Bill Text: NY A10551 | 2019-2020 | General Assembly | Introduced
Bill Title: Establishes the state of emergency minority and women owned business enterprises loan and grant program relating to the novel coronavirus (COVID-19).
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-05-28 - referred to governmental operations [A10551 Detail]
Download: New_York-2019-A10551-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 10551 IN ASSEMBLY May 29, 2020 ___________ Introduced by COMMITTEE ON RULES -- (at request of M. of A. Bichotte) -- read once and referred to the Committee on Governmental Operations AN ACT to amend the executive law, in relation to establishing the state of emergency minority and women owned business enterprises loan and grant program relating to novel coronavirus (COVID-19) The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The executive law is amended by adding a new section 29-l 2 to read as follows: 3 § 29-l. State of emergency minority and women owned business enter- 4 prises loan and grant program. 1. Definitions. As used in this section, 5 the following terms shall have the following meanings: 6 (a) "Affected business or organization" means and includes both minor- 7 ity and women owned business enterprises operating and located within 8 this state at the commencement of the state of emergency; 9 (b) "Bank" means a bank as such term is defined in subdivision one of 10 section two of the banking law; 11 (c) "Credit union" means a credit union as such term is defined in 12 subdivision nine of section two of the banking law; 13 (d) "Corporation" means the urban development corporation in cooper- 14 ation with the empire state development corporation; 15 (e) "Department" means the department of financial services; 16 (f) "Eligible financial institution" means a bank or credit union that 17 has a physical presence in this state and is in good standing; 18 (g) "Grace period" means the ninety-day period after a state of emer- 19 gency is over; and 20 (h) "State of emergency" means the period declared by executive order 21 202 on March 7, 2020 relating to the novel coronavirus (COVID-19). 22 2. State of emergency minority and women owned business enterprises 23 loan and grant program. (a) The corporation shall administer a state of 24 emergency minority and women owned business enterprises loan and grant 25 program to guarantee the repayment of loans made by an eligible finan- 26 cial institution to an eligible affected business pursuant to this 27 section. Subject to the cessation of new claim approvals under para- EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD15979-04-0A. 10551 2 1 graph (d) of subdivision six of this section, the corporation shall 2 submit all approved claims to the comptroller, who shall pay from the 3 general fund any and all claims submitted by the corporation. 4 (b) Any bank or credit union may apply to the department to partic- 5 ipate in the loan guarantee program. Not later than one business day 6 after receiving the application, the department shall determine whether 7 the financial institution is an eligible financial institution and imme- 8 diately notify the bank or credit union of such determination. Any 9 eligible financial institution may make loans to affected businesses in 10 accordance with this section. 11 (c) Each eligible financial institution that makes a loan pursuant to 12 this section, shall notify the department and corporation in writing not 13 later than one business day after making the loan, specifying such 14 information about the borrower as the department and corporation may 15 request. 16 3. Loan and grant program. An eligible financial institution or corpo- 17 ration may make a loan or grant to an affected business, in the follow- 18 ing manner: 19 (a) A minority and women owned business enterprise with fewer than one 20 hundred employees who have seen sales decreases of twenty-five percent 21 or more will be eligible for zero interest loans of up to seventy-five 22 thousand dollars to help mitigate losses in profit; or 23 (b) A minority and women owned business enterprise with fewer than 24 five employees will be eligible for a grant to cover forty percent of 25 payroll costs for two months up to ten thousand dollars to help retain 26 employees. 27 4. Loan and grant eligibility. An eligible financial institution or 28 corporation may make a loan or grant to an affected business, provided: 29 (a) The affected business has provided to the eligible financial 30 institution or corporation proof satisfactory to such institution or 31 corporation that such affected business is an affected business located 32 within the state of New York. 33 (b) The amount of the loan shall not exceed seventy-five thousand 34 dollars and the amount of the payroll cost assistance grant shall not 35 exceed ten thousand dollars. 36 (c) The loan is made in accordance with the eligible financial insti- 37 tution's and the corporation's underwriting policy and standards, 38 provided further that the affected business's creditworthiness shall not 39 be a factor used for the purposes of determining eligibility. 40 (d) The loan agreement shall not (i) require repayment during the 41 grace period, or (ii) charge interest on the principal amount before or 42 during the grace period or for one hundred eighty days after the grace 43 period, provided after such one hundred eighty-day period, the eligible 44 financial institution or corporation may charge interest or fees in 45 accordance with such financial institution's or corporation's lending 46 policy and the terms of the underlying loan agreement. 47 (e) The loan agreement shall require that the affected business repay 48 the loan in full not later than one hundred eighty days after the end of 49 the grace period by making at least three, and no more than six, equal 50 installment payments. The loan agreement shall not contain a fee or 51 penalty for the prepayment or early payment of the loan. 52 (f) The eligible financial institution or corporation shall offer 53 credit counseling services or refer such affected business to nonprofit 54 credit counselors. 55 5. Additional loans. An affected business who has received a loan 56 pursuant to this section may apply to the same eligible financial insti-A. 10551 3 1 tution or corporation for an additional loan for each thirty-day period 2 such minority or women owned business enterprise remains an affected 3 business, provided no affected business may receive more than three 4 loans under the program. Each additional loan shall be made in accord- 5 ance with subdivision four of this section. 6 6. Collection of loans. (a) On and after one hundred eighty days from 7 the end of the grace period, an eligible financial institution or corpo- 8 ration that has made a good-faith effort to collect the outstanding 9 principal from a loan issued pursuant to this section may make a claim 10 to the department for recovery of an amount equal to the outstanding 11 principal for such loan. Prior to the department's approving and submit- 12 ting a claim to the comptroller, such eligible financial institution or 13 corporation shall demonstrate to the satisfaction of the department that 14 the eligible financial institution or corporation has made a good-faith 15 effort to collect the outstanding principal from the affected business 16 in accordance with such financial institution's or corporation's loan 17 servicing and collection policies. Upon payment of a claim, the loan 18 shall be assigned to the state, and the department shall have the right 19 to continue collection efforts on the loan. 20 (b) The department shall maintain records in the regular course of 21 administration of the loan guarantee program, including a record of 22 loans issued and of payments made to honor loan guarantees issued under 23 this section. The department shall regularly review such records to 24 determine total loans issued and identify duplicative applications. 25 (c) The department may terminate any loan guarantee if the eligible 26 financial institution misrepresents any information pertaining to the 27 guarantee or fails to comply with any requirements of this section in 28 connection with the guarantee of the underlying loan. 29 (d) If the amounts expended to honor loan guarantees under the program 30 exceed ten percent of total loans issued, the department shall imme- 31 diately cease to approve claims and shall notify the comptroller and 32 each eligible financial institution and corporation of the total amount 33 of payments made and that the department has ceased honoring loan guar- 34 antees. 35 (e) Any interest deferred or not charged related to a loan issued 36 pursuant to this section shall be exempt from all state taxes that may 37 be applicable to such interest amounts as they relate to an affected 38 business. Eligible financial institutions and the corporation shall 39 disclose to affected business borrowers in the signed affidavit or loan 40 documents that there may be federal tax consequences to the program 41 loans and grants. 42 (f) No new loan applications shall be submitted under the program 43 after the state of emergency ends. The program shall expire upon the 44 repayment of all loans made under the program and, for all loans in 45 default, the repayment of claims made under the program, or the cessa- 46 tion of new claim approvals under paragraph (d) of this subdivision. 47 § 2. This act shall take effect immediately.
