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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1870 Reported in Senate (RS)]

<DOC>

                                                       Calendar No. 542
114th CONGRESS
  2d Session
                                S. 1870

  To amend the Small Business Act 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 27, 2015

    Mr. Moran (for himself, Mr. Tester, Mrs. Capito, and Mr. Coons) 
introduced the following bill; which was read twice and referred to the 
            Committee on Small Business and Entrepreneurship

                             June 29, 2016

               Reported by Mr. Vitter, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL

 
  To amend the Small Business Act 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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Veterans Entrepreneurial 
Transition Act of 2015'' or the ``VET Act of 2015''.</DELETED>

<DELETED>SEC. 2. VETERANS SMALL BUSINESS ENTREPRENEURSHIP PILOT 
              PROGRAM.</DELETED>

<DELETED>    Section 32 of the Small Business Act (15 U.S.C. 657b) is 
amended by adding at the end the following:</DELETED>
<DELETED>    ``(g) Veterans Small Business Entrepreneurship Pilot 
Program.--</DELETED>
        <DELETED>    ``(1) Pilot program required.--</DELETED>
                <DELETED>    ``(A) In general.--Not later than 90 days 
                after the date of enactment of this subsection, the 
                Administrator, in consultation with the Advisory 
                Committee and the Secretary of Veterans Affairs, shall 
                begin carrying out a pilot program to assess the 
                feasibility and advisability of making grants to 
                eligible veterans to start or acquire a qualifying 
                business enterprise.</DELETED>
                <DELETED>    ``(B) Promotion of efficiency.--In 
                carrying out the pilot program, the Administrator shall 
                ensure, to the maximum extent practicable, that the 
                pilot program promotes efficiency, accountability, and 
                competition.</DELETED>
                <DELETED>    ``(C) List of categories of business 
                enterprises.--The Administrator, in consultation with 
                the Advisory Committee, shall by rule establish a list 
                of categories of business enterprises that the 
                Administrator determines to be qualifying business 
                enterprises for purposes of the pilot program, which 
                shall include--</DELETED>
                        <DELETED>    ``(i) a small business 
                        concern;</DELETED>
                        <DELETED>    ``(ii) a franchise business 
                        enterprise; and</DELETED>
                        <DELETED>    ``(iii) any other category of 
                        business enterprise that the Administrator, in 
                        consultation with the Advisory Committee, 
                        determines is appropriate and in accordance 
                        with the purposes of the pilot 
                        program.</DELETED>
                <DELETED>    ``(D) Number of grants.--Under the pilot 
                program, the Administrator may make grants in 
                accordance with paragraph (4) to not more than 250 
                eligible veterans to start or acquire a qualifying 
                business enterprise.</DELETED>
                <DELETED>    ``(E) Geographic diversity.--In making 
                grants under the pilot program, the Administrator shall 
                ensure geographic diversity among the veterans who 
                receive the grants.</DELETED>
                <DELETED>    ``(F) Duration.--The Administrator shall 
                carry out the pilot program during the 3-year period 
                beginning on the date on which the Administrator begins 
                carrying out the pilot program.</DELETED>
        <DELETED>    ``(2) Application.--</DELETED>
                <DELETED>    ``(A) In general.--An eligible veteran 
                desiring a grant under the pilot program shall submit 
                an application--</DELETED>
                        <DELETED>    ``(i) to the Administrator in the 
                        form and containing the information as the 
                        Administrator may require, including the 
                        information described in subparagraph (B); 
                        and</DELETED>
                        <DELETED>    ``(ii) not later than 1 year 
                        before the date on which the pilot program 
                        terminates under paragraph (1)(F).</DELETED>
                <DELETED>    ``(B) Documentation requirements.--The 
                Administrator, in considering an application from an 
                eligible veteran for a grant under the pilot program, 
                may not approve the application unless the application 
                includes the following:</DELETED>
                        <DELETED>    ``(i) A description of the use of 
                        the grant amount, including an identification 
                        and description of the qualifying business 
                        enterprise.</DELETED>
                        <DELETED>    ``(ii) A description of the 
                        expected return on investment resulting from 
                        the grant amounts.</DELETED>
                        <DELETED>    ``(iii) A certification that the 
                        eligible veteran applying for the grant--
                        </DELETED>
                                <DELETED>    ``(I) shall complete the 
                                education and training relevant to the 
                                ownership and operation of the 
                                qualifying business enterprise 
                                described in paragraphs (3)(A) and 
                                (3)(B); and</DELETED>
                                <DELETED>    ``(II) understands that 
                                the eligible veteran may not receive 
                                amounts under a grant under the pilot 
                                program until after the eligible 
                                veteran has completed the required 
                                education and training relevant to the 
                                ownership and operation of the 
                                qualifying business enterprise 
                                described in paragraphs (3)(A) and 
                                (3)(B).</DELETED>
                        <DELETED>    ``(iv) Such certifications as the 
                        Administrator, in consultation with the 
                        Advisory Committee, shall by rule require, 
                        including--</DELETED>
                                <DELETED>    ``(I) for a business 
                                enterprise in operation on the date of 
                                the application, evidence that the 
                                Administrator, in consultation with the 
                                Advisory Committee, determines 
                                appropriate of--</DELETED>
                                        <DELETED>    ``(aa) good 
                                        standing;</DELETED>
                                        <DELETED>    ``(bb) profitable 
                                        operation; and</DELETED>
                                        <DELETED>    ``(cc) guarantees 
                                        relating to the purchase of the 
                                        enterprise;</DELETED>
                                <DELETED>    ``(II) for a franchise 
                                business enterprise, evidence that the 
                                Administrator, in consultation with the 
                                Advisory Committee, determines 
                                appropriate of--</DELETED>
                                        <DELETED>    ``(aa) compliance 
                                        with applicable State and 
                                        Federal laws on franchises; 
                                        and</DELETED>
                                        <DELETED>    ``(bb) training in 
                                        conformation with the industry 
                                        standard; and</DELETED>
                                <DELETED>    ``(III) for a startup, or 
                                an enterprise that is otherwise not in 
                                operation at the time of the 
                                application, a proposal for the 
                                operation of that enterprise that leads 
                                to profitable operation within a 
                                reasonable timeframe.</DELETED>
                        <DELETED>    ``(v) A certification that the 
                        eligible veteran applying for the grant 
                        understands that the eligible veteran may not 
                        receive amounts under the grant until after the 
                        business plan of the eligible veteran has been 
                        approved under the procedures described in 
                        paragraph (3)(C)(ii).</DELETED>
                        <DELETED>    ``(vi) A certification that the 
                        eligible veteran--</DELETED>
                                <DELETED>    ``(I) has been truthful 
                                about the employment status of the 
                                eligible veteran; and</DELETED>
