[House Report 113-130]
[From the U.S. Government Publishing Office]
113th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 113-130
======================================================================
AMENDING TITLE 38, UNITED STATES CODE, TO REQUIRE THE SECRETARY OF
VETERANS AFFAIRS TO INCLUDE AN APPEALS FORM IN ANY NOTICE OF DECISION
ISSUED FOR THE DENIAL OF A BENEFIT SOUGHT
_______
June 25, 2013.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Miller of Florida, from the Committee on Veterans' Affairs,
submitted the following
R E P O R T
[To accompany H.R. 1405]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred
the bill (H.R. 1405) to amend title 38, United States Code, to
require the Secretary of Veterans Affairs to include an appeals
form in any notice of decision issued for the denial of a
benefit sought, having considered the same, report favorably
thereon with amendment and recommend that the bill as amended
do pass.
CONTENTS
Page
Amendments....................................................... 2
Purpose and Summary.............................................. 9
Background and Need for Legislation.............................. 9
Hearings......................................................... 14
Subcommittee Consideration....................................... 15
Committee Consideration.......................................... 15
Committee Votes.................................................. 15
Committee Oversight Findings..................................... 16
Statement of General Performance Goals and Objectives............ 16
New Budget Authority, Entitlement Authority, and Tax Expenditures 16
Earmarks and Tax and Tariff Benefits............................. 16
Committee Cost Estimate.......................................... 16
Congressional Budget Office Estimate............................. 16
Federal Mandates Statement....................................... 19
Advisory Committee Statement..................................... 19
Constitutional Authority Statement............................... 19
Applicability to Legislative Branch.............................. 19
Statement on Duplication of Federal Programs..................... 19
Disclosure of Directed Rulemaking................................ 20
Section-by-Section Analysis of the Legislation................... 20
Changes in Existing Law Made by the Bill as Reported............. 22
Amendments
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. INCLUSION OF NOTICE OF DISAGREEMENT FORMS IN NOTICES OF
DECISIONS OF BENEFITS DENIALS ISSUED BY SECRETARY
OF VETERANS AFFAIRS.
(a) In General.--Section 5104(b) of title 38, United States Code, is
amended--
(1) by striking ``and (2)'' and inserting ``(2)''; and
(2) by inserting before the period at the end the following:
``, and (3) a form that may be used to file a notice of
disagreement to the decision''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply with respect to decisions made by the Secretary under section 511
of title 38, United States Code, on or after the date of the enactment
of this Act.
SEC. 2. PROVISION OF STATUS UNDER LAW BY HONORING CERTAIN MEMBERS OF
THE RESERVE COMPONENTS AS VETERANS.
(a) Veteran Status.--
(1) In general.--Chapter 1 of title 38, United States Code,
is amended by inserting after section 107 the following new
section:
``Sec. 107A. Honoring as veterans certain persons who performed service
in the reserve components
``Any person who is entitled under chapter 1223 of title 10 to
retired pay for nonregular service or, but for age, would be entitled
under such chapter to retired pay for nonregular service shall be
honored as a veteran but shall not be entitled to any benefit by reason
of this section.''.
(2) Clerical amendment.--The table of sections at the
beginning of such chapter is amended by inserting after the
item relating to section 107 the following new item:
``107A. Honoring as veterans certain persons who performed service in
the reserve components.''.
(b) Clarification Regarding Benefits.--No person may receive any
benefit under the laws administered by the Secretary of Veterans
Affairs solely by reason of section 107A of title 38, United States
Code, as added by subsection (a).
SEC. 3. PROVISION OF ACCESS TO CASE-TRACKING INFORMATION.
(a) In General.--Chapter 59 of title 38, United States Code, is
amended by adding at the end the following:
``Sec. 5906. Provision of access to case-tracking information
``(a) In General.--(1) In accordance with subsection (b), the
Secretary shall provide a covered employee with access to the case-
tracking system to provide a veteran with information regarding the
status of a claim submitted by such veteran if such employee is acting
under written permission or a power of attorney executed by such
veteran.
``(2) In providing a covered employee with access to the case-
tracking system under paragraph (1), the Secretary shall ensure--
``(A) that such access--
``(i) is provided in a manner that does not allow
such employee to modify the data contained in such
system; and
``(ii) does not include access to medical records;
and
``(B) that each time a covered employee accesses such system,
the employee must certify that such access is for official
purposes only.
``(b) Privacy Certification Course.--The Secretary may not provide a
covered employee with access to the case-tracking system under
subsection (a)(1) unless the covered employee has successfully
completed a certification course on privacy issues provided by the
Secretary.
``(c) Treatment of Disclosure.--The access to information by a
covered employee pursuant to subsection (a)(1) shall be deemed to be--
``(1) a covered disclosure under section 552a(b) of title 5;
and
``(2) a permitted disclosure under regulations promulgated
under section 264(c) of the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d-2 note).
``(d) Definitions.--In this section:
``(1) The term `case-tracking system' means the system of the
Department of Veterans Affairs that provides information
regarding the status of a claim submitted by a veteran.
``(2) The term `covered employee' means an employee of a
State or local governmental agency (including a veterans
service officer) who, in the course of carrying out the
responsibilities of such employment, assists veterans with
claims for any benefit under the laws administered by the
Secretary.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is amended by adding at the end the following new item:
``5906. Provision of access to case-tracking information.''.
SEC. 4. IMPROVEMENT OF FIDUCIARIES FOR VETERANS.
(a) Appointment and Supervision.--
(1) Section 5502 of title 38, United States Code, is amended
to read as follows:
``Sec. 5502. Appointment of fiduciaries
``(a) Appointment.--(1) Where it appears to the Secretary that the
interest of the beneficiary would be served thereby, payment of
benefits under any law administered by the Secretary may be made
directly to the beneficiary or to a relative or some other fiduciary
for the use and benefit of the beneficiary, regardless of any legal
disability on the part of the beneficiary.
``(2) When in the opinion of the Secretary, a temporary fiduciary is
needed in order to protect the benefits provided to the beneficiary
under any law administered by the Secretary while a determination of
incompetency is being made or appealed or a fiduciary is appealing a
determination of misuse, the Secretary may appoint one or more
temporary fiduciaries for a period not to exceed 120 days. If a final
decision has not been made within 120 days, the Secretary may not
continue the appointment of the fiduciary without obtaining a court
order for appointment of a guardian, conservator, or other fiduciary
under the authority provided in section 5502(b) of this title.
``(b) Appeals.--(1) If the Secretary determines a beneficiary to be
mentally incompetent for purposes of appointing a fiduciary under this
chapter, the Secretary shall provide such beneficiary with a written
statement detailing the reasons for such determination.
``(2) A beneficiary whom the Secretary has determined to be mentally
incompetent for purposes of appointing a fiduciary under this chapter
may appeal such determination.
``(c) Modification.--(1) A beneficiary for whom the Secretary
appoints a fiduciary under this chapter may, at any time, request the
Secretary to--
``(A) remove the fiduciary so appointed; and
``(B) have a new fiduciary appointed.
``(2) The Secretary shall comply with a request under paragraph (1)
if the Secretary determines that the request is made in good faith
and--
``(A) the fiduciary requested to be removed receives a fee
from the beneficiary and a suitable volunteer fiduciary is
available to assist the beneficiary; or
``(B) the beneficiary provides credible information that the
fiduciary requested to be removed is--
``(i) not acting in the interest of the beneficiary
;or
``(ii) unable to effectively serve the beneficiary
because of an irreconcilable personality conflict or
disagreement.
``(3) The Secretary shall ensure that any removal or new appointment
of a fiduciary under paragraph (1) does not delay or interrupt the
beneficiary's receipt of benefits administered by the Secretary.
``(d) Independence.--A fiduciary appointed by the Secretary shall
operate independently of the Department to determine the actions that
are in the interest of the beneficiary.
``(e) Predesignation.--A veteran may predesignate a fiduciary by--
``(1) submitting written notice to the Secretary of the
predesignated fiduciary; or
``(2) submitting a form provided by the Secretary for such
purpose.
``(f) Appointment of Non-Predesignated Fiduciary.--If a beneficiary
designates an individual to serve as a fiduciary under subsection (e)
and the Secretary appoints an individual not so designated as the
fiduciary for such beneficiary, the Secretary shall notify such
beneficiary of--
``(1) the reason why such designated individual was not
appointed; and
``(2) the ability of the beneficiary to modify the appointed
fiduciary under subsection (c).
``(g) Priority of Appointment.--In appointing a fiduciary under this
chapter, if a beneficiary does not designate a fiduciary pursuant to
subsection (e), to the extent possible the Secretary shall appoint a
person who is--
``(1) a relative of the beneficiary;
``(2) appointed as guardian of the beneficiary by a court of
competent jurisdiction; or
``(3) authorized to act on behalf of the beneficiary under a
durable power of attorney.''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 55 of title 38, United States Code, is
amended by striking the item relating to section 5502 and
inserting the following:
``5502. Appointment of fiduciaries.''.
(b) Supervision.--
(1) In general.--Chapter 55 of title 38, United States Code,
is amended by inserting after section 5502, as amended by
subsection (a)(1), the following new section:
``Sec. 5502A. Supervision of fiduciaries
``(a) Commission.--(1)(A) In a case in which the Secretary determines
that a commission is necessary in order to obtain the services of a
fiduciary in the best interests of a beneficiary, the Secretary may
authorize a fiduciary appointed by the Secretary to obtain from the
monthly benefits provided to the beneficiary a reasonable commission
for fiduciary services rendered, but the commission for any month may
not exceed the lesser of the following amounts:
``(i) The amount that equals three percent of the monthly
monetary benefits under laws administered by the Secretary paid
on behalf of the beneficiary to the fiduciary.
``(ii) $35.
``(B) A commission paid under this paragraph may not be derived from
any award to a beneficiary regarding back pay or retroactive benefits
payments.
``(C) A commission may not be authorized for a fiduciary who receives
any other form of remuneration or payment in connection with rendering
fiduciary services for benefits under this title on behalf of the
beneficiary.
``(D) In accordance with section 6106 of this title, a commission may
not be paid to a fiduciary if the Secretary determines that the
fiduciary misused any benefit payments of a beneficiary.
``(E) If the Secretary determines that the fiduciary has misused any
benefit or payments of a beneficiary, the Secretary may revoke the
fiduciary status of the fiduciary.
``(2) Where, in the opinion of the Secretary, any fiduciary receiving
funds on behalf of a Department beneficiary is acting in such a number
of cases as to make it impracticable to conserve properly the estates
or to supervise the persons of the beneficiaries, the Secretary may
refuse to make future payments in such cases as the Secretary may deem
proper.
``(b) Court.--Whenever it appears that any fiduciary, in the opinion
of the Secretary, is not properly executing or has not properly
executed the duties of the trust of such fiduciary or has collected or
paid, or is attempting to collect or pay, fees, commissions, or
allowances that are inequitable or in excess of those allowed by law
for the duties performed or expenses incurred, or has failed to make
such payments as may be necessary for the benefit of the ward or the
dependents of the ward, then the Secretary may appear, by the
Secretary's authorized attorney, in the court which has appointed such
fiduciary, or in any court having original, concurrent, or appellate
jurisdiction over said cause, and make proper presentation of such
matters. The Secretary, in the Secretary's discretion, may suspend
payments to any such fiduciary who shall neglect or refuse, after
reasonable notice, to render an account to the Secretary from time to
time showing the application of such payments for the benefit of such
incompetent or minor beneficiary, or who shall neglect or refuse to
administer the estate according to law. The Secretary may require the
fiduciary, as part of such account, to disclose any additional
financial information concerning the beneficiary (except for
information that is not available to the fiduciary). The Secretary may
appear or intervene by the Secretary's duly authorized attorney in any
court as an interested party in any litigation instituted by the
Secretary or otherwise, directly affecting money paid to such fiduciary
under this section.
