89–010 

115TH CONGRESS REPORT " ! SENATE 2d Session 115–448 

NATIONAL GUARD AND RESERVE ENTREPRENEURSHIP 

SUPPORT ACT OF 2018 

DECEMBER 20, 2018.—Ordered to be printed 

Mr. RISCH, from the Committee on Small Business and 

Entrepreneurship, submitted the following 

R E P O R T 

[To accompany S. 3561] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Small Business and Entrepreneurship, to 

which was referred the bill (S. 3561) to support entrepreneurs serving in the National Guard and Reserve, and for other purposes, 

having considered the same, reports favorably thereon with amendments and recommends that the bill, as amended, do pass. 

I. INTRODUCTION

The National Guard and Reserve Entrepreneurship Support Act 

of 2018 (S. 3561) was introduced by Senator Jeanne Shaheen, for 

herself, and Senator Patrick J. Leahy on October 15, 2018. Senator 

Christopher A. Coons and Senator Maria Cantwell were also included as co-sponsors of the legislation. 

This bill modifies the eligibility requirements for the Military Reservist Economic Injury Disaster Loan and Repayment for Deferral 

for Active Daily Reservists, directs the SBA to increase its outreach 

in order to provide counseling and training programs for spouses 

of veteran and members of the reserve forces, including by working 

with the National Guard and State Adjutant Generals, and requires the President to report semiannually to Congress on loans 

made through this program. 

During the markup, the bill was approved unanimously by a roll 

call vote as part of a manager’s package. 

II. HISTORY (PURPOSE & NEED FOR LEGISLATION)

According to the Department of Defense (DOD), there are over 

one million reservists, readily available to support our military opVerDate Sep 11 2014 22:36 Dec 28, 2018 Jkt 089010 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR448.XXX SR448
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erations or assist with a national emergency. Since 2001, the 

United States has conducted major military operations that have 

dramatically increased the operations tempo of the military services and required the large-scale mobilization of reservists. The 

military continues to rely heavily on its reserve components, and 

as of October 23, 2018, there were 37,036 National Guard and Reserve personnel activated for overseas contingency operations and 

approximately 2,000 National Guard personnel serving on the 

southwest border. 

Starting, growing, or maintaining a small business is a challenging endeavor, and veterans and active duty service members 

often face unique challenges and barriers due to their service to our 

country. According to a 2005 report and subsequent testimony provided by the Congressional Budget Office (CBO), many reservists 

lost income or experienced economic harm to their business as a result of deployments. Financial assistance through loans or grants 

and access to entrepreneurial development programs are key solutions to addressing these challenges and leveling the playing field 

for veterans, reservists, and National Guard members. In addition, 

small businesses that employ reservists or National Guard members can see their operations interrupted as a result of a deployment. 

The Committee first addressed this issue in the 106th Congress, 

when it established the Military Reservist Economic Injury Disaster Loan program. In the 110th Congress, the Committee made 

it a priority to once again address the challenges facing veterans 

and reservist entrepreneurs, and to ensure that federal agencies 

were committed to helping America’s veterans and reservists succeed in business and the private sector during and after their service to our country. 

In the 106th Congress, on April 29, 1999, Senator Kerry introduced the Military Reservists Small Business Relief Act of 1999 (S. 

918). The Military Reservist Economic Injury Disaster Loan program, which was in Senator Kerry’s bill, became law as part of the 

Veterans Entrepreneurship and Small Business Development Act 

of 1999 (P.L. 106–50). The program was intended to aid small businesses when an essential employee who was a reservist or National 

Guard member was called to active duty. The program was intended to protect service members, and those who employed them, 

from suffering the same financial hardships that disrupted the 

lives of men and women who served in Desert Storm. To accomplish this goal, the program authorized the Small Business Administration (SBA) to provide low-interest economic injury loans to 

small businesses that were adversely affected when essential employees were called to active duty during a time of military conflict. 