                                <DELETED>    ``(II) understands that 
                                the eligible veteran will be prohibited 
                                from participating in the pilot program 
                                if the certification described in 
                                subclause (I) is determined to be 
                                untrue.</DELETED>
                <DELETED>    ``(C) Group applications.--The 
                Administrator may authorize a group of eligible 
                veterans to apply as a group under the pilot program. 
                The group shall be treated as a single eligible veteran 
                under the pilot program, except that the maximum amount 
                of the grant shall be calculated by multiplying the 
                maximum amount under paragraph (4)(A) by the number of 
                members of the group.</DELETED>
        <DELETED>    ``(3) Entrepreneurship training.--</DELETED>
                <DELETED>    ``(A) In general.--Each eligible veteran 
                receiving a grant under the pilot program shall 
                complete an entrepreneurship readiness program approved 
                by the Administrator that is designed to prepare the 
                eligible veteran for, and lead to the immediate 
                subsequent ownership and management by the eligible 
                veteran of, a qualifying business enterprise.</DELETED>
                <DELETED>    ``(B) Approved programs.--An approved 
                program described in subparagraph (A) may include a 
                program--</DELETED>
                        <DELETED>    ``(i) available through a small 
                        business development center;</DELETED>
                        <DELETED>    ``(ii) approved by the 
                        Administrator for entrepreneurship 
                        training;</DELETED>
                        <DELETED>    ``(iii) approved by the Secretary 
                        of Veterans Affairs for entrepreneurship 
                        training;</DELETED>
                        <DELETED>    ``(iv) available through the 
                        Transition Assistance Program of the Department 
                        of Defense;</DELETED>
                        <DELETED>    ``(v) available through a women's 
                        business center, as described in section 
                        29;</DELETED>
                        <DELETED>    ``(vi) available through a 
                        Veterans Business Outreach Center, as described 
                        in subsection (d);</DELETED>
                        <DELETED>    ``(vii) available through the 
                        SCORE program authorized by section 8(b)(1); 
                        or</DELETED>
                        <DELETED>    ``(viii) approved by the 
                        Administrator, in consultation with the 
                        Advisory Committee, as appropriate because of 
                        the expertise the program offers relating to a 
                        certain type of business enterprise.</DELETED>
                <DELETED>    ``(C) Business plan.--</DELETED>
                        <DELETED>    ``(i) Contents.--An eligible 
                        veteran receiving a grant under the pilot 
                        program shall prepare a business plan, which 
                        shall include--</DELETED>
                                <DELETED>    ``(I) a description of how 
                                the qualifying business enterprise will 
                                achieve profitable operation within a 
                                reasonable timeframe;</DELETED>
                                <DELETED>    ``(II) an assessment of 
                                relevant--</DELETED>
                                        <DELETED>    ``(aa) economic 
                                        indicators;</DELETED>
                                        <DELETED>    ``(bb) consumer 
                                        data;</DELETED>
                                        <DELETED>    ``(cc) production 
                                        and sales data; and</DELETED>
                                        <DELETED>    ``(dd) market or 
                                        industry analysis; 
                                        and</DELETED>
                                <DELETED>    ``(III) other information 
                                that the Administrator, in consultation 
                                with the Advisory Committee, determines 
                                is appropriate.</DELETED>
                        <DELETED>    ``(ii) Approval procedure.--
                        </DELETED>
                                <DELETED>    ``(I) Approval by 
                                advisor.--If an advisor approves the 
                                business plan prepared by the eligible 
                                veteran, the Associate Administrator 
                                for Veterans Business Development of 
                                the Administration--</DELETED>
                                        <DELETED>    ``(aa) shall 
                                        review the business plan; 
                                        and</DELETED>
                                        <DELETED>    ``(bb) may reverse 
                                        the approval of the business 
                                        plan and require that the 
                                        eligible veteran continue to 
                                        consult with the advisor to 
                                        develop and resubmit the 
                                        business plan.</DELETED>
                                <DELETED>    ``(II) Disapproval by 
                                advisor.--If an advisor does not 
                                approve the business plan prepared by 
                                an eligible veteran, the Associate 
                                Administrator for Veterans Business 
                                Development of the Administration, upon 
                                appeal by the eligible veteran, may 
                                reverse the decision of the advisor and 
                                approve the business plan.</DELETED>
        <DELETED>    ``(4) Grant terms and conditions.--</DELETED>
                <DELETED>    ``(A) Maximum grant amount and additional 
                assistance.--</DELETED>
                        <DELETED>    ``(i) In general.--Subject to 
                        paragraph (2)(C), the maximum amount that an 
                        eligible veteran may receive under the pilot 
                        program shall not exceed an amount equal to the 
                        sum of--</DELETED>
                                <DELETED>    ``(I) the maximum grant 
                                amount specified in clause 
                                (ii);</DELETED>
                                <DELETED>    ``(II) the amount equal to 
                                the product obtained by multiplying--
                                </DELETED>
                                        <DELETED>    ``(aa) the amount 
                                        of additional assistance to 
                                        which the eligible veteran is 
                                        entitled under clause 
                                        (iii)(II); by</DELETED>
                                        <DELETED>    ``(bb) the number 
                                        of months that the eligible 
                                        veteran participates in the 
                                        pilot program; and</DELETED>
                                <DELETED>    ``(III) the amount of 
                                training assistance received by the 
                                eligible veteran in clause 
                                (iv).</DELETED>
                        <DELETED>    ``(ii) Maximum grant amount.--The 
                        maximum grant amount specified in this clause 
                        is the following:</DELETED>
                                <DELETED>    ``(I) In the case of an 
                                eligible veteran entitled to 
                                educational assistance under chapter 33 
                                of title 38, United States Code, the 
                                amount equal to the product obtained by 
                                multiplying--</DELETED>
                                        <DELETED>    ``(aa) the number 
                                        of months of educational 
                                        assistance to which the 
                                        eligible veteran is entitled on 
                                        the date that the eligible 
                                        veteran submits an application; 
                                        by</DELETED>
                                        <DELETED>    ``(bb) the pro 
                                        rata monthly rate of the amount 
                                        that the eligible veteran is 
                                        entitled to under paragraph 
                                        (1)(A)(ii)(II) of section 
                                        3313(c) of that title, subject 
                                        to paragraphs (2) through (7) 
                                        of that section.</DELETED>
                                <DELETED>    ``(II) In the case of an 
                                eligible veteran entitled to 
