[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.''.