In the 107th Congress, on October 30, 2003, Chair Olympia 

Snowe formally requested that the CBO analyze the impact of reserve component call-ups on small businesses and examine the potential costs and effectiveness of options to alleviate hardships 

without weakening our national defense. In response to her letter, 

in May 2005, the CBO issued a report entitled, ‘The Effects of Reserve Call-Ups on Civilian Employers.’ The report found that the 

Department of Defense had dramatically increased its reliance on 

the reserve forces, and that activations can create vacancies that 

firms would not otherwise have had, and that uncertainty about 

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the timing and duration of call-ups may also have an effect. The 

report concluded the impact of call-ups was found to be greatest 

when the reservist is an essential employee, the business relies on 

employees with highly specialized skills, and the reservist is selfemployed. On May 17, 2007, the CBO testified before the Commission on the National Guard and Reserves on the findings of the report. 

In the 110th Congress, on March 28, 2007, Chairman John Kerry 

issued a report, entitled ‘‘The State of Veteran and Reservist Entrepreneurship,’’ which outlined the obstacles facing veteran and reservist entrepreneurs and included specific recommendations for 

supporting veterans and reservists in small business. The report 

found that many recently discharged veterans were experiencing 

higher rates of unemployment and that a smaller percentage of 

small business loans were going to veterans. The report also found 

that many reservists were experiencing high rates of income loss 

during deployment, and included recommendations for increased 

oversight of federal contracting and new steps to increase contracting opportunities for service-disabled veterans. 

On March 28, 2007, in conjunction with the release of the aforementioned report, Senator Kerry introduced the Military Reservist 

and Veteran Small Business Reauthorization Act of 2007 (S. 1005). 

The bill would have created a new, non-collateralized loan of up to 

$100,000 for businesses affected by the deployment of a key employee. S. 1005 would have also changed the design of a program 

that provided reservist-dependent businesses access to low-interest 

loans through the SBA’s disaster loan program by expanding the 

application period for these loans and creating a method of pre-consideration so that businesses could apply for and access the capital 

they needed prior to incurring financial hardship. For small reservist-dependent firms that were unable to take on additional debt, 

the bill would have provided grants of up to $25,000, contingent 

upon the business providing a viable business plan. Finally, the bill 

would have authorized increased resources for the SBA’s Office of 

Veterans Business Development. Senator Chuck Hagel was the 

lead cosponsor on the bill, and Senators Cardin, Tester, and Mark 

Pryor also cosponsored. 

On July 12, 2007, Chairman Kerry and Ranking Member Snowe 

introduced the Military Reservist and Veteran Small Business Reauthorization and Opportunity Act of 2007 (S. 1784). The bill would 

have improved the Military Reservist Economic Injury Disaster 

Loan program by providing a longer application deadline, creating 

a pre-application loan approval process, expanding outreach and 

technical assistance, and raising the maximum loan amount. It 

also would have created a loan participation program in which veterans can receive 7(a) loans while paying just 50 percent of the fees 

and a grant program to improve Small Business Development Centers’ outreach to the veteran community. Additionally, it would 

have required Veteran Business Outreach Centers to increase their 

participation in the Transition Assistance Program and the Office 

of Veterans Business Development to create and disseminate information aimed at informing women veterans about the resources 

available to them. Finally, the bill would have required a GAO report on the needs of service-disabled veterans and how to improve 

relations between employers and reservist employees. The bill was 

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based on the provisions of S. 1005 and the Veterans Small Business Opportunity Act of 2007 (S. 904), which Senator Snowe introduced on March 15, 2007. S. 1784 was cosponsored by Senators 

Hagel, Landrieu, Lieberman, Cantwell, and Tester. On October 1, 

2007, an amendment modeled on S. 1784 passed the Senate as part 

of the 2008 Defense Authorization Act, but it was not included in 

the final version of the bill. The text of S. 1784 passed the Senate 

on December 19, 2007, as a substitute amendment to the Military 

Reservist and Veteran Small Business Reauthorization and Opportunity Act of 2008 (H.R. 4253). The House amended the bill with 

Senate-House compromise language, and this version passed the 

House on January 16, 2008. On January 31, 2008, the bill passed 

in the Senate by unanimous consent. On February 14, 2008, the 

bill was signed into law (P.L. 110–186). On August 15, 2008, as required by the Military Reservist and Veteran Small Business Reauthorization and Opportunity Act of 2008 (P.L. 110–186), the Government Accountability Office (GAO) issued a report entitled, ‘‘Military Personnel: Improvements Needed to Increase Effectiveness of 

