[Congressional Record Volume 152, Number 95 (Wednesday, July 19, 2006)]
[Senate]
[Pages S7924-S7926]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERRY (for himself, Ms. Snowe, Mr. Akaka, and Mr. Talent):
  S. 3691. A bill to amend the Small Business Act, to reform and 
reauthorize the National Veterans Business Development Corporation, and 
for other purposes; to the Committee on Small Business and 
Entrepreneurship.
  Mr. KERRY. Mr. President, as the ranking member of the Committee on 
Small Business and Entrepreneurship, I am joined today by my colleagues 
Senators Snowe, Akaka, and Talent to introduce the Veterans Corporation 
Reauthorization Act of 2006.
  This legislation is the product of lengthy bipartisan discussions 
about how we might be able to restore and revitalize the mission of The 
Veterans Corporation. Established in 1999 through Public Law 106-50, 
The National Veterans Business Development Corporation, commonly known 
as The Veterans Corporation, TVC, is charged with the task of assisting 
the men and women who have served this country in the military by 
helping them create and expand their own businesses. There are over 5 
million veteran entrepreneurs across the country--over 550,000 in the 
Commonwealth of Massachusetts alone--and approximately 200,000 veterans 
are expected to retire in 2006. Additionally, 2004 data from the Small 
Business Administration, SBA, shows that approximately 22 percent of 
veterans in the U.S. household

[[Page S7925]]

