[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1196 Engrossed in Senate (ES)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
    
107th CONGRESS
  1st Session
                                S. 1196

_______________________________________________________________________

                                 AN ACT


 
   To amend the Small Business Investment Act of 1958, 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 ``Small Business Investment Company 
Amendments Act of 2001''.

SEC. 2. SUBSIDY FEES.

    (a) In General.--Section 303 of the Small Business Investment Act 
of 1958 (15 U.S.C. 683) is amended--
            (1) in subsection (b)--
                    (A) by striking ``of not more than 1 percent per 
                year'';
                    (B) by inserting ``which amount may not exceed 1.38 
                percent per year, and'' before ``which shall be paid''; 
                and
                    (C) by striking ``September 30, 2000'' and 
                inserting ``September 30, 2001''; and
            (2) in subsection (g)(2)--
                    (A) by striking ``of not more than 1 percent per 
                year'';
                    (B) by inserting ``which amount may not exceed 1.38 
                percent per year, and'' before ``which shall be paid''; 
                and
                    (C) by striking ``September 30, 2000'' and 
                inserting ``September 30, 2001''.
    (b) Effective Date.--The amendments made by this section shall 
become effective on October 1, 2001.

SEC. 3. CONFLICTS OF INTEREST.

    Section 312 of the Small Business Investment Act of 1958 (15 U.S.C. 
687d) is amended by striking ``(including disclosure in the locality 
most directly affected by the transaction)''.

SEC. 4. PENALTIES FOR FALSE STATEMENTS.

    (a) Criminal Penalties.--Section 1014 of title 18, United States 
Code, is amended by inserting ``, as defined in section 103 of the 
Small Business Investment Act of 1958 (15 U.S.C. 662), or the Small 
Business Administration in connection with any provision of that Act'' 
after ``small business investment company''.
    (b) Civil Penalties.--Section 951 of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833a) is 
amended--
            (1) by redesignating subsections (d) through (g) as 
        subsections (e) through (h), respectively; and
            (2) in subsection (c)--
                    (A) in paragraph (1), by striking ``or'' at the 
                end;
                    (B) in paragraph (2)--
                            (i) by striking ``1341;'' and inserting 
                        ``1341''; and
                            (ii) by striking ``institution.'' and 
                        inserting ``institution; or'';
                    (C) by inserting immediately after paragraph (2) 
                the following:
            ``(3) section 16(a) of the Small Business Act (15 U.S.C. 
        645(a)).''; and
                    (D) by striking ``This section shall'' and 
                inserting the following:
    ``(d) Effective Date.--This section shall''.

SEC. 5. REMOVAL OR SUSPENSION OF MANAGEMENT OFFICIALS.

    Section 313 of the Small Business Investment Act of 1958 (15 U.S.C. 
687e) is amended to read as follows:

``SEC. 313. REMOVAL OR SUSPENSION OF MANAGEMENT OFFICIALS.

