[House Report 116-233]
[From the U.S. Government Publishing Office]
116th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 116-233
======================================================================
SUCCESSFUL ENTREPRENEURSHIP FOR RESERVISTS AND VETERANS ACT
_______
October 15, 2019.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Ms. Velazquez, from the Committee on Small Business,
submitted the following
R E P O R T
[To accompany H.R. 3734]
The Committee on Small Business, to whom was referred the
bill (H.R. 3734) to require the Comptroller General of the
United States to report on access to credit for small business
concerns owned and controlled by covered individuals, to
require the Administrator of the Small Business Administration
to report on the veterans interagency task force, and for other
purposes, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary.......................................2
II. Background and Need for Legislation............................2
III. Hearings.......................................................3
IV. Committee Consideration........................................3
V. Committee Votes................................................3
VI. Section-by-Section Analysis for H.R. 3734......................5
VII. Congressional Budget Office Cost Estimate......................5
VIII. Unfunded Mandates..............................................6
IX. New Budget Authority, Entitlement Authority, and Tax
Expenditures....................................................6
X. Oversight Findings.............................................6
XI. Statement of Constitutional Authority..........................7
XII. Congressional Accountability Act...............................7
XIII. Federal Advisory Committee Act Statement.......................7
XIV. Statement of No Earmarks.......................................7
XV. Statement of Duplication of Federal Programs...................7
XVI. Disclosure of Directed Rule Makings............................7
XVII. Performance Goals and Objectives...............................7
XVIII Changes in Existing Law, Made by the Bill, As Reported.........7
.
I. Purpose and Bill Summary
The purpose of H.R. 3734, the Successful Entrepreneurship
for Reservists and Veterans Act or the SERV Act, is to require
the Comptroller General of the United States to report on
access to credit for small business concerns owned and
controlled by covered individuals and for the Small Business
Administration's (SBA) Veterans Interagency Task Force to
identify and outline a plan to promote veterans'
entrepreneurship programs.
II. Background and Need for Legislation
H.R. 3734 was introduced by Representative Sharice Davids
(D-KS) and Ranking Member Steve Chabot (R-OH) on July 17, 2019.
The bill ensures veterans are receiving the assistance needed
to enter into entrepreneurship and also addresses the need for
data on veteran entrepreneurship as it pertains to financing.
The Interagency Task Force for Small Business Development
was established by statute and executed by Executive Order. The
Task Force is chaired by the U.S. Small Business Administration
and is comprised of representatives appointed by SBA's
Administrator from a variety of agencies, including the SBA's
Office of Veterans Business Development (OVBD), the Department
of Defense (DoD), the Department of Labor (DOL), the Department
of Treasury (Treasury), the Department of Veterans Affairs
(DVA), the General Services Administration (GSA), the Office of
Management and Budget (OMB), and four representatives from
veterans service and military organizations: American Legion,
Vietnam Veterans of America, StreetShares Foundation, and the
Military Officers Association of America.
The task force is charged with coordinating federal efforts
to improve capital access, business development, and
contracting goals for veteran and service-disabled veteran
businesses. With regard to the outreach plan, the SBA offers
several programs to help aspiring and existing veteran
entrepreneurs launch and grow their small businesses, but more
needs to be done to promote the veterans' entrepreneurship
programs. As valuable as the programs are in assisting
servicemembers, veterans, and military spouses, they cannot
fully realize their potential if veteran entrepreneurs are
unaware or taking full advantage of them. The task force is
also required to meet regularly and file annual reports on a
variety of topics. Unfortunately, the task force last filed an
annual report in fiscal year 2015. The legislation would
require the task force to report annually to Congress on the
appointments made to the task force and to identify and outline
a plan for outreach and promotion of programs serving veterans
at SBA.
It also requires a report from the Government
Accountability Office (GAO) on the credit issues related to
veterans. Findings indicate a decline in veteran business
ownership, yet the exact causes remain elusive. Studies have
shown that veterans are more likely to be denied credit and
often rely on personal savings and credit cards to launch or
grow their small businesses. The legislation would direct the
GAO to submit a report to Congress, to the extent practicable
and upon the availability of reliable evidence, that provides a
comprehensive and detailed analysis of credit issues related to
military servicemembers, military spouses, veterans, reservists
who are entrepreneurs. The report would be submitted to the
Senate and House Committees on Veterans Affairs and the Senate
and House Committees on Small Business within a year of
enactment of the legislation.
