Bill Text: NY A10924 | 2019-2020 | General Assembly | Introduced
Bill Title: Establishes the New York state small business protection program to provide loans and grants to qualifying entities that have less than 100 employees per location, did not receive any federal funding for the Federal CARES Act, was in existence in New York state by the first day the state disaster emergency related to COVID-19 was declared by the governor, can document actual economic harm or revenue shortfall as a direct result of the pandemic, and has filed 2018 or 2019 tax returns.
Spectrum: Moderate Partisan Bill (Democrat 26-3)
Status: (Introduced - Dead) 2020-08-17 - referred to small business [A10924 Detail]
Download: New_York-2019-A10924-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 10924 IN ASSEMBLY August 17, 2020 ___________ Introduced by COMMITTEE ON RULES -- (at request of M. of A. Dickens) -- read once and referred to the Committee on Small Business AN ACT establishing the New York state small business protection program The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Legislative findings. a. In April 2020, the Federal Govern- 2 ment enacted two Coronavirus Aid, Relief and Economic Security (CARES) 3 Act stimulus packages where it introduced the Paycheck Protection 4 Program (PPP) totaling $659 billion dollars to financially assist small 5 businesses, and to prevent the loss of jobs and the failure of small 6 businesses due to financial losses caused by the COVID-19 pandemic. 7 b. Many local small businesses including minority- and women-owned 8 businesses (MWBEs) in our state did not receive any federal funding 9 under the federal PPP in either of the two rounds of funding. In fact, 10 most of the first round of funding totaling $349 billion, which was 11 exhausted in 2 weeks, went to large publicly traded businesses. 12 c. According to a report issued by the Federal Small Business Adminis- 13 tration Inspector General, the Small Business Administration (SBA) was 14 faulted in administering the PPP, in that the SBA did not issue guide- 15 lines for banks to prioritize businesses in rural markets, companies 16 that have only been in business for two years or less, or businesses 17 owned by veterans, minorities, women and economically disadvantaged 18 individuals. Moreover, the PPP application did not include demographic 19 information making it difficult or near impossible to determine how much 20 money went into the markets. 21 d. As New York state is reopening regionally post COVID-19, many of 22 our small businesses, including MWBEs and farmers who did not receive 23 any PPP funding are in desperate need of funding to employ and/or pay 24 staff, purchase inventory, and pay rent and utilities. 25 § 2. Establishment. Notwithstanding any provision of law to the 26 contrary, the legislature shall authorize the establishment of a New 27 York State Small Business Protection Program (NYSSBPP) to be funded in 28 the amount of 100 million dollars from future federal stimulus funding. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD16401-04-0A. 10924 2 1 Such funding shall reimburse any moneys used from any state funds for 2 the purposes described under sections four or five of this act. 3 § 3. Eligibility. Entities shall be eligible for the NYSSBPP provided 4 such entity has less than 100 employees per location, did not receive 5 any federal funding from the Federal CARES Act, was in existence in New 6 York state by the first day the state disaster emergency related to 7 COVID-19 was declared by the governor, can document actual economic harm 8 or revenue shortfall as a direct result of the pandemic, and has filed 9 2018 or 2019 tax returns. The lending priority shall be as follows: 10 a. small businesses, including minority- and women-owned business 11 enterprises, owned by veterans, minorities, women, economically disad- 12 vantaged individuals and farmers; 13 b. businesses in the restaurant, luxury service, retail, transporta- 14 tion, hospitality and farming industries; 15 c. small businesses located in economically distressed or underserved 16 communities and rural markets; 17 d. non-profit organizations having tax exempt status under section 18 501(c)(3), or a veterans organization having tax exempt status under 19 section 501(c)(19) of the United States Internal Revenue Code; 20 e. sole proprietors, independent contractors, and self-employed 21 persons; 22 f. small businesses that have been in existence for two years or less; 23 and 24 g. new businesses formed or incorporated within 30 days after the 25 expiration of the state of emergencies or the region of the state where 26 the business is located has reopened post COVID-19. 27 § 4. Loan details and forgiveness. a. All eligible entities pursuant 28 to section three of this act, shall submit an application through commu- 29 nity development financial institutions (CDFIs), minority depository 30 institutions (MDIs), local community banks or credit unions located 31 within the state. No applications shall be processed through any 32 merchant cash advance or any financial technology companies. All lending 33 institutions in this program shall collect and provide data about the 34 borrowers' demographics and loan amount. 35 b. The loan amount shall equal 60% of the prior year eligible expenses 36 not to exceed $100,000.00. 37 c. Such loan shall be forgiven if funds are used for payroll or 1099 38 employees, interest on mortgages, rent, utilities and inventory. 39 d. Purchases of new equipment are permissible under this program but 40 such loan will not be forgiven as a grant. 41 e. All loan payments shall be deferred for 6 months, which can be 42 deferred for an additional 6 months but not to exceed 1 year from the 43 date of the loan. 44 f. No collateral or personal guarantees are required. Neither the 45 government nor financial institutions shall charge qualifying entities 46 any fees. 47 g. Forgiveness is based on the qualifying small business maintaining 48 or quickly rehiring employees and maintaining salary levels. Forgiveness 49 will be reduced if full-time headcount declines, or if salaries and 50 wages decrease within 12 weeks of receiving such funding. The 12-week 51 rule shall not apply to any entity if such entity paid its employees' 52 salaries during the COVID-19 state of disaster emergencies or when such 53 entity was closed. Documented proof of such payroll payment shall be 54 required.A. 10924 3 1 h. All loans not forgiven under subdivision b of this section shall 2 have a maturity of 2 years and an interest rate of 1% or 3 years of the 3 loan payments have been deferred. 4 i. The department of financial services shall have oversight and moni- 5 tor the application process pursuant to this section. Such department 6 shall create the application and promulgate rules necessary for the 7 administration of this program. 8 § 5. Grants. The NYSSBPP shall provide the following grants to all 9 qualified small businesses, not-for-profits and charitable organiza- 10 tions: 11 a. A rent reimbursement grant to reimburse qualifying entities for 12 rent paid during the COVID-19 pandemic, provided such entity has docu- 13 mentary proof of such paid rent. This rent reimbursement grant shall be 14 capped at 3 months of paid rent during the state of emergencies; 15 b. A grant to reimburse qualifying entities for perishable inventory 16 purchased before the COVID-19 state of disaster emergency that was 17 thrown out due to the forced shut down of such entity and/or to replace 18 food inventory to help such entity reopen; and 19 c. A grant subsidy for farmers to pay for gas and tolls to deliver the 20 products throughout the state. 21 § 6. Oversight. The state comptroller shall monitor the NYSSBPP to 22 ensure the provisions of this act are properly executed. The state comp- 23 troller shall submit a report on such program to the governor, the 24 temporary president of the senate and the speaker of the assembly, and 25 shall post such on the comptroller's website on a quarterly basis 26 describing any loans granted under such program. 27 § 7. This act shall take effect immediately.