II 116th CONGRESS 2d Session S. 3604 IN THE SENATE OF THE UNITED STATES May 5, 2020 Mr. Cardin (for himself, Mrs. Shaheen , Mr. Brown , Mr. Schumer , Mr. Manchin , and Mr. Reed ) introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To require the Administrator of the Small Business Administration to report on COVID–19 recovery small business programs, and for other purposes.

1. Short title This Act may be cited as the Transparency and Oversight of COVID–19 Small Business Assistance Act . 2. Findings and purpose (a) Findings Congress finds that— (1) on January 21, 2020, the first case of COVID–19 was confirmed in the United States; (2) more than 1,031,659 people in the United States have since tested positive and 60,057 people in the United States have died from complications related to COVID–19; (3) nearly a quarter of the 30,700,000 small business concerns in the United States are at risk of permanent closure over the coming months; (4) on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ( Public Law 116–136 ), also known as the CARES Act, was signed into law to provide relief to owners of small business concerns that need support for ongoing operations during this unprecedented public health and economic crisis; (5) the CARES Act ( Public Law 116–136 ) included $377,000,000,000 to establish the paycheck protection program under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ), the emergency economic injury disaster loan grant program under section 1110 of the CARES Act ( Public Law 116–136 ), and the debt relief program under section 1112 of such Act; (6) on April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act ( Public Law 116–139 ) was enacted to replenish funding for those small business programs along with important policy reforms to expand access to assistance from the Administration to more unbanked and underserved businesses; (7) the funding in the Paycheck Protection Program and Health Care Enhancement Act ( Public Law 116–139 ) included $310,000,000,000 for the paycheck protection program established under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ), $50,000,000,000 to leverage more than $350,000,000,000 for the economic injury disaster loan program under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) , and $10,000,000,000 for the emergency economic injury disaster loan grant program established under section 1110 of the CARES Act ( Public Law 116–136 ); (8) to support implementation and oversight of these programs, which are unprecedented in scale for the Administration, the CARES Act ( Public Law 116–136 ) and the Paycheck Protection Program and Health Care Enhancement Act ( Public Law 116–139 ) provided the Administration with $675,000,000 and $2,100,000,000 for salaries and expenses of the Administration, respectively; (9) in spite of this support, and precedent for posting borrower and lender information through Freedom of Information Act requests and program spending updates under the Veterans Entrepreneurship Act of 2015 ( Public Law 114–38 ; 129 Stat. 437), neither the public nor policymakers are getting information in a timely or complete way about how many loans and grants are being approved and disbursed, who is getting the funding, activity by lender, how many jobs have been saved, geographic and demographic information about the borrowers, or when the funding will run out; (10) the first time Congress received data on the paycheck protection program established under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ) was April 14, 2020, almost a week after the Administration announced that the program was running out of funding and requested an additional $250,000,000,000 to meet demand; (11) the Administration has provided limited data on both the availability and the distribution of funds under the economic injury disaster loan and emergency economic injury disaster loan grant programs, making it difficult for Congress to assess demand and to determine the need for additional funding; and (12) the Administration should provide essential data on small business programs established under the CARES Act ( Public Law 116–136 ) and the Paycheck Protection Program and Health Care Enhancement Act ( Public Law 116–139 ) on a daily and weekly basis, along with other longer term reporting requirements to provide transparency and oversight of these loans and grants that are vital to small business concerns and nonprofit organizations. (b) Purpose The purpose of this Act is to provide transparency and oversight of recovery programs of the Administration related to COVID–19 by requiring timely and complete reporting and public availability of data relating to the paycheck protection program under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ), the economic injury disaster loan program under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) in accordance with section 1110 of the CARES Act ( Public Law 116–136 ), the emergency economic injury disaster loan grant program established under section 1110 of the CARES Act ( Public Law 116–136 ), and the debt relief program under section 1112 of such Act. 3. Definitions In this Act— (1) the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof; (2) the term appropriate congressional committees means— (A) Committee on Appropriations, the Committee on Banking, Housing, and Urban Affairs, and the Committee on Small Business and Entrepreneurship of the Senate; and (B) the Committee on Appropriations, the Committee on Financial Services, and the Committee on Small Business of the House of Representatives; (3) the term community financial institutions 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) ); (4) the term covered assistance means— (A) loans made under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ); (B) emergency grants made under section 1110(e) of the CARES Act ( Public Law 116–136 ); (C) loans made under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) in accordance with section 1110 of the CARES Act ( Public Law 116–136 ); (D) loan forgiveness under section 1106 of the CARES Act ( Public Law 116–136 ); and (E) the payment of principal, interest, and fees under section 1112(c) of the CARES Act ( Public Law 116–136 ); (5) the term covered loan has the meaning given the term in section 1112(a) of the CARES Act ( Public Law 116–136 ); (6) the term demographics means veteran status, gender, race, and ethnicity, as reported on Form 1919 of the Administration or any similar loan application form of the Administration; and (7) the term State — (A) means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, and any possession of the United States; and (B) includes an Indian tribe, as defined in section 4 of the Indian Self-Determination and Education Assistance Act ( 25 U.S.C. 450b ). 