Trial Engrossment of Amendment A00901 to House Bill 0537 P.N. 0500, Regular Session 2021-2022

A00901

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

537

Session of

2021

INTRODUCED BY CIRESI, SNYDER, LONGIETTI, SANCHEZ, SCHLOSSBERG,

GALLOWAY, BENHAM, GUENST, D. WILLIAMS, HOHENSTEIN, ISAACSON,

MERSKI, SAPPEY, HILL-EVANS, SCHWEYER, CONKLIN, FREEMAN,

MALAGARI, KIRKLAND, NEILSON, GUZMAN, DeLUCA, FRANKEL,

WEBSTER, DEASY, PASHINSKI, PISCIOTTANO, O'MARA, INNAMORATO,

KULIK, DELLOSO, WARREN, SIMS AND LEE, FEBRUARY 16, 2021

REFERRED TO COMMITTEE ON COMMERCE, FEBRUARY 16, 2021

AN ACT

Amending the act of April 9, 1929 (P.L.343, No.176), entitled

"An act relating to the finances of the State government;

providing for cancer control, prevention and research, for

ambulatory surgical center data collection, for the Joint

Underwriting Association, for entertainment business

financial management firms, for private dam financial

assurance and for reinstatement of item vetoes; providing for

the settlement, assessment, collection, and lien of taxes,

bonus, and all other accounts due the Commonwealth, the

collection and recovery of fees and other money or property

due or belonging to the Commonwealth, or any agency thereof,

including escheated property and the proceeds of its sale,

the custody and disbursement or other disposition of funds

and securities belonging to or in the possession of the

Commonwealth, and the settlement of claims against the

Commonwealth, the resettlement of accounts and appeals to the

courts, refunds of moneys erroneously paid to the

Commonwealth, auditing the accounts of the Commonwealth and

all agencies thereof, of all public officers collecting

moneys payable to the Commonwealth, or any agency thereof,

and all receipts of appropriations from the Commonwealth,

authorizing the Commonwealth to issue tax anticipation notes

to defray current expenses, implementing the provisions of

section 7(a) of Article VIII of the Constitution of

Pennsylvania authorizing and restricting the incurring of

certain debt and imposing penalties; affecting every

department, board, commission, and officer of the State

government, every political subdivision of the State, and

certain officers of such subdivisions, every person,

association, and corporation required to pay, assess, or

collect taxes, or to make returns or reports under the laws

imposing taxes for State purposes, or to pay license fees or

other moneys to the Commonwealth, or any agency thereof,

every State depository and every debtor or creditor of the

Commonwealth," providing for small business grant program,

imposing duties on the Department of Community and Economic

Development; and making an appropriation. in emergency COVID-

19 response, establishing the County Block Grant - Small

Business Grant Program.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The act of April 9, 1929 (P.L.343, No.176), known

as The Fiscal Code, is amended by adding an article to read:

ARTICLE I-D

SMALL BUSINESS GRANT PROGRAM

Section 101-D. Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Department." The Department of Community and Economic

Development of the Commonwealth.

"Regional network." A department economic development

service provider, including, but not limited to, industrial

development organizations, local development districts and small

business development centers.

"Small business." A retail or personal service employer

within this Commonwealth:

(1) whose gross annual receipts for the prior fiscal

year did not exceed $1,500,000; or

(2) that employs no more than 10 full-time employees.

Section 102-D. Grants and funding.

(a) Purpose.--The department shall provide grants in

accordance with this article to regional networks for the

purpose of administering and funding a regional small business

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grant program pursuant to which grants will be provided to small

businesses that are adversely affected financially due to the

coronavirus pandemic and the proclamation of disaster emergency

issued by the Governor on March 6, 2020, published in 50 Pa.B.

1644 (March 21, 2020), and any renewal of the state of disaster

emergency.

