capital.
  This Small Business Lending Fund Act is for those who are going to 
grow us out of this recession. I urge my colleagues to support this 
important investment in those community businesses that are the 
cornerstone of our economy.
  I yield back the balance of my time.
  The CHAIR. All time for general debate has expired.
  In lieu of the amendment in the nature of a substitute recommended by 
the Committee on Financial Services printed in the bill, it shall be in 
order to consider as an original bill for the purpose of amendment 
under the 5-minute rule the amendment in the nature of a substitute 
printed in part A of House Report 111-506, modified by the amendment 
printed in part B of that report and the order of the House of today. 
The amendment in the nature of a substitute shall be considered as 
read.
  The text of the amendment in the nature of a substitute is as 
follows:

       Strike all after the enacting clause and insert the 
     following:

                  TITLE I--SMALL BUSINESS LENDING FUND

     SECTION 1. SHORT TITLE.

       This title may be cited as the ``Small Business Jobs and 
     Credit Act of 2010''.

     SEC. 2. PURPOSE.

       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.

     SEC. 3. DEFINITIONS.

       For purposes of this title:
       (1) Appropriate committees of congress.--The term 
     ``appropriate committees of Congress'' means--
       (A) the Committee on Small Business and Entrepreneurship, 
     the Committee on Agriculture, Nutrition, and Forestry, the 
     Committee on Banking, Housing, and Urban Affairs, the 
     Committee on Finance, the Committee on the Budget, and the 
     Committee on Appropriations of the Senate; and
       (B) the Committee on Small Business, the Committee on 
     Agriculture, the Committee on Financial Services, the 
     Committee on Ways and Means, the Committee on the Budget, and 
     the Committee on Appropriations of the House of 
     Representatives.
       (2) Appropriate federal banking agency.--The term 
     ``appropriate Federal banking agency'' has the meaning given 
     such term under section 3(q) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1813(q)).
       (3) Bank holding company.--The term ``bank holding 
     company'' has the meaning given such term under section 
     2(a)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 
     1841(2)(a)(1)).
       (4) Call report.--The term ``call report'' means--
       (A) reports of Condition and Income submitted to the Office 
     of the Comptroller of the Currency, the Board of Governors of 
     the Federal Reserve System, and the Federal Deposit Insurance 
     Corporation;
       (B) the Office of Thrift Supervision Thrift Financial 
     Report;
       (C) any report that is designated by the Office of the 
     Comptroller of the Currency, the Board of Governors of the 
     Federal Reserve System, the Federal Deposit Insurance 
     Corporation, or the Office of Thrift Supervision, as 
     applicable, as a successor to any report referred to in 
     subparagraph (A) or (B); and
       (D) standard reports of Condition and Income submitted by 
     Community Development Financial Institution loan funds to the 
     Community Development Financial Institutions Fund.
       (5) CDCI.--The term ``CDCI'' means the Community 
     Development Capital Initiative created by the Secretary under 
     the Troubled Asset Relief Program established by the 
     Emergency Economic Stabilization Act of 2008.
       (6) CDCI investment.--The term ``CDCI investment'' means, 
     with respect to any eligible institution, the principal 
     amount of any investment made by the Secretary in such 
     eligible institution under the CDCI that has not been repaid.
       (7) CPP.--The term ``CPP'' means the Capital Purchase 
     Program created by the Secretary under the Troubled Asset 
     Relief Program established by the Emergency Economic 
     Stabilization Act of 2008.
       (8) CPP investment.--The term ``CPP investment'' means, 
     with respect to any eligible institution, the principal 
     amount of any investment made by the Secretary in such 
     eligible institution under the CPP that has not been repaid.
       (9) Eligible institution.--The term ``eligible 
     institution'' means--
       (A) any insured depository institution, which--
       (i) is not controlled by a bank holding company or savings 
     and loan holding company that is also an eligible 
     institution;
       (ii) has total assets of equal to or less than 
     $10,000,000,000, as reported in the call report as of the end 
     of the fourth quarter of calendar year 2009; and
       (iii) is not directly or indirectly controlled by any 
     company or other entity that has total consolidated assets of 
     more than $10,000,000,000, as so reported;
       (B) any bank holding company which has total consolidated 
     assets of equal to or less than $10,000,000,000;
       (C) any savings and loan holding company which has total 
     consolidated assets of equal to or less than $10,000,000,000; 
     and
       (D) any community development financial institution loan 
     fund which has total assets of equal to or less than 
     $10,000,000,000.
       (10) Fund.--The term ``Fund'' means the Small Business 
     Lending Fund established by section 4(a)(1) of this title.
       (11) Insured depository institution.--The term ``insured 
     depository institution'' has the meaning given such term 
     under section 3(c)(2) of the Federal Deposit Insurance Act 
     (12 U.S.C. 1813(c)(2)).
       (12) Program.--The term ``Program'' means the Small 
     Business Lending Fund Program authorized by section 4(a)(2) 
     of this title.
       (13) Savings and loan holding company.--The term ``savings 
     and loan holding company'' has the meaning given such term 
     under section 10(a)(1)(D) of the Home Owners' Loan Act (12 
     U.S.C. 1467a(a)(1)(D)).
       (14) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (15) Small business lending.--
       (A) In general.--The term ``small business lending'' means 
     small business lending, as

[[Page H4521]]

     defined by and reported in an eligible institution's 
     quarterly call report, of the following types:
       (i) Commercial and industrial loans.
       (ii) Owner-occupied nonfarm, nonresidential real estate 
     loans.
       (iii) Loans to finance agricultural production and other 
     loans to farmers.
       (iv) Loans secured by farmland.
       (B) Treatment of holding companies.--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.
       (16) Minority-owned and women-owned business.--The terms 
     ``minority-owned business'' and ``women-owned business'' 
     shall have the meaning given the terms ``minority-owned 
     business'' and ``women's business'', respectively, under 
     section 21A(r)(4) of the Federal Home Loan Bank Act (12 
     U.S.C. 1441A(r)(4)).
       (17) CDFI; community development financial institution.--
     The terms ``CDFI'' and ``community development financial 
     institution'' have the meaning given the term ``community 
     development financial institution'' under the Riegle 
     Community Development and Regulatory Improvement Act of 1994.
       (18) CDLF; community development loan fund.--The terms 
     ``CDLF'' and ``community development loan fund'' mean any 
     entity that--
       (A) is certified by the Department of the Treasury as a 
     community development financial institution loan fund;
       (B) is exempt from taxation under the Internal Revenue Code 
     of 1986; and
       (C) has assets under $10,000,000,000 as of the fourth 
     quarter of calendar year 2009.

     SEC. 4. SMALL BUSINESS LENDING FUND.

       (a) Fund and Program.--
       (1) Fund established.--There is established in the Treasury 
     of the United States a fund to be known as the ``Small 
     Business Lending Fund'', which shall be administered by the 
     Secretary.
       (2) Programs authorized.--The Secretary is authorized to 
     establish the Small Business Lending Fund Program for using 
     the Fund consistent with this title.
       (b) Use of Fund.--
       (1) In general.--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 `other financial instruments' 
     shall include only debt instruments for which such eligible 
     institution is fully liable or equity equivalent capital of 
     the eligible institution. Such debt instruments may be 
     subordinated to the claims of other creditors of the eligible 
     institution''.
       (2) Maximum purchase limit.--The aggregate amount of 
     purchases (and commitments to purchase) made pursuant to 
     paragraph (1) may not exceed $30,000,000,000.
       (3) Proceeds used to pay down public debt.--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.
       (4) Limitation on purchases from cdlfs.--
       (A) In general.--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.
       (B) Eligibility standard.--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.
       (c) Credits to the Fund.--There shall be credited to the 
     Fund amounts made available pursuant to section 9, to the 
     extent provided by appropriations Acts.
       (d) Terms.--
       (1) Application.--
       (A) Institutions with assets of $1,000,000,000 or less.--
     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.
       (B) Institutions with assets of more than $1,000,000,000 
     and less than $10,000,000,000.--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.
       (C) Treatment of holding companies.--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.
       (D) Treatment of applicants that are institutions 
     controlled by holding companies.--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 
     ``control'' with respect to a bank holding company shall have 
     the same meaning as in section 2(a)(2) of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1841(2)(a)(2)). For purposes 
     of this paragraph, the term ``control'' with respect to a 
     savings and loan holding company shall have the same meaning 
     as in 10(a)(2) of the Home Owners' Loan Act (12 U.S.C. 
     1467a(a)(2)).
       (E) Requirement to provide a small business lending plan.--
     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 applicant's 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. This plan shall be 
     confidential supervisory information.
       (F) Treatment of applicants that are community development 
     loan funds.--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.
       (2) Consultation with regulators.--For each eligible 
     institution that applies to receive a capital investment 
     under the Program, the Secretary shall--
       (A) consult with the appropriate Federal banking agency or, 
     in the case of an eligible institution that is a 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;
       (B) in the case of an eligible institution that is a State-
     chartered bank, consider any views received from the State 
     banking regulator of the State of the eligible institution 
     regarding the financial condition of the eligible 
     institution; and
       (C) in the case of a community development financial 
     institution loan fund, consult with the Community Development 
     Financial Institution Fund.
       (3) Ineligibility of institutions on fdic problem bank 
     list.--
       (A) In general.--An eligible institution may not receive 
     any capital investment under the Program if--
       (i) such institution is on the FDIC problem bank list; or
       (ii) such institution has been removed from the FDIC 
     problem bank list for less than 90 days.
       (B) Construction.--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.
       (C) FDIC problem bank list defined.--For purposes of this 
     subparagraph, the term ``FDIC problem bank list'' 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.
       (4) Incentives to lend.--
       (A) Requirements on preferred stock and other financial 
     instruments.--Any preferred stock or other financial 
     instrument issued to Treasury by an eligible institution 
     receiving a capital investment under the Program shall 
     provide that--
       (i) the rate at which dividends or interest are payable 
     shall be 5 percent per annum initially;
       (ii) within the first 2 years after the date of the capital 
     investment under the Program, the rate may be adjusted based 
     on the amount of an eligible institution's small business 
     lending. Changes in the amount of small business lending 
     shall be measured against the amount of small business 
     lending

[[Page H4522]]

     reported by the eligible institution in its call report for 
     the last quarter in calendar year 2009 or the average amount 
     of small business lending reported by the eligible 
     institution in all call reports for calendar year 2009, 
     whichever is lower, minus adjustments from each quarterly 
     balance in respect of--

       (I) net loan charge offs with respect to small business 
     lending; and
       (II) gains realized by the eligible institution resulting 
     from mergers, acquisitions or purchases of loans after 
     origination and syndication; which adjustments shall be 
     determined in accordance with guidance promulgated by the 
     Secretary; and

       (iii) during any calendar quarter during the initial 2-year 
     period referred to in clause (ii), an institution's rate 
     shall be adjusted to reflect the following schedule, based on 
     that institution's change in the amount of small business 
     lending relative to the baseline--

       (I) if the amount of small business lending has increased 
     by less than 2.5 percent, the dividend or interest rate shall 
     be 5 percent;
       (II) if the amount of small business lending has increased 
     by 2.5 percent or greater, but by less than 5.0 percent, the 
     dividend or interest rate shall be 4 percent;
       (III) if the amount of small business lending has increased 
     by 5.0 percent or greater, but by less than 7.5 percent, the 
     dividend or interest rate shall be 3 percent;
       (IV) if the amount of small business lending has increased 
     by 7.5 percent or greater, and but by less than 10.0 percent, 
     the dividend or interest rate shall be 2 percent; or
       (V) if the amount of small business lending has increased 
     by 10 percent or greater, the dividend or interest rate shall 
     be 1 percent.

       (B) Basis of initial rate.--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.
       (C) Timing of rate adjustments.--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.
       (D) Rate following initial 2-year period.--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\1/2\-
     year period that begins on the date of the investment. In the 
     case where the amount of small business lending has remained 
     the same or decreased relative to the institution's baseline 
     in the eighth quarter after the date of the capital 
     investment under the Program, the rate shall be 7 percent 
     until the expiration of the 4\1/2\-year period that begins on 
     the date of the investment.
       (E) Rate following initial 4\1/2\-year period.--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\1/2\-year period 
     that begins on the date of the capital investment under 
     the Program.
       (F) Limitation on rate reductions with respect to certain 
     amount.--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.
       (G) Rate adjustments for s corporation.--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 ``S corporation'' has the same meaning as in section 
     1361(a) of the Internal Revenue Code of 1986.
       (H) Repayment deadline.--The capital investment received by 
     an eligible institution under the Program shall be evidenced 
     by preferred stock or other financial instrument that--
       (i) includes, as a term and condition, that the capital 
     investment will--

       (I) be repaid not later than the end of the 10-year period 
     beginning on the date of the capital investment under the 
     Program; or
       (II) at the end of such 10-year period, be subject to such 
     additional terms as the Secretary shall prescribe, which 
     shall include a requirement that the stock or instrument 
     shall carry the highest dividend or interest rate payable; 
     and

       (ii) provides that the term and condition described under 
     clause (i) shall not apply if the application of that term 
     and condition would adversely affect the capital treatment of 
     the stock or financial instrument under current or successor 
     applicable capital provisions compared to a capital 
     instrument with identical terms other than the term and 
     condition described under clause (i).
       (I) Requirements on financial instruments issued by a 
     community development financial institution loan fund.--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.
       (5) Additional incentives to repay.--The Secretary may, by 
     regulation or guidance issued under section 5(9), 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.
       (6) Capital purchase program refinance.--
       (A) In general.--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.
       (B) Prohibition on participation by non-paying cpp 
     participants.--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 
     divident payment.
       (7) Minority outreach.--The Secretary shall require 
     eligible institutions receiving capital investments under the 
     Program to provide outreach and advertising in the 
     appropriate language of 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 represent or work within 
     or are members of minority communities.
       (8) Additional terms.--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.
       (9) Minimum underwriting standards.--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''.
       (10) Reporting.--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--
       (A) guaranteed by the Small Business Administration;
       (B) made to Small Business Investment Companies;
       (C) 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
       (D) other loans made to entities that the internal 
     reporting of the concern classifies as a small business.

     SEC. 5. ADDITIONAL AUTHORITIES OF THE SECRETARY.

       The Secretary may take such actions as the Secretary deems 
     necessary to carry out the authorities in this title, 
     including, without limitation, the following:
       (1) The Secretary may use the services of any agency or 
     instrumentality of the United States or component thereof on 
     a reimbursable basis, and any such agency or instrumentality 
     or component thereof is authorized to provide services as 
     requested by the Secretary using all authorities vested in or 
     delegated to that agency, instrumentality, or component.
       (2) The Secretary may 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.
       (3) 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.
       (4) Subject to section 4(b)(3), the Secretary may manage 
     any assets purchased under this title, including revenues and 
     portfolio risks therefrom.
       (5) 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,

[[Page H4523]]

     upon terms and conditions and at a price determined by the 
     Secretary.
       (6) 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.
       (7) 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.
       (8) 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.

     SEC. 6. CONSIDERATIONS.

       In exercising the authorities granted in this title, the 
     Secretary shall take into consideration--
       (1) increasing the availability of credit for small 
     businesses;
       (2) providing funding to eligible institutions that serve 
     small businesses that are minority- and women-owned and that 
     also serve low- and moderate-income, minority, and other 
     underserved or rural communities;
       (3) protecting and increasing American jobs;
       (4) ensuring that all eligible institutions may apply to 
     participate in the program established under this title, 
     without discrimination based on geography;
       (5) providing transparency with respect to use of funds 
     provided under this title;
       (6) minimizing the cost to taxpayers of exercising the 
     authorities; and
       (7) promoting and engaging in financial education to would-
     be borrowers.

     SEC. 7. REPORTS.

       The Secretary shall provide to the appropriate committees 
     of Congress--
       (1) within 7 days of the end of each month commencing with 
     the first month in which transactions are made under the 
     Program, a written report describing all of the transactions 
     made during the reporting period pursuant to the authorities 
     granted under this title;
       (2) after the end of March and the end of September, 
     commencing September 30, 2010, a written report on all 
     projected costs and liabilities, all operating expenses, 
     including compensation for financial agents, and all 
     transactions made by the Fund, which shall include 
     participating institutions and amounts each institution has 
     received under the Program; and
       (3) within 7 days of the end of each 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.

