Section 1 Short title
This Act may be cited as the “COVID–19 Recovery by Enhancing Loan, Investment, and Education Funds for Small Businesses Act of 2020” or the “COVID–19 RELIEF for Small Businesses Act of 2020”.
COVID–19 Recovery by Enhancing Loan, Investment, and Education Funds for Small Businesses Act of 2020
A BILL
To provide assistance to small businesses impacted by COVID–19, and for other purposes.
Sec. 2 Findings
Congress finds that—
the 30,700,000 small businesses in the United States employ more than 47 percent of the private workforce;
small business supply chain firms account for almost 1,000,000 small businesses and about 10,000,000 jobs, playing a key role in the United States supply chain by providing goods and services to large corporations and Federal, State, and local government agencies;
the economic disruptions related to COVID–19 in the United States are unlike any that we have seen in the past couple of decades;
as a result of the global pandemic caused by COVID–19, many small businesses in the United States have suffered because—
their supply chains have been disrupted;
their establishments are experiencing decreased foot traffic and sales; and
their employees who have contracted the virus will need paid time off to avoid infecting others;
small business owners affected by COVID–19 are finding it difficult or impossible to—
make loan payments on existing debts;
pay their employees;
pay their vendors;
purchase materials, supplies, or inventory;
pay their rent, mortgage, or other operating expenses; or
secure financing for their business;
a significant number of small businesses will not qualify for loans under the existing disaster loan program of the Administration;
the absence of resources for vulnerable small businesses that cannot access programs of the Administration will undoubtedly leave many of them to fail; and
a new source of Federal support is necessary to help businesses that have no other place to turn.
Sec. 3 Purpose
The purpose of this Act is to mitigate economic injury to small business concerns and stabilize the United States economy by strengthening the loan, investment, procurement assistance, and management education programs of the Administration and by establishing a new grant program at the Administration for the small business concerns hardest hit by COVID–19.
Sec. 4 Definitions
In this Act—
the term Administration and Administrator mean the Small Business Administration and the Administrator thereof; and
the term small business concern has the meaning given the term in section 3 of the Small Business Act (15 U.S.C. 632).
Sec. 5 Economic injury grants for small business concerns
Purpose— The purpose of this section is to—
make grants available to small business concerns affected by COVID–19 that lack access to credit through the existing disaster loan program of the Administration; and
ensure resources are available for vulnerable small business concerns that are unlikely to survive without a new source of Federal support.
Definition of eligible small business concern— The term eligible small business concern means a small business concern that—
meets the applicable size standard established under section 3 of the Small Business Act (15 U.S.C. 632);
has not less than 2 employees and not more than 50 employees;
due to the effects of COVID–19, suffered—
a loss of revenue in 1 month greater than 50 percent as compared to the same month in the previous year; or
in the case of a business concern that has been in operation for not less than 4 months, a loss of revenue in 1 month greater than 50 percent as compared to the average of the 3 previous months;
can demonstrate an inability to pay obligations or stay up-to-date on accounts or payroll; and
submitted an application for a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) and was denied assistance under such section because the small business concern is unable to repay the loan.
Grants— The Administration shall provide assistance to eligible small business concerns, private nonprofit organizations, and small agricultural cooperatives that have suffered a substantial economic injury, directly or indirectly, as a result of COVID–19.
Awarding of grants and updates— The Administration shall—
award grants under this section as expeditiously as possible; and
on a monthly basis until the date on which the authority under this section terminates, update the Committee on Small Business and Entrepreneurship and the Committee on Appropriations of the Senate and the Committee on Small Business and the Committee on Appropriations of the House of Representatives on—
the number of grants awarded under this section; and
the geographic distribution of the grants by State and county.
Amount of grant—
In general— Except as provided in paragraph (2), a grant provided under this section shall be in an amount that is not more than $50,000.
Increased grant amount— The Administrator may make a grant under this section of not more than $100,000 if the Administrator demonstrates that doing so is necessary to assist eligible small business concerns, private nonprofit organizations, and small agricultural cooperatives that the Administrator determines are vital to their local economies.
Single award— No eligible small business concern, private nonprofit organization, or small agricultural cooperative may receive or directly benefit from more than 1 award made under this section.
Use of funds— An eligible small business concern, private nonprofit organization, or small agricultural cooperative that receives a grant under this section may use the grant funds to address the effects of COVID–19 through any of the permissible uses of funds under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)).
Application—
In general— An eligible small business concern, private nonprofit organization, or small agricultural cooperative desiring a grant under this section shall submit to the Administration an application at such time, in such manner, and containing such information as the Administration may require.
Priority— The Administrator shall—
establish selection criteria to ensure that eligible small business concerns, private nonprofit organizations, and small agricultural cooperatives that are hardest hit by the effects of COVID–19 receive priority in the event that funding is not sufficient to provide grants to all that submit applications under paragraph (1);
identify industry sectors for prioritization that have suffered uniquely and disproportionately from COVID–19; and
give priority to an applicant proposing to use grant funds for—
providing paid sick leave to employees unable to work due to the direct effects of COVID–19;
maintaining payroll to retain employees during business disruptions or substantial slowdowns;
making rent and mortgage payments; or
repaying obligations that cannot be met due to revenue losses.
Procedures— The Administrator shall establish procedures to discourage and prevent waste, fraud, and abuse by applicants and recipients of grants under this section.
Penalties for fraud and misapplication of funds— Any applicant or recipient of a grant provided under this section shall be subject to all applicable provisions of Federal law, including section 1001 of title 18, United States Code, and the provisions of section 123.9 of title 13, Code of Federal Regulations, or any successor regulation, relating to the misapplication of loan proceeds shall apply to grants provided under this section to the same extent as if those grants were loans provided under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)).
Inspector General audit— Not later than 180 days after the date on which the Administrator begins to provide assistance under this section, the Inspector General of the Administration shall—
conduct an audit of grants made under this section, which shall identify any discrepancies or irregularities in the grants; and
submit to the Committee on Small Business and Entrepreneurship and the Committee on Appropriations of the Senate and the Committee on Small Business and the Committee on Appropriations of the House of Representatives a copy of the audit conducted under paragraph (1).
Authorization of appropriations— There is authorized to be appropriated to the Administration $10,000,000,000 to carry out this section.
Termination— The authority to carry out grants under this section shall terminate on September 30, 2021.
Sec. 6 Economic injury disaster loans
Purpose— The purpose of this section is to ensure that owners of small business concerns have access to additional necessary funding to cover continuity-of-operation and risk mitigation improvements.
Definition of eligible small business concern— In this section, the term eligible small business concern means a small business concern that—
meets the applicable size standard established under section 3 of the Small Business Act (15 U.S.C. 632); and
is receiving assistance under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) related to COVID–19.
Additional amounts— The Administrator may increase by 20 percent the amount received by an eligible small business concern under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) to cover continuity-of-operation and risk mitigation improvements, including telework capability, offsite record keeping, redundancy, the administrative costs of establishing paid sick leave, and presenteeism prevention.
Expediting small economic injury disaster loans— With respect to a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19, if the loan does not exceed $350,000, the Administration may—
approve an applicant based solely on the credit score of the applicant, and in this circumstance, shall not require an applicant to submit a tax return or a tax return transcript; or
use other appropriate methods to determine an applicant’s ability to repay.
Emergencies involving Federal primary responsibility qualifying for small business administration assistance— Section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) is amended—
in subparagraph (A), by striking “or” at the end;
in subparagraph (B), by striking “or” at the end;
in subparagraph (C), by striking “or” at the end;
by redesignating subparagraph (D) as subparagraph (E);
by inserting after subparagraph (C) the following:
“(D) an emergency involving Federal primary responsibility determined to exist by the President under the section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5191(b)); or”
in subparagraph (E), as so redesignated—
by striking “or (C)” and inserting “(C), or (D)”;
by striking “disaster declaration” each place it appears and inserting “disaster or emergency declaration”;
by striking “disaster has occurred” and inserting “disaster or emergency has occurred”;
by striking “such disaster” and inserting “such disaster or emergency”; and
by striking “disaster stricken” and inserting “disaster- or emergency-stricken”; and
in the flush matter following subparagraph (E), by striking the period at the end and inserting the following: “: Provided further, That for purposes of subparagraph (D), the Administrator shall deem that such an emergency affects each State or subdivision thereof (including counties), and that each State or subdivision has sufficient economic damage to small business concerns to qualify for assistance under this paragraph and the Administrator shall accept applications for such assistance immediately.”.
Sec. 7 Waivers on principal and interest for 7(a), 504, and microloans
Definition of covered loan— In this section, the term covered loan means a loan that is—
guaranteed by the Administration under—
section 7(a) of the Small Business Act (15 U.S.C. 636(a)), including a loan made under the Community Advantage Pilot Program of the Administration, the Export Express Program under paragraph (34) of such section 7(a), the Export Working Capital Program under paragraph (14) of such section 7(a), or the International Trade Loan Program under paragraph (16) of such section 7(a); or
title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.); or
made by an intermediary to a small business concern (as defined in section 3 of the Small Business Act (15 U.S.C. 632)) using loans or grants received under section 7(m) of the Small Business Act (15 U.S.C. 636(m)).
Sense of Congress— It is the sense of Congress that—
all borrowers are adversely affected by COVID–19;
relief payments by the Administration are appropriate for all borrowers; and
the Administration should encourage lenders to extend the maturity of covered loans so as to avoid any increase in debt payments by borrowers at the end of the deferral period.
Interest payments—
In general— The Administrator shall pay the principal, interest, and any associated fees that are owed on a covered loan—
with respect to a covered loan made before the date of enactment of this Act, for the 6-month period beginning with the next payment due on the covered loan; and
with respect to a covered loan made during the period beginning on the date of enactment of this Act and ending on the date that is 6 months after such date of enactment, for the 6-month period beginning with the first payment due on the covered loan.
Timing of payment— The Administrator shall begin making payments under paragraph (1) on a covered loan not later than 30 days after the date on which the first such payment is due.
Application of payment— Any payment made by the Administrator under paragraph (1) shall be applied to the covered loan such that the borrower is relieved of the obligation to pay that amount.
Other requirements— The Administrator shall—
communicate and coordinate with the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and State bank regulators to encourage those entities to not require lenders to increase their reserves on account of receiving payments made by the Administrator under subsection (c);
waive statutory limits on covered loan durations for any lender that offers a deferral and extends the maturity of covered loan products during the 1-year period following the date of enactment of this Act; and
extend site visit requirements to 60 days for covered loan defaults and 90 days for nonpayment to provide more time because of the potential of higher volumes, travel restrictions, and the inability to access some properties during the COVID–19 pandemic.
Rule of construction— Nothing in this section may be construed to limit the authority of the Administrator to make payments pursuant to subsection (c) with respect to a covered loan solely because the covered loan has been sold in the secondary market.
