Minor League Baseball Relief Act
Bill: H.R.4150 | Sponsor: Rep. Matsui, Doris O. (D-CA)
Policy area: Sports and Recreation

Summary:
Minor League Baseball Relief Act
This bill establishes a program for the relief of certain minor league baseball clubs and independent professional baseball clubs that experienced large business losses.
The bill provides funding for the Small Business Administration to make grants to such clubs that experienced decreases in gross revenue in 2020 of at least 75%, as measured against revenues in 2019 (or, if revenues were negatively affected by a natural disaster or weather disruption in 2019, by the average of revenues over the prior three-year period).
The source of funding for the grants shall be funds appropriated under enacted COVID-19 relief legislation that have not been obligated and are no longer being used to carry out activities authorized under those laws. Grant amounts provided to any club may not exceed $10 million.

To establish a grant program for shuttered minor league baseball clubs, 
                        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 ``Minor League Baseball Relief Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Small Business Administration.
            (2) Covered grants.--The term ``covered grant'' means a 
        grant made under this Act to an eligible entity.
            (3) Covered law.--The term ``covered law'' means--
                    (A) the Coronavirus Preparedness and Response 
                Supplemental Appropriations Act, 2020 (Public Law 116-
                123; 134 Stat. 146);
                    (B) the Families First Coronavirus Response Act 
                (Public Law 116-127; 134 Stat. 177);
                    (C) the CARES Act (Public Law 116-136; 134 Stat. 
                281);
                    (D) the Paycheck Protection Program and Health Care 
                Enhancement Act (Public Law 116-139; 134 Stat. 620);
                    (E) the Consolidated Appropriations Act, 2021 
                (Public Law 116-260); or
                    (F) the American Rescue Plan Act of 2021 (Public 
                Law 117-2).
            (4) Covered mortgage obligation; covered rent obligation; 
        covered utility payment; covered worker protection 
        expenditure.--The terms ``covered mortgage obligation'', 
        ``covered rent obligation'', ``covered utility payment'', and 
        ``covered worker protection expenditure'' have the meanings 
        given those terms in section 7A(a) of the Small Business Act 
        (15 U.S.C. 636m(a)).
            (5) Eligible entity.--The term ``eligible entity'' means 
        any Minor League Baseball Club or Independent Professional 
        Baseball Club that meets the following requirements:
                    (A) The Minor League Baseball Club or Independent 
                Professional Baseball Club was operating in the 
                ordinary course of business on February 29, 2020.
                    (B) The gross revenues of the Minor League Baseball 
                Club or Independent Professional Baseball Club in 
                calendar year 2020 were not more than 25 percent of the 
                gross revenues of the Minor League Baseball Club or 
                Independent Professional Baseball Club in calendar year 
                2019, or, if the gross revenues of the Minor League 
                Baseball Club or Independent Professional Baseball Club 
                were negatively impacted by a natural disaster or 
                weather disruption in 2019, not more than 25 percent of 
                the average annual gross revenues of the Minor League 
                Baseball Club or Independent Professional Baseball Club 
                over the 3-year period from 2017 through 2019, as 
                determined by the Administrator using the accrual 
                method of accounting and excluding any amounts received 
                any amounts received under the CARES Act (15 U.S.C. 
                9001 et seq.), an amendment to such Act, the 
                Consolidated Appropriations Act, 2021 (Public Law 116-
                260), or any subsequent COVID Relief package.
                    (C) At the time the Minor League Baseball Club or 
                Independent Professional Baseball Club submits the 
                certification required under section 3(c), the Minor 
                League Baseball Club or Independent Professional 
                Baseball Club is open, or intends to reopen, for the 
                primary purpose of conducting baseball games.
                    (D) The Minor League Baseball Club or Independent 
                Professional Baseball Club is not majority owned, 
                directly or indirectly, by Major League Baseball, a 
                Major League Baseball Club, or one or more persons who 
                have a greater than 10-percent ownership interest in a 
                Major League Baseball Club.
            (6) Independent professional baseball club.--The term 
        ``Independent Professional Baseball Club'' means a professional 
        baseball team, including a professional baseball team that is a 
        corporation, limited liability company, or a partnership or 
        operated as a sole proprietorship, that--
                    (A) operates for profit or as a nonprofit 
                organization;
                    (B) is located in the United States; and
                    (C) as of February 29, 2020, was a member of--
                            (i) the American Association of 
                        Professional Baseball;
                            (ii) the Atlantic League of Professional 
                        Baseball;
                            (iii) the Canadian American Association of 
                        Professional Baseball;
                            (iv) the Empire Professional Baseball 
                        League;
                            (v) the Frontier League;
                            (vi) the Pacific Association of 
                        Professional Baseball Clubs;
                            (vii) the Pecos League of Professional 
                        Baseball Clubs;
                            (viii) the United Shore Professional 
                        Baseball League; or
                            (ix) the Western League.
