In the nature of a substitute.

SA 4594. Mr. REID (for Mr. Baucus (for himself, Ms. Landrieu, and Mr.
Reid)) proposed an amendment to 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, to amend the
Internal Revenue Code of 1986 to provide tax incentives for small
business job creation, and for other purposes; as follows:

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

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

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

TITLE I--SMALL BUSINESSES

Sec. 1001. Definitions.

Subtitle A--Small Business Access to Credit

Sec. 1101. Short title.

PART I--Next Steps for Main Street Credit Availability

Sec. 1111. Section 7(a) business loans.
Sec. 1112. Maximum loan amounts under 504 program.
Sec. 1113. Maximum loan limits under microloan program.
Sec. 1114. Loan guarantee enhancement extensions.
Sec. 1115. New Markets Venture Capital company investment limitations.
Sec. 1116. Alternative size standards.
Sec. 1117. Sale of 7(a) loans in secondary market.
Sec. 1118. Online lending platform.
Sec. 1119. SBA Secondary Market Guarantee Authority.

PART II--Small Business Access to Capital

Sec. 1122. Low-interest refinancing under the local development
business loan program.

PART III--Other Matters

Sec. 1131. Small business intermediary lending pilot program.
Sec. 1132. Public policy goals.
Sec. 1133. Floor plan pilot program extension.
Sec. 1134. Guarantees for bonds and notes issued for community or
economic development purposes.
Sec. 1135. Temporary express loan enhancement.
Sec. 1136. Prohibition on using TARP funds or tax increases.

Subtitle B--Small Business Trade and Exporting

Sec. 1201. Short title.
Sec. 1202. Definitions.
Sec. 1203. Office of International Trade.
Sec. 1204. Duties of the Office of International Trade.
Sec. 1205. Export assistance centers.
Sec. 1206. International trade finance programs.
Sec. 1207. State Trade and Export Promotion Grant Program.
Sec. 1208. Rural export promotion.
Sec. 1209. International trade cooperation by small business
development centers.

Subtitle C--Small Business Contracting

PART I--Contract Bundling

Sec. 1311. Small Business Act.
Sec. 1312. Leadership and oversight.
Sec. 1313. Consolidation of contract requirements.
Sec. 1314. Small business teams pilot program.

PART II--Subcontracting Integrity

Sec. 1321. Subcontracting misrepresentations.
Sec. 1322. Small business subcontracting improvements.

PART III--Acquisition Process

Sec. 1331. Reservation of prime contract awards for small businesses.
Sec. 1332. Micro-purchase guidelines.
Sec. 1333. Agency accountability.
Sec. 1334. Payment of subcontractors.
Sec. 1335. Repeal of Small Business Competitiveness Demonstration
Program.

PART IV--Small Business Size and Status Integrity

Sec. 1341. Policy and presumptions.
Sec. 1342. Annual certification.
Sec. 1343. Training for contracting and enforcement personnel.
Sec. 1344. Updated size standards.
Sec. 1345. Study and report on the mentor-protege program.
Sec. 1346. Contracting goals reports.
Sec. 1347. Small business contracting parity.

Subtitle D--Small Business Management and Counseling Assistance

Sec. 1401. Matching requirements under small business programs.
Sec. 1402. Grants for SBDCs.

Subtitle E--Disaster Loan Improvement

Sec. 1501. Aquaculture business disaster assistance.

Subtitle F--Small Business Regulatory Relief

Sec. 1601. Requirements providing for more detailed analyses.
Sec. 1602. Office of advocacy.

Subtitle G--Appropriations Provisions

Sec. 1701. Salaries and expenses.
Sec. 1702. Business loans program account.
Sec. 1703. Community Development Financial Institutions Fund program
account.
Sec. 1704. Small business loan guarantee enhancement extensions.

TITLE II--TAX PROVISIONS

Sec. 2001. Short title.

Subtitle A--Small Business Relief

PART I--Providing Access to Capital

Sec. 2011. Temporary exclusion of 100 percent of gain on certain small
business stock.
Sec. 2012. General business credits of eligible small businesses for
2010 carried back 5 years.
Sec. 2013. General business credits of eligible small businesses in
2010 not subject to alternative minimum tax.
Sec. 2014. Temporary reduction in recognition period for built-in gains
tax.

PART II--Encouraging Investment

Sec. 2021. Increased expensing limitations for 2010 and 2011; certain
real property treated as section 179 property.
Sec. 2022. Additional first-year depreciation for 50 percent of the
basis of certain qualified property.
Sec. 2023. Special rule for long-term contract accounting.

PART III--Promoting Entrepreneurship

Sec. 2031. Increase in amount allowed as deduction for start-up
expenditures in 2010.
Sec. 2032. Authorization of appropriations for the United States Trade
Representative to develop market access opportunities for
United States small- and medium-sized businesses and to
enforce trade agreements.

PART IV--Promoting Small Business Fairness

Sec. 2041. Limitation on penalty for failure to disclose reportable
transactions based on resulting tax benefits.
Sec. 2042. Deduction for health insurance costs in computing self-
employment taxes in 2010.
Sec. 2043. Removal of cellular telephones and similar
telecommunications equipment from listed property.

Subtitle B--Revenue Provisions

PART I--Reducing the Tax Gap

Sec. 2101. Information reporting for rental property expense payments.
Sec. 2102. Increase in information return penalties.
Sec. 2103. Report on tax shelter penalties and certain other
enforcement actions.
Sec. 2104. Application of continuous levy to tax liabilities of certain
Federal contractors.

PART II--Promoting Retirement Preparation

Sec. 2111. Participants in government section 457 plans allowed to
treat elective deferrals as Roth contributions.
Sec. 2112. Rollovers from elective deferral plans to designated Roth
accounts.
Sec. 2113. Special rules for annuities received from only a portion of
a contract.

PART III--Closing Unintended Loopholes

Sec. 2121. Crude tall oil ineligible for cellulosic biofuel producer
credit.
Sec. 2122. Source rules for income on guarantees.

PART IV--Time for Payment of Corporate Estimated Taxes

Sec. 2131. Time for payment of corporate estimated taxes.

TITLE III--STATE SMALL BUSINESS CREDIT INITIATIVE

Sec. 3001. Short title.
Sec. 3002. Definitions.
Sec. 3003. Federal funds allocated to States.
Sec. 3004. Approving States for participation.
Sec. 3005. Approving State capital access programs.
Sec. 3006. Approving collateral support and other innovative credit
access and guarantee initiatives for small businesses and
manufacturers.

[[Page S6935]]

Sec. 3007. Reports.
Sec. 3008. Remedies for State program termination or failures.
Sec. 3009. Implementation and administration.
Sec. 3010. Regulations.
Sec. 3011. Oversight and audits.

TITLE IV--ADDITIONAL SMALL BUSINESS PROVISIONS

Subtitle A--Small Business Lending Fund

Sec. 4101. Purpose.
Sec. 4102. Definitions.
Sec. 4103. Small business lending fund.
Sec. 4104. Additional authorities of the Secretary.
Sec. 4105. Considerations.
Sec. 4106. Reports.
Sec. 4107. Oversight and audits.
Sec. 4108. Credit reform; funding.
Sec. 4109. Termination and continuation of authorities.
Sec. 4110. Preservation of authority.
Sec. 4111. Assurances.
Sec. 4112. Study and report with respect to women-owned, veteran-owned,
and minority-owned businesses.
Sec. 4113. Sense of congress.

Subtitle B--Other Provisions

PART I--Small Business Export Promotion Initiatives

Sec. 4221. Short title.
Sec. 4222. Global business development and promotion activities of the
Department of Commerce.
Sec. 4223. Additional funding to improve access to global markets for
rural businesses.
Sec. 4224. Additional funding for the ExporTech program.
Sec. 4225. Additional funding for the market development cooperator
program of the department of commerce.
Sec. 4226. Hollings Manufacturing Partnership Program; Technology
Innovation Program.
Sec. 4227. Sense of the Senate concerning Federal collaboration with
States on export promotion issues.
Sec. 4228. Report on tariff and nontariff barriers.

PART II--Medicare Fraud

Sec. 4241. Use of predictive modeling and other analytics technologies
to identify and prevent waste, fraud, and abuse in the
Medicare fee-for-service program.

TITLE V--BUDGETARY PROVISIONS

Sec. 5001. Determination of budgetary effects.

TITLE I--SMALL BUSINESSES

SEC. 1001. DEFINITIONS.

In this title--
(1) the terms ``Administration'' and ``Administrator'' mean
the Small Business Administration and the Administrator
thereof, respectively; and
(2) the term ``small business concern'' has the meaning
given that term under section 3 of the Small Business Act (15
U.S.C. 632).

Subtitle A--Small Business Access to Credit

SEC. 1101. SHORT TITLE.

This subtitle may be cited as the ``Small Business Job
Creation and Access to Capital Act of 2010''.

PART I--NEXT STEPS FOR MAIN STREET CREDIT AVAILABILITY

SEC. 1111. SECTION 7(A) BUSINESS LOANS.

(a) Amendment.--Section 7(a) of the Small Business Act (15
U.S.C. 636(a)) is amended--
(1) in paragraph (2)(A)--
(A) in clause (i), by striking ``75 percent'' and inserting
``90 percent''; and
(B) in clause (ii), by striking ``85 percent'' and
inserting ``90 percent''; and
(2) in paragraph (3)(A), by striking ``$1,500,000 (or if
the gross loan amount would exceed $2,000,000'' and inserting
``$4,500,000 (or if the gross loan amount would exceed
$5,000,000''.
(b) Prospective Repeal.--Effective January 1, 2011, section
7(a) of the Small Business Act (15 U.S.C. 636(a)) is
amended--
(1) in paragraph (2)(A)--
(A) in clause (i), by striking ``90 percent'' and inserting
``75 percent''; and
(B) in clause (ii), by striking ``90 percent'' and
inserting ``85 percent''; and
(2) in paragraph (3)(A), by striking ``$4,500,000'' and
inserting ``$3,750,000''.

SEC. 1112. MAXIMUM LOAN AMOUNTS UNDER 504 PROGRAM.

Section 502(2)(A) of the Small Business Investment Act of
1958 (15 U.S.C. 696(2)(A)) is amended--
(1) in clause (i), by striking ``$1,500,000'' and inserting
``$5,000,000'';
(2) in clause (ii), by striking ``$2,000,000'' and
inserting ``$5,000,000'';
(3) in clause (iii), by striking ``$4,000,000'' and
inserting ``$5,500,000'';
(4) in clause (iv), by striking ``$4,000,000'' and
inserting ``$5,500,000''; and
(5) in clause (v), by striking ``$4,000,000'' and inserting
``$5,500,000''.

SEC. 1113. MAXIMUM LOAN LIMITS UNDER MICROLOAN PROGRAM.

Section 7(m) of the Small Business Act (15 U.S.C. 636(m))
is amended--
(1) in paragraph (1)(B)(iii), by striking ``$35,000'' and
inserting ``$50,000'';
(2) in paragraph (3)--
(A) in subparagraph (C), by striking ``$3,500,000'' and
inserting ``$5,000,000''; and
(B) in subparagraph (E), by striking ``$35,000'' each place
that term appears and inserting ``$50,000''; and
(3) in paragraph (11)(B), by striking ``$35,000'' and
inserting ``$50,000''.

SEC. 1114. LOAN GUARANTEE ENHANCEMENT EXTENSIONS.

(a) Fees.--Section 501 of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 151) is
amended by striking ``September 30, 2010'' each place that
term appears and inserting ``December 31, 2010''.
(b) Loan Guarantees.--Section 502(f) of division A of the
American Recovery and Reinvestment Act of 2009 (Public Law
111-5; 123 Stat. 153) is amended by striking ``May 31, 2010''
and inserting ``December 31, 2010''.

SEC. 1115. NEW MARKETS VENTURE CAPITAL COMPANY INVESTMENT
LIMITATIONS.

Section 355 of the Small Business Investment Act of 1958
(15 U.S.C. 689d) is amended by adding at the end the
following:
``(e) Investment Limitations.--
``(1) Definition.--In this subsection, the term `covered
New Markets Venture Capital company' means a New Markets
Venture Capital company--
``(A) granted final approval by the Administrator under
section 354(e) on or after March 1, 2002; and
``(B) that has obtained a financing from the Administrator.
``(2) Limitation.--Except to the extent approved by the
Administrator, a covered New Markets Venture Capital company
may not acquire or issue commitments for securities under
this title for any single enterprise in an aggregate amount
equal to more than 10 percent of the sum of--
``(A) the regulatory capital of the covered New Markets
Venture Capital company; and
``(B) the total amount of leverage projected in the
participation agreement of the covered New Markets Venture
Capital.''.

SEC. 1116. ALTERNATIVE SIZE STANDARDS.

Section 3(a) of the Small Business Act (15 U.S.C. 632(a))
is amended by adding at the end the following:
``(5) Alternative Size Standard.--
``(A) In general.--The Administrator shall establish an
alternative size standard for applicants for business loans
under section 7(a) and applicants for development company
loans under title V of the Small Business Investment Act of
1958 (15 U.S.C. 695 et seq.), that uses maximum tangible net
worth and average net income as an alternative to the use of
industry standards.
``(B) Interim rule.--Until the date on which the
alternative size standard established under subparagraph (A)
is in effect, an applicant for a business loan under section
7(a) or an applicant for a development company loan under
title V of the Small Business Investment Act of 1958 may be
eligible for such a loan if--
``(i) the maximum tangible net worth of the applicant is
not more than $15,000,000; and
``(ii) the average net income after Federal income taxes
(excluding any carry-over losses) of the applicant for the 2
full fiscal years before the date of the application is not
more than $5,000,000.''.

SEC. 1117. SALE OF 7(A) LOANS IN SECONDARY MARKET.

Section 5(g) of the Small Business Act (15 U.S.C. 634(g))
is amended by adding at the end the following:
``(6) If the amount of the guaranteed portion of any loan
under section 7(a) is more than $500,000, the Administrator
shall, upon request of a pool assembler, divide the loan
guarantee into increments of $500,000 and 1 increment of any
remaining amount less than $500,000, in order to permit the
maximum amount of any loan in a pool to be not more than
$500,000. Only 1 increment of any loan guarantee divided
under this paragraph may be included in the same pool.
Increments of loan guarantees to different borrowers that are
divided under this paragraph may be included in the same
pool.''.

SEC. 1118. ONLINE LENDING PLATFORM.

It is the sense of Congress that the Administrator of the
Small Business Administration should establish a website
that--
(1) lists each lender that makes loans guaranteed by the
Small Business Administration and provides information about
the loan rates of each such lender; and
(2) allows prospective borrowers to compare rates on loans
guaranteed by the Small Business Administration.

SEC. 1119. SBA SECONDARY MARKET GUARANTEE AUTHORITY.

Section 503(f) of division A of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 155) is
amended by striking ``on the date 2 years after the date of
enactment of this section'' and inserting ``2 years after the
date of the first sale of a pool of first lien position 504
loans guaranteed under this section to a third-party
investor''.

PART II--SMALL BUSINESS ACCESS TO CAPITAL

SEC. 1122. LOW-INTEREST REFINANCING UNDER THE LOCAL
DEVELOPMENT BUSINESS LOAN PROGRAM.

(a) Refinancing.--Section 502(7) of the Small Business
Investment Act of 1958 (15 U.S.C. 696(7)) is amended by
adding at the end the following:
``(C) Refinancing not involving expansions.--
``(i) Definitions.--In this subparagraph--

``(I) the term `borrower' means a small business concern
that submits an application to a development company for
financing under this subparagraph;

[[Page S6936]]

``(II) the term `eligible fixed asset' means tangible
property relating to which the Administrator may provide
financing under this section; and
``(III) the term `qualified debt' means indebtedness--

``(aa) that--
``(AA) was incurred not less than 2 years before the date
of the application for assistance under this subparagraph;
``(BB) is a commercial loan;
``(CC) is not subject to a guarantee by a Federal agency;
``(DD) the proceeds of which were used to acquire an
eligible fixed asset;
``(EE) was incurred for the benefit of the small business
concern; and
``(FF) is collateralized by eligible fixed assets; and
``(bb) for which the borrower has been current on all
payments for not less than 1 year before the date of the
application.
``(ii) Authority.--A project that does not involve the
expansion of a small business concern may include the
refinancing of qualified debt if--

``(I) the amount of the financing is not more than 90
percent of the value of the collateral for the financing,
except that, if the appraised value of the eligible fixed
assets serving as collateral for the financing is less than
the amount equal to 125 percent of the amount of the
financing, the borrower may provide additional cash or other
collateral to eliminate any deficiency;
``(II) the borrower has been in operation for all of the 2-
year period ending on the date of the loan; and
``(III) for a financing for which the Administrator
determines there will be an additional cost attributable to
the refinancing of the qualified debt, the borrower agrees to
pay a fee in an amount equal to the anticipated additional
cost.

``(iii) Financing for business expenses.--

``(I) Financing for business expenses.--The Administrator
may provide financing to a borrower that receives financing
that includes a refinancing of qualified debt under clause
(ii), in addition to the refinancing under clause (ii), to be
used solely for the payment of business expenses.
``(II) Application for financing.--An application for
financing under subclause (I) shall include--

``(aa) a specific description of the expenses for which the
additional financing is requested; and
``(bb) an itemization of the amount of each expense.

``(III) Condition on additional financing.--A borrower may
not use any part of the financing under this clause for non-
business purposes.

``(iv) Loans based on jobs.--

``(I) Job creation and retention goals.--

``(aa) In general.--The Administrator may provide financing
under this subparagraph for a borrower that meets the job
creation goals under subsection (d) or (e) of section 501.
``(bb) Alternate job retention goal.--The Administrator may
provide financing under this subparagraph to a borrower that
does not meet the goals described in item (aa) in an amount
that is not more than the product obtained by multiplying the
number of employees of the borrower by $65,000.

``(II) Number of employees.--For purposes of subclause (I),
the number of employees of a borrower is equal to the sum
of--

``(aa) the number of full-time employees of the borrower on
the date on which the borrower applies for a loan under this
subparagraph; and
``(bb) the product obtained by multiplying--
``(AA) the number of part-time employees of the borrower on
the date on which the borrower applies for a loan under this
subparagraph; by
``(BB) the quotient obtained by dividing the average number
of hours each part time employee of the borrower works each
week by 40.
``(v) Nondelegation.--Notwithstanding section 508(e), the
Administrator may not permit a premier certified lender to
approve or disapprove an application for assistance under
this subparagraph.
``(vi) Total amount of loans.--The Administrator may
provide not more than a total of $7,500,000,000 of financing
under this subparagraph for each fiscal year.''.
(b) Prospective Repeal.--Effective 2 years after the date
of enactment of this Act, section 502(7) of the Small
Business Investment Act of 1958 (15 U.S.C. 696(7)) is amended
by striking subparagraph (C).
(c) Technical Correction.--Section 502(2)(A)(i) of the
Small Business Investment Act of 1958 (15 U.S.C.
696(2)(A)(i)) is amended by striking ``subparagraph (B) or
(C)'' and inserting ``clause (ii), (iii), (iv), or (v)''.

PART III--OTHER MATTERS

SEC. 1131. SMALL BUSINESS INTERMEDIARY LENDING PILOT PROGRAM.

(a) In General.--Section 7 of the Small Business Act (15
U.S.C. 636) is amended by striking subsection (l) and
inserting the following:
``(l) Small Business Intermediary Lending Pilot Program.--
``(1) Definitions.--In this subsection--
``(A) the term `eligible intermediary'--
``(i) means a private, nonprofit entity that--

``(I) seeks or has been awarded a loan from the
Administrator to make loans to small business concerns under
this subsection; and
``(II) has not less than 1 year of experience making loans
to startup, newly established, or growing small business
concerns; and

``(ii) includes--

``(I) a private, nonprofit community development
corporation;
``(II) a consortium of private, nonprofit organizations or
nonprofit community development corporations; and
``(III) an agency of or nonprofit entity established by a
Native American Tribal Government; and

``(B) the term `Program' means the small business
intermediary lending pilot program established under
paragraph (2).
``(2) Establishment.--There is established a 3-year small
business intermediary lending pilot program, under which the
Administrator may make direct loans to eligible
intermediaries, for the purpose of making loans to startup,
newly established, and growing small business concerns.
``(3) Purposes.--The purposes of the Program are--
``(A) to assist small business concerns in areas suffering
from a lack of credit due to poor economic conditions or
changes in the financial market; and
``(B) to establish a loan program under which the
Administrator may provide loans to eligible intermediaries to
enable the eligible intermediaries to provide loans to
startup, newly established, and growing small business
concerns for working capital, real estate, or the acquisition
of materials, supplies, or equipment.
``(4) Loans to eligible intermediaries.--
``(A) Application.--Each eligible intermediary desiring a
loan under this subsection shall submit an application to the
Administrator that describes--
``(i) the type of small business concerns to be assisted;
``(ii) the size and range of loans to be made;
``(iii) the interest rate and terms of loans to be made;
``(iv) the geographic area to be served and the economic,
poverty, and unemployment characteristics of the area;
``(v) the status of small business concerns in the area to
be served and an analysis of the availability of credit; and
``(vi) the qualifications of the applicant to carry out
this subsection.
``(B) Loan limits.--No loan may be made to an eligible
intermediary under this subsection if the total amount
outstanding and committed to the eligible intermediary by the
Administrator would, as a result of such loan, exceed
$1,000,000 during the participation of the eligible
intermediary in the Program.
``(C) Loan duration.--Loans made by the Administrator under
this subsection shall be for a term of 20 years.
``(D) Applicable interest rates.--Loans made by the
Administrator to an eligible intermediary under the Program
shall bear an annual interest rate equal to 1.00 percent.
``(E) Fees; collateral.--The Administrator may not charge
any fees or require collateral with respect to any loan made
to an eligible intermediary under this subsection.
``(F) Delayed payments.--The Administrator shall not
require the repayment of principal or interest on a loan made
to an eligible intermediary under the Program during the 2-
year period beginning on the date of the initial disbursement
of funds under that loan.
``(G) Maximum participants and amounts.--During each of
fiscal years 2011, 2012, and 2013, the Administrator may make
loans under the Program--
``(i) to not more than 20 eligible intermediaries; and
``(ii) in a total amount of not more than $20,000,000.
``(5) Loans to small business concerns.--
``(A) In general.--The Administrator, through an eligible
intermediary, shall make loans to startup, newly established,
and growing small business concerns for working capital, real
estate, and the acquisition of materials, supplies,
furniture, fixtures, and equipment.
``(B) Maximum loan.--An eligible intermediary may not make
a loan under this subsection of more than $200,000 to any 1
small business concern.
``(C) Applicable interest rates.--A loan made by an
eligible intermediary to a small business concern under this
subsection, may have a fixed or a variable interest rate, and
shall bear an interest rate specified by the eligible
intermediary in the application of the eligible intermediary
for a loan under this subsection.
``(D) Review restrictions.--The Administrator may not
review individual loans made by an eligible intermediary to a
small business concern before approval of the loan by the
eligible intermediary.
``(6) Termination.--The authority of the Administrator to
make loans under the Program shall terminate 3 years after
the date of enactment of the Small Business Job Creation and
Access to Capital Act of 2010.''.
(b) Rulemaking Authority.--Not later than 180 days after
the date of enactment of this Act, the Administrator shall
issue regulations to carry out section 7(l) of the Small
Business Act, as amended by subsection (a).
(c) Availability of Funds.--Any amounts provided to the
Administrator for the purposes of carrying out section 7(l)
of the Small Business Act, as amended by subsection (a),
shall remain available until expended.

[[Page S6937]]

SEC. 1132. PUBLIC POLICY GOALS.

Section 501(d)(3) of the Small Business Investment Act of
1958 (15 U.S.C. 695(d)(3)) is amended--
(1) in subparagraph (J), by striking ``or'' at the end;
(2) in subparagraph (K), by striking the period at the end
and inserting ``, or''; and
(3) by adding at the end the following:
``(L) reduction of rates of unemployment in labor surplus
areas, as such areas are determined by the Secretary of
Labor.''.

SEC. 1133. FLOOR PLAN PILOT PROGRAM EXTENSION.