     SEC. 8. OVERSIGHT AND AUDITS.

       (a) Inspector General Oversight.--The Inspector General of 
     the Department of the Treasury shall conduct, supervise, and 
     coordinate audits and investigations of the purchase (and 
     commitments to purchase) of preferred stock and other 
     financial instruments under the Program.
       (b) GAO Audit.--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.
       (c) Required Certifications.--
       (1) Eligible institution certification.--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 minumum, requires financial 
     institutions, as that term is defined in 31 U.S.C. 5312(a)(2) 
     and (c)(1)(A), to implement reasonable procedures to verify 
     the identity of any person seeking to open an account, to the 
     extent reasonable and practicable, maintain records of the 
     information used to verify the person's identity, and 
     determine whether the person appears on any lists of known or 
     suspected terrorists or terrorist organizations provided to 
     the financial institution by any government agency.
       (2) Loan recipients.--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)).
       (d) Prohibition on Pornography.--None of the funds made 
     available under this title may be used to pay the salary of 
     any individual engaged in activities related to the Program 
     who has been officially disciplined for violations of subpart 
     G of the Standards of Ethical Conduct for Employees of the 
     Executive Branch for viewing, downloading, or exchanging 
     pornography, including chld pornography, on a Federal 
     Government computer or while performing official Federal 
     Government duties.

     SEC. 9. CREDIT REFORM; FUNDING.

       (a) Credit Reform.--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.).
       (b) Funds Made Available.--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.

     SEC. 10. TERMINATION AND CONTINUATION OF AUTHORITIES.

       (a) Termination of Investment Authority.--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.
       (b) Continuation of Other Authorities.--The authorities of 
     the Secretary in section 5 shall not be limited by the 
     termination date in subsection (a).

     SEC. 11. PRESERVATION OF AUTHORITY.

       Nothing in this title may be construed to limit the 
     authority of the Secretary under any other provision of law.

     SEC. 12. ASSURANCES.

       (a) Small Business Lending Fund Separate From TARP.--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.
       (b) Change in Law.--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.

     SEC. 13. STUDY AND REPORT WITH RESPECT TO WOMEN-OWNED AND 
                   MINORITY-OWNED BUSINESSES.

       (a) Study.--The Secretary shall conduct a study to 
     determine the number of women-owned businesses and minority-
     owned businesses that receive assistance as a result of the 
     Program, including--
       (1) efforts, including technical assistance and outreach 
     that institutions have employed under the Program to provide 
     loans to minority- and women-owned small businesses;
       (2) loan applications received;
       (3) loan applications approved; and
       (4) and any other relevant data related to such 
     transactions to promote the purposes of the Program as the 
     Secretary may require.
       (b) Report.--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).
       (c) Information Provided to the Secretary.--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.

            TITLE II--STATE SMALL BUSINESS CREDIT INITIATIVE

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``State Small Business 
     Credit Initiative Act of 2010''.

     SEC. 202. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Appropriate federal banking agency.--The term 
     ``appropriate Federal banking agency''--
       (A) has the same meaning as in section 3 of the Federal 
     Deposit Insurance Act; and
       (B) includes the National Credit Union Administration Board 
     in the case of any credit union the deposits of which are 
     insured in accordance with the Federal Credit Union Act.
       (2) Enrolled loan.--The term ``enrolled loan'' means a loan 
     made by a financial institution lender that is enrolled by a 
     participating State in an approved State capital access 
     program in accordance with this title.
       (3) Federal contribution.--The term ``Federal 
     contribution'' means the portion of the contribution made by 
     a participating State to, or for the account of, an approved 
     State program that is made with Federal funds allocated to 
     the State by the Secretary under section 203.
       (4) Financial institution.--The term ``financial 
     institution'' means any insured depository institution, 
     insured credit union, or community development financial 
     institution, as those terms are each defined in section 103 
     of the Riegle Community Development and Regulatory 
     Improvement Act of 1994.
       (5) Participating state.--The term ``participating State'' 
     means any State that has been approved for participation in 
     the Program under section 204.
       (6) Program.--The term ``Program'' means the State Small 
     Business Credit Initiative established under this title.
       (7) Qualifying loan or swap funding facility.--The term 
     ``qualifying loan or swap funding facility'' means a 
     contractual arrangement between a participating State and a 
     private financial entity under which--
       (A) the participating State delivers funds to the entity as 
     collateral;
       (B) the entity provides funding from the arrangement back 
     to the participating State; and

[[Page H4524]]

       (C) the full amount of resulting funding from the 
     arrangement, less any fees and other costs of the 
     arrangement, is contributed to, or for the account of, an 
     approved State program.
       (8) Reserve fund.--The term ``reserve fund'' means a fund, 
     established by a participating State, dedicated to a 
     particular financial institution lender, for the purposes 
     of--
       (A) depositing all required premium charges paid by the 
     financial institution lender and by each borrower receiving a 
     loan under an approved State program from that financial 
     institution lender;
       (B) depositing contributions made by the participating 
     State, including State contributions made with Federal 
     contributions; and
       (C) covering losses on enrolled loans by disbursing 
     accumulated funds.
       (9) State.--The term ``State'' means--
       (A) a State of the United States;
       (B) the District of Columbia, the Commonwealth of Puerto 
     Rico, the Commonwealth of Northern Mariana Islands, Guam, 
     American Samoa, and the United States Virgin Islands;
       (C) when designated by a State of the United States, a 
     political subdivision of that State that the Secretary 
     determines has the capacity to participate in the Program; 
     and
       (D) under the circumstances described in section 204(d), a 
     municipality of a State of the United States to which the 
     Secretary has given a special permission under section 
     204(d).
       (10) State capital access program.--The term ``State 
     capital access program'' means a program of a State that--
       (A) uses public resources to promote private access to 
     credit; and
       (B) meets the eligibility criteria in section 205(c).
       (11) State other credit support program.--The term ``State 
     other credit support program''--
       (A) means a program of a State that--
       (i) uses public resources to promote private access to 
     credit;
       (ii) is not a State capital access program; and
       (iii) meets the eligibility criteria in section 206(c); and
       (B) includes, collateral support programs, loan 
     participation programs, and credit guarantee programs.
       (12) State program.--The term ``State program'' means a 
     State capital access program or a State other credit support 
     program.
       (13) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.

     SEC. 203. FEDERAL FUNDS ALLOCATED TO STATES.

       (a) Program Established; Purpose.--There is established the 
     State Small Business Credit Initiative (hereinafter in this 
     title referred to as the ``Program''), to be administered by 
     the Secretary. Under the Program, the Secretary shall 
     allocate Federal funds to participating States and make the 
     allocated funds available to the participating States as 
     provided in this section for the uses described in this 
     section.
       (b) Allocation Formula.--
       (1) In general.--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--
       (A) would receive under the 2009 allocation, as determined 
     under paragraph (2); and
       (B) would receive under the 2010 allocation, as determined 
     under paragraph (3).
       (2) 2009 allocation formula.--
       (A) In general.--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.
       (B) Minimum allocation.--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.
       (C) 2008 state employment decline defined.--For purposes of 
     this paragraph and with respect to a State, the term ``2008 
     State employment decline'' means the excess (if any) of--
       (i) the number of individuals employed in such State 
     determined for December 2007; over
       (ii) the number of individuals employed in such State 
     determined for December 2008.
       (3) 2010 allocation formula.--
       (A) In general.--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.
       (B) Minimum allocation.--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.
       (C) 2009 unemployment number defined.--For purposes of this 
     paragraph and with respect to a State, the term ``2009 
     unemployment number'' means the number of individuals within 
     such State who were determined to be unemployed by the Bureau 
     of Labor Statistics for December 2009.
       (c) Availability of Allocated Amount.--The amount allocated 
     by the Secretary to each participating State under subsection 
     (b) shall be made available to the State as follows:
       (1) Allocated amount generally to be available to state in 
     one-thirds.--
       (A) In general.--The Secretary shall--
       (i) apportion the participating State's allocated amount 
     into one-thirds;
       (ii) transfer to the participating State the first one-
     third when the Secretary approves the State for participation 
     under section 204; and
       (iii) 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.
       (B) Authority to withhold pending audit.--The Secretary may 
     withhold the transfer of any successive one-third pending 
     results of a financial audit.
       (C) Transfers contingent on inspector general audits.--
       (i) In general.--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.
       (ii) Penalty for misstatement.--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.
       (iii) Municipalities.--For purposes of this subparagraph, 
     the term ``participating State'' shall include a municipality 
     given special permission to participate in the Program, 
     pursuant to section 204(d).
       (D) Exception.--
       (i) In general.--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.
       (ii) Recoupment triggered by intentional misstatement.--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.
       (2) Transferred amounts.--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).
       (3) Use of transferred funds.--Each participating State may 
     use funds transferred to it under this section only--
       (A) for making Federal contributions to, or for the account 
     of, an approved State program;
       (B) as collateral for a qualifying loan or swap funding 
     facility;
       (C) in the case of the first 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
       (D) 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.
       (4) Termination of availability of amounts not transferred 
     within 2 years of participation.--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.
       (5) Transferred amounts not assistance.--The amounts 
     transferred to a participating State under this section shall 
     not be considered ``assistance'' for purposes of subtitle V 
     of title 31, United States Code.
       (6) Definitions.--For purposes of this section--
       (A) the term ``allocated amount'' means the total amount of 
     Federal funds allocated by the Secretary under subsection (b) 
     to the participating State; and
       (B) the term ``one-third'' means--
       (i) in the case of the first and second one-thirds, an 
     amount equal to 33 percent of a participating State's 
     allocated amount; and
       (ii) in the case of the last one-third, an amount equal to 
     34 percent of a participating State's allocated amount.

     SEC. 204. APPROVING STATES FOR PARTICIPATION.

       (a) Application.--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.
       (b) General Approval Criteria.--The Secretary shall approve 
     a State to be a participating State, if--

[[Page H4525]]

       (1) a specific department, agency, or political subdivision 
     of the State has been designated to implement a State program 
     and participate in the Program;
       (2) all legal actions necessary to enable such designated 
     department, agency, or political subdivision to implement a 
     State program and participate in the Program have been 
     accomplished;
       (3) the State has filed an application with the Secretary 
     for approval of a State capital access program under section 
     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
       (4) the State and the Secretary have executed an allocation 
     agreement that--
       (A) conforms to the requirements of this title;
       (B) ensures that the State program complies with such 
     national standards as are established by the Secretary under 
     section 209(a)(2);
       (C) sets forth internal control, compliance, and reporting 
     requirements as established by the Secretary, and such other 
     terms and conditions necessary to carry out the purposes of 
     this title, including an agreement by the State to allow the 
     Secretary to audit State programs;
       (D) requires that the State program be fully positioned, 
     within 90 days of the State's execution of the allocation 
     agreement with the Secretary, to act on providing the kind of 
     credit support that the State program was established to 
     provide; and
       (E) includes an agreement by the State to deliver to the 
     Secretary, and update annually, a schedule describing how the 
     State intends to apportion among its State programs the 
     Federal funds allocated to the State.
       (c) Contractual Arrangements for Implementation of State 
     Programs.--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--
       (1) an existing, approved State program administered by 
     another State; or
       (2) an authorized agent of, or entity supervised by, the 
     State, including for-profit and not-for-profit entities.
       (d) Special Permission.--
       (1) Circumstances when a municipality may apply directly.--
     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.
       (2) Timing requirements applicable to municipalities 
     applying directly.--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.
       (3) Notices of intent and applications from more than 1 
     municipality.--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.
       (4) Approval criteria.--The general approval criteria in 
     paragraphs (2) and (4) shall apply.
       (5) Allocation to municipalities.--
       (A) If more than 3.--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.
       (B) If 3 or fewer.--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.
       (6) Apportionment of allocated amount among participating 
     municipalities.--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.
       (7) Approving state programs for municipalities.--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.

     SEC. 205. APPROVING STATE CAPITAL ACCESS PROGRAMS.

       (a) Application.--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.
       (b) Approval.--The Secretary shall approve such State 
     capital access program as eligible for Federal contributions 
     to the reserve fund if--
       (1) within 60 days after the date of enactment of this 
     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;
       (2) 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;
       (3) the State satisfies the requirements of subsections (a) 
     and (b) of section 204; and
       (4) the State capital access program meets the eligibility 
     criteria in subsection (c).
       (c) Eligibility Criteria for State Capital Access 
     Programs.--For a State capital access program to be approved 
     under this section, it must be a program of the State that--
       (1) provides portfolio insurance for business loans based 
     on a separate loan-loss reserve fund for each financial 
     institution;
       (2) requires insurance premiums to be paid by the financial 
     institution lenders and by the business borrowers to the 
     reserve fund to have their loans enrolled in the reserve 
     fund;
       (3) provides for contributions to be made by the State to 
     the reserve fund in amounts at least equal to the sum of the 
     amount of the insurance premium charges paid by the borrower 
     and the financial institution to the reserve fund for any 
     newly enrolled loan; and
       (4) provides its portfolio insurance solely for loans that 
     meet both the following requirements:
       (A) The borrower has 500 employees or less at the time that 
     the loan is enrolled in the Program.
       (B) The loan amount does not exceed $5,000,000.
       (d) Federal Contributions to Approved State Capital Access 
     Programs.--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.
       (e) Minimum Program Requirements for State Capital Access 
     Programs.--The Secretary shall, by regulation or other 
     guidance, prescribe Program requirements that meet the 
     following minimum requirements:
       (1) Experience and capacity.--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.
       (2) Investment authority.--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.
       (3) Loan terms and conditions to be determined by 
     agreement.--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.
       (4) Lender capital at-risk.--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.
       (5) Premium charges minimum and maximum amounts.--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.
       (6) State contributions.--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.

[[Page H4526]]

       (7) Loan purpose.--
       (A) Particular loan purpose requirements and 
     prohibitions.--In connection with the filing of a loan for 
     enrollment in an approved State capital access program, the 
     financial institution lender--
       (i) shall obtain an assurance from each borrower that--

       (I) the proceeds of the loan will be used for a business 
     purpose;
       (II) the loan will not be used to finance such business 
     activities as the Secretary, by regulation, may proscribe as 
     prohibited loan purposes for enrollment in an approved State 
     capital access program; and
       (III) the borrower is not--

       (aa) an executive officer, director, or principal 
     shareholder of the financial institution lender;
       (bb) a member of the immediate family of an executive 
     officer, director, or principal shareholder of the financial 
     institution lender; or
       (cc) a related interest of any such executive officer, 
     director, principal shareholder, or member of the immediate 
     family;
       (ii) shall provide assurances to the participating State 
     that the loan has not been made in order to place under the 
     protection of the approved State capital access program prior 
     debt that is not covered under the approved State capital 
     access program and that is or was owed by the borrower to the 
     financial institution lender or to an affiliate of the 
     financial institution lender;
       (iii) shall not allow the enrollment of a loan to a 
     borrower that is a refinancing of a loan previously made to 
     that borrower by the financial institution lender or an 
     affiliate of the financial institution lender; and
       (iv) may include additional restrictions on the eligibility 
     of loans or borrowers that are not inconsistent with the 
     provisions and purposes of this title, including compliance 
     with all applicable Federal and State laws, regulations, 
     ordinances, and Executive orders.
       (B) Definitions.--For purposes of this subsection, the 
     terms ``executive officer'', ``director'', ``principal 
     shareholder'', ``immediate family'', and ``related interest'' 
     refer to the same relationship to a financial institution 
     lender as the relationship described in part 215 of title 12 
     of the Code of Federal Regulations, or any successor to such 
     part.
       (8) Capital access for small businesses in underserved 
     communities.--At the time that a State applies to the 
     Secretary to have the State capital axccess 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.

     SEC. 206. APPROVING COLLATERAL SUPPORT AND OTHER INNOVATIVE 
                   CREDIT ACCESS AND GUARANTEE INITIATIVES FOR 
                   SMALL BUSINESSES AND MANUFACTURERS.

