[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5948 Referred in Senate (RFS)]

112th CONGRESS
  2d Session
                                H. R. 5948


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 20, 2012

Received; read twice and referred to the Committee on Veterans' Affairs

_______________________________________________________________________

                                 AN ACT


 
 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, to establish a Place of Remembrance at Arlington 
               National Cemetery, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Veterans Fiduciary 
Reform and Honoring Noble Service Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Improvement of fiduciaries for veterans.
Sec. 3. Establishment of Place of Remembrance at Arlington National 
                            Cemetery.
Sec. 4. Furnishing caskets and urns for deceased veterans with no known 
                            next of kin.
Sec. 5. Improved communication between Department of Veterans Affairs 
                            and medical examiners and funeral 
                            directors.
Sec. 6. Report on compliance of Department of Veterans Affairs with 
                            industry standards for caskets and urns.
Sec. 7. Exclusion of persons convicted of committing certain sex 
                            offenses from interment or memorialization 
                            in national cemeteries, Arlington National 
                            Cemetery, and certain State veterans' 
                            cemeteries and from receiving certain 
                            funeral honors.
Sec. 8. Veterans freedom of conscience protection.
Sec. 9. Provision of access to case-tracking information.
Sec. 10. Notification by the Secretary of Veterans Affairs of 
                            individuals whose sensitive personal 
                            information is involved in a data breach.
Sec. 11. Limitation on bonuses for Department of Veterans Affairs 
                            employees who violate Federal civil laws or 
                            regulations.
Sec. 12. Limitation on awards and bonuses to employees of the 
                            Department of Veterans Affairs.

SEC. 2. 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) 
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) 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.''.
            (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 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) 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 ``, 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) Matters Included.--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) 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) Regulations.--(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) 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' 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. 3. ESTABLISHMENT OF PLACE OF REMEMBRANCE AT ARLINGTON NATIONAL 
              CEMETERY.

    (a) Establishment Authorized.--
            (1) In general.--Chapter 446 of title 10, United States 
        Code, is amended by adding at the end the following new 
        section:
``Sec. 4727. Place of Remembrance at Arlington National Cemetery
    ``(a) Establishment Authorized.--Under regulations prescribed by 
the Secretary of Defense, the Secretary of the Army may establish at an 
appropriate location in Arlington National Cemetery a Place of 
Remembrance for the interment of cremated specimens or other portion of 
the remains of a deceased member of the armed forces described in 
subsection (b) when one of the conditions specified in subsection (c) 
applies with respect to the remains of the member.
    ``(b) Covered Members.--This section applies only with respect to 
members of the armed forces who die while on active duty--
            ``(1) in a war or contingency operation; or
            ``(2) in the line of duty, consistent with regulations 
        prescribed by the Secretary of the Army with respect to burial 
        at Arlington National Cemetery.
    ``(c) Conditions on Interment of Remains.--The conditions under 
which cremated specimens or other portion of the remains of a deceased 
member of the armed forces described in subsection (b) (including 
cremated specimens or other portion of remains believed by the 
Secretary concerned to be from the remains of the deceased member) are 
authorized to be interred in the Place of Remembrance are any of the 
following:
            ``(1) The remains are unidentified.
            ``(2) The person designated under section 1482(c) of this 
        title to direct disposition of the remains of the member agrees 
        to interment of the remains in the Place of Remembrance.
            ``(3) The person designated under section 1482(c) of this 
        title to direct disposition of the remains of the member has 
        indicated to the Secretary concerned that no further 
        notification is required if a specimen or portion of the 
        remains of the member is discovered.
            ``(4) When, especially in historical cases, the Secretary 
        concerned determines that there is no one authorized to direct 
        the disposition of the remains of the member and the Secretary 
        concerned recommends interment of the remains in the Place of 
        Remembrance.''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of such chapter is amended by adding at the end the 
        following new item:

``4727. Place of Remembrance at Arlington National Cemetery.''.
    (b) Retroactive Application.--Section 4727 of title 10, United 
States Code, as added by subsection (a), applies with respect to any 
war or contingency operation in which members of the Armed Forces 
participated and covers members of the Armed Forces who died in the 
line of duty before the date of the enactment of this Act, consistent 
with regulations prescribed by the Secretary of the Army with respect 
to burial at Arlington National Cemetery.

