I 

116TH CONGRESS 

1ST SESSION H. R. 225 

To provide for small business concerns located in Puerto Rico, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 3, 2019 

Ms. VELA ́ZQUEZ introduced the following bill; which was referred to the 

Committee on Small Business 

A BILL 

To provide for small business concerns located in Puerto 

Rico, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Puerto Rico Small 

5 Business Assistance Act of 2019’’. 

6 SEC. 2. TABLE OF CONTENTS. 

7 The table of contents for this Act are as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

Sec. 3. Definitions. 

TITLE I—LENDING 

Sec. 101. Microloan program for Puerto Rico small business concerns. 


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Sec. 102. Fee reductions. 

Sec. 103. Economic stimulus lending program for small businesses. 

Sec. 104. Contribution percentages for 504 projects. 

Sec. 105. Independent subsidy calculation. 

TITLE II—PROCUREMENT 

Sec. 201. Contracting preference for Puerto Rico businesses. 

TITLE III—ENTREPRENEURIAL DEVELOPMENT 

Sec. 301. Veteran Business Outreach Center in Puerto Rico. 

Sec. 302. FAST grant program for Puerto Rico. 

1 SEC. 3. DEFINITIONS. 

2 In this Act: 

3 (1) ADMINISTRATOR.—The term ‘‘Adminis4 trator’’ means the Administrator of the Small Busi5 ness Administration. 

6 (2) OVERSIGHT BOARD TERMINATION DATE.— 

7 The term ‘‘Oversight Board termination date’’ 

8 means the date on which the Oversight Board estab9 lished under section 101 of the Puerto Rico Over10 sight, Management, and Economic Stability Act (48 

11 U.S.C. 2121) terminates. 

12 (3) PUERTO RICO.—The term ‘‘Puerto Rico’’ 

13 means the Commonwealth of Puerto Rico. 

14 (4) PUERTO RICO BUSINESS.—The term ‘‘Puer15 to Rico business’’ has the meaning given in section 

16 3(ee) of the Small Business Act (15 U.S.C. 

17 632(ee)). 

18 (5) SMALL BUSINESS CONCERN.—The term 

19 ‘‘small business concern’’ has the meaning given 


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1 such term under section 3 of the Small Business Act 

2 (15 U.S.C. 632). 

3 TITLE I—LENDING 

4 SEC. 101. MICROLOAN PROGRAM FOR PUERTO RICO SMALL 

5 BUSINESS CONCERNS. 

6 (a) INCREASE IN ACCESS TO CAPITAL FOR CERTAIN

7 INTERMEDIARIES.—Section 7(m)(3)(C) of the Small Busi8 ness Act (15 U.S.C. 636(m)(3)(C)) is amended— 

9 (1) by inserting ‘‘and except as provided in 

10 clause (ii)’’ after ‘‘subsection (a)(3)’’; 

11 (2) by striking ‘‘Notwithstanding’’ and insert12 ing the following: 

13 ‘‘(i) IN GENERAL.—Notwithstanding’’; 

14 and 

15 (3) by adding at the end the following: 

16 ‘‘(ii) EXCEPTION FOR CERTAIN PUER17 TO RICO BUSINESSES.— 

18 ‘‘(I) IN GENERAL.—No loan shall 

19 be made under this subsection if the 

20 total amount outstanding and com21 mitted to 1 covered intermediary (ex22 cluding outstanding grants) from the 

23 business loan and investment fund es24 tablished by this Act would, as a re25 sult of such loan, exceed $6,000,000 


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1 in the remaining years of the covered 

2 intermediary’s participation in the 

3 program. 

4 ‘‘(II) DEFINITION.—In this 

5 clause, the term ‘covered inter6 mediary’ means an intermediary 

7 that— 

8 ‘‘(aa) is participating in the 

9 program; and 

10 ‘‘(bb) submits to the Admin11 istrator a certification that not 

12 less than 20 percent of the 

13 microloans made by the inter14 mediary under this subsection, 

15 during such period as the Admin16 istrator may specify, will be made 

17 to Puerto Rico businesses.’’. 

