II 

114TH CONGRESS 

1ST SESSION S. 1862 

To require the Administrator of the Small Business Administration to carry 

out a pilot program on issuing grants to eligible veterans to start or 

acquire qualifying businesses, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 26, 2015 

Mr. MORAN (for himself and Mr. TESTER) introduced the following bill; which 

was read twice and referred to the Committee on Veterans’ Affairs 

A BILL 

To require the Administrator of the Small Business Administration to carry out a pilot program on issuing grants 

to eligible veterans to start or acquire qualifying 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 ‘‘Veterans Entrepre5 neurial Transition Act of 2015’’ or the ‘‘VET Act of 

6 2015’’. 


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1 SEC. 2. VETERANS SMALL BUSINESS ENTREPRENEURSHIP 

2 PILOT PROGRAM. 

3 (a) PILOT PROGRAM REQUIRED.— 

4 (1) IN GENERAL.—Not later than 90 days after 

5 the date of enactment of this Act, the Administrator, 

6 in consultation with the Advisory Committee, shall 

7 begin carrying out a pilot program to assess the fea8 sibility and advisability of making grants to eligible 

9 veterans to start or acquire a qualifying business en10 terprise. 

11 (2) PROMOTION OF EFFICIENCY.—In carrying 

12 out the pilot program, the Administrator shall en13 sure, to the maximum extent practicable, that the 

14 pilot program promotes efficiency, accountability, 

15 and competition. 

16 (3) LIST OF CATEGORIES OF BUSINESS ENTER17 PRISES.—The Administrator, in consultation with 

18 the Advisory Committee, shall by rule establish a list 

19 of categories of business enterprises that the Admin20 istrator determines to be qualifying business enter21 prises for purposes of the pilot program, which shall 

22 include— 

23 (A) a small business concern (as the term 

24 is defined in section 3(a) of the Small Business 

25 Act (15 U.S.C. 632(a))); 

26 (B) a franchise business enterprise; and 


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1 (C) any other category of business enter2 prise that the Administrator, in consultation 

3 with the Advisory Committee, determines is ap4 propriate and in accordance with the purposes 

5 of the pilot program. 

6 (4) NUMBER OF GRANTS.—Under the pilot pro7 gram, the Administrator may make grants in ac8 cordance with subsection (d) to not more than 250 

9 eligible veterans to start or acquire a qualifying 

10 business enterprise. 

11 (5) GEOGRAPHIC DIVERSITY.—In making 

12 grants under the pilot program, the Administrator 

13 shall ensure geographic diversity among the veterans 

14 who receive the grants. 

15 (6) DURATION.—The Administrator shall carry 

16 out the pilot program during the 3-year period be17 ginning on the date on which the Administrator be18 gins carrying out the pilot program. 

19 (b) APPLICATION.— 

20 (1) IN GENERAL.—An eligible veteran desiring 

21 a grant under the pilot program shall submit an ap22 plication— 

23 (A) to the Administrator in the form and 

24 containing the information as the Administrator 


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1 may require, including the information de2 scribed in paragraph (2); and 

3 (B) not later than 1 year before the date 

4 on which the pilot program terminates under 

5 subsection (a)(6). 

6 (2) DOCUMENTATION REQUIREMENTS.—The 

7 Administrator, in considering an application from an 

8 eligible veteran for a grant under the pilot program, 

9 may not approve the application unless the applica10 tion includes the following: 

11 (A) A description of the use of the grant 

12 amount, including an identification and descrip13 tion of the qualifying business enterprise. 

14 (B) A description of the expected return on 

15 investment resulting from the grant amounts. 

16 (C) A certification that the eligible veteran 

17 applying for the grant— 

18 (i) shall complete the education and 

19 training relevant to the ownership and op20 eration of the qualifying business enter21 prise described in subsections (c)(1) and 

22 (c)(2); and 

23 (ii) understands that the eligible vet24 eran may not receive amounts under a 

25 grant under the pilot program until after 


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1 the eligible veteran has completed the re2 quired education and training relevant to 

3 the ownership and operation of the quali4 fying business enterprise described in sub5 sections (c)(1) and (c)(2). 