                                educational assistance under chapter 30 
                                of title 38, United States Code, the 
                                amount equal to the product obtained by 
                                multiplying--</DELETED>
                                        <DELETED>    ``(aa) the number 
                                        of months of educational 
                                        assistance to which the 
                                        eligible veteran is entitled on 
                                        the date that the eligible 
                                        veteran submits an application; 
                                        by</DELETED>
                                        <DELETED>    ``(bb) the rate in 
                                        effect under section 3015(a)(1) 
                                        of that title.</DELETED>
                        <DELETED>    ``(iii) Additional assistance.--
                        </DELETED>
                                <DELETED>    ``(I) Period of 
                                eligibility.--An eligible veteran shall 
                                receive the amount described in 
                                subclause (II) for each month that the 
                                eligible veteran participates in the 
                                pilot program.</DELETED>
                                <DELETED>    ``(II) Amount.--The amount 
                                of the additional assistance specified 
                                in this subclause is an amount, paid to 
                                the eligible veteran on a monthly 
                                basis, equal to the product obtained by 
                                multiplying--</DELETED>
                                        <DELETED>    ``(aa) the monthly 
                                        amount of the basic allowance 
                                        for housing payable under 
                                        section 403 of title 37, United 
                                        States Code, for a member with 
                                        dependents in pay grade E-5 
                                        residing in the military 
                                        housing area that encompasses 
                                        all or the majority portion of 
                                        the ZIP code area in which is 
                                        located the residence of the 
                                        eligible veteran (similar to 
                                        the calculation made under 
                                        section 3313(c)(1)(B)(i)(I) of 
                                        title 38, United States Code); 
                                        by--</DELETED>
                                        <DELETED>    ``(bb)(AA) in the 
                                        case of an eligible veteran 
                                        who, as of the date on which 
                                        the eligible veteran applies 
                                        for a grant under this 
                                        subsection, has no employment 
                                        other than the qualifying 
                                        business enterprise for which 
                                        the eligible veteran seeks a 
                                        grant under this subsection, 1; 
                                        or</DELETED>
                                        <DELETED>    ``(BB) in the case 
                                        of an eligible veteran who is 
                                        not described in subitem (AA), 
                                        0.5.</DELETED>
                        <DELETED>    ``(iv) Training assistance.--Upon 
                        application by an eligible veteran receiving a 
                        grant under the pilot program, the 
                        Administrator may pay for the cost, if 
                        applicable, of an approved program described in 
                        paragraph (3)(B)(viii).</DELETED>
                <DELETED>    ``(B) Disbursement.--The amount of a grant 
                made under the pilot program shall be disbursed to an 
                eligible veteran--</DELETED>
                        <DELETED>    ``(i) in installments, in 
                        accordance with the procedures described in 
                        subparagraph (C);</DELETED>
                        <DELETED>    ``(ii) only after the eligible 
                        veteran presents documentation proving that the 
                        eligible veteran has completed the required 
                        entrepreneurship training described in 
                        paragraphs (3)(A) and (3)(B); and</DELETED>
                        <DELETED>    ``(iii) only after the business 
                        plan of the eligible veteran has been approved 
                        under the procedures described in paragraph 
                        (3)(C)(ii).</DELETED>
                <DELETED>    ``(C) Installment payments.--The amount 
                described in subparagraph (A)(ii) shall be paid to the 
                eligible veteran in installments on a pro rata basis 
                with each installment being paid to the eligible 
                veteran--</DELETED>
                        <DELETED>    ``(i) not earlier than 3 months 
                        after the date of the payment of the most 
                        recent installment to the eligible 
                        veteran;</DELETED>
                        <DELETED>    ``(ii) not later than 12 months 
                        after the date of the payment of the most 
                        recent installment to the eligible veteran; 
                        and</DELETED>
                        <DELETED>    ``(iii) only after the eligible 
                        veteran has met milestones established in the 
                        business plan of the eligible 
                        veteran.</DELETED>
        <DELETED>    ``(5) Use of grant amounts.--An eligible veteran 
        who receives a grant under the pilot program may use the amount 
        of the grant--</DELETED>
                <DELETED>    ``(A) in accordance with the limitations 
                that the Administrator, in consultation with the 
                Advisory Committee, may by rule establish; 
                and</DELETED>
                <DELETED>    ``(B) for purposes related to starting or 
                acquiring a qualifying business enterprise that the 
                Administrator, in consultation with the Advisory 
                Committee, determines are appropriate, including--
                </DELETED>
                        <DELETED>    ``(i) purchasing goods or services 
                        necessary for the creation or operation of a 
                        qualifying business enterprise;</DELETED>
                        <DELETED>    ``(ii) funding a project that is 
                        directed toward any economic development 
                        objective described under section 501(d) of the 
                        Small Business Investment Act of 1958 (15 
                        U.S.C. 695(d)); and</DELETED>
                        <DELETED>    ``(iii) acquiring a qualifying 
                        business enterprise.</DELETED>
        <DELETED>    ``(6) Report.--</DELETED>
                <DELETED>    ``(A) In general.--Not later than 2 years 
                after the date on which the pilot program is commenced, 
                the Administrator shall submit to the Committee on 
                Small Business and Entrepreneurship and the Committee 
                on Veterans' Affairs of the Senate and the Committee on 
                Small Business and the Committee on Veterans' Affairs 
                of the House of Representatives a report analyzing the 
                feasibility and effectiveness of the pilot 
                program.</DELETED>
                <DELETED>    ``(B) Contents.--The report submitted 
                under subparagraph (A) shall include--</DELETED>
                        <DELETED>    ``(i) an assessment of the pilot 
                        program;</DELETED>
                        <DELETED>    ``(ii) a survey containing--
                        </DELETED>
                                <DELETED>    ``(I) the number of 
                                grantees under the pilot program; 
                                and</DELETED>
                                <DELETED>    ``(II) the number of the 
                                grantees under the pilot program that 
                                participated in each of the training 
                                programs described in subparagraphs (A) 
                                and (B) of paragraph (3);</DELETED>
                        <DELETED>    ``(iii) recommendations regarding 
                        whether any aspect of the pilot program should 
                        be made a permanent authority, and, if so, the 
                        means to ensure--</DELETED>
                                <DELETED>    ``(I) geographic and 
                                demographic diversity among the 
                                eligible veterans who receive the 
                                grants under the permanent authority; 
                                and</DELETED>
                                <DELETED>    ``(II) diversity in the 
                                types of qualifying business 
                                enterprises for which eligible veterans 