SEC. 4. FURNISHING CASKETS AND URNS FOR DECEASED VETERANS WITH NO KNOWN 
              NEXT OF KIN.

    (a) In General.--Section 2306 of title 38, United States Code, is 
amended--
            (1) by redesignating subsections (f) and (g) as subsections 
        (g) and (h), respectively;
            (2) by inserting after subsection (e) the following new 
        subsection (f):
    ``(f) The Secretary shall furnish a casket or urn, of such quality 
as the Secretary considers appropriate for a dignified burial, for 
burial in a national cemetery of a deceased veteran described in 
section 2414(b) of this title.''; and
            (3) in subsection (h), as redesignated by paragraph (1), by 
        adding at the end the following new paragraph:
    ``(4) A casket or urn may not be furnished under subsection (f) for 
burial of a person described in section 2411(b) of this title.''.
    (b) Effective Date.--Subsections (f) and (h)(4) of section 2306 of 
title 38, United States Code, as added by subsection (a), shall take 
effect on the date of the enactment of this Act and shall apply with 
respect to deaths occurring on or after such date.

SEC. 5. IMPROVED COMMUNICATION BETWEEN DEPARTMENT OF VETERANS AFFAIRS 
              AND MEDICAL EXAMINERS AND FUNERAL DIRECTORS.

    (a) In General.--Chapter 24 of title 38, United States Code, is 
amended by adding at the end the following new section:
``Sec. 2414. Communication between Department of Veterans Affairs and 
              medical examiners and funeral directors
    ``(a) Required Information.--With respect to each deceased veteran 
described in subsection (b) who is transported to a national cemetery 
for burial, the Secretary shall ensure that the local medical examiner, 
funeral director, county service group, or other entity responsible for 
the body of the deceased veteran before such transportation submits to 
the Secretary the following information:
            ``(1) Whether the deceased veteran was cremated.
            ``(2) The steps taken to ensure that the deceased veteran 
        has no next of kin.
    ``(b) Deceased Veteran Described.--A deceased veteran described in 
this subsection is a deceased veteran whom the Secretary determines--
            ``(1) that there is no next of kin or other person claiming 
        the body of the deceased veteran; and
            ``(2) does not have sufficient resources to cover burial 
        and funeral expenses.
    ``(c) Determination of Sufficient Resources.--If the Secretary is 
unable to make a reasonable determination of the amount of the 
resources of a deceased veteran under subsection (b)(2), the Secretary 
shall deem such resources to be an amount that is not sufficient to 
cover burial and funeral expenses.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
2413 the following new item:

``2414. Communication between Department of Veterans Affairs and 
                            medical examiners and funeral directors.''.
    (c) Effective Date.--Section 2414 of title 38, United States Code, 
as added by subsection (a), shall take effect on the date of the 
enactment of this Act and shall apply with respect to deaths occurring 
on or after the date that is 180 days after the date of the enactment 
of this Act.

SEC. 6. REPORT ON COMPLIANCE OF DEPARTMENT OF VETERANS AFFAIRS WITH 
              INDUSTRY STANDARDS FOR CASKETS AND URNS.

    (a) In General.--Not later than 180 days 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 report on the 
compliance of the Department of Veterans Affairs with industry 
standards for caskets and urns.
    (b) Elements.--The report required by subsection (a) shall include 
the following:
            (1) A description of industry standards for caskets and 
        urns.
            (2) An assessment of compliance with such standards at 
        National Cemeteries administered by the Department with respect 
        to caskets and urns used for the interment of those eligible 
        for burial at such cemeteries.

SEC. 7. EXCLUSION OF PERSONS CONVICTED OF COMMITTING CERTAIN SEX 
              OFFENSES FROM INTERMENT OR MEMORIALIZATION IN NATIONAL 
              CEMETERIES, ARLINGTON NATIONAL CEMETERY, AND CERTAIN 
              STATE VETERANS' CEMETERIES AND FROM RECEIVING CERTAIN 
              FUNERAL HONORS.

