[Senate Report 114-410]
[From the U.S. Government Publishing Office]
Calendar No. 225
114th Congress } { Report
SENATE
2d Session } { 114-410
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THE VETERANS SMALL BUSINESS OWNERSHIP INVESTMENT ACT
_______
December 20, 2016.--Ordered to be printed
Filed, under authority of the order of the Senate of December 10
(legislative day, December 9), 2016
_______
Mr. Vitter, from the Committee on Small Business and Entrepreneurship,
submitted the following
R E P O R T
[To accompany S. 1866]
The Committee on Small Business and Entrepreneurship, to
which was referred the bill (S. 1866) to establish the
veterans' business outreach center program, to improve the
programs for veterans of the Small Business Administration, and
for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill, as amended do pass.
I. INTRODUCTION
The Veterans Small Business Ownership Improvements Act (S.
1866) was introduced by Senators David Vitter, Hirono, and
Jeanne Shaheen on July 27, 2015.
During the markup of the bill, Senators Ayotte and Shaheen
filed an amendment to the bill that authorizes the SBA to
establish a peer-driven educational pilot program to help
veterans develop the requisite skills to become successful
small business owners. The five-year program will assist
participating service members, veterans, and their spouses/
dependents through in-depth training, providing the tools and
entrepreneurial knowledge necessary to identify a business
opportunity, draft a business plan, connect with local small
business resources, and launch a small business through an
organized peer environment. The Inspector General will conduct
annual reviews of contracts awarded through this program to
uphold the program's integrity and goals. The amendment was
approved by voice vote.
Senator Shaheen also filed an amendment to the bill that
would remove a provision preventing the SBA from spending more
than a certain percentage of funds on overseas travel in order
to deliver the program. The amendment would ensure that service
members stationed overseas have equal access to the SBA's Boots
to Business program as those stationed domestically. Ms.
Shaheen did not offer her amendment during the markup.
The bill, as amended, was also approved by voice vote.
II. HISTORY (PURPOSE & NEED FOR LEGISLATION)
In the past two years alone, over 360,000 service members
have separated from the armed forces, and there will be over 1
million service members transitioning out of the military over
the next five years. While military men and women gain valuable
experience throughout their service, 69% of veterans say that
their biggest challenge after leaving the military is finding a
job. Over 1 million veterans are currently unemployed, with
unemployment rates for veterans at 9% and in some markets as
high as 21%.
Veteran entrepreneurs and small business owners are
significant, vital contributors to the local and national
economies. There are over 2.4 million businesses with majority
ownership by veterans. They contribute over $1.2 trillion to
our economy each year and employ over 5.7 million workers.
However, while our service members demonstrate advanced
maturity and extensive professional and leadership skills from
their military service, many transitioning service members do
not have the technical knowledge to start and sustain a
business.
While many veterans are applying the same can-do approach
they used in the military to start and grow their own small
businesses, they need better connections to the resources that
can help their businesses succeed. By making the federal
government a better ally of veterans, they can transition from
military service to local job-creators.
Since the passage of the Veterans Entrepreneurship and
Small Business Development Act of 1999 (P.L. 106-50), the SBA's
Office of Veterans Business Development (OVBD) has been working
to provide technical assistance and support to those veterans
who have served our country and returned to start or grow a
small business. The Committee has supported efforts to ensure
successful transitions into civilian life and, more
specifically, civilian employment. By encouraging all levels of
veteran entrepreneurship and advocating for additional
resources, the Committee has worked diligently to provide
America's veterans with the information and tools they need to
become successful small business owners. The Committee
continues to recognize the tremendous success and potential of
the OVBD in providing critical information and services to
veteran small business owners across the country.
In continuing with the Committee's commitment to supporting
America's veteran entrepreneurs, on May 20, 2010 Senators
Landrieu and Snowe introduced the Strengthening
Entrepreneurship for America's Veterans Act of 2010 (S. 3394).
The legislation established a Veterans Business Center program
within the OVBD, to provide entrepreneurial training and
counseling to veterans, service-disabled veterans, reservists,
their spouses and surviving spouses. It also authorized funding
so that the OVBD may carry out the program. In addition, S.