4. Reporting requirements for COVID–19 recovery small business programs (a) Daily reporting (1) In general During the period beginning on the day after the date of enactment of this Act and ending on the date on which loan, grant, or payment activity described in this subsection related to COVID–19 has ceased, the Administrator shall, on a daily basis, report to Congress on— (A) the total number and dollar amount of loans or grants, broken down by loans and grants approved and loans and grants disbursed, under— (i) section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ); (ii) section 1110(e) of the CARES Act ( Public Law 116–136 ); and (iii) section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) in accordance with section 1110 of the CARES Act ( Public Law 116–136 ); (B) for loans made under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) )— (i) the amount of remaining authority and funds for the loans, in dollar amount and as a percentage; and (ii) an estimate of the date on which the net and gross dollar amount of loans will reach the maximum amount authorized for commitments and related funds for such loans; (C) for grants made under section 1110(e) of the CARES Act ( Public Law 116–136 )— (i) the amount of remaining authority and funds appropriated for the grants, in dollar amount and as a percentage; and (ii) an estimate of the date on which the net and gross dollar amount of loans will reach the maximum amount authorized for commitments and related funds for such grants; and (D) for loans made under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) in accordance with section 1110 of the CARES Act ( Public Law 116–136 )— (i) the amount of remaining authority and funds for the loans, in dollar amount and as a percentage; and (ii) an estimate of the date on which the net and gross dollar amount of loans will reach the maximum amount authorized for commitments and related funds for such loans. (2) Reporting on debt relief for microloans, 7(a) loans, and 504 loans The Administrator shall include in each daily report submitted under paragraph (1), and update as frequently as the data is available and not less frequently than on a monthly basis until the date described in paragraph (1), with respect to payments made on covered loans under section 1112(c) of the CARES Act ( Public Law 116–136 )— (A) the amount of remaining funds appropriated for the payments, in dollar amount and as a percentage; and (B) an estimate of the date on which the funds will be expended. (3) Retroactive data Not later than 14 days after the date of enactment of this Act, the Administrator shall submit to Congress a report that contains the data described in paragraphs (1) and (2), broken down on a daily basis in accordance with those paragraphs, with respect to the assistance described in those paragraphs that was made available during the period beginning on the date of enactment of the CARES Act ( Public Law 116–136 ) and ending on the day before the date of enactment of this Act. (b) Weekly reporting (1) In general Not later than 1 week after the date of enactment of this Act, and every week thereafter until the date on which loan, grant, or payment activity described in this subsection related to COVID–19 has ceased, the Administrator shall submit to Congress a report on— (A) loans made under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ), which shall include— (i) the number and dollar amount of loans approved for and the number and dollar amount of loans disbursed to all borrowers, including— (I) a breakout of loans by State, congressional district, demographics, industry, and loan size; and (II) a breakout of loans by type of participating lender, including a breakout for loans made by insured depository institutions, credit unions, and community financial institutions described in section 7(a)(36)(S) of the Small Business Act ( 15 U.S.C. 636(a)(36)(S) ); (ii) the number and dollar amount of loans approved for and the number and dollar amount of loans disbursed to business concerns assigned a North American Industry Classification System code beginning with 72, including a breakout of loans by State, congressional district, demographics, and loan size; (iii) the number and dollar amount of loans approved for and the number and dollar amount of loans disbursed to franchises, nonprofit organizations, and veterans organizations (as those terms are defined in section 7(a)(36)(A) of the Small Business Act ( 15 U.S.C. 636(a)(36)(A) ), including religious institutions, including a breakout of loans by State, congressional district, industry, and loan size; (iv) for each category of borrowers described in clauses (i), (ii), and (iii)— (I) the number of employees of the borrower at the time at which the borrower submits a loan application; (II) the number of employees of the borrower at the time at which the borrower receives loan forgiveness under section 1106 of the CARES Act ( Public Law 116–136 ); and (III) the number of employees expected to be retained by the borrower as a result of the loan who otherwise would have not have been retained; (v) the number and dollar amount of loans fully forgiven under section 1106 of the CARES Act ( Public Law 116–136 ), as compared to the number and dollar amount of loans made as of the date of the report; (vi) the number and dollar amount of loans not fully forgiven under section 1106 of the CARES Act ( Public Law 116–136 ), and