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107th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 107-212
VOCATIONAL AND TECHNICAL ENTREPRENEURSHIP DEVELOPMENT ACT OF 2001
September 21, 2001.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
Mr. Manzullo, from the Committee on Small Business, submitted the
R E P O R T
[To accompany H.R. 2666]
[Including cost estimate of the Congressional Budget Office]
The Committee on Small Business, to whom was referred the
bill (H.R. 2666) to amend the Small Business Act to direct the
Administrator of the Small Business Administration to establish
a vocational and technical entrepreneurship development
program, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
The purpose of the Act is to provide entrepreneurial
assistance to persons with vocational and technical skills to
help them own and operate their own businesses rather than
being employees of companies in which they have no direct
ownership interest. A further purpose of the Act is to
stimulate economic activity, to create new job opportunities,
and to help tradesmen and women realize the full potential of a
free enterprise system.
Specifically, H.R. 2666 aims to utilize the existing
network of small business development centers who will then
provide technical assistance to secondary schools, or to post
secondary vocational or technical schools, for the development
and implementation of curricula that can help students enrolled
in these institutions to obtain entrepreneurial skills.
Small businesses are the cornerstone of the U.S. economy,
accounting for more than 50 percent of this Nation's private
gross domestic product. The small business community represents
99.7 percent of all employers. In 1996, small businesses
produced approximately 75 percent of the 2.5 million new jobs
and for the one-year period from 1995-1996, small businesses
created over 78 percent of the net new jobs. As the statistics
establish, the small business sector of the economy is a proven
job-creator. It is anticipated that implementation of the Act
will add to and reinforce the central role of small businesses
in the economic fabric of this Nation.
Need for Legislation
Many persons within the United States have technical and
vocational skills, but do not have business experience or
training to help them succeed in the small business community.
Presently, small businesses employ mechanics, technicians,
carpenters, plumbers, machinists, and draftsmen. However, the
Act is needed to provide the essential training and business
counseling necessary for these skilled workers to start their
own businesses, to survive in the business world, and to grow.
In providing these needed services, the Act relies upon the
present infrastructure of the Small Business Development
Centers (``SBDCs'' or ``centers''), which has proven by past
performance to deliver services that greatly enhance the
chances of a small business surviving as compared with those
who do not receive such assistance.
The centers provide a focal point for studies, research,
and counseling concerning the managing, financing, and
operation of small business enterprises, including information
retrieval, coordination of federal and state government
services, and referral to experts. Therefore, the Committee
believes that the Small Business Development Center Program can
serve a greater number of potential entrepreneurs, by working
with institutions, both at the secondary and post secondary
level, that provide vocational and technical education.
Historically, the centers have focused on counseling
entrepreneurs or small business owners that are in a position
to either start their own business or take it to the next
level. However, a limited number of centers have begun sharing
their knowledge to provide vocational students, or ``future
entrepreneurs,'' the proper business tools while learning their
trade skills. Thus, these ``future entrepreneurs'' can begin
their own business venture after graduating with their new
skills instead of working for someone else, perhaps at a large
The Committee believes that the centers can provide an
effective mechanism for dispensing information and advice on
developing and implementing entrepreneurial curricula.
Therefore, the Committee believes that a targeted pilot program
to determine how assistance with entrepreneurial curricula by
selected small business development centers will operate is a
preferred strategy to generally requiring such assistance be
provided by all centers throughout the entire system.
Overview of the Act
The Act establishes a three-year pilot project providing
Small Business Administration (``SBA'') grants to SBDCs for
technical assistance to secondary schools and post-secondary
vocational and technical schools, to develop and implement
curricula to promote vocational and technical entrepreneurship.
The purpose of the Act is to assist the development and
implementation of curricula that will encourage skilled persons
to start their own businesses and to provide needed
entrepreneurial training to support the success of such
businesses. The Act provides the necessary entrepreneurial
support to expand the career opportunities for persons
receiving vocational training and, thus use their newly gained
skills to become the owners of their own business.
In the grant application, an applicant must outline its
goals and objectives for the assistance to be provided and the
educational curricula to be implemented with grant funds.
Grants are to be awarded to State small business development
centers to carry out the pilot program on a statewide basis. It
is the desire of the Committee that State small business
development centers pay particular focus to helping underserved
subcenters in the area of vocational and technical
entrepreneurship training. Those SBDCs receiving grants under
the pilot program must report to SBA within 18 months from
receiving the grant monies, detailing how all the grant funds
were used. In addition, not later than March 31, 2004, SBA must
conduct an evaluation of the program and report to Congress the
results of each such evaluation.
