69–010 

Calendar No. 542 

114TH CONGRESS REPORT " ! SENATE 2d Session 114–411 

THE VETERANS ENTREPRENEURIAL TRANSITION ACT OF 

2015 

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. 1870] 

The Committee on Small Business and Entrepreneurship, to 

which was referred the bill (S. 1870) to amend the Small Business 

Act to require the Administrator of the Small Business Administration to carry out a pilot program on issuing grants to eligible veterans to start or acquire qualifying businesses, 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 Entrepreneurial Transition Act of 2015 (S. 1870) 

was introduced by Senator Moran on July 27, 2015. 

The Veterans Entrepreneurial Transition Act establishes a threeyear grant program within the Small Business Administration 

(SBA) that would provide funding to no more than 250 eligible veterans to start or acquire a qualifying business. To be eligible, a veteran or group of veterans would need to complete entrepreneurship 

training and prepare a business plan that must be approved by an 

SBA-authorized advisor. 

Senator Vitter filed a manager’s amendment in the nature of a 

substitute which further clarified the eligibility requirements for 

veterans participating in the pilot program. The amendment includes the additional requirement that the grant be used for purVerDate Sep 11 2014 04:17 Dec 24, 2016 Jkt 069010 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR411.XXX SR411

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poses consistent with the activities and objectives set forth in the 

applicant’s business plan. It also includes a GAO report to be done 

within one year of conclusion of the pilot program in order to evaluate the program for issues pertaining to administrative difficulties, 

fiscal responsibility and whether the program is consistent with the 

original purposes of the GI Bill. 

The bill, as amended, was approved by voice vote. 

II. HISTORY (PURPOSE & NEED FOR LEGISLATION)

According to the U.S. Census Bureau, there are over 21.8 million 

veterans in the United States. Since 2001, over 2 million men and 

women have completed tours of service in the U.S. military and returned to civilian life. It is projected that an additional million will 

leave the Armed Forces over the next five years. That number 

could be much larger with planned force reductions. 

Veterans own an estimated 2.4 million businesses in the United 

States, accounting for approximately one-tenth of all businesses nationwide (U.S. Census Bureau). According to the Kauffman Foundation, 45 percent of veterans start their own business after their 

military service is completed. Veterans who wish to engage in entrepreneurship need access to resources, training, and support to 

pursue their dreams, start a business, employ other Americans, 

and generate growth in the economy. 

In the Office of Veteran Business Development at the SBA, there 

are several different resources or programs available to assist veterans in starting a small business. Some of these programs are effective, but there is room for improvement to tailor programming 

to the needs of veterans on their path of entrepreneurship. The 

Kauffman Foundation reports that ‘‘veteran entrepreneurship 

shares have been declining steadily over the past two decades. In 

1996, veterans represented 12.3 percent of all new entrepreneurs. 

By 2011, veterans comprised just 6 percent of new entrepreneurs.’’ 

The research by Kauffman attributes this decline to the fact that 

‘‘younger veterans now have less support from within their own 

community.’’ As they consider their own entrepreneurial ventures 

there are fewer networking opportunities, mentors and funders. 

III. HEARINGS & ROUNDTABLES

In the 113th Congress: 

On April 18, 2013, the Committee held a roundtable entitled, 

‘‘The State of Veteran Entrepreneurship: ‘Vetpreneur.’ ’’ The seven 

roundtable participants included representatives from the SBA, 

GallantFew, Troop ID & Troopswap, Maestro Blocks, TechStars Patriot Boot Camp, Kauffman Foundation FasTrac Veteran’s Initiative, and American Legion. During the roundtable, the Committee 

examined the success of the existing programs that assist veterans 

in general, and that assist veterans in launching their own small 

businesses. The committee also considered ideas from participants 

on how these current programs may be improved to better support 

veteran entrepreneurs. 