    (a) Prohibition Against.--Section 2411(b) of title 38, United 
States Code, is amended by adding at the end the following new 
paragraph:
            ``(4) A person--
                    ``(A) who has been convicted of a Federal or State 
                crime causing the person to be a tier III sex offender 
                for purposes of the Sex Offender Registration and 
                Notification Act (42 U.S.C. 16901 et seq.);
                    ``(B) who, for such crime, is sentenced to a 
                minimum of life imprisonment; and
                    ``(C) whose conviction is final (other than a 
                person whose sentence was commuted by the President or 
                Governor of a State, as the case may be).''.
    (b) Conforming Amendments.--Section 2411(a)(2) of such title is 
amended--
            (1) by striking ``or (b)(2)'' each place it appears and 
        inserting ``, (b)(2), or (b)(4)''; and
            (2) by striking ``capital'' each place it appears.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to interments and memorializations that occur on or 
after the date of the enactment of this Act.

SEC. 8. VETERANS FREEDOM OF CONSCIENCE PROTECTION.

    Section 2404 of title 38, United States Code, is amended by adding 
at the end the following new subsection:
    ``(h)(1) With respect to the interment or funeral, memorial 
service, or ceremony of a deceased individual at a national cemetery, 
the Secretary shall ensure that--
            ``(A) the expressed wishes of the next of kin or other 
        agent of the deceased individual are respected and given 
        appropriate deference when evaluating whether the proposed 
        interment or funeral, memorial service, or ceremony affects the 
        safety and security of the national cemetery and visitors to 
        the cemetery;
            ``(B) to the extent possible, all appropriate public areas 
        of the cemetery, including committal shelters, chapels, and 
        benches, may be used by the family of the deceased individual 
        for contemplation, prayer, mourning, or reflection; and
            ``(C) during such interment or funeral, memorial service, 
        or ceremony, the family of the deceased individual may display 
        any religious or other symbols chosen by the family.
    ``(2) Subject to regulations prescribed by the Secretary under 
paragraph (5), including such regulations ensuring the security of a 
national cemetery, the Secretary shall provide to any military or 
volunteer veterans honor guard, including such guards belonging to a 
veterans service organization or other non-governmental group that 
provides services to veterans, access to public areas of a national 
cemetery if such access is requested by the next of kin or other agent 
of a deceased individual whose interment or funeral, memorial service, 
or ceremony is being held in such cemetery.
    ``(3) With respect to the interment or funeral, memorial service, 
or ceremony of a deceased individual at a national cemetery, the 
Secretary shall notify the next of kin or other agent of the deceased 
individual of funeral honors available to the deceased veteran, 
including such honors provided by any military or volunteer veterans 
honor guard described in paragraph (2).
    ``(4) Any person aggrieved by a violation of this subsection or any 
regulation prescribed pursuant to this subsection may in a civil action 
in an appropriate Federal court obtain any appropriate relief against 
the Federal Government with respect to the violation. Standing to 
assert a claim or defense under this subsection shall be governed by 
the general rules of standing under Article III of the Constitution.
    ``(5) The Secretary shall prescribe regulations to carry out this 
subsection.''.

SEC. 9. 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, regardless of whether such 
employee is acting under 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--
                    ``(A) an employee of a Member of Congress who 
                assists the constituents of the Member with issues 
                regarding departments or agencies of the Federal 
                Government; or
                    ``(B) 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. 10. NOTIFICATION BY THE SECRETARY OF VETERANS AFFAIRS OF 
              INDIVIDUALS WHOSE SENSITIVE PERSONAL INFORMATION IS 
              INVOLVED IN A DATA BREACH.

