89–006 

116TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 116–116 

CLARIFYING THE SMALL BUSINESS RUNWAY 

EXTENSION ACT 

JUNE 13, 2019.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Ms. VELA ́ ZQUEZ, from the Committee on Small Business, 

submitted the following 

R E P O R T 

[To accompany H.R. 2345] 

The Committee on Small Business to whom was referred the bill 

(H.R. 2345) to amend the Small Business Act to clarify the intention of Congress that the Administrator of the Small Business Administration is subject to certain requirements with respect to establishing size standards for small business concerns, and for other 

purposes, having considered the same, report favorably thereon 

with an amendment and recommend that the bill as amended do 

pass. 

CONTENTS 

Page 

I. Amendment ................................................................................................. 2 

II. Purpose and Bill Summary ........................................................................ 3 

III. Background and Need for Legislation ....................................................... 3 

IV. Hearings ....................................................................................................... 4 

V. Committee Consideration ........................................................................... 5 

VI. Committee Votes ......................................................................................... 5 

VII. Section-by-Section Analysis for H.R. 2345 ................................................ 8 

VIII. Congressional Budget Office Cost Estimate ............................................. 9 

IX. Unfunded Mandates .................................................................................... 9 

X. New Budget Authority, Entitlement Authority, and Tax Expenditures 9 

XI. Oversight Findings ...................................................................................... 9 

XII. Statement of Constitutional Authority ...................................................... 9 

XIII. Congressional Accountability Act .............................................................. 9 

XIV. Federal Advisory Committee Act Statement ............................................ 9 

XV. Statement of No Earmarks ........................................................................ 10 

XVI. Statement of Duplication of Federal Programs ........................................ 10 

XVII. Disclosure of Directed Rule Makings ........................................................ 10 

XVIII. Performance Goals and Objectives ............................................................ 10 

XIX. Changes in Existing Law, Made by the Bill, As Reported ...................... 10 


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I. AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Clarifying the Small Business Runway Extension 

Act’’. 

SEC. 2. SENSE OF CONGRESS. 

It is the sense of Congress that— 

(1) the Small Business Runway Extension Act of 2018 (Public Law 115–324) 

applies to calculations of the size of a business concern made by the Administrator of the Small Business Administration; 

(2) Federal agencies rely upon such calculations to award contracts, including 

governmentwide acquisition contracts, to small business concerns; and 

(3) the Small Business Runway Extension Act of 2018 has been effective since 

the date it was signed into law, on December 17, 2018. 

SEC. 3. CLARIFYING AMENDMENT TO THE SMALL BUSINESS RUNWAY EXTENSION ACT OF 

2018. 

Section 3(a)(2)(C) of the Small Business Act (15 U.S.C. 632(a)(2)(C)) is amended 

by inserting ‘‘(including the Administration when acting pursuant to subparagraph 

(A))’’ after ‘‘no Federal department or agency’’. 

SEC. 4. FINALIZATION OF SMALL BUSINESS RUNWAY EXTENSION ACT OF 2018 RULES. 

The Administrator of the Small Business Administration shall issue a final rule 

implementing the Small Business Runway Extension Act of 2018 (Public Law 115– 

324) not later than December 17, 2019. 

SEC. 5. AMENDMENT TO SIZE STANDARDS FOR CERTAIN SMALL BUSINESS CONCERNS. 

(a) SIZE STANDARDS FOR SMALL BUSINESS CONCERNS PROVIDING SERVICES.—Section 3(a)(2)(C)(ii)(II) of the Small Business Act (15 U.S.C. 632(a)(2)(C)(ii)(II)) is 

amended by striking ‘‘not less than’’. 

(b) SIZE STANDARDS FOR OTHER BUSINESS CONCERNS.—Section 3(a)(2)(C)(ii)(III) of 

the Small Business Act (15 U.S.C. 632(a)(2)(C)(ii)(III)) is amended by striking ‘‘not 

less than 3 years’’ and inserting ‘‘5 years’’. 

SEC. 6. TRANSITION PLAN FOR THE SMALL BUSINESS RUNWAY EXTENSION ACT OF 2018. 

(a) PLAN REQUIRED.—Not later than 90 days after the date of the enactment of 

this Act, the Administrator of the Small Business Administration shall implement 

a transition plan to assist business concerns and Federal agencies with compliance 

with the requirements of the Small Business Runway Extension Act of 2018 (Public 

Law 115–324). 

(b) 3-YEAR CALCULATION FOR SIZE STANDARDS.— 

(1) IN GENERAL.—The transition plan described under subsection (a) shall include a requirement that, during the period beginning on December 17, 2018, 

and ending on the date that is 6 months after the date on which the Administrator issues final rules implementing the Small Business Runway Extension 

Act of 2018 (Public Law 115–324), allows the use of a 3-year calculation for a 

size standard to be applied to a business concern if the use of such 3-year calculation allows such concern to be considered a small business concern under 

section 3(a)(1) of the Small Business Act (15 U.S.C. 632(a)(1)). 

(2) 3-YEAR CALCULATION DEFINED.—In this subsection, the term ‘‘3-year calculation’’ means— 

(A) with respect to a business concern providing services described under 

clause (ii)(II) of such section, a determination of the size of such concern 

on the basis of the annual average gross receipts of such concern over a period of 3 years; and 

(B) with respect to a business concern described under clause (ii)(III) of 

such section, a determination of the size of such concern on the basis of 

data over a period of 3 years. 

SEC. 7. REQUIREMENT TO UPDATE SAM. 

Not later than 90 days after the date of the enactment of this Act, the System 

for Award Management (or any successor system) shall be updated to comply with 

the requirements of this Act. 


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1Pub. Law No. 115–324. 

II. PURPOSE AND BILL SUMMARY

The purpose of H.R. 2345 is to clarify that section 3(a)(2)(C) of 

the Small Business Act applies to the United States Small Business Administration (SBA), aligns the size standards based on data 

to the Runway Extension Act by changing the calculation from 3- 

years to 5-years, and requires the SBA to develop a transition plan 

for small businesses and federal agencies to help them successfully 

navigate the transition from the previous 3-year calculation to the 

new 5-year calculation as mandated by the Runway Extension Act. 

Lastly, the bill requires the System for Award Management be updated in accordance with the Runway Extension Act and the requirements of this bill. 

III. BACKGROUND AND NEED FOR LEGISLATION

H.R. 2345 was introduced by Representative Pete Stauber (R– 

MN) and Representative Jared Golden (D–ME) on April 18, 2019 

to address the delay in the implementation of the Small Business 

Runway Extension Act. 

A. BACKGROUND ON SIZE STANDARDS

The federal government recognizes two categories of businesses— 

‘‘small’’ and ‘‘other-than small.’’ While the SBA defines what a 

‘‘small’’ business is, there is no federal definition for ‘‘other-thansmall.’’ Therefore, this category can encompass firms that barely 

exceed the SBA’s small business size standards up to the multibillion-dollar household names. Businesses that find themselves in 

this gap between small and large face challenges when they surpass their designated small size status. Specifically, they no longer 

qualify for federal contracts restricted to competition among firms 

qualified as small, are no longer eligible for SBA assistance, and 

now must compete in the open market against the titans of the industry. The result is a deep decline of small businesses participating in the federal marketplace once they grow out of their small 

size status. 

One solution to this problem was H.R. 6330, the Small Business 

Runway Extension Act,1 which was enacted into law on December 

17, 2018. It adjusted the method by which the SBA calculates its 

size standards by lengthening the average receipts-based calculation from 3-years to 5-years. This longer base period provides growing small businesses more time to build their competitiveness and 

infrastructure to more successfully compete in the open market. 

