Puerto Rico Small Business Assistance Act of 2019

To provide for small business concerns located in Puerto Rico, and for other purposes. 1. Short title This Act may be cited as the Puerto Rico Small Business Assistance Act of 2019 2. Table of contents 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. 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. 3. Definitions In this Act: (1) Administrator The term Administrator (2) Oversight Board termination date The term Oversight Board termination date 48 U.S.C. 2121 (3) Puerto Rico The term Puerto Rico (4) Puerto Rico business The term Puerto Rico business 15 U.S.C. 632(ee) (5) Small business concern The term small business concern 15 U.S.C. 632 I Lending 101. Microloan program for Puerto Rico small business concerns (a) Increase in access to capital for certain intermediaries Section 7(m)(3)(C) of the Small Business Act ( 15 U.S.C. 636(m)(3)(C) (1) by inserting and except as provided in clause (ii) subsection (a)(3) (2) by striking Notwithstanding (i) In general Notwithstanding ; and (3) by adding at the end the following: (ii) Exception for certain Puerto Rico businesses (I) In general No loan shall be made under this subsection if the total amount outstanding and committed to 1 covered intermediary (excluding outstanding grants) from the business loan and investment fund established by this Act would, as a result of such loan, exceed $6,000,000 in the remaining years of the covered intermediary's participation in the program. (II) Definition In this clause, the term covered intermediary (aa) is participating in the program; and (bb) submits to the Administrator a certification that not less than 20 percent of the microloans made by the intermediary under this subsection, during such period as the Administrator may specify, will be made to Puerto Rico businesses. . (b) Waiver of 25/75 rule for microloans to Puerto Rico small business concerns (1) Waiver authorized Section 7(m)(4)(E) of the Small Business Act ( 15 U.S.C. 636(m)(4)(E) (A) in clause (i), by striking Each Except as provided in clause (iii), each (B) by adding at the end the following: (iii) Exception for certain intermediaries The Administrator shall waive the requirements of clause (i) for an intermediary for which not less than 25 percent of the loans made by the intermediary are made to Puerto Rico businesses. . (2) Study Not later than 18 months after the date of enactment of this Act, the Administrator shall submit to Congress a report on the impact of waiving the requirements of section 7(m)(4)(E)(i) of the Small Business Act for all intermediaries receiving grant funds under section 7(m)(1)(B)(ii) of the Small Business Act, which shall include an analysis of the effectiveness and feasibility of expanding the waiver to small business concerns nationwide. (c) Prospective repeal Subsections (a) and (b) shall be repealed, and the provisions of law amended by such subsections shall be restored as if such subsections had not been enacted, on the Oversight Board termination date. (d) GAO study Not later than 180 days after the date of enactment of this Act, the Comptroller General of the United States shall complete a study and submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the following: (1) The operations (including services provided, structure, size, and area of operation) of a representative sample of— (A) intermediaries that are eligible for participation in the microloan program under section 7(m) of the Small Business Act ( 15 U.S.C. 636(m) (B) intermediaries (including those operated for profit, operated as nonprofit organizations, and affiliated with a United States institution of higher learning (as defined in section 3452 of title 38, United States Code) that are so eligible and that do not participate in the microloan program. (2) The reasons why intermediaries described in paragraph (1)(B) choose not to participate in the microloan program. (3) Recommendations on how to encourage increased participation in the microloan program by intermediaries described in paragraph (1)(B). (4) Recommendations for increasing the number of intermediaries located in the territories of the United States or in economically distressed areas (as defined in section 7(m)(11)(D) of the Small Business Act ( 15 U.S.C. 636(m)(11)(D) (5) Recommendations on how to decrease the costs associated with participation in the microloan program for eligible intermediaries. 