[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1870 Reported in Senate (RS)]
<DOC>
Calendar No. 542
114th CONGRESS
2d Session
S. 1870
To amend the Small Business Act to require the Administrator of the
Small Business Administration to carry out a pilot program on issuing
grants to eligible veterans to start or acquire qualifying businesses,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 27, 2015
Mr. Moran (for himself, Mr. Tester, Mrs. Capito, and Mr. Coons)
introduced the following bill; which was read twice and referred to the
Committee on Small Business and Entrepreneurship
June 29, 2016
Reported by Mr. Vitter, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To amend the Small Business Act to require the Administrator of the
Small Business Administration to carry out a pilot program on issuing
grants to eligible veterans to start or acquire qualifying businesses,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Veterans Entrepreneurial
Transition Act of 2015'' or the ``VET Act of 2015''.</DELETED>
<DELETED>SEC. 2. VETERANS SMALL BUSINESS ENTREPRENEURSHIP PILOT
PROGRAM.</DELETED>
<DELETED> Section 32 of the Small Business Act (15 U.S.C. 657b) is
amended by adding at the end the following:</DELETED>
<DELETED> ``(g) Veterans Small Business Entrepreneurship Pilot
Program.--</DELETED>
<DELETED> ``(1) Pilot program required.--</DELETED>
<DELETED> ``(A) In general.--Not later than 90 days
after the date of enactment of this subsection, the
Administrator, in consultation with the Advisory
Committee and the Secretary of Veterans Affairs, shall
begin carrying out a pilot program to assess the
feasibility and advisability of making grants to
eligible veterans to start or acquire a qualifying
business enterprise.</DELETED>
<DELETED> ``(B) Promotion of efficiency.--In
carrying out the pilot program, the Administrator shall
ensure, to the maximum extent practicable, that the
pilot program promotes efficiency, accountability, and
competition.</DELETED>
<DELETED> ``(C) List of categories of business
enterprises.--The Administrator, in consultation with
the Advisory Committee, shall by rule establish a list
of categories of business enterprises that the
Administrator determines to be qualifying business
enterprises for purposes of the pilot program, which
shall include--</DELETED>
<DELETED> ``(i) a small business
concern;</DELETED>
<DELETED> ``(ii) a franchise business
enterprise; and</DELETED>
<DELETED> ``(iii) any other category of
business enterprise that the Administrator, in
consultation with the Advisory Committee,
determines is appropriate and in accordance
with the purposes of the pilot
program.</DELETED>
<DELETED> ``(D) Number of grants.--Under the pilot
program, the Administrator may make grants in
accordance with paragraph (4) to not more than 250
eligible veterans to start or acquire a qualifying
business enterprise.</DELETED>
<DELETED> ``(E) Geographic diversity.--In making
grants under the pilot program, the Administrator shall
ensure geographic diversity among the veterans who
receive the grants.</DELETED>
<DELETED> ``(F) Duration.--The Administrator shall
carry out the pilot program during the 3-year period
beginning on the date on which the Administrator begins
carrying out the pilot program.</DELETED>
<DELETED> ``(2) Application.--</DELETED>
<DELETED> ``(A) In general.--An eligible veteran
desiring a grant under the pilot program shall submit
an application--</DELETED>
<DELETED> ``(i) to the Administrator in the
form and containing the information as the
Administrator may require, including the
information described in subparagraph (B);
and</DELETED>
<DELETED> ``(ii) not later than 1 year
before the date on which the pilot program
terminates under paragraph (1)(F).</DELETED>
<DELETED> ``(B) Documentation requirements.--The
Administrator, in considering an application from an
eligible veteran for a grant under the pilot program,
may not approve the application unless the application
includes the following:</DELETED>
<DELETED> ``(i) A description of the use of
the grant amount, including an identification
and description of the qualifying business
enterprise.</DELETED>
<DELETED> ``(ii) A description of the
expected return on investment resulting from
the grant amounts.</DELETED>
<DELETED> ``(iii) A certification that the
eligible veteran applying for the grant--
</DELETED>
<DELETED> ``(I) shall complete the
education and training relevant to the
ownership and operation of the
qualifying business enterprise
described in paragraphs (3)(A) and
(3)(B); and</DELETED>
<DELETED> ``(II) understands that
the eligible veteran may not receive
amounts under a grant under the pilot
program until after the eligible
veteran has completed the required
education and training relevant to the
ownership and operation of the
qualifying business enterprise
described in paragraphs (3)(A) and
(3)(B).</DELETED>
<DELETED> ``(iv) Such certifications as the
Administrator, in consultation with the
Advisory Committee, shall by rule require,
including--</DELETED>
<DELETED> ``(I) for a business
enterprise in operation on the date of
the application, evidence that the
Administrator, in consultation with the
Advisory Committee, determines
appropriate of--</DELETED>
<DELETED> ``(aa) good
standing;</DELETED>
<DELETED> ``(bb) profitable
operation; and</DELETED>
<DELETED> ``(cc) guarantees
relating to the purchase of the
enterprise;</DELETED>
<DELETED> ``(II) for a franchise
business enterprise, evidence that the
Administrator, in consultation with the
Advisory Committee, determines
appropriate of--</DELETED>
<DELETED> ``(aa) compliance
with applicable State and
Federal laws on franchises;
and</DELETED>
<DELETED> ``(bb) training in
conformation with the industry
standard; and</DELETED>
<DELETED> ``(III) for a startup, or
an enterprise that is otherwise not in
operation at the time of the
application, a proposal for the
operation of that enterprise that leads
to profitable operation within a
reasonable timeframe.</DELETED>
<DELETED> ``(v) A certification that the
eligible veteran applying for the grant
understands that the eligible veteran may not
receive amounts under the grant until after the
business plan of the eligible veteran has been
approved under the procedures described in
paragraph (3)(C)(ii).</DELETED>
<DELETED> ``(vi) A certification that the
eligible veteran--</DELETED>
<DELETED> ``(I) has been truthful
about the employment status of the
eligible veteran; and</DELETED>
<DELETED> ``(II) understands that
the eligible veteran will be prohibited
from participating in the pilot program
if the certification described in
subclause (I) is determined to be
untrue.</DELETED>
<DELETED> ``(C) Group applications.--The
Administrator may authorize a group of eligible
veterans to apply as a group under the pilot program.
