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 five 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 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, Massachusetts; Flint, Michigan; and San Diego, California in addition to the flagship location in St. Louis, Missouri. 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 three 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’ 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 four 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 six 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 re-entering 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. Mr. President, I ask that the full text of my statement be included in the appropriate place in the Record.

To read the press release on this bill, click here.