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116th Congress    }                                 {    Rept. 116-280
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                 {           Part 1

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



 
  VERIFICATION ALIGNMENT AND SERVICE-DISABLED BUSINESS ADJUSTMENT ACT

                                _______
                                

 November 12, 2019.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Ms. Velazquez, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 1615]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 1615) to transfer the responsibility of verifying 
small business concerns owned and controlled by veterans or 
service-disabled veterans to the Small Business Administration, 
and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
   I.  Purpose and Bill Summary.......................................6
  II.  Background and Need for Legislation............................7
 III.  Hearings.......................................................8
  IV.  Committee Consideration........................................8
   V. Committee Votes.................................................8
  VI. Section-by-Section Analysis for H.R. 1615......................11
 VII. Congressional Budget Office Cost Estimate......................13
VIII. Unfunded Mandates..............................................13
  IX. New Budget Authority, Entitlement Authority, and Tax Expenditur13
   X. Oversight Findings.............................................13
  XI. Statement of Constitutional Authority..........................14
 XII. Congressional Accountability Act...............................14
XIII. Federal Advisory Committee Act Statement.......................14
 XIV. Statement of No Earmarks.......................................14
  XV. Statement of Duplication of Federal Programs...................14
 XVI. Disclosure of Directed Rule Makings............................14
XVII. Performance Goals and Objectives...............................14
XVIII.Changes in Existing Law, Made by the Bill, As Reported.........14


    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Verification 
Alignment and Service-disabled Business Adjustment Act'' or the ``VA-
SBA Act''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Transfer date.
Sec. 3. Amendment to and transfer of veteran-owned and service-disabled 
veteran-owned business database.
Sec. 4. Additional requirements for database.
Sec. 5. Procurement program for small business concerns owned and 
controlled by service-disabled veterans.
Sec. 6. Certification for small business concerns owned and controlled 
by veterans.
Sec. 7. Status of self-certified small business concerns owned and 
controlled by service-disabled veterans.
Sec. 8. Transfer of the Center for Verification and Evaluation of the 
Department of Veterans Affairs to the Small Business Administration.
Sec. 9. Report.

SEC. 2. TRANSFER DATE.

  For purposes of this Act, the term ``transfer date'' means the date 
that is 2 years after the date of enactment of this Act, except that 
such date may be extended an unlimited number of times by a period of 
not more than 6 months if the Administrator of the Small Business 
Administration and the Secretary of Veterans Affairs jointly issue a 
notice to Congress and the Law Revision Counsel of the House of 
Representatives containing--
          (1) a certification that such extension is necessary;
          (2) the rationale for and the length of such extension; and
          (3) a plan to comply with the requirements of this Act within 
        the timeframe of the extension.

SEC. 3. AMENDMENT TO AND TRANSFER OF VETERAN-OWNED AND SERVICE-DISABLED 
                    VETERAN-OWNED BUSINESS DATABASE.

  (a) Amendment of Veteran-Owned and Service-Disabled Veteran-Owned 
Business Database.--Effective on the transfer date, section 8127 of 
title 38, United States Code, is amended--
          (1) in subsection (e)--
                  (A) by striking ``the Secretary'' and inserting ``the 
                Administrator''; and
                  (B) by striking ``subsection (f)'' and inserting 
                ``section 36 of the Small Business Act'';
          (2) in subsection (f)--
                  (A) by striking ``the Secretary'' each place such 
                term appears, other than in the last place such term 
                appears under paragraph (2)(A), and inserting ``the 
                Administrator'';
                  (B) in paragraph (1), by striking ``small business 
                concerns owned and controlled by veterans with service-
                connected disabilities'' each place such term appears 
                and inserting ``small business concerns owned and 
                controlled by service-disabled veterans'';
                  (C) in paragraph (2)--
                          (i) in subparagraph (A), by striking ``to 
                        access'' and inserting ``to obtain from the 
                        Secretary of Veterans Affairs''; and
                          (ii) by striking subparagraph (B) and 
                        inserting the following:
  ``(B) For purposes of this subsection--
          ``(i) the Secretary of Veterans Affairs shall--
                  ``(I) verify an individual's status as a veteran or a 
                service-disabled veteran; and
                  ``(II) establish a system to permit the Administrator 
                to access, but not alter, such verification; and
          ``(ii) the Administrator shall verify--
                  ``(I) the status of a business concern as a small 
                business concern; and
                  ``(II) the ownership and control of such business 
                concern.
  ``(C) The Administrator may not certify a concern under subsection 
(b) or section 36A if the Secretary of Veterans Affairs cannot provide 
the verification described under subparagraph (B)(i)(I).'';
                  (D) by striking paragraphs (4) and (7);
                  (E) by redesignating paragraphs (5) and (6) as 
                paragraphs (4) and (5), respectively, and redesignating 
                paragraph (8) as paragraph (6);
                  (F) in paragraph (4), as so redesignated, by striking 
                ``The Secretary'' and inserting ``The Administrator''; 
                and
                  (G) in paragraph (6), as so redesignated--
                          (i) in subparagraph (A)--
                                  (I) by striking ``verify the status 
                                of the concern as a small business 
                                concern or the ownership or control of 
                                the concern'' and inserting ``certify 
                                the status of the concern as a small 
                                business concern owned and controlled 
                                by veterans (under section 36A) or a 
                                small business concern owned and 
                                controlled by service-disabled veterans 
                                (under section 36(g))''; and
                                  (II) by striking ``verification'' and 
                                inserting ``certification'';
                          (ii) in subparagraph (B)--
                                  (I) in clause (i), by striking 
                                ``small business concern owned and 
                                controlled by veterans with service-
                                connected disabilities'' and inserting 
                                ``small business concern owned and 
                                controlled by service-disabled 
                                veterans''; and
                                  (II) in clause (ii)--
                                          (aa) by amending subclause 
                                        (I) to read as follows:
                  ``(I) the Secretary of Veterans Affairs or the 
                Administrator; or''; and
                                          (bb) in subclause (II), by 
                                        striking ``the contracting 
                                        officer of the Department'' and 
                                        inserting ``the applicable 
                                        contracting officer''; and
                          (iii) by striking subparagraph (C);
          (3) by redesignating subsection (k) (relating to definitions) 
        as subsection (l);
          (4) by inserting after subsection (j) (relating to annual 
        reports) the following:
  ``(k) Annual Transfer for Certification Costs.--For each fiscal year, 
the Secretary of Veterans Affairs shall reimburse the Administrator in 
an amount necessary to cover any cost incurred by the Administrator for 
certifying small business concerns owned and controlled by veterans 
that do not qualify as small business concerns owned and controlled by 
service-disabled veterans for the Secretary for purposes of this 
section and section 8128 of this title. The Administrator is authorized 
to accept such reimbursement. The amount of any such reimbursement 
shall be determined jointly by the Secretary and the Administrator and 
shall be provided from fees collected by the Secretary under multiple-
award schedule contracts. Any disagreement about the amount shall be 
resolved by the Director of the Office of Management and Budget.''; and
          (5) in subsection (l) (relating to definitions), as so 
        redesignated, by adding at the end the following:
          ``(4) The term `Administrator' means the Administrator of the 
        Small Business Administration.''.
  (b) Transfer of Requirements Relating to Database to the Small 
Business Act.--Effective on the transfer date, subsection (f) of 
section 8127 of title 38, United States Code (as amended by subsection 
(a)), is transferred to section 36 of the Small Business Act (15 U.S.C. 
657f), inserted so as to appear after subsection (e).
  (c) Conforming Amendments.--The following amendments shall take 
effect on the transfer date:
          (1) Small business act.--Section 3(q)(2)(C)(i)(III) of the 
        Small Business Act (15 U.S.C. 632(q)(2)(C)(i)(III)) is amended 
        by striking ``section 8127(f) of title 38, United States Code'' 
        and inserting ``section 36''.
          (2) Title 38.--Section 8128 of title 38, United States Code, 
        is amended by striking ``section 8127(f) of this title'' and 
        inserting ``section 36 of the Small Business Act''.

SEC. 4. ADDITIONAL REQUIREMENTS FOR DATABASE.

