[House Report 111-506]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     111-506

======================================================================

 
   PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 5486) TO AMEND THE 
   INTERNAL REVENUE CODE OF 1986 TO PROVIDE TAX INCENTIVES FOR SMALL 
   BUSINESS JOB CREATION, AND FOR OTHER PURPOSES; AND PROVIDING FOR 
  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

                                _______
                                

   June 14, 2010.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

   Ms. Pingree, from the Committee on Rules, submitted the following

                              R E P O R T

                      [To accompany H. Res. 1436]

    The Committee on Rules, having had under consideration 
House Resolution 1436, by a non-record vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of H.R. 5486, the 
Small Business Jobs Tax Relief Act of 2010, under a closed 
rule. The resolution provides one hour of general debate 
equally divided and controlled by the chair and ranking 
minority member of the Committee on Ways and Means. The 
resolution waives all points of order against consideration of 
the bill except those arising under clause 9 or 10 of rule XXI. 
The resolution provides that the bill shall be considered as 
read. The resolution waives all points of order against the 
bill. This waiver does not affect the point of order available 
under clause 9 of rule XXI (regarding earmark disclosure). The 
resolution provides one motion to recommit H.R. 5486 with or 
without instructions.
    The resolution provides for consideration of H.R. 5297, the 
Small Business Lending Fund Act of 2010, under a structured 
rule. The resolution provides one hour of general debate 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 
resolution waives all points of order against consideration of 
the bill except for clauses 9 and 10 of rule XXI. The 
resolution provides that in lieu of the amendment in the nature 
of a substitute recommended by the Committee on Financial 
Services the amendment in the nature of a substitute printed in 
part A of this report, modified by the amendment printed in 
part B of this report, shall be considered as an original bill 
for the purpose of amendment and shall be considered as read. 
The resolution waives all points of order against the amendment 
in the nature of a substitute. This waiver does not affect the 
point of order available under clause 9 of rule XXI (regarding 
earmark disclosure).
    The resolution makes in order only those amendments printed 
in part C of this report. The resolution provides that the 
amendments made in order may be offered only in the order 
printed in this report, may be offered only by a Member 
designated in this report, shall be considered as 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. The resolution waives all 
points of order against the amendments printed in part C of 
this report except for clauses 9 and 10 of rule XXI. The 
resolution provides one motion to recommit H.R. 5297 with or 
without instructions.
    The resolution provides that the Chair may entertain a 
motion that the Committee rise only if offered by the chair of 
the Committee on Financial Services or his designee and 
provides that the Chair may not entertain a motion to strike 
out the enacting words of the bill (as described in clause 9 of 
rule XVIII).
    The resolution provides that in the engrossment of H.R. 
5297, the Clerk is authorized to make technical and conforming 
changes to amendatory instructions. It also provides that in 
the engrossment of H.R. 5297, the Clerk shall add the text of 
H.R. 5486, as passed by the House, at the end of H.R. 5297 and 
that H.R. 5486 shall be laid on the table.
    The resolution waives clause 6(a) of rule XIII for a two-
thirds vote to consider a report from the Committee on Rules on 
the same day it is presented to the House with respect to any 
resolution reported through the legislative day of June 18, 
2010, providing for consideration or disposition of any Senate 
amendment to the House amendment to the Senate amendment to the 
bill (H.R. 4213) to amend the Internal Revenue Code of 1986 to 
extend certain expiring provisions, and for other purposes.
    The resolution provides that measures may be considered 
under suspension of the rules at any time through the 
legislative day of June 18, 2010. The Speaker or her designee 
shall consult with the Minority Leader or his designee on the 
designation of any matter for consideration pursuant to this 
section.

                         EXPLANATION OF WAIVERS

    Although the rule waives all points of order against 
consideration of H.R. 5486 (except for clauses 9 and 10 of rule 
XXI) and all points of order against H.R. 5486 the Committee is 
not aware of any points of order. The waivers of all points of 
order are prophylactic.
    Although the rule waives all points of order against 
consideration of H.R. 5297 (except for clauses 9 and 10 of rule 
XXI) the Committee is not aware of any points of order. The 
waiver is prophylactic. The waiver of all points of order 
against the amendment in the nature of a substitute to H.R. 
5297 includes a waiver of clause 4 of rule XXI (prohibiting 
appropriations in legislative bills) and a waiver against 
clause 10 of rule XXI (regarding PAYGO).