                                may receive grants under the pilot 
                                program;</DELETED>
                        <DELETED>    ``(iv) an assessment regarding 
                        whether the grants distributed under the pilot 
                        program should continue to be made in 
                        installments or with a one-time, lump sum 
                        payment;</DELETED>
                        <DELETED>    ``(v) an assessment of the 
                        additional assistance made available under the 
                        pilot program, including the accountability 
                        surrounding the availability of additional 
                        assistance;</DELETED>
                        <DELETED>    ``(vi) an analysis of the 
                        procedures for approving a business plan and a 
                        recommendation regarding ways, if necessary, to 
                        improve the procedures; and</DELETED>
                        <DELETED>    ``(vii) a recommendation regarding 
                        ways, if necessary, to improve the 
                        accountability of advisors.</DELETED>
        <DELETED>    ``(7) No effect on time limitation for use of 
        entitlement to educational assistance.--Nothing in this 
        subsection shall be construed to modify any time limitation or 
        period during which an individual is entitled to educational 
        assistance under chapter 30 or 33 of title 38, United States 
        Code.</DELETED>
        <DELETED>    ``(8) Definitions.--In this subsection:</DELETED>
                <DELETED>    ``(A) Advisor.--The term `advisor' means a 
                person--</DELETED>
                        <DELETED>    ``(i) affiliated with an 
                        entrepreneurship or training and curricula 
                        program described in paragraphs (3)(A) and 
                        (3)(B);</DELETED>
                        <DELETED>    ``(ii) who may assist an eligible 
                        veteran with the preparation and approval of a 
                        business plan; and</DELETED>
                        <DELETED>    ``(iii) who is approved to serve 
                        as an advisor by the Administrator, in 
                        consultation with the Advisory 
                        Committee.</DELETED>
                <DELETED>    ``(B) Advisory committee.--The term 
                `Advisory Committee' means the Advisory Committee on 
                Veterans Business Affairs established under section 203 
                of the Veterans Entrepreneurship and Small Business 
                Development Act of 1999 (15 U.S.C. 657b 
                note).</DELETED>
                <DELETED>    ``(C) Business plan.--The term `business 
                plan' means a plan prepared by an eligible veteran for 
                the operation of a qualifying business enterprise that 
                shall be--</DELETED>
                        <DELETED>    ``(i) prepared--</DELETED>
                                <DELETED>    ``(I) while the eligible 
                                veteran participates in an approved 
                                training program described in 
                                paragraphs (3)(A) and (3)(B); 
                                and</DELETED>
                                <DELETED>    ``(II) with the assistance 
                                of an advisor; and</DELETED>
                        <DELETED>    ``(ii) consistent with the 
                        guidelines and recommendations provided by the 
                        Business Plan Tool of the 
                        Administration.</DELETED>
                <DELETED>    ``(D) Eligible veteran.--The term 
                `eligible veteran' means an individual who--</DELETED>
                        <DELETED>    ``(i) is--</DELETED>
                                <DELETED>    ``(I) a veteran; 
                                or</DELETED>
                                <DELETED>    ``(II) a member of the 
                                Armed Forces who--</DELETED>
                                        <DELETED>    ``(aa) is 
                                        currently retiring or 
                                        separating from the Armed 
                                        Forces and has a service 
                                        approved retirement or 
                                        separation packet; or</DELETED>
                                        <DELETED>    ``(bb) has last 
                                        been honorably discharged from 
                                        active duty service in the 
                                        Armed Forces;</DELETED>
                        <DELETED>    ``(ii) has completed not less 
                        than--</DELETED>
                                <DELETED>    ``(I) 36 months of active 
                                duty service in the Armed Forces (other 
                                than active duty service for training); 
                                or</DELETED>
                                <DELETED>    ``(II) 24 months of active 
                                duty service in the Armed Forces (other 
                                than active duty service for training) 
                                before being discharged or separated 
                                for a service-connected disability, as 
                                that term is defined in section 101 of 
                                title 38, United States Code; 
                                and</DELETED>
                        <DELETED>    ``(iii) is entitled to educational 
                        assistance under chapter 30 or 33 of title 38, 
                        United States Code.</DELETED>
                <DELETED>    ``(E) Franchise business enterprise.--The 
                term `franchise business enterprise' means any 
                continuing commercial relationship or arrangement, 
                regardless of the title given the relationship or 
                arrangement, under which the terms of the offer or 
                contract specify, or the franchise seller promises or 
                represents, orally or in writing, that--</DELETED>
                        <DELETED>    ``(i) the franchisee will obtain 
                        the right to--</DELETED>
                                <DELETED>    ``(I) operate a business 
                                that is identified or associated with 
                                the trademark of the franchisor; 
                                or</DELETED>
                                <DELETED>    ``(II) offer, sell, or 
                                distribute goods, services, or 
                                commodities that are identified or 
                                associated with the trademark of the 
                                franchisor;</DELETED>
                        <DELETED>    ``(ii) the franchisor may--
                        </DELETED>
                                <DELETED>    ``(I) exert, or has 
                                authority to exert, a significant 
                                degree of control over the method of 
                                operation of the franchisee; 
                                or</DELETED>
                                <DELETED>    ``(II) provide significant 
                                assistance in the method of operation 
                                of the franchisee; and</DELETED>
                        <DELETED>    ``(iii) as a condition of 
                        obtaining or commencing operation of the 
                        franchise business enterprise, the franchisee 
                        makes a required payment or commits to make a 
                        required payment to the franchisor or the 
                        affiliate of the franchisor.</DELETED>
                <DELETED>    ``(F) Franchisee.--The term `franchisee' 
                means any person who is granted a franchise business 
                enterprise.</DELETED>
                <DELETED>    ``(G) Franchisor.--The term `franchisor'--
                </DELETED>
                        <DELETED>    ``(i) means any person who grants 
                        a franchise business enterprise and 
                        participates in the franchise relationship; 
                        and</DELETED>
                        <DELETED>    ``(ii) includes 
                        subfranchisors.</DELETED>
                <DELETED>    ``(H) Pilot program.--The term `pilot 
                program' means the pilot program established under 
                paragraph (1)(A).</DELETED>
                <DELETED>    ``(I) Qualifying business enterprise.--The 
                term `qualifying business enterprise' means a business 
                included in the list of categories of business 
                enterprises established under paragraph 
                (1)(C).</DELETED>
                <DELETED>    ``(J) Startup.--The term `startup' means a 
                business enterprise that--</DELETED>
                        <DELETED>    ``(i) is not yet in existence; 
                        or</DELETED>
                        <DELETED>    ``(ii) has been in existence for 
                        not more than 5 years.</DELETED>
                <DELETED>    ``(K) Subfranchisor.--The term 
                `subfranchisor' means a person who functions as a 
                franchisor by engaging in both pre-sale activities and 
                post-sale performance.''.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Entrepreneurial Transition 
Act of 2016'' or the ``VET Act of 2016''.