Authorization of appropriations— There is authorized to be appropriated to the Administrator $16,800,000,000 to carry out this section.
Sec. 8 Temporary fee reductions
Purpose— The purpose of the section is to waive borrower and lender fees on loans, including a permanent fix to waive fees for veterans and their spouses.
Administrative fee waiver—
In general— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, and to the extent that the cost of such elimination or reduction of fees is offset by appropriations, with respect to each loan guaranteed under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) (including a recipient of assistance under the Community Advantage Pilot Program of the Administration) for which an application is approved or pending approval on or after the date of enactment of this Act, the Administrator shall—
in lieu of the fee otherwise applicable under section 7(a)(23)(A) of the Small Business Act (15 U.S.C. 636(a)(23)(A)), collect no fee or reduce fees to the maximum extent possible; and
in lieu of the fee otherwise applicable under section 7(a)(18)(A) of the Small Business Act (15 U.S.C. 636(a)(18)(A)), collect no fee or reduce fees to the maximum extent possible.
Application of fee eliminations or reductions— To the extent that amounts are made available to the Administrator for the purpose of fee eliminations or reductions under paragraph (1), the Administrator shall—
first use any amounts provided to eliminate or reduce fees paid by small business borrowers under clauses (i) through (iii) of section 7(a)(18)(A) of the Small Business Act (15 U.S.C. 636(a)(18)(A)), to the maximum extent possible; and
then use any amounts provided to eliminate or reduce fees under 7(a)(23)(A) of the Small Business Act (15 U.S.C. 636(a)(23)(A)).
Exception to guarantee fee waiver for veterans— Section 7(a)(31)(G) of the Small Business Act (15 U.S.C. 636(a)(31)(G)) is amended—
by striking clause (ii); and
by redesignating clause (iii) as clause (ii).
Temporary fee elimination for the 504 loan program—
In general— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, and to the extent the cost of such elimination in fees is offset by appropriations, with respect to each project or loan guaranteed by the Administrator pursuant to title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) for which an application is approved or pending approval on or after the date of enactment of this Act—
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)), collect no fee; and
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.
Reimbursement for waived fees—
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 pursuant to paragraph (1)(B).
Amount— The payment 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 pursuant to paragraph (1)(B).
Sec. 9 Guarantee amounts
Purpose— The purpose of this section is to increase loan guarantee amounts in order to mitigate risk for lenders and keep credit flowing, including an emphasis on underserved borrowers.
7(a) loan guarantees—
In general— Section 7(a)(2)(A) of the Small Business Act (15 U.S.C. 636(a)(2)(A)) is amended by striking “), such participation by the Administration shall be equal to” and all that follows through the period at the end and inserting “or the Community Advantage Pilot Program of the Administration), such participation by the Administration shall be equal to 90 percent of the balance of the financing outstanding at the time of disbursement of the loan.”.
Termination— Effective September 30, 2021, section 7(a)(2)(A) of the Small Business Act (15 U.S.C. 636(a)(2)(A)), as amended by paragraph (1), is amended to read as follows:
“(A) In general—Except as provided in subparagraphs (B), (D), and (E), in an agreement to participate in a loan on a deferred basis under this subsection (including a loan made under the Preferred Lenders Program), such participation by the Administration shall be equal to—
“(i) 75 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance exceeds $150,000; or
“(ii) 85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if such balance is less than or equal to $150,000.”
Express loan guarantee amounts and loan size increases—
Temporary modification— Section 7(a)(31) of the Small Business Act (15 U.S.C. 636(a)(31)) is amended—
in subparagraph (A)(iv), by striking “with a guaranty rate of not more than 50 percent.” and inserting the following:
“(I) for a loan in an amount less than or equal to $350,000, of not more than 90 percent; and
“(II) for a loan in an amount greater than $350,000, of not more than 75 percent.”
in subparagraph (D), by striking “$350,000” and inserting “$1,000,000”.
Increase in availability— Effective September 30, 2021, section 7(a)(31) of the Small Business Act (15 U.S.C. 636(a)(31)), as amended by paragraph (1), is amended—
in subparagraph (A)(iv), by striking “guarantee rate” and all that follows through the period at the end and inserting ‘‘guarantee rate of not more than 50 percent.’’; and
in subparagraph (D), by striking “$1,000,000” and inserting “$500,000”.
Sec. 10 Maximum loan amount and program levels for 7(a) loans
Purpose— The purpose of this section is to temporarily increase the maximum loan size in order to expand the reach of this long-term capital.
Maximum loan amount— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, with respect to any loan guaranteed under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) for which an application is approved or pending approval on or after the date of enactment of this Act, the maximum loan amount shall be $10,000,000.
Program levels— During each of fiscal years 2020 and 2021, commitments for general business loans authorized under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) shall not exceed $80,000,000,000.
Sec. 11 Maximum loan amount for 504 loans
Purpose— The purpose of this section is to make refinancing of fixed assets more flexible for small business concerns seeking immediate financing and relief from the COVID–19 crisis.
Temporary increase— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, with respect to each project or loan guaranteed by the Administrator pursuant to title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) for which an application is approved or pending approval on or after the date of enactment of this Act, the maximum loan amount shall be $10,000,000.
Permanent increase for small manufacturers— Effective on October 1, 2021, section 502(2)(A)(iii) of the Small Business Investment Act of 1958 (15 U.S.C. 696(2)(A)(iii)) is amended by striking “$5,500,000” and inserting “$10,000,000”.
Sec. 12 Leveraging 504 loans for refinancing and community development lending
Purpose— The purpose of this section is to make refinancing loans under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) more flexible so that lenders can more effectively and efficiently respond to the needs of small business concerns seeking immediate financing and relief from the economic impacts of COVID–19.
Low-Interest refinancing under the local development business loan program—
In general— Section 502(7) of the Small Business Investment Act of 1958 (15 U.S.C. 696(7)) is amended by adding at the end the following:
“(C) Refinancing not involving expansions
“(i) Definitions—In this subparagraph—
“(I) the term borrower means a small business concern that submits an application to a development company for financing under this subparagraph;
“(II) the term eligible fixed asset means tangible property relating to which the Administrator may provide financing under this section; and
“(III) the term qualified debt means indebtedness—
“(aa) that—
“(AA) was incurred not less than 2 years before the date of the application for assistance under this subparagraph;
“(BB) is a commercial loan;
“(CC) the proceeds of which were used to acquire an eligible fixed asset;
“(DD) was incurred for the benefit of the small business concern; and
“(EE) is collateralized by eligible fixed assets; and
“(bb) for which the borrower has been current on all payments for not less than 1 year before the date of the application.
“(ii) Authority—A project that does not involve the expansion of a small business concern may include the refinancing of qualified debt if—
“(I) the amount of the financing is not more than 90 percent of the value of the collateral for the financing, except that, if the appraised value of the eligible fixed assets serving as collateral for the financing is less than the amount equal to 125 percent of the amount of the financing, the borrower may provide additional cash or other collateral to eliminate any deficiency;
“(II) the borrower has been in operation for all of the 2-year period ending on the date of the loan;
“(III) the financing will provide a substantial benefit to the borrower when prepayment penalties, financing fees, and other financing costs are accounted for; and
“(IV) for a financing for which the Administrator determines there will be an additional cost attributable to the refinancing of the qualified debt, the borrower agrees to pay a fee in an amount equal to the anticipated additional cost.
“(iii) Financing for business expenses
“(I) Financing for business expenses—The Administrator may provide financing to a borrower that receives financing that includes a refinancing of qualified debt under clause (ii), in addition to the refinancing under clause (ii), to be used solely for the payment of business expenses.
“(II) Application for financing—An application for financing under subclause (I) shall include—
“(aa) a specific description of the expenses for which the additional financing is requested; and
“(bb) an itemization of the amount of each expense.
“(III) Condition on additional financing—A borrower may not use any part of the financing under this clause for non-business purposes.
“(iv) Loans based on jobs
“(I) Job creation and retention goals
“(aa) In general—The Administrator may provide financing under this subparagraph for a borrower that meets the job creation goals under subsection (d) or (e) of section 501.
“(bb) Alternate job retention goal—The Administrator may provide financing under this subparagraph to a borrower that does not meet the goals described in item (aa) in an amount that is not more than the product obtained by multiplying the number of employees of the borrower by $75,000.
“(II) Number of employees—For purposes of subclause (I), the number of employees of a borrower is equal to the sum of—
“(aa) the number of full-time employees of the borrower on the date on which the borrower applies for a loan under this subparagraph; and
“(bb) the product obtained by multiplying—
“(AA) the number of part-time employees of the borrower on the date on which the borrower applies for a loan under this subparagraph; by
“(BB) the quotient obtained by dividing the average number of hours each part time employee of the borrower works each week by 40.
“(v) Nondelegation—Notwithstanding section 508(e), the Administrator may not permit a premier certified lender to approve or disapprove an application for assistance under this subparagraph.
“(vi) Total amount of loans—The Administrator may provide not more than a total of $7,500,000,000 of financing under this subparagraph for each fiscal year.”
Conforming amendment— Section 521 of division E of the Consolidated Appropriations Act, 2016 (15 U.S.C. 696 note) is repealed.
Intent of Congress regarding refinancing existing business debt— It is the intent of Congress that the refinancing of existing business debt is an authorized use of a financing under the program under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.).
504 debt refinance with expansion— Section 502(7)(B) of the Small Business Investment Act of 1958 (15 U.S.C. 696(7)(B)) is amended, in the matter preceding clause (i), by striking “50” and inserting “100”.
Sec. 13 Recovery assistance for microbusinesses
Purpose— The purpose of this section is to allow lenders to deploy more capital, give borrowers more time to repay, increase rural lending, and cut technical assistance red tape.
Loans to intermediaries—
in paragraph (3)(C)—
by striking “and $6,000,000” and inserting “$10,000,000, in the aggregate,”; and
by inserting before the period at the end the following: “, and $4,500,000 in any of those remaining years”;
in paragraph (4)—
in subparagraph (A), by striking “subparagraph (C)” each place that term appears and inserting “subparagraphs (C) and (G)”;
in subparagraph (C)(i)—
by striking “subparagraph (A)” and inserting “subparagraphs (A) and (G)”; and
in subclause (II)—
by striking “has a portfolio” and inserting
“(aa) a portfolio”
in item (aa), by striking the period at the end and inserting “; or”; and
by adding at the end the following:
“(bb) a portfolio of loans made under this subsection of which not less than 25 percent is serving rural areas during the period of the intermediary's participation in the program.”
by adding at the end the following:
“(G) Grant amounts based on appropriations—In any fiscal year in which the amount appropriated to make grants under subparagraph (A) is sufficient to provide to each intermediary that receives a loan under paragraph (1)(B)(i) a grant of not less than 25 percent of the total outstanding balance of loans made to the intermediary under this subsection, the Administration shall make a grant under subparagraph (A) to each intermediary of not less than 25 percent and not more than 30 percent of that total outstanding balance for the intermediary.”
by striking paragraph (7) and inserting the following:
“(7) Program funding for microloans—Under the program authorized by this subsection, the Administration may fund, on a competitive basis, not more than 300 intermediaries.”
