Beat Bad Bureaucrats Act

Beat Bad Bureaucrats Act

This bill prohibits the Small Business Administration (SBA) from garnishing Social Security payments to victims of identity theft on account of certain delinquent SBA loans obtained fraudulently during the COVID-19 pandemic. 

Specifically, the SBA may not garnish an individual’s Social Security payments related to a covered loan if (1) the individual’s name was used to fraudulently obtain the loan, and (2) the individual has reported the identity theft to the SBA. Under the bill, covered loans are Disaster Loans granted in response to COVID-19 between January 31, 2020, and December 31, 2021 (e.g., Economic Injury Disaster Loans) and loans granted under the Paycheck Protection Program. The prohibition on garnishment does not apply if the SBA determines that an individual is not a victim of identity theft. 

Further, the SBA must post instructions on how to report identity theft on its public website and include them in the written notice provided to delinquent borrowers before garnishing their pay. 

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 886 Introduced in House (IH)]

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119th CONGRESS
  1st Session
                                H. R. 886

To prohibit the Administrator of the Small Business Administration from 
   garnishing social security benefits with respect to certain named 
individuals of covered loans who are victims of identity theft, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 31, 2025

    Mr. Rulli (for himself, Mr. Graves, and Mr. Webster of Florida) 
 introduced the following bill; which was referred to the Committee on 
                             the Judiciary

_______________________________________________________________________

                                 A BILL


 
To prohibit the Administrator of the Small Business Administration from 
   garnishing social security benefits with respect to certain named 
individuals of covered loans who are victims of identity theft, and for 
                            other purposes.

    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 ``Beat Bad Bureaucrats Act''.

SEC. 2. PROTECTION OF SOCIAL SECURITY BENEFITS FROM GARNISHMENT IN 
              CERTAIN CASES OF IDENTITY THEFT.

    (a) In General.--Notwithstanding section 3716(c)(3)(A)(i) of title 
31, United States Code, the Administrator may not, with respect to a 
covered loan, garnish payments made to the named individual of such 
covered loan under section 202 of the Social Security Act (42 U.S.C. 
402 et seq.) for the purposes of repayment of such covered loan.
    (b) Exception.--Subsection (a) does not apply if the Administrator 
determines that the named individual is not a victim of identity theft.
    (c) Revision of Rule.--Not later than 30 days after the date of the 
enactment of this Act, the Administrator shall revise section 
140.11(e)(1) of title 13, Code of Federal Regulations, to add to the 
list of notice requirements in such section information about how to 
report identity theft to the Administrator.
    (d) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Small Business Administration.
            (2) Covered loan.--The term ``covered loan'' means--
                    (A) a loan made under paragraph (36) or (37) of 
                section 7(a) of the Small Business Act (15 U.S.C. 
                636(a)); or
                    (B) a loan made under section 7(b) of such Act (15 
                U.S.C. 636(b)) in response to COVID-19 during the 
                covered period (as defined in section 1110(a) of the 
                CARES Act (15 U.S.C. 9009).
            (3) Named individual.--The term ``named individual'' means 
        an individual--
                    (A) under whose name a covered loan was 
                fraudulently made; and
                    (B) that has notified the Administrator, using the 
                procedure posted on a public website of the Small 
                Business Administration, that such individual is a 
                victim of identity theft with respect to such covered 
                loan.
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