3394 authorized the OVBD to create an online mechanism through
which the SBA may provide information to assist veteran
business centers in providing resources to clients.
Additionally, the legislation required two reports to be
completed, one regarding veterans' access to credit and another
on the effectiveness of the veterans' business center program.
The legislation included provisions similar to those contained
in the Entrepreneurial Development Act of 2009 (S. 1229)
introduced by Chair Landrieu and Ranking Member Snowe earlier
in the 111th Congress.
In the 113th Congress, Senator Pryor introduced the Veteran
Entrepreneurship and Training Opportunities Act of 2014. The
bill was intended to address the need for modern, targeted
entrepreneurial development programs that meet veterans at the
beginning of the transition process and provide the support
necessary for them to create jobs and grow the U.S. economy.
The legislation authorizes and improves several programs run by
the Small Business Administration's Office of Veteran Business
Development to help transitioning service members adjust to the
civilian world and gain the skills necessary to start and
expand their small businesses.
III. HEARINGS & ROUNDTABLES
In the 113th Congress:
On November 8, 2013, the Committee held a field hearing in
Little Rock, Arkansas, entitled ``From Warriors to
Entrepreneurs: Business Opportunities for Veterans.'' The
purpose of the hearing was to discuss efforts to provide
entrepreneurship training and business counseling for our
nation's veterans and returning service members, and the
reauthorization of existing veterans entrepreneurial
development programs within the Small Business Administration.
The Committee received testimony from Ms. Jeanne A. Hulit,
Acting Administrator, U.S. Small Business Administration; Ms.
Janet M. Roderick, ASBTDC State Director, UALR College of
Business; Mr. David Wallace, Wallace Staffing and Labor; Mr.
Damian Coleman, Marquette GIS, Inc.; Ms. Anita Montgomery; Ms.
Linda R. Nelson, CPA, Arkansas Small Business Administration
Director; Mr. Jeff Frisby, Enlisted Association of the Arkansas
National Guard; Mr. Kevin Kidd, Taco Kidd; Ms. Itzel Meador,
Arkansas Capital Corporation Group; Ms. Esther Fitch.
On November 13, 2013, the Committee held a roundtable
entitled ``Serving our Service Members: A Review of Programs
for Veteran Entrepreneurs.'' The purpose of the hearing was to
discuss efforts at the local, state, and national level to
provide entrepreneurship training and business counseling for
our nation's veterans and returning service members. The
Committee received testimony from Mr. C.E. Rowe, President and
CEO, America's SBDC; Lt. Col. Jason C. Anderson, Founder and
CEO, Active-Duty Entrepreneur, LLC; Ms. Robin D. Kistler,
Director, LSU Executive Education, Louisiana State University;
Mr. Aaron Dirks, Chairman, PosiGen; Mr. Chris Ferguson,
President, Shoulder 2 Shoulder Inc.; Mr. Louis J. Celli, Jr.,
Director, National Legislative Division, The American Legion;
Mr. Rhett Jeppson, Associate Administrator, Office of Veterans
Business Development, U.S. Small Business Administration; Mr.
Robert Rehder, Director, Veterans Business Outreach Center
(VBOC), Fayetteville State University; Mr. Joe Wynn, President,
Vets Group, Inc.; Dr. Mike Haynie, Ph.D., Executive Director
and Founder, Institute for Veterans and Military Families,
Syracuse University.
On June 4, 2014 the Committee held a hearing entitled
``From Military Service to Small Business Owner: Supporting
America's Veterans Entrepreneurs.'' The purpose of the hearing
was to discuss what the current Administration--in concert with
the new SBA Administrator--is doing to help boost veterans'
entrepreneurship and small business ownership. Additionally,
the purpose was to discuss pending legislation aimed at helping
veterans' small business ownership and entrepreneurial
development programs within the SBA. The Committee received
testimony from Ms. Julianna Duso, Program Director, Veterans
Business Outreach Center, U.S. Small Business Administration;
Mr. Rhett Jeppson, Associate Administrator, Office of Veterans
Business Development, U.S. Small Business Administration; Mr.
