[Federal Register Volume 79, Number 200 (Thursday, October 16, 2014)]
[Proposed Rules]
[Pages 62060-62070]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-22521]
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SMALL BUSINESS ADMINISTRATION
2 CFR Part 2700
13 CFR Parts 103, 124 and 134
RIN 3245-AG40
Agent Revocation and Suspension Procedures
AGENCY: Small Business Administration.
ACTION: Proposed rule.
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SUMMARY: This rule proposes detailed procedures for the suspension and
revocation of an Agent's privilege to do business with the United
States Small Business Administration (SBA) within a single Part of the
Code of Federal Regulations; remove 8(a) program specific procedures
for Agent suspension and revocation; clarify existing and related
regulations as to suspension, revocation, and debarment; and remove
Office of Hearings and Appeals jurisdiction over Agent suspensions and
revocations and government-wide debarment and suspension actions. This
proposed rule would also conform SBA suspension and revocation
procedures for Agents with general government-wide non-procurement
suspension and debarment procedures.
DATES: Comments must be received on or December 15, 2014.
ADDRESSES: You may submit comments, identified by RIN: 3245-AG40 by any
of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail/Hand Delivery/Courier: Debra L. Mayer, Chief,
Supervision and Enforcement, Office of Credit Risk
[[Page 62061]]
Management, 409 Third Street SW., 8th Floor, Washington, DC 20416.
SBA will post all comments to this proposed rule without change on
www.regulations.gov. If you wish to submit confidential business
information (CBI) as defined in the User Notice at www.regulations.gov,
you must submit such information to Debra L. Mayer, Chief, Supervision
and Enforcement, Office of Credit Risk Management, 409 Third Street
SW., 8th Floor, Washington, DC 20416 or send an email to
[email protected]. Highlight the information that you consider to be
CBI and explain why you believe SBA should hold this information as
confidential. SBA will review the information and make the final
determination whether it will publish the information.
FOR FURTHER INFORMATION CONTACT: Debra L. Mayer, Chief, Supervision and
Enforcement, Office of Credit Risk Management, 202-205-7577, email:
[email protected].
SUPPLEMENTARY INFORMATION:
I. Background Information
Under Part 103 of Title 13 of the Code of Federal Regulations
(CFR), SBA may, for good cause, suspend or revoke an Agent's privilege
to conduct business with SBA. Part 103 applies to ``Agents''--people/
entities that represent applicants or participants in SBA programs, per
13 CFR 103(a). Some examples of Agents are attorneys, consultants, loan
packagers, lender service providers, etc. Part 103 allows SBA to revoke
an Agent's privilege to conduct business with SBA. In short, a Part 103
revocation is similar to a debarment, but limited to SBA instead of the
entire federal government. Also, like debarment, Part 103 provides for
suspension prior to revocation. However, aside from those similarities,
revocation does not actually have any connections to debarment. It only
excludes Agents from conducting business with SBA, not the rest of the
federal government.
The current Part 103 regulations contain no procedures for
suspension/revocation. Instead, SBA currently only has limited
procedures regarding suspension and revocation, located in SBA's
Standard Operating Procedure (SOP) 50 53 A and 13 CFR 124.4(c). These
procedures apply only to a few types of Agents. SBA's Standard
Operating Procedure (SOP) 50 53 A, Lender Supervision and Enforcement
(June 2012) contains procedures only for the suspension and revocation
of only certain Agents related to SBA loan programs. In addition, 13
CFR 124.4(c) contains procedures only for the suspension and revocation
of only certain Agents related to SBA's 8(a) Business Development
Program. The proposed rule would fill this gap by establishing
procedures for all Part 103 suspensions and revocations; not just those
of certain programs.
SBA is modeling its Part 103 suspension and revocation procedures
after the Title 2 suspension and debarment procedures because the Title
2 procedures are detailed and clear, have been in use for over 25
years, and contain the standard tenets of due process--notice,
opportunity to object, notification of decision, and opportunity to
request reconsideration. Agents would benefit from the efficiency and
consistency of a single set of procedures for Part 103 suspension and
revocation, which would replace SBA's current various procedures at
Standard Operating Procedure (SOP) 50 53 A and 13 CFR 124.4(c), and
this single set of procedures would apply to all Agents, as defined in
13 CFR Part 103(a).
In summary, this proposed rule would centralize within Part 103 the
procedures for suspension and revocation for all Agents, without regard
to the particular SBA program, and would utilize the same procedural
elements found in current government-wide procedures and in SBA's
current practices.
II. The Proposal
A. In General
The proposed rule would be an adaptation of government-wide
suspension/debarment procedures set forth in 2 CFR Parts 180 and 2700,
which SBA already utilizes in practice when conducting Part 103
suspensions and revocations.
The proposed rule would also eliminate a set of procedures in Part
124. These are revocation procedures that were established just for
Agents dealing with the 8(a) Program. Now that SBA is establishing
procedures affecting Agents in all SBA programs, this section in Part
124 would be redundant and duplicative if left in place.
In addition, this proposed rule would remove Office of Hearings and
Appeals jurisdiction over Part 103 suspensions and revocations and
Title 2 suspensions and debarments. SBA is currently the only federal
agency whose administrative judges review nonprocurement suspension and
debarment. OHA review is a deviation from the government-wide debarment
regulations, in Title 2 at Part 2700. By eliminating OHA review, SBA
actually lessens its deviation from the government-wide debarment
regulations. Another reason for SBA's decision to do this is that OHA
does not review SBA's procurement debarments (debarments based in the
Federal Acquisition Regulations), so eliminating OHA review of Title 2
debarments not only makes SBA consistent with the rest of the federal
government, but also with SBA procedures for FAR debarments. Because
revocation is so similar to debarment in function, SBA wishes to make
the procedures for revocation consistent as well.
Finally, this proposed rule would make a number of clarifications
in 13 CFR Part 103 and 2 CFR Part 2700.
B. Section-By-Section Analysis
Title 2, Sections 2700.765, 2700.890 and 2700.980. SBA is proposing
to amend its nonprocurement suspension and debarment regulations at 2
CFR 2700.765 and 2700.890 to remove the Office of Hearings and Appeals'
jurisdiction over nonprocurement suspension and debarment. SBA is
currently the only government agency that provides for an appeal of
nonprocurement suspension and debarment in an administrative court.
Moreover, procurement suspensions and debarments under the Federal
Acquisition Regulations do not provide for an appeal to an
administrative court. SBA is therefore proposing this change in order
to bring its own procedures into conformity with the rest of the
government.
SBA is also proposing to add new section 2700.980 to supplement the
definition of a ``Participant'' as used in the government-wide
nonprocurement suspension and debarment regulations at 2 CFR Sec.
180.980. Although it is SBA's position that all agents who conduct
business with SBA are clearly included in the current definition of a
``Participant,'' the proposed rule would add supplemental language to
clarify that Agents, as defined in 13 CFR Part 103, are Participants
for the purposes of the nonprocurement suspension and debarment
regulations at 2 CFR Part 180.
Title 13, Sections 103.1 through 103.4. SBA is proposing a number
of changes to existing language of these sections for the purpose of
clarification.
