I 

114TH CONGRESS 

1ST SESSION H. R. 3945 

To amend the Small Business Act and title 38, United States Code, to 

improve contracting opportunities for certain veteran-owned small businesses, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 5, 2015 

Mr. COFFMAN (for himself, Mr. CHABOT, Mr. MILLER of Florida, Ms. 

VELA ́ZQUEZ, Mr. HANNA, Mr. CONNOLLY, and Mr. MOULTON) introduced the following bill; which was referred to the Committee on Veterans’ Affairs, and in addition to the Committee on Small Business, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Small Business Act and title 38, United 

States Code, to improve contracting opportunities for 

certain veteran-owned small businesses, 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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Improving Opportuni5 ties for Service-Disabled Veteran-Owned Small Businesses 

6 Act of 2015’’. 


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1 SEC. 2. IMPROVING CONTRACTING OPPORTUNITIES FOR 

2 CERTAIN VETERAN-OWNED SMALL BUSI3 NESSES. 

4 (a) DEFINITION OF SMALL BUSINESS CONCERN

5 CONSOLIDATED.—Section 3(q) of the Small Business Act 

6 (15 U.S.C. 632(q)) is amended— 

7 (1) by amending paragraph (2) to read as fol8 lows: 

9 ‘‘(2) SMALL BUSINESS CONCERN OWNED AND

10 CONTROLLED BY SERVICE-DISABLED VETERANS.— 

11 The term ‘small business concern owned and con12 trolled by service-disabled veterans’ means any of 

13 the following: 

14 ‘‘(A) A small business concern— 

15 ‘‘(i) not less than 51 percent of which 

16 is owned by one or more service-disabled 

17 veterans or, in the case of any publicly 

18 owned business, not less than 51 percent 

19 of the stock (not including any stock 

20 owned by an ESOP) of which is owned by 

21 one or more service-disabled veterans; and 

22 ‘‘(ii) the management and daily busi23 ness operations of which are controlled by 

24 one or more service-disabled veterans or, in 

25 the case of a veteran with permanent and 


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1 severe disability, the spouse or permanent 

2 caregiver of such veteran. 

3 ‘‘(B) A small business concern— 

4 ‘‘(i) not less than 51 percent of which 

5 is owned by one or more service-disabled 

6 veterans with a disability that is rated by 

7 the Secretary of Veterans Affairs as a per8 manent and total disability who are unable 

9 to manage the daily business operations of 

10 such concern; or 

11 ‘‘(ii) in the case of a publicly owned 

12 business, not less than 51 percent of the 

13 stock (not including any stock owned by an 

14 ESOP) of which is owned by one or more 

15 such veterans. 

16 ‘‘(C)(i) During the time period described in 

17 clause (ii), a small business concern that was a 

18 small business concern described in subpara19 graph (A) or (B) immediately prior to the death 

20 of a service-disabled veteran who was the owner 

21 of the concern, the death of whom causes the 

22 concern to be less than 51 percent owned by 

23 one or more service-disabled veterans, if— 


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1 ‘‘(I) the surviving spouse of the de2 ceased veteran acquires such veteran’s 

3 ownership interest in such concern; 

4 ‘‘(II) such veteran had a service-con5 nected disability (as defined in section 

6 101(16) of title 38, United States Code) 

7 rated as 100-percent disabling under the 

8 laws administered by the Secretary of Vet9 erans Affairs or such veteran died as a re10 sult of a service-connected disability; and 

11 ‘‘(III) immediately prior to the death 

12 of such veteran, and during the period de13 scribed in clause (ii), the small business 

14 concern is included in the database de15 scribed in section 8127(f) of title 38, 

16 United States Code. 

17 ‘‘(ii) The time period described in this 

18 clause is the time period beginning on the date 

19 of the veteran’s death and ending on the earlier 

20 of— 

21 ‘‘(I) the date on which the surviving 

22 spouse remarries; 

23 ‘‘(II) the date on which the surviving 

24 spouse relinquishes an ownership interest 

25 in the small business concern; or 


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1 ‘‘(III) the date that is 10 years after 

2 the date of the death of the veteran.’’; and 

3 (2) by adding at the end the following new 

4 paragraphs: 

5 ‘‘(6) ESOP.—The term ‘ESOP’ has the mean6 ing given the term ‘employee stock ownership plan’ 

7 in section 4975(e)(7) of the Internal Revenue Code 

8 of 1986 (26 U.S.C. 4975(e)(7)). 

9 ‘‘(7) SURVIVING SPOUSE.—The term ‘surviving 

10 spouse’ has the meaning given such term in section 

11 101(3) of title 38, United States Code.’’. 

12 (b) VETERANS AFFAIRS DEFINITION OF SMALL

13 BUSINESS CONCERN CONSOLIDATED.— 

14 (1) IN GENERAL.—Section 8127 of title 38, 

15 United States Code, is amended— 

16 (A) by striking subsection (h) and redesig17 nating subsections (i) through (l) as subsections 

18 (h) through (k), respectively; and 

19 (B) in subsection (k), as so redesignated— 

20 (i) by amending paragraph (2) to read 

21 as follows: 

22 ‘‘(2) The term ‘small business concern owned 

23 and controlled by veterans’ has the meaning given 

24 that term under section 3(q)(3) of the Small Busi25 ness Act (15 U.S.C. 632(q)(3)).’’; and 


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1 (ii) by adding at the end the following 

2 new paragraph: 

3 ‘‘(3) The term ‘small business concern owned 

4 and controlled by veterans with service-connected 

5 disabilities’ has the meaning given the term ‘small 

6 business concern owned and controlled by service7 disabled veterans’ under section 3(q)(2) of the Small 