6 (D) Such certifications as the Adminis7 trator, in consultation with the Advisory Com8 mittee, shall by rule require, including— 

9 (i) for a business enterprise in oper10 ation on the date of the application, evi11 dence that the Administrator, in consulta12 tion with the Advisory Committee, deter13 mines appropriate of— 

14 (I) good standing; 

15 (II) profitable operation; and 

16 (III) guarantees relating to the 

17 purchase of the enterprise; 

18 (ii) for a franchise business enter19 prise, evidence that the Administrator, in 

20 consultation with the Advisory Committee, 

21 determines appropriate of— 

22 (I) compliance with applicable 

23 State and Federal laws on franchises; 

24 and 


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1 (II) training in conformation 

2 with the industry standard; and 

3 (iii) for a startup, or an enterprise 

4 that is otherwise not in operation at the 

5 time of the application, a proposal for the 

6 operation of that enterprise that leads to 

7 profitable operation within a reasonable 

8 timeframe. 

9 (E) A certification that the eligible veteran 

10 applying for the grant understands that the eli11 gible veteran may not receive amounts under 

12 the grant until after the business plan of the el13 igible veteran has been approved under the pro14 cedures described in subsection (c)(3)(B). 

15 (F) A certification that the eligible vet16 eran— 

17 (i) has been truthful about the em18 ployment status of the eligible veteran; and 

19 (ii) understands that the eligible vet20 eran will be prohibited from participating 

21 in the pilot program if the certification de22 scribed in clause (i) is determined to be 

23 untrue. 

24 (3) GROUP APPLICATIONS.—The Administrator 

25 may authorize a group of eligible veterans to apply 


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1 as a group under the pilot program. The group shall 

2 be treated as a single eligible veteran under the pilot 

3 program, except that the maximum amount of the 

4 grant shall be calculated by multiplying the max5 imum amount under subsection (d)(1) by the num6 ber of members of the group. 

7 (c) ENTREPRENEURSHIP TRAINING.— 

8 (1) IN GENERAL.—Each eligible veteran receiv9 ing a grant under the pilot program shall complete 

10 an entrepreneurship readiness program approved by 

11 the Administrator that is designed to prepare the el12 igible veteran for, and lead to the immediate subse13 quent ownership and management by the eligible 

14 veteran of, a qualifying business enterprise. 

15 (2) APPROVED PROGRAMS.—An approved pro16 gram described in paragraph (1) may include a pro17 gram— 

18 (A) available through a small business de19 velopment center, as described in section 21 of 

20 the Small Business Act (15 U.S.C. 648); 

21 (B) approved by the Administrator for en22 trepreneurship training; 

23 (C) approved by the Secretary of Veterans 

24 Affairs for entrepreneurship training; 


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1 (D) available through the Transition As2 sistance Program of the Department of De3 fense; 

4 (E) available through a women’s business 

5 center, as described in section 29 of the Small 

6 Business Act (15 U.S.C. 656); 

7 (F) available through a Veterans Business 

8 Outreach Center, as described in section 32 of 

9 the Small Business Act (15 U.S.C. 657b); 

10 (G) available through the SCORE program 

11 authorized by section 8(b)(1) of the Small Busi12 ness Act (15 U.S.C. 637(b)(1)); or 

13 (H) approved by the Administrator, in con14 sultation with the Advisory Committee, as ap15 propriate because of the expertise the program 

16 offers relating to a certain type of business en17 terprise. 

18 (3) BUSINESS PLAN.— 

19 (A) CONTENTS.—An eligible veteran re20 ceiving a grant under the pilot program shall 

21 prepare a business plan, which shall include— 

22 (i) a description of how the qualifying 

23 business enterprise will achieve profitable 

24 operation within a reasonable timeframe; 

25 (ii) an assessment of relevant— 


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1 (I) economic indicators; 

2 (II) consumer data; 

3 (III) production and sales data; 

4 and 

5 (IV) market or industry analysis; 

6 and 

7 (iii) other information that the Ad8 ministrator, in consultation with the Advi9 sory Committee, determines is appropriate. 

10 (B) APPROVAL PROCEDURE.— 

11 (i) APPROVAL BY ADVISOR.—If an ad12 visor approves the business plan prepared 

13 by the eligible veteran, the Associate Ad14 ministrator for Veterans Business Develop15 ment of the Small Business Administra16 tion— 

17 (I) shall review the business plan; 

18 and 

19 (II) may reverse the approval of 

20 the business plan and require that the 

21 eligible veteran continue to consult 

22 with the advisor to develop and resub23 mit the business plan. 

24 (ii) DISAPPROVAL BY ADVISOR.—If an 

25 advisor does not approve the business plan 


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1 prepared by an eligible veteran, the Asso2 ciate Administrator for Veterans Business 

3 Development of the Small Business Ad4 ministration, upon appeal by the eligible 

5 veteran, may reverse the decision of the 

6 advisor and approve the business plan. 