  (a) Administration Access to Database Before the Transfer Date.--
During the period between the date of the enactment of this Act and the 
transfer date, the Secretary of Veterans Affairs shall provide the 
Administrator of the Small Business Administration with access to the 
contents of the database described under section 8127(f) of title 38, 
United States Code.
  (b) Rule of Construction.--Nothing in this Act or the amendments made 
by this Act may be construed--
          (1) as prohibiting the Administrator of the Small Business 
        Administration from combining the contents of the database 
        described under section 8127(f) of title 38, United States 
        Code, with other databases maintained by the Administration; or
          (2) as requiring the Administrator to use any system or 
        technology related to the database described under section 
        8127(f) of title 38, United States Code, on or after the 
        transfer date to comply with the requirement to maintain a 
        database under subsection (f) of section 36 of the Small 
        Business Act (as transferred pursuant to section 3(b) of this 
        Act).
  (c) Recognition of the Issuance of Joint Regulations.--The date 
specified under section 1832(e) of the National Defense Authorization 
Act for Fiscal Year 2017 (15 U.S.C. 632 note) shall be deemed to be 
October 1, 2018.

SEC. 5. PROCUREMENT PROGRAM FOR SMALL BUSINESS CONCERNS OWNED AND 
                    CONTROLLED BY SERVICE-DISABLED VETERANS.

  (a) Procurement Program for Small Business Concerns Owned and 
Controlled by Service-Disabled Veterans.--Section 36 of the Small 
Business Act (15 U.S.C. 657f) is amended--
          (1) by striking subsections (d) and (e);
          (2) by redesignating subsections (a), (b), and (c) as 
        subsections (c), (d), and (e) respectively;
          (3) by inserting before subsection (c), as so redesignated, 
        the following:
  ``(a) Contracting Officer Defined.--For purposes of this section, the 
term `contracting officer' has the meaning given such term in section 
2101 of title 41, United States Code.
  ``(b) Certification of Small Business Concerns Owned and Controlled 
by Service-Disabled Veterans.--With respect to a procurement program or 
preference established under this Act that applies to prime 
contractors, the Administrator shall--
          ``(1) certify the status of the concern as a `small business 
        concern owned and controlled by service-disabled veterans'; and
          ``(2) require the periodic recertification of such status.'';
          (4) in subsection (d), as so redesignated, by striking ``and 
        that the award can be made at a fair market price'' and 
        inserting ``, that the award can be made at a fair market 
        price, and if each concern is certified by the Administrator as 
        a small business concern owned and controlled by service-
        disabled veterans''; and
          (5) by adding at the end the following:
  ``(g) Certification Requirement.--Notwithstanding subsection (c), a 
contracting officer may only award a sole source contract to a small 
business concern owned and controlled by service-disabled veterans or a 
contract on the basis of competition restricted to small business 
concerns owned and controlled by service-disabled veterans if such a 
concern is certified by the Administrator as a small business concern 
owned and controlled by service-disabled veterans.
  ``(h) Enforcement; Penalties.--
          ``(1) Verification of eligibility.--In carrying out this 
        section, the Administrator shall establish procedures relating 
        to--
                  ``(A) the filing, investigation, and disposition by 
                the Administration of any challenge to the eligibility 
                of a small business concern to receive assistance under 
                this section (including a challenge, filed by an 
                interested party, relating to the veracity of a 
                certification made or information provided to the 
                Administration by a small business concern under 
                subsection (b)); and
                  ``(B) verification by the Administrator of the 
                accuracy of any certification made or information 
                provided to the Administration by a small business 
                concern under subsection (b).
          ``(2) Examinations.--
                  ``(A) Examination of applicants.--The procedures 
                established under paragraph (1) shall provide for a 
                program of examinations by the Administrator of any 
                small business concern making a certification or 
                providing information to the Administrator under 
                subsection (b), to determine the veracity of any 
                statements or information provided as part of such 
                certification or otherwise provided under subsection 
                (b).
                  ``(B) Examination of certified concerns.--The 
                procedures established under paragraph (1) shall 
                provide for the examination of risk-based samples of 
                small business concerns certified under subsection (b), 
                or of any small business concern that the Administrator 
                believes poses a particular risk or with respect to 
                which the Administrator receives specific and credible 
                information alleging that the small business concern no 
                longer meets eligibility requirements to be certified 
                as a small business concern owned and controlled by 
                service-disabled veterans.
          ``(3) Penalties.--In addition to the penalties described in 
        section 16(d), any small business concern that is determined by 
        the Administrator to have misrepresented the status of that 
        concern as a small business concern owned and controlled by 
        service-disabled veterans for purposes of subsection (b), shall 
        be subject to--
                  ``(A) section 1001 of title 18, United States Code;
                  ``(B) sections 3729 through 3733 of title 31, United 
                States Code; and
                  ``(C) section 8127(g) of title 38, United States 
                Code.
  ``(i) Provision of Data.--Upon the request of the Administrator, the 
head of any Federal department or agency shall promptly provide to the 
Administrator such information as the Administrator determines to be 
necessary to carry out subsection (b) or to be able to certify the 
status of the concern as a small business concern owned and controlled 
by veterans under section 36A.''.
  (b) Penalties for Misrepresentation.--Section 16 of the Small 
Business Act (15 U.S.C. 645) is amended--
          (1) in subsection (d)(1)--
                  (A) by striking ``,, a'' and inserting ``, a `small 
                business concern owned and controlled by service-
                disabled veterans', a `small business concern owned and 
                controlled by veterans', a''; and
                  (B) in paragraph (A), by striking ``9, 15, or 31'' 
                and inserting ``8, 9, 15, 31, 36, or 36A''; and
          (2) in subsection (e), by striking ``,, a'' and inserting ``, 
        a `small business concern owned and controlled by service-
        disabled veterans', a `small business concern owned and 
        controlled by veterans', a''.

SEC. 6. CERTIFICATION FOR SMALL BUSINESS CONCERNS OWNED AND CONTROLLED 
                    BY VETERANS.

  The Small Business Act (15 U.S.C. 631 et seq.) is amended by 
inserting after section 36 the following new section:

``SEC. 36A. CERTIFICATION OF SMALL BUSINESS CONCERNS OWNED AND 
                    CONTROLLED BY VETERANS.

  ``(a) In General.--With respect to the program established under 
section 8127 of title 38, United States Code, the Administrator shall--
          ``(1) certify the status of the concern as a `small business 
        concern owned and controlled by veterans'; and
          ``(2) require the periodic recertification of such status.
  ``(b) Enforcement; Penalties.--
          ``(1) Verification of eligibility.--In carrying out this 
        section, the Administrator shall establish procedures relating 
        to--
                  ``(A) the filing, investigation, and disposition by 
                the Administration of any challenge to the eligibility 
                of a small business concern to receive assistance under 
                this section (including a challenge, filed by an 
                interested party, relating to the veracity of a 
                certification made or information provided to the 
                Administration by a small business concern under 
                subsection (a)); and
                  ``(B) verification by the Administrator of the 
                accuracy of any certification made or information 
                provided to the Administration by a small business 
                concern under subsection (a).
          ``(2) Examination of applicants.--The procedures established 
        under paragraph (1) shall provide for a program of examinations 
        by the Administrator of any small business concern making a 
        certification or providing information to the Administrator 
        under subsection (a), to determine the veracity of any 
        statements or information provided as part of such 
        certification or otherwise provided under subsection (a).
          ``(3) Penalties.--In addition to the penalties described in 
        section 16(d), any small business concern that is determined by 
        the Administrator to have misrepresented the status of that 
        concern as a small business concern owned and controlled by 
        veterans for purposes of subsection (a), shall be subject to--
                  ``(A) section 1001 of title 18, United States Code;
                  ``(B) sections 3729 through 3733 of title 31, United 
                States Code; and
                  ``(C) section 8127(g) of title 38, United States 
                Code.''.

SEC. 7. STATUS OF SELF-CERTIFIED SMALL BUSINESS CONCERNS OWNED AND 
                    CONTROLLED BY SERVICE-DISABLED VETERANS.

