‘‘SEC. 45S. VETERANS FRANCHISING. 
‘‘(a) VETERANS FRANCHISE FEE CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of section 38 
and subject to the limitation set forth in paragraph 
(2), the veterans franchise fee credit determined 
under this section for the taxable year is an amount 
equal to 25 percent of the qualified franchise fee 
paid or incurred by a qualified veteran in connection 
with the purchase of a franchise. 
‘‘(2) LIMITATION.—The amount of qualified 
franchise fee taken into account under paragraph 
(1) shall not exceed $400,000. 
‘‘(b) REDUCTION WHERE FRANCHISE NOT 100 PER-
CENT VETERAN-OWNED.—In the case of any franchise in 
which veterans do not own 100 percent of the stock or 
the capital or profits interests of the franchisee, the credit 
under subsection (a) shall be the amount which bears the 
same ration to the amount determined under subsection 
(a) (without regard to this subsection) as— 
‘‘(1) the stock or capital or profits interests of 
the franchise held by veterans, bears to 
‘‘(2) the total stock or capital or profits inter-
ests of the franchisee. 
For purposes of this subsection, the spouse of a veteran 
shall be treated as a veteran. 
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‘‘(c) QUALIFIED FRANCHISE FEE.—For purposes of 
this section, the term ‘qualified franchise fee’ means any 
one-time fee required by the franchisor when entering into 
a franchise agreement with a veteran as the franchisee. 
‘‘(d) OTHER DEFINITIONS.—For purposes of this 
section, the terms ‘franchise’, ‘franchisee’, ‘franchisor’, 
and ‘franchise fee’ have the meanings given such terms 
in part 436 of title 16, Code of Federal Regulations. 
‘‘(e) VETERAN.—The term ‘veteran’ has the meaning 
given such term by section 101 of title 38, United States 
Code. 
‘‘(f) ELECTION.—This section shall not apply to a 
taxpayer for any taxable year if such taxpayer elects to 
have this section not apply for such taxable year.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of such Code is amended by strik-
ing ‘‘plus’’ at the end of paragraph (35), by striking the 
period at the end of paragraph (36) and inserting ‘‘, plus’’, 
and by adding at the end the following new paragraph: 
‘‘(37) the veterans franchise fee credit deter-
mined under section 45S(a).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 45S. Veterans franchising.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2011. 
SEC. 3. PUBLICATION OF INFORMATION BY DEPARTMENT 
OF VETERANS AFFAIRS AND SMALL BUSI-
NESS ADMINISTRATION. 
The Administrator of the Small Business Administra-
tion and the Secretary of Veterans Affairs shall publicize 
in mailings and brochures sent to veterans service organi-
zations and veteran advocacy groups information regard-
ing discounted franchise fees under section 45S of the In-
ternal Revenue Code of 1986 and other information about 
the program established under amendments made by this 
Act. 
Æ 
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