12 USC § 5707 - Remedies for State program termination or failures

---
identifier: "/us/usc/t12/s5707"
source: "usc"
legal_status: "official_prima_facie"
title: "12 USC § 5707 - Remedies for State program termination or failures"
title_number: 12
title_name: "BANKS AND BANKING"
section_number: "5707"
section_name: "Remedies for State program termination or failures"
chapter_number: 54
chapter_name: "STATE SMALL BUSINESS CREDIT INITIATIVE"
positive_law: false
currency: "119-84"
last_updated: "2026-04-17"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Pub. L. 111–240, title III, § 3008, Sept. 27, 2010, 124 Stat. 2580.)"
---


# § 5707. 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 5706 of this title 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** section 5702(b) of this title

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 .

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**Source Credit**: (Pub. L. 111–240, title III, § 3008, Sept. 27, 2010, 124 Stat. 2580.)