Border Business COVID–19 Rescue Act

II 117TH CONGRESS 1ST SESSION S. 327 To direct the Administrator of the Small Business Administration to establish a border closure recovery loan program for small businesses located near the United States border, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 12, 2021 Mr. KELLY (for himself and Mr. CORNYN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To direct the Administrator of the Small Business Adminis- tration to establish a border closure recovery loan pro- gram for small businesses located near the United States border, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Border Business 4 COVID–19 Rescue Act’’. 5 SEC. 2. BORDER CLOSURE RECOVERY LOAN. 6 (a) DEFINITIONS.—In this section: 7 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 2 •S 327 IS (1) ADMINISTRATOR.—The term ‘‘Adminis- 1 trator’’ means the Administrator of the Small Busi- 2 ness Administration. 3 (2) BORDER BUSINESS.—The term ‘‘border 4 business’’ means an entity eligible for a loan under 5 section 7(b)(2) of the Small Business Act (15 U.S.C. 6 636(b)(2)) that— 7 (A) has its principal office located in the 8 contiguous United States; 9 (B) has— 10 (i) estimated or actual annual average 11 gross receipts less than or equal to 12 $1,000,000; and 13 (ii) fewer than 50 employees; 14 (C)(i) except as provided in clauses (ii), 15 (iii), and (iv), had gross receipts during the 16 first, second, third, or fourth quarter in 2020 17 that demonstrate a reduction from the gross re- 18 ceipts of the entity during the same quarter in 19 2019; 20 (ii) if the entity was not in business during 21 the first or second quarter of 2019, but was in 22 business during the third and fourth quarter of 23 2019, had gross receipts during the first, sec- 24 ond, third, or fourth quarter of 2020 that dem- 25 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 3 •S 327 IS onstrate a reduction from the gross receipts of 1 the entity during the third or fourth quarter of 2 2019; 3 (iii) if the entity was not in business dur- 4 ing the first, second, or third quarter of 2019, 5 but was in business during the fourth quarter 6 of 2019, had gross receipts during the first, 7 second, third, or fourth quarter of 2020 that 8 demonstrate a reduction from the gross receipts 9 of the entity during the fourth quarter of 2019; 10 or 11 (iv) if the entity was not in business dur- 12 ing 2019, but was in operation on February 15, 13 2020, had gross receipts during the second, 14 third, or fourth quarter of 2020 that dem- 15 onstrate a reduction from the gross receipts of 16 the entity during the first quarter of 2020; and 17 (D) is located within 25 miles of the 18 United States border. 19 (b) BORDER CLOSURE RECOVERY LOAN PRO- 20 GRAM.— 21 (1) IN GENERAL.—The Administrator shall es- 22 tablish a program under which the Administrator 23 shall make loans to border businesses directly im- 24 pacted by the COVID–19 pandemic. 25 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 4 •S 327 IS (2) APPLICATION.—A border business desiring 1 a loan under this subsection shall submit to the Ad- 2 ministrator an application at such time, in such 3 place, and containing such information as the Ad- 4 ministrator determines necessary. 5 (3) TERMS.— 6 (A) AMOUNT; INTEREST RATE.—A loan 7 made under this subsection shall— 8 (i) be in an amount of not more than 9 $500,000; and 10 (ii) have an interest rate of not more 11 than 2 percent. 12 (B) PROHIBITED REQUIREMENTS.—With 13 respect to a loan made under this subsection, 14 the Administrator shall not establish— 15 (i) any rules related to a personal 16 guarantee for loans of less than $200,000; 17 or 18 (ii) any requirement that an applicant 19 exhaust other loan options before applying 20 for a loan under this subsection. 21 (4) USE OF FUNDS.—A border business that re- 22 ceives a loan under this subsection— 23 (A) shall use the loan proceeds for any al- 24 lowable purpose for a loan made under section 25 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 5 •S 327 IS 7(b)(2) of the Small Business Act (15 U.S.C. 1 636(b)(2)), including— 2 (i) providing paid sick leave to em- 3 ployees unable to work due to the direct ef- 4 fect of COVID–19; 5 (ii) maintaining payroll to retain em- 6 ployees during business disruptions or sub- 7 stantial slowdowns; 8 (iii) meeting increased costs to obtain 9 materials unavailable from the original 10 source of the border business due to inter- 11 rupted supply chains; 12 (iv) making rent or regular mortgage 13 payments; 14 (v) repaying obligations that cannot 15 be met due to revenue losses; 16 (vi) to pay for logistical expenses asso- 17 ciated with border closures due to the 18 COVID–19 pandemic; and 19 (vii) to pay for improvements related 20 to complying with public health guidelines, 21 including personal protective equipment, 22 signage, temporary barriers, and space 23 heaters; and 24 (B) may not use the loan proceeds— 25 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 6 •S 327 IS (i) to purchase real estate; 1 (ii) for payments of interest or prin- 2 cipal on any loan originated after February 3 15, 2020; 4 (iii) to invest or re-lend funds; 5 (iv) for the prepayment of any mort- 6 gage or other debt obligation; 7 (v) for any contribution or expendi- 8 ture to, or on behalf of, any political party, 9 party committee, or candidate for elective 10 office; or 11 (vi) for any other use as the Adminis- 12 trator may prohibit. 13 (c) APPROVAL AND ABILITY TO REPAY.