(a) In General.--Section 7(a) of the Small Business Act (15
U.S.C. 636(a)) is amended--
(1) by redesignating paragraph (32), relating to increased
veteran participation, as added by section 208 of the
Military Reservist and Veteran Small Business Reauthorization
and Opportunity Act of 2008 (Public Law 110-186; 122 Stat.
631), as paragraph (33); and
(2) by adding at the end the following:
``(34) Floor plan financing program.--
``(A) Definition.--In this paragraph, the term `eligible
retail good'--
``(i) means a good for which a title may be obtained under
State law; and
``(ii) includes an automobile, recreational vehicle, boat,
and manufactured home.
``(B) Program.--The Administrator may guarantee the timely
payment of an open-end extension of credit to a small
business concern, the proceeds of which may be used for the
purchase of eligible retail goods for resale.
``(C) Amount.--An open-end extension of credit guaranteed
under this paragraph shall be in an amount not less than
$500,000 and not more than $5,000,000.
``(D) Term.--An open-end extension of credit guaranteed
under this paragraph shall have a term of not more than 5
years.
``(E) Guarantee percentage.--The Administrator may
guarantee--
``(i) not less than 60 percent of an open-end extension of
credit under this paragraph; and
``(ii) not more than 75 percent of an open-end extension of
credit under this paragraph.
``(F) Advance rate.--The lender for an open-end extension
of credit guaranteed under this paragraph may allow the
borrower to draw funds on the line of credit in an amount
equal to not more than 100 percent of the value of the
eligible retail goods to be purchased.''.
(b) Sunset.--Effective September 30, 2013, section 7(a) of
the Small Business Act (15 U.S.C. 636(a)) is amended--
(1) by striking paragraph (34); and
(2) by redesignating paragraph (35), as added by section
1206 of this Act, as paragraph (34).

SEC. 1134. GUARANTEES FOR BONDS AND NOTES ISSUED FOR
COMMUNITY OR ECONOMIC DEVELOPMENT PURPOSES.

The Riegle Community Development and Regulatory Improvement
Act of 1994 (12 U.S.C. 4701 et seq.) is amended by inserting
after section 114 (12 U.S.C. 4713) the following:

``SEC. 114A. GUARANTEES FOR BONDS AND NOTES ISSUED FOR
COMMUNITY OR ECONOMIC DEVELOPMENT PURPOSES.

``(a) Definitions.--In this section, the following
definitions shall apply:
``(1) Eligible community development financial
institution.--The term `eligible community development
financial institution' means a community development
financial institution (as described in section 1805.201 of
title 12, Code of Federal Regulations, or any successor
thereto) certified by the Secretary that has applied to a
qualified issuer for, or been granted by a qualified issuer,
a loan under the Program.
``(2) Eligible community or economic development purpose.--
The term `eligible community or economic development
purpose'--
``(A) means any purpose described in section 108(b); and
``(B) includes the provision of community or economic
development in low-income or underserved rural areas.
``(3) Guarantee.--The term `guarantee' means a written
agreement between the Secretary and a qualified issuer (or
trustee), pursuant to which the Secretary ensures repayment
of the verifiable losses of principal, interest, and call
premium, if any, on notes or bonds issued by a qualified
issuer to finance or refinance loans to eligible community
development financial institutions.
``(4) Loan.--The term `loan' means any credit instrument
that is extended under the Program for any eligible community
or economic development purpose.
``(5) Master servicer.--
``(A) In general.--The term `master servicer' means any
entity approved by the Secretary in accordance with
subparagraph (B) to oversee the activities of servicers, as
provided in subsection (f)(4).
``(B) Approval criteria for master servicers.--The
Secretary shall approve or deny any application to become a
master servicer under the Program not later than 90 days
after the date on which all required information is submitted
to the Secretary, based on the capacity and experience of the
applicant in--
``(i) loan administration, servicing, and loan monitoring;
``(ii) managing regional or national loan intake,
processing, or servicing operational systems and
infrastructure;
``(iii) managing regional or national originator
communication systems and infrastructure;
``(iv) developing and implementing training and other risk
management strategies on a regional or national basis; and
``(v) compliance monitoring, investor relations, and
reporting.
``(6) Program.--The term `Program' means the guarantee
Program for bonds and notes issued for eligible community or
economic development purposes established under this section.
``(7) Program administrator.--The term `Program
administrator' means an entity designated by the issuer to
perform administrative duties, as provided in subsection
(f)(2).
``(8) Qualified issuer.--
``(A) In general.--The term `qualified issuer' means a
community development financial institution (or any entity
designated to issue notes or bonds on behalf of such
community development financial institution) that meets the
qualification requirements of this paragraph.
``(B) Approval criteria for qualified issuers.--
``(i) In general.--The Secretary shall approve a qualified
issuer for a guarantee under the Program in accordance with
the requirements of this paragraph, and such additional
requirements as the Secretary may establish, by regulation.
``(ii) Terms and qualifications.--A qualified issuer
shall--

``(I) have appropriate expertise, capacity, and experience,
or otherwise be qualified to make loans for eligible
community or economic development purposes;
``(II) provide to the Secretary--

``(aa) an acceptable statement of the proposed sources and
uses of the funds; and
``(bb) a capital distribution plan that meets the
requirements of subsection (c)(1); and

``(III) certify to the Secretary that the bonds or notes to
be guaranteed are to be used for eligible community or
economic development purposes.

``(C) Department opinion; timing.--
``(i) Department opinion.--Not later than 30 days after the
date of a request by a qualified issuer for approval of a
guarantee under the Program, the Secretary shall provide an
opinion regarding compliance by the issuer with the
requirements of the Program under this section.
``(ii) Timing.--The Secretary shall approve or deny a
guarantee under this section after consideration of the
opinion provided to the Secretary under clause (i), and in no
case later than 90 days after receipt of all required
information by the Secretary with respect to a request for
such guarantee.
``(9) Secretary.--The term `Secretary' means the Secretary
of the Treasury.
``(10) Servicer.--The term `servicer' means an entity
designated by the issuer to perform various servicing duties,
as provided in subsection (f)(3).
``(b) Guarantees Authorized.--The Secretary shall guarantee
payments on bonds or notes issued by any qualified issuer, if
the proceeds of the bonds or notes are used in accordance
with this section to make loans to eligible community
development financial institutions--
``(1) for eligible community or economic development
purposes; or
``(2) to refinance loans or notes issued for such purposes.
``(c) General Program Requirements.--
``(1) In general.--A capital distribution plan meets the
requirements of this subsection, if not less than 90 percent
of the principal amount of guaranteed bonds or notes (other
than costs of issuance fees) are used to make loans for any
eligible community or economic development purpose, measured
annually, beginning at the end of the 1-year period beginning
on the issuance date of such guaranteed bonds or notes.
``(2) Relending account.--Not more than 10 percent of the
principal amount of guaranteed bonds or notes, multiplied by
an amount equal to the outstanding principal balance of
issued notes or bonds, minus the risk-share pool amount under
subsection (d), may be held in a relending account and may be
made available for new eligible community or economic
development purposes.
``(3) Limitations on unpaid principal balances.--The
proceeds of guaranteed bonds or notes under the Program may
not be used to pay fees (other than costs of issuance fees),
and shall be held in--
``(A) community or economic development loans;
``(B) a relending account, to the extent authorized under
paragraph (2); or
``(C) a risk-share pool established under subsection (d).
``(4) Repayment.--If a qualified issuer fails to meet the
requirements of paragraph (1) by the end of the 90-day period
beginning at the end of the annual measurement period,
repayment shall be made on that portion of bonds or notes
necessary to bring the bonds or notes that remain outstanding
after such repayment into compliance with the 90 percent
requirement of paragraph (1).
``(5) Prohibited uses.--The Secretary shall, by
regulation--
``(A) prohibit, as appropriate, certain uses of amounts
from the guarantee of a bond or note under the Program,
including the use of such funds for political activities,
lobbying, outreach, counseling services, or travel expenses;
and
``(B) provide that the guarantee of a bond or note under
the Program may not be used for salaries or other
administrative costs of--
``(i) the qualified issuer; or

[[Page S6938]]

``(ii) any recipient of amounts from the guarantee of a
bond or note.
``(d) Risk-Share Pool.--Each qualified issuer shall, during
the term of a guarantee provided under the Program, establish
a risk-share pool, capitalized by contributions from eligible
community development financial institution participants an
amount equal to 3 percent of the guaranteed amount
outstanding on the subject notes and bonds.
``(e) Guarantees.--
``(1) In general.--A guarantee issued under the Program
shall--
``(A) be for the full amount of a bond or note, including
the amount of principal, interest, and call premiums;
``(B) be fully assignable and transferable to the capital
market, on terms and conditions that are consistent with
comparable Government-guaranteed bonds, and satisfactory to
the Secretary;
``(C) represent the full faith and credit of the United
States; and
``(D) not exceed 30 years.
``(2) Limitations.--
``(A) Annual number of guarantees.--The Secretary shall
issue not more than 10 guarantees in any calendar year under
the Program.
``(B) Guarantee amount.--The Secretary may not guarantee
any amount under the Program equal to less than $100,000,000,
but the total of all such guarantees in any fiscal year may
not exceed $1,000,000,000.
``(f) Servicing of Transactions.--
``(1) In general.--To maximize efficiencies and minimize
cost and interest rates, loans made under this section may be
serviced by qualified Program administrators, bond servicers,
and a master servicer.
``(2) Duties of program administrator.--The duties of a
Program administrator shall include--
``(A) approving and qualifying eligible community
development financial institution applications for
participation in the Program;
``(B) compliance monitoring;
``(C) bond packaging in connection with the Program; and
``(D) all other duties and related services that are
customarily expected of a Program administrator.
``(3) Duties of servicer.--The duties of a servicer shall
include--
``(A) billing and collecting loan payments;
``(B) initiating collection activities on past-due loans;
``(C) transferring loan payments to the master servicing
accounts;
``(D) loan administration and servicing;
``(E) systematic and timely reporting of loan performance
through remittance and servicing reports;
``(F) proper measurement of annual outstanding loan
requirements; and
``(G) all other duties and related services that are
customarily expected of servicers.
``(4) Duties of master servicer.--The duties of a master
servicer shall include--
``(A) tracking the movement of funds between the accounts
of the master servicer and any other servicer;
``(B) ensuring orderly receipt of the monthly remittance
and servicing reports of the servicer;
``(C) monitoring the collection comments and foreclosure
actions;
``(D) aggregating the reporting and distribution of funds
to trustees and investors;
``(E) removing and replacing a servicer, as necessary;
``(F) loan administration and servicing;
``(G) systematic and timely reporting of loan performance
compiled from all bond servicers' reports;
``(H) proper distribution of funds to investors; and
``(I) all other duties and related services that are
customarily expected of a master servicer.
``(g) Fees.--
``(1) In general.--A qualified issuer that receives a
guarantee issued under this section on a bond or note shall
pay a fee to the Secretary, in an amount equal to 10 basis
points of the amount of the unpaid principal of the bond or
note guaranteed.
``(2) Payment.--A qualified issuer shall pay the fee
required under this subsection on an annual basis.
``(3) Use of fees.--Fees collected by the Secretary under
this subsection shall be used to reimburse the Department of
the Treasury for any administrative costs incurred by the
Department in implementing the Program established under this
section.
``(h) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to the Secretary, such sums as are necessary to carry out
this section.
``(2) Use of fees.--To the extent that the amount of funds
appropriated for a fiscal year under paragraph (1) are not
sufficient to carry out this section, the Secretary may use
the fees collected under subsection (g) for the cost of
providing guarantees of bonds and notes under this section.
``(i) Investment in Guaranteed Bonds Ineligible for
Community Reinvestment Act Purposes.--Notwithstanding any
other provision of law, any investment by a financial
institution in bonds or notes guaranteed under the Program
shall not be taken into account in assessing the record of
such institution for purposes of the Community Reinvestment
Act of 1977 (12 U.S.C. 2901).
``(j) Administration.--
``(1) Regulations.--Not later than 1 year after the date of
enactment of this section, the Secretary shall promulgate
regulations to carry out this section.
``(2) Implementation.--Not later than 2 years after the
date of enactment of this section, the Secretary shall
implement this section.
``(k) Termination.--This section is repealed, and the
authority provided under this section shall terminate, on
September 30, 2014.''.

SEC. 1135. TEMPORARY EXPRESS LOAN ENHANCEMENT.

(a) In General.--Section 7(a)(31)(D) of the Small Business
Act (15 U.S.C. 636(a)(31)(D)) is amended by striking
``$350,000'' and inserting ``$1,000,000''.
(b) Prospective Repeal.--Effective 1 year after the date of
enactment of this Act, section 7(a)(31)(D) of the Small
Business Act (15 U.S.C. 636(a)(31)(D)) is amended by striking
``$1,000,000'' and inserting ``$350,000''.

SEC. 1136. PROHIBITION ON USING TARP FUNDS OR TAX INCREASES.

(a) In General.--Except as provided in subsection (b),
nothing in section 1111, 1112, 1113, 1114, 1115, 1116, 1117,
1118, 1122, or 1131, or an amendment made by such sections,
shall be construed to limit the ability of Congress to
appropriate funds.
(b) TARP Funds and Tax Increases.--
(1) In general.--Any covered amounts may not be used to
carry out section 1111, 1112, 1113, 1114, 1115, 1116, 1117,
1118, 1122, or 1131, or an amendment made by such sections.
(2) Definition.--In this subsection, the term ``covered
amounts'' means--
(A) the amounts made available to the Secretary of the
Treasury under title I of the Emergency Economic
Stabilization Act of 2008 S.C. 5201 et seq.) to purchase
(under section 101) or guarantee (under section 102) assets
under that Act; and
(B) any revenue increase attributable to any amendment to
the Internal Revenue Code of 1986 made during the period
beginning on the date of enactment of this Act and ending on
December 31, 2010.

Subtitle B--Small Business Trade and Exporting

SEC. 1201. SHORT TITLE.

This subtitle may be cited as the ``Small Business Export
Enhancement and International Trade Act of 2010''.

SEC. 1202. DEFINITIONS.

(a) Definitions.--In this subtitle--
(1) the term ``Associate Administrator'' means the
Associate Administrator for International Trade appointed
under section 22(a)(2) of the Small Business Act, as amended
by this subtitle;
(2) the term ``Export Assistance Center'' means a one-stop
shop referred to in section 2301(b)(8) of the Omnibus Trade
and Competitiveness Act of 1988 (15 U.S.C. 4721(b)(8)); and
(3) the term ``rural small business concern'' means a small
business concern located in a rural area, as that term is
defined in section 1393(a)(2) of the Internal Revenue Code of
1986.
(b) Technical and Conforming Amendments.--
(1) Definitions.--Section 3 of the Small Business Act (15
U.S.C. 632) is amended by adding at the end the following:
``(t) Small Business Development Center.--In this Act, the
term `small business development center' means a small
business development center described in section 21.
``(u) Region of the Administration.--In this Act, the term
`region of the Administration' means the geographic area
served by a regional office of the Administration established
under section 4(a).''.
(2) Conforming amendment.--Section 4(b)(3)(B)(x) of the
Small Business Act (15 U.S.C. 633(b)(3)(B)(x)) is amended by
striking ``Administration district and region'' and inserting
``district and region of the Administration''.

SEC. 1203. OFFICE OF INTERNATIONAL TRADE.

(a) Establishment.--Section 22 of the Small Business Act
(15 U.S.C. 649) is amended--
(1) by striking ``Sec. 22. (a) There'' and inserting the
following:

``SEC. 22. OFFICE OF INTERNATIONAL TRADE.

``(a) Establishment.--
``(1) Office.--There''; and
(2) in subsection (a)--
(A) in paragraph (1), as so designated, by striking the
period and inserting ``for the primary purposes of
increasing--
``(A) the number of small business concerns that export;
and
``(B) the volume of exports by small business concerns.'';
and
(B) by adding at the end the following:
``(2) Associate administrator.--The head of the Office
shall be the Associate Administrator for International Trade,
who shall be responsible to the Administrator.''.
(b) Authority for Additional Associate Administrator.--
Section 4(b)(1) of the Small Business Act (15 U.S.C.
633(b)(1)) is amended--
(1) in the fifth sentence, by striking ``five Associate
Administrators'' and inserting ``Associate Administrators'';
and
(2) by adding at the end the following: ``One such
Associate Administrator shall be the Associate Administrator
for International Trade, who shall be the head of the Office
of International Trade established under section 22.''.
(c) Discharge of International Trade Responsibilities of
Administration.--Section 22 of the Small Business Act (15
U.S.C. 649) is amended by adding at the end the following:
``(h) Discharge of International Trade Responsibilities of
Administration.--The Administrator shall ensure that--

[[Page S6939]]

``(1) the responsibilities of the Administration regarding
international trade are carried out by the Associate
Administrator;
``(2) the Associate Administrator has sufficient resources
to carry out such responsibilities; and
``(3) the Associate Administrator has direct supervision
and control over--
``(A) the staff of the Office; and
``(B) any employee of the Administration whose principal
duty station is an Export Assistance Center, or any successor
entity.''.
(d) Role of Associate Administrator in Carrying Out
International Trade Policy.--Section 2(b)(1) of the Small
Business Act (15 U.S.C. 631(b)(1)) is amended in the matter
preceding subparagraph (A)--
(1) by inserting ``the Administrator of'' before ``the
Small Business Administration''; and
(2) by inserting ``through the Associate Administrator for
International Trade, and'' before ``in cooperation with''.
(e) Implementation Date.--Not later than 90 days after the
date of enactment of this Act, the Administrator of the Small
Business Administration shall appoint an Associate
Administrator for International Trade under section 22(a) of
the Small Business Act (15 U.S.C. 649(a)), as added by this
section.

SEC. 1204. DUTIES OF THE OFFICE OF INTERNATIONAL TRADE.

(a) Amendments to Section 22.--Section 22 of the Small
Business Act (15 U.S.C. 649) is amended--
(1) by striking subsection (b) and inserting the following:
``(b) Trade Distribution Network.--The Associate
Administrator, working in close cooperation with the
Secretary of Commerce, the United States Trade
Representative, the Secretary of Agriculture, the Secretary
of State, the President of the Export-Import Bank of the
United States, the President of the Overseas Private
Investment Corporation, Director of the United States Trade
and Development Agency, and other relevant Federal agencies,
small business development centers engaged in export
promotion efforts, Export Assistance Centers, regional and
district offices of the Administration, the small business
community, and relevant State and local export promotion
programs, shall--
``(1) maintain a distribution network, using regional and
district offices of the Administration, the small business
development center network, networks of women's business
centers, the Service Corps of Retired Executives authorized
by section 8(b)(1), and Export Assistance Centers, for
programs relating to--
``(A) trade promotion;
``(B) trade finance;
``(C) trade adjustment assistance;
``(D) trade remedy assistance; and
``(E) trade data collection;
``(2) aggressively market the programs described in
paragraph (1) and disseminate information, including
computerized marketing data, to small business concerns on
exporting trends, market-specific growth, industry trends,
and international prospects for exports;
``(3) promote export assistance programs through the
district and regional offices of the Administration, the
small business development center network, Export Assistance
Centers, the network of women's business centers, chapters of
the Service Corps of Retired Executives, State and local
export promotion programs, and partners in the private
sector; and
``(4) give preference in hiring or approving the transfer
of any employee into the Office or to a position described in
subsection (c)(9) to otherwise qualified applicants who are
fluent in a language in addition to English, to--
``(A) accompany small business concerns on foreign trade
missions; and
``(B) translate documents, interpret conversations, and
facilitate multilingual transactions, including by providing
referral lists for translation services, if required.'';
(2) in subsection (c)--
(A) by striking ``(c) The Office'' and inserting the
following:
``(c) Promotion of Sales Opportunities.--The Associate
Administrator'';
(B) by redesignating paragraphs (1) through (8) as
paragraphs (2) through (9), respectively;
(C) by inserting before paragraph (2), as so redesignated,
the following:
``(1) establish annual goals for the Office relating to--
``(A) enhancing the exporting capability of small business
concerns and small manufacturers;
``(B) facilitating technology transfers;
``(C) enhancing programs and services to assist small
business concerns and small manufacturers to compete
effectively and efficiently in foreign markets;
``(D) increasing the ability of small business concerns to
access capital; and
``(E) disseminating information concerning Federal, State,
and private programs and initiatives;'';
(D) in paragraph (2), as so redesignated, by striking
``mechanism for'' and all that follows through ``(D)
assisting'' and inserting the following: ``mechanism for--
``(A) identifying subsectors of the small business
community with strong export potential;
``(B) identifying areas of demand in foreign markets;
``(C) prescreening foreign buyers for commercial and credit
purposes; and
``(D) assisting'';
(E) in paragraph (3), as so redesignated, by striking
``assist small businesses in the formation and utilization
of'' and inserting ``assist small business concerns in
forming and using'';
(F) in paragraph (4), as so redesignated--
(i) by striking ``local'' and inserting ``district'';
(ii) by striking ``existing'';
(iii) by striking ``Small Business Development Center
network'' and inserting ``small business development center
network''; and
(iv) by striking ``Small Business Development Center
Program'' and inserting ``small business development center
program'';
(G) in paragraph (5), as so redesignated--
(i) in subparagraph (A), by striking ``Gross State
Produce'' and inserting ``Gross State Product'';
(ii) in subparagraph (B), by striking ``SIC'' each place it
appears and inserting ``North American Industry
Classification System''; and
(iii) in subparagraph (C), by striking ``small businesses''
and inserting ``small business concerns'';
(H) in paragraph (6), as so redesignated, by striking the
period at the end and inserting a semicolon;
(I) in paragraph (7), as so redesignated--
(i) in the matter preceding subparagraph (A)--

(I) by inserting ``concerns'' after ``small business''; and
(II) by striking ``current'' and inserting ``up to date'';

(ii) in subparagraph (A), by striking ``Administration's
regional offices'' and inserting ``regional and district
offices of the Administration'';
(iii) in subparagraph (B) by striking ``current'';
(iv) in subparagraph (C), by striking ``current''; and
(v) by striking ``small businesses'' each place that term
appears and inserting ``small business concerns'';
(J) in paragraph (8), as so redesignated, by striking and
at the end;
(K) in paragraph (9), as so redesignated--
(i) in the matter preceding subparagraph (A)--

(I) by striking ``full-time export development specialists
to each Administration regional office and assigning''; and
(II) by striking ``person in each district office. Such
specialists'' and inserting ``individual in each district
office and providing each Administration regional office with
a full-time export development specialist, who'';

(ii) in subparagraph (B)--

(I) by striking ``current''; and
(II) by striking ``with'' and inserting ``in'';

(iii) in subparagraph (D)--

(I) by striking ``Administration personnel involved in
granting'' and inserting ``personnel of the Administration
involved in making''; and
(II) by striking ``and'' at the end;

(iv) in subparagraph (E)--

(I) by striking ``small businesses' needs'' and inserting
``the needs of small business concerns''; and
(II) by striking the period at the end and inserting a
semicolon;

(v) by adding at the end the following:
``(F) participate, jointly with employees of the Office, in
an annual training program that focuses on current small
business needs for exporting; and
``(G) develop and conduct training programs for exporters
and lenders, in cooperation with the Export Assistance
Centers, the Department of Commerce, the Department of
Agriculture, small business development centers, women's
business centers, the Export-Import Bank of the United
States, the Overseas Private Investment Corporation, and
other relevant Federal agencies;''; and
(vi) by striking ``small businesses'' each place that term
appears and inserting ``small business concerns''; and
(L) by adding at the end the following:
``(10) make available on the website of the Administration
the name and contact information of each individual described
in paragraph (9);
``(11) carry out a nationwide marketing effort using
technology, online resources, training, and other strategies
to promote exporting as a business development opportunity
for small business concerns;
``(12) disseminate information to the small business
community through regional and district offices of the
Administration, the small business development center
network, Export Assistance Centers, the network of women's
business centers, chapters of the Service Corps of Retired
Executives authorized by section 8(b)(1), State and local
export promotion programs, and partners in the private sector
regarding exporting trends, market-specific growth, industry
trends, and prospects for exporting; and
``(13) establish and carry out training programs for the
staff of the regional and district offices of the
Administration and resource partners of the Administration on
export promotion and providing assistance relating to
exports.'';
(3) in subsection (d)--
(A) by redesignating paragraphs (1) through (5) as clauses
(i) through (v), respectively, and adjusting the margins
accordingly;
(B) by striking ``(d) The Office'' and inserting the
following:
``(d) Export Financing Programs.--
``(1) In general.--The Associate Administrator''; and

[[Page S6940]]