The Act designates the Association of Small Business
Development Centers as a clearinghouse for the collection of
information and expertise regarding vocational and technical
entrepreneurship programs. The minimum amount of a grant under
the pilot program is $200,000 and the annual authorization for
the 3-year pilot program is $7 million.
hearing on h.r. 2666
On Thursday, July 19, 2001, the Subcommittee on Workforce,
Empowerment and Government Programs of the Committee on Small
Business held a hearing, commencing at 10:00 a.m., to hear
testimony with regard to H.R. 203, H.R. 2538, and H.R. 2666.
The Subcommittees received the testimony of eight witnesses.
Panel 1 included: Congressman John E. Sweeney of New York,
Congressman Robert A. Brady of Pennsylvania, and Congressman
Tom Udall of New Mexico. Panel 2 included: Mr. Thomas G.
Grumbles, CIH, Vice President, American Industrial Hygiene
Association; Mr. Donald T. Wilson, President and CEO,
Association of Small Business Development Centers; Mr. Rudolph
Cartier, Jr., Small Business Ombudsman, State of New Hampshire;
Mr. Christian Conroy, Associate State Director, Pennsylvania
Small Business Development Centers; and, Mr. Leonard Lopez, Sun
Valley Express, Navajo Reservation, Shiprock, New Mexico.
The hearing showed that some SBDCs were already providing,
on a limited basis, the services which are the subject of the
three bills. The hearing evidenced a need for expansion of the
services to other locations.
consideration of h.r. 2666
At 10:05 a.m. on August 1, 2001, the Committee on Small
Business met to consider and report four bills, that included
H.R. 2666. The bill H.R. 2666 was introduced. Chairman Manzullo
asked unanimous consent that H.R. 2666 be considered as read
and open for amendment at any point. No amendments were
offered. Chairman Manzullo then moved to pass H.R. 2666 and to
report it to the House. At 10:38 a.m., a quorum being present,
the Committee passed the bill, H.R. 2666, and ordered it
Section 1. Short title
The section establishes the short title as the ``Vocational
and Technical Entrepreneurship Development Act of 2001.''
Section 2. Vocational and Technical Entrepreneurship Development
This section amends the Small Business Act by adding a new
section at the end entitled: ``Vocational and Technical
Entrepreneurship Development Program.''
Subsection (a) defines the terms: ``Administrator,''
``program,'' and ``small business development center.''
Subsection (b) requires the Administrator to establish a
program by which the Administrator makes grants to SBDCs to
enable such centers to provide technical assistance to
secondary schools, or to postsecondary vocational or technical
schools, for the development and implementation of curricula
designed to promote vocational and technical entrepreneurship.
The Committee expects that SBDCs will work in cooperation with
secondary schools and post secondary vocational and technical
schools to develop and implement curricula designed to promote
Subsection (c) establishes the minimum grant that the
Administrator can make with respect to the pilot program as not
less than $200,000.
Subsection (d) requires the Administrator to design a grant
application that must be completed by any SBDC seeking a grant.
The application shall include information regarding the
applicant's goals and objectives for the educational programs
to be funded. The Committee expects that the Administrator will
consider the quality of the proposed programs in determining
which centers are selected to participate in the pilot program
in order to provide a baseline by which the Administrator and
the Committee can evaluate the success of the program.
Subsection (e) requires the Administrator, as a condition
of each grant under the program, that the grantee shall
transmit to the Administrator, within 18 months after receipt
of grant funds, a report describing how the grant funds were
used. The Committee encourages these reports to include whether
each center met its goals and how the center met its
Subsection (f) permits the Administrator to enter into a
cooperative agreement or contract with a small business
development center receiving a grant under this section to
provide additional assistance that furthers the purposes of the
Subsection (g) requires the Administrator to transmit a
report to Congress, no later than March 31, 2004, that
evaluates the program.
Subsection (h) requires the Administrator to select an
association established under section 21(a)(3)(A) of the Small
Business Act to act as a clearinghouse of information and
expertise regarding vocational and technical entrepreneurship
education programs. In each fiscal year, 2002, 2003, and 2004,
the Administrator shall provide additional assistance to the
association selected to serve as the clearinghouse. The
Committee expects that the Association of Small Business
Development Centers will act as the repository and
Subsection (i) authorizes $7,000,000 be appropriated for
each of the fiscal years 2002, 2003, and 2004. The funds are to
remain available until expended.
Congressional Budget Office,
Washington, DC, August 15, 2001.
Hon. Donald Manzullo,
Chairman, Committee on Small Business,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2666, the
Vocational and Technical Entrepreneurship Development Act of
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Ken Johnson.
