[Senate Report 107-307]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 695
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-307

======================================================================



 
   VOCATIONAL AND TECHNICAL ENTREPRENEURSHIP DEVELOPMENT ACT OF 2001

                                _______
                                

                October 9, 2002.--Ordered to be printed

                                _______
                                

 Mr. Kerry, from the Committee on Small Business and Entrepreneurship, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2666]

    The Committee on Small Business and Entrepreneurship to 
which was referred the bill (H.R. 2666) to amend the Small 
Business Act to direct the Administrator of the Small Business 
Administration to establish a vocational and technical 
entrepreneurship development program, having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.
    On July 24, 2002, the Committee on Small Business and 
Entrepreneurship, considered H.R. 2666, the ``Vocational and 
Technical Entrepreneurship Development Act of 2001.'' H.R. 2666 
would establish a three-year pilot project providing Small 
Business Administration (SBA) grants to Small Business 
Development Centers (SBDCs) for technical assistance to 
secondary schools and post-secondary vocational and technical 
schools, to develop and implement curricula to promote 
vocational and technical entrepreneurship. Having considered 
H.R. 2666, the Committee reports favorably thereon without 
further amendment and recommends that the bill do pass.

                            I. INTRODUCTION

    Many persons within the United States have technical and 
vocational skills, but do not have business experience or 
training to help them succeed in the small business community. 
Presently, small businesses employ mechanics, technicians, 
carpenters, plumbers, machinists, and draftsmen. However, H.R. 
2666, the ``Vocational and Technical Entrepreneurship 
Development Act of 2001,'' is needed to provide the essential 
training and business counseling necessary for these skilled 
workers to start their own businesses, to survive in the 
business world, and to grow. Many who work in the trade sector 
of construction, plumbing, etc. enter these professions with 
the goal of one day starting a business. Unfortunately, too 
many aspiring business owners who partake in career training or 
vocational training in certain trades, fail to obtain the 
necessary business education to develop and grow their newly 
formed business. This initiative would develop a program that 
allows workers within the trade industries to move towards 
starting a new business.
    The bill establishes, through a business-education 
partnership, a ``vocational entrepreneurship development 
demonstration program,'' under which the Small Business 
Administration (SBA) would award grants, through Small Business 
Development Centers (SBDCs), to provide technical assistance to 
high schools and technical career institutes to promote small 
business development in their curricula. The SBDC Program is 
designed to deliver such up-to-date counseling, training and 
technical assistance in all aspects of small business 
management and is the ideal candidate to provide such a 
program.
    In establishing these needed services, H.R. 2666 relies 
upon the present infrastructure of the SBDCs, which has proven 
to deliver services that greatly enhance the chances of a small 
business surviving as compared with those who do not receive 
such assistance. The SBDCs provide a focal point for studies, 
research, and counseling concerning the managing, financing, 
and operation of small business enterprises, including 
information retrieval, coordination of federal and state 
government services, and referral to experts. Therefore, the 
Committee believesthat the SBDC program can serve a greater 
number of potential entrepreneurs, by working with institutions, both 
at the secondary and post-secondary level, that provide vocational and 
technical education.
    Historically, the SBDCs have focused on counseling 
entrepreneurs or small business owners that are in a position 
to either start their own business or take it to the next 
level. However, a limited number of centers have begun sharing 
their knowledge to provide vocational students, or ``future 
entrepreneurs,''' the proper business tools while learning 
their trade skills. Thus, these future entrepreneurs can begin 
their own business venture after graduating with their new 
skills instead of working for someone else, perhaps at a large 
firm. The Committee believes that the centers can provide an 
effective mechanism for dispensing information and advice on 
developing and implementing entrepreneurial curricula. 
Therefore, the Committee believes that a targeted pilot program 
to determine how assistance with entrepreneurial curricula by 
selected small business development centers will operate is a 
preferred strategy to generally requiring such assistance be 
provided by all centers throughout the entire SBDC network.