B. THE NEED FOR THE CHANGES OUTLINED IN THE BILL

Upon the Small Business Runway Extension Act’s passage into 

law, the SBA delayed its implementation and decided to engage in 

rulemaking. The SBA made two arguments in support of its position: (1) that the bill declined to contain an effective date and 

therefore was not effective immediately; and (2) that the portion of 

the Small Business Act amended by the Runway Extension Act applied to ‘‘other Federal agencies,’’ not to SBA’s own regulations pertaining to size standards. Thus, SBA stated that it had to engage 

in rulemaking to make their regulations consistent with statute. 


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2 Cleared for Take-off? Implementation of the Small Business Runway Extension Act: Hearing 

Before the Subcomm. on Contracting and Infrastructure of the H. Comm. on Small Bus., 116th 

Cong. (2019). 3 Id. Testimony offered by Mr. David Black, Procurement Attorney, contends that SBA’s argument that the Runway Extension Act was not effective immediately is refuted by longstanding 

principles of statutory construction applied by the United States Supreme Court. ‘‘The absence 

of an express effective date does not mean that the SBREA’s effectiveness is suspended indefinitely. To the contrary, it means that SBREA took immediate effect on December 17, 2018. As 

the Supreme Court has explained, ‘‘the omission of an express effective date simply indicates 

that, absent clear congressional direction, it takes effect on its enactment date.’’ Johnson, 529 

U.S. at 694–95, (citing Gozlon-Peretz v. United States, 498 U.S. 395, 404 (1991)) (emphasis 

added).’’ 

Many small businesses and legal experts disagreed with the SBA’s 

position, arguing that settled case law makes clear that if a bill 

lacks an effective date, it is effective the date it is signed into Law. 

Furthermore, they argued that the section amended by the Small 

Business Runway Extension Act does, in fact, apply to the SBA because it applies to ‘‘federal agencies’’ and that concept, as defined 

in the Small Business Act, is inclusive of the SBA. Unfortunately, 

this conflict between law and regulation created increased confusion in the federal contracting community. 

H.R. 2345 seeks to provide clarity by unequivocally stating Congressional intent and to ease the transition to the 5-year calculation for size standards while SBA continues the rulemaking process. 

IV. HEARINGS

In the 116th Congress, the Committee held a hearing that explored the matters covered by H.R. 2345. On March 26, 2019, the 

Subcommittee on Contracting and Infrastructure met for a hearing 

titled ‘‘Cleared for Takeoff? Implementation of the Runway Extension Act.’’ 2 The hearing examined SBA’s conclusion that the Runway Extension Act was not effective upon enactment and therefore, 

not applicable to contracts, offers, or bids until the SBA concluded 

its rulemaking process. In the hearing, small businesses and legal 

experts reiterated their disagreement with SBA’s position, contending that the Runway Act took immediate effect when signed 

into law.3 Each of the witnesses testified persuasively before the 

Committee, advocating for various solutions to ensure the effectiveness of the Runway Act. 

One witness suggested passing a clarifying amendment, making 

clear that the SBA is subject to the requirements of section 

3(a)(2)(C) of the Small Business Act, which the SBA has publicly 

held it is not subject to. Another witness suggested instituting a 

transition period which would allow small businesses, as well as 

the federal agencies, time to prepare for the transition to the new 

5-year calculation mandated by the Runway Act. This transition 

period would include a set timeframe in which the 3-year calculation would also apply, in concert with the Runway Act, so a small 

business considered small under the 3-year calculation but otherthan-small under the 5-year calculation could certify as ‘‘small’’ for 

the duration of this transition period. 

The witnesses agreed that this conflict between the law (the 

Small Business Runway Extension Act mandating a 5-year calculation), and regulation (stating 3 years, as offered by the SBA’s information notice) was creating an atmosphere of confusion and controversy among the small business federal contracting community 


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that is untenable. This dichotomy harmed the same small business 

contractors that Congress intended to help through the enactment 

of the Runway Act. Small business owners on the Committee’s witness panel expressed that losing their small business status, even 

for a short period of time, would result in lost contracts, loss of resources and personnel, and other lost opportunities that may be irrecoverable. This disruption in a small firms’ business development 

has the potential to stall or reverse its momentum and upward 

growth. Witnesses on the panel endorsed the need for H.R. 2345 

and offered suggestions for not just clarifying the law but also assisting businesses as they transitioned from one calculation method 

to another. 

V. COMMITTEE CONSIDERATION

The Committee on Small Business met in open session, with a 

quorum being present, on May 1, 2019 and ordered H.R. 2345 favorably reported to the House. During the markup, one amendment 

was offered. 

Amendment Number One was offered by Representative 

Hagedorn (R–MN). This amendment explicitly states the sense of 

Congress that the Small Business Runway Extension Act has been 

in effect since its enactment, that the Runway Extension Act applies to size calculations made by the SBA, and that agencies rely 

on SBA’s size calculations for their own procurement purposes. The 

amendment passed by voice vote at 12:31 P.M. 

VI. COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the recorded votes on the motion to report legislation and amendments thereto. The Committee 

voted by voice vote to favorably report H.R. 2345 to the House at 

12:32 P.M. 


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VII. SECTION-BY-SECTION OF H.R. 2345 

Section 1. Short title 

This section designates the bill as the ‘‘Clarifying the Small Business Runway Extension Act.’’ 

Section 2. Sense of Congress 

This section explicitly states that the Small Business Runway 

Extension Act of 2018 has been in full effect since its enactment, 

reiterates that the Law applies to size calculations made by the 

Small Business Administration and that all agencies across the 

Federal Government rely on SBA’s size calculations for their own 

procurement purposes. 

Section 3. Clarifying amendment to the Small Business Runway Extension Act of 2018 

This section amends Section 3(a)(2)(C) of the Small Business Act 

to state specifically that the Small Business Administration is in 

fact subject to the requirements laid out in section (C) of the Small 

Business Act. 

Section 4. Finalization of Small Business Runway Extension Act of 

2018 rules 

This section directs the Small Business Administration to issue 

a final rule implementing Pub. Law 115–324 no later than Dec. 17, 

2019 which is one year after the enactment of the Small Business 

Runway Extension Act of 2018. 

Section 5. Amendment to size standards for certain small business 

concerns 

This subsection 4(a) amends Section 3(a)(2)(C)(ii)(II) of the Small 

Business Act to clarify that the size standard to be used is 5 years 

exactly, no more or less than that. This subsection 4(b) also aligns 

Section 3(a)(2)(C)(ii)(III), ‘‘the size of other business concerns on the 

basis of data’’, with the Small Business Runway Extension Act by 

changing the 3-year calculation in that section to 5-years. 

Section 6. Transition plan for the Small Business Runway Extension Act of 2018 

This subsection 5(a) directs the Small Business Administration to 

implement a transition plan which will ease small businesses and 

federal agencies transition to use of the 5-year standard as required by the Small Business Runway Extension Act of 2018. The 

Small Business Administration shall have no more than 90 days 

following enactment of this bill to develop this transition plan. 

This subsection 5(b) authorizes small businesses concerns to continue to rely on the previous 3-year calculation to determine their 

size, if such calculation allows the business concern to remain 

small. This permitted use of the 3-year calculation during this 

transition period shall take retroactive effect, from December 17, 

2018 until no later than 6 months after the Small Business Administration has issued its final rules promulgating the Small Business 

Runway Extension Act of 2018. 


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Section 7. Requirement to update SAM 

This section requires the System for Award Management be updated within 90 days to comply with the requirements of this Act. 

VIII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

At the time H.R. 2345 was reported to the House, the Congressional Budget Office had not provided a cost-estimate. 

IX. UNFUNDED MANDATES

H.R. 2345 contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act, Public 

Law No. 104–4, and would impose no costs on state, local, or tribal 

governments. 

X. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House, the Committee provides the following opinion and estimate 

with respect to new budget authority, entitlement authority, and 

tax expenditures. While the Committee has not received an estimate of new budget authority contained in the cost estimate prepared by the Director of the Congressional Budget Office pursuant 

to § 402 of the Congressional Budget Act of 1974, the Committee 

does not believe that there will be any additional costs attributable 

to this legislation. H.R. 2345 does not direct new spending, but instead reallocates funding independently authorized and appropriated. 