``(c) Payment of Certain Expenses.--Authority is hereby granted for
the payment of any court or other expenses incident to any
investigation or court proceeding for the appointment of any fiduciary
or other person for the purpose of payment of benefits payable under
laws administered by the Secretary or the removal of such fiduciary and
appointment of another, and of expenses in connection with the
administration of such benefits by such fiduciaries, or in connection
with any other court proceeding hereby authorized, when such payment is
authorized by the Secretary.
``(d) Temporary Payment of Benefits.--All or any part of any benefits
the payment of which is suspended or withheld under this section may,
in the discretion of the Secretary, be paid temporarily to the person
having custody and control of the incompetent or minor beneficiary, to
be used solely for the benefit of such beneficiary, or, in the case of
an incompetent veteran, may be apportioned to the dependent or
dependents, if any, of such veteran. Any part not so paid and any funds
of a mentally incompetent or insane veteran not paid to the chief
officer of the institution in which such veteran is a patient nor
apportioned to the veteran's dependent or dependents may be ordered
held in the Treasury to the credit of such beneficiary. All funds so
held shall be disbursed under the order and in the discretion of the
Secretary for the benefit of such beneficiary or the beneficiary's
dependents. Any balance remaining in such fund to the credit of any
beneficiary may be paid to the beneficiary if the beneficiary recovers
and is found competent, or if a minor, attains majority, or otherwise
to the beneficiary's fiduciary, or, in the event of the beneficiary's
death, to the beneficiary's personal representative, except as
otherwise provided by law; however, payment will not be made to the
beneficiary's personal representative if, under the law of the
beneficiary's last legal residence, the beneficiary's estate would
escheat to the State. In the event of the death of a mentally
incompetent or insane veteran, all gratuitous benefits under laws
administered by the Secretary deposited before or after August 7, 1959,
in the personal funds of patients trust fund on account of such veteran
shall not be paid to the personal representative of such veteran, but
shall be paid to the following persons living at the time of
settlement, and in the order named: The surviving spouse, the children
(without regard to age or marital status) in equal parts, and the
dependent parents of such veteran, in equal parts. If any balance
remains, such balance shall be deposited to the credit of the
applicable current appropriation; except that there may be paid only so
much of such balance as may be necessary to reimburse a person (other
than a political subdivision of the United States) who bore the
expenses of last sickness or burial of the veteran for such expenses.
No payment shall be made under the two preceding sentences of this
subsection unless claim therefor is filed with the Secretary within
five years after the death of the veteran, except that, if any person
so entitled under said two sentences is under legal disability at the
time of death of the veteran, such five-year period of limitation shall
run from the termination or removal of the legal disability.
``(e) Escheatment.--Any funds in the hands of a fiduciary appointed
by a State court or the Secretary derived from benefits payable under
laws administered by the Secretary, which under the law of the State
wherein the beneficiary had last legal residence would escheat to the
State, shall escheat to the United States and shall be returned by such
fiduciary, or by the personal representative of the deceased
beneficiary, less legal expenses of any administration necessary to
determine that an escheat is in order, to the Department, and shall be
deposited to the credit of the applicable revolving fund, trust fund,
or appropriation.
``(f) Assistance.--The Secretary shall provide to a fiduciary
appointed under section 5502 of this title materials and tools to
assist the fiduciary in carrying out the responsibilities of the
fiduciary under this chapter, including--
``(1) handbooks, brochures, or other written material that
explain the responsibilities of a fiduciary under this chapter;
``(2) tools located on an Internet website, including forms
to submit to the Secretary required information; and
``(3) assistance provided by telephone.''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 55 of title 38, United States Code, is
amended by inserting after the item relating to section 5502
the following new item:
``5502A. Supervision of fiduciaries.''.
(c) Definition of Fiduciary.--Section 5506 of title 38, United States
Code is amended--
(1) by striking ``For purposes'' and inserting ``(a) For
purposes''; and
(2) by adding at the end the following new subsection:
``(b)(1) For purposes of subsection (a), the term `person' includes
any--
``(A) State or local government agency whose mission is to
carry out income maintenance, social service, or health care-
related activities;
``(B) any State or local government agency with fiduciary
responsibilities; or
``(C) any nonprofit social service agency that the Secretary
determines--
``(i) regularly provides services as a fiduciary
concurrently to five or more individuals; and
``(ii) is not a creditor of any such individual.
``(2) The Secretary shall maintain a list of State or local agencies
and nonprofit social service agencies under paragraph (1) that are
qualified to act as a fiduciary under this chapter. In maintaining such
list, the Secretary may consult the lists maintained under section
807(h) of the Social Security Act (42 U.S.C. 1007(h)).''.
(d) Qualifications.--Section 5507 of title 38, United States Code, is
amended to read as follows:
``Sec. 5507. Inquiry, investigations, and qualification of fiduciaries
``(a) Investigation.--Any certification of a person for payment of
benefits of a beneficiary to that person as such beneficiary's
fiduciary under section 5502 of this title shall be made on the basis
of--
``(1) an inquiry or investigation by the Secretary of the
fitness of that person to serve as fiduciary for that
beneficiary to be conducted in advance of such certification
and in accordance with subsection (b);
``(2) adequate evidence that certification of that person as
fiduciary for that beneficiary is in the interest of such
beneficiary (as determined by the Secretary under regulations);
``(3) adequate evidence that the person to serve as fiduciary
protects the private information of a beneficiary in accordance
with subsection (d)(1); and
``(4) the furnishing of any bond that may be required by the
Secretary in accordance with subsection (f).
``(b) Elements of Investigation.--(1) In conducting an inquiry or
investigation of a proposed fiduciary under subsection (a)(1), the
Secretary shall conduct--
``(A) a face-to-face interview with the proposed fiduciary by
not later than 30 days after the date on which such inquiry or
investigation begins; and
``(B) a background check of the proposed fiduciary to--
``(i) in accordance with paragraph (2), determine
whether the proposed fiduciary has been convicted of a
crime; and
``(ii) determine whether the proposed fiduciary will
serve the best interest of the beneficiary, including
by conducting a credit check of the proposed fiduciary
and checking the records under paragraph (5).
``(2) The Secretary shall request information concerning whether that
person has been convicted of any offense under Federal or State law. If
that person has been convicted of such an offense, the Secretary may
certify the person as a fiduciary only if the Secretary finds that the
person is an appropriate person to act as fiduciary for the beneficiary
concerned under the circumstances.
``(3) The Secretary shall conduct the background check described in
paragraph (1)(B)--
``(A) each time a person is proposed to be a fiduciary,
regardless of whether the person is serving or has served as a
fiduciary; and
``(B) at no expense to the beneficiary.
``(4) Each proposed fiduciary shall disclose to the Secretary the
number of beneficiaries that the fiduciary acts on behalf of.
``(5) The Secretary shall maintain records of any person who has--
``(A) previously served as a fiduciary; and
``(B) had such fiduciary status revoked by the Secretary.
``(6)(A) If a fiduciary appointed by the Secretary is convicted of a
crime described in subparagraph (B), the Secretary shall notify the
beneficiary of such conviction by not later than 14 days after the date
on which the Secretary learns of such conviction.
``(B) A crime described in this subparagraph is a crime--
``(i) for which the fiduciary is convicted while serving as a
fiduciary for any person;
``(ii) that is not included in a report submitted by the
fiduciary under section 5509(a) of this title; and
``(iii) that the Secretary determines could affect the
ability of the fiduciary to act on behalf of the beneficiary.
``(c) Investigation of Certain Persons.--(1) In the case of a
proposed fiduciary described in paragraph (2), the Secretary, in
conducting an inquiry or investigation under subsection (a)(1), may
carry out such inquiry or investigation on an expedited basis that may
include giving priority to conducting such inquiry or investigation.
Any such inquiry or investigation carried out on such an expedited
basis shall be carried out under regulations prescribed for purposes of
this section.
``(2) Paragraph (1) applies with respect to a proposed fiduciary who
is--
``(A) the parent (natural, adopted, or stepparent) of a
beneficiary who is a minor;
``(B) the spouse or parent of an incompetent beneficiary;
``(C) a person who has been appointed a fiduciary of the
beneficiary by a court of competent jurisdiction;
``(D) being appointed to manage an estate where the annual
amount of veterans benefits to be managed by the proposed
fiduciary does not exceed $3,600, as adjusted pursuant to
section 5312 of this title; or
``(E) a person who is authorized to act on behalf of the
beneficiary under a durable power of attorney.
``(d) Protection of Private Information.--(1) A fiduciary shall take
all reasonable precautions to--
``(A) protect the private information of a beneficiary,
including personally identifiable information; and
``(B) securely conducts financial transactions.
``(2) A fiduciary shall notify the Secretary of any action of the
fiduciary that compromises or potentially compromises the private
information of a beneficiary.
``(e) Potential Misuse of Funds.--(1) If the Secretary has reason to
believe that a fiduciary may be misusing all or part of the benefit of
a beneficiary, the Secretary shall--
``(A) conduct a thorough investigation to determine the
veracity of such belief; and
``(B) if such veracity is established, transmit to the
officials described in paragraph (2) a report of such
investigation.
``(2) The officials described in this paragraph are the following:
``(A) The Attorney General.
``(B) Each head of a Federal department or agency that pays
to a fiduciary or other person benefits under any law
administered by such department of agency for the use and
benefit of a minor, incompetent, or other beneficiary.
``(f) Bond.--In determining whether a proposed fiduciary is required
to furnish a bond under subsection (a)(4), the Secretary shall
consider--
``(1) the existence of any familial or other personal
relationship between the proposed fiduciary and the
beneficiary; and
``(2) the care the proposed fiduciary has taken to protect
the interests of the beneficiary.
``(g) List of Fiduciaries.--Each regional office of the Veterans
Benefits Administration shall maintain a list of the following:
``(1) The name and contact information of each fiduciary,
including address, telephone number, and email address.
``(2) With respect to each fiduciary described in paragraph
(1)--
``(A) the date of the most recent background check
and credit check performed by the Secretary under this
section;
``(B) the date that any bond was paid under this
section;
``(C) the name, address, and telephone number of each
beneficiary the fiduciary acts on behalf of; and
``(D) the amount that the fiduciary controls with
respect to each beneficiary described in subparagraph
(C).''.
(e) Annual Receipt of Payments.--
(1) In general.--Section 5509 of title 38, United States
Code, is amended--
(A) in subsection (a)----
(i) by striking ``may require a fiduciary to
file a'' and inserting ``shall require a
fiduciary to file an annual''; and
(ii) by adding at the end the following new
sentence: ``The Secretary shall transmit such
annual report or accounting to the beneficiary
and any legal guardian of such beneficiary.'';
(B) by adding at the end the following new
subsections:
``(c) Matters Included.--Except as provided by subsection (f), an
annual report or accounting under subsection (a) shall include the
following:
``(1) For each beneficiary that a fiduciary acts on behalf
of--
``(A) the amount of the benefits of the beneficiary
provided under any law administered by the Secretary
accrued during the year, the amount spent, and the
amount remaining; and
``(B) if the fiduciary serves the beneficiary with
respect to benefits not administered by the Secretary,
an accounting of all sources of benefits or other
income the fiduciary oversees for the beneficiary.