            (7) Minor league baseball club.--The term ``Minor League 
        Baseball Club'' means a professional baseball team, including a 
        professional baseball team that is a corporation, limited 
        liability company, or a partnership or operated as a sole 
        proprietorship, that--
                    (A) operates for profit or as a nonprofit 
                organization;
                    (B) is located in the United States; and
                    (C)(i) as of February 29, 2020, was a member of a 
                league that was a member of the National Association of 
                Professional Baseball Leagues, Inc.; or
                    (ii) has been offered and is operating or has 
                agreed to operate under--
                            (I) a Player Development License granted by 
                        MLB Professional Development Leagues, LLC; or
                            (II) a license granted by Appalachian 
                        League, Inc.
            (8) Payroll costs.--The term ``payroll costs'' has the 
        meaning given the term in section 7(a)(36)(A) of the Small 
        Business Act (15 U.S.C. 636(a)(36)).

SEC. 3. GRANTS FOR CERTAIN MINOR LEAGUE BASEBALL CLUBS.

    (a) In General.--The Administrator shall, subject to the 
availability of appropriations, make covered grants to eligible 
entities in accordance with this section.
    (b) Authority.--The Associate Administrator for the Office of 
Disaster Assistance of the Small Business Administration shall 
coordinate and formulate policies relating to the administration of 
covered grants.
    (c) Certification of Need.--An eligible entity applying for a 
covered grant shall submit a good faith certification that the 
uncertainty of current economic conditions makes necessary the grant to 
support the ongoing operations of the eligible entity.
    (d) Multiple Business Entities.--The Administrator shall treat each 
eligible entity as an independent, non-affiliated entity for the 
purposes of this section.
    (e) Grant Terms.--
            (1) Number of grants.--
                    (A) In general.--Except as provided in subparagraph 
                (B), an eligible entity may receive only 1 covered 
                grant.
                    (B) Supplemental grant.--The Administrator may make 
                a second covered grant to an eligible entity if, as of 
                June 30, 2021, the gross revenues of such eligible 
                entity for calendar year 2021 as of such date are not 
                more than 30 percent of the gross revenues of such 
                eligible entity for the corresponding period of 2019, 
                or, if the gross revenues of the eligible entity were 
                negatively impacted by a natural disaster or weather 
                disruption in 2019, not more than 30 percent of the 
                average gross revenues of the eligible entity during 
                the first 6 months of 2017, 2018, and 2019, due to the 
                COVID-19 pandemic.
            (2) Amount.--
                    (A) In general.--Except as provided in subparagraph 
                (B), a covered grant shall be in an amount equal to the 
                lesser of--
                            (i) the amount equal to 45 percent of the 
                        gross revenues of the eligible entity for 2019, 
                        or, if the gross revenues of the eligible 
                        entity were negatively impacted by a natural 
                        disaster or weather disruption in 2019, equal 
                        to 45 percent of the average annual gross 
                        revenues of the eligible entity over the 3-year 
                        period from 2016 through 2018, which shall 
                        include the gross revenues of all subsidiaries 
                        and other related entities that are 
                        consolidated with the gross revenues of the 
                        eligible entity in a financial statement 
                        prepared in accordance with generally accepted 
                        accounting principles for such eligible entity 
                        for such year; or
                            (ii) $10,000,000.
                    (B) Supplement grant amount.--A covered grant made 
                pursuant to paragraph (1)(B) shall be in an amount 
                equal to 50 percent of the first covered grant received 
                by the eligible entity.
            (3) Grant aggregate maximum.--The total amount of covered 
        grants received by an eligible entity may not exceed 
        $10,000,000.
            (4) Use of funds.--
                    (A) Timing.--
                            (i) Expenses incurred.--
                                    (I) In general.--Except as provided 
                                in subclause (II), amounts received 
                                under a covered grant may only be used 
                                for expenses incurred during the period 
                                beginning on March 1, 2020, and ending 
                                on December 31, 2021.
                                    (II) Extension for supplemental 
                                grants.--If an eligible entity receives 
                                a grant under paragraph (1)(B), amounts 
                                received under a covered grant may be 
                                used for costs incurred during the 
                                period beginning on March 1, 2020, and 
                                ending September 30, 2022.
                            (ii) Expenditure.--
                                    (I) In general.--Except as provided 
                                in subclause (II), an eligible entity 
                                shall return to the Administrator any 
                                amounts received under a covered grant 
                                that are not expended on or before the 
                                date that is 1 year after the date of 
                                disbursement of the covered grant.
                                    (II) Extension for supplemental 
                                grants.--If an eligible entity receives 
                                a grant under paragraph (1)(B), the 
                                eligible entity shall return to the 
                                Administrator any amounts received 
                                under any covered grant that are not 
                                expended on or before the date that is 
                                18 months after the date of 
                                disbursement of the first covered grant 
                                received by the eligible entity.
