H. Rept. 118–184: Bill on Returning Erroneous COVID Loans
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- Crpt 118Hrpt184
Summary
House Report 118–184 of the 118th Congress, 1st Session, submitted by Mr. Williams of Texas from the Committee on Small Business on September 1, 2023 to accompany H.R. 4667, the RECLAIM Taxpayer Funds Act. The committee reports the bill favorably without amendment and recommends that it pass. The report states the bill would require the Small Business Administration to issue guidance and procedures for accepting, processing and accounting for fraudulent and unused Paycheck Protection Program loan funds, citing SBA Office of Inspector General Report 23–08. It recounts a July 13, 2023 hearing at which the Inspector General testified to an estimated $200 billion in fraudulent loans out of $1.2 trillion disbursed, and a July 18, 2023 markup. A section-by-section analysis covers return guidance, a returns handling process, definitions and CUTGO compliance.
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118TH CONGRESS REPORT
" HOUSE OF REPRESENTATIVES !
1st Session 118–184
RETURNING ERRONEOUS COVID LOANS ADDRESSING
ILLEGAL AND MISAPPROPRIATED TAXPAYER FUNDS ACT
SEPTEMBER 1, 2023.—Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. WILLIAMS of Texas, from the Committee on Small Business,
submitted the following
R E P O R T
[To accompany H.R. 4667]
The Committee on Small Business, to whom was referred the bill
(H.R. 4667) to require the Administrator of the Small Business Ad-
ministration to issue guidance and rules for lenders and the Small
Business Administration on handling amounts of Paycheck Protec-
tion Loans returned by borrowers, and for other purposes, having
considered the same, reports favorably thereon without amendment
and recommends that the bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary ........................................................................ 1
II. Need for Legislation .................................................................................... 2
III. Hearings ....................................................................................................... 2
IV. Committee Consideration ........................................................................... 2
V. Committee Votes ......................................................................................... 2
VI. Section-by-Section of H.R. 4667 ................................................................. 5
VII. Congressional Budget Office Cost Estimate ............................................. 5
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures 5
IX. Oversight Findings and Recommendations .............................................. 6
X. Performance Goals and Objectives ............................................................ 6
XI. Statement of Duplication of Federal Programs ........................................ 6
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits ..................................................................................................... 6
XIII. Federal Mandates Statement ..................................................................... 6
XIV. Federal Advisory Committee Statement ................................................... 6
XV. Applicability to Legislative Branch ........................................................... 6
XVI. Statement of Constitutional Authority ...................................................... 7
I. PURPOSE AND BILL SUMMARY
H.R. 4667 was introduced by Rep. Maria Salazar (R–FL) and
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Rep. Morgan McGarvey (D–KY) on July 17, 2023. The purpose of
39–006
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H.R. 4667, the ‘‘RECLAIM Taxpayer Funds Act,’’ is to require the
Small Business Administration (SBA) to establish processes and
procedures to accept, process, and account for fraudulent and un-
used Paycheck Protection Program (PPP) loan funds.
II. NEED FOR LEGISLATION
H.R. 4667 enacts recommendations made by the SBA Office of
the Inspector General (OIG) that the SBA establish processes and
procedures to accept, process, and account for potentially fraudu-
lent and unused PPP loan funds.
In fiscal year (FY) 2022, the OIG found that the SBA did not pro-
vide comprehensive fraud guidance to lenders. In addition, the OIG
received numerous inquiries regarding how to handle potentially
fraudulent PPP loans that ultimately went unanswered.1 Since
then, the OIG found that the SBA’s guidance to borrowers and
lenders on returning PPP funds is insufficient, as it does not cover
how funds can be returned at the time of forgiveness, nor does the
SBA have specific guidance for financial institutions that need to
return deposits related to PPP funds.2 This bill remedies the lack
of official guidance for borrowers or lenders of PPP loans to return
PPP funds to the government.3
III. HEARINGS
In the 118th Congress, the Committee held one hearing exam-
ining the issues covered in H.R. 4667. On July 13, 2023, during the
Full Committee hearing, ‘‘Stolen Taxpayer Funds: Reviewing the
SBA and OIG Reports of Fraud in Pandemic Lending Programs,’’
the Inspector General testified that of the $1.2 trillion in COVID–
19 Economic Injury Disaster Loans (EIDL) and PPP loans that
were disbursed, it is estimated that $200 billion—or 17 percent—
were fraudulent.
IV. COMMITTEE CONSIDERATION
The Committee on Small Business met in open session, with a
quorum being present, on July 18, 2023, and ordered H.R. 4667 re-
ported to the House of Representatives. During the markup, no
amendments were offered.
V. COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of Representa-
tives requires the Committee to list the recorded votes on the mo-
tion to report legislation and amendments thereto. The Committee
voted to favorably report H.R. 4667 to the House of Representatives
at 11:53 AM.
