Puerto Rico Small Business Assistance Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 225 To provide for small business concerns located in Puerto Rico, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JANUARY 3, 2019 Ms. VELA´ZQUEZ introduced the following bill; which was referred to the Committee on Small Business A BILL To provide for small business concerns located in Puerto Rico, 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 ‘‘Puerto Rico Small 4 Business Assistance Act of 2019’’. 5 SEC. 2. TABLE OF CONTENTS. 6 The table of contents for this Act are as follows: 7 Sec. 1. Short title. Sec. 2. Table of contents. Sec. 3. Definitions. TITLE I—LENDING Sec. 101. Microloan program for Puerto Rico small business concerns. VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 2 •HR 225 IH Sec. 102. Fee reductions. Sec. 103. Economic stimulus lending program for small businesses. Sec. 104. Contribution percentages for 504 projects. Sec. 105. Independent subsidy calculation. TITLE II—PROCUREMENT Sec. 201. Contracting preference for Puerto Rico businesses. TITLE III—ENTREPRENEURIAL DEVELOPMENT Sec. 301. Veteran Business Outreach Center in Puerto Rico. Sec. 302. FAST grant program for Puerto Rico. SEC. 3. DEFINITIONS. 1 In this Act: 2 (1) ADMINISTRATOR.—The term ‘‘Adminis- 3 trator’’ means the Administrator of the Small Busi- 4 ness Administration. 5 (2) OVERSIGHT BOARD TERMINATION DATE.— 6 The term ‘‘Oversight Board termination date’’ 7 means the date on which the Oversight Board estab- 8 lished under section 101 of the Puerto Rico Over- 9 sight, Management, and Economic Stability Act (48 10 U.S.C. 2121) terminates. 11 (3) PUERTO RICO.—The term ‘‘Puerto Rico’’ 12 means the Commonwealth of Puerto Rico. 13 (4) PUERTO RICO BUSINESS.—The term ‘‘Puer- 14 to Rico business’’ has the meaning given in section 15 3(ee) of the Small Business Act (15 U.S.C. 16 632(ee)). 17 (5) SMALL BUSINESS CONCERN.—The term 18 ‘‘small business concern’’ has the meaning given 19 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 3 •HR 225 IH such term under section 3 of the Small Business Act 1 (15 U.S.C. 632). 2 TITLE I—LENDING 3 SEC. 101. MICROLOAN PROGRAM FOR PUERTO RICO SMALL 4 BUSINESS CONCERNS. 5 (a) INCREASE IN ACCESS TO CAPITAL FOR CERTAIN 6 INTERMEDIARIES.—Section 7(m)(3)(C) of the Small Busi- 7 ness Act (15 U.S.C. 636(m)(3)(C)) is amended— 8 (1) by inserting ‘‘and except as provided in 9 clause (ii)’’ after ‘‘subsection (a)(3)’’; 10 (2) by striking ‘‘Notwithstanding’’ and insert- 11 ing the following: 12 ‘‘(i) IN GENERAL.—Notwithstanding’’; 13 and 14 (3) by adding at the end the following: 15 ‘‘(ii) EXCEPTION FOR CERTAIN PUER- 16 TO RICO BUSINESSES.— 17 ‘‘(I) IN GENERAL.—No loan shall 18 be made under this subsection if the 19 total amount outstanding and com- 20 mitted to 1 covered intermediary (ex- 21 cluding outstanding grants) from the 22 business loan and investment fund es- 23 tablished by this Act would, as a re- 24 sult of such loan, exceed $6,000,000 25 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 4 •HR 225 IH in the remaining years of the covered 1 intermediary’s participation in the 2 program. 3 ‘‘(II) DEFINITION.—In this 4 clause, the term ‘covered inter- 5 mediary’ means an intermediary 6 that— 7 ‘‘(aa) is participating in the 8 program; and 9 ‘‘(bb) submits to the Admin- 10 istrator a certification that not 11 less than 20 percent of the 12 microloans made by the inter- 13 mediary under this subsection, 14 during such period as the Admin- 15 istrator may specify, will be made 16 to Puerto Rico businesses.’’. 17 (b) WAIVER OF 25/75 RULE FOR MICROLOANS TO 18 PUERTO RICO SMALL BUSINESS CONCERNS.— 19 (1) WAIVER AUTHORIZED.—Section 7(m)(4)(E) 20 of the Small Business Act (15 U.S.C. 636(m)(4)(E)) 21 is amended— 22 (A) in clause (i), by striking ‘‘Each’’ and 23 inserting ‘‘Except as provided in clause (iii), 24 each’’; and 25 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 5 •HR 225 IH (B) by adding at the end the following: 1 ‘‘(iii) EXCEPTION FOR CERTAIN 2 INTERMEDIARIES.—The Administrator 3 shall waive the requirements of clause (i) 4 for an intermediary for which not less than 5 25 percent of the loans made by the inter- 6 mediary are made to Puerto Rico busi- 7 nesses.’’. 8 (2) STUDY.—Not later than 18 months after 9 the date of enactment of this Act, the Administrator 10 shall submit to Congress a report on the impact of 11 waiving the requirements of section 7(m)(4)(E)(i) of 12 the Small Business Act for all intermediaries receiv- 13 ing grant funds under section 7(m)(1)(B)(ii) of the 14 Small Business Act, which shall include an analysis 15 of the effectiveness and feasibility of expanding the 16 waiver to small business concerns nationwide. 