S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6407
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 17, 2021
                                ___________
 
 Introduced  by  M.  of  A.  DICKENS,  ABINANTI,  ASHBY, BARRON, BRONSON,
   COLTON, CRUZ, DINOWITZ, EPSTEIN, FAHY, ENGLEBRIGHT,  FERNANDEZ,  GOTT-
   FRIED, GRIFFIN, MONTESANO, PAULIN, PERRY, RAMOS, RODRIGUEZ, SEAWRIGHT,
   SIMON, STERN, TAYLOR, TAGUE -- read once and referred to the Committee
   on Small Business

 AN ACT establishing the New York state small business protection program
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative findings. a. In April 2020, the Federal Govern-
 ment enacted two Coronavirus Aid, Relief and Economic  Security  (CARES)
 Act  stimulus  packages  where  it  introduced  the  Paycheck Protection
 Program (PPP) totaling $659 billion dollars to financially assist  small
 businesses,  and  to  prevent  the loss of jobs and the failure of small
 businesses due to financial losses caused by the COVID-19 pandemic.
   b. Many local small businesses  including  minority-  and  women-owned
 businesses  (MWBEs)  in  our  state  did not receive any federal funding
 under the federal PPP in either of the two rounds of funding.  In  fact,
 most  of  the  first  round  of funding totaling $349 billion, which was
 exhausted in 2 weeks, went to large publicly traded businesses.
   c. According to a report issued by the Federal Small Business Adminis-
 tration Inspector General, the Small Business Administration  (SBA)  was
 faulted  in  administering the PPP, in that the SBA did not issue guide-
 lines for banks to prioritize businesses  in  rural  markets,  companies
 that  have  only  been  in business for two years or less, or businesses
 owned by veterans,  minorities,  women  and  economically  disadvantaged
 individuals.  Moreover,  the PPP application did not include demographic
 information making it difficult or near impossible to determine how much
 money went into the markets.
   d. As New York state is reopening regionally post  COVID-19,  many  of
 our  small  businesses,  including MWBEs and farmers who did not receive
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03804-01-1
              

 A. 6407                             2
 
 any PPP funding are in desperate need of funding to  employ  and/or  pay
 staff, purchase inventory, and pay rent and utilities.
   §  2.  Establishment.  Notwithstanding  any  provision  of  law to the
 contrary, the legislature shall authorize the  establishment  of  a  New
 York  State  Small Business Protection Program (NYSSBPP) to be funded in
 the amount of 100 million dollars from future federal stimulus  funding.
 Such  funding  shall  reimburse any moneys used from any state funds for
 the purposes described under sections four or five of this act.
   § 3. Eligibility. Entities shall be eligible for the NYSSBPP  provided
 such  entity  has  less than 100 employees per location, did not receive
 any federal funding from the Federal CARES Act, was in existence in  New
 York  state  by  the  first  day the state disaster emergency related to
 COVID-19 was declared by the governor, can document actual economic harm
 or revenue shortfall as a direct result of the pandemic, and  has  filed
 2018,  2019  or  2020  tax  returns.  The  lending  priority shall be as
 follows:
   a. small businesses,  including  minority-  and  women-owned  business
 enterprises,  owned  by veterans, minorities, women, economically disad-
 vantaged individuals and farmers;
   b. businesses in the restaurant, luxury service,  retail,  transporta-
 tion, hospitality and farming industries;
   c.  small businesses located in economically distressed or underserved
 communities and rural markets;
   d. non-profit organizations having tax  exempt  status  under  section
 501(c)(3),  or  a  veterans  organization having tax exempt status under
 section 501(c)(19) of the United States Internal Revenue Code;
   e.  sole  proprietors,  independent  contractors,  and   self-employed
 persons;
   f. small businesses that have been in existence for two years or less;
 and
   g.  new  businesses  formed  or  incorporated within 30 days after the
 expiration of the state of emergencies or the region of the state  where
 the business is located has reopened post COVID-19.
   §  4.  Loan details and forgiveness. a. All eligible entities pursuant
 to section three of this act, shall submit an application through commu-
 nity development financial  institutions  (CDFIs),  minority  depository
 institutions  (MDIs),  local  community  banks  or credit unions located
 within the  state.  No  applications  shall  be  processed  through  any
 merchant cash advance or any financial technology companies. All lending
 institutions  in  this  program shall collect and provide data about the
 borrowers' demographics and loan amount.
   b. The loan amount shall equal 60% of the prior year eligible expenses
 not to exceed $100,000.00.
   c. Such loan shall be forgiven if funds are used for payroll  or  1099
 employees, interest on mortgages, rent, utilities and inventory.
   d.  Purchases  of new equipment are permissible under this program but
 such loan will not be forgiven as a grant.
   e. All loan payments shall be deferred for  6  months,  which  can  be
 deferred  for  an  additional 6 months but not to exceed 1 year from the
 date of the loan.
   f. No collateral or personal  guarantees  are  required.  Neither  the
 government  nor  financial institutions shall charge qualifying entities
 any fees.
   g. Forgiveness is based on the qualifying small  business  maintaining
 or quickly rehiring employees and maintaining salary levels. Forgiveness
 will  be  reduced  if  full-time  headcount declines, or if salaries and

