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Congressman McNerney Introduces Bill To Help Small Businesses Owned By Disabled Veterans

Press Release

Location: Washington, DC

Today, Congressman Jerry McNerney (D-Stockton) introduced the Service Disabled Veteran Owned Small Business Relief Act. Currently, service-disabled veterans who decide to open a small business may have their business classified as a service-disabled veteran owned small business (SDVOSB). Unfortunately, if and when the veteran and small business owner passes away, the surviving family members and business owners are not necessarily given ample time to transition away from SDVOSB status. In order to be classified as an SDVOSB, the business must be at least 51 percent veteran-owned. Last year, there were an estimated 500,000 SDVOSBs in the U.S.

The Service Disabled Veteran Owned Small Business Relief Act will allow an SDVOSB, whose principal owner passes away and was rated less than 100 percent disabled at the time of death, with a reasonable three-year transition period from SDVOSB status throughout all federal agencies, allowing SDVOSBs to thrive.

"The brave men and women who served in our armed forces are returning home to a tough economy and are struggling to find work despite being highly-trained. They have distinctive skills and a commitment to community that make them uniquely qualified to become part of one of the best economic drivers we have in our country -- small businesses," said Congressman McNerney.

Under current law, if a veteran who was rated 100 percent disabled and owned an SDVOSB passes away, the surviving spouse has 10 years to transition the business away from SDVOSB status for any contracts that company has with the Department of Veterans Affairs (VA). Conversely, if the veteran business owner was rated less than 100 percent disabled or dies of a non-service connected injury, the surviving spouse only has one year to transition the business out of SDVOSB status with the VA. Moreover, if the SDVOSB has contracts with any federal agency other than the VA, the business immediately loses its SDVOSB status upon the passing of the veteran. Unfortunately, current law provides no transition period, putting many SDVOSBs at a disadvantage.

"The effects of losing SDVOSB status immediately can put severe financial strain on a business owner's spouse or family members, harm operations, and jeopardize jobs. It is our responsibility to do what we can to provide our heroes and their families, and the business's employees with flexibility and certainty to ensure their businesses continue to thrive," said McNerney.

The Service Disabled Veteran Owned Small Business Relief Act is endorsed by the Veterans of Foreign Wars (VFW) and Paralyzed Veterans of America (PVA).

"The VFW is proud to support Congressman McNerney's efforts to offer reasonable relief for the survivors of service-disabled veteran-owned small businesses. It is unreasonable to simply cut off surviving spouses and their businesses almost immediately when a loved one passes away. The VFW has long called for reasonable accommodations for the survivors of SDVOSB owners to finish work, foster a smooth transition, and allow for loved ones to grieve appropriately." -- Raymond Kelley, National Legislative Director, VFW

"Service-disabled veteran owned businesses play a critical role in federal contracting. PVA gladly supports this legislation that will ensure that the SDVOSB is not immediately penalized by the passing of the veteran business owner who honorably served this Nation." - Carl Blake, National Legislative Director, Paralyzed Veterans of America

Reps. John Garamendi and Corrine Brown are original cosponsors of the bill.

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