Late Wednesday night the House and Senate came to an agreement on CARES Act appropriation specifically for small businesses. These dollars were part of the $1.25 billion given to the state in response to the COVID-19 pandemic.
The conference report passed by a vote of 116 to 1 in the House, with Rep. Scott voting no and Rep. Bomgar, Criswell and Barnett voting present. After a longer debate it was passed in the Senate by a vote of 42-2.
The appropriation comes in the form of a conference report on the budget transfer bill, SB 2772. This bill was originally passed a few weeks ago by Legislature. This act was argued between the Governor, who believed he had the authority to divvy up the dollars, and Legislative leaders Lt. Governor Hosemann and Speaker Gunn. Eventually an agreement was made, and Legislature took control.
Senate members brought the bill back to the floor for consideration and discussions began on how the money would be divided. Originally, it was thought that $100 million would be used for small businesses in various ways under the federal guidelines.
The approved plan will move $240 million into a special fund managed by the Mississippi Development Authority for small business owners entitled “Back to Business Mississippi Grant Fund.” This money will be divvied out as grants, not loans. $60 million will be placed in the Mississippi COVID-19 Relief Payment Fund, which will be the immediate funds sent to businesses. This allocation provides a total of $300 million to small business.
Each business forced to close during the pandemic will receive an immediate payment of $2,000 out of the relief fund. Those payments are part of the non-application program. Other businesses can begin the application grant process for $1,500 minimum (with an additional $500). This process also allows businesses to apply for up to $25,000 in grants through the Back to Business Grant Fund.
In Section 7 of the bill it provides a 21-day application period in which MDA will only consider and review applications from eligible businesses that did not receive a U.S. Small Business Administration-Guaranty Paycheck Protection Program (PPP) loan. After that time period, other businesses impacted will be considered. MDA will be responsible for developing regulations, procedures and applications for these grants.
The eligible businesses include those that have a physical address in the state of Mississippi. They must have been registered before March 1, 2020, had an Employer Identification Number or Social Security Number and an active department withholding account established before that date. Small businesses are classified as no more than 50 full time employees.
The bill also holds provisions for minority business enterprises. It will specifically provide grants of at least $40 million for those businesses who apply within the first 60 days. House and Senate Democrats said they were encouraged to see minority businesses prioritized.
“The Democrats’ primary focus was to ensure that we produced something impactful for small businesses, but specifically minority and disadvantaged businesses. We were able to secure provisions for approximately 30,000 small businesses that suffered a loss as a result of being shut down due to federal, state, or municipal executive orders. These businesses include but are not limited to barbers, cosmetologists, and child care centers. This was a great result for our constituents and a great testament as to what can happen when you have a bipartisan effort working together,” said Rep. Robert Johnson III, House Minority Leader.
The grant fund will last until the money runs out. Any unclaimed dollars from the Back to Business fund will be subject to the discretion of Governor Reeves by November 1, 2020.