                            COMMITTEE VOTES

    The results of each record vote on an amendment or motion 
to report, together with the names of those voting for and 
against, are printed below:

Rules Committee record vote No. 444

    Date: June 14, 2010.
    Measure: H.R. 5297/H.R. 5486.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Hensarling (TX) and Rep. 
Cummings (MD), #55, which would give the Special Inspector 
General for TARP (SIGTARP) oversight responsibility for the 
SBLF to ensure that bailout recipients aren't able to escape 
effective oversight.
    Results: Defeated 2-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Pingree--Nay; Polis--Nay; Dreier--
Yea; Foxx--Yea.

Rules Committee record vote No. 445

    Date: June 14, 2010.
    Measure: H.R. 5297/H.R. 5486.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Hensarling (TX), #36, which 
would state that banks must have a CAMELS rating of 1 or 2 in 
order to be eligible for SBLF funds.
    Results: Defeated 2-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Pingree--Nay; Polis--Nay; Dreier--
Yea; Foxx--Yea.

Rules Committee record vote No. 446

    Date: June 14, 2010.
    Measure: H.R. 5297/H.R. 5486.
    Motion by: Mr. Dreier.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Reps. Bean (IL)/Rep. Dahlkemper 
(PA)/Lipinski (IL)/Quigley (IL)/Welch (VT)/Moore (KS)/Peters 
(MI)/Ellsworth (IN)/Hill (IN)/Hodes (NH)/Halvorson (IL)/Klein 
(FL)/Markey (CO)/Michaud (ME)/Holden (PA)/Murphy (NY), #56, 
which would temporarily expand the SBA 504 loan program to 
allow commercial real estate and fixed asset refinancing for 
small business owners current on payments. It would raise caps 
on SBA 504 guarantees to $5 million and to $5.5 million for 
small manufacturers.
    Results: Defeated 2-6.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Perlmutter--Nay; Pingree--Nay; Polis--Nay; 
Dreier--Yea; Foxx--Yea.

Rules Committee record vote No. 447

    Date: June 14, 2010.
    Measure: H.R. 5297/H.R. 5486.
    Motion by: Dr. Foxx.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. Bachmann (MN), #7, which would 
redirect federal funds withheld from States found in 
noncompliance with this act to pay down the national debt.
    Results: Defeated 2-7.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Perlmutter--Nay; Pingree--Nay; 
Polis--Nay; Dreier--Yea; Foxx--Yea.

Rules Committee record vote No. 448

    Date: June 14, 2010.
    Measure: H.R. 5297/H.R. 5486.
    Motion by: Dr. Foxx.
    Summary of motion: To make in order and provide appropriate 
waivers for an amendment by Rep. McClintock (CA), #15, which 
would prohibit authorization of appropriations by this bill 
from being effective following a year with a federal budget 
deficit.
    Results: Defeated 2-7.
    Vote by Members: McGovern--Nay; Hastings (FL)--Nay; 
Matsui--Nay; Cardoza--Nay; Perlmutter--Nay; Pingree--Nay; 
Polis--Nay; Dreier--Yea; Foxx--Yea.

  SUMMARY OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE IN PART A TO 
              H.R. 5297 TO BE CONSIDERED AS ORIGINAL TEXT

    The amendment includes the text of H.R. 5297 as reported 
from the Committee on Financial Services, with the addition of 
Title III, which would establish at the Small Business 
Administration (SBA) a program to provide equity financing 
support to early-stage and high growth small businesses.

  SUMMARY OF AMENDMENT IN PART B TO THE AMENDMENT IN THE NATURE OF A 
     SUBSTITUTE TO H.R. 5297 IN PART A TO BE CONSIDERED AS ADOPTED

    The amendment would (1) clarify the pricing for the 
investment held past the initial repayment period; (2) would 
add Community Development Financial Institutions as an eligible 
institution; (3) would clarify what ``other financial 
instruments'' include; (4) would clarify reporting requirements 
for banks participating in the Fund; (5) would clarify 
regulator consultation requirements for underwriting Fund 
applications; (6) would clarify how installment amounts are 
transferred to States and requires repayment for intentional 
audit misstatements; (7) would insert a requirement for States 
to provide a plan for access to Fund proceeds for small 
businesses in underserved communities; (8) would provide that 
the Small Business Lending Fund, the State Small Business 
Credit Initiative, and the Small Business Early-Stage 
Investment Program would receive direct appropriations, instead 
of authorization for appropriations; (9) would require 
certification that institutions participating in the programs 
provided for under the Act are in compliance with laws 
regarding immigration status and sex offender status; and (10) 
would prohibit the viewing pornography by Federal employees 
working on the programs created under the Act. The amendment 
also includes a provision indicating that, in order to comply 
with the Statutory Pay-As-You-Go Act of 2010, the budgetary 
effects of the legislation shall be determined by reference to 
a statement of budgetary effects submitted for printing in the 
Congressional Record by the chair or chairs of the Committee on 
the Budget.

