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H.R. 1669: State Small Business Credit Initiative Renewal Act


The text of the bill below is as of Mar 9, 2021 (Introduced).


I

117th CONGRESS

1st Session

H. R. 1669

IN THE HOUSE OF REPRESENTATIVES

March 9, 2021

(for himself and Ms. Waters) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To amend the State Small Business Credit Initiative Act of 2010 to respond to the COVID–19 pandemic, and for other purposes.

1.

Short title

This Act may be cited as the State Small Business Credit Initiative Renewal Act.

2.

Reauthorization of the State Small Business Credit Initiative Act of 2010

(a)

Reauthorization

(1)

In general

The State Small Business Credit Initiative Act of 2010 (12 U.S.C. 5701 et seq.) is amended—

(A)

in section 3003—

(i)

in subsection (b)—

(I)

by amending paragraph (1) to read as follows:

(1)

In general

Not later than 30 days after the date of enactment of subsection (d), the Secretary shall allocate Federal funds to participating States so that each State is eligible to receive an amount equal to what the State would receive under the 2021 allocation, as determined under paragraph (2).

;

(II)

in paragraph (2)—

(aa)

by striking 2009 each place such term appears and inserting 2021;

(bb)

by striking 2008 each place such term appears and inserting 2020;

(cc)

in subparagraph (A), by striking The Secretary and inserting With respect to States other than Tribal governments, the Secretary;

(dd)

in subparagraph (C)(i), by striking 2007 and inserting 2019; and

(ee)

by adding at the end the following:

(C)

Separate allocation for Tribal governments

(i)

In general

With respect to States that are Tribal governments, the Secretary shall determine the 2021 allocation by allocating $500,000,000 among the Tribal governments in the proportion the Secretary determines appropriate, including with consideration to available employment and economic data regarding each such Tribal government.

(ii)

Notice of intent; timing of allocation

With respect to allocations to States that are Tribal governments, the Secretary may—

(I)

require Tribal governments that wish to participate in the Program to file a notice of intent with the Secretary not later than 30 days after the date of enactment of subsection (d); and

(II)

notwithstanding paragraph (1), allocate Federal funds to participating Tribal governments not later than 60 days after the date of enactment of subsection (d).

(D)

Employment data

If the Secretary determines that employment data with respect to a State is unavailable from the Bureau of Labor Statistics of the Department of Labor, the Secretary shall consider such other economic and employment data that is otherwise available for purposes of determining the employment data of such State.

; and

(III)

by striking paragraph (3); and

(ii)

in subsection (c)—

(I)

in paragraph (1)(A)(iii), by inserting before the period the following: that have delivered loans or investments to eligible businesses; and

(II)

by amending paragraph (4) to read as follows:

(4)

Termination of availability of amounts not transferred

(A)

In general

Any portion of a participating State’s allocated amount that has not been transferred to the State under this section may be deemed by the Secretary to be no longer allocated to the State and no longer available to the State and shall be returned to the general fund of the Treasury or reallocated as described under subparagraph (B), if—

(i)

the second 1/3 of a State’s allocated amount has not been transferred to the State before the end of the end of the 3-year period beginning on the date that the Secretary approves the State for participation; or

(ii)

the last 1/3 of a State’s allocated amount has not been transferred to the State before the end of the end of the 5-year period beginning on the date that the Secretary approves the State for participation.

(B)

Reallocation

Any amount deemed by the Secretary to be no longer allocated to a State and no longer available to such State under subparagraph (A) may be reallocated by the Secretary to other participating States. In making such a reallocation, the Secretary shall not take into account the minimum allocation requirements under subsection (b)(2)(B) or the specific allocation for Tribal governments described under subsection (b)(2)(C).

;

(B)

in section 3004(d), by striking date of enactment of this Act each place it appears and inserting date of the enactment of section 3003(d);

(C)

in section 3005(b), by striking date of enactment of this Act each place it appears and inserting date of the enactment of section 3003(d);

(D)

in section 3006(b)(4), by striking date of enactment of this Act and inserting date of the enactment of section 3003(d);

(E)

in section 3007(b), by striking March 31, 2011 and inserting March 31, 2022;

(F)

in section 3009, by striking date of enactment of this Act each place it appears and inserting date of the enactment of section 3003(d); and

(G)

in section 3011(b), by striking date of the enactment of this Act each place it appears and inserting date of the enactment of section 3003(d).