(b) Regional small business grant program.--Regional

networks awarded a grant under this article shall operate their

regional small business grant program in accordance with

guidelines developed by the department under section 107-D.

grant from a regional network to a small business under this

section shall not exceed $15,000.

Section 103-D. Application form.

(a) Development of forms.--The department shall develop a

regional small business grant application form for small

businesses to apply to regional networks for a grant under this

article.

(b) Contents of form.--At a minimum, the regional small

business grant application form shall contain the following

information:

(1) The name, address and contact information of the

small business.

(2) The amount of grant money requested.

(3) The proposed use for the grant money requested.

(4) The financial impact of the coronavirus pandemic and

the proclamation of disaster emergency issued by the Governor

on March 6, 2020, published in 50 Pa.B. 1644 (March 21,

2020), and any renewal of the state of disaster emergency, on

the small business.

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(5) Any other information that the department deems

necessary and appropriate.

Section 104-D. Public notice.

The department shall provide information regarding the

availability and award of grant money on the department's

publicly accessible Internet website.

Section 105-D. Award of grants.

(a) Criteria.--After review of the information specified

under section 103-D and within 20 days of the submission of the

grant application, the regional network shall determine whether

to award grant money to the small business and, if so, the

amount of the grant money awarded.

(b) Considerations.--In awarding grant money to a small

business, the regional network :

(1) Shall consider the geographic and demographic

diversity of the small businesses applying for the grant

money.

(2) Shall consider how the small business and other

persons would be served through the award of the grant to the

small business.

(3) May require documentation of gross annual receipts

and employee information for the small business.

(1) The regional network shall provide written notice to

the small business of the award or denial of the grant money.

(2) Notice of the award of grant money shall include the

amount of the grant money awarded and any conditions or

restrictions on the use of the grant money.

(3) Notice of the denial of all or part of the grant

money requested shall include the reasons for the full or

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partial denial.

(4) The regional network shall provide copies of all

notices to the department when they are provided to the small

businesses and shall provide other documents, information and

data to the department immediately upon request.

Section 106-D. Reports.

(a) Preparation.--By September 30, 2021, or 60 days after

the expiration of this article, whichever occurs later, the

department shall prepare a report that lists each regional

network and small business that received grant money under this

article and a summary of the information specified under section

103-D(b).

(b) Publication.--The report under this section shall be

posted on the department's publicly accessible Internet website.

Section 107-D. Guidelines.

The department may promulgate guidelines for the

implementation and administration of this article.

Section 108-D. Appropriation.

A disposition in the sum of $50,000,000 is hereby

appropriated to the department in accordance with section 1703-A

from the Budget Stabilization Reserve Fund established in

section 1701-A to administer and fund the grant program created

by this article.

Section 109-D. Expiration.

This article shall expire on September 30, 2021, or 30 days

after the termination of the declaration of disaster emergency

under 35 Pa.C.S. § 7301(c) (relating to general authority of

Governor), whichever occurs later.

Section 2. This act shall take effect immediately.

Section 1. The act of April 9, 1929 (P.L.343, No.176), known

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as The Fiscal Code, is amended by adding a section to read:

Section 135-C. Small Business Grant Program.

(a) County block grants.--From money appropriated by the

General Assembly for the distribution of grants under this

section, each county shall receive an amount equal to the

population proportion amount as determined under paragraph (2).

The following shall apply:

(1) The department shall distribute funding to counties

in accordance with this subsection no later than 21 days

after the starting date.

(2) For the purpose of this subsection, the population

proportion amount shall be determined as follows:

(i) Divide:

(A) the population estimate of the county; by

(B) the sum of the population estimates of all

counties; and

(ii) Multiply the quotient under subparagraph (i) by

the total amount appropriated by the General Assembly for

the distribution of grants under this section.

(3) For the purpose of this subsection, a county's

population shall be equal to the published estimate by the

United States Census Bureau's Population Estimates Program

for calendar year 2019.