SUMMARY OF THE FURTHER AMENDMENTS IN PART C TO H.R. 5297 TO BE MADE IN 
                                 ORDER

    1. Israel (NY), Barrow (GA): Would add veteran- and women- 
owned businesses to the groups that will receive outreach under 
the Small Business Lending Fund established by the bill. It 
would add veteran-owned businesses to those businesses that 
should receive consideration in the Fund, add veterans to the 
study on lending assistance, and require the study to report 
not just on the number of loans made to women-, veteran- and 
minority-owned businesses, but the percent of loans that go to 
them as a part of the program. (10 minutes)
    2. Schrader (OR): Would establish the Small Business 
Borrower Assistance Program which will create a fund for 7(a) 
loan borrowers to use if they need help paying the principal or 
interest payments of their small business loans. (10 minutes)
    3. Nye (VA): Would add four stipulations to the Small 
Business Lending Fund to safeguard small businesses in the 
bill: 1) base SBLF incentives on number of loans an institution 
makes, not just the total dollars of loans; 2) include Small 
Business Lending Centers with less than $10 billion in assets 
as qualified financial institutions to participate in the SBLF; 
3) add the SBA definition to define what a small business is; 
and 4) change the base lending amount from a comparison of the 
fourth quarter of 2009, to a full year of data. (10 minutes)
    4. Minnick (ID), Simpson (ID), Kosmas (FL), Quigley (IL), 
Marchant (TX): Would make non-owner occupied commercial real 
estate loans eligible for the program. (10 minutes)
    5. Perlmutter (CO), Gutierrez (IL), Klein, Ron (FL), Kagen 
(WI): Would allow small banks to amortize losses or write-downs 
on commercial real estate loans over a 10-year period, freeing 
up more capital for these small institutions to lend to small 
businesses. (10 minutes)
    6. Price, Tom (GA): Would express the Sense of Congress 
that small business lending is being hindered by mixed messages 
from federal financial regulators. (10 minutes)
    7. Green, Al (TX): Would improve disclosures by eligible 
institutions receiving funding under the program. (10 minutes)
    8. Driehaus (OH), Connolly (VA), Moore, Dennis (KS): Would 
institute a new Office of Small Business Lending Fund 
Oversight. (10 minutes)
    9. Peters (MI): Would give Treasury the authority to recoup 
funds transferred to states before an audit is conducted if the 
audit finds that the state misused the funds. (10 minutes)
    10. Miller, Brad (NC), Baca (CA): Would, for purposes of 
the SBLF, allow the amount of lending reported as construction, 
land development, and other land loans in domestic offices to 
be included in the determination of the amount of a banks small 
business lending. To be eligible, the amendment would require 
the applicant that intends to use an SBLF investment for 
construction to notify the Secretary at the time of the 
application's submission. (10 minutes)
    11. Michaud (ME): Would ensure that state-run venture 
capital fund programs will be able to qualify as ``state other 
credit support programs,'' as long as they do not use funds 
under H.R. 5297 to lend to businesses with more than 750 
employees. It would clarify that state-run venture capital fund 
programs will be able to qualify as ``state other credit 
support programs,'' as long as they meet all other 
requirements. (10 minutes)
    12. Jackson Lee (TX), Cao (LA): Would provide funding to 
eligible institutions that serve small businesses in 
communities that have suffered negative economic effects as a 
result of the Deepwater Horizon oil spill with particular 
consideration to States along the coast of the Gulf of Mexico. 
(10 minutes)
    13. Sanchez, Loretta (CA): Would include as part of the 
selection criteria for investment companies the extent to which 
the applicant will concentrate investment activities on small 
business concerns in targeted industries. (10 minutes)
    14. Cuellar (TX): Would require the Secretary to take into 
consideration areas with high unemployment rates that exceed 
the national average to increase opportunities for small 
business development. (10 minutes)
    15. Braley (IA): Would require the use of plain writing by 
the Department of the Treasury and the Small Business 
Administration for documents relevant to obtaining a benefit or 
service under the bill. (10 minutes)
    16. Loebsack (IA): Would include a Sense of Congress 
stating that agriculture operations, farms, and rural 
communities should receive equal consideration through lending 
activities for small businesses, particularly small and mid-
size farms and agriculture operations; and attention should be 
given to ensuring there is adequate small business credit and 
financing availability in the agriculture and farming sectors. 
(10 minutes)
    17. Chu (CA), Honda (CA), Green, Al (TX), Carson (IN): 
Would (1) require the inclusion of linguistically and 
culturally appropriate outreach where appropriate to the 
applicant's small business lending plan; (2) provide for 
linguistically and culturally appropriate minority outreach and 
advertising; (3) explicitly state minority-owned financial 
institutions are eligible for consideration of by the Secretary 
for funding; and (4) require the Secretary, to the extent 
possible, to disaggregate the results of the report on women-
owned and minority-owned business by ethnic group and gender. 
(10 minutes)

