I 114th CONGRESS 1st Session H. R. 3945 IN THE HOUSE OF REPRESENTATIVES November 5, 2015 Mr. Coffman (for himself, Mr. Chabot , Mr. Miller of Florida , Ms. Velázquez , Mr. Hanna , Mr. Connolly , and Mr. Moulton ) introduced the following bill; which was referred to the Committee on Veterans’ 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 committee 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.

1. Short title This Act may be cited as the Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2015 . 2. Improving contracting opportunities for certain veteran-owned small businesses (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 follows: (2) Small business concern owned and controlled by service-disabled veterans The term small business concern owned and controlled 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 business operations of which are controlled by one or more service-disabled veterans or, in the case of a veteran with permanent and 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 permanent 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 subparagraph (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— (I) the surviving spouse of the deceased veteran acquires such veteran’s ownership interest in such concern; (II) such veteran had a service-connected 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 Veterans Affairs or such veteran died as a result of a service-connected disability; and (III) immediately prior to the death of such veteran, and during the period described in clause (ii), the small business concern is included in the database described 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 (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 meaning 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 redesignating 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 Business Act ( 15 U.S.C. 632(q)(3) ). ; and (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 controlled 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 controlled by veterans ; (C) in subsection (d) by inserting or small business concerns owned and controlled by veterans with service-connected disabilities after small business concerns owned and controlled by veterans both places it appears; and (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 controlled 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). . 3. Regulations relating to database of the Secretary of Veterans Affairs (a) Requirement To use certain Small Business Administration regulations Section 8127(f)(4) of title 38, United States Code, is amended by striking verified and inserting verified, using regulations 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 Affairs issuing certain regulations Section 8127(f) 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 concern. . (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. 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 established under part 134 of title 13, Code of Federal Regulations, or any successor administrative appellate entity created with the Small Business Administration). The decision of the Office of Hearings and Appeals shall be considered 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 disabilities 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 described 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 submitted an offer under clause (i). (C) For each fiscal year, the Secretary shall reimburse the Administrator of the Small Business Administration in an amount necessary to cover any cost incurred by the Office of Hearings and Appeals of the Small Business 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 Administrator 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.