SBA Business Stabilization Direct Loan Program Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6268 To establish a business stabilization direct loan program and the authority to establish a secondary market guarantee in the Small Business Admin- istration, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 12, 2020 Ms. VELA´ZQUEZ introduced the following bill; which was referred to the Committee on Small Business A BILL To establish a business stabilization direct loan program and the authority to establish a secondary market guar- antee in the Small Business Administration, 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 ‘‘SBA Business Sta- 4 bilization Direct Loan Program Act of 2020’’. 5 VerDate Sep 11 2014 17:52 Mar 27, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6268.IH H6268 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6268 IH SEC. 2. BUSINESS STABILIZATION DIRECT LOAN PROGRAM. 1 (a) IN GENERAL.—The Administrator of the Small 2 Business Administration shall carry out a program to 3 make loans directly to eligible borrowers. 4 (b) ELIGIBLE BORROWER DEFINED.—In this sec- 5 tion, the term ‘‘eligible borrower’’ means a person who— 6 (1) is a small business concern as defined under 7 section 3 of the Small Business Act (15 U.S.C. 8 632); and 9 (2) is located in a State or territory of the 10 United States with a confirmed or presumed positive 11 case of COVID–19. 12 (c) USE OF FUNDS.—In addition to the use of pro- 13 ceeds currently permitted under section 7(a) of the Small 14 Business Act (15 U.S.C. 636(a)), loans made under this 15 section may be used for the following purposes: 16 (1) To make periodic payments of principal and 17 interest, for a period not to exceed 12 months, on 18 a loan or a loan guarantee made to an eligible bor- 19 rower that meets the eligibility standards of such 20 section 7(a). 21 (2) To provide benefits to employees of the eli- 22 gible borrower, including group life insurance, dis- 23 ability insurance, sick leave, annual leave, edu- 24 cational benefits, paid family leave, or retirement 25 benefits (including a pension plan or IRA). 26 VerDate Sep 11 2014 17:52 Mar 27, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6268.IH H6268 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6268 IH (3) To pay wages to employees of the eligible 1 borrower, and related State and Federal payroll 2 taxes, except that loan proceeds may not be used to 3 pay amounts under a garnishment order issued by 4 an agency of a State or Federal Government. 5 (4) To provide technology, hardware, or soft- 6 ware for a shift to telework or remote work for em- 7 ployees of the eligible borrower to enable continuity 8 of operations. 9 (5) To pay rent or utilities due or owed on any 10 place of business of the eligible borrower. 11 (6) To refinance an existing debt (including in- 12 terest) in an amount not to exceed 50 percent of the 13 amount of the debt. 14 (7) To provide floor plan financing or other re- 15 volving line of credit. 16 (8) To pay past-due Federal, State, or local 17 payroll taxes, sales taxes, or other similar taxes that 18 are required to be collected by the eligible borrower 19 and held in trust on behalf of a Federal, State, or 20 local government entity. 21 (9) To provide employees and patrons of the eli- 22 gible borrower with the necessary items specified by 23 any public health authority to mitigate the spread of 24 COVID–19. 25 VerDate Sep 11 2014 17:52 Mar 27, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6268.IH H6268 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6268 IH (d) LOAN TERMS.— 1 (1) AMOUNT.—Loans made under this section 2 may not exceed $2,500,000. 3 (2) DISBURSEMENT.—Not more than 20 per- 4 cent of the proceeds of a loan made under this sec- 5 tion shall be disbursed not later than 5 calendar 6 days after a loan is approved under this section. 7 (3) TERM.—Loans made under this section 8 shall be for a term of 10 years, and a borrower shall 9 not be required to repay such loan during the 12- 10 month period beginning on the date of disbursement 11 of the loan. 12 (4) INTEREST; FEES.—The Administrator may 13 not charge any interest or fees for a loan made 14 under this section. 15 (e) COLLATERAL.—The Administrator shall not de- 16 cline to make a loan under this section to an otherwise 17 eligible borrower due solely to inadequate collateral. The 18 Administrator shall accept any available collateral, includ- 19 ing subordinated liens, to secure a loan made under this 20 section. 21 (f) SUNSET.— 22 (1) IN GENERAL.—Except as provided in para- 23 graph (2), the Administrator of the Small Business 24 VerDate Sep 11 2014 17:52 Mar 27, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6268.IH H6268 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6268 IH Administration may not make a loan under this sec- 1 tion after September 30, 2022. 2 (2) EXTENSION.—The Administrator may ex- 3 tend authority to make loans under this section by 4 an additional 6 months by notifying Congress, in 5 writing, within 10 calendar days before any exten- 6 sion. 7 (g) EMERGENCY RULEMAKING AUTHORITY.— 8 (1) IN GENERAL.—Within 15 days after the 9 date of the enactment of this section, the Adminis- 10 trator of the Small Business Administration— 11 (A) shall issue rules to carry out this sec- 12 tion; and 13 (B) may issue rules to establish a sec- 14 ondary market for loans made under this sec- 15 tion. 16 (2) NOTICE.—The notice requirements of sec- 17 tion 553(b) of title 5, United States Code shall not 18 apply to any issuance of rules under paragraph (1). 19 (h) AUTHORIZATION OF APPROPRIATIONS.—There is 20 authorized to be appropriated to the Administrator of the 21 Small Business Administration such sums as may be nec- 22 essary to pay for the cost of making $25,000,000,000 in 23 direct loans under this section. In the previous sentence, 24 VerDate Sep 11 2014 17:52 Mar 27, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6268.IH H6268 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6268 IH the cost of direct loans shall be as defined in section 502 1 of the Congressional Budget Act of 1974 (2 U.S.C. 661a). 2 Æ VerDate Sep 11 2014 17:52 Mar 27, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H6268.IH H6268 pamtmann on DSKBC07HB2PROD with BILLS