S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8121--A
 
                             I N  S E N A T E
 
                              March 23, 2020
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Veterans, Homeland Securi-
   ty and Military Affairs -- committee discharged and said bill  commit-
   ted to the Committee on Commerce, Economic Development and Small Busi-
   ness  --  committee  discharged,  bill  amended,  ordered reprinted as
   amended and recommitted to said committee

 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD15979-03-0

 S. 8121--A                          2
 
 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-
 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.

 S. 8121--A                          3
 
   (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-
 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.