—With re- 14 spect to a loan made under subsection (b), the Adminis- 15 trator may— 16 (1) approve an applicant— 17 (A) based solely on the credit score of the 18 applicant; or 19 (B) by using alternative appropriate meth- 20 ods to determine an applicant’s ability to repay; 21 and 22 (2) use information from the Department of the 23 Treasury to confirm that— 24 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 7 •S 327 IS (A) an applicant is eligible to receive the 1 loan; or 2 (B) the information contained in an appli- 3 cation for the loan is accurate. 4 (d) REPAYMENT.—The Administrator shall establish 5 the repayment terms with respect to each loan made under 6 subsection (b), except that— 7 (1) repayment shall not begin before the date 8 that is 1 year after the date on which the loan is 9 made; 10 (2) the Administrator shall establish a process 11 by which a border business that continues to experi- 12 ence a reduction in gross receipts following receipt 13 of the loan can apply to delay the repayment of the 14 loan for a period of not more than 4 years; and 15 (3) the loan shall not accrue interest during the 16 period in which repayment of the loan is deferred. 17 (e) LOAN ADVANCE.— 18 (1) IN GENERAL.—A border business that ap- 19 plies for a loan under subsection (b) may request 20 that the Administrator provide an advance in the 21 amount requested by the applicant to the applicant 22 not later than 15 business days after the date on 23 which the Administrator receives the request. 24 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 8 •S 327 IS (2) AMOUNT.—The amount of an advance pro- 1 vided under this subsection shall be not less than 2 $10,000. 3 (3) VERIFICATION.—Before disbursing amounts 4 under this subsection, the Administrator shall, not 5 later than 15 business days after the date on which 6 the Administrator receives the request for an ad- 7 vance by an applicant under this subsection— 8 (A) perform the verification required under 9 subsection (c); 10 (B) if the Administrator verifies that the 11 applicant is eligible for an advance under sub- 12 section (c), provide to the applicant with a pay- 13 ment in the amount described in paragraph (2); 14 and 15 (C) with respect to an applicant that the 16 Administrator determines is not eligible for an 17 advance under this subsection, provide the ap- 18 plicant with a notification explaining the rea- 19 sons for reaching that determination. 20 (4) USE OF FUNDS.—An advance provided 21 under this subsection may be used for any purpose 22 described in subsection (b)(4). 23 (5) REPAYMENT.—An applicant shall not be re- 24 quired to repay any amounts of an advance provided 25 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 9 •S 327 IS under this subsection, even if the applicant is subse- 1 quently denied a loan under subsection (b). 2 (f) OTHER BENEFITS.—Receipt of an advance under 3 subsection (e) or a loan under subsection (b) shall not be 4 construed as to prohibit receipt of any other Federal 5 grant, loan, or aid. 6 (g) TAXABILITY.—For purposes of the Internal Rev- 7 enue Code of 1986— 8 (1) any advance described in paragraph (e) 9 shall not be included in the gross income of the bor- 10 der business that receives the advance; 11 (2) no deduction shall be denied, no tax at- 12 tribute shall be reduced, and no basis increase shall 13 be denied, by reason of the exclusion from gross in- 14 come provided by paragraph (1); and 15 (3) in the case of a partnership or S corpora- 16 tion that receives an advance described in subsection 17 (e)— 18 (A) any amount excluded from income 19 under this subsection shall be treated as tax ex- 20 empt income for purposes of sections 705 and 21 1366 of the Internal Revenue Code of 1986, 22 and 23 (B) the Secretary of the Treasury (or the 24 Secretary’s delegate) shall prescribe rules for 25 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 10 •S 327 IS determining a partner’s distributive share of 1 any amount described in subparagraph (A) for 2 purposes of section 705 of the Internal Revenue 3 Code of 1986. 4 (h) OUTREACH.— 5 (1) IN GENERAL.—In carrying out the loan pro- 6 gram under this section, the Administrator shall— 7 (A) establish an advertising and outreach 8 program in partnership with State and local 9 governments, community advocacy groups, 10 chambers of commerce, and other State and 11 local entities to help border businesses under- 12 stand the availability of the loan program and 13 to promote participation in the program by bor- 14 der businesses located in economically depressed 15 areas; and 16 (B) provide technical assistance to appli- 17 cants, including instructions on how to partici- 18 pate in the loan program, assistance in pre- 19 paring applications, and assistance in applying 20 for loan deferral. 21 (2) LANGUAGE ACCESS.—The Administrator 22 shall ensure that outreach and technical assistance 23 activities described in this subsection are made avail- 24 able by the Administration to border business con- 25 VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS 11 •S 327 IS cerns in the commonly spoken languages, other than 1 English, in the States of the United States that bor- 2 der the international boundary with Canada or Mex- 3 ico, which shall include Spanish and French. 4 (i) AUTHORIZATION OF APPROPRIATIONS.—There is 5 authorized to be appropriated $500,000,000, to remain 6 available until December 31, 2021, to carry out the re- 7 quirements of this Act. 8 Æ VerDate Sep 11 2014 00:28 Mar 03, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\S327.IS S327 SSpencer on DSK126QN23PROD with BILLS