DOD’s Programs to Promote Positive Working Relationships between Reservists and Their Employers.’’ The GAO was unable to 

determine the impact of increased call-ups following September 11, 

2001, due to the absence of data. The report recommended that the 

DOD establish an annual performance plan that develops and facilitates the implementation of performance measures, conduct regular and recurring follow-up activities on efforts to maintain positive working relationships with employers, and develop initiatives 

to perform outreach to small businesses that employ reservists. 

III. HEARINGS & ROUNDTABLES

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.’’ This hearing focused on SBA sponsored programs such 

as SCORE, SBDCs, and VBOCs and the resources they can provide 

to veterans seeking entrepreneurial ventures. 

In the 113th Congress: 

On June 4, 2014, the Senate Committee on Small Business and 

Entrepreneurship held a hearing entitled ‘‘From Military Service to 

Small Business Owner: Supporting America’s Veteran Entrepreneurs.’’ This hearing discussed legislative proposals the Committee was considering relating to veterans’ entrepreneurship and 

small business ownership. One of the main topics discussed was access to capital and the challenges veteran entrepreneurs face in obtaining funding. 

IV. DESCRIPTION OF BILL

The National Guard and Reserve Entrepreneurship Support Act 

of 2018 (S. 3561) amends the Small Business Act and The Veterans 

and Small Business Development Act of 1999. In particular, the 

bill updates existing statutory eligibility requirements for the Military Reservist Economic Injury Disaster Loan (MREIDL) and Repayment Deferral for Active Duty Reservists, which currently limit 

their use to Guard members or Reservists called up during ‘‘periods 

of conflict.’’ The bill changes this outdated eligibility to ‘‘being ordered to perform active service for a period of more than 30 conVerDate Sep 11 2014 22:36 Dec 28, 2018 Jkt 089010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR448.XXX SR448
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secutive days,’’ which reflects the shift reserve forces have experienced from a strategic reserve to an operational reserve. 

This bill also directs the SBA to grow relationships with private 

and public sector entities to provide counseling and training programs for spouses of veterans and members of the reserve forces. 

More specifically, it would require the SBA to develop a National 

Guard and Reserve Deployment Support and Business Training 

Program that will provide counseling and assistance to support 

members of the reserves of the armed forces and their spouses. The 

bill directs the SBA to collaborate with the National Guard Bureau 

and State Adjutant Generals to identify existing SBA programs relevant to members of the Guard and Reserves, and develop more 

targeted and effective outreach, particularly prior to deployment. 

The bill would also require the President to report semiannually to 

Congress on the number of loans made through the MREIDL. 

V. COMMITTEE VOTE

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

Senate, the following vote was recorded on October 11, 2018. 

A motion to adopt the National Guard and Reserve Entrepreneurship Act, a bill to support entrepreneurs serving in the National Guard and Reserve, and for other purposes, was approved 

unanimously by roll call vote as part of a manager’s package. Senators Risch, Rubio, Paul, Scott, Ernst, Inhofe, Young, Enzi, Rounds, 

Kennedy, Cardin, Cantwell, Shaheen, Heitkamp, Markey, Booker, 

Coons, Hirono, and Duckworth voted for the bill. 

VI. COST ESTIMATE

In compliance with rule XXVI(11)(a)(1) of the Standing Rules of 

the Senate, the Committee estimates the cost of the legislation will 

be equal to the amounts discussed in the following letter from the 

Congressional Budget Office: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, November 14, 2018. 

Hon. JAMES E. RISCH, 

Chairman, Committee on Small Business and Entrepreneurship, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 3561, the National Guard 

and Reserve Entrepreneurship Support Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Stephen Rabent. 

Sincerely, 

KEITH HALL, Director. 

Enclosure. 