Amendment in 2021— Effective on October 1, 2021, section 7(m)(3)(C) of the Small Business Act (15 U.S.C. 636(m)(3)(C)) is amended—
by striking “$10,000,000” and by inserting “$7,000,000”; and
by striking “$4,500,000” and inserting “$3,000,000”.
Temporary waiver of technical assistance grants matching requirements and flexibility on pre- and post-Loan assistance— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, the Administration shall waive—
the requirement to contribute non-Federal funds under section 7(m)(4)(B) of the Small Business Act (15 U.S.C. 636(m)(4)(B)); and
the limitation on amounts allowed to be expended to provide information and technical assistance under clause (i) of section 7(m)(4)(E) of the Small Business Act (15 U.S.C. 636(m)(4)(E)) and enter into third-party contracts to provide technical assistance under clause (ii) of such section 7(m)(4)(E).
Temporary duration of loans to borrowers—
In general— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, the duration of a loan made by an eligible intermediary under section 7(m) of the Small Business Act (15 U.S.C. 636(m))—
to an existing borrower may be extended to not more than 8 years; and
to a new borrower may be not more than 8 years.
Reversion— On and after October 1, 2021, the duration of a loan made by an eligible intermediary to a borrower under section 7(m) of the Small Business Act (15 U.S.C. 636(m)) shall be 7 years or such other amount established by the Administrator.
Program levels— Section 20 of the Small Business Act (15 U.S.C. 631 note) is amended by adding at the end the following:
“(h) Microloan program—For each of fiscal years 2021 through 2025, the Administration is authorized to make—
“(1) $80,000,000 in technical assistance grants, as provided in section 7(m); and
“(2) $110,000,000 in direct loans, as provided in section 7(m).”
Authorization of appropriations— In addition to amounts provided under the Consolidated Appropriations Act, 2020 (Public Law 116–93) for the program established under section 7(m) of the Small Business Act (15 U.S.C. 636(m)), there is authorized to be appropriated for fiscal year 2020, to remain available until expended—
$50,000,000 to provide technical assistance grants under such section 7(m); and
$7,000,000 to provide direct loans under such section 7(m).
Sec. 14 Electronic submissions for the small business investment company program
Purpose— The purpose of this section is to quickly provide capital to struggling small business concerns by allowing electronic signatures to expedite the approval process of the Administration for additional investment funds, especially as staff telework.
Electronic submissions— Unless otherwise prohibited by law or regulation, the Administration shall permit any document submitted under section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 662) or pursuant to a regulation carrying out title V of such Act (15 U.S.C. 695 et seq.) to be submitted electronically, including by permitting an electronic signature for any signature that is required on such a document.
Rule of construction— Nothing in this section shall be construed to preempt, supersede, or otherwise prohibit private sector requirements, covenants, customary practices, obligations, or legal prohibitions against electronic signatures.
Sec. 15 Business stabilization direct loan program
Definition of eligible borrower— In this section, the term eligible borrower means a small business concern that is located in the United States (as defined in section 4(a) of the Small Business Act (15 U.S.C. 633(a))) with a confirmed or presumed positive case of COVID–19.
Program— The Administrator shall carry out a program to make loans directly to eligible borrowers.
Use of funds— In addition to the use of loan proceeds permitted under section 7(a) of the Small Business Act (15 U.S.C. 636(a)), loans made under this section may be used for the following purposes:
To make periodic payments of principal and interest, for a period not to exceed 12 months, on a loan or a loan guarantee made to an eligible borrower that meets the eligibility standards of such section 7(a).
To provide benefits to employees of the eligible borrower, including group life insurance, disability insurance, sick leave, annual leave, educational benefits, paid family leave, or retirement benefits, including a pension plan or individual retirement account.
To pay wages to employees of the eligible borrower, and related State and Federal payroll taxes, except that loan proceeds may not be used to pay amounts under a garnishment order issued by an agency of a State or Federal Government.
To provide technology, hardware, or software for a shift to telework or remote work for employees of the eligible borrower to enable continuity of operations.
To pay rent or utilities due or owed on any place of business of the eligible borrower.
To refinance an existing debt, including interest, in an amount not to exceed 50 percent of the amount of the debt.
To provide floor plan financing or other revolving line of credit.
To pay past-due Federal, State, or local payroll taxes, sales taxes, or other similar taxes that are required to be collected by the eligible borrower and held in trust on behalf of a Federal, State, or local government entity.
To provide employees and patrons of the eligible borrower with the necessary items specified by any public health authority to mitigate the spread of COVID–19.
Loan terms—
Amount— Loans made under this section may not exceed $2,500,000.
Disbursement— Not less than 10 percent, but not more than 20 percent, of the proceeds of a loan made under this section shall be disbursed not later than 5 calendar days after a loan is approved under this section.
Term— Loans made under this section shall be for a term of 10 years, and an eligible borrower shall not be required to repay such loan during the 12-month period beginning on the date of disbursement of the loan.
Interest; fees— The Administrator may not charge any interest or fees for a loan made under this section.
Collateral— The Administrator—
shall not decline to make a loan under this section to an otherwise eligible borrower due solely to inadequate collateral; and
shall accept any available collateral, including subordinated liens, to secure a loan made under this section.
Forgiveness— If an eligible borrower that receives loan proceeds under this section demonstrates to the Administrator that the number of employees of the eligible borrower on December 31, 2021, is greater than or equal to the number of employees of the eligible borrower on December 31, 2019, the Administrator shall forgive not more than 50 percent of the outstanding principal on such loan.
Sunset—
In general— Except as provided in paragraph (2), the Administrator may not make a loan under this section after September 30, 2022.
Extension— The Administrator may extend authority to make loans under this section by an additional 6 months by notifying Congress, in writing, within 10 calendar days before any extension.
Emergency rulemaking authority— In issuing rules to carry out this section under section 25, the Administrator may issue rules to establish a secondary market for loans made under this section.
Authorization of appropriations— There is authorized to be appropriated to the Administrator of the Small Business Administration such sums as may be necessary to pay for the cost (as defined in section 502 of the Congressional Budget Act of 1974 (2 U.S.C. 661a)) of making $100,000,000,000 in direct loans under this section.
Sec. 16 State Trade Expansion Program
The Administrator may use amounts appropriated to carry out the State Trade Expansion Program established under section 22(l) of the Small Business Act (15 U.S.C. 649(l)) for fiscal years 2018 and 2019 that remain unobligated or unexpended to carry out the State Trade Expansion Program through the end of fiscal year 2021.
Sec. 17 Contracting and entrepreneurial development assistance
Purpose— The purpose of this section is to provide—
flexibility to small business Federal suppliers and to the Federal Government to more quickly award contracting dollars to small business concerns in times of economic uncertainty and downturn related to COVID–19; and
additional funds to resource partners of the Administration, such as small business development centers, women’s business centers, and SCORE to conduct outreach to small business concerns affected by COVID–19, including by increasing their virtual outreach capacity.
Definitions— In this section—
the term contracting officer has the meaning given the term in section 36(e) of the Small Business Act (15 U.S.C. 657f(e));
the term covered entity means a small business concern or nonprofit organization—
that is a party to a contract with a Federal agency; and
for which the contractor performance is adversely impacted as a result of COVID–19;
the term economically disadvantaged women-owned small business has the meaning given the term in section 127.102 of title 13, Code of Federal Regulations, or any succcessor regulation;
the term HUBZone small business concern has the meaning given the term in section 31(b) of the Small Business Act (15 U.S.C. 657a(b));
the term SCORE means the Service Corps of Retired Executives program established under section 8(b)(1)(B) of the Small Business Act (15 U.S.C. 637(b)(1)(B));
the term small business concern owned and controlled by service-disabled veterans has the meaning given the term in section 3(q) of the Small Business Act (15 U.S.C. 632(q));
the term small business concern owned and controlled by women has the meaning given the term in section 8(m) of the Small Business Act (15 U.S.C. 637(m));
the term small business development center has the meaning given the term in section 3(t) of the Small Business Act (15 U.S.C. 632(t)); and
the term women’s business center means a women’s business center described in section 29 of the Small Business Act (15 U.S.C. 656).
Promotion of small business contracting—
Small business contracting relief— Notwithstanding any other provision of law or regulation, during the period beginning on the date of enactment of this Act and ending on September 30, 2021, the head of the Federal agency with which a covered entity has a contract shall provide the covered entity with the greater of—
30 additional days to carry out the responsibilities of the covered entity under the contract; or
an additional amount of time to carry out the responsibilities of the covered entity under the contract that the head of the Federal agency determines to be appropriate after taking into consideration the severity of the adverse impact experienced by the covered entity.
Payment continuation— If the performance of all or any part of the work of a Federal goods or services contract with a contractor that is a small business concern or a nonprofit organization in force and effect during the period beginning on the date of enactment of this Act and ending on September 30, 2021, is unavoidably delayed or interrupted by the inability of the employees of the small business concern or nonprofit organization, as applicable, to access Government facilities, systems, or other Government-provided resources due to restrictions related to COVID–19 that have been imposed by any authority or due to orders or instructions issued by the contracting agency in response to COVID–19—
the Government shall pay the small business concern or nonprofit organization, as applicable, upon the submission of the documentation required by the contract and according to the terms specified in the contract, the prices stipulated in the contract for goods or services as if the small business concern or nonprofit organization, as applicable, had rendered and the Government accepted the goods or services; and
contractor delivery schedules shall be revised and the small business concern or nonprofit organization, as applicable, shall be eligible for equitable adjustments based on the revised schedules.
Temporary sole-source award parity among contracting programs— Notwithstanding any other provision of law or regulation, during the period beginning on the date of enactment of this Act and ending on September 30, 2021, with respect to a small business concern owned and controlled by women, an economically disadvantaged women-owned small business, a HUBZone small business concern, or a small business concern owned and controlled by service-disabled veterans, a contracting officer may award a sole source contract to the small business concern if the anticipated award price of the contract will not exceed the maximum permissible amount for the contract, as provided under the applicable provision of the Small Business Act (15 U.S.C. 631 et seq.), as amended by this subsection.
Increasing sole source caps—
Qualified HUBZone small business concerns— Section 31(c)(2)(A)(ii) of the Small Business Act (15 U.S.C. 657a(c)(2)(A)(ii)) is amended—
in subclause (I), by striking “$5,000,000” and inserting “$10,000,000”; and
in subclause (II), by striking “$3,000,000” and inserting “$8,000,000”.
Small business concerns owned and controlled by service-disabled veterans— Section 36(a)(2) of the Small Business Act (15 U.S.C. 657f(a)(2)) is amended—
in subparagraph (A), by striking “$5,000,000” and inserting “$10,000,000”; and
in subparagraph (B), by striking “$3,000,000” and inserting “$8,000,000”.
