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115th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                     {      115-939

======================================================================



 
              SMALL BUSINESS RUNWAY EXTENSION ACT OF 2018

                                _______
                                

 September 12, 2018.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Chabot, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 6330]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 6330) to amend the Small Business Act to modify the 
method for prescribing size standards for business concerns, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
   I. Purpose and Bill Summary........................................1
  II. Need for Legislation............................................2
 III. Hearings........................................................7
  IV.  Committee Consideration........................................8
   V.  Committee Votes................................................8
  VI. Section-by-Section of H.R. 6330................................10
 VII. Congressional Budget Office Cost Estimate......................10
VIII. Unfunded Mandates..............................................10
  IX. New Budget Authority, Entitlement Authority, and Tax Expenditur10
   X. Oversight Findings.............................................10
  XI. Statement of Constitutional Authority..........................10
 XII. Congressional Accountability Act...............................10
XIII. Federal Advisory Committee Act Statement.......................11
 XIV. Statement of No Earmarks.......................................11
  XV. Statement of Duplication of Federal Programs...................11
 XVI. Disclosure of Directed Rule Makings............................11
XVII. Performance Goals and Objectives...............................11
XVIII.Changes in Existing Law, Made by the Bill, As Reported.........11


                      I. Purpose and Bill Summary

    The purpose of H.R. 6330, the ``Small Business Runway 
Extension Act of 2018,'' is to help advanced-small contractors 
successfully navigate the middle market as they reach the upper 
limits of their small size standard.
    H.R. 6330 lengthens the time in which the Small Business 
Administration (SBA) measures size through revenue, from the 
average of the past 3 years to the average of the past 5 years. 
This modest modification of SBA's size formula is designed to 
reduce the impact of rapid-growth years which result in spikes 
in revenue that may prematurely eject a small business out of 
their small size standard. This legislation will allow small 
businesses at every level more time to grow and develop their 
competitiveness and infrastructure, before entering the open 
marketplace. The bill will also protect federal investment in 
SBA's small business programs by promoting greater chances of 
success in the middle market for newly-graduated firms, 
resulting in enhanced competition against large prime 
contractors.

                II. Background and Need for Legislation

    H.R. 6330 was introduced by Rep. Steve Knight (R-CA) and 
Rep. Yvette Clarke (D-NY) on July 11, 2018. Background on each 
of these provisions will be provided along with an explanation 
of the need for legislation.

          A. DEFINING A SMALL BUSINESS--WHY IS THIS IMPORTANT?

    Key to understanding the mid-size issue is to first 
understand the definition of a small business and the relevance 
of this definition to federal procurement. Section 3(a)(1) of 
the Small Business Act, 15 U.S.C. 632(a)(1), provides, in 
pertinent part: ``[a] small business concern . . . shall be 
deemed to be one that is independently owned and operated and 
which is not dominant in its field of operation.''\1\ To 
calculate the size of a small business, the SBA is authorized 
to consider number of employees, dollar volume of business,\2\ 
net worth,\3\ net income, other factors, or any combination of 
those factors. In sum, Congress has granted the Administrator 
substantial discretion in calculating the size of a small 
business, provided that the business is independently owned and 
operated and not dominant in its field.
---------------------------------------------------------------------------
    \1\Furthermore, 15 U.S.C. ' 632(a)(2)(A) states that the Small 
Business Administration (SBA) is authorized to ``specify detailed 
definitions or standards by which a business concern may be determined 
to be small for purposes of this Act or any other Act''.
    \2\Current SBA size standards use gross revenue as a measure of 
dollar volume. Nothing in the Act requires reliance on dollar volume 
and other measures could be used.
    \3\The net worth standard is used, for among other purposes, to 
determine eligibility for investments made by small business investment 
companies, loans made pursuant to Title V of the Small Business 
Investment Act of 1958, and for participation in the program 
established by Sec. 8(a) of the Small Business Act.
---------------------------------------------------------------------------
    The SBA size standards are important because they establish 
eligibility for a variety of small business assistance 
programs, including a panoply of government contracting 
programs designed to assist small businesses in obtaining 
federal government contracts. The federal government spends 
trillions of dollars per year,\4\ which includes hundreds of 
billions of dollars spent on products and services.\5\ The 
volume of dollars involved in federal contracting means that 
every firm is looking for a competitive advantage, and the 
small business contracting programs are one way to obtain that 
advantage. In order to diversify the industrial base, create 
jobs, and increase competition, contracting preferences have 
been extended to small business participants in the 8(a) 
Business Development program, the HUBZone program, the Service 
Disabled Veteran-Owned Small Business program, and the Woman-
Owned Small Business Program.\6\
---------------------------------------------------------------------------
    \4\The federal government spent $3.98 trillion in fiscal year 2017. 
USASpending.gov, https://www.usaspending.gov/#/.
    \5\The report states that federal agencies procured approximately 
$438 billion in products and services in fiscal year 2015. GAO, 
Contracting Data Analysis: Assessment of Government-Wide Trends 5 (GAO-
17-244SP) (2017).
    \6\15 U.S.C. Sec. 631(a), 644(a).
---------------------------------------------------------------------------

                 B. THE ``OTHER-THAN-SMALL'' CONUNDRUM

    The federal government recognizes two categories of 
businesses--``small'' and ``other-than small.'' While the SBA 
defines what a ``small'' business is, there is no federal 
definition for ``other-than-small.'' Therefore, this category 
can encompass firms that barely exceed the SBA's small business 
size standards up to the multi-billion dollar household names. 
For example, the upper limit of the SBA's small business size 
standard for information technology (IT) companies\7\ is $27.5 
million. An IT company that barely surpasses that amount, for 
example at $28 million, or even significantly surpassing that 
amount at $200 million, are considered ``other-than-small'' and 
therefore required to compete against each other and the 
dominant IT contractors. Leidos and Lockheed Martin Corp. are 
among the largest IT government contractors and boast an 
average of $6.8 billion in annual revenue each.\8\
---------------------------------------------------------------------------
    \7\NAICS code 541519, ``Other Computer Related Services'' is an 
often used industry code for IT services. Small Bus. Admin., https://
www.sba.gov/sites/default/files/files/Size--Standards--Table.pdf.
    \8\Washington Tech., https://washingtontechnology.com/toplists/top-
100-lists/2017.aspx.
---------------------------------------------------------------------------
    This creates a dilemma for newly-graduated firms--they no 
longer qualify for small business contracts and no longer 
eligible for SBA assistance, yet must compete in the open 
market against these titans of industry. In many cases, firms 
caught in this circumstance face difficult choices. They may 
choose to sell, often at a devalued rate than they had 
previously held as a small company due to the loss of that 
small size status.\9\ If these businesses are not acquired and 
subsumed into the supply chain of larger companies, they may 
choose to modify their business model, focusing on 
subcontracting opportunities with other small or large 
companies.\10\ This path negates the firm's ability to gain 
critical project management skills needed to continue 
growth.\11\ Finally, they may fail or deliberately choose to 
impede their own success so that they may remain small and 
eligible for small business set-aside contracts.\12\
---------------------------------------------------------------------------
    \9\Leaving the Nest: Challenges Facing Advanced Small Businesses: 
Roundtable Before the H. Comm. on Small Bus., 115th Cong. (2018) 
(statement of multiple roundtable participants), on file with the 
Committee.
    \10\Tonya Saunders, The mid-tier paradox: too small to compete, too 
large to survive, Bloomberg Gov. (May 13, 2016), https://
about.bgov.com/blog/the-mid-tier-paradox-too-small-to-compete-too-
large-to-survive/.
    \11\Id.
    \12\Supra note 9.
---------------------------------------------------------------------------

                C. CHALLENGES FACING MID-SIZE BUSINESSES

    While there are businesses that have successfully 
maintained their mid-size status, many firms venturing into the 
middle market face a heavily uncertain future and many threats 
to success. The Committee on Small Business examined a number 
of these challenges during a roundtable held on November 14, 
2018\13\ which are discussed, in brief, in this memorandum.
---------------------------------------------------------------------------
    \13\SupraT1K note 9.
---------------------------------------------------------------------------

a. Lack of empirical data examining the failure or success rate of 
        small businesses exceeding their small size

