H.R.825 - Assisting Small Businesses Not Fraudsters Act (119th Congress)
Summary
H.R. 825, the "Assisting Small Businesses Not Fraudsters Act," aims to prevent individuals convicted of defrauding the government from receiving financial assistance from the Small Business Administration (SBA). The bill amends Section 16 of the Small Business Act to prohibit SBA assistance to associates of small businesses who have been convicted of financial misconduct related to covered loans or grants. This prohibition extends to the business concerns themselves if they have such an associate.
Expected Effects
The Act will change the eligibility criteria for SBA financial assistance, specifically targeting those with fraud convictions. This will likely reduce the amount of fraudulent activity associated with SBA loans and grants. It will also ensure that government funds intended for legitimate small businesses are not misused.
Potential Benefits
- Reduces fraud and misuse of SBA funds.
- Ensures that financial assistance reaches deserving small businesses.
- Strengthens the integrity of government programs.
- Potentially improves public trust in government spending.
- May deter future fraudulent activities.
Potential Disadvantages
- May inadvertently penalize businesses with minor associations to individuals with past convictions, even if the business itself is legitimate.
- Could create additional administrative burden for the SBA to verify the backgrounds of all associates.
- May disproportionately affect certain communities if fraud convictions are more prevalent in those areas.
- The definition of 'associate' could be interpreted too broadly, capturing individuals with minimal influence.
- Legitimate businesses might face delays in receiving assistance due to increased scrutiny.
Constitutional Alignment
The bill appears to align with the Constitution's principle of promoting the general welfare (Preamble). Congress has the power to legislate regarding financial matters and to ensure responsible use of taxpayer funds (Article I, Section 8). The bill does not appear to infringe on individual rights or liberties protected by the Constitution or its amendments, such as the First Amendment or the Fifth Amendment's due process clause, as it applies only after a conviction has been obtained through due process.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).