       (a) Application.--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.
       (b) Approval.--The Secretary shall approve such State other 
     credit support program as eligible for Federal contributions 
     to, or for the account of, the program if--
       (1) the Secretary determines that the State satisfies the 
     requirements of paragraphs (1) through (3) of section 205(b);
       (2) the Secretary determines that the State other credit 
     support program meets the eligibility criteria in subsection 
     (c);
       (3) the Secretary determines the State other credit support 
     program to be eligible based on the additional considerations 
     in subsection (d); and
       (4) within 9 months after the date of enactment of this 
     title, the State has filed with Treasury a complete 
     application for Treasury approval.
       (c) Eligibility Criteria for State Other Credit Support 
     Programs.--For a State other credit support program to be 
     approved under this section, it must be a program of the 
     State that--
       (1) 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;
       (2) can demonstrate a reasonable expectation that, when 
     considered with all other State programs of the State, such 
     State programs together have the ability to use amounts of 
     new Federal contributions to, or for the account of, all such 
     programs in the State to cause and result in amounts of new 
     small business lending at least 10 times the new Federal 
     contribution amount;
       (3) for those State other credit support programs that 
     provide their credit support through 1 or more financial 
     institution lenders, requires the financial institution 
     lenders to have a meaningful amount of their own capital 
     resources at risk in their small business lending; and
       (4) extends credit support that--
       (A) targets an average borrower size of 500 employees or 
     less;
       (B) does not extend credit support to borrowers that have 
     more than 750 employees;
       (C) targets support towards loans with an average principal 
     amount of $5,000,000 or less; and
       (D) does not extend credit support to loans that exceed a 
     principal amount of $20,000,000.
       (d) Additional Considerations.--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:
       (1) The anticipated benefits to the State, its businesses, 
     and its residents to be derived from the Federal 
     contributions to, or for the account of, the approved State 
     other credit support program, including the extent to which 
     resulting small business lending will expand economic 
     opportunities.
       (2) The operational capacity, skills, and experience of the 
     management team of the State other credit support program.
       (3) The capacity of the State other credit support program 
     to manage increases in the volume of its small business 
     lending.
       (4) The internal accounting and administrative controls 
     systems of the State other credit support program, and the 
     extent to which they can provide reasonable assurance that 
     funds of the State program are safeguarded against waste, 
     loss, unauthorized use, or misappropriation.
       (5) The soundness of the program design and implementation 
     plan of the State other credit support program.
       (e) Federal Contributions to Approved State Other Credit 
     Support Programs.--A State other credit support program 
     approved under this section will be eligible for receiving 
     Federal contributions to, or for the account of, the State 
     program in an amount consistent with the schedule describing 
     the apportionment of allocated Federal funds among State 
     programs delivered by the State to the Secretary under the 
     allocation agreement.
       (f) Minimum Program Requirements for State Other Credit 
     Support Programs.--
       (1) Fund to prescribe.--The Secretary shall, by regulation 
     or other guidance, prescribe Program requirements for 
     approved State other credit support programs.
       (2) Considerations for fund.--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).

     SEC. 207. REPORTS.

       (a) Quarterly Use-of-funds Report.--
       (1) In general.--Not later than 30 days after the beginning 
     of each calendar quarter, beginning after the first full 
     calendar quarter to occur after the date the Secretary 
     approves a State for participation, the participating State 
     shall submit to the Secretary a report on the use of Federal 
     funding by the participating State during the previous 
     calendar quarter.
       (2) Report contents.--The report shall--
       (A) indicate the total amount of Federal funding used by 
     the participating State;
       (B) include a certification by the participating State 
     that--
       (i) the information provided in accordance with 
     subparagraph (A) is accurate;
       (ii) funds continue to be available and legally committed 
     to contributions by the State to, or for the account of, 
     approved State programs, less any amount that has been 
     contributed by the State to, or for the account of, approved 
     State programs subsequent to the State being approved for 
     participation in the Program; and
       (iii) the participating State is implementing its approved 
     State program or programs in accordance with this title and 
     regulations issued pursuant to section 210.
       (b) Annual Report.--Not later than March 31 of each year, 
     beginning March 31, 2011, each participating State shall 
     submit to the Secretary an annual report that shall include 
     the following information:
       (1) The number of borrowers that received new loans 
     originated under the approved State program or programs after 
     the State program was approved as eligible for Federal 
     contributions.
       (2) The total amount of such new loans.
       (3) Breakdowns by industry type, loan size, annual sales, 
     and number of employees of the borrowers that received such 
     new loans.
       (4) The zip code of each borrower that received such a new 
     loan.
       (5) Such other data as the Secretary, in the Secretary's 
     sole discretion, may require to carry out the purposes of the 
     Program.
       (c) Form.--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.
       (d) Termination of Reporting Requirements.--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.

     SEC. 208. REMEDIES FOR STATE PROGRAM TERMINATION OR FAILURES.

       (a) Remedies.--
       (1) In general.--If any of the events listed in paragraph 
     (2) occur, the Secretary, in the Secretary's discretion, 
     may--
       (A) reduce the amount of Federal funds allocated to the 
     State under the Program; or
       (B) terminate any further transfers of allocated amounts 
     that have not yet been transferred to the State.

[[Page H4527]]

       (2) Causal events.--The events referred to in paragraph (1) 
     are--
       (A) termination by a participating State of its 
     participation in the Program;
       (B) failure on the part of a participating State to submit 
     complete reports under section 207 on a timely basis; or
       (C) noncompliance by the State with the terms of the 
     allocation agreement between the Secretary and the State.
       (b) Deallocated Amounts to Be Reallocated.--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).

     SEC. 209. IMPLEMENTATION AND ADMINISTRATION.

       (a) General Authorities and Duties.--The Secretary shall--
       (1) consult with the Administrator of the Small Business 
     Administration and the appropriate Federal banking agencies 
     on the administration of the Program;
       (2) establish minimum national standards for approved State 
     programs;
       (3) provide technical assistance to States for starting 
     State programs and generally disseminate best practices;
       (4) manage, administer, and perform necessary program 
     integrity functions for the Program; and
       (5) ensure adequate oversight of the approved State 
     programs, including oversight of the cash flows, performance, 
     and compliance of each approved State program.
       (b) Appropriations.--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.
       (c) Termination of Secretary's Program Administration 
     Functions.--The authorities and duties of the Secretary to 
     implement and administer the Program shall terminate at the 
     end of the 7-year period beginning on the date of enactment 
     of this title.

     SEC. 210. REGULATIONS.

       The Secretary, in consultation with the Administrator of 
     the Small Business Administration, shall issue such 
     regulations and other guidance as the Secretary 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.

     SEC. 211. OVERSIGHT AND AUDITS.

       (a) Inspector General Oversight.--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.
       (b) GAO Audit.--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.
       (c) Required Certification.--
       (1) Financial institutions certification.--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.
       (2) Sex offense certification.--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)).
       (d) Prohibition on Pornography.--None of the funds made 
     available under this title may be used to pay the salary of 
     any individual engaged in activities related to the Program 
     who has been officially disciplined for 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.

        TITLE III--SMALL BUSINESS EARLY-STAGE INVESTMENT PROGRAM

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Small Business Early-Stage 
     Investment Program Act of 2010''.

     SEC. 302. SMALL BUSINESS EARLY-STAGE INVESTMENT PROGRAM.

       Title III of the Small Business Investment Act of 1958 (15 
     U.S.C. 681 et seq.) is amended by adding at the end the 
     following:

        ``PART D--SMALL BUSINESS EARLY-STAGE INVESTMENT PROGRAM

     ``SEC. 399A. ESTABLISHMENT OF PROGRAM.

       ``The Administrator shall establish and carry out an early-
     stage investment program (hereinafter referred to in this 
     part as the `program') to provide equity investment financing 
     to support early-stage small businesses in accordance with 
     this part.

     ``SEC. 399B. ADMINISTRATION OF PROGRAM.

       ``The program shall be administered by the Administrator 
     acting through the Associate Administrator described under 
     section 201.

     ``SEC. 399C. APPLICATIONS.

       ``(a) In General.--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.
       ``(b) Requirements for Application.--An application to 
     participate in the program shall include the following:
       ``(1) 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.
       ``(2) Information regarding the relevant venture capital 
     investment qualifications and backgrounds of the individuals 
     responsible for the management of the applicant.
       ``(3) A description of the extent to which the applicant 
     meets the selection criteria under section 399D.
       ``(c) Applications From Managers of Small Business 
     Investment Companies.--The Administrator shall establish an 
     abbreviated application process for 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).

     ``SEC. 399D. SELECTION OF PARTICIPATING INVESTMENT COMPANIES.

       ``(a) In General.--Not later than 90 days after the date on 
     which the Administrator receives an application from an 
     applicant under section 399C, the Administrator shall make a 
     determination to conditionally approve or 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.
       ``(b) Selection Criteria.--In making a determination under 
     subsection (a), the Administrator shall consider each of the 
     following:
       ``(1) The likelihood that the applicant will meet the goals 
     specified in the business plan of the applicant.
       ``(2) The likelihood that the investments of the applicant 
     will create or preserve jobs, both directly and indirectly.
       ``(3) The character and fitness of the management of the 
     applicant.
       ``(4) The experience and background of the management of 
     the applicant.
       ``(5) The extent to which the applicant will concentrate 
     investment activities on early-stage small businesses.
       ``(6) The likelihood that the applicant will achieve 
     profitability.
       ``(7) The experience of the management of the applicant 
     with respect to establishing a profitable investment track 
     record.
       ``(c) Final Approval.--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.

     ``SEC. 399E. EQUITY FINANCINGS.

       ``(a) In General.--The Administrator may make one or more 
     equity financings to a participating investment company.
       ``(b) Equity Financing Amounts.--
       ``(1) Non-federal capital.--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.
       ``(2) Limitation on aggregate amount.--The aggregate amount 
     of all equity financings made to a participating investment 
     company under the program may not exceed $100,000,000.

[[Page H4528]]

       ``(c) Equity Financing Process.--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--
       ``(1) for new-named investments during the 5-year period 
     beginning on the date on which each such commitment is first 
     drawn upon; and
       ``(2) for follow-on investments and management fees during 
     the 10-year period beginning on the date on which each such 
     commitment is first drawn upon, with not more than 2 
     additional 1-year periods available at the discretion of the 
     Administrator.
       ``(d) Commitment of Funds.--The Administrator shall make 
     commitments for equity financings not later than 2 years 
     after the date funds are appropriated for the program.

     ``SEC. 399F. INVESTMENTS IN EARLY-STAGE SMALL BUSINESSES.

       ``(a) In General.--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.
       ``(b) Evaluation of Compliance.--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.

     ``SEC. 399G. PRO RATA INVESTMENT SHARES.

       ``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.

     ``SEC. 399H. EQUITY FINANCING INTEREST.

       ``(a) Equity Financing Interest.--
       ``(1) In general.--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).
       ``(2) Effect of conveyance.--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.
       ``(b) Manager Profits.--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.
       ``(c) Distribution Requirements.--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.

     ``SEC. 399I. FUND.

       ``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.

     ``SEC. 399J. APPLICATION OF OTHER SECTIONS.

       ``To the extent not inconsistent with requirements under 
     this part, the Administrator may apply sections 309, 311, 
     312, 313, and 314 to activities under this part and an 
     officer, director, employee, agent, or other participant in a 
     participating investment company shall be subject to the 
     requirements under such sections.

     ``SEC. 399K. ANNUAL REPORTING.

       ``The Administrator shall report on the performance of the 
     program in the annual performance report of the 
     Administration.

     ``SEC. 399L. DEFINITIONS.

       ``In this part, the following definitions apply:
       ``(1) Early-stage small business.--The term `early-stage 
     small business' means a small business concern that--
       ``(A) is domiciled in a State; and
       ``(B) has not generated gross annual sales revenues 
     exceeding $15,000,000 in any of the previous 3 years.
       ``(2) Participating investment company.--The term 
     `participating investment company' means an applicant 
     approved under section 399D to participate in the program.
       ``(3) Targeted industries.--The term `targeted industries' 
     means any of the following business sectors:
       ``(A) Agricultural technology.
       ``(B) Energy technology.
       ``(C) Environmental technology.
       ``(D) Life science.
       ``(E) Information technology.
       ``(F) Digital media.
       ``(G) Clean technology.
       ``(H) Defense technology.
       ``(I) Photonics technology.

     ``SEC. 399M. APPROPRIATION.

       ``From funds not otherwise appropriated, there is hereby 
     appropriated $1,000,000,000 to carry out the program.

     ``SEC. 399N. CERTIFICATION.

       ``(a) Immigration Certification.--
       ``(1) Participating investment companies.--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.
       ``(2) Early-stage small businesses.--Each early-stage small 
     business that receives funds from a participating investment 
     company that receives an equity financing under this part 
     after the date of the enactment of this part must, if 
     applicable, certify that such company is in compliance with 
     the requiremetns 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.
       ``(b) Sex Offender Certification.--
       ``(1) Participating investment companies.--Each 
     participating investment company that receives an equity 
     financing under this part after the date of the enactment of 
     this part shall certify to the Administrator that the 
     principals of such company have not been convicted of a sex 
     offense against a minor (as such terms are defined in section 
     111 of the Sex Offender Registration and Notification Act (42 
     U.S.C. 16911)).
       ``(2) Early-stage small businesses.--Each early-stage small 
     business that receives funds from a participating investment 
     company that receives an equity financing under this part 
     after the date of the enactment of this part shall certify to 
     the 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)).
       ``(c) Pornography Certification.--None of the funds made 
     available under this part may be used to pay the salary of 
     any individual engaged in activities related to the 
     provisions of this part who has been officially disciplined 
     for violations of supbart 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.''.

     SEC. 303. REGULATIONS.

       Not later than 180 days after the date of enactment of this 
     Act, the Administrator shall issue regulations to carry out 
     this title and the amendments made by this title.

     SEC. 304. PROHIBITIONS ON EARMARKS.

       None of the funds appropriated for the program 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.

                         TITLE _--MISCELLANEOUS

     SEC. _. BUDGETARY EFFECTS.

       The budgetary effects of this Act, for the purpose of 
     complying with the Statutory Pay-As-You-Go Act of 2010, shall 
     be determined by reference to the latest statment titled 
     ``Budgetary Effects of PAYGO Legislation'' for this Act, 
     submitted for printing in

[[Page H4529]]

     the Congressional Record by the Chairman of the House Budget 
     Committee, provided that such statement has been submitted 
     prior to the vote on passage.

  The CHAIR. No amendment to that amendment in the nature of a 
substitute is in order except those printed in part C of the report. 
Each amendment may be offered only in the order printed in the report, 
by a Member designated in the report, shall be considered read, shall 
be debatable for the time specified in the report, equally divided and 
controlled by the proponent and an opponent, shall not be subject to 
amendment, and shall not be subject to a demand for division of the 
question.

                              {time}  1130


                 Amendment No. 1 Offered by Mr. Israel

  The CHAIR. It is now in order to consider amendment No. 1 printed in 
part C of House Report 111-506.
  Mr. ISRAEL. Mr. Chairman, I have an amendment at the desk made in 
order under the rule.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Israel:
       Page 6, insert after line 25 the following:
       (17) Veteran-owned business.--
       (A) The term ``veteran-owned business'' means a business--
       (i) more than 50 percent of the ownership or control of 
     which is held by 1 or more veterans;
       (ii) more than 50 percent of the net profit or loss of 
     which accrues to 1 or more veterans; and
       (iii) a significant percentage of senior management 
     positions of which are held by veterans.
       (B) For purposes of this paragraph, the term ``veteran'' 
     has the meaning given such term in section 101(2) of title 
     38, United States Code.
       Page 18, line 6, strike ``minority outreach'' and insert 
     the following: ``outreach to minorities, women, and 
     veterans''.
       Page 18, strike lines 15-16 and insert the following:

     tions, and individuals that--
       (A) represent or work within or are members of minority 
     communities;
       (B) represent or work with or are women; and
       (C) represent or work with or are veterans.
       Page 21, line 14, insert after ``minority-'' the following: 
     ``, veteran-,''.
       Page 25, line 10, insert after ``WOMEN-OWNED'' the 
     following: ``, VETERAN-OWNED,''.
       Page 25, line 12, insert after ``women-owned businesses'' 
     the following: ``, veteran-owned businesses,''.
       Page 25, line 14, insert after ``Program'' the following: 
     ``(including determining the percentage of the total number 
     of all businesses that receive assistance that such number 
     represents)''.
       Page 25, line 17, insert after ``minority-'' the following: 
     ``, veteran-,''.