8 Business Act (15 U.S.C. 632(q)(2)).’’. 

9 (2) CONFORMING AMENDMENTS.—Such section 

10 is further amended— 

11 (A) in subsection (b), by inserting ‘‘or a 

12 small business concern owned and controlled by 

13 veterans with service-connected disabilities’’ 

14 after ‘‘a small business concern owned and con15 trolled by veterans’’; 

16 (B) in subsection (c), by inserting ‘‘or a 

17 small business concern owned and controlled by 

18 veterans with service-connected disabilities’’ 

19 after ‘‘a small business concern owned and con20 trolled by veterans’’; 

21 (C) in subsection (d) by inserting ‘‘or small 

22 business concerns owned and controlled by vet23 erans with service-connected disabilities’’ after 

24 ‘‘small business concerns owned and controlled 

25 by veterans’’ both places it appears; and 


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1 (D) in subsection (f)(1), by inserting ‘‘, 

2 small business concerns owned and controlled 

3 by veterans with service-connected disabilities,’’ 

4 after ‘‘small business concerns owned and con5 trolled by veterans’’. 

6 (c) TECHNICAL CORRECTION.—Section 8(d)(3) of the 

7 Small Business Act (15 U.S.C. 637(d)(3)), is amended by 

8 adding at the end the following new subparagraph: 

9 ‘‘(H) In this contract, the term ‘small business 

10 concern owned and controlled by service-disabled 

11 veterans’ has the meaning given that term in section 

12 3(q).’’. 

13 SEC. 3. REGULATIONS RELATING TO DATABASE OF THE 

14 SECRETARY OF VETERANS AFFAIRS. 

15 (a) REQUIREMENT TO USE CERTAIN SMALL BUSI16 NESS ADMINISTRATION REGULATIONS.—Section 

17 8127(f)(4) of title 38, United States Code, is amended by 

18 striking ‘‘verified’’ and inserting ‘‘verified, using regula19 tions issued by the Administrator of the Small Business 

20 Administration with respect to the status of the concern 

21 as a small business concern and the ownership and control 

22 of such concern,’’. 

23 (b) PROHIBITION ON SECRETARY OF VETERANS AF24 FAIRS ISSUING CERTAIN REGULATIONS.—Section 8127(f) 


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1 of title 38, United States Code, is amended by adding at 

2 the end the following new paragraph: 

3 ‘‘(7) The Secretary may not issue regulations related 

4 to the status of a concern as a small business concern and 

5 the ownership and control of such small business con6 cern.’’. 

7 (c) DELAYED EFFECTIVE DATE.—The amendments 

8 made by this section and section 2 shall take effect on 

9 the date on which the Administrator of the Small Business 

10 Administration and the Secretary of Veterans Affairs 

11 jointly issue regulations implementing such sections. Such 

12 date shall be not later than 18 months after the date of 

13 enactment of this Act. 

14 SEC. 4. APPEALS OF INCLUSION IN DATABASE. 

15 (a) IN GENERAL.—Section 8127(f) of title 38, United 

16 States Code, as amended by section 3, is further amended 

17 by adding at the end the following new paragraph: 

18 ‘‘(8)(A) If the Secretary does not verify a concern for 

19 inclusion in the database under this subsection based on 

20 the status of the concern as a small business concern or 

21 the ownership or control of the concern, the concern may 

22 appeal the denial of verification to the Office of Hearings 

23 and Appeals of the Small Business Administration (as es24 tablished under part 134 of title 13, Code of Federal Reg25 ulations, or any successor administrative appellate entity 


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1 created with the Small Business Administration). The de2 cision of the Office of Hearings and Appeals shall be con3 sidered a final agency action. 

4 ‘‘(B)(i) If an interested party challenges the inclusion 

5 in the database of a small business concern owned and 

6 controlled by veterans or a small business concern owned 

7 and controlled by veterans with service-connected disabil8 ities based on the status of the concern as a small business 

9 concern or the ownership or control of the concern, the 

10 challenge shall be heard by the Office of Hearings and 

11 Appeals of the Small Business Administration as de12 scribed in subparagraph (A). The decision of the Office 

13 of Hearings and Appeals shall be considered final agency 

14 action. 

15 ‘‘(ii) In this subparagraph, the term ‘interested party’ 

16 means— 

17 ‘‘(I) the Secretary; and 

18 ‘‘(II) in the case of a small business concern 

19 that is awarded a contract, the contracting officer of 

20 the Department or another small business concern 

21 that submitted an offer for the contract that was 

22 awarded to the small business concern that sub23 mitted an offer under clause (i). 

24 ‘‘(C) For each fiscal year, the Secretary shall reim25 burse the Administrator of the Small Business AdminisVerDate Sep 11 2014 00:19 Nov 11, 2015 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3945.IH H3945

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1 tration in an amount necessary to cover any cost incurred 

2 by the Office of Hearings and Appeals of the Small Busi3 ness Administration for actions taken by the Office under 

4 this paragraph. The amount of any such reimbursement 

5 shall be determined jointly by the Secretary and the Ad6 ministrator and shall be provided from fees collected by 

7 the Secretary under multiple-award schedule contracts. 

8 Any disagreement about the amount shall be resolved by 

9 the Director of the Office of Management and Budget.’’. 

10 (b) EFFECTIVE DATE.—Paragraph (8) of subsection 

11 (f) of title 38, United States Code, as added by subsection 

12 (a), shall apply with respect to a verification decision made 

13 by the Secretary of Veterans Affairs on or after the date 

14 of the enactment of this Act. 

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