[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 327 Introduced in Senate (IS)]
<DOC>
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 Administration to
establish a border closure recovery loan program for small businesses
located near the United States border, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Border Business COVID-19 Rescue
Act''.
SEC. 2. BORDER CLOSURE RECOVERY LOAN.
(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Small Business Administration.
(2) Border business.--The term ``border business'' means an
entity eligible for a loan under section 7(b)(2) of the Small
Business Act (15 U.S.C. 636(b)(2)) that--
(A) has its principal office located in the
contiguous United States;
(B) has--
(i) estimated or actual annual average
gross receipts less than or equal to
$1,000,000; and
(ii) fewer than 50 employees;
(C)(i) except as provided in clauses (ii), (iii),
and (iv), had gross receipts during the first, second,
third, or fourth quarter in 2020 that demonstrate a
reduction from the gross receipts of the entity during
the same quarter in 2019;
(ii) if the entity was not in business during the
first or second quarter of 2019, but was in business
during the third and fourth quarter of 2019, had gross
receipts during the first, second, third, or fourth
quarter of 2020 that demonstrate a reduction from the
gross receipts of the entity during the third or fourth
quarter of 2019;
(iii) if the entity was not in business during the
first, second, or third quarter of 2019, but was in
business during the fourth quarter of 2019, had gross
receipts during the first, second, third, or fourth
quarter of 2020 that demonstrate a reduction from the
gross receipts of the entity during the fourth quarter
of 2019; or
(iv) if the entity was not in business during 2019,
but was in operation on February 15, 2020, had gross
receipts during the second, third, or fourth quarter of
2020 that demonstrate a reduction from the gross
receipts of the entity during the first quarter of
2020; and
(D) is located within 25 miles of the United States
border.
(b) Border Closure Recovery Loan Program.--
(1) In general.--The Administrator shall establish a
program under which the Administrator shall make loans to
border businesses directly impacted by the COVID-19 pandemic.
(2) Application.--A border business desiring a loan under
this subsection shall submit to the Administrator an
application at such time, in such place, and containing such
information as the Administrator determines necessary.
(3) Terms.--
(A) Amount; interest rate.--A loan made under this
subsection shall--
(i) be in an amount of not more than
$500,000; and
(ii) have an interest rate of not more than
2 percent.
(B) Prohibited requirements.--With respect to a
loan made under this subsection, the Administrator
shall not establish--
(i) any rules related to a personal
guarantee for loans of less than $200,000; or
(ii) any requirement that an applicant
exhaust other loan options before applying for
a loan under this subsection.
(4) Use of funds.--A border business that receives a loan
under this subsection--
(A) shall use the loan proceeds for any allowable
purpose for a loan made under section 7(b)(2) of the
Small Business Act (15 U.S.C. 636(b)(2)), including--
(i) providing paid sick leave to employees
unable to work due to the direct effect of
COVID-19;
(ii) maintaining payroll to retain
employees during business disruptions or
substantial slowdowns;
(iii) meeting increased costs to obtain
materials unavailable from the original source
of the border business due to interrupted
supply chains;
(iv) making rent or regular mortgage
payments;
(v) repaying obligations that cannot be met
due to revenue losses;
(vi) to pay for logistical expenses
associated with border closures due to the
COVID-19 pandemic; and
(vii) to pay for improvements related to
complying with public health guidelines,
including personal protective equipment,
signage, temporary barriers, and space heaters;
and
(B) may not use the loan proceeds--
(i) to purchase real estate;
(ii) for payments of interest or principal
on any loan originated after February 15, 2020;
(iii) to invest or re-lend funds;
(iv) for the prepayment of any mortgage or
other debt obligation;
(v) for any contribution or expenditure to,
or on behalf of, any political party, party
committee, or candidate for elective office; or
(vi) for any other use as the Administrator
may prohibit.