Title 13, Section 103.1. In subsection (a), SBA would clarify that
the list of agents in the definition for Agents is not all-inclusive
and is proposing to add the term ``loan agent'' into the non-
comprehensive list of various representatives who are considered Agents
for the purpose of the regulation.
[[Page 62062]]
In subsections (b)(1) and (b)(2), SBA is proposing to add the word
``assisting in the preparation of'' in order to eliminate any possible
ambiguity in the use of the word ``preparing.'' This addition would
clarify that preparing an application for federal assistance includes
any assistance in such preparation.
SBA is also proposing to add a new subsection (b)(3) and
redesignate subsections (b)(3), (b)(4), and (b)(5) as (b)(4), (b)(5),
and (b)(6), respectively. The proposed new subsection (b)(3) would
specify that actions taken as a Referral Agent are included in the
definition of the term ``conduct business with SBA.''
In subsection (d), SBA is proposing to change the words ``a
specific'' to ``an'' in order to prevent confusion as to whether there
is a limiting factor regarding which documents the suspending official
may examine. SBA knows of no such limitation.
In subsection (f), SBA is proposing to add the words, ``such as a
broker'' in order to make clear that the term ``Referral Agent''
includes brokers.
In subsection (g), SBA is proposing to add the term ``procurement''
in order to make clear that a ``Participant'' as defined in this
section includes persons or entities involved in all of SBA's programs,
including those related to government procurement.
Title 13, Section 103.2. SBA is proposing to change the word
``may'' to the words ``have the privilege to'' in order to clarify that
it is a privilege to conduct business with SBA and not a right. SBA is
also proposing to change the words ``Applicant, Participant or lender''
to ``Applicant or Participant'' because the defined terms ``Applicant''
and ``Participant'' include by their definitions any lender that is
participating or has applied to participate in an SBA program,
including for example an SBA lender as defined in Title 13, Section
120.10.
Title 13, Section 103.3. SBA is proposing to remove language from
section 103.3 that provides for an appeal to the Office of Hearings and
Appeals (OHA) for suspension and revocation of Agents. SBA is proposing
to also remove OHA's jurisdiction over nonprocurement suspension and
debarment actions. These changes would conform SBA's suspension and
revocation procedures to the government-wide procedures for
nonprocurement suspension and debarment. In addition, SBA is proposing
to add that the Agency may publish the names of agents subject to
actions under this part in the System for Award Management (SAM), or
any successor system, and on SBA's Web site.
Title 13, Section 103.4. In the introductory paragraph, SBA is
proposing to add the words ``but is not limited to'' in order to make
clear that the list of activities within the section that constitute
``good cause'' is not exclusive.
In subsections 103.4(b) and (d), SBA is proposing to add the words
``or Participant'' in order to make clear that the listed actions with
regard to both Applicants and Participants constitute unlawful or
unethical activity.
In subsection 103.4(d), SBA is also proposing to add language
regarding an Agent's inaccurate representations of endorsement or
approval by SBA. In so doing, SBA aims to make clear that an
implication or statement of special influence with SBA also includes
implications or statements of SBA's approval or endorsement where those
implications or statements are not accurate (i.e., where an Agent has
no such approval or endorsement).
In subsection 103.4(f), SBA is proposing to add the words ``but not
limited to'' in order to make clear that the list of conduct within the
subsection that constitutes ``conduct indicating a lack of business
integrity'' is not exclusive. In addition, SBA is proposing to clarify
the term ``false statements'' by changing it to ``making false or
misleading statements or representations,'' which would make clear that
the type of false statements at issue include misleading statements and
representations. SBA is also proposing to move ``debarment, criminal
conviction, or civil judgment within the last seven years'' to a
separate sentence, stating that they, when based upon certain conduct,
constitute evidence of certain conduct, because they are not actually
``conduct'' of an agent.
In subsection 103.4(g), SBA is proposing to replace the words
``Lender Service Provider or Referral Agent and a Packager for an
Applicant'' with the words ``a Lender Service Provider and a Packager
for an Applicant or acting as both a Referral Agent and a Packager for
an Applicant'' in order to clearly state the specific relationships
that constitute the ``two master'' prohibition set forth in the
subsection. SBA is also proposing to add the word ``Participant''
before each instance of the word ``lender'' in order to clarify that a
lender in this example is a Participant for whom the Agent is acting.
In subsection 103.4(h), SBA is proposing to change the citation
``103.5'' to ``103.39'' in order to conform to the redesignation of
Section 103.5 as Section 103.39 in this proposed rule. In subsection
103.4(i), SBA is proposing to add the words ``Participant, or Agent''
in order to clarify that the section applies to any violations of which
the Applicant, Participant, or Agent has been made aware.
In subsection 103.4(i), SBA is proposing to delete the words ``of
which the Applicant, Participant or Agent has been made aware.'' This
deletion would clarify the subsection in that the deleted words merely
state a point of fact and not a requirement. An Applicant, Participant
or Agent has constructive knowledge of SBA's regulations, policies, and
procedures by nature of their publication and thus SBA is not required
to prove such knowledge in taking a suspension or revocation action.
Title 13, Sections 103.5 through 103.38. SBA is proposing to
redesignate the current Section 103.5 as Section 103.38 and add new
Sections 103.5 through 103.37. These sections are similar in substance
to the government-wide procedures for nonprocurement suspension and
debarment set forth at 2 CFR Part 180. OMB guidance for implementing
those procedures was first issued in 1987 [52 FR 20360, May 29, 1987].
OMB revised its guidance in 1988 [53 FR 19160, May 26, 1988] after
agencies issued a common rule to implement the suspension and debarment
guidance, and again in 1995 [60 FR 33036, June 26, 1995] and 2005 [70
FR 51863, August 31, 2005] to conform to agencies' updates to the
common rule. [68 FR 66534, November 26, 2003]. In 2006 OMB codified
final guidance in Title 2 of the CFR [71 FR 66431, November 15, 2006],
which, among other things, required agencies to adopt the guidance as
the government-wide nonprocurement debarment and suspension procedures
instead of the common rule. SBA adopted those procedures in 2007 [72 FR
39728, July 20, 2007], including SBA-specific additions to those
procedures as set forth in 2 CFR Part 2700.
In seeking to codify detailed procedures for Agent suspension and
revocation, SBA notes that there are clear parallels between the
suspension and revocation remedies at SBA and government-wide
nonprocurement suspension and debarment remedies: both place a bar on
one's privilege to conduct business with the federal government. Given
these clear parallels and the 25-year history of the government-wide
nonprocurement suspension and debarment procedures (which have been
open to public comment on numerous occasions), SBA has determined that
it is logical and appropriate to use the same suspension
[[Page 62063]]
and debarment procedures for Agent suspension and revocation. As such,
the language and substance of the proposed procedures for Agent
suspension and revocation are specifically adapted from those in 2 CFR
Parts 180 and 2700 which address suspension and debarment.
Although the language in the proposed procedures is largely
identical to those in 2 CFR Parts 180 and 2700, language has been
changed to adapt debarment and debarment-specific standards and bases
to revocation and revocation-specific standards and bases. A small
number of other changes have been made for clarity.
