Hardest-Hit Small Business COVID Relief Act of 2022
Bill: S.4471 | Sponsor: Sen. Cardin, Benjamin L. (D-MD)
Policy area: Commerce

Summary:
Hardest-Hit Small Business COVID Relief Act of 2022
This bill requires the Small Business Administration to provide grants to small businesses that experienced substantial losses due to the COVID-19 pandemic.

To provide relief for small businesses suffering extraordinary losses 
                     due to the COVID-19 pandemic.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Hardest-Hit Small Business COVID 
Relief Act of 2022''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definitions.
Sec. 4. Hardest-Hit Small Business Relief Fund.
Sec. 5. Grants from Fund.
Sec. 6. Data transparency and customer service.
Sec. 7. Business identifiers.
Sec. 8. Oversight and audits.
Sec. 9. Gross receipts.
Sec. 10. Rules.
Sec. 11. Transfer of funds.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Small Business Administration.
            (2) Covered mortgage obligation; covered rent obligation; 
        covered supplier cost; covered utility payment; covered worker 
        protection expenditure.--The terms ``covered mortgage 
        obligation'', ``covered rent obligation'', ``covered supplier 
        cost'', ``covered utility payment'', and ``covered worker 
        protection expenditure'' have the meanings given the terms in 
        section 7A(a) of the Small Business Act (15 U.S.C. 636m(a)).
            (3) Covered period.--The term ``covered period'' means the 
        period--
                    (A) beginning on March 1, 2020; and
                    (B) ending on March 31, 2023, or a date to be 
                determined by the Administrator that is not later than 
                2 years after the date of enactment of this Act.
            (4) Eligible entity.--The term ``eligible entity''--
                    (A) means a small business concern (as defined in 
                section 3 of the Small Business Act (15 U.S.C. 632)) 
                that has experienced substantial losses resulting from 
                the COVID-19 pandemic, as determined by the 
                Administrator;
                    (B) may include--
                            (i) a Tribally-owned concern;
                            (ii) a sole proprietorship;
                            (iii) an independent contractor; and
                            (iv) an eligible self-employed individual; 
                        and
                    (C) does not include--
                            (i) an entity described in subparagraph (A) 
                        that--
                                    (I) is a State or local government-
                                owned or operated business; and
                                    (II) has a pending application for 
                                or has received a grant under--
                                            (aa) section 324 of the 
                                        Economic Aid to Hard-Hit Small 
                                        Businesses, Nonprofits, and 
                                        Venues Act (15 U.S.C. 9009a); 
                                        or
                                            (bb) section 5003 of the 
                                        American Rescue Plan Act of 
                                        2021 (15 U.S.C. 9009c);
                            (ii) a publicly-traded company;
                            (iii) an entity that is owned or operated 
                        by a private equity fund;
                            (iv) an entity that was not in operation 
                        before March 1, 2020; or
                            (v) an entity that is not in operation on, 
                        and does not intend to reopen on or before the 
                        date that is 180 days after, the date on which 
                        the entity applies for a grant.
            (5) Eligible self-employed individual.--The term ``eligible 
        self-employed individual'' has the meaning given the term in 
        section 7002(b) of the Families First Coronavirus Response Act 
        (26 U.S.C. 1401 note).
            (6) Exchange; issuer; security.--The terms ``exchange'', 
        ``issuer'', and ``security'' have the meanings given those 
        terms in section 3(a) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78c(a)).
            (7) Fund.--The term ``Fund'' means the Hardest-Hit Small 
        Business Relief Fund established under section 4(a).
            (8) National securities exchange.--The term ``national 
        securities exchange'' means an exchange that is registered in 
        accordance with section 6 of the Securities Exchange Act of 
        1934 (15 U.S.C. 78f).
            (9) Payroll costs.--The term ``payroll costs'' has the 
        meaning given the term in section 7(a)(36)(A) of the Small 
        Business Act (15 U.S.C. 636(a)(36)(A)), except that such term 
        shall not include--
                    (A) qualified wages (as defined in subsection 
                (c)(3) of section 2301 of the CARES Act (26 U.S.C. 3111 
                note)) taken into account in determining the credit 
                allowed under such section 2301; or
                    (B) premiums taken into account in determining the 
                credit allowed under section 6432 of the Internal 
                Revenue Code of 1986.
            (10) Private equity fund.--The term ``private equity fund'' 
        has the meaning given the term in section 225.173(a) of title 
        12, Code of Federal Regulations, or any successor regulation.
            (11) Publicly-traded company.--The term ``publicly-traded 
        company'' means an entity that is majority owned or controlled 
        by an entity that is an issuer, the securities of which are 
        listed on a national securities exchange.
            (12) Tribally-owned concern.--The term ``Tribally-owned 
        concern'' has the meaning given the term in section 124.3 of 
        title 13, Code of Federal Regulations, or any successor 
        regulation.