``(2) A list of events that occurred during the year covered
by the report that could affect the ability of the fiduciary to
act on behalf of the beneficiary, including--
``(A) the fiduciary being convicted of any crime;
``(B) the fiduciary declaring bankruptcy; and
``(C) any judgments entered against the fiduciary.
``(d) Random Audits.--The Secretary shall annually conduct random
audits of fiduciaries who receive a commission pursuant to subsection
5502A(a)(1) of this title.
``(e) Status of Fiduciary.--If a fiduciary includes in the annual
report events described in subsection (c)(2), the Secretary may take
appropriate action to adjust the status of the fiduciary as the
Secretary determines appropriate, including by revoking the fiduciary
status of the fiduciary.
``(f) Caregivers and Certain Other Fiduciaries.--(1)(A) In carrying
out this section, the Secretary shall ensure that a caregiver fiduciary
is required only to file an annual report or accounting under
subsection (a) with respect to the amount of the benefits of the
beneficiary provided under any law administered by the Secretary--
``(i) spent on--
``(I) food and housing for the beneficiary; and
``(II) clothing, health-related expenses, recreation,
and other personal items for the beneficiary; and
``(ii) saved for the beneficiary.
``(B) The Secretary shall coordinate with the Under Secretary for
Benefits and the Under Secretary for Health to--
``(i) minimize the frequency with which employees of the
Department visit the home of a caregiver fiduciary and
beneficiary; and
``(ii) limit the extent of supervision by such Under
Secretaries with respect to such a fiduciary and beneficiary.
``(C) In this paragraph, the term `caregiver fiduciary' means a
fiduciary who--
``(i) in addition to acting as a fiduciary for a beneficiary,
is approved by the Secretary to be a provider of personal care
services for the beneficiary under paragraph (3)(A)(i) of
section 1720G(a) of this title;
``(ii) in carrying out such care services to such
beneficiary, has undergone not less than four home visits under
paragraph (9)(A) of such section; and
``(iii) has not been required by the Secretary to take
corrective action pursuant to paragraph (9)(C) of such section.
``(2) In carrying out this section, the Secretary may adjust the
matters required under an annual report or accounting under subsection
(a) with respect to a fiduciary whom the Secretary determines to have
effectively protected the interests of the beneficiary over a sustained
period.''; and
(C) by striking the section heading and inserting the
following: ``Annual reports and accountings of
fiduciaries''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 55 of title 38, United States Code, is
amended by striking the item relating to section 5509 and
inserting the following new item:
``5509. Annual reports and accountings of fiduciaries.''.
(f) Repayment of Misused Benefits.--Section 6107(a)(2)(C) of title
38, United States Code, is amended by inserting before the period the
following: ``, including by the Secretary not acting in accordance with
section 5507 of this title''.
(g) Annual Reports.--Section 5510 of title 38, United States Code, is
amended by striking ``The Secretary shall include in the Annual
Benefits Report of the Veterans Benefits Administration or the
Secretary's Annual Performance and Accountability Report'' and
inserting ``Not later than July 1 of each year, the Secretary shall
submit to the Committees on Veterans' Affairs of the House of
Representatives and the Senate a separate report containing''.
(h) Report.--Not later than one year after the date of the enactment
of this Act, the Secretary of Veterans Affairs shall submit to the
Committee on Veterans' Affairs of the Senate and the Committee on
Veterans' Affairs of the House of Representatives a comprehensive
report on the implementation of the amendments made by this Act,
including--
(1) detailed information on the establishment of new policies
and procedures pursuant to such amendments and training
provided on such policies and procedures; and
(2) a discussion of whether the Secretary should provide
fiduciaries with standardized financial software to simplify
reporting requirements.
SEC. 5. LIMITATION ON AWARDS AND BONUSES TO EMPLOYEES OF DEPARTMENT OF
VETERANS AFFAIRS.
For each of fiscal years 2014 through 2018, the Secretary of Veterans
Affairs may not pay more than $345,000,000 in awards or bonuses under
chapter 45 or 53 of title 5, United States Code, or any other awards or
bonuses authorized under such title.
Amend the title to read:
A bill to amend title 38, United States Code, to require
the Secretary of Veterans Affairs to include a notice of
disagreement form in any notice of decision issued for the
denial of a benefit sought, to improve the supervision of
fiduciaries of veterans under the laws administered by the
Secretary of Veterans Affairs, and for other purposes.
Purpose and Summary
H.R. 1405 was introduced on March 25, 2013, by
Representative Dina Titus of Nevada. H.R. 1405, as amended,
incorporates provisions from H.R. 679, introduced by
Representative Timothy J. Walz of Minnesota, H.R. 733,
introduced by Representative Jon Runyan of New Jersey; and H.R.
894, as amended, introduced by Representative Bill Johnson of
Ohio. Together, these provisions would require the inclusion of
a Notice of Disagreement Form within notices of decisions of
benefits denials issued by Department of Veterans Affairs (VA);
honor America's Guard-Reserve retirees; increase accessibility
to case-tracking information on pending claims; and improve
fiduciary services for veterans. H.R. 1405, as amended, also
makes reasonable modifications to the overall amount of bonuses
at VA.
Background and Need for Legislation
SECTION 1--INCLUSION OF NOTICE OF DISAGREEMENT FORMS IN NOTICES OF
DECISIONS OF BENEFITS DENIALS ISSUED BY SECRETARY OF VETERANS AFFAIRS
Currently, section 5104 of title 38, United States Code,
states that the Secretary must notify a claimant of any
benefits decision made and, in cases where the Secretary denies
the benefit sought, the claimant must also be notified of the
reasons for the decision and a summary of the evidence that was
considered. This provision would amend this section to also
require the Secretary to provide a specific Notice of
Disagreement form along with any notice of decision issued for
the denial of a benefit sought.
Although VA provides veterans with specific forms for most
filings related to benefits claims, there is currently no
specific form provided for filing a Notice of Disagreement, the
document that initiates the process by which a claimant may
appeal an adverse benefits decision. Pursuant to section 7105
of title 38, United States Code, any form may be used to file a
Notice of Disagreement, so long as it is in writing and
expresses disagreement with the rating decision that was
issued. Due to this leniency, it is sometimes unclear to raters
processing a claim when a veteran is expressing disagreement
with a decision. This may ultimately lead to unnecessary delays
in review and resolution of the veteran's claim. Accordingly,
Section 1 of H.R. 1405, as amended, requires VA to provide a
specific form that will assist the veteran in clarifying intent
when it comes to appealing an adverse benefits decision.
SECTION 2--PROVISION OF STATUS UNDER LAW BY HONORING CERTAIN MEMBERS OF
THE RESERVE COMPONENTS AS VETERANS
Section 2 of H.R. 1405, as amended, is derived from H.R.
679, introduced by Representative Timothy J. Walz of Minnesota.
The National Guard and Reserve Component of the United States
Armed Forces perform an invaluable role and are an important
part of our overall force structure. They support the active
duty component of the United States military by responding in
times of national emergency, ready to be called to active-duty
service in times of need.
Section 101(2) of title 38, United States Code, defines a
``veteran'' as ``a person who served in the active military,
naval, or air service, and who was discharged or released
therefrom under conditions other than dishonorable.''
Generally, persons not meeting that definition are ineligible
for the full range of rights and benefits extended under the
law.
Speaking on behalf of Section 2 of H.R. 1405, as amended,
Representative Walz commented that the failure to recognize
those who have served 20 or more years in the Reserve and
National Guard as ``veterans'' is not right. National Guard and
Reserve members who completed 20 or more years of service wore
the same uniform as active-duty servicemembers, were subject to
the same code of military justice, received the same training,
and were available for call-up to active-duty service at any
time. Representative Walz noted that having someone who served
in uniform for 20 years feel badly about referring to
themselves as a veteran is simply wrong.
Section 2 of H.R. 1405, as amended, would confer honorary
veteran status on those individuals who are entitled under
chapter 1223 of title 10, United States Code, to retired pay
for nonregular service or who would be entitled to retired pay,
but for age. Further, section 2 of H.R. 1405, as amended, would
ensure that those who receive the honorary recognition as
``veteran'' conferred in the bill would not be entitled to any
benefit under the laws administered by the Secretary of
Veterans Affairs solely by reason of such recognition.
SECTION 3--PROVISION OF ACCESS TO CASE-TRACKING INFORMATION
Section 3 of H.R. 1405, as amended, is derived from H.R.
733, originally introduced by Representative Jon Runyan of New
Jersey. This section would allow certain State or local
government employees to access read-only information regarding
the status of pending claims. Privacy concerns would be
addressed through requirement of the veteran's written
permission or power of attorney, through an employee's
certification upon each access, and through required VA privacy
training.
The need for this legislation has been raised several times
by County Veteran Service Officers (CVSOs). One of the main
issues repeatedly presented is the lack of access to claims
file information, which impedes CVSOs' ability to answer
veterans' questions about their claims. Although many veterans
use a nationally chartered veteran service organization (VSO)
as their Power of Attorney (POA) during the claims process,
this contact is often unable to timely respond to veterans'
status requests due to workload constraints. Therefore, this
legislation aims to provide such access, which should assist in
preventing veterans from filing duplicate claims and
overburdening VA.
SECTION 4--IMPROVEMENT OF FIDUCIARIES FOR VETERANS
Section 4 of H.R. 1405, as amended, is derived from H.R.
894, originally introduced by Representative Bill Johnson of
Ohio, and provides reforms to the VA's fiduciary program.
Specifically, chapter 55 of title 38, United States Code,
provides authority for the VA Fiduciary Program, which is
intended to help veterans and other VA beneficiaries who are
deemed by the Secretary of Veterans Affairs to be mentally
incompetent for purposes of handling their financial affairs.
In such cases, the Secretary appoints a fiduciary who, by
statute, is only authorized to receive and manage benefits
administered by the Secretary on behalf of the beneficiary. The
fiduciary is responsible for ensuring that a beneficiary's
bills are paid on time and that a beneficiary receives money to
pay for food, shelter, clothing, medical expenses, and other
necessities.
The framework established in chapter 55 allows the
Department a great deal of latitude in implementing the
Fiduciary Program. Section 4 of H.R. 1405, as amended, is
designed to transform the VA's Fiduciary Program to better
serve the needs of our most vulnerable veterans and their
hardworking fiduciaries, and to protect veterans in the program
from falling victim to deceitful and criminal fiduciaries.
Section 4 of H.R. 1405, as amended, overhauls the VA Fiduciary
Program, making many necessary reforms to address problems
identified in recent years and realigns chapter 55 to a
structure more consistent with other amended sections of title
38.
Section 4 of H.R. 1405, as amended, provides the Secretary
with authority to appoint a temporary fiduciary, if one is
needed to protect the benefits of a VA beneficiary while a
determination of incompetency is being made or appealed or a
fiduciary is appealing a determination of misuse. The Secretary
would be able to appoint temporary fiduciaries for up to 120
days. Under current law, a VA beneficiary who is appointed a
fiduciary has the right to appeal the decision. However, the
appeals process within VA's Fiduciary Program is difficult,
slow, and often results in healthy, capable veterans being
unable to remove themselves from the program. Section 4 of H.R.
1405, as amended, would require the Secretary to provide a
written statement to a beneficiary determined to be mentally
incompetent for purposes of appointing a fiduciary, which would
detail the reasons for such determination, and would allow a
veteran to appeal the finding of incompetence at any time. This
provision not only enables a veteran to remain out of the
fiduciary program if medical evidence supports such a position,
it also allows a veteran who has sufficiently recovered at a
later time to return to managing his or her own financial
affairs.
