TUPELO • State lawmakers on Friday began outlining how to spend $1.25 billion in federal coronavirus relief funds and are hoping to pass a bill by early next week to provide small business grants.

The Senate Appropriations Committee convened a hearing to discuss the COVID-19 Mississippi Business Assistance Act, which is currently slated to provide up to $100 million in grants for small businesses across the state.

“Our thought is first to award funds to eligible businesses that were forced to close or voluntarily closed and have not received any federal assistance from any (Small Business Association) programs for COVID-19. Second, is award funds to other eligible businesses,” Senate Finance Chairman Josh Harkins, R-Flowood, said.

In order for a business to qualify for a grant, it must have been established in the state prior to March 1, be in good standing with the Secretary of State’s office, have a controlling interest owned by one or more Mississippi residents and have no more than 50 employees, according to the current version of the bill.

Eligible businesses can receive anywhere from $1,000 to $25,000 in funds under the bill. The money would come in the form of a grant, and businesses would not have to repay the money. $15 million of the total funds are specifically set to go toward minority-owned businesses.

State Sen. Daniel Sparks, R-Belmont, told the Daily Journal that he supported the overall intent of the bill, but he had reservations about the lawmaking body telling small business owners that the grant money could be used to cover a loss of profit when that might not be the case.

“I want somebody that is well-versed in this ... to say ‘I get what you’re saying, and I cleared it with the U.S. Treasury,’” Sparks said.

The federal funds come from the Coronavirus, Aid, Relief and Economic Securities Act that was passed by Congress in March. Mississippi received $1.25 billion from the federal act. The U.S. Department of the Treasury then issued regulations on how states can spend the funds.

State Sen. Chad McMahan, R-Guntown, expressed concern at the hearing that businesses with only one or two employees would be overlooked with this legislation or would not have extra staff to complete an application

“This may not be the best method,” McMahan said. “I just want to verify that we’re taking every effort to help these microbusinesses, these very small businesses.”

McMahan also doubted that the Mississippi Development Authority, the state’s economic development agency, has the capabilities to administer the funds. He suggested that the state’s four workforce development areas, like Three Rivers Planning and Development, should administer the money.

“MDA does not have a director. We’ve been six months, and they don’t have a director of MDA,” McMahan said. “Why are we using them as the administrator of this? Do they have the expertise or do they even have the systems in place to do this? It may take them 30, 60 or even 90 days to process something.”

Harkins said that MDA has the ability to process a lot of grants and that the agency administered grants after Hurricane Katrina.

In the current version of the bill, $750,000 is allocated for MDA to administer the program, which would allow the agency to hire additional staff to handle the applications.

MDA is an executive agency, which means it is under the direction of the governor. When asked about MDA at a press conference on Friday, Gov. Tate Reeves did not specifically say if he thought MDA would be able to efficiently process a large number of applications for the grant money.

“I will tell you our parameters that the right agency must oversee it, and they must be properly staffed,” Reeves said. “We believe there are certain ways and manners of pre-auditing those funds that are critical. So there’s a number of critical steps that must be taken. But we are early in the process and we are working with the legislative leaders to make that happen.”

The discussion on the legislation came after state lawmakers were locked into a tense feud with Reeves over who was the authority to spend more than a billion dollars of federal coronavirus aid.

Legislative leaders believed the state constitution gave them the power to appropriate funds and overwhelmingly passed a bill that stripped Reeves of the power to spend the funds. All lawmakers from Northeast Mississippi voted for the bill, except for Rep. Shane Aguirre, R-Tupelo, who did not cast a vote.

As a deadline to veto the bill approached, Lt. Gov. Delbert Hosemann, House Speaker Philip Gunn and Reeves announced a deal to work together and avoid a veto.

The legislative leaders agreed they would appropriate the funds with advice from the governor.

State Sens. Kathy Chism, R-New Albany and Benjamin Suber, R-Bruce, serve on the Senate Appropriations Committee. Neither of the two Northeast Mississippi lawmakers could be reached for comment on Friday afternoon about the small -business assistance legislation.

McMahan is a member of the Senate Finance Committee, which is working with the appropriations committee. He told the Daily Journal that he does plan to support the bill, but hopes the leaders of the committee take his concerns under advisement.

McMahan has also outlined other areas on which he would like to spend the federal relief money, such as setting aside $300 million for rural power associations to provide internet services to every home, allocating $50 million to reimburse local governments for out-of-pocket expenses and providing $200 million for tier one hospitals.

Lawmakers will reconvene at 10 a.m. on Tuesday to further discuss how to spend relief dollars.

taylor.vance@journalinc.com

Twitter: @taylor_vance28

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