  (a) In General.--Notwithstanding any other provision of law, any 
small business concern that self-certified as a small business concern 
owned and controlled by service-disabled veterans shall--
          (1) if the concern files a certification application with the 
        Administrator of the Small Business Administration before the 
        end of the 1-year period beginning on the transfer date, 
        maintain such self-certification until the Administrator makes 
        a determination with respect to such certification; and
          (2) if the concern does not file such a certification 
        application before the end of the 1-year period beginning on 
        the transfer date, lose, at the end of such 1-year period, any 
        self-certification of the concern as a small business concern 
        owned and controlled by service-disabled veterans.
  (b) Non-Applicability to Department of Veterans Affairs.--Subsection 
(a) shall not apply to participation in contracts (including 
subcontracts) with the Department of Veterans Affairs.
  (c) Notice.--The Administrator shall notify any small business 
concern that self-certified as a small business concern owned and 
controlled by service-disabled veterans about the requirements of this 
Act, including the transfer date and any extension of such transfer 
date made pursuant to section 2, and make such notice publicly 
available, on--
          (1) the date of the enactment of this Act; and
          (2) the date on which an extension described under section 2 
        is approved.

SEC. 8. TRANSFER OF THE CENTER FOR VERIFICATION AND EVALUATION OF THE 
                    DEPARTMENT OF VETERANS AFFAIRS TO THE SMALL 
                    BUSINESS ADMINISTRATION.

  (a) Abolishment.--The Center for Verification and Evaluation of the 
Department of Veterans Affairs defined under section 74.1 of title 38, 
Code of Federal Regulations, is abolished effective on the transfer 
date.
  (b) Transfer of Functions.--All functions that, immediately before 
the effective date of this section, were functions of the Center for 
Verification and Evaluation shall--
          (1) on the date of enactment of this Act, be functions of 
        both the Center for Verification and Evaluation and the Small 
        Business Administration, except that the Small Business 
        Administration shall not have any authority to carry out any 
        verification functions of the Center for Verification and 
        Evaluation; and
          (2) on the transfer date, be functions of the Small Business 
        Administration.
  (c) Transfer of Assets.--So much of the personnel, property, records, 
and unexpended balances of appropriations, allocations, and other funds 
employed, used, held, available, or to be made available in connection 
with a function transferred under this section shall be available to 
the Small Business Administration at such time or times as the 
President directs for use in connection with the functions transferred.
  (d) References.--Any reference in any other Federal law, Executive 
order, rule, regulation, or delegation of authority, or any document of 
or pertaining to a function of the Center for Verification and 
Evaluation that is transferred under this section is deemed, after the 
transfer date, to refer to the Small Business Administration.

SEC. 9. REPORT.

  Not later than the end of the 1-year period beginning on the date of 
the enactment of this Act, and every 6 months thereafter until the 
transfer date, the Administrator of the Small Business Administration 
and Secretary of Veterans Affairs shall jointly issue a report to the 
Committees on Appropriations, Small Business, and Veterans' Affairs of 
the House of Representatives and the Committees on Appropriations, 
Small Business and Entrepreneurship, and Veterans' Affairs of the 
Senate on the planning for the transfer of functions and property 
required under this Act and the amendments made by this Act on the 
transfer date. Such report shall include--
          (1) whether and how the verification database and operations 
        of the Center for Verification and Evaluation of the Department 
        of Veterans Affairs will be incorporated into the existing 
        certification database of the Small Business Administration;
          (2) projections for the numbers and timing, in terms of 
        fiscal year, of--
                  (A) already verified concerns that will come up for 
                recertification; and
                  (B) self-certified concerns that are expected to 
                apply for certification;
          (3) an explanation of how outreach to veteran service 
        organizations, the service-disabled veteran-owned and veteran-
        owned small business community, and other stakeholders will be 
        conducted; and
          (4) other pertinent information determined by the 
        Administrator and the Secretary.

                      I. Purpose and Bill Summary

    The purpose of H.R. 1615, the ``Verification Alignment and 
Service-disabled Business Adjustment Act'' or the ``VA-SBA 
Act,'' is to transfer the responsibility of verifying small 
business concerns owned and controlled by veterans or service-
disabled veterans to the Small Business Administration. 
Pursuant to the bill, the transfer date is two years after 
enactment of this legislation. Among other things, the bill 
transfers to the SBA the responsibility of keeping a database 
of all certified veteran-owned and service-disabled veteran-
owned small businesses; allows the VA to provide the necessary 
funds to cover SBA's costs in certifying veteran-owned small 
businesses and; transfers assets of the VA's Center for 
Verification and Evaluation to the SBA. The bill also clarifies 
that the VA remains responsible for verifying the individual 
business owner's status as a veteran or service-disabled 
veteran, while the SBA is responsible for determining the 
business concern's status as a small business concern.

                II. Background and Need for Legislation

    H.R. 1615 was introduced by Representative Trent Kelly (R-
MS), and Representative Jason Crow (D-CO) on March 7, 2019. The 
bill eliminates the certification process offered by the U.S. 
Department of Veterans Affairs (VA) and transfers to the Small 
Business Administration (SBA) the responsibility of certifying 
all veteran-owned and service-disabled veteran-owned small 
businesses interested in participating in the VA's small 
business contracting program. Furthermore, it requires formal 
certification of service-disabled veteran-owned small 
businesses in SBA's government-wide contracting program.
    Congress has designated service-disabled veteran-owned 
small businesses (SDVOSBs) as a key group that can benefit from 
contract assistance. To underscore this commitment, the 
Veterans Entrepreneurship and Small Business Development Act of 
1999 established an annual goal of not less than 3 percent on 
all federal prime contract and subcontract awards for service-
disabled veteran-owned small businesses (SDVOSBs).\1\ In order 
to achieve this goal, the Veterans Benefits Act of 2003,\2\ 
amended the Small Business Act to create incentives for 
providing greater contract opportunities to SDVOSBs. Under the 
program that SBA oversees, SDVOSBs are eligible for set aside 
and sole- source contracts.
---------------------------------------------------------------------------
    \1\Pub. L. No. 106-50, Sec. 502, 113 Stat 233, 247 (1999).
    \2\Pub. L. No. 108-183, Sec. 308, 117 Stat 2651, 2662 (2003).
---------------------------------------------------------------------------
    In addition to the SBA program, which applies to all 
agencies, Congress authorized the Department of Veterans 
Affairs
    (VA) to administer its own procurement program known as the 
``Vets First Program'' through the Veterans Benefits, Health 
Care, and Information Technology Act of 2006 (VA Act).\3\ The 
VA Act gave the VA the authority to set aside contracts and 
make source sole awards to SDVOSBs and Veteran-Owned Small 
Businesses (VOSBs) as a whole. Moreover, while the SBA program 
only sets a contracting preference, the VA Act gives SDVOSBs 
and VOSBs a priority over other small business preferences.
---------------------------------------------------------------------------
    \3\Pub. L. No. 109-461, 3 Pub. L. No. 109-461, 502, 120 Stat 3403. 
502, 120 Stat 3403.
---------------------------------------------------------------------------
    Although the two programs share the same goal, each has 
different requirements for certification. Under the VA Program, 
SDVOSBs and VOSBs need to go through a rigorous certification 
process offered by the VA administrator before being eligible 
to contracting opportunities within the agency. By contrast, 
SBA's program, which applies government-wide, allows program 
participants to self-certify eligibility; resulting in much 
confusion across the service-disabled veteran-owned small 
business procurement community.
    H.R. 1615 addresses this issue by harmonizing the two 
conflicting SDVOSB contracting programs at the VA and SBA, 
which in turn eliminates duplicity or redundancy between the 
two agencies. It does this by abolishing the VA certification 
process and transferring the responsibility of certifying 
SDVOSBs and VOSBs to the SBA. Moreover, SDVOSBs would no longer 
be able to self-certify for the SBA program. H.R. 1615 would 
require those firms to obtain formal certification as well. 
Thus, the bill prevents against fraud and abuse by deploying a 
full front-end certification program governmentwide.

