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                                                     Calendar No. 633
115th Congress      }                         {               Report
                                 SENATE
 2d Session         }                         {               115-414

======================================================================



 
            VETERANS SMALL BUSINESS ENHANCEMENT ACT OF 2018

                                _______
                                

                December 5, 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. 2679]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Small Business and Entrepreneurship, to 
which was referred the bill (S. 2679) to provide access to and 
manage the distribution of excess or surplus property to 
veteran-owned small businesses, having considered the same, 
reports favorably thereon with an amendment (in the nature of a 
substitute) and recommends that the bill (as amended) do pass.

                            I. INTRODUCTION

    A bill to provide access to and manage the distribution of 
excess or surplus property to veteran-owned small businesses 
(S. 2679) was introduced by Senator Richard J. Durbin on behalf 
of Senator Tammy Duckworth, for herself, and Senator John 
Kennedy on April 16, 2018. Other cosponsors include Senator Jon 
Tester, Senator Tim Kaine, and Senator Maria Cantwell.
    This bill directs the Small Business Administration (SBA), 
in coordination with the General Services Administration (GSA) 
and state surplus agencies to allow veteran-owned small 
businesses to be eligible to receive surplus federal property.
    During the markup of the bill, the Duckworth substitute 
amendment to the bill was approved unanimously by a roll call 
vote as part of a manager's package. The Duckworth amendment is 
a clarifying amendment that references United States Code to 
better define the terms ``state agency'' and ``foreign excess 
property.'' The bill, as amended, was also approved unanimously 
by a roll call vote as part of a manager's package.

              II. HISTORY (PURPOSE & NEED FOR LEGISLATION)

    SBA and GSA define veteran-owned small businesses as those 
independently owned and operated by an honorably discharged 
veteran that meet the size standard eligibility. Eligibility 
varies from industry to industry and is based on the average 
number of employees for the preceding twelve months or on the 
business's average gross revenue over a three year period.
    In Fiscal Year 2016 the GSA facilitated the disposal of 
more than 160,000 personal property items.\1\ If surplus 
property is not claimed or donated, the federal government must 
pay to dispose of it. The GSA administered surplus property 
program makes excess federal property, such as vehicles, 
computers, office equipment, tools, heavy construction 
equipment, and any property not considered ``real property'', 
available to non-profit organizations at no cost except 
shipping and handling. Because small businesses are for-profit 
organizations, they do not fall under 40 U.S.C. Sec. 549, which 
regulates the federal surplus property program. However, 
through the program's partnership with SBA's 8a program, 
minority-owned small business owners have participated in the 
federal surplus property program since 1999.
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    \1\Government Accountability Office Report 18-257, February 16, 
2018.
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    The legislation would amend the Small Business Act to 
direct the SBA's Office of Veterans Business Development to 
provide access to and manage the distribution of excess or 
surplus federal property to veteran-owned small businesses. It 
is currently not possible to simply add veterans-owned small 
businesses to the list of eligible participants. Rather, the 
SBA's Office of Veterans Business Development would work with 
each state and the GSA to establish a memorandum of agreement 
allowing eligible businesses to work with state agencies for 
surplus property to acquire property in a manner similar to how 
minority-owned businesses utilize the program.
    In the 114th Congress Senator Richard J. Durbin and the 
Committee's Chairman, Senator David Vitter introduced similar 
legislation, the Veterans Small Business Enhancement Act of 
2015. The Committee favorably reported the bill by voice vote, 
but it did not receive consideration by the full Senate.

                      III. HEARINGS & ROUNDTABLES

    In the 115th Congress the Committee held a hearing on May 
15, 2018 entitled, ``The State of Small Business in America: An 
update from the U.S. Small Business Administration.'' In her 
questions for the record Senator Duckworth asked Administrator 
McMahon if she would support S. 2679. The Administrator 
responded that she would work with the Senator and would 
provide comments to Senator Duckworth on how to ensure that the 
SBA can properly manage the program.

                        IV. DESCRIPTION OF BILL

    This bill would direct the SBA, GSA, and various state 
agencies for surplus property to enter into memorandums of 
agreement to allow veteran-owned small businesses to be 
eligible to receive surplus federal property. This change in 
the law would simply add veteran-owned small businesses to the 
list of entities that can receive this property. Currently, the 
only for-profit organizations that can receive surplus property 
are minority-owned small businesses that utilize SBA's 8(a) 
contracting program.

                           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 S. 2679, a bill to provide access to and 
manage the distribution of excess or surplus property to 
veteran-owned small businesses, as amended by the Duckworth 
substitute amendment, was approved unanimously by a 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 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 16, 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. 2679, the Veterans 
Small Business Enhancement Act of 2018.
    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. 2679--Veterans Small Business Enhancement Act of 2018

    Under current law, the General Services Administration 
(GSA) is responsible for the management and distribution of 
surplus federal personal property. Some of that property is 
transferred to state agencies for distribution to certain 
qualifying entities. S. 2679 would direct the Small Business 
Administration (SBA), in coordination with GSA, to provide 
small businesses owned and controlled by veterans with access 
to surplus personal property and foreign excess personal 
property.
    Using information from the SBA and GSA, CBO estimates that 
implementing the bill would cost less than $500,000 for the GSA 
to expand the scope of its current activities to include the 
management and transfer of property to small businesses owned 
and controlled by veterans through a memorandum of agreement 
with the SBA.
    Under the bill, GSA may transfer surplus equipment that it 
otherwise could sell under current law. The proceeds of those 
sales are recorded in the budget as offsetting receipts, which 
are treated as reductions in direct spending. Using information 
from GSA, CBO expects that adding a new group of entities to 
those already eligible to receive surplus property would 
increase competition for that property; however, we expect that 
such competition would not substantially reduce the amounts of 
surplus property, generally the least desirable items, that 
would eventually be sold to the public. Because enacting S. 
2679 could reduce offsetting receipts, pay-as-you-go procedures 
apply; however, CBO estimates that those forgone receipts would 
be insignificant. Enacting the bill would not affect revenues.
    CBO estimates that enacting S. 2679 would not significantly 
increase net direct spending or on-budget deficits in any of 
the four consecutive 10-year periods beginning in 2029.
    S. 2679 contains no intergovernmental or private-sector 
mandate 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.

                   VIII. SECTION-BY-SECTION ANALYSIS

Section 1: Short title

    This section designates the act as the ``Veterans Small 
Business Enhancement Act of 2018''.

Sec. 2: Access to surplus property for veteran-owned small businesses

    This section defines the terms ``foreign excess property'' 
and ``state agency''. The section also directs the SBA, GSA, 
and state agencies for surplus property to allow veteran-owned 
and controlled small businesses to be eligible to receive 
federal surplus property and foreign excess property through 
memorandums of agreement.

                                  [all]