The group shall be treated as a single eligible veteran
under the pilot program, except that the maximum amount
of the grant shall be calculated by multiplying the
maximum amount under paragraph (4)(A) by the number of
members of the group.</DELETED>
<DELETED> ``(3) Entrepreneurship training.--</DELETED>
<DELETED> ``(A) In general.--Each eligible veteran
receiving a grant under the pilot program shall
complete an entrepreneurship readiness program approved
by the Administrator that is designed to prepare the
eligible veteran for, and lead to the immediate
subsequent ownership and management by the eligible
veteran of, a qualifying business enterprise.</DELETED>
<DELETED> ``(B) Approved programs.--An approved
program described in subparagraph (A) may include a
program--</DELETED>
<DELETED> ``(i) available through a small
business development center;</DELETED>
<DELETED> ``(ii) approved by the
Administrator for entrepreneurship
training;</DELETED>
<DELETED> ``(iii) approved by the Secretary
of Veterans Affairs for entrepreneurship
training;</DELETED>
<DELETED> ``(iv) available through the
Transition Assistance Program of the Department
of Defense;</DELETED>
<DELETED> ``(v) available through a women's
business center, as described in section
29;</DELETED>
<DELETED> ``(vi) available through a
Veterans Business Outreach Center, as described
in subsection (d);</DELETED>
<DELETED> ``(vii) available through the
SCORE program authorized by section 8(b)(1);
or</DELETED>
<DELETED> ``(viii) approved by the
Administrator, in consultation with the
Advisory Committee, as appropriate because of
the expertise the program offers relating to a
certain type of business enterprise.</DELETED>
<DELETED> ``(C) Business plan.--</DELETED>
<DELETED> ``(i) Contents.--An eligible
veteran receiving a grant under the pilot
program shall prepare a business plan, which
shall include--</DELETED>
<DELETED> ``(I) a description of how
the qualifying business enterprise will
achieve profitable operation within a
reasonable timeframe;</DELETED>
<DELETED> ``(II) an assessment of
relevant--</DELETED>
<DELETED> ``(aa) economic
indicators;</DELETED>
<DELETED> ``(bb) consumer
data;</DELETED>
<DELETED> ``(cc) production
and sales data; and</DELETED>
<DELETED> ``(dd) market or
industry analysis;
and</DELETED>
<DELETED> ``(III) other information
that the Administrator, in consultation
with the Advisory Committee, determines
is appropriate.</DELETED>
<DELETED> ``(ii) Approval procedure.--
</DELETED>
<DELETED> ``(I) Approval by
advisor.--If an advisor approves the
business plan prepared by the eligible
veteran, the Associate Administrator
for Veterans Business Development of
the Administration--</DELETED>
<DELETED> ``(aa) shall
review the business plan;
and</DELETED>
<DELETED> ``(bb) may reverse
the approval of the business
plan and require that the
eligible veteran continue to
consult with the advisor to
develop and resubmit the
business plan.</DELETED>
<DELETED> ``(II) Disapproval by
advisor.--If an advisor does not
approve the business plan prepared by
an eligible veteran, the Associate
Administrator for Veterans Business
Development of the Administration, upon
appeal by the eligible veteran, may
reverse the decision of the advisor and
approve the business plan.</DELETED>
<DELETED> ``(4) Grant terms and conditions.--</DELETED>
<DELETED> ``(A) Maximum grant amount and additional
assistance.--</DELETED>
<DELETED> ``(i) In general.--Subject to
paragraph (2)(C), the maximum amount that an
eligible veteran may receive under the pilot
program shall not exceed an amount equal to the
sum of--</DELETED>
<DELETED> ``(I) the maximum grant
amount specified in clause
(ii);</DELETED>
<DELETED> ``(II) the amount equal to
the product obtained by multiplying--
</DELETED>
<DELETED> ``(aa) the amount
of additional assistance to
which the eligible veteran is
entitled under clause
(iii)(II); by</DELETED>
<DELETED> ``(bb) the number
of months that the eligible
veteran participates in the
pilot program; and</DELETED>
<DELETED> ``(III) the amount of
training assistance received by the
eligible veteran in clause
(iv).</DELETED>
<DELETED> ``(ii) Maximum grant amount.--The
maximum grant amount specified in this clause
is the following:</DELETED>
<DELETED> ``(I) In the case of an
eligible veteran entitled to
educational assistance under chapter 33
of title 38, United States Code, the
amount equal to the product obtained by
multiplying--</DELETED>
<DELETED> ``(aa) the number
of months of educational
assistance to which the
eligible veteran is entitled on
the date that the eligible
veteran submits an application;
by</DELETED>
<DELETED> ``(bb) the pro
rata monthly rate of the amount
that the eligible veteran is
entitled to under paragraph
(1)(A)(ii)(II) of section
3313(c) of that title, subject
to paragraphs (2) through (7)
of that section.</DELETED>
<DELETED> ``(II) In the case of an
eligible veteran entitled to
educational assistance under chapter 30