Small business concerns owned and controlled by socially and economically disadvantaged individuals— Section 8(a)(1)(D)(i)(II) of the Small Business Act (15 U.S.C. 637(a)(1)(D)(i)(II)) is amended—
by striking “$5,000,000” and inserting “$10,000,000”; and
by striking “$3,000,000” and inserting “$8,000,000”.
Certain small business concerns owned and controlled by women— Section 8(m) of the Small Business Act (15 U.S.C. 637(m)) is amended—
in paragraph (7)(B)—
in clause (i), by striking “$6,500,000” and inserting “$10,000,000”; and
in clause (ii), by striking “$4,000,000” and inserting “$8,000,000”; and
in paragraph (8)(B)—
in clause (i), by striking “$6,500,000” and inserting “$10,000,000”; and
in clause (ii), by striking “$4,000,000” and inserting “$8,000,000”.
Category management— Section 15 of the Small Business Act (15 U.S.C. 644) is amended by adding at the end the following:
“(y) Category management
“(1) Definition of contract—In this subsection, the term contract includes a prime contract, a task order, a delivery order, a blanket purchase agreement, and a basic ordering agreement.
“(2) Exemption—Any acquisition for a contract to be awarded under the procedures of section 8(a), 8(m), 31, or 36 or under subsection (a) or (j) of this section, including an acquisition for commercial items, shall be—
“(A) exempt from the procedural requirements of agency-level or Governmentwide guidance on category management, best in class solutions, common contract solutions, or successor strategies for contract consolidation; and
“(B) disregarded when measuring attainment of any goal or benchmark established under agency-level or Governmentwide guidance on category management, best in class solutions, common contract solutions, or successor strategies for contract consolidation, unless considering the acquisition aids in the achievement of the goal or benchmark.
“(3) Prohibition—Once a contract has been awarded under the section 8(a), 8(m), 31, or 36 or under subsection (a) or (j) of this section, including an acquisition for commercial items, the contract shall not be removed and placed in category management, best in class solutions, common contract solutions, or successor strategies for contract consolidation.”
Prompt payments— Notwithstanding any other provision of law or regulation, during any period in which the President invokes the authorities of the Defense Production Act of 1950 (50 U.S.C. 4501 et seq.), for any payment due by the head of an agency on a contract for an item of property or service provided—
with respect to a prime contractor (as defined in section 8701 of title 41, United States Code) that is a small business concern or nonprofit organization, the head of the agency shall, to the fullest extent permitted by law and to the maximum extent practicable, establish an accelerated payment date of 15 days after a proper invoice for the amount due is received; and
with respect to a prime contractor (as defined in section 8701 of title 41, United States Code) that subcontracts with a small business concern or nonprofit organization, the head of the agency shall, to fullest extent permitted by law and to the maximum extent practicable, establish an accelerated payment date of 15 days after receipt of a proper invoice for the amount due if the prime contractor agrees to make payments to the subcontractor in accordance with the accelerated payment date, to the maximum extent practicable, without any further consideration from or fees charged to the subcontractor.
Promotion of small business economic development programs—
Authorization of appropriations— There is authorized to be appropriated to the Administrator the following amounts, which shall remain available until expended:
$18,750,000 to carry out the women’s business center program under section 29 of the Small Business Act (15 U.S.C. 656), with respect to which the following requirements shall apply:
The Administrator shall allocate that amount so that each women’s business center operating pursuant to that section receives an equal allocation, unless the Administrator determines that another manner of allocation is necessary.
A center that receives amounts under this subparagraph shall not be subject to the requirement to provide non-Federal funding under section 29(c) of the Small Business Act (15 U.S.C. 656(c)).
A center that receives amounts under this subparagraph shall use the grant to—
enhance remote services provided by the center; and
provide counseling, training, and other related services, such as promoting long-term resiliency, to small business concerns and entrepreneurs impacted by or experiencing substantial economic injury as a result of COVID–19.
$1,000,000 to carry out SCORE, which shall be used to—
hire staff members with respect to SCORE to develop and implement an education program to—
provide mentoring and other related services, such as promoting long-term resiliency, to small business concerns and entrepreneurs impacted by or experiencing substantial economic injury as a result of COVID–19;
help owners of small business concerns address issues relating to COVID–19; and
educate volunteers with respect to the program regarding issues relating to COVID–19;
develop and design content relating to the issues described in clause (i);
encourage the use of virtual mentoring and workshops in carrying out SCORE; and
recruit and train more virtual mentors.
$40,000,000 to hire additional staff to carry out the small business development program established under section 21 of the Small Business Act (15 U.S.C. 648), with respect to which the following requirements shall apply:
A small business development center receiving funds under this subparagraph shall not be subject to the requirement to provide matching amounts under subparagraphs (A) and (B) of section 21(a)(4) of the Small Business Act (15 U.S.C. 648(a)(4)).
The Administrator shall allocate the funds according to the funding formula described in section 21(a)(4)(C) of the Small Business Act (15 U.S.C. 648(a)(4)(C)), unless the Administrator determines that another manner of allocation is necessary.
Funds provided under this subparagraph shall be used to provide counseling, training, and other related services, such as promoting long-term resiliency, to small business concerns and entrepreneurs impacted by or experiencing substantial economic injury as a result of COVID–19, which shall include training and advising on—
the hazards and prevention of the transmission and communication of the COVID–19 and other communicable diseases;
the potential effects to their supply chains and the distribution and sale of products, and the mitigation of those effects;
the management and practice of telework to reduce possible transmission;
the management and practice of remote customer service by electronic or other means;
the risks and mitigation of cyber threats in remote customer service or telework practices;
the mitigation of the effects of reduced travel or outside activities on small business concerns during COVID–19 or similar occurrences; and
any other relevant business practices necessary to mitigate the economic effects of COVID–19 or similar occurrences.
Metrics— The Administrator, in cooperation with recipients of financial assistance under paragraph (1), shall establish metrics and goals for performance of activities using funds provided under paragraph (1).
Application—
In general— A small business development center, a women’s business center, or SCORE shall submit an application to the Administrator to receive assistance under paragraph (1).
Provision of assistance— The Administrator shall provide assistance under paragraph (1) after making a determination that the applicant is in need of financial assistance due to economic injury as a result of COVID–19 or has the capacity to provide assistance to small business concerns affected by COVID–19.
Waiver— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, the requirement relating to obtaining matching contributions from non-Federal sources under sections 21(a)(4) and 29(c) of the Small Business Act (15 U.S.C. 648(a)(4), 656(c)) is waived for any recipient of assistance under such section 21 or 29, respectively.
SBA creation of made in America list—
Short term response— Not later than 60 days after the date of enactment of this Act the resource partners of the Administration, including small business development centers, women’s business centers, SCORE, and veterans business outreach centers, shall provide the Administrator with a list of the small business concerns—
that those partners have served during the 10-year period preceding the date on which the list is created; and
that self-identify as having, or as expecting to have, supply chain vulnerabilities.
Creation of list— Based on the list provided under subparagraph (A), the Administration shall create a list of small business concerns entitled the “Made in America” list.
Long term response—
In general— After the creation of the list under subparagraph(B)—
the Administrator shall—
share the list with the resource partners of the Administration, including the entities described in subparagraph (A);
update the list not less frequently than once every 6 months, or at such intervals as the Administrator may determine appropriate;
on an ongoing basis, seek to match the small business concerns identified on the list (referred to in this subparagraph as “listed small business concerns”), as updated under item (bb), with—
suppliers identified under subclause (II); and
any other supplier that may be able to address the supply chain vulnerabilities of the listed small business concerns; and
in carrying out item (cc), collaborate with other Federal agencies, including the Minority Business Development Agency of the Department of Commerce, to identify supply chain vulnerabilities in the United States that small business concerns may be able to address; and
the resource partners of the Administration shall disseminate the list received under subclause (I)(aa) to manufacturing clients of those partners with the objective of matching the listed small business concerns with suppliers that are able to address the supply chain vulnerabilities of those small business concerns.
Report— Not later than 1 year after the date of enactment of this Act, and annually thereafter, 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 that contains—
the number of listed small business concerns, as updated under clause (i)(I)(bb);
the number of notification of opportunities that went out requesting new small business concern suppliers; and
the number of matches made from the list required under this paragraph.
Authorization of appropriations— In addition to amounts provided under any other provision of law, there is authorized to be appropriated $150,000,000, to remain available until expended, under the heading “Small Business Administration—Entrepreneurial Development Programs”, of which—
$40,000,000 shall be to support programs carried out by small business development centers described in section 21 of the Small Business Act (15 U.S.C. 648);
$18,750,000 shall be to support programs carried out by women’s business centers described in section 29 of such Act (15 U.S.C. 656);
$1,000,000 shall be to support programs carried out by the Service Corps of Retired Executives authorized under section 8(b)(1) of such Act (15 U.S.C. 637(b)(1));
$50,000,000 shall be for microloan technical assistance grants under section 7(m)(4) of such Acct (15 U.S.C. 636(m)(4)); and
$40,250,000 shall be for additional grants for technical assistance, counseling, mentoring, training, and workshops for outreach to small business concerns impacted by COVID–19.
Sec. 18 Small business intermediary lending program
in the subsection heading, by striking “Pilot”;
in paragraph (1)—
in subparagraph (A), by striking “and” at the end;
by redesignating subparagraph (B) as subparagraph (C);
by inserting after subparagraph (A) the following:
“(B) the term newly established small business concern means a small business concern that has been existence for not more than 2 years on the date on which a loan is made to the small business concern under the Program;”
in subparagraph (C), as so redesignated—
by striking “pilot”; and
by striking the period at the end and inserting a semicolon; and
by adding at the end the following:
“(D) the term small business concern in an underserved market means a small business concern—
“(i) that is located in—
“(I) a low- to moderate-income community;
“(II) a HUBZone;
“(III) a community that has been designated as an empowerment zone or an enterprise community under section 1391 of the Internal Revenue Code of 1986;
“(IV) a community that has been designated as a promise zone by the Secretary of Housing and Urban Development;
“(V) a community that has been designated as a qualified opportunity zone under section 1400Z–1 of the Internal Revenue Code of 1986; or
“(VI) a rural area;
“(ii) that has more than 50 percent of employees residing in a low- or moderate-income community;
“(iii) that is a startup or new business;
“(iv) owned and controlled by socially and economically disadvantaged individuals, including Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities;
“(v) owned and controlled by women;
“(vi) owned and controlled by veterans;
“(vii) owned and controlled by service-disabled veterans;
“(viii) not less than 51 percent owned and controlled by 1 or more—
“(I) members of the Armed Forces participating in the Transition Assistance Program of the Department of Defense;
“(II) Reservists;
“(III) spouses of veterans, members of the Armed Forces, or Reservists; or
“(IV) surviving spouses of veterans who died on active duty or as a result of a service-connected disability; or
“(V) individuals who have completed a term of imprisonment in Federal, State, or local jail or prison; or
“(ix) that is eligible to receive a veterans advantage loan;
“(E) the term small business concern owned and controlled by socially and economically disadvantaged individuals has the meaning given the term in section 8(d)(3)(C); and
“(F) the term startup means a business that has not yet opened.”
in paragraph (2)—
by striking “3-year ”; and
by striking “pilot”;
in paragraph (3)—
in subparagraph (A), by striking “and” at the end;
in subparagraph (B), by striking the period at the end and inserting “; and”; and
by adding at the end the following:
“(C) to provide flexible capital to and through mission lenders who are best positioned to understand community need and respond quickly to it during times of economic downturn, especially as a result of a disaster, including those caused by public health threats.”
in paragraph (4)—
by striking subparagraph (B) and inserting the following:
“(B) Loan limits
“(i) Single loan
“(I) In general—Except as provided in subclause (II), no single loan to an eligible intermediary under this subsection may exceed $1,000,000.
