Steel Markets

AGC Files Suit Over PPP Questionnaire
Written by Sandy Williams
December 10, 2020
The Associated General Contractors of America filed a lawsuit on Wednesday alleging that the Small Business Administration and the Office of Management and Budget secretly crafted an intrusive questionnaire that gathers irrelevant information on business operations to reassess eligibility for Paycheck Protection Program loans.
“The administration has every right, and obligation, to ensure businesses were eligible to apply for and receive the relief loans,” said Stephen E. Sandherr, the AGC’s chief executive officer. “But they do not have the right to use a secretly crafted form to gather unprecedented amounts of proprietary information that has little or nothing to do with the economic uncertainty that led businesses to apply for the loans in the first place.”
AGC is requesting that the court declare the questionnaire arbitrary and capricious, and that the SBA cannot lawfully use the information the form generates to find a company ineligible for a PPP loan or deny a company’s application for forgiveness of its loan.
Businesses that have borrowed an original PPP loan of $2 million or greater are required to fill out and return the questionnaire, Form 3509, within 10 days of receipt from their lender. Failure to do so could result in a determination by SBA of ineligibility and a requirement to pay back the loan.
The nine-page questionnaire asks for details on a company’s financial status including revenue, liquidity, employee compensation, equity securities and foreign ownership status.
The complaint, filed in the U.S. District Court of the District of Columbia, also asserts that the agencies ignored a legally mandated process for developing the questionnaire, thus violating the Paperwork Reduction Act and the Administrative Procedures Act. AGC said the OMB authorized SBA to use the form in “compete secrecy” without releasing it for the usual 60-day public comment period. In order to bypass the normal review process, AGC charges that the agencies arbitrarily declared that the questionnaire required approval on an “emergency” basis and did not constitute a change in the scope of SBA’s prior information collection process.
“The CARES Act (which established the PPP program) only required loan applicants to make a ‘good faith certification that the uncertainty of current economic conditions makes necessary the loan request….’ Instead of asking borrowers how they concluded they faced such uncertainty when applying for their loans, the form attempts to set a means test, a revenue reduction test and a liquidity test that Congress never contemplated, and it focuses on later events that few companies could have predicted when applying,” said AGC.
“Resorting to a secret form that disregards Congressional intent and retroactively changes the criteria for a loan is not due diligence; it is unlawful and needs to stop before employers are irrevocably harmed,” said Sandherr.

Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets

Latin American steel advocates warn on cheap import flood
Subsidized Chinese steel imports and cheap steel products from Association of Southeast Asian Nations (ASEAN) entering Latin American (LATAM) are threatening the region's steel market.

CRU: Steel prices fall amid global demand weakness
The forceful headwinds bearing down on steel markets across the globe have created demand challenges and sent prices southward. The US, however, challenged the global trend.

Hot-rolled price hikes garner mixed reactions from the market
Several steel market sources say they were blindsided when mills increased spot prices for hot-rolled coils this week.

Steel market participants mull the impact of US/Mexico S232 negotiations
Steel market participants learned that negotiations between the US and Mexico include discussions about Section 232 tariffs on steel and aluminum despite President Trump’s June 3 proclamation increasing the tariffs from 25% to 50% for all steel and aluminum imports—except for those from the UK.

ArcelorMittal plans wire-drawing closure in Hamilton, shifts production to Montreal
ArcelorMittal’s (AM) Hamilton location to be shuttered, wire production shifting to Montreal.