of title 38, United States Code, the
amount equal to the product obtained by
multiplying--</DELETED>
<DELETED> ``(aa) the number
of months of educational
assistance to which the
eligible veteran is entitled on
the date that the eligible
veteran submits an application;
by</DELETED>
<DELETED> ``(bb) the rate in
effect under section 3015(a)(1)
of that title.</DELETED>
<DELETED> ``(iii) Additional assistance.--
</DELETED>
<DELETED> ``(I) Period of
eligibility.--An eligible veteran shall
receive the amount described in
subclause (II) for each month that the
eligible veteran participates in the
pilot program.</DELETED>
<DELETED> ``(II) Amount.--The amount
of the additional assistance specified
in this subclause is an amount, paid to
the eligible veteran on a monthly
basis, equal to the product obtained by
multiplying--</DELETED>
<DELETED> ``(aa) the monthly
amount of the basic allowance
for housing payable under
section 403 of title 37, United
States Code, for a member with
dependents in pay grade E-5
residing in the military
housing area that encompasses
all or the majority portion of
the ZIP code area in which is
located the residence of the
eligible veteran (similar to
the calculation made under
section 3313(c)(1)(B)(i)(I) of
title 38, United States Code);
by--</DELETED>
<DELETED> ``(bb)(AA) in the
case of an eligible veteran
who, as of the date on which
the eligible veteran applies
for a grant under this
subsection, has no employment
other than the qualifying
business enterprise for which
the eligible veteran seeks a
grant under this subsection, 1;
or</DELETED>
<DELETED> ``(BB) in the case
of an eligible veteran who is
not described in subitem (AA),
0.5.</DELETED>
<DELETED> ``(iv) Training assistance.--Upon
application by an eligible veteran receiving a
grant under the pilot program, the
Administrator may pay for the cost, if
applicable, of an approved program described in
paragraph (3)(B)(viii).</DELETED>
<DELETED> ``(B) Disbursement.--The amount of a grant
made under the pilot program shall be disbursed to an
eligible veteran--</DELETED>
<DELETED> ``(i) in installments, in
accordance with the procedures described in
subparagraph (C);</DELETED>
<DELETED> ``(ii) only after the eligible
veteran presents documentation proving that the
eligible veteran has completed the required
entrepreneurship training described in
paragraphs (3)(A) and (3)(B); and</DELETED>
<DELETED> ``(iii) only after the business
plan of the eligible veteran has been approved
under the procedures described in paragraph
(3)(C)(ii).</DELETED>
<DELETED> ``(C) Installment payments.--The amount
described in subparagraph (A)(ii) shall be paid to the
eligible veteran in installments on a pro rata basis
with each installment being paid to the eligible
veteran--</DELETED>
<DELETED> ``(i) not earlier than 3 months
after the date of the payment of the most
recent installment to the eligible
veteran;</DELETED>
<DELETED> ``(ii) not later than 12 months
after the date of the payment of the most
recent installment to the eligible veteran;
and</DELETED>
<DELETED> ``(iii) only after the eligible
veteran has met milestones established in the
business plan of the eligible
veteran.</DELETED>
<DELETED> ``(5) Use of grant amounts.--An eligible veteran
who receives a grant under the pilot program may use the amount
of the grant--</DELETED>
<DELETED> ``(A) in accordance with the limitations
that the Administrator, in consultation with the
Advisory Committee, may by rule establish;
and</DELETED>
<DELETED> ``(B) for purposes related to starting or
acquiring a qualifying business enterprise that the
Administrator, in consultation with the Advisory
Committee, determines are appropriate, including--
</DELETED>
<DELETED> ``(i) purchasing goods or services
necessary for the creation or operation of a
qualifying business enterprise;</DELETED>
<DELETED> ``(ii) funding a project that is
directed toward any economic development
objective described under section 501(d) of the
Small Business Investment Act of 1958 (15
U.S.C. 695(d)); and</DELETED>
<DELETED> ``(iii) acquiring a qualifying
business enterprise.</DELETED>
<DELETED> ``(6) Report.--</DELETED>
<DELETED> ``(A) In general.--Not later than 2 years
after the date on which the pilot program is commenced,
the Administrator shall submit to the Committee on
Small Business and Entrepreneurship and the Committee
on Veterans' Affairs of the Senate and the Committee on
Small Business and the Committee on Veterans' Affairs
of the House of Representatives a report analyzing the
feasibility and effectiveness of the pilot
program.</DELETED>
<DELETED> ``(B) Contents.--The report submitted
under subparagraph (A) shall include--</DELETED>
<DELETED> ``(i) an assessment of the pilot
program;</DELETED>
<DELETED> ``(ii) a survey containing--
</DELETED>
<DELETED> ``(I) the number of
grantees under the pilot program;
and</DELETED>
<DELETED> ``(II) the number of the
grantees under the pilot program that