(C) by striking ``To accomplish this goal, the Office shall
work'' and inserting the following:
``(2) Trade finance specialist.--To accomplish the goal
established under paragraph (1), the Associate Administrator
shall--
``(A) designate at least 1 individual within the
Administration as a trade finance specialist to oversee
international loan programs and assist Administration
employees with trade finance issues; and
``(B) work'';
(4) in subsection (e), by striking ``(e) The Office'' and
inserting the following:
``(e) Trade Remedies.--The Associate Administrator'';
(5) by amending subsection (f) to read as follows:
``(f) Reporting Requirement.--The Associate Administrator
shall submit an annual report to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives that
contains--
``(1) a description of the progress of the Office in
implementing the requirements of this section;
``(2) a detailed account of the results of export growth
activities of the Administration, including the activities of
each district and regional office of the Administration,
based on the performance measures described in subsection
(i);
``(3) an estimate of the total number of jobs created or
retained as a result of export assistance provided by the
Administration and resource partners of the Administration;
``(4) for any travel by the staff of the Office, the
destination of such travel and the benefits to the
Administration and to small business concerns resulting from
such travel; and
``(5) a description of the participation by the Office in
trade negotiations.'';
(6) in subsection (g), by striking ``(g) The Office'' and
inserting the following:
``(g) Studies.--The Associate Administrator''; and
(7) by adding after subsection (h), as added by section
1203 of this subtitle, the following:
``(i) Export and Trade Counseling.--
``(1) Definition.--In this subsection--
``(A) the term `lead small business development center'
means a small business development center that has received a
grant from the Administration; and
``(B) the term `lead women's business center' means a
women's business center that has received a grant from the
Administration.
``(2) Certification program.--The Administrator shall
establish an export and trade counseling certification
program to certify employees of lead small business
development centers and lead women's business centers in
providing export assistance to small business concerns.
``(3) Number of certified employees.--The Administrator
shall ensure that the number of employees of each lead small
business development center who are certified in providing
export assistance is not less than the lesser of--
``(A) 5; or
``(B) 10 percent of the total number of employees of the
lead small business development center.
``(4) Reimbursement for certification.--
``(A) In general.--Subject to the availability of
appropriations, the Administrator shall reimburse a lead
small business development center or a lead women's business
center for costs relating to the certification of an employee
of the lead small business center or lead women's business
center in providing export assistance under the program
established under paragraph (2).
``(B) Limitation.--The total amount reimbursed by the
Administrator under subparagraph (A) may not exceed $350,000
in any fiscal year.
``(j) Performance Measures.--
``(1) In general.--The Associate Administrator shall
develop performance measures for the Administration to
support export growth goals for the activities of the Office
under this section that include--
``(A) the number of small business concerns that--
``(i) receive assistance from the Administration;
``(ii) had not exported goods or services before receiving
the assistance described in clause (i); and
``(iii) export goods or services;
``(B) the number of small business concerns receiving
assistance from the Administration that export goods or
services to a market outside the United States into which the
small business concern did not export before receiving the
assistance;
``(C) export revenues by small business concerns assisted
by programs of the Administration;
``(D) the number of small business concerns referred to an
Export Assistance Center or a small business development
center by the staff of the Office;
``(E) the number of small business concerns referred to the
Administration by an Export Assistance Center or a small
business development center; and
``(F) the number of small business concerns referred to the
Department of Commerce, the Department of Agriculture, the
Department of State, the Export-Import Bank of the United
States, the Overseas Private Investment Corporation, or the
United States Trade and Development Agency by the staff of
the Office, an Export Assistance Center, or a small business
development center.
``(2) Joint performance measures.--The Associate
Administrator shall develop joint performance measures for
the district offices of the Administration and the Export
Assistance Centers that include the number of export loans
made under--
``(A) section 7(a)(16);
``(B) the Export Working Capital Program established under
section 7(a)(14);
``(C) the Preferred Lenders Program, as defined in section
7(a)(2)(C)(ii); and
``(D) the export express program established under section
7(a)(34).
``(3) Consistency of tracking.--The Associate
Administrator, in coordination with the departments and
agencies that are represented on the Trade Promotion
Coordinating Committee established under section 2312 of the
Export Enhancement Act of 1988 (15 U.S.C. 4727) and the small
business development center network, shall develop a system
to track exports by small business concerns, including
information relating to the performance measures developed
under paragraph (1), that is consistent with systems used by
the departments and agencies and the network.''.
(b) Report.--Not later than 60 days after the date of
enactment of this Act, the Administrator shall submit a
report to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives on any travel by the
staff of the Office of International Trade of the
Administration, during the period beginning on October 1,
2004, and ending on the date of enactment of the Act,
including the destination of such travel and the benefits to
the Administration and to small business concerns resulting
from such travel.

SEC. 1205. EXPORT ASSISTANCE CENTERS.

(a) Export Assistance Centers.--Section 22 of the Small
Business Act (15 U.S.C. 649), as amended by this subtitle, is
amended by adding at the end the following:
``(k) Export Assistance Centers.--
``(1) Export finance specialists.--
``(A) Minimum number of export finance specialists.--On and
after the date that is 90 days after the date of enactment of
this subsection, the Administrator, in coordination with the
Secretary of Commerce, shall ensure that the number of export
finance specialists is not less than the number of such
employees so assigned on January 1, 2003.
``(B) Export finance specialists assigned to each region of
the administration.--On and after the date that is 2 years
after the date of enactment of this subsection, the
Administrator, in coordination with the Secretary of
Commerce, shall ensure that there are not fewer than 3 export
finance specialists in each region of the Administration.
``(2) Placement of export finance specialists.--
``(A) Priority.--The Administrator shall give priority, to
the maximum extent practicable, to placing employees of the
Administration at any Export Assistance Center that--
``(i) had an Administration employee assigned to the Export
Assistance Center before January 2003; and
``(ii) has not had an Administration employee assigned to
the Export Assistance Center during the period beginning
January 2003, and ending on the date of enactment of this
subsection, either through retirement or reassignment.
``(B) Needs of exporters.--The Administrator shall, to the
maximum extent practicable, strategically assign
Administration employees to Export Assistance Centers, based
on the needs of exporters.
``(C) Rule of construction.--Nothing in this subsection may
be construed to require the Administrator to reassign or
remove an export finance specialist who is assigned to an
Export Assistance Center on the date of enactment of this
subsection.
``(3) Goals.--The Associate Administrator shall work with
the Department of Commerce, the Export-Import Bank of the
United States, and the Overseas Private Investment
Corporation to establish shared annual goals for the Export
Assistance Centers.
``(4) Oversight.--The Associate Administrator shall
designate an individual within the Administration to oversee
all activities conducted by Administration employees assigned
to Export Assistance Centers.
``(l) Definitions.--In this section--
``(1) the term `Associate Administrator' means the
Associate Administrator for International Trade described in
subsection (a)(2);
``(2) the term `Export Assistance Center' means a one-stop
shop for United States exporters established by the United
States and Foreign Commercial Service of the Department of
Commerce pursuant to section 2301(b)(8) of the Omnibus Trade
and Competitiveness Act of 1988 (15 U.S.C. 4721(b)(8));
``(3) the term `export finance specialist' means a full-
time equivalent employee of the Office assigned to an Export
Assistance Center to carry out the duties described in
subsection (e); and
``(4) the term `Office' means the Office of International
Trade established under subsection (a)(1).''.
(b) Study and Report on Filling Gaps in High-and-Low-Export
Volume Areas.--
(1) Study and report.--Not later than 6 months after the
date of enactment of this Act, and every 2 years thereafter,
the Administrator shall--
(A) conduct a study of--
(i) the volume of exports for each State;
(ii) the availability of export finance specialists in each
State;

[[Page S6941]]

(iii) the number of exporters in each State that are small
business concerns;
(iv) the percentage of exporters in each State that are
small business concerns;
(v) the change, if any, in the number of exporters that are
small business concerns in each State--

(I) for the first study conducted under this subparagraph,
during the 10-year period ending on the date of enactment of
this Act; and
(II) for each subsequent study, during the 10-year period
ending on the date the study is commenced;

(vi) the total value of the exports in each State by small
business concerns;
(vii) the percentage of the total volume of exports in each
State that is attributable to small business concerns; and
(viii) the change, if any, in the percentage of the total
volume of exports in each State that is attributable to small
business concerns--

(I) for the first study conducted under this subparagraph,
during the 10-year period ending on the date of enactment of
this Act; and
(II) for each subsequent study, during the 10-year period
ending on the date the study is commenced; and

(B) submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report
containing--
(i) the results of the study under subparagraph (A);
(ii) to the extent practicable, a recommendation regarding
how to eliminate gaps between the supply of and demand for
export finance specialists in the 15 States that have the
greatest volume of exports, based upon the most recent data
available from the Department of Commerce;
(iii) to the extent practicable, a recommendation regarding
how to eliminate gaps between the supply of and demand for
export finance specialists in the 15 States that have the
lowest volume of exports, based upon the most recent data
available from the Department of Commerce; and
(iv) such additional information as the Administrator
determines is appropriate.
(2) Definition.--In this subsection, the term ``export
finance specialist'' has the meaning given that term in
section 22(l) of the Small Business Act, as added by this
title.

SEC. 1206. INTERNATIONAL TRADE FINANCE PROGRAMS.

(a) Loan Limits.--
(1) Total amount outstanding.--Section 7(a)(3)(B) of the
Small Business Act (15 U.S.C. 636(a)(3)(B)) is amended by
striking ``$1,750,000, of which not more than $1,250,000''
and inserting ``$4,500,000 (or if the gross loan amount would
exceed $5,000,000), of which not more than $4,000,000''.
(2) Participation.--Section 7(a)(2) of the Small Business
Act (15 U.S.C. 636(a)(2)) is amended--
(A) in subparagraph (A), in the matter preceding clause
(i), by striking ``subparagraph (B)'' and inserting
``subparagraphs (B), (D), and (E)'';
(B) in subparagraph (D), by striking ``Notwithstanding
subparagraph (A), in'' and inserting ``In''; and
(C) by adding at the end the following:
``(E) Participation in international trade loan.--In an
agreement to participate in a loan on a deferred basis under
paragraph (16), the participation by the Administration may
not exceed 90 percent.''.
(b) Working Capital.--Section 7(a)(16)(A) of the Small
Business Act (15 U.S.C. 636(a)(16)(A)) is amended--
(1) in the matter preceding clause (i), by striking ``in--
'' and inserting ``--'';
(2) in clause (i)--
(A) by inserting ``in'' after ``(i)''; and
(B) by striking ``or'' at the end;
(3) in clause (ii)--
(A) by inserting ``in'' after ``(ii)''; and
(B) by striking the period at the end and inserting ``,
including any debt that qualifies for refinancing under any
other provision of this subsection; or''; and
(4) by adding at the end the following:
``(iii) by providing working capital.''.
(c) Collateral.--Section 7(a)(16)(B) of the Small Business
Act (15 U.S.C. 636(a)(16)(B)) is amended--
(1) by striking ``Each loan'' and inserting the following:
``(i) In general.--Except as provided in clause (ii), each
loan''; and
(2) by adding at the end the following:
``(ii) Exception.--A loan under this paragraph may be
secured by a second lien position on the property or
equipment financed by the loan or on other assets of the
small business concern, if the Administrator determines the
lien provides adequate assurance of the payment of the
loan.''.
(d) Export Working Capital Program.--Section 7(a) of the
Small Business Act (15 U.S.C. 636(a)) is amended--
(1) in paragraph (2)(D), by striking ``not exceed'' and
inserting ``be''; and
(2) in paragraph (14)--
(A) by striking ``(A) The Administration'' and inserting
the following: ``Export working capital program.--
``(A) In general.--The Administrator'';
(B) by striking ``(B) When considering'' and inserting the
following:
``(C) Considerations.--When considering'';
(C) by striking ``(C) The Administration'' and inserting
the following:
``(D) Marketing.--The Administrator''; and
(D) by inserting after subparagraph (A) the following:
``(B) Terms.--
``(i) Loan amount.--The Administrator may not guarantee a
loan under this paragraph of more than $5,000,000.
``(ii) Fees.--

``(I) In general.--For a loan under this paragraph, the
Administrator shall collect the fee assessed under paragraph
(23) not more frequently than once each year.
``(II) Untapped credit.--The Administrator may not assess a
fee on capital that is not accessed by the small business
concern.''.

(e) Participation in Preferred Lenders Program.--Section
7(a)(2)(C) of the Small Business Act (15 U.S.C. 636(a)(2)(C))
is amended--
(1) by redesignating clause (ii) as clause (iii); and
(2) by inserting after clause (i) the following:
``(ii) Export-import bank lenders.--Any lender that is
participating in the Delegated Authority Lender Program of
the Export-Import Bank of the United States (or any successor
to the Program) shall be eligible to participate in the
Preferred Lenders Program.''.
(f) Export Express Program.--Section 7(a) of the Small
Business Act (15 U.S.C. 636(a)) is amended by adding at the
end the following:
``(35) Export express program.--
``(A) Definitions.--In this paragraph--
``(i) the term `export development activity' includes--

``(I) obtaining a standby letter of credit when required as
a bid bond, performance bond, or advance payment guarantee;
``(II) participation in a trade show that takes place
outside the United States;
``(III) translation of product brochures or catalogues for
use in markets outside the United States;
``(IV) obtaining a general line of credit for export
purposes;
``(V) performing a service contract from buyers located
outside the United States;
``(VI) obtaining transaction-specific financing associated
with completing export orders;
``(VII) purchasing real estate or equipment to be used in
the production of goods or services for export;
``(VIII) providing term loans or other financing to enable
a small business concern, including an export trading company
and an export management company, to develop a market outside
the United States; and
``(IX) acquiring, constructing, renovating, modernizing,
improving, or expanding a production facility or equipment to
be used in the United States in the production of goods or
services for export; and

``(ii) the term `express loan' means a loan in which a
lender uses to the maximum extent practicable the loan
analyses, procedures, and documentation of the lender to
provide expedited processing of the loan application.
``(B) Authority.--The Administrator may guarantee the
timely payment of an express loan to a small business concern
made for an export development activity.
``(C) Level of participation.--
``(i) Maximum amount.--The maximum amount of an express
loan guaranteed under this paragraph shall be $500,000.
``(ii) Percentage.--For an express loan guaranteed under
this paragraph, the Administrator shall guarantee--

``(I) 90 percent of a loan that is not more than $350,000;
and
``(II) 75 percent of a loan that is more than $350,000 and
not more than $500,000.''.

(g) Annual Listing of Export Finance Lenders.--Section
7(a)(16) of the Small Business Act (15 U.S.C. 636(a)(16)) is
amended by adding at the end the following:
``(F) List of export finance lenders.--
``(i) Publication of list required.--The Administrator
shall publish an annual list of the banks and participating
lending institutions that, during the 1-year period ending on
the date of publication of the list, have made loans
guaranteed by the Administration under--

``(I) this paragraph;
``(II) paragraph (14); or
``(III) paragraph (34).

``(ii) Availability of list.--The Administrator shall--

``(I) post the list published under clause (i) on the
website of the Administration; and
``(II) make the list published under clause (i) available,
upon request, at each district office of the
Administration.''.

(h) Applicability.--The amendments made by subsections (a)
through (f) shall apply with respect to any loan made after
the date of enactment of this Act.

SEC. 1207. STATE TRADE AND EXPORT PROMOTION GRANT PROGRAM.

(a) Definitions.--In this section--
(1) the term ``eligible small business concern'' means a
small business concern that--
(A) has been in business for not less than the 1-year
period ending on the date on which assistance is provided
using a grant under this section;
(B) is operating profitably, based on operations in the
United States;
(C) has demonstrated understanding of the costs associated
with exporting and doing business with foreign purchasers,
including the costs of freight forwarding, customs brokers,
packing and shipping, as determined by the Associate
Administrator; and
(D) has in effect a strategic plan for exporting;

[[Page S6942]]

(2) the term ``program'' means the State Trade and Export
Promotion Grant Program established under subsection (b);
(3) the term ``small business concern owned and controlled
by women'' has the meaning given that term in section 3 of
the Small Business Act (15 U.S.C. 632);
(4) the term ``socially and economically disadvantaged
small business concern'' has the meaning given that term in
section 8(a)(4)(A) of the Small Business Act (15 U.S.C.
6537(a)(4)(A)); and
(5) the term ``State'' means each of the several States,
the District of Columbia, the Commonwealth of Puerto Rico,
the Virgin Islands, Guam, and American Samoa.
(b) Establishment of Program.--The Associate Administrator
shall establish a 3-year trade and export promotion pilot
program to be known as the State Trade and Export Promotion
Grant Program, to make grants to States to carry out export
programs that assist eligible small business concerns in--
(1) participation in a foreign trade mission;
(2) a foreign market sales trip;
(3) a subscription to services provided by the Department
of Commerce;
(4) the payment of website translation fees;
(5) the design of international marketing media;
(6) a trade show exhibition;
(7) participation in training workshops; or
(8) any other export initiative determined appropriate by
the Associate Administrator.
(c) Grants.--
(1) Joint review.--In carrying out the program, the
Associate Administrator may make a grant to a State to
increase the number of eligible small business concerns in
the State that export or to increase the value of the exports
by eligible small business concerns in the State.
(2) Considerations.--In making grants under this section,
the Associate Administrator may give priority to an
application by a State that proposes a program that--
(A) focuses on eligible small business concerns as part of
an export promotion program;
(B) demonstrates success in promoting exports by--
(i) socially and economically disadvantaged small business
concerns;
(ii) small business concerns owned or controlled by women;
and
(iii) rural small business concerns;
(C) promotes exports from a State that is not 1 of the 10
States with the highest percentage of exporters that are
small business concerns, based upon the latest data available
from the Department of Commerce; and
(D) promotes new-to-market export opportunities to the
People's Republic of China for eligible small business
concerns in the United States.
(3) Limitations.--
(A) Single application.--A State may not submit more than 1
application for a grant under the program in any 1 fiscal
year.
(B) Proportion of amounts.--The total value of grants under
the program made during a fiscal year to the 10 States with
the highest number of exporters that are small business
concerns, based upon the latest data available from the
Department of Commerce, shall be not more than 40 percent of
the amounts appropriated for the program for that fiscal
year.
(4) Application.--A State desiring a grant under the
program shall submit an application at such time, in such
manner, and accompanied by such information as the Associate
Administrator may establish.
(d) Competitive Basis.--The Associate Administrator shall
award grants under the program on a competitive basis.
(e) Federal Share.--The Federal share of the cost of an
export program carried out using a grant under the program
shall be--
(1) for a State that has a high export volume, as
determined by the Associate Administrator, not more than 65
percent; and
(2) for a State that does not have a high export volume, as
determined by the Associate Administrator, not more than 75
percent.
(f) Non-Federal Share.--The non-Federal share of the cost
of an export program carried using a grant under the program
shall be comprised of not less than 50 percent cash and not
more than 50 percent of indirect costs and in-kind
contributions, except that no such costs or contributions may
be derived from funds from any other Federal program.
(g) Reports.--
(1) Initial report.--Not later than 120 days after the date
of enactment of this Act, the Associate Administrator shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report, which
shall include--
(A) a description of the structure of and procedures for
the program;
(B) a management plan for the program; and
(C) a description of the merit-based review process to be
used in the program.
(2) Annual reports.--The Associate Administrator shall
submit an annual report to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives regarding the
program, which shall include--
(A) the number and amount of grants made under the program
during the preceding year;
(B) a list of the States receiving a grant under the
program during the preceding year, including the activities
being performed with grant; and
(C) the effect of each grant on exports by eligible small
business concerns in the State receiving the grant.
(h) Reviews by Inspector General.--
(1) In general.--The Inspector General of the
Administration shall conduct a review of--
(A) the extent to which recipients of grants under the
program are measuring the performance of the activities being
conducted and the results of the measurements; and
(B) the overall management and effectiveness of the
program.
(2) Report.--Not later than September 30, 2012, the
Inspector General of the Administration shall submit to the
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives a report regarding the review conducted under
paragraph (1).
(i) Authorization of Appropriations.--There is authorized
to be appropriated to carry out the program $30,000,000 for
each of fiscal years 2011, 2012, and 2013.
(j) Termination.--The authority to carry out the program
shall terminate 3 years after the date on which the Associate
Administrator establishes the program.

SEC. 1208. RURAL EXPORT PROMOTION.

Not later than 6 months after the date of enactment of this
Act, the Administrator, in consultation with the Secretary of
Agriculture and the Secretary of Commerce, shall submit to
the Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives a report that contains--
(1) a description of each program of the Administration
that promotes exports by rural small business concerns,
including--
(A) the number of rural small business concerns served by
the program;
(B) the change, if any, in the number of rural small
business concerns as a result of participation in the program
during the 10-year period ending on the date of enactment of
this Act;
(C) the volume of exports by rural small business concerns
that participate in the program; and
(D) the change, if any, in the volume of exports by rural
small businesses that participate in the program during the
10-year period ending on the date of enactment of this Act;
(2) a description of the coordination between programs of
the Administration and other Federal programs that promote
exports by rural small business concerns;
(3) recommendations, if any, for improving the coordination
described in paragraph (2);
(4) a description of any plan by the Administration to
market the international trade financing programs of the
Administration through lenders that--
(A) serve rural small business concerns; and
(B) are associated with financing programs of the
Department of Agriculture;
(5) recommendations, if any, for improving coordination
between the counseling programs and export financing programs
of the Administration, in order to increase the volume of
exports by rural small business concerns; and
(6) any additional information the Administrator determines
is necessary.

SEC. 1209. INTERNATIONAL TRADE COOPERATION BY SMALL BUSINESS
DEVELOPMENT CENTERS.

Section 21(a) of the Small Business Act (15 U.S.C. 648(a))
is amended--
(1) by striking ``(2) The Small Business Development
Centers'' and inserting the following:
``(2) Cooperation to provide international trade
services.--
``(A) Information and services.--The small business
development centers''; and
(2) in paragraph (2)--
(A) in subparagraph (A), as so designated, by inserting
``(including State trade agencies),'' after ``local
agencies''; and
(B) by adding at the end the following:
``(B) Cooperation with state trade agencies and export
assistance centers.--A small business development center that
counsels a small business concern on issues relating to
international trade shall--
``(i) consult with State trade agencies and Export
Assistance Centers to provide appropriate services to the
small business concern; and
``(ii) as necessary, refer the small business concern to a
State trade agency or an Export Assistance Center for further
counseling or assistance.
``(C) Definition.--In this paragraph, the term `Export
Assistance Center' has the same meaning as in section 22.''.

Subtitle C--Small Business Contracting

PART I--CONTRACT BUNDLING

SEC. 1311. SMALL BUSINESS ACT.

Section 3 of the Small Business Act (15 U.S.C. 632), as
amended by section 1202, is amended by adding at the end the
following:
``(v) Multiple Award Contract.--In this Act, the term
`multiple award contract' means--
``(1) a multiple award task order contract or delivery
order contract that is entered into under the authority of
sections 303H through 303K of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C. 253h through
253k); and
``(2) any other indefinite delivery, indefinite quantity
contract that is entered into

[[Page S6943]]

by the head of a Federal agency with 2 or more sources
pursuant to the same solicitation.''.

SEC. 1312. LEADERSHIP AND OVERSIGHT.

(a) In General.--Section 15 of the Small Business Act (15
U.S.C. 644) is amended by adding at the end the following:
``(q) Bundling Accountability Measures.--
``(1) Teaming requirements.--Each Federal agency shall
include in each solicitation for any multiple award contract
above the substantial bundling threshold of the Federal
agency a provision soliciting bids from any responsible
source, including responsible small business concerns and
teams or joint ventures of small business concerns.
``(2) Policies on reduction of contract bundling.--
``(A) In general.--Not later than 1 year after the date of
enactment of this subsection, the Federal Acquisition
Regulatory Council established under section 25(a) of the
Office of Federal Procurement Policy Act (41 U.S.C. 4219(a))
shall amend the Federal Acquisition Regulation issued under
section 25 of such Act to--
``(i) establish a Government-wide policy regarding contract
bundling, including regarding the solicitation of teaming and
joint ventures under paragraph (1); and
``(ii) require that the policy established under clause (i)
be published on the website of each Federal agency.
``(B) Rationale for contract bundling.--Not later than 30
days after the date on which the head of a Federal agency
submits data certifications to the Administrator for Federal
Procurement Policy, the head of the Federal agency shall
publish on the website of the Federal agency a list and
rationale for any bundled contract for which the Federal
agency solicited bids or that was awarded by the Federal
agency.
``(3) Reporting.--Not later than 90 days after the date of
enactment of this subsection, and every 3 years thereafter,
the Administrator shall submit to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives a report
regarding procurement center representatives and commercial
market representatives, which shall--
``(A) identify each area for which the Administration has
assigned a procurement center representative or a commercial
market representative;
``(B) explain why the Administration selected the areas
identified under subparagraph (A); and
``(C) describe the activities performed by procurement
center representatives and commercial market
representatives.''.
(b) Technical Correction.--Section 15(g) of the Small
Business Act (15 U.S.C. 644(g)) is amended by striking
``Administrator of the Office of Federal Procurement Policy''
each place it appears and inserting ``Administrator for
Federal Procurement Policy''.
(c) Report.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Comptroller General of the United
States shall submit to Congress a report regarding the
procurement center representative program of the
Administration.
(2) Contents.--The report submitted under paragraph (1)
shall--
(A) address ways to improve the effectiveness of the
procurement center representative program in helping small
business concerns obtain Federal contracts;
(B) evaluate the effectiveness of procurement center
representatives and commercial marketing representatives; and
(C) include recommendations, if any, on how to improve the
procurement center representative program.
(d) Electronic Procurement Center Representative.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall implement a 3-
year pilot electronic procurement center representative
program.
(2) Report.--Not later than 30 days after the pilot program
under paragraph (1) ends, the Comptroller General of the
United States shall submit to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report regarding
the pilot program.