XI. OVERSIGHT FINDINGS

In accordance with clause 2(b)(1) of rule X of the Rules of the 

House, the oversight findings and recommendations of the Committee on Small Business with respect to the subject matter contained in H.R. 2345 are incorporated into the descriptive portions 

of this report. 

XII. STATEMENT OF CONSTITUTIONAL AUTHORITY

Pursuant to clause 7 of rule XII of the Rules of the House of Representatives, the Committee finds the authority for this legislation 

in Art. I, § 8, cl. 1 of the Constitution of the United States. 

XIII. CONGRESSIONAL ACCOUNTABILITY ACT

H.R. 2345 does not relate to the terms and conditions of employment or access to public services or accommodations within the 

meaning of § 102(b)(3) of Public Law No. 104–1. 

XIV. FEDERAL ADVISORY COMMITTEE ACT STATEMENT

H.R. 2345 does not establish or authorize the establishment of 

any new advisory committees as that term is defined in the Federal 

Advisory Committee Act, 5 U.S.C. App. 2. 


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XV. STATEMENT OF NO EARMARKS

Pursuant to clause 9 of rule XXI, H.R. 2345 does not contain any 

congressional earmarks, limited tax benefits, or limited tariff benefits as defined in subsections (d), (e), or (f) of clause 9 of rule XXI 

of the Rules of the House. 

XVI. STATEMENT OF DUPLICATION OF FEDERAL PROGRAMS

Pursuant to clause 3 of rule XIII of the Rules of the House, no 

provision of H.R. 2345 establishes or reauthorizes a program of the 

federal government known to be duplicative of another federal program, a program that was included in any report from the United 

States Government Accountability Office pursuant to § 21 of Pub. 

L. No. 111–139, or a program related to a program identified in the 

most recent catalog of federal domestic assistance. 

XVII. DISCLOSURE OF DIRECTED RULEMAKINGS

Pursuant to clause 3 of rule XIII of the Rules of the House, H.R. 

2345 does not direct any rulemaking. 

XVIII. PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XII of the Rules of the House, 

the Committee establishes the following performance-related goals 

and objectives for this legislation: 

H.R. 2345 requires the prompt implementation of the Runway 

Extension Act. Its objective is to ensure that the SBA issues a final 

rule for its implementation by Dec. 17, 2019 while, in the meantime, a transition plan is implemented so that businesses under the 

3-year rule and the 5-year rule can both be classified as ‘‘small’’ for 

purposes of the incentives and benefits granted by the Small Business Act. 

XIX. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House, changes in existing law made by the bill, as reported, as 

shown as follows: existing law proposed to be omitted is enclosed 

in black brackets, new matter is printed in italic, and existing law 

in which no change is proposed is shown in roman: 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

and existing law in which no change is proposed is shown in 

roman): 

SMALL BUSINESS ACT 

* * * * * * * 

SEC. 3. DEFINITIONS. 

(a) SMALL BUSINESS CONCERNS.— 


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(1) IN GENERAL.—For the purposes of this Act, a small-business concern, including but not limited to enterprises that are 

engaged in the business of production of food and fiber, ranching and raising of livestock, aquaculture, and all other farming 

and agricultural related industries, shall be deemed to be one 

which is independently owned and operated and which is not 

dominant in its field of operation. 

(2) ESTABLISHMENT OF SIZE STANDARDS.— (A) IN GENERAL.—In addition to the criteria specified in 

paragraph (1), the Administrator may specify detailed definitions or standards by which a business concern may be 

determined to be a small business concern for the purposes 

of this Act or any other Act. 

(B) ADDITIONAL CRITERIA.—The standards described in 

paragraph (1) may utilize number of employees, dollar volume of business, net worth, net income, a combination 

thereof, or other appropriate factors. 

(C) REQUIREMENTS.—Unless specifically authorized by 

statute, no Federal department or agency (including the 

Administration when acting pursuant to subparagraph (A)) 

may prescribe a size standard for categorizing a business 

concern as a small business concern, unless such proposed 

size standard— 

(i) is proposed after an opportunity for public notice 

and comment; 

(ii) provides for determining— 

(I) the size of a manufacturing concern as measured by the manufacturing concern’s average employment based upon employment during each of 

the manufacturing concern’s pay periods for the 

preceding 12 months; 

(II) the size of a business concern providing 

services on the basis of the annual average gross 

receipts of the business concern over a period of 

ønot less than¿ 5 years; 

(III) the size of other business concerns on the 

basis of data over a period of ønot less than 3 

years¿ 5 years; or 

(IV) other appropriate factors; and 

(iii) is approved by the Administrator. 

(3) VARIATION BY INDUSTRY AND CONSIDERATION OF OTHER

FACTORS.—When establishing or approving any size standard 

pursuant to paragraph (2), the Administrator shall ensure that 

the size standard varies from industry to industry to the extent 

necessary to reflect the differing characteristics of the various 

industries and consider other factors deemed to be relevant by 

the Administrator. 

(4) EXCLUSION OF CERTAIN SECURITY EXPENSES FROM CONSIDERATION FOR PURPOSE OF SMALL BUSINESS SIZE STANDARDS.— (A) DETERMINATION REQUIRED.—Not later than 30 days 

after the date of enactment of this paragraph, the Administrator shall review the application of size standards established pursuant to paragraph (2) to small business concerns that are performing contracts in qualified areas and 

determine whether it would be fair and appropriate to exVerDate Sep 11 2014 02:49 Jun 16, 2019 Jkt 089006 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\HR\OC\HR116.XXX HR116

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clude from consideration in the average annual gross receipts of such small business concerns any payments made 

to such small business concerns by Federal agencies to reimburse such small business concerns for the cost of subcontracts entered for the sole purpose of providing security 

services in a qualified area. 

(B) ACTION REQUIRED.—Not later than 60 days after the 

date of enactment of this paragraph, the Administrator 

shall either— 

(i) initiate an adjustment to the size standards, as 

described in subparagraph (A), if the Administrator 

determines that such an adjustment would be fair and 

appropriate; or 

(ii) provide a report to the Committee on Small 

Business and Entrepreneurship of the Senate and the 

Committee on Small Business of the House of Representatives explaining in detail the basis for the determination by the Administrator that such an adjustment would not be fair and appropriate. 

(C) QUALIFIED AREAS.—In this paragraph, the term 

‘‘qualified area’’ means— 

(i) Iraq, 

(ii) Afghanistan, and 

(iii) any foreign country which included a combat 

zone, as that term is defined in section 112(c)(2) of the 

Internal Revenue Code of 1986, at the time of performance of the relevant Federal contract or subcontract. 

(5) ALTERNATIVE SIZE STANDARD.— 

(A) IN GENERAL.—The Administrator shall establish an 

alternative size standard for applicants for business loans 

under section 7(a) and applicants for development company loans under title V of the Small Business Investment 

Act of 1958 (15 U.S.C. 695 et seq.), that uses maximum 

tangible net worth and average net income as an alternative to the use of industry standards. 

(B) INTERIM RULE.—Until the date on which the alternative size standard established under subparagraph (A) is 

in effect, an applicant for a business loan under section 

7(a) or an applicant for a development company loan under 

title V of the Small Business Investment Act of 1958 may 

be eligible for such a loan if— 

(i) the maximum tangible net worth of the applicant 

is not more than $15,000,000; and 

(ii) the average net income after Federal income 

taxes (excluding any carry-over losses) of the applicant 

for the 2 full fiscal years before the date of the application is not more than $5,000,000. 