Dan L. Crippen, Director.
congressional budget office cost estimate
H.R. 2666--Vocational and Technical Entrepreneurship Development Act of
Summary: H.R. 2666 would require the Small Business
Administration (SBA) to issue grants to small business
development centers (SBDCs) so that they can help schools
design curricula for teaching vocational and technical
entrepreneurship. SBDCs are jointly funded by the private
sector, schools, and federal, state, and local governments to
provide management assistance to current and prospective small
H.R. 2666 would authorize the appropriation of $7 million a
year during the 2002-2004 period to fund the new program. CBO
estimates that implementing the bill would cost $20 million
over the 2002-2006 period, assuming the appropriation of the
authorized amounts. The bill would not affect direct spending
or receipts; therefore, pay-as-you-go procedures would not
H.R. 2666 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
The bill would benefit state and local governments by providing
grants to promote vocational and technical entrepreneurship.
Any costs to entities receiving grants under this program would
be incurred voluntarily.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2666 is shown in the following table.
The costs of this legislation fall within budget function 370
(commerce and housing credit). For this estimate, CBO assumes
that the authorized amounts will be appropriated for each year
and that outlays will follow historical spending patterns for
similar SBA programs.
By fiscal year, in millions of dollars--
2002 2003 2004 2005 2006
Changes in spending subject to appropriation:
Authorization level............................................ 7 7 7 0 0
Estimated outlays.............................................. 5 6 7 2 (\1\)
1. Less than $500,000.
Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: H.R. 2666
contains no intergovernmental or private-sector mandates as
defined in UMRA. The bill would benefit state and local
governments by providing grants to promote vocational and
technical entrepreneurship. Any costs to entities receiving
grants under this program would be incurred voluntarily.
Estimate prepared by: Federal Cost: Ken Johnson. Impact on
State, Local, and Tribal Governments: Susan Sieg Tompkins.
Impact on the Private Sector: Patrice Gordon.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Committee Estimate of Costs
Pursuant to the Congressional Budget Act of 1974, the
Committee estimates that the amendments to the Small Business
Act contained in H.R. 2666 will increase appropriations by no
more than $7 million annually over the next three fiscal years,
i.e., 2002 through 2004. Furthermore, pursuant to clause
3(d)(2)(A) of rule XIII of the Rules of the House of
Representatives, the Committee estimates that implementation of
H.R. 2666 will not significantly increase the administrative
costs. This concurs with the estimate of the Congressional
In accordance with clause 4(c)(2) of rule X of the Rules of
the House of Representatives, the Committee states that no
oversight findings or recommendations have been made by the
Committee on Government Reform with respect to the subject
matter contained in H.R. 2666.
In accordance with clause 2(b)(1) of rule X of the Rules of
the House of Representatives, the oversight findings and
recommendations of the Committee on Small Business with respect
to the subject matter contained in H.R. 2666 are contained in
the descriptive portions of this report.
Statement of Constitutional Authority
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, Section 8, Clause 18 of the
Constitution of the United States.
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 (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
SMALL BUSINESS ACT
* * * * * * *
SEC. 36. VOCATIONAL AND TECHNICAL ENTREPRENEURSHIP DEVELOPMENT PROGRAM.
(a) Definitions.--In this section, the following definitions
(1) Administrator.--The term ``Administrator'' means
the Administrator of the Small Business Administration.
(2) Program.--The term ``program'' means the program
established under subsection (b).
(3) Small business development center.--The term
``small business development center'' means a small
business development center described in section 21.
(b) Establishment.--In accordance with this section, the
Administrator shall establish a program under which the
Administrator shall make grants to small business development
centers to enable such centers to provide technical assistance
to secondary schools, or to postsecondary vocational or
technical schools, for the development and implementation of
curricula designed to promote vocational and technical
(c) Minimum Grant.--The Administrator may make no grant under
the program for an amount less than $200,000.
(d) Application.--Each small business development center
seeking a grant under the program shall submit to the
Administrator an application in such form as the Administrator
may require. The application shall include information
regarding the applicant's goals and objectives for the
educational programs to be assisted.
(e) Report to Administrator.--The Administrator shall make a
condition of each grant under the program that not later than
18 months after the receipt of the grant the recipient shall
transmit to the Administrator a report describing how the grant
funds were used.
(f) Cooperative Agreements and Contracts.--The Administrator
may enter into a cooperative agreement or contract with a small
business development center receiving a grant under this
section to provide additional assistance that furthers the
purposes of this section.
(g) Evaluation of Program.--Not later than March 31, 2004,
the Administrator shall transmit to Congress a report
containing an evaluation of the program.
(1) Selection.--Before making grants under the
program, the Administrator shall select an association
established pursuant to section 21(a)(3)(A) to act as a
clearinghouse of information and expertise regarding
vocational and technical entrepreneurship education
(2) Additional assistance authorized.--In each fiscal
year in which grants are made under the program, the
Administrator shall provide additional assistance to
the association selected under paragraph (1) to carry
out the functions described in such paragraph.
(i) Authorization of Appropriations.--There is authorized to
be appropriated to carry out this section $7,000,000 for each
of fiscal years 2002, 2003, and 2004. Such sums shall remain
available until expended.