  The CHAIR. Pursuant to House Resolution 1436, the gentleman from New 
York (Mr. Israel) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from New York.
  Mr. ISRAEL. Mr. Chairman, I yield myself 2 minutes.
  I rise in support of the Israel-Barrow amendment. In particular, I 
would like to thank the gentleman from Georgia (Mr. Barrow) for his 
leadership and his partnership on behalf of veterans.
  This amendment is rather direct. The underlying bill creates a new 
community bank lending fund for small businesses. It is essential that 
as we continue our recovery, we expand the amount of credit to 
America's small businesses so they can buy products and hire people.
  Our amendment does three things. One, it ensures that community banks 
participating in the lending fund prioritize veteran-owned businesses. 
Two, it requires aggressive outreach in advertising to veteran-owned 
small businesses. And, third, it requires the Secretary of Treasury, 
when designating lending institutions in the fund, to focus on veteran-
owned businesses.
  Mr. Chairman, last year there were 3.6 million veteran-owned 
businesses in the United States of America; 250,000 were owned by 
service-disabled veterans. They fought our battles, we should fight for 
their businesses, and that is precisely what our amendment does.
  I again want to thank the gentleman from Georgia (Mr. Barrow) for 
working with me on this amendment. It is the Israel-Barrow amendment, 
but it might as well be called the Barrow-Israel amendment as a result 
of the partnership that we brought to this task on behalf of small 
businesses and veterans.
  Mr. Chairman, I reserve the balance of my time.
  Mr. NEUGEBAUER. Mr. Chairman, I rise to claim the time in opposition, 
although I am not opposed to the amendment.
  The CHAIR. Without objection, the gentleman from Texas is recognized 
for 5 minutes.
  There was no objection.
  Mr. NEUGEBAUER. The bill currently includes language regarding women 
and minority-owned business, and adding the veteran-owned businesses 
makes sense. And so with that, we support this amendment and we thank 
the gentleman for bringing it forward.
  I yield back the balance of my time.
  Mr. ISRAEL. Mr. Chairman, I yield such time as he may consume to the 
gentleman from Georgia (Mr. Barrow).
  Mr. BARROW. Mr. Chairman, I thank the gentleman for yielding. I have 
spent a lot of time meeting with small business owners across my 
district because small businesses are the backbone of our economy and 
they hold the key to our recovery. In the last decade, 70 percent of 
all new jobs are created by small businesses. But many are now facing a 
credit squeeze which makes it hard to cover everyday expenses, 
including hiring and remaining workers. It is in the best interest of 
our country that our small businesses thrive. That is why the Small 
Business Lending Fund Act deserves our support.
  I am pleased to offer an amendment with Congressman Israel that I 
think makes this good bill just a little bit better. Our amendment 
simply asks banks receiving funds under this act to reach out to women, 
minority and veteran-owned businesses to make them aware of the 
availability of these funds. These businesses are a valuable but often 
disadvantaged part of our economy, and I think they deserve our special 
attention.
  I want to thank Congressman Israel for his collaboration on this 
amendment and his leadership, I want to thank the chairman for his 
support.
  Mr. ISRAEL. Mr. Chairman, we have proven today to the American people 
that both sides of this aisle can agree on at least one thing, and that 
is supporting veterans and supporting small businesses. I am grateful 
for the bipartisan cooperation that we have received on this.
  I have no further requests for time, and I yield back the balance of 
my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from New York (Mr. Israel).
  The question was taken; and the Chair announced that the ayes 
appeared to have it.
  Mr. ISRAEL. Mr. Chair, I demand a recorded vote.
  The CHAIR. Pursuant to clause 6 of rule XVIII, further proceedings on 
the amendment offered by the gentleman from New York will be postponed.


                   Amendment No. 3 Offered by Mr. Nye

  The CHAIR. The Chair understands that amendment No. 2 will not be 
offered.
  It is now in order to consider amendment No. 3 printed in part C of 
House Report 111-506.
  Mr. NYE. Mr. Chairman, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

  Amendment No. 3 offered by Mr. Nye:
       Page 3, line 5, strike ``and''.
       Page 3, line 12, strike the period and insert ``; and''.
       Page 3, after line 12, insert the following new 
     subparagraph:
       (D) 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.
       Page 4, line 25, strike ``and''.
       Page 5, line 3, strike the period and insert ``; and''.
       Page 5, after line 3, insert the following new 
     subparagraph:
       (D) any small business lending company that has total 
     assets of equal to or less than $10,000,000,000.
       Page 6, line 1, after ``report,'' insert the following: 
     ``where each loan comprising such lending is made to a small 
     business and is one''.
       Page 6, after line 25 insert the following new paragraphs:
       (1) Small business.--The term ``small business'' has the 
     meaning given the term

[[Page H4530]]

     ``small business concern'' under section 3 of the Small 
     Business Act (15 U.S.C. 632).
       (2) Small business lending company.--The term ``small 
     business lending company'' has the meaning given such term 
     under section 3(r)(1) of the Small Business Act (15 U.S.C. 
     632(r)(1)).
       Page 12, beginning on line 19, strike ``the amount of small 
     business lending reported by the eligible institution in its 
     call report for the last quarter in calendar year 2009 or the 
     average amount of small business lending reported by the 
     eligible institution in all call reports for calendar year 
     2009, whichever is lower'' and insert ``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''.
       Page 17, after line 9, insert the following new 
     subparagraph:
       (I) Incentives contingent on an increase in the number of 
     loans made.--For any quarter during the first 4\1/2\-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--
       (i) 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
       (ii) 7 percent, if such quarter is after such 2-year 
     period.
       (J) Alternative computation.--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.

  The CHAIR. Pursuant to House Resolution 1436, the gentleman from 
Virginia (Mr. Nye) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Virginia.
  Mr. NYE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, recent reports on U.S. economic growth are promising 
and suggest that recovery is taking hold. However, I continue to hear 
from small business owners in my district who are still having a tough 
time obtaining the business loans that they need today. They have 
weathered the worst of the storm and are ready to lead our economy to a 
strong recovery. However, in order to do this, they need capital; 
capital from loans that banks are unwilling to lend.
  As chairman of the Small Business Subcommittee on Contracting and 
Technology, my subcommittee examines every day how the Federal 
Government can incentivize business innovation.
  For example, last year, with my fellow Virginian Mark Warner, I 
proposed the Small Business Administration take action on the ARC loan 
program, a vital loan program that had been delayed months until 
Congress authorized it. Because of our efforts, soon after the ARC loan 
program was implemented, and it is expected to create or retain 24,000 
jobs and assist 4,900 businesses this year alone.
  We must continue to implement these types of small business programs 
that will unfreeze the small business credit markets. However, as we 
create this program to increase lending capacity to small banks, we 
must ensure that it is not another bank bailout.
  The amendment I offer today puts controls in place to guarantee the 
funds in this bill are in fact going to small businesses. First and 
foremost, we must define what a small business is. If the Small 
Business Lending Fund is created with the intention to spur small 
business lending, we must ensure that the funds are in fact lent to 
businesses that are properly defined as small business. In order to do 
this, we should use the definition already being used by Federal 
agencies to determine a business's size.
  Second, we want to increase lending volume and open up the credit 
markets to every qualified small business. To do this effectively, we 
need to link lending incentives to volume, or in other words, to the 
number of loans that a bank makes and not just the amount of money 
lent. If we measure the lending of a bank merely by the amount of money 
lent, then a bank could make a few large loans and call it a day. 
Working capital for most small businesses requires small loans, and 
many times it takes more than one. Thus, to effectively measure if this 
program is truly supporting working capital efforts, we must certify 
that the volume of these small loans increases.
  Third, in the same vein, a hardened baseline with real meaning must 
be set when measuring a bank's lending record. Currently, the bill only 
requires a bank to increase its lending according to its 2009 fourth 
quarter record. The fourth quarter of 2009 saw a historically low 
lending rate. Small financial institutions decreased their small 
business lending by an average of 12.8 percent, and small business 
lending by large banks dropped by more than 20 percent. To gather a 
more accurate measure of small business lending, this amendment 
requires a full year's worth of data to measure a bank's lending 
report.
  Finally, small business lending companies exist only to lend to small 
businesses. It would be nearsighted not to make these institutions that 
already have a strong infrastructure and proven ability to lend to 
small businesses eligible in this bill. My amendment includes small 
business lending companies with less than $10 billion in assets as 
qualified financial institutions, alongside community banks and small 
credit unions.
  If our economic recovery is going to translate into economic 
expansion, we must open up the credit markets to our small businesses 
who are proven job creators and we must ensure that programs created to 
provide capital to small businesses take the necessary measures to 
promote small business lending and not big business bailouts.
  I urge my colleagues to support this amendment for our small 
businesses and for our economic future.
  I reserve the balance of my time.
  Mr. NEUGEBAUER. Mr. Chairman, I rise to claim the time in opposition.
  The CHAIR. The gentleman from Texas is recognized for 5 minutes.
  Mr. NEUGEBAUER. Mr. Chairman, I am opposed to this amendment because 
it removes some of the safeguards to ensure the banks use the money in 
the way that they are supposed to and not simply just building up their 
capital buffers. Allowing recipients to self-certify that they have 
increased small business lending guts all of the other protections in 
this bill.
  If we are going to allow recipients to pay dividends as low as 1 
percent, we need to make sure that the money is used the way the 
legislation is intended. We already have less oversight of this money 
than we did in the TARP program, and even though it is the same 
program, cutting back even further is the wrong approach.
  Already under this bill, banks are getting a good deal on the cost of 
capital, thanks to the taxpayers. Community banks that issue preferred 
equity paid dividends of 9 percent or more in the private market, here 
we have the government giving them the capital for 5 percent, or as low 
as 1 percent.
  This amendment changes the incentives in the wrong way, and we need 
more safeguards for the taxpayers, not fewer.
  Mr. Chairman, I reserve the balance of my time.
  Mr. NYE. Mr. Chairman, I yield the balance of my time to 
Congresswoman Velazquez, the chairwoman of the Small Business 
Committee.
  Ms. VELAZQUEZ. I thank the gentleman for yielding.
  Mr. Chairman, since the financial crisis struck in 2007, much has 
already been done to help banks and financial institutions stay 
solvent. Those steps were necessary. I firmly believe that without 
them, the financial crisis would deepened, unemployment would have been 
higher, more Americans would have suffered, and our economic recovery 
may have been delayed for many years.
  Despite these efforts, our entrepreneurs are still struggling to tap 
into the credit they need. As we revisit this problem once more, it is 
vital that we ensure that the benefits of this bill reach small 
businesses. That is the intent of this legislation. But without the 
right safeguards, this will be another attempt that fails to address 
the underlying problem of small business access to capital.

[[Page H4531]]

  If this measure is not crafted properly, loans which go to large 
businesses could qualify under the program. Mr. Chairman, I support 
this amendment.
  Mr. NEUGEBAUER. Mr. Chairman, I just want to repeat that when we are 
going to give a dividend, a lesser dividend rate for the more 
performance that these banks have, letting themselves certify is not a 
good check and balance. Certainly we want them to increase their 
lending, but we need third-party validation to make sure that if they 
are going to get as low as a 1 percent capital dividend rate, that some 
third-party validation validates that because obviously that has impact 
on this program.
  I reserve the balance of my time.
  Mr. NYE. I ask unanimous consent that each side be allocated an 
additional 2 minutes.
  The CHAIR. Is there objection to the request of the gentleman from 
Virginia?
  There was no objection.
  Mr. NYE. Mr. Chairman, I yield 2 minutes to the distinguished ranking 
member of the committee, Congressman Graves.
  Mr. GRAVES of Missouri. Mr. Chairman, I rise in support of the 
amendment offered by the gentleman from Virginia.
  Under the program, the way it was reported out of the Financial 
Services Committee, the bill bases its lending on the size of loans, 
and assumes that loans of under $250,000 and $1 million will be made to 
small businesses. However, there is no such assurance in the bill, and 
loans of those sizes could be made to large businesses, but count as 
small business lending. If this is a small business lending program, 
then it should use the definition of small business used throughout the 
government, and that is the one in the Small Business Act. The approach 
offered by the gentleman from Virginia (Mr. Nye) does just that. It 
makes that sensible change.
  The other change that the gentleman's amendment does is to include 
small business lending companies. These institutions are not overseen 
by the Federal financial regulators, but are authorized by the Small 
Business Administration to make guaranteed loans. If the idea of the 
program is to increase lending to small businesses, small business 
lending companies should not be excluded from this program.
  For these reasons, I definitely support the gentleman's amendment, 
and I appreciate his offering it.
  Mr. NEUGEBAUER. Mr. Chairman, I yield back the balance of my time.
  Mr. NYE. Mr. Chairman, I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Virginia (Mr. Nye).
  The amendment was agreed to.


          Amendment No. 4 Offered by Mr. Minnick, as Modified

  The CHAIR. It is now in order to consider amendment No. 4 printed in 
part C of House Report 111-506.
  Mr. MINNICK. Mr. Chair, I have an amendment at the desk designated 
under the rule.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Mr. Minnick:
       Page 11, after line 3, insert the following new 
     subparagraph:
       (F) Election to include other nonfarm, nonresidential real 
     estate loans in amount of small business lending.--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).

  The CHAIR. Pursuant to House Resolution 1436, the gentleman from 
Idaho (Mr. Minnick) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Idaho.

                              {time}  1145

  Mr. MINNICK. Mr. Chairman, I ask unanimous consent to modify my 
amendment.
  The CHAIR. The Clerk will report the modification.
  The Clerk read as follows:

       Amendment No. 4 offered by Mr. Minnick, as modified:
       Page 6, after line 9, insert the following:
       (v) Nonowner-occupied commercial real estate loans.

  The CHAIR. Is there objection to the request of the gentleman from 
Idaho?
  Without objection, the amendment is modified.
  There was no objection.
  Mr. MINNICK. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, this amendment, while short in length, is extremely 
important to the commercial banking industry and to small business in 
my State and all of the United States. What it does is adds commercial 
real estate to the category of assets that can be covered by small 
business loan guarantees and increases the amount of those assets up to 
$10 million.
  This allows a category of assets that is now being held by small 
business men throughout the country, a category that is very large that 
needs to be refinanced because commercial real estate loans are short 
term and banks simply do not have the capacity in the current market to 
finance and process all of the commercial loans that need to be 
reprocessed over the next 3 to 5 years. By making these smaller loans 
that our community banks have made to strip shopping centers, to 
restaurants, to small business, making them more liquid by applying a 
Federal guarantee, they will be able to sell these loans in the market. 
The bank will get cash and be able to make another commercial loan.
  So this is a very important piece of legislation, an important 
component of the Small Business Lending Act that will do more, I think, 
than any other single thing in terms of getting our banking system 
functioning again and providing credit to the entrepreneurs and small 
businesses across this country who will fuel the economic recovery and 
create the jobs that will bring us out of this recession.
  I urge my colleagues to accept this amendment, and I reserve the 
balance of my time.
  Mr. NEUGEBAUER. Mr. Chairman, I seek time in opposition, although I 
am not opposed to the amendment.
  The CHAIR. Without objection, the gentleman from Texas is recognized 
for 5 minutes.
  There was no objection.
  Mr. NEUGEBAUER. I appreciate the gentleman's point here of trying to 
create a new source of capital in commercial real estate at a time when 
there is a significant amount of stress on our community banks. 
Financing for commercial real estate, particularly the smaller loan 
market that serves small businesses, has been limited. The commercial 
mortgage-backed securities market, the CMBS market, which accounted for 
nearly 50 percent of the commercial real estate lending in 2007, 
remains dormant.
  So while I continue to believe the $30 billion lending fund will not 
improve lending for small businesses, I do not oppose the gentleman's 
amendment.
  I yield back the balance of my time.
  Mr. MINNICK. I thank the gentleman.
  I would urge my colleagues to endorse this amendment and ask that it 
be added to the bill.
  I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Idaho (Mr. Minnick), as modified.
  The amendment was agreed to.


               Amendment No. 5 Offered by Mr. Perlmutter

  The CHAIR. It is now in order to consider amendment No. 5 printed in 
part C of House Report 111-506.
  Mr. PERLMUTTER. Mr. Chairman, I have an amendment at the desk made in 
order under the rule.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 5 offered by Mr. Perlmutter:
       Add at the end of title I the following new section:

     SEC. 14. TEMPORARY AMORTIZATION AUTHORITY.

