S. 1005

Military Reservist and Veteran Small Business Reauthorization Act of 2007

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II

110th CONGRESS

1st Session

S. 1005

IN THE SENATE OF THE UNITED STATES

March 28, 2007

Mr. Kerry (for himself, Mr. Hagel, Mr. Cardin, Mr. Pryor, and Mr. Tester) introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship

A BILL

To amend the Small Business Act to improve programs for veterans, and for other purposes.

1.

Short title

This Act may be cited as the Military Reservist and Veteran Small Business Reauthorization Act of 2007.

2.

Definitions

In this Act—

(1)

the term activated means receiving an order placing a Reservist on active duty;

(2)

the term active duty has the meaning given that term in section 101 of title 10, United States Code;

(3)

the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively;

(4)

the term Reservist means a member of a reserve component of the Armed Forces, as described in section 10101 of title 10, United States Code;

(5)

the term Service Corps of Retired Executives means the Service Corps of Retired Executives authorized by section 8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1));

(6)

the terms service-disabled veteran and small business concern have the meanings given those terms in section 3 of the Small Business Act (15 U.S.C. 632);

(7)

the term small business development center means a small business development center described in section 21 of the Small Business Act (15 U.S.C. 648); and

(8)

the term women's business center means a women's business center described in section 29 of the Small Business Act (15 U.S.C. 656).

I

Military Reservist Loans

101.

Grant assistance for military Reservists' small businesses

(a)

Authorization of grants

Section 7(b)(3)(B) of the Small Business Act (15 U.S.C. 636(b)(3)(B)) is amended by inserting or grants after or a deferred basis).

(b)

Grant specifications

Section 7(b)(3) of the Small Business Act (15 U.S.C. 636(b)(3)) is amended by inserting after subparagraph (F) the following:

(G)

Grants made under subparagraph (B)—

(i)

may be awarded in addition to any loan made under subparagraph (B);

(ii)

shall not exceed $25,000; and

(iii)

shall be made only to a small business concern—

(I)

that provides a business plan demonstrating viability for not less than 3 years after the date of the application for that grant;

(II)

with 10 or fewer employees; and

(III)

that has not received a grant under subparagraph (B) during the 2-year period ending on the date of the application for that grant.

.

(c)

Authorization of appropriations

Section 20(e)(2) of the Small Business Act (15 U.S.C. 631 note) is amended by inserting after subparagraph (B) the following:

(C)

Grant assistance for military Reservists' small businesses

There are authorized to be appropriated for grants under section 7(b)(3)(B)—

(i)

$5,000,000 for the first fiscal year beginning after the date of enactment of the Military Reservist and Veteran Small Business Reauthorization Act of 2007; and

(ii)

$5,000,000 for each of the 2 fiscal years following the fiscal year described in clause (i).

.

102.

Noncollateralized loans

Section 7(b)(3) of the Small Business Act (15 U.S.C. 636(b)(3)) is amended by inserting after subparagraph (G), as added by this Act, the following:

(H)
(i)

Notwithstanding any other provision of law, the Administrator may make a loan under this paragraph of not more than $100,000 without collateral.

(ii)

The Administrator may defer payment of principal and interest on a loan described in clause (i) during the longer of—

(I)

the 1-year period beginning on the date of the initial disbursement of the loan; and

(II)

the period during which the relevant essential employee is on active duty.

.

103.

Application period

Section 7(b)(3)(C) of the Small Business Act (15 U.S.C. 636(b)(3)(C)) is amended by striking 90 days and inserting 1 year.

104.

Preapproval process

(a)

Definition

In this section, the term eligible Reservist means a Reservist who—

(1)

has not been ordered to active duty;

(2)

expects to be ordered to active duty during a period of military conflict (as that term is defined in section 7(n)(1) of the Small Business Act (15 U.S.C. 636(n)(1)); and

(3)

can reasonably demonstrate that the small business concern for which that Reservist is a key employee will suffer economic injury in the absence of that Reservist.