                             III. Hearings

    In the 116th Congress, the Committee held a hearing that 
explored the matters covered by H.R. 1615. On July 10, 2019 the 
Committee on Small Business held a hearing titled ``Continuing 
to Serve: From Military to Entrepreneur.''\4\ The witnesses for 
the hearing were: Mr. Davy Leghorn, Assistant Director, The 
American Legion, Washington, DC; Mr. Scott M. Davidson CPT. 
USA, Retired, Managing Partner and CEO, The GCO Consulting 
Group, McLean, VA; Ms. Torrance Hart, Founder, Teak and Twine, 
LLC, Springfield, VA and; Ms. Laurie Sayles, President and CEO, 
Civility Management Solutions, Greenbelt, MD.
---------------------------------------------------------------------------
    \4\Continuing to Serve: From Military to Entrepreneur, Hearing 
Before the H. Comm. On Small Bus., 116th Cong. (2019).
---------------------------------------------------------------------------
    In this hearing, three of the witnesses testified about the 
confusion that the existence of two SDVOSB certification 
programs created among contracting officers and small 
businesses. In particular, Mr. Leghorn testified that this 
confusion was further aggravated by the fact that many federal 
agencies now asked for VA's certification, forcing small 
businesses to seek it, when in reality it was not required 
under SBA's government-wide contracting program. Similarly, Mr. 
Davidson and Ms. Sayles both agreed that it is SBA, not the VA, 
the agency with the expertise and necessary resources to 
provide such certification. Thus, all three witnesses advocated 
for the consolidation of the certifications programs under SBA 
and demonstrated their support for H.R. 1615.

                      IV. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on July 17, 2019, and ordered H.R. 1615 
favorably reported, as amended, to the House of 
Representatives. During the markup, one amendment was offered 
and adopted. Disposition of the amendment is addressed below.
    Amendment Number One, filed by Mr. Kelly of Mississippi, 
clarifies various sections of H.R. 1615 to ensure the intent of 
the bill is clearly interpreted by the public and the 
implementing agency. The amendment also strikes Section 4 of 
the original bill of H.R. 1615 relative to sole-source 
thresholds, which was dependent on the passage of a separate 
bill creating uniformity between contracting sole-source 
thresholds.

                           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. 1615, as amended to the House at 12:12 P.M.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  VI. Section-by-Section of H.R. 1615


Section 1. Short title

    This section designates the short title as the 
``Verification Alignment and Service-disabled Business 
Adjustment Act'' or the ``VA-SBA Act.'' This section also 
contains a table of contents for this bill.

Section 2. Transfer date

    This section defines ``transfer date'' as the date that is 
2 years after the date of enactment of this Act. However, it 
allows the SBA and VA to jointly extend this transfer date by 
6-month increments. The SBA and VA may request an extension an 
unlimited number of times but must notify Congress of each 
extension.

Section 3. Amendment to and transfer of veteran-owned and service-
        disabled veteran-owned business database

    This section transfers the responsibility of maintaining a 
database of fully certified SDVOSBs and VOSBs from the VA to 
the SBA by striking ``the Secretary'' referring to the 
Secretary of the VA with the ``Administrator'' referring to the 
Administrator of the SBA; where such term appears in Title 38, 
Section 8127(e), eligibility of small business concerns, and 
(f), database of owned businesses.
    It also clarifies that the VA is responsible for verifying 
the individual business owner's status as a veteran or service-
disabled veteran, and the SBA is responsible for determining 
the business concern's status as a small business concern. 
Furthermore, it prohibits the SBA from including a business 
concern in the database if either the individual's veteran or 
service-disability status cannot be verified by the VA, or the 
business concern's ownership and control eligibility 
requirements cannot be verified by the SBA.
    This section authorizes the VA to transfer to the SBA funds 
necessary to cover the SBA's costs in certifying VOSBs for the 
VA's VOSB procurement program and the amount will be determined 
jointly by both agencies. The section allows this reimbursement 
to come from the VA's multiple-award schedule contracts and 
allows the Office of Management and Budget to be the arbiter of 
any disagreements of reimbursable funds.
    Finally, it transfers the responsibility relating to the 
requirements and maintenance of the list, or database, of fully 
certified service-disabled veteran-owned and veteran-owned 
small businesses from title 38 Sec. 8127(f) in the VA Act to 
the Small Business Act in title 15.

Section 4. Additional requirement for database

    This section authorizes the SBA to access internal 
information at the VA relating to the list of certified SDVOSBs 
and VOSBs currently maintained by the VA during the transition 
period between the date of enactment of this bill to the 
official transfer date prescribed in Section 2. This section 
also states that the bill does not preclude the SBA from 
combining the contents of the database once inherited, with 
other lists maintained by the Administrator. Finally, it 
clarifies that what is being transferred is the contents of the 
database, not the system or information technology used at the 
VA.

Section 5. Procurement program for small business concerns owned and 
        controlled by service-disabled veterans

    This section amends Section 36 of the Small Business Act 
(15 U.S.C. 657(f)) pertaining to the SBA's SDVOSB program. It 
first defines terms pertinent to this section and requires SBA 
to actively certify all small business concerns owned and 
controlled by service-disabled veterans, also requiring 
periodic recertification by the SBA of SDVOSBs.
    This section further requires the SBA to establish 
procedures verifying the eligibility of SDVOSBs in several 
ways: 1) by allowing the SBA to perform examinations of the 
small business concern and to determine the veracity of the 
information provided by the SDVOSB applicant as part of its 
certification request; 2) by allowing the SBA to perform 
examinations of certified SDVOSBs using a risk-based 
assessment; 3) and by allowing the SBA to examine allegations 
or challenges made to an SDVOSB's status. This section also 
imposes penalties that can be assessed against an SDVOSB that 
has been found to have misrepresented its status to the federal 
government. It also requires federal agencies to provide 
relevant information to the SBA that may be needed to certify 
SDVOSBs or penalize for misrepresentation.

Section 6. Certification for small business concerns owned and 
        controlled by veterans

    This section authorizes the SBA to certify small business 
concerns owned and controlled by veterans, as currently 
established under section 8127 of title 38, for use by the VA. 
Additionally, it requires the SBA to establish procedures 
verifying the eligibility of VOSBs in several ways: by allowing 
the SBA to perform examinations of the small business concern 
and to determine the veracity of the information provided by 
the VOSB applicant as part of its certification request and by 
allowing the SBA to examine allegations or challenges made to 
an VOSB's status. This section also imposes penalties that can 
be assessed against an VOSB that has been found to have 
misrepresented its status to the federal government.

Section 7. Status of self-certified small business concerns owned and 
        controlled by service-disabled veterans

    This section allows a self-certified SDVOSB in the SBA's 
program to maintain its self-certification if the concern files 
a new application with the SBA for front-end certification 
within one year of the transfer date of certification duties 
from the VA to the SBA, as established in this bill. The 
concern may maintain its self-certified status until the SBA 
has made a determination with respect to its new certification 
application. If the concern fails to file a new certification 
application before the 1-year period, the concern forfeits its 
status as an SDVOSB. This section does not apply to SDVOSB 
contract holders with the VA who have already received 
verification of their status through the VA. The SBA is also 
required to notify self-certified SDVOSBs of the requirements 
of this bill, including the transfer date.

Section 8. Transfer of the Center for Verification and Evaluation of 
        the Department of Veterans Affairs to the Small Business 
        Administration

    This section abolishes the VA's Center for Verification and 
Evaluation (CVE) effective on the transfer date established by 
this bill and requires the SBA to take on the certification 
functions of the CVE on the established transfer date. This 
section also establishes the transfer of assets of the VA's CVE 
program from the VA to the SBA.

Section 9. Report

    The VA and the SBA are required to jointly issue a report 
to the Committees on Appropriations, Small Business, and 
Veterans Affairs of the House of Representatives and Senate, 
describing the progress made on the transfer of the CVE's 
certification function to the SBA and also requires an 
explanation of the joint agencies outreach efforts to the VOSB 
and SDVOSB community. This report shall be issued no later than 
1 year after the date of enactment of this bill and every 6 
months thereafter until the transfer date described in section 
8 of this Act.

             VII. Congressional Budget Office Cost Estimate

    At the time H.R. 1615 was reported to the House, the 
Congressional Budget Office had not provided a cost-estimate.

                        VIII. Unfunded Mandates

    H.R. 1615 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 Sec. 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. 
1615 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. 1615 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 
of Representatives, the Committee finds the authority for this 
legislation in Art. I, Sec. 8, cl. 1 of the Constitution of the 
United States.

                 XII. Congressional Accountability Act

    H.R. 1615 does not relate to the terms and conditions of 
employment or access to public services or accommodations 
within the meaning of Sec. 102(b)(3) of Public Law No. 104-1.