       (a) Purpose.--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

[[Page H4532]]

     write-downs in order to increase the availability of credit 
     for small businesses.
       (b) In General.--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--
       (1) other real estate owned (as defined under section 34.81 
     of title 12, Code of Federal Regulation), or
       (2) an impared loan secured by real estate,

     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.
       (c) Amortization Requirements.--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:
       (1) If the amount of small business lending has increased 
     by less than 2.5 percent, the amortization period shall be 6 
     years.
       (2) 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.
       (3) 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.
       (4) 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.
       (5) If the amount of small business lending has increased 
     by 10 percent or greater, the amortization period shall be 10 
     years.
       (d) Minimum Underwriting Standards.--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.
       (e) Effective Date.--The provisions of this section shall 
     apply to loan origination that occurred on or after January 
     1, 2003, and before January 1, 2008.

  The CHAIR. Pursuant to House Resolution 1436, the gentleman from 
Colorado (Mr. Perlmutter) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Colorado.
  Mr. PERLMUTTER. Mr. Chairman, I yield myself such time as I might 
consume.
  Mr. Chairman, the amendment I offer with my colleagues today would 
increase the availability of capital for small businesses. It 
temporarily allows banks to amortize real estate losses over 6 years. 
In addition, smaller community banks would be incentivized to increase 
small business lending through an extended amortization period of up to 
10 years.
  The impact of this amendment deals with regional and small banks. It 
will be immediate and is a necessary step in providing greater 
availability of credit, which will lead to job creation and economic 
growth.
  We had an earthquake on Wall Street about a year-and-a-half ago. 
Those aftershocks are still being felt by small businesses and small 
banks all across the country. It is for that reason these banks, in an 
effort to help small businesses regain their footing, deserve this kind 
of amortization and flexibility with respect to their loan portfolios. 
They did not cause the trouble that they now find themselves in, and we 
believe that amortization is appropriate.
  Mr. Chair, I reserve the balance of my time.
  Mr. NEUGEBAUER. Mr. Chair, I am opposed to the amendment.
  The CHAIR. The gentleman from Texas is recognized for 5 minutes.
  Mr. NEUGEBAUER. Certainly I am sympathetic to the many community 
banks coping with real estate assets on their books that have lost 
their value; however, I am not sure this amendment is the best 
solution.
  This amendment would essentially allow certain banks to hide losses 
for up to 10 years. The practice of legislative forbearance is a 
dangerous one and could result in problems that only get worse because 
they are not properly addressed. Accounting rules function to provide a 
clear record of the health of the institution. This amendment does just 
the opposite by hiding the losses.
  The amortization provided by this amendment does not take effect for 
2 years, when the increase in small business lending is measured; thus, 
it doesn't really address the current credit problems that this bill 
attempts to solve. This amendment creates the wrong incentive of 
allowing banks to hide losses for longer periods of time based on 
making even more loans. Instead of continuing to distort the market, 
the government should instead create an expansionary environment where 
we are lowering taxes and providing regulatory certainty and not hiding 
accounting losses.
  I urge opposition to this amendment.
  I yield back the balance of my time.
  Mr. PERLMUTTER. Mr. Chairman, I would say the amendment provides that 
if there is a $250,000 loss, it is booked and it is open, but then is 
spread out for 6 up to 10 years. It's easily transparent and open.
  I yield 1 minute to my friend from Florida (Mr. Klein).
  Mr. KLEIN of Florida. I thank the gentleman from Colorado. All of us 
share a common goal: We are committed to an economic recovery. We also 
agree that small business lending is critical to achieving that 
recovery.
  Small businesses in my district in south Florida and around the 
country are struggling to get access to credit so they can grow their 
businesses and create jobs. Even though bank regulators at the top are 
telling banks to lend, I have heard over and over again directly from 
dozens of businesses in my community and the banks locally that 
examiners on the ground are giving the exact opposite message.
  It is essential that we do everything we can to increase small 
business lending. This amendment provides incentives for small business 
and real estate lending, exactly what south Florida and other 
communities need to continue on the road to recovery. The amendment 
provides a solution to a critical problem, and I am proud to have 
worked with community banks, our Realtors and real estate community on 
this issue.
  I urge my colleagues to support this amendment.
  Mr. PERLMUTTER. At this point, I would also say to my friend from 
Texas, the amendment takes place immediately, not after 2 years.
  I yield 1 minute to my colleague from Colorado (Mr. Coffman).
  Mr. COFFMAN of Colorado. I thank the gentleman from Colorado for 
yielding.
  Mr. Chair, I rise today in strong support of this amendment to House 
Resolution 5297, the Small Business Lending Fund Act of 2010. The 
amendment offered by my friend from Colorado, Representative 
Perlmutter, would do a great deal to increase the availability of loans 
to our Nation's small businesses. Small businesses are the engine that 
drives our economy.
  This amendment will allow Colorado banks to amortize, or write down, 
commercial real estate loan losses over a period of time to ensure an 
adequate amount of capital for continued lending. The amendment 
encourages continued lending to small businesses by establishing a 
graduated scale with a maximum 10-year period of amortization for 
increased small business lending of 10 percent or more.
  Enacting commonsense measures such as this will do a great deal to 
help small businesses, while also protecting many community banks from 
the volatility that currently surrounds their commercial real estate 
portfolio.
  I have run a small business, and access to capital was always a 
pressing concern. I am glad that Congress is addressing this important 
issue.
  I urge my colleagues to vote in favor of this amendment.
  Mr. PERLMUTTER. I yield 1 minute to my friend from Wisconsin (Mr. 
Kagen).
  Mr. KAGEN. I rise in strong support of the Perlmutter, Gutierrez, 
Klein, and Kagen amendment. Why? It's exactly the medicine we need in 
our economy right now. Small businesses in Wisconsin, small businesses 
in Colorado and across the country are looking for access to credit at 
a price they can afford to pay. And right now our community banks are 
unable to lend, not because of their own activity, but because of the 
bad judgment of big banks on Wall Street.
  Main Street community banks and Main Street small businesses should

[[Page H4533]]

not have to continue to pay for the mistakes of Wall Street. The 
Perlmutter amendment would allow community banks under $10 billion of 
assets to amortize potential losses over 6 years and up to 10 years if 
they increase their lending to small businesses.
  We get it. We understand that small businesses are the economic 
engines of this country. It's time to give small businesses the 
opportunity to grow our economy and the jobs we need to work our way 
back into prosperity.
  I would urge a strong ``yes'' vote on this amendment.
  Mr. PERLMUTTER. Mr. Chairman, how much time do I have left?
  The CHAIR. The gentleman has 1 minute remaining.
  Mr. PERLMUTTER. Thank you.
  The point here is smaller banks, regional banks, unlike banks on Wall 
Street, did not create the credit and lending mess that exists today. 
Small businesses didn't create the mess that we see. And it is small 
business that employs so many people, and we have got to get folks back 
to work.
  So the amendment allows for a bank to take a loss and then spread it 
over a period of time so that they can weather this storm until we get 
back to a good financial footing in this country. It is something that 
is necessary. It will assist with the availability of credit today and 
doesn't cost the taxpayer any money.
  Something like this was used in the 1980s to assist the agricultural 
banks, and it worked at that time. It will work today.
  I urge an ``aye'' vote on amendment No. 5, and I yield back the 
balance of my time.
  The Acting CHAIR (Ms. Norton). The question is on the amendment 
offered by the gentleman from Colorado (Mr. Perlmutter).
  The amendment was agreed to.


            Amendment No. 6 Offered by Mr. Price of Georgia

  The Acting CHAIR. It is now in order to consider amendment No. 6 
printed in part C of House Report 111-506.
  Mr. PRICE of Georgia. Madam Chair, I have an amendment at the desk 
made in order under the rule.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Mr. Price of Georgia:
       Page 26, after line 7, insert the following new section:

     SEC. 14. SENSE OF CONGRESS.

       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.

  The Acting CHAIR. Pursuant to House Resolution 1436, the gentleman 
from Georgia (Mr. Price) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Georgia.
  Mr. PRICE of Georgia. Madam Chair, I want to thank the chairman of 
the committee and the ranking member for working with me on this 
amendment. And although, as they know, I am opposed to the underlying 
bill, this amendment is extremely important to highlight the serious 
problem of mixed messages that financial regulators are sending to our 
community banks. And I appreciate the support of the chairman on this 
amendment.
  Banks in Georgia employ almost 50,000 people and hold $276 billion in 
assets. Most of these banks are community institutions, which were mere 
bystanders to the financial and liquidity crisis of the last 2 years.

                              {time}  1200

  Late last week, the Treasury Department reported that TARP will cost 
less than they originally estimated. In fact, Treasury expects to spend 
less than the $550 billion of the $700 billion authorized. Regrettably, 
this figure does not factor in the bailouts for Fannie Mae, Freddie 
Mac, and AIG.
  But even so, this is a revolving taxpayer bailout fund, meaning that 
there is $550 billion that the administration and leadership could put 
towards small business lending. However, the administration chose not 
to do this and, instead, wants Congress to appropriate another $33 
billion of taxpayer money. That's right, another $33 billion.
  Certainly, small business lending is a priority for banks and 
businesses. However, this bill doesn't address the underlying causes of 
contraction in lending but invests much more in a failed regulatory 
agency.
  Unfortunately, the mixed messages being sent by failed bank 
regulators will not be fixed. Instead of making the FDIC and the other 
regulators send a clear, consistent message to our Nation's banks, this 
Congress feels that throwing more money at the problem will fix it.
  In February, bank regulators, both State and Federal, issued a joint 
statement providing guidance to banks and to credit unions, encouraging 
them to make loans to credit-worthy small business borrowers. The 
regulators described the guidance as intended to ``emphasize that 
financial institutions engaging in prudent small business lending after 
performing a comprehensive review of a borrower's financial condition 
will not be subject to supervisory criticism for small business loans 
made on that basis.''
  However, reports from the field show a much different picture. I hear 
from bankers in my district and across our State that there is capital 
to lend. However, I also hear from those same banks that they're 
nervous and anxious about the unpredictable regulators' response and 
scrutiny of their regulatory capital ratios and loan requirements. For 
many banks, it's easier and better just to ride out the storm by 
hoarding their cash than to justify every penny that they lend to the 
regulators, possibly risking their capitalized standing.
  Banks cannot hold capital for regulatory compliance and comply with 
regulators' instructions to lend at the same time. They're mutually 
exclusive. My amendment states that these mixed messages sent by the 
regulators are a very serious problem and a cause of the contraction in 
small business lending and are destructive to communities.
  In order to highlight this, I urge adoption of the amendment.
  I reserve the balance of my time.
  Ms. BEAN. I claim time in opposition, even though I'm not opposed.
  The Acting CHAIR. Without objection, the gentlewoman from Illinois is 
recognized for 5 minutes.
  There was no objection.
  Ms. BEAN. I yield myself such time as I may consume.
  I want to acknowledge Congressman Price's amendment and its 
recognition of the challenges facing not only community businesses 
seeking loans but the community bankers that are trying to provide 
them. His amendment recognizes mixed messages between legislators 
urging more lending while regulators and examiners are often urging 
less, particularly in the area of commercial real estate. That's why I 
have a bill that addresses both priorities by expanding the SBA 504 
program to allow banks to lend to small businesses for owner-occupied 
properties, while easing the exposure on their bank's balance sheet 
with investments from the CDCs.
  I also want to acknowledge that this amendment recognizes the credit 
crisis that's challenging our country and our small businesses 
particularly, which is the point of this underlying bill. And I hope my 
colleague will support the underlying bill as it addresses those credit 
challenges.
  I yield back the balance of my time.
  Mr. PRICE of Georgia. I thank the gentlelady for her support of the 
amendment and would just point out, once again, the mixed messages that 
are being received by our community banks.
  I would also like to point out that the amount of money left 
available in TARP right now could easily cover the intent of this bill. 
However, this bill has in it an extra $33 billion, $33 billion, Madam 
Chair, that, frankly, we do not have as a Nation. We put it on backs of 
our kids and grandkids and borrow it from some other nation when we 
could be utilizing money that has already been appropriated for the 
same positive purpose.
  I urge adoption of the amendment.
  I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Georgia (Mr. Price).
  The amendment was agreed to.


            Amendment No. 7 Offered by Mr. Al Green of Texas

  The Acting CHAIR. It is now in order to consider amendment No. 7 
printed in part C of House Report 111-506.

[[Page H4534]]

  Mr. AL GREEN of Texas. Madam Chair, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 7 offered by Mr. Al Green of Texas:
       Page 19, after line 4, insert the following new subsection:
       (e) Notification to Customers.--Any eligible institution 
     receiving funds under the Program shall--
       (1) disclose on every applicable loan transaction that the 
     loan is being made possible by the Program; and
       (2) if such institution has an established internet 
     website, such institution shall make available on its 
     internet website--
       (A) the written reports made by the Secretary pursuant to 
     paragraphs (1) and (2) of section 7; and
       (B) 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.

  The Acting CHAIR. Pursuant to House Resolution 1436, the gentleman 
from Texas (Mr. Al Green) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. AL GREEN of Texas. I yield myself 3 minutes at this time.
  Madam Chair, this is an important amendment. This amendment will not 
be a perfect amendment with references to what it seeks to do, but it 
is a perfecting amendment. This amendment seeks to provide disclosure 
and enhance accountability, and I'd like to make it known that this 
amendment received a lot of help and input from the Office of 
Congressman Hensarling, and I thank him for what he has done.
  This amendment would provide that an institution engaged in the 
lending process with the funds from the program, that this institution 
will on applicable loan documents indicate that the funds being loaned 
are funds that are coming from the fund. This is important because the 
public desires to know where the money is going, how it is being 
utilized.
  This amendment would also require, if the institution has a Web site, 
it will require that that Web site contain the written reports of the 
Treasury Secretary. These reports would indicate, to the extent that 
loans have been made, how the money has been utilized, and this, again, 
would provide additional transparency which will lead to 
accountability.
  Finally, the amendment will require lending institutions to make 
known to the capable, competent, and qualified borrowers that they will 
have the opportunity to participate in the program by way of receiving 
loans and that these loans must be based upon the law as it is written 
and not allow any type of discrimination, invidious discrimination to 
infiltrate the program.
  I think this is an amendment that goes a long way toward helping us 
improve our transparency and accountability. It is not a perfect 
amendment, but it is a perfecting amendment.
  I reserve the balance of my time.
  Mr. NEUGEBAUER. Madam Chair, I claim time in opposition, although I 
don't think I'm going to oppose the amendment.
  The Acting CHAIR. Without objection, the gentleman from Texas is 
recognized for 5 minutes.
  There was no objection.
  Mr. NEUGEBAUER. I just wanted to clarify something that the gentleman 
said.
  I understand that the bank will disclose to the borrower that they 
are loaning them funds because they are participating under this 
program, and then the gentleman went on to say that the Treasury would 
then post a report on their Web site. Now, would that list the names of 
the borrowers? Will the Treasury report list on their Web site the 
names of each borrower that borrowed money under this program?
  Mr. AL GREEN of Texas. If the gentleman would yield to me?
  Mr. NEUGEBAUER. I yield.
  Mr. AL GREEN of Texas. It will indicate what transactions took place, 
and it will indicate who the banks, the lending institutions, that 
engaged in the transaction. The borrower's name would not be a part of 
the information.
  Mr. NEUGEBAUER. I thank the gentleman because I was concerned about 
the privacy of those business owners, you know, letting the world know 
how much money they're borrowing. So I'm not opposed to the gentleman's 
amendment. I think disclosure is a good thing.
  I just want to make a point that there have been several discussions 
up here today that this is not going to cost the taxpayers any money, 
and only in Washington, D.C., can you go spend $33 billion and say it's 
not going to cost anything. The problem is, if this program is 
participated up to $33 billion, we don't have $33 billion, and so we're 
going to go have to borrow $33 billion from the Chinese to loan banks 
to loan to small businesses in this country.
  And a lot of folks I think understand that kind of how we got here 
was that the whole world, small businesses, individuals, and 
governments, have been on this borrowing and spending binge, borrow and 
spend, borrow and spend, and quite honestly, that's how we wove this 
web where we've got our financial markets in somewhat of a wrinkle 
right now.
  So, while I applaud the gentleman's amendment, I still go back to the 
fundamental point here that, one, this bill will not help small 
businesses have any additional capital, but more importantly, we are 
going to go spend $33 billion that we don't have, and I don't think 
that's the right prescription for our country.
  With that, I reserve the balance of my time.
  Mr. AL GREEN of Texas. Let me simply say in response that the bill 
anticipates that loans will be repaid. It's not a circumstance where 
persons are going to receive or businesses will receive loans that are 
not going to be paid. And the bill causes banks or lending institutions 
to make the loans because they will receive a better interest rate upon 
making loans such that they are incentivized to make these loans.
  So, while the bill will not cure all of the ails of society, all of 
the ills that we have, it certainly will go a long way towards 
stimulating small business lending, which is important to the economic 
recovery.
  I believe in this bill. I believe that this amendment will help with 
transparency and accountability. And I also believe that it is time for 
us to do all that we can to help the small businesses in this country. 
I believe that this is something we can do, and I believe that it is 
the something that will make a difference.
  I reserve the balance of my time.
  Mr. NEUGEBAUER. I appreciate the gentleman.
  I still go back to the point, and I think that's where we get kind of 
in a, we're living in Wally World here in Washington, D.C., where you 
still have to have $33 billion. If you're going to go invest in the 
preferred shares of these banks, you've still got to find the $33 
billion. And the truth of the matter is for every dollar we're going to 
appropriate or allocate in this country this year, we're going to have 
to borrow 42 cents of it.
  So I guess the question is, should we go out and hock another $33 
billion for a program that many people think that there's adequate 
capital and liquidity already in the banking industry? Some people have 
been quoted as saying, well, 42 percent of the small businesses have 
been turned down for loans in this country. Well, you know, I was in 
the loan business, and everybody that came in to my borrow money from 
me when I was a loan officer wasn't credit-worthy or it wasn't in their 
best interest to leverage their business further.
  So I'm afraid that we're out here trying to encourage behavior that 
the marketplace may be already taking care of.
  My good friend from Georgia did make a point that the regulatory 
folks are sending mixed messages. I think that's a bad policy. I think 
the regulators need to be more consistent with their policy, again 
bringing that certainty because what we've heard time and time again, 
whether it's from the business community or from the lending community, 
all of this uncertainty about what Congress is doing and the regulatory 
reforms that are going on, all of this is creating a huge amount of 
uncertainty. And so what happens when we have uncertainty in the 
marketplace, people just sit on the sidelines.