    ``(a) Definition of `Management Official'.--In this section, the 
term `management official' means an officer, director, general partner, 
manager, employee, agent, or other participant in the management or 
conduct of the affairs of a licensee.
    ``(b) Removal of Management Officials.--
            ``(1) Notice of removal.--The Administrator may serve upon 
        any management official a written notice of its intention to 
        remove that management official whenever, in the opinion of the 
        Administrator--
                    ``(A) such management official--
                            ``(i) has willfully and knowingly committed 
                        any substantial violation of--
                                    ``(I) this Act;
                                    ``(II) any regulation issued under 
                                this Act; or
                                    ``(III) a cease-and-desist order 
                                which has become final; or
                            ``(ii) has willfully and knowingly 
                        committed or engaged in any act, omission, or 
                        practice which constitutes a substantial breach 
                        of a fiduciary duty of that person as a 
                        management official; and
                    ``(B) the violation or breach of fiduciary duty is 
                one involving personal dishonesty on the part of such 
                management official.
            ``(2) Contents of notice.--A notice of intention to remove 
        a management official, as provided in paragraph (1), shall 
        contain a statement of the facts constituting grounds therefor, 
        and shall fix a time and place at which a hearing will be held 
        thereon.
            ``(3) Hearings.--
                    ``(A) Timing.--A hearing described in paragraph (2) 
                shall be fixed for a date not earlier than 30 days nor 
                later than 60 days after the date of service of notice 
                of the hearing, unless an earlier or a later date is 
                set by the Administrator at the request of--
                            ``(i) the management official, and for good 
                        cause shown; or
                            ``(ii) the Attorney General of the United 
                        States.
                    ``(B) Consent.--Unless the management official 
                shall appear at a hearing described in this paragraph 
                in person or by a duly authorized representative, that 
                management official shall be deemed to have consented 
                to the issuance of an order of removal under paragraph 
                (1).
            ``(4) Issuance of order of removal.--
                    ``(A) In general.--In the event of consent under 
                paragraph (3)(B), or if upon the record made at a 
                hearing described in this subsection, the Administrator 
                finds that any of the grounds specified in the notice 
                of removal has been established, the Administrator may 
                issue such orders of removal from office as the 
                Administrator deems appropriate.
                    ``(B) Effectiveness.--An order under subparagraph 
                (A) shall--
                            ``(i) become effective at the expiration of 
                        30 days after the date of service upon the 
                        subject licensee and the management official 
                        concerned (except in the case of an order 
                        issued upon consent as described in paragraph 
                        (3)(B), which shall become effective at the 
                        time specified in such order); and
                            ``(ii) remain effective and enforceable, 
                        except to such extent as it is stayed, 
                        modified, terminated, or set aside by action of 
                        the Administrator or a reviewing court in 
                        accordance with this section.
    ``(c) Authority to Suspend or Prohibit Participation.--
            ``(1) In general.--The Administrator may, if the 
        Administrator deems it necessary for the protection of the 
        licensee or the interests of the Administration, suspend from 
        office or prohibit from further participation in any manner in 
        the management or conduct of the affairs of the licensee, or 
        both, any management official referred to in subsection (b)(1), 
        by written notice to such effect served upon the management 
        official.
            ``(2) Effectiveness.--A suspension or prohibition under 
        paragraph (1)--
                    ``(A) shall become effective upon service of notice 
                under paragraph (1); and
                    ``(B) unless stayed by a court in proceedings 
                authorized by paragraph (3), shall remain in effect--
                            ``(i) pending the completion of the 
                        administrative proceedings pursuant to a notice 
                        of intention to remove served under subsection 
                        (b); and
                            ``(ii) until such time as the Administrator 
                        shall dismiss the charges specified in the 
                        notice, or, if an order of removal or 
                        prohibition is issued against the management 
                        official, until the effective date of any such 
                        order.
            ``(3) Judicial review.--Not later than 10 days after any 
        management official has been suspended from office or 
        prohibited from participation in the management or conduct of 
        the affairs of a licensee, or both, under paragraph (1), that 
        management official may apply to the United States district 
        court for the judicial district in which the home office of the 
        licensee is located, or the United States District Court for 
        the District of Columbia, for a stay of the suspension or 
        prohibition pending the completion of the administrative 
        proceedings pursuant to a notice of intent to remove served 
        upon the management official under subsection (b), and such 
        court shall have jurisdiction to stay such action.
    ``(d) Authority To Suspend on Criminal Charges.--
                    ``(1) In general.--Whenever a management official 
                is charged in any information, indictment, or complaint 
                authorized by a United States attorney, with the 
                commission of or participation in a felony involving 
                dishonesty or breach of trust, the Administrator may, 
                by written notice served upon that management official, 
                suspend that management official from office or 