102. Fee reductions (a) Administrative provisions for the Small Business Administration (1) Definition In this subsection, the term covered business loan (A) of not more than $2,000,000; (B) that is guaranteed by the Administrator under section 7(a) of the Small Business Act ( 15 U.S.C. 636(a) (C) for which the application is approved on or after the date of enactment of this Act; and (D) that is made to a Puerto Rico business. (2) Fees During the period beginning on the date of enactment of this Act and ending on the Oversight Board termination date, and to the extent that the cost of such elimination or reduction of fees is offset by appropriations, with respect to each covered business loan, the Administrator shall— (A) in lieu of the fee otherwise applicable under section 7(a)(23)(A) of the Small Business Act, collect no fee or reduce fees to the maximum extent possible; and (B) in lieu of the fee otherwise applicable under section 7(a)(18)(A) of the Small Business Act, collect no fee or reduce fees to the maximum extent possible. (b) Temporary fee elimination for the 504 loan program (1) In general During the period beginning on the date of enactment of this Act and ending on the Oversight Board termination date, and to the extent the cost of such elimination in fees is offset by appropriations, with respect to each loan of not more than $2,000,000 guaranteed by the Administrator under title V of the Small Business Investment Act of 1958 ( 15 U.S.C. 695 (A) the Administrator shall, in lieu of the fee otherwise applicable under section 503(d)(2) of the Small Business Investment Act of 1958 ( 15 U.S.C. 697(d)(2) (B) a development company shall, in lieu of the processing fee under section 120.971(a)(1) of title 13, Code of Federal Regulations (relating to fees paid by borrowers), or any successor thereto, collect no fee. (2) Reimbursement for waived fees (A) In general To the extent that the cost of such payments is offset by appropriations, the Administrator shall reimburse each development company that does not collect a processing fee under paragraph (1)(B). (B) Amount The reimbursement to a development company under subparagraph (A) shall be in an amount equal to 1.5 percent of the net debenture proceeds for which the development company does not collect a processing fee under paragraph (1)(B). (c) Application of fee eliminations To the extent that amounts are made available to the Administrator for the purpose of fee eliminations or reductions under subsection (a), the Administrator shall— (1) first use any amounts provided to eliminate or reduce fees paid by borrowers under clauses (i), (ii), and (iii) of section 7(a)(18)(A) of the Small Business Act ( 15 U.S.C. 636(a)(18)(A) (2) to the extent amounts provided remain after use in accordance with paragraph (1), use any amounts provided to eliminate or reduce fees under section 7(a)(23)(A) of the Small Business Act ( 15 U.S.C. 636(a)(23)(A) (3) to the extent amounts provided remain after use in accordance with paragraphs (1) and (2), use any remaining amounts provided to reduce fees under section 7(a)(23)(A) of the Small Business Act paid by lenders other than those described under paragraph (2). 103. Economic stimulus lending program for small businesses (a) Authority Notwithstanding section 7(a) of the Small Business Act ( 15 U.S.C. 636(a) (b) Qualifying small business loan defined For purposes of this section, the term qualifying small business loan 15 U.S.C. 636(a) 15 U.S.C. 636(a)(31) (c) Qualified borrowers (1) Aliens unlawfully present in the United States The Administrator may not guarantee a loan made under this section to a small business concern if an individual who is an alien unlawfully present in the United States— (A) has an ownership interest in that concern; or (B) has an ownership interest in another concern that itself has an ownership interest in that concern. (2) Firms in violation of immigration laws The Administrator may not guarantee a loan made under this section to any entity, based on a determination by the Secretary of Homeland Security or the Attorney General, found to have engaged in a pattern or practice of hiring, recruiting, or referring for a fee for employment in the United States an alien, if such entity knows that the person is an unauthorized alien. (d) Criminal background checks Prior to guaranteeing a loan made under this section, the Administrator may verify the applicant’s criminal background, or lack thereof, through the best available means, including, if possible, use of the National Crime Information Center computer system at the Federal Bureau of Investigation. (e) Application of other law Nothing in this section shall be construed to exempt any activity of the Administrator under this section from the Federal Credit Reform Act of 1990. (f) Small Business Act provisions Except as otherwise provided in this section, the requirements of section 7 of the Small Business Act (and regulations promulgated thereunder) applicable to loan guarantees on or before the date of enactment of this Act shall apply to loan guarantees made under this section. (g) Sunset The Administrator may not guarantee a loan made under this section after the Oversight Board termination date. 104. Contribution percentages for 504 projects Notwithstanding section 502(3) of the Small Business Investment Act of 1958 ( 15 U.S.C. 696(3) (1) 50 percent is derived from a loan from a private sector lender; (2) 45 percent is derived from a loan made from the proceeds of such debenture issued by the development company; and (3) 5 percent is provide by the borrower of such loans. 