(6) PROPOSED RULEMAKING.—In conducting rulemaking to revise, modify or establish size standards pursuant to this section, the Administrator shall consider, and address, and make 

publicly available as part of the notice of proposed rulemaking 

and notice of final rule each of the following: 

(A) a detailed description of the industry for which the 

new size standard is proposed; 


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(B) an analysis of the competitive environment for that 

industry; 

(C) the approach the Administrator used to develop the 

proposed standard including the source of all data used to 

develop the proposed rule making; and 

(D) the anticipated effect of the proposed rulemaking on 

the industry, including the number of concerns not currently considered small that would be considered small 

under the proposed rule making and the number of concerns currently considered small that would be deemed 

other than small under the proposed rulemaking. 

(7) COMMON SIZE STANDARDS.—In carrying out this subsection, the Administrator may establish or approve a single 

size standard for a grouping of 4-digit North American Industry Classification System codes only if the Administrator 

makes publicly available, not later than the date on which 

such size standard is established or approved, a justification 

demonstrating that such size standard is appropriate for each 

individual industry classification included in the grouping. 

(8) NUMBER OF SIZE STANDARDS.—The Administrator shall 

not limit the number of size standards established pursuant to 

paragraph (2), and shall assign the appropriate size standard 

to each North American Industry Classification System Code. 

(9) PETITIONS FOR RECONSIDERATION OF SIZE STANDARDS.— (A) IN GENERAL.—A person may file a petition for reconsideration with the Office of Hearings and Appeals (as established under section 5(i)) of a size standard revised, 

modified, or established by the Administrator pursuant to 

this subsection. 

(B) TIME LIMIT.—A person filing a petition for reconsideration described in subparagraph (A) shall file such petition not later than 30 days after the publication in the 

Federal Register of the notice of final rule to revise, modify, or establish size standards described in paragraph (6). 

(C) PROCESS FOR AGENCY REVIEW.—The Office of Hearings and Appeals shall use the same process it uses to decide challenges to the size of a small business concern to 

decide a petition for review pursuant to this paragraph. 

(D) JUDICIAL REVIEW.—The publication of a final rule in 

the Federal Register described in subparagraph (B) shall 

be considered final agency action for purposes of seeking 

judicial review. Filing a petition for reconsideration under 

subparagraph (A) shall not be a condition precedent to judicial review of any such size standard. 

(E) RULES OR GUIDANCE.—The Office of Hearings and 

Appeals shall begin accepting petitions for reconsideration 

described in subparagraph (A) after the date on which the 

Administration issues a rule or other guidance implementing this paragraph. Notwithstanding the provisions of 

subparagraph (B), petitions for reconsideration of size 

standards revised, modified, or established in a Federal 

Register final rule published between November 25, 2015, 

and the effective date of such rule or other guidance shall 

be considered timely if filed within 30 days of such effective date. 


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(b) For purposes of this Act, any reference to an agency or department of the United States, and the term ‘‘Federal agency,’’ 

shall have the meaning given the term ‘‘agency’’ by section 551(1) 

of title 5, United States Code, but does not include the United 

States Postal Service or the General Accounting Office. 

(c)(1) For purposes of this Act, a qualified employee trust shall 

be eligible for any loan guarantee under section 7(a) with respect 

to a small business concern on the same basis as if such trust were 

the same legal entity as such concern. 

(2) For purposes of this Act, the term ‘‘qualified employee trust’’ 

means, with respect to a small business concern, a trust— 

(A) which forms part of an employee stock ownership plan 

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

of 1954)— 

(i) which is maintained by such concern, and 

(ii) which provides that each participant is entitled to direct the plan trustee as to the manner of how to vote the 

qualified employer securities (as defined in section 

4975(e)(8) of the Internal Revenue Code of 1986), which 

are allocated to the account of such participant with respect to a corporate matter which (by law or charter) must 

be decided by a vote conducted in accordance with section 

409(e) of the Internal Revenue Code of 1986; and 

(B) in the case of any loan guarantee under section 7(a), the 

trustee of which enters into an agreement with the Administrator of which enters into an agreement with the Administrator which is binding on the trust and no such small business concern and which provides that— 

(i) the loan guaranteed under section 7(a) shall be used 

solely for the purchase of qualifying employer securities of 

such concern. 

(ii) all funds acquired by the concern in such purchase 

shall be used by such concern solely for the purposes for 

which such loan was guaranteed, 

(iii) such concern will provide such funds as may be necessary for the timely repayment of such loan, and the 

property of such concern shall be available as security for 

repayment of such loan, and 

(iv) all qualifying employer securities acquired by such 

trust in such purchase shall be allocated to the accounts 

of participants in such plan who are entitled to share in 

such allocation, and each participant has a nonforfeitable 

right, not later than the date such loan is repaid, to all 

such qualifying employer securities which are so allocated 

to the participant’s account. 

(3) Under regulations which may be prescribed by the Administrator, a trust may be treated as a qualified employee trust with 

respect to a small business concern if— 

(A) the trust is maintained by an employee organization 

which represents at least 51 percent of the employee of such 

concern, and 

(B) such concern maintains a plan— 

(i) which is an employee benefit plan which is designed 

to invest primarily in qualifying employer securities (as 


dlhill on DSKBBY8HB2PROD with HEARING
15 

defined in section 4975(e)(8) of the Internal Revenue Code 

of 1954). 

(ii) which provides that each participant in the plan is 

entitled to direct the plan as to the manner in which voting rights under qualifying employer securities which are 

allocated to the account of such participant are to be exercised with respect to a corporate matter which (by law or 

charter) must be decided by a majority vote of the outstanding common shares voted, 

(iii) which provides that each participant who is entitled 

to distribution from the plan has a right, in the case of 

qualifying employer securities which are not readily 

tradable on an established market, to require that the concern repurchase such securities under a fair valuation formula, and 

(iv) which meets such other requirements (similar to requirements applicable to employee ownership plans as defined in section 4975(e)(7) of the Internal Revenue Code of 

1954) as the Administrator may prescribe, and 

(C) in the case of a loan guarantee under section 7(a), such 

organization enters into an agreement with the Administration 

which is described in paragraph (2)(B). 

(d) For purposes of section 7 of this Act, the term ‘‘qualified Indian tribe’’ means an Indian tribe as defined in section 4(a) of the 

Indian Self-Determination and Education Assistance Act, which 

owns and controls 100 per centum of a small business concern. 

(e) For purposes of section 7 of this Act, the term ‘‘public or private organization for the handicapped’’ means one— 

(1) which is organized under the laws of the United States 

or of any State, operated in the interest of handicapped individuals, the net income of which does not insure in whole or 

in part to the benefit of any shareholder or other individual; 

(2) which complies with any applicable occupational health 

and safety standard prescribed by the Secretary of Labor; and 

(3) which, in the production of commodities and in the provision of services during any fiscal year in which it received financial assistance under this subsection, employs handicapped 

individuals for not less than 75 per centum of the man-hours 

required for the production or provision of the commodities or 

services. 

(f) For purposes of section 7 of this Act, the term ‘‘handicapped 

individual’’ means an individual— 

(1) who has a physical, mental, or emotional impairment, defect, ailment, disease, or disability of a permanent nature 

which in any way limits the selection of any type of employment for which the person would otherwise be qualified or 

qualifiable; or 

(2) who is a service-disabled veteran. 

(g) For purposes of section 7 of this Act, the term ‘‘energy measures’’ includes— 

(1) solar thermal energy equipment which is either of the active type based upon mechanically forced energy transfer or of 

the passive type based on convective, conductive, or radiant energy transfer or some combination equipment; 

(2) photovoltaic cells and related equipment; 


dlhill on DSKBBY8HB2PROD with HEARING
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(3) a product or service the primary purpose of which is conservation of energy through devices or techniques which increase the energy through devices or techniques which increase 

the energy efficiency of existing equipment, methods of operation, or systems which use fossil fuels, and which is on the 

Energy Conservation Measures list of the Secretary of Energy 

or which the Administrator determines to be consistent with 

the intent of this subsection; 

(4) equipment the primary purpose of which is production of 

energy from wood, biological waste, grain, or other biomass 

source of energy; 

(5) equipment the primary purpose of which is industrial cogeneration of energy, district heating, or production of energy 

from industrial waste; 

(6) hydroelectric power equipment; 

(7) wind energy conversion equipment; and 

(8) engineering, architectural, consulting, or other professional services which are necessary or appropriate to aid citizens in using any of the measures described in paragraph (1) 

through (7). 