Section 4 of H.R. 1405, as amended, would also allow a
veteran to request the appointment of a new fiduciary if it is
perceived that the current fiduciary is not acting in the best
interest of the veteran or has an irreconcilable personality
conflict or disagreement. The Secretary may deny the removal of
an appointed fiduciary if it is determined that the request was
not made in good faith, and shall ensure that the delivery of
benefits is not interrupted if a previous fiduciary is removed
and a new one appointed.
Section 4 of H.R. 1405, as amended, would enable a veteran
to designate a preferred fiduciary ahead of time, such as a
family member or guardian. While the Secretary would not be
required to appoint the designated fiduciary, the reason for
not appointing that fiduciary would have to be presented in
writing to the veteran as would a notice of the veteran's right
to modify the appointment. In many cases, a veteran may already
have a family member or court-appointed guardian acting as a
fiduciary for other benefits, and in cases where the veteran
was happy with the fiduciary's performance of those duties, a
sensible approach would be to maintain that relationship.
Under certain circumstances, the Secretary may decide that
a paid fiduciary is in a veteran's best interest. Section
5502(a)(2) of title 38, United States Code, states that a
fiduciary may receive a commission for his or her efforts, but
that commission may not exceed four percent of the monetary
benefits a beneficiary receives in one year. Investigations,
hearings, and media reports identified many problems in the
Fiduciary Program arising from paid fiduciaries receiving more
than the amount authorized under law, including receiving
commissions from retroactive and lump sum payments to veterans.
Further, evidence also revealed VA field examiners directing
fiduciaries to take income from non-VA benefits as well, an
action explicitly not authorized in law. In many of these
instances, the veteran beneficiary still did not receive basic
funding for food, clothing, and shelter that should have been
administered by the fiduciary.
Hearings and investigations have indicated that current law
and policy regarding commissions paid to fiduciaries are
frequently violated throughout the nation; additionally, the
commission rate paid to VA-appointed fiduciaries is already
higher than that paid by the Social Security Administration
(SSA) under the Representative Payee Program, the SSA's
equivalent to VA's Fiduciary Program. In comparison to the
approximately 120,000 beneficiaries under VA's Fiduciary
Program, the Social Security Representative Payee Program deals
with approximately 7.8 million beneficiaries.
Section 4 of H.R. 1405, as amended, reduces the commission
rate paid to fiduciaries, if the Secretary determines that a
paid fiduciary is in the best interest of the veteran, to not
more than 3% of the veteran's monthly benefits, or $35 per
month, whichever is less. Any desire by VA to increase this
rate would require congressional authorization. This commission
rate would give VA's Fiduciary Program a similar structure to
the SSA's Representative Payee Program and will reduce the
profit motive of predatory fiduciaries. The section also
clarifies that commission payments are not to be derived from
retroactive or lump sum payments; that fiduciaries who are
determined to misuse a veteran's benefits may not receive
commissions; that fiduciaries found to be misusing funds may
have their status as fiduciaries revoked; that the Secretary
may seek compensation in a court of law from fiduciaries found
to misuse benefits or fiduciaries who fail to adequately
account for a veteran's benefits; and that funds remaining with
a paid fiduciary after a veteran's passing shall escheat to the
federal government. Reducing the financial incentive for a
predatory fiduciary to apply to VA's Fiduciary Program provides
further assurance that participants are working in the best
interest of vulnerable veterans.
During past investigations and hearings, concerns arose
regarding the qualifications of fiduciaries. Documented cases
existed of convicted felons serving as fiduciaries as well as
fiduciaries with no knowledge of or training regarding their
duties to the veteran. Many cases of embezzlement of a
veteran's funds could have been prevented with a basic
background check of a fiduciary, but VA frequently used its
authority to waive the current background check requirement for
appointment of a fiduciary, and failed to follow up at a later
point in time to determine the suitability of the appointed
fiduciary.
Section 4 of H.R. 1405, as amended, improves the
qualification process for fiduciaries as well as oversight of
fiduciaries already appointed by requiring the Secretary to
perform civil and criminal background investigations and a
face-to-face interview prior to certifying an individual as a
fiduciary. To address concerns that performing background
checks may slow the fiduciary appointment process, authority is
provided to the Secretary to expedite background checks where
necessary. This section would also protect veterans' sensitive
personal information and would require the furnishing of a bond
when required by the Secretary before certifying an individual
as a fiduciary. Concerns were raised by veterans service
organizations that the requirement of a bond for family or
caregiver fiduciaries causes undue hardship upon those closest
to the veteran; to address these concerns, Section 4 of H.R.
1405, as amended, would allow the Secretary to consider the
existence of a familial or personal relationship between the
proposed fiduciary and beneficiary, as well as the care the
proposed fiduciary has taken to protect the interests of the
beneficiary.
Many documented cases also exist where a veteran had never
met nor heard from his or her fiduciary, in addition to cases
where VA experienced difficulty contacting fiduciaries it had
appointed. This lack of accountability on the part of
fiduciaries, coupled with VA's lack of oversight, contributed
to veterans not receiving the necessary funds to pay basic
utilities and predatory fiduciaries making a profit at the
expense of the veteran. To address this, Section 4 of H.R.
1405, as amended, contains a provision that would require an
annual accounting by fiduciaries that will consist of benefits
earned, benefits disbursed, and the remaining balance as well
as other sources of income for that veteran that the fiduciary
controls. The fiduciary must also report any events affecting
his or her ability to serve the veteran including criminal
convictions, bankruptcy filings, and judgments filed against
the fiduciary, and any events reported in the annual accounting
may be considered by the Secretary in determining a fiduciary's
ability to serve the best interest of the veteran. The annual
report would be transmitted to the veteran beneficiary or
guardian.
Section 4 of H.R. 1405, as amended, also provides for
specific treatment of caregiver fiduciaries, ensuring that a
limited annual report is required. The Secretary is given
discretion to adjust the matters required under an annual
report or accounting with respect to a caregiver fiduciary whom
the Secretary determines to have effectively protected the
interests of the beneficiary over a sustained period, including
the parameters for the posting of bond as mentioned above.
Additionally, the Veterans Benefits Administration and the
Veterans Health Administration are required to coordinate and
minimize the frequency with which employees of the Department
visit the home of a caregiver fiduciary and beneficiary and
limit the extent of supervision by such Under Secretaries with
respect to such a fiduciary and beneficiary.
SECTION 5--LIMITATION ON AWARDS AND BONUSES TO EMPLOYEES OF DEPARTMENT
OF VETERANS AFFAIRS
Section 5 of H.R. 1405, as amended, places a limit on total
funds permitted to be used towards VA performance awards or
bonuses for the next five fiscal years. VA currently disburses
an annual average of approximately $400,000,000 in bonuses,
awards, and other incentives. These incentives include Group
Cash Awards, Travel Savings Incentives, Individual Cash Awards
(Not Rating Based), Presidential Rank Awards, SES Performance
Awards, Individual Cash Awards (Rating Based), Individual
Suggestion/Invention Awards, Group Suggestion/Invention Awards,
Foreign Language Awards, Group Awards--Other, Specialty
Certification Awards, Exemplary Job Performance/Achievement
Awards, Lump Sum Performance Payments (Rating Based--In Lieu of
Pay Adjustment), Lump Sum Performance Payments (Rating Based
Not in Lieu of Pay Adjustment), Lump Sum Performance Payments
(Not Rating Based), Retention Incentives, Recruitment
Incentives, and Relocation Incentives. In addition, VA also
awards Individual Time Off Awards--Hours and Group Time Off
Awards--Hours, which are not readily quantified into dollar
amounts.
The Office of Personnel Management (OPM) issues a guide to
federal agencies for processing these awards, many of which are
covered under title 5, United States Code. Further policy for
awarding bonuses and other incentives is established by VA's
Office of Human Resources Management. This policy is then
executed at multiple levels throughout VA all the way down to
facility directors.
In a November 14, 2011, report titled ``Audit of Retention
Incentives for Veterans Health Administration and VA Central
Office Employees,'' (VAOIG 10-02887-30) VA's Office of
Inspector General (VAOIG) identified that approving officials
within both the Department of Veterans Affairs Central Office
(VACO) and the Veterans Health Administration (VHA) did not
adequately justify retention incentive awards. In the awards
reviewed, VAOIG also consistently identified missing support
documentation to accompany the award. More recently, concerns
have been raised regarding VA's provision of merit-based
bonuses to managers and supervisors who have led troubled
offices, including Veterans Health Administration medical
centers with demonstrated incidences of gross negligence in
care, and VBA positions where a growing inventory of claims and
poor workload management practices abound.
The VAOIG's findings were consistent with the Committee's
findings of bonuses being awarded to employees with less than
satisfactory performance and retention incentives being awarded
to employees who had stated their intention to retire in the
very near future. The proposed reduction under section 5 of the
bill, which does not include additional time off awards, would
leave sufficient funding for VA to award suitable bonuses and
other incentives to deserving employees.
Hearings
On April 16, 2013, the Subcommittee on Disability
Assistance and Memorial Affairs conducted a legislative hearing
on various bills introduced during the 113th Congress,
including H.R. 679 (from which section 2 of H.R. 1405, as
amended, is derived), H.R. 733 (from which section 3 of H.R.
1405, as amended, is derived), H.R. 894 (from which section 4
of H.R. 1405, as amended, is derived), and H.R. 1405. The
following witnesses testified:
The Honorable Bill Johnson, U.S. House of Representatives;
The Honorable Chellie Pingree, U.S. House of Representatives;
The Honorable Timothy J. Walz, U.S. House of Representatives;
Mr. Jeff Hall, Assistant National Legislative Director,
Disabled American Veterans; Mr. Raymond Kelley, Director of
National Legislative Service, Veterans of Foreign Wars; Colonel
Robert F. Norton, USA (Ret.), Deputy Director of Government
Relations, Military Officers Association of America; Heather
Ansley, Esq., MSW, Vice President of Veterans Policy,
VetsFirst, a program of United Spinal Association; Mr. Michael
D. Murphy, Executive Director, National Association of County
Veterans Service Officers; Mr. Richard Hipolit, Assistant
General Counsel, U.S. Department of Veterans Affairs; Mr. David
R. McLenachen, Director, Pension and Fiduciary Service, U.S.
Department of Veterans Affairs, accompanied by Ms. Mary Ann
Flynn, Deputy Director, Policy and Procedures, Compensation
Service, U.S. Department of Veterans Affairs. The following
groups submitted statements for the record: The American
Legion; Iraq and Afghanistan Veterans of America; National
Organization of Veterans Advocates; and Wounded Warrior
Project.
Subcommittee Consideration
On April 25, 2013, the Subcommittee on Disability
Assistance and Memorial Affairs met in an open markup session,
a quorum being present, and favorably forwarded to the full
Committee H.R. 894 and H.R. 1405, as amended, by voice vote.
During consideration of H.R. 1405, the following amendment
was considered:
An amendment in the nature of a substitute offered by Ms.
Titus of Nevada that modified the original text to clarify that
the standardized appeal form included in the mailing is to be a
Notice of Disagreement, and that incorporated amended
provisions from H.R. 679 and H.R. 733, to limit case-tracking
information access by requiring written permission or power of
attorney, as well as limiting access to employees of a State or
local governmental agency was agreed to by voice vote.
Committee Consideration
On May 8, 2013, the full Committee met in an open markup
session, a quorum being present, and ordered H.R. 1405 reported
favorably to the House of Representatives by voice vote.