  PART A--TEXT OF THE AMENDMENT IN THE NATURE OF A SUBSTITUTE TO H.R. 
                 5297 TO BE CONSIDERED AS ORIGINAL TEXT

  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 Lending Fund 
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; and
                  (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).
          (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 
                assets of equal to or less than 
                $10,000,000,000; and
                  (C) any savings and loan holding company 
                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 
                defined by and reported in an eligible 
                institution's quarterly call report, of the 
                following types:
                          (i) Commercial and industrial loans 
                        plus.
                          (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)).

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.
          (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.
  (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 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.
          (2) Consultation with regulators.--For each eligible 
        institution that applies to receive a capital 
        investment under the Program, the Secretary shall 
        consult with the appropriate Federal banking agency for 
        the eligible institution to determine whether the 
        eligible institution may receive such capital 
        investment.
          (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) 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 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 repaid by the end of 
                the 10-year period that begins on the date of 
                the capital investment under the Program.
          (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 ever missed a dividend payment due 
                under the CPP.
          (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 regulations defining minimum underwriting 
        standards that must be used for loans made by the 
        eligible institution using such funds.

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 enter into contracts, including 
        contracts for services authorized by section 3109 of 
        title 5, United States Code.
          (3) The Secretary may designate any bank, savings 
        association, trust company, security broker or dealer, 
        asset manager, or investment adviser as a financial 
        agent of the Federal Government and such institution 
        shall perform all such reasonable duties related to 
        this 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.
          (4) The Secretary may exercise any rights received in 
        connection with any preferred stock or other financial 
        instruments or assets purchased or acquired pursuant to 
        the authorities granted under this title.
          (5) Subject to section 4(b)(3), the Secretary may 
        manage any assets purchased under this title, including 
        revenues and portfolio risks therefrom.
          (6) The Secretary may sell, dispose of, transfer, 
        exchange or enter into securities loans, repurchase 
        transactions, or other financial transactions in regard 
        to, any preferred stock or other financial instrument 
        or asset purchased or acquired under this title, upon 
        terms and conditions and at a price determined by the 
        Secretary.
          (7) The Secretary may manage or prohibit conflicts of 
        interest that may arise in connection with the 
        administration and execution of the authorities 
        provided under this title.
          (8) The Secretary may establish and use vehicles, 
        subject to supervision by the Secretary, to purchase, 
        hold, and sell preferred stock or other financial 
        instruments and issue obligations.
          (9) The Secretary may, in consultation with the 
        Administrator of the Small Business Administration, 
        issue such regulations and other guidance as may be 
        necessary or appropriate to define terms or carry out 
        the authorities or purposes of this 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.

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 authorized to be 
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
                  (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).
          (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) 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--
          (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.
          (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.

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.
          (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) Authorization of Appropriations.--There are authorized to 
be 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.

        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.
  ``(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. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated to carry out the 
program $1,000,000,000.''.

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.

     PART B--TEXT OF AMENDMENT TO THE AMENDMENT IN THE NATURE OF A 
     SUBSTITUTE TO H.R. 5297 IN PART A TO BE CONSIDERED AS ADOPTED

  Page 1, beginning on line 4, strike ``Small Business Lending 
Fund Act of 2010'' and insert ``Small Business Jobs and Credit 
Act of 2010''.

  Page 3, line 5, strike ``and''.

