[Senate Report 107-307]
[From the U.S. Government Publishing Office]
Calendar No. 695
107th Congress Report
SENATE
2d Session 107-307
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VOCATIONAL AND TECHNICAL ENTREPRENEURSHIP DEVELOPMENT ACT OF 2001
_______
October 9, 2002.--Ordered to be printed
_______
Mr. Kerry, from the Committee on Small Business and Entrepreneurship,
submitted the following
R E P O R T
[To accompany H.R. 2666]
The Committee on Small Business and Entrepreneurship to
which 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, reports favorably thereon without amendment and
recommends that the bill do pass.
On July 24, 2002, the Committee on Small Business and
Entrepreneurship, considered H.R. 2666, the ``Vocational and
Technical Entrepreneurship Development Act of 2001.'' H.R. 2666
would establish a three-year pilot project providing Small
Business Administration (SBA) grants to Small Business
Development Centers (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. Having considered
H.R. 2666, the Committee reports favorably thereon without
further amendment and recommends that the bill do pass.
I. INTRODUCTION
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, H.R.
2666, the ``Vocational and Technical Entrepreneurship
Development Act of 2001,'' 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. Many who work in the trade sector
of construction, plumbing, etc. enter these professions with
the goal of one day starting a business. Unfortunately, too
many aspiring business owners who partake in career training or
vocational training in certain trades, fail to obtain the
necessary business education to develop and grow their newly
formed business. This initiative would develop a program that
allows workers within the trade industries to move towards
starting a new business.
The bill establishes, through a business-education
partnership, a ``vocational entrepreneurship development
demonstration program,'' under which the Small Business
Administration (SBA) would award grants, through Small Business
Development Centers (SBDCs), to provide technical assistance to
high schools and technical career institutes to promote small
business development in their curricula. The SBDC Program is
designed to deliver such up-to-date counseling, training and
technical assistance in all aspects of small business
management and is the ideal candidate to provide such a
program.
In establishing these needed services, H.R. 2666 relies
upon the present infrastructure of the SBDCs, which has proven
to deliver services that greatly enhance the chances of a small
business surviving as compared with those who do not receive
such assistance. The SBDCs 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 believesthat the SBDC 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 SBDCs 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
firm. 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 SBDC network.
II. LEGISLATIVE HISTORY
On July 19, 2001, the Subcommittee on Workforce,
Empowerment and Government Programs of the House Committee on
Small Business held a hearing on pending legislation, including
H.R. 2666, the ``Vocational and Technical Entrepreneurship
Development Act of 2001.'' The hearing demonstrated a need for
expansion of the services to other locations.
On August 1, 2001, the House Committee on Small Business
considered H.R. 2666, passed it without amendment and ordered
it reported. On October 2, 2001, the full House considered H.R.
2666 under suspension of the rules. It was subsequently agreed
to by voice vote.
During consideration of H.R. 2666 in the Senate Committee
on Small Business and Entrepreneurship on July 24, 2002, the
Senate Committee's Ranking Republican, Senator Christopher S.
Bond, raised concerns that the Senate Committee had not
adequately considered the National Small Business Regulatory
Assistance Act. In response to these concerns, the Committee
Chairman, Senator John F. Kerry, proposed holding a roundtable
on the legislation to alleviate these concerns in order to move
forward with the Committee vote. The Ranking Republican agreed
and the legislation was passed without amendment by the Senate
Committee.
On August 1, 2002, the Senate Committee held a roundtable
titled ``Promoting Small Business Regulatory Compliance and
Entrepreneurial Education--the Role of the SBDC Network.''
During this roundtable, the Senate Committee received evidence
that H.R. 2666 would provide adequate resources to Small
Business Development Centers (SBDCs) so that they may provide
technical assistance to secondary schools and post-secondary
vocational and technical schools, to develop and implement
curricula to promote vocational and technical entrepreneurship.
Small business representatives at the roundtable also stressed
the need to provide such assistance as an important addition to
curricula that is merely skills based.
Small business groups such as the National Small Business
United support H.R. 2666, as well as leading educational
institutions, such as the Wharton School of Business at the
University of Pennsylvania, and the Association of Small
Business Development Centers.
III. ANALYSIS OF H.R. 2666, THE ``VOCATIONAL AND TECHNICAL
ENTREPRENEURSHIP DEVELOPMENT ACT OF 2001''
Purpose
The purpose of H.R. 2666, the ``Vocational and Technical
Entrepreneurship Development Act of 2001,'' 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 successful owners of their own business.
Grant process
The Administrator of the Small Business Administration
(SBA) is required to make grants to state Small Business
Development Centers (SBDCs). The minimum amount of a grant
under the pilot program is $200,000.