7 (d) GRANT TERMS AND CONDITIONS.— 

8 (1) MAXIMUM GRANT AMOUNT AND ADDI9 TIONAL ASSISTANCE.— 

10 (A) IN GENERAL.—Subject to subsection 

11 (b)(3), the maximum amount that an eligible 

12 veteran may receive under the pilot program 

13 shall not exceed an amount equal to the sum 

14 of— 

15 (i) the maximum grant amount speci16 fied in subparagraph (B); 

17 (ii) the amount equal to the product 

18 obtained by multiplying— 

19 (I) the amount of additional as20 sistance to which the eligible veteran 

21 is entitled under subparagraph (C)(ii); 

22 by 

23 (II) the number of months that 

24 the eligible veteran participates in the 

25 pilot program; and 


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1 (iii) the amount of training assistance 

2 received by the eligible veteran in subpara3 graph (D). 

4 (B) MAXIMUM GRANT AMOUNT.—The max5 imum grant amount specified in this subpara6 graph is the following: 

7 (i) In the case of an eligible veteran 

8 entitled to educational assistance under 

9 chapter 33 of title 38, United States Code, 

10 the amount equal to the product obtained 

11 by multiplying— 

12 (I) the number of months of edu13 cational assistance to which the eligi14 ble veteran is entitled on the date that 

15 the eligible veteran submits an appli16 cation; by 

17 (II) the pro rata monthly rate of 

18 the amount that the eligible veteran is 

19 entitled to under paragraph 

20 (1)(A)(ii)(II) of section 3313(c) of 

21 that title, subject to paragraphs (2) 

22 through (7) of that section. 

23 (ii) In the case of an eligible veteran 

24 entitled to educational assistance under 

25 chapter 30 of title 38, United States Code, 


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1 the amount equal to the product obtained 

2 by multiplying— 

3 (I) the number of months of edu4 cational assistance to which the eligi5 ble veteran is entitled on the date that 

6 the eligible veteran submits an appli7 cation; by 

8 (II) the rate in effect under sec9 tion 3015(a)(1) of that title. 

10 (C) ADDITIONAL ASSISTANCE.— 

11 (i) PERIOD OF ELIGIBILITY.—An eli12 gible veteran shall receive the amount de13 scribed in clause (ii) for each month that 

14 the eligible veteran participates in the pilot 

15 program. 

16 (ii) AMOUNT.—The amount of the ad17 ditional assistance specified in this clause 

18 is an amount, paid to the eligible veteran 

19 on a monthly basis, equal to the product 

20 obtained by multiplying— 

21 (I) the monthly amount of the 

22 basic allowance for housing payable 

23 under section 403 of title 37, United 

24 States Code, for a member with de25 pendents in pay grade E–5 residing in 


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1 the military housing area that encom2 passes all or the majority portion of 

3 the ZIP code area in which is located 

4 the residence of the eligible veteran 

5 (similar to the calculation made under 

6 section 3313(c)(1)(B)(i)(I) of title 38, 

7 United States Code); by— 

8 (II)(aa) in the case of an eligible 

9 veteran who, as of the date on which 

10 the eligible veteran applies for a grant 

11 under this section, has no employment 

12 other than the qualifying business en13 terprise for which the eligible veteran 

14 seeks a grant under this section, 1; or 

15 (bb) in the case of an eligible vet16 eran who is not described in item 

17 (aa), 0.5. 

18 (D) TRAINING ASSISTANCE.—Upon appli19 cation by an eligible veteran receiving a grant 

20 under the pilot program, the Administrator may 

21 pay for the cost, if applicable, of an approved 

22 program described in subsection (c)(2)(H). 

23 (2) DISBURSEMENT.—The amount of a grant 

24 made under the pilot program shall be disbursed to 

25 an eligible veteran— 


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1 (A) in installments, in accordance with the 

2 procedures described in paragraph (3); 

3 (B) only after the eligible veteran presents 

4 documentation proving that the eligible veteran 

5 has completed the required entrepreneurship 

6 training described in subsections (c)(1) and 

7 (c)(2); and 

8 (C) only after the business plan of the eli9 gible veteran has been approved under the pro10 cedures described in subsection (c)(3)(B). 

11 (3) INSTALLMENT PAYMENTS.—The amount 

12 described in paragraph (1)(B) shall be paid to the 

13 eligible veteran in installments on a pro rata basis 

14 with each installment being paid to the eligible vet15 eran— 

16 (A) not earlier than 3 months after the 

17 date of the payment of the most recent install18 ment to the eligible veteran; 

19 (B) not later than 12 months after the 

20 date of the payment of the most recent install21 ment to the eligible veteran; and 

22 (C) only after the eligible veteran has met 

23 milestones established in the business plan of 

24 the eligible veteran. 


