S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10551
 
                           I N  A S S E M B L Y
 
                               May 29, 2020
                                ___________
 
 Introduced by COMMITTEE ON RULES -- (at request of M. of A. Bichotte) --
   read once and referred to the Committee on Governmental Operations
 
 AN ACT to amend the executive law, in relation to establishing the state
   of  emergency  minority  and women owned business enterprises loan and
   grant program relating to novel coronavirus (COVID-19)

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The executive law is amended by adding a new section 29-l
 to read as follows:
   § 29-L. STATE OF EMERGENCY MINORITY AND WOMEN  OWNED  BUSINESS  ENTER-
 PRISES  LOAN AND GRANT PROGRAM. 1. DEFINITIONS. AS USED IN THIS SECTION,
 THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "AFFECTED BUSINESS OR ORGANIZATION" MEANS AND INCLUDES BOTH MINOR-
 ITY AND WOMEN OWNED BUSINESS ENTERPRISES OPERATING  AND  LOCATED  WITHIN
 THIS STATE AT THE COMMENCEMENT OF THE STATE OF EMERGENCY;
   (B)  "BANK" MEANS A BANK AS SUCH TERM IS DEFINED IN SUBDIVISION ONE OF
 SECTION TWO OF THE BANKING LAW;
   (C) "CREDIT UNION" MEANS A CREDIT UNION AS SUCH  TERM  IS  DEFINED  IN
 SUBDIVISION NINE OF SECTION TWO OF THE BANKING LAW;
   (D)  "CORPORATION"  MEANS THE URBAN DEVELOPMENT CORPORATION IN COOPER-
 ATION WITH THE EMPIRE STATE DEVELOPMENT CORPORATION;
   (E) "DEPARTMENT" MEANS THE DEPARTMENT OF FINANCIAL SERVICES;
   (F) "ELIGIBLE FINANCIAL INSTITUTION" MEANS A BANK OR CREDIT UNION THAT
 HAS A PHYSICAL PRESENCE IN THIS STATE AND IS IN GOOD STANDING;
   (G) "GRACE PERIOD" MEANS THE NINETY-DAY PERIOD AFTER A STATE OF  EMER-
 GENCY IS OVER; AND
   (H)  "STATE OF EMERGENCY" MEANS THE PERIOD DECLARED BY EXECUTIVE ORDER
 202 ON MARCH 7, 2020 RELATING TO THE NOVEL CORONAVIRUS (COVID-19).
   2. STATE OF EMERGENCY MINORITY AND WOMEN  OWNED  BUSINESS  ENTERPRISES
 LOAN  AND GRANT PROGRAM. (A) THE CORPORATION SHALL ADMINISTER A STATE OF
 EMERGENCY MINORITY AND WOMEN OWNED BUSINESS ENTERPRISES LOAN  AND  GRANT
 PROGRAM  TO  GUARANTEE THE REPAYMENT OF LOANS MADE BY AN ELIGIBLE FINAN-
 CIAL INSTITUTION TO AN  ELIGIBLE  AFFECTED  BUSINESS  PURSUANT  TO  THIS
 SECTION.    SUBJECT  TO THE CESSATION OF NEW CLAIM APPROVALS UNDER PARA-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD15979-04-0

