[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.
---------------------------------------------------------------------------
    \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




           *       *       *       *       *       *       *
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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