--- kind: "section" citation: "12 U.S.C. § 4743" title: "12" title_heading: "Banks and Banking" number: "4743" heading: "Approving States for participation" release: "119-102" date: "2026-07-12" url: "https://uscodex.org/usc/12/4743" units: - "Chapter 47 — Community Development Banking" - "Subchapter II — Small Business Capital Enhancement" --- # §4743. Approving States for participation - (a) **Application—** Any [State](/usc/12/4702.md?p=18) may apply to the [Fund](/usc/12/4702.md?p=10) for approval to be a [participating State](/usc/12/4742.md?p=7) under the [Program](/usc/12/4742.md?p=9) and to be eligible for reimbursement by the [Fund](/usc/12/4702.md?p=10) pursuant to [section 4747 of this title](/usc/12/4747.md). - (b) **Approval criteria—** The [Fund](/usc/12/4702.md?p=10) shall approve a [State](/usc/12/4702.md?p=18) to be a [participating State](/usc/12/4742.md?p=7), if— - (1) a specific department or agency of the [State](/usc/12/4702.md?p=18) has been designated to implement the [Program](/usc/12/4742.md?p=9); - (2) all legal actions necessary to enable such designated department or agency to implement the [Program](/usc/12/4742.md?p=9) have been accomplished; - (3) [funds](/usc/12/4702.md?p=10) in the amount of at least $1 for every 2 people residing in the [State](/usc/12/4702.md?p=18) (as of the last decennial census for which data have been released) are available and have been legally committed to contributions by the [State](/usc/12/4702.md?p=18) to [reserve funds](/usc/12/4742.md?p=10), with such [funds](/usc/12/4702.md?p=10) being available without time limit and without requiring additional legal action, except that such requirements shall not be construed to limit the authority of the [State](/usc/12/4702.md?p=18) to take action at a later time that results in the termination of its obligation to enroll loans and make contributions to [reserve funds](/usc/12/4742.md?p=10); - (4) the [State](/usc/12/4702.md?p=18) has prescribed a form of participation agreement to be entered into between it and each [participating financial institution](/usc/12/4742.md?p=6) that is consistent with the requirements and purposes of this subchapter; and - (5) the [State](/usc/12/4702.md?p=18) and the [Fund](/usc/12/4702.md?p=10) have executed a reimbursement agreement that conforms to the requirements of this subchapter. - (c) **Existing State programs—** - (1) **In general—** A [State](/usc/12/4702.md?p=18) that is not a [participating State](/usc/12/4742.md?p=7), but that has its own capital access [program](/usc/12/4742.md?p=9) providing portfolio insurance for business loans (based on a separate loss [reserve fund](/usc/12/4742.md?p=10) for each [financial institution](/usc/12/4742.md?p=5)), may apply at any time to the [Fund](/usc/12/4702.md?p=10) to be approved to be a [participating State](/usc/12/4742.md?p=7). The [Fund](/usc/12/4702.md?p=10) shall approve such [State](/usc/12/4702.md?p=18) to be a [participating State](/usc/12/4742.md?p=7), and to be eligible for reimbursements by the [Fund](/usc/12/4702.md?p=10) pursuant to [section 4747 of this title](/usc/12/4747.md), if the [State](/usc/12/4702.md?p=18)— - (A) satisfies the requirements of subsections [(a)](#a) and [(b)](#b); and - (B) certifies that each affected [financial institution](/usc/12/4742.md?p=5) has satisfied the requirements of [section 4744 of this title](/usc/12/4744.md). - (2) **Applicable terms of participation—** - (A) **Status of institutions—** If a [State](/usc/12/4702.md?p=18) is approved for participation under [paragraph (1)](#c-1), each [financial institution](/usc/12/4742.md?p=5) with a participation agreement in effect with the [participating State](/usc/12/4742.md?p=7) shall immediately be considered a [participating financial institution](/usc/12/4742.md?p=6). Reimbursements may be made under [section 4747](/usc/12/4747.md)[^1] of this title in connection with all contributions made to the [reserve fund](/usc/12/4742.md?p=10) by the [State](/usc/12/4702.md?p=18) in connection with lending that occurs on or after the date on which the [Fund](/usc/12/4702.md?p=10) approves the [State](/usc/12/4702.md?p=18) for participation. - (B) **Effective date of participation—** If an amended participation agreement that conforms with [section 4745 of this title](/usc/12/4745.md) is required in order to secure participation approval by the [Fund](/usc/12/4702.md?p=10), contributions subject to reimbursement under [section 4747 of this title](/usc/12/4747.md) shall include only those contributions made to a [reserve fund](/usc/12/4742.md?p=10) with respect to loans enrolled on or after the date that an amended participation agreement between the [participating State](/usc/12/4742.md?p=7) and the [participating financial institution](/usc/12/4742.md?p=6) becomes effective. - (C) **Use of accumulated reserve funds—** A [State](/usc/12/4702.md?p=18) that is approved for participation in accordance with this subsection may continue to implement the [program](/usc/12/4742.md?p=9)[^2] utilizing the [reserve funds](/usc/12/4742.md?p=10) accumulated under the [State](/usc/12/4702.md?p=18) [program](/usc/12/4742.md?p=9). - (d) **Prior appropriations requirement—** The [Fund](/usc/12/4702.md?p=10) shall not approve a [State](/usc/12/4702.md?p=18) for participation in the [Program](/usc/12/4742.md?p=9) until at least $50,000,000 has been appropriated to the [Fund](/usc/12/4702.md?p=10) (subject to an appropriations Act), without fiscal year limitation, for the purpose of making reimbursements pursuant to [section 4747 of this title](/usc/12/4747.md) and otherwise carrying out this subchapter. - (e) **Amendments to agreements—** If a [State](/usc/12/4702.md?p=18) that has been approved to be a [participating State](/usc/12/4742.md?p=7) wishes to amend its form of participation agreement and continue to be a [participating State](/usc/12/4742.md?p=7), such [State](/usc/12/4702.md?p=18) shall submit such amendment for review by the [Fund](/usc/12/4702.md?p=10) in accordance with [subsection (b)(4)](#b-4). Any such amendment shall become effective only after it has been approved by the [Fund](/usc/12/4702.md?p=10). ## Footnotes [^1]: See References in Text note below. [^2]: So in original. Probably should be capitalized. ## Source credit (Pub. L. 103–325, title II, § 253, Sept. 23, 1994, 108 Stat. 2205.) ## Notes ### Editorial Notes ### References in Text Section 4747 of this title, referred to in subsec. (c)(2)(A), was in the original “section 237” and was translated as reading “section 257” meaning section 257 of Pub. L. 103–325, to reflect the probable intent of Congress. Pub. L. 103–325 does not contain a section 237.