 A. 10551                            2

 GRAPH (D) OF SUBDIVISION SIX OF  THIS  SECTION,  THE  CORPORATION  SHALL
 SUBMIT  ALL  APPROVED  CLAIMS TO THE COMPTROLLER, WHO SHALL PAY FROM THE
 GENERAL FUND ANY AND ALL CLAIMS SUBMITTED BY THE CORPORATION.
   (B)  ANY  BANK  OR CREDIT UNION MAY APPLY TO THE DEPARTMENT TO PARTIC-
 IPATE IN THE LOAN GUARANTEE PROGRAM. NOT LATER  THAN  ONE  BUSINESS  DAY
 AFTER  RECEIVING THE APPLICATION, THE DEPARTMENT SHALL DETERMINE WHETHER
 THE FINANCIAL INSTITUTION IS AN ELIGIBLE FINANCIAL INSTITUTION AND IMME-
 DIATELY NOTIFY THE BANK OR  CREDIT  UNION  OF  SUCH  DETERMINATION.  ANY
 ELIGIBLE  FINANCIAL INSTITUTION MAY MAKE LOANS TO AFFECTED BUSINESSES IN
 ACCORDANCE WITH THIS SECTION.
   (C) EACH ELIGIBLE FINANCIAL INSTITUTION THAT MAKES A LOAN PURSUANT  TO
 THIS SECTION, SHALL NOTIFY THE DEPARTMENT AND CORPORATION IN WRITING NOT
 LATER  THAN  ONE  BUSINESS  DAY  AFTER  MAKING THE LOAN, SPECIFYING SUCH
 INFORMATION ABOUT THE BORROWER AS THE  DEPARTMENT  AND  CORPORATION  MAY
 REQUEST.
   3. LOAN AND GRANT PROGRAM. AN ELIGIBLE FINANCIAL INSTITUTION OR CORPO-
 RATION  MAY MAKE A LOAN OR GRANT TO AN AFFECTED BUSINESS, IN THE FOLLOW-
 ING MANNER:
   (A) A MINORITY AND WOMEN OWNED BUSINESS ENTERPRISE WITH FEWER THAN ONE
 HUNDRED EMPLOYEES WHO HAVE SEEN SALES DECREASES OF  TWENTY-FIVE  PERCENT
 OR  MORE  WILL BE ELIGIBLE FOR ZERO INTEREST LOANS OF UP TO SEVENTY-FIVE
 THOUSAND DOLLARS TO HELP MITIGATE LOSSES IN PROFIT; OR
   (B) A MINORITY AND WOMEN OWNED BUSINESS  ENTERPRISE  WITH  FEWER  THAN
 FIVE  EMPLOYEES  WILL  BE ELIGIBLE FOR A GRANT TO COVER FORTY PERCENT OF
 PAYROLL COSTS FOR TWO MONTHS UP TO TEN THOUSAND DOLLARS TO  HELP  RETAIN
 EMPLOYEES.
   4.  LOAN  AND  GRANT ELIGIBILITY. AN ELIGIBLE FINANCIAL INSTITUTION OR
 CORPORATION MAY MAKE A LOAN OR GRANT TO AN AFFECTED BUSINESS, PROVIDED:
   (A) THE AFFECTED BUSINESS  HAS  PROVIDED  TO  THE  ELIGIBLE  FINANCIAL
 INSTITUTION  OR  CORPORATION  PROOF  SATISFACTORY TO SUCH INSTITUTION OR
 CORPORATION THAT SUCH AFFECTED BUSINESS IS AN AFFECTED BUSINESS  LOCATED
 WITHIN THE STATE OF NEW YORK.
   (B)  THE  AMOUNT  OF  THE  LOAN SHALL NOT EXCEED SEVENTY-FIVE THOUSAND
 DOLLARS AND THE AMOUNT OF THE PAYROLL COST ASSISTANCE  GRANT  SHALL  NOT
 EXCEED TEN THOUSAND DOLLARS.
   (C)  THE LOAN IS MADE IN ACCORDANCE WITH THE ELIGIBLE FINANCIAL INSTI-
 TUTION'S  AND  THE  CORPORATION'S  UNDERWRITING  POLICY  AND  STANDARDS,
 PROVIDED FURTHER THAT THE AFFECTED BUSINESS'S CREDITWORTHINESS SHALL NOT
 BE A FACTOR USED FOR THE PURPOSES OF DETERMINING ELIGIBILITY.
   (D)  THE  LOAN  AGREEMENT  SHALL  NOT (I) REQUIRE REPAYMENT DURING THE
 GRACE PERIOD, OR (II) CHARGE INTEREST ON THE PRINCIPAL AMOUNT BEFORE  OR
 DURING  THE  GRACE PERIOD OR FOR ONE HUNDRED EIGHTY DAYS AFTER THE GRACE
 PERIOD, PROVIDED AFTER SUCH ONE HUNDRED EIGHTY-DAY PERIOD, THE  ELIGIBLE
 FINANCIAL  INSTITUTION  OR  CORPORATION  MAY  CHARGE INTEREST OR FEES IN
 ACCORDANCE WITH SUCH FINANCIAL INSTITUTION'S  OR  CORPORATION'S  LENDING
 POLICY AND THE TERMS OF THE UNDERLYING LOAN AGREEMENT.
   (E)  THE LOAN AGREEMENT SHALL REQUIRE THAT THE AFFECTED BUSINESS REPAY
 THE LOAN IN FULL NOT LATER THAN ONE HUNDRED EIGHTY DAYS AFTER THE END OF
 THE GRACE PERIOD BY MAKING AT LEAST THREE, AND NO MORE THAN  SIX,  EQUAL
 INSTALLMENT  PAYMENTS.  THE  LOAN  AGREEMENT  SHALL NOT CONTAIN A FEE OR
 PENALTY FOR THE PREPAYMENT OR EARLY PAYMENT OF THE LOAN.
   (F) THE ELIGIBLE FINANCIAL  INSTITUTION  OR  CORPORATION  SHALL  OFFER
 CREDIT  COUNSELING SERVICES OR REFER SUCH AFFECTED BUSINESS TO NONPROFIT
 CREDIT COUNSELORS.
   5. ADDITIONAL LOANS. AN AFFECTED BUSINESS  WHO  HAS  RECEIVED  A  LOAN
 PURSUANT TO THIS SECTION MAY APPLY TO THE SAME ELIGIBLE FINANCIAL INSTI-

