To direct the Secretary of Veterans Affairs to conduct a pilot project on the use of educational assistance under programs of the Department of Veterans Affairs to defray training costs associated with the purchase of certain franchise enterprises.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Self-Employment Act of 
2005''.

SEC. 2. AVAILABILITY OF EDUCATION BENEFITS FOR PAYMENT OF TRAINING 
              COSTS ASSOCIATED WITH THE PURCHASE OF CERTAIN FRANCHISE 
              ENTERPRISES.

    (a) Establishment of Five-Year Pilot Project.--The Secretary of 
Veterans Affairs shall conduct a five-year pilot project to test the 
feasibility and advisability of the use of educational assistance under 
the programs of the Department of Veterans Affairs under the following 
provisions of law to pay for training costs associated with the 
purchase of a franchise enterprise:
            (1) Chapter 30 of title 38, United States Code.
            (2) Chapter 32 of such title.
            (3) Chapter 35 of such title.
            (4) Chapter 1606 of title 10, United States Code.
            (5) Chapter 1607 of title 10, United States Code.
    (b) Amount of Payment.--
            (1) In general.--Subject to paragraph (3), the amount of 
        educational assistance payable under the applicable provision 
        of law referred to in subsection (a) to an individual entitled 
        to such assistance under such provision of law for the payment 
        of training costs associated with the purchase of a franchise 
        enterprise is equal to the lesser of \1/2\ of the franchise fee 
        or \1/3\ of the remaining amount of educational assistance to 
        which the individual is entitled under such applicable 
        provision of law, such remaining amount determined as of the 
        date of approval by the Secretary of the individual's 
        application for such assistance for payment of such training 
        costs.
            (2) Lump sum payment.--Amounts payable to an individual 
        under paragraph (1) shall be made in a lump sum.
    (c) Requirements for Payment.--
            (1) Requirement for the provision of training.--Payment may 
        not be made for training costs associated with the purchase of 
        a franchise enterprise under the pilot project under this 
        section unless--
                    (A) appropriate training is required and provided 
                with respect to the purchase and operation of the 
                franchise operation; and
                    (B) such training, and the entity or organization 
                offering the training, are approved by the Secretary in 
                accordance with this subsection.
            (2) General requirements for approval.--The requirements of 
        approval for such training and organizations or entities 
        offering such training shall be in accordance with the 
        applicable provisions of chapters 30, 32, 35, and 36 of title 
        38, United States Code, and chapters 1606 and 1607 of title 10, 
        United States Code, and with regulations prescribed by the 
        Secretary to carry out this section, and shall include the 
        following:
                    (A) The organization or entity certifies to the 
                Secretary that the training offered by the organization 
                or entity is generally accepted, in accordance with 
                relevant government, business, or industry standards, 
                employment policies, or hiring practices, as attesting 
                to a level of knowledge or skill required to own and 
                successfully operate a franchise operation.
                    (B) The organization or entity is licensed, 
                chartered, or incorporated in a State and has offered 
                such training for a minimum of two years before the 
                date on which the organization or entity first submits 
                to the Secretary an application for approval under this 
                section.
                    (C) The organization or entity maintains 
                appropriate records with respect to all trainees who 
                pursue such training for a period prescribed by the 
                Secretary, but in no case for a period of less than 
                three years.
                    (D) The organization or entity promptly issues 
                progress reports on the training and notice of the 
                successful completion of such training to the trainee.
                    (E) The organization or entity has in place a 
                process to review complaints submitted against the 
                organization or entity with respect to the training or 
                the process for acquiring a franchise enterprise.
                    (F) The organization or entity furnishes to the 
                Secretary the following information:
                            (i) A description of the training offered 
                        by the organization or entity, including the 
                        purpose of the training, the vocational, 
                        professional, governmental, and other entities 
                        that recognize the training, and the license or 
                        certificate (if any) issued upon successful 
                        completion of the training.
                            (ii) The requirements to undertake the 
                        training, including the amount of the fee 
                        charged for the training and any prerequisite 
                        education, training, skills, or other 
                        certification.
                    (G) Upon request of the Secretary, the organization 
                or entity furnishes such information to the Secretary 
                that the Secretary determines necessary to perform an 
                assessment of--
                            (i) the training conducted by the 
                        organization or entity; and
                            (ii) the applicability of the training over 
                        such periods of time as the Secretary 
                        determines appropriate.
            (3) Consideration of past performance.--In determining 
        whether to make payment under the pilot project to an 
        organization or entity offering training, the Secretary shall 