SEC. 2. VETERANS SMALL BUSINESS ENTREPRENEURSHIP PILOT PROGRAM.

    Section 32 of the Small Business Act (15 U.S.C. 657b) is amended by 
adding at the end the following:
    ``(g) Veterans Small Business Entrepreneurship Pilot Program.--
            ``(1) Pilot program required.--
                    ``(A) In general.--Not later than 90 days after the 
                date of enactment of this subsection, the 
                Administrator, in consultation with the Advisory 
                Committee and the Secretary of Veterans Affairs, shall 
                begin carrying out a pilot program to assess the 
                feasibility and advisability of making grants to 
                eligible veterans to start or acquire a qualifying 
                business enterprise.
                    ``(B) Promotion of efficiency.--In carrying out the 
                pilot program, the Administrator shall ensure, to the 
                maximum extent practicable, that the pilot program 
                promotes efficiency, accountability, and competition.
                    ``(C) List of categories of business enterprises.--
                The Administrator, in consultation with the Advisory 
                Committee, shall by rule establish a list of categories 
                of business enterprises that the Administrator 
                determines to be qualifying business enterprises for 
                purposes of the pilot program, which shall include--
                            ``(i) a small business concern;
                            ``(ii) a franchise business enterprise; and
                            ``(iii) any other category of business 
                        enterprise that the Administrator, in 
                        consultation with the Advisory Committee, 
                        determines is appropriate and in accordance 
                        with the purposes of the pilot program.
                    ``(D) Number of grants.--Under the pilot program, 
                the Administrator may make grants in accordance with 
                paragraph (4) to not more than 250 eligible veterans to 
                start or acquire a qualifying business enterprise.
                    ``(E) Geographic diversity.--In making grants under 
                the pilot program, the Administrator shall ensure 
                geographic diversity among the veterans who receive the 
                grants.
                    ``(F) Duration.--The Administrator shall carry out 
                the pilot program during the 3-year period beginning on 
                the date on which the Administrator begins carrying out 
                the pilot program.
            ``(2) Application.--
                    ``(A) In general.--An eligible veteran desiring a 
                grant under the pilot program shall submit an 
                application--
                            ``(i) to the Administrator in the form and 
                        containing the information the Administrator 
                        may require, including the information 
                        described in subparagraph (B); and
                            ``(ii) not later than 1 year before the 
                        date on which the pilot program terminates 
                        under paragraph (1)(F).
                    ``(B) Documentation requirements.--The 
                Administrator, in considering an application from an 
                eligible veteran for a grant under the pilot program, 
                may not approve the application unless the application 
                includes the following:
                            ``(i) A description of the use of the grant 
                        amount, including an identification and 
                        description of the qualifying business 
                        enterprise.
                            ``(ii) A description of the expected return 
                        on investment resulting from the grant amounts.
                            ``(iii) A certification that the eligible 
                        veteran applying for the grant--
                                    ``(I) shall complete the education 
                                and training relevant to the ownership 
                                and operation of the qualifying 
                                business enterprise described in 
                                paragraphs (3)(A) and (3)(B); and
                                    ``(II) understands that the 
                                eligible veteran may not receive 
                                amounts under a grant under the pilot 
                                program until after the eligible 
                                veteran has completed the required 
                                education and training relevant to the 
                                ownership and operation of the 
                                qualifying business enterprise 
                                described in paragraphs (3)(A) and 
                                (3)(B).
                            ``(iv) Such certifications as the 
                        Administrator, in consultation with the 
                        Advisory Committee, shall by rule require, 
                        including--
                                    ``(I) for a business enterprise in 
                                operation on the date of the 
                                application, evidence that the 
                                Administrator, in consultation with the 
                                Advisory Committee, determines 
                                appropriate of--
                                            ``(aa) good standing;
                                            ``(bb) profitable 
                                        operation; and
                                            ``(cc) guarantees relating 
                                        to the purchase of the 
                                        enterprise;
                                    ``(II) for a franchise business 
                                enterprise, evidence that the 
                                Administrator, in consultation with the 
                                Advisory Committee, determines 
                                appropriate of--
                                            ``(aa) compliance with 
                                        applicable State and Federal 
                                        laws on franchises; and
                                            ``(bb) training in 
                                        confirmation with the industry 
                                        standard; and
                                    ``(III) for a startup, or an 
                                enterprise that is otherwise not in 
                                operation at the time of the 
                                application, a proposal for the 
                                operation of that enterprise that leads 
                                to profitable operation within a 
                                reasonable time frame.
                            ``(v) A certification that the eligible 
                        veteran applying for the grant understands that 
                        the eligible veteran may not receive amounts 
                        under the grant until after the business plan 
                        of the eligible veteran has been approved under 
                        the procedures described in paragraph 
                        (3)(C)(ii).
                            ``(vi) A certification that the eligible 
                        veteran--
                                    ``(I) has been truthful about the 
                                employment status of the eligible 
                                veteran; and
                                    ``(II) understands that the 
                                eligible veteran will be prohibited 
                                from participating in the pilot program 
                                if the certification described in 
                                subclause (I) is determined to be 
                                untrue.
                    ``(C) Group applications.--The Administrator may 
                authorize a group of eligible veterans to apply as a 
                group under the pilot program. The group shall be 
                treated as a single eligible veteran under the pilot 
                program, except that the maximum amount of the grant 
                shall be calculated by multiplying the maximum amount 
                under paragraph (4)(A) by the number of members of the 
                group.
            ``(3) Entrepreneurship training.--
                    ``(A) In general.--Each eligible veteran receiving 