                prohibit that management official from further 
                participation in any manner in the management or 
                conduct of the affairs of the licensee, or both.
                    ``(2) Effectiveness.--A suspension or prohibition 
                under paragraph (1) shall remain in effect until the 
                subject information, indictment, or complaint is 
                finally disposed of, or until terminated by the 
                Administrator.
                    ``(3) Authority upon conviction.--If a judgment of 
                conviction with respect to an offense described in 
                paragraph (1) is entered against a management official, 
                then at such time as the judgment is not subject to 
                further appellate review, the Administrator may issue 
                and serve upon the management official an order 
                removing that management official, which removal shall 
                become effective upon service of a copy of the order 
                upon the licensee.
                    ``(4) Authority upon dismissal or other 
                disposition.--A finding of not guilty or other 
                disposition of charges described in paragraph (1) shall 
                not preclude the Administrator from thereafter 
                instituting proceedings to suspend or remove the 
                management official from office, or to prohibit the 
                management official from participation in the 
                management or conduct of the affairs of the licensee, 
                or both, pursuant to subsection (b) or (c).
    ``(e) Notification to Licensees.--Copies of each notice required to 
be served on a management official under this section shall also be 
served upon the interested licensee.
    ``(f) Procedural Provisions; Judicial Review.--
            ``(1) Hearing venue.--Any hearing provided for in this 
        section shall be--
                    ``(A) held in the Federal judicial district or in 
                the territory in which the principal office of the 
licensee is located, unless the party afforded the hearing consents to 
another place; and
                    ``(B) conducted in accordance with the provisions 
                of chapter 5 of title 5, United States Code.
            ``(2) Issuance of orders.--After a hearing provided for in 
        this section, and not later than 90 days after the 
        Administrator has notified the parties that the case has been 
        submitted for final decision, the Administrator shall render a 
        decision in the matter (which shall include findings of fact 
        upon which its decision is predicated), and shall issue and 
        cause to be served upon each party to the proceeding an order 
        or orders consistent with the provisions of this section.
            ``(3) Authority to modify orders.--The Administrator may 
        modify, terminate, or set aside any order issued under this 
        section--
                    ``(A) at any time, upon such notice, and in such 
                manner as the Administrator deems proper, unless a 
                petition for review is timely filed in a court of 
                appeals of the United States, as provided in paragraph 
                (4)(B), and thereafter until the record in the 
                proceeding has been filed in accordance with paragraph 
                (4)(C); and
                    ``(B) upon such filing of the record, with 
                permission of the court.
            ``(4) Judicial review.--
                    ``(A) In general.--Judicial review of an order 
                issued under this section shall be exclusively as 
                provided in this subsection.
                    ``(B) Petition for review.--Any party to a hearing 
                provided for in this section may obtain a review of any 
                order issued pursuant to paragraph (2) (other than an 
                order issued with the consent of the management 
                official concerned, or an order issued under subsection 
                (d)), by filing in the court of appeals of the United 
                States for the circuit in which the principal office of 
                the licensee is located, or in the United States Court 
                of Appeals for the District of Columbia Circuit, not 
                later than 30 days after the date of service of such 
                order, a written petition praying that the order of the 
                Administrator be modified, terminated, or set aside.
                    ``(C) Notification to administration.--A copy of a 
                petition filed under subparagraph (B) shall be 
                forthwith transmitted by the clerk of the court to the 
                Administrator, and thereupon the Administrator shall 
                file in the court the record in the proceeding, as 
                provided in section 2112 of title 28, United States 
                Code.
                    ``(D) Court jurisdiction.--Upon the filing of a 
                petition under subparagraph (A)--
                            ``(i) the court shall have jurisdiction, 
                        which, upon the filing of the record under 
                        subparagraph (C), shall be exclusive, to 
                        affirm, modify, terminate, or set aside, in 
                        whole or in part, the order of the 
                        Administrator, except as provided in the last 
                        sentence of paragraph (3)(B);
                            ``(ii) review of such proceedings shall be 
                        had as provided in chapter 7 of title 5, United 
                        States Code; and
                            ``(iii) the judgment and decree of the 
                        court shall be final, except that the judgment 
                        and decree shall be subject to review by the 
                        Supreme Court of the United States upon 
                        certiorari, as provided in section 1254 of 
                        title 28, United States Code.
                    ``(E) Judicial review not a stay.--The commencement 
                of proceedings for judicial review under this paragraph 
                shall not, unless specifically ordered by the court, 
                operate as a stay of any order issued by the 
                Administrator under this section.''.

            Passed the Senate November 15, 2001.

            Attest:

                                                             Secretary.
107th CONGRESS

  1st Session

                                S. 1196

_______________________________________________________________________

                                 AN ACT

   To amend the Small Business Investment Act of 1958, and for other 
                               purposes.