[[Page H4535]]

  If you want to get businesses going again, if you want to get the 
economy going again, we've got to get the government out of the banking 
business. We've got to get the government out of all these huge 
regulations. We've got to bring economic certainty by not imposing more 
restrictions on companies on their health care; cap-and-trade affecting 
what they're potentially going to pay for energy in the future; 
uncertainty with our tax code, where we don't know what provisions are 
going to expire, what provisions aren't.
  And you know, wouldn't it be nice for the American people to get to 
see a budget of how Congress is planning to spend their money, instead 
of going through a daily, monthly, weekly exercise of spending money 
without a budget? The American people don't do their business that way. 
They're a little bit concerned that the United States Congress just 
keeps on spending money but without a budget.
  So, with that, I yield back the balance of my time.
  Mr. AL GREEN of Texas. I yield myself such time as I may consume.
  While I appreciate the gentleman from Texas' desire to make sure that 
budgets are balanced and to make sure that we have accountability and 
transparency, I do have to remind the gentleman that the desire and the 
need to balance the budget did not start this year, nor did it start 
last year. We should have had a balanced budget for the 8 years of the 
prior administration.

                              {time}  1215

  I think that you find this administration burdened with the problems 
that were created by the past administration. I believe that in an 
effort to correct these problems, we will have to take some necessary 
steps toward helping small business.
  I hear my colleagues on the other side quite regularly contending 
that small businesses need help. This is help, and my trust and my hope 
and my belief is that the small business help will be supported by not 
only this side of the aisle, but by both sides of the aisle.
  Madam Chair, I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Texas (Mr. Al Green).
  The amendment was agreed to.


                Amendment No. 8 Offered by Mr. Driehaus

  The Acting CHAIR. It is now in order to consider amendment No. 8 
printed in part C of House Report 111-506.
  Mr. DRIEHAUS. Madam Chair, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 8 offered by Mr. Driehaus:
       Page 23, strike lines 7 through 9 and insert the following: 
     ``of the Program through the Office of Small Business Lending 
     Fund Program Oversight established under subsection (b)''.
       Page 23, after line 9, insert the following new subsection:
       (b) Office of Small Business Lending Fund Program 
     Oversight.--
       (1) Establishment.--There is hereby established within the 
     Office of the Inspector General of the Department of the 
     Treasury a new office to be named the ``Office of Small 
     Business Lending Fund Program Oversight'' to provide 
     oversight of the Program.
       (2) Leadership.--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.
       (3) Reporting.--
       (A) In general.--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.
       (B) Recommendations.--With respect to any deficiencies 
     identified in a report under subparagraph (A), the Secretary 
     shall either--
       (i) take actions to address such deficiencies; or
       (ii) certify to the appropriate committees of Congress that 
     no action is necessary or appropriate.
       (4) Coordination.--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.
       (5) Termination.--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.
       (6) Definitions.--For purposes of this subsection:
       (A) Office.--The term ``Office'' means the Office of Small 
     Business Lending Fund Program Oversight established under 
     paragraph (1).
       (B) Inspector general.--The term ``Inspector General'' 
     means the Inspector General of the Department of the 
     Treasury.
       Page 23, line 10, strike ``(b)'' and insert ``(c)''.

  The Acting CHAIR. Pursuant to House Resolution 1436, the gentleman 
from Ohio (Mr. Driehaus) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Ohio.
  Mr. DRIEHAUS. Madam Chair, I yield myself such time as I may consume.
  Madam Chair, we know that small businesses account for the majority 
of new jobs created in this country, and we know that making it easier 
for small businesses to borrow is essential to our continued economic 
recovery. This legislation will help small businesses access the credit 
they need to create the jobs that will move our economy forward, but we 
need to provide strong oversight to ensure that these loans are being 
put to use where they are most effective and put to use in a way that 
is responsible to the American taxpayer.
  The amendment I have offered with my colleagues from Virginia and 
Kansas will establish the Office of Small Business Lending Fund 
Oversight under the authority of the Treasury Inspector General. The 
Special Deputy Inspector General of the oversight office will be 
required to monitor the Small Business Loan Fund and to report to 
Congress at least twice a year with recommendations for improving the 
program.
  This amendment is about good government. It places no additional 
burdens on banks or small businesses. Instead, it makes a good bill 
better by ensuring accountability and transparency to the American 
people.
  We've seen what happens when government fails to provide adequate 
protections when special interests are put ahead of the public good. 
Now we're taking steps to make up for the years of lax oversight and 
neglected responsibility.
  Make no mistake, this bill is about creating jobs. Small business 
owners tell me constantly that they could begin hiring again if only 
they had access to credit and capital. This legislation will encourage 
banks to lend to small businesses, and my amendment will help protect 
taxpayers in the process.
  This bill will strengthen our economic recovery without adding a dime 
to the deficit. I encourage my colleagues to support this amendment as 
well as the underlying legislation.
  Madam Chair, I reserve the balance of my time.
  Mr. NEUGEBAUER. Madam Chair, I rise to claim time in opposition to 
the bill.
  The Acting CHAIR. The gentleman from Texas is recognized for 5 
minutes.
  Mr. NEUGEBAUER. This new capital injection program is designed to 
operate exactly like the TARP program but without any of the taxpayer 
protection or oversight bodies. Now, this amendment is intended to 
substitute for putting the experience of the Inspector General for this 
type of program in charge of this new fund.
  Republicans had an amendment that put the Special Inspector General 
for TARP, or SIGTARP, in charge of the oversight of this new fund, but 
the Rules Committee blocked it. Really, this creates a new regulator 
where we had an existing regulator in place for TARP-like programs, 
which this is, and we think that that was a better alternative. And now 
we want to put someone that doesn't have as much experience with this 
type of program in charge of oversight, and we just don't think that's 
in the best interest of the taxpayers.
  Republicans, as I want to remind the chairman, offered a number of 
amendments that would have given the taxpayers much more protection 
even than this amendment would. Unfortunately, again--and I don't want 
to be redundant here, but the Rules Committee, which is controlled by 
the majority, only allowed one Republican amendment to be heard while 
we've

[[Page H4536]]

had 16 amendments from the majority. Again, we wondered why Republican 
amendments to provide better protection and better oversight were 
blocked by the majority when I think the American people think that any 
kind of amendment that would have provided them more opportunity, more 
protection, and more oversight would have been in their best interest.
  We don't think that this amendment does the job that it needs to do, 
and therefore we're opposed to it.
  Madam Chair, I reserve the balance of my time.
  Mr. DRIEHAUS. Madam Chair, I would just comment on the gentleman's 
comments.
  Yes, those amendments were offered, but as you know, not a dime of 
TARP money is being used in this bill, so it's not appropriate for 
SIGTARP to have the oversight. In fact, Mr. Thorson, who will have the 
oversight, has incredible experience overseeing small business 
programs. Before becoming the Inspector General of the Treasury 
Department, Mr. Thorson served as the Inspector General for the Small 
Business Administration from 2006 to 2008. In that short time, his 
office uncovered what is believed to be the largest government-backed 
loan fraud scheme in history, roughly $75 million. As a result of that 
investigation, they arrested 15 people in one day. That's oversight.
  And so while the gentleman is asking for SIGTARP to have oversight, 
despite the fact that not a dime of TARP is being spent on this bill, 
we have oversight that is adequate, that is strong, that is contained 
in Treasury, that should have the oversight within this bill.
  Madam Chair, I yield 30 seconds to my colleague from Illinois (Ms. 
Bean).
  Ms. BEAN. I just want to applaud Congressmen Driehaus, Connolly, and 
Moore's efforts to improve the oversight of the SBLF program. This 
amendment importantly expands oversight to ensure taxpayer dollars are 
protected. I urge my colleagues to adopt the amendment.
  I would further rebut our colleague from Texas' inaccurate assertion 
that the program is not paid for. The gentleman knows full well that it 
is fully paid for and that, according to the CBO, the government will 
earn a profit.
  Mr. NEUGEBAUER. I concede to the gentleman that none of this money is 
coming from the TARP program; it probably should have because it's a 
TARP program. I want to just remind the gentleman that Neil Barofsky, 
the Special Inspector General who oversees TARP, said, In terms of its 
basic design, its participants, its application process, from an 
oversight perspective the Small Business Lending Fund would essentially 
be an extension of TARP's capital purchase program.
  From Elizabeth Warren, the SBLF's prospects are far from certain. The 
SBLF also raises the question whether, in light of the capital purchase 
program's poor performance in improving credit access, any capital 
infusion for the program can essentially jump-start small business 
lending. So everybody but the Democrats understands that this is a TARP 
program.
  Now, why did we want SIGTARP to have oversight? Because this is a 
TARP-like program. And just today it was released that SIGTARP helped 
bring a new lawsuit today for $1.9 billion in fraud collection with the 
failure of Colonial Bank. Colonial Bank received $553 million in TARP 
funds. To say that you're going to go out and put $33 billion into the 
marketplace and not suffer any losses at a time when we have over 100 
banks that have already missed one dividend payment--we've had one bank 
that has missed six dividend payments--and that several billion dollars 
have already been lost from some of these banks that were defaulted and 
were closed after the taxpayers had put money in there.
  And I go back to you saying, well, it doesn't cost the taxpayers any 
money. I keep asking the majority, where is the $33 billion for this 
program coming from?
  I yield to the gentleman.
  Mr. DRIEHAUS. Well, I appreciate your yielding because I would like 
to rebut your first point about the TARP.
  Mr. NEUGEBAUER. No. I would like the gentleman to answer the 
question----
  Mr. DRIEHAUS. There is not a dime of TARP money going into this bill. 
You are undermining the authority--or attempting to undermine the 
authority of the Inspector General of Treasury.
  Mr. NEUGEBAUER. I will reclaim my time if the gentleman is not going 
to answer my question. The question to the gentleman was, Where is the 
$33 billion coming from? If the gentleman wants to answer that 
question, I would love to yield him time. If he's not prepared to tell 
me where the $33 billion is coming from, then I would not yield the 
gentleman time.
  Mr. DRIEHAUS. As the gentleman knows, we disposed of that issue 
yesterday and we paid for it.
  Mr. NEUGEBAUER. No. The pay-for was to cover any potential losses, 
supposedly. But where is the $33 billion that you're going to invest in 
these banks coming from?
  Mr. DRIEHAUS. With all due respect to the gentleman, I know that this 
doesn't fit into the political framework of the Republicans to suggest 
that this is not TARP, this is not another bailout, this is about 
helping small businesses.
  Mr. NEUGEBAUER. I will reclaim my time because the gentleman 
obviously doesn't know where the $33 billion is coming from, which is 
part of the problem up here. People just think this money appears when 
you start saying I'm going to put $33 billion here or $100 billion 
here, $250 billion here; and nobody knows where the money is coming 
from. But the bottom line is we know where the money is coming from. 
We're going out and borrowing that money because the Treasury doesn't 
have $33 billion.
  Mr. DRIEHAUS. Madam Chair, the political framework of the Republicans 
is that they want to call everything a bailout. And when it's not a 
bailout, they want to act like it is. They want to call this TARP even 
when it's not. So this doesn't fit into the definition that they want 
to use out there on Fox News and elsewhere, but the fact of the matter 
is it's coming out of Treasury. Treasury deserves the oversight.
  Madam Chair, I yield 1\1/2\ minutes to the gentleman from Virginia 
(Mr. Connolly).
  Mr. CONNOLLY of Virginia. I thank my colleague from Ohio for his 
leadership and my friend from Illinois for her kind words.
  The Small Business Lending Fund Act will expand opportunities for 
small businesses to access critically needed capital today. Our 
amendment ensures that the program works as intended, that America's 
small businesses receive access to that capital and that taxpayers' 
loans are repaid.
  The lending facility encourages small business loans to credit-worthy 
companies, with the repaid funds and interest payments all going to 
reduce the deficit that our friends on the other side say they're 
concerned about.
  Small businesses will lead private sector job growth if they can 
obtain the necessary capital. The Office of Small Business Lending Fund 
Program Oversight established by our amendment will provide 
accountability and enhance the effectiveness of the lending fund, 
helping to spur a more robust small business sector.
  The current Treasury IG has a reputation for safeguarding taxpayer 
funds, as my friend from Ohio said. A review of the Office of Thrift 
Supervision uncovered six cases where it improperly allowed private 
thrifts to backdate capital deposits, allowing institutions like failed 
IndyMac to appear more solvent than they were. This amendment will 
correct that problem moving forward in the future. I urge its adoption.
  The Acting CHAIR. The gentleman from Ohio has 15 seconds remaining.
  Mr. DRIEHAUS. Madam Chair, I just want to remind the Members this 
amendment is about oversight; it's about doing our job to make 
government work properly. And while I realize it doesn't always fit 
into the political rhetoric of the other side, it is about good 
government. This isn't TARP; this isn't a bailout. This is about 
helping small businesses, moving the economy forward, and good 
government.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Ohio (Mr. Driehaus).
  The amendment was agreed to.


                Amendment No. 11 Offered by Mr. Michaud

  The Acting CHAIR. The Chair understands that amendment Nos. 9 and 10 
will not be offered.

[[Page H4537]]

  It is now in order to consider amendment No. 11 printed in part C of 
House Report 111-506.
  Mr. MICHAUD. Madam Chair, I have an amendment at the desk made in 
order under the rule.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 11 offered by Mr. Michaud:
       Page 30, line 14, after ``programs,'' insert the following: 
     ``State-run venture capital fund programs,''.
       Page 51, line 3, strike ``extends credit support that'' and 
     insert ``uses Federal funds allocated under this title to 
     extend credit support that''.

  The Acting CHAIR. Pursuant to House Resolution 1436, the gentleman 
from Maine (Mr. Michaud) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Maine.