SEC. 1313. CONSOLIDATION OF CONTRACT REQUIREMENTS.

(a) In General.--The Small Business Act (15 U.S.C. 631 et
seq.) is amended--
(1) by redesignating section 44 as section 45; and
(2) by inserting after section 43 the following:

``SEC. 44. CONSOLIDATION OF CONTRACT REQUIREMENTS.

``(a) Definitions.--In this section--
``(1) the term `Chief Acquisition Officer' means the
employee of a Federal agency designated as the Chief
Acquisition Officer for the Federal agency under section
16(a) of the Office of Federal Procurement Policy Act (41
U.S.C. 414(a));
``(2) the term `consolidation of contract requirements',
with respect to contract requirements of a Federal agency,
means a use of a solicitation to obtain offers for a single
contract or a multiple award contract to satisfy 2 or more
requirements of the Federal agency for goods or services that
have been provided to or performed for the Federal agency
under 2 or more separate contracts lower in cost than the
total cost of the contract for which the offers are
solicited; and
``(3) the term `senior procurement executive' means an
official designated under section 16(c) of the Office of
Federal Procurement Policy Act (41 U.S.C. 414(c)) as the
senior procurement executive for a Federal agency.
``(b) Policy.--The head of each Federal agency shall ensure
that the decisions made by the Federal agency regarding
consolidation of contract requirements of the Federal agency
are made with a view to providing small business concerns
with appropriate opportunities to participate as prime
contractors and subcontractors in the procurements of the
Federal agency.
``(c) Limitation on Use of Acquisition Strategies Involving
Consolidation.--
``(1) In general.--Subject to paragraph (4), the head of a
Federal agency may not carry out an acquisition strategy that
includes a consolidation of contract requirements of the
Federal agency with a total value of more than $2,000,000,
unless the senior procurement executive or Chief Acquisition
Officer for the Federal agency, before carrying out the
acquisition strategy--
``(A) conducts market research;
``(B) identifies any alternative contracting approaches
that would involve a lesser degree of consolidation of
contract requirements;
``(C) makes a written determination that the consolidation
of contract requirements is necessary and justified;
``(D) identifies any negative impact by the acquisition
strategy on contracting with small business concerns; and
``(E) certifies to the head of the Federal agency that
steps will be taken to include small business concerns in the
acquisition strategy.
``(2) Determination that consolidation is necessary and
justified.--
``(A) In general.--A senior procurement executive or Chief
Acquisition Officer may determine that an acquisition
strategy involving a consolidation of contract requirements
is necessary and justified for the purposes of paragraph
(1)(C) if the benefits of the acquisition strategy
substantially exceed the benefits of each of the possible
alternative contracting approaches identified under paragraph
(1)(B).
``(B) Savings in administrative or personnel costs.--For
purposes of subparagraph (A), savings in administrative or
personnel costs alone do not constitute a sufficient
justification for a consolidation of contract requirements in
a procurement unless the expected total amount of the cost
savings, as determined by the senior procurement executive or
Chief Acquisition Officer, is expected to be substantial in
relation to the total cost of the procurement.
``(3) Benefits to be considered.--The benefits considered
for the purposes of paragraphs (1) and (2) may include cost
and, regardless of whether quantifiable in dollar amounts--
``(A) quality;
``(B) acquisition cycle;
``(C) terms and conditions; and
``(D) any other benefit.
``(4) Department of defense.--
``(A) In general.--The Department of Defense and each
military department shall comply with this section until
after the date described in subparagraph (C).
``(B) Rule.--After the date described in subparagraph (C),
contracting by the Department of Defense or a military
department shall be conducted in accordance with section 2382
of title 10, United States Code.
``(C) Date.--The date described in this subparagraph is the
date on which the Administrator determines the Department of
Defense or a military department is in compliance with the
Government-wide contracting goals under section 15.''.
(b) Technical and Conforming Amendment.--Section 2382(b)(1)
of title 10, United States Code, is amended by striking ``An
official'' and inserting ``Subject to section 44(c)(4), an
official''.

SEC. 1314. SMALL BUSINESS TEAMS PILOT PROGRAM.

(a) Definitions.--In this section--
(1) the term ``Pilot Program'' means the Small Business
Teaming Pilot Program established under subsection (b); and
(2) the term ``eligible organization'' means a well-
established national organization for small business concerns
with the capacity to provide assistance to small business
concerns (which may be provided with the assistance of the
Administrator) relating to--
(A) customer relations and outreach;
(B) team relations and outreach; and
(C) performance measurement and quality assurance.
(b) Establishment.--The Administrator shall establish a
Small Business Teaming Pilot Program for teaming and joint
ventures involving small business concerns.
(c) Grants.--Under the Pilot Program, the Administrator may
make grants to eligible organizations to provide assistance
and guidance to teams of small business concerns seeking to
compete for larger procurement contracts.
(d) Contracting Opportunities.--The Administrator shall
work with eligible organizations receiving a grant under the
Pilot Program to recommend appropriate contracting
opportunities for teams or joint ventures of small business
concerns.
(e) Report.--Not later than 1 year before the date on which
the authority to carry out the Pilot Program terminates under
subsection (f), the Administrator shall submit

[[Page S6944]]

to the Committee on Small Business and Entrepreneurship of
the Senate and the Committee on Small Business of the House
of Representatives a report on the effectiveness of the Pilot
Program.
(f) Termination.--The authority to carry out the Pilot
Program shall terminate 5 years after the date of enactment
of this Act.
(g) Authorization of Appropriations.--There are authorized
to be appropriated for grants under subsection (c) $5,000,000
for each of fiscal years 2010 through 2015.

PART II--SUBCONTRACTING INTEGRITY

SEC. 1321. SUBCONTRACTING MISREPRESENTATIONS.

Not later than 1 year after the date of enactment of this
Act, the Administrator, in consultation with the
Administrator for Federal Procurement Policy, shall
promulgate regulations relating to, and the Federal
Acquisition Regulatory Council established under section
25(a) of the Office of Federal Procurement Policy Act (41
U.S.C. 421(a)) shall amend the Federal Acquisition Regulation
issued under section 25 of such Act to establish a policy on,
subcontracting compliance relating to small business
concerns, including assignment of compliance responsibilities
between contracting offices, small business offices, and
program offices and periodic oversight and review activities.

SEC. 1322. SMALL BUSINESS SUBCONTRACTING IMPROVEMENTS.

Section 8(d)(6) of the Small Business Act (15 U.S.C.
637(d)(6)) is amended--
(1) in subparagraph (E), by striking ``and'' at the end;
(2) in subparagraph (F), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end, the following:
``(G) a representation that the offeror or bidder will--
``(i) make a good faith effort to acquire articles,
equipment, supplies, services, or materials, or obtain the
performance of construction work from the small business
concerns used in preparing and submitting to the contracting
agency the bid or proposal, in the same amount and quality
used in preparing and submitting the bid or proposal; and
``(ii) provide to the contracting officer a written
explanation if the offeror or bidder fails to acquire
articles, equipment, supplies, services, or materials or
obtain the performance of construction work as described in
clause (i).''.

PART III--ACQUISITION PROCESS

SEC. 1331. RESERVATION OF PRIME CONTRACT AWARDS FOR SMALL
BUSINESSES.

Section 15 of the Small Business Act (15 U.S.C. 644), as
amended by this Act, is amended by adding at the end the
following:
``(r) Multiple Award Contracts.--Not later than 1 year
after the date of enactment of this subsection, the
Administrator for Federal Procurement Policy and the
Administrator, in consultation with the Administrator of
General Services, shall, by regulation, establish guidance
under which Federal agencies may, at their discretion--
``(1) set aside part or parts of a multiple award contract
for small business concerns, including the subcategories of
small business concerns identified in subsection (g)(2);
``(2) notwithstanding the fair opportunity requirements
under section 2304c(b) of title 10, United States Code, and
section 303J(b) of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 253j(b)), set aside orders
placed against multiple award contracts for small business
concerns, including the subcategories of small business
concerns identified in subsection (g)(2); and
``(3) reserve 1 or more contract awards for small business
concerns under full and open multiple award procurements,
including the subcategories of small business concerns
identified in subsection (g)(2).''.

SEC. 1332. MICRO-PURCHASE GUIDELINES.

Not later than 1 year after the date of enactment of this
Act, the Director of the Office of Management and Budget, in
coordination with the Administrator of General Services,
shall issue guidelines regarding the analysis of purchase
card expenditures to identify opportunities for achieving and
accurately measuring fair participation of small business
concerns in purchases in an amount not in excess of the
micro-purchase threshold, as defined in section 32 of the
Office of Federal Procurement Policy Act (41 U.S.C. 428) (in
this section referred to as ``micro-purchases''), consistent
with the national policy on small business participation in
Federal procurements set forth in sections 2(a) and 15(g) of
the Small Business Act (15 U.S.C. 631(a) and 644(g)), and
dissemination of best practices for participation of small
business concerns in micro-purchases.

SEC. 1333. AGENCY ACCOUNTABILITY.

Section 15(g)(2) of the Small Business Act (15 U.S.C.
644(g)(2)) is amended--
(1) by inserting ``(A)'' after ``(2)'';
(2) by striking ``Goals established'' and inserting the
following:
``(B) Goals established'';
(3) by striking ``Whenever'' and inserting the following:
``(C) Whenever'';
(4) by striking ``For the purpose of'' and inserting the
following:
``(D) For the purpose of'';
(5) by striking ``The head of each Federal agency, in
attempting to attain such participation'' and inserting the
following:
``(E) The head of each Federal agency, in attempting to
attain the participation described in subparagraph (D)''.
(6) in subparagraph (E), as so designated--
(A) by striking ``(A) contracts'' and inserting ``(i)
contracts''; and
(B) by striking ``(B) contracts'' and inserting ``(ii)
contracts''; and
(7) by adding at the end the following:
``(F)(i) Each procurement employee or program manager
described in clause (ii) shall communicate to the
subordinates of the procurement employee or program manager
the importance of achieving small business goals.
``(ii) A procurement employee or program manager described
in this clause is a senior procurement executive, senior
program manager, or Director of Small and Disadvantaged
Business Utilization of a Federal agency having contracting
authority.''.

SEC. 1334. PAYMENT OF SUBCONTRACTORS.

Section 8(d) of the Small Business Act (15 U.S.C. 637(d))
is amended by adding at the end the following:
``(12) Payment of Subcontractors.--
``(A) Definition.--In this paragraph, the term `covered
contract' means a contract relating to which a prime
contractor is required to develop a subcontracting plan under
paragraph (4) or (5).
``(B) Notice.--
``(i) In general.--A prime contractor for a covered
contract shall notify in writing the contracting officer for
the covered contract if the prime contractor pays a reduced
price to a subcontractor for goods and services upon
completion of the responsibilities of the subcontractor or
the payment to a subcontractor is more than 90 days past due
for goods or services provided for the covered contract for
which the Federal agency has paid the prime contractor.
``(ii) Contents.--A prime contractor shall include the
reason for the reduction in a payment to or failure to pay a
subcontractor in any notice made under clause (i).
``(C) Performance.--A contracting officer for a covered
contract shall consider the unjustified failure by a prime
contractor to make a full or timely payment to a
subcontractor in evaluating the performance of the prime
contractor.
``(D) Control of funds.--If the contracting officer for a
covered contract determines that a prime contractor has a
history of unjustified, untimely payments to contractors, the
contracting officer shall record the identity of the
contractor in accordance with the regulations promulgated
under subparagraph (E).
``(E) Regulations.--Not later than 1 year after the date of
enactment of this paragraph, the Federal Acquisition
Regulatory Council established under section 25(a) of the
Office of Federal Procurement Policy Act (41 U.S.C. 421(a))
shall amend the Federal Acquisition Regulation issued under
section 25 of such Act to--
``(i) describe the circumstances under which a contractor
may be determined to have a history of unjustified, untimely
payments to subcontractors;
``(ii) establish a process for contracting officers to
record the identity of a contractor described in clause (i);
and
``(iii) require the identity of a contractor described in
clause (i) to be incorporated in, and made publicly available
through, the Federal Awardee Performance and Integrity
Information System, or any successor thereto.''.

SEC. 1335. REPEAL OF SMALL BUSINESS COMPETITIVENESS
DEMONSTRATION PROGRAM.

(a) In General.--The Business Opportunity Development
Reform Act of 1988 (Public Law 100-656) is amended by
striking title VII (15 U.S.C. 644 note).
(b) Effective Date and Applicability.--The amendment made
by this section--
(1) shall take effect on the date of enactment of this Act;
and
(2) apply to the first full fiscal year after the date of
enactment of this Act.

PART IV--SMALL BUSINESS SIZE AND STATUS INTEGRITY

SEC. 1341. POLICY AND PRESUMPTIONS.

Section 3 of the Small Business Act (15 U.S.C. 632), as
amended by section 1311, is amended by adding at the end the
following:
``(w) Presumption.--
``(1) In general.--In every contract, subcontract,
cooperative agreement, cooperative research and development
agreement, or grant which is set aside, reserved, or
otherwise classified as intended for award to small business
concerns, there shall be a presumption of loss to the United
States based on the total amount expended on the contract,
subcontract, cooperative agreement, cooperative research and
development agreement, or grant whenever it is established
that a business concern other than a small business concern
willfully sought and received the award by misrepresentation.
``(2) Deemed certifications.--The following actions shall
be deemed affirmative, willful, and intentional
certifications of small business size and status:
``(A) Submission of a bid or proposal for a Federal grant,
contract, subcontract, cooperative agreement, or cooperative
research and development agreement reserved, set aside, or
otherwise classified as intended for award to small business
concerns.
``(B) Submission of a bid or proposal for a Federal grant,
contract, subcontract, cooperative agreement, or cooperative
research and development agreement which in any way
encourages a Federal agency to classify the bid or proposal,
if awarded, as an award to a small business concern.

[[Page S6945]]

``(C) Registration on any Federal electronic database for
the purpose of being considered for award of a Federal grant,
contract, subcontract, cooperative agreement, or cooperative
research agreement, as a small business concern.
``(3) Certification by signature of responsible official.--
``(A) In general.--Each solicitation, bid, or application
for a Federal contract, subcontract, or grant shall contain a
certification concerning the small business size and status
of a business concern seeking the Federal contract,
subcontract, or grant.
``(B) Content of certifications.--A certification that a
business concern qualifies as a small business concern of the
exact size and status claimed by the business concern for
purposes of bidding on a Federal contract or subcontract, or
applying for a Federal grant, shall contain the signature of
an authorized official on the same page on which the
certification is contained.
``(4) Regulations.--The Administrator shall promulgate
regulations to provide adequate protections to individuals
and business concerns from liability under this subsection in
cases of unintentional errors, technical malfunctions, and
other similar situations.''.

SEC. 1342. ANNUAL CERTIFICATION.

Section 3 of the Small Business Act (15 U.S.C. 632), as
amended by section 1341, is amended by adding at the end the
following:
``(x) Annual Certification.--
``(1) In general.--Each business certified as a small
business concern under this Act shall annually certify its
small business size and, if appropriate, its small business
status, by means of a confirming entry on the Online
Representations and Certifications Application database of
the Administration, or any successor thereto.
``(2) Regulations.--Not later than 1 year after the date of
enactment of this subsection, the Administrator, in
consultation with the Inspector General and the Chief Counsel
for Advocacy of the Administration, shall promulgate
regulations to ensure that--
``(A) no business concern continues to be certified as a
small business concern on the Online Representations and
Certifications Application database of the Administration, or
any successor thereto, without fulfilling the requirements
for annual certification under this subsection; and
``(B) the requirements of this subsection are implemented
in a manner presenting the least possible regulatory burden
on small business concerns.''.

SEC. 1343. TRAINING FOR CONTRACTING AND ENFORCEMENT
PERSONNEL.

(a) In General.--Not later than 1 year after the date of
enactment of this Act, the Federal Acquisition Institute, in
consultation with the Administrator for Federal Procurement
Policy, the Defense Acquisition University, and the
Administrator, shall develop courses for acquisition
personnel concerning proper classification of business
concerns and small business size and status for purposes of
Federal contracts, subcontracts, grants, cooperative
agreements, and cooperative research and development
agreements.
(b) Policy on Prosecutions of Small Business Size and
Status Fraud.--Section 3 of the Small Business Act (15 U.S.C.
632), as amended by section 1342, is amended by adding at the
end the following:
``(y) Policy on Prosecutions of Small Business Size and
Status Fraud.--Not later than 1 year after the date of
enactment of this subsection, the Administrator, in
consultation with the Attorney General, shall issue a
Government-wide policy on prosecution of small business size
and status fraud, which shall direct Federal agencies to
appropriately publicize the policy.''.

SEC. 1344. UPDATED SIZE STANDARDS.

(a) Rolling Review.--
(1) In general.--The Administrator shall--
(A) during the 18-month period beginning on the date of
enactment of this Act, and during every 18-month period
thereafter, conduct a detailed review of not less than \1/3\
of the size standards for small business concerns established
under section 3(a)(2) of the Small Business Act (15 U.S.C.
632(a)(2)), which shall include holding not less than 2
public forums located in different geographic regions of the
United States;
(B) after completing each review under subparagraph (A)
make appropriate adjustments to the size standards
established under section 3(a)(2) of the Small Business Act
to reflect market conditions;
(C) make publicly available--
(i) information regarding the factors evaluated as part of
each review conducted under subparagraph (A); and
(ii) information regarding the criteria used for any
revised size standards promulgated under subparagraph (B);
and
(D) not later than 30 days after the date on which the
Administrator completes each review under subparagraph (A),
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives and make publicly
available a report regarding the review, including why the
Administrator--
(i) used the factors and criteria described in subparagraph
(C); and
(ii) adjusted or did not adjust each size standard that was
reviewed under the review.
(2) Complete review of size standards.--The Administrator
shall ensure that each size standard for small business
concerns established under section 3(a)(2) of the Small
Business Act (15 U.S.C. 632(a)(2)) is reviewed under
paragraph (1) not less frequently than once every 5 years.
(b) Rules.--Not later than 1 year after the date of
enactment of this Act, the Administrator shall promulgate
rules for conducting the reviews required under subsection
(a).

SEC. 1345. STUDY AND REPORT ON THE MENTOR-PROTEGE PROGRAM.

(a) In General.--The Comptroller General of the United
States shall conduct a study of the mentor-protege program of
the Administration for small business concerns participating
in programs under section 8(a) of the Small Business Act (15
U.S.C. 637(a)), and other relationships and strategic
alliances pairing a larger business and a small business
concern partner to gain access to Federal Government
contracts, to determine whether the programs and
relationships are effectively supporting the goal of
increasing the participation of small business concerns in
Government contracting.
(b) Matters To Be Studied.--The study conducted under this
section shall include--
(1) a review of a broad cross-section of industries; and
(2) an evaluation of--
(A) how each Federal agency carrying out a program
described in subsection (a) administers and monitors the
program;
(B) whether there are systems in place to ensure that the
mentor-protege relationship, or similar affiliation, promotes
real gain to the protege, and is not just a mechanism to
enable participants that would not otherwise qualify under
section 8(a) of the Small Business Act (15 U.S.C. 637(a)) to
receive contracts under that section; and
(C) the degree to which protege businesses become able to
compete for Federal contracts without the assistance of a
mentor.
(c) Report to Congress.--Not later than 180 days after the
date of enactment of this Act, the Comptroller General shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report on the
results of the study conducted under this section.

SEC. 1346. CONTRACTING GOALS REPORTS.

Section 15(h)(2) of the Small Business Act (15 U.S.C.
644(h)(2)) is amended by striking ``submit them'' and all
that follows through ``the following:'' and inserting
``submit to the President and the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives the compilation and
analysis, which shall include the following:''.

SEC. 1347. SMALL BUSINESS CONTRACTING PARITY.

(a) Definitions.--In this section--
(1) the terms ``Administration'' and ``Administrator'' mean
the Small Business Administration and the Administrator
thereof, respectively; and
(2) the terms ``HUBZone small business concern'', ``small
business concern'', ``small business concern owned and
controlled by service-disabled veterans'', and ``small
business concern owned and controlled by women'' have the
same meanings as in section 3 of the Small Business Act (15
U.S.C. 632).
(b) Contracting Improvements.--
(1) Contracting opportunities.--Section 31(b)(2)(B) of the
Small Business Act (15 U.S.C. 657a(b)(2)(B)) is amended by
striking ``shall'' and inserting ``may''.
(2) Contracting goals.--Section 15(g)(1) of the Small
Business Act (15 U.S.C. 644(g)(1)) is amended in the fourth
sentence by inserting ``and subcontract'' after ``not less
than 3 percent of the total value of all prime contract''.
(3) Mentor-protege programs.--The Administrator may
establish mentor-protege programs for small business concerns
owned and controlled by service-disabled veterans, small
business concerns owned and controlled by women, and HUBZone
small business concerns modeled on the mentor-protege program
of the Administration for small business concerns
participating in programs under section 8(a) of the Small
Business Act (15 U.S.C. 637(a)).
(c) Small Business Contracting Programs Parity.--Section
31(b)(2) of the Small Business Act (15 U.S.C. 657a(b)(2)) is
amended--
(1) in the matter preceding subparagraph (A), by striking
``Notwithstanding any other provision of law--'';
(2) in subparagraph (A)--
(A) in the matter preceding clause (i), by striking ``a
contracting'' and inserting ``Sole source contracts.--A
contracting''; and
(B) in clause (iii), by striking the semicolon at the end
and inserting a period;
(3) in subparagraph (B)--
(A) by striking ``a contract opportunity shall'' and
inserting ``Restricted competition.--A contract opportunity
may''; and
(B) by striking ``; and'' and inserting a period; and
(4) in subparagraph (C), by striking ``not later'' and
inserting ``Appeals.--Not later''.

Subtitle D--Small Business Management and Counseling Assistance

SEC. 1401. MATCHING REQUIREMENTS UNDER SMALL BUSINESS
PROGRAMS.

(a) Microloan Program.--Section 7(m) of the Small Business
Act (15 U.S.C. 636(m)) is amended--
(1) in paragraph (3)(B)--
(A) by striking ``As a condition'' and inserting the
following:
``(i) In general.--Subject to clause (ii), as a
condition'';

[[Page S6946]]

(B) by striking ``the Administration'' and inserting ``the
Administrator''; and
(C) by adding at the end the following:
``(ii) Waiver of non-federal share.--

``(I) In general.--Upon request by an intermediary, and in
accordance with this clause, the Administrator may waive, in
whole or in part, the requirement to obtain non-Federal funds
under clause (i) for a fiscal year. The Administrator may
waive the requirement to obtain non-Federal funds under this
clause for successive fiscal years.
``(II) Considerations.--In determining whether to waive the
requirement to obtain non-Federal funds under this clause,
the Administrator shall consider--

``(aa) the economic conditions affecting the intermediary;
``(bb) the impact a waiver under this clause would have on
the credibility of the microloan program under this
subsection;
``(cc) the demonstrated ability of the intermediary to
raise non-Federal funds; and
``(dd) the performance of the intermediary.

``(III) Limitations.--

``(aa) In general.--The Administrator may not waive the
requirement to obtain non-Federal funds under this clause if
granting the waiver would undermine the credibility of the
microloan program under this subsection.
``(bb) Sunset.--The Administrator may not waive the
requirement to obtain non-Federal funds under this clause for
fiscal year 2013 or any fiscal year thereafter.''; and
(2) in paragraph (4)(B)--
(A) by striking ``As a condition'' and all that follows
through ``the Administration shall require'' and inserting
the following:
``(i) In general.--Subject to clause (ii), as a condition
of a grant made under subparagraph (A), the Administrator
shall require''; and
(B) by adding at the end the following:
``(ii) Waiver of non-federal share.--

``(I) In general.--Upon request by an intermediary, and in
accordance with this clause, the Administrator may waive, in
whole or in part, the requirement to obtain non-Federal funds
under clause (i) for a fiscal year. The Administrator may
waive the requirement to obtain non-Federal funds under this
clause for successive fiscal years.
``(II) Considerations.--In determining whether to waive the
requirement to obtain non-Federal funds under this clause,
the Administrator shall consider--

``(aa) the economic conditions affecting the intermediary;
``(bb) the impact a waiver under this clause would have on
the credibility of the microloan program under this
subsection;
``(cc) the demonstrated ability of the intermediary to
raise non-Federal funds; and
``(dd) the performance of the intermediary.