Each applicant wishing to apply for a grant must submit an
application, as directed by the Administrator, which includes
an outline of the applicant's goals and objectives for the
assistance to be provided and the educational curricula to be
implemented with grant funds.
The Committee expects the Administrator to consider the
quality of the proposed programs in determining which centers
are selected to participate in the pilot program provide a
baseline by which the Administrator and the Congress can
evaluate the success of the program.
Grants are to be awarded to state SBDCs to carry out the
pilot program on a statewide basis.
It is the desire of the Committee that State small business
development centers place particular focus on helping
underserved populations in the area of vocational and technical
entrepreneurship training.
Reporting requirements
Those SBDCs receiving grants under the pilot program must
report to the SBA within 18 months of receiving the grant
monies, detailing how all the grant funds were used. In
addition, not later than March 31, 2004, the SBA must conduct
an evaluation of the program and report to Congress the results
of each such evaluation.
Role of the Association of Small Business Development Centers
The Act designates the Association of Small Business
Development Centers as aclearinghouse for the collection of
information and expertise regarding vocational and technical
entrepreneurship programs.
The Committee expects the Association of Small Business
Development Centers to act as the repository and clearinghouse.
Authorization level
The pilot program is authorized for 3 years at $7 million
per year. The committee does not expect an appropriation for
this pilot program to reduce the core funding for the regular
4SBDC program.
IV. COMMITTEE VOTE
In compliance with rule XXVI(7)(b) of the Standing Rules of
the Senate, the following votes were recorded on July 24, 2002.
A motion by Senator Kerry to adopt H.R. 2666, the ``Vocational
and Technical Entrepreneurship Development Act of 2001,'' was
approved by an 18-1 recorded vote, with the following Senators
voting in the affirmative: Kerry, Bond, Levin, Harkin,
Lieberman, Wellstone, Cleland, Landrieu, Edwards, Cantwell,
Carnahan, Burns, Bennett, Snowe, Fitzgerald, Crapo, Allen and
Ensign. Senator Enzi voted in the negative.
V. 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 make use of the services provided.
VI. CHANGES IN EXISTING LAW
In the opinion of the Committee, it is necessary to
dispense with the requirement of rule XXVI (12) of the Standing
Rules of the Senate in order to expedite the business of the
Senate.
VII. 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 indicated by the
Congressional Budget Office in the following letter.
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 30, 2002.
Hon. John F. Kerry,
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 H.R. 2666, the
Vocational and Technical Entrepreneurship Development Act of
2001.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Ken Johnson.
Sincerely,
Barry. B. Anderson
(For Dan L. Crippen, Director.)
Enclosure.
H.R. 2666--Vocational and Technical Entrepreneurship Development Act of
2001
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
business owners.
H.R. 2666 would authorize the appropriation of $7 million a
year through 2004 to fund the new program. CBO estimates that
implementing the act would cost $14 million over the 2003-2007
period, assuming the appropriation of the authorized amounts.
The act would not affect direct spending or receipts;
therefore, pay-as-you-go procedures would not apply.
H.R. 2666 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
The bill would benefit state, local, or tribal governments
receiving grants under this bill, and any costs they incur
would be voluntary.
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 each year
beginning in 2003, and that outlays will follow historical
spending patterns for similar SBA programs.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
--------------------------------------------
2003 2004 2005 2006 2007
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CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Authorization level................................................ 7 7 0 0 0
Estimated outlays.................................................. 5 7 2 0 0
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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, local, or tribal
governments receiving grants under this bill, and any costs
they incur would be voluntary.
Previous CBO estimate: On August 15, 2001, CBO transmitted
a cost estimate for H.R. 2666 as ordered reported by the House
Committee on Small Business on August 1, 2001. The two versions
of the legislation are very similar. CBO estimated that the
prior version of H.R. 2666 would cost about $20 million over
the 2002-2006 period, subject to the availability of
appropriated funds. The higher estimated costs for the House
version reflect CBO's assumption that funds would be
appropriated for the program for three years (beginning in
2002), rather than our current assumption of two years
(beginning in 2003).
Estimate prepared by: Federal cost: Ken Johnson, Impact on
state, local, and tribal governments: Greg Waring; Impact on
the private sector: Cecil McPherson.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
VIII. SECTION-BY-SECTION ANALYSIS
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
Program
This section amends the Small Business Act by adding a new
section at the end titled: ``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 Small
Business Development Centers to enable such centers to provide
technical assistance to secondary schools, or to post-secondary
vocational or technical schools, for the development and
implementation of curricula designed to promote vocational and
technical entrepreneurship.
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 Small Business
Development Center seeking a grant. The application shall
include information regarding the applicant's goals and
objectives for the educational programs to be funded.
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.
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
program.
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.
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.