“(II) Exception for underserved markets—If an eligible intermediary makes not less than 60 percent of its loans to small business concerns in underserved markets, the eligible intermediary may receive a single loan under this subsection of $1,500,000.
“(ii) Total amount—The total amount outstanding and committed to an eligible intermediary by the Administrator under the Program may not exceed $5,000,000.
“(iii) Considerations—In determining whether to make a loan to an eligible intermediary before prior loans made to the eligible intermediary under the Program are paid off, the Administrator shall take into consideration the lending experience and track record of the eligible intermediary within the Program.”
by striking subparagraphs (F) and (G) and inserting the following:
“(F) Delayed payments
“(i) In general—The Administrator shall not require the repayment of principal or interest on a loan made to an eligible intermediary under the Program during the 2-year period beginning on the date of the initial disbursement of funds under that loan.
“(ii) Delayed payments for certain small business concerns—An eligible intermediary shall not require the repayment of principal or interest on a loan made to a manufacturing or high-tech, innovative small business concern for the purposes of commercialization, including firms involved in the SBIR and STTR programs under section 9, until the earlier of—
“(I) that date that is 6 months after the date of the initial disbursement of funds under that loan; or
“(II) the date on which the small business concern brings in revenue.
“(G) Repayment structures—The Administrator may allow eligible intermediaries to engage borrowers in prudent repayment structures, including revenue-based financing, based on the type of business and business industry needs.
“(H) Maximum amounts—In each fiscal year, the Administrator may make loans under the Program in a total amount of not more than $30,000,000.”
by striking paragraph (6) and inserting the following:
“(6) Report—Not later than 1 year after the date of enactment of the COVID–19 Recovery by Enhancing Loan, Investment, and Education Funds for Small Businesses Act of 2020, 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 regarding the performance and effectiveness of the Program, which shall include—
“(A) the number and dollar amount of loans made in each year the Program has been in effect;
“(B) each eligible intermediary that received a loan under the Program; and
“(C) any recommendations for improvements to the Program.
“(7) Authorization of appropriations—There is authorized to be appropriated to carry out this section—
“(A) $20,000,000 for fiscal year 2020; and
“(B) $30,000,000 for fiscal year 2021.”
Rulemaking authority— Not later than 180 days after the date of enactment of this Act, the Administrator shall issue regulations to carry out section 7(l) of the Small Business Act (15 U.S.C. 636(l)), as amended by subsection (a).
Sec. 19 Community Advantage Loan Program
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by adding at the end the following:
“(36) Community Advantage Loan Program
“(A) Purposes—The purposes of the Community Advantage Loan Program are—
“(i) to create a mission-oriented loan guarantee program that builds on the demonstrated success of the Community Advantage Pilot Program of the Administration, as established in 2011, to reach more underserved small business concerns;
“(ii) to increase lending to small business concerns in underserved and rural markets, including veterans and members of the military community, small business concerns owned and controlled by socially and economically disadvantaged individuals, women, and startups;
“(iii) to ensure that the program under this subsection (in this paragraph referred to as the 7(a) loan program) is more inclusive and more broadly meets congressional intent to reach borrowers who are unable to get credit elsewhere on reasonable terms and conditions;
“(iv) to help underserved small business concerns become bankable by utilizing the small-dollar financing and business support experience of mission-oriented lenders;
“(v) to allow certain mission-oriented lenders, primarily nonprofit financial intermediaries focused on economic development in underserved markets, access to guarantees for loans under this subsection (in this paragraph referred to as 7(a) loans) of not more than $350,000 and provide management and technical assistance to small business concerns as needed;
“(vi) to provide certainty for the lending partners that make loans under this subsection and to attract new lenders; and
“(vii) to encourage collaboration between mission-oriented and conventional lenders under this subsection in order to support underserved small business concerns.
“(B) Definitions—In this paragraph—
“(i) the term covered institution means—
“(I) a development company, as defined in section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 662), participating in the 504 Loan Guaranty program established under title V of that Act (15 U.S.C. 695 et seq.);
“(II) a nonprofit intermediary, as defined in subsection (m)(11), participating in the microloan program under subsection (m);
“(III) a non-Federally regulated entity certified as a community development financial institution by the Community Development Financial Institutions Fund established under section 104(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4703(a)); and
“(IV) an eligible intermediary, as defined in subsection (l)(1), participating in the Intermediary Lending Program established under subsection (l)(2);
“(ii) the term existing business means a small business concern that has been in existence for not less than 2 years on the date on which a loan is made to the small business concern under the program;
“(iii) the term new business means a small business concern that has been existence for not more than 2 years on the date on which a loan is made to the small business concern under the program;
“(iv) the term program means the Community Advantage Loan Program established under subparagraph (C);
“(v) the term Reservist means a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code;
“(vi) the term rural area means any county that the Bureau of the Census has defined as mostly rural or completely rural in the most recent decennial census;
“(vii) the term service-connected has the meaning given the term in section 101(16) of title 38, United States Code;
“(viii) the term small business concern in an underserved market means a small business concern—
“(I) that is located in—
“(aa) a low- to moderate-income community;
“(bb) a HUBZone, as that term is defined in section 31(b);
“(cc) a community that has been designated as an empowerment zone or an enterprise community under section 1391 of the Internal Revenue Code of 1986;
“(dd) a community that has been designated as a promise zone by the Secretary of Housing and Urban Development;
“(ee) a community that has been designated as a qualified opportunity zone under section 1400Z–1 of the Internal Revenue Code of 1986; or
“(ff) a rural area;
“(II) for which more than 50 percent of the employees reside in a low- or moderate-income community;
“(III) that is a startup or new business;
“(IV) owned and controlled by socially and economically disadvantaged individuals, including Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities;
“(V) owned and controlled by women;
“(VI) owned and controlled by veterans;
“(VII) owned and controlled by service-disabled veterans;
“(VIII) not less than 51 percent owned and controlled by 1 or more—
“(aa) members of the Armed Forces participating in the Transition Assistance Program of the Department of Defense;
“(bb) Reservists;
“(cc) spouses of veterans, members of the Armed Forces, or Reservists; or
“(dd) surviving spouses of veterans who died on active duty or as a result of a service-connected disability;
“(IX) that is eligible to receive a veterans advantage loan; or
“(X) owned and controlled by an individual who has completed a term of imprisonment in a Federal, State, or local jail or prison;
“(ix) the term small business concern owned and controlled by socially and economically disadvantaged individuals has the meaning given the term in section 8(d)(3)(C);
“(x) the term startup means a business that has not yet opened; and
“(xi) the term veterans advantage loan means a loan made to a small business concern under this subsection that is eligible for a waiver of the guarantee fee under paragraph (18) or the yearly fee under paragraph (23) because the small business concern is a concern described in subclause (VI), (VII), or (VIII) of clause (viii).
“(C) Establishment—There is established a Community Advantage Loan Program under which the Administration may guarantee loans made by covered institutions under this subsection, including loans made to small business concerns in underserved markets.
“(D) Program levels—In each of fiscal years 2020, 2021, 2022, 2023, 2024, and 2025, not more than 10 percent of the number of loans guaranteed under this subsection may be guaranteed under the program.
“(E) New lenders
“(i) Fiscal years 2021 and 2022—In each of fiscal years 2021 and 2022—
“(I) not more than 150 covered institutions shall participate in the program; and
“(II) the Administrator shall allow for new applicants and give priority to applications submitted by any covered institution that is located in an area with insufficient or no lending under the program.
“(ii) Fiscal years 2023, 2024, and 2025
“(I) In general—In each of fiscal years 2023, 2024, and 2025—
“(aa) except as provided in subclause (II), not more than 175 covered institutions shall participate in the program; and
“(bb) the Administrator shall allow for new applicants and give priority to applications submitted by any covered institution that is located in an area with insufficient or no lending under the program.
“(II) Exception for fiscal year 2025—In fiscal year 2025, not more than 200 covered institutions may participate in the program if—
“(aa) after reviewing the report under subparagraph (M), the Administrator determines that not more than 200 covered institutions may participate in the program;
“(bb) the Administrator notifies Congress in writing of the determination of the Administrator under item (aa); and
“(cc) not later than July 30, 2024, the Administrator notifies the public of the determination of the Administrator under item (aa).
“(F) Grandfathering of existing lenders—Any covered institution that participated in the Community Advantage Pilot Program of the Administration and is in good standing on the day before the date of enactment of this paragraph—
“(i) shall retain designation in the program; and
“(ii) shall not be required to submit an application to participate in the program.
“(G) Requirement to make loans to underserved markets—Not less than 75 percent of loans made by a covered institution under the program shall consist of loans made to small business concerns in underserved markets.
“(H) Maximum loan amount
“(i) In general—Except as provided in clause (ii), the maximum loan amount for a loan guaranteed under the program is $250,000.
“(ii) Exception
““(I) In general—The Administration may, in the discretion of the Administration, approve a guarantee of a loan under the program that is more than $250,000 and not more than $350,000.
“(II) Notification—Not later than 2 days after receiving a request for an exception to the maximum loan amount established under clause (i), the Administration shall—
“(aa) review the request; and
“(bb) provide a decision regarding the request to the covered institution making the loan.
“(I) Training and technical assistance—The Administration—
“(i) shall, in person and online, provide upfront and ongoing training and technical assistance for covered institutions making loans under the program in order to support prudent lending standards and improve the interface between the covered institutions and the Administration, which shall include—
“(I) guidance for following the regulations of the Administration, including best practices for maintaining healthy portfolios of loans; and
“(II) directions for covered institutions to do what is in the best interest of the borrowers, including by ensuring to the maximum extent possible that those borrowers are informed about loans with the most favorable terms for those borrowers;
“(ii) shall ensure that the training and technical assistance described in clause (i) is provided for free or at a low-cost;
“(iii) may enter into a contract to provide the training or technical assistance described in clause (i) with an organization with expertise in lending under this subsection, mission-oriented lending, and lending to underserved markets; and
“(iv) shall ensure that covered institutions adequately report the extent to which the covered institutions take the actions required under clause (i)(II).