IV. DESCRIPTION OF BILL

The bill will provide veterans the opportunity to pursue their 

small business and entrepreneurial aspirations by giving them acVerDate Sep 11 2014 04:17 Dec 24, 2016 Jkt 069010 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\SR411.XXX SR411

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cess to resources through the Small Business Administration. The 

bill will establish a 3-year pilot program that enables up to 250 GI 

Bill benefit-eligible veteran’s applicants to start a new business or 

purchase as existing business or franchise. The pilot program includes a thorough applications process and requires participation in 

an approved entrepreneurial training program. The entrepreneurial training program will require them to develop a business 

plan to be approved by their training camp advisor and the SBA’s 

Associate Administrator for Veterans Business Development. Once 

the veteran’s business plan is approved, they may receive an 

amount equivalent to that of their GI Bill benefit in the form of a 

grant in order to implement their business plan and start their 

small business enterprise. The bill does not purport to interfere 

with the existing GI Bill eligibility or benefits. 

V. COMMITTEE VOTE

In compliance with rule XXVI (7)(b) of the Standing Rules of the 

Senate, the following vote was recorded on July 27, 2015. 

A motion to adopt the Veterans Entrepreneurial Transition Act, 

a bill to allow veterans the opportunity to pursue their small business and entrepreneurial aspirations by giving them access to resources through the Small Business Administration was approved 

by voice vote with the following Senators present: Vitter, Gardner, 

Peters, Heitkamp, Shaheen, Enzi, 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 16, 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. 1870, the Veterans Entrepreneurial Transition 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. 

S. 1870—The Veterans Entrepreneurial Transition Act of 2015 

Basis of estimate: For this estimate, CBO assumes that S. 1870 

will be enacted near the end of calendar year 2015, that the necessary amounts will be appropriated each year, and that spending 

will follow historical patterns for similar grants. CBO estimates 

that implementing S. 1870 would cost $80 million over the 2016– 

2020 period, assuming appropriation of the necessary amounts. The 

bill would establish a three-year grant program within the Small 

Business Administration (SBA) that would provide funding to no 

more than 250 eligible veterans to start or acquire a qualifying 

business. To be eligible, a veteran or group of veterans would need 

to complete entrepreneurship training and prepare a business plan 

that must be approved by an SBA-authorized advisor. 


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Participating veterans who complete the required training and 

develop an approved business plan would be eligible to receive a 

grant equal to their unused veteran’s education benefits plus a 

monthly housing allowance for each month they participate in the 

program. Participants also would be reimbursed for costs associated with the required entrepreneurship training. (Receipt of a 

grant would not affect veterans’ eligibility for education benefits.) 

Although S. 1870 would authorize only 250 grants, the bill would 

allow groups of veterans to apply; each group would be treated as 

a single application against the maximum of 250 grants. The 

amount funded under each grant, however, would be calculated 

based on the number of veterans participating in the group. Because the bill would create an incentive for veterans to team up in 

order to maximize the grant funding available for their business, 

CBO expects that half of the applications would be for individual 

proprietors and the remainder would consist of larger groups of 

veterans. (According to the SBA, 70 percent of small businesses are 

sole proprietorships.) We estimate that each application would, on 

average, consist of three eligible veterans; therefore, benefits would 

be available to about 750 individuals. The amount available to each 

participant would be broken into three components: 

An amount equal to the number of months of educational assistance available to the veteran at the time the application is submitted multiplied by the monthly rate for educational assistance 

under current law. Based on the costs for veterans that are using 

education assistance benefits for other purposes, we estimate the 

educational assistance benefits would be worth about $1,900 per 

month, on average, and that participating veterans would be eligible for about 32 months of those benefits. Assuming appropriation 

of the necessary amounts, we estimate that those grants would cost 

$45 million over the 2016–2020 period. 

Summary: S. 1870 would establish a pilot program to provide 

grants to veterans that would be used to start or acquire a small 

business. The program would be authorized to award no more than 

250 grants during a three-year period. 

CBO estimates that implementing S. 1870 would cost $80 million 

over the 2016–2020 period, assuming appropriation of the necessary funds. Pay-as-you-go procedures do not apply to this legislation because enacting the bill would not affect direct spending or 

revenues. 

S. 1870 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary effect of S. 1870 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 

Estimated Authorization Level ...................................................... * 27 26 26 * 80 

Estimated Outlays ........................................................................ * 23 26 26 4 80 

Notes: Components may not sum to total because of rounding. * = less than $500,000. 