SEC. 4. HARDEST-HIT SMALL BUSINESS RELIEF FUND.

    (a) Establishment.--There is established in the Treasury of the 
United States a fund to be known as the Hardest-Hit Small Business 
Relief Fund.
    (b) Funding.--
            (1) In general.--The Fund shall consist of--
                    (A) amounts transferred under section 11; and
                    (B) other amount appropriated to the Fund.
            (2) Administrative expenses.--Of the amounts transferred 
        under section 11, $80,000,000 shall be for administrative 
        expenses to carry out the program under this Act, of which 
        $20,000,000 shall be for the Inspector General of the Small 
        Business Administration for necessary expenses of the Office of 
        Inspector General.

SEC. 5. GRANTS FROM FUND.

    (a) In General.--Except as provided in subsection (c)(4), the 
Administrator shall make grants under this section to eligible entities 
in the order in which applications are received by the Administrator.
    (b) Applications.--
            (1) Certification.--An eligible entity applying for a grant 
        under this section shall make a good faith certification that--
                    (A) the uncertainty of current economic conditions 
                makes necessary the request for the grant to support 
                the ongoing operations of the eligible entity;
                    (B) the eligible entity does not have a pending 
                application for, and has not received, a grant under--
                            (i) section 324 of the Economic Aid to 
                        Hard-Hit Small Businesses, Nonprofits, and 
                        Venues Act (15 U.S.C. 9009a); or
                            (ii) section 5003 of the American Rescue 
                        Plan Act of 2021 (15 U.S.C. 9009c); and
                    (C) contains any other information that the 
                Administrator may require.
            (2) Verification materials.--The Administrator shall use 
        tax records and may, in addition, use other reliable sources 
        such as certified accounting statements with respect to an 
        applicant for a grant to determine--
                    (A) the eligibility of the applicant for that 
                grant; and
                    (B) the amount of that grant to the applicant.
            (3) Acceptance of applications.--Not later than 90 days 
        after the date of enactment of this Act, the Administrator 
        shall begin accepting applications for grants under this 
        section.
    (c) Amount of Grant.--
            (1) In general.--Subject to paragraph (4), the amount of a 
        grant under this section made to an eligible entity shall be 
        determined based on a formula to be established by the 
        Administrator.
            (2) Reduction.--Any formula established by the 
        Administrator to determine grant amounts under paragraph (1) 
        shall reduce awards by amounts a recipient has received under--
                    (A) section 1110 of the Coronavirus Aid, Relief, 
                and Economic Security Act (15 U.S.C. 9009);
                    (B) section 331 of the Economic Aid to Hard-Hit 
                Small Businesses, Nonprofits, and Venues Act (15 U.S.C. 
                9009b); or
                    (C) section 5002 of the American Rescue Plan Act of 
                2021 (15 U.S.C. 9009 note).
            (3) Determination of revenue.--
                    (A) In general.--When calculating the revenue of an 
                entity for purposes of determining the eligibility of 
                the entity for a grant under this section or the amount 
                of such a grant, the Administrator shall treat as 
                revenue--
                            (i) any amounts received from a covered 
                        loan made under paragraph (36) or (37) of 
                        section 7(a) of the Small Business Act (15 
                        U.S.C. 636(a)), in 2020 or 2021; and
                            (ii) the amount by which the total of all 
                        remunerative payments made to an individual, 
                        including any annual salary paid to an 
                        employee, in 2020, or 2021, exceeds $250,000.
                    (B) Administrator authority.--The Administrator may 
                determine the types of payments and individuals to 
                which subparagraph (A)(ii) applies.
            (4) Insufficient funding.--
                    (A) In general.--If the Administrator determines 
                that the amounts made available to carry out this 
                section are insufficient to make grants to each 
                eligible entity in the amount provided under paragraph 
                (1), the Administrator shall distribute grants to all 
                eligible applicants that submit an application during 
                the 21-day period beginning on the date on which the 
                Administrator begins accepting those applications on 
                either--
                            (i) a pro rata basis; or
                            (ii) based on a formula to be determined by 
                        the Administrator.
                    (B) Reserving funds.--Nothing in subparagraph (A) 
                shall prevent the Administrator from--
                            (i) reserving funding for applicants that 
                        may be determined to be eligible for a grant 
                        upon reconsideration; or
                            (ii) making partial awards to eligible 
                        entities on a preliminary basis until the 
                        amount of funding required to fund grants to 
                        all eligible entities that submit applications 
                        is established upon the completion of the 
                        reconsideration process.
    (d) Use of Funds.--During the covered period, an eligible entity 
that receives a grant under this section may use amounts received for 
the following expenses incurred as a direct result of, or during, the 
COVID-19 pandemic:
            (1) Payroll costs.
            (2) Payments to independent contractors, as reported on 
        Form 1099-MISC, except that each payment under this paragraph 
        shall be in an amount that is not more than $100,000.
            (3) Scheduled payments of interest or principal on any 
        covered mortgage obligation (which may not include any 
        prepayment of principal on a covered mortgage obligation).
            (4) Payments on any covered rent obligation and common area 
        maintenance charges under a lease agreement.
            (5) Covered utility payments.
            (6) Maintenance expenses.
            (7) Covered worker protection expenditures.
            (8) Supplies, including protective equipment and cleaning 
        materials.
            (9) Expenses that were within the scope of the normal 
        business practice of the eligible entity before the covered 
        period.
            (10) Covered supplier costs.
            (11) Operational expenses.
            (12) Paid sick leave.
            (13) Any other expenses that the Administrator determines 
        to be essential to maintaining the eligible entity.
    (e) Returning Funds.--If an eligible entity that receives a grant 
under this section fails to use all of the amounts received under the 
grant on or before the last day of the covered period or permanently 
ceases operations on or before the last day of the covered period, the 
eligible entity shall return to the Treasury any funds that the 
eligible entity did not use for the allowable expenses under subsection 
(d).