    Because there is no federally-recognized definition of 
``mid-size,'' there is a lack of empirical data tracking the 
trajectory of small firms as they exceed their size 
standard.\14\ As such, potentially critical economic indicators 
remain uncaptured, such as: the success or failure rate of 
small businesses that grow out of their small status, the 
number of jobs created by growing small firms, industries that 
promote or inhibit middle-market growth, and many other 
factors.
---------------------------------------------------------------------------
    \14\David J. Berteau, Challenges Facing Advanced Small Businesses, 
Prof. Services Council (Dec. 14, 2017), https://www.pscouncil.org/a/
Content/2017/Challenges_Facing_Advanced_
Small_Businesses.aspx.
---------------------------------------------------------------------------
    Ultimately, this lack of data limits Congressional insight 
into how effective SBA's contracting programs are in meeting 
national economic policies geared towards encouraging small 
business growth and job creation.\15\ Certain metrics that may 
be helpful to track, specifically regarding evaluating the 
impact of SBA's contracting programs, may include: the success 
rate of newly-graduated firms competing in the open market, 
firms that deliberately scale back down to the small size 
standard, firms that merge or become acquired, and other 
metrics.
---------------------------------------------------------------------------
    \15\Id.
---------------------------------------------------------------------------

b. Newly-graduated small businesses are less able to compete against 
        dominate large companies

    The ``other-than-small'' category includes firms that have 
just graduated out of their small business size by mere 
dollars, through the entire middle-market spectrum, to also 
include the large, billion-dollar companies. These large 
companies have several competitive advantages over small and 
mid-size firms, making true competition illusory. For instance, 
large companies have vast past performance qualifications, 
strong brand-name recognition and agency ties, as well as a 
multitude of professional certifications, clearances, and 
greater financial resources.\16\ Small and mid-size businesses 
cannot afford to maintain these resources, leaving them at a 
considerable disadvantage. These advantages by large firms can 
have a chilling effect, potentially freezing out emerging 
advanced-small companies.\17\ While larger mid-size firms have 
a stronger foothold in the middle market, they still have 
limited bid and proposal budgets and many do not have 
specialized teams dedicated to business development or 
communications and marketing.\18\ Large companies have a solid 
infrastructure and can afford teams of personnel dedicated to 
proposal development, graphic design, protests, pipeline 
development, legal teams, and other specializations.\19\
---------------------------------------------------------------------------
    \16\Supra note 10.
    \17\Id.
    \18\Bloomberg Gov., The Mid-Tier Paradox: Too Small to Compete, Too 
Large to Survive? 4 (2016).
    \19\Id.
---------------------------------------------------------------------------
    Additionally, large businesses, which once competed 
primarily for large, high-dollar contracts, are now 
increasingly competing for contracts across the spectrum, 
including those contracts that are most suitable for mid-sized 
and advanced-small businesses.\20\ This puts additional 
pressure on mid-size firms, particularly those emergent, 
advanced-small businesses.
---------------------------------------------------------------------------
    \20\Mark Amtower, Be prepared: GWACS, IDIQs will grow in this age 
of uncertainty, Wash. Technology (Mar. 16, 2017), https://
washingtontechnology.com/articles/2017/03/16/insights-amtower-gwac-
idiq-advice.aspx.
---------------------------------------------------------------------------

c. Going from small to other-than-small triggers certain requirements

    As contracts grow in scope and size, one large contract 
(i.e., a high-dollar value set-aside contract) won by a small 
company could catapult that firm out of its small size status. 
This growth out of the small size triggers certain requirements 
that other-than-small firms must comply with, that small firms 
are exempt from. For example, other-than-small firms must 
develop detailed subcontracting plans;\21\ however, small 
businesses are exempt from this requirement. Thus, a small firm 
that saw a spike in revenue due to winning a large contract may 
not have the infrastructure and business processes prepared and 
in place to take on a whole host of new requirements. This may 
result in small business struggling to stay viable in the open 
market and may be one of the contributing factors to the 
constant shuffling between small/other-than-small status that 
is evident between the upper levels of the small size bracket, 
and the lower levels of the mid-tier bracket.\22\
---------------------------------------------------------------------------
    \21\15 USC Sec. 637(d)(4) and (6).
    \22\Supra note 9.
---------------------------------------------------------------------------

d. The federal procurement landscape creates inherent challenges to 
        growth

    Due to evolving federal procurement practices, small and 
mid-tier companies are facing a more uncertain climate. One of 
the challenges small and mid-size firms face is a shrinking 
federal market. As budgets have shrunk,\23\ the use of contract 
consolidation and bundling has risen--this is a procurement 
strategy that combines several separate, smaller contracts into 
one unnecessarily large and complex contract, increasing the 
size and scope of the contract.\24\ These contracts become 
prohibitive to small or mid-size businesses, and are suitable 
mostly for larger companies. This disadvantages emergent, newly 
graduated firms and smaller mid-size firms from competing on 
these contracts which are now too complex to suit their 
internal capabilities. The Federal Strategic Sourcing 
Initiative (FSSI), Category Management, and other executive 
branch initiatives continue to promote bundling and 
consolidation.\25\
---------------------------------------------------------------------------
    \23\The federal government has reported decreased spending yearly 
from fiscal year 2011 to fiscal year 2016. National Contract Management 
Association & Deltek, Annual Review of Government Contracting 2016 7 
(2017).
    \24\The Committee has a long history of oversight with respect to 
contract bundling and consolidation, as well as the initiatives used to 
employ these strategies, e.g., FSSI and Category Management. Further 
explanation is outside of the scope of this report. Contracting and the 
Industrial Base II: Bundling, Goaling, and the Office of Hearings and 
Appeals: Hearing Before the Subcomm. on Contracting and Workforce of 
the H. Comm. on Small Bus., 114th Cong. (2015).
    \25\Id.
---------------------------------------------------------------------------
    Additionally, large, government-wide contract vehicles and 
indefinite-delivery, indefinite-quantity contracts have 
experienced significant growth in utilization the past several 
years.\26\ Those small and mid-size businesses fortunate enough 
to have been awarded a spot on these highly-competitive, long-
term contracts may still be locked out of key markets or forced 
to subcontract by large multiple-award contracts that require 
overly extensive past performance requirements, such as Alliant 
and OASIS.\27\ The increasing use of strict past performance 
quantification as an evaluation tool hinders small mid-tier 
companies from competing as prime vendors, essentially blocking 
them out of critical growth markets for years.\28\
---------------------------------------------------------------------------
    \26\Supra note 20.
    \27\Description of these MACs and IDIQs such as Alliant are beyond 
the scope of this memorandum. Bloomberg Gov., The Mid-Tier Paradox: 
2018 Company Report 6 (2018).
    \28\Id. at 6, 11.
---------------------------------------------------------------------------
    Furthermore, due to budget constraints and other 
interagency pressures, contracting officers are increasingly 
expecting vendors to be able to do more with less, and in the 
face of uncertainty, the government tends to be risk-averse, 
preferring to contract with large, established contractors over 
small and mid-tier companies. Because of these and other 
changes in the procurement landscape, the diversity of 
contractors has drastically declined,\29\ further limiting the 
choices contracting officers have. In sum, the shrinking 
federal market, increased use of large, government-wide 
contracting vehicles, and increasing use of strict past 
performance qualifications on these contracting vehicles limits 
the government's opportunity to realize a return on its 
investment in emergent small firms and mid-size businesses.
---------------------------------------------------------------------------
    \29\Section 809 Panel, Report of the Advisory Panel on Streamlining 
and Codifying Acquisition Regulations 171 (1 vol. 2018).
---------------------------------------------------------------------------

D. POTENTIAL LEGISLATION EXTENDING DEFINITION OF A SMALL BUSINESS: PROS 
                                AND CONS

    The Committee engaged stakeholders in identifying potential 
legislation that may assist advanced-small businesses 
transitioning into the middle market. Proponents believe that 
the size standards the SBA sets for certain industries may fail 
to encompass many firms that are small according to statute, 
i.e., independently owned and not dominant in its field. Thus, 
the suggestion was raised to amend the Small Business Act to 
provide a longer time period for which a business may be 
qualified as small, arguing that this will improve the health 
of the industrial base, increase competition resulting in lower 
prices, and create and preserve jobs.