``(III) Limitations.--

``(aa) In general.--The Administrator may not waive the
requirement to obtain non-Federal funds under this clause if
granting the waiver would undermine the credibility of the
microloan program under this subsection.
``(bb) Sunset.--The Administrator may not waive the
requirement to obtain non-Federal funds under this clause for
fiscal year 2013 or any fiscal year thereafter.''.
(b) Women's Business Center Program.--Section 29(c) of the
Small Business Act (15 U.S.C. 656(c)) is amended--
(1) in paragraph (1), by striking ``As a condition'' and
inserting ``Subject to paragraph (5), as a condition''; and
(2) by adding at the end the following:
``(5) Waiver of non-federal share relating to technical
assistance and counseling.--
``(A) In general.--Upon request by a recipient
organization, and in accordance with this paragraph, the
Administrator may waive, in whole or in part, the requirement
to obtain non-Federal funds under this subsection for the
technical assistance and counseling activities of the
recipient organization carried out using financial assistance
under this section for a fiscal year. The Administrator may
waive the requirement to obtain non-Federal funds under this
paragraph for successive fiscal years.
``(B) Considerations.--In determining whether to waive the
requirement to obtain non-Federal funds under this paragraph,
the Administrator shall consider--
``(i) the economic conditions affecting the recipient
organization;
``(ii) the impact a waiver under this clause would have on
the credibility of the women's business center program under
this section;
``(iii) the demonstrated ability of the recipient
organization to raise non-Federal funds; and
``(iv) the performance of the recipient organization.
``(C) Limitations.--
``(i) In general.--The Administrator may not waive the
requirement to obtain non-Federal funds under this paragraph
if granting the waiver would undermine the credibility of the
women's business center program under this section.
``(ii) Sunset.--The Administrator may not waive the
requirement to obtain non-Federal funds under this paragraph
for fiscal year 2013 or any fiscal year thereafter.''.
(c) Prospective Repeals.--Effective October 1, 2012, the
Small Business Act (15 U.S.C. 631 et seq.) is amended--
(1) in section 7(m) (15 U.S.C. 636(m))--
(A) in paragraph (3)(B)--
(i) by striking ``Intermediary contribution.--'' and all
that follows through ``Subject to clause (ii), as'' and
inserting ``Intermediary contribution.--As''; and
(ii) by striking clause (ii); and
(B) in paragraph (4)(B)--
(i) by striking ``Contribution.--'' and all that follows
through ``Subject to clause (ii), as'' and inserting
``Contribution.--As''; and
(ii) by striking clause (ii); and
(2) in section 29(c) (15 U.S.C. 656(c))--
(A) in paragraph (1), by striking ``Subject to paragraph
(5), as'' and inserting ``As''; and
(B) by striking paragraph (5).

SEC. 1402. GRANTS FOR SBDCS.

(a) In General.--The Administrator may make grants to small
business development centers under section 21 of the Small
Business Act (15 U.S.C. 648) to provide targeted technical
assistance to small business concerns seeking access to
capital or credit, Federal procurement opportunities, energy
efficiency audits to reduce energy bills, opportunities to
export products or provide services to foreign customers,
adopting, making innovations in, and using broadband
technologies, or other assistance.
(b) Allocation.--
(1) In general.--Subject to paragraph (2), and
notwithstanding the requirements of section 21(a)(4)(C)(iii)
of the Small Business Act (15 U.S.C. 648(a)(4)(C)(iii)), the
amount appropriated to carry out this section shall be
allocated under the formula under section 21(a)(4)(C)(i) of
that Act.
(2) Minimum funding.--The amount made available under this
section to each State shall be not less than $325,000.
(3) Types of uses.--Of the total amount of the grants
awarded by the Administrator under this section--
(A) not less than 80 percent shall be used for counseling
of small business concerns; and
(B) not more than 20 percent may be used for classes or
seminars.
(c) No Non-Federal Share Required.--Notwithstanding section
21(a)(4)(A) of the Small Business Act (15 U.S.C.
648(a)(4)(A)), the recipient of a grant made under this
section shall not be required to provide non-Federal matching
funds.
(d) Distribution.--Not later than 30 days after the date on
which amounts are appropriated to carry out this section, the
Administrator shall disburse the total amount appropriated.
(e) Authorization of Appropriations.--There is authorized
to be appropriated to the Administrator $50,000,000 to carry
out this section.

Subtitle E--Disaster Loan Improvement

SEC. 1501. AQUACULTURE BUSINESS DISASTER ASSISTANCE.

Section 3 of the Small Business Act (15 U.S.C. 632), as
amended by section 1343, is amended by adding at the end the
following:
``(z) Aquaculture Business Disaster Assistance.--Subject to
section 18(a) and notwithstanding section 18(b)(1), the
Administrator may provide disaster assistance under section
7(b)(2) to aquaculture enterprises that are small
businesses.''.

Subtitle F--Small Business Regulatory Relief

SEC. 1601. REQUIREMENTS PROVIDING FOR MORE DETAILED ANALYSES.

Section 604(a) of title 5, United States Code, is amended--
(1) in paragraph (1), by striking ``succinct'';
(2) in paragraph (2), by striking ``summary'' each place it
appears and inserting ``statement'';
(3) by redesignating paragraphs (3), (4), and (5) as
paragraphs (4), (5), and (6), respectively; and
(4) by inserting after paragraph (2) the following:
``(3) the response of the agency to any comments filed by
the Chief Counsel for Advocacy of the Small Business
Administration in response to the proposed rule, and a
detailed statement of any change made to the proposed rule in
the final rule as a result of the comments;''.

SEC. 1602. OFFICE OF ADVOCACY.

(a) In General.--Section 203 of Public Law 94-305 (15
U.S.C. 634c) is amended--
(1) in paragraph (4), by striking ``and'' at the end;
(2) in paragraph (5), by striking the period and inserting
``; and''; and
(3) by adding at the end the following:
``(6) carry out the responsibilities of the Office of
Advocacy under chapter 6 of title 5, United States Code.''.
(b) Budgetary Line Item and Authorization of
Appropriations.--Title II of Public Law 94-305 (15 U.S.C.
634a et seq.) is amended by striking section 207 and
inserting the following:

``SEC. 207. BUDGETARY LINE ITEM AND AUTHORIZATION OF
APPROPRIATIONS.

``(a) Appropriation Requests.--Each budget of the United
States Government submitted by the President under section
1105 of title 31, United States Code, shall include a
separate statement of the amount of appropriations requested
for the Office of Advocacy of the Small Business
Administration, which shall be designated in a separate
account in the General Fund of the Treasury.
``(b) Administrative Operations.--The Administrator of the
Small Business Administration shall provide the Office of
Advocacy with appropriate and adequate office space at
central and field office locations, together with such
equipment, operating budget, and communications facilities
and services as may be necessary, and shall provide necessary
maintenance services for such offices and the equipment and
facilities located in such offices.
``(c) Authorization of Appropriations.--There are
authorized to be appropriated such

[[Page S6947]]

sums as are necessary to carry out this title. Any amount
appropriated under this subsection shall remain available,
without fiscal year limitation, until expended.''.

Subtitle G--Appropriations Provisions

SEC. 1701. SALARIES AND EXPENSES.

(a) Appropriation.--There is appropriated, out of any money
in the Treasury not otherwise appropriated, for the fiscal
year ending September 30, 2010, $150,000,000, to remain
available until September 30, 2012, for an additional amount
for the appropriations account appropriated under the heading
``salaries and expenses'' under the heading ``Small Business
Administration'', of which--
(1) $50,000,000 is for grants to small business development
centers authorized under section 1402;
(2) $1,000,000 is for the costs of administering grants
authorized under section 1402;
(3) $30,000,000 is for grants to States for fiscal year
2011 to carry out export programs that assist small business
concerns authorized under section 1207;
(4) $30,000,000 is for grants to States for fiscal year
2012 to carry out export programs that assist small business
concerns authorized under section 1207;
(5) $2,500,000 is for the costs of administering grants
authorized under section 1207;
(6) $5,000,000 is for grants for fiscal year 2011 under the
Small Business Teaming Pilot Program under section 1314; and
(7) $5,000,000 is for grants for fiscal year 2012 under the
Small Business Teaming Pilot Program under section 1314.
(b) Report.--Not later than 60 days after the date of
enactment of this Act, the Administrator shall submit to the
Committee on Appropriations of the Senate and the Committee
on Appropriations of the House of Representatives a detailed
expenditure plan for using the funds provided under
subsection (a).

SEC. 1702. BUSINESS LOANS PROGRAM ACCOUNT.

(a) In General.--There is appropriated, out of any money in
the Treasury not otherwise appropriated, for the fiscal year
ending September 30, 2010, for an additional amount for the
appropriations account appropriated under the heading
``business loans program account'' under the heading ``Small
Business Administration''--
(1) $8,000,000, to remain available until September 30,
2012, for fiscal year 2011 for the cost of direct loans
authorized under section 7(l) of the Small Business Act, as
added by section 1131 of this title, including the cost of
modifying the loans;
(2) $8,000,000, to remain available until September 30,
2012, for fiscal year 2012 for the cost of direct loans
authorized under section 7(l) of the Small Business Act, as
added by section 1131 of this title, including the cost of
modifying the loans;
(3) $6,500,000, to remain available until September 30,
2012, for administrative expenses to carry out the direct
loan program authorized under section 7(l) of the Small
Business Act, as added by section 1131 of this title, which
may be transferred to and merged with the appropriations
account appropriated under the heading ``salaries and
expenses'' under the heading ``Small Business
Administration''; and
(4) $15,000,000, to remain available until September 30,
2011, for the cost of guaranteed loans as authorized under
section 7(a) of the Small Business Act, including the cost of
modifying the loans.
(b) Definition.--In this section, the term ``cost'' has the
meaning given that term in section 502 of the Congressional
Budget Act of 1974.

SEC. 1703. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS FUND
PROGRAM ACCOUNT.

There is appropriated, out of any money in the Treasury not
otherwise appropriated, for the fiscal year ending September
30, 2010, for an additional amount for the appropriations
account appropriated under the heading ``community
development financial institutions fund program account''
under the heading ``DEPARTMENT OF THE TREASURY'',
$13,500,000, to remain available until September 30, 2012,
for the costs of administering guarantees for bonds and notes
as authorized under section 114A of the Riegle Community
Development and Regulatory Improvement Act of 1994, as added
by section 1134 of this Act.

SEC. 1704. SMALL BUSINESS LOAN GUARANTEE ENHANCEMENT
EXTENSIONS.

(a) Extension of Programs.--
(1) In general.--There is appropriated, out of any funds in
the Treasury not otherwise appropriated, for an additional
amount for ``Small Business Administration--Business Loans
Program Account'', $505,000,000, to remain available through
December 31, 2010, for the cost of--
(A) fee reductions and eliminations under section 501 of
division A of the American Recovery and Reinvestment Act of
2009 (Public Law 111-5; 123 Stat. 151), as amended by this
Act; and
(B) loan guarantees under section 502 of division A of the
American Recovery and Reinvestment Act of 2009 (Public Law
111-5; 123 Stat. 152), as amended by this Act.
(2) Cost.--For purposes of this subsection, the term
``cost'' has the same meaning as in section 502 of the
Congressional Budget Act of 1974 (2 U.S.C. 661a).
(b) Administrative Expenses.--There is appropriated for an
additional amount, out of any funds in the Treasury not
otherwise appropriated, for administrative expenses to carry
out sections 501 and 502 of division A of the American
Recovery and Reinvestment Act of 2009 (Public Law 111-5),
$5,000,000, to remain available until expended, which may be
transferred and merged with the appropriation for ``Small
Business Administration--Salaries and Expenses''.

TITLE II--TAX PROVISIONS

SEC. 2001. SHORT TITLE.

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

Subtitle A--Small Business Relief

PART I--PROVIDING ACCESS TO CAPITAL

SEC. 2011. TEMPORARY EXCLUSION OF 100 PERCENT OF GAIN ON
CERTAIN SMALL BUSINESS STOCK.

(a) In General.--Subsection (a) of section 1202 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new paragraph:
``(4) 100 percent exclusion for stock acquired during
certain periods in 2010.--In the case of qualified small
business stock acquired after the date of the enactment of
the Creating Small Business Jobs Act of 2010 and before
January 1, 2011--
``(A) paragraph (1) shall be applied by substituting `100
percent' for `50 percent',
``(B) paragraph (2) shall not apply, and
``(C) paragraph (7) of section 57(a) shall not apply.''.
(b) Conforming Amendment.--Paragraph (3) of section 1202(a)
of the Internal Revenue Code of 1986 is amended--
(1) by inserting ``certain periods in'' before ``2010'' in
the heading, and
(2) by striking ``before January 1, 2011'' and inserting
``on or before the date of the enactment of the Creating
Small Business Jobs Act of 2010''.
(c) Effective Date.--The amendments made by this section
shall apply to stock acquired after the date of the enactment
of this Act.

SEC. 2012. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL
BUSINESSES FOR 2010 CARRIED BACK 5 YEARS.

(a) In General.--Section 39(a) of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
paragraph:
``(4) 5-year carryback for eligible small business
credits.--
``(A) In general.--Notwithstanding subsection (d), in the
case of eligible small business credits determined in the
first taxable year of the taxpayer beginning in 2010--
``(i) paragraph (1) shall be applied by substituting `each
of the 5 taxable years' for `the taxable year' in
subparagraph (A) thereof, and
``(ii) paragraph (2) shall be applied--

``(I) by substituting `25 taxable years' for `21 taxable
years' in subparagraph (A) thereof, and
``(II) by substituting `24 taxable years' for `20 taxable
years' in subparagraph (B) thereof.

``(B) Eligible small business credits.--For purposes of
this subsection, the term `eligible small business credits'
has the meaning given such term by section 38(c)(5)(B).''.
(b) Conforming Amendment.--Section 39(a)(3)(A) of the
Internal Revenue Code of 1986 is amended by inserting ``or
the eligible small business credits'' after ``credit)''.
(c) Effective Date.--The amendments made by this section
shall apply to credits determined in taxable years beginning
after December 31, 2009.

SEC. 2013. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL
BUSINESSES IN 2010 NOT SUBJECT TO ALTERNATIVE
MINIMUM TAX.

(a) In General.--Section 38(c) of the Internal Revenue Code
of 1986 is amended by redesignating paragraph (5) as
paragraph (6) and by inserting after paragraph (4) the
following new paragraph:
``(5) Special rules for eligible small business credits in
2010.--
``(A) In general.--In the case of eligible small business
credits determined in taxable years beginning in 2010--
``(i) this section and section 39 shall be applied
separately with respect to such credits, and
``(ii) in applying paragraph (1) to such credits--

``(I) the tentative minimum tax shall be treated as being
zero, and
``(II) the limitation under paragraph (1) (as modified by
subclause (I)) shall be reduced by the credit allowed under
subsection (a) for the taxable year (other than the eligible
small business credits).

``(B) Eligible small business credits.--For purposes of
this subsection, the term `eligible small business credits'
means the sum of the credits listed in subsection (b) which
are determined for the taxable year with respect to an
eligible small business. Such credits shall not be taken into
account under paragraph (2), (3), or (4).
``(C) Eligible small business.--For purposes of this
subsection, the term `eligible small business' means, with
respect to any taxable year--
``(i) a corporation the stock of which is not publicly
traded,
``(ii) a partnership, or
``(iii) a sole proprietorship,
if the average annual gross receipts of such corporation,
partnership, or sole proprietorship for the 3-taxable-year
period preceding such taxable year does not exceed
$50,000,000. For purposes of applying the test under the
preceding sentence, rules similar to the rules of paragraphs
(2) and (3) of section 448(c) shall apply.

[[Page S6948]]

``(D) Treatment of partners and s corporation
shareholders.--Credits determined with respect to a
partnership or S corporation shall not be treated as eligible
small business credits by any partner or shareholder unless
such partner or shareholder meets the gross receipts test
under subparagraph (C) for the taxable year in which such
credits are treated as current year business credits.''.
(b) Technical Amendment.--Section 55(e)(5) of the Internal
Revenue Code of 1986 is amended by striking ``38(c)(3)(B)''
and inserting ``38(c)(6)(B)''.
(c) Conforming Amendments.--
(1) Subclause (II) of section 38(c)(2)(A)(ii) of the
Internal Revenue Code of 1986 is amended by inserting ``the
eligible small business credits,'' after ``the New York
Liberty Zone business employee credit,''.
(2) Subclause (II) of section 38(c)(3)(A)(ii) of such Code
is amended by inserting ``, the eligible small business
credits,'' after ``the New York Liberty Zone business
employee credit''.
(3) Subclause (II) of section 38(c)(4)(A)(ii) of such Code
is amended by inserting ``the eligible small business credits
and'' before ``the specified credits''.
(d) Effective Date.--The amendments made by subsection (a)
shall apply to credits determined in taxable years beginning
after December 31, 2009, and to carrybacks of such credits.

SEC. 2014. TEMPORARY REDUCTION IN RECOGNITION PERIOD FOR
BUILT-IN GAINS TAX.

(a) In General.--Subparagraph (B) of section 1374(d)(7) of
the Internal Revenue Code of 1986 is amended to read as
follows:
``(B) Special rules for 2009, 2010, and 2011.--No tax shall
be imposed on the net recognized built-in gain of an S
corporation--
``(i) in the case of any taxable year beginning in 2009 or
2010, if the 7th taxable year in the recognition period
preceded such taxable year, or
``(ii) in the case of any taxable year beginning in 2011,
if the 5th year in the recognition period preceded such
taxable year.
The preceding sentence shall be applied separately with
respect to any asset to which paragraph (8) applies.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2010.

PART II--ENCOURAGING INVESTMENT

SEC. 2021. INCREASED EXPENSING LIMITATIONS FOR 2010 AND 2011;
CERTAIN REAL PROPERTY TREATED AS SECTION 179
PROPERTY.

(a) Increased Limitations.--Subsection (b) of section 179
of the Internal Revenue Code of 1986 is amended--
(1) by striking ``shall not exceed'' and all that follows
in paragraph (1) and inserting ``shall not exceed--
``(A) $250,000 in the case of taxable years beginning after
2007 and before 2010,
``(B) $500,000 in the case of taxable years beginning in
2010 or 2011, and
``(C) $25,000 in the case of taxable years beginning after
2011.'', and
(2) by striking ``exceeds'' and all that follows in
paragraph (2) and inserting ``exceeds--
``(A) $800,000 in the case of taxable years beginning after
2007 and before 2010,
``(B) $2,000,000 in the case of taxable years beginning in
2010 or 2011, and
``(C) $200,000 in the case of taxable years beginning after
2011.''.
(b) Inclusion of Certain Real Property.--Section 179 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new subsection:
``(f) Special Rules for Qualified Real Property.--
``(1) In general.--If a taxpayer elects the application of
this subsection for any taxable year beginning in 2010 or
2011, the term `section 179 property' shall include any
qualified real property which is--
``(A) of a character subject to an allowance for
depreciation,
``(B) acquired by purchase for use in the active conduct of
a trade or business, and
``(C) not described in the last sentence of subsection
(d)(1).
``(2) Qualified real property.--For purposes of this
subsection, the term `qualified real property' means--
``(A) qualified leasehold improvement property described in
section 168(e)(6),
``(B) qualified restaurant property described in section
168(e)(7) (without regard to the dates specified in
subparagraph (A)(i) thereof), and
``(C) qualified retail improvement property described in
section 168(e)(8) (without regard to subparagraph (E)
thereof).
``(3) Limitation.--For purposes of applying the limitation
under subsection (b)(1)(B), not more than $250,000 of the
aggregate cost which is taken into account under subsection
(a) for any taxable year may be attributable to qualified
real property.
``(4) Carryover limitation.--
``(A) In general.--Notwithstanding subsection (b)(3)(B), no
amount attributable to qualified real property may be carried
over to a taxable year beginning after 2011.
``(B) Treatment of disallowed amounts.--Except as provided
in subparagraph (C), to the extent that any amount is not
allowed to be carried over to a taxable year beginning after
2011 by reason of subparagraph (A), this title shall be
applied as if no election under this section had been made
with respect to such amount.
``(C) Amounts carried over from 2010.--If subparagraph (B)
applies to any amount (or portion of an amount) which is
carried over from a taxable year other than the taxpayer's
last taxable year beginning in 2011, such amount (or portion
of an amount) shall be treated for purposes of this title as
attributable to property placed in service on the first day
of the taxpayer's last taxable year beginning in 2011.
``(D) Allocation of amounts.--For purposes of applying this
paragraph and subsection (b)(3)(B) to any taxable year, the
amount which is disallowed under subsection (b)(3)(A) for
such taxable year which is attributed to qualified real
property shall be the amount which bears the same ratio to
the total amount so disallowed as--
``(i) the aggregate amount attributable to qualified real
property placed in service during such taxable year,
increased by the portion of any amount carried over to such
taxable year from a prior taxable year which is attributable
to such property, bears to
``(ii) the total amount of section 179 property placed in
service during such taxable year, increased by the aggregate
amount carried over to such taxable year from any prior
taxable year.
For purposes of the preceding sentence, only section 179
property with respect to which an election was made under
subsection (c)(1) (determined without regard to subparagraph
(B) of this paragraph) shall be taken into account.''.
(c) Revocability of Election.--Paragraph (2) of section
179(c) of the Internal Revenue Code of 1986 is amended by
striking ``2011'' and inserting ``2012''.
(d) Computer Software Treated as 179 Property.--Clause (ii)
of section 179(d)(1)(A) is amended by striking ``2011'' and
inserting ``2012''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to property
placed in service after December 31, 2009, in taxable years
beginning after such date.
(2) Extensions.--The amendments made by subsections (c) and
(d) shall apply to taxable years beginning after December 31,
2010.

SEC. 2022. ADDITIONAL FIRST-YEAR DEPRECIATION FOR 50 PERCENT
OF THE BASIS OF CERTAIN QUALIFIED PROPERTY.

(a) In General.--Paragraph (2) of section 168(k) of the
Internal Revenue Code of 1986 is amended--
(1) by striking ``January 1, 2011'' in subparagraph (A)(iv)
and inserting ``January 1, 2012'', and
(2) by striking ``January 1, 2010'' each place it appears
and inserting ``January 1, 2011''.
(b) Conforming Amendments.--
(1) The heading for subsection (k) of section 168 of the
Internal Revenue Code of 1986 is amended by striking
``January 1, 2010'' and inserting ``January 1, 2011''.
(2) The heading for clause (ii) of section 168(k)(2)(B) of
such Code is amended by striking ``Pre-january 1, 2010'' and
inserting ``Pre-january 1, 2011''.
(3) Subparagraph (D) of section 168(k)(4) of such Code is
amended by striking ``and'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
a comma, and by adding at the end the following new clauses:
``(iv) `January 1, 2011' shall be substituted for `January
1, 2012' in subparagraph (A)(iv) thereof, and
``(v) `January 1, 2010' shall be substituted for `January
1, 2011' each place it appears in subparagraph (A)
thereof.''.
(4) Subparagraph (B) of section 168(l)(5) of such Code is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(5) Subparagraph (C) of section 168(n)(2) of such Code is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(6) Subparagraph (D) of section 1400L(b)(2) of such Code is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(7) Subparagraph (B) of section 1400N(d)(3) of such Code is
amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2009, in taxable years ending after such date.

SEC. 2023. SPECIAL RULE FOR LONG-TERM CONTRACT ACCOUNTING.

(a) In General.--Section 460(c) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new paragraph:
``(6) Special rule for allocation of bonus depreciation
with respect to certain property.--
``(A) In general.--Solely for purposes of determining the
percentage of completion under subsection (b)(1)(A), the cost
of qualified property shall be taken into account as a cost
allocated to the contract as if subsection (k) of section 168
had not been enacted.
``(B) Qualified property.--For purposes of this paragraph,
the term `qualified property' means property described in
section 168(k)(2) which--
``(i) has a recovery period of 7 years or less, and
``(ii) is placed in service after December 31, 2009, and
before January 1, 2011 (January 1, 2012, in the case of
property described in section 168(k)(2)(B)).''.
(b) Effective Date.--The amendment made by this section
shall apply to property placed in service after December 31,
2009.