Gary Multanen, CEO, Best Bath Systems, Inc.; Ms. Trena Payton,
President, ABN Technologies; Mr. Dan Proulx, Jr. Member
Manager, Monument Construction, LLC.
In the 114th Congress:
On June 25, 2015, the Committee held a hearing entitled
``Opening Doors to Economic Opportunity for Our Veterans and
Their Families through Entrepreneurship.'' The purpose of the
hearing was to examine entrepreneurship programs available to
veterans, especially those with disabilities, as they
transition to civilian life. The Committee heard testimony from
two separate panels. The first panel comprised representatives
for veteran programs; representing the Office of Veterans
Business Development, the Institute for Veterans and Military
Families, the Small Business Technology & Development Center,
and the Veterans Business Outreach Center at Community Business
Partnership. The Second panel comprised several veteran
entrepreneurs. Witnesses testified on how to avoid duplicating
existing programs, coordinating efforts with existing programs,
ensuring efficiency through metrics and accountability, and
whether the new program should extend to overseas operations.
IV. DESCRIPTION OF BILL
This bill authorizes the Boots to Business Program, the
Women Veterans Business Training Program, the Business Training
Program for Service Disabled Veterans, and the Veterans'
Business Outreach Center Program under the Small Business
Administration's (SBA) Office of Veterans Business Development.
The bill authorizes appropriations of $10,500,000 for each of
fiscal years 2016 through 2020. It requires annual reports on
performance metrics, other information, and improvement
suggestions for the programs, IG review of B2B awards, and
examinations for VBOCs. Requires GAO reports on access to
capital and VBOC performance. Directs the SBA to establish
guidelines for improving the matching and network of military
service members and veterans for both counselors/mentors and
clients throughout these programs. Requires that all VBOCs be
affiliated with an SBDC through cooperative agreements, and
outlines the VBOC application process and application
requirements in addition to requirements for the Administrator/
Associate Administrator for managing the application,
selection, and grant disbursement processes. Limits the amount
of funds available for international travel reimbursements to
administer the programs. Improves service/resource coordination
amongst programs and agencies. Creates a one-stop online
resource for all of the SBA's business development and
entrepreneurial programs.
The Ayotte/Shaheen amendment creates a peer-driven
educational pilot program through SBA to help veterans develop
the requisite skills to become successful small business
owners. The five-year program will assist participating service
members, veterans, and their spouses/dependents through in-
depth training, providing the tools and entrepreneurial
knowledge necessary to identify a business opportunity, draft a
business plan, connect with local small business resources, and
launch a small business through an organized peer environment.
The Inspector General will conduct annual reviews of contracts
awarded through this program to uphold the program's integrity
and goals.
The Shaheen amendment, while not offered, would ensure that
service members stationed overseas have equal access to the
SBA's Boots to Business program as those stationed
domestically. As written, the underlying provision would deny
nearly 2,000 Service members stationed overseas with quality
instruction on the challenges of entrepreneurship. The
amendment, which struck the underlying provision including that
limitation, sought to reconcile the bill with the long-standing
Department of Defense's policy of brick-and-mortar instruction
as well as providing equal opportunities to transitioning
military personnel regardless of their duty station.
V. COMMITTEE VOTE
In compliance with rule XXVI(7)(b) of the Standing Rules of
the Senate, the following vote was recorded on July 29, 2015.
A motion to adopt the Veterans Small Business Ownership
Improvements Act, a bill to reauthorize Veteran Owned Small
Business programs including the Boots to Business program, the
Veteran Business Outreach Centers, and to make certain
improvements as amended by the Ayotte/Shaheen amendment, was
approved unanimously by voice vote with the following Senators
present: Vitter, Gardner, Peters, Heitkamp, Shaheen, Eniz,
Booker, Cantwell, Hirono, Fischer, Ernst, and Scott.
VI. 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 discussed in the
following letter from the Congressional Budget Office:
September 14, 2015.