  Page 3, line 12, strike the period and insert ``; and''

  Page 3, after line 12, insert the following:

                  (D) standard reports of Condition and Income 
                submitted by Community Development Financial 
                Institution loan funds to the Community 
                Development Financial Institutions Fund.

  Page 4, line 24, after ``total'' insert ``consolidated''.

  Page 4, line 25, strike ``and''.

  Page 5, line 3, strike the period and insert ``; and''.

  Page 5, line 2, after ``total'' insert ``consolidated''.

  Page 5, after line 3, insert the following:

                  (D) any community development financial 
                institution loan fund which has total assets of 
                equal to or less than $10,000,000,000.

  Page 6, beginning on line 3, strike ``loans plus.'' and 
insert ``loans.''.

  Page 6, after line 25, insert the following paragraphs:

          (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.

  Page 7, line 20, insert after the period the following: ``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''.

  Page 8, after line 5, insert the following new paragraph:

          (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 standards.--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.

  Page 10, line 23, after ``agency'' insert the following: 
``and, for applicants that are State-chartered banks, to the 
appropriate State banking regulator,''.

  Page 11, after line 3, insert the following subparagraph:

                  (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.

  Page 11, strike lines 7 through 10 and insert the following:

        shall--
                  (A) consult with the appropriate Federal 
                banking agency 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.

  Page 11, line 8, after ``agency'' insert the following: ``or, 
in the case of an eligible institution that is a non-depository 
community development financial institution, the Community 
Development Financial Institution Fund,''.

  Page 11, after line 20, insert the following new 
subparagraph:

                  (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.

  Page 11, line 21, strike ``(B)'' and insert ``(C)''.

  Page 17, beginning on line 7, strike ``shall be repaid by the 
end of the 10-year period that begins on the date of the 
capital investment under the Program.'' and insert the 
following:

                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).

  Page 17, after line 9, insert the following new subparagraph:

                  (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.

  Page 18, strike lines 1 through 5 and insert the following 
new subparagraph:

                  (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 
                dividend payment.

  Page 19, beginning on line 1, strike ``regulations defining 
minimum underwriting standards'' and insert ``guidance 
regarding prudent underwriting standards''.

  Page 19, line 4, insert after the period the following: ``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''.

  Page 19, after line 4, insert the following new paragraph:

          (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.

  Page 19, strike lines 16 through 18 (and redesignate 
subsequent paragraphs accordingly).

  Page 23, after line 13, insert the following new subsections:

  (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 
        minimum, requires financial institutions, as that term 
        is defined in 31 U.S.C. 5312(a)(2) and (c)(1)(A), to 
        implement reasonable procedures to verify the identity 
        of any person seeking to open an account, to the extent 
        reasonable and practicable, maintain records of the 
        information used to verify the person's identity, and 
        determine whether the person appears on any lists of 
        known or suspected terrorists or terrorist 
        organizations provided to the financial institution by 
        any government agency.
          (2) Loan 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 child pornography, on a Federal Government computer 
or while performing official Federal Government duties.

  Page 23, beginning on line 20, strike ``authorized to be''.

  Page 35, after line 7, insert the following new subparagraph:

                  (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.

  Page 36, after line 14, insert the following new paragraph:

          (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.

  Page 36, line 15, strike ``(5)'' and insert ``(6)''.

  Page 49, after line 4, insert the following new paragraph:

          (8) Capital access for small businesses in 
        underserved communities.--At the time that a State 
        applies to the Secretary to have the State capital 
        access program approved as eligible for Federal 
        contributions, the State shall deliver to the Secretary 
        a report stating how the State plans to use the Federal 
        contributions to the reserve fund to provide access to 
        capital for small businesses in low- and moderate-
        income, minority, and other underserved communities, 
        including women- and minority-owned small businesses.

  Page 57, line 19, strike ``Authorization of''.

  Page 57, line 20, strike ``are authorized to be'' and insert 
``is hereby''.

  Page 58, after line 21, insert the following new subsections:

  (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.

  Page 69, strike lines 9 through 11 and insert the following 
new sections:

``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 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.
  ``(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 
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.''.

  Add at the end the following new title:

                        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 statement titled 
``Budgetary Effects of PAYGO Legislation'' for this Act, 
submitted for printing in the Congressional Record by the 
Chairman of the House Budget Committee, provided that such 
statement has been submitted prior to the vote on passage.