             XIII. Federal Advisory Committee Act Statement

    H.R. 1615 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. 1615 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 rule XIII of the Rules of the 
House, no provision of H.R. 1615 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 Sec. 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 rule XIII of the Rules of the 
House, H.R. 1615 does not direct any rulemaking.

                 XVII. Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XII of the Rules of the 
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
    H.R. 1615 eliminates redundancy and confusion by making 
only one entity, the SBA, responsible for providing formal 
certification and granting VOSB and SDVOSB status across two 
small business contracting programs.

      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, as 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):

                      TITLE 38, UNITED STATES CODE




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PART VI--ACQUISITION AND DISPOSITION OF PROPERTY

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   CHAPTER 81--ACQUISITION AND OPERATION OF HOSPITAL AND DOMICILIARY 
    FACILITIES; PROCUREMENT AND SUPPLY; ENHANCED-USE LEASES OF REAL 
PROPERTY

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SUBCHAPTER II--PROCUREMENT AND SUPPLY

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Sec. 8127. Small business concerns owned and controlled by veterans: 
                    contracting goals and preferences

  (a) Contracting Goals.--(1) In order to increase contracting 
opportunities for small business concerns owned and controlled 
by veterans and small business concerns owned and controlled by 
veterans with service-connected disabilities, the Secretary 
shall--
          (A) establish a goal for each fiscal year for 
        participation in Department contracts (including 
        subcontracts) by small business concerns owned and 
        controlled by veterans who are not veterans with 
        service-connected disabilities in accordance with 
        paragraph (2); and
          (B) establish a goal for each fiscal year for 
        participation in Department contracts (including 
        subcontracts) by small business concerns owned and 
        controlled by veterans with service-connected 
        disabilities in accordance with paragraph (3).
  (2) The goal for a fiscal year for participation under 
paragraph (1)(A) shall be determined by the Secretary.
  (3) The goal for a fiscal year for participation under 
paragraph (1)(B) shall be not less than the Government-wide 
goal for that fiscal year for participation by small business 
concerns owned and controlled by veterans with service-
connected disabilities under section 15(g)(1) of the Small 
Business Act (15 U.S.C. 644(g)(1)).
  (4) The Secretary shall establish a review mechanism to 
ensure that, in the case of a subcontract of a Department 
contract that is counted for purposes of meeting a goal 
established pursuant to this section, the subcontract was 
actually awarded to a business concern that may be counted for 
purposes of meeting that goal.
  (b) Use of Noncompetitive Procedures for Certain Small 
Contracts.--For purposes of meeting the goals under subsection 
(a), and in accordance with this section, in entering into a 
contract with a small business concern owned and controlled by 
veterans or a small business concern owned and controlled by 
veterans with service-connected disabilities for an amount less 
than the simplified acquisition threshold (as defined in 
section 134 of title 41), a contracting officer of the 
Department may use procedures other than competitive 
procedures.
  (c) Sole Source Contracts for Contracts Above Simplified 
Acquisition Threshold.--For purposes of meeting the goals under 
subsection (a), and in accordance with this section, a 
contracting officer of the Department may award a contract to a 
small business concern owned and controlled by veterans or a 
small business concern owned and controlled by veterans with 
service-connected disabilities using procedures other than 
competitive procedures if--
          (1) such concern is determined to be a responsible 
        source with respect to performance of such contract 
        opportunity;
          (2) the anticipated award price of the contract 
        (including options) will exceed the simplified 
        acquisition threshold (as defined in section 134 of 
        title 41) but will not exceed $5,000,000; and
          (3) in the estimation of the contracting officer, the 
        contract award can be made at a fair and reasonable 
        price that offers best value to the United States.
  (d) Use of Restricted Competition.--Except as provided in 
subsections (b) and (c), for purposes of meeting the goals 
under subsection (a), and in accordance with this section, a 
contracting officer of the Department shall award contracts on 
the basis of competition restricted to small business concerns 
owned and controlled by veterans or small business concerns 
owned and controlled by veterans with service-connected 
disabilities if the contracting officer has a reasonable 
expectation that two or more small business concerns owned and 
controlled by veterans or small business concerns owned and 
controlled by veterans with service-connected disabilities will 
submit offers and that the award can be made at a fair and 
reasonable price that offers best value to the United States.
  (e) Eligibility of Small Business Concerns.--A small business 
concern may be awarded a contract under this section only if 
the small business concern and the veteran owner of the small 
business concern are listed in the database of veteran-owned 
businesses maintained by [the Secretary] the Administrator 
under [subsection (f)] section 36 of the Small Business Act.
  [(f) Database of Veteran-Owned Businesses.--(1) Subject to 
paragraphs (2) through (6), the Secretary shall maintain a 
database of small business concerns owned and controlled by 
veterans, small business concerns owned and controlled by 
veterans with service-connected disabilities, and the veteran 
owners of such business concerns.
  [(2)(A) To be eligible for inclusion in the database, such a 
veteran shall submit to the Secretary such information as the 
Secretary may require with respect to the small business 
concern or the veteran. Application for inclusion in the 
database shall constitute permission under section 552a of 
title 5 (commonly referred to as the Privacy Act) for the 
Secretary to access such personal information maintained by the 
Secretary as may be necessary to verify the information 
contained in the application.
  [(B) If the Secretary receives an application for inclusion 
in the database from an individual whose status as a veteran 
cannot be verified because the Secretary does not maintain 
information with respect to the veteran status of the 
individual, the Secretary may not include the small business 
concern owned and controlled by the individual in the database 
maintained by the Secretary until the Secretary receives such 
information as may be necessary to verify that the individual 
is a veteran.
  [(3) Information maintained in the database shall be 
submitted on a voluntary basis by such veterans.
  [(4) No small business concern may be listed in the database 
until the Secretary has verified, using regulations issued by 
the Administrator of the Small Business Administration with 
respect to the status of the concern as a small business 
concern and the ownership and control of such concern, that--
          [(A) the small business concern is owned and 
        controlled by veterans; and
          [(B) in the case of a small business concern for 
        which the person who owns and controls the concern 
        indicates that the person is a veteran with a service-
        connected disability, that the person is a veteran with 
        a service-connected disability.
  [(5) The Secretary shall make the database available to all 
Federal departments and agencies and shall notify each such 
department and agency of the availability of the database.
  [(6) If the Secretary determines that the public 
dissemination of certain types of information maintained in the 
database is inappropriate, the Secretary shall take such steps 
as are necessary to maintain such types of information in a 
secure and confidential manner.
  [(7) The Secretary may not issue regulations related to the 
status of a concern as a small business concern and the 
ownership and control of such small business concern.
  [(8)(A) If a small business concern is not included in the 
database because the Secretary does not verify the status of 
the concern as a small business concern or the ownership or 
control of the concern, the concern may appeal the denial of 
verification to the Office of Hearings and Appeals of the Small 
Business Administration (as established under section 5(i) of 
the Small Business Act). The decision of the Office of Hearings 
and Appeals shall be considered a final agency action.
  [(B)(i) If an interested party challenges the inclusion in 
the database of a small business concern owned and controlled 
by veterans or a small business concern owned and controlled by 
veterans with service-connected disabilities based on the 
status of the concern as a small business concern or the 
ownership or control of the concern, the challenge shall be 
heard by the Office of Hearings and Appeals of the Small 
Business Administration as described in subparagraph (A). The 
decision of the Office of Hearings and Appeals shall be 
considered final agency action.
  [(ii) In this subparagraph, the term ``interested party'' 
means--
          [(I) the Secretary; or
          [(II) in the case of a small business concern that is 
        awarded a contract, the contracting officer of the 
        Department or another small business concern that 
        submitted an offer for the contract that was awarded to 
        the small business concern that is the subject of a 
        challenge made under clause (i).
  [(C) For each fiscal year, the Secretary shall reimburse the 
Administrator of the Small Business Administration in an amount 
necessary to cover any cost incurred by the Office of Hearings 
and Appeals of the Small Business Administration for actions 
taken by the Office under this paragraph. The Administrator is 
authorized to accept such reimbursement. The amount of any such 
reimbursement shall be determined jointly by the Secretary and 
the Administrator and shall be provided from fees collected by 
the Secretary under multiple-award schedule contracts. Any 
disagreement about the amount shall be resolved by the Director 
of the Office of Management and Budget.]
  (g) Enforcement Penalties for Misrepresentation.--(1) Any 
business concern that is determined by the Secretary to have 
willfully and intentionally misrepresented the status of that 
concern as a small business concern owned and controlled by 
veterans or as a small business concern owned and controlled by 
service-disabled veterans for purposes of this subsection shall 
be debarred from contracting with the Department for a period 
of not less than five years.
  (2) In the case of a debarment under paragraph (1), the 
Secretary shall commence debarment action against the business 
concern by not later than 30 days after determining that the 
concern willfully and intentionally misrepresented the status 
of the concern as described in paragraph (1) and shall complete 
debarment actions against such concern by not later than 90 
days after such determination.
  (3) The debarment of a business concern under paragraph (1) 
includes the debarment of all principals in the business 
concern for a period of not less than five years.
  (h) Priority for Contracting Preferences.--Preferences for 
awarding contracts to small business concerns shall be applied 
in the following order of priority:
          (1) Contracts awarded pursuant to subsection (b), 
        (c), or (d) to small business concerns owned and 
        controlled by veterans with service-connected 
        disabilities.
          (2) Contracts awarded pursuant to subsection (b), 
        (c), or (d) to small business concerns owned and 
        controlled by veterans that are not covered by 
        paragraph (1).
          (3) Contracts awarded pursuant to--
                  (A) section 8(a) of the Small Business Act 
                (15 U.S.C. 637(a)); or
                  (B) section 31 of such Act (15 U.S.C. 657a).
          (4) Contracts awarded pursuant to any other small 
        business contracting preference.
  (i) Applicability of Requirements to Contracts.--(1) If after 
December 31, 2008, the Secretary enters into a contract, 
memorandum of understanding, agreement, or other arrangement 
with any governmental entity to acquire goods or services, the 
Secretary shall include in such contract, memorandum, 
agreement, or other arrangement a requirement that the entity 
will comply, to the maximum extent feasible, with the 
provisions of this section in acquiring such goods or services.
  (2) Nothing in this subsection shall be construed to 
supersede or otherwise affect the authorities provided under 
the Small Business Act (15 U.S.C. 631 et seq.).
  (j) Annual Reports.--Not later than December 31 each year, 
the Secretary shall submit to Congress a report on small 
business contracting during the fiscal year ending in such 
year. Each report shall include, for the fiscal year covered by 
such report, the following:
          (1) The percentage of the total amount of all 
        contracts awarded by the Department during that fiscal 
        year that were awarded to small business concerns owned 
        and controlled by veterans.
          (2) The percentage of the total amount of all such 
        contracts awarded to small business concerns owned and 
        controlled by veterans with service-connected 
        disabilities.
          (3) The percentage of the total amount of all 
        contracts awarded by each Administration of the 
        Department during that fiscal year that were awarded to 
        small business concerns owned and controlled by 
        veterans.
          (4) The percentage of the total amount of all 
        contracts awarded by each such Administration during 
        that fiscal year that were awarded to small business 
        concerns owned and controlled by veterans with service-
        connected disabilities.
  (k) Annual Transfer for Certification Costs.--For each fiscal 
year, the Secretary of Veterans Affairs shall reimburse the 
Administrator in an amount necessary to cover any cost incurred 
by the Administrator for certifying small business concerns 
owned and controlled by veterans that do not qualify as small 
business concerns owned and controlled by service-disabled 
veterans for the Secretary for purposes of this section and 
section 8128 of this title. The Administrator is authorized to 
accept such reimbursement. The amount of any such reimbursement 
shall be determined jointly by the Secretary and the 
Administrator and shall be provided from fees collected by the 
Secretary under multiple-award schedule contracts. Any 
disagreement about the amount shall be resolved by the Director 
of the Office of Management and Budget.
  [(k)] (l) Definitions.--In this section:
          (1) The term ``small business concern'' has the 
        meaning given that term under section 3 of the Small 
        Business Act (15 U.S.C. 632).
          (2) The term ``small business concern owned and 
        controlled by veterans'' has the meaning given that 
        term under section 3(q)(3) of the Small Business Act 
        (15 U.S.C. 632(q)(3)).
          (3) The term ``small business concern owned and 
        controlled by veterans with service-connected 
        disabilities'' has the meaning given the term ``small 
        business concern owned and controlled by service-
        disabled veterans'' under section 3(q)(2) of the Small 
        Business Act (15 U.S.C. 632(q)(2)).
          (4) The term ``Administrator'' means the 
        Administrator of the Small Business Administration.