“(J) Delegated authority—A covered institution is not eligible to receive delegated authority from the Administration under the program until the covered institution makes not less than 10 loans under the program, unless the Administration determines otherwise after an opportunity for public comment for a period of not less than 30 days before implementing such a change.
“(K) Regulations
“(i) In general—Not later than 180 days after the date of enactment of this paragraph and in accordance with the notice and comment procedures under section 553 of title 5, United States Code, the Administrator shall promulgate regulations to carry out the program, which shall be substantially similar to the Community Advantage Pilot Program of the Administration, as in effect on September 1, 2018, and shall—
“(I) outline the requirements for participation by covered institutions in the program;
“(II) define performance metrics for covered institutions participating in the program for the first time, which are required to be met in order to continue participating in the program;
“(III) establish an acceptable range of program costs and level of risk that shall be based on other loan products—
“(aa) of similar size;
“(bb) that use similar lenders; and
“(cc) that are intended to reach similar borrowers;
“(IV) determine the credit score of a small business concern under which the Administration is required to underwrite a loan provided to the small business concern under the program and the loan may not be made using the delegated authority of a covered institution;
“(V) require each covered institution that sells loans made under the program on the secondary market to establish a loan loss reserve fund, which—
“(aa) with respect to covered institutions in good standing, including the covered institutions described in subparagraph (F), shall be maintained at a level equal to 3 percent of the outstanding guaranteed portion of the loans; and
“(bb) with respect to any other covered institution, shall be maintained at a level equal to 5 percent of the outstanding guaranteed portion of the loans; and
“(VI) allow the Administrator to require additional amounts to be deposited into a loan loss reserve fund established by a covered institution under subclause (V) based on the risk characteristics or performance of the covered institution and the loan portfolio of the covered institution.
“(ii) Termination of pilot program—Beginning on the date on which the regulations promulgated by the Administrator under clause (i) take effect, the Administrator may not carry out the Community Advantage Pilot Program of the Administration.
“(L) GAO report—Not later than 3 years after the date of enactment of this paragraph, the Comptroller General of the United States shall submit to the Administrator, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business of the House of Representatives a report—
“(i) assessing—
“(I) the extent to which the program fulfills the requirements of this paragraph; and
“(II) the performance of covered institutions participating in the program; and
“(ii) providing recommendations on the administration of the program and the findings under subclauses (I) and (II) of clause (i).
“(M) Working group
“(i) In general—Not later than 90 days after the date of enactment of this paragraph, the Administrator shall establish a Community Advantage Working Group, which shall—
“(I) include—
“(aa) a geographically diverse representation of members from among covered institutions participating in the program; and
“(bb) representatives from the Office of Capital Access of the Administration, including the Office of Credit Risk Management, the Office of Financial Assistance, and the Office of Economic Opportunity;
“(II) develop recommendations on how the Administration can effectively manage, support, and promote the program and the mission of the program;
“(III) establish metrics of success and benchmarks that reflect the mission and population served by covered institutions under the program, which the Administration shall use to evaluate the performance of those covered institutions;
“(IV) institute regular and sustainable systems of communication between the Administration and covered institutions participating in the program; and
“(V) establish criteria for covered institutions regarding when those institutions should provide technical assistance to borrowers under the program and the scope of that technical assistance.
“(ii) Report—Not later than 180 days after the date of enactment of this paragraph, 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 that includes—
“(I) the recommendations of the Community Advantage Working Group established under clause (i); and
“(II) a recommended plan and timeline for implementation of those recommendations.”
Sec. 20 Accelerating small business innovations
Purpose— The purpose of this section is to accelerate the review and award of SBIR and STTR (as defined in section 9 of the Small Business Act (15 U.S.C. 638)) projects at most civilian agencies in order to speed the development of innovations, which is particularly necessary to stimulate the economy and provide agencies with new technologies.
in subsection (g)(8)—
in subparagraph (B), by striking “and” at the end;
in subparagraph (C), by adding “and” at the end; and
by adding at the end the following:
“(D) the average and median amount of time that each Federal agency with an SBIR program takes to review and make a final decision on proposals submitted under the program;”
in subsection (o)(9)—
in subparagraph (B), by striking “and” at the end;
in subparagraph (C), by adding “and” at the end; and
by adding at the end the following:
“(D) the average and median amount of time that each Federal agency with an STTR program takes to review and make a final decision on proposals submitted under the program;”
in subsection (hh), by adding at the end the following:
“(3) Requirement to accelerate SBIR and STTR awards of civilian agencies—Not later than 1 year after the date of enactment of this paragraph, each Federal agency participating in the SBIR program or STTR program, other than the Department of Defense, shall establish a process to reduce the time for awards under the SBIR and STTR programs of the Federal agency by—
“(A) developing simplified and standardized application processes and requirements and simplified and standardized model contracts or awards throughout the Federal agency for Phase I, Phase II, and Phase III SBIR awards;
“(B) for Phase I SBIR and STTR awards, reducing the amount of time between solicitation closure and award;
“(C) for Phase II SBIR and STTR awards, reducing the amount of time between the end of a Phase I award and the start of the Phase II award;
“(D) for Phase II SBIR and STTR awards that skip Phase I, reducing the amount of time between solicitation closure and award;
“(E) for sequential Phase II SBIR and STTR awards, reducing the amount of time between Phase II awards; and
“(F) reducing the award times described in subparagraphs (B), (C), (D), and (E) to not later than 180 days with respect to the Department of Health and Human Services, the National Science Foundation, and the Department of Agriculture, and as close to 90 days as possible with respect to any other participating agency.”
in subsection (ii), by adding at the end the following:
“(3) Additional comptroller general reports—The Comptroller General of the United States 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) not later than 2 years after the date of enactment of this paragraph, a report that—
“(i) provides the average and median amount of time that each Federal agency with an SBIR or STTR program takes to review and make a final decision on proposals submitted under the program; and
“(ii) compares that average and median amount of time with that of the previous 5 fiscal years; and
“(B) not later than March 31, 2024, a report that—
“(i) includes the information described in subparagraph (A);
“(ii) assesses where each Federal agency participating in the SBIR or STTR program needs improvement with respect to the proposal review and award times under the program;
“(iii) identifies best practices for shortening the proposal review and award times under the SBIR and STTR programs; and
“(iv) analyzes the efficacy of the program established under subsection (hh)(3).”
Sec. 21 Improvements to SBIR/STTR commercialization
Purpose— The purpose of this section is to make the small business research programs permanent, allow limited skipping of the first research phase, and designate a Technology Commercialization Officer in each participating agency to help companies with commercialization.
Permanency of SBIR and STTR programs—
in the subsection heading, by striking “Termination” and inserting “SBIR program authorization”; and
by striking “terminate on September 30, 2022” and inserting “be in effect for each fiscal year”.
STTR— Section 9(n)(1)(A) of the Small Business Act (15 U.S.C. 638(n)(1)(A)) is amended by striking “through fiscal year 2022”.
in subsection (g)—
in paragraph (4)(B)(i)—
by striking “1 year” and inserting “180 days”; and
by striking “National Institutes of Health or the National Science Foundation” and inserting “Department of Health and Human Services, the National Science Foundation, or the Department of Agriculture”;
in paragraph (11), by striking “and” at the end;
in paragraph (12), by striking the period at the end and inserting “; and”; and
by adding at the end the following:
“(13) with respect to peer review carried out under the SBIR program, to the extent practicable, include in the peer review—
“(A) the likelihood of commercialization in addition to scientific and technical merit and feasibility; and
“(B) not less than 1 reviewer with commercialization expertise who is capable of assessing the likelihood of commercialization.”
in subsection (o)—
in paragraph (4)(B)(i)—
by striking “1 year” and inserting “180 days”; and
by striking “National Institutes of Health or the National Science Foundation” and inserting “Department of Health and Human Services, the National Science Foundation, or the Department of Agriculture”;
in paragraph (15), by striking “and” at the end;
in paragraph (16), by striking the period at the end and inserting “; and”; and
by adding at the end the following:
“(17) with respect to peer review carried out under the STTR program, to the extent practicable, include in the peer review—
“(A) the likelihood of commercialization in addition to scientific and technical merit and feasibility; and
“(B) not less than 1 reviewer with commercialization expertise who is capable of assessing the likelihood of commercialization.”
in subsection (aa), by adding at the end the following:
“(6) Application of waiver—The waiver authority under paragraph (4) shall not apply to Phase II awards that skip Phase I unless the additional funds are needed to respond to an urgent need in the United States, such as a pandemic.”
in subsection (cc)—
by striking “During fiscal years 2012 through 2022, the National Institutes of Health, the Department of Defense, and the Department of Education” and inserting the following:
“(1) In general—During fiscal years 2020 through 2025, each Federal agency with an SBIR or STTR program”
by adding at the end the following:
“(2) Limitation—The total value of awards provided by a Federal agency under this subsection in a fiscal year shall be—
“(A) except as provided in subparagraph (B), not more than 10 percent of the total funds allocated to the SBIR and STTR programs of the Federal agency during that fiscal year; and
“(B) with respect to the Department of Health and Human Services, not more than 15 percent of the total funds allocated to the SBIR and STTR programs of the Department of Health and Human Services during that fiscal year.
“(3) Extension—During fiscal years 2024 and 2025, each Federal agency with an SBIR or STTR program may continue phase flexibility as described in this subsection only if—
“(A) the reports required under subsection (tt)(1)(B) have been submitted to the appropriate committees;
“(B) the results in the reports demonstrate that skipping Phase I is effective at commercializing SBIR and STTR projects; and
“(C) the allocation percentages in subsections (f)(1) and (n)(1) have been increased above 3.2 percent and .45 percent, respectively.”
in subsection (hh)(2)(A)(i), by striking “procedures and model contracts” and inserting “processes and requirements and simplified and standardized model contracts or awards”; and
by adding at the end the following:
“(vv) Technology Commercialization Official—Each Federal agency participating in the SBIR or STTR program shall designate a Technology Commercialization Official in the Federal agency, who shall—
“(1) have sufficient commercialization experience;
“(2) provide assistance to SBIR and STTR program awardees in commercializing and transitioning technologies;
“(3) identify SBIR and STTR program technologies with sufficient technology and commercialization readiness to advance to Phase III awards or other non-SBIR or STTR program contracts;
“(4) coordinate with the Technology Commercialization Officials of other Federal agencies to identify additional markets and commercialization pathways for promising SBIR and STTR program technologies;
“(5) submit to the Administration an annual report on the number of technologies from the SBIR or STTR program that have advanced commercialization activities, including information required in the commercialization impact assessment under subsection (xx) and how those activities may relate to support of the diversification of the United States supply chain;
“(6) submit to the Administration an annual report on actions taken by the Federal agency, and the results of those actions, to simplify, standardize, and expedite the application process and requirements, procedures, and contracts as required under subsection (hh) and described in subsection (xx)(E); and
“(7) carry out such other duties as the Federal agency determines necessary.”