population purchased or started a new business, or were considering 
doing so. This legislation ensures that necessary steps are taken to 
continue fostering entrepreneurship and business ownership among a 
veterans population that can clearly benefit from such assistance 
nationwide.
  My distinguished colleagues and I feel that TVC is an organization 
worth reinvigorating. In fiscal year 2005, TVC reached out to over 
18,000 current and potential veteran entrepreneurs, and opened three 
Veteran Business Resource Centers in Boston, MA; Flint, MI; and San 
Diego, CA, in addition to the flagship location in St. Louis, MO. In my 
home State of Massachusetts, TVC has close to 100 business owners and 
over 400 registered members.
  Yet, in recent years, TVC has come under criticism for its overall 
performance. Many within the veterans community, and indeed some of my 
colleagues in Congress, do not believe TVC has produced results that 
warrant the millions of dollars in funding the organization has 
received. I understand this sentiment, and share in the desire to 
ensure taxpayer dollars are well-spent. This was among my primary 
concerns as we approached reauthorizing TVC. However, my colleagues and 
I came to the conclusion that by reauthorizing the organization, 
Congress could ensure greater oversight and accountability on the part 
of TVC and its use of Federal dollars--ultimately resulting in better 
service for our veterans. This is exactly what the Veterans Corporation 
Reauthorization Act of 2006 aims to do.
  This legislation builds on the preexisting TVC program in order to 
expand its reach nationwide, so that more veterans can have the tools 
they need to realize their entrepreneurial aspirations. Through a 
series of provisions that target the weaknesses of TVC and develop 
sound policies to strengthen them and clarify the organization's 
mission within the veterans community it serves, this bill makes 
several key improvements to the corporation.
  In its inception, we envisioned that TVC would establish centers 
across the country to help assist veteran entrepreneurs with their 
small business needs. Unfortunately, the organization has shifted its 
primary focus toward the development of online programs in recent 
years. Although it is a good thing that TVC has four centers across the 
country, clearly more needs to be done to build upon these and develop 
a substantial number of new centers and networking opportunities for 
veterans nationwide. That is why this bill clarifies the role TVC 
should have in local communities. In rewriting the purpose of TVC in 
this capacity, our legislation explicitly states that the organization 
should be actively working to form more centers in order to build and 
create a national network linking veterans to the information, 
counseling, and assistance they need in starting and maintaining their 
businesses.
  A recurring frustration that echoes from many veterans nationwide is 
that they are often unable to gain access to the Federal contracting 
and procurement realm. It is downright shameful that so many servicemen 
and women feel as though a government they fought so hard to protect 
all but abandons them--continuing to award myriad contracts to big 
businesses. By law, the Federal Government has a 3-percent contracting 
goal for service-disabled veterans. However, in 2004 only 0.38 percent 
of government contracts were awarded to service-disabled veterans. 
Patterns such as this are all too common--replaying themselves year in 
and year out. Clearly, more ought to be done to help those veterans who 
are looking to gain access to Federal contracts. Given this, our 
legislation directs TVC to assist veterans, particularly service-
disabled veterans, with Federal contracting opportunities.
  We received numerous complaints from veterans about the way the 
administration has chosen to interpret the current law such that it 
severely limits Congress's role in appointing board members. In this, 
TVC had experienced significant staffing changes on its Board of 
Directors since 1999. Our legislation ensures that the President works 
with the chair and ranking members of the Senate Committee on Small 
Business and Entrepreneurship and/or the Senate Committee on Veterans 
Affairs, and their House counterparts, to appoint nine members of the 
board with 4-year terms. Additionally, our legislation dictates that in 
this nomination process, the President and Congress consult with 
veterans groups nationwide. Furthermore, the Veterans Corporation 
Reauthorization Act of 2006 stipulates that no more than five of the 
nine board members be from the same political party and that all have 
business experience, knowledge of veterans issues, as well as the 
wherewithal to raise private funds for TVC. I firmly believe that this 
provision will ensure that TVC has top-notch board members, who can 
offer the best service to those who have already served our country.
  This legislation authorizes $2 million in Federal funds annually from 
fiscal years 2007 through 2009. Additionally, because TVC was 
originally to become a self-sustaining entity, our bill requires that 
for all Federal dollars received, the organization match those dollar 
amounts with private funds. Since its authorization expired in 2004, 
TVC's original matching requirement vanished, and the organization 
instead received Federal funding without any private fundraising 
requirement. We felt that this matching requirement needed to be 
reinstated to better enable TVC to become fully self-sustaining. Thus, 
our legislation forces TVC to function in a way similar to the SBA's 
Women's Business Centers and Small Business Development Centers. The 
leveraging of Federal dollars enables TVC to expand its donor base so 
that it can achieve the goal of self-sustainability. Additionally, it 
has come to our attention through conversations with the veterans 
community, that servicemen and women are being charged high fees for 
using TVC services. That was never the intention when this program was 
conceptualized, and it is wrong for TVC to earn its private funds on 
the backs of veterans. We fix that in this bill by limiting the amount 
of non-Federal funds that TVC can raise in the form of fees to veterans 
to no more than 33 percent of the organization's total revenue.
  In addition to the matching-fund requirement within our bill, it also 
requires that TVC develop a comprehensive plan for privatization within 
6 months of the enactment of the Veterans Corporation Reauthorization 
Act of 2006. To ensure that TVC is in full compliance with the 
provisions in our bill, and that its self-sustaining plan demonstrates 
a certain degree of feasibility, we have asked the Government 
Accountability Office to conduct an audit of the organization no later 
than one year after date of enactment.
  Finally, this bill extends the SBA's Veterans Advisory Committee, 
which the administration planned on terminating as of this year. 
Originally established through Public Law 106-50, this committee was to 
advise and counsel the SBA Administrator and the agency's Associate 
Administrator for Veterans' Business Development on the entrepreneurial 
needs and concerns of veteran small business owners and to monitor 
public and private plans that have the potential to impact veteran 
entrepreneurs from obtaining capital, credit, and to access markets. 
Additionally, it was to roll into TVC by September 30, 2004. However, 
when this date came around, it was clear that TVC was in no position to 
take on more responsibilities. Thus, Congress reauthorized the Veterans 
Advisory Committee and postponed the transfer date until this year. As 
the deadline closes in, we thought it best to reauthorize Veterans 
Advisory Committee and again postpone the transfer.
  America's veterans and service-disabled veteran communities deserve a 
resource to assist them in bringing their entrepreneurial ideas into 
fruition. Nationwide, more and more veterans are turning to small 
businesses as a means of carving out their piece of the American dream, 
despite the many barriers they face upon reentering civilian life. The 
strengthening and revitalization of TVC that this legislation proposes, 
is one way that Congress can help in this effort and ensure greater 
effectiveness and accountability within the organization in the years 
ahead.
  I urge my colleagues to join in support of this bipartisan Veterans 
Corporation Reauthorization Act of 2006--because in helping TVC 
succeed, we are ultimately helping veterans succeed and prosper.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