participated in each of the training
programs described in subparagraphs (A)
and (B) of paragraph (3);</DELETED>
<DELETED> ``(iii) recommendations regarding
whether any aspect of the pilot program should
be made a permanent authority, and, if so, the
means to ensure--</DELETED>
<DELETED> ``(I) geographic and
demographic diversity among the
eligible veterans who receive the
grants under the permanent authority;
and</DELETED>
<DELETED> ``(II) diversity in the
types of qualifying business
enterprises for which eligible veterans
may receive grants under the pilot
program;</DELETED>
<DELETED> ``(iv) an assessment regarding
whether the grants distributed under the pilot
program should continue to be made in
installments or with a one-time, lump sum
payment;</DELETED>
<DELETED> ``(v) an assessment of the
additional assistance made available under the
pilot program, including the accountability
surrounding the availability of additional
assistance;</DELETED>
<DELETED> ``(vi) an analysis of the
procedures for approving a business plan and a
recommendation regarding ways, if necessary, to
improve the procedures; and</DELETED>
<DELETED> ``(vii) a recommendation regarding
ways, if necessary, to improve the
accountability of advisors.</DELETED>
<DELETED> ``(7) No effect on time limitation for use of
entitlement to educational assistance.--Nothing in this
subsection shall be construed to modify any time limitation or
period during which an individual is entitled to educational
assistance under chapter 30 or 33 of title 38, United States
Code.</DELETED>
<DELETED> ``(8) Definitions.--In this subsection:</DELETED>
<DELETED> ``(A) Advisor.--The term `advisor' means a
person--</DELETED>
<DELETED> ``(i) affiliated with an
entrepreneurship or training and curricula
program described in paragraphs (3)(A) and
(3)(B);</DELETED>
<DELETED> ``(ii) who may assist an eligible
veteran with the preparation and approval of a
business plan; and</DELETED>
<DELETED> ``(iii) who is approved to serve
as an advisor by the Administrator, in
consultation with the Advisory
Committee.</DELETED>
<DELETED> ``(B) Advisory committee.--The term
`Advisory Committee' means the Advisory Committee on
Veterans Business Affairs established under section 203
of the Veterans Entrepreneurship and Small Business
Development Act of 1999 (15 U.S.C. 657b
note).</DELETED>
<DELETED> ``(C) Business plan.--The term `business
plan' means a plan prepared by an eligible veteran for
the operation of a qualifying business enterprise that
shall be--</DELETED>
<DELETED> ``(i) prepared--</DELETED>
<DELETED> ``(I) while the eligible
veteran participates in an approved
training program described in
paragraphs (3)(A) and (3)(B);
and</DELETED>
<DELETED> ``(II) with the assistance
of an advisor; and</DELETED>
<DELETED> ``(ii) consistent with the
guidelines and recommendations provided by the
Business Plan Tool of the
Administration.</DELETED>
<DELETED> ``(D) Eligible veteran.--The term
`eligible veteran' means an individual who--</DELETED>
<DELETED> ``(i) is--</DELETED>
<DELETED> ``(I) a veteran;
or</DELETED>
<DELETED> ``(II) a member of the
Armed Forces who--</DELETED>
<DELETED> ``(aa) is
currently retiring or
separating from the Armed
Forces and has a service
approved retirement or
separation packet; or</DELETED>
<DELETED> ``(bb) has last
been honorably discharged from
active duty service in the
Armed Forces;</DELETED>
<DELETED> ``(ii) has completed not less
than--</DELETED>
<DELETED> ``(I) 36 months of active
duty service in the Armed Forces (other
than active duty service for training);
or</DELETED>
<DELETED> ``(II) 24 months of active
duty service in the Armed Forces (other
than active duty service for training)
before being discharged or separated
for a service-connected disability, as
that term is defined in section 101 of
title 38, United States Code;
and</DELETED>
<DELETED> ``(iii) is entitled to educational
assistance under chapter 30 or 33 of title 38,
United States Code.</DELETED>
<DELETED> ``(E) Franchise business enterprise.--The
term `franchise business enterprise' means any
continuing commercial relationship or arrangement,
regardless of the title given the relationship or
arrangement, under which the terms of the offer or
contract specify, or the franchise seller promises or
represents, orally or in writing, that--</DELETED>
<DELETED> ``(i) the franchisee will obtain
the right to--</DELETED>
<DELETED> ``(I) operate a business
that is identified or associated with
the trademark of the franchisor;
or</DELETED>
<DELETED> ``(II) offer, sell, or
distribute goods, services, or
commodities that are identified or
associated with the trademark of the
franchisor;</DELETED>
<DELETED> ``(ii) the franchisor may--
</DELETED>
<DELETED> ``(I) exert, or has
authority to exert, a significant
degree of control over the method of
operation of the franchisee;
or</DELETED>
<DELETED> ``(II) provide significant
