S08364 Summary:

BILL NOS08364A
 
SAME ASNo Same As
 
SPONSORSANDERS
 
COSPNSRMAY
 
MLTSPNSR
 
 
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.
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S08364 Actions:

BILL NOS08364A
 
05/19/2020REFERRED TO COMMERCE, ECONOMIC DEVELOPMENT AND SMALL BUSINESS
05/22/2020AMEND (T) AND RECOMMIT TO COMMERCE, ECONOMIC DEVELOPMENT AND SMALL BUSINESS
05/22/2020PRINT NUMBER 8364A
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S08364 Committee Votes:

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S08364 Floor Votes:

There are no votes for this bill in this legislative session.
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S08364 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         8364--A
 
                    IN SENATE
 
                                      May 19, 2020
                                       ___________
 
        Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Commerce, Economic  Devel-
          opment  and  Small  Business  --  committee  discharged, bill amended,
          ordered reprinted as amended and recommitted to said committee
 
        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
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16401-03-0

        S. 8364--A                          2
 
     1  the  amount of 100 million dollars from future federal stimulus funding.
     2  Such funding shall reimburse any moneys used from any  state  funds  for
     3  the purposes described under sections four or five of this act.
     4    §  3. Eligibility. Entities shall be eligible for the NYSSBPP provided
     5  such entity has less than 100 employees per location,  did  not  receive
     6  any  federal funding from the Federal CARES Act, was in existence in New
     7  York state by the first day the  state  disaster  emergency  related  to
     8  COVID-19 was declared by the governor, can document actual economic harm
     9  or  revenue  shortfall as a direct result of the pandemic, and has filed
    10  2018 or 2019 tax returns. The lending priority shall be as follows:
    11    a. small businesses,  including  minority-  and  women-owned  business
    12  enterprises,  owned  by veterans, minorities, women, economically disad-
    13  vantaged individuals and farmers;
    14    b. businesses in the restaurant, luxury service,  retail,  transporta-
    15  tion, hospitality and farming industries;
    16    c.  small businesses located in economically distressed or underserved
    17  communities and rural markets;
    18    d. non-profit organizations having tax  exempt  status  under  section
    19  501(c)(3),  or  a  veterans  organization having tax exempt status under
    20  section 501(c)(19) of the United States Internal Revenue Code;
    21    e.  sole  proprietors,  independent  contractors,  and   self-employed
    22  persons;
    23    f. small businesses that have been in existence for two years or less;
    24  and
    25    g.  new  businesses  formed  or  incorporated within 30 days after the
    26  expiration of the state of emergencies or the region of the state  where
    27  the business is located has reopened post COVID-19.
    28    §  4.  Loan details and forgiveness. a. All eligible entities pursuant
    29  to section three of this act, shall submit an application through commu-
    30  nity development financial  institutions  (CDFIs),  minority  depository
    31  institutions  (MDIs),  local  community  banks  or credit unions located
    32  within the  state.  No  applications  shall  be  processed  through  any
    33  merchant cash advance or any financial technology companies. All lending
    34  institutions  in  this  program shall collect and provide data about the
    35  borrowers' demographics and loan amount.
    36    b. The loan amount shall equal 60% of the prior year eligible expenses
    37  not to exceed $100,000.00.
    38    c. Such loan shall be forgiven if funds are used for payroll  or  1099
    39  employees, interest on mortgages, rent, utilities and inventory.
    40    d.  Purchases  of new equipment are permissible under this program but
    41  such loan will not be forgiven as a grant.
    42    e. All loan payments shall be deferred for  6  months,  which  can  be
    43  deferred  for  an  additional 6 months but not to exceed 1 year from the
    44  date of the loan.
    45    f. No collateral or personal  guarantees  are  required.  Neither  the
    46  government  nor  financial institutions shall charge qualifying entities
    47  any fees.
    48    g. Forgiveness is based on the qualifying small  business  maintaining
    49  or quickly rehiring employees and maintaining salary levels. Forgiveness
    50  will  be  reduced  if  full-time  headcount declines, or if salaries and
    51  wages decrease within 12 weeks of receiving such  funding.  The  12-week
    52  rule  shall  not  apply to any entity if such entity paid its employees'
    53  salaries during the COVID-19 state of disaster emergencies or when  such
    54  entity  was  closed.  Documented  proof of such payroll payment shall be
    55  required.

        S. 8364--A                          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.
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