(b) Small Business Grant Program.--The County Block Grant -

Small Business Grant Program is established within the

department for the purpose of awarding grants under this

section. The following shall apply to the program:

(1) No later than 22 days after the starting date, each

county that receives a grant under this section shall

contract with at least one CEDO or CDFI designated to serve

A00901 - 6 -

that county to award grants under this section.

(2) Subject to the prohibition under subparagraph (ii),

grants under this section may be awarded to eligible

applicants for the purpose of alleviating revenue losses and

paying eligible operating expenses. The following shall apply

to grants awarded under this section:

(i) A grant awarded to an eligible applicant may not

exceed $15,000.

(ii) A grant may not be awarded to pay for the same

eligible operating expenses for which an eligible

applicant receives or received payment, reimbursement or

loan forgiveness from the following sources:

(A) Money that is not required to be repaid to

the Federal Government under the CARES Act or

Consolidated Appropriations Act, 2021.

(B) The act of May 29, 2020 (P.L. , No.2A),

known as the COVID-19 Emergency Supplement to the

General Appropriation Act of 2019.

(3) The receipt of a loan or grant issued under the

authority of the Federal Government or the Commonwealth shall

not disqualify an applicant from eligibility for a grant

under this section.

(4) Priority in the awarding of grants under this

section shall be given to an eligible applicant that meets

any of the following:

(i) The eligible applicant has not received a loan

or grant issued under the authority of the Commonwealth

or the Commonwealth's political subdivisions or by the

Federal Government under the CARES Act or Consolidated

Appropriations Act, 2021.

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(ii) The eligible applicant was subject to closure

by the proclamation of disaster emergency issued by the

Governor on March 6, 2020, published at 50 Pa.B. 1644

(March 21, 2020), and any renewal of the state of

disaster emergency.

(iii) The eligible applicant can demonstrate a

reduction in revenue that meets any of the following:

(A) A reduction in gross receipts of 50% or more

for the period beginning after March 31, 2020, and

ending before December 31, 2020, in comparison to the

period beginning after March 31, 2019, and ending

before December 31, 2019.

(B) If the eligible applicant was not in

operation during the entire comparison period under

clause (A), but was in operation on March 1, 2020, a

monthly average reduction in gross receipts of 50% or

more for the period beginning after March 31, 2020,

and ending before December 31, 2020, in comparison to

the period beginning after January 1, 2020, and

ending before April 1, 2020.

(5) The following shall apply to applications to receive

grants under this section:

(i) Applications shall be in a form determined by a

county with input from a CEDO or CDFI processing the

application on behalf of a county.

(ii) Applications shall contain documentation as

required by the county.

(iii) Applications shall be available

electronically.

(iv) No later than 45 days after the starting date,

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a CEDO or CDFI shall receive and consider applications on

a rolling basis until funding for grants received by the

county under subsection (a) has been completely expended,

or 130 days after the starting date, whichever occurs

first. Upon completely expending the funds available for

grants, a CEDO or CDFI shall notify the department.

(6) The following shall apply to reviewing applications

for grants under this section:

(i) No later than 160 days after the starting date,

a CEDO or CDFI shall approve or disapprove applications

for grants.

(ii) Upon approving an application under

subparagraph (i), a CEDO or CDFI shall enter into a grant

agreement with the eligible applicant in order to award

the grant.

(iii) The grant agreement under subparagraph (ii)

shall explain the terms and conditions of the grant,

including the applicable laws of this Commonwealth and

reporting requirements.

(iv) The grant agreement under subparagraph (ii) may

be electronically signed and returned to the CEDO or CDFI

that approved the application.

(7) An eligible applicant or authorized representative

of the eligible applicant that submits an application for a

grant under this section shall certify in good faith to all

of the following:

(i) The eligible applicant was in operation on March

1, 2020, and, if required, paid income taxes to the

Federal Government and the Commonwealth, as reported on

individual or business tax returns.