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1 U.S. SMALL BUS. ADMIN. OFFICE OF INSPECTOR GEN., REPORT 23–08, SERIOUS CONCERNS RE-
GARDING THE RETURN OF PAYCHECK PROTECTION PROGRAM FUNDS (MAY 31, 2023).
2 Id.
3 Id.
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VI. SECTION-BY-SECTION OF H.R. 4667
Section 1. Short title
This Act may be cited as the ‘‘Returning Erroneous COVID
Loans Addressing Illegal and Misappropriated Taxpayer Funds
Act’’ or the ‘‘RECLAIM Taxpayer Funds Act’’.
Section 2. Paycheck protection loan return guidance
This section requires that the SBA issue guidance for borrowers
and lenders returning any unused amounts of PPP loans. The guid-
ance must include processes and procedures for how unused
amounts of PPP loans should be returned from the borrower to the
lender, and then from the lender to the SBA. This section also re-
quires the SBA guidance to detail the responsibilities of the lenders
and financial institutions to accept and document the return of any
unused amounts of PPP loans, as well as a reminder that any lend-
ers and borrowers must comply with the statutory requirement to
report any information indicating the occurrence of fraud with the
SBA OIG.
Section 3. Returns handling process
This section requires that the SBA establish guidance on how the
SBA will accept unused amounts of PPP loans, and mandates that
such funds be returned to the Department of Treasury. This section
also requires the SBA to establish guidance on a process to track
the returned amounts of PPP loans to mitigate the risk of financial
loss to the Federal Government.
Section 4. Definitions
This section defines the terms ‘‘Administration,’’ ‘‘Administrator,’’
and ‘‘PPP Loan.’’
Section 5. Compliance with CUTGO
This section does not authorize any additional appropriations for
this bill.
VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
Pursuant to clause 3(d)(1) of House rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of the
Congressional Budget Office pursuant to section 402 of the Con-
gressional Budget Act of 1974. The Committee has requested but
not received from the Director of the Congressional Budget Office
a cost estimate for the Committee’s provisions. Once available, the
cost estimate will be published in the Congressional Record.
VIII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND
TAX EXPENDITURES
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House
of Representatives and section 308(a)(I) of the Congressional Budg-
et Act of 1974, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement author-
ity, and tax expenditures. While the Committee has not received an
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estimate of new budget authority contained in the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant to Sec. 402 of the Congressional Budget Act of 1974, the Com-
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mittee does not believe that there will be any additional costs at-
tributable to this legislation. H.R. 4667 does not direct new spend-
ing, and instead establishes processes to track, collect, and return
fraudulent and unused PPP loans to the Federal Government.
IX. OVERSIGHT FINDINGS AND RECOMMENDATIONS
In accordance with clause 3(c)(1) of rule XIII and clause 2(b)(1)
of rule X of the Rules of the House of Representatives, the over-
sight findings and recommendations of the Committee on Small
Business with respect to the subject matter contained in the H.R.
4667 are incorporated into the descriptive portions of this report.
X. PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirements of clause 3(c)(1) of rule XIII of
the Rules of the House of Representatives, the performance goals
and objectives of H.R. 4667 are to require the SBA to incorporate
the recommendations provided in the Inspector General Report 23–
08, Serious Concerns Regarding the Return of Paycheck Protection
Program Funds, which request action by the SBA to ensure it has
processes and procedures in place to adequately accept, process,
and account for PPP funds returned by borrowers, lenders, and fi-
nancial institutions.4
XI. STATEMENT OF DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House
of Representatives, no provision of H.R. 4667 is known to be dupli-
cative of another Federal program, including any program that was
included in a report to Congress pursuant to section 21 of Public
Law 111–139 or the most recent Catalog of Federal Domestic As-
sistance.
XII. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND LIMITED
TARIFF BENEFITS
With respect to clause 9 of rule XXI of the Rules of the House
of Representatives, the Committee finds that the bill does not con-
tain any congressional earmarks, limited tax benefits, or limited
tariff benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI of
the Rules of the House of Representatives.
XIII. FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal man-
dates prepared by the Director of the Congressional Budget Office
pursuant to section 423 of the Unfunded Mandates Reform Act.
XIV. FEDERAL ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b) of the
Federal Advisory Committee Act were created by this legislation.
XV. APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to the
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terms and conditions of employment or access to public services or
4 Id.
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accommodations within the meaning of section 102(b)(3) of the Con-
gressional Accountability Act.
XVI. STATEMENT OF CONSTITUTIONAL AUTHORITY
Pursuant to clause 7 of Rule XII of the Rules of the House, the
Committee finds that the authority for this legislation in Art. I, § 8,
cl.1 of the Constitution of the United States.
Æ
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