105. Independent subsidy calculation In making calculations under section 7(a)(26) of the Small Business Act ( 15 U.S.C. 636(a)(26) 15 U.S.C. 697(g) II Procurement 201. Contracting preference for Puerto Rico businesses Section 15(x) of the Small Business Act ( 15 U.S.C. 644(x) (1) in the subsection heading, by striking Small Business Credit Contracting (2) by redesignating paragraph (2) as subparagraph (B) (and conforming the margins accordingly); (3) by striking If an agency (A) In general If an agency ; (4) in subparagraph (B), as so redesignated— (A) by striking paragraph (1) subparagraph (A) (B) by striking paragraph subparagraph (5) by adding at the end the following new paragraph: (2) Contracting preference for Puerto Rico businesses An agency shall provide a contracting preference for a Puerto Rico business during the period beginning on the date of enactment of this paragraph and ending on the date on which the Oversight Board established under section 101 of the Puerto Rico Oversight, Management, and Economic Stability Act ( 48 U.S.C. 2121 . III Entrepreneurial Development 301. Veteran Business Outreach Center in Puerto Rico (a) In general Section 32 of the Small Business Act ( 15 U.S.C. 657b (1) by redesignating subsection (f) as subsection (g); and (2) by inserting after subsection (e) the following: (f) Veteran Business Outreach Center in Puerto Rico The Administrator shall partner with an organization to establish a Veteran Business Outreach Center in the Commonwealth of Puerto Rico to provide entrepreneurial development services to small business concerns owned and controlled by service-disabled veterans and small business concerns owned and controlled by veterans located in the Commonwealth of Puerto Rico. If the Administrator cannot partner with an organization, the Administrator shall use amounts appropriated to carry out this subsection to provide such services to veterans who own or are considering starting a Puerto Rico business. . (b) Prospective repeal Subsection (a) shall be repealed, and the provisions of law amended by such subsection shall be restored as if such subsection had not been enacted, on the Oversight Board termination date. 302. FAST grant program for Puerto Rico (a) In general Section 34 of the Small Business Act ( 15 U.S.C. 657d (j) FAST grant program for Puerto Rico (1) Establishment The Administrator shall establish a program that shall be part of the FAST program to make awards to, or enter into cooperative agreements with, a Puerto Rico business. (2) Technical assistance If no applicant is selected to receive assistance under this subsection, the Administrator shall use amounts appropriated to carry out this subsection to provide business advice and counseling to a Puerto Rico business. (3) Waiver of matching requirements The Administrator may, upon application, waive the matching requirements under subsection (e)(2) for an applicant that receives an award or has in effect a cooperative agreement under this subsection. (4) Funding There is authorized to be appropriated $100,000 for fiscal year 2020, and each fiscal year thereafter, to carry out this subsection. . (b) Prospective repeal Subsection (a) shall be repealed, and the provisions of law amended by such subsection shall be restored as if such subsection had not been enacted, on the Oversight Board termination date.

Summary: Puerto Rico Small Business Assistance Act of 2019This bill expands funding and support for small businesses that have their principal office in Puerto Rico. Specifically, the bill increases the total amount of loans outstanding and committed to any microloan intermediary if at least 20% of the intermediary's loans are made to such businesses; waives the Small Business Administration (SBA) Microloan Program's limit on an intermediary's spending on technical assistance for prospective borrowers if 25% of the intermediary's loans are made to these businesses requires the Government Accountability Office to report on intermediary participation; reduces or eliminates SBA fees on certain loans to such businesses; and gives federal contract preference to such businesses. The SBA shall establish (1) a Veteran Business Outreach Center in Puerto Rico, and (2) a temporary Federal and State Technology (FAST) grant program to provide assistance to Puerto Rico businesses.