I 
114TH CONGRESS 
1ST SESSION H. R. 3945 
To amend the Small Business Act and title 38, United States Code, to 
improve contracting opportunities for certain veteran-owned small busi-
nesses, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 5, 2015 
Mr. COFFMAN (for himself, Mr. CHABOT, Mr. MILLER of Florida, Ms. 
VELA´ZQUEZ, Mr. HANNA, Mr. CONNOLLY, and Mr. MOULTON) intro-
duced the following bill; which was referred to the Committee on Vet-
erans’ Affairs, and in addition to the Committee on Small Business, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To amend the Small Business Act and title 38, United 
States Code, to improve contracting opportunities for 
certain veteran-owned small businesses, and for other 
purposes. 
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 ‘‘Improving Opportuni-
ties for Service-Disabled Veteran-Owned Small Businesses 
Act of 2015’’. 
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SEC. 2. IMPROVING CONTRACTING OPPORTUNITIES FOR 
CERTAIN 
VETERAN-OWNED 
SMALL 
BUSI-
NESSES. 
(a) DEFINITION
OF SMALL BUSINESS CONCERN 
CONSOLIDATED.—Section 3(q) of the Small Business Act 
(15 U.S.C. 632(q)) is amended— 
(1) by amending paragraph (2) to read as fol-
lows: 
‘‘(2) SMALL BUSINESS CONCERN OWNED AND 
CONTROLLED
BY
SERVICE-DISABLED
VETERANS.— 
The term ‘small business concern owned and con-
trolled by service-disabled veterans’ means any of 
the following: 
‘‘(A) A small business concern— 
‘‘(i) not less than 51 percent of which 
is owned by one or more service-disabled 
veterans or, in the case of any publicly 
owned business, not less than 51 percent 
of the stock (not including any stock 
owned by an ESOP) of which is owned by 
one or more service-disabled veterans; and 
‘‘(ii) the management and daily busi-
ness operations of which are controlled by 
one or more service-disabled veterans or, in 
the case of a veteran with permanent and 
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severe disability, the spouse or permanent 
caregiver of such veteran. 
‘‘(B) A small business concern— 
‘‘(i) not less than 51 percent of which 
is owned by one or more service-disabled 
veterans with a disability that is rated by 
the Secretary of Veterans Affairs as a per-
manent and total disability who are unable 
to manage the daily business operations of 
such concern; or 
‘‘(ii) in the case of a publicly owned 
business, not less than 51 percent of the 
stock (not including any stock owned by an 
ESOP) of which is owned by one or more 
such veterans. 
‘‘(C)(i) During the time period described in 
clause (ii), a small business concern that was a 
small business concern described in subpara-
graph (A) or (B) immediately prior to the death 
of a service-disabled veteran who was the owner 
of the concern, the death of whom causes the 
concern to be less than 51 percent owned by 
one or more service-disabled veterans, if— 
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‘‘(I) the surviving spouse of the de-
ceased veteran acquires such veteran’s 
ownership interest in such concern; 
‘‘(II) such veteran had a service-con-
nected disability (as defined in section 
101(16) of title 38, United States Code) 
rated as 100-percent disabling under the 
laws administered by the Secretary of Vet-
erans Affairs or such veteran died as a re-
sult of a service-connected disability; and 
‘‘(III) immediately prior to the death 
of such veteran, and during the period de-
scribed in clause (ii), the small business 
concern is included in the database de-
scribed in section 8127(f) of title 38, 
United States Code. 
‘‘(ii) The time period described in this 
clause is the time period beginning on the date 
of the veteran’s death and ending on the earlier 
of— 
‘‘(I) the date on which the surviving 
spouse remarries; 
‘‘(II) the date on which the surviving 
spouse relinquishes an ownership interest 
in the small business concern; or 
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‘‘(III) the date that is 10 years after 
the date of the death of the veteran.’’; and 
(2) by adding at the end the following new 
paragraphs: 
‘‘(6) ESOP.—The term ‘ESOP’ has the mean-
ing given the term ‘employee stock ownership plan’ 
in section 4975(e)(7) of the Internal Revenue Code 
of 1986 (26 U.S.C. 4975(e)(7)). 
‘‘(7) SURVIVING SPOUSE.—The term ‘surviving 
spouse’ has the meaning given such term in section 
101(3) of title 38, United States Code.’’. 
(b) VETERANS AFFAIRS DEFINITION
OF SMALL 
BUSINESS CONCERN CONSOLIDATED.— 
(1) IN
GENERAL.—Section 8127 of title 38, 
United States Code, is amended— 
(A) by striking subsection (h) and redesig-
nating subsections (i) through (l) as subsections 
(h) through (k), respectively; and 
(B) in subsection (k), as so redesignated— 
(i) by amending paragraph (2) to read 
as follows: 
‘‘(2) The term ‘small business concern owned 
and controlled by veterans’ has the meaning given 
that term under section 3(q)(3) of the Small Busi-
ness Act (15 U.S.C. 632(q)(3)).’’; and 
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(ii) by adding at the end the following 
new paragraph: 
‘‘(3) The term ‘small business concern owned 
and controlled by veterans with service-connected 
disabilities’ has the meaning given the term ‘small 
business concern owned and controlled by service- 
disabled veterans’ under section 3(q)(2) of the Small 
Business Act (15 U.S.C. 632(q)(2)).’’. 
