SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Improving Opportunities for Service-
Disabled Veteran-Owned Small Businesses Act of 2013''.

SEC. 2. SMALL BUSINESS DEFINTION OF SMALL BUSINESS CONCERN 
              CONSOLIDATED.

    Section 3(q) of the Small Business Act (15 U.S.C. 632(q)) is 
amended--
            (1) in paragraph (2), to read as follows:
            ``(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--
                    ``(A)(i) not less than 51 percent of which is owned 
                by one or more service-disabled veterans or, in the 
                case of any publicly owned business, not less than 51 
                percent of the stock of which is owned by one or more 
                service-disabled veterans; and
                    ``(ii) the management and daily business operations 
                of which are controlled by one or more service-disabled 
                veterans or, in the case of a veteran with permanent 
                and severe disability, the spouse or permanent 
                caregiver of such veteran; or
                    ``(B) not less than 51 percent of which is owned by 
                one or more veterans with service-connected 
                disabilities that are permanent and total who are 
                unable to manage the daily business operations of such 
                concern or, in the case of a publicly owned business, 
                not less than 51 percent of the stock of which is owned 
                by one or more such veterans.''; and
            (2) by adding at the end the following:
            ``(6) Treatment of businesses after death of veteran-
        owner.--
                    ``(A) In general.--Subject to subparagraph (C), if 
                the death of a service-disabled veteran causes a small 
                business concern to be less than 51 percent owned by 
                one or more such veterans, the surviving spouse of such 
                veteran who acquires ownership rights in such small 
                business concern shall, for the period described in 
                subparagraph (B), be treated as if the surviving spouse 
                were that veteran for the purpose of maintaining the 
                status of the small business concern as a small 
                business concern owned and controlled by service-
                disabled veterans.
                    ``(B) Period described.--The period referred to in 
                subparagraph (A) is the period beginning on the date on 
                which the service-disabled veteran dies and ending on 
                the earliest of the following dates:
                            ``(i) The date on which the surviving 
                        spouse remarries.
                            ``(ii) The date on which the surviving 
                        spouse relinquishes an ownership interest in 
                        the small business concern.
                            ``(iii) The date that is ten years after 
                        the date of the veteran's death.
                    ``(C) Application to surviving spouse.--
                Subparagraph (A) only applies to a surviving spouse of 
                a veteran with a service-connected disability rated as 
                100 percent disabling or who dies as a result of a 
                service-connected disability.''.

SEC. 3. VETERANS AFFAIRS DEFINITION OF SMALL BUSINESS CONCERN 
              CONSOLIDATED.

    Section 8127 of title 38, United States Code, is amended--
            (1) by striking subsection (h); and
            (2) in subsection (l)(2), by striking ``means'' and all 
        that follows through the period at the end and inserting the 
        following: ``has the meaning given that term under section 3(q) 
        of the Small Business Act (15 U.S.C. 632(q)).''.

SEC. 4. SBA TO ASSUME CONTROL OF VERIFICATION OF OWNERSHIP AND CONTROL 
              STATUS OF APPLICANTS FOR INCLUSION IN THE DATABASE OF 
              SMALL BUSINESSES OWNED AND CONTROLLED BY SERVICE DISABLED 
              VETERANS AND VETERANS.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended by adding 
at the end the following:

``SEC. 47. VETS FIRST PROGRAM.

    ``Not later than 180 days after the effective date of this section, 
the Administrator shall enter into a memorandum of understanding with 
the Secretary of Veterans Affairs that transfer control and 
administration of the program under subsections (e) through (g) of 
section 8127 of title 38, United States Code, to the Administrator, 
consistent with the following:
            ``(1) Not later than 270 days after completing the 
        memorandum of understanding, the Administrator shall make rules 
        to carry out the memorandum. If the Administrator does not make 
        such rules by such date, the Administrator may not exercise the 
        authority under section 7(a)(25)(A) until such time as those 
        rules are made.
            ``(2) The Administrator shall assume authority and 
        responsibility for maintenance and operation of the database 
        and for verifications under the program.
            ``(3) Any appeal by a small business concern, at the time 
        that verification is denied or a contract is awarded, of any 
        determination under the program shall be heard by the Office of 
        Hearings and Appeals of the Small Business Administration.
            ``(4) The Secretary shall, for a period of 6 years 
        commencing on a date agreed to in the completed memorandum, 
        reimburse to the Administrator of the Small Business 
        Administration any costs incurred by the Administrator for 
        actions undertaken pursuant to the memorandum from fees 
        collected by the Secretary of Veteran Affairs under multiple-
        award schedule contracts. Any disputes between the Secretary 
        and the Administrator shall be resolved by the Director of the 
        Office of Management and Budget''.

SEC. 5. MEMORANDUM OF UNDERSTANDING.

    Section 8127(f) of title 38, United States Code, is amended by 
adding at the end the following:
            ``(7) Not later than 180 days after the effective date of 
        this paragraph, the Secretary shall enter into a memorandum of 
        understanding with the Administrator of the Small Business 
        Administration consistent with section 47 of the Small Business 
        Act.''.
Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2014 - (Sec. 2) Amends the Small Business Act to require the Administrator of the Small Business Administration (SBA) to enter into a memorandum of understanding with the Secretary of Veterans Affairs (VA) that transfers from the Secretary to the Administrator control and administration of a database of veteran-owned businesses. (Small business concerns owned and controlled by veterans and small business concerns owned and controlled by veterans with service-connected disabilities must be in that database to participate in the Veterans First program that gives VA contracting preferences to those businesses.) Requires the Administrator to employ database fraud prevention measures that include: (1) the investigation of allegations of potential fraud, (2) the removal of unqualified businesses from the database, and (3) the referral of cases for prosecution when appropriate.  Requires any appeal by a small business of any determination of its status as a veteran-owned business to be heard by the SBA's Office of Hearings and Appeals. Directs the Secretary, for the six years beginning on a date agreed to in the memorandum, to use fees the Secretary collects under multiple-award schedule contracts to reimburse the Administrator for the costs the Administrator incurs in implementing the memorandum. Requires the Secretary and the Administrator, every 180 days, to: (1) meet to discuss ways to improve collaboration under the memorandum to increase opportunities for service-disabled veteran-owned small businesses and veteran-owned small businesses, (2) consult with congressionally-chartered Veterans Service Organizations to discuss ways to increase opportunities for those businesses, and (3) report to Congress on their progress in implementing the memorandum. (Sec. 3) Requires the Secretary to enter into a memorandum of agreement with the SBA specifying the manner in which the Secretary shall notify the Administrator as to whether an individual is a veteran and if that veteran has a service-connected disability.
Improving Opportunities for Service-Disabled Veteran-Owned Small Businesses Act of 2013