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1 (4) IMPACT ON ENTITLEMENT TO EDU2 CATIONAL ASSISTANCE.—An eligible veteran who re3 ceives a grant under the pilot program shall be 

4 deemed to have received an amount of educational 

5 assistance under chapter 30 or 33, of title 38, 

6 United States Code, as the case may be, that is 

7 equal to the amount of the grant. 

8 (e) USE OF GRANT AMOUNTS.—An eligible veteran 

9 who receives a grant under the pilot program may use the 

10 amount of the grant— 

11 (1) in accordance with the limitations that the 

12 Administrator, in consultation with the Advisory 

13 Committee, may by rule establish; and 

14 (2) for purposes related to starting or acquiring 

15 a qualifying business enterprise that the Adminis16 trator, in consultation with the Advisory Committee, 

17 determines are appropriate, including— 

18 (A) purchasing goods or services necessary 

19 for the creation or operation of a qualifying 

20 business enterprise; 

21 (B) funding a project that is directed to22 ward any economic development objective de23 scribed under section 501(d) of the Small Busi24 ness Investment Act of 1958 (15 U.S.C. 

25 695(d)); and 


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1 (C) acquiring a qualifying business enter2 prise. 

3 (f) REPORT.— 

4 (1) IN GENERAL.—Not later than 2 years after 

5 the date on which the pilot program is commenced, 

6 the Administrator shall submit to the Committee on 

7 Small Business and Entrepreneurship and the Com8 mittee on Veterans’ Affairs of the Senate and the 

9 Committee on Small Business and the Committee on 

10 Veterans’ Affairs of the House of Representatives a 

11 report analyzing the feasibility and effectiveness of 

12 the pilot program. 

13 (2) CONTENTS.—The report submitted under 

14 paragraph (1) shall include— 

15 (A) an assessment of the pilot program; 

16 (B) a survey containing— 

17 (i) the number of grantees under the 

18 pilot program; and 

19 (ii) the number of the grantees under 

20 the pilot program that participated in each 

21 of the training programs described in para22 graphs (1) and (2) of subsection (c); 

23 (C) recommendations regarding whether 

24 any aspect of the pilot program should be made 


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1 a permanent authority, and, if so, the means to 

2 ensure— 

3 (i) geographic and demographic diver4 sity among the eligible veterans who re5 ceive the grants under the permanent au6 thority; and 

7 (ii) diversity in the types of qualifying 

8 business enterprises for which eligible vet9 erans may receive grants under the pilot 

10 program; 

11 (D) an assessment regarding whether the 

12 grants distributed under the pilot program 

13 should continue to be made in installments or 

14 with a one-time, lump sum payment; 

15 (E) an assessment of the additional assist16 ance made available under the pilot program, 

17 including the accountability surrounding the 

18 availability of additional assistance; 

19 (F) an analysis of the procedures for ap20 proving a business plan and a recommendation 

21 regarding ways, if necessary, to improve the 

22 procedures; and 

23 (G) a recommendation regarding ways, if 

24 necessary, to improve the accountability of advi25 sors. 


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1 (g) NO EFFECT ON TIME LIMITATION FOR USE OF

2 ENTITLEMENT TO EDUCATIONAL ASSISTANCE.—Nothing 

3 in this section shall be construed to modify any time limi4 tation or period during which an individual is entitled to 

5 educational assistance under chapter 30 or 33 of title 38, 

6 United States Code. 

7 (h) FUNDING.— 

8 (1) IN GENERAL.—The Secretary of Veterans 

9 Affairs shall transfer to the Administrator from 

10 funds appropriated to the Secretary to carry out 

11 chapters 30 and 33 of title 38, United States Code, 

12 an amount equal to the amount necessary for the 

13 Administrator to carry out the pilot program. 

14 (2) AVAILABILITY.—Amounts transferred to the 

15 Administrator under paragraph (1) shall remain 

16 available until the date on which the pilot program 

17 terminates under subsection (a)(5). 

18 (i) DEFINITIONS.—In this section: 

19 (1) ADMINISTRATOR.—The term ‘‘Adminis20 trator’’ means the Administrator of the Small Busi21 ness Administration. 