 A. 6407                             3
 
 wages decrease within 12 weeks of receiving such  funding.  The  12-week
 rule  shall  not  apply to any entity if such entity paid its employees'
 salaries during the COVID-19 state of disaster emergencies or when  such
 entity  was  closed.  Documented  proof of such payroll payment shall be
 required.
   h. All loans not forgiven under subdivision b of  this  section  shall
 have  a maturity of 2 years and an interest rate of 1% or 3 years of the
 loan payments have been deferred.
   i. The department of financial services shall have oversight and moni-
 tor the application process pursuant to this  section.  Such  department
 shall  create  the  application  and  promulgate rules necessary for the
 administration of this program.
   § 5. Grants. The NYSSBPP shall provide the  following  grants  to  all
 qualified  small  businesses,  not-for-profits  and charitable organiza-
 tions:
   a. A rent reimbursement grant to  reimburse  qualifying  entities  for
 rent  paid  during the COVID-19 pandemic, provided such entity has docu-
 mentary proof of such paid rent. This rent reimbursement grant shall  be
 capped at 3 months of paid rent during the state of emergencies;
   b.  A  grant to reimburse qualifying entities for perishable inventory
 purchased before the COVID-19  state  of  disaster  emergency  that  was
 thrown  out due to the forced shut down of such entity and/or to replace
 food inventory to help such entity reopen; and
   c. A grant subsidy for farmers to pay for gas and tolls to deliver the
 products throughout the state.
   § 6. Oversight. The state comptroller shall  monitor  the  NYSSBPP  to
 ensure the provisions of this act are properly executed. The state comp-
 troller  shall  submit  a  report  on  such program to the governor, the
 temporary president of the senate and the speaker of the  assembly,  and
 shall  post  such  on  the  comptroller's  website  on a quarterly basis
 describing any loans granted under such program.
   § 7. This act shall take effect immediately.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  6407--A
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 17, 2021
                                ___________
 
 Introduced  by  M.  of  A.  DICKENS,  ABINANTI,  ASHBY, BARRON, BRONSON,
   COLTON, CRUZ, DINOWITZ, EPSTEIN, FAHY, ENGLEBRIGHT,  FERNANDEZ,  GOTT-
   FRIED, GRIFFIN, MONTESANO, PAULIN, PERRY, RAMOS, RODRIGUEZ, SEAWRIGHT,
   SIMON, STERN, TAYLOR, TAGUE -- read once and referred to the Committee
   on  Small  Business  --  committee  discharged,  bill amended, ordered
   reprinted as amended and recommitted to said committee
 
 AN ACT establishing the New York state small business protection program
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Legislative  findings. a. The American Rescue Plan Act of
 2021 is a $1.9 trillion economic stimulus legislation package passed  by
 Congress  and  signed  into  law  by President Joseph Biden on March 11,
 2021.
   b. Many local small businesses  including  minority-  and  women-owned
 businesses  (MWBEs)  in  our  state  did not receive any federal funding
 under the federal Paycheck Protection Program (PPP).
   c. As New York state is reopening regionally post  COVID-19,  many  of
 our  small  businesses,  including MWBEs and farmers who did not receive
 any PPP funding are in desperate need of funding to  employ  and/or  pay
 staff, purchase inventory, and pay rent and utilities.
   §  2.  Establishment.  Notwithstanding  any  provision  of  law to the
 contrary, the legislature shall authorize the  establishment  of  a  New
 York  State  Small Business Protection Program (NYSSBPP) to be funded in
 the amount of 100 million dollars from the American Rescue Plan  Act  of
 2021.  Funding for such program may also come from state appropriations.
 Funds received from the American Rescue Plan Act of 2021 shall  be  used
 to  reimburse  any  monies  appropriated  by  the state for the purposes
 described under section four or five of this act.
   § 3. Eligibility. Entities shall be eligible for the NYSSBPP  provided
 such  entity  has less than 100 employees per location, was in existence
 in New York state by the first day the state disaster emergency  related
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03804-03-1