                a grant under the pilot program shall complete an 
                entrepreneurship readiness program approved by the 
                Administrator that is designed to prepare the eligible 
                veteran for, and lead to the immediate subsequent 
                ownership and management by the eligible veteran of, a 
                qualifying business enterprise.
                    ``(B) Approved programs.--An approved program 
                described in subparagraph (A) may include a program--
                            ``(i) available through a small business 
                        development center;
                            ``(ii) approved by the Administrator for 
                        entrepreneurship training;
                            ``(iii) approved by the Secretary of 
                        Veterans Affairs for entrepreneurship training;
                            ``(iv) available through the Transition 
                        Assistance Program of the Department of 
                        Defense;
                            ``(v) available through a women's business 
                        center, as described in section 29;
                            ``(vi) available through a Veterans 
                        Business Outreach Center, as described in 
                        subsection (d);
                            ``(vii) available through the SCORE program 
                        authorized by section 8(b)(1); or
                            ``(viii) approved by the Administrator, in 
                        consultation with the Advisory Committee, as 
                        appropriate because of the expertise the 
                        program offers relating to a certain type of 
                        business enterprise.
                    ``(C) Business plan.--
                            ``(i) Contents.--An eligible veteran 
                        receiving a grant under the pilot program shall 
                        prepare a business plan, which shall include--
                                    ``(I) a description of how the 
                                qualifying business enterprise will 
                                achieve profitable operation within a 
                                reasonable time frame;
                                    ``(II) an assessment of relevant--
                                            ``(aa) economic indicators;
                                            ``(bb) consumer data;
                                            ``(cc) production and sales 
                                        data; and
                                            ``(dd) market or industry 
                                        analysis; and
                                    ``(III) other information that the 
                                Administrator, in consultation with the 
                                Advisory Committee, determines is 
                                appropriate.
                            ``(ii) Approval procedure.--
                                    ``(I) Approval by advisor.--If an 
                                advisor approves the business plan 
                                prepared by the eligible veteran, the 
                                Associate Administrator for Veterans 
                                Business Development of the 
                                Administration--
                                            ``(aa) shall review the 
                                        business plan; and
                                            ``(bb) may reverse the 
                                        approval of the business plan 
                                        and require that the eligible 
                                        veteran continue to consult 
                                        with the advisor to develop and 
                                        resubmit the business plan.
                                    ``(II) Disapproval by advisor.--If 
                                an advisor does not approve the 
                                business plan prepared by an eligible 
                                veteran, the Associate Administrator 
                                for Veterans Business Development of 
                                the Administration, upon appeal by the 
                                eligible veteran, may reverse the 
                                decision of the advisor and approve the 
                                business plan.
            ``(4) Grant terms and conditions.--
                    ``(A) Maximum grant amount and additional 
                assistance.--
                            ``(i) In general.--Subject to paragraph 
                        (2)(C), the maximum amount that an eligible 
                        veteran may receive under the pilot program 
                        shall not exceed an amount equal to the sum 
                        of--
                                    ``(I) the maximum grant amount 
                                specified in clause (ii);
                                    ``(II) the amount equal to the 
                                product obtained by multiplying--
                                            ``(aa) the amount of 
                                        additional assistance to which 
                                        the eligible veteran is 
                                        entitled under clause 
                                        (iii)(II); by
                                            ``(bb) the number of months 
                                        that the eligible veteran 
                                        participates in the pilot 
                                        program; and
                                    ``(III) the amount of training 
                                assistance received by the eligible 
                                veteran under clause (iv).
                            ``(ii) Maximum grant amount.--The maximum 
                        grant amount specified in this clause is the 
                        following:
                                    ``(I) In the case of an eligible 
                                veteran entitled to educational 
                                assistance under chapter 33 of title 
                                38, United States Code, the amount 
                                equal to the product obtained by 
                                multiplying--
                                            ``(aa) the number of months 
                                        of educational assistance to 
                                        which the eligible veteran is 
                                        entitled on the date that the 
                                        eligible veteran submits an 
                                        application; by
                                            ``(bb) the pro rata monthly 
                                        rate of the amount that the 
                                        eligible veteran is entitled to 
                                        under paragraph (1)(A)(ii)(II) 
                                        of section 3313(c) of that 
                                        title, subject to paragraphs 
                                        (2) through (7) of that 
                                        section.
                                    ``(II) In the case of an eligible 
                                veteran entitled to educational 
                                assistance under chapter 30 of title 
                                38, United States Code, the amount 
                                equal to the product obtained by 
                                multiplying--
                                            ``(aa) the number of months 
                                        of educational assistance to 
                                        which the eligible veteran is 
                                        entitled on the date that the 
                                        eligible veteran submits an 
                                        application; by
                                            ``(bb) the rate in effect 
                                        under section 3015(a)(1) of 
                                        that title.
                            ``(iii) Additional assistance.--
                                    ``(I) Period of eligibility.--An 
                                eligible veteran shall receive the 
                                amount described in subclause (II) for 
                                each month that the eligible veteran 
                                participates in the pilot program.
