[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1862 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                S. 1862

 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 26, 2015

 Mr. Moran (for himself and Mr. Tester) introduced the following bill; 
which was read twice and referred to the Committee on Veterans' Affairs

_______________________________________________________________________

                                 A BILL


 
 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,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Entrepreneurial Transition 
Act of 2015'' or the ``VET Act of 2015''.

SEC. 2. VETERANS SMALL BUSINESS ENTREPRENEURSHIP PILOT PROGRAM.

    (a) Pilot Program Required.--
            (1) In general.--Not later than 90 days after the date of 
        enactment of this Act, the Administrator, in consultation with 
        the Advisory Committee, 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.
            (2) 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.
            (3) 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--
                    (A) a small business concern (as the term is 
                defined in section 3(a) of the Small Business Act (15 
                U.S.C. 632(a)));
                    (B) a franchise business enterprise; and
                    (C) 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.
            (4) Number of grants.--Under the pilot program, the 
        Administrator may make grants in accordance with subsection (d) 
        to not more than 250 eligible veterans to start or acquire a 
        qualifying business enterprise.
            (5) Geographic diversity.--In making grants under the pilot 
        program, the Administrator shall ensure geographic diversity 
        among the veterans who receive the grants.
            (6) 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.
    (b) Application.--
            (1) In general.--An eligible veteran desiring a grant under 
        the pilot program shall submit an application--
                    (A) to the Administrator in the form and containing 
                the information as the Administrator may require, 
                including the information described in paragraph (2); 
                and
                    (B) not later than 1 year before the date on which 
                the pilot program terminates under subsection (a)(6).
            (2) 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:
                    (A) A description of the use of the grant amount, 
                including an identification and description of the 
                qualifying business enterprise.
                    (B) A description of the expected return on 
                investment resulting from the grant amounts.
                    (C) 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 subsections (c)(1) and (c)(2); 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 subsections (c)(1) and (c)(2).
                    (D) 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--
                                    (I) good standing;
                                    (II) profitable operation; and
                                    (III) 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--
                                    (I) compliance with applicable 
                                State and Federal laws on franchises; 
                                and
                                    (II) training in conformation 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 timeframe.
                    (E) 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 
                subsection (c)(3)(B).
                    (F) 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 
                        clause (i) is determined to be untrue.
            (3) 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 subsection (d)(1) by the number of members of the 
        group.
    (c) Entrepreneurship Training.--
            (1) 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.
            (2) Approved programs.--An approved program described in 
        paragraph (1) may include a program--
                    (A) available through a small business development 
                center, as described in section 21 of the Small 
                Business Act (15 U.S.C. 648);
                    (B) approved by the Administrator for 
                entrepreneurship training;
                    (C) approved by the Secretary of Veterans Affairs 
                for entrepreneurship training;
                    (D) available through the Transition Assistance 
                Program of the Department of Defense;
                    (E) available through a women's business center, as 
                described in section 29 of the Small Business Act (15 
                U.S.C. 656);
                    (F) available through a Veterans Business Outreach 
                Center, as described in section 32 of the Small 
                Business Act (15 U.S.C. 657b);
                    (G) available through the SCORE program authorized 
                by section 8(b)(1) of the Small Business Act (15 U.S.C. 
                637(b)(1)); or
                    (H) 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.
            (3) Business plan.--
                    (A) 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 timeframe;
                            (ii) an assessment of relevant--
                                    (I) economic indicators;
                                    (II) consumer data;
                                    (III) production and sales data; 
                                and
                                    (IV) market or industry analysis; 
                                and
                            (iii) other information that the 
                        Administrator, in consultation with the 
                        Advisory Committee, determines is appropriate.
                    (B) 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 Small 
                        Business Administration--
                                    (I) shall review the business plan; 
                                and
                                    (II) 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 Small Business Administration, upon 
                        appeal by the eligible veteran, may reverse the 
                        decision of the advisor and approve the 
                        business plan.
    (d) Grant Terms and Conditions.--
            (1) Maximum grant amount and additional assistance.--
                    (A) In general.--Subject to subsection (b)(3), 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 
                        subparagraph (B);
                            (ii) the amount equal to the product 
                        obtained by multiplying--
                                    (I) the amount of additional 
                                assistance to which the eligible 
                                veteran is entitled under subparagraph 
                                (C)(ii); by
                                    (II) 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 in 
                        subparagraph (D).
                    (B) Maximum grant amount.--The maximum grant amount 
                specified in this subparagraph 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--
                                    (I) 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
                                    (II) 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--
                                    (I) 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
                                    (II) the rate in effect under 
                                section 3015(a)(1) of that title.
                    (C) Additional assistance.--
                            (i) Period of eligibility.--An eligible 
                        veteran shall receive the amount described in 
                        clause (ii) for each month that the eligible 
                        veteran participates in the pilot program.
                            (ii) Amount.--The amount of the additional 
                        assistance specified in this clause is an 
                        amount, paid to the eligible veteran on a 
                        monthly basis, equal to the product obtained by 
                        multiplying--
                                    (I) 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--
                                    (II)(aa) in the case of an eligible 
                                veteran who, as of the date on which 
                                the eligible veteran applies for a 