18 (b) WAIVER OF 25/75 RULE FOR MICROLOANS TO

19 PUERTO RICO SMALL BUSINESS CONCERNS.— 

20 (1) WAIVER AUTHORIZED.—Section 7(m)(4)(E) 

21 of the Small Business Act (15 U.S.C. 636(m)(4)(E)) 

22 is amended— 

23 (A) in clause (i), by striking ‘‘Each’’ and 

24 inserting ‘‘Except as provided in clause (iii), 

25 each’’; and 


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1 (B) by adding at the end the following: 

2 ‘‘(iii) EXCEPTION FOR CERTAIN

3 INTERMEDIARIES.—The Administrator 

4 shall waive the requirements of clause (i) 

5 for an intermediary for which not less than 

6 25 percent of the loans made by the inter7 mediary are made to Puerto Rico busi8 nesses.’’. 

9 (2) STUDY.—Not later than 18 months after 

10 the date of enactment of this Act, the Administrator 

11 shall submit to Congress a report on the impact of 

12 waiving the requirements of section 7(m)(4)(E)(i) of 

13 the Small Business Act for all intermediaries receiv14 ing grant funds under section 7(m)(1)(B)(ii) of the 

15 Small Business Act, which shall include an analysis 

16 of the effectiveness and feasibility of expanding the 

17 waiver to small business concerns nationwide. 

18 (c) PROSPECTIVE REPEAL.—Subsections (a) and (b) 

19 shall be repealed, and the provisions of law amended by 

20 such subsections shall be restored as if such subsections 

21 had not been enacted, on the Oversight Board termination 

22 date. 

23 (d) GAO STUDY.—Not later than 180 days after the 

24 date of enactment of this Act, the Comptroller General 

25 of the United States shall complete a study and submit 


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1 to the Committee on Small Business and Entrepreneur2 ship of the Senate and the Committee on Small Business 

3 of the House of Representatives a report on the following: 

4 (1) The operations (including services provided, 

5 structure, size, and area of operation) of a rep6 resentative sample of— 

7 (A) intermediaries that are eligible for par8 ticipation in the microloan program under sec9 tion 7(m) of the Small Business Act (15 U.S.C. 

10 636(m)) and that participate in the microloan 

11 program; and 

12 (B) intermediaries (including those oper13 ated for profit, operated as nonprofit organiza14 tions, and affiliated with a United States insti15 tution of higher learning (as defined in section 

16 3452 of title 38, United States Code) that are 

17 so eligible and that do not participate in the 

18 microloan program. 

19 (2) The reasons why intermediaries described in 

20 paragraph (1)(B) choose not to participate in the 

21 microloan program. 

22 (3) Recommendations on how to encourage in23 creased participation in the microloan program by 

24 intermediaries described in paragraph (1)(B). 


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1 (4) Recommendations for increasing the num2 ber of intermediaries located in the territories of the 

3 United States or in economically distressed areas (as 

4 defined in section 7(m)(11)(D) of the Small Busi5 ness Act (15 U.S.C. 636(m)(11)(D)) that are eligi6 ble for participation in the microloan program under 

7 section 7(m) of such Act. 

8 (5) Recommendations on how to decrease the 

9 costs associated with participation in the microloan 

10 program for eligible intermediaries. 

11 SEC. 102. FEE REDUCTIONS. 

12 (a) ADMINISTRATIVE PROVISIONS FOR THE SMALL

13 BUSINESS ADMINISTRATION.— 

14 (1) DEFINITION.—In this subsection, the term 

15 ‘‘covered business loan’’ means a loan— 

16 (A) of not more than $2,000,000; 

17 (B) that is guaranteed by the Adminis18 trator under section 7(a) of the Small Business 

19 Act (15 U.S.C. 636(a)); 

20 (C) for which the application is approved 

21 on or after the date of enactment of this Act; 

22 and 

23 (D) that is made to a Puerto Rico busi24 ness. 