S. 3561. The National Guard and Reserve Entrepreneurship Support Act 

Under its disaster loan program, the Small Business Administration (SBA) provides direct loans to people and small businesses; including those that suffered substantial economic injury because essential employees were ordered to active duty during a military 

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1The subsidy cost is the estimated long-term cost to the government, calculated on a netpresent-value basis. Present value is a single number that expresses a flow of current and future 

income (or payments) in terms of an equivalent lump sum received (or paid) at a specific time. 

That value depends on the rate of interest (called the discount rate) used to translate future 

cash flows into current dollars. 

conflict. S. 3561 would permit loan assistance when such a deployment is not part of a military conflict. The bill also would expand 

eligibility for a program that allows loan recipients to defer the repayment of principal and interest on disaster loans to include certain small businesses and borrowers who are ordered to active 

service for more than 30 consecutive days. 

Using information from the SBA about the disaster loan program, CBO estimates that the total amount of loans administered 

by the SBA would increase slightly under the bill. CBO estimates 

that increase would have an insignificant effect on the estimated 

subsidy cost of disaster loans; such spending would be subject to 

the availability of appropriated funds.1 (The subsidy cost of the 

program was $187 million in 2017.) 

S. 3561 also would expand the target of certain SBA outreach 

programs that provide training and assistance to include the 

spouses of veterans and members of the reserve component of the 

armed forces. Using information from the SBA about the administrative costs of those programs, CBO estimates that implementing 

those provisions would increase the agency’s costs by an insignificant amount because the SBA is already expanding its outreach efforts toward those groups. 

S. 3561 would expand the pool of people who are eligible to defer 

the payment of principal and interest for disaster loans in certain 

circumstances. Because that provision could affect the timing of expected payments of loans currently outstanding, those changes 

would be treated as direct spending; therefore, pay-as-you-go procedures apply. Using information from the SBA, CBO estimates that 

the net effect on those expected payments would be insignificant 

over the 2019–2028 period. Implementing S. 3561 would not affect 

revenues. 

CBO estimates that enacting S. 3561 would not increase net direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2029. 

S. 3561 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. 

The CBO staff contact for this estimate is Stephen Rabent. The 

estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

VII. EVALUATION OF REGULATORY IMPACT

In compliance with rule XXVI(11)(b) of the Standing Rules of the 

Senate, it is the opinion of the Committee that no significant additional regulatory impact will be incurred in carrying out the provisions of this legislation. There will be no additional impact on the 

personal privacy of companies or individuals who utilize the services provided. 

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VIII. SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

This section provides for the title, ‘‘National Guard and Reserve 

Entrepreneurship Support Act of 2018.’’ 

Sec. 2. Extension of loan assistance and deferral eligibility to reservists beyond periods of military conflict 

This section replaces the existing language of the current Small 

Business Act to allow the Military Reservists Economic Injury Disaster Loan (MREIDL) and Repayment Deferral for Activity Duty 

Reservists program to be used for those soldiers who are ‘‘being ordered to perform active service for a period of more than 30 consecutive days.’’ This change of wording from ‘‘periods of conflict’’ 

would remove an obstacle preventing the SBA and the National 

Guard from providing services and training to those National 

Guard and Reserve personnel. This section also directs the President to submit a semiannual report to the Senate Committee on 

Small Business and Entrepreneurship and the Senate Committee 

on Appropriations and the House Committee on Small Business 

and the House Committee on Appropriations. This report will include the number of loans given out under the Military Reservist 

Economic Injury Disaster Loan program and the dollar volume. 

The report shall also contain the subsidy rate of the disaster loan 

program as authorized under section 7(b) of the Small Business Act 

with the loans made under the Military Reservist Economic Injury 

Disaster Loan program and without those loans included. 

Sec. 3. National Guard and Reserve Deployment and Business 

Training Program 

This section directs the SBA, in carrying out its authorities to 

make grants and enter into cooperative agreements for veterans, to 

establish a National Guard and Reserve Deployment Support and 

Business Training Program to provide training and other assistance for reserve forces and their spouses. In carrying out these duties, the Administrator may modify programs and resources to provide pre-deployment information to Guard members and reservists, 

as well as collaborate with the Chief of the National Guard Bureau 

and State Adjutants General. 

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