(2)

Appropriation

(A)

In general

There is hereby appropriated to the Secretary of the Treasury, out of funds in the Treasury not otherwise appropriated, $10,000,000,000 to carry out the State Small Business Credit Initiative established under the State Small Business Credit Initiative Act of 2010, including to pay reasonable costs of administering such Initiative.

(B)

Rescission

With respect to amounts appropriated under subparagraph (A)—

(i)

the Secretary of the Treasury shall complete all disbursements and remaining obligations before September 30, 2030; and

(ii)

any amounts that remain unexpended (whether obligated or unobligated) on September 30, 2030, shall be rescinded and deposited into the general fund of the Treasury.

(b)

Additional allocations to support business enterprises owned and controlled by socially and economically disadvantaged individuals

Section 3003 of the State Small Business Credit Initiative Act of 2010 (12 U.S.C. 5702) is amended by adding at the end the following:

(d)

Additional allocations to support business enterprises owned and controlled by socially and economically disadvantaged individuals

Of the amounts appropriated to carry out the Program, the Secretary shall—

(1)

ensure that $1,500,000,000 from funds allocated under this section shall be expended for business enterprises owned and controlled by socially and economically disadvantaged individuals; and

(2)

allocate such amounts to States based on the needs of business enterprises owned and controlled by socially and economically disadvantaged individuals, as determined by the Secretary, in each State, and not subject to the allocation formula described under subsection (b).

(e)

Supporting business enterprises owned and controlled by socially and economically disadvantaged individuals

In allocating funds to participating States under this section, the Secretary shall establish a minimum amount of support that a State shall provide to business enterprises owned and controlled by socially and economically disadvantaged individuals.

(f)

Incentive allocations to support business enterprises owned and controlled by socially and economically disadvantaged individuals

Of the amounts appropriated to carry out the Program, the Secretary shall set aside $1,000,000,000 for an incentive program under which the Secretary shall increase the second 1/3 and last 1/3 allocations for States that demonstrate robust support, as determined by the Secretary, for business concerns owned and controlled by socially and economically disadvantaged individuals in the deployment of prior allocation amounts.

.

(c)

CDFI and MDI participation plan

Section 3004 of the State Small Business Credit Initiative Act of 2010 (12 U.S.C. 5703) is amended by adding at the end the following:

(e)

CDFI and MDI participation plan

The Secretary may not approve a State to be a participating State unless the State has provided the Secretary with a plan detailing how minority depository institutions and community development financial institutions will be encouraged to participate in State programs.

.

(d)

Pandemic response plan

Section 3004 of the State Small Business Credit Initiative Act of 2010 (12 U.S.C. 5703), as amended by subsection (c), is further amended by adding at the end the following:

(f)

Pandemic response plan

The Secretary may not approve a State to be a participating State unless the State has provided the Secretary with a description of how the State will expeditiously utilize funds to support small businesses, including business enterprises owned and controlled by socially and economically disadvantaged individuals, in responding to and recovering from the economic effects of the COVID–19 pandemic.

.

(e)

Technical assistance

(1)

State technical assistance plan

Section 3004 of the State Small Business Credit Initiative Act of 2010 (12 U.S.C. 5703), as amended by subsection (d), is further amended by adding at the end the following:

(g)

State technical assistance plan

(1)

In general

The Secretary may not approve a State to be a participating State unless the State has provided the Secretary with a technical assistance plan under which the State will use a portion of the funds received under the Program to provide legal, accounting, and financial advisory services to very small businesses and business enterprises owned and controlled by socially and economically disadvantaged individuals applying for—

(A)

State programs under the Program; and

(B)

other State or Federal programs that support small businesses.