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1 (2) FEES.—During the period beginning on the 

2 date of enactment of this Act and ending on the 

3 Oversight Board termination date, and to the extent 

4 that the cost of such elimination or reduction of fees 

5 is offset by appropriations, with respect to each cov6 ered business loan, the Administrator shall— 

7 (A) in lieu of the fee otherwise applicable 

8 under section 7(a)(23)(A) of the Small Busi9 ness Act, collect no fee or reduce fees to the 

10 maximum extent possible; and 

11 (B) in lieu of the fee otherwise applicable 

12 under section 7(a)(18)(A) of the Small Busi13 ness Act, collect no fee or reduce fees to the 

14 maximum extent possible. 

15 (b) TEMPORARY FEE ELIMINATION FOR THE 504 

16 LOAN PROGRAM.— 

17 (1) IN GENERAL.—During the period beginning 

18 on the date of enactment of this Act and ending on 

19 the Oversight Board termination date, and to the ex20 tent the cost of such elimination in fees is offset by 

21 appropriations, with respect to each loan of not more 

22 than $2,000,000 guaranteed by the Administrator 

23 under title V of the Small Business Investment Act 

24 of 1958 (15 U.S.C. 695 et seq.) with respect to a 

25 development company that has its principal office loVerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225

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1 cated in Puerto Rico and for which an application 

2 is approved or pending approval on or after the date 

3 of enactment of this Act— 

4 (A) the Administrator shall, in lieu of the 

5 fee otherwise applicable under section 503(d)(2) 

6 of the Small Business Investment Act of 1958 

7 (15 U.S.C. 697(d)(2)), collect no fee; and 

8 (B) a development company shall, in lieu 

9 of the processing fee under section 

10 120.971(a)(1) of title 13, Code of Federal Reg11 ulations (relating to fees paid by borrowers), or 

12 any successor thereto, collect no fee. 

13 (2) REIMBURSEMENT FOR WAIVED FEES.— 

14 (A) IN GENERAL.—To the extent that the 

15 cost of such payments is offset by appropria16 tions, the Administrator shall reimburse each 

17 development company that does not collect a 

18 processing fee under paragraph (1)(B). 

19 (B) AMOUNT.—The reimbursement to a 

20 development company under subparagraph (A) 

21 shall be in an amount equal to 1.5 percent of 

22 the net debenture proceeds for which the devel23 opment company does not collect a processing 

24 fee under paragraph (1)(B). 


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1 (c) APPLICATION OF FEE ELIMINATIONS.—To the 

2 extent that amounts are made available to the Adminis3 trator for the purpose of fee eliminations or reductions 

4 under subsection (a), the Administrator shall— 

5 (1) first use any amounts provided to eliminate 

6 or reduce fees paid by borrowers under clauses (i), 

7 (ii), and (iii) of section 7(a)(18)(A) of the Small 

8 Business Act (15 U.S.C. 636(a)(18)(A)), to the 

9 maximum extent possible; 

10 (2) to the extent amounts provided remain after 

11 use in accordance with paragraph (1), use any 

12 amounts provided to eliminate or reduce fees under 

13 section 7(a)(23)(A) of the Small Business Act (15 

14 U.S.C. 636(a)(23)(A)) paid by lenders with assets of 

15 not more than $1,000,000,000, as of the date of en16 actment of this Act; and 

17 (3) to the extent amounts provided remain after 

18 use in accordance with paragraphs (1) and (2), use 

19 any remaining amounts provided to reduce fees 

20 under section 7(a)(23)(A) of the Small Business Act 

21 paid by lenders other than those described under 

22 paragraph (2). 


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1 SEC. 103. ECONOMIC STIMULUS LENDING PROGRAM FOR 

2 SMALL BUSINESSES. 

3 (a) AUTHORITY.—Notwithstanding section 7(a) of 

4 the Small Business Act (15 U.S.C. 636(a)), for a quali5 fying small business loan the Administrator may guar6 antee not more than 90 percent of the balance of the fi7 nancing outstanding at the time of disbursement of the 

8 loan, if such balance is less than or equal to $2,000,000. 