a. Industrial base

    Proponents argue that mid-size firms are failing, as small 
firms that outgrow the size standards either go out of business 
or are acquired by large firms. An earlier study by Bloomberg 
Government, examining data from fiscal years 2012-16, predicted 
a dire outlook with weaker mid-size prospects, finding that 
``average annual prime contract revenue for this segment of the 
federal market has declined substantially . . . midsize 
contractors are losing market share year after year . . . 
pressures from both large and small companies have squeezed the 
mid-tier market share, and this trend doesn't show signs of 
slowing down in the long-term future.''\30\
---------------------------------------------------------------------------
    \30\Bloomberg Gov., The Mid-Tier Challenge 2 (2017).
---------------------------------------------------------------------------

b. Competition and price

    Proponents further argue that an increase in mid-size 
business presence in the market will increase competition 
against the larger competitors, thereby decreasing price. Given 
the trend towards increased use of larger, consolidated, multi-
award contracts and the decline of small businesses willing to 
work with the federal government as described earlier in this 
memorandum, there is a concern that contracts will become 
increasingly available for the largest contractors and less so 
for smaller contractors. A strong middle market consisting of 
emergent, newly-graduated firms up to larger mid-size companies 
might increase competition against the biggest federal 
contractors and could indeed bring down prices.

c. Creation/preservation of jobs

    When mid-size businesses are acquired by large firms, the 
large firm normally sheds the administrative side of the 
businesses--the human resources, accounting, marketing, legal, 
and other functions which are often duplicated at the acquiring 
company's office. Thus, these jobs are lost. Proponents argue 
that maintaining and growing these businesses would preserve 
these jobs. Further, they argue that if the mid-size business 
continues to grow, it will also continue to add jobs, pointing 
out that these firms are credited with high job creation.\31\
---------------------------------------------------------------------------
    \31\For example, the National Center for the Middle Market found 
that five years of middle-market data show that the middle market 
produces jobs 1.5 to 2 times faster than either big or small 
businesses, producing 3 out of 5 net new private-sector jobs. Michael 
Evans, Job Creation in the New Political Economy: Small Companies, Not 
Big Companies, Create Jobs, Forbes (Feb. 8, 2017), https://
www.forbes.com/sites/allbusiness/2017/02/08/job-creation-in-the-new-
political-economy-small-companies-not-big-companies-create-jobs/
#82a24949e6ec.
---------------------------------------------------------------------------

d. Inhibiting growth of small businesses

    Proponents of legislation extending the period of time a 
business can be considered small argue that a longer 
transitional period would benefit small firms who experience 
sudden, rapid growth in revenue, typically by winning a large 
contract or task order. A change in the calculation of size 
would help these firms sustain revenue levels under the small 
size threshold, allowing them the ability to develop their 
business plan and infrastructure to transition to mid-size more 
successfully, because of the increased lead-time.

                             III. Hearings

    In the 115th Congress, the Committee held one hearing 
examining the issues covered in H.R. 6330. On April 26, 2018, 
the Committee on Small Business Subcommittee on Contracting and 
Workforce met for a hearing titled ``No Man's Land: Middle-
Market Challenges for Small Business Graduates.'' This hearing 
examined the challenges to growth and success for businesses as 
they approach the upper limits of their small size standard. 
Witnesses included a subject matter expert representing the 
Montgomery County Chamber of Commerce, two advanced-small 
business owners, and a representative of the Federal 
Procurement Information Technology Alliance for Public Sector 
(ITAPS) Information Technology Industry Council.

                      IV. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on July 18, 2018 and ordered H.R. 6330 
favorably reported to the House. During the markup, no 
amendments were offered.

                           V. Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report legislation and amendments 
thereto. The Committee voted by voice vote to favorably report 
H.R. 6330 to the House at 11:31 am.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

              VI. Section-by-Section Analysis of H.R. 6330


Section 1. Short title

    This section designates the bill as the ``Small Business 
Runway Extension Act of 2018.''

Section 2. Modification to method for prescribing size standards for 
        business concerns

    This section amends Section 15 of the Small Business Act by 
changing the size determination of a small business concern 
based on the annual average gross receipts of the small 
business concern over the past 3 years, to the past 5 years.

             VII. Congressional Budget Office Cost Estimate

    At the time H.R. 6330 was reported to the House, the 
Congressional Budget Office had not provided a cost estimate.

                        VIII. Unfunded Mandates

    H.R. 6330 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act, Public 
Law No. 104-4, and would impose no costs on state, local, or 
tribal governments.

 IX. New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House, the Committee provides the following opinion and 
estimate with respect to new budget authority, entitlement 
authority, and tax expenditures. While the Committee has not 
received an estimate of new budget authority contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to 402 of the Congressional Budget Act 
of 1974, the Committee does not believe that there will be any 
additional costs attributable to this legislation. H.R. 6330 
does not direct new spending, but instead reallocates funding 
independently authorized and appropriated.

                         X. Oversight Findings

    In accordance with clause 2(b)(1) of rule X of the Rules of 
the House, the oversight findings and recommendations of the 
Committee on Small Business with respect to the subject matter 
contained in H.R. 6330 are incorporated into the descriptive 
portions of this report.

               XI. Statement of Constitutional Authority

    Pursuant to clause 7 of rule XII of the Rules of the House, 
the Committee finds that the authority for this legislation in 
Art. I, 8, cl.1.

                 XII. Congressional Accountability Act

    H.R. 6330 does not relate to the terms and conditions of 
employment or access to public services or accommodations 
within the meaning of 102(b)(3) of Public Law No. 104-1.

             XIII. Federal Advisory Committee Act Statement

    H.R. 6330 does not establish or authorize the establishment 
of any new advisory committees as that term is defined in the 
Federal Advisory Committee Act, 5 U.S.C. App.2.

                     XIV. Statement of No Earmarks

    Pursuant to clause 9 of rule XXI, H.R. 6330 does not 
contain any congressional earmarks, limited tax benefits, or 
limited tariff benefits as defined in subsections (d), (e), or 
(f) of clause 9 of Rule XXI of the Rules of the House.

            XV. Statement of Duplication of Federal Programs

    Pursuant to clause 3 of the rule XIII of the Rules of the 
House, no provision of H.R. 6330 establishes or reauthorizes a 
program of the federal government known to be duplicative of 
another federal program, a program that was included in any 
report from the United States Government Accountability Office 
pursuant to 21 of Pub. L. No. 111-139, or a program related to 
a program identified in the most recent catalog of federal 
domestic assistance.

                XVI. Disclosure of Directed Rulemakings

    Pursuant to clause 3 of the rule XIII of the Rules of the 
House, H.R. 6330 does not direct any rulemaking.

                 XVII. Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
          H.R. 6330 extends the time in which a business can be 
        considered small as measured by SBA's size standard by 
        modifying the calculation used to determine size. The 
        objective is to allow the small firm additional time to 
        build its competitiveness in order to succeed once it 
        exceeds its small size and must enter the open 
        marketplace, competing against much larger firms.

      XVIII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause (E) of rule XIII of the rules of 
the House, changes in existing law made by the bill, as 
reported, are shown as follows: existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                           SMALL BUSINESS ACT



           *       *       *       *       *       *       *
SEC. 3. DEFINITIONS.