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(ii) The eligible applicant remains in operation and

does not intend to permanently cease operations within

one year of the date of application.

(iii) COVID-19 had an adverse economic impact on the

eligible applicant, which makes the grant request

necessary to support the ongoing operations of the

eligible applicant.

(iv) The grant will be used to pay for COVID-19-

related economic impacts.

(v) During the period beginning January 1, 2021, and

ending 150 days after the starting date, the eligible

applicant has not and will not receive another grant

under this section.

(vi) The information provided in the application

and all supporting documents and forms is true and

accurate in all material respects. An eligible applicant

or an authorized representative of the eligible applicant

that knowingly makes a false statement to obtain a grant

shall be subject to 18 Pa.C.S. § 4904 (relating to

unsworn falsification to authorities).

(8) The following shall apply to the awarding of grants

under this section:

(i) A CEDO or CDFI may award grants in increments of

$5,000, not to exceed the limitation under paragraph (2)

(i).

(ii) A fully executed grant agreement under

paragraph (6)(ii) shall be required before the

disbursement of grant funds.

(iii) The aggregate amount of all grants awarded may

not exceed the amount of money received by the county

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under subsection (a).

(9) A CEDO or CDFI may charge a fee not to exceed $500

per completed and reviewed application for a grant under this

section. Fees charged under this paragraph shall be deducted

from the total amount of money distributed to the county

under subsection (a) and may not reduce the amount of the

grant awarded to an eligible applicant.

(10) A grant awarded under this section shall be paid to

an eligible applicant no later than 175 days after the

starting date.

(11) A county that provides grants under this section

shall compile a report, which shall include all of the

following:

(i) A list of each grant awarded.

(ii) The name and address of each grant recipient.

(iii) The amount of the grant and a description of

the financial impact to the grant recipient.

(iv) The name of the CEDO or CDFI that processed the

grant.

(12) A county shall submit the report under paragraph

(11) to the department no later than 200 days after the

starting date.

(13) The department shall prepare a consolidated report

with the information in the reports submitted under paragraph

(12) from all counties and submit the consolidated report to

the chair and minority chair of the Appropriations Committee

of the Senate and the chair and minority chair of the

Appropriations Committee of the House of Representatives no

later than 235 days after the starting date.

(14) The county shall post and maintain the report under

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paragraph (11) on the county's publicly accessible Internet

website.

(15) The department shall post and maintain the

consolidated report under paragraph (14) on the department's

publicly accessible Internet website.

(16) A county awarding grants and a CEDO or CDFI

processing grants on behalf of a county under this section

shall provide documentation to the Department of the Auditor

General or the department, upon request, for purposes of an

audit review.

(17) The department may not impose additional

requirements on counties that are not specified in this

section.

(d) (Reserved).

(e) Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"CDFI." A community development financial institution that

is certified by the United States Department of the Treasury, is

headquartered in this Commonwealth, is part of the 17-member

Pennsylvania community development financial institution network

and primarily provides business loans to low-to-moderate income

individuals and business owners.

"CEDO." An economic development organization that has been

certified by the Pennsylvania Industrial Development Authority

or an economic development organization that serves more than

one county and is accredited by the International Economic

Development Council.

"Consolidated Appropriations Act, 2021." The Consolidated

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Appropriations Act, 2021 (Public Law 116-260, 134 Stat. 1182).

"Department." The Department of Community and Economic

Development of the Commonwealth.

"Economic development organization." Any local development

district, industrial development agency, industrial resource

center, redevelopment authority, community development financial

institution or any other nonprofit economic development

organization that is certified to participate in the

Pennsylvania Industrial Development Authority loan program.

"Eligible applicant." An entity that submits an application

for a grant under this section and meets all of the following:

(1) The entity is not publicly traded.

(2) The entity experienced a reduction in revenue in

calendar year 2020, measured as follows:

(i) The entity had gross receipts during the first,

second, third or fourth quarter in calendar year 2020

that demonstrate at least a 25% reduction from the

entity's gross receipts during the same quarter in

calendar year 2019.