Title 13, Section 103.5. Although not currently formalized in the
CFR, SBA's suspending and revoking officials are the same as its
suspending and debarring officials. This proposed rule would merely
codify this role. Designating the Agency's suspending and debarring
officials as the suspending and revoking officials makes sense in that
the process and substance of suspension and revocation are similar to
those for nonprocurement suspension and debarment.
Title 13, Sections 103.6 through 103.10. These sections of the
proposed rule would set forth the process by which SBA determines to
issue a suspension and the manner in which it issues the suspension.
This includes the bases for suspension, considerations the suspending
official must make, and the manner and form in which SBA provides
notice of the suspension.
Title 13, Section 103.8. In adapting language from 2 CFR 180.705,
SBA is proposing to remove the word ``basic,'' which may lead to
confusion as to whether there is a limiting factor regarding which
documents the suspending official may examine. Because SBA knows of no
such limitation, SBA is not including the word.
Title 13, Sections 103.11 through 103.14. These sections of the
proposed rule, which are modeled on comparable sections in Title 2,
would set forth the procedures for challenging a suspension, including
the time period in which to respond, and the information that must be
submitted to respond to the Notice of Suspension.
Title 13, Sections 103.15 through 103.19. These sections of the
proposed rule makes it clear that suspensions are not formal
proceedings, describe the factors the suspending official will consider
in reviewing submissions in opposition to the Notice of Suspension, and
how he or she will conduct fact-finding, if necessary, and decide
whether to continue or terminate the suspension.
Title 13, Section 103.16. In adapting language from 2 CFR 180.745,
SBA is proposing to change the phrase ``If fact-finding is conducted''
to ``If the suspending official determines that fact-finding is
necessary.'' This change would clarify the procedures for conducting
fact-finding if an Agent receives an additional opportunity to
challenge the facts on which the suspension is based by stating the
circumstances under which fact-finding would occur.
Title 13, Section 103.19. In adapting language from 2 CFR 180.760,
SBA is proposing to reword subsection (a) to clarify what is meant by
``legal or revocation proceedings.'' SBA aims to make clear that the
time limitation is based upon (a) a revocation proceeding, or (b) legal
action on behalf of the government, or if none, then no longer than 12
months. SBA also aims to make clear that the legal action referred to
is an action taken by the government regarding the facts giving rise to
the suspension, rather than any legal action without limitation. SBA is
also proposing to add its Inspector General to those officials from
whom SBA may consider a request to extend a suspension, because Part
103 suspension is an SBA-specific remedy, which is likely to not only
be affected by ongoing investigation and prosecution by the Department
of Justice but also ongoing investigation by SBA's Inspector General.
Title 13, Section 103.20. This section of the proposed rule,
adapted from 2 CFR 2700.765, sets forth the right of the subject of a
suspension to ask the suspending official to reconsider his or her
determination to continue a suspension and the process to make such
request. As with the changes to 2 CFR Part 2700, stated above, this
section does not provide for an appeal to SBA's Office of Hearings and
Appeals because jurisdiction over suspensions is proposed to be removed
from the Office of Hearings and Appeals.
Title 13, Sections 103.21 through 103.22. These sections of the
proposed rule, which are modeled on comparable sections in Title 2, set
forth the process by which SBA would determine to issue a revocation
and the manner in which it issues the revocation. This includes the
manner and form in which SBA provides notice of the revocation and a
statement of when revocation takes effect.
Title 13, Sections 103.23 through 103.26. These sections of the
proposed rule, which are modeled on comparable sections in Title 2, set
forth the procedures the subject of a revocation may use to challenge
the revocation, including the time period in which to respond, as well
as what information must be submitted to respond to the Notice of
Proposed Revocation.
Title 13, Sections 103.27 through 103.34. These sections of the
proposed rule, which are modeled on comparable sections in Title 2,
provide for the procedure and manner in which the revoking official
will consider submissions in opposition to the Notice of Proposed
Revocation, conduct fact-finding, if necessary, and decide whether to
revoke the privilege to conduct business with SBA and the revocation
term, as well as how SBA sends notice of the revoking official's
decision.
Title 13, Section 103.27. 2 CFR 180.835 states, ``Debarment
proceedings are conducted in a fair and informal manner. The debarring
official may use flexible procedures to allow you as a respondent to
present matters in opposition. In so doing, the debarring official is
not required to follow formal rules of evidence or procedure in
creating an official record upon which the official will base the
decision whether to debar.'' In adapting language from 2 CFR 180.835,
SBA proposes to reword subsection (a) from the nonprocurement debarment
regulations for the sake of clarity by utilizing more straightforward
language.
Title 13, Section 103.28. In adapting language from 2 CFR 180.840,
SBA would change the phrase ``If fact-finding is conducted'' to ``If
the revoking official determines that fact-finding is necessary.'' This
change would clarify the procedures for conducting fact-finding if an
Agent receives an additional opportunity to challenge the facts on
which the proposed revocation is based.
Title 13, Sections 103.35 through 103.36. These sections of the
proposed rule, which are modeled on comparable sections in Title 2, set
forth the procedures by which the subject of a revocation may request
reconsideration from the revoking official, including the factors that
may influence the revoking official's decision on reconsideration.
Title 13, Section 103.37. This section of the proposed rule sets
forth the procedures by which a revoking official may extend a
revocation.
Title 13, Section 103.38. This section of the proposed rule, which
is modeled on a comparable section in Title 2, sets forth the Agency's
ability to impute conduct between individuals and organizations, as
well as between organizations.
[[Page 62064]]
Title 13, Section 134.102. SBA is proposing to remove jurisdiction
over Part 103 suspension and revocation and Title 2 suspension and
debarment from the Office and Hearings and Appeals. As such, the final
agency decision of SBA with regard to such suspension or revocation and
suspension or debarment would be from the debarring or revoking
official. This change is being made to bring SBA's nonprocurement
suspension and debarment procedures into conformity with the other
federal agencies, which do not provide for an additional level of
administrative review of suspension and debarment decisions, as well as
maintain consistency between the procedures for suspension and
revocation with nonprocurement suspension and debarment.
III. Comments Requested
Readers are encouraged to review closely the proposed rule to fully
comprehend the extent of the rule and its changes. SBA invites comment
on all aspects of this proposed rule, including the underlying
policies.
Compliance With Executive Orders 12866, 12988, 13132, and 13563, the
Paperwork Reduction Act (44 U.S.C. Ch. 35), and the Regulatory
Flexibility Act (5 U.S.C. 601-612) Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
proposed rule constitutes a significant regulatory action under the
meaning of Executive Order 12866. This proposed rule is not a major
rule under the Congressional Review Act. The Regulatory Impact Analysis
is set forth below.
1. Necessity of Regulation
Currently, SBA utilizes procedures for Part 103 suspension and
revocation for loan program Agents, as adopted in SBA's Standard
Operating Procedure 50 53 A. Similar procedures for suspension or
revocation of agents in SBA's 8(a) Business Development Program are
codified in 13 CFR Part 124.
However, Part 103 suspension and revocation is not limited to
Agents under particular SBA programs such as SBA loan programs or the
8(a) Business Development Program. Instead, these remedies, which have
long existed, may be used against any Agent, as defined in the
regulation. Agents may exist in many other contexts apart from SBA's
loan programs or 8(a) Business Development Program but SBA does not
currently have detailed written procedures for the suspension and
revocation of such Agents.