SEC. 6. DATA TRANSPARENCY AND CUSTOMER SERVICE.

    The Administrator shall--
            (1) on a biweekly basis until the amounts made available 
        under this Act are fully expended, publish data that shows, for 
        the period beginning on the date of enactment of this Act and 
        ending on the date on which the information is published--
                    (A) with respect to applications for grants under 
                this Act, the number of those applications--
                            (i) that the Administrator has received;
                            (ii) that the Administrator has reviewed or 
                        is in the process of reviewing; and
                            (iii) with respect to which the 
                        Administrator has made a decision; and
                    (B) the number and dollar amount of grants--
                            (i) that are awarded; and
                            (ii) that are disbursed;
            (2) on a weekly basis until the amounts made available 
        under this Act are fully expended, publish, with respect to the 
        period beginning on the date of enactment of this Act, and 
        ending on the date on which the information is published--
                    (A) with respect to each entity to which a grant 
                under this Act has been made--
                            (i) the name of the entity, including the 
                        name under which the entity does business if 
                        that name is different from the name of the 
                        entity;
                            (ii) the address of the entity; and
                            (iii) if the physical location for the 
                        eligible business listed on the application is 
                        different from the address of the entity, the 
                        address of such physical location; and
                    (B) the amount of each grant described in paragraph 
                (1); and
            (3) with respect to an applicant that applies for a grant 
        under this Act and is denied by the Administrator--
                    (A) make available to the applicant a brief 
                explanation identifying the reason why the 
                Administrator denied the application of the applicant, 
                which shall include, where applicable, a citation to 
                the statutory, regulatory, or guidance provision with 
                which the applicant failed to comply and that was the 
                basis for the denial; and
                    (B) establish a reconsideration process through 
                which the applicant may--
                            (i) submit to the Administrator additional 
                        clarifying information the applicant determines 
                        to be relevant to whether the applicant is 
                        eligible for the grant; and
                            (ii) receive a second review of the 
                        application submitted by the applicant.

SEC. 7. BUSINESS IDENTIFIERS.

    In accepting applications for grants under this Act, the 
Administrator shall prioritize the ability of each applicant to use the 
existing business identifier of the applicant over requiring other 
forms of registration or identification that may not be common to the 
industry of the applicant, which may impose additional burdens on the 
applicant.

SEC. 8. OVERSIGHT AND AUDITS.