                                    ``(II) Amount.--The amount of the 
                                additional assistance specified in this 
                                subclause is an amount, paid to the 
                                eligible veteran on a monthly basis, 
                                equal to the product obtained by 
                                multiplying--
                                            ``(aa) the monthly amount 
                                        of the basic allowance for 
                                        housing payable under section 
                                        403 of title 37, United States 
                                        Code, for a member with 
                                        dependents in pay grade E-5 
                                        residing in the military 
                                        housing area that encompasses 
                                        all or the majority portion of 
                                        the ZIP code area in which is 
                                        located the residence of the 
                                        eligible veteran (similar to 
                                        the calculation made under 
                                        section 3313(c)(1)(B)(i)(I) of 
                                        title 38, United States Code); 
                                        by--
                                            ``(bb)(AA) in the case of 
                                        an eligible veteran who, as of 
                                        the date on which the eligible 
                                        veteran applies for a grant 
                                        under this subsection, has no 
                                        employment other than the 
                                        qualifying business enterprise 
                                        for which the eligible veteran 
                                        seeks a grant under this 
                                        subsection, 1; or
                                            ``(BB) in the case of an 
                                        eligible veteran who is not 
                                        described in subitem (AA), 0.5.
                            ``(iv) Training assistance.--Upon 
                        application by an eligible veteran receiving a 
                        grant under the pilot program, the 
                        Administrator may pay for the cost, if 
                        applicable, of an approved program described in 
                        paragraph (3)(B)(viii).
                    ``(B) Disbursement.--The amount of a grant made 
                under the pilot program shall be disbursed to an 
                eligible veteran--
                            ``(i) in installments, in accordance with 
                        the procedures described in subparagraph (C);
                            ``(ii) only after the eligible veteran 
                        presents documentation proving that the 
                        eligible veteran has completed the required 
                        entrepreneurship training described in 
                        paragraphs (3)(A) and (3)(B); and
                            ``(iii) only after the business plan of the 
                        eligible veteran has been approved under the 
                        procedures described in paragraph (3)(C)(ii).
                    ``(C) Installment payments.--The amount described 
                in subparagraph (A)(ii) shall be paid to the eligible 
                veteran in installments on a pro rata basis with each 
                installment being paid to the eligible veteran--
                            ``(i) not earlier than 3 months after the 
                        date of the payment of the most recent 
                        installment to the eligible veteran;
                            ``(ii) not later than 12 months after the 
                        date of the payment of the most recent 
                        installment to the eligible veteran; and
                            ``(iii) only after the eligible veteran has 
                        met milestones established in the business plan 
                        of the eligible veteran.
            ``(5) Use of grant amounts.--An eligible veteran who 
        receives a grant under the pilot program may use the amount of 
        the grant--
                    ``(A) in accordance with the limitations that the 
                Administrator, in consultation with the Advisory 
                Committee, may by rule establish;
                    ``(B) for purposes consistent with the activities 
                and objectives set forth in the business plan of the 
                eligible veteran, as described in paragraph (3)(C); and
                    ``(C) for purposes related to starting or acquiring 
                a qualifying business enterprise that the 
                Administrator, in consultation with the Advisory 
                Committee, determines are appropriate, including--
                            ``(i) purchasing goods or services 
                        necessary for the creation or operation of a 
                        qualifying business enterprise;
                            ``(ii) funding a project that is directed 
                        toward any economic development objective 
                        described under section 501(d) of the Small 
                        Business Investment Act of 1958 (15 U.S.C. 
                        695(d)); and
                            ``(iii) acquiring a qualifying business 
                        enterprise.
            ``(6) Responsibility of the administrator.--In implementing 
        the pilot program, the Administrator shall maximize existing 
        relationships with the public and private sector to--
                    ``(A) ensure successful outcomes by participants in 
                the pilot program; and
                    ``(B) prevent redundancy with existing public and 
                private programs.
            ``(7) Report to congressional committees.--
                    ``(A) In general.--Not later than 2 years after the 
                date on which the pilot program is commenced, the 
                Administrator shall submit to the Committee on Small 
                Business and Entrepreneurship and the Committee on 
                Veterans' Affairs of the Senate and the Committee on 
                Small Business and the Committee on Veterans' Affairs 
                of the House of Representatives a report analyzing the 
                feasibility and effectiveness of the pilot program.
                    ``(B) Contents.--The report submitted under 
                subparagraph (A) shall include--
                            ``(i) an assessment of the pilot program;
                            ``(ii) a survey containing--
                                    ``(I) the number of grantees under 
                                the pilot program; and
                                    ``(II) the number of the grantees 
                                under the pilot program that 
                                participated in each of the training 
                                programs described in subparagraphs (A) 
                                and (B) of paragraph (3);
                            ``(iii) recommendations regarding whether 
                        any aspect of the pilot program should be made 
                        a permanent authority, and, if so, the means to 
                        ensure--
                                    ``(I) geographic and demographic 
                                diversity among the eligible veterans 
                                who receive the grants under the 
                                permanent authority; and
                                    ``(II) diversity in the types of 
                                qualifying business enterprises for 
                                which eligible veterans may receive 
                                grants under the pilot program;
                            ``(iv) an assessment regarding whether the 
                        grants distributed under the pilot program 
                        should continue to be made in installments or 
                        with a 1-time, lump sum payment;
                            ``(v) an assessment of the additional 
                        assistance made available under the pilot 
                        program, including the accountability 
                        surrounding the availability of additional 
                        assistance;
