[Senate Report 115-414]
[From the U.S. Government Publishing Office]
Calendar No. 633
115th Congress } { Report
SENATE
2d Session } { 115-414
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VETERANS SMALL BUSINESS ENHANCEMENT ACT OF 2018
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December 5, 2018.--Ordered to be printed
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Mr. Risch, from the Committee on Small Business and
Entrepreneurship, submitted the following
R E P O R T
[To accompany S. 2679]
[Including cost estimate of the Congressional Budget Office]
The Committee on Small Business and Entrepreneurship, to
which was referred the bill (S. 2679) to provide access to and
manage the distribution of excess or surplus property to
veteran-owned small businesses, having considered the same,
reports favorably thereon with an amendment (in the nature of a
substitute) and recommends that the bill (as amended) do pass.
I. INTRODUCTION
A bill to provide access to and manage the distribution of
excess or surplus property to veteran-owned small businesses
(S. 2679) was introduced by Senator Richard J. Durbin on behalf
of Senator Tammy Duckworth, for herself, and Senator John
Kennedy on April 16, 2018. Other cosponsors include Senator Jon
Tester, Senator Tim Kaine, and Senator Maria Cantwell.
This bill directs the Small Business Administration (SBA),
in coordination with the General Services Administration (GSA)
and state surplus agencies to allow veteran-owned small
businesses to be eligible to receive surplus federal property.
During the markup of the bill, the Duckworth substitute
amendment to the bill was approved unanimously by a roll call
vote as part of a manager's package. The Duckworth amendment is
a clarifying amendment that references United States Code to
better define the terms ``state agency'' and ``foreign excess
property.'' The bill, as amended, was also approved unanimously
by a roll call vote as part of a manager's package.
II. HISTORY (PURPOSE & NEED FOR LEGISLATION)
SBA and GSA define veteran-owned small businesses as those
independently owned and operated by an honorably discharged
veteran that meet the size standard eligibility. Eligibility
varies from industry to industry and is based on the average
number of employees for the preceding twelve months or on the
business's average gross revenue over a three year period.
In Fiscal Year 2016 the GSA facilitated the disposal of
more than 160,000 personal property items.\1\ If surplus
property is not claimed or donated, the federal government must
pay to dispose of it. The GSA administered surplus property
program makes excess federal property, such as vehicles,
computers, office equipment, tools, heavy construction
equipment, and any property not considered ``real property'',
available to non-profit organizations at no cost except
shipping and handling. Because small businesses are for-profit
organizations, they do not fall under 40 U.S.C. Sec. 549, which
regulates the federal surplus property program. However,
through the program's partnership with SBA's 8a program,
minority-owned small business owners have participated in the
federal surplus property program since 1999.
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\1\Government Accountability Office Report 18-257, February 16,
2018.
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The legislation would amend the Small Business Act to
direct the SBA's Office of Veterans Business Development to
provide access to and manage the distribution of excess or
surplus federal property to veteran-owned small businesses. It
is currently not possible to simply add veterans-owned small
businesses to the list of eligible participants. Rather, the
SBA's Office of Veterans Business Development would work with
each state and the GSA to establish a memorandum of agreement
allowing eligible businesses to work with state agencies for
surplus property to acquire property in a manner similar to how
minority-owned businesses utilize the program.
In the 114th Congress Senator Richard J. Durbin and the
Committee's Chairman, Senator David Vitter introduced similar
legislation, the Veterans Small Business Enhancement Act of
2015. The Committee favorably reported the bill by voice vote,
but it did not receive consideration by the full Senate.
III. HEARINGS & ROUNDTABLES
In the 115th Congress the Committee held a hearing on May
15, 2018 entitled, ``The State of Small Business in America: An
update from the U.S. Small Business Administration.'' In her
questions for the record Senator Duckworth asked Administrator
McMahon if she would support S. 2679. The Administrator
responded that she would work with the Senator and would
provide comments to Senator Duckworth on how to ensure that the
SBA can properly manage the program.
IV. DESCRIPTION OF BILL
This bill would direct the SBA, GSA, and various state
agencies for surplus property to enter into memorandums of
agreement to allow veteran-owned small businesses to be
eligible to receive surplus federal property. This change in
the law would simply add veteran-owned small businesses to the
list of entities that can receive this property. Currently, the
only for-profit organizations that can receive surplus property
are minority-owned small businesses that utilize SBA's 8(a)
contracting program.
V. COMMITTEE VOTE
In compliance with rule XXVI (7)(b) of the Standing Rules
of the Senate, the following vote was recorded on October 11,
2018.
A motion to adopt S. 2679, a bill to provide access to and
manage the distribution of excess or surplus property to
veteran-owned small businesses, as amended by the Duckworth
substitute amendment, was approved unanimously by a roll call
vote as part of a manager's package. Senators Risch, Rubio,
Paul, Scott, Ernst, Inhofe, Young, Enzi, Rounds, Kennedy,
Cardin, Cantwell, Shaheen, Heitkamp, Markey, Booker, Coons,
Hirono, and Duckworth voted for the bill.
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 will be equal to the amounts discussed in
the following letter from the Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, November 16, 2018.
Hon. James E. Risch,
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. 2679, the Veterans
Small Business Enhancement Act of 2018.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Stephen
Rabent.
Sincerely,
Keith Hall,
Director.
Enclosure.
S. 2679--Veterans Small Business Enhancement Act of 2018
Under current law, the General Services Administration
(GSA) is responsible for the management and distribution of
surplus federal personal property. Some of that property is
transferred to state agencies for distribution to certain
qualifying entities. S. 2679 would direct the Small Business
Administration (SBA), in coordination with GSA, to provide
small businesses owned and controlled by veterans with access
to surplus personal property and foreign excess personal
property.
Using information from the SBA and GSA, CBO estimates that
implementing the bill would cost less than $500,000 for the GSA
to expand the scope of its current activities to include the
management and transfer of property to small businesses owned
and controlled by veterans through a memorandum of agreement
with the SBA.
Under the bill, GSA may transfer surplus equipment that it
otherwise could sell under current law. The proceeds of those
sales are recorded in the budget as offsetting receipts, which
are treated as reductions in direct spending. Using information
from GSA, CBO expects that adding a new group of entities to
those already eligible to receive surplus property would
increase competition for that property; however, we expect that
such competition would not substantially reduce the amounts of
surplus property, generally the least desirable items, that
would eventually be sold to the public. Because enacting S.
2679 could reduce offsetting receipts, pay-as-you-go procedures
apply; however, CBO estimates that those forgone receipts would
be insignificant. Enacting the bill would not affect revenues.
CBO estimates that enacting S. 2679 would not significantly
increase net direct spending or on-budget deficits in any of
the four consecutive 10-year periods beginning in 2029.
S. 2679 contains no intergovernmental or private-sector
mandate as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Stephen Rabent.
The estimate was reviewed by H. Samuel Papenfuss, Deputy
Assistant Director for Budget Analysis.
VII. 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.
VIII. SECTION-BY-SECTION ANALYSIS
Section 1: Short title
This section designates the act as the ``Veterans Small
Business Enhancement Act of 2018''.
Sec. 2: Access to surplus property for veteran-owned small businesses
This section defines the terms ``foreign excess property''
and ``state agency''. The section also directs the SBA, GSA,
and state agencies for surplus property to allow veteran-owned
and controlled small businesses to be eligible to receive
federal surplus property and foreign excess property through
memorandums of agreement.
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