113 HR 894 IH: To amend title 38, United States Code, to improve the supervision of fiduciaries of veterans under the laws administered by the Secretary of Veterans Affairs.
U.S. House of Representatives
2013-02-28
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Improvement of fiduciaries
for veterans
(a)Appointment and
supervision
(1)Section 5502 of
title 38, United States Code, is amended to read as follows:
5502.Appointment 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.
(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)(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)(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) unless the Secretary determines that the request is
not made in good faith.
(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)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)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 fiduciaryIf 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)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)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)
(1)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:
5502A.Supervision
of fiduciaries
(a)(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)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 expensesAuthority 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 benefitsAll 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.
.
(2)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)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)Section 5507 of title 38, United States
Code, is amended to read as follows:
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 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)In requiring the furnishing of a bond under
subsection (a)(4), the Secretary shall—
(1)ensure that any
such bond is not paid using any funds of the beneficiary; and
(2)consider—
(A)the care a
proposed fiduciary has taken to protect the interests of the beneficiary;
and
(B)the capacity of
the proposed fiduciary to meet the financial requirements of the bond without
sustaining hardship.
(g)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)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
, subject to regulations prescribed pursuant to subsection (f), 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)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 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)The Secretary shall annually conduct random audits of
fiduciaries who receive a commission pursuant to subsection 5502A(a)(1) of this
title.
(e)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)(1)In prescribing regulations to carry out
this section, the Secretary, in consultation with the Under Secretary for
Benefits and the Under Secretary for Health, shall ensure that the care
provided by a fiduciary described in paragraph (2) to a beneficiary is not
diminished or otherwise worsened by the fiduciary complying with this
section.
(2)A
fiduciary described in this paragraph is a fiduciary who, in addition to acting
as a fiduciary for a beneficiary, provides care to the beneficiary pursuant to
this title (including such care provided under section 1720G of this
title).
;
and
(C)by striking the
section heading and inserting the following: Annual reports and accountings of
fiduciaries
.
(2)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 benefitsSection 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)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)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.