Hon. David Vitter,
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 S. 1866, the Veterans
Small Business Ownership Improvements Act of 2015.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Susan Willie.
Sincrely,
Keith Hall.
Enclosure.
Summary: S. 1866 would authorize several programs to
provide entrepreneurship training through the Small Business
Administration (SBA) to veterans. S. 1866 also would require
the SBA and the Government Accountability Office (GAO) to
provide reports to the Congress on the performance and
effectiveness of the programs authorized under the bill.
CBO estimates that implementing S. 1866 would cost $52
million over the 2016-2020 period, assuming appropriation of
the authorized and necessary amounts. Pay-as-you-go procedures
do not apply to this legislation because enacting it would not
affect direct spending or revenues.
S. 1866 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary effect of S. 1866 is shown in the following table.
The costs of this legislation fall within budget function 370
(commerce and housing credit).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------------
2016 2017 2018 2019 2020 2016-2020
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Veterans Entrepreneurial Development Programs:
Authorization Level................................. 11 11 11 11 11 53
Estimated Outlays................................... 6 9 11 11 11 47
Other Programs, Reports, and Online Efforts:
Estimated Authorization Level....................... 2 1 1 1 1 6
Estimated Outlays................................... 1 1 1 1 1 5
Total:
Estimated Authorization Level................... 12 11 11 11 11 57
Estimated Outlays............................... 7 10 11 11 11 52
----------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.
Basis of estimate: For this estimate, CBO assumes that the
bill will be enacted late in calendar year 2015, that the
necessary amounts will be appropriated each year, and that
spending will follow historical patterns for similar
activities.
S. 1866 would authorize $10.5 million annually for fiscal
years 2016 through 2020 for several SBA programs that provide
advice and assistance to veterans who desire to or have
established small businesses. The bill also would authorize a
pilot program for nonprofits to develop peer support groups to
help eligible active members of the military as well as
veterans explore issues related to self-employment and small
business ownership. Finally, the bill would direct the SBA to
make information about all of the agency's programs to support
veterans' entrepreneurial efforts available online. CBO
estimates that implementing S. 1866 would cost $52 million over
the 2016-2020 period, assuming the appropriation of the
authorized and necessary amounts. Veterans Entrepreneurial
Development Programs S.1866 would authorize $10.5 million for
each of fiscal years 2016 through 2020 for the following
programs to provide entrepreneurship training to members of the
armed forces, veterans, and their spouses:
The Boots to Business Program,
the Women Veterans Business Training
Program,
the Business Training Program for Service
Disabled Veterans, and
the Veterans' Business Outreach Center
program.
Based on information from the SBA, CBO estimates that
implementing those provisions would cost $47 million over the
2016-2020 period, assuming appropriation of the authorized
amounts. SBA spent about $10 million in fiscal year 2014 for
entrepreneurial development programs aimed at veterans
including Boots to Business and the Veterans Business
Opportunity Center programs.
Other programs, reports and online efforts
Other provisions of S. 1866 would:
Authorize the Veterans Business Owners
Initiative Pilot Program to provide funding to
nonprofit entities that would establish support groups
for veterans interested in establishing a small
business to help them understand the complexities of
self-employment;
Broaden the amount of information the SBA
must submit to the Congress annually about its efforts
to support entrepreneurs who are veterans;
Require GAO to prepare reports on veterans'
ability to access credit and on the Veterans Business
Outreach Center program; and
Require the SBA to develop a single online
source for all resources the agency makes available to
veterans.
Based on information from the SBA, CBO estimates that
implementing those provisions would cost $5 million over the
2016-2020 period, assuming appropriation of the necessary
amounts. Of that amount, about $1 million would be spent in
one-time costs for the SBA to upgrade its data collection and
online resources, $1 million would be spent to meet additional
reporting requirements, and the balance would be spent to
implement the new pilot program.
Pay-As-You-Go considerations: None.