assistance in the method of operation
of the franchisee; and</DELETED>
<DELETED> ``(iii) as a condition of
obtaining or commencing operation of the
franchise business enterprise, the franchisee
makes a required payment or commits to make a
required payment to the franchisor or the
affiliate of the franchisor.</DELETED>
<DELETED> ``(F) Franchisee.--The term `franchisee'
means any person who is granted a franchise business
enterprise.</DELETED>
<DELETED> ``(G) Franchisor.--The term `franchisor'--
</DELETED>
<DELETED> ``(i) means any person who grants
a franchise business enterprise and
participates in the franchise relationship;
and</DELETED>
<DELETED> ``(ii) includes
subfranchisors.</DELETED>
<DELETED> ``(H) Pilot program.--The term `pilot
program' means the pilot program established under
paragraph (1)(A).</DELETED>
<DELETED> ``(I) Qualifying business enterprise.--The
term `qualifying business enterprise' means a business
included in the list of categories of business
enterprises established under paragraph
(1)(C).</DELETED>
<DELETED> ``(J) Startup.--The term `startup' means a
business enterprise that--</DELETED>
<DELETED> ``(i) is not yet in existence;
or</DELETED>
<DELETED> ``(ii) has been in existence for
not more than 5 years.</DELETED>
<DELETED> ``(K) Subfranchisor.--The term
`subfranchisor' means a person who functions as a
franchisor by engaging in both pre-sale activities and
post-sale performance.''.</DELETED>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Veterans Entrepreneurial Transition
Act of 2016'' or the ``VET Act of 2016''.
SEC. 2. VETERANS SMALL BUSINESS ENTREPRENEURSHIP PILOT PROGRAM.
Section 32 of the Small Business Act (15 U.S.C. 657b) is amended by
adding at the end the following:
``(g) Veterans Small Business Entrepreneurship Pilot Program.--
``(1) Pilot program required.--
``(A) In general.--Not later than 90 days after the
date of enactment of this subsection, the
Administrator, in consultation with the Advisory
Committee and the Secretary of Veterans Affairs, shall
begin carrying out a pilot program to assess the
feasibility and advisability of making grants to
eligible veterans to start or acquire a qualifying
business enterprise.
``(B) Promotion of efficiency.--In carrying out the
pilot program, the Administrator shall ensure, to the
maximum extent practicable, that the pilot program
promotes efficiency, accountability, and competition.
``(C) List of categories of business enterprises.--
The Administrator, in consultation with the Advisory
Committee, shall by rule establish a list of categories
of business enterprises that the Administrator
determines to be qualifying business enterprises for
purposes of the pilot program, which shall include--
``(i) a small business concern;
``(ii) a franchise business enterprise; and
``(iii) any other category of business
enterprise that the Administrator, in
consultation with the Advisory Committee,
determines is appropriate and in accordance
with the purposes of the pilot program.
``(D) Number of grants.--Under the pilot program,
the Administrator may make grants in accordance with
paragraph (4) to not more than 250 eligible veterans to
start or acquire a qualifying business enterprise.
``(E) Geographic diversity.--In making grants under
the pilot program, the Administrator shall ensure
geographic diversity among the veterans who receive the
grants.
``(F) Duration.--The Administrator shall carry out
the pilot program during the 3-year period beginning on
the date on which the Administrator begins carrying out
the pilot program.
``(2) Application.--
``(A) In general.--An eligible veteran desiring a
grant under the pilot program shall submit an
application--
``(i) to the Administrator in the form and
containing the information the Administrator
may require, including the information
described in subparagraph (B); and
``(ii) not later than 1 year before the
date on which the pilot program terminates
under paragraph (1)(F).
``(B) Documentation requirements.--The
Administrator, in considering an application from an
eligible veteran for a grant under the pilot program,
may not approve the application unless the application
includes the following:
``(i) A description of the use of the grant
amount, including an identification and
description of the qualifying business
enterprise.
``(ii) A description of the expected return
on investment resulting from the grant amounts.
``(iii) A certification that the eligible
veteran applying for the grant--
``(I) shall complete the education
and training relevant to the ownership
and operation of the qualifying
business enterprise described in
paragraphs (3)(A) and (3)(B); and
``(II) understands that the
eligible veteran may not receive
amounts under a grant under the pilot
program until after the eligible
veteran has completed the required
education and training relevant to the
ownership and operation of the
qualifying business enterprise
described in paragraphs (3)(A) and
(3)(B).