                        II. LEGISLATIVE HISTORY

    On July 19, 2001, the Subcommittee on Workforce, 
Empowerment and Government Programs of the House Committee on 
Small Business held a hearing on pending legislation, including 
H.R. 2666, the ``Vocational and Technical Entrepreneurship 
Development Act of 2001.'' The hearing demonstrated a need for 
expansion of the services to other locations.
    On August 1, 2001, the House Committee on Small Business 
considered H.R. 2666, passed it without amendment and ordered 
it reported. On October 2, 2001, the full House considered H.R. 
2666 under suspension of the rules. It was subsequently agreed 
to by voice vote.
    During consideration of H.R. 2666 in the Senate Committee 
on Small Business and Entrepreneurship on July 24, 2002, the 
Senate Committee's Ranking Republican, Senator Christopher S. 
Bond, raised concerns that the Senate Committee had not 
adequately considered the National Small Business Regulatory 
Assistance Act. In response to these concerns, the Committee 
Chairman, Senator John F. Kerry, proposed holding a roundtable 
on the legislation to alleviate these concerns in order to move 
forward with the Committee vote. The Ranking Republican agreed 
and the legislation was passed without amendment by the Senate 
Committee.
    On August 1, 2002, the Senate Committee held a roundtable 
titled ``Promoting Small Business Regulatory Compliance and 
Entrepreneurial Education--the Role of the SBDC Network.'' 
During this roundtable, the Senate Committee received evidence 
that H.R. 2666 would provide adequate resources to Small 
Business Development Centers (SBDCs) so that they may provide 
technical assistance to secondary schools and post-secondary 
vocational and technical schools, to develop and implement 
curricula to promote vocational and technical entrepreneurship. 
Small business representatives at the roundtable also stressed 
the need to provide such assistance as an important addition to 
curricula that is merely skills based.
    Small business groups such as the National Small Business 
United support H.R. 2666, as well as leading educational 
institutions, such as the Wharton School of Business at the 
University of Pennsylvania, and the Association of Small 
Business Development Centers.

      III. ANALYSIS OF H.R. 2666, THE ``VOCATIONAL AND TECHNICAL 
               ENTREPRENEURSHIP DEVELOPMENT ACT OF 2001''

Purpose

    The purpose of H.R. 2666, the ``Vocational and Technical 
Entrepreneurship Development Act of 2001,'' is to assist the 
development and implementation of curricula that will encourage 
skilled persons to start their own businesses and to provide 
needed entrepreneurial training to support the success of such 
businesses. The Act provides the necessary entrepreneurial 
support to expand the career opportunities for persons 
receiving vocational training and, thus use their newly gained 
skills to become the successful owners of their own business.

Grant process

    The Administrator of the Small Business Administration 
(SBA) is required to make grants to state Small Business 
Development Centers (SBDCs). The minimum amount of a grant 
under the pilot program is $200,000.
    Each applicant wishing to apply for a grant must submit an 
application, as directed by the Administrator, which includes 
an outline of the applicant's goals and objectives for the 
assistance to be provided and the educational curricula to be 
implemented with grant funds.
    The Committee expects the Administrator to consider the 
quality of the proposed programs in determining which centers 
are selected to participate in the pilot program provide a 
baseline by which the Administrator and the Congress can 
evaluate the success of the program.
    Grants are to be awarded to state SBDCs to carry out the 
pilot program on a statewide basis.
    It is the desire of the Committee that State small business 
development centers place particular focus on helping 
underserved populations in the area of vocational and technical 
entrepreneurship training.

Reporting requirements

    Those SBDCs receiving grants under the pilot program must 
report to the SBA within 18 months of receiving the grant 
monies, detailing how all the grant funds were used. In 
addition, not later than March 31, 2004, the SBA must conduct 
an evaluation of the program and report to Congress the results 
of each such evaluation.

Role of the Association of Small Business Development Centers

    The Act designates the Association of Small Business 
Development Centers as aclearinghouse for the collection of 
information and expertise regarding vocational and technical 
entrepreneurship programs.
    The Committee expects the Association of Small Business 
Development Centers to act as the repository and clearinghouse.

Authorization level

    The pilot program is authorized for 3 years at $7 million 
per year. The committee does not expect an appropriation for 
this pilot program to reduce the core funding for the regular 
4SBDC program.

                           IV. COMMITTEE VOTE

    In compliance with rule XXVI(7)(b) of the Standing Rules of 
the Senate, the following votes were recorded on July 24, 2002. 
A motion by Senator Kerry to adopt H.R. 2666, the ``Vocational 
and Technical Entrepreneurship Development Act of 2001,'' was 
approved by an 18-1 recorded vote, with the following Senators 
voting in the affirmative: Kerry, Bond, Levin, Harkin, 
Lieberman, Wellstone, Cleland, Landrieu, Edwards, Cantwell, 
Carnahan, Burns, Bennett, Snowe, Fitzgerald, Crapo, Allen and 
Ensign. Senator Enzi voted in the negative.

                   V. EVALUATION OF REGULATORY IMPACT

    In compliance with rule XXVI(11)(b) of the Standing Rules 
of the Senate, it is the opinion of the Committee that no 
significant additional regulatory impact will be incurred in 
carrying out the provisions of this legislation. There will be 
no additional impact on the personal privacy of companies or 
individuals who make use of the services provided.

                      VI. CHANGES IN EXISTING LAW

    In the opinion of the Committee, it is necessary to 
dispense with the requirement of rule XXVI (12) of the Standing 
Rules of the Senate in order to expedite the business of the 
Senate.

