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U.S. Code as of:
01/19/04
Section 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 -
(i) is proposed after an opportunity for public notice and
comment;
(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;
(III) the size of other business concerns on the basis of
data over a period of not less than 3 years; or
(IV) other appropriate factors; and
(iii) is approved by the Administrator.
(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.
(b) "Agency" defined
For purposes of this chapter, any reference to an agency or
department of the United States, and the term "Federal agency",
shall have the meaning given the term "agency" by section 551(1) of
title 5, but does not include the United States Postal Service or
the General Accounting Office.
(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) -
(i) which is maintained by such concern, and
(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,
(iii) which provides that each participant who is entitled to
distribution from the plan has a right, in the case of
qualifying employer securities which are not readily tradeable
on an established market, to require that the concern
repurchase such securities under a fair valuation formula, and
(iv) which meets such other requirements (similar to
requirements applicable to employee stock ownership plans as
defined in section 4975(e)(7) of title 26) as the Administrator
may prescribe, and
(C) in the case of a loan guarantee under section 636(a) of
this title, such organization enters into an agreement with the
Administration which is described in paragraph (2)(B).
(d) "Qualified Indian tribe" defined
For purposes of section 636 of this title, the term "qualified
Indian tribe" means an Indian tribe as defined in section 450b(e)
of title 25, which owns and controls 100 per centum of a small
business concern.
(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 -
(1) who has a physical, mental, or emotional impairment,
defect, ailment, disease, or disability of a permanent nature
which in any way limits the selection of any type of employment
for which the person would otherwise be qualified or qualifiable;
or
(2) who is a service-disabled veteran.
(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;
(2) photovoltaic cells and related equipment;
(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;
(5) equipment the primary purpose of which is industrial
cogeneration of energy, district heating, or production of energy
from industrial waste;
(6) hydroelectric power equipment;
(7) wind energy conversion equipment; and
(8) engineering, architectural, consulting, or other
professional services which are necessary or appropriate to aid
citizens in using any of the measures described in paragraph (1)
through (7).
(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 section 636(b)(2) of this title, 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
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.
(l) "Computer crime" defined
For purposes of this chapter -
(1) (!1) the term "computer crime" means -
(A) any crime committed against a small business concern by
means of the use of a computer; and
(B) any crime involving the illegal use of, or tampering
with, a computer owned or utilized by a small business concern.
(m) "Simplified acquisition threshold" defined
For purposes of this chapter, the term "simplified acquisition
threshold" has the meaning given such term in section 403(11) of
title 41.
(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 -
(1) at least 51 percent of small business concern is owned by
one or more women or, in the case of any publicly owned business,
at least 51 percent of the stock of which is owned by one or more
women; and
(2) the management and daily business operations of the
business are controlled by one or more women.
(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 -
(A) the diversity, size, or specialized nature of the
elements of the performance specified;
(B) the aggregate dollar value of the anticipated award;
(C) the geographical dispersion of the contract performance
sites; or
(D) any combination of the factors described in subparagraphs
(A), (B), and (C).
(3) Separate smaller contract
The term "separate smaller contract", with respect to a
bundling of contract requirements, means a contract that has been
performed by 1 or more small business concerns or was suitable
for award to 1 or more small business concerns.
(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 -
(A) qualified census tracts;
(B) qualified nonmetropolitan counties;
(C) lands within the external boundaries of an Indian
reservation; or
(D) redesignated areas.
(2) HUBZone
The term "HUBZone" means a historically underutilized business
zone.
(3) HUBZone small business concern
The term "HUBZone small business concern" means -
(A) a small business concern that is owned and controlled by
one or more persons, each of whom is a United States citizen;
(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 -
(i) that is wholly owned by one or more Indian tribal
governments, or by a corporation that is wholly owned by one
or more Indian tribal governments; or
(ii) that is owned in part by one or more Indian tribal
governments, or by a corporation that is wholly owned by one
or more Indian tribal governments, if all other owners are
either United States citizens or small business concerns; or
(D) a small business concern that is -
(i) wholly owned by a community development corporation
that has received financial assistance under part 1 of
subchapter A of the Community Economic Development Act of
1981 (42 U.S.C. 9805 et seq.); or
(ii) owned in part by one or more community development
corporations, if all other owners are either United States
citizens or small business concerns.
(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) 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) 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; or
(II) the unemployment rate is not less than 140 percent
of the Statewide average unemployment rate for the State in
which the county is located, based on the most recent data
available from the Secretary of Labor.
(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 for
the 3-year period following the date on which the census tract
or nonmetropolitan county ceased to be so qualified.
(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), or (D) 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
(ii) no certification made or information provided by the
small business concern under clause (i) has been, in
accordance with the procedures established under section
657a(c)(1) of this title -
(I) successfully challenged by an interested party; or
(II) otherwise determined by the Administrator to be
materially false.
(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;
(ii) be updated by the Administrator not less than
annually; and
(iii) be provided upon request to any Federal agency or
other entity.
(6) Native American small business concerns
(A) Alaska Native Corporation
The term "Alaska Native Corporation" has the same meaning as
the term "Native Corporation" in section 1602 of title 43.
(B) Alaska Native Village
The term "Alaska Native Village" has the same meaning as the
term "Native village" in section 1602 of title 43.
(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) lands taken into trust or acquired by an Indian
tribe after December 21, 2000, if such lands are not
located within the external boundaries of an Indian
reservation or former reservation or are not contiguous to
the lands held in trust or restricted status on December
21, 2000; 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).
(7) Agricultural commodity
The term "agricultural commodity" has the same meaning as in
section 5602 of title 7.
(q) Definitions relating to veterans
In this chapter, the following definitions apply:
(1) Service-disabled veteran
The term "service-disabled veteran" means a veteran with a
disability that is service-connected (as defined in section
101(16) of title 38).
(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) 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
(B) 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.
(3) Small business concern owned and controlled by veterans
The term "small business concern owned and controlled by
veterans" means a small business concern -
(A) not less than 51 percent of which is owned by one or more
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 veterans; and
(B) the management and daily business operations of which are
controlled by one or more veterans.
(4) Veteran
The term "veteran" has the meaning given the term in section
101(2) of title 38.
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