During consideration of H.R. 1405 the following amendment
was considered: An amendment in the nature of a substitute
offered by Ms. Titus of Nevada that incorporated provisions of
H.R. 894, originally offered by Representative Bill Johnson of
Ohio, with amendment to clarify a veteran's ability to request
the appointment of a new fiduciary, and to provide certain
considerations to caregiver fiduciaries, was agreed to by voice
vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the recorded
votes on the motion to report the legislation and amendments
thereto. There were no recorded votes taken on amendments or in
connection with ordering H.R. 1405, as amended, reported to the
House. A motion by Ranking Member Michael H. Michaud of Maine
to report H.R. 1405, as amended, favorably to the House of
Representatives was agreed to by voice vote.
Committee Oversight Findings
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Earmarks and Tax and Tariff Benefits
H.R. 1405, as amended, does not contain any congressional
earmarks, limited tax benefits, or limited tariff benefits as
defined in clause 9 of rule XXI of the Rules of the House of
Representatives.
Committee Cost Estimate
The Committee adopts as its own the cost estimate on H.R.
1405, as amended, prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Congressional Budget Office Cost Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
for H.R. 1405, as amended, provided by the Congressional Budget
Office pursuant to section 402 of the Congressional Budget Act
of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 15, 2013.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1405, a bill to
amend title 38, United States Code, to require the Secretary of
Veterans Affairs to include a notice of disagreement form in
any notice of decision issued for the denial of a benefit
sought, to improve the supervision of fiduciaries of veterans
under laws administered by the Secretary of Veterans Affairs,
and for other purposes.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Dwayne M.
Wright.
Sincerely,
Douglas W. Elmendorf.
Enclosure.
H.R. 1405--A bill to amend title 38, United States Code, to require the
Secretary of Veterans Affairs to include a notice of
disagreement form in any notice of decision issued for the
denial of a benefit sought, to improve the supervision of
fiduciaries of veterans under laws administered by the
Secretary of Veterans Affairs, and for other purposes
Summary: H.R. 1405 would make changes to certain
administrative procedures and programs of the Department of
Veterans Affairs (VA), including the fiduciary program, access
to case-tracking information, and limits on bonuses for
employees. CBO estimates that implementing H.R. 1405 would
yield net discretionary savings of $108 million over the 2014-
2018 period, assuming appropriation actions consistent with the
bill.
Pay-as-you-go procedures do not apply to this legislation
because it would not affect direct spending or revenues.
H.R. 1405 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 1405 is shown in the following table.
The costs of this legislation fall within budget function 700
(veterans benefits and services).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------
2014 2015 2016 2017 2018 2014-2018
----------------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Limit on Awards and Bonuses to VA Employees:
Estimated Authorization Level............. -54 -58 -62 -66 -70 -310
Estimated Outlays......................... -54 -58 -62 -66 -70 -310
Improvement of Fiduciary Program for Veterans:
Estimated Authorization Level............. 19 38 39 40 40 176
Estimated Outlays......................... 19 38 39 40 40 176
Provision of Access to Case-Tracking System:
Estimated Authorization Level............. 6 5 5 5 5 26
Estimated Outlays......................... 6 5 5 5 5 26
Total Changes:
Estimated Authorization Level......... -29 -15 -18 -21 -25 -108
Estimated Outlays..................... -29 -15 -18 -21 -25 -108
----------------------------------------------------------------------------------------------------------------
Note: VA = Department of Veterans Affairs.
Basis of estimate:
Limit on awards and bonuses to VA employees
Section 5 would limit the amount that VA could pay in
awards and bonuses to VA employees to $345 million per year
over the 2014-2018 period.
For 2013, the amount of allowable payments was capped at
$395 million. Assuming such payments will increase from that
level at historical rates of growth, CBO estimates that
implementing section 5 would reduce spending for pay and
performance by $310 million over the 2014-2018 period, assuming
appropriation actions consistent with the bill.
Improvement of fiduciary program for veterans
Section 4 would make significant changes to VA's fiduciary
program. That program provides or approves fiduciaries for
veterans who cannot manage their financial affairs. The
fiduciaries receive and manage the veterans' benefits on their
behalf. The provision would require VA to:
Determine the competency of individuals
appointed as fiduciaries;
Remove certain fiduciaries deemed
incompetent and review the files of fiduciaries
appealing such decisions;
Maintain a list of state, local, or
nonprofit agencies that could perform fiduciary duties;
Update the qualifications and procedures for
certifying a fiduciary to include: visits to proposed
fiduciaries, Internet training, and criminal background
and credit checks;
Require that all fiduciaries provide
pertinent accounting details for VA verification; and
Notify veterans if a requested fiduciary is
unqualified and why, and provide veterans with a notice
of certified fiduciaries.
Section 4 also would require VA to maintain a database of
all fiduciaries and to submit a report to the Congress on the
progress of the program.
Based on information from VA, CBO estimates that about 460
additional employees would need to be hired to carry out the
requirements of section 4 at an average annual cost of about
$80,000 per employee in 2014 and increasing thereafter with
inflation. We also estimate that the information technology
systems necessary to maintain the database would cost about $1
million per year. In total, CBO estimates that implementing
section 4 would cost $176 million over the 2014-2018 period,
assuming appropriation of the necessary amounts.
Provision of access to case-tracking system
Section 3 would require VA to provide certain individuals,
referred to as covered employees, access to VA's case-tracking
system in order to provide veterans with information regarding
the status of claims submitted to VA. Covered employees under
section 3 would include Members of the Congress and their staff
and certain employees of state and local agencies who assist
veterans with claims for benefits.
This access would be limited so that covered employees
would not be able to alter any information in the system or
have access to any medical records. Covered employees also
would be required to complete a certification course on privacy
issues that would be provided by VA.
CBO expects that about 8,000 Congressional, state, and
local employees would take training courses each year and be
granted access at a cost of about $600 per employee. VA also
would need to modify their system to ensure limited access. CBO
estimates that implementing section 3 would increase spending
for information technology by $26 million over the 2014-2018
period, assuming appropriation of the necessary amounts.
Notice of disagreement
Section 1 would require VA to include a form that could be
used to file a notice of disagreement when a claimant's
application for benefits is denied. Under current law, when an
application for benefits is denied, the claimant is provided
with a written notice of the decision, a statement of the
reasons for the denial, and a summary of evidence used to
support the denial. CBO estimates that including an additional
form with that notification would have an insignificant cost.
Intergovernmental and private-sector impact: H.R. 1405
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Federal Costs: Dwayne M. Wright;
Impact on State, Local, and Tribal Governments: Lisa Ramirez-
Branum; Impact on the Private Sector: Elizabeth Bass.
Estimate approved by: Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates regarding H.R. 1405, as amended, prepared by the
Director of the Congressional Budget Office pursuant to section
423 of the Unfunded Mandates Reform Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act would be created by H.R.
1405, as amended.
Statement of Constitutional Authority
Pursuant to Article I, section 8 of the United States
Constitution, the reported bill is authorized by Congress'
power to ``provide for the common Defense and general Welfare
of the United States.''
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Statement on Duplication of Federal Programs
Pursuant to section 3(j) of H. Res. 5, 113th Cong. (2013),
the Committee finds that no provision of H.R. 1405, as amended,
establishes or reauthorizes a program of the Federal Government
known to be duplicative of another Federal program, a program
that was included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance.
Disclosure of Directed Rulemaking
Pursuant to section 3(k) of H. Res. 5, 113th Cong. (2013),
the Committee estimates that H.R. 1405, as amended, does not
require any directed rule makings.
Section-by-Section Analysis of the Legislation
Section 1--Inclusion of Notice of Disagreement Forms in Notices of
Decisions of Benefits Denials Issued by Secretary of Veterans
Affairs
Section 1(a) would require VA to provide claimants with a
standardized form to appeal adverse benefits decisions in the
form of a Notice of Disagreement.
Section 1(b) would set an effective date, which makes this
section effective to VA decisions on or after date of enactment
of this Act.
Section 2--Provision of status under law by honoring certain members of
the reserve components as veterans
Section 2(a) would honor as a veteran any person entitled
to retired pay for nonregular service or who would be entitled
to retired pay, but for age, would be so entitled.
Section 2(b) would clarify that no VA benefits attach to
any individual solely by the individual's recognition as
``veteran'' under this Act.
Section 3--Provision of access to case-tracking information
Section 3(a) would add a new section, 5906, to chapter 59
of title 38, United States Code, to provide certain covered
employees, to include certain State or local governmental
agency employees, with access to case-tracking information from
the Veterans Benefits Administration, and would require covered
employees certify that each access is for official purposes
only. The covered employee would not have access to certain
private records such as medical records and would not be able
to modify data in the system. This section would require the
covered employees to complete a required privacy certification
course, would provide that the case-tracking access is a
permitted disclosure under the Health Insurance Portability and
Accountability Act of 1996, and would provide necessary defined
terms.
Section 4--Improvement of fiduciaries for veterans
Section 4(a) would amend section 5502 of chapter 55 of
title 38, United State Code, to revise the process for
appointment of fiduciaries. Section 4(a) would allow for the
appointment of a fiduciary, including a temporary fiduciary for
a period not to exceed 120 days. Section 4(a) would require VA
to provide a written statement to the veteran detailing the
reasons for the appointment of a fiduciary and implement an
appeals process which would allow a veteran to challenge the
finding of mental incompetence. It would also allow a veteran
to request the modification of an appointed fiduciary. Section
4(a) would establish that a fiduciary operates independently of
VA to act in the best interest of the beneficiary, would allow
predesignation of a fiduciary, and would require the Secretary
to provide a veteran notice as to why a different fiduciary,
rather than the predesignated fiduciary, was appointed for the
veteran beneficiary, and would require notice of ability to
modify the appointment. Section 4(a) would also set a priority
of appointment of fiduciary, to include relatives, court
appointed guardian, or individual holding a power of attorney.
Section 4(b) would amend chapter 55 of title 38, United
States Code, by adding a new section 5502A, which would
decrease the commission appointed fiduciaries may receive. The
rate would be set at the lesser of either 3% of monthly
benefits or $35. It would also allow VA attorneys to appear in
a court of appropriate jurisdiction against any fiduciary who
has failed to execute the duties of a VA appointed fiduciary.
Section 4(b) would permit VA to temporarily make payments to
the person or institution having custody and control of an
incompetent or minor beneficiary. Upon the death of a
beneficiary, section 4(b) would direct fiduciaries to pay all
remaining funds overseen by fiduciaries to any surviving
spouse, or in equal parts to any children, or in equal parts to
any dependent parents. It would also require that if a
beneficiary did not have a spouse, children, or dependent
parents, and lived in a state where the beneficiary's assets
would escheat to the state, any funds derived from VA benefits
would then escheat to the United States. Section 4(b) would
also require the Secretary to provide a fiduciary with tools
such as written materials and Internet materials.
Section 4(c) would amend section 5506 of chapter 55 of
title 38, United States Code, to require VA to expand the
definition of a person eligible to serve as a fiduciary to
include state and local government agencies and nonprofits, and
compel VA to maintain a list of state or local agencies and
nonprofit social agencies who qualify to act as a fiduciary.