                           VII. cost estimate

    In compliance with rule XXVI(11)(a)(1) of the Standing 
Rules of the Senate, the Committee estimates the cost of the 
legislation will be equal to the amounts indicated by the 
Congressional Budget Office in the following letter.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 30, 2002.
Hon. John F. Kerry,
Chairman, Committee on Small Business and Entrepreneurship,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2666, the 
Vocational and Technical Entrepreneurship Development Act of 
2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Ken Johnson.
            Sincerely,
                                         Barry. B. Anderson
                                    (For Dan L. Crippen, Director.)
    Enclosure.

H.R. 2666--Vocational and Technical Entrepreneurship Development Act of 
        2001

    Summary: H.R. 2666 would require the Small Business 
Administration (SBA) to issue grants to small business 
development centers (SBDCs) so that they can help schools 
design curricula for teaching vocational and technical 
entrepreneurship. SBDCs are jointly funded by the private 
sector, schools, and federal, state, and local governments to 
provide management assistance to current and prospective small 
business owners.
    H.R. 2666 would authorize the appropriation of $7 million a 
year through 2004 to fund the new program. CBO estimates that 
implementing the act would cost $14 million over the 2003-2007 
period, assuming the appropriation of the authorized amounts. 
The act would not affect direct spending or receipts; 
therefore, pay-as-you-go procedures would not apply.
    H.R. 2666 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
The bill would benefit state, local, or tribal governments 
receiving grants under this bill, and any costs they incur 
would be voluntary.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2666 is shown in the following table. 
The costs of this legislation fall within budget function 370 
(commerce and housing credit). For this estimate, CBO assumes 
that the authorized amounts will be appropriated each year 
beginning in 2003, and that outlays will follow historical 
spending patterns for similar SBA programs.

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2003     2004     2005     2006     2007
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization level................................................        7        7        0        0        0
Estimated outlays..................................................        5        7        2        0        0
----------------------------------------------------------------------------------------------------------------

    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: H.R. 2666 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would benefit state, local, or tribal 
governments receiving grants under this bill, and any costs 
they incur would be voluntary.
    Previous CBO estimate: On August 15, 2001, CBO transmitted 
a cost estimate for H.R. 2666 as ordered reported by the House 
Committee on Small Business on August 1, 2001. The two versions 
of the legislation are very similar. CBO estimated that the 
prior version of H.R. 2666 would cost about $20 million over 
the 2002-2006 period, subject to the availability of 
appropriated funds. The higher estimated costs for the House 
version reflect CBO's assumption that funds would be 
appropriated for the program for three years (beginning in 
2002), rather than our current assumption of two years 
(beginning in 2003).
    Estimate prepared by: Federal cost: Ken Johnson, Impact on 
state, local, and tribal governments: Greg Waring; Impact on 
the private sector: Cecil McPherson.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                   VIII. SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    The section establishes the short title as the ``Vocational 
and Technical Entrepreneurship Development Act of 2001.''

Section 2. Vocational and Technical Entrepreneurship Development 
        Program

    This section amends the Small Business Act by adding a new 
section at the end titled: ``Vocational and Technical 
Entrepreneurship Development Program.''
    Subsection (a) defines the terms: ``Administrator,'' 
``program,''' and ``small business development center.''
    Subsection (b) requires the Administrator to establish a 
program by which the Administrator makes grants to Small 
Business Development Centers to enable such centers to provide 
technical assistance to secondary schools, or to post-secondary 
vocational or technical schools, for the development and 
implementation of curricula designed to promote vocational and 
technical entrepreneurship.
    Subsection (c) establishes the minimum grant that the 
Administrator can make with respect to the pilot program as not 
less than $200,000.
    Subsection (d) requires the Administrator to design a grant 
application that must be completed by any Small Business 
Development Center seeking a grant. The application shall 
include information regarding the applicant's goals and 
objectives for the educational programs to be funded.
    Subsection (e) requires the Administrator, as a condition 
of each grant under the program, that the grantee shall 
transmit to the Administrator, within 18 months after receipt 
of grant funds, a report describing how the grant funds were 
used.
    Subsection (f) permits the Administrator to enter into a 
cooperative agreement or contract with a small business 
development center receiving a grant under this section to 
provide additional assistance that furthers the purposes of the 
program.
    Subsection (g) requires the Administrator to transmit a 
report to Congress, no later than March 31, 2004, that 
evaluates the program.
    Subsection (h) requires the Administrator to select an 
association established under section 21(a)(3)(A) of the Small 
Business Act to act as a clearinghouse of information and 
expertise regarding vocational and technical entrepreneurship 
education programs. In each fiscal year, 2002, 2003, and 2004, 
the Administrator shall provide additional assistance to the 
association selected to serve as the clearinghouse.
    Subsection (i) authorizes $7,000,000 be appropriated for 
each of the fiscal years 2002, 2003, and 2004. The funds are to 
remain available until expended.

                                
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