the proportion of that dollar amount of loans that become term loans guaranteed by the Administration under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ); (vii) the number of participating lenders by type, including a breakout of the number of participating lenders that are insured depository institutions, credit unions, or community financial institutions described in section 7(a)(36)(S) of the Small Business Act ( 15 U.S.C. 636(a)(36)(S) ); (viii) the total amount of the lender compensation fees paid to lenders; and (ix) the total amount lenders paid in broker fees; and (B) loans made under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) in accordance with section 1110 of the CARES Act ( Public Law 116–136 ) and emergency grants made under subsection (e) of such section 1110, which shall include— (i) the number and dollar amount of loans approved for and the number and dollar amount of loans disbursed to all borrowers, including a breakout of loans by State, congressional district, demographics, industry, and loan size; (ii) the number and dollar amount of grants approved for and the number and dollar amount of loans disbursed to grantees, including a breakout of loans by State, congressional district, demographics, industry, and grant size; (iii) the number and dollar amount of grants approved for and the number and dollar amount of loans disbursed to private nonprofit organizations, including a breakout by State, congressional district, industry, and loan or grant size; (iv) for each category of borrowers or grantees, the number employees of the borrower or grantee at the time at which an application is submitted for the loan or grant, and the number of employees expected to be retained by the borrower or grantee as a result of the loan or grant who otherwise would not have been retained; (v) loan processing times, including processing times for application to approval and approval to disbursement; and (vi) grant processing times, including the percentage of advances that were provided within 3 days of submission of the application, as required under section 1110(e)(1) of the CARES Act ( Public Law 116–136 ). (2) Reporting on debt relief for microloans, 7(a) loans, and 504 loans The Administrator shall include in each weekly report submitted under paragraph (1), and update as the data is available and not less frequently than on a monthly basis until the date described in paragraph (1), with respect to payments made on covered loans under section 1112(c) of the CARES Act ( Public Law 116–136 )— (A) the total dollar amount approved and the total amount disbursed by the Administration and the number of borrowers receiving assistance under such section 1112(c), including a breakdown by— (i) each type of covered loan described in subparagraphs (A) and (B) of paragraph (1) and paragraph (2) of such section 1112(a); and (ii) whether the borrower is— (I) an existing borrower of a covered loan, as described in subparagraph (A) or (B) of such section 1112(c)(1); or (II) a new borrower of a covered loan, as described in subparagraph (C) of such section 1112(c)(1); (B) the total dollar amount approved and the total amount disbursed by the Administration and number of borrowers receiving assistance under such section 1112(c) broken out by State and congressional district, including a breakdown by each type of covered loan described in subparagraphs (A) and (B) of paragraph (1) and paragraph (2) of such section 1112(a); and (C) the total number and amount of new covered loans by approval and disbursement broken out by lending institution, including a breakout of loans by State, congressional district, demographics, industry, and loan size. (3) Retroactive data Not later than 14 days after the date of enactment of this Act, the Administrator shall submit to Congress a report that contains the data described in paragraphs (1) and (2), broken down on a weekly basis in accordance with those paragraphs, with respect to the assistance described in those paragraphs that was made available during the period beginning on the date of enactment of the CARES Act ( Public Law 116–136 ) and ending on the day before the date of enactment of this Act. (c) Jobs outcomes for the debt relief program (1) In general To the extent practicable, with respect to each type of covered loan described in subparagraphs (A) and (B) of paragraph (1) and paragraph (2) of section 1112(a) of the CARES Act ( Public Law 116–136 ), the Administrator shall submit to Congress information on— (A) the number of employees— (i) for existing borrowers of a covered loan, as described in subparagraph (A) or (B) of such section 1112(c)(1) at the start of the debt relief under such section 1112(c); and (ii) for new borrowers of a covered loan, as described in subparagraph (C) of such section 1112(c)(1), at the time of application for the covered loan; and (B) the number of employees expected to be retained by the borrower as a result of the covered loan or debt relief who otherwise would not have been retained. (2) Timing The Administrator shall submit to Congress the information required under paragraph (1) to the extent practicable and not later than October 1, 2020, with an updated version submitted not later than January 31, 2021. (d) Report on COVID relief salaries and expenses funding and anti-Waste, fraud and abuse plans Not later than 30 days after the date of enactment of this Act, the Administrator and the Secretary of the Treasury shall submit to the appropriate congressional committees a report that includes— (1) the plans of the Administrator to use the $675,000,000 provided in section 1107(a)(2) of the CARES Act ( Public Law 116–136 ) and the $2,100,000,000 provided in the Paycheck Protection Program and Health Care Enhancement Act ( Public Law 116–139 ) for salaries and expenses, including staff hired, the use of outside consultants, program improvements, and system upgrades, to carry out the provisions of title I of division A of the CARES Act ( Public Law 116–136 ); and (2) a plan that details steps that the Administration and the Department of the Treasury are