[[Page S6949]]

PART III--PROMOTING ENTREPRENEURSHIP

SEC. 2031. INCREASE IN AMOUNT ALLOWED AS DEDUCTION FOR START-
UP EXPENDITURES IN 2010.

(a) Start-up Expenditures.--Subsection (b) of section 195
of the Internal Revenue Code of 1986 is amended by adding at
the end the following new paragraph:
``(3) Special rule for taxable years beginning in 2010.--In
the case of a taxable year beginning in 2010, paragraph
(1)(A)(ii) shall be applied--
``(A) by substituting `$10,000' for `$5,000', and
``(B) by substituting `$60,000' for `$50,000'.''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts paid or incurred in taxable years
beginning after December 31, 2009.

SEC. 2032. AUTHORIZATION OF APPROPRIATIONS FOR THE UNITED
STATES TRADE REPRESENTATIVE TO DEVELOP MARKET
ACCESS OPPORTUNITIES FOR UNITED STATES SMALL-
AND MEDIUM-SIZED BUSINESSES AND TO ENFORCE
TRADE AGREEMENTS.

(a) In General.--There are authorized to be appropriated to
the Office of the United States Trade Representative
$5,230,000, to remain available until expended, for--
(1) analyzing and developing opportunities for businesses
in the United States to access the markets of foreign
countries; and
(2) enforcing trade agreements to which the United States
is a party.
(b) Requirements.--In obligating and expending the funds
authorized to be appropriated under subsection (a), the
United States Trade Representative shall--
(1) give preference to those initiatives that the United
States Trade Representative determines will create or sustain
the greatest number of jobs in the United States or result in
the greatest benefit to the economy of the United States; and
(2) consider the needs of small- and medium-sized
businesses in the United States with respect to--
(A) accessing the markets of foreign countries; and
(B) the enforcement of trade agreements to which the United
States is a party.

PART IV--PROMOTING SMALL BUSINESS FAIRNESS

SEC. 2041. LIMITATION ON PENALTY FOR FAILURE TO DISCLOSE
REPORTABLE TRANSACTIONS BASED ON RESULTING TAX
BENEFITS.

(a) In General.--Subsection (b) of section 6707A of the
Internal Revenue Code of 1986 is amended to read as follows:
``(b) Amount of Penalty.--
``(1) In general.--Except as otherwise provided in this
subsection, the amount of the penalty under subsection (a)
with respect to any reportable transaction shall be 75
percent of the decrease in tax shown on the return as a
result of such transaction (or which would have resulted from
such transaction if such transaction were respected for
Federal tax purposes).
``(2) Maximum penalty.--The amount of the penalty under
subsection (a) with respect to any reportable transaction
shall not exceed--
``(A) in the case of a listed transaction, $200,000
($100,000 in the case of a natural person), or
``(B) in the case of any other reportable transaction,
$50,000 ($10,000 in the case of a natural person).
``(3) Minimum penalty.--The amount of the penalty under
subsection (a) with respect to any transaction shall not be
less than $10,000 ($5,000 in the case of a natural
person).''.
(b) Effective Date.--The amendment made by this section
shall apply to penalties assessed after December 31, 2006.

SEC. 2042. DEDUCTION FOR HEALTH INSURANCE COSTS IN COMPUTING
SELF-EMPLOYMENT TAXES IN 2010.

(a) In General.--Paragraph (4) of section 162(l) of the
Internal Revenue Code of 1986 is amended by inserting ``for
taxable years beginning before January 1, 2010, or after
December 31, 2010'' before the period.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2009.

SEC. 2043. REMOVAL OF CELLULAR TELEPHONES AND SIMILAR
TELECOMMUNICATIONS EQUIPMENT FROM LISTED
PROPERTY.

(a) In General.--Subparagraph (A) of section 280F(d)(4) of
the Internal Revenue Code of 1986 (defining listed property)
is amended by adding `` `and' '' at the end of clause (iv),
by striking clause (v), and by redesignating clause (vi) as
clause (v).
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2009.

Subtitle B--Revenue Provisions

PART I--REDUCING THE TAX GAP

SEC. 2101. INFORMATION REPORTING FOR RENTAL PROPERTY EXPENSE
PAYMENTS.

(a) In General.--Section 6041 of the Internal Revenue Code
of 1986, as amended by section 9006 of the Patient Protection
and Affordable Care Act, is amended by redesignating
subsections (h) and (i) as subsections (i) and (j),
respectively, and by inserting after subsection (g) the
following new subsection:
``(h) Treatment of Rental Property Expense Payments.--
``(1) In general.--Solely for purposes of subsection (a)
and except as provided in paragraph (2), a person receiving
rental income from real estate shall be considered to be
engaged in a trade or business of renting property.
``(2) Exceptions.--Paragraph (1) shall not apply to--
``(A) any individual, including any individual who is an
active member of the uniformed services or an employee of the
intelligence community (as defined in section
121(d)(9)(C)(iv)), if substantially all rental income is
derived from renting the principal residence (within the
meaning of section 121) of such individual on a temporary
basis,
``(B) any individual who receives rental income of not more
than the minimal amount, as determined under regulations
prescribed by the Secretary, and
``(C) any other individual for whom the requirements of
this section would cause hardship, as determined under
regulations prescribed by the Secretary.''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to payments made after December 31, 2010.

SEC. 2102. INCREASE IN INFORMATION RETURN PENALTIES.

(a) Failure To File Correct Information Returns.--
(1) In general.--Subsections (a)(1), (b)(1)(A), and
(b)(2)(A) of section 6721 of the Internal Revenue Code of
1986 are each amended by striking ``$50'' and inserting
``$100''.
(2) Aggregate annual limitation.--Subsections (a)(1),
(d)(1)(A), and (e)(3)(A) of section 6721 of such Code are
each amended by striking ``$250,000'' and inserting
``$1,500,000''.
(b) Reduction Where Correction Within 30 Days.--
(1) In general.--Subparagraph (A) of section 6721(b)(1) of
the Internal Revenue Code of 1986 is amended by striking
``$15'' and inserting ``$30''.
(2) Aggregate annual limitation.--Subsections (b)(1)(B) and
(d)(1)(B) of section 6721 of such Code are each amended by
striking ``$75,000'' and inserting ``$250,000''.
(c) Reduction Where Correction on or Before August 1.--
(1) In general.--Subparagraph (A) of section 6721(b)(2) of
the Internal Revenue Code of 1986 is amended by striking
``$30'' and inserting ``$60''.
(2) Aggregate annual limitation.--Subsections (b)(2)(B) and
(d)(1)(C) of section 6721 of such Code are each amended by
striking ``$150,000'' and inserting ``$500,000''.
(d) Aggregate Annual Limitations for Persons With Gross
Receipts of Not More Than $5,000,000.--
(1) In general.--Paragraph (1) of section 6721(d) of the
Internal Revenue Code of 1986 is amended--
(A) by striking ``$100,000'' in subparagraph (A) and
inserting ``$500,000'',
(B) by striking ``$25,000'' in subparagraph (B) and
inserting ``$75,000'', and
(C) by striking ``$50,000'' in subparagraph (C) and
inserting ``$200,000''.
(2) Technical amendment.--Paragraph (1) of section 6721(d)
of such Code is amended by striking ``such taxable year'' and
inserting ``such calendar year''.
(e) Penalty in Case of Intentional Disregard.--Paragraph
(2) of section 6721(e) of the Internal Revenue Code of 1986
is amended by striking ``$100'' and inserting ``$250''.
(f) Adjustment for Inflation.--Section 6721 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(f) Adjustment for Inflation.--
``(1) In general.--For each fifth calendar year beginning
after 2012, each of the dollar amounts under subsections (a),
(b), (d) (other than paragraph (2)(A) thereof), and (e) shall
be increased by such dollar amount multiplied by the cost-of-
living adjustment determined under section 1(f)(3) determined
by substituting `calendar year 2011' for `calendar year 1992'
in subparagraph (B) thereof.
``(2) Rounding.--If any amount adjusted under paragraph
(1)--
``(A) is not less than $75,000 and is not a multiple of
$500, such amount shall be rounded to the next lowest
multiple of $500, and
``(B) is not described in subparagraph (A) and is not a
multiple of $10, such amount shall be rounded to the next
lowest multiple of $10.''.
(g) Failure to Furnish Correct Payee Statements.--Section
6722 of the Internal Revenue Code of 1986 is amended to read
as follows:

``SEC. 6722. FAILURE TO FURNISH CORRECT PAYEE STATEMENTS.

``(a) Imposition of Penalty.--
``(1) General rule.--In the case of each failure described
in paragraph (2) by any person with respect to a payee
statement, such person shall pay a penalty of $100 for each
statement with respect to which such a failure occurs, but
the total amount imposed on such person for all such failures
during any calendar year shall not exceed $1,500,000.
``(2) Failures subject to penalty.--For purposes of
paragraph (1), the failures described in this paragraph are--
``(A) any failure to furnish a payee statement on or before
the date prescribed therefor to the person to whom such
statement is required to be furnished, and
``(B) any failure to include all of the information
required to be shown on a payee statement or the inclusion of
incorrect information.
``(b) Reduction Where Correction in Specified Period.--
``(1) Correction within 30 days.--If any failure described
in subsection (a)(2) is corrected on or before the day 30
days after the required filing date--
``(A) the penalty imposed by subsection (a) shall be $30 in
lieu of $100, and
``(B) the total amount imposed on the person for all such
failures during any calendar

[[Page S6950]]

year which are so corrected shall not exceed $250,000.
``(2) Failures corrected on or before august 1.--If any
failure described in subsection (a)(2) is corrected after the
30th day referred to in paragraph (1) but on or before August
1 of the calendar year in which the required filing date
occurs--
``(A) the penalty imposed by subsection (a) shall be $60 in
lieu of $100, and
``(B) the total amount imposed on the person for all such
failures during the calendar year which are so corrected
shall not exceed $500,000.
``(c) Exception for De Minimis Failures.--
``(1) In general.--If--
``(A) a payee statement is furnished to the person to whom
such statement is required to be furnished,
``(B) there is a failure described in subsection (a)(2)(B)
(determined after the application of section 6724(a)) with
respect to such statement, and
``(C) such failure is corrected on or before August 1 of
the calendar year in which the required filing date occurs,

for purposes of this section, such statement shall be treated
as having been furnished with all of the correct required
information.
``(2) Limitation.--The number of payee statements to which
paragraph (1) applies for any calendar year shall not exceed
the greater of--
``(A) 10, or
``(B) one-half of 1 percent of the total number of payee
statements required to be filed by the person during the
calendar year.
``(d) Lower Limitations for Persons With Gross Receipts of
Not More Than $5,000,000.--
``(1) In general.--If any person meets the gross receipts
test of paragraph (2) with respect to any calendar year, with
respect to failures during such calendar year--
``(A) subsection (a)(1) shall be applied by substituting
`$500,000' for `$1,500,000',
``(B) subsection (b)(1)(B) shall be applied by substituting
`$75,000' for `$250,000', and
``(C) subsection (b)(2)(B) shall be applied by substituting
`$200,000' for `$500,000'.
``(2) Gross receipts test.--A person meets the gross
receipts test of this paragraph if such person meets the
gross receipts test of section 6721(d)(2).
``(e) Penalty in Case of Intentional Disregard.--If 1 or
more failures to which subsection (a) applies are due to
intentional disregard of the requirement to furnish a payee
statement (or the correct information reporting requirement),
then, with respect to each such failure--
``(1) subsections (b), (c), and (d) shall not apply,
``(2) the penalty imposed under subsection (a)(1) shall be
$250, or, if greater--
``(A) in the case of a payee statement other than a
statement required under section 6045(b), 6041A(e) (in
respect of a return required under section 6041A(b)),
6050H(d), 6050J(e), 6050K(b), or 6050L(c), 10 percent of the
aggregate amount of the items required to be reported
correctly, or
``(B) in the case of a payee statement required under
section 6045(b), 6050K(b), or 6050L(c), 5 percent of the
aggregate amount of the items required to be reported
correctly, and
``(3) in the case of any penalty determined under paragraph
(2)--
``(A) the $1,500,000 limitation under subsection (a) shall
not apply, and
``(B) such penalty shall not be taken into account in
applying such limitation to penalties not determined under
paragraph (2).
``(f) Adjustment for Inflation.--
``(1) In general.--For each fifth calendar year beginning
after 2012, each of the dollar amounts under subsections (a),
(b), (d)(1), and (e) shall be increased by such dollar amount
multiplied by the cost-of-living adjustment determined under
section 1(f)(3) determined by substituting `calendar year
2011' for `calendar year 1992' in subparagraph (B) thereof.
``(2) Rounding.--If any amount adjusted under paragraph
(1)--
``(A) is not less than $75,000 and is not a multiple of
$500, such amount shall be rounded to the next lowest
multiple of $500, and
``(B) is not described in subparagraph (A) and is not a
multiple of $10, such amount shall be rounded to the next
lowest multiple of $10.''.
(h) Effective Date.--The amendments made by this section
shall apply with respect to information returns required to
be filed on or after January 1, 2011.

SEC. 2103. REPORT ON TAX SHELTER PENALTIES AND CERTAIN OTHER
ENFORCEMENT ACTIONS.

(a) In General.--The Commissioner of Internal Revenue, in
consultation with the Secretary of the Treasury, shall submit
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate an
annual report on the penalties assessed by the Internal
Revenue Service during the preceding year under each of the
following provisions of the Internal Revenue Code of 1986:
(1) Section 6662A (relating to accuracy-related penalty on
understatements with respect to reportable transactions).
(2) Section 6700(a) (relating to promoting abusive tax
shelters).
(3) Section 6707 (relating to failure to furnish
information regarding reportable transactions).
(4) Section 6707A (relating to failure to include
reportable transaction information with return).
(5) Section 6708 (relating to failure to maintain lists of
advisees with respect to reportable transactions).
(b) Additional Information.--The report required under
subsection (a) shall also include information on the
following with respect to each year:
(1) Any action taken under section 330(b) of title 31,
United States Code, with respect to any reportable
transaction (as defined in section 6707A(c) of the Internal
Revenue Code of 1986).
(2) Any extension of the time for assessment of tax
enforced, or assessment of any amount under such an
extension, under paragraph (10) of section 6501(c) of the
Internal Revenue Code of 1986.
(c) Date of Report.--The first report required under
subsection (a) shall be submitted not later than December 31,
2010.

SEC. 2104. APPLICATION OF CONTINUOUS LEVY TO TAX LIABILITIES
OF CERTAIN FEDERAL CONTRACTORS.

(a) In General.--Subsection (f) of section 6330 of the
Internal Revenue Code of 1986 is amended by striking ``or''
at the end of paragraph (2), by inserting ``or'' at the end
of paragraph (3), and by inserting after paragraph (3) the
following new paragraph:
``(4) the Secretary has served a Federal contractor
levy,''.
(b) Federal Contractor Levy.--Subsection (h) of section
6330 of the Internal Revenue Code of 1986 is amended--
(1) by striking all that precedes ``any levy in connection
with the collection'' and inserting the following:
``(h) Definitions Related to Exceptions.--For purposes of
subsection (f)--
``(1) Disqualified employment tax levy.--A disqualified
employment tax levy is''; and
(2) by adding at the end the following new paragraph:
``(2) Federal contractor levy.--A Federal contractor levy
is any levy if the person whose property is subject to the
levy (or any predecessor thereof) is a Federal contractor.''.
(c) Conforming Amendment.--The heading of subsection (f) of
section 6330 of the Internal Revenue Code of 1986 is amended
by striking ``Jeopardy and State Refund Collection'' and
inserting ``Exceptions''.
(d) Effective Date.--The amendments made by this section
shall apply to levies issued after the date of the enactment
of this Act.

PART II--PROMOTING RETIREMENT PREPARATION

SEC. 2111. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS
ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH
CONTRIBUTIONS.

(a) In General.--Section 402A(e)(1) of the Internal Revenue
Code of 1986 is amended by striking ``and'' at the end of
subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, and'', and by adding at
the end the following:
``(C) an eligible deferred compensation plan (as defined in
section 457(b)) of an eligible employer described in section
457(e)(1)(A).''.
(b) Elective Deferrals.--Section 402A(e)(2) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(2) Elective deferral.--The term `elective deferral'
means--
``(A) any elective deferral described in subparagraph (A)
or (C) of section 402(g)(3), and
``(B) any elective deferral of compensation by an
individual under an eligible deferred compensation plan (as
defined in section 457(b)) of an eligible employer described
in section 457(e)(1)(A).''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2010.

SEC. 2112. ROLLOVERS FROM ELECTIVE DEFERRAL PLANS TO
DESIGNATED ROTH ACCOUNTS.

(a) In General.--Section 402A(c) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new paragraph:
``(4) Taxable rollovers to designated roth accounts.--
``(A) In general.--Notwithstanding sections 402(c),
403(b)(8), and 457(e)(16), in the case of any distribution to
which this paragraph applies--
``(i) there shall be included in gross income any amount
which would be includible were it not part of a qualified
rollover contribution,
``(ii) section 72(t) shall not apply, and
``(iii) unless the taxpayer elects not to have this clause
apply, any amount required to be included in gross income for
any taxable year beginning in 2010 by reason of this
paragraph shall be so included ratably over the 2-taxable-
year period beginning with the first taxable year beginning
in 2011.

Any election under clause (iii) for any distributions during
a taxable year may not be changed after the due date for such
taxable year.
``(B) Distributions to which paragraph applies.--In the
case of an applicable retirement plan which includes a
qualified Roth contribution program, this paragraph shall
apply to a distribution from such plan other than from a
designated Roth account which is contributed in a qualified
rollover contribution (within the meaning of section 408A(e))
to the designated Roth account maintained under such plan for
the benefit of the individual to whom the distribution is
made.
``(C) Coordination with limit.--Any distribution to which
this paragraph applies shall not be taken into account for
purposes of paragraph (1).

[[Page S6951]]

``(D) Other rules.--The rules of subparagraphs (D), (E),
and (F) of section 408A(d)(3) (as in effect for taxable years
beginning after 2009) shall apply for purposes of this
paragraph.''.
(b) Effective Date.--The amendments made by this section
shall apply to distributions after the date of the enactment
of this Act.

SEC. 2113. SPECIAL RULES FOR ANNUITIES RECEIVED FROM ONLY A
PORTION OF A CONTRACT.

(a) In General.--Subsection (a) of section 72 of the
Internal Revenue Code of 1986 is amended to read as follows:
``(a) General Rules for Annuities.--
``(1) Income inclusion.--Except as otherwise provided in
this chapter, gross income includes any amount received as an
annuity (whether for a period certain or during one or more
lives) under an annuity, endowment, or life insurance
contract.
``(2) Partial annuitization.--If any amount is received as
an annuity for a period of 10 years or more or during one or
more lives under any portion of an annuity, endowment, or
life insurance contract--
``(A) such portion shall be treated as a separate contract
for purposes of this section,
``(B) for purposes of applying subsections (b), (c), and
(e), the investment in the contract shall be allocated pro
rata between each portion of the contract from which amounts
are received as an annuity and the portion of the contract
from which amounts are not received as an annuity, and
``(C) a separate annuity starting date under subsection
(c)(4) shall be determined with respect to each portion of
the contract from which amounts are received as an
annuity.''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts received in taxable years beginning
after December 31, 2010.

PART III--CLOSING UNINTENDED LOOPHOLES

SEC. 2121. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL
PRODUCER CREDIT.

(a) In General.--Clause (iii) of section 40(b)(6)(E) of the
Internal Revenue Code of 1986, as added by the Health Care
and Education Reconciliation Act of 2010, is amended--
(1) by striking ``or'' at the end of subclause (I),
(2) by striking the period at the end of subclause (II) and
inserting ``, or'',
(3) by adding at the end the following new subclause:

``(III) such fuel has an acid number greater than 25.'',
and

(4) by striking ``unprocessed'' in the heading and
inserting ``certain''.
(b) Effective Date.--The amendments made by this section
shall apply to fuels sold or used on or after January 1,
2010.

SEC. 2122. SOURCE RULES FOR INCOME ON GUARANTEES.

(a) Amounts Sourced Within the United States.--Subsection
(a) of section 861 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new paragraph:
``(9) Guarantees.--Amounts received, directly or
indirectly, from--
``(A) a noncorporate resident or domestic corporation for
the provision of a guarantee of any indebtedness of such
resident or corporation, or
``(B) any foreign person for the provision of a guarantee
of any indebtedness of such person, if such amount is
connected with income which is effectively connected (or
treated as effectively connected) with the conduct of a trade
or business in the United States.''.
(b) Amounts Sourced Without the United States.--Subsection
(a) of section 862 of the Internal Revenue Code of 1986 is
amended by striking ``and'' at the end of paragraph (7), by
striking the period at the end of paragraph (8) and inserting
``; and'', and by adding at the end the following new
paragraph:
``(9) amounts received, directly or indirectly, from a
foreign person for the provision of a guarantee of
indebtedness of such person other than amounts which are
derived from sources within the United States as provided in
section 861(a)(9).''.
(c) Conforming Amendment.--Clause (ii) of section
864(c)(4)(B) of the Internal Revenue Code of 1986 is amended
by striking ``dividends or interest'' and inserting
``dividends, interest, or amounts received for the provision
of guarantees of indebtedness''.
(d) Effective Date.--The amendments made by this section
shall apply to guarantees issued after the date of the
enactment of this Act.

PART IV--TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES

SEC. 2131. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

The percentage under paragraph (2) of section 561 of the
Hiring Incentives to Restore Employment Act in effect on the
date of the enactment of this Act is increased by 36
percentage points.

TITLE III--STATE SMALL BUSINESS CREDIT INITIATIVE

SEC. 3001. SHORT TITLE.

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

SEC. 3002. DEFINITIONS.

In this title, the following definitions shall apply:
(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''--
(A) has the same meaning as in section 3(q) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(q)); and
(B) includes the National Credit Union Administration Board
in the case of any credit union the deposits of which are
insured in accordance with the Federal Credit Union Act.
(3) Enrolled 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.
(4) 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 3003.
(5) 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 (12 U.S.C. 4702).
(6) Participating state.--The term ``participating State''
means any State that has been approved for participation in
the Program under section 3004.
(7) Program.--The term ``Program'' means the State Small
Business Credit Initiative established under this title.
(8) 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.
(9) 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.
(10) 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 3004(d), a
municipality of a State of the United States to which the
Secretary has given a special permission under section
3004(d).
(11) State capital access 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 3005(c).
(12) 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 3006(c);
and
(B) includes, collateral support programs, loan
participation programs, State-run venture capital fund
programs, and credit guarantee programs.
(13) State program.--The term ``State program'' means a
State capital access program or a State other credit support
program.
(14) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.

SEC. 3003. FEDERAL FUNDS ALLOCATED TO STATES.

(a) Program Established; Purpose.--There is established the
State Small Business Credit Initiative, to be administered by
the Secretary. Under the Program, the Secretary shall
allocate Federal funds to participating States and make the
allocated funds available to the participating States as

[[Page S6952]]

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 Act, the Secretary shall allocate Federal
funds to participating States so that each State is eligible
to receive an amount equal to the average of the respective
amounts that the State--
(A) would receive under the 2009 allocation, as determined
under paragraph (2); and
(B) would receive under the 2010 allocation, as determined
under paragraph (3).
(2) 2009 allocation formula.--
(A) In 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.--In 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.--In 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 thirds;
(ii) transfer to the participating State the first \1/3\
when the Secretary approves the State for participation under
section 3004; and
(iii) transfer to the participating State each successive
\1/3\ when the State has certified to the Secretary that it
has expended, transferred, or obligated 80 percent of the
last transferred \1/3\ for Federal contributions to, or for
the account of, State programs.
(B) Authority to withhold pending audit.--The Secretary may
withhold the transfer of any successive \1/3\ pending results
of a financial audit.
(C) Inspector general audits.--
(i) In general.--The Inspector General of the Department of
the Treasury shall carry out an audit of the participating
State's use of allocated Federal funds transferred to the
State.
(ii) Recoupment of misused transferred funds 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 if the results of the an audit include a
finding that there was an intentional or reckless misuse of
transferred funds by the State.
(iii) Penalty for 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.
(iv) Municipalities.--In this subparagraph, the term
``participating State'' shall include a municipality given
special permission to participate in the Program, under
section 3004(d).
(D) Exception.--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.
(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 \1/3\ transferred, for paying
administrative costs incurred by the State in implementing an
approved State program in an amount not to exceed 5 percent
of that first \1/3\; or
(D) in the case of each successive \1/3\ transferred, for
paying administrative costs incurred by the State in
implementing an approved State program in an amount not to
exceed 3 percent of that successive \1/3\.
(4) Termination of availability of amounts not transferred
within 2 years of participation.--Any portion of a
participating State's allocated amount that has not been
transferred to the State under this section by the end of the
2-year period beginning on the date that the Secretary
approves the State for participation may be deemed by the
Secretary to be no longer allocated to the State and no
longer available to the State and shall be returned to the
General Fund of the Treasury.
(5) Transferred amounts not assistance.--The amounts
transferred to a participating State under this section shall
not be considered assistance for purposes of subtitle V of
title 31, United States Code.
(6) Definitions.--In this section--
(A) the term ``allocated amount'' means the total amount of
Federal funds allocated by the Secretary under subsection (b)
to the participating State; and
(B) the term ``\1/3\'' means--
(i) in the case of the first \1/3\ and second \1/3\, an
amount equal to 33 percent of a participating State's
allocated amount; and
(ii) in the case of the last \1/3\, an amount equal to 34
percent of a participating State's allocated amount.

