I 111th CONGRESS 2d Session H. R. 4420 IN THE HOUSE OF REPRESENTATIVES January 12, 2010 Mr. Sestak introduced the following bill; which was referred to the Committee on Small Business A BILL To amend the Small Business Act with respect to misrepresentation through the use of a pass-through business, and for other purposes.

1.

Short title

This Act may be cited as the Small Business Contracting Protection Act of 2010.

2.

Misrepresentation through use of a pass-through business

(a)

Pass-through business defined

Not later than 180 days after the date of enactment of this Act, the Administrator of the Small Business Administration shall issue regulations defining the term pass-through business for purposes of section 16(d) of the Small Business Act (15 U.S.C. 645(d)), as amended by subsection (b) of this section. Such definition shall include one or more of the following as criteria for determining whether an entity is a pass-through business with respect to another business: (1)The business shares a location with such other business. (2)The business shares ordering or personnel systems with such other business. (3)An officer, director, principal, stockholder, managing member, or key employee of the business participates in the business decisions of such other business. (4)Equity interest in the business owned by such other business. (5)The accounts receivable of the business is directly or indirectly controlled by such other business. (6)The relationship with the business generates more than 50 percent of the income of such other business. (b)

Penalties for misrepresentation

(1)

Amendment

Section 16(d)(1) of the Small Business Act (15 U.S.C. 645(d)(1)) is amended by striking , in order and inserting , including through the use of a pass-through business, in order. (2)

Effective date

The amendment made under paragraph (1) shall take effect on the date that is 180 days after the date of enactment of this Act.