22 (2) ADVISOR.—The term ‘‘advisor’’ means a 

23 person— 


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1 (A) affiliated with an entrepreneurship or 

2 training and curricula program described in 

3 subsections (c)(1) and (c)(2); 

4 (B) who may assist an eligible veteran with 

5 the preparation and approval of a business 

6 plan; and 

7 (C) who is approved to serve as an advisor 

8 by the Administrator, in consultation with the 

9 Advisory Committee. 

10 (3) ADVISORY COMMITTEE.—The term ‘‘Advi11 sory Committee’’ means the Advisory Committee on 

12 Veterans Business Affairs established under section 

13 203 of the Veterans Entrepreneurship and Small 

14 Business Development Act of 1999 (15 U.S.C. 657b 

15 note). 

16 (4) BUSINESS PLAN.—The term ‘‘business 

17 plan’’ means a plan prepared by an eligible veteran 

18 for the operation of a qualifying business enterprise 

19 that shall be— 

20 (A) prepared— 

21 (i) while the eligible veteran partici22 pates in an approved training program de23 scribed in subsections (c)(1) and (c)(2); 

24 and 


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1 (ii) with the assistance of an advisor; 

2 and 

3 (B) consistent with the guidelines and rec4 ommendations provided by the Business Plan 

5 Tool of the Small Business Administration. 

6 (5) ELIGIBLE VETERAN.—The term ‘‘eligible 

7 veteran’’ means an individual who— 

8 (A) is— 

9 (i) a veteran; or 

10 (ii) a member of the Armed Forces 

11 who— 

12 (I) is currently retiring or sepa13 rating from the Armed Forces and 

14 has a service approved retirement or 

15 separation packet; or 

16 (II) has last been honorably dis17 charged from active duty service in 

18 the Armed Forces; 

19 (B) has completed not less than— 

20 (i) 36 months of active duty service in 

21 the Armed Forces (other than active duty 

22 service for training); or 

23 (ii) 24 months of active duty service 

24 in the Armed Forces (other than active 

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1 charged or separated for a service-con2 nected disability, as that term is defined in 

3 section 101 of title 38, United States 

4 Code; and 

5 (C) is entitled to educational assistance 

6 under chapter 30 or 33 of title 38, United 

7 States Code. 

8 (6) FRANCHISE BUSINESS ENTERPRISE.—The 

9 term ‘‘franchise business enterprise’’ means any con10 tinuing commercial relationship or arrangement, re11 gardless of the title given the relationship or ar12 rangement, under which the terms of the offer or 

13 contract specify, or the franchise seller promises or 

14 represents, orally or in writing, that— 

15 (A) the franchisee will obtain the right 

16 to— 

17 (i) operate a business that is identi18 fied or associated with the trademark of 

19 the franchisor; or 

20 (ii) offer, sell, or distribute goods, 

21 services, or commodities that are identified 

22 or associated with the trademark of the 

23 franchisor; 

24 (B) the franchisor may— 


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1 (i) exert, or has authority to exert, a 

2 significant degree of control over the meth3 od of operation of the franchisee; or 

4 (ii) provide significant assistance in 

5 the method of operation of the franchisee; 

6 and 

7 (C) as a condition of obtaining or com8 mencing operation of the franchise business en9 terprise, the franchisee makes a required pay10 ment or commits to make a required payment 

11 to the franchisor or the affiliate of the 

12 franchisor. 

13 (7) FRANCHISEE.—The term ‘‘franchisee’’ 

14 means any person who is granted a franchise busi15 ness enterprise. 

16 (8) FRANCHISOR.—The term ‘‘franchisor’’— 

17 (A) means any person who grants a fran18 chise business enterprise and participates in the 

19 franchise relationship; and 

20 (B) includes subfranchisors. 

21 (9) PILOT PROGRAM.—The term ‘‘pilot pro22 gram’’ means the pilot program established under 

23 subsection (a)(1). 

24 (10) QUALIFYING BUSINESS ENTERPRISE.—The 

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1 ness included in the list of categories of business en2 terprises established under subsection (a)(3). 

3 (11) STARTUP.—The term ‘‘startup’’ means a 

4 business enterprise that— 

5 (A) is not yet in existence; or 

6 (B) has been in existence for not more 

7 than 5 years. 

8 (12) SUBFRANCHISOR.—The term 

9 ‘‘subfranchisor’’ means a person who functions as a 

10 franchisor by engaging in both pre-sale activities and 

11 post-sale performance. 

12 (13) VETERAN.—The term ‘‘veteran’’ has the 

13 meaning given the term in section 101 of title 38, 

14 United States Code. 

Æ 


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