``(iv) Such certifications as the
Administrator, in consultation with the
Advisory Committee, shall by rule require,
including--
``(I) for a business enterprise in
operation on the date of the
application, evidence that the
Administrator, in consultation with the
Advisory Committee, determines
appropriate of--
``(aa) good standing;
``(bb) profitable
operation; and
``(cc) guarantees relating
to the purchase of the
enterprise;
``(II) for a franchise business
enterprise, evidence that the
Administrator, in consultation with the
Advisory Committee, determines
appropriate of--
``(aa) compliance with
applicable State and Federal
laws on franchises; and
``(bb) training in
confirmation with the industry
standard; and
``(III) for a startup, or an
enterprise that is otherwise not in
operation at the time of the
application, a proposal for the
operation of that enterprise that leads
to profitable operation within a
reasonable time frame.
``(v) A certification that the eligible
veteran applying for the grant understands that
the eligible veteran may not receive amounts
under the grant until after the business plan
of the eligible veteran has been approved under
the procedures described in paragraph
(3)(C)(ii).
``(vi) A certification that the eligible
veteran--
``(I) has been truthful about the
employment status of the eligible
veteran; and
``(II) understands that the
eligible veteran will be prohibited
from participating in the pilot program
if the certification described in
subclause (I) is determined to be
untrue.
``(C) Group applications.--The Administrator may
authorize a group of eligible veterans to apply as a
group under the pilot program. The group shall be
treated as a single eligible veteran under the pilot
program, except that the maximum amount of the grant
shall be calculated by multiplying the maximum amount
under paragraph (4)(A) by the number of members of the
group.
``(3) Entrepreneurship training.--
``(A) In general.--Each eligible veteran receiving
a grant under the pilot program shall complete an
entrepreneurship readiness program approved by the
Administrator that is designed to prepare the eligible
veteran for, and lead to the immediate subsequent
ownership and management by the eligible veteran of, a
qualifying business enterprise.
``(B) Approved programs.--An approved program
described in subparagraph (A) may include a program--
``(i) available through a small business
development center;
``(ii) approved by the Administrator for
entrepreneurship training;
``(iii) approved by the Secretary of
Veterans Affairs for entrepreneurship training;
``(iv) available through the Transition
Assistance Program of the Department of
Defense;
``(v) available through a women's business
center, as described in section 29;
``(vi) available through a Veterans
Business Outreach Center, as described in
subsection (d);
``(vii) available through the SCORE program
authorized by section 8(b)(1); or
``(viii) approved by the Administrator, in
consultation with the Advisory Committee, as
appropriate because of the expertise the
program offers relating to a certain type of
business enterprise.
``(C) Business plan.--
``(i) Contents.--An eligible veteran
receiving a grant under the pilot program shall
prepare a business plan, which shall include--
``(I) a description of how the
qualifying business enterprise will
achieve profitable operation within a
reasonable time frame;
``(II) an assessment of relevant--
``(aa) economic indicators;
``(bb) consumer data;
``(cc) production and sales
data; and
``(dd) market or industry
analysis; and
``(III) other information that the
Administrator, in consultation with the
Advisory Committee, determines is
appropriate.
``(ii) Approval procedure.--
``(I) Approval by advisor.--If an
advisor approves the business plan
prepared by the eligible veteran, the
Associate Administrator for Veterans
Business Development of the
Administration--
``(aa) shall review the
business plan; and
``(bb) may reverse the
approval of the business plan
and require that the eligible
veteran continue to consult
with the advisor to develop and
resubmit the business plan.
``(II) Disapproval by advisor.--If
an advisor does not approve the
business plan prepared by an eligible
veteran, the Associate Administrator
for Veterans Business Development of
the Administration, upon appeal by the
eligible veteran, may reverse the
decision of the advisor and approve the
business plan.
``(4) Grant terms and conditions.--
``(A) Maximum grant amount and additional
assistance.--
``(i) In general.--Subject to paragraph
(2)(C), the maximum amount that an eligible
veteran may receive under the pilot program
shall not exceed an amount equal to the sum
of--
``(I) the maximum grant amount
specified in clause (ii);
``(II) the amount equal to the
product obtained by multiplying--
``(aa) the amount of
additional assistance to which
the eligible veteran is
entitled under clause
(iii)(II); by
``(bb) the number of months
that the eligible veteran
participates in the pilot
program; and
``(III) the amount of training
assistance received by the eligible
veteran under clause (iv).
``(ii) Maximum grant amount.--The maximum
grant amount specified in this clause is the
following:
``(I) In the case of an eligible
veteran entitled to educational
assistance under chapter 33 of title
38, United States Code, the amount
equal to the product obtained by
multiplying--
``(aa) the number of months
of educational assistance to
which the eligible veteran is
entitled on the date that the
eligible veteran submits an
application; by
``(bb) the pro rata monthly
rate of the amount that the
eligible veteran is entitled to
under paragraph (1)(A)(ii)(II)
of section 3313(c) of that
title, subject to paragraphs
(2) through (7) of that
section.
