[House Report 118-184]
[From the U.S. Government Publishing Office]


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 Administration to issue guidance and rules for lenders 
and the Small Business Administration on handling amounts of 
Paycheck Protection 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 Expenditure  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 
Rep. Morgan McGarvey (D-KY) on July 17, 2023. The purpose of 
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 unused 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 
fraudulent and unused PPP loan funds.
    In fiscal year (FY) 2022, the OIG found that the SBA did 
not provide 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\
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    \1\U.S. Small Bus. Admin. Office Of Inspector Gen., Report 23-08, 
Serious Concerns Regarding The Return Of Paycheck Protection Program 
Funds (May 31, 2023).
    \2\Id.
    \3\Id.
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                             III. HEARINGS

    In the 118th Congress, the Committee held one hearing 
examining 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 
reported 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 
Representatives requires the Committee to list the recorded 
votes on the motion to report legislation and amendments 
thereto. The Committee voted to favorably report H.R. 4667 to 
the House of Representatives at 11:53 AM.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  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 guidance 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 requires 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 lenders 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 Congressional 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 Budget Act of 1974, the Committee provides the 
following opinion and estimate with respect to new budget 
authority, entitlement authority, and tax expenditures. While 
the Committee has not received an estimate of new budget 
authority contained in the cost estimate prepared by the 
Director of the Congressional Budget Office pursuant to Sec. 
402 of the Congressional Budget Act of 1974, the Committee does 
not believe that there will be any additional costs 
attributable to this legislation. H.R. 4667 does not direct new 
spending, 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 oversight 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 financial institutions.\4\
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    \4\Id.
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            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 duplicative 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 Assistance.

 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 contain 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 
mandates 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 terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional 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, Sec. 8, cl.1 of the Constitution of the United States.

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