(ii) If the entity was not in business during the

first or second quarter of calendar year 2019, but was in

business during the third and fourth quarters of calendar

year 2019, the entity had gross receipts during the

first, second, third or fourth quarter of calendar year

2020 that demonstrate at least a 25% reduction from the

entity's gross receipts during the third or fourth

quarter of calendar year 2019.

(iii) If the entity was not in business during the

first, second or third quarter of calendar year 2019, but

was in business during the fourth quarter of calendar

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year 2019, the entity had gross receipts during the

first, second, third or fourth quarter of calendar year

2020 that demonstrate at least a 25% reduction from the

fourth quarter of calendar year 2019.

(iv) If the entity was not in business during

calendar year 2019, but was in operation on March 1,

2020, the entity had gross receipts during the second,

third or fourth quarter of calendar year 2020 that

demonstrate at least a 25% reduction from the gross

receipts of the entity during the first quarter of

calendar year 2020.

(v) For the purpose of this definition, if the

entity was in operation in all four quarters of calendar

year 2019, the entity shall be deemed to have experienced

the revenue reduction under subparagraph (i) if the

entity experienced a reduction in annual receipts of at

least 25% in calendar year 2020 compared to calendar year

2019 and the entity provides copies of the entity's

annual Federal tax forms substantiating the revenue

decline .

(vi) For the purpose of this definition, if the

entity changed ownership or control in calendar year

2020, the entity may measure the entity's reduction in

revenue in calendar year 2020 under subparagraph (i),

(ii), (iii), (iv) or (v) using the gross receipts of the

entity for calendar year 2019.

(3) The entity meets all of the following conditions as

of March 1, 2020:

(i) The entity is a retail or personal service

employer within this Commonwealth.

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(ii) The entity has no more than 10 full-time

employees.

(iii) The entity has gross annual receipts for the

prior fiscal year that did not exceed $1,500,000.

"Eligible operating expense." An operating expense,

including a payroll and non-payroll expense, that is common and

accepted in an eligible applicant's industry, helpful and

appropriate for the eligible applicant's trade or business and

subject to the following limitations:

(1) The operating expense must have been incurred

between March 1, 2020, and 130 days after the starting date,

or prior to submission of an application for a grant under

this section, whichever occurs first.

(2) For a mortgage obligation, the mortgage must have

been in force before March 1, 2020.

(3) For rent, under lease agreements, the lease

agreement must have been in force before March 1, 2020.

(4) For utility costs, service must have begun before

March 1, 2020.

(5) For the purpose of paragraphs (2) and (3), if an

existing mortgage obligation or lease agreement is in force

before March 1, 2020, and is refinanced or restructured after

March 1, 2020, the mortgage obligation or lease agreement is

deemed to have been in force before March 1, 2020.

"Full-time equivalent employee." The quotient obtained by

dividing the total number of hours for which employees were

compensated for employment over the preceding 12-month period by

2,080.

"Gross receipts." Revenue in whatever form received or

accrued, in accordance with the recipient's accounting method,

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from whatever source, including from the sales of products or

services, interest, dividends, rents, royalties, fees or

commissions, reduced by returns and allowances. The term does

not include any of the following:

(1) Taxes collected for and remitted to a taxing

authority if included in gross or total income, including

sales or other taxes collected from customers and excluding

taxes levied on an entity or the entity's employees.

(2) Proceeds from transactions between an entity and the

entity's domestic or foreign affiliates.

(3) Amounts collected for another by a travel agent,

real estate agent, advertising agent or conference management

service provider.

"Program." The County Block Grant - Small Business Grant

Program established under subsection (b).

"Starting date." The effective date of this section or the

effective date of an appropriation for distribution of grants

under this section, whichever is later.

Section 2. This act shall take effect immediately.

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