    (a) In General.--The Administrator shall institute an oversight and 
audit plan with respect to entities receiving grants under this Act, 
which shall include--
            (1) documentation requirements that are consistent with the 
        eligibility and other requirements, including by requiring an 
        entity that receives a grant under this Act to retain records 
        that demonstrate compliance with those requirements; and
            (2) reviews of the use by entities of grants under this Act 
        to ensure compliance with the requirements under this Act, 
        which shall include--
                    (A) the review and audit, by the Administrator, of 
                grants made under this Act; and
                    (B) in the case of fraud or other material 
                noncompliance with respect to a grant made under this 
                Act--
                            (i) a requirement that the applicable 
                        entity repay to the Administrator the amount of 
                        the misspent funds; or
                            (ii) the pursuit, by the Administrator, of 
                        legal action to collect the misspent funds.
    (b) Submission of Plan.--Not later than 90 days after the date of 
enactment of this Act, the Administrator shall submit to the Committee 
on Small Business and Entrepreneurship of the Senate and the Committee 
on Small Business of the House of Representatives the plan required 
under subsection (a), which shall describe--
            (1) the policies and procedures of the Administrator for 
        conducting oversight and audits of grants under this Act; and
            (2) the metrics that the Administrator will use to 
        determine which grants will be audited under that plan.
    (c) Reports.--Not later than 90 days after the date of enactment of 
this Act, once every 30 days thereafter until the date that is 180 days 
after the date on which all amounts made available to carry out this 
Act have been fully expended, and upon request thereafter, the 
Administrator shall submit to the Committee on Small Business and 
Entrepreneurship of the Senate and the Committee on Small Business of 
the House of Representatives a report on the oversight and audit 
activities of the Administrator under this section, which shall 
include--
            (1) the total number of grants under this Act approved and 
        disbursed;
            (2) the total amount of each grant under this Act received 
        by each entity that received such a payment;
            (3) the number of active investigations and audits of 
        grants made under this Act;
            (4) the number of completed reviews and audits of grants 
        under this Act, including a description of--
                    (A) any findings of fraud or other material 
                noncompliance;
                    (B) questionable costs identified by the 
                Administrator; and
                    (C) the total amount recouped from ineligible 
                recipients; and
            (5) a description of any substantial changes made to the 
        plan required under subsection (a).

SEC. 9. GROSS RECEIPTS.

    The Administrator may authorize applicants for grants under this 
Act to measure annual gross receipts using either the calendar year or 
fiscal year.

SEC. 10. RULES.

    Not later than 60 days after the date of enactment of this Act, the 
Administrator shall issue rules to carry out this Act, without regard 
to the notice requirements under section 553(b) of title 5, United 
States Code.

SEC. 11. TRANSFER OF FUNDS.

    (a) In General.--The unobligated balances of amounts made available 
under the heading ``Small Business Administration--Business Loans 
Program Account, CARES Act'' in section 323(d)(1)(A) of division N of 
the Consolidated Appropriations Act, 2021 (Public Law 116-260; 134 
Stat. 2019) for the cost of guaranteed loans as authorized under 
paragraphs (36) and (37) of section 7(a) of the Small Business Act (15 
U.S.C. 636(a)) shall be transferred to the Fund.
    (b) CARES Act.--The unexpended balances of amounts made available 
under the heading ``Small Business Administration--Business Loans 
Program Account, CARES Act'' in section 1107(a)(1) of the Coronavirus 
Aid, Relief, and Economic Security Act (15 U.S.C. 9006(a)(1)) shall be 
transferred to the Fund.
    (c) Shuttered Venues.--The unobligated balances in the account 
appropriated under the heading ``Small Business Administration--
Shuttered Venue Operators'' shall be transferred to the Fund.
    (d) American Rescue Plan Act.--
            (1) In general.--If the Administrator submits to Congress a 
        certification described in paragraph (2), effective on the date 
        of the certification, the unobligated balances of amounts made 
        available under section 5002(b) of the American Rescue Plan Act 
        of 2021 (15 U.S.C. 9009 note), including any of such balances 
        that were transferred under section 90007(b)(2) of the 
        Infrastructure Investment and Jobs Act (Public Law 117-58; 135 
        Stat. 1347), shall be transferred to the Fund.
            (2) Certification of sufficiency of funds for eidl 
        program.--A certification described in this paragraph is a 
        certification that, if the balances described in paragraph (1) 
        are transferred, the Administrator will still have sufficient 
        funds to make loans described in section 7(b)(2) of the Small 
        Business Act (15 U.S.C. 636(b)(2)) to each entity described in 
        section 1110(b) of the CARES Act (15 U.S.C. 9009(b)) that 
        submitted--
                    (A) an application for such a loan on or before 
                December 31, 2021; or
                    (B) a request for a modification, rehearing, or 
                appeal in connection with an application for such a 
                loan on or before May 6, 2022.
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