  (a) Small Business Concerns.--
          (1) In general.--For the purposes of this Act, a 
        small-business concern, including but not limited to 
        enterprises that are engaged in the business of 
        production of food and fiber, ranching and raising of 
        livestock, aquaculture, and all other farming and 
        agricultural related industries, shall be deemed to be 
        one which is independently owned and operated and which 
        is not dominant in its field of operation.
          (2) Establishment of size standards.--
                  (A) In general.--In addition to the criteria 
                specified in paragraph (1), the Administrator 
                may specify detailed definitions or standards 
                by which a business concern may be determined 
                to be a small business concern for the purposes 
                of this Act or any other Act.
                  (B) Additional criteria.--The standards 
                described in paragraph (1) may utilize number 
                of employees, dollar volume of business, net 
                worth, net income, a combination thereof, or 
                other appropriate factors.
                  (C) Requirements.--Unless specifically 
                authorized by statute, no Federal department or 
                agency may prescribe a size standard for 
                categorizing a business concern as a small 
                business concern, unless such proposed size 
                standard--
                          (i) is proposed after an opportunity 
                        for public notice and comment;
                          (ii) provides for determining--
                                  (I) the size of a 
                                manufacturing concern as 
                                measured by the manufacturing 
                                concern's average employment 
                                based upon employment during 
                                each of the manufacturing 
                                concern's pay periods for the 
                                preceding 12 months;
                                  (II) the size of a business 
                                concern providing services on 
                                the basis of the annual average 
                                gross receipts of the business 
                                concern over a period of not 
                                less than [3 years] 5 years;
                                  (III) the size of other 
                                business concerns on the basis 
                                of data over a period of not 
                                less than 3 years; or
                                  (IV) other appropriate 
                                factors; and
                          (iii) is approved by the 
                        Administrator.
          (3) Variation by industry and consideration of other 
        factors.--When establishing or approving any size 
        standard pursuant to paragraph (2), the Administrator 
        shall ensure that the size standard varies from 
        industry to industry to the extent necessary to reflect 
        the differing characteristics of the various industries 
        and consider other factors deemed to be relevant by the 
        Administrator.
          (4) Exclusion of certain security expenses from 
        consideration for purpose of small business size 
        standards.--
                  (A) Determination required.--Not later than 
                30 days after the date of enactment of this 
                paragraph, the Administrator shall review the 
                application of size standards established 
                pursuant to paragraph (2) to small business 
                concerns that are performing contracts in 
                qualified areas and determine whether it would 
                be fair and appropriate to exclude from 
                consideration in the average annual gross 
                receipts of such small business concerns any 
                payments made to such small business concerns 
                by Federal agencies to reimburse such small 
                business concerns for the cost of subcontracts 
                entered for the sole purpose of providing 
                security services in a qualified area.
                  (B) Action required.--Not later than 60 days 
                after the date of enactment of this paragraph, 
                the Administrator shall either--
                          (i) initiate an adjustment to the 
                        size standards, as described in 
                        subparagraph (A), if the Administrator 
                        determines that such an adjustment 
                        would be fair and appropriate; or
                          (ii) provide a report to the 
                        Committee on Small Business and 
                        Entrepreneurship of the Senate and the 
                        Committee on Small Business of the 
                        House of Representatives explaining in 
                        detail the basis for the determination 
                        by the Administrator that such an 
                        adjustment would not be fair and 
                        appropriate.
                  (C) Qualified areas.--In this paragraph, the 
                term ``qualified area'' means--
                          (i) Iraq,
                          (ii) Afghanistan, and
                          (iii) any foreign country which 
                        included a combat zone, as that term is 
                        defined in section 112(c)(2) of the 
                        Internal Revenue Code of 1986, at the 
                        time of performance of the relevant 
                        Federal contract or subcontract.
          (5) Alternative Size Standard.--
                  (A) In general.--The Administrator shall 
                establish an alternative size standard for 
                applicants for business loans under section 
                7(a) and applicants for development company 
                loans under title V of the Small Business 
                Investment Act of 1958 (15 U.S.C. 695 et seq.), 
                that uses maximum tangible net worth and 
                average net income as an alternative to the use 
                of industry standards.
                  (B) Interim rule.--Until the date on which 
                the alternative size standard established under 
                subparagraph (A) is in effect, an applicant for 
                a business loan under section 7(a) or an 
                applicant for a development company loan under 
                title V of the Small Business Investment Act of 
                1958 may be eligible for such a loan if--
                          (i) the maximum tangible net worth of 
                        the applicant is not more than 
                        $15,000,000; and
                          (ii) the average net income after 
                        Federal income taxes (excluding any 
                        carry-over losses) of the applicant for 
                        the 2 full fiscal years before the date 
                        of the application is not more than 
                        $5,000,000.
          (6) Proposed rulemaking.--In conducting rulemaking to 
        revise, modify or establish size standards pursuant to 
        this section, the Administrator shall consider, and 
        address, and make publicly available as part of the 
        notice of proposed rulemaking and notice of final rule 
        each of the following:
                  (A) a detailed description of the industry 
                for which the new size standard is proposed;
                  (B) an analysis of the competitive 
                environment for that industry;
                  (C) the approach the Administrator used to 
                develop the proposed standard including the 
                source of all data used to develop the proposed 
                rule making; and
                  (D) the anticipated effect of the proposed 
                rulemaking on the industry, including the 
                number of concerns not currently considered 
                small that would be considered small under the 
                proposed rule making and the number of concerns 
                currently considered small that would be deemed 
                other than small under the proposed rulemaking.
          (7) Common size standards.--In carrying out this 
        subsection, the Administrator may establish or approve 
        a single size standard for a grouping of 4-digit North 
        American Industry Classification System codes only if 
        the Administrator makes publicly available, not later 
        than the date on which such size standard is 
        established or approved, a justification demonstrating 
        that such size standard is appropriate for each 
        individual industry classification included in the 
        grouping.
          (8) Number of size standards.--The Administrator 
        shall not limit the number of size standards 
        established pursuant to paragraph (2), and shall assign 
        the appropriate size standard to each North American 
        Industry Classification System Code.
          (9) Petitions for reconsideration of size 
        standards.--
                  (A) In general.--A person may file a petition 
                for reconsideration with the Office of Hearings 
                and Appeals (as established under section 5(i)) 
                of a size standard revised, modified, or 
                established by the Administrator pursuant to 
                this subsection.
                  (B) Time limit.--A person filing a petition 
                for reconsideration described in subparagraph 
                (A) shall file such petition not later than 30 
                days after the publication in the Federal 
                Register of the notice of final rule to revise, 
                modify, or establish size standards described 
                in paragraph (6).
                  (C) Process for agency review.--The Office of 
                Hearings and Appeals shall use the same process 
                it uses to decide challenges to the size of a 
                small business concern to decide a petition for 
                review pursuant to this paragraph.
                  (D) Judicial review.--The publication of a 
                final rule in the Federal Register described in 
                subparagraph (B) shall be considered final 
                agency action for purposes of seeking judicial 
                review. Filing a petition for reconsideration 
                under subparagraph (A) shall not be a condition 
                precedent to judicial review of any such size 
                standard.
                  (E) Rules or guidance.--The Office of 
                Hearings and Appeals shall begin accepting 
                petitions for reconsideration described in 
                subparagraph (A) after the date on which the 
                Administration issues a rule or other guidance 
                implementing this paragraph. Notwithstanding 
                the provisions of subparagraph (B), petitions 
                for reconsideration of size standards revised, 
                modified, or established in a Federal Register 
                final rule published between November 25, 2015, 
                and the effective date of such rule or other 
                guidance shall be considered timely if filed 
                within 30 days of such effective date.
  (b) For purposes of this Act, any reference to an agency or 
department of the United States, and the term ``Federal 
agency,'' shall have the meaning given the term ``agency'' by 
section 551(1) of title 5, United States Code, but does not 
include the United States Postal Service or the General 
Accounting Office.
  (c)(1) For purposes of this Act, a qualified employee trust 
shall be eligible for any loan guarantee under section 7(a) 
with respect to a small business concern on the same basis as 
if such trust were the same legal entity as such concern.
  (2) For purposes of this Act, the term ``qualified employee 
trust'' means, with respect to a small business concern, a 
trust--
          (A) which forms part of an employee stock ownership 
        plan (as defined in section 4975(e)(7) of the Internal 
        Revenue Code of 1954)--
                  (i) which is maintained by such concern, and
                  (ii) which provides that each participant in 
                the plan is entitle to direct the plan as to 
                the manner in which voting rights under 
                qualifying employer securities (as defined in 
                section 4975(e)(8) of such Code) which are 
                allocated to the account of such participant 
                are to be exercised with respect to a corporate 
                matter which (by law or charter) must be 
                decided by a majority vote of outstanding 
                common shares voted; and
          (B) in the case of any loan guarantee under section 
        7(a), the trustee of which enters into an agreement 
        with the Administrator of which enters into an 