The proposed changes would clearly codify the same procedures for
all Agents who are subject to suspension or revocation regardless of
the SBA program at issue. In addition, by making the suspension and
revocation procedures consistent across programs, SBA intends to
alleviate any possible public confusion.
2. Alternate Approaches to Regulation
SBA's alternate options to a single set of agency-wide procedures
for Part 103 suspensions and revocations are limited and far less
effective than setting forth the procedures in regulation. One
alternate option would be to have no written procedures throughout the
Agency. However, the proposed regulation is simpler and clearer for the
public. Also, without written procedures for suspensions and
revocations, those actions would be subjected to greater scrutiny by
courts when evaluating them for due process, because due process is
more readily achieved where the public is aware of a known and
published set of procedures for such actions. As such, SBA finds that
amending Part 103 to codify procedures for suspension and revocation
avoids the drawbacks of proceeding with no written procedures.
Another alternative that SBA considered was providing a consistent
set of procedures by enacting those same procedures through numerous
Standard Operating Procedures and policy notices throughout SBA,
relating to various SBA programs. However, this too proves to be an
inadequate alternative to providing procedures by regulation. The
process of identifying the numerous locations to publish such
procedures and then publishing in those locations doing so would prove
far more burdensome for SBA than placing the procedures in one location
within the regulations--Part 103--where suspension and revocation
themselves are set forth. This single location for the procedures would
also reduce the burden on the public, who would not have to seek out
which version of the procedures to follow. It is for these reasons that
SBA has determined that the most sensible and appropriate means to
provide procedures for Part 103 suspensions and revocations is to place
those procedures within the Part 103 regulation itself.
3. Potential Benefits and Costs
By amending Part 103 to codify a standard set of procedures agency-
wide, SBA will be poised to make full use of these remedies in
combatting fraud, waste, and abuse against the Agency. SBA has already
used a similar remedy, suspension and debarment under 2 CFR Part 180,
as an enforcement measure against many types of wrongdoers. Part 103
suspension and revocation, however, provide a remedy against Agents in
situations beyond the scope of 2 CFR Part 180 suspension and debarment.
In fiscal years 2008 through 2011, SBA suspended 23 Participants (as
defined in 2 CFR Part 180) and debarred 86 Participants. These
Participants either defrauded the government or were not eligible for
the contracts or benefits that they received. Hundreds of millions of
dollars had been awarded or paid out by the government to these
Participants prior to those suspension and debarment actions, and
taking such actions has prevented such Participants from receiving
further benefits and/or money. Thus, these actions have saved the
government from potentially paying hundreds of millions of further
government funds to those wrongdoers during their suspensions or
subsequent to their debarments.
SBA expects to achieve similar results from Part 103 suspensions
and revocations through the use of consistent procedures for such
actions agency-wide. Agents are collectively paid hundreds of millions
of dollars by the small business community each year to conduct
business with SBA on behalf of Applicants and Participants in SBA
programs. By having centralized, consistent procedures, SBA will be
able to fully utilize these remedies to limit the proportion of those
dollars that goes into the hands of wrongdoers who commit fraud, waste,
and abuse of SBA programs and government funds.
Conversely, there are no costs to enacting these amendments to Part
103. No extra requirements are being placed upon those subjected to
Part 103 suspensions and revocations. Rather, the codification of these
procedures will enable such Agents to better understand their rights
and the procedures by which SBA seeks to carry out those suspensions
and revocations.
SBA notes that it is the sole agency subject to 2 CFR Part 180
suspensions and debarments that provides for appeals to go to an
administrative court. Without being required to exhaust their
administrative remedies through the Office of Hearings and Appeals,
Agents will be able to receive a final determination by SBA more
quickly and without the cost and delay of protracted administrative
litigation. SBA believes that the ability to appeal directly to federal
court constitutes a benefit to those subjected to suspension,
debarment, and revocation.
[[Page 62065]]
These amendments to Part 103 also would pose no costs to SBA. The
remedies of Part 103 suspension and revocation already exist. Because
the proposed procedures are substantially similar to those of 2 CFR
Part 180 suspension and debarment, SBA is capable of performing Part
103 suspension and revocation actions with the same resources as it
already utilizes for suspension and debarment. Also, the centralization
of those procedures also ensures that various elements within SBA are
not exercising different versions of these procedures. In addition, by
removing the review of the 2 CFR Part 180 suspension and debarment
actions from the jurisdiction of Office of Hearings and Appeals, SBA
would benefit from decreased burden on that Office.
Executive Order 12988
This action meets applicable standards set forth in Sections 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. The action does not
have retroactive or preemptive effect.
Executive Order 13132
For purposes of Executive Order 13132, SBA has determined that the
rule will not have substantial, direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. Therefore, for the purpose of Executive Order 13132,
Federalism, SBA has determined that this proposed rule has no
federalism implications warranting preparation of a federalism
assessment.
Executive Order 13563
Executive Order 13563 reaffirms the principles of Executive Order
12866 while calling for improvements in the nation's regulatory system
to promote predictability, to reduce uncertainty, and to use the best,
most innovative, and least burdensome tools for achieving regulatory
ends. The executive order directs agencies to consider regulatory
approaches that reduce burdens and maintain flexibility and freedom of
choice for the public where these approaches are relevant, feasible,
and consistent with regulatory objectives. We have developed this rule
in a manner consistent with these requirements. Executive Order 13563
also emphasizes that the rulemaking process must allow for public
participation and an open exchange of ideas. With regard to this
proposed rule, the number and variety of individuals and entities
affected is too broad and varied to allow for meaningful direct
participation with the public regarding the procedures set forth in the
proposed rule prior to its publication in the Federal Register. As
such, SBA intends to use the publication of this proposed rule in the
Federal Register as the primary medium for generating public dialogue
on the standards proposed in the rule. Concurrent with publication in
the Federal Register, SBA will also post a notice on its Web site,
including specific program Web sites, to publicize the publication of
the rule and to encourage the public to review it and provide comment
through www.regulations.gov. After an analysis of any public comments,
SBA will consider whether additional efforts are warranted.
Paperwork Reduction Act, 44 U.S.C., Ch. 35
SBA has determined that this proposed rule imposes no additional
reporting or recordkeeping requirements under the Paperwork Reduction
Act (PRA), 44 U.S.C., Chapter 35. Any information reported to SBA as a
result of these regulations would be in the context of an
administrative action involving the specific individuals facing
possible suspension or revocation under these regulations. Information
submitted in such proceedings is exempt from the requirements of the
PRA.
Regulatory Flexibility Act, 5 U.S.C. 601-612
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires
administrative agencies to consider the effect of their actions on
small entities, small non-profit enterprises, and small local
governments. Pursuant to RFA, when an agency issues a rulemaking, the
agency must prepare a regulatory flexibility analysis which describes
the impact of the rule on small entities. However, section 605 of the
RFA allows an agency to certify a rule, in lieu of preparing an
analysis, if the rulemaking is not expected to have a significant
economic impact on a substantial number of small entities. Within the
meaning of RFA, SBA certifies that this rule will not have a
significant economic impact on a substantial number of small entities.