(2)

Contracting

Services described under paragraph (1) may be contracted with legal, accounting, and financial advisory firms, with priority given to business enterprises owned and controlled by socially and economically disadvantaged individuals.

.

(2)

Funding

Section 3009 of the State Small Business Credit Initiative Act of 2010 (12 U.S.C. 5708) is amended by adding at the end the following:

(e)

Technical assistance

Of the amounts appropriated to carry out the Program, $500,000,000 may be used by the Secretary to—

(1)

provide funds to States to carry out technical assistance plans described under section 3004(g);

(2)

transfer amounts to the Minority Business Development Agency, so that the Agency may use such amounts in a manner the Agency determines appropriate, including through contracting with third parties, to provide technical assistance to business enterprises owned and controlled by socially and economically disadvantaged individuals applying to—

(A)

State programs under the Program; and

(B)

other State or Federal programs that support small businesses; and

(3)

contract with legal, accounting, and financial advisory firms (with priority given to business enterprises owned and controlled by socially and economically disadvantaged individuals), to provide technical assistance to business enterprises owned and controlled by socially and economically disadvantaged individuals applying to—

(A)

State programs under the Program; and

(B)

other State or Federal programs that support small businesses.

.

(f)

Multi-State participation program

Section 3009 of the State Small Business Credit Initiative Act of 2010 (12 U.S.C. 5708), as amended by subsection (d)(2), is further amended by adding at the end the following:

(f)

Multi-State participation program

The Secretary may establish a multi-State participation program under which—

(1)

the Secretary determines which State programs are similar to each other, with respect to eligibility criteria and such other criteria as the Secretary determines appropriate; and

(2)

a State may elect to automatically deem a person eligible for a State program if the person is already participating in another State’s State program that the Secretary has determined is similar under paragraph (1).

.

(g)

Application of the Military Lending Act

Section 3004 of the State Small Business Credit Initiative Act of 2010 (15 U.S.C. 5702), as amended by subsection (d)(1), is further amended by adding at the end the following:

(h)

Application of the Military Lending Act

The Secretary may not approve a State to be a participating State unless the State has agreed that no lending activity supported by amounts received by the State under the Program would result in interest rates being charged at an annualized percentage rate above 36 percent, as determined in accordance with section 987(b) of title 10, United States Code (commonly known as the Military Lending Act).

.

(h)

Inclusion of Tribal governments

Section 3002(10) of the State Small Business Credit Initiative Act of 2010 (12 U.S.C. 5701(10)) is amended—

(1)

in subparagraph (C), by striking and at the end;

(2)

in subparagraph (D), by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following:

(E)

a Tribal government.

.

(i)

Definitions

Section 3002 of the State Small Business Credit Initiative Act of 2010 (12 U.S.C. 5701) is amended by adding at the end the following:

(15)

Business enterprise owned and controlled by socially and economically disadvantaged individuals

The term business enterprise owned and controlled by socially and economically disadvantaged individuals means a business that—

(A)

if privately owned, 51 percent is owned by one or more socially and economically disadvantaged individuals;

(B)

if publicly owned, 51 percent of the stock is owned by one or more socially and economically disadvantaged individuals; and

(C)

in the case of a mutual institution, a majority of the Board of Directors, account holders, and the community which the institution services is predominantly comprised of socially and economically disadvantaged individuals.

(16)

Community development financial institution

The term community development financial institution has the meaning given that term under section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994.

(17)

Minority depository institution

The term minority depository institution has the meaning given that term under section 308(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

(18)

Socially and economically disadvantaged individual

The term socially and economically disadvantaged individual means an individual who is a socially disadvantaged individual or an economically disadvantaged individual, as such terms are defined, respectively, under section 8 of the Small Business Act (15 U.S.C. 637) and the regulations thereunder.

(19)

Tribal government

The term Tribal government means a government of an Indian Tribe listed on the list of recognized Tribes published by the Secretary of the Interior under section 104 of the Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 5131).

.

(j)

Rule of application

The amendments made by this section shall apply with respect to funds appropriated under this section and funds appropriated on and after the date of enactment of this section.