[[Page S7926]]

                                S. 3691

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Veterans Corporation 
     Reauthorization Act of 2006''.

     SEC. 2. PURPOSES OF THE CORPORATION.

       (a) Purposes.--Section 33(b) of the Small Business Act (15 
     U.S.C. 657c(b)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) to establish and maintain a national network of 
     information and assistance centers for use by veterans and 
     the public by--
       ``(A) providing information regarding small business 
     oriented employment or development programs;
       ``(B) providing access to studies and research concerning 
     the management, financing, and operation of small business 
     enterprises, small business participation in international 
     markets, export promotion, and technology transfer;
       ``(C) providing referrals to business analysts who can 
     provide direct counseling to veteran small business owners 
     regarding the subjects described in this section;
       ``(D) serving as an information clearinghouse for business 
     development and entrepreneurial assistance materials, as well 
     as other veteran assistance materials, as deemed necessary, 
     that are provided by Federal, State and local governments; 
     and
       ``(E) providing assistance to veterans and service-disabled 
     veterans in efforts to gain access to Federal prime contracts 
     and subcontracts; and''; and
       (2) in paragraph (2), by striking ``including service-
     disabled veterans'' and inserting ``particularly service-
     disabled veterans''.

     SEC. 3. MANAGEMENT OF THE CORPORATION.

       (a) Appointments to the Board.--Section 33(c)(2) of the 
     Small Business Act (15 U.S.C. 657c(c)(2)) is amended to read 
     as follows:
       ``(2) Appointment of voting members.--
       ``(A) In general.--The President shall, after considering 
     recommendations proposed under subparagraph (B), appoint the 
     9 voting members of the Board, all of whom shall be United 
     States citizens, and not more than 5 of whom shall be members 
     of the same political party.
       ``(B) Recommendations.--Recommendations shall be submitted 
     to the President for appointments under this paragraph by the 
     chairman or ranking member (or both) of the Committee on 
     Small Business and Entrepreneurship or the Committee on 
     Veterans Affairs (or both) of the Senate or the Committee on 
     Small Business or the Committee on Veterans Affairs (or both) 
     of the House of Representatives.
       ``(C) Consultation with veteran organizations.--
     Recommendations under subparagraph (B) shall be made after 
     consultation with such veteran service organizations as are 
     determined appropriate by the member of Congress making the 
     recommendation.
       ``(D) Considerations.--Consideration for eligibility for 
     membership on the Board shall include business experience, 
     knowledge of veterans' issues, and ability to raise funds for 
     the Corporation.
       ``(E) Limitation on internal recommendations.--No member of 
     the Board may recommend an individual for appointment to 
     another position on the Board.''.
       (b) Terms.--Section 33(c)(6) of the Small Business Act (15 
     U.S.C. 657c(c)(6)) is amended to read as follows:
       ``(6) Terms of appointed members.--
       ``(A) In general.--Each member of the Board of Directors 
     appointed under paragraph (2) shall serve for a term of 4 
     years.
       ``(B) Unexpired terms.--Any member of the Board of 
     Directors appointed to fill a vacancy occurring before the 
     expiration of the term for which the member's predecessor was 
     appointed shall be appointed only for the remainder of the 
     term. A member of the Board of Directors may not serve beyond 
     the expiration of the term for which the member is 
     appointed.''.
       (c) Removal of Board Members.--Section 33(c) of the Small 
     Business Act (15 U.S.C. 657c(c)) is amended by adding at the 
     end the following:
       ``(12) Removal of members.--With the approval of a majority 
     of the Board of Directors and the approval of the chairmen 
     and ranking members of the Committee on Small Business and 
     Entrepreneurship and the Committee on Veterans Affairs of the 
     Senate, the Corporation may remove a member of the Board of 
     Directors that is deemed unable to fulfill his or her duties, 
     as established under this section.''.