Sec. 22 Spurring innovation in underserved markets
by redesignating section 49 (15 U.S.C. 631 note) as section 50; and
by inserting after section 48 (15 U.S.C. 657u) the following:
“49. Innovation Centers Program
“(a) Definitions—In this section:
“(1) Accelerator—The term accelerator means an organization—
“(A) that—
“(i) works with a startup or growing small business concern for a predetermined period; and
“(ii) provides mentorship and instruction to scale businesses; and
“(B) that may—
“(i) provide, but is not exclusively designed to provide, seed investment in exchange for a small amount of equity; and
“(ii) offer startup capital or the opportunity to raise capital from outside investors.
“(2) Federally recognized area of economic distress—The term federally recognized area of economic distress means—
“(A) a HUBZone; or
“(B) an area that has been designated as—
“(i) an empowerment zone under section 1391 of the Internal Revenue Code of 1986;
“(ii) a qualified opportunity zone under section 1400Z–1 of the Internal Revenue Code of 1986;
“(iii) a Promise Zone by the Secretary of Housing and Urban Development; or
“(iv) a low-income neighborhood or moderate-income neighborhood for purposes of the Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.).
“(3) Growing; newly established; startup—The terms growing, newly established, and startup, with respect to a small business concern, mean growing, newly established, and startup, respectively, within the meaning given those terms under section 7(m).
“(4) Incubator—The term incubator means an organization—
“(A) that—
“(i) tends to work with startup and newly established small business concerns; and
“(ii) provides mentorship to startup and newly established small business concerns; and
“(B) that may—
“(i) provide a co-working environment or a month-to-month lease program; and
“(ii) work with a startup or newly established small business concern for a predetermined period or an open-ended period.
“(5) Individuals with a disability—The term individuals with a disability means more than one individual with a disability, as defined in section 3 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12102).
“(6) Eligible entity—The term eligible entity means—
“(A) an institution described in any of paragraphs (1) through (7) of section 371(a) of the Higher Education Act of 1965 (20 U.S.C. 1067q(a));
“(B) a junior or community college, as defined in section 312 of the Higher Education Act of 1965 (20 U.S.C. 1058); or
“(C) any nonprofit organization associated with an entity described in subparagraph (A) or (B).
“(7) Rural area—The term rural area has the meaning given that term in section 7(m)(11).
“(8) Socially and economically disadvantaged individuals—The term socially and economically disadvantaged individual means a socially and economically disadvantaged individual within the meaning given that term under section 8(d)(3)(C).
“(b) Establishment—Not later than 18 months after the date of enactment of the COVID–19 Recovery by Enhancing Loan, Investment, and Education Funds for Small Businesses Act of 2020, the Administrator shall develop and begin implementing a program (to be known as the “Innovation Centers Program”) to enter into cooperative agreements with eligible entities under this section.
“(c) Purposes—The purposes of the Innovation Centers Program are to—
“(1) stimulate economic growth in underserved communities by creating good paying jobs and pathways to prosperity, which are especially important in times of economic downturn;
“(2) increase prospects for success for small business concerns in underserved communities, which often suffer from higher business failure rates than the national average;
“(3) help create a pipeline for small business concerns in underserved and rural markets into high-growth sectors, where they are generally underrepresented;
“(4) help address the multi-decade decline in the rate of new business creation;
“(5) close the gaps that underserved small business concerns often have in terms of revenue and number of employees, which represent lost opportunity for the economy; and
“(6) encourage collaboration between the Administration and institutions of higher learning that serve low-income and minority communities.
“(d) Authority
“(1) In general—The Administrator may—
“(A) enter into cooperative agreements to provide financial assistance to eligible entities to conduct 5-year projects for the benefit of startup, newly established, or growing small business concerns; and
“(B) renew a cooperative agreement entered into under this section for additional 3-year periods, in accordance with paragraph (3).
“(2) Project requirements—A project conducted under a cooperative agreement under this section shall—
“(A) include operating as an accelerator, an incubator, or any other small business innovation-focused project as the Administrator approves;
“(B) be carried out in such locations as to provide maximum accessibility and benefits to the small business concerns that the project is intended to serve;
“(C) have a full-time staff, including a full-time director who shall—
“(i) have the authority to make expenditures under the budget of the project; and
“(ii) manage the activities carried out under the project;
“(D) include the joint provision of programs and services by the eligible entity and the Administration, which—
“(i) shall be jointly developed, negotiated, and agreed upon, with full participation of both parties, pursuant to an executed cooperative agreement between the eligible entity and the Administration; and
“(ii) shall include—
“(I) 1-to-1 individual counseling as described in section 21(c)(3)(A); and
“(II) a formal, structured mentorship program;
“(E) incorporate continuous upgrades and modifications to the services and programs offered under the project, as needed to meet the changing and evolving needs of the business community;
“(F) involve working with underserved groups, which include—
“(i) women;
“(ii) socially and economically disadvantaged individuals;
“(iii) veterans;
“(iv) individuals with disabilities; or
“(v) startup, newly established, or growing small business concerns located in rural areas;
“(G) not impose or otherwise collect a fee or other compensation in connection with participation in the programs and services described in subparagraph (D)(ii); and
“(H) ensure that small business concerns participating in the project have access, including through resource partners, to information concerning Federal, State, and local regulations that affect small business concerns.
“(3) Continued funding
“(A) In general—An eligible entity that enters into an initial cooperative agreement or a renewal of a cooperative under paragraph (1) may submit an application for a 3-year renewal of the cooperative agreement at such time, in such manner, and accompanied by such information as the Administrator may establish.
“(B) Application and approval criteria
“(i) Criteria—The Administrator shall develop and publish criteria for the consideration and approval of applications for renewals by eligible entities under this paragraph, which shall take into account the structure and the stated goals of the project.
“(ii) Notification—Not later than 60 days after the date of the deadline to submit applications for each fiscal year, the Administrator shall approve or deny any application under this paragraph and notify the applicant for each such application.
“(C) Priority—In allocating funds made available for cooperative agreements under this section, the Administrator shall give applications under this paragraph priority over first-time applications for cooperative agreements under paragraph (1)(A).
“(4) Limit on use of funds—Amounts received by an eligible entity under a cooperative agreement under this section may not be used to provide capital to a participant in the project carried out under the cooperative agreement.
“(5) Scope of authority
“(A) Subject to appropriations—The authority of the Administrator to enter into cooperative agreements under this section shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts.
“(B) Suspension, termination, and failure to renew or extend—After the Administrator has entered into a cooperative agreement with an eligible entity under this section, the Administrator shall not suspend, terminate, or fail to renew or extend the cooperative agreement unless the Administrator provides the eligible entity with written notification setting forth the reasons therefore and affords the eligible entity an opportunity for a hearing, appeal, or other administrative proceeding under chapter 5 of title 5, United States Code.
“(e) Criteria
“(1) In general—The Administrator shall—
“(A) establish and rank in terms of relative importance the criteria the Administrator shall use in awarding cooperative agreements under this section, which shall include—
“(i) whether the proposed project will be located in—
“(I) a federally recognized area of economic distress;
“(II) a rural area; or
“(III) an area lacking sufficient entrepreneurial development resources, as determined by the Administrator; and
“(ii) whether the proposed project demonstrates a commitment to partner with core stakeholders working with small business concerns in the relevant area, including—
“(I) investment and lending organizations;
“(II) nongovernmental organizations;
“(III) programs of State and local governments that are concerned with aiding small business concerns;
“(IV) Federal agencies; and
“(V) for-profit organizations with an expertise in small business innovation;
“(B) make publicly available, including on the website of the Administration, and state in each solicitation for applications for cooperative agreements under this section the selection criteria and ranking established under subparagraph (A); and
“(C) evaluate and rank applicants for cooperative agreements under this section in accordance with the selection criteria and ranking established under subparagraph (A).
“(2) Contents—The criteria established under paragraph (1)(A)—
“(A) for eligible entities that have in operation an accelerator, incubator, or other small business innovation-focused project shall include the record of the eligible entity in assisting growing, newly established, and startup small business concerns, including, for each of the 3 full years before the date on which the eligible entity applies for a cooperative agreement under this section, or if the accelerator, incubator, or other small business innovation-focused project has been in operation for less than 3 years, for the most recent full year the accelerator, incubator, or other small business innovation-focused project was in operation—
“(i) the number and retention rate of growing, newly established, and startup business concerns in the program of the eligible entity;
“(ii) the average period of participation by growing, newly established, and startup small business concerns in the program of the eligible entity;
“(iii) the total and median capital raised by growing, newly established, and startup small business concerns participating in the program of the eligible entity;
“(iv) the number of investments or loans received by growing, newly established, and startup small business concerns participating in the program of the eligible entity; and
“(v) the total and median number of employees of growing, newly established, and startup small business concerns participating in the program of the eligible entity; and
“(B) for all eligible entities—
“(i) shall include whether the eligible entity—
“(I) indicates the structure and goals of the project;
“(II) demonstrates ties to the business community;
“(III) identifies the resources available for the project;
“(IV) describes the capabilities of the project, including coordination with local resource partners and local or national lending partners of the Administration;
“(V) addresses the unique business and economic challenges faced by the community in which the eligible entity is located and businesses in that community; and
“(VI) provides a proposed budget and plan for use of funds; and
“(ii) may include any other criteria determined appropriate by the Administrator.
“(f) Program examination
“(1) In general—The Administrator shall—
“(A) develop and implement an annual programmatic and financial examination of each project conducted under this section, under which each eligible entity entering into a cooperative agreement under this section shall provide to the Administrator—
“(i) an itemized cost breakdown of actual expenditures for costs incurred during the preceding year; and
“(ii) documentation regarding—
“(I) the amount of matching assistance from non-Federal sources obtained and expended by the eligible entity during the preceding year in order to meet the matching requirement; and
“(II) with respect to any in-kind contributions that were used to satisfy the matching requirement, verification of the existence and valuation of those contributions; and
“(B) analyze the results of each examination conducted under subparagraph (A) and, based on that analysis, make a determination regarding the programmatic and financial viability of each eligible entity.
“(2) Conditions for continued funding—In determining whether to continue or renew a cooperative agreement under this section, the Administrator—
“(A) shall consider the results of the most recent examination of the project under paragraph (1); and
“(B) may terminate or not renew a cooperative agreement, if the Administrator determines that the eligible entity has failed to provide any information required to be provided (including information provide for purpose of the annual report by the Administrator under subsection (n)) or the information provided by the eligible entity is inadequate.