Section 4(d) would amend section 5507 of chapter 55 of
title 38, United States Code, to mandate that VA investigate
each fiduciary before an appointment and allow VA to expedite
the investigation for certain proposed fiduciaries. The
investigation would include a face-to-face interview no more
than 30 days after the investigation begins and a background
check which would include a criminal background check and a
credit check. The background check would be performed each time
a person is proposed as a fiduciary. It would also require VA
to notify the beneficiary if a fiduciary is convicted of
certain crimes. This part would also require VA to maintain
records of any person who previously served as a fiduciary and
any fiduciary whose status was revoked and would require each
regional office to maintain a list with the name and contact
information of each fiduciary and include pertinent information
related to each fiduciary's background investigation, bond
payment, and the amount the fiduciary controls for each
beneficiary served. Section 4(d) would require the Secretary to
consider the fiduciary's relationship to the beneficiary, such
as familial or personal relationships when determining bond.
Section 4(d) would also require VA to investigate alleged
misuse of benefits, and, if substantiated, to transmit the
results of the investigation to the Attorney General and each
head of a federal department or agency that pays benefits to
fiduciaries or beneficiaries. It would also require VA to
ensure that any bond furnished by a fiduciary was not paid
using funds from the beneficiary and to consider the care a
proposed fiduciary has taken to protect the interests of the
beneficiary while also considering the capacity of the proposed
fiduciary to meet the financial requirements of the bond.
Section 4(e) would amend section 5509 of chapter 55 of
title 38, United States Code, to require fiduciaries to file an
annual report to include the amount of benefits the beneficiary
accrued during the year, if the fiduciary serves the
beneficiary for non-VA benefits, an accounting of all other
sources of income the fiduciary oversees for the beneficiary,
and whether the fiduciary was convicted of any crime, filed
bankruptcy, and any judgments entered against the fiduciary. It
would require VA to perform random audits of fiduciaries who
receive a commission. Section 4(e) would also require the Under
Secretary of Benefits and the Under Secretary for Health to
promulgate regulations that would not diminish the ability of
fiduciaries providing care under chapter 17, title 38, United
States Code, to care for beneficiaries.
Section 4(f) would amend section 6107 of chapter 61 of
title 38, United States Code, to amend provision for repayment
of misused benefits. Specifically, section 4(f) would provide
that the Secretary's failure to act in accordance with section
5507 would constitute negligent failure under section 6107.
Section 4(g) would amend VA annual reporting requirements,
and would require the Secretary to submit a separate report on
fiduciaries not later than July 1 of each year to the Committee
on Veterans' Affairs of the Senate and the Committee on
Veterans' Affairs of the House of Representatives.
Section 4(h) would require VA to provide, within one year
of enactment, a report to the Committee on Veterans' Affairs of
the Senate and the Committee on Veterans' Affairs of the House
of Representatives on the implementation of the new policies
and a discussion on whether VA should offer fiduciaries
standardized financial software to comply with reporting
requirements.
Section 5--Limitation on awards and bonuses to employees of Department
of Veterans Affairs
Section 13 would require VA to limit the total amount paid
in performance awards or bonuses for each of fiscal years 2014
through 2018 to $345,000,000.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
TITLE 38, UNITED STATES CODE
* * * * * * *
PART I--GENERAL PROVISIONS
* * * * * * *
CHAPTER 1--GENERAL
Sec.
101. Definitions.
* * * * * * *
107A. Honoring as veterans certain persons who performed service in the
reserve components.
* * * * * * *
Sec. 107A. Honoring as veterans certain persons who performed service
in the reserve components
Any person who is entitled under chapter 1223 of title 10 to
retired pay for nonregular service or, but for age, would be
entitled under such chapter to retired pay for nonregular
service shall be honored as a veteran but shall not be entitled
to any benefit by reason of this section.
* * * * * * *
PART IV--GENERAL ADMINISTRATIVE PROVISIONS
* * * * * * *
CHAPTER 51--CLAIMS, EFFECTIVE DATES, AND PAYMENTS
SUBCHAPTER I--CLAIMS
* * * * * * *
Sec. 5104. Decisions and notices of decisions
(a) * * *
(b) In any case where the Secretary denies a benefit sought,
the notice required by subsection (a) shall also include (1) a
statement of the reasons for the decision, [and (2)] (2) a
summary of the evidence considered by the Secretary, and (3) a
form that may be used to file a notice of disagreement to the
decision.
* * * * * * *
CHAPTER 55--MINORS, INCOMPETENTS, AND OTHER WARDS
Sec.
5501. Commitment actions.
[5502. Payments to and supervision of fiduciaries.]
5502. Appointment of fiduciaries.
5502A. Supervision of fiduciaries.
* * * * * * *
[5509. Authority to require fiduciary to receive payments at regional
offices of the Department when failing to provide required
accounting.]
5509. Annual reports and accountings of fiduciaries.
* * * * * * *
* * * * * * *
[Sec. 5502. Payments to and supervision of fiduciaries
[(a)(1) Where it appears to the Secretary that the interest
of the beneficiary would be served thereby, payment of benefits
under any law administered by the Secretary may be made
directly to the beneficiary or to a relative or some other
fiduciary for the use and benefit of the beneficiary,
regardless of any legal disability on the part of the
beneficiary. Where, in the opinion of the Secretary, any
fiduciary receiving funds on behalf of a Department beneficiary
is acting in such a number of cases as to make it impracticable
to conserve properly the estates or to supervise the persons of
the beneficiaries, the Secretary may refuse to make future
payments in such cases as the Secretary may deem proper.
[(2) In a case in which the Secretary determines that a
commission is necessary in order to obtain the services of a
fiduciary in the best interests of a beneficiary, the Secretary
may authorize a fiduciary appointed by the Secretary to obtain
from the beneficiary's estate a reasonable commission for
fiduciary services rendered, but the commission for any year
may not exceed 4 percent of the monetary benefits under laws
administered by the Secretary paid on behalf of the beneficiary
to the fiduciary during such year. A commission may not be
authorized for a fiduciary who receives any other form of
remuneration or payment in connection with rendering fiduciary
services for benefits under this title on behalf of the
beneficiary.
[(b) Whenever it appears that any fiduciary, in the opinion
of the Secretary, is not properly executing or has not properly
executed the duties of the trust of such fiduciary or has
collected or paid, or is attempting to collect or pay, fees,
commissions, or allowances that are inequitable or in excess of
those allowed by law for the duties performed or expenses
incurred, or has failed to make such payments as may be
necessary for the benefit of the ward or the dependents of the
ward, then the Secretary may appear, by the Secretary's
authorized attorney, in the court which has appointed such
fiduciary, or in any court having original, concurrent, or
appellate jurisdiction over said cause, and make proper
presentation of such matters. The Secretary, in the Secretary's
discretion, may suspend payments to any such fiduciary who
shall neglect or refuse, after reasonable notice, to render an
account to the Secretary from time to time showing the
application of such payments for the benefit of such
incompetent or minor beneficiary, or who shall neglect or
refuse to administer the estate according to law. The Secretary
may require the fiduciary, as part of such account, to disclose
any additional financial information concerning the beneficiary
(except for information that is not available to the
fiduciary). The Secretary may appear or intervene by the
Secretary's duly authorized attorney in any court as an
interested party in any litigation instituted by the Secretary
or otherwise, directly affecting money paid to such fiduciary
under this section.
[(c) Authority is hereby granted for the payment of any court
or other expenses incident to any investigation or court
proceeding for the appointment of any fiduciary or other person
for the purpose of payment of benefits payable under laws
administered by the Secretary or the removal of such fiduciary
and appointment of another, and of expenses in connection with
the administration of such benefits by such fiduciaries, or in
connection with any other court proceeding hereby authorized,
when such payment is authorized by the Secretary.
[(d) All or any part of any benefits the payment of which is
suspended or withheld under this section may, in the discretion
of the Secretary, be paid temporarily to the person having
custody and control of the incompetent or minor beneficiary, to
be used solely for the benefit of such beneficiary, or, in the
case of an incompetent veteran, may be apportioned to the
dependent or dependents, if any, of such veteran. Any part not
so paid and any funds of a mentally incompetent or insane
veteran not paid to the chief officer of the institution in
which such veteran is a patient nor apportioned to the
veteran's dependent or dependents may be ordered held in the
Treasury to the credit of such beneficiary. All funds so held
shall be disbursed under the order and in the discretion of the
Secretary for the benefit of such beneficiary or the
beneficiary's dependents. Any balance remaining in such fund to
the credit of any beneficiary may be paid to the beneficiary if
the beneficiary recovers and is found competent, or if a minor,
attains majority, or otherwise to the beneficiary's fiduciary,
or, in the event of the beneficiary's death, to the
beneficiary's personal representative, except as otherwise
provided by law; however, payment will not be made to the
beneficiary's personal representative if, under the law of the
beneficiary's last legal residence, the beneficiary's estate
would escheat to the State. In the event of the death of a
mentally incompetent or insane veteran, all gratuitous benefits
under laws administered by the Secretary deposited before or
after August 7, 1959, in the personal funds of patients trust
fund on account of such veteran shall not be paid to the
personal representative of such veteran, but shall be paid to
the following persons living at the time of settlement, and in
the order named: The surviving spouse, the children (without
regard to age or marital status) in equal parts, and the
dependent parents of such veteran, in equal parts. If any
balance remains, such balance shall be deposited to the credit
of the applicable current appropriation; except that there may
be paid only so much of such balance as may be necessary to
reimburse a person (other than a political subdivision of the
United States) who bore the expenses of last sickness or burial
of the veteran for such expenses. No payment shall be made
under the two preceding sentences of this subsection unless
claim therefor is filed with the Secretary within five years
after the death of the veteran, except that, if any person so
entitled under said two sentences is under legal disability at
the time of death of the veteran, such five-year period of
limitation shall run from the termination or removal of the
legal disability.
[(e) Any funds in the hands of a fiduciary appointed by a
State court or the Secretary derived from benefits payable
under laws administered by the Secretary, which under the law
of the State wherein the beneficiary had last legal residence
would escheat to the State, shall escheat to the United States
and shall be returned by such fiduciary, or by the personal
representative of the deceased beneficiary, less legal expenses
of any administration necessary to determine that an escheat is
in order, to the Department, and shall be deposited to the
credit of the applicable revolving fund, trust fund, or
appropriation.]
Sec. 5502. Appointment of fiduciaries
(a) Appointment.--(1) Where it appears to the Secretary that
the interest of the beneficiary would be served thereby,
payment of benefits under any law administered by the Secretary
may be made directly to the beneficiary or to a relative or
some other fiduciary for the use and benefit of the
beneficiary, regardless of any legal disability on the part of
the beneficiary.
(2) When in the opinion of the Secretary, a temporary
fiduciary is needed in order to protect the benefits provided
to the beneficiary under any law administered by the Secretary
while a determination of incompetency is being made or appealed
or a fiduciary is appealing a determination of misuse, the
Secretary may appoint one or more temporary fiduciaries for a
period not to exceed 120 days. If a final decision has not been
made within 120 days, the Secretary may not continue the
appointment of the fiduciary without obtaining a court order
for appointment of a guardian, conservator, or other fiduciary
under the authority provided in section 5502(b) of this title.
(b) Appeals.--(1) If the Secretary determines a beneficiary
to be mentally incompetent for purposes of appointing a
fiduciary under this chapter, the Secretary shall provide such
beneficiary with a written statement detailing the reasons for
such determination.
(2) A beneficiary whom the Secretary has determined to be
mentally incompetent for purposes of appointing a fiduciary
under this chapter may appeal such determination.
(c) Modification.--(1) A beneficiary for whom the Secretary
appoints a fiduciary under this chapter may, at any time,
request the Secretary to--
(A) remove the fiduciary so appointed; and
(B) have a new fiduciary appointed.