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Additional assistance equal to the basic allowance for housing 

that the Department of Defense pays to enlisted service members 

with dependents and a rank of E–5, multiplied by the number of 

months the veteran participates in the program (the housing allowance would be reduced by half if the veteran is also employed elsewhere). CBO estimates housing assistance would be worth about 

$1,650 per month, on average, and that participating veterans 

would be eligible for about 75 percent of that amount for the duration of the pilot program (because we expect half of the recipients 

would be employed elsewhere). Assuming appropriation of the necessary amounts, we estimate that this additional assistance would 

cost $32 million over the 2016–2020 period. 

Training assistance equal to the cost of entrepreneurial training, 

if requested by the participant. Based on the costs of entrepreneurial training programs offered at several institutions of higher 

education, we estimate that training assistance would cost about 

$1 million over the 2016–2020 period, assuming appropriation of 

the necessary amounts. Finally, we estimate that SBA would spend $2 million to administer the program over the 2016–2020 period. 

Pay-As-You-Go considerations: None. 

Intergovernmental and private-sector impact: S. 1870 contains no 

intergovernmental or private-sector mandates as defined in UMRA 

and would impose no costs on state, local, or tribal governments. 

Estimate prepared by: Federal costs: Susan Willie and David 

Newman; 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 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 utilize the services provided. 

VIII. SECTION-BY-SECTION ANALYSIS

Section 1. Short title: Designates this bill as the ‘‘Veterans Entrepreneurial Transition Act of 2015’’ or the ‘‘VET Act of 2015.’’ 

Section 2: Amends Section 32 of the Small Business Act to add 

the Veterans Small Business Entrepreneurship Pilot Program 

No later than 90 days after the enactment of the Act, that the 

Administrator, in consultation with the Advisory Committee on 

Veterans Business Affairs (15 U.S.C. 657b) and the Secretary of 

Veterans Affairs, shall begin a pilot program designed to assess the 

feasibility and advisability of providing grants to eligible veterans 

who wish to start or acquire a small business. 

The Administrator shall promote efficiency, accountability and 

competition in carrying out the pilot program. 

The Administrator and Advisory Committee will determine as 

appropriate the qualifying business enterprises for eligibility are a 

small business as defined by the Small Business Act, a franchise 

business, or any other category of business, such as a start-up. 


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Restricts the number of grants awarded by the Administrator to 

no more than 250 eligible veterans in the pilot program, ensures 

geographic diversity of grants awarded and the duration of the 

pilot is three years beginning on the date the pilot program is implemented by the Administrator. 

In order to qualify and possibly receive a grant through the pilot 

program, eligible veterans are required to submit an application 

within the first two years of the pilot program. The application 

must include: A description of how the grant amount will be used, 

including a description of the qualifying business enterprise. A description of the expected return on investment resulting from the 

grant amount. A certification that the eligible veteran will complete 

the required education and training program and that the veteran 

understands that he or she will not receive the grant amount until 

the required education and training program has been completed. 

Any other certification that the Administrator and Advisory Committee determine are necessary by rule, depending on the type of 

business enterprise and as determined appropriate, such as: Proof 

of good standing, profitable operation, and guarantees relating to 

the purchase of the enterprise if a veteran is purchasing an already 

existing small business; proof of compliance with applicable State 

and Federal laws on franchises and proof of training in conformation with the industry standard if the eligible veteran is starting 

a franchise enterprise; or a proposal for operation that leads to a 

profitable operation if a veteran pursues a startup or an enterprise 

not in operation at the time of application. 

A certification that the eligible veterans understands when applying for the grant that he or she will not receive funds through 

the grant until after his or her business plan has been approved 

under the required procedures. 

A group of eligible veterans may apply as a group under the pilot 

program, and they will be treated as a single eligible veteran for 

the purposes of the program, except in regards to the maximum 

amount of the grant, which is to be calculated by multiplying the 

maximum amount available for one rant by the number of members of the group. 

Each eligible veteran must complete an entrepreneurship readiness program approved by the Administrator that will prepare the 

veteran for ownership and management of their qualifying business 

enterprise in order to receive a grant. 