9 (b) QUALIFYING SMALL BUSINESS LOAN DE10 FINED.—For purposes of this section, the term ‘‘quali11 fying small business loan’’ means any loan to a Puerto 

12 Rico business made pursuant to section 7(a) of the Small 

13 Business Act (15 U.S.C. 636(a)), except for such loans 

14 made under section 7(a)(31) of such Act (15 U.S.C. 

15 636(a)(31)). 

16 (c) QUALIFIED BORROWERS.— 

17 (1) ALIENS UNLAWFULLY PRESENT IN THE

18 UNITED STATES.—The Administrator may not guar19 antee a loan made under this section to a small busi20 ness concern if an individual who is an alien unlaw21 fully present in the United States— 

22 (A) has an ownership interest in that con23 cern; or 

24 (B) has an ownership interest in another 

25 concern that itself has an ownership interest in 

26 that concern. 


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1 (2) FIRMS IN VIOLATION OF IMMIGRATION

2 LAWS.—The Administrator may not guarantee a 

3 loan made under this section to any entity, based on 

4 a determination by the Secretary of Homeland Secu5 rity or the Attorney General, found to have engaged 

6 in a pattern or practice of hiring, recruiting, or re7 ferring for a fee for employment in the United 

8 States an alien, if such entity knows that the person 

9 is an unauthorized alien. 

10 (d) CRIMINAL BACKGROUND CHECKS.—Prior to 

11 guaranteeing a loan made under this section, the Adminis12 trator may verify the applicant’s criminal background, or 

13 lack thereof, through the best available means, including, 

14 if possible, use of the National Crime Information Center 

15 computer system at the Federal Bureau of Investigation. 

16 (e) APPLICATION OF OTHER LAW.—Nothing in this 

17 section shall be construed to exempt any activity of the 

18 Administrator under this section from the Federal Credit 

19 Reform Act of 1990. 

20 (f) SMALL BUSINESS ACT PROVISIONS.—Except as 

21 otherwise provided in this section, the requirements of sec22 tion 7 of the Small Business Act (and regulations promul23 gated thereunder) applicable to loan guarantees on or be24 fore the date of enactment of this Act shall apply to loan 

25 guarantees made under this section. 


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1 (g) SUNSET.—The Administrator may not guarantee 

2 a loan made under this section after the Oversight Board 

3 termination date. 

4 SEC. 104. CONTRIBUTION PERCENTAGES FOR 504 

5 PROJECTS. 

6 Notwithstanding section 502(3) of the Small Busi7 ness Investment Act of 1958 (15 U.S.C. 696(3)), during 

8 the period beginning on the date of enactment of this Act 

9 and ending on the Oversight Board termination date, the 

10 Administrator may guarantee a debenture issued by a de11 velopment company that has its principal office located in 

12 Puerto Rico if, of the total cost of the project financed— 

13 (1) 50 percent is derived from a loan from a 

14 private sector lender; 

15 (2) 45 percent is derived from a loan made 

16 from the proceeds of such debenture issued by the 

17 development company; and 

18 (3) 5 percent is provide by the borrower of such 

19 loans. 

20 SEC. 105. INDEPENDENT SUBSIDY CALCULATION. 

21 In making calculations under section 7(a)(26) of the 

22 Small Business Act (15 U.S.C. 636(a)(26)) or section 

23 503(g) of the Small Business Investment Act of 1958 (15 

24 U.S.C. 697(g)), the Director of the Office of Management 

25 and Budget shall make such calculations separately for 


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1 loans purchased or guaranteed under the authority under 

2 section 102, 103, or 104 of this Act. 

3 TITLE II—PROCUREMENT 

4 SEC. 201. CONTRACTING PREFERENCE FOR PUERTO RICO 

5 BUSINESSES. 

6 Section 15(x) of the Small Business Act (15 U.S.C. 

7 644(x)) is amended— 

8 (1) in the subsection heading, by striking 

9 ‘‘SMALL BUSINESS CREDIT’’ and inserting ‘‘CON10 TRACTING’’; 

11 (2) by redesignating paragraph (2) as subpara12 graph (B) (and conforming the margins accord13 ingly); 

14 (3) by striking ‘‘If an agency’’ and inserting: 