PART C--TEXT OF THE FURTHER AMENDMENTS TO H.R. 5297 TO BE MADE IN ORDER

1. An Amendment To Be Offered by Representative Israel, of New York, or 
                 His Designee, Debatable for 10 Minutes

  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: 
``, vet-
eran-,''.
  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: 
``, vet-
eran-,''.
                              ----------                              


2. An Amendment To Be Offered by Representative Schrader, of Oregon, or 
                 His Designee, Debatable for 10 Minutes

  Add at the end the following new title:

          TITLE IV--SMALL BUSINESS BORROWER ASSISTANCE PROGRAM

SEC. 401. SMALL BUSINESS BORROWER ASSISTANCE PROGRAM.

  (a) In General.--The Administrator shall carry out a program 
to be called the ``Small Business Borrower Assistance Program'' 
to provide payments of principal and interest on qualifying 
small business loans.
  (b) Automatic Enrollment; Commitment of Funds.--
          (1) In general.--To the extent funds are available 
        under the Program, each borrower that receives a 
        qualifying small business loan after the date on which 
        the Administrator issues regulations pursuant to 
        subsection (e) shall be automatically enrolled in the 
        Program, unless the borrower requests otherwise, and 
        the Administrator shall commit an amount to each 
        borrower equal to 6 percent of the principal disbursed 
        amount of such borrower's qualifying small business 
        loan.
          (2) One year window for participating in program.--
        Notwithstanding paragraph (1), a borrower may only be 
        enrolled in the Program if the borrower is approved for 
        a qualifying small business loan before the end of the 
        1-year period following the date on which the 
        Administrator issues final regulations pursuant to 
        subsection (e).
          (3) Termination of participation in certain 
        circumstances.--In any instance in which the 
        Administrator determines that a borrower participating 
        in the Program has committed fraud or made a material 
        misrepresentation related to such participation, the 
        Administrator may terminate such borrower's 
        participation in the Program and ban such borrower from 
        any future participation in the Program.
  (c) Disbursement of Funds.--
          (1) In general.--A borrower enrolled in the Program 
        may submit a request for the payment of committed funds 
        by a method to be developed by the Administrator.
          (2) Multiple disbursements permitted.--A borrower 
        enrolled in the Program may request multiple payments 
        under paragraph (1), as long as the aggregate amount of 
        such payments does not exceed the amount committed to 
        such borrower under subsection (b).
  (d) Terms.--
          (1) Payments only to lender or servicer.--Payments 
        made by the Administrator under the Program shall only 
        be made to the lender or servicer of a qualifying small 
        business loan to be applied against outstanding 
        principal or interest, and may not be made to the 
        borrower.
          (2) Program participation only permitted during first 
        2 years.--
                  (A) In general.--Payments made by the 
                Administrator under the Program may only be 
                made with respect to a payment of interest or 
                principal due on a qualifying small business 
                loan within the 2-year period following the 
                date on which such loan is disbursed.
                  (B) Unexpended committed funds.--
                          (i) In general.--With respect to any 
                        funds committed to a borrower enrolled 
                        in the Program that remain unexpended 
                        at the end of the 2-year period 
                        described under subparagraph (A), such 
                        funds shall be paid to the lender or 
                        servicer of the borrower's loan and 
                        applied to the principal of such loan.
                          (ii) Exception.--In any case in which 
                        the amount of committed funds that 
                        remain unexpended is greater than the 
                        remaining principal of a borrower's 
                        loan, the amount of any excess shall be 
                        returned to the Treasury.
  (e) Rulemaking.--Not later than 180 days after the date of 
the enactment of this section, the Administrator shall issue 
regulations necessary to carry out this section.
  (f) Contracting With Agents.--The Administrator may contract 
with one or more entities as necessary to carry out the 
provisions of the Program. The Secretary of the Treasury is 
authorized to designate financial institutions, including any 
bank, savings association, or trust company, as financial 
agents of the Federal government to carry out the authorities 
of this section, and such institutions shall perform all such 
reasonable duties related to the Program as financial agents of 
the Federal government as the Secretary may require. In 
engaging any such third parties to carry out the Program, the 
Administrator or the Secretary shall seek to involve small 
businesses in the provision of the core direct services 
required under the engagement.
  (g) Definitions.--For purposes of this section:
          (1) Administrator.--The term ``Administrator'' means 
        the Administrator of the Small Business Administration.
          (2) Program.--The term ``Program'' means the Small 
        Business Borrower Assistance Program established under 
        subsection (a).
          (3) Qualifying small business loan.--The term 
        ``qualifying small business loan'' means any loan, up 
        to $300,000, made to a small business concern and 
        guaranteed under section 7(a) of the Small Business Act 
        (15 U.S.C. 636(a)), other than a loan made pursuant to 
        section 7(a)(31) of such Act, a revolving credit line, 
        or any other revolving loan.
          (4) Small business concern.--The term ``small 
        business concern'' has the meaning given such term 
        under section 3 of the Small Business Act (15 U.S.C. 
        632).
  (h) Appropriations.--From funds not otherwise appropriated, 
there is hereby appropriated to the Administrator $300,000,000 
to carry out this section.
                              ----------                              