SEC. 3004. 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
3005 or approval as a State other credit support program
under section 3006, in each case within the time period
provided in the respective section; and
(4) the State and the Secretary have executed an allocation
agreement that--
(A) conforms to the requirements of this title;
(B) ensures that the State program complies with such
national standards as are established by the Secretary under
section 3009(a)(2);
(C) sets forth internal control, compliance, and reporting
requirements as established by the Secretary, and such other
terms and conditions necessary to carry out the purposes of
this title, including an agreement by the State to allow the
Secretary to audit State programs;
(D) requires that the State program be fully positioned,
within 90 days of the State's execution of the allocation
agreement with the Secretary, to act on providing the kind of
credit support that the State program was established to
provide; and
(E) includes an agreement by the State to deliver to the
Secretary, and update annually, a schedule describing how the
State intends to apportion among its State programs the
Federal funds allocated to the State.
(c) Contractual Arrangements for Implementation of State
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 Act, file with the Secretary a notice of
its intent to apply for approval by the Secretary of a State
program or within 9 months after the date of enactment of
this Act, file with the Secretary a complete application for
approval of a State program, the Secretary may grant to
municipalities of that State a special permission that will
allow them to apply directly to the Secretary without the
State for approval to be participating municipalities.
(2) Timing requirements applicable to municipalities
applying directly.--To qualify for the special permission, a
municipality of a State shall be required, within 12 months
after the date of enactment of this Act, to file with the
Secretary a complete application for approval by the
Secretary of a State program.
(3) Notices of intent and applications from more than 1
municipality.--A municipality of a State may combine with 1
or more other municipalities of that State to

[[Page S6953]]

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
3006(d) in making the determination under section 3005 or
3006 that the State program or programs to be implemented by
the participating municipalities, including a State capital
access program, is eligible for Federal contributions to, or
for the account of, the State program.

SEC. 3005. 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 Act,
the State has filed with the Secretary a notice of intent to
apply for approval by the Secretary of a State capital access
program;
(2) within 9 months after the date of enactment of this
Act, the State has filed with the Secretary a complete
application for approval by the Secretary of a capital access
program;
(3) the State satisfies the requirements of subsections (a)
and (b) of section 3004; and
(4) the State capital access program meets the eligibility
criteria in subsection (c).
(c) Eligibility Criteria for State Capital Access
Programs.--For a State capital access program to be approved
under this section, that program shall be required to be a
program of the State that--
(1) provides portfolio insurance for business loans based
on a separate loan-loss reserve fund for each financial
institution;
(2) requires insurance premiums to be paid by the financial
institution lenders and by the business borrowers to the
reserve fund to have their loans enrolled in the reserve
fund;
(3) provides for contributions to be made by the State to
the reserve fund in amounts at least equal to the sum of the
amount of the insurance premium charges paid by the borrower
and the financial institution to the reserve fund for any
newly enrolled loan; and
(4) provides its portfolio insurance solely for loans that
meet both the following requirements:
(A) The borrower has 500 employees or less at the time that
the loan is enrolled in the Program.
(B) The loan amount does not exceed $5,000,000.
(d) Federal Contributions to Approved State Capital Access
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 nondepository community
development financial institution, the Community Development
Financial Institution Fund, that the financial institution
has sufficient commercial lending experience and financial
and managerial capacity to participate in the approved State
capital access program. The determination by the State shall
not be reviewable by the Secretary.
(2) Investment 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 shall require
the financial institution lender to have a meaningful amount
of its own capital resources at risk in the loan.
(5) Premium charges minimum and maximum 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.--In this paragraph, the terms ``executive
officer'', ``director'', ``principal shareholder'',
``immediate family'', and ``related interest'' refer to the
same relationship to a financial institution lender as the
relationship described in part 215 of title 12 of the Code of
Federal Regulations, or any successor to such part.
(8) Capital access for small businesses in underserved
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.

SEC. 3006. 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--

[[Page S6954]]

(1) the Secretary determines that the State satisfies the
requirements of paragraphs (1) through (3) of section
3005(b);
(2) the Secretary determines that the State other credit
support program meets the eligibility criteria in subsection
(c);
(3) the Secretary determines the State other credit support
program to be eligible based on the additional considerations
in subsection (d); and
(4) within 9 months after the date of enactment of this
Act, the State has filed with Treasury a complete application
for Treasury approval.
(c) Eligibility Criteria for State Other Credit Support
Programs.--For a State other credit support program to be
approved under this section, that program shall be required
to be a program of the State that--
(1) can demonstrate that, at a minimum, $1 of public
investment by the State program will cause and result in $1
of new private credit;
(2) can demonstrate a reasonable expectation that, when
considered with all other State programs of the State, such
State programs together have the ability to use amounts of
new Federal contributions to, or for the account of, all such
programs in the State to cause and result in amounts of new
small business lending at least 10 times the new Federal
contribution amount;
(3) for those State other credit support programs that
provide their credit support through 1 or more financial
institution lenders, requires the financial institution
lenders to have a meaningful amount of their own capital
resources at risk in their small business lending; and
(4) uses Federal funds allocated under this title to extend
credit support that--
(A) targets an average borrower size of 500 employees or
less;
(B) does not extend credit support to borrowers that have
more than 750 employees;
(C) targets support towards loans with an average principal
amount of $5,000,000 or less; and
(D) does not extend credit support to loans that exceed a
principal amount of $20,000,000.
(d) Additional 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 3005(e).

SEC. 3007. 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.--Each report under this subsection
shall--
(A) indicate the total amount of Federal funding used by
the participating State; and
(B) include a certification by the participating State
that--
(i) the information provided in accordance with
subparagraph (A) is accurate;
(ii) funds continue to be available and legally committed
to contributions by the State to, or for the account of,
approved State programs, less any amount that has been
contributed by the State to, or for the account of, approved
State programs subsequent to the State being approved for
participation in the Program; and
(iii) the participating State is implementing its approved
State program or programs in accordance with this title and
regulations issued under section 3010.
(b) Annual 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 under subsections (a)
and (b) shall be in such form as the Secretary, in the
Secretary's sole discretion, may require.
(d) Termination of Reporting 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. 3008. 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 3007 on a timely basis; or
(C) noncompliance by the State with the terms of the
allocation agreement between the Secretary and the State.
(b) Deallocated Amounts To Be 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 3003(b).

SEC. 3009. IMPLEMENTATION AND ADMINISTRATION.

(a) General Authorities and Duties.--The Secretary shall--
(1) consult with the Administrator of the Small Business
Administration and the appropriate Federal banking agencies
on the administration of the Program;
(2) establish minimum national standards for approved State
programs;
(3) provide technical assistance to States for starting
State programs and generally disseminate best practices;
(4) manage, administer, and perform necessary program
integrity functions for the Program; and
(5) ensure adequate oversight of the approved State
programs, including oversight of the cash flows, performance,
and compliance of each approved State program.
(b) Appropriations.--There is hereby appropriated to the
Secretary, out of funds in the Treasury not otherwise
appropriated, $1,500,000,000 to carry out the Program,
including to pay reasonable costs of administering the
Program.
(c) Termination of Secretary's Program Administration
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 Act.
(d) Expedited Contracting.--During the 1-year period
beginning on the date of enactment of this Act, the Secretary
may enter into contracts without regard to any other
provision of law regarding public contracts, for purposes of
carrying out this title.

SEC. 3010. 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 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. 3011. 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 containing
the results of such audit.
(c) Required Certification.--
(1) Financial institutions certification.--With respect to
funds received by a participating State under the Program,
any

[[Page S6955]]

financial institution that receives a loan, a loan guarantee,
or other financial assistance using such funds after the date
of the enactment of this Act shall certify that such
institution is in compliance with the requirements of section
103.121 of title 31, Code of Federal Regulations, a
regulation that, at a minimum, requires financial
institutions, as that term is defined in section 5312 (a)(2)
and (c)(1)(A) of title 31, United States Code, to implement
reasonable procedures to verify the identity of any person
seeking to open an account, to the extent reasonable and
practicable, maintain records of the information used to
verify the person's identity, and determine whether the
person appears on any lists of known or suspected terrorists
or terrorist organizations provided to the financial
institution by any government agency.
(2) Sex offense 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 Act shall certify to the participating
State that the principals of such entity have not been
convicted of a sex offense against a minor (as such terms are
defined in section 111 of the Sex Offender Registration and
Notification Act (42 U.S.C. 16911)).
(d) Prohibition on Pornography.--None of the funds made
available under this title may be used to pay the salary of
any individual engaged in activities related to the Program
who has been officially disciplined for violations of subpart
G of the Standards of Ethical Conduct for Employees of the
Executive Branch for viewing, downloading, or exchanging
pornography, including child pornography, on a Federal
Government computer or while performing official Federal
Government duties.

TITLE IV--ADDITIONAL SMALL BUSINESS PROVISIONS

Subtitle A--Small Business Lending Fund

SEC. 4101. PURPOSE.

The purpose of this subtitle is to address the ongoing
effects of the financial crisis on small businesses by
providing temporary authority to the Secretary of the
Treasury to make capital investments in eligible institutions
in order to increase the availability of credit for small
businesses.

SEC. 4102. DEFINITIONS.

For purposes of this subtitle:
(1) Appropriate committees of congress.--The term
``appropriate committees of Congress'' means--
(A) the Committee on Small Business and Entrepreneurship,
the Committee on Agriculture, Nutrition, and Forestry, the
Committee on Banking, Housing, and Urban Affairs, the
Committee on Finance, the Committee on the Budget, and the
Committee on Appropriations of the Senate; and
(B) the Committee on Small Business, the Committee on
Agriculture, the Committee on Financial Services, the
Committee on Ways and Means, the Committee on the Budget, and
the Committee on Appropriations of the House of
Representatives.
(2) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' has the meaning given
such term under section 3(q) of the Federal Deposit Insurance
Act (12 U.S.C. 1813(q)).
(3) Bank holding company.--The term ``bank holding
company'' has the meaning given such term under section
2(a)(1) of the Bank Holding Company Act of 1956 (12 U.S.C.
1841(2)(a)(1)).
(4) Call report.--The term ``call report'' means--
(A) reports of Condition and Income submitted to the Office
of the Comptroller of the Currency, the Board of Governors of
the Federal Reserve System, and the Federal Deposit Insurance
Corporation;
(B) the Office of Thrift Supervision Thrift Financial
Report;
(C) any report that is designated by the Office of the
Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance
Corporation, or the Office of Thrift Supervision, as
applicable, as a successor to any report referred to in
subparagraph (A) or (B);
(D) reports of Condition and Income as designated through
guidance developed by the Secretary, in consultation with the
Director of the Community Development Financial Institutions
Fund; and
(E) with respect to an eligible institution for which no
report exists that is described under subparagraph (A), (B),
(C), or (D), such other report or set of information as the
Secretary, in consultation with the Administrator of the
Small Business Administration, may prescribe.
(5) 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) 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.
(8) 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) had assets less than or equal to $10,000,000,000 as of
the end of the fourth quarter of calendar year 2009.
(9) 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.
(10) 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.
(11) 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 of the
insured depository institution as of the end of the fourth
quarter of calendar year 2009; and
(iii) is not directly or indirectly controlled by any
company or other entity that has total consolidated assets of
more than $10,000,000,000, as so reported;
(B) any bank holding company which has total consolidated
assets of equal to or less than $10,000,000,000, as reported
in the call report of the bank holding company as of the end
of the fourth quarter of calendar year 2009;
(C) any savings and loan holding company which has total
consolidated assets of equal to or less than $10,000,000,000,
as reported in the call report of the savings and loan
holding company as of the end of the fourth quarter of
calendar year 2009; and
(D) any community development financial institution loan
fund which has total assets of equal to or less than
$10,000,000,000, as reported in audited financial statements
for the fiscal year of the community development financial
institution loan fund that ends in calendar year 2009.
(12) Fund.--The term ``Fund'' means the Small Business
Lending Fund established under section 4103(a)(1).
(13) 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)).
(14) 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)).
(15) Program.--The term ``Program'' means the Small
Business Lending Fund Program authorized under section
4103(a)(2).
(16) 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)).
(17) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(18) Small business lending.--
(A) In general.--The term ``small business lending'' means
lending, as defined by and reported in an eligible
institutions' quarterly call report, where each loan
comprising such lending is one of the following types:
(i) Commercial and industrial loans.
(ii) Owner-occupied nonfarm, nonresidential real estate
loans.
(iii) Loans to finance agricultural production and other
loans to farmers.
(iv) Loans secured by farmland.
(B) Exclusion.--No loan that has an original amount greater
than $10,000,000 or that goes to a business with more than
$50,000,000 in revenues shall be included in the measure.
(C) Treatment of holding 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.
(19) Veteran-owned business.--
(A) The term ``veteran-owned business'' means a business--
(i) more than 50 percent of the ownership or control of
which is held by 1 or more veterans;
(ii) more than 50 percent of the net profit or loss of
which accrues to 1 or more veterans; and
(iii) a significant percentage of senior management
positions of which are held by veterans.
(B) For purposes of this paragraph, the term ``veteran''
has the meaning given such term in section 101(2) of title
38, United States Code.

SEC. 4103. 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.

[[Page S6956]]

(2) Programs authorized.--The Secretary is authorized to
establish the Small Business Lending Fund Program for using
the Fund consistent with this subtitle.
(b) Use of Fund.--
(1) In 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 subtitle. For purposes of this paragraph and with
respect to an eligible institution, the term ``other
financial instruments'' shall include only debt instruments
for which such eligible institution is fully liable or equity
equivalent capital of the eligible institution. Such debt
instruments may be subordinated to the claims of other
creditors of the eligible institution.
(2) Maximum purchase limit.--The aggregate amount of
purchases (and commitments to purchase) made pursuant to
paragraph (1) may not exceed $30,000,000,000.
(3) Proceeds used to pay down public debt.--All funds
received by the Secretary in connection with purchases made
pursuant to paragraph (1), including interest payments,
dividend payments, and proceeds from the sale of any
financial instrument, shall be paid into the general fund of
the Treasury for reduction of the public debt.
(4) Limitation on purchases from cdlfs.--
(A) In general.--Not more than 1 percent of the maximum
purchase limit of the Program, pursuant to paragraph (2), 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 shall include the following:
(i) Ratio of net assets to total assets is at least 20
percent.
(ii) Ratio of loan loss reserves to loans and leases 90
days or more delinquent (including loans sold with full
recourse) is at least 30 percent.
(iii) Positive net income measured on a 3-year rolling
average.
(iv) Operating liquidity ratio of at least 1.0 for the 4
most recent quarters and for one or both of the two preceding
years.
(v) Ratio of loans and leases 90 days or more delinquent
(including loans sold with full recourse) to total equity
plus loan loss reserves is less than 40 percent.
(C) Requirement to submit audited financial statements.--
CDLFs participating in the Program shall submit audited
financial statements to the Secretary, have a clean audit
opinion, and have at least 3 years of operating experience.
(c) Credits to the Fund.--There shall be credited to the
Fund amounts made available pursuant to section 4108, to the
extent provided by appropriations Acts.
(d) Terms.--
(1) Application.--
(A) Institutions with assets of $1,000,000,000 or 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 or equal to $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 subparagraph, the term
``control'' with respect to a bank holding company shall have
the same meaning as in section 2(a)(2) of the Bank Holding
Company Act of 1956 (12 U.S.C. 1841(2)(a)(2)). For purposes
of this subparagraph, the term ``control'' with respect to a
savings and loan holding company shall have the same meaning
as in 10(a)(2) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(2)).
(E) Requirement to provide a small business lending plan.--
At the time that an applicant submits an application to the
Secretary for a capital investment under the Program, the
applicant shall deliver to the appropriate Federal banking
agency, and, for applicants that are State-chartered banks,
to the appropriate State banking regulator, a small business
lending plan describing how the applicant's business strategy
and operating goals will allow it to address the needs of
small businesses in the areas it serves, as well as a plan to
provide linguistically and culturally appropriate outreach,
where appropriate. In the case of eligible institutions that
are community development loan funds, this plan shall be
submitted to the Secretary. This plan shall be confidential
supervisory information.
(F) Treatment of applicants that are community development
loan funds.--Eligible institutions that are community
development loan funds may apply to receive a capital
investment from the Fund in an amount not exceeding 5 percent
of total assets, as reported in the audited financial
statements for the fiscal year of the eligible institution
that ends in calendar year 2009.
(2) Consultation with regulators.--For each eligible
institution that applies to receive a capital investment
under the Program, the Secretary shall--
(A) consult with the appropriate Federal banking agency or,
in the case of an eligible institution that is a
nondepository community development financial institution,
the Community Development Financial Institution Fund, for the
eligible institution, to determine whether the eligible
institution may receive such capital investment;
(B) in the case of an eligible institution that is a State-
chartered bank, consider any views received from the State
banking regulator of the State of the eligible institution
regarding the financial condition of the eligible
institution; and
(C) in the case of a community development financial
institution loan fund, consult with the Community Development
Financial Institution Fund.
(3) Consideration of matched private investments.--
(A) In general.--For an eligible institution that applies
to receive a capital investment under the Program, if the
entity to be consulted under paragraph (2) would not
otherwise recommend the eligible institution to receive the
capital investment, the Secretary, in consultation with the
entity to be so consulted, may consider whether the entity to
be consulted would recommend the eligible institution to
receive a capital investment based on the financial condition
of the institution if the conditions in subparagraph (B) are
satisfied.
(B) Conditions.--The conditions referred to in subparagraph
(A) are as follows:
(i) Capital sources.--The eligible institution shall
receive capital both under the Program and from private,
nongovernment investors.
(ii) Amount of capital.--The amount of capital to be
received under the Program shall not exceed 3 percent of
risk-weighted assets, as reported in the call report
immediately preceding the date of application, less the
amount of any CDCI investment and any CPP investment.
(iii) Terms.--The amount of capital to be received from
private, nongovernment investors shall be--

(I) equal to or greater than 100 percent of the capital to
be received under the Program; and
(II) subordinate to the capital investment made by the
Secretary under the Program.

(4) Ineligibility of institutions on fdic problem bank
list.--
(A) In general.--An eligible institution may not receive
any capital investment under the Program, if--
(i) such institution is on the FDIC problem bank list; or
(ii) such institution has been removed from the FDIC
problem bank list for less than 90 days.
(B) Construction.--Nothing in subparagraph (A) shall be
construed as limiting the discretion of the Secretary to deny
the application of an eligible institution that is not on the
FDIC problem bank list.
(C) FDIC problem bank list defined.--For purposes of this
paragraph, the term ``FDIC problem bank list'' means the list
of depository institutions having a current rating of 4 or 5
under the Uniform Financial Institutions Rating System, or
such other list designated by the Federal Deposit Insurance
Corporation.
(5) Incentives to lend.--
(A) Requirements on preferred stock and other financial
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 average amount of small
business lending reported by the eligible institution in its
call reports for the 4 full quarters

[[Page S6957]]

immediately preceding the date of enactment of this Act,
minus adjustments from each quarterly balance in respect of--

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

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

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

(B) Basis of initial rate.--The initial dividend or
interest rate shall be based on call report data published in
the quarter immediately preceding the date of the capital
investment under the Program.
(C) Timing of rate adjustments.--Any rate adjustment shall
occur in the calendar quarter following the publication of
call report data, such that the rate based on call report
data from any one calendar quarter, which is published in the
first following calendar quarter, shall be adjusted in that
first following calendar quarter and payable in the second
following quarter.
(D) Rate following initial 2-year period.--Generally, the
rate based on call report data from the eighth calendar
quarter after the date of the capital investment under the
Program shall be payable until the expiration of the 4\1/2\-
year period that begins on the date of the investment. In the
case where the amount of small business lending has remained
the same or decreased relative to the institution's baseline
in the eighth quarter after the date of the capital
investment under the Program, the rate shall be 7 percent
until the expiration of the 4\1/2\-year period that begins on
the date of the investment.
(E) Rate following initial 4\1/2\ -year period.--The
dividend or interest rate paid on any preferred stock or
other financial instrument issued by an eligible institution
that receives a capital investment under the Program shall
increase to 9 percent at the end of the 4\1/2\-year period
that begins on the date of the capital investment under the
Program.
(F) Limitation on rate reductions with respect to certain
amount.--The reduction in the dividend or interest rate
payable to Treasury by any eligible institution shall be
limited such that the rate reduction shall not apply to a
dollar amount of the investment made by Treasury that is
greater than the dollar amount increase in the amount of
small business lending realized under this program. The
Secretary may issue guidelines that will apply to new capital
investments limiting the amount of capital available to
eligible institutions consistent with this limitation.
(G) Rate adjustments for s corporation.--Before making a
capital investment in an eligible institution that is an S
corporation or a corporation organized on a mutual basis, the
Secretary may adjust the dividend or interest rate on the
financial instrument to be issued to the Secretary, from the
dividend or interest rate that would apply under
subparagraphs (A) through (F), to take into account any
differential tax treatment of securities issued by such
eligible institution. For purpose of this subparagraph, the
term ``S corporation'' has the same meaning as in section
1361(a) of the Internal Revenue Code of 1986.
(H) Repayment deadline.--The capital investment received by
an eligible institution under the Program shall be evidenced
by preferred stock or other financial instrument that--
(i) includes, as a term and condition, that the capital
investment will--

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

(ii) provides that the term and condition described under
clause (i) shall not apply if the application of that term
and condition would adversely affect the capital treatment of
the stock or financial instrument under current or successor
applicable capital provisions compared to a capital
instrument with identical terms other than the term and
condition described under clause (i).
(I) Requirements on financial instruments issued by a
community development financial institution loan fund.--Any
equity equivalent capital issued to the Treasury by a
community development loan fund receiving a capital
investment under the Program shall provide that the rate at
which interest is payable shall be 2 percent per annum for 8
years. After 8 years, the rate at which interest is payable
shall be 9 percent.
(6) Additional incentives to repay.--The Secretary may, by
regulation or guidance issued under section 4104(9),
establish repayment incentives in addition to the incentive
in paragraph (5)(E) that will apply to new capital
investments in a manner that the Secretary determines to be
consistent with the purposes of this subtitle.
(7) Capital purchase program refinance.--
(A) In general.--The Secretary shall, in a manner that the
Secretary determines to be consistent with the purposes of
this subtitle, issue regulations and other guidance to permit
eligible institutions to refinance securities issued to
Treasury under the CDCI and the CPP for securities to be
issued under the Program.
(B) Prohibition on participation by non-paying cpp
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.
(8) Outreach to minorities, women, and veterans.--The
Secretary shall require eligible institutions receiving
capital investments under the Program to provide
linguistically and culturally appropriate outreach and
advertising in the applicant pool describing the availability
and application process of receiving loans from the eligible
institution that are made possible by the Program through the
use of print, radio, television or electronic media outlets
which target organizations, trade associations, and
individuals that--
(A) represent or work within or are members of minority
communities;
(B) represent or work with or are women; and
(C) represent or work with or are veterans.
(9) Additional terms.--The Secretary may, by regulation or
guidance issued under section 4104(9), make modifications
that will apply to new capital investments in order to manage
risks associated with the administration of the Fund in a
manner consistent with the purposes of this subtitle.
(10) Minimum underwriting standards.--The appropriate
Federal banking agency for an eligible institution that
receives funds under the Program shall within 60 days issue
guidance regarding prudent underwriting standards that must
be used for loans made by the eligible institution using such
funds.

SEC. 4104. ADDITIONAL AUTHORITIES OF THE SECRETARY.

