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June 29, 1999

H.R. 1568 - Veterans Entrepreneurship and Small Business
Development Act of 1999

(Talent (R-MO) and 55 cosponsors)

The Administration strongly supports efforts to increase veterans' opportunities for success in small business. H.R. 1568 in its current form, however, would duplicate much that the Small Business Administration (SBA) is already implementing, and contains provisions which give rise to constitutional and other concerns.

The Administration does not oppose House passage of H.R. 1568, but will work with the Senate to amend the bill to:

  • Delete the requirement to establish a Government-wide goal for procurement from small businesses owned by service-disabled veterans. SBA has contracted for a study of the availability of, and participation in Federal contracting by, small businesses owned by service-disabled veterans which should be completed by the end of the year. The study should provide a basis for determining whether such a goal is necessary and, if so, what that goal should be. The Administration strongly opposes the establishment of a procurement goal until this study has been completed and its results have been analyzed.

  • Eliminate duplication of existing SBA offices and programs. For example, the bill would create a National Business Development Corporation and an Advisory Committee on Veterans Business Affairs, each of which would largely duplicate existing SBA programs. The bill would authorize appropriations of $12 million over four years for these programs. The Administration is concerned that the cost of administering these duplicative programs would further constrain SBA's appropriations and thereby hinder the SBA's ability to achieve its core mission. Finally, the manner in which the Board of Directors of the National Business Development Corporation would be appointed raises constitutional concerns.

Finally, the Administration has serious concerns regarding expanding eligibility for Economic Injury Disaster Loans to cover certain small businesses affected by the call-up of reservists to active duty. The SBA has historically extended consideration to small businesses affected by military actions, but expanding the EIDL program to cover events other than natural disasters could detract from the program's fundamental mission of providing disaster relief.