Sec. 8128. Small business concerns owned and controlled by veterans: 
                    contracting priority

  (a) Contracting Priority.--In procuring goods and services 
pursuant to a contracting preference under this title or any 
other provision of law, the Secretary shall give priority to a 
small business concern owned and controlled by veterans, if 
such business concern also meets the requirements of that 
contracting preference.
  (b) Definition.--For purposes of this section, the term 
``small business concern owned and controlled by veterans'' 
means a small business concern that is included in the small 
business database maintained by the Secretary under [section 
8127(f) of this title] section 36 of the Small Business Act.

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                              ----------                              


                           SMALL BUSINESS ACT



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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 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 is 
                entitled to direct the plan trustee as to the 
                manner of how to vote the qualified employer 
                securities (as defined in section 4975(e)(8) of 
                the Internal Revenue Code of 1986), which are 
                allocated to the account of such participant 
                with respect to a corporate matter which (by 
                law or charter) must be decided by a vote 
                conducted in accordance with section 409(e) of 
                the Internal Revenue Code of 1986; 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 any of the following:
                  (A) A small business concern--
                          (i) not less than 51 percent of which 
                        is owned by one or more service-
                        disabled veterans or, in the case of 
                        any publicly owned business, not less 
                        than 51 percent of the stock (not 
                        including any stock owned by an ESOP) 
                        of which is owned by one or more 
                        service-disabled veterans; and
                          (ii) the management and daily 
                        business operations of which are 
                        controlled by one or more service-
                        disabled veterans or, in the case of a 
                        veteran with permanent and severe 
                        disability, the spouse or permanent 
                        caregiver of such veteran.
                  (B) A small business concern--
                          (i) not less than 51 percent of which 
                        is owned by one or more service-
                        disabled veterans with a disability 
                        that is rated by the Secretary of 
                        Veterans Affairs as a permanent and 
                        total disability who are unable to 
                        manage the daily business operations of 
                        such concern; or
                          (ii) in the case of a publicly owned 
                        business, not less than 51 percent of 
                        the stock (not including any stock 
                        owned by an ESOP) of which is owned by 
                        one or more such veterans.
                  (C)(i) During the time period described in 
                clause (ii), a small business concern that was 
                a small business concern described in 
                subparagraph (A) or (B) immediately prior to 
                the death of a service-disabled veteran who was 
                the owner of the concern, the death of whom 
                causes the concern to be less than 51 percent 
                owned by one or more service-disabled veterans, 
                if--
                                  (I) the surviving spouse of 
                                the deceased veteran acquires 
                                such veteran's ownership 
                                interest in such concern;
                                  (II) such veteran had a 
                                service-connected disability 
                                (as defined in section 101(16) 
                                of title 38, United States 
                                Code) rated as 100 percent 
                                disabling under the laws 
                                administered by the Secretary 
                                of Veterans Affairs or such 
                                veteran died as a result of a 
                                service-connected disability; 
                                and
                                  (III) immediately prior to 
                                the death of such veteran, and 
                                during the period described in 
                                clause (ii), the small business 
                                concern is included in the 
                                database described in section 
                                8127(f) of title 38, United 
                                States Code.
                          (ii) The time period described in 
                        this clause is the time period 
                        beginning on the date of the veteran's 
                        death and ending on the earlier of--
                                  (I) the date on which the 
                                surviving spouse remarries;
                                  (II) the date on which the 
                                surviving spouse relinquishes 
                                an ownership interest in the 
                                small business concern; or
                                  (III) the date that is 10 
                                years after the date of the 
                                death of the veteran.
          (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.).
          (6) ESOP.--The term ``ESOP'' has the meaning given 
        the term ``employee stock ownership plan'' in section 
        4975(e)(7) of the Internal Revenue Code of 1986 (26 
        U.S.C. 4975(e)(7)).
          (7) Surviving spouse.--The term ``surviving spouse'' 
        has the meaning given such term in section 101(3) of 
        title 38, United States Code.
  (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.
  (ee) Puerto Rico Business.--In this Act, the term ``Puerto 
Rico business'' means a small business concern that has its 
principal office located in the Commonwealth of Puerto Rico.