III. Hearings
In the 116th Congress, the Committee on Small Business held
a hearing on July 10, 2019 titled ``Continuing to Serve: From
Military to Entrepreneur.''\1\ The witnesses for the hearing
were: Mr. Davy Leghorn, Assistant Director, The American
Legion, Washington, DC; Mr. Scott M. Davidson CPT. USA,
Retired, Managing Partner and CEO, The GCO Consulting Group,
McLean, VA; Ms. Torrance Hart, Founder, Teak and Twine, LLC,
Springfield, VA and; Ms. Laurie Sayles, President and CEO,
Civility Management Solutions, Greenbelt, MD.
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\1\Continuing to Serve: From Military to Entrepreneur, Hearing
Before the H. Comm. On Small Bus., 116th Cong. (2019).
---------------------------------------------------------------------------
The hearing examined the role of veteran entrepreneurs in
growing the economy and efforts to foster veteran
entrepreneurship. One witness testified that people in rural
areas feel like they are left out and don't have access to
federal resources. He added, ``there are ways to connect, and
one way to get the word out to veterans on the street is
through social media.'' Other witnesses testified that access
to capital is a challenge for veteran entrepreneurs, with many
veteran entrepreneurs relying on credit cards to launch a small
business. Another concern raised during the hearing dealt with
predatory lenders targeting veteran entrepreneurs during their
transition from the military to civilian life, saddling them
with loans with high interest rates and limiting their ability
to grow their small business.
IV. Committee Consideration
The Committee on Small Business met in open session, with a
quorum being present, on July 17, 2019, and ordered H.R. 3734
favorably reported to the House of Representatives. During the
markup, no amendments were offered.
V. Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report legislation and amendments
thereto. The Committee voted by voice vote to favorably report
H.R. 3734 to the House at 11:55 A.M.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
VI. Section-by-Section of H.R. 3734
Section 1. Short title
This section designates the bill as the ``Successful
Entrepreneurship for Reservists and Veterans Act'' or the
``SERV Act.''
Section 2. Reporting requirement for the Veterans Interagency Task
Force
This section amends section 32 (c) of the Small Business
Act to require the Administrator to submit a report as part of
the Congressional Budget Justifications that will (1) discuss
the appointments made to the activities of the task force and
(2) identify and outline a plan for outreach and promotion of
programs.
Section 3. GAO report on access to credit
This section requires the GAO to submit a report to
Congress on veterans, service-disabled veterans, Reservists,
and veteran and military spouses' ability to access credit. The
report will be submitted to House and Senate Small Business
Committees and the House and Senate Veterans' Affairs
Committees within one year of enactment of the Act. The report
will include, to the extent practicable, an analysis of the
source of credit used by covered individuals, as well as the
average percentage of credit obtained from each source; the
default rate for covered individuals compared to the default
rate for all small businesses; the Federal lending programs
that are available to provide credit to covered individuals;
gaps in the availability of credit that are not filled by the
Federal government or private sources; obstacles facing covered
individuals in accessing credit; the extent to which deployment
and other military responsibilities affect the credit history
of veterans and Reservists; and the extent to which covered
individuals are aware of Federal programs targeted towards
helping them, and covered individuals include veterans,
service-disabled veterans, Reservists, spouses of veterans, and
military spouses.
VII. Congressional Budget Office Cost Estimate
The Congressional Budget Office pursuant to section 402 of
the Congressional Budget Act of 1974, submitted a cost estimate
for H.R. 3734 that stated enacting the legislation would not
significantly increase net direct spending or budget deficits
in any of the four consecutive 10-year periods beginning in
2030.
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 16, 2019.
Hon. Nydia M. Velazquez,
Chairwoman, Committee on Small Business,
House of Representatives, Washington, DC.
Dear Madam Chairwoman: The Congressional Budget Office has
prepared the enclosed cost estimate for 3734, the Successful
Entrepreneurship for Reservists and Veterans Act. If you wish
further details on this estimate, we will be pleased to provide
them. The CBO staff contact is Sofia Guo.
Sincerely,
Phillip L. Swagel,
Director.
Enclosure.
H.R. 3734 would require the Small Business Administration
(SBA) to submit an annual report on the activities,
appointments, and outreach efforts of the Interagency Task
Force on Veterans Small Business Development. That task force
currently comprises representatives appointed by SBA from
federal, nonprofit and private organizations and is responsible
for improving business development opportunities for veteran
owned and operated small businesses. The bill also would
require the Government Accountability Office (GAO) to submit a
report on the availability and accessibility of credit used by
such small businesses.
Using information from the Interagency Task Force on
Veterans Small Business Development and GAO, CBO estimates that
implementing H.R. 3734 would cost less than $500,000 over the
2019-2024 period subject to the availability of appropriated
funds. The task force has issued annual reports similar to
those required by H.R. 3734 in the past.