(2) The Secretary shall comply with a request under paragraph
(1) if the Secretary determines that the request is made in
good faith and--
(A) the fiduciary requested to be removed receives a
fee from the beneficiary and a suitable volunteer
fiduciary is available to assist the beneficiary; or
(B) the beneficiary provides credible information
that the fiduciary requested to be removed is--
(i) not acting in the interest of the
beneficiary;or
(ii) unable to effectively serve the
beneficiary because of an irreconcilable
personality conflict or disagreement.
(3) The Secretary shall ensure that any removal or new
appointment of a fiduciary under paragraph (1) does not delay
or interrupt the beneficiary's receipt of benefits administered
by the Secretary.
(d) Independence.--A fiduciary appointed by the Secretary
shall operate independently of the Department to determine the
actions that are in the interest of the beneficiary.
(e) Predesignation.--A veteran may predesignate a fiduciary
by--
(1) submitting written notice to the Secretary of the
predesignated fiduciary; or
(2) submitting a form provided by the Secretary for
such purpose.
(f) Appointment of Non-Predesignated Fiduciary.--If a
beneficiary designates an individual to serve as a fiduciary
under subsection (e) and the Secretary appoints an individual
not so designated as the fiduciary for such beneficiary, the
Secretary shall notify such beneficiary of--
(1) the reason why such designated individual was not
appointed; and
(2) the ability of the beneficiary to modify the
appointed fiduciary under subsection (c).
(g) Priority of Appointment.--In appointing a fiduciary under
this chapter, if a beneficiary does not designate a fiduciary
pursuant to subsection (e), to the extent possible the
Secretary shall appoint a person who is--
(1) a relative of the beneficiary;
(2) appointed as guardian of the beneficiary by a
court of competent jurisdiction; or
(3) authorized to act on behalf of the beneficiary
under a durable power of attorney.
Sec. 5502A. Supervision of fiduciaries
(a) Commission.--(1)(A) In a case in which the Secretary
determines that a commission is necessary in order to obtain
the services of a fiduciary in the best interests of a
beneficiary, the Secretary may authorize a fiduciary appointed
by the Secretary to obtain from the monthly benefits provided
to the beneficiary a reasonable commission for fiduciary
services rendered, but the commission for any month may not
exceed the lesser of the following amounts:
(i) The amount that equals three percent of the
monthly monetary benefits under laws administered by
the Secretary paid on behalf of the beneficiary to the
fiduciary.
(ii) $35.
(B) A commission paid under this paragraph may not be derived
from any award to a beneficiary regarding back pay or
retroactive benefits payments.
(C) A commission may not be authorized for a fiduciary who
receives any other form of remuneration or payment in
connection with rendering fiduciary services for benefits under
this title on behalf of the beneficiary.
(D) In accordance with section 6106 of this title, a
commission may not be paid to a fiduciary if the Secretary
determines that the fiduciary misused any benefit payments of a
beneficiary.
(E) If the Secretary determines that the fiduciary has
misused any benefit or payments of a beneficiary, the Secretary
may revoke the fiduciary status of the fiduciary.
(2) Where, in the opinion of the Secretary, any fiduciary
receiving funds on behalf of a Department beneficiary is acting
in such a number of cases as to make it impracticable to
conserve properly the estates or to supervise the persons of
the beneficiaries, the Secretary may refuse to make future
payments in such cases as the Secretary may deem proper.
(b) Court.--Whenever it appears that any fiduciary, in the
opinion of the Secretary, is not properly executing or has not
properly executed the duties of the trust of such fiduciary or
has collected or paid, or is attempting to collect or pay,
fees, commissions, or allowances that are inequitable or in
excess of those allowed by law for the duties performed or
expenses incurred, or has failed to make such payments as may
be necessary for the benefit of the ward or the dependents of
the ward, then the Secretary may appear, by the Secretary's
authorized attorney, in the court which has appointed such
fiduciary, or in any court having original, concurrent, or
appellate jurisdiction over said cause, and make proper
presentation of such matters. The Secretary, in the Secretary's
discretion, may suspend payments to any such fiduciary who
shall neglect or refuse, after reasonable notice, to render an
account to the Secretary from time to time showing the
application of such payments for the benefit of such
incompetent or minor beneficiary, or who shall neglect or
refuse to administer the estate according to law. The Secretary
may require the fiduciary, as part of such account, to disclose
any additional financial information concerning the beneficiary
(except for information that is not available to the
fiduciary). The Secretary may appear or intervene by the
Secretary's duly authorized attorney in any court as an
interested party in any litigation instituted by the Secretary
or otherwise, directly affecting money paid to such fiduciary
under this section.
(c) Payment of Certain Expenses.--Authority is hereby granted
for the payment of any court or other expenses incident to any
investigation or court proceeding for the appointment of any
fiduciary or other person for the purpose of payment of
benefits payable under laws administered by the Secretary or
the removal of such fiduciary and appointment of another, and
of expenses in connection with the administration of such
benefits by such fiduciaries, or in connection with any other
court proceeding hereby authorized, when such payment is
authorized by the Secretary.
(d) Temporary Payment of Benefits.--All or any part of any
benefits the payment of which is suspended or withheld under
this section may, in the discretion of the Secretary, be paid
temporarily to the person having custody and control of the
incompetent or minor beneficiary, to be used solely for the
benefit of such beneficiary, or, in the case of an incompetent
veteran, may be apportioned to the dependent or dependents, if
any, of such veteran. Any part not so paid and any funds of a
mentally incompetent or insane veteran not paid to the chief
officer of the institution in which such veteran is a patient
nor apportioned to the veteran's dependent or dependents may be
ordered held in the Treasury to the credit of such beneficiary.
All funds so held shall be disbursed under the order and in the
discretion of the Secretary for the benefit of such beneficiary
or the beneficiary's dependents. Any balance remaining in such
fund to the credit of any beneficiary may be paid to the
beneficiary if the beneficiary recovers and is found competent,
or if a minor, attains majority, or otherwise to the
beneficiary's fiduciary, or, in the event of the beneficiary's
death, to the beneficiary's personal representative, except as
otherwise provided by law; however, payment will not be made to
the beneficiary's personal representative if, under the law of
the beneficiary's last legal residence, the beneficiary's
estate would escheat to the State. In the event of the death of
a mentally incompetent or insane veteran, all gratuitous
benefits under laws administered by the Secretary deposited
before or after August 7, 1959, in the personal funds of
patients trust fund on account of such veteran shall not be
paid to the personal representative of such veteran, but shall
be paid to the following persons living at the time of
settlement, and in the order named: The surviving spouse, the
children (without regard to age or marital status) in equal
parts, and the dependent parents of such veteran, in equal
parts. If any balance remains, such balance shall be deposited
to the credit of the applicable current appropriation; except
that there may be paid only so much of such balance as may be
necessary to reimburse a person (other than a political
subdivision of the United States) who bore the expenses of last
sickness or burial of the veteran for such expenses. No payment
shall be made under the two preceding sentences of this
subsection unless claim therefor is filed with the Secretary
within five years after the death of the veteran, except that,
if any person so entitled under said two sentences is under
legal disability at the time of death of the veteran, such
five-year period of limitation shall run from the termination
or removal of the legal disability.
(e) Escheatment.--Any funds in the hands of a fiduciary
appointed by a State court or the Secretary derived from
benefits payable under laws administered by the Secretary,
which under the law of the State wherein the beneficiary had
last legal residence would escheat to the State, shall escheat
to the United States and shall be returned by such fiduciary,
or by the personal representative of the deceased beneficiary,
less legal expenses of any administration necessary to
determine that an escheat is in order, to the Department, and
shall be deposited to the credit of the applicable revolving
fund, trust fund, or appropriation.
(f) Assistance.--The Secretary shall provide to a fiduciary
appointed under section 5502 of this title materials and tools
to assist the fiduciary in carrying out the responsibilities of
the fiduciary under this chapter, including--
(1) handbooks, brochures, or other written material
that explain the responsibilities of a fiduciary under
this chapter;
(2) tools located on an Internet website, including
forms to submit to the Secretary required information;
and
(3) assistance provided by telephone.
* * * * * * *
Sec. 5506. Definition of ``Fiduciary''
[For purposes] (a) For purposes of this chapter and chapter
61 of this title, the term ``fiduciary'' means--
(1) * * *
* * * * * * *
(b)(1) For purposes of subsection (a), the term ``person''
includes any--
(A) State or local government agency whose mission is
to carry out income maintenance, social service, or
health care-related activities;
(B) any State or local government agency with
fiduciary responsibilities; or
(C) any nonprofit social service agency that the
Secretary determines--
(i) regularly provides services as a
fiduciary concurrently to five or more
individuals; and
(ii) is not a creditor of any such
individual.
(2) The Secretary shall maintain a list of State or local
agencies and nonprofit social service agencies under paragraph
(1) that are qualified to act as a fiduciary under this
chapter. In maintaining such list, the Secretary may consult
the lists maintained under section 807(h) of the Social
Security Act (42 U.S.C. 1007(h)).
[Sec. 5507. Inquiry, investigations, and qualification of fiduciaries
[(a) Any certification of a person for payment of benefits of
a beneficiary to that person as such beneficiary's fiduciary
under section 5502 of this title shall be made on the basis
of--
[(1) an inquiry or investigation by the Secretary of
the fitness of that person to serve as fiduciary for
that beneficiary, such inquiry or investigation--
[(A) to be conducted in advance of such
certification;
[(B) to the extent practicable, to include a
face-to-face interview with such person; and
[(C) to the extent practicable, to include a
copy of a credit report for such person issued
within one year of the date of the proposed
appointment;
[(2) adequate evidence that certification of that
person as fiduciary for that beneficiary is in the
interest of such beneficiary (as determined by the
Secretary under regulations); and
[(3) the furnishing of any bond that may be required
by the Secretary.
[(b) As part of any inquiry or investigation of any person
under subsection (a), the Secretary shall request information
concerning whether that person has been convicted of any
offense under Federal or State law which resulted in
imprisonment for more than one year. If that person has been
convicted of such an offense, the Secretary may certify the
person as a fiduciary only if the Secretary finds that the
person is an appropriate person to act as fiduciary for the
beneficiary concerned under the circumstances.
[(c)(1) In the case of a proposed fiduciary described in
paragraph (2), the Secretary, in conducting an inquiry or
investigation under subsection (a)(1), may carry out such
inquiry or investigation on an expedited basis that may include
waiver of any specific requirement relating to such inquiry or
investigation, including the otherwise applicable provisions of
subparagraphs (A), (B), and (C) of such subsection. Any such
inquiry or investigation carried out on such an expedited basis
shall be carried out under regulations prescribed for purposes
of this section.
[(2) Paragraph (1) applies with respect to a proposed
fiduciary who is--
[(A) the parent (natural, adopted, or stepparent) of
a beneficiary who is a minor;
[(B) the spouse or parent of an incompetent
beneficiary;
[(C) a person who has been appointed a fiduciary of
the beneficiary by a court of competent jurisdiction;
or
[(D) being appointed to manage an estate where the
annual amount of veterans benefits to be managed by the
proposed fiduciary does not exceed $3,600, as adjusted
pursuant to section 5312 of this title.
[(d) Temporary Fiduciaries.--When in the opinion of the
Secretary, a temporary fiduciary is needed in order to protect
the assets of the beneficiary while a determination of
incompetency is being made or appealed or a fiduciary is
appealing a determination of misuse, the Secretary may appoint
one or more temporary fiduciaries for a period not to exceed
120 days. If a final decision has not been made within 120
days, the Secretary may not continue the appointment of the
fiduciary without obtaining a court order for appointment of a
guardian, conservator, or other fiduciary under the authority
provided in section 5502(b) of this title.]