The Secretary may take such actions as the Secretary deems
necessary to carry out the authorities in this subtitle,
including, without limitation, the following:
(1) The Secretary may use the services of any agency or
instrumentality of the United States or component thereof on
a reimbursable basis, and any such agency or instrumentality
or component thereof is authorized to provide services as
requested by the Secretary using all authorities vested in or
delegated to that agency, instrumentality, or component.
(2) The Secretary may enter into contracts, including
contracts for services authorized by section 3109 of title 5,
United States Code.
(3) The Secretary may designate any bank, savings
association, trust company, security broker or dealer, asset
manager, or investment adviser as a financial agent of the
Federal Government and such institution shall perform all
such reasonable duties related to this subtitle as financial
agent of the Federal Government as may be required. The
Secretary shall have authority to amend existing agreements
with financial agents, entered into during the 2-year period
before the date of enactment of this Act, to perform
reasonable duties related to this subtitle.
(4) The Secretary may exercise any rights received in
connection with any preferred stock or other financial
instruments or assets purchased or acquired pursuant to the
authorities granted under this subtitle.
(5) Subject to section 4103(b)(3), the Secretary may manage
any assets purchased under this subtitle, including revenues
and portfolio risks therefrom.
(6) The Secretary may sell, dispose of, transfer, exchange
or enter into securities loans, repurchase transactions, or
other financial transactions in regard to, any preferred
stock or other financial instrument or asset purchased or
acquired under this subtitle, upon terms and conditions and
at a price determined by the Secretary.
(7) The Secretary may manage or prohibit conflicts of
interest that may arise in connection with the administration
and execution of the authorities provided under this
subtitle.
(8) The Secretary may establish and use vehicles, subject
to supervision by the Secretary, to purchase, hold, and sell
preferred stock or other financial instruments and issue
obligations.
(9) The Secretary may, in consultation with the
Administrator of the Small Business Administration, issue
such regulations and other guidance as may be necessary or
appropriate to define terms or carry out the authorities or
purposes of this subtitle.

SEC. 4105. CONSIDERATIONS.

In exercising the authorities granted in this subtitle, the
Secretary shall take into consideration--

[[Page S6958]]

(1) increasing the availability of credit for small
businesses;
(2) providing funding to minority-owned eligible
institutions and other eligible institutions that serve small
businesses that are minority-, veteran-, and women-owned and
that also serve low- and moderate-income, minority, and other
underserved or rural communities;
(3) protecting and increasing American jobs;
(4) increasing the opportunity for small business
development in areas with high unemployment rates that exceed
the national average;
(5) ensuring that all eligible institutions may apply to
participate in the program established under this subtitle,
without discrimination based on geography;
(6) providing transparency with respect to use of funds
provided under this subtitle;
(7) minimizing the cost to taxpayers of exercising the
authorities;
(8) promoting and engaging in financial education to would-
be borrowers; and
(9) providing funding to eligible institutions that serve
small businesses directly affected by the discharge of oil
arising from the explosion on and sinking of the mobile
offshore drilling unit Deepwater Horizon and small businesses
in communities that have suffered negative economic effects
as a result of that discharge with particular consideration
to States along the coast of the Gulf of Mexico.

SEC. 4106. 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 subtitle;
(2) after the end of March and the end of September,
commencing September 30, 2010, a written report on all
projected costs and liabilities, all operating expenses,
including compensation for financial agents, and all
transactions made by the Fund, which shall include
participating institutions and amounts each institution has
received under the Program; and
(3) within 7 days of the end of each calendar quarter
commencing with the first calendar quarter in which
transactions are made under the Program, a written report
detailing how eligible institutions participating in the
Program have used the funds such institutions received under
the Program.

SEC. 4107. 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 Program through
the Office of Small Business Lending Fund Program Oversight
established under subsection (b).
(b) Office of Small Business Lending Fund Program
Oversight.--
(1) 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.
(c) 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.
(d) Required Certifications.--
(1) Eligible institution certification.--Each eligible
institution that participates in the Program must certify
that such institution is in compliance with the requirements
of section 103.121 of title 31, Code of Federal Regulations,
a regulation that, at a minimum, requires financial
institutions, as that term is defined in 31 U.S.C. 5312(a)(2)
and (c)(1)(A), to implement reasonable procedures to verify
the identity of any person seeking to open an account, to the
extent reasonable and practicable, maintain records of the
information used to verify the person's identity, and
determine whether the person appears on any lists of known or
suspected terrorists or terrorist organizations provided to
the financial institution by any government agency.
(2) Loan 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 Act shall
certify to such eligible institution that the principals of
such business have not been convicted of a sex offense
against a minor (as such terms are defined in section 111 of
the Sex Offender Registration and Notification Act (42 U.S.C.
16911)).
(e) Prohibition on Pornography.--None of the funds made
available under this subtitle may be used to pay the salary
of any individual engaged in activities related to the
Program who has been officially disciplined for violations of
subpart G of the Standards of Ethical Conduct for Employees
of the Executive Branch for viewing, downloading, or
exchanging pornography, including child pornography, on a
Federal Government computer or while performing official
Federal Government duties.

SEC. 4108. CREDIT REFORM; FUNDING.

(a) Credit Reform.--The cost of purchases of preferred
stock and other financial instruments made as capital
investments under this subtitle shall be determined as
provided under the Federal Credit Reform Act of 1990 (2
U.S.C. 661 et seq.).
(b) Funds Made Available.--There are hereby appropriated,
out of funds in the Treasury not otherwise appropriated, such
sums as may be necessary to pay the costs of $30,000,000,000
of capital investments in eligible institutions, including
the costs of modifying such investments, and reasonable costs
of administering the program of making, holding, managing,
and selling the capital investments.

SEC. 4109. 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 subtitle shall terminate 1 year after the
date of enactment of this Act.
(b) Continuation of Other Authorities.--The authorities of
the Secretary under section 4104 shall not be limited by the
termination date in subsection (a).

SEC. 4110. PRESERVATION OF AUTHORITY.

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

SEC. 4111. 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. 4112. STUDY AND REPORT WITH RESPECT TO WOMEN-OWNED,
VETERAN-OWNED, AND MINORITY-OWNED BUSINESSES.

(a) Study.--The Secretary shall conduct a study of the
impact of the Program on women-owned businesses, veteran-
owned businesses, and minority-owned businesses.
(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). To the extent possible, the Secretary shall
disaggregate the results of such study by ethnic group and
gender.
(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.

SEC. 4113. 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.

Subtitle B--Other Provisions

PART I--SMALL BUSINESS EXPORT PROMOTION INITIATIVES

SEC. 4221. SHORT TITLE.

This part may be cited as the ``Export Promotion Act of
2010''.

[[Page S6959]]

SEC. 4222. GLOBAL BUSINESS DEVELOPMENT AND PROMOTION
ACTIVITIES OF THE DEPARTMENT OF COMMERCE.

(a) Increase in Employees With Responsibility for Global
Business Development and Promotion Activities.--
(1) In general.--During the 24-month period beginning on
the date of the enactment of this Act, the Secretary of
Commerce shall increase the number of full-time departmental
employees whose primary responsibilities involve promoting or
facilitating participation by United States businesses in the
global marketplace and facilitating the entry into, or
expansion of, such participation by United States businesses.
In carrying out this subsection, the Secretary shall ensure
that--
(A) the cohort of such employees is increased by not less
than 80 persons; and
(B) a substantial portion of the increased cohort is
stationed outside the United States.
(2) Enhanced focus on united states small- and medium-sized
businesses.--In carrying out this subsection, the Secretary
shall take such action as may be necessary to ensure that the
activities of the Department of Commerce relating to
promoting and facilitating participation by United States
businesses in the global marketplace include promoting and
facilitating such participation by small and medium-sized
businesses in the United States.
(3) Authorization of appropriations.--There are authorized
to be appropriated to the Secretary for each of the fiscal
years 2011 and 2012 such sums as may be necessary to carry
out this section.
(b) Additional Funding for Global Business Development and
Promotion Activities of the Department of Commerce.--
(1) In general.--There are authorized to be appropriated to
the Secretary of Commerce for the period beginning on the
date of the enactment of this Act and ending 18 months
thereafter, $30,000,000 to promote or facilitate
participation by United States businesses in the global
marketplace and facilitating the entry into, or expansion of,
such participation by United States businesses.
(2) Requirements.--In obligating and expending the funds
authorized to be appropriated by paragraph (1), the Secretary
of Commerce shall give preference to activities that--
(A) assist small- and medium-sized businesses in the United
States; and
(B) the Secretary determines will create or sustain the
greatest number of jobs in the United States and obtain the
maximum return on investment.

SEC. 4223. ADDITIONAL FUNDING TO IMPROVE ACCESS TO GLOBAL
MARKETS FOR RURAL BUSINESSES.

(a) In General.--There are authorized to be appropriated to
the Secretary of Commerce $5,000,000 for each of the fiscal
years 2011 and 2012 for improving access to the global
marketplace for goods and services provided by rural
businesses in the United States.
(b) Requirements.--In obligating and expending the funds
authorized to be appropriated by subsection (a), the
Secretary of Commerce shall give preference to activities
that--
(1) assist small- and medium-sized businesses in the United
States; and
(2) the Secretary determines will create or sustain the
greatest number of jobs in the United States and obtain the
maximum return on investment.

SEC. 4224. ADDITIONAL FUNDING FOR THE EXPORTECH PROGRAM.

(a) In General.--There are authorized to be appropriated to
the Secretary of Commerce $11,000,000 for the period
beginning on the date of the enactment of this Act and ending
18 months thereafter, to expand ExporTech, a joint program of
the Hollings Manufacturing Partnership Program and the Export
Assistance Centers of the Department of Commerce.
(b) Requirements.--In obligating and expending the funds
authorized to be appropriated by subsection (a), the
Secretary of Commerce shall give preference to activities
that--
(1) assist small- and medium-sized businesses in the United
States; and
(2) the Secretary determines will create or sustain the
greatest number of jobs in the United States and obtain the
maximum return on investment.

SEC. 4225. ADDITIONAL FUNDING FOR THE MARKET DEVELOPMENT
COOPERATOR PROGRAM OF THE DEPARTMENT OF
COMMERCE.

(a) In General.--There are authorized to be appropriated to
the Secretary of Commerce for the period beginning on the
date of the enactment of this Act and ending 18 months
thereafter, $15,000,000 for the Manufacturing and Services
unit of the International Trade Administration--
(1) to establish public-private partnerships under the
Market Development Cooperator Program of the International
Trade Administration; and
(2) to underwrite a portion of the start-up costs for new
projects carried out under that Program to strengthen the
competitiveness and market share of United States industry,
not to exceed, for each such project, the lesser of--
(A) \1/3\ of the total start-up costs for the project; or
(B) $500,000.
(b) Requirements.--In obligating and expending the funds
authorized to be appropriated by subsection (a), the
Secretary of Commerce shall give preference to activities
that--
(1) assist small- and medium-sized businesses in the United
States; and
(2) the Secretary determines will create or sustain the
greatest number of jobs in the United States and obtain the
maximum return on investment.

SEC. 4226. HOLLINGS MANUFACTURING PARTNERSHIP PROGRAM;
TECHNOLOGY INNOVATION PROGRAM.

(a) Hollings Manufacturing Partnership Program.--Section
25(f) of the National Institute of Standards and Technology
Act (15 U.S.C. 278k(f)) is amended by adding at the end the
following:
``(7) Global marketplace projects.--In making awards under
this subsection, the Director, in consultation with the
Manufacturing Extension Partnership Advisory Board and the
Secretary of Commerce, may--
``(A) take into consideration whether an application has
significant potential for enhancing the competitiveness of
small and medium-sized United States manufacturers in the
global marketplace; and
``(B) give a preference to applications for such projects
to the extent the Director deems appropriate, taking into
account the broader purposes of this subsection.''.
(b) Technology Innovation Program.--In awarding grants,
cooperative agreements, or contracts under section 28 of the
National Institute of Standards and Technology Act (15 U.S.C.
278n), in addition to the award criteria set forth in
subsection (c) of that section, the Director of the National
Institute of Standards and Technology may take into
consideration whether an application has significant
potential for enhancing the competitiveness of small- and
medium-sized businesses in the United States in the global
marketplace. The Director shall consult with the Technology
Innovation Program Advisory Board and the Secretary of
Commerce in implementing this subsection.

SEC. 4227. SENSE OF THE SENATE CONCERNING FEDERAL
COLLABORATION WITH STATES ON EXPORT PROMOTION
ISSUES.

It is the sense of the Senate that the Secretary of
Commerce should enhance Federal collaboration with the States
on export promotion issues by--
(1) providing the necessary training to the staff at State
international trade agencies to enable them to assist the
United States and Foreign Commercial Service (established by
section 2301 of the Export Enhancement Act of 1988 (15 U.S.C.
4721)) in providing counseling and other export services to
businesses in their communities; and
(2) entering into agreements with State international trade
agencies for those agencies to deliver export promotion
services in their local communities in order to extend the
outreach of United States and Foreign Commercial Service
programs.

SEC. 4228. REPORT ON TARIFF AND NONTARIFF BARRIERS.

Not later than 90 days after the date of the enactment of
this Act, the Secretary of Commerce, in consultation with the
United States Trade Representative and other appropriate
entities, shall report to Congress on the tariff and
nontariff barriers imposed by Colombia, the Republic of
Korea, and Panama with respect to exports of articles from
the United States, including articles exported or produced by
small- and medium-sized businesses in the United States.

PART II--MEDICARE FRAUD

SEC. 4241. USE OF PREDICTIVE MODELING AND OTHER ANALYTICS
TECHNOLOGIES TO IDENTIFY AND PREVENT WASTE,
FRAUD, AND ABUSE IN THE MEDICARE FEE-FOR-
SERVICE PROGRAM.

(a) Use in the Medicare Fee-for-service Program.--The
Secretary shall use predictive modeling and other analytics
technologies (in this section referred to as ``predictive
analytics technologies'') to identify improper claims for
reimbursement and to prevent the payment of such claims under
the Medicare fee-for-service program.
(b) Predictive Analytics Technologies Requirements.--The
predictive analytics technologies used by the Secretary
shall--
(1) capture Medicare provider and Medicare beneficiary
activities across the Medicare fee-for-service program to
provide a comprehensive view across all providers,
beneficiaries, and geographies within such program in order
to--
(A) identify and analyze Medicare provider networks,
provider billing patterns, and beneficiary utilization
patterns; and
(B) identify and detect any such patterns and networks that
represent a high risk of fraudulent activity;
(2) be integrated into the existing Medicare fee-for-
service program claims flow with minimal effort and maximum
efficiency;
(3) be able to--
(A) analyze large data sets for unusual or suspicious
patterns or anomalies or contain other factors that are
linked to the occurrence of waste, fraud, or abuse;
(B) undertake such analysis before payment is made; and
(C) prioritize such identified transactions for additional
review before payment is made in terms of the likelihood of
potential waste, fraud, and abuse to more efficiently utilize
investigative resources;
(4) capture outcome information on adjudicated claims for
reimbursement to allow for refinement and enhancement of the
predictive analytics technologies on the basis of such
outcome information, including post-payment information about
the eventual status of a claim; and

[[Page S6960]]

(5) prevent the payment of claims for reimbursement that
have been identified as potentially wasteful, fraudulent, or
abusive until such time as the claims have been verified as
valid.
(c) Implementation Requirements.--
(1) Request for proposals.--Not later than January 1, 2011,
the Secretary shall issue a request for proposals to carry
out this section during the first year of implementation. To
the extent the Secretary determines appropriate--
(A) the initial request for proposals may include
subsequent implementation years; and
(B) the Secretary may issue additional requests for
proposals with respect to subsequent implementation years.
(2) First implementation year.--The initial request for
proposals issued under paragraph (1) shall require the
contractors selected to commence using predictive analytics
technologies on July 1, 2011, in the 10 States identified by
the Secretary as having the highest risk of waste, fraud, or
abuse in the Medicare fee-for-service program.
(3) Second implementation year.--Based on the results of
the report and recommendation required under subsection
(e)(1)(B), the Secretary shall expand the use of predictive
analytics technologies on October 1, 2012, to apply to an
additional 10 States identified by the Secretary as having
the highest risk of waste, fraud, or abuse in the Medicare
fee-for-service program, after the States identified under
paragraph (2).
(4) Third implementation year.--Based on the results of the
report and recommendation required under subsection (e)(2),
the Secretary shall expand the use of predictive analytics
technologies on January 1, 2014, to apply to the Medicare
fee-for-service program in any State not identified under
paragraph (2) or (3) and the commonwealths and territories.
(5) Fourth implementation year.--Based on the results of
the report and recommendation required under subsection
(e)(3), the Secretary shall expand the use of predictive
analytics technologies, beginning April 1, 2015, to apply to
Medicaid and CHIP. To the extent the Secretary determines
appropriate, such expansion may be made on a phased-in basis.
(6) Option for refinement and evaluation.--If, with respect
to the first, second, or third implementation year, the
Inspector General of the Department of Health and Human
Services certifies as part of the report required under
subsection (e) for that year no or only nominal actual
savings to the Medicare fee-for-service program, the
Secretary may impose a moratorium, not to exceed 12 months,
on the expansion of the use of predictive analytics
technologies under this section for the succeeding year in
order to refine the use of predictive analytics technologies
to achieve more than nominal savings before further
expansion. If a moratorium is imposed in accordance with this
paragraph, the implementation dates applicable for the
succeeding year or years shall be adjusted to reflect the
length of the moratorium period.
(d) Contractor Selection, Qualifications, and Data Access
Requirements.--
(1) Selection.--
(A) In general.--The Secretary shall select contractors to
carry out this section using competitive procedures as
provided for in the Federal Acquisition Regulation.
(B) Number of contractors.--The Secretary shall select at
least 2 contractors to carry out this section with respect to
any year.
(2) Qualifications.--
(A) In general.--The Secretary shall enter into a contract
under this section with an entity only if the entity--
(i) has leadership and staff who--

(I) have the appropriate clinical knowledge of, and
experience with, the payment rules and regulations under the
Medicare fee-for-service program; and
(II) have direct management experience and proficiency
utilizing predictive analytics technologies necessary to
carry out the requirements under subsection (b); or

(ii) has a contract, or will enter into a contract, with
another entity that has leadership and staff meeting the
criteria described in clause (i).
(B) Conflict of interest.--The Secretary may only enter
into a contract under this section with an entity to the
extent that the entity complies with such conflict of
interest standards as are generally applicable to Federal
acquisition and procurement.
(3) Data access.--The Secretary shall provide entities with
a contract under this section with appropriate access to data
necessary for the entity to use predictive analytics
technologies in accordance with the contract.
(e) Reporting Requirements.--
(1) First implementation year report.--Not later than 3
months after the completion of the first implementation year
under this section, the Secretary shall submit to the
appropriate committees of Congress and make available to the
public a report that includes the following:
(A) A description of the implementation of the use of
predictive analytics technologies during the year.
(B) A certification of the Inspector General of the
Department of Health and Human Services that--
(i) specifies the actual and projected savings to the
Medicare fee-for-service program as a result of the use of
predictive analytics technologies, including estimates of the
amounts of such savings with respect to both improper
payments recovered and improper payments avoided;
(ii) the actual and projected savings to the Medicare fee-
for-service program as a result of such use of predictive
analytics technologies relative to the return on investment
for the use of such technologies and in comparison to other
strategies or technologies used to prevent and detect fraud,
waste, and abuse in the Medicare fee-for-service program; and
(iii) includes recommendations regarding--

(I) whether the Secretary should continue to use predictive
analytics technologies;
(II) whether the use of such technologies should be
expanded in accordance with the requirements of subsection
(c); and
(III) any modifications or refinements that should be made
to increase the amount of actual or projected savings or
mitigate any adverse impact on Medicare beneficiaries or
providers.

(C) An analysis of the extent to which the use of
predictive analytics technologies successfully prevented and
detected waste, fraud, or abuse in the Medicare fee-for-
service program.
(D) A review of whether the predictive analytics
technologies affected access to, or the quality of, items and
services furnished to Medicare beneficiaries.
(E) A review of what effect, if any, the use of predictive
analytics technologies had on Medicare providers.
(F) Any other items determined appropriate by the
Secretary.
(2) Second year implementation report.--Not later than 3
months after the completion of the second implementation year
under this section, the Secretary shall submit to the
appropriate committees of Congress and make available to the
public a report that includes, with respect to such year, the
items required under paragraph (1) as well as any other
additional items determined appropriate by the Secretary with
respect to the report for such year.
(3) Third year implementation report.--Not later than 3
months after the completion of the third implementation year
under this section, the Secretary shall submit to the
appropriate committees of Congress, and make available to the
public, a report that includes with respect to such year, the
items required under paragraph (1), as well as any other
additional items determined appropriate by the Secretary with
respect to the report for such year, and the following:
(A) An analysis of the cost-effectiveness and feasibility
of expanding the use of predictive analytics technologies to
Medicaid and CHIP.
(B) An analysis of the effect, if any, the application of
predictive analytics technologies to claims under Medicaid
and CHIP would have on States and the commonwealths and
territories.
(C) Recommendations regarding the extent to which technical
assistance may be necessary to expand the application of
predictive analytics technologies to claims under Medicaid
and CHIP, and the type of any such assistance.
(f) Independent Evaluation and Report.--
(1) Evaluation.--Upon completion of the first year in which
predictive analytics technologies are used with respect to
claims under Medicaid and CHIP, the Secretary shall, by
grant, contract, or interagency agreement, conduct an
independent evaluation of the use of predictive analytics
technologies under the Medicare fee-for-service program and
Medicaid and CHIP. The evaluation shall include an analysis
with respect to each such program of the items required for
the third year implementation report under subsection (e)(3).
(2) Report.--Not later than 18 months after the evaluation
required under paragraph (1) is initiated, the Secretary
shall submit a report to Congress on the evaluation that
shall include the results of the evaluation, the Secretary's
response to such results and, to the extent the Secretary
determines appropriate, recommendations for legislation or
administrative actions.
(g) Waiver Authority.--The Secretary may waive such
provisions of titles XI, XVIII, XIX, and XXI of the Social
Security Act, including applicable prompt payment
requirements under titles XVIII and XIX of such Act, as the
Secretary determines to be appropriate to carry out this
section.
(h) Funding.--
(1) Appropriation.--Out of any funds in the Treasury not
otherwise appropriated, there is appropriated to the
Secretary to carry out this section, $100,000,000 for the
period beginning January 1, 2011, to remain available until
expended.
(2) Reservations.--
(A) Independent evaluation.--The Secretary shall reserve
not more than 5 percent of the funds appropriated under
paragraph (1) for purposes of conducting the independent
evaluation required under subsection (f).
(B) Application to medicaid and chip.--The Secretary shall
reserve such portion of the funds appropriated under
paragraph (1) as the Secretary determines appropriate for
purposes of providing assistance to States for administrative
expenses in the event of the expansion of predictive
analytics technologies to claims under Medicaid and CHIP.
(i) Definitions.--In this section:
(1) Commonwealths and territories.--The term ``commonwealth
and territories'' includes the Commonwealth of Puerto Rico,

[[Page S6961]]

the Virgin Islands, Guam, American Samoa, the Commonwealth of
the Northern Mariana Islands, and any other territory or
possession of the United States in which the Medicare fee-
for-service program, Medicaid, or CHIP operates.
(2) CHIP.--The term ``CHIP'' means the Children's Health
Insurance Program established under title XXI of the Social
Security Act (42 U.S.C. 1397aa et seq.).
(3) Medicaid.--The term ``Medicaid'' means the program to
provide grants to States for medical assistance programs
established under title XIX of the Social Security Act (42
U.S.C. 1396 et seq.).
(4) Medicare beneficiary.--The term ``Medicare
beneficiary'' means an individual enrolled in the Medicare
fee-for-service program.
(5) Medicare fee-for-service program.--The term ``Medicare
fee-for-service program'' means the original medicare fee-
for-service program under parts A and B of title XVIII of the
Social Security Act (42 U.S.C. 1395 et seq.).
(6) Medicare provider.--The term ``Medicare provider''
means a provider of services (as defined in subsection (u) of
section 1861 of the Social Security Act (42 U.S.C. 1395x))
and a supplier (as defined in subsection (d) of such
section).
(7) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services, acting through the
Administrator of the Centers for Medicare & Medicaid
Services.
(8) State.--The term ``State'' means each of the 50 States
and the District of Columbia.

TITLE V--BUDGETARY PROVISIONS

SEC. 5001. DETERMINATION OF 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 Senate Budget Committee, provided that such
statement has been submitted prior to the vote on passage.
______