                              {time}  1230

  Mr. MICHAUD. I yield myself such time as I may consume.
  Madam Chair, I rise today in support of my amendment to the Small 
Business Lending Fund Act.
  The amendment I offer today does two things to improve the underlying 
bill's State Small Business Credit Initiative program.
  First, it ensures that State-run venture capital programs are 
eligible to participate in the program. Second, it clarifies that State 
financing programs will be eligible for the program as long as their 
use of the new funds meets the business-sized requirements in the bill.
  The programs created in the Small Business Lending Fund Act build on 
the proven potential of existing State lending programs. In Maine, 
these programs have been enormously effective at getting small 
businesses the access to capital and to the technical support they 
need.
  My amendment ensures that States are able to maintain their existing 
initiatives while taking advantage of the new programs created in this 
bill.
  I urge my colleagues to support this amendment and the underlying 
bill.
  I reserve the balance of my time.
  Mr. NEUGEBAUER. Madam Chair, we do not object to this amendment.
  Mr. MICHAUD. Madam Chair, I would encourage my colleagues to adopt 
this amendment.
  I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Maine (Mr. Michaud).
  The amendment was agreed to.


                  Amendment No. 12 Offered by Mr. Cao

  The Acting CHAIR. It is now in order to consider amendment No. 12 
printed in part C of House Report 111-506.
  Mr. CAO. As the designee of the gentlewoman from Texas, I have an 
amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 12 offered by Mr. Cao:
       In section 6(6) of the bill, strike ``and'' at the end.
       In section 6(7) of the bill, strike the period at the end 
     and insert ``; and''.
       In section 6 of the bill, add at the end the following:
       (8) 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.

  The Acting CHAIR. Pursuant to House Resolution 1436, the gentleman 
from Louisiana (Mr. Cao) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Louisiana.
  Mr. CAO. I yield myself such time as I may consume.
  Madam Chair, I rise today in support of amendment No. 12 to H.R. 
5297, the Small Business Lending Fund Act of 2010, and I urge my 
colleagues to support this amendment.
  This amendment requires the Secretary of the Treasury to provide 
consideration, in the allocation of funds, to gulf region States in the 
areas where businesses and the economy have been adversely affected by 
the Deepwater Horizon oil spill.
  I thank the gentlewoman from Texas for her partnership in drafting 
this amendment and for her consideration for gulf coast communities 
during our time of crisis.
  I would also like to thank the gentleman from Alabama, the ranking 
member of the Financial Services Committee, for his ongoing assistance 
and support.
  The district that I represent includes Louisiana's Orleans and 
Jefferson Parishes. In my district and all across the gulf coast, we 
were still recovering from the devastating storms of 2005 when we were 
hit with the latest disaster.
  The oil spill in the Gulf of Mexico in April presents us with 
economic, environmental, and health challenges of unprecedented 
proportions. The shutters have gone down on businesses throughout the 
gulf region because they simply do not have the short-term or long-term 
resources to operate. Industries such as fishing and seafood 
processing, recreational fishing, restaurants, and tourism are all 
suffering disproportionately.
  I have spoken with hundreds of fishermen and oystermen from my 
district who are no longer able to fish the waters they and their 
families have fished for generations. Many have spoken of desperation 
in not knowing how they will provide for their families. Tens of 
thousands of claims have been filed through BP, and the SBA has made 
disaster loans available to businesses adversely affected by the oil 
spill, and they will defer loan payments for 1 year.
  These provide only temporary relief, however, and a long-term 
solution for economic assistance to the gulf region is what is needed 
now because the last thing we need is more unemployment. Without 
immediate economic assistance, the very businesses that in 2005 
returned to the Orleans and Jefferson Parishes, committed to our 
recovery, will be forced to leave.
  This amendment is a strong step in the right direction to providing 
desperately needed economic assistance, because it will see that small 
businesses along the gulf coast receive the credit necessary to keep 
our businesses alive. At the same time, it will spur new business which 
will be able to absorb any unavoidable and unfortunate job losses 
caused by the oil spill.
  Again, I urge my colleagues to pass this amendment, and I yield back 
the balance of my time.
  Ms. JACKSON LEE of Texas. I rise to claim time in opposition, but I 
will not oppose the amendment.
  The Acting CHAIR. Without objection, the gentlewoman from Texas is 
recognized for 5 minutes.
  There was no objection.
  Ms. JACKSON LEE of Texas. Madam Chair, I am delighted to have Mr. Cao 
join me in my amendment that I offered in the Rules Committee, and I am 
delighted that he was able to rise to claim the time for this 
amendment. This is an amendment that I have written, and I have asked 
Mr. Cao to join me, as he had a similar amendment. I appreciate very 
much the support that he has given, and I recognize the concerns that 
he has expressed.
  I want to support the underlying bill as well and to make note of the 
fact that small businesses are now facing the most difficult time in 
the worst recession in our history.
  According to a February 2010 report of the Federal Deposit Insurance 
Corporation, total bank loans and leases declined for the sixth 
straight quarter, with total loans to commercial and industrial 
borrowers declining by 4.3 percent and real estate construction 
development loans declining by 8.4 percent.
  What that means is that small businesses are taking the strongest 
hit. This bill will focus, in particular, on the question of providing 
a lending scheme, a lending structure, which is paid for to provide the 
start-up credit for our small businesses.
  Well, here we find ourselves addressing an enormous crisis that has 
occurred in the gulf. During the Memorial Day recess, I did a flyover 
of the gulf and of the Deepwater Horizon, and I saw the magnitude and 
the growth of this disaster. Somewhere between millions--or at least a 
million gallons--but somewhere between 20,000 and 40,000 barrels per 
day are gushing into the gulf. We don't know where this is going to 
stop.
  Many small businesses are impacted in the Gulf States. That would 
include Florida. That would include Texas.

[[Page H4538]]

That would include Alabama, Mississippi, and Louisiana. This amendment, 
for which I am delighted to be joined by Mr. Cao, will, in fact, cause 
lending institutions to focus resources on the small business 
community.
  Even Linda Smith, who owns the Alligator Cafe in Houston, Texas, is 
shut down because she cannot get product. When I visited New Orleans, 
there were restaurants that seemed to close early because they couldn't 
get product. What about the oystermen and shrimpers and fishermen who 
can't seem to get a lump sum payment from BP for which we've advocated?
  In speaking just a few minutes ago to an oysterman in Pointe a la 
Hache, he indicated he had not gotten his money. So, therefore, I am 
asking my colleagues to support this amendment.
  I reserve the balance of my time.
  Mr. CAO. Madam Chair, again, I just want to express my gratitude and 
appreciation to the gentlewoman from Texas. She has been a very strong 
voice and has been very committed to the gulf coast region and has been 
committed to helping the many people who are in desperate need. Again, 
I would like to convey to her my thanks.
  I yield back the balance of my time.
  Ms. JACKSON LEE of Texas. I thank the gentleman from Louisiana and 
New Orleans, especially for his leadership. I look forward to working 
with him as we go forward on legislation that addresses some of the 
concerns I have heard him express so as we may establish a real 
national energy policy.
  I would ask my colleagues to support this amendment. As I have 
indicated, I have obtained the time in opposition, but I will not 
oppose the amendment that we have both offered on the floor of the 
House. I will argue vigorously that this is an excellent opportunity to 
protect small businesses which are yet noted, which are yet listed, 
which are going to be impacted across that gulf from tourism in 
Florida, Alabama, Mississippi, on to the shrimpers, fishermen, 
oystermen, and to the restaurants that are now in conditions where they 
are shutting down and where they are letting go of their employees. 
They are pleading for assistance.
  This is a good amendment, and it is a good amendment to this 
legislation. It focuses on our small businesses, so I would ask my 
colleagues to support this amendment.
  I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Louisiana (Mr. Cao).
  The question was taken; and the Acting Chair announced that the ayes 
appeared to have it.
  Ms. JACKSON LEE of Texas. Madam Chair, I demand a recorded vote.
  The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from Louisiana 
will be postponed.


     Amendment No. 13 Offered by Ms. Loretta Sanchez of California

  The Acting CHAIR. It is now in order to consider amendment No. 13 
printed in part C of House Report 111-506.
  Ms. LORETTA SANCHEZ of California. Madam Chairwoman, I have an 
amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 13 offered by Ms. Loretta Sanchez of 
     California:
       Page 62, after line 15, insert the following:
       ``(8) The extent to which the applicant will concentrate 
     investment activities on small business concerns in targeted 
     industries.

  The Acting CHAIR. Pursuant to House Resolution 1436, the gentlewoman 
from California (Ms. Loretta Sanchez) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. LORETTA SANCHEZ of California. I yield myself such time as I may 
consume.
  Madam Chairwoman, I rise today in support of H.R. 5297, the Small 
Business Lending Fund Act.
  It is crucial in today's world that we further expand the potential 
of small businesses and of key industries that have proven to create 
jobs and to increase our manufacturing base here in the United States.
  As a former investor and financial analyst, I was particularly 
impressed with title III of this bill, the Small Business Early Stage 
Investment program. In recent years, we have seen a shift from the 
entrepreneur and small business start-up community, from the 
traditional loans and from leverage such as mortgaging our own homes, 
to using intellectual capital and innovation as our leverage.
  As a Californian, I understand the importance of start-up businesses 
and the economy as California makes up a large percentage of start-ups 
and venture capital funders. Creating a public-private partnership 
designed to channel investment capital to them is increasingly 
important in order to get our economy on track, which is why I 
submitted an amendment that would include additional criteria during 
the selection process of these investment companies.
  My amendment would ensure that, as part of the selection criteria, 
the small business administrator would examine the extent the 
investment company would concentrate its investment capital on our 
targeted industries. Such targeted industries have been historical in 
job and economic growth, such as the information technologies, life 
sciences, defense technologies, clean technology, and digital media.
  The small business start-ups are the backbone of our economy, and 
they will contribute to all of the sectors so that we can get our 
economy going again.
  I urge my colleagues to support this amendment and the underlying 
legislation.
  I reserve the balance of my time.

                              {time}  1245

  Ms. VELAZQUEZ. Madam Chair, while I am not opposed to the amendment, 
I rise to claim the time in opposition.
  The Acting CHAIR. Without objection, the gentlewoman from New York is 
recognized for 5 minutes.
  There was no objection.
  Ms. VELAZQUEZ. America's small businesses have always pioneered new 
economic fields and sectors. Today, small businesses continue to be 
some of our most creative innovators. As our Nation shifts away from 
the fossil fuels and seeks clean sources of energy, entrepreneurs are 
leading the way. Today, small businesses represent 90 percent of those 
companies operating in the renewable and energy efficiency industries.
  Small firms are also making important contributions in the realm of 
life sciences and biomedicine, uncovering groundbreaking therapies and 
medicines. Technologies used in our national defense have also been 
advanced by small businesses. Components of the Predator drone, for 
instance, were developed by small firms. And small businesses are 
helping develop new information technology and digital media services 
that better connect our world.
  The United States must continue to lead in all these areas if our 
economy is to remain strong in the long term. This type of innovation 
creates good-paying, highly skilled jobs. However, before these 
businesses can develop the next game-changing defense technology, 
unearth the next medical breakthrough, or discover a new source of 
clean energy, they need capital. The amendment before us simply ensures 
that the Small Business Early-Stage Investment program is targeted to 
fields like these, where there will be the biggest payoff for economic 
growth and job creation.
  Madam Chair, this is a good amendment. It will ensure the industries 
of tomorrow and future companies can secure financing to get off the 
ground. I urge my colleagues to vote ``yes.''
  I yield the balance of my time to the gentleman from Missouri (Mr. 
Graves).
  Mr. GRAVES of Missouri. Thank you, Madam Chair.
  Madam Chair, I rise in support of the amendment from the gentlewoman 
from California. If we're going to enact a program that's designed to 
target investment in certain industries, then selection of the 
applicants should be based on the likelihood that a venture capital 
company will make those amendments. As a result, I believe it provides 
a very important technical clarification to the bill, and I support it.
  Ms. LORETTA SANCHEZ of California. Madam Chair, first, I would like 
to thank our great chairwoman of the Small Business Committee. I know 
that she's a little under the weather

[[Page H4539]]

today, so we really appreciate that she would come down and speak on 
our amendment.
  As a Californian, I continue to go back every week to my district, 
and our small businesses are ailing. They're asking for help. They're 
holding on. A lot of them have not been able to make it through. Those 
who are still holding on are waiting for us to help them to do 
something.
  About a month ago, I had Chairman Bernanke before us in the Joint 
Economic Committee. And we talked about the fact that we need--really--
we need to help small business. Small business is really where the 
hiring of America happens. So if they're ailing, then there will be 
unemployment. So I really believe in this bill. I thank those who have 
worked on it. I urge a ``yes'' vote on the underlying bill and on this 
amendment.
  I have no further requests for time, and I yield back the balance of 
my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentlewoman from California (Ms. Loretta Sanchez).
  The amendment was agreed to.


                Amendment No. 14 offered by Mr. Cuellar

  The Acting CHAIR. It is now in order to consider amendment No. 14 
printed in part C of House Report 111-506.
  Mr. CUELLAR. Madam Chair, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 14 offered by Mr. Cuellar:
       Page 21, after line 18, insert the following new paragraph 
     (and redesignate succeeding paragraphs accordingly):
       (4) increasing the opportunity for small business 
     development in areas with high unemployment rates that exceed 
     the national average;

  The Acting CHAIR. Pursuant to House Resolution 1436, the gentleman 
from Texas (Mr. Cuellar) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. CUELLAR. Madam Chair, I yield myself such time as I may consume.
  I rise today in support of my amendment to H.R. 5297, the Small 
Business Lending Act of 2010. The concept of this bill is simple: 
Create a lending fund to help small businesses get important capital. 
This bill will help stabilize our economy and create jobs. And 
certainly I want to thank the chairwoman from New York and the 
gentlewoman from Illinois also for the work that they all have been 
working on.
  My particular commonsense amendment is straightforward. My amendment 
requires that the Secretary take into consideration those areas with 
high unemployment rates that exceed the national average. This 
consideration will increase opportunities for small business 
development in places where it's needed the most. The national 
unemployment rate is about 9.7, as of last month. There are certain 
communities suffering at rates severely above the State and national 
average for unemployment.
  Like many counties across the Nation, counties in my congressional 
district are particularly higher than the national rate. One of my 
counties, Starr County in south Texas, has a high of 17.3 unemployment 
rate. Hidalgo County is another one, at an 11.1 unemployment rate. 
Again, this is not a partisan matter. Areas throughout the country have 
unemployment rates that exceed the national average.
  This is a matter of importance to every worker and family and 
businessperson. And that's why this bill is good for the backbone of 
American small businesses, in many ways, the Nation's economic engine. 
I urge all of my colleagues to support this bill.
  At this time I will yield 1\1/2\ minutes to the gentleman from North 
Carolina (Mr. Etheridge).
  Mr. ETHERIDGE. Madam Chair, I thank Mr. Cuellar for offering this 
amendment to make sure that creating jobs where they are needed most is 
the focus of this piece of legislation.
  As a former small businessman myself, I call on the House to pass 
this important piece of legislation. Small businesses form the backbone 
of our economy and create jobs that we need to continue our recovery. 
But far too many are having difficulty getting the credit they need to 
grow and expand.
  Today we have the opportunity to do more than just praise small 
businesses and lament the credit crunch. We have a bill that frees up 
$30 billion directly for small businesses across our communities that 
are responsible for job growth in our country. Business leaders in 
Smithfield, community bankers in Dunn, and folks across my district in 
North Carolina have said that what they need most is to expand credit, 
and have shared their support of this initiative with me.
  Today, we have an opportunity to provide real help for our Main 
Street businesses. Let us avoid partisan bickering, end the delay, and 
pass this piece of legislation now.
  Mr. NEUGEBAUER. Madam Chair, I rise to claim time in opposition, 
although I am not opposed to the bill.
  The Acting CHAIR. Without objection, the gentleman from Texas is 
recognized for 5 minutes.
  There was no objection.
  Mr. NEUGEBAUER. I thank my friend from Texas.
  I think this is a commonsense amendment. I think if you're going to 
do this program--certainly, I don't support the underlying program, but 
if we are going to do it, we are going to put this capital into some of 
these banks for lending, it certainly ought to be in areas where they 
have the highest unemployment. That makes sense.
  I still think we can do better for small businesses by providing an 
environment where there's less uncertainty; more certainty on what the 
tax situation is going to be, and less uncertainty about what the 
regulatory environment is going to be. But I think the gentleman's 
amendment makes the underlying bill better. So we would not object to 
it.
  I yield back the balance of my time.
  Mr. CUELLAR. Madam Chair, I thank my colleague from Texas, and thank 
him for the kind words. And I appreciate it. I thank him for the work 
that he's been doing.
  At this time, Madam Chair, I'd certainly just want to ask my 
colleagues to support this. I'm also a former small businessperson, and 
I understand how hard capital can be to get to the small businesses. So 
I would ask Members to support my amendment.
  I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Texas (Mr. Cuellar).
  The amendment was agreed to.