(b)

Establishment

Not later than 6 months after the date of enactment of this Act, the Administrator shall establish a preapproval process, under which—

(1)

the Administrator may approve a loan or grant to a small business concern under section 7(b)(3) of the Small Business Act (15 U.S.C. 636(b)(3)), as amended by this Act, before an eligible Reservist employed by that small business concern is activated; and

(2)

the Administrator shall distribute funds for any loan or grant approved under paragraph (1) if that eligible Reservist is activated.

105.

Outreach and technical assistance program

(a)

In general

Not later than 6 months after the date of enactment of this Act, the Administrator, in consultation with the Secretary of Veterans Affairs and the Secretary of Defense, shall develop a comprehensive outreach and technical assistance program (in this section referred to as the program) to—

(1)

market the loans and grants available under section 7(b)(3) of the Small Business Act (15 U.S.C. 636(b)(3)), as amended by this Act, to Reservists, and family members of Reservists, that are on active duty and that are not on active duty; and

(2)

provide technical assistance to a small business concern applying for a loan or grant under that section.

(b)

Components

The program shall—

(1)

incorporate appropriate websites maintained by the Administration, the Department of Veterans Affairs, and the Department of Defense; and

(2)

require that information on the program is made available to small business concerns directly through—

(A)

the district offices and resource partners of the Administration, including small business development centers, women's business centers, and the Service Corps of Retired Executives; and

(B)

other Federal agencies, including the Department of Veterans Affairs and the Department of Defense.

(c)

Report

(1)

In general

Not later than 6 months after the date of enactment of this Act, and every 6 months thereafter until the date that is 30 months after such date of enactment, the Administrator shall submit to Congress a report on the status of the program.

(2)

Contents

Each report submitted under paragraph (1) shall include—

(A)

for the 6-month period before the date of that report—

(i)

the number of loans and grants approved under section 7(b)(3) of the Small Business Act (15 U.S.C. 636(b)(3)), as amended by this Act;

(ii)

the number of loans and grants disbursed under that section; and

(iii)

the total amount disbursed under that section; and

(B)

recommendations, if any, to make the program more effective in serving small business concerns that employ Reservists.

II

National Reservist Enterprise Transition and Sustainability

201.

Short title

This title may be cited as the National Reservist Enterprise Transition and Sustainability Act of 2007.

202.

Purpose

The purpose of this title is to establish a program to—

(1)

provide managerial, financial, planning, development, technical, and regulatory assistance to small business concerns owned and operated by Reservists;

(2)

provide managerial, financial, planning, development, technical, and regulatory assistance to the temporary heads of small business concerns owned and operated by Reservists;

(3)

create a partnership between the Small Business Administration, the Department of Defense, and the Department of Veterans Affairs to assist small business concerns owned and operated by Reservists;

(4)

utilize the service delivery network of small business development centers, women's business centers, Veterans Business Outreach Centers, and centers operated by the National Veterans Business Development Corporation to expand the access of small business concerns owned and operated by Reservists to programs providing business management, development, financial, procurement, technical, regulatory, and marketing assistance;

(5)

utilize the service delivery network of small business development centers, women's business centers, Veterans Business Outreach Centers, and centers operated by the National Veterans Business Development Corporation to quickly respond to an activation of Reservists that own and operate small business concerns; and

(6)

utilize the service delivery network of small business development centers, women's business centers, Veterans Business Outreach Centers, and centers operated by the National Veterans Business Development Corporation to assist Reservists that own and operate small business concerns in preparing for future military activations.

203.

National guard and reserve business assistance

(a)

In general

Section 21(a)(1) of the Small Business Act (15 U.S.C. 648(a)(1)) is amended by inserting any small business development center, women's business center, Veterans Business Outreach Center, or center operated by the National Veterans Business Development Corporation providing enterprise transition and sustainability assistance to Reservists under section 37, after any women's business center operating pursuant to section 29,.