                                grant under this section, has no 
                                employment other than the qualifying 
                                business enterprise for which the 
                                eligible veteran seeks a grant under 
                                this section, 1; or
                                    (bb) in the case of an eligible 
                                veteran who is not described in item 
                                (aa), 0.5.
                    (D) 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 
                subsection (c)(2)(H).
            (2) Disbursement.--The amount of a grant made under the 
        pilot program shall be disbursed to an eligible veteran--
                    (A) in installments, in accordance with the 
                procedures described in paragraph (3);
                    (B) only after the eligible veteran presents 
                documentation proving that the eligible veteran has 
                completed the required entrepreneurship training 
                described in subsections (c)(1) and (c)(2); and
                    (C) only after the business plan of the eligible 
                veteran has been approved under the procedures 
                described in subsection (c)(3)(B).
            (3) Installment payments.--The amount described in 
        paragraph (1)(B) shall be paid to the eligible veteran in 
        installments on a pro rata basis with each installment being 
        paid to the eligible veteran--
                    (A) not earlier than 3 months after the date of the 
                payment of the most recent installment to the eligible 
                veteran;
                    (B) not later than 12 months after the date of the 
                payment of the most recent installment to the eligible 
                veteran; and
                    (C) only after the eligible veteran has met 
                milestones established in the business plan of the 
                eligible veteran.
            (4) Impact on entitlement to educational assistance.--An 
        eligible veteran who receives a grant under the pilot program 
        shall be deemed to have received an amount of educational 
        assistance under chapter 30 or 33, of title 38, United States 
        Code, as the case may be, that is equal to the amount of the 
        grant.
    (e) Use of Grant Amounts.--An eligible veteran who receives a grant 
under the pilot program may use the amount of the grant--
            (1) in accordance with the limitations that the 
        Administrator, in consultation with the Advisory Committee, may 
        by rule establish; and
            (2) for purposes related to starting or acquiring a 
        qualifying business enterprise that the Administrator, in 
        consultation with the Advisory Committee, determines are 
        appropriate, including--
                    (A) purchasing goods or services necessary for the 
                creation or operation of a qualifying business 
                enterprise;
                    (B) 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
                    (C) acquiring a qualifying business enterprise.
    (f) Report.--
            (1) 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.
            (2) Contents.--The report submitted under paragraph (1) 
        shall include--
                    (A) an assessment of the pilot program;
                    (B) 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 paragraphs (1) 
                        and (2) of subsection (c);
                    (C) 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;
                    (D) 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;
                    (E) an assessment of the additional assistance made 
                available under the pilot program, including the 
                accountability surrounding the availability of 
                additional assistance;
                    (F) an analysis of the procedures for approving a 
                business plan and a recommendation regarding ways, if 
                necessary, to improve the procedures; and
                    (G) a recommendation regarding ways, if necessary, 
                to improve the accountability of advisors.
    (g) No Effect on Time Limitation for Use of Entitlement to 
Educational Assistance.--Nothing in this section 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.
    (h) Funding.--
            (1) In general.--The Secretary of Veterans Affairs shall 
        transfer to the Administrator from funds appropriated to the 
        Secretary to carry out chapters 30 and 33 of title 38, United 
        States Code, an amount equal to the amount necessary for the 
        Administrator to carry out the pilot program.
            (2) Availability.--Amounts transferred to the Administrator 
        under paragraph (1) shall remain available until the date on 
        which the pilot program terminates under subsection (a)(5).
    (i) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Small Business Administration.
            (2) Advisor.--The term ``advisor'' means a person--
                    (A) affiliated with an entrepreneurship or training 
                and curricula program described in subsections (c)(1) 
                and (c)(2);
                    (B) who may assist an eligible veteran with the 
                preparation and approval of a business plan; and
                    (C) who is approved to serve as an advisor by the 
                Administrator, in consultation with the Advisory 
                Committee.
            (3) 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).
            (4) 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--
                    (A) prepared--
                            (i) while the eligible veteran participates 
                        in an approved training program described in 
                        subsections (c)(1) and (c)(2); and
                            (ii) with the assistance of an advisor; and
                    (B) consistent with the guidelines and 
                recommendations provided by the Business Plan Tool of 
                the Small Business Administration.
            (5) Eligible veteran.--The term ``eligible veteran'' means 
        an individual who--
                    (A) is--
                            (i) a veteran; or
                            (ii) a member of the Armed Forces who--
                                    (I) is currently retiring or 
                                separating from the Armed Forces and 
                                has a service approved retirement or 
                                separation packet; or
                                    (II) has last been honorably 
                                discharged from active duty service in 
                                the Armed Forces;
                    (B) 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
                    (C) is entitled to educational assistance under 
                chapter 30 or 33 of title 38, United States Code.
            (6) 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--
                    (A) 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;
                    (B) 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
                    (C) 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.
            (7) Franchisee.--The term ``franchisee'' means any person 
        who is granted a franchise business enterprise.
            (8) Franchisor.--The term ``franchisor''--
                    (A) means any person who grants a franchise 
                business enterprise and participates in the franchise 
                relationship; and
                    (B) includes subfranchisors.
            (9) Pilot program.--The term ``pilot program'' means the 
        pilot program established under subsection (a)(1).
            (10) Qualifying business enterprise.--The term ``qualifying 
        business enterprise'' means a business included in the list of 
        categories of business enterprises established under subsection 
        (a)(3).
            (11) Startup.--The term ``startup'' means a business 
        enterprise that--
                    (A) is not yet in existence; or
                    (B) has been in existence for not more than 5 
                years.
            (12) Subfranchisor.--The term ``subfranchisor'' means a 
        person who functions as a franchisor by engaging in both pre-
        sale activities and post-sale performance.
            (13) Veteran.--The term ``veteran'' has the meaning given 
        the term in section 101 of title 38, United States Code.
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