             Amendment No. 15 Offered by Mr. Braley of Iowa

  The Acting CHAIR. It is now in order to consider amendment No. 15 
printed in part C of House Report 111-506.
  Mr. BRALEY of Iowa. Madam Chair, I have an amendment at the desk made 
in order under the rule.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 15 offered by Mr. Braley of Iowa:
       Add at the end the following new title:

                      TITLE IV--PLAIN WRITING ACT

     SECTION 401. SHORT TITLE.

       This title may be cited as the ``Plain Writing Act of 
     2010''.

     SEC. 402. PURPOSE.

       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.

     SEC. 403. DEFINITIONS.

       In this title:
       (1) Agency.--The term ``agency'' means the Department of 
     the Treasury and the Small Business Administration.
       (2) Covered document.--The term ``covered document''--
       (A) means any document that--
       (i) is relevant to obtaining any Federal Government benefit 
     or service provided under title I, II, or III;
       (ii) provides information about any Federal Government 
     benefit or service provided under title I, II, or III; or
       (iii) explains to the public how to comply with a 
     requirement the Federal Government administers or enforces 
     under title I, II, or III;
       (B) includes (whether in paper or electronic form) a 
     letter, publication, form, notice, or instruction; and
       (C) does not include a regulation.
       (3) Plain writing.--The term ``plain writing'' 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.

     SEC. 404. RESPONSIBILITIES OF FEDERAL AGENCIES.

       (a) Preparation for Implementation of Plain Writing 
     Requirements.--

[[Page H4540]]

       (1) In general.--Not later than 9 months after the date of 
     enactment of this title, the head of each agency shall--
       (A) designate 1 or more senior officials within the agency 
     to oversee the agency implementation of this title;
       (B) communicate the requirements of this title to the 
     employees of the agency;
       (C) train employees of the agency in plain writing;
       (D) establish a process for overseeing the ongoing 
     compliance of the agency with the requirements of this title;
       (E) create and maintain a plain writing section of the 
     agency's website that is accessible from the homepage of the 
     agency's website; and
       (F) designate 1 or more agency points-of-contact to receive 
     and respond to public input on--
       (i) agency implementation of this title; and
       (ii) the agency reports required under section 405.
       (2) Website.--The plain writing section described under 
     paragraph (1)(E) shall--
       (A) inform the public of agency compliance with the 
     requirements of this title; and
       (B) provide a mechanism for the agency to receive and 
     respond to public input on--
       (i) agency implementation of this title; and
       (ii) the agency reports required under section 405.
       (b) Requirement To Use Plain Writing in New Documents.--
     Beginning not later than 1 year after the date of enactment 
     of this title, each agency shall use plain writing in every 
     covered document of the agency that the agency issues or 
     substantially revises.
       (c) Guidance.--In carrying out the provisions of this 
     title, agencies may follow the guidance of--
       (1) the writing guidelines developed by the Plain Language 
     Action and Information Network; or
       (2) guidance provided by the head of the agency.

     SEC. 405. REPORTS TO CONGRESS.

       (a) Initial Report.--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.
       (b) Annual Compliance Report.--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.

  The Acting CHAIR. Pursuant to House Resolution 1436, the gentleman 
from Iowa (Mr. Braley) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Iowa.
  Mr. BRALEY of Iowa. Madam Chair, I yield myself such time as I may 
consume.
  My amendment to H.R. 5297 is a commonsense bill that is consistent 
with what we've already passed in the 111th Congress by a vote of 386-
33 on March 17. It was my Plain Language in Government Communications 
Act.
  Madam Chairwoman, when I go back and I talk to small business owners 
in my district, one of their biggest complaints is a Federal 
bureaucracy with too much red tape, written in language they can't 
understand, which forces them to go hire lawyers and accountants so 
that they can understand the requirements that we impose upon them.
  My amendment would require plain language to be used for documents 
that go to the public related to this lending fund. It will improve the 
effectiveness and accountability of the Department of the Treasury and 
the Small Business Administration by promoting clear government 
communication that the public can understand and use.
  Plain language is writing that the intended audience can clearly 
understand because it is concise, well-organized, and follows other 
practices of plain writing. The Department of the Treasury and Small 
Business Administration will be required to implement plain writing 
requirements by designating a senior official to oversee the 
implementation of the provision; communicate the requirements to 
employees; train employees in plain writing; establish a process to 
oversee compliance; create a plain language requirement on their 
agency's Web site; and designate one or more agency points of contact 
to receive and respond to public feedback.
  Writing government documents in plain language will increase 
government accountability and save taxpayers, community banks, and 
small business owners time and money. Plain, straightforward language 
makes it easier to understand these loan documents. And my amendment 
will make it easier for small businesses and community banks to work 
with and understand the government. That is why it is so important that 
we move forward to implement plain writing requirements across the 
board, but particularly in these two agencies, as it relates to the 
loan programs that are under consideration.
  I reserve the balance of my time.
  Mr. NEUGEBAUER. Madam Chair, I claim opposition to the amendment, but 
I am not opposed to it.
  The Acting CHAIR. Without objection, the gentleman is recognized for 
5 minutes.
  There was no objection.
  Mr. NEUGEBAUER. Well, I thank the gentleman for this commonsense 
amendment. It's unfortunate that we have to bring an amendment to the 
floor of the House of Representatives to tell government agencies to 
write out the instructions in plain English. But I appreciate the 
gentleman's amendment. I think it makes the bill better.
  I yield back the balance of my time.
  Mr. BRALEY of Iowa. Madam Chair, I would yield 1 minute to the 
gentlewoman from Illinois (Ms. Bean).
  Ms. BEAN. Madam Chairwoman, I just want to acknowledge Congressman 
Braley's efforts recognizing the challenges Americans have reading many 
government documents, particularly lending disclosures, which are very 
difficult to understand. This amendment is a commonsense approach to 
making the program more accessible. And I commend his leadership to 
expand plain language to all government documents.
  Mr. BRALEY of Iowa. Madam Chairwoman, I think that the comments that 
you've heard are indicative of what's wrong with the way the government 
agencies write their documents. I think it is deplorable that we have 
to take this action.
  But the sad truth is, anybody who's looked at these loan documents 
knows how serious this problem is. I think this is a small step in the 
right direction. I call this ``the little engine that could.'' I think 
if we implement this across the board in federal agencies, American 
taxpayers and consumers of Federal information will be much better off. 
And I urge my colleagues to vote in support of the amendment.
  I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Iowa (Mr. Braley).
  The amendment was agreed to.


                Amendment No. 16 Offered by Mr. Loebsack

  The Acting CHAIR. It is now in order to consider amendment No. 16 
printed in part C of House Report 111-506.
  Mr. LOEBSACK. Madam Chair, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 16 offered by Mr. Loebsack:
       Add at the end the following new title:
 TITLE IV--SENSE OF CONGRESS ON AGRICULTURE AND FARMING SMALL BUSINESS 
                                 LOANS

     SEC. 401. SENSE OF CONGRESS.

       It is the sense of the Congress that--
       (1) 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
       (2) attention should be given to ensuring there is adequate 
     small business credit and financing availability under this 
     Act in the agriculture and farming sectors.

  The Acting CHAIR. Pursuant to House Resolution 1436, the gentleman 
from Iowa (Mr. Loebsack) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Iowa.
  Mr. LOEBSACK. Madam Chair, I yield myself such time as I may consume.
  My amendment is simple. It states that farmers and rural communities 
should receive equal consideration through lending activities for small 
businesses, particularly our Nation's small- and mid-sized farms and 
agriculture operations, which make up the majority of our agriculture 
community.
  It also states that we should give attention to ensuring that there 
is adequate credit and financing available in the agriculture and 
farming sectors.
  While the amendment itself is simple, the issue is not. Throughout 
this

[[Page H4541]]

economic downtown, our rural communities and farmers have been 
struggling, just as our major metro areas have been. Many areas in my 
district in Iowa have unemployment rates above the national average. I 
have also seen examples of agriculture operations having a difficult 
time finding financing, and I have worked to try to assist such 
operations.

                              {time}  1300

  Unfortunately, our farmers and rural communities are often not 
discussed in the broader debate on how to encourage economic recovery. 
The persistence of rural poverty and hunger and the lack of rural 
development often go underreported as well. On a positive note, I was 
pleased to recently hold a series of rural development roundtables in 
my district with the under Secretary for Rural Development, Dallas 
Tonsager. I hope we can continue to build momentum nationally and 
ensure our farmers in rural communities can contribute to continued 
economic recovery.
  Agriculture and our Nation's farmers are consistently strong 
contributors to the economy and are certainly vital for the survival of 
our rural communities and vice versa. Many of our rural areas were 
struggling even before the downturn, and we continue to see a decline 
in the number of farmers and rural businesses. Often the loss of one 
rural business can have a domino effect throughout the community and 
surrounding areas. I think we need to be vigilant in bringing rural and 
farming issues to the forefront of the debates we have on economic 
development and, additionally, look at policies to promote access to 
and the development of new food market and supply chain improvements 
and related rural businesses.
  I hope my colleagues will agree on the need to bring attention to 
expanding the opportunities for agriculture and farming to contribute 
to the national and local economic recovery.
  I reserve the balance of my time.
  Mr. NEUGEBAUER. I rise to claim the time in opposition, although I am 
not opposed to the amendment.
  The Acting CHAIR. Without objection, the gentleman from Texas is 
recognized for 5 minutes.
  There was no objection.
  Mr. NEUGEBAUER. As the provisions in the bill say, loans to farmers 
in rural areas count as small business lending under the provisions of 
this bill. But just like the sponsor of the bill, I represent an 
agricultural district and understand how important access to credit is 
for farmers. I think this sense of Congress emphasizes that farming and 
ranching and agriculture is an integral part of our economy. It is an 
integral part of our small business community, and I think it 
highlights that. So I appreciate the gentleman from Iowa bringing that 
forward. I support the amendment.
  I yield back the balance of my time.
  Mr. LOEBSACK. Madam Speaker, I want to thank my colleagues for their 
consideration of this amendment, and I want to urge its passage, and I 
yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Iowa (Mr. Loebsack).
  The amendment was agreed to.


           Amendment No. 17 Offered by Mr. Al Green of Texas

  The Acting CHAIR. It is now in order to consider amendment No. 17 
printed in part C of House Report 111-506.
  Mr. AL GREEN of Texas. Madam Chair, as the designee of the 
gentlewoman from California, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 17 offered by Mr. Al Green of Texas:
       Page 11, line 2, before the period insert the following: 
     ``, as well as a plan to provide linguistically and 
     culturally appropriate outreach, where appropriate''.
       Page 18, line 8, after ``provide'' insert the following: 
     ``linguistically and culturally appropriate''.
       Page 18, line 9, strike ``appropriate language of the''.
       Page 21, line 13, after ``funding to'' insert the 
     following: ``minority-owned eligible institutions and 
     other''.
       Page 26, line 2, insert after the period the following: 
     ``To the extent possible, the Secretary shall disaggregate 
     the results of such study by ethnic group and gender.''.

   The Acting CHAIR. Pursuant to House Resolution 1436, the gentleman 
from Texas and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. AL GREEN of Texas. Madam Chair, this amendment is one that will 
add additional language to the requirement that there be minority 
outreach in this program. It's important for me to state that I have a 
district that I represent that is currently about 36 percent African 
American, 31 percent Latino, 21 percent Anglo, and 12 percent Asian. 
It's important to note that in my district the ballot is printed in 
three languages. It's printed in English, Spanish and Vietnamese.
  This amendment furthers the notion that persons who speak languages 
other than English will have an opportunity to have materials that are 
linguistically and culturally sensitive. This amendment would require 
that appropriate materials, when published, be in languages that are 
culturally and linguistically sensitive. It also requires that 
advertising receive the same sort of consideration, given that we are 
trying to reach markets wherein we do have persons who can better 
understand what is being conveyed if they have the opportunity to do so 
in a language that they are comfortable with.
  By the way, I would add that many people who speak English have 
difficulty with financial documents, as was indicated by a previous 
amendment. Imagine, if you will, speaking English, but it is not a 
language that you are as comfortable with as perhaps another language. 
This would assist persons with the understanding that they should have, 
so as to participate in the program.
  The amendment also would have data disaggregated. We find that the 
information that we collect too often does not disaggregate as it 
relates to the Asian American community, and we would have this 
information disaggregated so that we might ascertain whether or not we 
have persons who are not only of wealth in the community but also find 
out about persons who may not be as wealthy as many others.
  With this said, I will reserve the balance of my time.
  Mr. NEUGEBAUER. I rise to claim the time in opposition, although I am 
not opposed to the bill.
  The Acting CHAIR. Without objection, the gentleman from Texas is 
recognized for 5 minutes.
  There was no objection.
  Mr. NEUGEBAUER. I thank the gentleman for that. Basically, the 
amendment would require an applicant for the Small Business Lending 
Fund to plan for logistically and culturally appropriate outreach and 
require that such outreach is performed after receiving the funds. I 
think that could be appropriate there. And as I understand it, the 
requirements of this fall to the eligible institutions; and there's no 
additional money appropriated for that; but they would do that out of 
their own operating expenses. Is that correct?
  Mr. AL GREEN of Texas. If the gentleman yields, I would add that your 
assumption is correct.
  Mr. NEUGEBAUER. Thank you. I appreciate it.
  I yield back the balance of my time.
  Mr. AL GREEN of Texas. Madam Chair, at this time I yield as much time 
as she may consume to the gentlewoman from California (Ms. Chu).
  Ms. CHU. Madam Chair, the Small Business Lending Fund Act is critical 
to helping small businesses across the country and is, therefore, 
critical to helping people because small businesses create more jobs 
than anyone else. Small businesses sustain their communities.
  Our amendment ensures that we don't leave minority business owners 
behind. Minority businesses need every opportunity to grow, create 
jobs, and contribute to their community. But there are barriers. Our 
amendment makes sure that bank lending plans, outreach, and advertising 
are culturally and linguistically appropriate for diverse sets of 
businesses. This provision is essential for the Asian American and 
Pacific Islander communities because government programs can miss 
important details when they don't account for cultural and linguistic 
differences.
  Take the Census Bureau, for instance, which provides so many funds

[[Page H4542]]

for our communities. Earlier this year, they mistranslated parts of the 
Vietnamese census forms. The forms used a phrase connected to the 
previous governmental regime which meant ``government investigation'' 
in place of the word ``census.'' Clearly this was no minor gaffe. The 
language in this amendment ensures that future outreach doesn't repeat 
these mistakes, that is, excluding deserving businesses from great 
opportunities.
  But it's not just minority businesses that need access to this 
program. Minority-owned banks also deserve the right to compete. That's 
why our amendment makes sure such institutions receive consideration 
during the program's implementation. Minority-owned banks play a vital 
role in the Asian Pacific Islander and minority business development 
endeavor; and together they enhance the country's economic recovery and 
long-term growth. Minority firms currently provide nearly 5 million 
steady jobs but could potentially create over 11 million more. Our 
amendment helps them do so.
  I ask my colleagues to support this amendment because it eliminates 
obstacles in the way of our Nation's minority businesses and 
facilitates their growth during these very tough economic times.
  Mr. AL GREEN of Texas. I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Texas (Mr. Al Green).
  The amendment was agreed to.
  Ms. BEAN. Madam Chair, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Ms. 
Chu) having assumed the chair, Ms. Norton, Acting Chair of the 
Committee of the Whole House on the State of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 5297) to 
create the Small Business Lending Fund Program to direct the Secretary 
of the Treasury to make capital investments in eligible institutions in 
order to increase the availability of credit for small businesses, and 
for other purposes, had come to no resolution thereon.

                          ____________________