(b)

Program

The Small Business Act (15 U.S.C. 631 et seq.) is amended—

(1)

by redesignating section 37 (15 U.S.C. 631 note) as section 38; and

(2)

by inserting after section 36 the following:

37.

Reservist enterprise transition and sustainability

(a)

In general

The Administrator shall establish a program to provide business planning assistance to small business concerns owned and operated by Reservists.

(b)

Definitions

In this section—

(1)

the terms activated and activation mean having received an order placing a Reservists on active duty, as defined by section 101(1) of title 10, United States Code;

(2)

the term Administrator means the Administrator of the Small Business Administration, acting through the Associate Administrator for Small Business Development Centers;

(3)

the term Association means the association established under section 21(a)(3)(A);

(4)

the term eligible applicant means—

(A)

a small business development center that is accredited under section 21(k);

(B)

a women's business center;

(C)

a Veterans Business Outreach Center that receives funds from the Office of Veterans Business Development; or

(D)

an information and assistance center operated by the National Veterans Business Development Corporation under section 33;

(5)

the term enterprise transition and sustainability assistance means assistance provided by an eligible applicant to a small business concern owned and operated by a Reservist, who has been activated or is likely to be activated in the next 12 months, to develop and implement a business strategy for the period while the owner is on active duty and 6 months after the date of the return of the owner;

(6)

the term Reservists means any person who is—

(A)

a member of a reserve component of the Armed Forces, as defined by section 10101 of title 10, United States Code; and

(B)

on active status, as defined by section 101(d)(4) of title 10, United States Code;

(7)

the term small business development center means a small business development center as described in section 21 of the Small Business Act (15 U.S.C. 648);

(8)

the term State means each of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, and Guam; and

(9)

the term women's business center means a women's business center described in section 29 of the Small Business Act (15 U.S.C. 656).

(c)

Authority

The Administrator may award grants, in accordance with the regulations developed under subsection (d), to eligible applicants to assist small business concerns owned and operated by Reservists by—

(1)

providing management, development, financing, procurement, technical, regulatory, and marketing assistance;

(2)

providing access to information and resources, including Federal and State business assistance programs;

(3)

distributing contact information provided by the Department of Defense regarding activated Reservists to corresponding State directors;

(4)

offering free, one-on-one, in-depth counseling regarding management, development, financing, procurement, regulations, and marketing;

(5)

assisting in developing a long-term plan for possible future activation; and

(6)

providing enterprise transition and sustainability assistance.

(d)

Rulemaking

(1)

In general

The Administrator, in consultation with the Association and after notice and an opportunity for comment, shall promulgate regulations to carry out this section.

(2)

Deadline

The Administrator shall promulgate final regulations not later than 180 days of the date of enactment of the Military Reservist and Veteran Small Business Reauthorization Act of 2007.

(3)

Contents

The regulations developed by the Administrator under this subsection shall establish—

(A)

procedures for identifying, in consultation with the Secretary of Defense, States that have had a recent activation of Reservists;

(B)

priorities for the types of assistance to be provided under the program authorized by this section;

(C)

standards relating to educational, technical, and support services to be provided by a grantee;

(D)

standards relating to any national service delivery and support function to be provided by a grantee;

(E)

standards relating to any work plan that the Administrator may require a grantee to develop; and

(F)

standards relating to the educational, technical, and professional competency of any expert or other assistance provider to whom a small business concern may be referred for assistance by a grantee.

(e)

Application

(1)

In general

Each eligible applicant desiring a grant under this section shall submit an application to the Administrator at such time, in such manner, and accompanied by such information as the Administrator may reasonably require.

(2)

Contents

Each application submitted under paragraph (1) shall describe—

(A)

the activities for which the applicant seeks assistance under this section; and

(B)

how the applicant plans to allocate funds within its network.

(3)

Matching not required

Subparagraphs (A) and (B) of section 21(a)(4), requiring matching funds, shall not apply to grants awarded under this section.