The CBO staff contact for this estimate is Sofia Guo. The
estimate was reviewed by Theresa Gullo, Assistant Director for
Budget Analysis.
VIII. Unfunded Mandates
H.R. 3734 contains no intergovernmental or private sector
mandates as defined in the Unfunded Mandates Reform Act, Public
Law No. 104-4, and would impose no costs on state, local, or
tribal governments.
IX. New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement
authority, and tax expenditures. While the Committee has not
received an estimate of new budget authority contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to 402 of the Congressional Budget Act
of 1974, the Committee does not believe that there will be any
additional costs attributable to this legislation. H.R. 3734
does not direct new spending, but instead reallocates funding
independently authorized and appropriated.
X. Oversight Findings
In accordance with clause 2(b)(1) of rule X of the Rules of
the House, the oversight findings and recommendations of the
Committee on Small Business with respect to the subject matter
contained in H.R. 3734 are incorporated into the descriptive
portions of this report.
XI. Statement of Constitutional Authority
Pursuant to clause 7 of rule XII of the Rules of the House
of Representatives, the Committee finds the authority for this
legislation in Art. I, 8, cl. 3 of the Constitution of the
United States.
XII. Congressional Accountability Act
H.R. 3734 does not relate to the terms and conditions of
employment or access to public services or accommodations
within the meaning of 102(b)(3) of Public Law No. 104-1.
XIII. Federal Advisory Committee Act Statement
H.R. 3734 does not establish or authorize the establishment
of any new advisory committees as that term is defined in the
Federal Advisory Committee Act, 5 U.S.C. App.2.
XIV. Statement of No Earmarks
Pursuant to clause 9 of rule XXI, H.R. 3734 does not
contain any congressional earmarks, limited tax benefits, or
limited tariff benefits as defined in subsections (d), (e), or
(f) of clause 9 of rule XXI of the Rules of the House.
XV. Statement of Duplication of Federal Programs
Pursuant to clause 3 of rule XIII of the Rules of the
House, no provision of H.R. 3734 establishes or reauthorizes a
program of the federal government known to be duplicative of
another federal program, a program that was included in any
report from the United States Government Accountability Office
pursuant to 21 of Pub. L. No. 111-139, or a program related to
a program identified in the most recent catalog of federal
domestic assistance.
XVI. Disclosure of Directed Rulemakings
Pursuant to clause 3 of rule XIII of the Rules of the
House, H.R. 3734 does not direct any rulemaking.
XVII. Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XII of the Rules of the
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
H.R. 3734 aligns current deployment practices with policies
to increase access to capital for small businesses with an
essential employee who was deployed as part of the National
Guard or Reserve.
XVIII. Changes in Existing Law Made by the Bill, as Reported
In compliance with clause (E) of rule XIII of the Rules of
the House, changes in existing law made by the bill, as
reported, as shown as follows: existing law proposed to be
omitted is enclosed in black brackets, new matter is printed in
italic, and existing law in which no change is proposed is
shown in roman:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
SMALL BUSINESS ACT
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SEC. 32. VETERANS PROGRAMS.
(a) Office of Veterans Business Development.--There is
established in the Administration an Office of Veterans
Business Development, which shall be administered by the
Associate Administrator for Veterans Business Development (in
this section referred to as the ``Associate Administrator'')
appointed under section 4(b)(1).
(b) Associate Administrator for Veterans Business
Development.--The Associate Administrator--
(1) shall be an appointee in the Senior Executive
Service;
(2) shall be responsible for the formulation,
execution, and promotion of policies and programs of
the Administration that provide assistance to small
business concerns owned and controlled by veterans and
small business concerns owned and controlled by
service-disabled veterans. The Associate Administrator
shall act as an ombudsman for full consideration of
veterans in all programs of the Administration; and
(3) shall report to and be responsible directly to
the Administrator.
(c) Interagency Task Force.--
(1) Establishment.--Not later than 90 days after the
date of enactment of this subsection, the President
shall establish an interagency task force to coordinate
the efforts of Federal agencies necessary to improve
capital and business development opportunities for, and
ensure achievement of the pre-established Federal
contracting goals for, small business concerns owned
and controlled by service-disabled veterans and small
business concerns owned and controlled by veterans (in
this section referred to as the ``task force'').