``(II) In the case of an eligible
veteran entitled to educational
assistance under chapter 30 of title
38, United States Code, the amount
equal to the product obtained by
multiplying--
``(aa) the number of months
of educational assistance to
which the eligible veteran is
entitled on the date that the
eligible veteran submits an
application; by
``(bb) the rate in effect
under section 3015(a)(1) of
that title.
``(iii) Additional assistance.--
``(I) Period of eligibility.--An
eligible veteran shall receive the
amount described in subclause (II) for
each month that the eligible veteran
participates in the pilot program.
``(II) Amount.--The amount of the
additional assistance specified in this
subclause is an amount, paid to the
eligible veteran on a monthly basis,
equal to the product obtained by
multiplying--
``(aa) the monthly amount
of the basic allowance for
housing payable under section
403 of title 37, United States
Code, for a member with
dependents in pay grade E-5
residing in the military
housing area that encompasses
all or the majority portion of
the ZIP code area in which is
located the residence of the
eligible veteran (similar to
the calculation made under
section 3313(c)(1)(B)(i)(I) of
title 38, United States Code);
by--
``(bb)(AA) in the case of
an eligible veteran who, as of
the date on which the eligible
veteran applies for a grant
under this subsection, has no
employment other than the
qualifying business enterprise
for which the eligible veteran
seeks a grant under this
subsection, 1; or
``(BB) in the case of an
eligible veteran who is not
described in subitem (AA), 0.5.
``(iv) Training assistance.--Upon
application by an eligible veteran receiving a
grant under the pilot program, the
Administrator may pay for the cost, if
applicable, of an approved program described in
paragraph (3)(B)(viii).
``(B) Disbursement.--The amount of a grant made
under the pilot program shall be disbursed to an
eligible veteran--
``(i) in installments, in accordance with
the procedures described in subparagraph (C);
``(ii) only after the eligible veteran
presents documentation proving that the
eligible veteran has completed the required
entrepreneurship training described in
paragraphs (3)(A) and (3)(B); and
``(iii) only after the business plan of the
eligible veteran has been approved under the
procedures described in paragraph (3)(C)(ii).
``(C) Installment payments.--The amount described
in subparagraph (A)(ii) shall be paid to the eligible
veteran in installments on a pro rata basis with each
installment being paid to the eligible veteran--
``(i) not earlier than 3 months after the
date of the payment of the most recent
installment to the eligible veteran;
``(ii) not later than 12 months after the
date of the payment of the most recent
installment to the eligible veteran; and
``(iii) only after the eligible veteran has
met milestones established in the business plan
of the eligible veteran.
``(5) Use of grant amounts.--An eligible veteran who
receives a grant under the pilot program may use the amount of
the grant--
``(A) in accordance with the limitations that the
Administrator, in consultation with the Advisory
Committee, may by rule establish;
``(B) for purposes consistent with the activities
and objectives set forth in the business plan of the
eligible veteran, as described in paragraph (3)(C); and
``(C) for purposes related to starting or acquiring
a qualifying business enterprise that the
Administrator, in consultation with the Advisory
Committee, determines are appropriate, including--
``(i) purchasing goods or services
necessary for the creation or operation of a
qualifying business enterprise;
``(ii) funding a project that is directed
toward any economic development objective
described under section 501(d) of the Small
Business Investment Act of 1958 (15 U.S.C.
695(d)); and
``(iii) acquiring a qualifying business
enterprise.
``(6) Responsibility of the administrator.--In implementing
the pilot program, the Administrator shall maximize existing
relationships with the public and private sector to--
``(A) ensure successful outcomes by participants in
the pilot program; and
``(B) prevent redundancy with existing public and
private programs.
``(7) Report to congressional committees.--
``(A) In general.--Not later than 2 years after the
date on which the pilot program is commenced, the
Administrator shall submit to the Committee on Small
Business and Entrepreneurship and the Committee on
Veterans' Affairs of the Senate and the Committee on
Small Business and the Committee on Veterans' Affairs
of the House of Representatives a report analyzing the
feasibility and effectiveness of the pilot program.
``(B) Contents.--The report submitted under
subparagraph (A) shall include--
``(i) an assessment of the pilot program;
``(ii) a survey containing--
``(I) the number of grantees under
the pilot program; and
``(II) the number of the grantees
under the pilot program that
participated in each of the training
programs described in subparagraphs (A)
and (B) of paragraph (3);
``(iii) recommendations regarding whether
any aspect of the pilot program should be made
a permanent authority, and, if so, the means to
ensure--
``(I) geographic and demographic
diversity among the eligible veterans
who receive the grants under the
permanent authority; and
``(II) diversity in the types of
qualifying business enterprises for
which eligible veterans may receive
grants under the pilot program;
``(iv) an assessment regarding whether the
grants distributed under the pilot program
should continue to be made in installments or
with a 1-time, lump sum payment;
``(v) an assessment of the additional
assistance made available under the pilot
program, including the accountability
surrounding the availability of additional
assistance;
``(vi) an analysis of the procedures for
approving a business plan and a recommendation
regarding ways, if necessary, to improve the
procedures; and
``(vii) a recommendation regarding ways, if
necessary, to improve the accountability of
advisors.