(h) The term ‘‘credit elsewhere’’ means— 

(1) for the purposes of this Act (except as used in section 

7(b)), the availability of credit on reasonable terms and conditions to the individual loan applicant from non-Federal, nonState, or non-local government sources, considering factors associated with conventional lending practices, including— 

(A) the business industry in which the loan applicant operates; 

(B) whether the loan applicant is an enterprise that has 

been in operation for a period of not more than 2 years; 

(C) the adequacy of the collateral available to secure the 

requested loan; 

(D) the loan term necessary to reasonably assure the 

ability of the loan applicant to repay the debt from the actual or projected cash flow of the business; and 

(E) any other factor relating to the particular credit application, as documented in detail by the lender, that cannot be overcome except through obtaining a Federal loan 

guarantee under prudent lending standards; and 

(2) for the purposes of section 7(b), the availability of credit 

on reasonable terms and conditions from non-Federal sources 

taking into consideration the prevailing rates and terms in the 

community in or near where the applicant business concern 

transacts business, or the applicant homeowner resides, for 

similar purposes and periods of time. 

(i) For purposes of section 7 of this Act, the term ‘‘homeowners’’ 

includes owners and lessees of residential property and also includes personal property. 

(j) For the purposes of this Act, the term ‘‘small agricultural cooperative’’ means an association (corporate or otherwise) acting 

pursuant to the provisions of the Agricultural Marketing Act (12 

U.S.C. 1141j), whose size does not exceed the size standard established by the Administration for other similar agricultural small 

business concerns. In determining such size, the Administration 

shall regard the association as a business concern and shall not inVerDate Sep 11 2014 02:49 Jun 16, 2019 Jkt 089006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\HR\OC\HR116.XXX HR116

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clude the income or employees of any member shareholder of such 

cooperative. 

(k)(1) For the purposes of this Act, the term ‘‘disaster’’ means a 

sudden event which causes severe damage including, but not limited to, floods, hurricanes, tornadoes, earthquakes, fires, explosions, 

volcanoes, windstorms, landslides or mudslides, tidal waves, commercial fishery failures or fishery resource disasters (as determined 

by the Secretary of Commerce under section 308(b) of the Interjurisdictional Fisheries Act of 1986), ocean conditions resulting in 

the closure of customary fishing waters, riots, civil disorders or 

other catastrophes, except it does not include economic dislocations. 

(2) For purposes of section 7(b)(2), the term ‘‘disaster’’ includes— 

(A) drought; 

(B) below average water levels in the Great Lakes, or on any 

body of water in the United States that supports commerce by 

small business concerns; and 

(C) ice storms and blizzards. 

(l) For purposes of this Act— 

(1) the term ‘‘computer crime’’ means’’— 

(A) any crime committed against a small business concern by means of the use of a computer; and 

(B) any crime involving the illegal use of, or tampering 

with, a computer owned or utilized by a small business 

concern. 

(m) DEFINITIONS RELATING TO CONTRACTING.—In this Act: 

(1) PRIME CONTRACT.—The term ‘‘prime contract’’ has the 

meaning given such term in section 8701(4) of title 41, United 

States Code. 

(2) PRIME CONTRACTOR.—The term ‘‘prime contractor’’ has 

the meaning given such term in section 8701(5) of title 41, 

United States Code. 

(3) SIMPLIFIED ACQUISITION THRESHOLD.—The term ‘‘simplified acquisition threshold’’ has the meaning given such term 

in section 134 of title 41, United States Code. 

(4) MICRO-PURCHASE THRESHOLD.—The term ‘‘micro-purchase 

threshold’’ has the meaning given such term in section 1902 of 

title 41, United States Code. 

(5) TOTAL PURCHASES AND CONTRACTS FOR PROPERTY AND

SERVICES.—The term ‘‘total purchases and contracts for property and services’’ shall mean total number and total dollar 

amount of contracts and orders for property and services. 

(n) For the purposes of this Act, a small business concern is a 

small business concern owned and controlled by women if— 

(1) at least 51 percent of small business concern is owned by 

one or more women or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one 

or more women; and 

(2) the management and daily business operations of the 

business are controlled by one or more women. 

(o) DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS AND

RELATED TERMS.—In this Act: 

(1) BUNDLED CONTRACT.—The term ‘‘bundled contract’’ 

means a contract that is entered into to meet requirements 

that are consolidated in a bundling of contract requirements. 


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(2) BUNDLING OF CONTRACT REQUIREMENTS.—The term ‘‘bundling of contract requirements’’ means consolidating 2 or more 

procurement requirements for goods or services previously provided or performed under separate smaller contracts into a solicitation of offers for a single contract that is likely to be unsuitable for award to a small-business concern due to— 

(A) the diversity, size, or specialized nature of the elements of the performance specified; 

(B) the aggregate dollar value of the anticipated award; 

(C) the geographical dispersion of the contract performance sites; or 

(D) any combination of the factors described in subparagraphs (A), (B), and (C). 

(3) SEPARATE SMALLER CONTRACT.—The term ‘‘separate 

smaller contract’’, with respect to a bundling of contract requirements, means a contract that has been performed by 1 or 

more small business concerns or was suitable for award to 1 

or more small business concerns. 

(p) DEFINITIONS RELATING TO HUBZONES.—In this Act: 

(1) HISTORICALLY UNDERUTILIZED BUSINESS ZONE.—The term 

‘‘historically underutilized business zone’’ means any area located within 1 or more— 

(A) qualified census tracts; 

(B) qualified nonmetropolitan counties; 

(C) lands within the external boundaries of an Indian 

reservation; 

(D) redesignated areas; 

(E) base closure areas; or 

(F) qualified disaster areas. 

(2) HUBZONE.—The term ‘‘HUBZone’’ means a historically 

underutilized business zone. 

(3) HUBZONE SMALL BUSINESS CONCERN.—The term 

‘‘HUBZone small business concern’’ means— 

(A) a small business concern that is at least 51 percent 

owned and controlled by United States citizens; 

(B) a small business concern that is— 

(i) an Alaska Native Corporation owned and controlled by Natives (as determined pursuant to section 

29(e)(1) of the Alaska Native Claims Settlement Act 

(43 U.S.C. 1626(e)(1))); or 

(ii) a direct or indirect subsidiary corporation, joint 

venture, or partnership of an Alaska Native Corporation qualifying pursuant to section 29(e)(1) of the Alaska Native Claims Settlement Act (43 U.S.C. 

1626(e)(1)), if that subsidiary, joint venture, or partnership is owned and controlled by Natives (as determined pursuant to section 29(e)(2)) of the Alaska Native Claims Settlement Act (43 U.S.C. 1626(e)(2))); 

(C) a small business concern— 

(i) that is wholly owned by one or more Indian tribal 

governments, or by a corporation that is wholly owned 

by one or more Indian tribal governments; or 

(ii) that is owned in part by one or more Indian tribal governments, or by a corporation that is wholly 

owned by one or more Indian tribal governments, if all 


dlhill on DSKBBY8HB2PROD with HEARING
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other owners are either United States citizens or small 

business concerns; 

(D) a small business concern— 

(i) that is wholly owned by one or more Native Hawaiian Organizations (as defined in section 8(a)(15)), 

or by a corporation that is wholly owned by one or 

more Native Hawaiian Organizations; or 

(ii) that is owned in part by one or more Native Hawaiian Organizations, or by a corporation that is wholly owned by one or more Native Hawaiian Organizations, if all other owners are either United States citizens or small business concerns; 

(E) a small business concern that is— 

(i) wholly owned by a community development corporation that has received financial assistance under 

part 1 of subchapter A of the Community Economic 

Development Act of 1981 (42 U.S.C. 9805 et seq.); or 

(ii) owned in part by one or more community development corporations, if all other owners are either 

United States citizens or small business concerns; or 

(F) a small business concern that is— 

(i) a small agricultural cooperative organized or incorporated in the United States; 

(ii) wholly owned by 1 or more small agricultural cooperatives organized or incorporated in the United 

States; or 

(iii) owned in part by 1 or more small agricultural 

cooperatives organized or incorporated in the United 

States, if all owners are small business concerns or 

United States citizens. 

