Border Business COVID–19 Rescue Act
Bill: S.327 | Sponsor: Sen. Kelly, Mark (D-AZ)
Policy area: Commerce

Summary:
Border Business COVID-19 Rescue Act
This bill requires the Small Business Administration to establish a loan program to assist border businesses that are directly impacted by the COVID-19 (i.e., coronavirus disease 2019) pandemic. For the purposes of this bill, the term border business refers to a business that (1) is eligible for an economic injury disaster loan, (2) has its principal office located in the contiguous United States and is located within 25 miles of the U.S. border, (3) has fewer than 50 employees and annual revenue of $1 million or less, and (4) demonstrates a reduction in revenue from specified prior periods.
Recipients must use loan funds for purposes related to COVID-19 such as (1) providing sick leave to employees, (2) meeting increased costs arising from interrupted supply chains, or (3) paying for logistical expenses associated with border closures.

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>