Intergovernmental and private-sector impact: S. 1866
contains no intergovernmental or private-sector mandates as
defined in UMRA. State, local, and tribal governments may
benefit from programs to provide assistance to veteran owners
of small businesses. Any costs to those entities would be
incurred voluntarily as a condition of receiving federal
assistance.
Estimate prepared by: Federal costs: Susan Willie; Impact
on state, local, and tribal governments: Melissa Merrell;
Impact on the private sector: Logan Smith.
Estimate approved by: H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis
VII. EVALUATION OF REGULATOY 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 utilize the services provided.
VIII. SECTION-BY-SECTION ANALYSIS
Section 1. Short title
This Act may be cited as the ``Veterans Small Business
Ownership Improvements Act of 2015.''
Section 2. Veterans' Business Outreach Center Program; Office of
Veterans Business Development
This section authorizes the Boots to Business Program and
the Veterans' Business Outreach Center Program under the Small
Business Administration's (SBA) Office of Veterans Business
Development. This section requires annual reports to Congress
on the performance and effectiveness of the programs and also
restricts use of funds under this section for program services
provided outside the U.S. It authorizes appropriations of
$5,500,000 for each of fiscal years 2016 through 2020 in order
to carry out this section.
Boots to Business Program
The Boots to Business Program is a pilot initiative for an
entrepreneurial education and training program by the SBA that
currently operates as a no-cost training track within the
Department of Defense's Transition Assistance (TAP) Program.
The program serves service members, veterans, and their
spouses/dependents through a three-step curriculum that
includes an introduction to entrepreneurship, a two-day
classroom course, and an eight-week instructor-led online
course guiding participants through the key steps for
evaluating business concepts and providing the foundational
knowledge required to develop a business plan. In addition,
participants are introduced to SBA resources available to help
access start-up capital and additional technical assistance.
This section authorizes the Boots to Business Program under
the SBA, includes program components such as online and
classroom courses to meet goals, and requires the program to be
implemented through various SBA resource partners, including
Veterans' Business Outreach Centers (VBOC), Small Business
Development Centers (SBDC), Women's Business Centers (WBC), and
the Service Core of Retired Executives (SCORE), and other
entities. In addition to the resource partners, the Boots to
Business material will be included in the DOD TAP program
manual, on the TAP website, and through other DOD published
materials. The Inspector General will conduct annual reviews of
contracts awarded through this program to uphold the program's
integrity and goals.
Veterans' Business Outreach Centers
Veteran Business Outreach Centers (VBOC) provide veterans,
Reservists, and spouses/dependents with business development
training and counseling that include technical assistance and
financial, management and marketing advice.
This section authorizes the VBOC program to be implemented
through educational institutions, veterans' nonprofit
community-based organizations, and Federal, State, and local
departments and agencies for 5-year, renewable projects.
This section outlines the application process and
application requirements in addition to requirements for the
Administrator/Associate Administrator for managing the
application, selection, and grant disbursement processes.
This section requires VBOC grants to be between $100,000
and $300,000 for each fiscal year and outlines non-federal
matching requirements and allowances.
This section requires that all VBOCs be affiliated with an
SBDC through cooperative agreements and ensures that the new
agreements between the VBOC and SBDC does not conflict with the
agreements between the SBDC and the SBA.
This section requires the Associate Administrator to
conduct annual examinations of the VBOC program and centers to
include performance metrics and other appropriate information.
This section also encourages and requires improved
coordination amongst VBOC centers and amongst veterans'
business development officers including online.
Section 3. Improvements to business development and entrepreneurial
programs
This section instructs the Administrator to establish
guidelines for improving the matching and network of military
service members and veterans for both counselors/mentors and
clients throughout the business development and entrepreneurial
programs under the SBA. This is to enhance the service and
network targeted at service members and veterans.
This section also creates a one-stop online resource for
all of the SBA's business development and entrepreneurial
programs. The website will contain program descriptions;
targeted audiences; local, state, and national contact
information; associated program costs; and curriculum outlines
available for each of SBA's business development programs. This
is to allow for a consolidated, one-stop resource for
entrepreneurs and business owners who are seeking assistance in
starting or developing small businesses.
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