           *       *       *       *       *       *       *

  Sec. 16. (a) Whoever makes any statement knowing it to be 
false, or whoever willfully overvalues any security, for the 
purpose of obtaining for himself or for any applicant any loan, 
or extension thereof by renewal, deferment of action, or 
otherwise, or the acceptance, release, or substitution of 
security therefor, or for the purpose of influencing in any way 
the action of the Administration, or for the purpose of 
obtaining money, property, or anything of value, under this 
Act, shall be punished by a fine of not more than $5,000 or by 
imprisonment for not more than two years, or both.
  (b) Whoever, being connected in any capacity with the 
Administration, (1) embezzles, abstracts, purloins, or 
willfully misapplies any moneys, funds, securities, or other 
things of value, whether belonging to it or pledged or 
otherwise entrusted to it, or (2) with intent to defrand the 
Administration or any other body politic or corporate, or any 
individual, or to deceive any officer, auditor, or examiner of 
the Administration, makes any false entry in any book, report, 
or statement of or to the Administration, or, without being 
duly authorized, draws any order or issues, puts forth, or 
assigns any note, debenture, bond, or other obligation, or 
draft, bill of exchange, mortgage, judgment, or decree thereof, 
or (3) with intent to defraud participates or shares in or 
receives directly or indirectly any money, profit, property, or 
benefit through any transaction, loan, commission, contract, or 
any other part of the Administration, or (4) gives any 
unauthorized information concerning any future action or plan 
of the Administration which might affect the value of 
securities, or, having such knowledge, invests or speculates, 
directly or indirectly, in the securities or property of any 
company or corporation receiving loans or other assistance from 
the Administration, shall be punished by a fine of not more 
than $10,000 or by imprisonment for not more than five years, 
or both.
  (c) Whoever, with intent to defraud, knowingly conceals, 
removes, disposes of, or converts to his own use or that of 
another, any property mortgaged or pledged to, or held by, the 
Administration, shall be fined not more than $5,000 or 
imprisoned not more than five years, or both; but if the value 
of such property does not exceed $100, he shall be fined not 
more than $1,000 or imprisoned not more than one year, or both.
  (d)(1) Whoever misrepresents the status of any concern or 
person as a ``small business concern''[,, a], a ``small 
business concern owned and controlled by service-disabled 
veterans'', a ``small business concern owned and controlled by 
veterans'', a ``qualified HUBZone small business concern'', a 
``small business concern owned and controlled by socially and 
economically disadvantaged individuals'', or a ``small business 
concern owned and controlled by women'', in order to obtain for 
oneself or another any--
          (A) prime contract to be awarded pursuant to section 
        [9, 15, or 31] 8, 9, 15, 31, 36, or 36A;
          (B) subcontract to be awarded pursuant to section 
        8(a);
          (C) subcontract that is to be included as part or all 
        of a goal contained in a subcontracting plan required 
        pursuant to section 8(d); or
          (D) prime or subcontract to be awarded as a result, 
        or in furtherance, of any other provision of Federal 
        law that specifically references section 8(d) for a 
        definition of program eligibility, shall be subject to 
        the penalties and remedies described in paragraph (2).
  (2) Any person who violates paragraph (1) shall--
          (A) be punished by a fine of not more than $500,000 
        or by imprisonment for not more than 10 years, or both;
          (B) be subject to the administrative remedies 
        prescribed by the Program Fraud Civil Remedies Act of 
        1986 (31 U.S.C. 3801-3812);
          (C) be subject to suspension and debarment as 
        specified in subpart 9.4 of title 48, Code of Federal 
        Regulations (or any successor regulation); and
          (D) be ineligible for participation in any program or 
        activity conducted under the authority of this Act or 
        the Small Business Investment Act of 1958 (15 U.S.C. 
        661 et seq.) for a period not to exceed 3 years.
          (3) Limitation on liability.--This subsection shall 
        not apply to any conduct in violation of subsection (a) 
        if the defendant acted in good faith reliance on a 
        written advisory opinion from a Small Business 
        Development Center (as defined in this Act), or an 
        entity participating in the Procurement Technical 
        Assistance Cooperative Agreement Program defined in 
        chapter 142 of title 10, United States Code; however 
        nothing in this Act shall obligate either entity to 
        provide such a letter nor shall the provision of such a 
        letter in any way render the providing entity liable to 
        the business concern should the Administrator later 
        determine that the concern is not a small business 
        concern. Upon issuance of an advisory opinion under 
        this paragraph, the entity issuing the advisory opinion 
        shall remit a copy of the opinion to the General 
        Counsel of the Administration, who may reject the 
        advisory opinion. If the General Counsel of the 
        Administration rejects the advisory opinion, the 
        Administration shall notify the entity issuing the 
        advisory opinion and the recipient of the opinion, 
        after which time the business concern may not rely upon 
        the opinion.
  (e) Any representation of the status of any concern or person 
as a ``small business concern''[,, a], a ``small business 
concern owned and controlled by service-disabled veterans'', a 
``small business concern owned and controlled by veterans'', a  
``HUBZone small business concern'', a ``small business concern 
owned and controlled by socially and economically disadvantaged 
individuals'', or a ``small business concern owned and 
controlled by women'' in order to obtain any prime contract or 
subcontract enumerated in subsection (d) of this section shall 
be in writing.
  (f) Whoever falsely certifies past compliance with the 
requirements of section 7(j)(10)(I) of this Act shall be 
subject to the penalties prescribed in subsection (d).
  (g) Subcontracting Limitations.--
          (1) In general.--Whoever violates a requirement 
        established under section 46 shall be subject to the 
        penalties prescribed in subsection (d), except that, 
        for an entity that exceeded a limitation on 
        subcontracting under such section, the fine described 
        in subsection (d)(2)(A) shall be treated as the greater 
        of--
                  (A) $500,000; or
                  (B) the dollar amount expended, in excess of 
                permitted levels, by the entity on 
                subcontractors.
          (2) Monitoring.--Not later than 1 year after the date 
        of enactment of this subsection, the Administrator 
        shall take such actions as are necessary to ensure that 
        an existing Federal subcontracting reporting system is 
        modified to notify the Administrator, the appropriate 
        Director of the Office of Small and Disadvantaged 
        Business Utilization, and the appropriate contracting 
        officer if a requirement established under section 46 
        is violated.

           *       *       *       *       *       *       *


SEC. 36. PROCUREMENT PROGRAM FOR SMALL BUSINESS CONCERNS OWNED AND 
                    CONTROLLED BY SERVICE-DISABLED VETERANS.

