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[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).

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                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2016     2017     2018     2019     2020   2016-2020
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                                  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
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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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