(2) CONFORMING AMENDMENTS.—Such section 
is further amended— 
(A) in subsection (b), by inserting ‘‘or a 
small business concern owned and controlled by 
veterans with service-connected disabilities’’ 
after ‘‘a small business concern owned and con-
trolled by veterans’’; 
(B) in subsection (c), by inserting ‘‘or a 
small business concern owned and controlled by 
veterans with service-connected disabilities’’ 
after ‘‘a small business concern owned and con-
trolled by veterans’’; 
(C) in subsection (d) by inserting ‘‘or small 
business concerns owned and controlled by vet-
erans with service-connected disabilities’’ after 
‘‘small business concerns owned and controlled 
by veterans’’ both places it appears; and 
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(D) in subsection (f)(1), by inserting ‘‘, 
small business concerns owned and controlled 
by veterans with service-connected disabilities,’’ 
after ‘‘small business concerns owned and con-
trolled by veterans’’. 
(c) TECHNICAL CORRECTION.—Section 8(d)(3) of the 
Small Business Act (15 U.S.C. 637(d)(3)), is amended by 
adding at the end the following new subparagraph: 
‘‘(H) In this contract, the term ‘small business 
concern owned and controlled by service-disabled 
veterans’ has the meaning given that term in section 
3(q).’’. 
SEC. 3. REGULATIONS RELATING TO DATABASE OF THE 
SECRETARY OF VETERANS AFFAIRS. 
(a) REQUIREMENT TO USE CERTAIN SMALL BUSI-
NESS
ADMINISTRATION
REGULATIONS.—Section 
8127(f)(4) of title 38, United States Code, is amended by 
striking ‘‘verified’’ and inserting ‘‘verified, using regula-
tions issued by the Administrator of the Small Business 
Administration with respect to the status of the concern 
as a small business concern and the ownership and control 
of such concern,’’. 
(b) PROHIBITION ON SECRETARY OF VETERANS AF-
FAIRS ISSUING CERTAIN REGULATIONS.—Section 8127(f) 
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of title 38, United States Code, is amended by adding at 
the end the following new paragraph: 
‘‘(7) The Secretary may not issue regulations related 
to the status of a concern as a small business concern and 
the ownership and control of such small business con-
cern.’’. 
(c) DELAYED EFFECTIVE DATE.—The amendments 
made by this section and section 2 shall take effect on 
the date on which the Administrator of the Small Business 
Administration and the Secretary of Veterans Affairs 
jointly issue regulations implementing such sections. Such 
date shall be not later than 18 months after the date of 
enactment of this Act. 
SEC. 4. APPEALS OF INCLUSION IN DATABASE. 
(a) IN GENERAL.—Section 8127(f) of title 38, United 
States Code, as amended by section 3, is further amended 
by adding at the end the following new paragraph: 
‘‘(8)(A) If the Secretary does not verify a concern for 
inclusion in the database under this subsection based on 
the status of the concern as a small business concern or 
the ownership or control of the concern, the concern may 
appeal the denial of verification to the Office of Hearings 
and Appeals of the Small Business Administration (as es-
tablished under part 134 of title 13, Code of Federal Reg-
ulations, or any successor administrative appellate entity 
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created with the Small Business Administration). The de-
cision of the Office of Hearings and Appeals shall be con-
sidered a final agency action. 
‘‘(B)(i) If an interested party challenges the inclusion 
in the database of a small business concern owned and 
controlled by veterans or a small business concern owned 
and controlled by veterans with service-connected disabil-
ities based on the status of the concern as a small business 
concern or the ownership or control of the concern, the 
challenge shall be heard by the Office of Hearings and 
Appeals of the Small Business Administration as de-
scribed in subparagraph (A). The decision of the Office 
of Hearings and Appeals shall be considered final agency 
action. 
‘‘(ii) In this subparagraph, the term ‘interested party’ 
means— 
‘‘(I) the Secretary; and 
‘‘(II) in the case of a small business concern 
that is awarded a contract, the contracting officer of 
the Department or another small business concern 
that submitted an offer for the contract that was 
awarded to the small business concern that sub-
mitted an offer under clause (i). 
‘‘(C) For each fiscal year, the Secretary shall reim-
burse the Administrator of the Small Business Adminis-
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tration in an amount necessary to cover any cost incurred 
by the Office of Hearings and Appeals of the Small Busi-
ness Administration for actions taken by the Office under 
this paragraph. The amount of any such reimbursement 
shall be determined jointly by the Secretary and the Ad-
ministrator and shall be provided from fees collected by 
the Secretary under multiple-award schedule contracts. 
Any disagreement about the amount shall be resolved by 
the Director of the Office of Management and Budget.’’. 
(b) EFFECTIVE DATE.—Paragraph (8) of subsection 
(f) of title 38, United States Code, as added by subsection 
(a), shall apply with respect to a verification decision made 
by the Secretary of Veterans Affairs on or after the date 
of the enactment of this Act. 
Æ 
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