 A. 6407--A                          2
 
 to  COVID-19  was declared by the governor, can document actual economic
 harm or revenue shortfall as a direct result of the  pandemic,  and  has
 filed  2018,  2019 or 2020 tax returns. The lending priority shall be as
 follows:
   a.  small  businesses,  including  minority-  and women-owned business
 enterprises, owned by veterans, minorities, women,  economically  disad-
 vantaged individuals and farmers;
   b.  businesses  in the restaurant, luxury service, retail, transporta-
 tion, hospitality and farming industries;
   c. small businesses located in economically distressed or  underserved
 communities and rural markets;
   d.  non-profit  organizations  having  tax exempt status under section
 501(c)(3), or a veterans organization having  tax  exempt  status  under
 section 501(c)(19) of the United States Internal Revenue Code;
   e.   sole  proprietors,  independent  contractors,  and  self-employed
 persons;
   f. small businesses that have been in existence for two years or less;
 and
   g. new businesses formed or incorporated  within  30  days  after  the
 expiration  of the state of emergencies or the region of the state where
 the business is located has reopened post COVID-19.
   § 4. Loan details and forgiveness. a. All eligible  entities  pursuant
 to section three of this act, shall submit an application through commu-
 nity  development  financial  institutions  (CDFIs), minority depository
 institutions (MDIs), local community  banks  or  credit  unions  located
 within  the  state.  No  applications  shall  be  processed  through any
 merchant cash advance or any financial technology companies. All lending
 institutions in this program shall collect and provide  data  about  the
 borrowers' demographics and loan amount.
   b. The loan amount shall equal 60% of the prior year eligible expenses
 not to exceed $100,000.00.
   c.  Such  loan shall be forgiven if funds are used for payroll or 1099
 employees, interest on mortgages, rent, utilities and inventory.
   d. Purchases of new equipment are permissible under this  program  but
 such loan will not be forgiven as a grant.
   e.  All  loan  payments  shall  be deferred for 6 months, which can be
 deferred for an additional 6 months but not to exceed 1  year  from  the
 date of the loan.
   f.  No  collateral  or  personal  guarantees are required. Neither the
 government nor financial institutions shall charge  qualifying  entities
 any fees.
   g.  Forgiveness  is based on the qualifying small business maintaining
 or quickly rehiring employees and maintaining salary levels. Forgiveness
 will be reduced if full-time headcount  declines,  or  if  salaries  and
 wages  decrease  within  12 weeks of receiving such funding. The 12-week
 rule shall not apply to any entity if such entity  paid  its  employees'
 salaries  during the COVID-19 state of disaster emergencies or when such
 entity was closed. Documented proof of such  payroll  payment  shall  be
 required.
   h.  All  loans  not forgiven under subdivision b of this section shall
 have a maturity of 2 years and an interest rate of 1% or 3 years of  the
 loan payments have been deferred.
   i. The department of financial services shall have oversight and moni-
 tor  the  application  process pursuant to this section. Such department
 shall create the application and  promulgate  rules  necessary  for  the
 administration of this program.

 A. 6407--A                          3
 
   §  5.  Grants.  The  NYSSBPP shall provide the following grants to all
 qualified small businesses,  not-for-profits  and  charitable  organiza-
 tions:
   a.  A  rent  reimbursement  grant to reimburse qualifying entities for
 rent paid during the COVID-19 pandemic, provided such entity  has  docu-
 mentary  proof of such paid rent. This rent reimbursement grant shall be
 capped at 3 months of paid rent during the state of emergencies;
   b. A grant to reimburse qualifying entities for  perishable  inventory
 purchased  before  the  COVID-19  state  of  disaster emergency that was
 thrown out due to the forced shut down of such entity and/or to  replace
 food inventory to help such entity reopen; and
   c. A grant subsidy for farmers to pay for gas and tolls to deliver the
 products throughout the state.
   §  6.  Oversight.  The  state comptroller shall monitor the NYSSBPP to
 ensure the provisions of this act are properly executed. The state comp-
 troller shall submit a report on  such  program  to  the  governor,  the
 temporary  president  of the senate and the speaker of the assembly, and
 shall post such on  the  comptroller's  website  on  a  quarterly  basis
 describing any loans granted under such program.
   § 7. This act shall take effect immediately.