§ 632. Small-business concern
(a)
Criteria
(1)
For the purposes of this chapter, 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, agriculture, 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: Provided, That notwithstanding any other provision of law, an agricultural enterprise shall be deemed to be a small business concern if it (including its affiliates) has annual receipts not in excess of $750,000.
(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 chapter 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—
(ii)
provides for determining—
(I)
the size of a manufacturing concern as measured by the manufacturing concern’s average employment based upon employment during each of the manufacturing concern’s pay periods for the preceding 12 months;
(II)
the size of a business concern providing services on the basis of the annual average gross receipts of the business concern over a period of not less than 3 years;
(3)
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 January 6, 2006, 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.
(c)
Qualified employee trust; eligibility for loan guarantee; “qualified employee trust” defined; regulations for treatment of trust as qualified employee trust
(1)
For purposes of this chapter, a qualified employee trust shall be eligible for any loan guarantee under section
636
(a) of this title 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 chapter, 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 title
26)—
(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 (as defined in section
4975
(e)(8) of title
26) which are allocated to the account of such participant are to be exercised with respect to a corporate matter which (by law or charter) must be decided by a majority vote of outstanding common shares voted; and
(B)
in the case of any loan guarantee under section
636
(a) of this title, the trustee of which enters into an agreement with the Administrator which is binding on the trust and on such small business concern and which provides that—
(i)
the loan guaranteed under section
636
(a) of this title 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 employees 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 title
26),
(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,
(e)
“Public or private organization for the handicapped” defined
For purposes of section
636 of this title, 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 inure in whole or in part to the benefit of any shareholder or other individuals;
(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)
“Handicapped individual” defined
For purposes of section
636 of this title, the term “handicapped individual” means an individual—
(g)
“Energy measures” defined
For purposes of section
636 of this title, 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 of these types;
(3)
a product or service the primary purpose of which is conservation of 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;
(h)
“Credit elsewhere” defined
For purposes of this chapter the term “credit elsewhere” means the availability of credit from non-Federal sources on reasonable terms and conditions taking into consideration the prevailing rates and terms in the community in or near where the concern transacts business, or the homeowner resides, for similar purposes and periods of time.
(i)
“Homeowners” defined
For purposes of section
636 of this title, the term “homeowners” includes owners and lessees of residential property and also includes personal property.
(j)
“Small agricultural cooperative” defined
For the purposes of this chapter, 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)
“Disaster” defined
(1)
For the purposes of this chapter, 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
4107
(b) of title
16), ocean conditions resulting in the closure of customary fishing waters, riots, civil disorders or other catastrophes, except it does not include economic dislocations.
(n)
“Small business concern owned and controlled by women” defined
For the purposes of this chapter, a small business concern is a small business concern owned and controlled by women if—
(o)
Definitions of bundling of contract requirements and related terms
In this chapter:
(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—
(p)
Definitions relating to HUBZones
In this chapter:
(1)
Historically underutilized business zone
The term “historically underutilized business zone” means any area located within 1 or more—
(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
1626
(e)(1) of title
43); or
(ii)
a direct or indirect subsidiary corporation, joint venture, or partnership of an Alaska Native Corporation qualifying pursuant to section
1626
(e)(1) of title
43, if that subsidiary, joint venture, or partnership is owned and controlled by Natives (as determined pursuant to section
1626
(e)(2) of title
43);
(C)
a small business concern—
(D)
a small business concern that is—
(4)
Qualified areas
(A)
Qualified census tract
The term “qualified census tract” has the meaning given that term in section
42
(d)(5)(C)(ii) [2] of title
26.
(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 title
26) at the time of the most recent census taken for purposes of selecting qualified census tracts under section
42
(d)(5)(C)(ii) [2] of title
26; 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) [2] of title
26, 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—
(D)
Base closure area
The term “base closure area” means lands within the external boundaries of a military installation that were closed through a privatization process under the authority of—
(i)
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 );
(ii)
title II of the Defense Authorization Amendments and Base Closure and Realignment Act (Public Law 100–526; 10 U.S.C. 2687 note );
(iv)
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.
(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), or (E) 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; or
(bb)
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
657a
(b) of this title 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
657a
(b) of this title; 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
657a of this title, the small business concern will ensure that—
(aa)
in the case of a contract for services (except construction), not less than 50 percent of the cost of contract performance incurred for personnel will be expended for its employees or for employees of other HUBZone small business concerns;
(bb)
in the case of a contract for procurement of supplies (other than procurement from a regular dealer in such supplies), not less than 50 percent of the cost of manufacturing the supplies (not including the cost of materials) will be incurred in connection with the performance of the contract in a HUBZone by 1 or more HUBZone small business concerns; and
(cc)
in the case of a contract for the procurement by the Secretary of Agriculture of agricultural commodities, none of the commodity being procured will be obtained by the prime contractor through a subcontract for the purchase of the commodity in substantially the final form in which it is to be supplied to the Government; and
(B)
Change in percentages
The Administrator may utilize a percentage other than the percentage specified in item (aa) or (bb) of subparagraph (A)(i)(III), if the Administrator determines that such action is necessary to reflect conventional industry practices among small business concerns that are below the numerical size standard for businesses in that industry category.
(C)
Construction and other contracts
The Administrator shall promulgate final regulations imposing requirements that are similar to those specified in items (aa) and (bb) of subparagraph (A)(i)(III) on contracts for general and specialty construction, and on contracts for any other industry category that would not otherwise be subject to those requirements. The percentage applicable to any such requirement shall be determined in accordance with subparagraph (B).
(D)
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;
(6)
Native American small business concerns
(C)
Indian reservation
The term “Indian reservation”—
(i)
has the same meaning as the term “Indian country” in section
1151 of title
18, 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 December 21, 2000, unless that tribe is recognized after December 21, 2000, 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)
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 December 21, 2000).
(q)
Definitions relating to veterans
In this chapter, the following definitions apply:
(2)
Small business concern owned and controlled by service-disabled veterans
The term “small business concern owned and controlled by service-disabled veterans” means a small business concern—
(3)
Small business concern owned and controlled by veterans
The term “small business concern owned and controlled by veterans” means a small business concern—
(5)
Relief from time limitations
(A)
In general
Any time limitation on any qualification, certification, or period of participation imposed under this chapter 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 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
(r)
Definitions relating to small business lending companies
As used in section
650 of this title:
[1] So in original. No par. (2) has been enacted.
[2] See References in Text note below.