Sec.  37. All laws and parts of laws inconsistent with
this Act are hereby repealed to the extent of such
Democrats understand that to start a new, successful
business, one must have sound management and organizational
skills. The necessity of increasing productivity, the
difficulties in recruiting qualified workers from a shrinking
labor force, and the importance of devising ways to meet
workers' benefits, will challenge small business owners. The
future of the economy depends on the continued emergence of
successful small businesses.
Small business owners continue to demonstrate their
extraordinary capacity to mobilize resources and generate new
jobs. There are more than 20 million small businesses in the
U.S., and each year, nearly a quarter of a million new ones are
started. However, the majority of entrepreneurs start without
receiving some form of formal business training. Many are drawn
into starting their own business by the possibility of being
their own boss, but to be a successful entrepreneur, one must
In addition, many of today's workers participating in
career training or vocational education, fail to obtain the
necessary entrepreneurial skills that can assist them to grow
and develop their own business venture successfully. This
legislation will give them the tools they need to balance their
trade-skill with sound business practices.
The pilot program established by H.R. 2666 utilizes the
existing network of the Small Business Administration's Small
Business Development Center (SBDC) Program. SBDCs awarded
grants will utilize their statewide network of service centers
to partner with secondary schools, or postsecondary vocational
or technical schools, in developing a cohesive curriculum on
starting and operating a successful business venture.
The teacher of the secondary schools, or postsecondary
vocational or technical schools, will use the curriculum
developed through the partnership, to provide their students
with entrepreneurial skills. In addition, the teacher can
modify the training to provide assistance relevant to the
particular industry sector for which the students are learning
By providing entrepreneurial knowledge at the same time
workers are learning a trade-skill (e.g., mechanic, machinist
or HVAC repair), career opportunities are expanded. Students
not only become more employable, they can become a small
business owner (e.g., auto repair service, machining and
tooling business, or HVAC repair service). In addition, they
become the employer, thus expanding the local job market, and
revitalizing and developing the economic growth of the
H.R. 2666 will also enhance the productivity and strength
of the overall SBDC Program. By expanding the number of
potential entrepreneurs, the number of potential SBDC clients
will also increase. It also enhances the effectiveness of
current SBDC assistance by offering entrepreneurial knowledge
during the learning phase and before the initial
entrepreneurial phase. After graduating from their career or
vocational training, students will have the basic tools and
understanding enabling future SBDC assistance to be more
efficient and productive, thus increasing the rate of
However, we feel the report language needs to emphasize
that SBDCs will only work in partnership with secondary
schools, or postsecondary vocational or technical schools, in
developing and implementing the curricula and will not replace
the teacher. SBDC resources should not be used to staff
educational institutions. It is also important to emphasize
that the curriculum will be implemented into the educational
plan of secondary schools, or postsecondary vocational or
technical schools, and not postsecondary educational
institutions whose school curriculum already offers their own
entrepreneurial or business classes.
In addition, SBDCs that are the most qualified, and with
the most experience, should be given priority in awarding
grants and the opportunity to expand on their current efforts.
This will ensure the quality and success of the overall pilot
project, especially if there are experienced programs that can
ensure and produce positive results. If these results are
realized, these successes may then be used as examples for the
expansion of the program to other areas, where such programs
have not been implemented.
One of the purposes for establishing this program as a
pilot, and not as a permanent program, is to build upon the
current practices, experience and innovation of SBDCs to expand
the scope of their services. If proven successful, the pilot
could then be made permanent and also expanded, as stated
earlier, to other areas in further need. To do otherwise,
stifles or discourages innovation and discriminates against
those SBDCs that have taken that first step. If SBDCs develop
new, innovative ways to assist entrepreneurs, they should be
encouraged to expand and develop that assistance further.
Lastly, we believe that fees must not be charged in
conjunction with this pilot project. Although the SBDCs are
permitted to charge fees under limited circumstances, one-on-
one counseling is provided free of charge. Current and past
Administrations have attempted to implement a fee-for-service
structure for SBDC services that are, and have been,
historically free. However, implementing such a structure would
not only be detrimental to the pilot program, but to the
overall SBDC program. Democrats have consistently opposed such
a move and will continue to oppose future attempts.
If the SBDC program is to serve a greater number of
potential entrepreneurs, the centers must transfer their
knowledge and expertise to those educational systems having the
capacity to reach and to educate a much larger segment of those
potential entrepreneurs. The centers are authorized to provide
assistance of many types, but they do not have an organized
program for providing the assistance established under H.R.
2666. We believe that under the pilot program, the centers can
provide an effective mechanism for dispensing information and
advice on developing entrepreneurial curricula. Therefore, we
support this pilot program and the entrepreneurial assistance
it will provide.
Nydia M. Velazquez.