15 ‘‘(A) IN GENERAL.—If an agency’’; 

16 (4) in subparagraph (B), as so redesignated— 

17 (A) by striking ‘‘paragraph (1)’’ and in18 serting ‘‘subparagraph (A)’’; and 

19 (B) by striking ‘‘paragraph’’ and inserting 

20 ‘‘subparagraph’’; and 

21 (5) by adding at the end the following new 

22 paragraph: 

23 ‘‘(2) CONTRACTING PREFERENCE FOR PUERTO

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1 ing the period beginning on the date of enactment 

2 of this paragraph and ending on the date on which 

3 the Oversight Board established under section 101 

4 of the Puerto Rico Oversight, Management, and 

5 Economic Stability Act (48 U.S.C. 2121) termi6 nates. The preference under this paragraph shall 

7 take priority over any preference for purchasing 

8 from the procurement list established pursuant to 

9 section 8503 of title 41, United States Code, or the 

10 Federal Prison Industries catalog described under 

11 section 4124(d) of title 18, United States Code.’’. 

12 TITLE III—ENTREPRENEURIAL 

13 DEVELOPMENT 

14 SEC. 301. VETERAN BUSINESS OUTREACH CENTER IN 

15 PUERTO RICO. 

16 (a) IN GENERAL.—Section 32 of the Small Business 

17 Act (15 U.S.C. 657b) is amended— 

18 (1) by redesignating subsection (f) as sub19 section (g); and 

20 (2) by inserting after subsection (e) the fol21 lowing: 

22 ‘‘(f) VETERAN BUSINESS OUTREACH CENTER IN

23 PUERTO RICO.—The Administrator shall partner with an 

24 organization to establish a Veteran Business Outreach 

25 Center in the Commonwealth of Puerto Rico to provide 


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1 entrepreneurial development services to small business 

2 concerns owned and controlled by service-disabled veterans 

3 and small business concerns owned and controlled by vet4 erans located in the Commonwealth of Puerto Rico. If the 

5 Administrator cannot partner with an organization, the 

6 Administrator shall use amounts appropriated to carry out 

7 this subsection to provide such services to veterans who 

8 own or are considering starting a Puerto Rico business.’’. 

9 (b) PROSPECTIVE REPEAL.—Subsection (a) shall be 

10 repealed, and the provisions of law amended by such sub11 section shall be restored as if such subsection had not been 

12 enacted, on the Oversight Board termination date. 

13 SEC. 302. FAST GRANT PROGRAM FOR PUERTO RICO. 

14 (a) IN GENERAL.—Section 34 of the Small Business 

15 Act (15 U.S.C. 657d) is amended by adding at the end 

16 the following: 

17 ‘‘(j) FAST GRANT PROGRAM FOR PUERTO RICO.— 

18 ‘‘(1) ESTABLISHMENT.—The Administrator 

19 shall establish a program that shall be part of the 

20 FAST program to make awards to, or enter into co21 operative agreements with, a Puerto Rico business. 

22 ‘‘(2) TECHNICAL ASSISTANCE.—If no applicant 

23 is selected to receive assistance under this sub24 section, the Administrator shall use amounts appro25 priated to carry out this subsection to provide busiVerDate Sep 11 2014 21:54 Jan 18, 2019 Jkt 089200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H225.IH H225

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1 ness advice and counseling to a Puerto Rico busi2 ness. 

3 ‘‘(3) WAIVER OF MATCHING REQUIREMENTS.— 

4 The Administrator may, upon application, waive the 

5 matching requirements under subsection (e)(2) for 

6 an applicant that receives an award or has in effect 

7 a cooperative agreement under this subsection. 

8 ‘‘(4) FUNDING.—There is authorized to be ap9 propriated $100,000 for fiscal year 2020, and each 

10 fiscal year thereafter, to carry out this subsection.’’. 

11 (b) PROSPECTIVE REPEAL.—Subsection (a) shall be 

12 repealed, and the provisions of law amended by such sub13 section shall be restored as if such subsection had not been 

14 enacted, on the Oversight Board termination date. 

Æ 


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