        agreement with the Administrator which is binding on 
        the trust and no such small business concern and which 
        provides that--
                  (i) the loan guaranteed under section 7(a) 
                shall be used solely for the purchase of 
                qualifying employer securities of such concern.
                  (ii) all funds acquired by the concern in 
                such purchase shall be used by such concern 
                solely for the purposes for which such loan was 
                guaranteed,
                  (iii) such concern will provide such funds as 
                may be necessary for the timely repayment of 
                such loan, and the property of such concern 
                shall be available as security for repayment of 
                such loan, and
                  (iv) all qualifying employer securities 
                acquired by such trust in such purchase shall 
                be allocated to the accounts of participants in 
                such plan who are entitled to share in such 
                allocation, and each participant has a 
                nonforfeitable right, not later than the date 
                such loan is repaid, to all such qualifying 
                employer securities which are so allocated to 
                the participant's account.
  (3) Under regulations which may be prescribed by the 
Administrator, a trust may be treated as a qualified employee 
trust with respect to a small business concern if--
          (A) the trust is maintained by an employee 
        organization which represents at least 51 percent of 
        the employee of such concern, and
          (B) such concern maintains a plan--
                  (i) which is an employee benefit plan which 
                is designed to invest primarily in qualifying 
                employer securities (as defined in section 
                4975(e)(8) of the Internal Revenue Code of 
                1954).
                  (ii) which provides that each participant in 
                the plan is entitled to direct the plan as to 
                the manner in which voting rights under 
                qualifying employer securities which are 
                allocated to the account of such participant 
                are to be exercised with respect to a corporate 
                matter which (by law or charter) must be 
                decided by a majority vote of the outstanding 
                common shares voted,
                  (iii) which provides that each participant 
                who is entitled to distribution from the plan 
                has a right, in the case of qualifying employer 
                securities which are not readily tradable on an 
                established market, to require that the concern 
                repurchase such securities under a fair 
                valuation formula, and
                  (iv) which meets such other requirements 
                (similar to requirements applicable to employee 
                ownership plans as defined in section 
                4975(e)(7) of the Internal Revenue Code of 
                1954) as the Administrator may prescribe, and
          (C) in the case of a loan guarantee under section 
        7(a), such organization enters into an agreement with 
        the Administration which is described in paragraph 
        (2)(B).
  (d) For purposes of section 7 of this Act, the term 
``qualified Indian tribe'' means an Indian tribe as defined in 
section 4(a) of the Indian Self-Determination and Education 
Assistance Act, which owns and controls 100 per centum of a 
small business concern.
  (e) For purposes of section 7 of this Act, the term ``public 
or private organization for the handicapped'' means one--
          (1) which is organized under the laws of the United 
        States or of any State, operated in the interest of 
        handicapped individuals, the net income of which does 
        not insure in whole or in part to the benefit of any 
        shareholder or other individual;
          (2) which complies with any applicable occupational 
        health and safety standard prescribed by the Secretary 
        of Labor; and
          (3) which, in the production of commodities and in 
        the provision of services during any fiscal year in 
        which it received financial assistance under this 
        subsection, employs handicapped individuals for not 
        less than 75 per centum of the man-hours required for 
        the production or provision of the commodities or 
        services.
  (f) For purposes of section 7 of this Act, the term 
``handicapped individual'' means an individual--
          (1) who has a physical, mental, or emotional 
        impairment, defect, ailment, disease, or disability of 
        a permanent nature which in any way limits the 
        selection of any type of employment for which the 
        person would otherwise be qualified or qualifiable; or
          (2) who is a service-disabled veteran.
  (g) For purposes of section 7 of this Act, the term ``energy 
measures'' includes--
          (1) solar thermal energy equipment which is either of 
        the active type based upon mechanically forced energy 
        transfer or of the passive type based on convective, 
        conductive, or radiant energy transfer or some 
        combination equipment;
          (2) photovoltaic cells and related equipment;
          (3) a product or service the primary purpose of which 
        is conservation of energy through devices or techniques 
        which increase the energy through devices or techniques 
        which increase the energy efficiency of existing 
        equipment, methods of operation, or systems which use 
        fossil fuels, and which is on the Energy Conservation 
        Measures list of the Secretary of Energy or which the 
        Administrator determines to be consistent with the 
        intent of this subsection;
          (4) equipment the primary purpose of which is 
        production of energy from wood, biological waste, 
        grain, or other biomass source of energy;
          (5) equipment the primary purpose of which is 
        industrial cogeneration of energy, district heating, or 
        production of energy from industrial waste;
          (6) hydroelectric power equipment;
          (7) wind energy conversion equipment; and
          (8) engineering, architectural, consulting, or other 
        professional services which are necessary or 
        appropriate to aid citizens in using any of the 
        measures described in paragraph (1) through (7).
  (h) The term ``credit elsewhere'' means--
          (1) for the purposes of this Act (except as used in 
        section 7(b)), the availability of credit on reasonable 
        terms and conditions to the individual loan applicant 
        from non-Federal, non-State, or non-local government 
        sources, considering factors associated with 
        conventional lending practices, including--
                  (A) the business industry in which the loan 
                applicant operates;
                  (B) whether the loan applicant is an 
                enterprise that has been in operation for a 
                period of not more than 2 years;
                  (C) the adequacy of the collateral available 
                to secure the requested loan;
                  (D) the loan term necessary to reasonably 
                assure the ability of the loan applicant to 
                repay the debt from the actual or projected 
                cash flow of the business; and
                  (E) any other factor relating to the 
                particular credit application, as documented in 
                detail by the lender, that cannot be overcome 
                except through obtaining a Federal loan 
                guarantee under prudent lending standards; and
          (2) for the purposes of section 7(b), the 
        availability of credit on reasonable terms and 
        conditions from non-Federal sources taking into 
        consideration the prevailing rates and terms in the 
        community in or near where the applicant business 
        concern transacts business, or the applicant homeowner 
        resides, for similar purposes and periods of time.
  (i) For purposes of section 7 of this Act, the term 
``homeowners'' includes owners and lessees of residential 
property and also includes personal property.
  (j) For the purposes of this Act, the term ``small 
agricultural cooperative'' means an association (corporate or 
otherwise) acting pursuant to the provisions of the 
Agricultural Marketing Act (12 U.S.C. 1141j), whose size does 
not exceed the size standard established by the Administration 
for other similar agricultural small business concerns. In 
determining such size, the Administration shall regard the 
association as a business concern and shall not include the 
income or employees of any member shareholder of such 
cooperative.
  (k)(1) For the purposes of this Act, the term ``disaster'' 
means a sudden event which causes severe damage including, but 
not limited to, floods, hurricanes, tornadoes, earthquakes, 
fires, explosions, volcanoes, windstorms, landslides or 
mudslides, tidal waves, commercial fishery failures or fishery 
resource disasters (as determined by the Secretary of Commerce 
under section 308(b) of the Interjurisdictional Fisheries Act 
of 1986), ocean conditions resulting in the closure of 
customary fishing waters, riots, civil disorders or other 
catastrophes, except it does not include economic dislocations.
  (2) For purposes of section 7(b)(2), the term ``disaster'' 
includes--
          (A) drought;
          (B) below average water levels in the Great Lakes, or 
        on any body of water in the United States that supports 
        commerce by small business concerns; and
          (C) ice storms and blizzards.
  (l) For purposes of this Act--
          (1) the term ``computer crime'' means''--
                  (A) any crime committed against a small 
                business concern by means of the use of a 
                computer; and
                  (B) any crime involving the illegal use of, 
                or tampering with, a computer owned or utilized 
                by a small business concern.
  (m) Definitions Relating to Contracting.--In this Act:
          (1) Prime contract.--The term ``prime contract'' has 
        the meaning given such term in section 8701(4) of title 
        41, United States Code.
          (2) Prime contractor.--The term ``prime contractor'' 
        has the meaning given such term in section 8701(5) of 
        title 41, United States Code.
          (3) Simplified acquisition threshold.--The term 
        ``simplified acquisition threshold'' has the meaning 
        given such term in section 134 of title 41, United 
        States Code.
          (4) Micro-purchase threshold.--The term ``micro-
        purchase threshold'' has the meaning given such term in 
        section 1902 of title 41, United States Code.
          (5) Total purchases and contracts for property and 
        services.--The term ``total purchases and contracts for 
        property and services'' shall mean total number and 
        total dollar amount of contracts and orders for 
        property and services.
  (n) For the purposes of this Act, a small business concern is 
a small business concern owned and controlled by women if--
          (1) at least 51 percent of small business concern is 
        owned by one or more women or, in the case of any 
        publicly owned business, at least 51 percent of the 
        stock of which is owned by one or more women; and
          (2) the management and daily business operations of 
        the business are controlled by one or more women.
  (o) Definitions of Bundling of Contract Requirements and 
Related Terms.--In this Act:
          (1) Bundled contract.--The term ``bundled contract'' 
        means a contract that is entered into to meet 
        requirements that are consolidated in a bundling of 
        contract requirements.
          (2) Bundling of contract requirements.--The term 
        ``bundling of contract requirements'' means 
        consolidating 2 or more procurement requirements for 
        goods or services previously provided or performed 
        under separate smaller contracts into a solicitation of 
        offers for a single contract that is likely to be 
        unsuitable for award to a small-business concern due 
        to--
                  (A) the diversity, size, or specialized 
                nature of the elements of the performance 
                specified;
                  (B) the aggregate dollar value of the 
                anticipated award;
                  (C) the geographical dispersion of the 
                contract performance sites; or
                  (D) any combination of the factors described 
                in subparagraphs (A), (B), and (C).
          (3) Separate smaller contract.--The term ``separate 
        smaller contract'', with respect to a bundling of 
        contract requirements, means a contract that has been 
        performed by 1 or more small business concerns or was 
        suitable for award to 1 or more small business 
        concerns.
  (p) Definitions Relating to HUBZones.--In this Act:
          (1) Historically underutilized business zone.--The 
        term ``historically underutilized business zone'' means 
