BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AJR 7| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AJR 7 Author: Mathis (R) Amended: 5/22/15 in Assembly Vote: 21 SENATE VETERANS AFFAIRS COMMITTEE: 5-0, 6/23/15 AYES: Nielsen, Hueso, Allen, Nguyen, Roth ASSEMBLY FLOOR: 75-0, 5/22/15 - See last page for vote SUBJECT: Veterans: first businesses SOURCE: Author DIGEST: This bill requests that the Congress of the United States of America further amend the GI Bill of Rights to make benefits available, with all appropriate safeguards, to all veterans for use as startup capital in the establishment of first businesses. ANALYSIS: Existing federal law, the Post-9/11 Veterans Educational Assistance Act of 2008 (GI Bill), provides educational assistance to servicemembers, veterans, and their dependents. AJR 7 Page 2 This bill requests that the Congress of the United States of America further amend the GI Bill to make benefits available, with all appropriate safeguards, to all veterans for use as startup capital in the establishment of first businesses. Background GI Bill. Established originally in 1944 and modified several times over the years, the GI Bill program provides educational assistance to servicemembers, veterans, and their dependents. The Post-9/11 GI Bill, which gives veterans with active duty service on, or after, Sept. 11 2001, enhanced educational benefits that cover more educational expenses, provide a living allowance, money for books and the ability to transfer unused educational benefits to spouses or children. Any veteran who served at least 90 days on active duty after September 11, 2001, is eligible for the Post-9/11 GI Bill. Those who served less than 36 months since 9/11/2001 receive reduced benefits. Those who retired prior to August 1, 2009, are not eligible to transfer benefits to their dependents. In most cases, veterans will need to use their benefits within 15 years of discharge. Those who meet the time in-service requirements and apply for transfer of benefits while still on active duty can transfer Post-9/11 GI Bill benefits to spouses and dependents. However, dependents must be named and assigned at least one percent of the benefits available prior to discharge. Veteran Entrepreneurship Programs. The federal Small Business Administration (SBA) manages entrepreneurship programs that assist veterans, in general, and veterans with service-connected disabilities. Areas supporting include starting a business, writing a business plan, registering a business, obtaining licenses and permits, understanding laws and regulations, preparing taxes, hiring employees, employee benefits and incentives, marketing, and business exporting. The SBA also oversees the Service-Disabled Veteran-Owned Small Business Concern (SDVOSBC) Procurement Program. Veterans with service-connected disabilities may win federal procurement AJR 7 Page 3 contracts characterized by veteran preferences, restricted competition, set-asides or sole-sourcing. The California Department of General Services administers the Disabled Veteran Business Enterprise Program, which requires that state governmental entities that award contracts for goods and services (aka "awarding departments") expend no less than 3 percent of the value of all their contracts on firms that are owned by disabled veterans. The business enterprises must meet certain eligibility criteria, such as at least 51 percent of the business must be owned by a veteran who has received a USDVA service-connected disability rating of at least 10 percent. Comments The author's intent is to assist future entrepreneurs transitioning from military to civilian life in the same way that we currently assist future scholars. According to Forbes, 80 percent of new small businesses fail within their first 18 months, often due to insufficient capital to fund the post-startup growth phase. The bill appropriately includes a recommendation for strong safeguards to protect GI Bill entrepreneurship funds if Congress enacts this approach. This concern arises because some educational entities have targeted veterans' GI bill benefits in a predatory manner, and the same could occur with GI Bill entrepreneurial moneys. FISCAL EFFECT: Appropriation: No Fiscal Com.:NoLocal: No SUPPORT: (Verified6/23/15) American Legion - Department of California AMVETS - Department of California California Association of County Veterans Service Officers California State Commanders Veteran Council Military Officers Association of America - California Council of Chapters MJ King Insurance Services Veterans of Foreign Wars - Department of California AJR 7 Page 4 Vietnam Veterans of American - California State Council OPPOSITION: (Verified6/23/15) None received ASSEMBLY FLOOR: 75-0, 5/22/15 AYES: Achadjian, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Alejo, O'Donnell, Olsen, Waldron, Weber Prepared by:Wade Cooper Teasdale / V.A. / (916) 651-1503 6/24/15 16:04:04 **** END ****