                    (B) Allowable expenses.--An eligible entity may use 
                amounts received under a covered grant for--
                            (i) payroll costs;
                            (ii) payments on any covered rent 
                        obligation or other obligation to a public 
                        entity from whom the primary venue of the 
                        eligible entity is leased or licensed;
                            (iii) any covered utility payment;
                            (iv) payments of interest or principal due 
                        on any covered mortgage obligation;
                            (v) payments of interest or principal due 
                        on any indebtedness or debt instrument incurred 
                        in the ordinary course of business that is a 
                        liability of the eligible entity and was in 
                        place or incurred prior to February 15, 2020;
                            (vi) covered worker protection 
                        expenditures;
                            (vii) payments made to independent 
                        contractors, as reported on Form 1099-MISC, not 
                        to exceed a total of $100,000 in annual 
                        compensation for any individual employee of an 
                        independent contractor; and
                            (viii) other ordinary and necessary 
                        business expenses, including--
                                    (I) maintenance expenses;
                                    (II) administrative costs, 
                                including fees and licensing costs;
                                    (III) State and local taxes and 
                                fees;
                                    (IV) operating leases in effect as 
                                of February 15, 2020;
                                    (V) payments required for insurance 
                                on any insurance policy;
                                    (VI) settling existing debts with 
                                vendors; and
                                    (VII) advertising, production, 
                                transportation, and capital 
                                expenditures relating to the primary 
                                venue of the eligible entity or events 
                                held at such venue, except that a grant 
                                under this section may not be used 
                                primarily for such expenditures.
                    (C) Prohibited expenses.--An eligible entity may 
                not use amounts received under a grant under this 
                section--
                            (i) to purchase real estate;
                            (ii) for payments of interest or principal 
                        for loans originated after February 15, 2020;
                            (iii) to invest or re-lend funds;
                            (iv) for contributions or expenditures to, 
                        or on behalf of, any political party, party 
                        committee or candidate for elective office; or
                            (v) for any other use as may be reasonably 
                        prohibited by the Administrator.
    (f) Increased Oversight.--The Administrator shall increase 
oversight of eligible entities receiving covered grants, which may 
include the following:
            (1) Documentation.--Additional documentation requirements 
        that are consistent with the eligibility and other requirements 
        under this section, including requiring an eligible entity that 
        receives a grant under this section to retain records that 
        document compliance with the requirements for grants under this 
        section--
                    (A) with respect to employment records, for the 4-
                year period following receipt of the grant; and
                    (B) with respect to other records, for the 3-year 
                period following receipt of the grant.
            (2) Reviews of use.--Reviews of the use of the grant 
        proceeds by an eligible entity to ensure the compliance with 
        requirements established under this section and by the 
        Administrator, including that the Administrator may--
                    (A) review and audit grants under this section; and
                    (B) in the case of fraud of other material 
                noncompliance with respect to a grant under this 
                section--
                            (i) require repayment of misspent funds; or
                            (ii) pursue legal action to collect funds.
    (g) Oversight and Audit Plan.--
            (1) In general.--Not later than 45 days after the date of 
        enactment of this Act, the Administrator shall submit to the 
        Committee on Small Business and Entrepreneurship of the Senate 
        and the Committee on Small Business of the House of 
        Representatives an audit plan that details--
                    (A) the policies and procedures of the 
                Administrator for conducting oversight and audits of 
                covered grants; and
                    (B) the metrics that the Administrator shall use to 
                determine which covered grants will be audited pursuant 
                to subsection (f).
            (2) Report.--Not later than 60 days after the date of 
        enactment of this Act, and each month thereafter until the date 
        that is 1 year after the date on which all amounts appropriated 
        to make covered grants have been expended, the Administrator 
        shall 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 
        oversight and audit activities of the Administrator under this 
        subsection, which shall include--
                    (A) the total number of covered grants approved and 
                disbursed;
                    (B) the total amount of covered grants received by 
                each eligible entity;
                    (C) the number of active investigations and audits 
                of covered grants;
                    (D) the number of completed reviews and audits of 
                covered grants, including a description of any findings 
                of fraud or other material non-compliance; and
                    (E) any substantial changes made to the oversight 
                and audit plan submitted under paragraph (1).
    (h) Tax Treatment of Covered Loans.--
            (1) In general.--For the purposes of the Internal Revenue 
        Code of 1986--
                    (A) no covered grant shall be included in the gross 
                income of the eligible entity that receives such 
                covered grant;
                    (B) 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 subparagraph (A); and
                    (C) in the case of a partnership or S corporation 
                that receives such a covered grant--
                            (i) any amount excluded from income by 
                        reason of subparagraph (A) shall be treated as 
                        tax exempt income for purposes of sections 705 
                        and 1366 of the Internal Revenue Code of 1986; 
                        and
                            (ii) 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 clause (i) for purposes 
                        of section 705 of the Internal Revenue Code of 
                        1986.
            (2) Applicability.--Paragraph (1) shall apply to taxable 
        years ending after the date of enactment of this Act.
    (i) Funding.--Notwithstanding any provision of covered law, from 
any funds appropriated under such a law that have not been obligated as 
of the date of enactment of this Act and are no longer being used to 
carry out the activities under such a law, the remaining funds or 
$550,000,000, whichever is greater, but in any case not more than 
$550,000,000, shall be allocated to the Administrator to carry out this 
section, of which not more than $50,000,000 shall be allocated to 
Independent Professional Baseball Clubs.
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