Microloan Emergency Assistance Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6291 To amend the microloan program of the Small Business Adminstration in response to COVID-19, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 19, 2020 Mr. KIM introduced the following bill; which was referred to the Committee on Small Business A BILL To amend the microloan program of the Small Business Adminstration in response to COVID-19, 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 ‘‘Microloan Emergency 4 Assistance Act of 2020’’. 5 SEC. 2. RECOVERY ASSISTANCE FOR MICROBUSINESSES. 6 (a) PURPOSE.—The purpose of this section is to allow 7 lenders to deploy more capital, give borrowers more time 8 to repay, increase rural lending, and cut technical assist- 9 ance red tape. 10 VerDate Sep 11 2014 02:02 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6291.IH H6291 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6291 IH (b) LOANS TO INTERMEDIARIES.— 1 (1) IN GENERAL.—Section 7(m) of the Small 2 Business Act (15 U.S.C. 636(m)) is amended— 3 (A) in paragraph (3)(C)— 4 (i) by striking ‘‘and $6,000,000’’ and 5 inserting ‘‘$10,000,000, in the aggre- 6 gate,’’; and 7 (ii) by inserting before the period at 8 the end the following: ‘‘, and $4,500,000 in 9 any of those remaining years’’; 10 (B) in paragraph (4)— 11 (i) in subparagraph (A), by striking 12 ‘‘subparagraph (C)’’ each place that term 13 appears and inserting ‘‘subparagraphs (C) 14 and (G)’’; 15 (ii) in subparagraph (C), by amending 16 clause (i) to read as follows: 17 ‘‘(i) IN GENERAL.—In addition to 18 grants made under subparagraph (A) or 19 (G), each intermediary shall be eligible to 20 receive a grant equal to 5 percent of the 21 total outstanding balance of loans made to 22 the intermediary under this subsection if— 23 ‘‘(I) the intermediary provides 24 not less than 25 percent of its loans 25 VerDate Sep 11 2014 02:02 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6291.IH H6291 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6291 IH to small business concerns located in 1 or owned by one or more residents of 2 an economically distressed area; or 3 ‘‘(II) the intermediary has a 4 portfolio of loans made under this 5 subsection— 6 ‘‘(aa) that averages not 7 more than $10,000 during the 8 period of the intermediary’s par- 9 ticipation in the program; or 10 ‘‘(bb) of which not less than 11 25 percent is serving rural areas 12 during the period of the 13 intermediary’s participation in 14 the program.’’; and 15 (iii) by adding at the end the fol- 16 lowing: 17 ‘‘(G) GRANT AMOUNTS BASED ON APPRO- 18 PRIATIONS.—In any fiscal year in which the 19 amount appropriated to make grants under 20 subparagraph (A) is sufficient to provide to 21 each intermediary that receives a loan under 22 paragraph (1)(B)(i) a grant of not less than 25 23 percent of the total outstanding balance of 24 loans made to the intermediary under this sub- 25 VerDate Sep 11 2014 02:02 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6291.IH H6291 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6291 IH section, the Administration shall make a grant 1 under subparagraph (A) to each intermediary 2 of not less than 25 percent and not more than 3 30 percent of that total outstanding balance for 4 the intermediary.’’; and 5 (C) by striking paragraph (7) and insert- 6 ing the following: 7 ‘‘(7) PROGRAM FUNDING FOR MICROLOANS.— 8 Under the program authorized by this subsection, 9 the Administration may fund, on a competitive basis, 10 not more than 300 intermediaries.’’. 11 (2) AMENDMENT IN 2021.—Effective on October 12 1, 2021, section 7(m)(3)(C) of the Small Business 13 Act (15 U.S.C. 636(m)(3)(C)) is amended— 14 (A) by striking ‘‘$10,000,000’’ and by in- 15 serting ‘‘$7,000,000’’; and 16 (B) by striking ‘‘$4,500,000’’ and insert- 17 ing ‘‘$3,000,000’’. 18 (c) TEMPORARY WAIVER OF TECHNICAL ASSISTANCE 19 GRANTS MATCHING REQUIREMENTS AND FLEXIBILITY 20 ON PRE- AND POST-LOAN ASSISTANCE.—During the pe- 21 riod beginning on the date of enactment of this Act and 22 ending on September 30, 2021, the Administration shall 23 waive— 24 VerDate Sep 11 2014 02:02 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6291.IH H6291 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6291 IH (1) the requirement to contribute non-Federal 1 funds under section 7(m)(4)(B) of the Small Busi- 2 ness Act (15 U.S.C. 636(m)(4)(B)); and 3 (2) the limitation on amounts allowed to be ex- 4 pended to provide information and technical assist- 5 ance under clause (i) of section 7(m)(4)(E) of the 6 Small Business Act (15 U.S.C. 636(m)(4)(E)) and 7 enter into third-party contracts to provide technical 8 assistance under clause (ii) of such section 9 7(m)(4)(E). 10 (d) TEMPORARY DURATION OF LOANS TO BOR- 11 ROWERS.— 12 (1) IN GENERAL.—During the period beginning 13 on the date of enactment of this Act and ending on 14 September 30, 2021, the duration of a loan made by 15 an eligible intermediary under section 7(m) of the 16 Small Business Act (15 U.S.C. 636(m))— 17 (A) to an existing borrower may be ex- 18 tended to not more than 8 years; and 19 (B) to a new borrower may be not more 20 than 8 years. 21 (2) REVERSION.—On and after October 1, 22 2021, the duration of a loan made by an eligible 23 intermediary to a borrower under section 7(m) of 24 the Small Business Act (15 U.S.C. 636(m)) shall be 25 VerDate Sep 11 2014 02:02 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6291.IH H6291 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6291 IH 7 years or such other amount established by the Ad- 1 ministrator. 2 (e) PROGRAM LEVELS.—Section 20 of the Small 3 Business Act (15 U.S.C. 631 note) is amended by adding 4 at the end the following: 5 ‘‘(h) MICROLOAN PROGRAM.—For each of fiscal 6 years 2021 through 2025, the Administration is author- 7 ized to make— 8 ‘‘(1) $80,000,000 in technical assistance grants, 9 as provided in section 7(m); and 10 ‘‘(2) $110,000,000 in direct loans, as provided 11 in section 7(m).’’. 12 (f) AUTHORIZATION OF APPROPRIATIONS.—In addi- 13 tion to amounts provided under the Consolidated Appro- 14 priations Act, 2020 (Public Law 116–93) for the program 15 established under section 7(m) of the Small Business Act 16 (15 U.S.C. 636(m)), there is authorized to be appro- 17 priated for fiscal year 2020, to remain available until ex- 18 pended— 19 (1) $50,000,000 to provide technical assistance 20 grants under such section 7(m); and 21 (2) $7,000,000 to provide direct loans under 22 such section 7(m). 23 Æ VerDate Sep 11 2014 02:02 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H6291.IH H6291 pamtmann on DSKBC07HB2PROD with BILLS