     SEC. 4. TIMING OF TRANSFER OF ADVISORY COMMITTEE DUTIES.

       Section 33(h) of the Small Business Act (15 U.S.C. 657c(h)) 
     is amended by striking ``October 1, 2006'' and inserting 
     ``October 1, 2009''.

     SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

       Section 33(k) of the Small Business Act (15 U.S.C. 
     657c(k)(1)) is amended--
       (1) in paragraph (1)--
       (A) by inserting ``, through the Office of Veteran's 
     Business Development of the Administration,'' after ``to the 
     Corporation''; and
       (B) by striking subparagraphs (A) through (D) and inserting 
     the following:
       ``(A) $2,000,000 for fiscal year 2007;
       ``(B) $2,000,000 for fiscal year 2008; and
       ``(C) $2,000,000 for fiscal year 2009.'';
       (2) by striking paragraph (2) and inserting the following:
       ``(2) Matching requirements.--
       ``(A) In general.--The Administration shall require, as a 
     condition of any grant (or amendment or modification thereto) 
     made to the Corporation under this section, that a matching 
     amount (excluding any fees collected from recipients of such 
     assistance) equal to the amount of such grant be provided 
     from sources other than the Federal Government.
       ``(B) Limitation.--Not more than 33 percent of the total 
     revenue of the Corporation, including the funds raised for 
     use at the Veteran's Business Resource Centers, may be 
     acquired from fee-for-service tools or direct charge to the 
     veteran receiving services, as described in this section, 
     except that the amount of any such fee or charge may not 
     exceed the amount of such fee or charge in effect on the date 
     of enactment of the Veterans Corporation Reauthorization Act 
     of 2006.
       ``(C) Mission-related limitation.--The Corporation may not 
     engage in revenue producing programs, services, or related 
     business ventures that are not intended to carry out the 
     mission and activities described in section (b).
       ``(D) Return to treasury.--Funds appropriated under this 
     section that have not been expended at the end of the fiscal 
     year for which they were appropriated shall revert back to 
     the Treasury.''; and
       (3) by striking paragraph (3).

     SEC. 6. PRIVATIZATION.

       Section 33 of the Small Business Act (15 U.S.C. 657c) is 
     amended--
       (1) by striking subsections (f) and (i); and
       (2) by redesignating subsections (g), (h), (j), and (k) as 
     subsections (f) through (i), respectively; and
       (3) by adding at the end the following:
       ``(j) Privatization.--
       ``(1) Development of plan.--Not later than 6 months after 
     the date of enactment of the Veterans Corporation 
     Reauthorization Act of 2006, the Corporation shall develop, 
     institute, and implement a plan to raise private funds and 
     become a self-sustaining corporation.
       ``(2) GAO audit and report.--
       ``(A) Audit.--The Comptroller General of the United States 
     shall conduct an audit of the Corporation, in accordance with 
     generally accepted accounting principles and generally 
     accepted audit standards.
       ``(B) Inclusions.--The audit required by this paragraph 
     shall include--
       ``(i) an evaluation of the efficacy of the Corporation in 
     carrying out the purposes under section (b); and
       ``(ii) an analysis of the feasibility of the sustainability 
     plan developed by the Corporation.
       ``(C) Report.--Not later than 1 year after the date of 
     enactment of the Veterans Corporation Reauthorization Act of 
     2006, the Comptroller General shall submit a report on the 
     audit conducted under this paragraph to the Committee on 
     Small Business and Entrepreneurship and the Committee on 
     Veterans Affairs of the Senate and to the Committee on Small 
     Business and the Committee on Veterans Affairs of the House 
     of Representatives.''.
                                 ______