118TH CONGRESS 

1ST SESSION H. R. 5427 

AN ACT 

To prohibit individuals convicted of defrauding the Government from receiving any assistance from the Small Business Administration, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. ASSISTANCE PROHIBITED AFTER FRAUD CON2 VICTION. 

3 (a) IN GENERAL.—Section 16 of the Small Business 

4 Act (15 U.S.C. 645) is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(h) FINANCIAL ASSISTANCE PROHIBITION.— 

7 ‘‘(1) IN GENERAL.—An associate of a small 

8 business concern who is finally convicted of any 

9 crime involving or relating to financial misconduct or 

10 a false statement with respect to a covered loan or 

11 grant shall be ineligible to receive any financial as12 sistance from the Administrator, other than financial 

13 assistance under section 7(b). 

14 ‘‘(2) BUSINESS CONCERNS.—A small business 

15 concern that has as an associate an individual sub16 ject to paragraph (1) shall be ineligible to receive 

17 any financial assistance from the Administrator, 

18 other than financial assistance under section 7(b). 

19 ‘‘(3) DEFINITIONS.—In this subsection: 

20 ‘‘(A) ASSOCIATE.—The term ‘associate’ 

21 means, with respect to a small business con22 cern— 

23 ‘‘(i) an officer, director, or owner of 

24 more than 20 percent of the equity of, or 

25 a key employee of, such small business 

26 concern; 
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1 ‘‘(ii) any entity not less than 20 per2 cent owned or controlled by one or more 

3 individuals referred to in clause (i); and 

4 ‘‘(iii) any other individual or entity in 

5 control of or controlled by such small busi6 ness concern, except for a licensed small 

7 business investment company (as defined 

8 in section 103(3) of the Small Business In9 vestment Act of 1958 (15 U.S.C. 662(3)). 

10 ‘‘(B) COVERED LOAN OR GRANT.—The 

11 term ‘covered loan or grant’ means— 

12 ‘‘(i) a loan made under— 

13 ‘‘(I) paragraph (36) or (37) of 

14 subsection (a) of section 7 of the 

15 Small Business Act (15 U.S.C. 636); 

16 or 

17 ‘‘(II) subsection (b) of such sec18 tion in response to the COVID–19 

19 pandemic; or 

20 ‘‘(ii) a grant made under— 

21 ‘‘(I) section 5003 of the Amer22 ican Rescue Plan Act of 2021 (15 

23 U.S.C. 9009c); or 

24 ‘‘(II) section 324 of the Eco25 nomic Aid to Hard-Hit Small Busi-
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1 nesses, Nonprofits, and Venues Act 

2 (15 U.S.C. 9009a). 

3 ‘‘(C) FINALLY CONVICTED.—The term ‘fi4 nally convicted’ means, with respect to an indi5 vidual or entity, that such individual or entity 

6 has been convicted of an offense and such con7 viction— 

8 ‘‘(i) has not been appealed and is no 

9 longer appealable because the time for tak10 ing an appeal has expired; or 

11 ‘‘(ii) has been appealed and the ap12 peals process for such conviction is com13 pleted.’’. 

14 (b) APPLICABILITY.—Subsection (h) of section 16 of 

15 the Small Business Act (15 U.S.C. 645), as added by sub16 section (a) of this Act, shall not apply to any contract or 

17 other agreement entered into by the Government prior to 

18 the date of the enactment of this Act. 

Passed the House of Representatives November 28, 

2023. 

Attest: 

Clerk. 

118TH CONGRESS 

1ST SESSION H. R. 5427 

AN ACT 

To prohibit individuals convicted of defrauding the 

purposes. the Small Business Administration, and for other Government from receiving any assistance from