I 115th CONGRESS 1st Session H. R. 3294 IN THE HOUSE OF REPRESENTATIVES July 19, 2017 Ms. Velázquez (for herself and Mr. Chabot ) introduced the following bill; which was referred to the Committee on Small Business A BILL To amend the Small Business Act to clarify the definitions relating to HUBZones, and for other purposes.

1. Short title This Act may be cited as the HUBZone Unification and Business Stability Act of 2017 . 2. Transfer of HUBZone definitions (a) Redesignation Section 31 of the Small Business Act ( 15 U.S.C. 657a ) is amended by redesignating subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively. (b) Transfer Subsection (p) of section 3 of the Small Business Act ( 15 U.S.C. 632(p) ) is transferred to section 31 of the Small Business Act ( 15 U.S.C. 657a ), inserted so as to appear after subsection (a), and redesignated as subsection (b), and is amended— (1) by striking In this Act: and inserting In this section: ; (2) in paragraph (1)— (A) by striking term and inserting terms ; and (B) by striking means and inserting or HUBZone mean ; and (3) by striking paragraph (2) (and redesignating subsequent paragraphs accordingly). (c) Definition of qualified HUBZone small business concern Section 3 of the Small Business Act ( 15 U.S.C. 632 ), as amended by subsection (a), is further amended by inserting after subsection (o) the following new subsection (p): (p) Qualified HUBZone small business concern In this Act, the term qualified HUBZone small business concern has the meaning given such term in section 31(b). . (d) Conforming amendments (1) Mentor-protege program Section 831(n)(2)(G) of the National Defense Authorization Act for Fiscal Year 1991 ( Public Law 101–510 ; 104 Stat. 1607; 10 U.S.C. 2302 note) is amended by striking section 3(p) of the Small Business Act ( 15 U.S.C. 632(p) ) and inserting section 31(b) of the Small Business Act ( 15 U.S.C. 657a(b) ) . (2) Title 10 Section 2323 of title 10, United States Code, is amended by striking section 3(p) of the Small Business Act each place it appears and inserting section 31(b) of the Small Business Act ( 15 U.S.C. 657a(b) ) . (3) Small Business Act Section 8(d)(3)(G) of the Small Business Act ( 15 U.S.C. 637(d)(3)(G) ) is amended by striking section 3(p) of the Small Business Act and inserting section 31(b) . (4) Comprehensive small business subcontracting plans Section 834 of the National Defense Authorization Act for Fiscal Years 1990 and 1991 ( 15 U.S.C. 637 note) is amended by striking section 3(p)(5) of such Act ( 15 U.S.C. 632(p)(5) ) and inserting section 31(b) of such Act ( 15 U.S.C. 657a(b) ) . (5) Contracts for collection services Section 3718 of title 31, United States Code, is amended by striking section 3(p) of the Small Business Act each place it appears and inserting section 31(b) of the Small Business Act . (6) Title 41 Title 41, United States Code, is amended— (A) in section 1122, by striking section 3(p) of the Small Business Act ( 15 U.S.C. 632(p) ) each place it appears and inserting section 31(b) of the Small Business Act ( 15 U.S.C. 657a(b) ) ; and (B) in section 1713, by striking section 3(p) of the Small Business Act ( 15 U.S.C. 632(p) ) and inserting section 31(b) of the Small Business Act ( 15 U.S.C. 657a(b) ) . (7) Title 49 Title 49, United States Code, is amended— (A) in section 47107, by striking section 3(p) of the Small Business Act each place it appears and inserting section 31(b) of the Small Business Act ( 15 U.S.C. 657a(b) ) ; and (B) in section 47113(a)(3), by striking section 3(p) of the Small Business Act ( 15 U.S.C. 632(o) ) and inserting section 31(b) of the Small Business Act ( 15 U.S.C. 657a(b) ) . 3. Amendments to definitions of qualified census tract and qualified nonmetropolitan county (a) In general Paragraph (3) of section 31(b) of the Small Business Act (as transferred and redesignated by section 2 of this Act) is amended— (1) in subparagraph (A)— (A) by amending clause (i) to read as follows: (i) In general The term qualified census tract means a qualified census tract as defined in section 42(d)(5)(B)(ii) of the Internal Revenue Code of 1986 that is reflected in an online tool prepared by the Administrator described under subsection (d)(7). ; and (B) in clause (ii) by inserting and that is reflected in the online tool described under clause (i) after such section ; and (2) in subparagraph (B)— (A) by inserting and that is reflected in the online tool described under subparagraph (A)(i) after any county ; and (B) in clause (ii)— (i) in subclause (I), by striking nonmetropolitan ; and (ii) by striking the most recent data available each place such term appears and inserting a 5-year average of the available data . (b) Technical amendments Paragraph (3)(B) of section 31(b) of the Small Business Act (as transferred and redesignated by section 2 of this Act), as amended by subsection (a), is further amended— (1) in clause (i), by striking section 42(d)(5)(C)(ii) of the Internal Revenue Code of 1986 and inserting section 42(d)(5)(B)(ii) of the Internal Revenue Code of 1986 ; and (2) in clause (ii)(III), by striking section 42(d)(5)(C)(iii) of the Internal Revenue Code of 1986 and inserting section 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 . 