I 
116TH CONGRESS 
1ST SESSION 
H. R. 446 
To amend the Internal Revenue Code of 1986 to allow tax credits to veterans 
for the establishment of franchises. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 10, 2019 
Ms. BROWNLEY of California (for herself and Mrs. WALORSKI) introduced the 
following bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow tax 
credits to veterans for the establishment of franchises. 
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 ‘‘Veteran Entrepreneurs 
Act of 2019’’. 
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 is amended by adding at the end the following new 
section: 
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‘‘SEC. 45T. VETERANS FRANCHISING CREDIT. 
‘‘(a) VETERANS FRANCHISE FEE CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of section 38 
and subject to the limitation set forth in paragraph 
(2), in the case of an eligible veteran or business 
owned by an eligible veteran, the veterans franchise 
fee credit determined under this section for the tax-
able year is an amount equal to 25 percent of the 
qualified franchise fee paid or incurred by an eligible 
veteran in connection with the purchase of a fran-
chise. 
‘‘(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 vet-
erans franchise fee credit under subsection (a) shall be the 
amount which bears the same ration to the amount deter-
mined under subsection (a) (without regard to this sub-
section) 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. 
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For purposes of this subsection, the spouse of a veteran 
shall be treated as a veteran. 
‘‘(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) ELIGIBLE VETERAN.—For purposes of this sec-
tion, the term ‘eligible veteran’ means a person who served 
in the active military, naval, or air service, and who was 
discharged or released therefrom under conditions other 
than dishonorable who pays or incurs a ‘qualified franchise 
fee’ in connection with a franchise agreement with a 
franchisor. 
‘‘(f) TRANSFER OF CREDIT.—With respect to the 
credit under subsection (a) for any taxable year, an eligi-
ble veteran may elect to transfer the credit to an eligible 
franchisor in exchange for a discount in the franchise fee 
commensurate with the value of the credit. In such case, 
the franchisor specified in such election shall be treated 
as the taxpayer for purposes of this title with respect to 
such credit (or such portion thereof). 
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For purposes of this subsection, the term ‘eligible 
franchisor’ means the person who grants a franchise to 
the eligible veteran and participates in the franchise agree-
ment. 
‘‘(g) 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 (36), by striking the 
period at the end of paragraph (37) and inserting ‘‘, plus’’, 
and by adding at the end the following new paragraph: 
‘‘(38) the veterans franchise fee credit deter-
mined under section 45T(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. 45T. Veterans franchising credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2019. 
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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 45T 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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