(f)

Award of grants

(1)

Deadline

The Administrator shall award grants not later than 60 days after the promulgation of final rules and regulations under subsection (d).

(2)

Amount

Each eligible applicant awarded a grant under this section shall receive a grant in an amount—

(A)

not less than $150,000 per fiscal year; and

(B)

not greater than $500,000 per fiscal year.

(g)

Report

(1)

In general

The Comptroller General of the United States shall—

(A)

initiate an evaluation of the program not later than 30 months after the disbursement of the first grant under this section; and

(B)

submit a report not later than 6 months after the initiation of the evaluation under paragraph (1) to—

(i)

the Administrator;

(ii)

the Committee on Small Business and Entrepreneurship of the Senate; and

(iii)

the Committee on Small Business of the House of Representatives.

(2)

Contents

The report under paragraph (1) shall—

(A)

address the results of the evaluation conducted under paragraph (1); and

(B)

recommend changes to law, if any, that it believes would be necessary or advisable to achieve the goals of this section.

(h)

Authorization of appropriations

(1)

In general

There are authorized to be appropriated to carry out this section—

(A)

$5,000,000 for the first fiscal year beginning after the date of enactment of the Military Reservist and Veteran Small Business Reauthorization Act of 2007; and

(B)

$5,000,000 for each of the 3 fiscal years following the fiscal year described in subparagraph (A).

(2)

Limitation on use of other funds

The Administrator may carry out the program authorized by this section only with amounts appropriated in advance specifically to carry out this section.

.

III

Veteran entrepreneur loans

301.

Authorization

The first sentence of section 7(a) of the Small Business Act (15 U.S.C. 636) is amended by inserting new veteran entrepreneurs under paragraph (32) and and after loans to any qualified small business concern, including.

302.

Specifications

Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by adding after paragraph (31) the following:

(32)

Veteran entrepreneur loans

Each loan to a new veteran entrepreneur under this subsection shall—

(A)

be made directly to the new veteran entrepreneur;

(B)

not exceed $100,000; and

(C)

be made at the same interest rate as loans made under the second proviso of the unnumbered paragraph of subsection (b).

.

303.

Definitions

Section 3(q) of the Small Business Act (15 U.S.C. 632(q)) is amended by adding after paragraph (4) the following:

(5)

New veteran entrepreneur

The term new veteran entrepreneur means a person who—

(A)

is a veteran;

(B)

is establishing a new small business concern or established a new small business concern during the 6-month period ending on the date of the request for a loan; and

(C)

does not own or control any other business.

.

IV

Other provisions

401.

Increased funding for the Office of Veterans Business Development

There are authorized to be appropriated to the Office of Veterans Business Development of the Administration, to remain available until expended—

(1)

$2,100,000 for fiscal year 2008;

(2)

$2,300,000 for fiscal year 2009; and

(3)

$2,500,000 for fiscal year 2010.

402.

Permanent extension of SBA Advisory Committee on veterans business affairs

(a)

Assumption of duties

Section 33 of the Small Business Act (15 U.S.C. 657c) is amended—

(1)

by striking subsection (h); and

(2)

by redesignating subsections (i) through (k) as subsections (h) through (j), respectively.

(b)

Permanent extension of authority

Section 203 of the Veterans Entrepreneurship and Small Business Development Act of 1999 (15 U.S.C. 657b note) is amended by striking subsection (h).

403.

Reservists study

Not later than 180 days after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding whether there has been a reduction in the hiring of Reservists by business concerns because of—

(1)

any increase in the use of Reservists after September 11, 2001; or

(2)

any change in any policy of the Department of Defense relating to Reservists after September 11, 2001.

404.

Service-disabled veterans

Not later than 180 days after the date of enactment of this Act, the Comptroller General of the United States shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report describing—

(1)

the types of assistance needed by service-disabled veterans who wish to become entrepreneurs; and

(2)

any resources that would assist such service-disabled veterans.