Sec. 5507. Inquiry, investigations, and qualification of fiduciaries
(a) Investigation.--Any certification of a person for payment
of benefits of a beneficiary to that person as such
beneficiary's fiduciary under section 5502 of this title shall
be made on the basis of--
(1) an inquiry or investigation by the Secretary of
the fitness of that person to serve as fiduciary for
that beneficiary to be conducted in advance of such
certification and in accordance with subsection (b);
(2) adequate evidence that certification of that
person as fiduciary for that beneficiary is in the
interest of such beneficiary (as determined by the
Secretary under regulations);
(3) adequate evidence that the person to serve as
fiduciary protects the private information of a
beneficiary in accordance with subsection (d)(1); and
(4) the furnishing of any bond that may be required
by the Secretary in accordance with subsection (f).
(b) Elements of Investigation.--(1) In conducting an inquiry
or investigation of a proposed fiduciary under subsection
(a)(1), the Secretary shall conduct--
(A) a face-to-face interview with the proposed
fiduciary by not later than 30 days after the date on
which such inquiry or investigation begins; and
(B) a background check of the proposed fiduciary to--
(i) in accordance with paragraph (2),
determine whether the proposed fiduciary has
been convicted of a crime; and
(ii) determine whether the proposed fiduciary
will serve the best interest of the
beneficiary, including by conducting a credit
check of the proposed fiduciary and checking
the records under paragraph (5).
(2) The Secretary shall request information concerning
whether that person has been convicted of any offense under
Federal or State law. If that person has been convicted of such
an offense, the Secretary may certify the person as a fiduciary
only if the Secretary finds that the person is an appropriate
person to act as fiduciary for the beneficiary concerned under
the circumstances.
(3) The Secretary shall conduct the background check
described in paragraph (1)(B)--
(A) each time a person is proposed to be a fiduciary,
regardless of whether the person is serving or has
served as a fiduciary; and
(B) at no expense to the beneficiary.
(4) Each proposed fiduciary shall disclose to the Secretary
the number of beneficiaries that the fiduciary acts on behalf
of.
(5) The Secretary shall maintain records of any person who
has--
(A) previously served as a fiduciary; and
(B) had such fiduciary status revoked by the
Secretary.
(6)(A) If a fiduciary appointed by the Secretary is convicted
of a crime described in subparagraph (B), the Secretary shall
notify the beneficiary of such conviction by not later than 14
days after the date on which the Secretary learns of such
conviction.
(B) A crime described in this subparagraph is a crime--
(i) for which the fiduciary is convicted while
serving as a fiduciary for any person;
(ii) that is not included in a report submitted by
the fiduciary under section 5509(a) of this title; and
(iii) that the Secretary determines could affect the
ability of the fiduciary to act on behalf of the
beneficiary.
(c) Investigation of Certain Persons.--(1) In the case of a
proposed fiduciary described in paragraph (2), the Secretary,
in conducting an inquiry or investigation under subsection
(a)(1), may carry out such inquiry or investigation on an
expedited basis that may include giving priority to conducting
such inquiry or investigation. Any such inquiry or
investigation carried out on such an expedited basis shall be
carried out under regulations prescribed for purposes of this
section.
(2) Paragraph (1) applies with respect to a proposed
fiduciary who is--
(A) the parent (natural, adopted, or stepparent) of a
beneficiary who is a minor;
(B) the spouse or parent of an incompetent
beneficiary;
(C) a person who has been appointed a fiduciary of
the beneficiary by a court of competent jurisdiction;
(D) being appointed to manage an estate where the
annual amount of veterans benefits to be managed by the
proposed fiduciary does not exceed $3,600, as adjusted
pursuant to section 5312 of this title; or
(E) a person who is authorized to act on behalf of
the beneficiary under a durable power of attorney.
(d) Protection of Private Information.--(1) A fiduciary shall
take all reasonable precautions to--
(A) protect the private information of a beneficiary,
including personally identifiable information; and
(B) securely conducts financial transactions.
(2) A fiduciary shall notify the Secretary of any action of
the fiduciary that compromises or potentially compromises the
private information of a beneficiary.
(e) Potential Misuse of Funds.--(1) If the Secretary has
reason to believe that a fiduciary may be misusing all or part
of the benefit of a beneficiary, the Secretary shall--
(A) conduct a thorough investigation to determine the
veracity of such belief; and
(B) if such veracity is established, transmit to the
officials described in paragraph (2) a report of such
investigation.
(2) The officials described in this paragraph are the
following:
(A) The Attorney General.
(B) Each head of a Federal department or agency that
pays to a fiduciary or other person benefits under any
law administered by such department of agency for the
use and benefit of a minor, incompetent, or other
beneficiary.
(f) Bond.--In determining whether a proposed fiduciary is
required to furnish a bond under subsection (a)(4), the
Secretary shall consider--
(1) the existence of any familial or other personal
relationship between the proposed fiduciary and the
beneficiary; and
(2) the care the proposed fiduciary has taken to
protect the interests of the beneficiary.
(g) List of Fiduciaries.--Each regional office of the
Veterans Benefits Administration shall maintain a list of the
following:
(1) The name and contact information of each
fiduciary, including address, telephone number, and
email address.
(2) With respect to each fiduciary described in
paragraph (1)--
(A) the date of the most recent background
check and credit check performed by the
Secretary under this section;
(B) the date that any bond was paid under
this section;
(C) the name, address, and telephone number
of each beneficiary the fiduciary acts on
behalf of; and
(D) the amount that the fiduciary controls
with respect to each beneficiary described in
subparagraph (C).
* * * * * * *
Sec. 5509. [Authority to require fiduciary to receive payments at
regional offices of the Department when failing to
provide required accounting] Annual reports and
accountings of fiduciaries
(a) Required Reports and Accountings.--The Secretary [may
require a fiduciary to file a] shall require a fiduciary to
file an annual report or accounting pursuant to regulations
prescribed by the Secretary. The Secretary shall transmit such
annual report or accounting to the beneficiary and any legal
guardian of such beneficiary.
* * * * * * *
(c) Matters Included.--Except as provided by subsection (f),
an annual report or accounting under subsection (a) shall
include the following:
(1) For each beneficiary that a fiduciary acts on
behalf of--
(A) the amount of the benefits of the
beneficiary provided under any law administered
by the Secretary accrued during the year, the
amount spent, and the amount remaining; and
(B) if the fiduciary serves the beneficiary
with respect to benefits not administered by
the Secretary, an accounting of all sources of
benefits or other income the fiduciary oversees
for the beneficiary.
(2) A list of events that occurred during the year
covered by the report that could affect the ability of
the fiduciary to act on behalf of the beneficiary,
including--
(A) the fiduciary being convicted of any
crime;
(B) the fiduciary declaring bankruptcy; and
(C) any judgments entered against the
fiduciary.
(d) Random Audits.--The Secretary shall annually conduct
random audits of fiduciaries who receive a commission pursuant
to subsection 5502A(a)(1) of this title.
(e) Status of Fiduciary.--If a fiduciary includes in the
annual report events described in subsection (c)(2), the
Secretary may take appropriate action to adjust the status of
the fiduciary as the Secretary determines appropriate,
including by revoking the fiduciary status of the fiduciary.
(f) Caregivers and Certain Other Fiduciaries.--(1)(A) In
carrying out this section, the Secretary shall ensure that a
caregiver fiduciary is required only to file an annual report
or accounting under subsection (a) with respect to the amount
of the benefits of the beneficiary provided under any law
administered by the Secretary--
(i) spent on--
(I) food and housing for the beneficiary; and
(II) clothing, health-related expenses,
recreation, and other personal items for the
beneficiary; and
(ii) saved for the beneficiary.
(B) The Secretary shall coordinate with the Under Secretary
for Benefits and the Under Secretary for Health to--
(i) minimize the frequency with which employees of
the Department visit the home of a caregiver fiduciary
and beneficiary; and
(ii) limit the extent of supervision by such Under
Secretaries with respect to such a fiduciary and
beneficiary.
(C) In this paragraph, the term ``caregiver fiduciary'' means
a fiduciary who--
(i) in addition to acting as a fiduciary for a
beneficiary, is approved by the Secretary to be a
provider of personal care services for the beneficiary
under paragraph (3)(A)(i) of section 1720G(a) of this
title;
(ii) in carrying out such care services to such
beneficiary, has undergone not less than four home
visits under paragraph (9)(A) of such section; and
(iii) has not been required by the Secretary to take
corrective action pursuant to paragraph (9)(C) of such
section.
(2) In carrying out this section, the Secretary may adjust
the matters required under an annual report or accounting under
subsection (a) with respect to a fiduciary whom the Secretary
determines to have effectively protected the interests of the
beneficiary over a sustained period.
Sec. 5510. Annual report
[The Secretary shall include in the Annual Benefits Report of
the Veterans Benefits Administration or the Secretary's Annual
Performance and Accountability Report] Not later than July 1 of
each year, the Secretary shall submit to the Committees on
Veterans' Affairs of the House of Representatives and the
Senate a separate report containing information concerning
fiduciaries who have been appointed to receive payments for
beneficiaries of the Department. As part of such information,
the Secretary shall separately set forth the following:
(1) * * *
* * * * * * *
CHAPTER 59--AGENTS AND ATTORNEYS
Sec.
5901. Prohibition against acting as claims agent or attorney.
* * * * * * *
5906. Provision of access to case-tracking information.
* * * * * * *
Sec. 5906. Provision of access to case-tracking information
(a) In General.--(1) In accordance with subsection (b), the
Secretary shall provide a covered employee with access to the
case-tracking system to provide a veteran with information
regarding the status of a claim submitted by such veteran if
such employee is acting under written permission or a power of
attorney executed by such veteran.
(2) In providing a covered employee with access to the case-
tracking system under paragraph (1), the Secretary shall
ensure--
(A) that such access--
(i) is provided in a manner that does not
allow such employee to modify the data
contained in such system; and
(ii) does not include access to medical
records; and
(B) that each time a covered employee accesses such
system, the employee must certify that such access is
for official purposes only.
(b) Privacy Certification Course.--The Secretary may not
provide a covered employee with access to the case-tracking
system under subsection (a)(1) unless the covered employee has
successfully completed a certification course on privacy issues
provided by the Secretary.
(c) Treatment of Disclosure.--The access to information by a
covered employee pursuant to subsection (a)(1) shall be deemed
to be--
(1) a covered disclosure under section 552a(b) of
title 5; and
(2) a permitted disclosure under regulations
promulgated under section 264(c) of the Health
Insurance Portability and Accountability Act of 1996
(42 U.S.C. 1320d-2 note).
(d) Definitions.--In this section:
(1) The term ``case-tracking system'' means the
system of the Department of Veterans Affairs that
provides information regarding the status of a claim
submitted by a veteran.
(2) The term ``covered employee'' means an employee
of a State or local governmental agency (including a
veterans service officer) who, in the course of
carrying out the responsibilities of such employment,
assists veterans with claims for any benefit under the
laws administered by the Secretary.
* * * * * * *
CHAPTER 61--PENAL AND FORFEITURE PROVISIONS
* * * * * * *
Sec. 6107. Reissuance of benefits
(a) Negligent Failure by Secretary.--(1) * * *
(2) There shall be considered to have been a negligent
failure by the Secretary to investigate and monitor a fiduciary
in the following cases:
(A) * * *
* * * * * * *
(C) In any other case in which actual negligence is
shown, including by the Secretary not acting in
accordance with section 5507 of this title.
* * * * * * *