17 (c) PROSPECTIVE REPEAL.—Subsections (a) and (b) 18 shall be repealed, and the provisions of law amended by 19 such subsections shall be restored as if such subsections 20 had not been enacted, on the Oversight Board termination 21 date. 22 (d) GAO STUDY.—Not later than 180 days after the 23 date of enactment of this Act, the Comptroller General 24 of the United States shall complete a study and submit 25 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 6 •HR 225 IH to the Committee on Small Business and Entrepreneur- 1 ship of the Senate and the Committee on Small Business 2 of the House of Representatives a report on the following: 3 (1) The operations (including services provided, 4 structure, size, and area of operation) of a rep- 5 resentative sample of— 6 (A) intermediaries that are eligible for par- 7 ticipation in the microloan program under sec- 8 tion 7(m) of the Small Business Act (15 U.S.C. 9 636(m)) and that participate in the microloan 10 program; and 11 (B) intermediaries (including those oper- 12 ated for profit, operated as nonprofit organiza- 13 tions, and affiliated with a United States insti- 14 tution of higher learning (as defined in section 15 3452 of title 38, United States Code) that are 16 so eligible and that do not participate in the 17 microloan program. 18 (2) The reasons why intermediaries described in 19 paragraph (1)(B) choose not to participate in the 20 microloan program. 21 (3) Recommendations on how to encourage in- 22 creased participation in the microloan program by 23 intermediaries described in paragraph (1)(B). 24 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 7 •HR 225 IH (4) Recommendations for increasing the num- 1 ber of intermediaries located in the territories of the 2 United States or in economically distressed areas (as 3 defined in section 7(m)(11)(D) of the Small Busi- 4 ness Act (15 U.S.C. 636(m)(11)(D)) that are eligi- 5 ble for participation in the microloan program under 6 section 7(m) of such Act. 7 (5) Recommendations on how to decrease the 8 costs associated with participation in the microloan 9 program for eligible intermediaries. 10 SEC. 102. FEE REDUCTIONS. 11 (a) ADMINISTRATIVE PROVISIONS FOR THE SMALL 12 BUSINESS ADMINISTRATION.— 13 (1) DEFINITION.—In this subsection, the term 14 ‘‘covered business loan’’ means a loan— 15 (A) of not more than $2,000,000; 16 (B) that is guaranteed by the Adminis- 17 trator under section 7(a) of the Small Business 18 Act (15 U.S.C. 636(a)); 19 (C) for which the application is approved 20 on or after the date of enactment of this Act; 21 and 22 (D) that is made to a Puerto Rico busi- 23 ness. 24 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 8 •HR 225 IH (2) FEES.—During the period beginning on the 1 date of enactment of this Act and ending on the 2 Oversight Board termination date, and to the extent 3 that the cost of such elimination or reduction of fees 4 is offset by appropriations, with respect to each cov- 5 ered business loan, the Administrator shall— 6 (A) in lieu of the fee otherwise applicable 7 under section 7(a)(23)(A) of the Small Busi- 8 ness Act, collect no fee or reduce fees to the 9 maximum extent possible; and 10 (B) in lieu of the fee otherwise applicable 11 under section 7(a)(18)(A) of the Small Busi- 12 ness Act, collect no fee or reduce fees to the 13 maximum extent possible. 14 (b) TEMPORARY FEE ELIMINATION FOR THE 504 15 LOAN PROGRAM.— 16 (1) IN GENERAL.—During the period beginning 17 on the date of enactment of this Act and ending on 18 the Oversight Board termination date, and to the ex- 19 tent the cost of such elimination in fees is offset by 20 appropriations, with respect to each loan of not more 21 than $2,000,000 guaranteed by the Administrator 22 under title V of the Small Business Investment Act 23 of 1958 (15 U.S.C. 695 et seq.) with respect to a 24 development company that has its principal office lo- 25 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 9 •HR 225 IH cated in Puerto Rico and for which an application 1 is approved or pending approval on or after the date 2 of enactment of this Act— 3 (A) the Administrator shall, in lieu of the 4 fee otherwise applicable under section 503(d)(2) 5 of the Small Business Investment Act of 1958 6 (15 U.S.C. 697(d)(2)), collect no fee; and 7 (B) a development company shall, in lieu 8 of the processing fee under section 9 120.971(a)(1) of title 13, Code of Federal Reg- 10 ulations (relating to fees paid by borrowers), or 11 any successor thereto, collect no fee. 12 (2) REIMBURSEMENT FOR WAIVED FEES.