As this proposed rule merely sets forth procedures that SBA already
substantively utilizes, including the basic elements of due process
such as notice and the opportunity to respond, in conducting
suspensions and revocations, no part of this proposed rule would impose
any significant additional cost or burden.
List of Subjects
2 CFR Part 2700
Administrative practice and procedure, Government contracts, Grant
programs, Loan programs, Reporting and recordkeeping requirements.
13 CFR Part 103
Administrative practice and procedure, Lawyers.
13 CFR Part 124
Administrative practice and procedure, Government procurement,
Reporting and recordkeeping requirements, Technical assistance.
13 CFR Part 134
Administrative practice and procedure, Claims, Lawyers,
Organization and functions (Government agencies).
For the reasons stated in the preamble, SBA proposes to amend 2 CFR
Part 2700, and 13 CFR Parts 103, 124, and 134 as follows:
PART 2700--NONPROCUREMENT DEBARMENT AND SUSPENSION
0
1. The authority citation for part 2700 is revised to read as follows:
Authority: 15 U.S.C. 634(b)(6); Sec 2455, Pub L. 103-355, 108
Stat. 3327 (31 U.S.C. 6101 note); E.O. 12549, 51 FR 6370, 3 CFR,
1986 Comp., p. 189; E.O. 12689. 54 FR 34131, 3 CFR, 1989 Comp., p.
235.
0
2. Amend Sec. 2700.765 by revising the section heading and paragraphs
(a) and (c); and by removing paragraph (d) to read as follows:
Sec. 2700.765 May I ask the suspending official to reconsider a
decision to continue my suspension?
(a) If the SBA suspending official issues a decision under Sec.
180.755 to continue your suspension after you present information in
opposition to that suspension under Sec. 180.720, you may ask the
suspending official to reconsider the decision for material errors of
fact or law that you believe will change the outcome of the matter.
* * * * *
(c) The SBA suspending official must notify you of the decision
under this section, in writing, using the notice procedures set forth
at Sec. Sec. 180.615 and 180.975.
Sec. 2700.890 [Removed]
0
3. Remove Sec. 2700.890.
0
4. Add new Sec. 2700.980 to read as follows:
[[Page 62066]]
Sec. 2700.980 Participant (SBA supplement to governmentwide
definition at 2 CFR 180.980).
Participant means, in addition to those individuals and entities
listed at 2 CFR 180.980, any Agent as defined in 13 CFR part 103.
Title 13: Business Credit and Assistance
PART 103--STANDARDS FOR CONDUCTING BUSINESS WITH SBA
0
5. The authority citation for part 103 is revised to read as follows:
Authority: 15 U.S.C. 634 and 642.
0
6. Amend Sec. 103.1 as follows:
0
a. Revise paragraphs (a), (b)(1) and (b)(2);
0
b. Redesignate paragraphs (b)(3) through (b)(5) as (b)(4) through
(b)(6);
0
c. Add new paragraph (b)(3);
0
d. Revise paragraphs (d), (f), and (g).
The revisions and additions read as follows:
Sec. 103.1 Key Definitions.
(a) Agent means a representative authorized to conduct business on
behalf of another, including but not limited to an attorney,
accountant, consultant, loan agent (such as a packager, referral agent,
or lender service provider), or any other person representing an
Applicant or Participant by conducting business with SBA.
(b) * * *
(1) Preparing, assisting in the preparation of, or submitting on
behalf of an applicant an application for financial assistance of any
kind, assistance from the Investment Division of SBA, or assistance in
procurement and technical matters;
(2) Preparing, assisting in the preparation of, or processing on
behalf of a lender or a participant in any of SBA's programs an
application for federal financial assistance;
(3) Acting as a Referral Agent, such as a broker, in connection
with an applicant's efforts to obtain financial assistance of any kind,
assistance from the Investment Division of SBA, or assistance in
procurement and technical matters.
* * * * *
(d) Lender Service Provider means an Agent who carries out lender
functions in originating, disbursing, servicing, or liquidating an SBA
business loan or loan portfolio for compensation from the lender. SBA
determines whether or not an Agent is a ``Lender Service Provider'' on
a loan-by-loan basis.
* * * * *
(f) Referral Agent means a person or entity who identifies and
refers an Applicant to a lender or a lender to an Applicant, such as a
broker. The Referral Agent may be employed and compensated by either an
Applicant or a lender.
(g) Participant means a person or entity that is participating in
any of the financial, investment, procurement, or business development
programs authorized by the Small Business Act or Small Business
Investment Act of 1958.
0
7. Amend Sec. 103.2, by revising the first sentence of paragraph (b),
to read as follows:
Sec. 103.2 Who may conduct business with SBA?
* * * * *
(b) If you are an Agent, you have the privilege to conduct business
with SBA on behalf of an Applicant or Participant, unless
representation is otherwise prohibited by law or the regulations in
this part or any other part in this chapter. * * *
Sec. 103.3 [Amended]
0
8. Revise Sec. 103.3 to read as follows:
Sec. 103.3 May SBA suspend or revoke an Agent's privilege?
The Administrator of SBA or designee may, for good cause, suspend
or revoke the privilege of any Agent to conduct business with SBA. SBA
may publish the names of agents subject to actions under this part in
the System for Award Management, or any successor system, and on SBA's
Web site.
0
9. Amend Sec. 103.4 as follows:
0
a. Revise the introductory paragraph;
0
b. Revise paragraphs (b), (d), (f), (g), (h) and (i).
The revisions read as follows:
Sec. 103.4 What is ``good cause'' for suspension or revocation?
Any unlawful or unethical activity is good cause for suspension or
revocation of the privilege to conduct business with SBA. This
includes, but is not limited to:
* * * * *
(b) Soliciting for the provision of services to an Applicant or
Participant by another entity when there is an undisclosed business
relationship between the two parties.
* * * * *
(d) Implying or stating that the work to be performed for an
Applicant or Participant will include use of political or other special
influence with SBA or inaccurately representing SBA endorsement or
approval. Examples include indicating that the entity is affiliated
with or paid, endorsed, approved or employed by SBA, advertising or
otherwise holding oneself out to the public using the words Small
Business Administration or SBA in a manner that inaccurately implies
SBA's endorsement, approval or sponsorship, use of SBA's seal or
symbol, and giving a ``guaranty'' to an Applicant or Participant that
the application will be approved.
* * * * *
(f) Engaging in any conduct indicating a lack of business integrity
or business honesty, including but not limited to fraud, embezzlement,
theft, forgery, bribery, falsification or destruction of records,
making false statements or misleading statements or representations,
conspiracy, receiving stolen property, false claims, or obstruction of
justice. Debarment, criminal conviction, or civil judgment within the
last seven years for such conduct demonstrates evidence of that
conduct.
(g) Acting as both a Lender Service Provider and a Packager for an
Applicant or acting as both a Referral Agent and a Packager for an
Applicant on the same SBA business loan, and receiving compensation for
such activity from both the Applicant and Participant lender without
full disclosure of compensation to both the Applicant and Participant
lender. A limited exception to this ``two master'' prohibition exists
when an Agent acts as a Packager and is compensated by the Applicant
for packaging services, acts as a Referral Agent and is compensated by
the Participant lender for those activities, discloses the referral
activities to the Applicant, and discloses the packaging activities to
the Participant lender.