                            ``(vi) an analysis of the procedures for 
                        approving a business plan and a recommendation 
                        regarding ways, if necessary, to improve the 
                        procedures; and
                            ``(vii) a recommendation regarding ways, if 
                        necessary, to improve the accountability of 
                        advisors.
            ``(8) GAO report.--Not later than 1 year after the date on 
        which the pilot program terminates, the Comptroller General of 
        the United States shall submit to Congress a report that 
        evaluates the pilot program with respect to--
                    ``(A) administrative difficulties;
                    ``(B) issues of fiscal responsibility;
                    ``(C) duplication with existing entrepreneurship 
                pilot programs in the Federal Government; and
                    ``(D) whether the pilot program is consistent with 
                the Post-9/11 Veterans Educational Assistance 
                Improvements Act of 2010 (Public Law 111-377; 124 Stat. 
                4106).
            ``(9) No effect on time limitation for use of entitlement 
        to educational assistance.--Nothing in this subsection shall be 
        construed to modify any time limitation or period during which 
        an individual is entitled to educational assistance under 
        chapter 30 or 33 of title 38, United States Code.
            ``(10) Definitions.--In this subsection:
                    ``(A) Advisor.--The term `advisor' means a person--
                            ``(i) affiliated with an entrepreneurship 
                        or training and curricula program described in 
                        paragraphs (3)(A) and (3)(B);
                            ``(ii) who may assist an eligible veteran 
                        with the preparation and approval of a business 
                        plan; and
                            ``(iii) who is approved to serve as an 
                        advisor by the Administrator, in consultation 
                        with the Advisory Committee.
                    ``(B) Advisory committee.--The term `Advisory 
                Committee' means the Advisory Committee on Veterans 
                Business Affairs established under section 203 of the 
                Veterans Entrepreneurship and Small Business 
                Development Act of 1999 (15 U.S.C. 657b note).
                    ``(C) Business plan.--The term `business plan' 
                means a plan prepared by an eligible veteran for the 
                operation of a qualifying business enterprise that 
                shall be--
                            ``(i) prepared--
                                    ``(I) while the eligible veteran 
                                participates in an approved training 
                                program described in paragraphs (3)(A) 
                                and (3)(B); and
                                    ``(II) with the assistance of an 
                                advisor; and
                            ``(ii) consistent with the guidelines and 
                        recommendations provided by the Business Plan 
                        Tool of the Administration.
                    ``(D) Eligible veteran.--The term `eligible 
                veteran' means an individual who--
                            ``(i) is--
                                    ``(I) a veteran; or
                                    ``(II) a member of the Armed Forces 
                                who--
                                            ``(aa) is currently 
                                        retiring or separating from the 
                                        Armed Forces and has a service 
                                        approved retirement or 
                                        separation packet; or
                                            ``(bb) has last been 
                                        honorably discharged from 
                                        active duty service in the 
                                        Armed Forces;
                            ``(ii) has completed not less than--
                                    ``(I) 36 months of active duty 
                                service in the Armed Forces (other than 
                                active duty service for training); or
                                    ``(II) 24 months of active duty 
                                service in the Armed Forces (other than 
                                active duty service for training) 
                                before being discharged or separated 
                                for a service-connected disability, as 
                                that term is defined in section 101 of 
                                title 38, United States Code; and
                            ``(iii) is entitled to educational 
                        assistance under chapter 30 or 33 of title 38, 
                        United States Code.
                    ``(E) Franchise business enterprise.--The term 
                `franchise business enterprise' means any continuing 
                commercial relationship or arrangement, regardless of 
                the title given the relationship or arrangement, under 
                which the terms of the offer or contract specify, or 
                the franchise seller promises or represents, orally or 
                in writing, that--
                            ``(i) the franchisee will obtain the right 
                        to--
                                    ``(I) operate a business that is 
                                identified or associated with the 
                                trademark of the franchisor; or
                                    ``(II) offer, sell, or distribute 
                                goods, services, or commodities that 
                                are identified or associated with the 
                                trademark of the franchisor;
                            ``(ii) the franchisor may--
                                    ``(I) exert, or has authority to 
                                exert, a significant degree of control 
                                over the method of operation of the 
                                franchisee; or
                                    ``(II) provide significant 
                                assistance in the method of operation 
                                of the franchisee; and
                            ``(iii) as a condition of obtaining or 
                        commencing operation of the franchise business 
                        enterprise, the franchisee makes a required 
                        payment or commits to make a required payment 
                        to the franchisor or the affiliate of the 
                        franchisor.
                    ``(F) Franchisee.--The term `franchisee' means any 
                person who is granted a franchise business enterprise.
                    ``(G) Franchisor.--The term `franchisor'--
                            ``(i) means any person who grants a 
                        franchise business enterprise and participates 
                        in the franchise relationship; and
                            ``(ii) includes subfranchisors.
                    ``(H) Pilot program.--The term `pilot program' 
                means the pilot program established under paragraph 
                (1)(A).
                    ``(I) Qualifying business enterprise.--The term 
                `qualifying business enterprise' means a business 
                included in the list of categories of business 
                enterprises established under paragraph (1)(C).
                    ``(J) Startup.--The term `startup' means a business 
                enterprise that--
                            ``(i) is not yet in existence; or
                            ``(ii) has been in existence for not more 
                        than 5 years.
                    ``(K) Subfranchisor.--The term `subfranchisor' 
                means a person who functions as a franchisor by 
                engaging in both pre-sale activities and post-sale 
                performance.''.
                                                       Calendar No. 542

114th CONGRESS

  2d Session

                                S. 1870

_______________________________________________________________________

                                 A BILL

  To amend the Small Business Act 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.

_______________________________________________________________________

                             June 29, 2016

                       Reported with an amendment
```