H.R. 4340 – Reading Mode

111th CONGRESS

1st Session

H. R. 4340

IN THE HOUSE OF REPRESENTATIVES

December 16, 2009

Mr. Davis of Alabama introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To require the Secretary of the Treasury to establish a revolving loan fund program for certain businesses to facilitate increased lending in the United States.

Short title

This Act may be cited as the Main Street Survival Act.

Findings; Sense of Congress

(a)

Findings

The Congress finds the following:

(1)

Despite the infusion of hundreds of billions of dollars to provide liquidity to capital markets, many qualified and creditworthy small and medium-sized businesses continue to face severely constricted credit markets.

(2)

Banks of all sizes have significantly decreased lending in, and in some cases withdrawn completely from, the small and medium-sized business credit market.

(3)

Available and affordable credit is critical for the survival of the small and medium-sized businesses that form the backbone of the economy of the United States.

(b)

Sense of the Congress on lending to small and medium-sized businesses

It is the sense of the Congress that the President, acting through the Secretary of the Treasury, should encourage financial institutions that have received Federal financial support to maintain historic levels of lending to small and medium-sized businesses.

Definitions

In this Act—

(1)

the term revolving loan fund means the revolving loan fund established under section 4(b); and

(2)

the term Secretary means the Secretary of the Treasury.

Main street revolving loan fund program

(a)

Establishment

The Secretary shall establish the Main Street Revolving Loan Fund Program (hereinafter in this Act referred to as the program) to provide temporary loans to businesses that meet the size requirement under paragraph (1) of subsection (c).

(b)

Revolving loan fund

(1)

In general

There is established in the Treasury a revolving loan fund for the program.

(2)

Initial transfer

From dividends paid by financial institutions that have received financial assistance provided under title I of the Emergency Economic Stabilization Act of 2008 (Public Law 110–343; 12 U.S.C. 5211 et seq.), the Secretary shall transfer and credit $1,000,000,000 to the revolving loan fund.

(3)

Expenditures

The Secretary shall use the amounts in the revolving loan fund to carry out the program.

(4)

Deposits

The Secretary shall deposit amounts received as payment on loans provided under the program into the revolving loan fund.

(c)

Eligibility

(1)

Size requirement

To qualify for a loan under the program, a business shall have less than 1,000 full-time equivalent employees at the time of submission of an application under subsection (d).

(2)

Considerations

The Secretary, through regulations, shall develop criteria to evaluate and select businesses for participation in the program, taking into consideration—

(A)

the likelihood that the business concerned will be forced to lay off employees in the absence of obtaining a loan under such program; and

(B)

the ability of such businesses to repay the loan.

(3)

Availability

The criteria developed under paragraph (2) shall be made available on the official public Web site of the Department of the Treasury.

(d)

Application

A business desiring a loan under the program shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require.

Terms

(a)

Use of funds

A business receiving a loan under the program may use the funds to finance the cost of operations, including—

(1)

purchasing and operating equipment;

(2)

paying salaries, wages, and building expenses; and

(3)

purchasing inventory or making improvements to enhance productivity.

(b)

Prohibited use

A loan provided under the program may not be used to significantly expand operations.

(c)

Repayment period

A loan provided under the program shall be made for a period not to exceed 9 months.

(d)

Maximum loan amount

Under the program, the Secretary may provide not more than a total of $1,000,000 in loans to a particular business in any fiscal year.

Administrative costs

Not more than $1,000,000 may be used for administrative costs in any fiscal year to carry out the program.

Report

(a)

In general

The Secretary shall make available on the official public Web site of the Department of the Treasury, and submit to Congress—

(1)

within 1 year after the date of enactment of this Act and each year thereafter in which a loan has been made under the program, an annual report; and

(2)

within 90 days after the end of the 9-month period following the issuance of the final loan under the program, a final report.

(b)

Details

Each report shall provide details on loans provided under the program and the effectiveness of such program in providing stability for, and otherwise supporting, businesses.

Regulations

The Secretary may prescribe regulations necessary to carry out this Act.

Sunset

An application for a loan under the program may not be accepted after the date which is 3 years after the date of enactment of this Act.