— 13 (A) IN GENERAL.—To the extent that the 14 cost of such payments is offset by appropria- 15 tions, the Administrator shall reimburse each 16 development company that does not collect a 17 processing fee under paragraph (1)(B). 18 (B) AMOUNT.—The reimbursement to a 19 development company under subparagraph (A) 20 shall be in an amount equal to 1.5 percent of 21 the net debenture proceeds for which the devel- 22 opment company does not collect a processing 23 fee under paragraph (1)(B). 24 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 10 •HR 225 IH (c) APPLICATION OF FEE ELIMINATIONS.—To the 1 extent that amounts are made available to the Adminis- 2 trator for the purpose of fee eliminations or reductions 3 under subsection (a), the Administrator shall— 4 (1) first use any amounts provided to eliminate 5 or reduce fees paid by borrowers under clauses (i), 6 (ii), and (iii) of section 7(a)(18)(A) of the Small 7 Business Act (15 U.S.C. 636(a)(18)(A)), to the 8 maximum extent possible; 9 (2) to the extent amounts provided remain after 10 use in accordance with paragraph (1), use any 11 amounts provided to eliminate or reduce fees under 12 section 7(a)(23)(A) of the Small Business Act (15 13 U.S.C. 636(a)(23)(A)) paid by lenders with assets of 14 not more than $1,000,000,000, as of the date of en- 15 actment of this Act; and 16 (3) to the extent amounts provided remain after 17 use in accordance with paragraphs (1) and (2), use 18 any remaining amounts provided to reduce fees 19 under section 7(a)(23)(A) of the Small Business Act 20 paid by lenders other than those described under 21 paragraph (2). 22 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 11 •HR 225 IH SEC. 103. ECONOMIC STIMULUS LENDING PROGRAM FOR 1 SMALL BUSINESSES. 2 (a) AUTHORITY.—Notwithstanding section 7(a) of 3 the Small Business Act (15 U.S.C. 636(a)), for a quali- 4 fying small business loan the Administrator may guar- 5 antee not more than 90 percent of the balance of the fi- 6 nancing outstanding at the time of disbursement of the 7 loan, if such balance is less than or equal to $2,000,000. 8 (b) QUALIFYING SMALL BUSINESS LOAN DE- 9 FINED.—For purposes of this section, the term ‘‘quali- 10 fying small business loan’’ means any loan to a Puerto 11 Rico business made pursuant to section 7(a) of the Small 12 Business Act (15 U.S.C. 636(a)), except for such loans 13 made under section 7(a)(31) of such Act (15 U.S.C. 14 636(a)(31)). 15 (c) QUALIFIED BORROWERS.— 16 (1) ALIENS UNLAWFULLY PRESENT IN THE 17 UNITED STATES.—The Administrator may not guar- 18 antee a loan made under this section to a small busi- 19 ness concern if an individual who is an alien unlaw- 20 fully present in the United States— 21 (A) has an ownership interest in that con- 22 cern; or 23 (B) has an ownership interest in another 24 concern that itself has an ownership interest in 25 that concern. 26 VerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225 pbinns on DSK79D2C42PROD with BILLS 12 •HR 225 IH (2) FIRMS IN VIOLATION OF IMMIGRATION 1 LAWS.—The Administrator may not guarantee a 2 loan made under this section to any entity, based on 3 a determination by the Secretary of Homeland Secu- 4 rity or the Attorney General, found to have engaged 5 in a pattern or practice of hiring, recruiting, or re- 6 ferring for a fee for employment in the United 7 States an alien, if such entity knows that the person 8 is an unauthorized alien. 9 (d) CRIMINAL BACKGROUND CHECKS.—Prior to 10 guaranteeing a loan made under this section, the Adminis- 11 trator may verify the applicant’s criminal background, or 12 lack thereof, through the best available means, including, 13 if possible, use of the National Crime Information Center 14 computer system at the Federal Bureau of Investigation. 15 (e) APPLICATION OF OTHER LAW.—Nothing in this 16 section shall be construed to exempt any activity of the 17 Administrator under this section from the Federal Credit 18 Reform Act of 1990. 19 (f) SMALL BUSINESS ACT PROVISIONS.—Except as 20 otherwise provided in this section, the requirements of sec- 21 tion 7 of the Small Business Act (and regulations promul- 22 gated thereunder) applicable to loan guarantees on or be- 23 fore the date of enactment of this Act shall apply to loan 24 guarantees made under this section. 25 VerDat [Text truncated for display. 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