  (a) Contracting Officer Defined.--For purposes of this 
section, the term ``contracting officer'' has the meaning given 
such term in section 2101 of title 41, United States Code.
  (b) Certification of Small Business Concerns Owned and 
Controlled by Service-disabled Veterans.--With respect to a 
procurement program or preference established under this Act 
that applies to prime contractors, the Administrator shall--
          (1) certify the status of the concern as a ``small 
        business concern owned and controlled by service-
        disabled veterans''; and
          (2) require the periodic recertification of such 
        status.
  [(a)] (c) Sole Source Contracts.--In accordance with this 
section, a contracting officer may award a sole source contract 
to any small business concern owned and controlled by service-
disabled veterans if--
          (1) such concern is determined to be a responsible 
        contractor with respect to performance of such contract 
        opportunity and the contracting officer does not have a 
        reasonable expectation that 2 or more small business 
        concerns owned and controlled by service-disabled 
        veterans will submit offers for the contracting 
        opportunity;
          (2) the anticipated award price of the contract 
        (including options) will not exceed--
                  (A) $5,000,000, in the case of a contract 
                opportunity assigned a standard industrial 
                classification code for manufacturing; or
                  (B) $3,000,000, in the case of any other 
                contract opportunity; and
          (3) in the estimation of the contracting officer, the 
        contract award can be made at a fair and reasonable 
        price.
  [(b)] (d) Restricted Competition.--In accordance with this 
section, a contracting officer may award contracts on the basis 
of competition restricted to small business concerns owned and 
controlled by service-disabled veterans if the contracting 
officer has a reasonable expectation that not less than 2 small 
business concerns owned and controlled by service-disabled 
veterans will submit offers [and that the award can be made at 
a fair market price], that the award can be made at a fair 
market price, and if each concern is certified by the 
Administrator as a small business concern owned and controlled 
by service-disabled veterans.
  [(c)] (e) Relationship to Other Contracting Preferences.--A 
procurement may not be made from a source on the basis of a 
preference provided under subsection (a) or (b) if the 
procurement would otherwise be made from a different source 
under section 4124 or 4125 of title 18, United States Code, or 
the Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.).
  [(d) Enforcement; Penalties.--Rules similar to the rules of 
paragraphs (5) and (6) of section 8(m) shall apply for purposes 
of this section.
  [(e) Contracting Officer.--For purposes of this section, the 
term ``contracting officer'' has the meaning given such term in 
section 27(f)(5) of the Office of Federal Procurement Policy 
Act (41 U.S.C. 423(f)(5)).]
  (f) Database of Veteran-Owned Businesses.--(1) Subject to 
paragraphs (2) through (6), the Administrator shall maintain a 
database of small business concerns owned and controlled by 
veterans, small business concerns owned and controlled by 
service-disabled veterans, and the veteran owners of such 
business concerns.
  (2)(A) To be eligible for inclusion in the database, such a 
veteran shall submit to the Administrator such information as 
the Administrator may require with respect to the small 
business concern or the veteran. Application for inclusion in 
the database shall constitute permission under section 552a of 
title 5 (commonly referred to as the Privacy Act) for the 
Administrator to obtain from the Administrator of Veterans 
Affairs such personal information maintained by the Secretary 
as may be necessary to verify the information contained in the 
application.
  (B) For purposes of this subsection--
          (i) the Secretary of Veterans Affairs shall--
                  (I) verify an individual's status as a 
                veteran or a service-disabled veteran; and
                  (II) establish a system to permit the 
                Administrator to access, but not alter, such 
                verification; and
          (ii) the Administrator shall verify--
                  (I) the status of a business concern as a 
                small business concern; and
                  (II) the ownership and control of such 
                business concern.
  (C) The Administrator may not certify a concern under 
subsection (b) or section 36A if the Secretary of Veterans 
Affairs cannot provide the verification described under 
subparagraph (B)(i)(I).
  (3) Information maintained in the database shall be submitted 
on a voluntary basis by such veterans.
   (4) The Administrator shall make the database available to 
all Federal departments and agencies and shall notify each such 
department and agency of the availability of the database.
   (5) If the Adminissur determines that the public 
dissemination of certain types of information maintained in the 
database is inappropriate, the Secretary the Administrator 
shall take such steps as are necessary to maintain such types 
of information in a secure and confidential manner.
  (6)(A) If a small business concern is not included in the 
database because the Administrator does not certify the status 
of the concern as a small business concern owned and controlled 
by veterans (under section 36A) or a small business concern 
owned and controlled by service-disabled veterans (under 
section 36(g)), the concern may appeal the denial of 
certification to the Office of Hearings and Appeals of the 
Small Business Administration (as established under section 
5(i) of the Small Business Act). The decision of the Office of 
Hearings and Appeals shall be considered a final agency action.
  (B)(i) If an interested party challenges the inclusion in the 
database of a small business concern owned and controlled by 
veterans or a small business concern owned and controlled by 
service-disabled veteran based on the status of the concern as 
a small business concern or the ownership or control of the 
concern, the challenge shall be heard by the Office of Hearings 
and Appeals of the Small Business Administration as described 
in subparagraph (A). The decision of the Office of Hearings and 
Appeals shall be considered final agency action.
  (ii) In this subparagraph, the term ``interested party'' 
means--
          (I) the Secretary of Veterans Affairs of the 
        Administrator; or
          (II) in the case of a small business concern that is 
        awarded a contract, the applicable contracting officer 
        or another small business concern that submitted an 
        offer for the contract that was awarded to the small 
        business concern that is the subject of a challenge 
        made under clause (i).
  (g) Certification Requirement.--Notwithstanding subsection 
(c), a contracting officer may only award a sole source 
contract to a small business concern owned and controlled by 
service-disabled veterans or a contract on the basis of 
competition restricted to small business concerns owned and 
controlled by service-disabled veterans if such a concern is 
certified by the Administrator as a small business concern 
owned and controlled by service-disabled veterans.
  (h) Enforcement; Penalties.--
          (1) Verification of eligibility.--In carrying out 
        this section, the Administrator shall establish 
        procedures relating to--
                  (A) the filing, investigation, and 
                disposition by the Administration of any 
                challenge to the eligibility of a small 
                business concern to receive assistance under 
                this section (including a challenge, filed by 
                an interested party, relating to the veracity 
                of a certification made or information provided 
                to the Administration by a small business 
                concern under subsection (b)); and
                  (B) verification by the Administrator of the 
                accuracy of any certification made or 
                information provided to the Administration by a 
                small business concern under subsection (b).
          (2) Examinations.--
                  (A) Examination of applicants.--The 
                procedures established under paragraph (1) 
                shall provide for a program of examinations by 
                the Administrator of any small business concern 
                making a certification or providing information 
                to the Administrator under subsection (b), to 
                determine the veracity of any statements or 
                information provided as part of such 
                certification or otherwise provided under 
                subsection (b).
                  (B) Examination of certified concerns.--The 
                procedures established under paragraph (1) 
                shall provide for the examination of risk-based 
                samples of small business concerns certified 
                under subsection (b), or of any small business 
                concern that the Administrator believes poses a 
                particular risk or with respect to which the 
                Administrator receives specific and credible 
                information alleging that the small business 
                concern no longer meets eligibility 
                requirements to be certified as a small 
                business concern owned and controlled by 
                service-disabled veterans.
          (3) Penalties.--In addition to the penalties 
        described in section 16(d), any small business concern 
        that is determined by the Administrator to have 
        misrepresented the status of that concern as a small 
        business concern owned and controlled by service-
        disabled veterans for purposes of subsection (b), shall 
        be subject to--
                  (A) section 1001 of title 18, United States 
                Code;
                  (B) sections 3729 through 3733 of title 31, 
                United States Code; and
                  (C) section 8127(g) of title 38, United 
                States Code.
  (i) Provision of Data.--Upon the request of the 
Administrator, the head of any Federal department or agency 
shall promptly provide to the Administrator such information as 
the Administrator determines to be necessary to carry out 
subsection (b) or to be able to certify the status of the 
concern as a small business concern owned and controlled by 
veterans under section 36A.

SEC. 36A. CERTIFICATION OF SMALL BUSINESS CONCERNS OWNED AND CONTROLLED 
                    BY VETERANS.

  (a) In General.--With respect to the program established 
under section 8127 of title 38, United States Code, the 
Administrator shall--
          (1) certify the status of the concern as a ``small 
        business concern owned and controlled by veterans''; 
        and
          (2) require the periodic recertification of such 
        status.
  (b) Enforcement; Penalties.--
          (1) Verification of eligibility.--In carrying out 
        this section, the Administrator shall establish 
        procedures relating to--
                  (A) the filing, investigation, and 
                disposition by the Administration of any 
                challenge to the eligibility of a small 
                business concern to receive assistance under 
                this section (including a challenge, filed by 
                an interested party, relating to the veracity 
                of a certification made or information provided 
                to the Administration by a small business 
                concern under subsection (a)); and
                  (B) verification by the Administrator of the 
                accuracy of any certification made or 
                information provided to the Administration by a 
                small business concern under subsection (a).
          (2) Examination of applicants.--The procedures 
        established under paragraph (1) shall provide for a 
        program of examinations by the Administrator of any 
        small business concern making a certification or 
        providing information to the Administrator under 
        subsection (a), to determine the veracity of any 
        statements or information provided as part of such 
        certification or otherwise provided under subsection 
        (a).
          (3) Penalties.--In addition to the penalties 
        described in section 16(d), any small business concern 
        that is determined by the Administrator to have 
        misrepresented the status of that concern as a small 
        business concern owned and controlled by veterans for 
        purposes of subsection (a), shall be subject to--
                  (A) section 1001 of title 18, United States 
                Code;
                  (B) sections 3729 through 3733 of title 31, 
                United States Code; and
                  (C) section 8127(g) of title 38, United 
                States Code.

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