        any area located within 1 or more--
                  (A) qualified census tracts;
                  (B) qualified nonmetropolitan counties;
                  (C) lands within the external boundaries of 
                an Indian reservation;
                  (D) redesignated areas;
                  (E) base closure areas; or
                  (F) qualified disaster areas.
          (2) HUBZone.--The term ``HUBZone'' means a 
        historically underutilized business zone.
          (3) HUBZone small business concern.--The term 
        ``HUBZone small business concern'' means--
                  (A) a small business concern that is at least 
                51 percent owned and controlled by United 
                States citizens;
                  (B) a small business concern that is--
                          (i) an Alaska Native Corporation 
                        owned and controlled by Natives (as 
                        determined pursuant to section 29(e)(1) 
                        of the Alaska Native Claims Settlement 
                        Act (43 U.S.C. 1626(e)(1))); or
                          (ii) a direct or indirect subsidiary 
                        corporation, joint venture, or 
                        partnership of an Alaska Native 
                        Corporation qualifying pursuant to 
                        section 29(e)(1) of the Alaska Native 
                        Claims Settlement Act (43 U.S.C. 
                        1626(e)(1)), if that subsidiary, joint 
                        venture, or partnership is owned and 
                        controlled by Natives (as determined 
                        pursuant to section 29(e)(2)) of the 
                        Alaska Native Claims Settlement Act (43 
                        U.S.C. 1626(e)(2)));
                  (C) a small business concern--
                          (i) that is wholly owned by one or 
                        more Indian tribal governments, or by a 
                        corporation that is wholly owned by one 
                        or more Indian tribal governments; or
                          (ii) that is owned in part by one or 
                        more Indian tribal governments, or by a 
                        corporation that is wholly owned by one 
                        or more Indian tribal governments, if 
                        all other owners are either United 
                        States citizens or small business 
                        concerns;
                  (D) a small business concern--
                          (i) that is wholly owned by one or 
                        more Native Hawaiian Organizations (as 
                        defined in section 8(a)(15)), or by a 
                        corporation that is wholly owned by one 
                        or more Native Hawaiian Organizations; 
                        or
                          (ii) that is owned in part by one or 
                        more Native Hawaiian Organizations, or 
                        by a corporation that is wholly owned 
                        by one or more Native Hawaiian 
                        Organizations, if all other owners are 
                        either United States citizens or small 
                        business concerns;
                  (E) a small business concern that is--
                          (i) wholly owned by a community 
                        development corporation that has 
                        received financial assistance under 
                        part 1 of subchapter A of the Community 
                        Economic Development Act of 1981 (42 
                        U.S.C. 9805 et seq.); or
                          (ii) owned in part by one or more 
                        community development corporations, if 
                        all other owners are either United 
                        States citizens or small business 
                        concerns; or
                  (F) a small business concern that is--
                          (i) a small agricultural cooperative 
                        organized or incorporated in the United 
                        States;
                          (ii) wholly owned by 1 or more small 
                        agricultural cooperatives organized or 
                        incorporated in the United States; or
                          (iii) owned in part by 1 or more 
                        small agricultural cooperatives 
                        organized or incorporated in the United 
                        States, if all owners are small 
                        business concerns or United States 
                        citizens.
          (4) Qualified areas.--
                  (A) Qualified census tract.--
                          (i) In general.--The term ``qualified 
                        census tract'' has the meaning given 
                        that term in section 42(d)(5)(B)(ii) of 
                        the Internal Revenue Code of 1986.
                          (ii) Exception.--For any metropolitan 
                        statistical area in the Commonwealth of 
                        Puerto Rico, the term ``qualified 
                        census tract'' has the meaning given 
                        that term in section 42(d)(5)(B)(ii) of 
                        the Internal Revenue Code of 1986 as 
                        applied without regard to subclause 
                        (II) of such section, except that this 
                        clause shall only apply--
                                  (I) 10 years after the date 
                                that the Administrator 
                                implements this clause, or
                                  (II) the date on which the 
                                Financial Oversight and 
                                Management Board for the 
                                Commonwealth of Puerto Rico 
                                created by the Puerto Rico 
                                Oversight, Management, and 
                                Economic Stability Act ceases 
                                to exist,
                        whichever event occurs first.
                  (B) Qualified nonmetropolitan county.--The 
                term ``qualified nonmetropolitan county'' means 
                any county--
                          (i) that was not located in a 
                        metropolitan statistical area (as 
                        defined in section 143(k)(2)(B) of the 
                        Internal Revenue Code of 1986) at the 
                        time of the most recent census taken 
                        for purposes of selecting qualified 
                        census tracts under section 
                        42(d)(5)(C)(ii) of the Internal Revenue 
                        Code of 1986; and
                          (ii) in which--
                                  (I) the median household 
                                income is less than 80 percent 
                                of the nonmetropolitan State 
                                median household income, based 
                                on the most recent data 
                                available from the Bureau of 
                                the Census of the Department of 
                                Commerce;
                                  (II) the unemployment rate is 
                                not less than 140 percent of 
                                the average unemployment rate 
                                for the United States or for 
                                the State in which such county 
                                is located, whichever is less, 
                                based on the most recent data 
                                available from the Secretary of 
                                Labor; or
                                  (III) there is located a 
                                difficult development area, as 
                                designated by the Secretary of 
                                Housing and Urban Development 
                                in accordance with section 
                                42(d)(5)(C)(iii) of the 
                                Internal Revenue Code of 1986, 
                                within Alaska, Hawaii, or any 
                                territory or possession of the 
                                United States outside the 48 
                                contiguous States.
                  (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), except 
                that a census tract or a nonmetropolitan county 
                may be a ``redesignated area'' only until the 
                later of--
                          (i) the date on which the Census 
                        Bureau publicly releases the first 
                        results from the 2010 decennial census; 
                        or
                          (ii) 3 years after the date on which 
                        the census tract or nonmetropolitan 
                        county ceased to be so qualified.
                  (D) Base closure area.--
                          (i) In general.--Subject to clause 
                        (ii), the term ``base closure area'' 
                        means--
                                  (I) lands within the external 
                                boundaries of a military 
                                installation that were closed 
                                through a privatization process 
                                under the authority of--
                                          (aa) the Defense Base 
                                        Closure and Realignment 
                                        Act of 1990 (part A of 
                                        title XXIX of division 
                                        B of Public Law 101-
                                        510; 10 U.S.C. 2687 
                                        note);
                                          (bb) title II of the 
                                        Defense Authorization 
                                        Amendments and Base 
                                        Closure and Realignment 
                                        Act (Public Law 100-
                                        526; 10 U.S.C. 2687 
                                        note);
                                          (cc) section 2687 of 
                                        title 10, United States 
                                        Code; or
                                          (dd) any other 
                                        provision of law 
                                        authorizing or 
                                        directing the Secretary 
                                        of Defense or the 
                                        Secretary of a military 
                                        department to dispose 
                                        of real property at the 
                                        military installation 
                                        for purposes relating 
                                        to base closures of 
                                        redevelopment, while 
                                        retaining the authority 
                                        to enter into a 
                                        leaseback of all or a 
                                        portion of the property 
                                        for military use;
                                  (II) the census tract or 
                                nonmetropolitan county in which 
                                the lands described in 
                                subclause (I) are wholly 
                                contained;
                                  (III) a census tract or 
                                nonmetropolitan county the 
                                boundaries of which intersect 
                                the area described in subclause 
                                (I); and
                                  (IV) a census tract or 
                                nonmetropolitan county the 
                                boundaries of which are 
                                contiguous to the area 
                                described in subclause (II) or 
                                subclause (III).
                          (ii) Limitation.--A base closure area 
                        shall be treated as a HUBZone--
                                  (I) with respect to a census 
                                tract or nonmetropolitan county 
                                described in clause (i), for a 
                                period of not less than 8 
                                years, beginning on the date 
                                the military installation 
                                undergoes final closure and 
                                ending on the date the 
                                Administrator makes a final 
                                determination as to whether or 
                                not to implement the applicable 
                                designation described in 