4. Amendments to definitions of base closure area and qualified disaster area Paragraph (3) of section 31(b) of the Small Business Act (as transferred and redesignated by section 2 of this Act), as amended by section 3, is further amended— (1) by amending clause (ii) of subparagraph (D) to read as follows: (ii) Limitation With respect to a base closure area that is a census tract or nonmetropolitan county described in clause (i), such census tract or nonmetropolitan shall be treated as a HUBZone for a period beginning on the date the military installation undergoes final closure and ending on the date the base closure area ceases to be a qualified census tract under subparagraph (A) or a qualified nonmetropolitan county under subparagraph (B) in accordance with the online tool prepared by the Administrator described under subsection (d)(7). ; and (2) by amending subparagraph (E) to read as follows: (E) Qualified disaster area (i) In general Subject to clauses (ii) and (iii), the term qualified disaster area means any census tract or nonmetropolitan county located in a major disaster area or an area in which a catastrophic incident has occurred if such census tract or nonmetropolitan county ceased to be qualified under subparagraph (A) or (B), as applicable, during the period beginning 5 years before the date on which the President declared the major disaster or the catastrophic incident occurred. (ii) Duration A census tract or nonmetropolitan county shall be considered to be a qualified disaster area only for the period of time ending on the date the area ceases to be a qualified census tract under subparagraph (A) or a qualified nonmetropolitan county under subparagraph (B), in accordance with the online tool prepared by the Administrator described under subsection (d)(7) and beginning— (I) in the case of a major disaster declared by the President, on the date the President declared the major disaster for the area in which the census tract or nonmetropolitan county, as applicable, is located; or (II) in the case of a catastrophic incident, on the date on which the catastrophic incident occurred in the area in which the census tract or nonmetropolitan county, as applicable, is located. (iii) Extension With respect to a census tract or nonmetropolitan county that is a qualified disaster area because it is located in an area in which a catastrophic incident occurred, the Administrator may extend the period described in clause (ii) if the Administrator determines that the census tract or nonmetropolitan county has not fully recovered from the catastrophic incident. (iv) Definitions In this subparagraph: (I) Major disaster area The term major disaster area means an area for which the President has declared a major disaster under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5170 ). (II) Other definitions The terms census tract and nonmetropolitan county have the meanings given such terms in subparagraph (D)(iii). . 5. Amendment to definition of redesignated areas Paragraph (3) of section 31(b) of the Small Business Act (as transferred and redesignated by section 2 of this Act), as amended by section 4, is further amended by amending subparagraph (C) to read as follows: (C) Redesignated area The term redesignated area means any census tract that ceases to be qualified under subparagraph (A) and any nonmetropolitan county that ceases to be qualified under subparagraph (B) for a period of 3 years after the date on which the census tract or nonmetropolitan county ceased to be so qualified. . 6. Repeal of 5-year limitation on HUBZone status of base closure areas Section 152(a) of title I of division K of the Consolidated Appropriations Act, 2005 ( 15 U.S.C. 632 note) is amended by repealing paragraph (2). 7. Amendment to definition of qualified HUBZone small business concern Paragraph (4) of section 31(b) of the Small Business Act (as transferred and redesignated by section 2 of this Act) is amended to read as follows: (4) Qualified HUBZone small business concern The term qualified HUBZone small business concern means a HUBZone small business concern that has been certified by the Administrator in accordance with the procedures described in this section. . 8. Amendments to HUBZone Program (a) Clarifications to eligibility for HUBZone Program Section 31(d) of the Small Business Act, as redesignated by section 2, is amended to read as follows: (d) Eligibility requirements; enforcement (1) Certification In order to be certified by the Administrator as a qualified HUBZone small business concern, a HUBZone small business concern shall submit documentation the Administrator stating that— (A) at the time of certification and at each examination conducted pursuant to paragraph (4), the principal office of the concern is located in a HUBZone and not fewer than 35 percent of its employees reside in a HUBZone; (B) the concern will attempt to maintain the applicable employment percentage under subparagraph (A) during the performance of any contract awarded to such concern on the basis of a preference provided under subsection (b); and (C) the concern will ensure that the requirements of section 46 are satisfied with respect to any subcontract entered into by such concern pursuant to a contract awarded under this section. (2) Verification In carrying out this section, the Administrator shall establish procedures relating to— (A) the filing, investigation, and disposition by the Administration of any challenge to the eligibility of a HUBZone small business concern to receive assistance under this section (including a challenge, filed by an interested party, relating to the veracity of documentation provided to the Administration by such a concern under paragraph (1)); and (B) verification by the Administrator of the accuracy of any documentation provided by a HUBZone small business concern under paragraph (1). (3) Timing The Administrator shall complete the verification procedures described in paragraph (2) in a reasonable time, not later than 30 days after the date on which the Administrator receives sufficient and complete documentation from a HUBZone small business concern under paragraph (1). (4) Examinations The Administrator shall conduct program examinations of qualified HUBZone small business concerns, using a risk-based analysis to select such concerns, to ensure that each such concern meets the requirements of paragraph (1). (5) Recertification The