(h) Violating materially the terms of any compensation agreement or
Lender Service Provider agreement provided for in Sec. 103.39.
(i) Violating or assisting in the violation of any SBA program
requirement, including, without limitation, any requirement imposed by
an SBA regulation, policy, procedure, notice, form, or agreement. Such
violations include but are not limited to failure to disclose fees paid
by an Applicants or Participant when required by SBA program
requirements.10. Redesignate Sec. 103.5 as Sec. 103.39.
0
11. Add new Sec. Sec. 103.5 through 103.38 to part 103 to read as
follows:
Sec.
103.5 Who are the suspending and revoking officials?
103.6 How does SBA provide notification of a suspension or
revocation action?
103.7 When may the suspending official issue a suspension?
103.8 What does the suspending official consider in issuing a
suspension?
103.9 When does a suspension take effect?
[[Page 62067]]
103.10 What notice does the suspending official give me if I am
suspended?
103.11 How may I contest a suspension?
103.12 How much time do I have to contest a suspension?
103.13 What information must I provide to the suspending official if
I contest the suspension?
103.14 Under what conditions do I get an additional opportunity to
challenge the facts on which the suspension is based?
103.15 Are suspension proceedings formal?
103.16 How is fact-finding conducted?
103.17 What does the suspending official consider in deciding
whether to continue or terminate my suspension?
103.18 When will I know whether the suspension is continued or
terminated?
103.19 How long may my suspension last?
103.20 May I ask the suspending official to reconsider a decision to
continue my suspension?
103.21 What notice does the revoking official give me if I am
proposed for revocation?
103.22 When does a revocation take effect?
103.23 How may I contest a proposed revocation?
103.24 How much time do I have to contest a proposed revocation?
103.25 What information must I provide to the revoking official if I
contest the proposed revocation?
103.26 Under what conditions do I get an additional opportunity to
challenge the facts on which the proposed revocation is based?
103.27 Are revocation proceedings formal?
103.28 How is a fact-finding conducted?
103.29 What does the revoking official consider in deciding whether
to revoke my privilege to conduct business with SBA?
103.30 What is the standard of proof in a revocation action?
103.31 Who has the burden of proof in a revocation action?
103.32 What factors may influence the revoking official's decision?
103.33 How long may my revocation last?
103.34 When do I know if the revoking official revokes my privilege
to conduct business with SBA?
103.35 May I ask the revoking official to reconsider a decision to
revoke my privilege to conduct business with SBA?
103.36 What factors may influence the revoking official during
reconsideration?
103.37 May the revoking official extend a revocation?
103.38 May the Agency impute conduct of one person to another?
Sec. 103.5 Who are the suspending and revoking officials?
The suspending and revoking officials are those officials
designated as suspending and debarring officials for SBA at 2 CFR Sec.
180.930.
Sec. 103.6 How does SBA provide notification of a suspension or
revocation action?
The suspending or revoking official sends a written notice to the
last known street address, facsimile number, or email address of you or
your identified counsel.
Sec. 103.7 When may the suspending official issue a suspension?
Suspension is a serious action. Using the procedures of this part,
the suspending official may impose suspension only when that official
determines that--
(a) There exists adequate evidence of any good cause under Sec.
103.4; and
(b) Immediate action is necessary to protect the public interest.
Sec. 103.8 What does the suspending official consider in issuing a
suspension?
(a) In determining whether there is adequate evidence to support
the suspension, the suspending official considers how much information
is available, how credible it is given the circumstances, whether or
not important allegations are corroborated, and what inferences can
reasonably be drawn as a result. During this assessment, the suspending
official may examine the documents, including grants, cooperative
agreements, loan authorizations, contracts, and other relevant
documents.
(b) An indictment, conviction, civil judgment, or other official
findings by Federal, State, or local bodies that determine factual and/
or legal matters, constitutes reasonable evidence for purposes of
suspension actions.
(c) In deciding whether immediate action is needed to protect the
public interest, the suspending official has wide discretion. For
example, the suspending official may infer the necessity for immediate
action to protect the public interest either from the nature of the
circumstances giving rise to a cause for suspension or from potential
business relationships or involvement with a program of the Federal
Government.
Sec. 103.9 When does a suspension take effect?
A suspension is effective when the suspending official signs the
decision to suspend.
Sec. 103.10 What notice does the suspending official give me if I am
suspended?
After deciding to suspend you, the suspending official will
promptly send you a Notice of Suspension advising you--
(a) That you have been suspended;
(b) Of the good cause upon which the suspending official relied
under Sec. 103.4 for imposing suspension;
(c) That your suspension is for a temporary period pending the
completion of an investigation or resulting legal or revocation
proceedings; and
(d) Of the applicable provisions of this part, and any other agency
procedures governing suspension decision making, including appeals and
appeal rights.
Sec. 103.11 How may I contest a suspension?
If you as a respondent wish to contest a suspension, you or your
representative must provide the suspending official with information in
opposition to the suspension. You may do this orally or in writing, but
any information provided orally that you consider important must also
be submitted in writing for the official record.
Sec. 103.12 How much time do I have to contest a suspension?
(a) As a respondent you or your representative must either send, or
make arrangements to appear and present, the information and argument
to the suspending official within 30 days after you receive the Notice
of Suspension.
(b) SBA considers the notice to be received by you--
(1) When delivered, if the agency mails the notice to the last
known street address, or five days after the agency sends it if the
letter is undeliverable;
(2) When sent, if the agency sends the notice by facsimile or five
days after the agency sends it if the facsimile is undeliverable; or
(3) When delivered, if the agency sends the notice by email or five
days after the agency sends it if the email is undeliverable.
Sec. 103.13 What information must I provide to the suspending
official if I contest the suspension?
(a) In addition to any information and argument in opposition, as a
respondent your submission to the suspending official must identify
specific facts that contradict the statements contained in the Notice
of Suspension. A general denial is insufficient to raise a genuine
dispute over facts material to the suspension.
(b) If you fail to disclose this information, or provide false
information, SBA may seek further criminal, civil or administrative
action against you, as appropriate.
Sec. 103.14 Under what conditions do I get an additional opportunity
to challenge the facts on which the suspension is based?
(a) You as a respondent will have an opportunity to challenge the
facts if the suspending official determines that your presentation in
opposition raises a genuine dispute over facts material to the
suspension.
[[Page 62068]]
(b) If you have an opportunity to challenge disputed material facts
under this section, the suspending official or designee must conduct
additional proceedings to resolve those facts.
Sec. 103.15 Are suspension proceedings formal?
(a) Suspension proceedings are not formal and formal rules of
evidence do not apply. The suspending official will use flexible
procedures to allow you to present matters in opposition. In so doing,
the suspending official is not required to follow formal rules of
evidence or procedure in creating an official record upon which the
official will base a final suspension decision.
(b) You as a respondent or your representative must submit any
documentary evidence you want the suspending official to consider.
Sec. 103.16 How is fact-finding conducted?
(a) If the suspending official determines that fact-finding is
necessary--
(1) You may present witnesses and other evidence, and confront any
witness presented; and
(2) The fact-finder must prepare written findings of fact for the
record.