(2) Membership.--The members of the task force shall
include--
(A) the Administrator, who shall serve as
chairperson of the task force; and
(B) a senior level representative from--
(i) the Department of Veterans
Affairs;
(ii) the Department of Defense;
(iii) the Administration (in addition
to the Administrator);
(iv) the Department of Labor;
(v) the Department of the Treasury;
(vi) the General Services
Administration;
(vii) the Office of Management and
Budget; and
(viii) 4 representatives from a
veterans service organization or
military organization or association,
selected by the President.
(3) Duties.--The task force shall--
(A) consult regularly with veterans service
organizations and military organizations in
performing the duties of the task force; and
(B) coordinate administrative and regulatory
activities and develop proposals relating to--
(i) improving capital access and
capacity of small business concerns
owned and controlled by service-
disabled veterans and small business
concerns owned and controlled by
veterans through loans, surety bonding,
and franchising;
(ii) ensuring achievement of the pre-
established Federal contracting goals
for small business concerns owned and
controlled by service-disabled veterans
and small business concerns owned and
controlled by veterans through expanded
mentor-protege assistance and matching
such small business concerns with
contracting opportunities;
(iii) increasing the integrity of
certifications of status as a small
business concern owned and controlled
by service-disabled veterans or a small
business concern owned and controlled
by veterans;
(iv) reducing paperwork and
administrative burdens on veterans in
accessing business development and
entrepreneurship opportunities;
(v) increasing and improving training
and counseling services provided to
small business concerns owned and
controlled by veterans; and
(vi) making other improvements
relating to the support for veterans
business development by the Federal
Government.
(4) Report.--Along with the budget justification
documents for the Small Business Administration
submitted to Congress in connection with the budget for
a fiscal year submitted under 1105 of title 31, United
States Code, the Administrator shall submit a report--
(A) discussing the appointments made to and
activities of the task force; and
(B) identifying and outlining a plan for
outreach and promotion of the programs and
services for veterans, including Veteran
Business Outreach Centers, Boots to Business,
Boots to Business Reboot, Service-Disabled
Entrepreneurship Development Training Program,
Veteran Institute for Procurement, Women
Veteran Entrepreneurship Training Program, and
Veteran Women Igniting the Spirit of
Entrepreneurship.
(d) Participation in TAP Workshops.--
(1) In general.--The Associate Administrator shall
increase veteran outreach by ensuring that Veteran
Business Outreach Centers regularly participate, on a
nationwide basis, in the workshops of the Transition
Assistance Program of the Department of Labor.
(2) Presentations.--In carrying out paragraph (1), a
Veteran Business Outreach Center may provide grants to
entities located in Transition Assistance Program
locations to make presentations on the opportunities
available from the Administration for recently
separating or separated veterans. Each presentation
under this paragraph shall include, at a minimum, a
description of the entrepreneurial and business
training resources available from the Administration.
(3) Written materials.--The Associate Administrator
shall--
(A) create written materials that provide
comprehensive information on self-employment
and veterans entrepreneurship, including
information on resources available from the
Administration on such topics; and
(B) make the materials created under
subparagraph (A) available to the Secretary of
Labor for inclusion in the Transition
Assistance Program manual.
(4) Reports.--The Associate Administrator shall
submit to Congress progress reports on the
implementation of this subsection.
(e) Women Veterans Business Training.--The Associate
Administrator shall--
(1) compile information on existing resources
available to women veterans for business training,
including resources for--
(A) vocational and technical education;
(B) general business skills, such as
marketing and accounting; and
(C) business assistance programs targeted to
women veterans; and
(2) disseminate the information compiled under
paragraph (1) through Veteran Business Outreach Centers
and women's business centers.
(f) Authorization of Appropriations.--There are authorized to
be appropriated to carry out this section--
(1) $1,500,000 for fiscal year 2005; and
(2) $2,000,000 for fiscal year 2006.
(g) Access to Surplus Property for Veteran-owned Small
Businesses.--
(1) Definitions.--In this subsection--
(A) the term ``foreign excess property'' has
the meaning given the term in section 102 of
title 40, United States Code; and
(B) the term ``state agency'' has the meaning
given the term, including the roles and
responsibilities assigned, in section 549 of
title 40, United States Code.
(2) Requirement.--The Administrator, in coordination
with the Administrator of General Services, shall
provide access to and manage the distribution of
surplus property, and foreign excess property returned
to a State for handling as surplus property, owned by
the United States under chapter 7 of title 40, United
States Code, to small business concerns owned and
controlled by veterans (as verified by the Secretary of
Veterans Affairs under section 8127 of title 38, United
States Code) pursuant to a memorandum of agreement
between the Administrator, the Administrator of General
Services, and the head of the applicable state agency
for surplus properties and in accordance with section
549 of title 40, United States Code.
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