Administrator shall verify the accuracy of any documentation provided by a HUBZone small business concern under paragraph (1) to determine if such HUBZone small business concern is a qualified HUBZone small business concern 3 years after the date that such HUBZone small business concern has been certified as a qualified HUBZone small business concern, and every 3 years thereafter. (6) Loss of certification A HUBZone small business concern that, based on the results of an examination conducted pursuant to paragraph (4) no longer meets the requirements of paragraph (1), shall have 30 days to submit documentation to the Administrator to be eligible to be certified as a qualified HUBZone small business concern. During the 30-day period, such concern may not compete for or be awarded a contract under this section. If such concern fails to meet the requirements of paragraph (1) by the last day of the 30-day period, such concern will not be certified as a qualified HUBZone small business concern. (7) HUBZone online tool (A) In general The Administrator shall develop a publicly accessible online tool that depicts HUBZones. Such online tool shall be updated— (i) with respect to qualified areas described under subparagraphs (A) and (B) of subsection (b)(3), beginning on January 1, 2020, and every 5 years thereafter; (ii) with respect to qualified areas described under subsection (b)(3)(C), immediately after an area ceases to be a redesignated area; and (iii) with respect to qualified areas described under subparagraphs (D) and (E) of subsection (b)(3), immediately after an area is designated as a base closure area or a qualified disaster area. (B) Data The online tool required under subparagraph (A) shall clearly and conspicuously provide access to the data used by the Administrator to determine whether or not an area is a qualified area in the year in which the online tool was prepared. (C) Notification of update The Administrator shall include in the online tool a notification of the date on which the online tool, and the data used to create the online tool, will be updated. (8) List of qualified HUBZone small business concerns The Administrator shall establish and maintain on the Internet a list of qualified HUBZone small business concerns that shall— (A) to the extent practicable, include the name, address, and type of business with respect to such concern; (B) be updated by the Administrator not less than annually; and (C) be provided upon request to any Federal agency or other entity. (9) Provision of data Upon the request of the Administrator, the Secretary of Labor, the Administrator of the Federal Emergency Management Agency, the Secretary of Housing and Urban Development, and the Secretary of the Interior (or the Assistant Secretary for Indian Affairs), shall promptly provide to the Administrator such information as the Administrator determines to be necessary to carry out this subsection. (10) Penalties In addition to the penalties described in section 16(d), any small business concern that is determined by the Administrator to have misrepresented the status of that concern as a qualified HUBZone small business concern for purposes of this section, shall be subject to liability for fraud, including section 1001 of title 18, United States Code, and sections 3729 through 3733 of title 31, United States Code. . (b) Performance metrics Section 31 of the Small Business Act ( 15 U.S.C. 657a ) is amended— (1) in subsection (a), by inserting , including promoting economic development in economically distressed areas (as defined in section 7(m)(11)), after assistance ; (2) by redesignating subsection (e) (as redesignated by section 2 of this Act) as subsection (f); and (3) by inserting after subsection (d) the following new subsection: (e) Performance metrics (1) In general Not later than 1 year after enactment of this Act, the Administrator shall publish performance metrics designed to measure the success of the HUBZone program established under this section in meeting the program’s objective of promoting economic development in economically distressed areas (as defined in section 7(m)(11)). (2) Collecting and managing HUBZone data The Administrator shall develop processes to incentivize regional offices of the Administration to collect and manage data on HUBZones within the geographic area served by such regional office. (3) Report Not later than 90 days after the last date of each fiscal year, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report— (A) analyzing the data from the performance metrics; and (B) including the number of HUBZone small business concerns that lost certification as a qualified HUBZone small business concern because of the results of an examination performed under subsection (d)(6), and the number of those concerns that did not submit documentation to be recertified under subsection (d)(7). . (c) Authorization of appropriations Section 31(f) of the Small Business Act, as redesignated by subsection (b), is amended by striking fiscal years 2004 through 2006 and inserting fiscal years 2017 through 2020 . 9. Current qualified HUBZone small business concerns A HUBZone small business concern that was qualified pursuant to section 3(p)(5) of the Small Business Act on or before the date of the enactment of this Act shall continue to be considered as a qualified HUBZone small business concern during the period beginning on the date of the enactment of this Act and ending on the date that the Administrator of the Small Business Administration prepares the online tool depicting qualified areas described under section 31(d)(7) (as added by this Act). 10. Effective date The provisions of this Act shall take effect— (1) with respect to section 9, on the date of the enactment of this Act; and (2) with respect to sections 1 through 8, on January 1, 2020.