(b) A transcribed record of fact-finding proceedings must be made,
unless you as a respondent and SBA agree to waive it in advance. If you
want a copy of the transcribed record, you may purchase the record from
the transcription service.
Sec. 103.17 What does the suspending official consider in deciding
whether to continue or terminate my suspension?
(a) The suspending official bases the decision on all information
contained in the official record. The record includes--
(1) All information in support of the suspending official's initial
decision to suspend you;
(2) Any further information and argument presented in support of,
or opposition to, the suspension; and
(3) Any transcribed record of fact-finding proceedings.
(b) The suspending official may refer disputed material facts to
another official for findings of fact. The suspending official may
reject any resulting findings, in whole or in part, only after
specifically determining them to be arbitrary, capricious, or clearly
erroneous.
Sec. 103.18 When will I know whether the suspension is continued or
terminated?
The suspending official must make a written decision whether to
continue, modify, or terminate your suspension within 45 days of
closing the official record. The official record closes upon the
suspending official's receipt of final submissions, information and
findings of fact, if any. The suspending official may extend that
period for good cause.
Sec. 103.19 How long may my suspension last?
(a) If revocation proceedings or legal action on behalf of the
government regarding the facts giving rise to the suspension are
initiated at the time of, or during, your suspension, the suspension
may continue until the conclusion of those proceedings or legal action.
However, if such proceedings or legal action are not initiated, a
suspension may not exceed 12 months.
(b) The suspending official may extend the 12 month limit under
paragraph (a) of this section for an additional 6 months if SBA's
Inspector General or an office of a U.S. Assistant Attorney General,
U.S. Attorney, or other responsible prosecuting official requests an
extension in writing. In no event may a suspension exceed 18 months
without initiating proceedings described under paragraph (a) of this
section.
(c) The suspending official must notify the appropriate officials
under paragraph (b) of this section of an impending termination of a
suspension at least 30 days before the 12 month period expires to allow
the officials an opportunity to request an extension.
Sec. 103.20 May I ask the suspending official to reconsider a
decision to continue my suspension?
(a) If the SBA suspending official issues a decision under Sec.
103.18 to continue your suspension after you present information in
opposition to that suspension under Sec. 103.11, you may ask the
suspending official to reconsider the decision for material errors of
fact or law that you believe will change the outcome of the matter.
(b) A request for review under this section must be in writing;
state the specific findings you believe to be in error; and include the
reasons or legal bases for your position.
(c) The SBA suspending official must notify you of his or her
decision under this section, in writing, using the notice procedures
set forth at Sec. 103.6.
Sec. 103.21 What notice does the revoking official give me if I am
proposed for revocation?
After consideration of the causes in Sec. 103.4, if the revoking
official proposes to revoke your privilege to conduct business with
SBA, the official sends you a Notice of Proposed Revocation, pursuant
to Sec. 103.6, advising you--
(a) That the revoking official is considering revoking your
privilege to conduct business with SBA;
(b) Of the reasons for proposing to revoke your privilege to
conduct business with SBA in terms sufficient to put you on notice of
the conduct or transactions upon which the proposed revocation is
based;
(c) Of the good cause under Sec. 103.4 upon which the revoking
official relied for proposing your revocation; and
(d) Of the applicable provisions of this part, and any other agency
procedures governing revocation.
Sec. 103.22 When does a revocation take effect?
A revocation is not effective until the revoking official issues a
decision. The revoking official does not issue a decision until the
respondent has had an opportunity to contest the proposed revocation.
Sec. 103.23 How may I contest a proposed revocation?
If you as a respondent wish to contest a proposed revocation, you
or your representative must provide the revoking official with
information in opposition to the proposed revocation. You may do this
orally or in writing, but any information provided orally that you
consider important must also be submitted in writing for the official
record.
Sec. 103.24 How much time do I have to contest a proposed revocation?
(a) As a respondent you or your representative must send the
information and argument to the revoking official within 30 days after
you receive the Notice of Proposed Revocation.
(b) SBA considers the Notice of Proposed Revocation to be received
by you--
(1) When delivered, if the agency mails the notice to the last
known street address, or five days after the agency sends it if the
letter is undeliverable;
(2) When sent, if the agency sends the notice by facsimile or five
days after the agency sends it if the facsimile is undeliverable; or
(3) When delivered, if the agency sends the notice by email or five
days after the agency sends it if the email is undeliverable.
Sec. 103.25 What information must I provide to the revoking official
if I contest the proposed revocation?
(a) In addition to any information and argument in opposition, as a
respondent your submission to the revoking official must identify
specific facts that contradict the statements contained in
[[Page 62069]]
the Notice of Proposed Revocation. Include any information about any of
the factors listed in Sec. 103.4. A general denial is insufficient to
raise a genuine dispute over facts material to the revocation.
(b) If you fail to disclose this information, or provide false
information, SBA may seek further criminal, civil or administrative
action against you, as appropriate.
Sec. 103.26 Under what conditions do I get an additional opportunity
to challenge the facts on which the proposed revocation is based?
(a) You as a respondent will have an additional opportunity to
challenge the facts if the revoking official determines that your
presentation in opposition raises a genuine dispute over facts material
to the proposed revocation.
(b) If you have an opportunity to challenge disputed material facts
under this section, the revoking official or designee must conduct
additional proceedings to resolve those facts.
Sec. 103.27 Are revocation proceedings formal?
(a) Revocation proceedings are not formal and formal rules of
evidence do not apply. The revoking official will use flexible
procedures in creating an official record upon which the official will
base a final revocation decision.
(b) You or your representative must submit any documentary evidence
you want the revoking official to consider.
Sec. 103.28 How is fact-finding conducted?
(a) If the revoking official determines that fact-finding is
necessary--
(1) You may present witnesses and other evidence, and confront any
witness presented; and
(2) The fact-finder must prepare written findings of fact for the
record.
(b) A transcribed record of fact-finding proceedings must be made,
unless you as a respondent and SBA agree to waive it in advance. If you
want a copy of the transcribed record, you may purchase it.
Sec. 103.29 What does the revoking official consider in deciding
whether to revoke my privilege to conduct business with SBA?
(a) The revoking official may revoke your privilege to conduct
business with SBA for any of the causes in Sec. 103.4. However, the
official need not revoke your privilege to conduct business with SBA
even if a cause for revocation exists. The official may consider the
seriousness of your acts or omissions and the mitigating or aggravating
factors set forth at Sec. 103.32.
(b) The revoking official bases the decision on all information
contained in the official record. The record includes--
(1) All information in support of the revoking official's proposed
revocation;
(2) Any further information and argument presented in support of,
or in opposition to, the proposed revocation; and
(3) Any transcribed record of fact-finding proceedings.
(c) The revoking official may refer disputed material facts to
another official for findings of fact. The revoking official may reject
any resultant findings, in whole or in part, only after specifically
determining them to be arbitrary, capricious, or clearly erroneous.
Sec. 103.30 What is the standard of proof in a revocation action?
(a) In any revocation action, SBA must establish the cause for
revocation by a preponderance of the evidence.
(b) If the proposed revocation is based upon a conviction or civil
judgment, the standard of proof is met.
Sec. 103.31 Who has the burden of proof in a revocation action?