 3. An Amendment To Be Offered by Representative Nye, of Virginia, or 
                 His Designee, Debatable for 10 Minutes

  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 ``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.
                              ----------                              


 4. An Amendment To Be Offered by Representative Minnick, of Idaho, or 
                 His Designee, Debatable for 10 Minutes

  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).
                              ----------                              


    5. An Amendment To Be Offered by Representative Perlmutter, of 
          Colorado, or His Designee, Debatable for 10 Minutes

  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 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.
                              ----------                              


6. An Amendment To Be Offered by Representative Tom Price, of Georgia, 
               or His Designee, Debatable for 10 Minutes

  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.
                              ----------                              


7. An Amendment To Be Offered by Representative Al Green, of Texas, or 
                 His Designee, Debatable for 10 Minutes

  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.
                              ----------                              


 8. An Amendment To Be Offered by Representative Driehaus, of Ohio, or 
                 His Designee, Debatable for 10 Minutes

  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)''.
                              ----------                              


9. An Amendment To Be Offered by Representative Peters, of Michigan, or 
                 His Designee, Debatable for 10 Minutes

  Page 34, beginning on line 7, strike ``Transfers contingent 
on inspector'' and insert ``Inspector''.
  Page 34, line 9, strike ``Before'' and insert ``Following''.
  Page 34, after line 15, insert the following new clause:
                          (ii) Recoupment of misused 
                        transferred funds required.--The 
                        allocation agreement between the 
                        Secretary and the participating State 
                        shall provide that the Secretary shall 
                        recoup any allocated Federal funds 
                        transferred to the participating State 
                        before the start of the audit if the 
                        results of the audit include a finding 
                        that there was an intentional or 
                        reckless misuse of transferred funds by 
                        the State before the audit began.
  Page 34, line 16, strike ``(ii)'' and insert ``(iii)''.
  Page 35, line 3, strike ``(iii)'' and insert ``(iv)''.
                              ----------                              


10. An Amendment To Be Offered by Representative Brad Miller, of North 
          Carolina, or His Designee, Debatable for 10 Minutes

  Page 11, after line 3, insert the following new subparagraph:
                  (F) Election to include construction, land 
                development, and other land loans in domestic 
                offices 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 construction, 
                land development, and other land loans in 
                domestic offices in its quarterly call report. 
                If an applicant makes the election under this 
                subparagraph, the amount of lending reported as 
                construction, land development, and other land 
                loans in domestic offices shall be included in 
                the determination of the amount of its small 
                business lending for purposes of the 
                computations made under paragraph (4).
                              ----------                              


11. An Amendment To Be Offered by Representative Michaud, of Maine, or 
                 His Designee, Debatable for 10 Minutes

  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''.
                              ----------                              


12. An Amendment To Be Offered by Representative Jackson Lee, of Texas, 
               or Her Designee, Debatable for 10 Minutes

  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.
                              ----------                              


 13. An Amendment To Be Offered by Representative Loretta Sanchez, of 
         California, or Her Designee, Debatable for 10 Minutes

  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.
                              ----------                              


14. An Amendment To Be Offered by Representative Cuellar, of Texas, or 
                 His Designee, Debatable for 10 Minutes

  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;
                              ----------                              


 15. An Amendment To Be Offered by Representative Braley, of Iowa, or 
                 His Designee, Debatable for 10 Minutes

  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.--
          (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.
                              ----------                              


16. An Amendment To Be Offered by Representative Loebsack, of Iowa, or 
                 His Designee, Debatable for 10 Minutes

  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.
                              ----------                              


17. An Amendment To Be Offered by Representative Chu, of California, or 
                 Her Designee, Debatable for 10 Minutes

  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.''.

                                  
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