        consider the rate of success of the organization or entity in 
        the training of individuals to own and successfully operate a 
        franchise enterprise.
            (4) Authority for the use of state approving agencies for 
        approval of training and organizations or entities.--To the 
        extent that the Secretary determines practicable, State 
        approving agencies may, in lieu of the Secretary, approve 
        training, and organizations and entities offering such 
        training, under this section.
    (d) Entitlement Charges.--
            (1) Chapter 30.--The number of months of entitlement 
        charged an individual under chapter 30 of title 38, United 
        States Code, for educational assistance for the payment of 
        training costs under subsection (b)(1) is equal to the number 
        (including any fraction) determined by dividing the total 
        amount of educational assistance paid such individual for such 
        training costs by the full-time monthly institutional rate of 
        educational assistance which, except for subsection (b)(1), 
        such individual would otherwise be paid under such chapter.
            (2) Chapter 32.--The number of months of entitlement 
        charged an individual under chapter 32 of title 38, United 
        States Code, for educational assistance for the payment of 
        training costs under subsection (b)(1) is equal to the number 
        (including any fraction) determined by dividing the total 
        amount of educational assistance paid such individual for such 
        training costs by the full-time monthly institutional rate of 
        educational assistance which, except for subsection (b)(1), 
        such individual would otherwise be paid under such chapter.
            (3) Chapter 35.--The number of months of entitlement 
        charged an individual under chapter 35 of title 38, United 
        States Code, for educational assistance for the payment of 
        training costs under subsection (b)(1) is equal to the number 
        (including any fraction) determined by dividing the total 
        amount of educational assistance paid such individual for such 
        training costs by the full-time monthly institutional rate of 
        educational assistance which, except for subsection (b)(1), 
        such individual would otherwise be paid under such chapter.
            (4) Chapter 1606.--The number of months of entitlement 
        charged an individual under chapter 1606 of title 10, United 
        States Code, for educational assistance for the payment of 
        training costs under subsection (b)(1) is equal to the number 
        (including any fraction) determined by dividing the total 
        amount of educational assistance paid such individual for such 
        training costs by the full-time monthly institutional rate of 
        educational assistance which, except for subsection (b)(1), 
        such individual would otherwise be paid under such chapter.
            (5) Chapter 1607.--The number of months of entitlement 
        charged an individual under chapter 1607 of title 10, United 
        States Code, for educational assistance for the payment of 
        training costs under subsection (b)(1) is equal to the number 
        (including any fraction) determined by dividing the total 
        amount of educational assistance paid such individual for such 
        training costs by the full-time monthly institutional rate of 
        educational assistance which, except for subsection (b)(1), 
        such individual would otherwise be paid under such chapter.
    (e) Administration.--Except as otherwise specifically provided in 
this section or chapter 30, 32, 35, or 36 of title 38, United States 
Code, or chapters 1606 or 1607 of title 10, United States Code, in 
implementing this section and making payment under the applicable 
provision of law referred to in subsection (a) of training costs 
associated with the purchase of a franchise enterprise, the training is 
deemed to be a ``course'' and the organization or entity that offers 
such training is deemed to be an ``institution'' or ``educational 
institution'', respectively, as those terms are applied under and for 
purposes of sections 3671, 3673, 3674, 3678, 3679, 3680(a), 3680A, 
3681, 3682, 3683, 3685, 3690, 3691, and 3696 of title 38, United States 
Code.
    (f) Rule of Construction.--Payments under this section shall not be 
construed as payment for on-job training benefits under title 38, 
United States Code.
    (g) Implementation.--The Secretary shall implement the pilot 
project under this section as soon as practicable, but in no case later 
than the date that is 18 months after the date of the enactment of this 
Act.
    (h) GAO Evaluation and Report.--
            (1) Evaluation.--The Comptroller General of the United 
        States shall conduct periodic evaluations of the pilot project.
            (2) Report.--Not later than the date that is the end of the 
        third year of the pilot project, the Comptroller General shall 
        submit to Congress a report on the evaluations conducted under 
        paragraph (1). The report shall include the following 
        information:
                    (A) The number of individuals who participated in 
                the pilot project.
                    (B) The number of franchise enterprises operated by 
                such individuals by reason of such participation.
                    (C) The aggregate payments made by the Secretary of 
                Veterans Affairs under the pilot project.
                    (D) Recommendations for the continuation of the 
                pilot project.
                    (E) Recommendations for such other administrative 
                action or legislation as the Comptroller General 
                determines to be appropriate.

Summary: Veterans Self-Employment Act of 2005 - Directs the Secretary of Veterans Affairs to conduct a five-year pilot project to test the feasibility and advisability of the use of educational assistance under certain programs of the Department of Veterans Affairs to pay for training costs associated with the purchase of a franchise enterprise. Prohibits the use of such assistance unless: (1) training is required and provided in connection with the purchase and operation of a franchise; and (2) such training, and the training entity, are approved by the Secretary. Provides training and entity approval requirements.