(a) SBA has the burden to prove that a cause for revocation exists.
(b) Once a cause for revocation is established, you as a respondent
have the burden of demonstrating to the satisfaction of the revoking
official that revocation is not necessary.
Sec. 103.32 What factors may influence the revoking official's
decision?
This section lists the mitigating and aggravating factors that the
revoking official may consider in determining whether to revoke your
privilege to conduct business with SBA and the length of your
revocation period. The revoking official may consider other factors if
appropriate in light of the circumstances of a particular case. The
existence or nonexistence of any factor, such as one of those set forth
in this section, is not necessarily determinative of whether revocation
is necessary. In making a revocation decision, the revoking official
may consider the following factors:
(a) The actual or potential harm or impact that result or may
result from the wrongdoing.
(b) The frequency of incidents and/or duration of the wrongdoing.
(c) Whether there is a pattern or prior history of wrongdoing. For
example, if you have been found by another Federal agency or a State
agency to have engaged in wrongdoing similar to that found in the
revocation action, the existence of this fact may be used by the
revoking official in determining that you have a pattern or prior
history of wrongdoing.
(d) Whether you are or have been excluded or disqualified by an
agency of the Federal Government or have not been allowed to
participate in State or local contracts or assistance agreements on a
basis of conduct similar to one or more of the causes for revocation
specified in this part.
(e) Whether you have entered into an administrative agreement with
a Federal agency or a State or local government that is based on
conduct similar to one or more of the causes for revocation specified
in this part.
(f) Whether and to what extent you planned, initiated, or carried
out the wrongdoing.
(g) Whether you have accepted responsibility for the wrongdoing and
recognize the seriousness of the misconduct that led to the cause for
revocation.
(h) Whether you have paid or agreed to pay all criminal, civil and
administrative liabilities for the improper activity, including any
investigative or administrative costs incurred by the government, and
have made or agreed to make full restitution.
(i) Whether you have cooperated fully with the government agencies
during the investigation and any court or administrative action. In
determining the extent of cooperation, the revoking official may
consider when the cooperation began and whether you disclosed all
pertinent information known to you.
(j) Whether you took appropriate corrective action or remedial
measures to correct your wrongdoing.
(k) Other factors that are appropriate to the circumstances of a
particular case.
Sec. 103.33 How long may my revocation last?
(a) If the revoking official decides to revoke your privilege to
conduct business with SBA, your period of revocation will be based on
the seriousness of the cause(s) upon which your revocation is based.
(b) In determining the period of revocation, the revoking official
may consider the factors in Sec. 103.32. If a suspension has preceded
your revocation, the revoking official must consider the time you were
suspended.
Sec. 103.34 When do I know if the revoking official revokes my
privilege to conduct business with SBA?
(a) The revoking official must make a written decision within 45
days of closing the official record. The official record closes upon
the revoking official's receipt of final submissions,
[[Page 62070]]
information and findings of fact, if any. The revoking official may
extend that period for good cause.
(b) The revoking official sends you written notice, pursuant to
Sec. 103.6, that the official decided either--
(1) Not to revoke your privilege to conduct business with SBA; or
(2) To revoke your privilege to conduct business with SBA. In this
event, the notice:
(i) Refers to the Notice of Proposed Revocation;
(ii) Specifies the reasons for your revocation; and
(iii) States the period of your revocation, including the effective
dates.
Sec. 103.35 May I ask the revoking official to reconsider a decision
to revoke my privilege to conduct business with SBA?
Yes, you may ask the revoking official to reconsider the revocation
decision or to reduce the time period or scope of the revocation.
However, you must put your request in writing and support it with
documentation.
Sec. 103.36 What factors may influence the revoking official during
reconsideration?
The revoking official may reduce or terminate your revocation based
on--
(a) Newly discovered material evidence not previously available;
(b) A reversal of the conviction or civil judgment upon which your
revocation was based;
(c) A bona fide change in ownership or management;
(d) Elimination of other causes for which the revocation was
imposed; or
(e) Other reasons the revoking official finds appropriate.
Sec. 103.37 May the revoking official extend a revocation?
(a) Yes, the revoking official may extend a revocation for an
additional period, if that official determines that an extension is
necessary to protect the public interest.
(b) However, the revoking official may not extend a revocation
solely on the basis of the facts and circumstances upon which the
initial revocation action was based.
(c) If the revoking official decides that a revocation for an
additional period is necessary, the revoking official must follow the
applicable procedures in this part to extend the revocation, at
Sec. Sec. 103.21 through 103.36 of this part.
Sec. 103.38 May the Agency impute conduct of one person to another?
For purposes of actions taken under this rule, SBA may impute
conduct as follows:
(a) Conduct imputed from an individual to an organization. SBA may
impute the fraudulent, criminal, or other improper conduct of any
officer, director, shareholder, partner, employee, or other individual
associated with an organization, to that organization when the improper
conduct occurred in connection with the individual's performance of
duties for or on behalf of that organization, or with the
organization's knowledge, approval or acquiescence. The organization's
acceptance of the benefits derived from the conduct is evidence of
knowledge, approval or acquiescence.
(b) Conduct imputed from an organization to an individual, or
between individuals. SBA may impute the fraudulent, criminal, or other
improper conduct of any organization to an individual, or from one
individual to another individual, if the individual to whom the
improper conduct is imputed either participated in, had knowledge of,
or reason to know of the improper conduct.
(c) Conduct imputed from one organization to another organization.
SBA may impute the fraudulent, criminal, or other improper conduct of
one organization to another organization when the improper conduct
occurred in connection with a partnership, joint venture, joint
application, association or similar arrangement, or when the
organization to whom the improper conduct is imputed has the power to
direct, manage, control or influence the activities of the organization
responsible for the improper conduct. Acceptance of the benefits
derived from the conduct is evidence of knowledge, approval or
acquiescence.
PART 124--8(a) BUSINESS DEVELOPMENT/SMALL DISADVANTAGED BUSINESS
STATUS DETERMINATIONS
0
13. The authority citation for part 124 is revised to read as follows:
Authority: 15 U.S.C. 634(b)(6), 636(j), 637(a), 637(d); 42
U.S.C. 9815; Pub. L. 99-661; Pub L. 100-656; sec. 1207, Pub L. 101-
37; Pub. L. 101-574; sec. 8021, Pub. L. 108-87.
Sec. 124.4 [Amended]
0
14. Amend Sec. 124.4 by removing paragraph (c) and redesignating
paragraph (d) as paragraph (c).
PART 134--RULES OF PROCEDURE GOVERNING CASES BEFORE THE OFFICE OF
HEARINGS AND APPEALS
0
15. The authority citation for part 134 continues to read as follows:
Authority: 5 U.S.C. 504; 15 U.S.C. 632, 634(b)(6), 637(a),
648(l), 656(i), and 687(c); E.O. 12549, 51 FR 6370, 3 CFR, 1986
Comp., p. 189.
Sec. 134.102 [Amended]
0
16. Amend Sec. 134.102 by removing and reserving paragraphs (c) and
(p).
Maria Contreras-Sweet,
Administrator.
[FR Doc. 2014-22521 Filed 10-14-14; 8:45 am]
BILLING CODE 8025-01-P