I 
113TH CONGRESS 
1ST SESSION H. R. 3725 
To amend the Internal Revenue Code of 1986 to allow credits for the 
establishment of franchises with veterans. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 12, 2013 
Mr. FLORES (for himself, Mr. TAKANO, Mr. COOK, Mr. RUNYAN, Mr. SCHNEI-
DER, Ms. TITUS, Mr. COFFMAN, and Mr. HANNA) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow credits 
for the establishment of franchises with veterans. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Veterans Entre-
preneurs Act of 2013’’. 
SEC. 2. VETERANS FRANCHISING CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to business related credits) is amended by 
adding at the end the following new section: 
VerDate Mar 15 2010 
18:46 Dec 17, 2013
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H3725.IH
H3725
maindgalligan on DSK5TPTVN1PROD with BILLS
‘‘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. 
VerDate Mar 15 2010 
18:46 Dec 17, 2013
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H3725.IH
H3725
maindgalligan on DSK5TPTVN1PROD with BILLS
‘‘(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.’’. 
VerDate Mar 15 2010 
18:46 Dec 17, 2013
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6211
E:\BILLS\H3725.IH
H3725
maindgalligan on DSK5TPTVN1PROD with BILLS
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2013. 
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 
VerDate Mar 15 2010 
18:46 Dec 17, 2013
Jkt 039200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6301
E:\BILLS\H3725.IH
H3725
maindgalligan on DSK5TPTVN1PROD with BILLS