An approved training program may include any program approved by the Administrator or Secretary of Veterans Affairs for 

entrepreneurship training; a program available through the Department of Defense’s Transition Assistance Program; any program 

approved by the Administrator in consultation with the Advisory 

Committee that is determined appropriate because of the expertise 

it offers relating to a certain type of business enterprise (such as 

a startup); or through any of the following as outlined in the Small 

Business Act: Small Business Development Center, Women’s Business Center, Veterans Business Outreach Center, and the SCORE 

program. 

An eligible veteran must submit a business plan for approval 

that contains, but is not limited to the following in order to qualify 

for the grant: Description of how the business enterprise will 

achieve a profitable operation in a reasonable amount of time. An 


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assessment of relevant economic indicators, consumer data, production and sales data, and market any industry analysis. Any other 

information determined appropriate by the Administrator in consultation with the Advisory Committee. The Associate Administrator for Veterans Business Development of the Small Business 

Administration shall review and approve or disapprove a veteran’s 

business plan in coordination with the veteran’s training program 

advisor. 

The maximum grant amount includes funds for the purpose of 

starting a business enterprise and any additional assistance 

amount provided on a monthly basis. 

The maximum grant amount will be equal to the amount of the 

number of months of educational assistance an eligible veteran is 

entitled to on the date of their application through their GI Bill 

benefits as determined in Chapters 30 and 33 of Title 38. 

The veteran is eligible for additional assistance in the form of a 

basic housing allowance for each month that he or she participates 

in the pilot program, which is calculated based on chapter 33 of 

title 38 and is dependent on the employment status of the veteran 

at the time of application to the pilot program. If a veteran is not 

employed on the date of the application and the SBA pilot program 

to start a small business is their full-time means of employment, 

they may be eligible for the full amount of additional assistance 

just as a full-time student in higher education under title 38 is calculated according to the rate in effect for each veteran. If a veteran 

is employed on the date of the application for the SBA pilot program, they may be eligible for half of the amount of additional assistance just as a part-time student in higher education under title 

38 is calculated according to the rate in effect for each veteran. If 

necessary, the Administrator may pay for the entrepreneurial 

training program pursued by a veteran. The amount of the grant 

may be disbursed to the veteran in installments (no earlier than 

3 months or later than 1 year from the previous installment), and 

only after the veteran has completed the required entrepreneurship 

training, their business plan has been approved and according to 

established milestones, as appropriate in their business plan. 

In accordance with any rules and limitations that the Administrator, in consultation with the Advisory Committee, establish; and 

for purposes relating to starting or acquiring their qualifying business enterprise that the Administrator and Advisory Committee determine appropriate, including purchasing goods or services needed 

for creating the operation, funding a project directed toward any 

economic development objective as outlined by the Small Business 

Investment Act, or for acquiring a qualifying business enterprise. 

In implementing the pilot program, the Administrator shall 

maximize existing relationships with the public and private sector 

to ensure successful outcomes for participants in the pilot program 

and to prevent redundancy with existing public and private programs. 

The Administrator shall submit a report, no later than 2 years 

after the start of the pilot program, to the House and Senate Committees on Small Business and Entrepreneurship and Veterans Affairs that provides the following: An assessment of the pilot program, a survey of all the grantees under the pilot program, and the 

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ing programs, recommendations regarding which aspects of the 

pilot program should be made permanent, and the means to ensuring geographic and demographic diversity as well as business enterprise diversity within the program, assessment of whether 

grants should be distributed through installments or a one-time, 

lump-sum payment; assessment of the additional assistance, particularly the accountability and use of the additional assistance; 

analysis of and recommendations regarding the process for approving business plans; recommendations for improving accountability 

of advisors. 

Not later than 1 year after the date where the pilot programs is 

terminated, the Comptroller General of the United States will submit a report to Congress that evaluates the pilot program in respect to: Administrative difficulties, issues of fiscal responsibility, 

duplication with existing entrepreneurship pilot programs within 

the Federal Government, and whether the pilot program is consistent with the Post-9/11 G.I. Bill. 

There is no modification to any time limitation or period during 

which an individual is entitled to educational assistance under the 

GI Bill. 

Definitions for the following: Advisor, Advisory Committee, Business Plan, Eligible Veteran, Franchise Business Enterprise, 

Franchisee, Franchisor, Pilot Program, Qualifying Business Enterprise, Startup and Subfranchisor. 

Æ 


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