``(8) GAO report.--Not later than 1 year after the date on
which the pilot program terminates, the Comptroller General of
the United States shall submit to Congress a report that
evaluates the pilot program with respect to--
``(A) administrative difficulties;
``(B) issues of fiscal responsibility;
``(C) duplication with existing entrepreneurship
pilot programs in the Federal Government; and
``(D) whether the pilot program is consistent with
the Post-9/11 Veterans Educational Assistance
Improvements Act of 2010 (Public Law 111-377; 124 Stat.
4106).
``(9) No effect on time limitation for use of entitlement
to educational assistance.--Nothing in this subsection shall be
construed to modify any time limitation or period during which
an individual is entitled to educational assistance under
chapter 30 or 33 of title 38, United States Code.
``(10) Definitions.--In this subsection:
``(A) Advisor.--The term `advisor' means a person--
``(i) affiliated with an entrepreneurship
or training and curricula program described in
paragraphs (3)(A) and (3)(B);
``(ii) who may assist an eligible veteran
with the preparation and approval of a business
plan; and
``(iii) who is approved to serve as an
advisor by the Administrator, in consultation
with the Advisory Committee.
``(B) Advisory committee.--The term `Advisory
Committee' means the Advisory Committee on Veterans
Business Affairs established under section 203 of the
Veterans Entrepreneurship and Small Business
Development Act of 1999 (15 U.S.C. 657b note).
``(C) Business plan.--The term `business plan'
means a plan prepared by an eligible veteran for the
operation of a qualifying business enterprise that
shall be--
``(i) prepared--
``(I) while the eligible veteran
participates in an approved training
program described in paragraphs (3)(A)
and (3)(B); and
``(II) with the assistance of an
advisor; and
``(ii) consistent with the guidelines and
recommendations provided by the Business Plan
Tool of the Administration.
``(D) Eligible veteran.--The term `eligible
veteran' means an individual who--
``(i) is--
``(I) a veteran; or
``(II) a member of the Armed Forces
who--
``(aa) is currently
retiring or separating from the
Armed Forces and has a service
approved retirement or
separation packet; or
``(bb) has last been
honorably discharged from
active duty service in the
Armed Forces;
``(ii) has completed not less than--
``(I) 36 months of active duty
service in the Armed Forces (other than
active duty service for training); or
``(II) 24 months of active duty
service in the Armed Forces (other than
active duty service for training)
before being discharged or separated
for a service-connected disability, as
that term is defined in section 101 of
title 38, United States Code; and
``(iii) is entitled to educational
assistance under chapter 30 or 33 of title 38,
United States Code.
``(E) Franchise business enterprise.--The term
`franchise business enterprise' means any continuing
commercial relationship or arrangement, regardless of
the title given the relationship or arrangement, under
which the terms of the offer or contract specify, or
the franchise seller promises or represents, orally or
in writing, that--
``(i) the franchisee will obtain the right
to--
``(I) operate a business that is
identified or associated with the
trademark of the franchisor; or
``(II) offer, sell, or distribute
goods, services, or commodities that
are identified or associated with the
trademark of the franchisor;
``(ii) the franchisor may--
``(I) exert, or has authority to
exert, a significant degree of control
over the method of operation of the
franchisee; or
``(II) provide significant
assistance in the method of operation
of the franchisee; and
``(iii) as a condition of obtaining or
commencing operation of the franchise business
enterprise, the franchisee makes a required
payment or commits to make a required payment
to the franchisor or the affiliate of the
franchisor.
``(F) Franchisee.--The term `franchisee' means any
person who is granted a franchise business enterprise.
``(G) Franchisor.--The term `franchisor'--
``(i) means any person who grants a
franchise business enterprise and participates
in the franchise relationship; and
``(ii) includes subfranchisors.
``(H) Pilot program.--The term `pilot program'
means the pilot program established under paragraph
(1)(A).
``(I) Qualifying business enterprise.--The term
`qualifying business enterprise' means a business
included in the list of categories of business
enterprises established under paragraph (1)(C).
``(J) Startup.--The term `startup' means a business
enterprise that--
``(i) is not yet in existence; or
``(ii) has been in existence for not more
than 5 years.
``(K) Subfranchisor.--The term `subfranchisor'
means a person who functions as a franchisor by
engaging in both pre-sale activities and post-sale
performance.''.
Calendar No. 542
114th CONGRESS
2d Session
S. 1870
_______________________________________________________________________
A BILL
To amend the Small Business Act to require the Administrator of the
Small Business Administration to carry out a pilot program on issuing
grants to eligible veterans to start or acquire qualifying businesses,
and for other purposes.
_______________________________________________________________________
June 29, 2016
Reported with an amendment