(4) QUALIFIED AREAS.— (A) QUALIFIED CENSUS TRACT.— 

(i) IN GENERAL.—The term ‘‘qualified census tract’’ 

has the meaning given that term in section 

42(d)(5)(B)(ii) of the Internal Revenue Code of 1986. 

(ii) EXCEPTION.—For any metropolitan statistical 

area in the Commonwealth of Puerto Rico, the term 

‘‘qualified census tract’’ has the meaning given that 

term in section 42(d)(5)(B)(ii) of the Internal Revenue 

Code of 1986 as applied without regard to subclause 

(II) of such section, except that this clause shall only 

apply— 

(I) 10 years after the date that the Administrator implements this clause, or 

(II) the date on which the Financial Oversight 

and Management Board for the Commonwealth of 

Puerto Rico created by the Puerto Rico Oversight, 

Management, and Economic Stability Act ceases 

to exist, 

whichever event occurs first. 

(B) QUALIFIED NONMETROPOLITAN COUNTY.—The term 

‘‘qualified nonmetropolitan county’’ means any county— 

(i) that was not located in a metropolitan statistical 

area (as defined in section 143(k)(2)(B) of the Internal 

Revenue Code of 1986) at the time of the most recent 


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census taken for purposes of selecting qualified census 

tracts under section 42(d)(5)(C)(ii) of the Internal Revenue Code of 1986; and 

(ii) in which— 

(I) the median household income is less than 80 

percent of the nonmetropolitan State median 

household income, based on the most recent data 

available from the Bureau of the Census of the 

Department of Commerce; 

(II) the unemployment rate is not less than 140 

percent of the average unemployment rate for the 

United States or for the State in which such county is located, whichever is less, based on the most 

recent data available from the Secretary of Labor; 

or 

(III) there is located a difficult development 

area, as designated by the Secretary of Housing 

and Urban Development in accordance with section 42(d)(5)(C)(iii) of the Internal Revenue Code 

of 1986, within Alaska, Hawaii, or any territory or 

possession of the United States outside the 48 

contiguous States. 

(C) REDESIGNATED AREA.—The term ‘‘redesignated area’’ 

means any census tract that ceases to be qualified under 

subparagraph (A) and any nonmetropolitan county that 

ceases to be qualified under subparagraph (B), except that 

a census tract or a nonmetropolitan county may be a ‘‘redesignated area’’ only until the later of— 

(i) the date on which the Census Bureau publicly releases the first results from the 2010 decennial census; 

or 

(ii) 3 years after the date on which the census tract 

or nonmetropolitan county ceased to be so qualified. 

(D) BASE CLOSURE AREA.— 

(i) IN GENERAL.—Subject to clause (ii), the term 

‘‘base closure area’’ means— 

(I) lands within the external boundaries of a 

military installation that were closed through a 

privatization process under the authority of— 

(aa) the Defense Base Closure and Realignment Act of 1990 (part A of title XXIX of division B of Public Law 101–510; 10 U.S.C. 2687 

note); 

(bb) title II of the Defense Authorization 

Amendments and Base Closure and Realignment Act (Public Law 100–526; 10 U.S.C. 

2687 note); 

(cc) section 2687 of title 10, United States 

Code; or 

(dd) any other provision of law authorizing 

or directing the Secretary of Defense or the 

Secretary of a military department to dispose 

of real property at the military installation for 

purposes relating to base closures of redevelopment, while retaining the authority to enter 


dlhill on DSKBBY8HB2PROD with HEARING
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into a leaseback of all or a portion of the property for military use; 

(II) the census tract or nonmetropolitan county 

in which the lands described in subclause (I) are 

wholly contained; 

(III) a census tract or nonmetropolitan county 

the boundaries of which intersect the area described in subclause (I); and 

(IV) a census tract or nonmetropolitan county 

the boundaries of which are contiguous to the area 

described in subclause (II) or subclause (III). 

(ii) LIMITATION.—A base closure area shall be treated as a HUBZone— 

(I) with respect to a census tract or nonmetropolitan county described in clause (i), for a period 

of not less than 8 years, beginning on the date the 

military installation undergoes final closure and 

ending on the date the Administrator makes a 

final determination as to whether or not to implement the applicable designation described in subparagraph (A) or (B) in accordance with the results of the decennial census conducted after the 

area was initially designated as a base closure 

area; and 

(II) if such area was treated as a HUBZone at 

any time after 2010, until such time as the Administrator makes a final determination as to 

whether or not to implement the applicable designation described in subparagraph (A) or (B), 

after the 2020 decennial census. 

(iii) DEFINITIONS.—In this subparagraph: 

(I) CENSUS TRACT.—The term ‘‘census tract’’ 

means a census tract delineated by the United 

States Bureau of the Census in the most recent 

decennial census that is not located in a nonmetropolitan county and does not otherwise qualify as a qualified census tract. 

(II) NONMETROPOLITAN COUNTY.—The term 

‘‘nonmetropolitan county’’ means a county that 

was not located in a metropolitan statistical area 

(as defined in section 143(k)(2)(B) of the Internal 

Revenue Code of 1986) at the time of the most recent census taken for purposes of selecting qualified census tracts and does not otherwise qualify 

as a qualified nonmetropolitan county. 

(E) QUALIFIED DISASTER AREA.— 

(i) IN GENERAL.—Subject to clause (ii), the term 

‘‘qualified disaster area’’ means any census tract or 

nonmetropolitan county located in an area for which 

the President has declared a major disaster under section 401 of the Robert T. Stafford Disaster Relief and 

Emergency Assistance Act (42 U.S.C. 5170) or located 

in an area in which a catastrophic incident has occurred if such census tract or nonmetropolitan county 

ceased to be qualified under subparagraph (A) or (B), 


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as applicable, during the period beginning 5 years before the date on which the President declared the 

major disaster or the catastrophic incident occurred 

and ending 2 years after such date, except that such 

census tract or nonmetropolitan county may be a 

‘‘qualified disaster area’’ only— 

(I) in the case of a major disaster declared by 

the President, during the 5-year period beginning 

on the date on which the President declared the 

major disaster for the area in which the census 

tract or nonmetropolitan county, as applicable, is 

located; and 

(II) in the case of a catastrophic incident, during 

the 10-year period beginning on the date on which 

the catastrophic incident occurred in the area in 

which the census tract or nonmetropolitan county, 

as applicable, is located. 

(ii) LIMITATION.—A qualified disaster area described 

in clause (i) shall be treated as a HUBZone for a period of not less than 8 years, beginning on the date the 

Administrator makes a final determination as to 

whether or not to implement the designations described in subparagraphs (A) and (B) in accordance 

with the results of the decennial census conducted 

after the area was initially designated as a qualified 

disaster area. 