                                subparagraph (A) or (B) in 
                                accordance with the results of 
                                the decennial census conducted 
                                after the area was initially 
                                designated as a base closure 
                                area; and
                                  (II) if such area was treated 
                                as a HUBZone at any time after 
                                2010, until such time as the 
                                Administrator makes a final 
                                determination as to whether or 
                                not to implement the applicable 
                                designation described in 
                                subparagraph (A) or (B), after 
                                the 2020 decennial census.
                          (iii) Definitions.--In this 
                        subparagraph:
                                  (I) Census tract.--The term 
                                ``census tract'' means a census 
                                tract delineated by the United 
                                States Bureau of the Census in 
                                the most recent decennial 
                                census that is not located in a 
                                nonmetropolitan county and does 
                                not otherwise qualify as a 
                                qualified census tract.
                                  (II) Nonmetropolitan 
                                county.--The term 
                                ``nonmetropolitan county'' 
                                means a county that was not 
                                located in a metropolitan 
                                statistical area (as defined in 
                                section 143(k)(2)(B) of the 
                                Internal Revenue Code of 1986) 
                                at the time of the most recent 
                                census taken for purposes of 
                                selecting qualified census 
                                tracts and does not otherwise 
                                qualify as a qualified 
                                nonmetropolitan county.
                  (E) Qualified disaster area.--
                          (i) In general.--Subject to clause 
                        (ii), the term ``qualified disaster 
                        area'' means any census tract or 
                        nonmetropolitan county located in 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) or located in 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 and ending 2 years after such 
                        date, except that such census tract or 
                        nonmetropolitan county may be a 
                        ``qualified disaster area'' only--
                                  (I) in the case of a major 
                                disaster declared by the 
                                President, during the 5-year 
                                period beginning on the date on 
                                which the President declared 
                                the major disaster for the area 
                                in which the census tract or 
                                nonmetropolitan county, as 
                                applicable, is located; and
                                  (II) in the case of a 
                                catastrophic incident, during 
                                the 10-year period beginning on 
                                the date on which the 
                                catastrophic incident occurred 
                                in the area in which the census 
                                tract or nonmetropolitan 
                                county, as applicable, is 
                                located.
                          (ii) Limitation.--A qualified 
                        disaster area described in clause (i) 
                        shall be treated as a HUBZone for a 
                        period of not less than 8 years, 
                        beginning on the date the Administrator 
                        makes a final determination as to 
                        whether or not to implement the 
                        designations described in subparagraphs 
                        (A) and (B) in accordance with the 
                        results of the decennial census 
                        conducted after the area was initially 
                        designated as a qualified disaster 
                        area.
          (5) Qualified hubzone small business concern.--
                  (A) In general.--A HUBZone small business 
                concern is ``qualified'', if--
                          (i) the small business concern has 
                        certified in writing to the 
                        Administrator (or the Administrator 
                        otherwise determines, based on 
                        information submitted to the 
                        Administrator by the small business 
                        concern, or based on certification 
                        procedures, which shall be established 
                        by the Administration by regulation) 
                        that--
                                  (I) it is a HUBZone small 
                                business concern--
                                          (aa) pursuant to 
                                        subparagraph (A), (B), 
                                        (C), (D), (E), or (F) 
                                        of paragraph (3), and 
                                        that its principal 
                                        office is located in a 
                                        HUBZone and not fewer 
                                        than 35 percent of its 
                                        employees reside in a 
                                        HUBZone;
                                          (bb) pursuant to 
                                        subparagraph (A), (B), 
                                        (C), (D), (E), or (F) 
                                        of paragraph (3), that 
                                        its principal office is 
                                        located within a base 
                                        closure area and that 
                                        not fewer than 35 
                                        percent of its 
                                        employees reside in 
                                        such base closure area 
                                        or in another HUBZone; 
                                        or
                                          (cc) pursuant to 
                                        paragraph (3)(C), and 
                                        not fewer than 35 
                                        percent of its 
                                        employees engaged in 
                                        performing a contract 
                                        awarded to the small 
                                        business concern on the 
                                        basis of a preference 
                                        provided under section 
                                        31(b) reside within any 
                                        Indian reservation 
                                        governed by one or more 
                                        of the tribal 
                                        government owners, or 
                                        reside within any 
                                        HUBZone adjoining any 
                                        such Indian 
                                        reservation;
                                  (II) the small business 
                                concern will attempt to 
                                maintain the applicable 
                                employment percentage under 
                                subclause (I) during the 
                                performance of any contract 
                                awarded to the small business 
                                concern on the basis of a 
                                preference provided under 
                                section 31(b); and
                                  (III) with respect to any 
                                subcontract entered into by the 
                                small business concern pursuant 
                                to a contract awarded to the 
                                small business concern under 
                                section 31, the small business 
                                concern will ensure that the 
                                requirements of section 46 are 
                                satisfied; and
                          (ii) no certification made or 
                        information provided by the small 
                        business concern under clause (i) has 
                        been, in accordance with the procedures 
                        established under section 31(c)(1)--
                                  (I) successfully challenged 
                                by an interested party; or
                                  (II) otherwise determined by 
                                the Administrator to be 
                                materially false.
                  (B) List of qualified small business 
                concerns.--The Administrator shall establish 
                and maintain a list of qualified HUBZone small 
                business concerns, which list shall, to the 
                extent practicable--
                          (i) once the Administrator has made 
                        the certification required by 
                        subparagraph (A)(i) regarding a 
                        qualified HUBZone small business 
                        concern and has determined that 
                        subparagraph (A)(ii) does not apply to 
                        that concern, include the name, 
                        address, and type of business with 
                        respect to each such small business 
                        concern;
                          (ii) be updated by the Administrator 
                        not less than annually; and
                          (iii) be provided upon request to any 
                        Federal agency or other entity.
          (6) Native american small business concerns.--
                  (A) Alaska native corporation.--The term 
                ``Alaska Native Corporation'' has the same 
                meaning as the term ``Native Corporation'' in 
                section 3 of the Alaska Native Claims 
                Settlement Act (43 U.S.C. 1602).
                  (B) Alaska native village.--The term ``Alaska 
                Native Village'' has the same meaning as the 
                term ``Native village'' in section 3 of the 
                Alaska Native Claims Settlement Act (43 U.S.C. 
                1602).
                  (C) Indian reservation.--The term ``Indian 
                reservation''--
                          (i) has the same meaning as the term 
                        ``Indian country'' in section 1151 of 
                        title 18, United States Code, except 
                        that such term does not include--
                                  (I) any lands that are 
                                located within a State in which 
                                a tribe did not exercise 
                                governmental jurisdiction on 
                                the date of the enactment of 
                                this paragraph, unless that 
                                tribe is recognized after that 
                                date of the enactment by either 
                                an Act of Congress or pursuant 
                                to regulations of the Secretary 
                                of the Interior for the 
                                administrative recognition that 
                                an Indian group exists as an 
                                Indian tribe (part 83 of title 
                                25, Code of Federal 
                                Regulations); and
                                  (II) lands taken into trust 
                                or acquired by an Indian tribe 
                                after the date of the enactment 
                                of this paragraph if such lands 
                                are not located within the 
                                external boundaries of an 
                                Indian reservation or former 
                                reservation or are not 
                                contiguous to the lands held in 
                                trust or restricted status on 
                                that date of the enactment; and