 A. 10551                            3
 
 TUTION  OR CORPORATION FOR AN ADDITIONAL LOAN FOR EACH THIRTY-DAY PERIOD
 SUCH MINORITY OR WOMEN OWNED BUSINESS  ENTERPRISE  REMAINS  AN  AFFECTED
 BUSINESS,  PROVIDED  NO  AFFECTED  BUSINESS  MAY RECEIVE MORE THAN THREE
 LOANS  UNDER  THE PROGRAM. EACH ADDITIONAL LOAN SHALL BE MADE IN ACCORD-
 ANCE WITH SUBDIVISION FOUR OF THIS SECTION.
   6. COLLECTION OF LOANS. (A) ON AND AFTER ONE HUNDRED EIGHTY DAYS  FROM
 THE END OF THE GRACE PERIOD, AN ELIGIBLE FINANCIAL INSTITUTION OR CORPO-
 RATION  THAT  HAS  MADE  A  GOOD-FAITH EFFORT TO COLLECT THE OUTSTANDING
 PRINCIPAL FROM A LOAN ISSUED PURSUANT TO THIS SECTION MAY MAKE  A  CLAIM
 TO  THE  DEPARTMENT  FOR  RECOVERY OF AN AMOUNT EQUAL TO THE OUTSTANDING
 PRINCIPAL FOR SUCH LOAN. PRIOR TO THE DEPARTMENT'S APPROVING AND SUBMIT-
 TING A CLAIM TO THE COMPTROLLER, SUCH ELIGIBLE FINANCIAL INSTITUTION  OR
 CORPORATION SHALL DEMONSTRATE TO THE SATISFACTION OF THE DEPARTMENT THAT
 THE  ELIGIBLE FINANCIAL INSTITUTION OR CORPORATION HAS MADE A GOOD-FAITH
 EFFORT TO COLLECT THE OUTSTANDING PRINCIPAL FROM THE  AFFECTED  BUSINESS
 IN  ACCORDANCE  WITH  SUCH FINANCIAL INSTITUTION'S OR CORPORATION'S LOAN
 SERVICING AND COLLECTION POLICIES. UPON PAYMENT OF  A  CLAIM,  THE  LOAN
 SHALL  BE ASSIGNED TO THE STATE, AND THE DEPARTMENT SHALL HAVE THE RIGHT
 TO CONTINUE COLLECTION EFFORTS ON THE LOAN.
   (B) THE DEPARTMENT SHALL MAINTAIN RECORDS IN  THE  REGULAR  COURSE  OF
 ADMINISTRATION  OF  THE  LOAN  GUARANTEE  PROGRAM, INCLUDING A RECORD OF
 LOANS ISSUED AND OF PAYMENTS MADE TO HONOR LOAN GUARANTEES ISSUED  UNDER
 THIS  SECTION.  THE  DEPARTMENT  SHALL  REGULARLY REVIEW SUCH RECORDS TO
 DETERMINE TOTAL LOANS ISSUED AND IDENTIFY DUPLICATIVE APPLICATIONS.
   (C) THE DEPARTMENT MAY TERMINATE ANY LOAN GUARANTEE  IF  THE  ELIGIBLE
 FINANCIAL  INSTITUTION  MISREPRESENTS  ANY INFORMATION PERTAINING TO THE
 GUARANTEE OR FAILS TO COMPLY WITH ANY REQUIREMENTS OF  THIS  SECTION  IN
 CONNECTION WITH THE GUARANTEE OF THE UNDERLYING LOAN.
   (D) IF THE AMOUNTS EXPENDED TO HONOR LOAN GUARANTEES UNDER THE PROGRAM
 EXCEED  TEN  PERCENT  OF  TOTAL LOANS ISSUED, THE DEPARTMENT SHALL IMME-
 DIATELY CEASE TO APPROVE CLAIMS AND SHALL  NOTIFY  THE  COMPTROLLER  AND
 EACH  ELIGIBLE FINANCIAL INSTITUTION AND CORPORATION OF THE TOTAL AMOUNT
 OF PAYMENTS MADE AND THAT THE DEPARTMENT HAS CEASED HONORING LOAN  GUAR-
 ANTEES.
   (E)  ANY  INTEREST  DEFERRED  OR  NOT CHARGED RELATED TO A LOAN ISSUED
 PURSUANT TO THIS SECTION SHALL BE EXEMPT FROM ALL STATE TAXES  THAT  MAY
 BE  APPLICABLE  TO  SUCH  INTEREST AMOUNTS AS THEY RELATE TO AN AFFECTED
 BUSINESS.   ELIGIBLE FINANCIAL INSTITUTIONS AND  THE  CORPORATION  SHALL
 DISCLOSE  TO AFFECTED BUSINESS BORROWERS IN THE SIGNED AFFIDAVIT OR LOAN
 DOCUMENTS THAT THERE MAY BE FEDERAL  TAX  CONSEQUENCES  TO  THE  PROGRAM
 LOANS AND GRANTS.
   (F)  NO  NEW  LOAN  APPLICATIONS  SHALL BE SUBMITTED UNDER THE PROGRAM
 AFTER THE STATE OF EMERGENCY ENDS. THE PROGRAM  SHALL  EXPIRE  UPON  THE
 REPAYMENT  OF  ALL  LOANS  MADE  UNDER THE PROGRAM AND, FOR ALL LOANS IN
 DEFAULT, THE REPAYMENT OF CLAIMS MADE UNDER THE PROGRAM, OR  THE  CESSA-
 TION OF NEW CLAIM APPROVALS UNDER PARAGRAPH (D) OF THIS SUBDIVISION.
   § 2. This act shall take effect immediately.