(5) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.— 

(A) IN GENERAL.—A HUBZone small business concern is 

‘‘qualified’’, if— 

(i) the small business concern has certified in writing to the Administrator (or the Administrator otherwise determines, based on information submitted to 

the Administrator by the small business concern, or 

based on certification procedures, which shall be established by the Administration by regulation) that— 

(I) it is a HUBZone small business concern— 

(aa) pursuant to subparagraph (A), (B), (C), 

(D), (E), or (F) of paragraph (3), and that its 

principal office is located in a HUBZone and 

not fewer than 35 percent of its employees reside in a HUBZone; 

(bb) pursuant to subparagraph (A), (B), (C), 

(D), (E), or (F) of paragraph (3), that its principal office is located within a base closure 

area and that not fewer than 35 percent of its 

employees reside in such base closure area or 

in another HUBZone; or 

(cc) pursuant to paragraph (3)(C), and not 

fewer than 35 percent of its employees engaged in performing a contract awarded to the 

small business concern on the basis of a preference provided under section 31(b) reside 

within any Indian reservation governed by 

one or more of the tribal government owners, 


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or reside within any HUBZone adjoining any 

such Indian reservation; 

(II) the small business concern will attempt to 

maintain the applicable employment percentage 

under subclause (I) during the performance of any 

contract awarded to the small business concern on 

the basis of a preference provided under section 

31(b); and 

(III) with respect to any subcontract entered 

into by the small business concern pursuant to a 

contract awarded to the small business concern 

under section 31, the small business concern will 

ensure that the requirements of section 46 are 

satisfied; and 

(ii) no certification made or information provided by 

the small business concern under clause (i) has been, 

in accordance with the procedures established under 

section 31(c)(1)— 

(I) successfully challenged by an interested 

party; or 

(II) otherwise determined by the Administrator 

to be materially false. 

(B) LIST OF QUALIFIED SMALL BUSINESS CONCERNS.—The 

Administrator shall establish and maintain a list of qualified HUBZone small business concerns, which list shall, to 

the extent practicable— 

(i) once the Administrator has made the certification 

required by subparagraph (A)(i) regarding a qualified 

HUBZone small business concern and has determined 

that subparagraph (A)(ii) does not apply to that concern, include the name, address, and type of business 

with respect to each such small business concern; 

(ii) be updated by the Administrator not less than 

annually; and 

(iii) be provided upon request to any Federal agency 

or other entity. 

(6) NATIVE AMERICAN SMALL BUSINESS CONCERNS.— (A) ALASKA NATIVE CORPORATION.—The term ‘‘Alaska 

Native Corporation’’ has the same meaning as the term 

‘‘Native Corporation’’ in section 3 of the Alaska Native 

Claims Settlement Act (43 U.S.C. 1602). 

(B) ALASKA NATIVE VILLAGE.—The term ‘‘Alaska Native 

Village’’ has the same meaning as the term ‘‘Native village’’ in section 3 of the Alaska Native Claims Settlement 

Act (43 U.S.C. 1602). 

(C) INDIAN RESERVATION.—The term ‘‘Indian reservation’’— 

(i) has the same meaning as the term ‘‘Indian country’’ in section 1151 of title 18, United States Code, except that such term does not include— 

(I) any lands that are located within a State in 

which a tribe did not exercise governmental jurisdiction on the date of the enactment of this paragraph, unless that tribe is recognized after that 

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gress or pursuant to regulations of the Secretary 

of the Interior for the administrative recognition 

that an Indian group exists as an Indian tribe 

(part 83 of title 25, Code of Federal Regulations); 

and 

(II) lands taken into trust or acquired by an Indian tribe after the date of the enactment of this 

paragraph if such lands are not located within the 

external boundaries of an Indian reservation or 

former reservation or are not contiguous to the 

lands held in trust or restricted status on that 

date of the enactment; and 

(ii) in the State of Oklahoma, means lands that— 

(I) are within the jurisdictional areas of an 

Oklahoma Indian tribe (as determined by the Secretary of the Interior); and 

(II) are recognized by the Secretary of the Interior as eligible for trust land status under part 

151 of title 25, Code of Federal Regulations (as in 

effect on the date of the enactment of this paragraph). 

(7) AGRICULTURAL COMMODITY.—The term ‘‘agricultural commodity’’ has the same meaning as in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602). 

(p) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.—In this Act, 

the term ‘‘qualified HUBZone small business concern’’ has the 

meaning given such term in section 31(b). 

(q) DEFINITIONS RELATING TO VETERANS.—In this Act, the following definitions apply: 

(1) SERVICE-DISABLED VETERAN.—The term ‘‘service-disabled 

veteran’’ means a veteran with a disability that is service-connected (as defined in section 101(16) of title 38, United States 

Code). 

(2) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY

SERVICE-DISABLED VETERANS.—The term ‘‘small business concern owned and controlled by service-disabled veterans’’ means 

a small business concern— 

(A) not less than 51 percent of which is owned by one 

or more service-disabled veterans or, in the case of any 

publicly owned business, not less than 51 percent of the 

stock of which is owned by one or more service-disabled 

veterans; and 

(B) the management and daily business operations of 

which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and severe disability, the spouse or permanent caregiver of such 

veteran. 

(2) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY

SERVICE-DISABLED VETERANS.—The term ‘‘small business concern owned and controlled by service-disabled veterans’’ means 

any of the following: 

(A) A small business concern— 


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(i) not less than 51 percent of which is owned by one 

or more service-disabled veterans or, in the case of any 

publicly owned business, not less than 51 percent of the 

stock (not including any stock owned by an ESOP) of 

which is owned by one or more service-disabled veterans; and 

(ii) the management and daily business operations of 

which are controlled by one or more service-disabled 

veterans or, in the case of a veteran with permanent 

and severe disability, the spouse or permanent caregiver of such veteran. 

(B) A small business concern— 

(i) not less than 51 percent of which is owned by one 

or more service-disabled veterans with a disability that 

is rated by the Secretary of Veterans Affairs as a permanent and total disability who are unable to manage 

the daily business operations of such concern; or 

(ii) in the case of a publicly owned business, not less 

than 51 percent of the stock (not including any stock 

owned by an ESOP) of which is owned by one or more 

such veterans. 

(C)(i) During the time period described in clause (ii), a 

small business concern that was a small business concern 

described in subparagraph (A) or (B) immediately prior to 

the death of a service-disabled veteran who was the owner 

of the concern, the death of whom causes the concern to be 

less than 51 percent owned by one or more service-disabled 

veterans, if— 

(I) the surviving spouse of the deceased veteran 

acquires such veteran’s ownership interest in such 

concern; 

(II) such veteran had a service-connected disability (as defined in section 101(16) of title 38, 

United States Code) rated as 100 percent disabling 

under the laws administered by the Secretary of 

Veterans Affairs or such veteran died as a result of 

a service-connected disability; and 

(III) immediately prior to the death of such veteran, and during the period described in clause 

(ii), the small business concern is included in the 

database described in section 8127(f) of title 38, 

United States Code. 

(ii) The time period described in this clause is the 

time period beginning on the date of the veteran’s 

death and ending on the earlier of— 

(I) the date on which the surviving spouse remarries; 

(II) the date on which the surviving spouse relinquishes an ownership interest in the small business concern; or 

(III) the date that is 10 years after the date of 

the death of the veteran. 


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(3) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY

VETERANS.—The term ‘‘small business concern owned and controlled by veterans’’ means a small business concern— 

(A) not less than 51 percent of which is owned by one 

or more veterans or, in the case of any publicly owned 

business, not less than 51 percent of the stock of which is 

owned by one or more veterans; and 

(B) the management and daily business operations of 

which are controlled by one or more veterans. 

(4) VETERAN.—The term ‘‘veteran’’ has the meaning given 

the term in section 101(2) of title 38, United States Code. 

(5) RELIEF FROM TIME LIMITATIONS.— (A) IN GENERAL.—Any time limitation on any qualification, certification, or period of participation imposed under 

this Act on any program that is available to small business 

concerns shall be extended for a small business concern 

that— 

(i) is owned and controlled by— 

(I) a veteran who was called or ordered to active 

duty under a provision of law specified in section 

101(a)(13)(B) of title 10, United States Code, on or 

after September 11, 2001; or 

(II) a service-disabled veteran who became such 

a veteran due to an injury or illness incurred or 

aggravated in the active military, naval, or air 

service during a period of active duty pursuant to 

a call or order to active duty under a provision of 

law referred to in subclause (I) on or after September 11, 2001; and 

(ii) was subject to the time limitation during such 

period of active duty. 