                          (ii) in the State of Oklahoma, means 
                        lands that--
                                  (I) are within the 
                                jurisdictional areas of an 
                                Oklahoma Indian tribe (as 
                                determined by the Secretary of 
                                the Interior); and
                                  (II) are recognized by the 
                                Secretary of the Interior as 
                                eligible for trust land status 
                                under part 151 of title 25, 
                                Code of Federal Regulations (as 
                                in effect on the date of the 
                                enactment of this paragraph).
          (7) Agricultural commodity.--The term ``agricultural 
        commodity'' has the same meaning as in section 102 of 
        the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
  (q) Definitions Relating to Veterans.--In this Act, the 
following definitions apply:
          (1) Service-disabled veteran.--The term ``service-
        disabled veteran'' means a veteran with a disability 
        that is service-connected (as defined in section 
        101(16) of title 38, United States Code).
          (2) Small business concern owned and controlled by 
        service-disabled veterans.--The term ``small business 
        concern owned and controlled by service-disabled 
        veterans'' means a small business concern--
                  (A) 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 of which 
                is owned by one or more service-disabled 
                veterans; and
                  (B) 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.
          (3) Small business concern owned and controlled by 
        veterans.--The term ``small business concern owned and 
        controlled by veterans'' means a small business 
        concern--
                  (A) not less than 51 percent of which is 
                owned by one or more veterans or, in the case 
                of any publicly owned business, not less than 
                51 percent of the stock of which is owned by 
                one or more veterans; and
                  (B) the management and daily business 
                operations of which are controlled by one or 
                more veterans.
          (4) Veteran.--The term ``veteran'' has the meaning 
        given the term in section 101(2) of title 38, United 
        States Code.
          (5) Relief from time limitations.--
                  (A) In general.--Any time limitation on any 
                qualification, certification, or period of 
                participation imposed under this Act on any 
                program that is available to small business 
                concerns shall be extended for a small business 
                concern that--
                          (i) is owned and controlled by--
                                  (I) a veteran who was called 
                                or ordered to active duty under 
                                a provision of law specified in 
                                section 101(a)(13)(B) of title 
                                10, United States Code, on or 
                                after September 11, 2001; or
                                  (II) a service-disabled 
                                veteran who became such a 
                                veteran due to an injury or 
                                illness incurred or aggravated 
                                in the active military, naval, 
                                or air service during a period 
                                of active duty pursuant to a 
                                call or order to active duty 
                                under a provision of law 
                                referred to in subclause (I) on 
                                or after September 11, 2001; 
                                and
                          (ii) was subject to the time 
                        limitation during such period of active 
                        duty.
                  (B) Duration.--Upon submission of proper 
                documentation to the Administrator, the 
                extension of a time limitation under 
                subparagraph (A) shall be equal to the period 
                of time that such veteran who owned or 
                controlled such a concern was on active duty as 
                described in that subparagraph.
                  (C) Exception for programs subject to federal 
                credit reform act of 1990.--The provisions of 
                subparagraphs (A) and (B) shall not apply to 
                any programs subject to the Federal Credit 
                Reform Act of 1990 (2 U.S.C. 661 et seq.).
  (r) Definitions Relating to Small Business Lending 
Companies.--As used in section 23 of this Act:
          (1) Small business lending company.--The term ``small 
        business lending company'' means a business concern 
        that is authorized by the Administrator to make loans 
        pursuant to section 7(a) and whose lending activities 
        are not subject to regulation by any Federal or State 
        regulatory agency.
          (2) Non-federally regulated lender.--The term ``non-
        Federally regulated lender'' means a business concern 
        if--
                  (A) such concern is authorized by the 
                Administrator to make loans under section 7;
                  (B) such concern is subject to regulation by 
                a State; and
                  (C) the lending activities of such concern 
                are not regulated by any Federal banking 
                authority.
  (s) Major Disaster.--In this Act, the term ``major disaster'' 
has the meaning given that term in section 102 of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5122).
  (t) Small Business Development Center.--In this Act, the term 
``small business development center'' means a small business 
development center described in section 21.
  (u) Region of the Administration.--In this Act, the term 
``region of the Administration'' means the geographic area 
served by a regional office of the Administration established 
under section 4(a).
  (v) Multiple Award Contract.--In this Act, the term 
``multiple award contract'' means--
          (1) a multiple award task order contract or delivery 
        order contract that is entered into under the authority 
        of sections 303H through 303K of the Federal Property 
        and Administrative Services Act of 1949 (41 U.S.C. 253h 
        through 253k); and
          (2) any other indefinite delivery, indefinite 
        quantity contract that is entered into by the head of a 
        Federal agency with 2 or more sources pursuant to the 
        same solicitation.
  (w) Presumption.--
          (1) In general.--In every contract, subcontract, 
        cooperative agreement, cooperative research and 
        development agreement, or grant which is set aside, 
        reserved, or otherwise classified as intended for award 
        to small business concerns, there shall be a 
        presumption of loss to the United States based on the 
        total amount expended on the contract, subcontract, 
        cooperative agreement, cooperative research and 
        development agreement, or grant whenever it is 
        established that a business concern other than a small 
        business concern willfully sought and received the 
        award by misrepresentation.
          (2) Deemed certifications.--The following actions 
        shall be deemed affirmative, willful, and intentional 
        certifications of small business size and status:
                  (A) Submission of a bid or proposal for a 
                Federal grant, contract, subcontract, 
                cooperative agreement, or cooperative research 
                and development agreement reserved, set aside, 
                or otherwise classified as intended for award 
                to small business concerns.
                  (B) Submission of a bid or proposal for a 
                Federal grant, contract, subcontract, 
                cooperative agreement, or cooperative research 
                and development agreement which in any way 
                encourages a Federal agency to classify the bid 
                or proposal, if awarded, as an award to a small 
                business concern.
                  (C) Registration on any Federal electronic 
                database for the purpose of being considered 
                for award of a Federal grant, contract, 
                subcontract, cooperative agreement, or 
                cooperative research agreement, as a small 
                business concern.
          (3) Certification by signature of responsible 
        official.--
                  (A) In general.--Each solicitation, bid, or 
                application for a Federal contract, 
                subcontract, or grant shall contain a 
                certification concerning the small business 
                size and status of a business concern seeking 
                the Federal contract, subcontract, or grant.
                  (B) Content of certifications.--A 
                certification that a business concern qualifies 
                as a small business concern of the exact size 
                and status claimed by the business concern for 
                purposes of bidding on a Federal contract or 
                subcontract, or applying for a Federal grant, 
                shall contain the signature of an authorized 
                official on the same page on which the 
                certification is contained.
          (4) Regulations.--The Administrator shall promulgate 
        regulations to provide adequate protections to 
        individuals and business concerns from liability under 
        this subsection in cases of unintentional errors, 
        technical malfunctions, and other similar situations.
  (x) Annual Certification.--
          (1) In general.--Each business certified as a small 
        business concern under this Act shall annually certify 
        its small business size and, if appropriate, its small 
        business status, by means of a confirming entry on the 
        Online Representations and Certifications Application 
        database of the Administration, or any successor 
        thereto.
          (2) Regulations.--Not later than 1 year after the 
        date of enactment of this subsection, the 
        Administrator, in consultation with the Inspector 
        General and the Chief Counsel for Advocacy of the 
        Administration, shall promulgate regulations to ensure 
        that--
                  (A) no business concern continues to be 
                certified as a small business concern on the 
                Online Representations and Certifications 
                Application database of the Administration, or 
                any successor thereto, without fulfilling the 
                requirements for annual certification under 
                this subsection; and
                  (B) the requirements of this subsection are 
                implemented in a manner presenting the least 
                possible regulatory burden on small business 
                concerns.
  (y) Policy on Prosecutions of Small Business Size and Status 
Fraud.--Not later than 1 year after the date of enactment of 
this subsection, the Administrator, in consultation with the 
Attorney General, shall issue a Government-wide policy on 
prosecution of small business size and status fraud, which 
shall direct Federal agencies to appropriately publicize the 
policy.
  (z) Aquaculture Business Disaster Assistance.--Subject to 
section 18(a) and notwithstanding section 18(b)(1), the 
Administrator may provide disaster assistance under section 
7(b)(2) to aquaculture enterprises that are small businesses.
  (aa) Venture Capital Operating Company.--In this Act, the 
term ``venture capital operating company'' means an entity 
described in clause (i), (v), or (vi) of section 121.103(b)(5) 
of title 13, Code of Federal Regulations (or any successor 
thereto).
  (bb) Hedge Fund.--In this Act, the term ``hedge fund'' has 
the meaning given that term in section 13(h)(2) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).
  (cc) Private Equity Firm.--In this Act, the term ``private 
equity firm'' has the meaning given the term ``private equity 
fund'' in section 13(h)(2) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1851(h)(2)).
  (dd) Definitions Pertaining to Subcontracting.--In this Act:
          (1) Subcontract.--The term ``subcontract'' means a 
        legally binding agreement between a contractor that is 
        already under contract to another party to perform 
        work, and a third party, hereinafter referred to as the 
        subcontractor, for the subcontractor to perform a part, 
        or all, of the work that the contractor has undertaken.
          (2) First tier subcontractor.--The term ``first tier 
        subcontractor'' means a subcontractor who has a 
        subcontract directly with the prime contractor.
          (3) At any tier.--The term ``at any tier'' means any 
        subcontractor other than a subcontractor who is a first 
        tier subcontractor.

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