taking to identify and prevent potential instances of waste, fraud, and abuse relating to covered assistance. (e) GAO report on small business COVID–19 small business programs Not later than 180 days after the date of enactment of this Act, the Comptroller General of the United States shall submit to the appropriate congressional committees a report that— (1) assesses the effectiveness of the requirements and sense of the Senate under section 7(a)(36)(P) of the Small Business Act ( 15 U.S.C. 636(a)(36)(P) ) to ensure underserved borrowers, including socially and economically disadvantaged individuals, women, and veterans and members of the military community, as well as small business concerns located in underserved and rural markets and in operation for less than 2 years, received assistance under the paycheck protection program, including a review of actions by the Administration and relevant data; (2) assesses the effectiveness of the Administration in reaching underserved businesses in grants made under section 1110(e) of the CARES Act ( Public Law 116–136 ) and loans made under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) in accordance with section 1110 of the CARES Act ( Public Law 116–136 ), including socially and economically disadvantaged individuals, women, and veterans and members of the military community, as well as small business concerns located in underserved and rural markets and in operation for less than 2 years; (3) provides a comprehensive review of the data described in subsections (a) and (b), including the retroactive data submitted under subsections (a)(3) and (b)(3); (4) assesses the impact on jobs of the paycheck protection program under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ), the economic injury disaster loan program under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) in accordance with section 1110 of the CARES Act ( Public Law 116–136 ), the emergency economic injury disaster loan grant program established under section 1110 of the CARES Act ( Public Law 116–136 ), and to the extent possible the debt relief program under section 1112 of such Act, including a review of the data described in subsection (c); (5) provides a list of the 15 lenders that made the most loans under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ) by number and dollar amount, and a review of how the lenders processed the loans and the borrowers that received the loans; (6) provides a list of the 15 community financial institutions lenders that made the most loans under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ) by number and dollar amount, and a review of how the lenders processed the loans and the borrowers that received the loans; (7) provides the total amount of the lender compensation fees paid to each lender under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ); (8) provides the total amount each lender paid in broker fees under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ); and (9) provides, to the extent practicable, detailed information on processing times for— (A) loan approvals and loan disbursements under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ); (B) lender compensation fees paid by the Administration to lenders under such section 7(a)(36); (C) notices of forgiveness of the loans under section 1106 of the CARES Act ( Public Law 116–136 ) to borrowers; (D) grants made under section 1110(e) of the CARES Act ( Public Law 116–136 ); and (E) loans made under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) in accordance with section 1110 of the CARES Act ( Public Law 116–136 ). (f) Collection of demographic and jobs data for the paycheck protection program With respect to data not collected on initial the application form for a loan under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ), including demographic and job information, the Administrator shall request that information when a borrower applies for loan forgiveness under section 1106 of the CARES Act ( Public Law 116–136 ). (g) Privacy considerations In publishing the data under this Act, the Administrator shall take all necessary steps to protect the sensitive personally identifiable information included in that data, including social security numbers, bank account and credit card numbers, dates of birth, and other information other than the applicant business or nonprofit organization name, business or nonprofit organization address, loan or grant amount and loan forgiveness amount, lender name, and lender address. (h) Public availability (1) In general The Administrator shall make available to the public on the website of the Administration— (A) each report required to be submitted under this Act; and (B) any data contained in a report submitted under this Act, in a standardized and downloadable format. (2) Information about CARES Act recipients and lenders Consistent with information that the Administrator makes available on loans made by the Administration in compliance with section 552 of title 5, United States Code (commonly known as the Freedom of Information Act ), the Administrator shall make available to the public information about the paycheck protection program under section 7(a)(36) of the Small Business Act ( 15 U.S.C. 636(a)(36) ), the economic injury disaster loan program under section 7(b)(2) of the Small Business Act ( 15 U.S.C. 636(b)(2) ) in accordance with section 1110 of the CARES Act ( Public Law 116–136 ), the emergency economic injury disaster loan grant program established under section 1110 of the CARES Act ( Public Law 116–136 ), and the debt relief program under section 1112 of such Act, including— (A) the name of each business or nonprofit organization borrower or grantee; (B) the address of the principal place of business of each borrower or grantee; (C) the name and address of the principal place of business of each lender; (D) the amount of each loan or grant; (E) the North American Industry Classification System code of each borrower or grantee; (F) whether each borrower or grantee is a franchisee; and (G) the type of business of each borrower or grantee.