(B) DURATION.—Upon submission of proper documentation to the Administrator, the extension of a time limitation under subparagraph (A) shall be equal to the period 

of time that such veteran who owned or controlled such a 

concern was on active duty as described in that subparagraph. 

(C) EXCEPTION FOR PROGRAMS SUBJECT TO FEDERAL

CREDIT REFORM ACT OF 1990.—The provisions of subparagraphs (A) and (B) shall not apply to any programs subject 

to the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et 

seq.). 

(6) ESOP.—The term ‘‘ESOP’’ has the meaning given the 

term ‘‘employee stock ownership plan’’ in section 4975(e)(7) of 

the Internal Revenue Code of 1986 (26 U.S.C. 4975(e)(7)). 

(7) SURVIVING SPOUSE.—The term ‘‘surviving spouse’’ has the 

meaning given such term in section 101(3) of title 38, United 

States Code. 

(r) DEFINITIONS RELATING TO SMALL BUSINESS LENDING COMPANIES.—As used in section 23 of this Act: 

(1) SMALL BUSINESS LENDING COMPANY.—The term ‘‘small 

business lending company’’ means a business concern that is 

authorized by the Administrator to make loans pursuant to 


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section 7(a) and whose lending activities are not subject to regulation by any Federal or State regulatory agency. 

(2) NON-FEDERALLY REGULATED LENDER.—The term ‘‘nonFederally regulated lender’’ means a business concern if— 

(A) such concern is authorized by the Administrator to 

make loans under section 7; 

(B) such concern is subject to regulation by a State; and 

(C) the lending activities of such concern are not regulated by any Federal banking authority. 

(s) MAJOR DISASTER.—In this Act, the term ‘‘major disaster’’ has 

the meaning given that term in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 

5122). 

(t) SMALL BUSINESS DEVELOPMENT CENTER.—In this Act, the 

term ‘‘small business development center’’ means a small business 

development center described in section 21. 

(u) REGION OF THE ADMINISTRATION.—In this Act, the term ‘‘region of the Administration’’ means the geographic area served by 

a regional office of the Administration established under section 

4(a). 

(v) MULTIPLE AWARD CONTRACT.—In this Act, the term ‘‘multiple 

award contract’’ means— 

(1) a multiple award task order contract or delivery order 

contract that is entered into under the authority of sections 

303H through 303K of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253h through 253k); and 

(2) any other indefinite delivery, indefinite quantity contract 

that is entered into by the head of a Federal agency with 2 or 

more sources pursuant to the same solicitation. 

(w) PRESUMPTION.— (1) IN GENERAL.—In every contract, subcontract, cooperative 

agreement, cooperative research and development agreement, 

or grant which is set aside, reserved, or otherwise classified as 

intended for award to small business concerns, there shall be 

a presumption of loss to the United States based on the total 

amount expended on the contract, subcontract, cooperative 

agreement, cooperative research and development agreement, 

or grant whenever it is established that a business concern 

other than a small business concern willfully sought and received the award by misrepresentation. 

(2) DEEMED CERTIFICATIONS.—The following actions shall be 

deemed affirmative, willful, and intentional certifications of 

small business size and status: 

(A) Submission of a bid or proposal for a Federal grant, 

contract, subcontract, cooperative agreement, or cooperative research and development agreement reserved, set 

aside, or otherwise classified as intended for award to 

small business concerns. 

(B) Submission of a bid or proposal for a Federal grant, 

contract, subcontract, cooperative agreement, or cooperative research and development agreement which in any 

way encourages a Federal agency to classify the bid or proposal, if awarded, as an award to a small business concern. 

(C) Registration on any Federal electronic database for 

the purpose of being considered for award of a Federal 


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grant, contract, subcontract, cooperative agreement, or cooperative research agreement, as a small business concern. 

(3) CERTIFICATION BY SIGNATURE OF RESPONSIBLE OFFICIAL.— 

(A) IN GENERAL.—Each solicitation, bid, or application 

for a Federal contract, subcontract, or grant shall contain 

a certification concerning the small business size and status of a business concern seeking the Federal contract, 

subcontract, or grant. 

(B) CONTENT OF CERTIFICATIONS.—A certification that a 

business concern qualifies as a small business concern of 

the exact size and status claimed by the business concern 

for purposes of bidding on a Federal contract or subcontract, or applying for a Federal grant, shall contain the 

signature of an authorized official on the same page on 

which the certification is contained. 

(4) REGULATIONS.—The Administrator shall promulgate regulations to provide adequate protections to individuals and 

business concerns from liability under this subsection in cases 

of unintentional errors, technical malfunctions, and other similar situations. 

(x) ANNUAL CERTIFICATION.— 

(1) IN GENERAL.—Each business certified as a small business 

concern under this Act shall annually certify its small business 

size and, if appropriate, its small business status, by means of 

a confirming entry on the Online Representations and Certifications Application database of the Administration, or any successor thereto. 

(2) REGULATIONS.—Not later than 1 year after the date of 

enactment of this subsection, the Administrator, in consultation with the Inspector General and the Chief Counsel for Advocacy of the Administration, shall promulgate regulations to 

ensure that— 

(A) no business concern continues to be certified as a 

small business concern on the Online Representations and 

Certifications Application database of the Administration, 

or any successor thereto, without fulfilling the requirements for annual certification under this subsection; and 

(B) the requirements of this subsection are implemented 

in a manner presenting the least possible regulatory burden on small business concerns. 

(y) POLICY ON PROSECUTIONS OF SMALL BUSINESS SIZE AND STATUS FRAUD.—Not later than 1 year after the date of enactment of 

this subsection, the Administrator, in consultation with the Attorney General, shall issue a Government-wide policy on prosecution 

of small business size and status fraud, which shall direct Federal 

agencies to appropriately publicize the policy. 

(z) AQUACULTURE BUSINESS DISASTER ASSISTANCE.—Subject to 

section 18(a) and notwithstanding section 18(b)(1), the Administrator may provide disaster assistance under section 7(b)(2) to 

aquaculture enterprises that are small businesses. 

(aa) VENTURE CAPITAL OPERATING COMPANY.—In this Act, the 

term ‘‘venture capital operating company’’ means an entity described in clause (i), (v), or (vi) of section 121.103(b)(5) of title 13, 

Code of Federal Regulations (or any successor thereto). 


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(bb) HEDGE FUND.—In this Act, the term ‘‘hedge fund’’ has the 

meaning given that term in section 13(h)(2) of the Bank Holding 

Company Act of 1956 (12 U.S.C. 1851(h)(2)). 

(cc) PRIVATE EQUITY FIRM.—In this Act, the term ‘‘private equity 

firm’’ has the meaning given the term ‘‘private equity fund’’ in section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 

1851(h)(2)). 

(dd) DEFINITIONS PERTAINING TO SUBCONTRACTING.—In this Act: 

(1) SUBCONTRACT.—The term ‘‘subcontract’’ means a legally 

binding agreement between a contractor that is already under 

contract to another party to perform work, and a third party, 

hereinafter referred to as the subcontractor, for the subcontractor to perform a part, or all, of the work that the contractor 

has undertaken. 

(2) FIRST TIER SUBCONTRACTOR.—The term ‘‘first tier subcontractor’’ means a subcontractor who has a subcontract directly 

with the prime contractor. 

(3) AT ANY TIER.—The term ‘‘at any tier’’ means any subcontractor other than a subcontractor who is a first tier subcontractor. 

(ee) PUERTO RICO BUSINESS.—In this Act, the term ‘‘Puerto Rico 

business’’ means a small business concern that has its principal office located in the Commonwealth of Puerto Rico. 

* * * * * * * 

Æ 


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