“(g) Training and technical assistance—The Administrator—
“(1) shall provide in person or online training and technical assistance to each eligible entity entering into a cooperative agreement under this section at the beginning of the participation of the eligible entity in the Innovation Centers Program, or as requested by the eligible entity, in order to build the capacity of the eligible entity and ensure compliance with procedures established by the Administrator;
“(2) shall ensure that the training and technical assistance described in paragraph (1) is provided at no cost or at a low cost; and
“(3) may enter into a contract to provide the training or technical assistance described in paragraph (1) with 1 or more organizations with expertise in the entrepreneurial development programs of the Administration, innovation, and entrepreneurial development.
“(h) Coordination—In carrying out a project under this section, an eligible entity may coordinate with—
“(1) resource and lending partners of the Administration;
“(2) programs of State and local governments that are concerned with aiding small business concerns; and
“(3) other Federal agencies, including to provide services to and assist small business concerns in participating in the SBIR and STTR programs, as defined in section 9(e).
“(i) Funding limit—The amount of financial assistance provided to an eligible entity under a cooperative agreement entered into under this section shall be not more than $400,000 during each year.
“(j) Matching requirement
“(1) In general—An eligible entity shall contribute toward the cost of the project carried out under the cooperative agreement under this section an amount equal to 50 percent of the amount received under the cooperative agreement.
“(2) In-kind contributions—Not more than 75 percent of the contribution of an eligible entity under paragraph (1) may be in the form of in-kind contributions.
“(3) Waiver
“(A) In general—If the Administrator determines that an eligible entity is unable to meet the contribution requirement under paragraph (1), the Administrator may reduce the required contribution.
“(B) Presumption
“(i) In general—The Administration shall, by regulation, establish criteria to determine which eligible entities are presumed to be unable to meet the contribution requirement under paragraph (1).
“(ii) Stakeholders—In establishing the criteria under clause (i), the Administrator shall work with stakeholders immediately impacted by the criteria.
“(iii) Periodic review—The Administration shall periodically review the criteria established under clause (i) not less than every 5 years to ensure that the criteria aligns with economic conditions.
“(4) Failure to obtain non-federal funding—If an eligible entity fails to obtain the required non-Federal contribution during any project, or the reduced non-Federal contribution as determined by the Administrator—
“(A) the eligible entity shall not be eligible thereafter for any other project for which it is or may be funded by the Administration; and
“(B) prior to approving assistance for the eligible entity for any other projects, the Administrator shall specifically determine whether the Administrator believes that the eligible entity will be able to obtain the requisite non-Federal funding and enter a written finding setting the forth the reasons for making that determination.
“(5) Rule of construction—The demonstrated inability of an eligible entity to meet the contribution requirement under paragraph (1) shall not disqualify the eligible entity from entering into a cooperative agreement under this section.
“(k) Contract authority
“(1) In general—An eligible entity may enter into a contract with a Federal department or agency to provide specific assistance to startup, newly established, or growing small business concerns.
“(2) Performance—Performance of a contract entered into under paragraph (1) may not hinder the eligible entity in carrying out the terms of the cooperative agreement under this section.
“(3) Exemption from matching requirement—A contract entered into under paragraph (1) shall not be subject to the matching requirement under subsection (j).
“(4) Additional provision—Notwithstanding any other provision of law, a contract for assistance under paragraph (1) shall not be applied to any Federal department or agency's small business, woman-owned business, or socially and economically disadvantaged business contracting goal under section 15(g).
“(l) Privacy requirements
“(1) In general—An eligible entity may not disclose the name, address, or telephone number of any individual or small business concern receiving assistance under this section without the consent of such individual or small business concern, unless—
“(A) the Administrator is ordered to make such a disclosure by a court in any civil or criminal enforcement action initiated by a Federal or State agency; or
“(B) the Administrator considers such a disclosure to be necessary for the purpose of conducting a financial audit of an eligible entity, but a disclosure under this subparagraph shall be limited to the information necessary for such audit.
“(2) Administration use of information—This subsection shall not—
“(A) restrict Administration access to program activity data; or
“(B) prevent the Administration from using client information (other than the information described in subparagraph (A)) to conduct client surveys.
“(3) Regulations—The Administrator shall issue regulations to establish standards for requiring disclosures during a financial audit under paragraph (1)(B).
“(m) Publication of information—The Administrator shall—
“(1) publish information about the program under this section online, including—
“(A) on the website of the Administration; and
“(B) on the social media of the Administration; and
“(2) request that the resource and lending partners of the Administration and the district offices of the Administration publicize the program.
“(n) Annual reporting—Not later than 1 year after the date on which the Administrator establishes the program under this section, and every year thereafter, the Administrator shall submit to Congress a report on the activities under the program, including—
“(1) a list of all eligible entities participating in the program;
“(2) the number of startup, newly established, and growing small business concerns participating in the project carried out by each eligible entity under a cooperative agreement under this section (in this paragraph referred to as “participants”), including a breakdown of the owners of the participants by race, gender, veteran status, and urban versus rural location;
“(3) the retention rate for participants;
“(4) the total and median amount of capital accessed by participants, including the type of capital accessed;
“(5) the total and median number of employees of participants;
“(6) the number and median wage of jobs created by participants;
“(7) the number of jobs sustained by participants; and
“(8) information regarding such other metrics as the Administrator determines appropriate.
“(o) Funding
“(1) Authorization of appropriations—There are authorized to be appropriated to carry out this section—
“(A) $4,000,000 for the first fiscal year beginning after the date of enactment of the COVID–19 Recovery by Enhancing Loan, Investment, and Education Funds for Small Businesses Act of 2020;
“(B) $7,500,000 for the second fiscal year beginning after such date of enactment; and
“(C) $12,000,000 for each of the third, fourth, and fifth fiscal years beginning after such date of enactment.
“(2) Administrative expenses—Of the amount made available to carry out this section for any fiscal year, not more than 10 percent may be used by the Administrator for administrative expenses.”
Regulations— The Administrator shall promulgate regulations to carry out section 49 of the Small Business Act, as added by subsection (b).
Sec. 23 Coordinating lending in underserved markets
Section 7 of the Small Business Act (15 U.S.C. 636) is amended by adding at the end the following:
“(o) Office of emerging markets
“(1) Definitions—In this subsection—
“(A) the term Associate Administrator means the Associate Administrator of the Office of Capital Access of the Administration;
“(B) the term Director means the Director of the Office of Emerging Markets;
“(C) the term microloan program means the program described in subsection (m);
“(D) the term Reservist means a member of a reserve component of the Armed Forces named in section 10101 of title 10, United States Code;
“(E) the term rural area has the meaning given the term in subsection (m)(11);
“(F) the term service-connected has the meaning given the term in section 101 of title 38, United States Code; and
“(G) the term small business concern in an emerging market means a small business concern—
“(i) that is located in—
“(I) a low income or moderate income area for purposes of the Community Development Block Grant Program under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.);
“(II) a HUBZone;
“(III) a community that has been designated as an empowerment zone or an enterprise community under section 1391 of the Internal Revenue Code of 1986;
“(IV) a community that has been designated as a Promise Zone by the Secretary of Housing and Urban Development;
“(V) a community that has been designated as a qualified opportunity zone under section 1400Z–1 of the Internal Revenue Code of 1986; or
“(VI) a rural area;
“(ii) that has more than 50 percent of employees residing in a low- or moderate-income community;
“(iii) that is growing, newly established, or a startup, as those terms are used in subsection (m);
“(iv) owned and controlled by socially and economically disadvantaged individuals, including Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and other minorities;
“(v) owned and controlled by women;
“(vi) owned and controlled by veterans;
“(vii) owned and controlled by service-disabled veterans; or
“(viii) not less than 51 percent owned and controlled by 1 or more—
“(I) members of the Armed Forces participating in the Transition Assistance Program of the Department of Defense;
“(II) Reservists;
“(III) spouses of veterans, members of the Armed Forces, or Reservists;
“(IV) surviving spouses of veterans who died on active duty or as a result of a service-connected disability; or
“(V) individuals with a disability, as defined in section 3 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12102).
“(2) Establishment—There is established within the Administration the Office of Emerging Markets, which shall be—
“(A) under the general management and oversight of the Administration; and
“(B) responsible for the planning, coordination, implementation, evaluation, and improvement of the efforts of the Administrator to enhance the economic well-being of small business concerns in an emerging market.
“(3) Purposes—The purposes of the Office of Emerging Markets are—
“(A) to provide the Administration with an integrated approach to the development of small business concerns in emerging markets;
“(B) to reignite economic opportunity for underserved or emerging markets, particularly after an economic downturn; and
“(C) to oversee the expansion of access to capital programs that meet the needs of emerging markets.
“(4) Director
“(A) In general—Not later than 180 days after the date of enactment of the COVID–19 Recovery by Enhancing Loan, Investment, and Education Funds for Small Businesses Act of 2020, the Administrator shall appoint a Director of the Office of Emerging Markets, who shall—
“(i) supervise the Office of Emerging Markets and report to the Associate Administrator; and
“(ii) be in the Senior Executive Service.
“(B) Duties—The Director shall—
“(i) create and implement strategies and programs that provide an integrated approach to the development of small business concerns in an emerging market;
“(ii) develop and recommend policies concerning the microloan program and any other access to capital program of the Administration, as such programs pertain to small business concerns in an emerging market;
“(iii) establish partnerships to advance the goal of improving the economic success of small business concerns in an emerging market; and
“(iv) review the effectiveness and impact of the microloan program and any other access to capital program of the Administration that is targeted to serve small business concerns in an emerging market.
“(C) Consultation—In carrying out the duties under this paragraph, the Director shall consult with district offices of the Administration.”
Sec. 24 Authorization of appropriations and other matters
Authorization of appropriations— In addition to amounts provided under any other provision of law, there is authorized to be appropriated, to remain available until expended—
$5,000,000,000 to carry out sections 8, 9, 10, and 11;
$177,000,000 for administrative expenses related to carrying out the disaster loan program under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2));
$1,000,000,000 for loan subsidies for the disaster loan program under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)); and
$200,000,000 for salaries and expenses for the Administration.
Allowable uses of 7(a) program loans—
In general— During the period beginning on the date of enactment of this Act and ending on September 30, 2021, a recipient of a loan made under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) (including a recipient of assistance under the Community Advantage Pilot Program of the Administration) may, in addition to the allowable uses of such a loan, use the proceeds of the loan for payroll support, including paid sick, medical, or family leave, and costs related to the continuation of group health care benefits during those periods of leave.
Guidance— Not later than 15 days after the date of enactment of this Act, the Administrator shall issue guidance to lenders under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) on payroll and support and disrupted supply chain eligibility under paragraph (1).
Sec. 25 Emergency rulemaking authority
Not later than 15 days after the date of enactment of this Act, the Administrator shall issue regulations to carry out this Act without regard to the notice requirements under section 553(b) of title 5, United States Code.