(c) Approval and Ability To Repay.--With respect to a loan made
under subsection (b), the Administrator may--
(1) approve an applicant--
(A) based solely on the credit score of the
applicant; or
(B) by using alternative appropriate methods to
determine an applicant's ability to repay; and
(2) use information from the Department of the Treasury to
confirm that--
(A) an applicant is eligible to receive the loan;
or
(B) the information contained in an application for
the loan is accurate.
(d) Repayment.--The Administrator shall establish the repayment
terms with respect to each loan made under subsection (b), except
that--
(1) repayment shall not begin before the date that is 1
year after the date on which the loan is made;
(2) the Administrator shall establish a process by which a
border business that continues to experience a reduction in
gross receipts following receipt of the loan can apply to delay
the repayment of the loan for a period of not more than 4
years; and
(3) the loan shall not accrue interest during the period in
which repayment of the loan is deferred.
(e) Loan Advance.--
(1) In general.--A border business that applies for a loan
under subsection (b) may request that the Administrator provide
an advance in the amount requested by the applicant to the
applicant not later than 15 business days after the date on
which the Administrator receives the request.
(2) Amount.--The amount of an advance provided under this
subsection shall be not less than $10,000.
(3) Verification.--Before disbursing amounts under this
subsection, the Administrator shall, not later than 15 business
days after the date on which the Administrator receives the
request for an advance by an applicant under this subsection--
(A) perform the verification required under
subsection (c);
(B) if the Administrator verifies that the
applicant is eligible for an advance under subsection
(c), provide to the applicant with a payment in the
amount described in paragraph (2); and
(C) with respect to an applicant that the
Administrator determines is not eligible for an advance
under this subsection, provide the applicant with a
notification explaining the reasons for reaching that
determination.
(4) Use of funds.--An advance provided under this
subsection may be used for any purpose described in subsection
(b)(4).
(5) Repayment.--An applicant shall not be required to repay
any amounts of an advance provided under this subsection, even
if the applicant is subsequently denied a loan under subsection
(b).
(f) Other Benefits.--Receipt of an advance under subsection (e) or
a loan under subsection (b) shall not be construed as to prohibit
receipt of any other Federal grant, loan, or aid.
(g) Taxability.--For purposes of the Internal Revenue Code of
1986--
(1) any advance described in paragraph (e) shall not be
included in the gross income of the border business that
receives the advance;
(2) no deduction shall be denied, no tax attribute shall be
reduced, and no basis increase shall be denied, by reason of
the exclusion from gross income provided by paragraph (1); and
(3) in the case of a partnership or S corporation that
receives an advance described in subsection (e)--
(A) any amount excluded from income under this
subsection shall be treated as tax exempt income for
purposes of sections 705 and 1366 of the Internal
Revenue Code of 1986, and
(B) the Secretary of the Treasury (or the
Secretary's delegate) shall prescribe rules for
determining a partner's distributive share of any
amount described in subparagraph (A) for purposes of
section 705 of the Internal Revenue Code of 1986.
(h) Outreach.--
(1) In general.--In carrying out the loan program under
this section, the Administrator shall--
(A) establish an advertising and outreach program
in partnership with State and local governments,
community advocacy groups, chambers of commerce, and
other State and local entities to help border
businesses understand the availability of the loan
program and to promote participation in the program by
border businesses located in economically depressed
areas; and
(B) provide technical assistance to applicants,
including instructions on how to participate in the
loan program, assistance in preparing applications, and
assistance in applying for loan deferral.
(2) Language access.--The Administrator shall ensure that
outreach and technical assistance activities described in this
subsection are made available by the Administration to border
business concerns in the commonly spoken languages, other than
English, in the States of the United States that border the
international boundary with Canada or Mexico, which shall
include Spanish and French.
(i) Authorization of Appropriations.--There is authorized to be
appropriated $500,000,000, to remain available until December 31, 2021,
to carry out the requirements of this Act.
<all>