    (a) In General.--Subchapter III of chapter 57 of title 38, United 
States Code is amended by inserting after section 5724 the following 
new section:
``Sec. 5724A. Data breach notification
    ``(a) Notification Requirement.--Except as provided in subsection 
(d), in the event of a data breach with respect to sensitive personal 
information that is processed or maintained by the Secretary, by not 
later than 10 business days after the date on which the Secretary 
learns of the data breach, the Secretary shall notify the appropriate 
committees of Congress and each individual whose sensitive personal 
information is involved in the data breach is notified of the data 
breach. If the Secretary determines that providing such notification 
within 10 business days is not feasible due to circumstances necessary 
to accurately identify the individuals whose sensitive personal 
information is involved in the data breach or to prevent further breach 
or unauthorized disclosure and reasonably restore the integrity of the 
data system the Secretary shall provide such notification not later 
than 15 business days after the date on which the Secretary learns of 
the data breach.
    ``(b) Contracts for Data Processing or Maintenance.--If the 
Secretary enters into a contract for the performance of any Department 
function that requires access to sensitive personal information, the 
Secretary shall require as a condition of the contract that the 
contractor agree to provide notification of data breaches in the same 
manner as required of the Secretary under subsection (a).
    ``(c) Method and Content of Notification.--(1) Notification 
provided to an individual under subsection (a) shall be provided 
clearly and conspicuously by one of the following methods:
            ``(A) Written notification.
            ``(B) Notification by email or other electronic means, if 
        the Secretary's primary method of communication with the 
        individual is by email or such other electronic means.
    ``(2) Regardless of the method by which notification is provided to 
an individual under paragraph (1), such notification shall include--
            ``(A) a description of the sensitive personal information 
        involved in the data breach;
            ``(B) a telephone number that the individual may use, at no 
        cost to the individual, to contact an appropriate employee of 
        the Department to inquire about the data breach or the 
        individual's sensitive personal information maintained by the 
        Department;
            ``(C) notice that the individual is entitled to receive, at 
        no cost to such individual, credit protection services under 
        section 5724 of this title;
            ``(D) the toll-free contact telephone numbers and addresses 
        for the major credit reporting agencies; and
            ``(E) a toll-free telephone number and website address 
        whereby the individual may obtain information regarding 
        identity theft.
    ``(d) Notification of General Public.--The Secretary, acting 
through the Office of Public Affairs of the Department, shall notify 
the general public concerning any data breach involving sensitive 
personal information by not later than 10 business days after the date 
on which the Secretary learns of the data breach, unless the Secretary 
determines that to do so is not feasible due to circumstances necessary 
to accurately identify the individuals whose sensitive personal 
information is involved in the data breach or to prevent further breach 
or unauthorized disclosure and reasonably restore the integrity of the 
data system, such notification shall be made as soon as possible.
    ``(e) Appropriate Committees of Congress.--In this section, the 
term `appropriate committees of Congress' means the Committee on 
Veterans Affairs' of the House of Representatives and the Committee on 
Veterans' Affairs of the Senate.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
5724 the following new item:

``5724A. Data breach notification.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to a data breach occurring on or after the date that 
is 90 days after the date of the enactment of this Act.

SEC. 11. LIMITATION ON BONUSES FOR DEPARTMENT OF VETERANS AFFAIRS 
              EMPLOYEES WHO VIOLATE FEDERAL CIVIL LAWS OR REGULATIONS.

    (a) In General.--Chapter 7 of title 38, United States Code, is 
amended by adding at the end the following new section:
``Sec. 713. Limitation on bonuses
    ``(a) In General.--(1) The Secretary shall ensure that no employee 
of the Department who, during any year, knowingly violates any law, 
regulation, or policy described in paragraph (2) receives a bonus for 
or during that year.
    ``(2) A law, regulation, or policy described in this paragraph is 
any of the following:
            ``(A) A Federal civil law or Federal regulation, including 
        such civil laws or regulations covered under the Federal 
        Acquisition Regulation and the Veterans Affairs Acquisition 
        Regulation.
            ``(B) An internal policy of the Department.
    ``(b) Certification.--The Secretary shall annually certify to 
Congress that each bonus awarded by the Secretary during the previous 
year was awarded in accordance with subsection (a)(1).
    ``(c) Bonus Defined.--For purposes of this section, the term 
`bonus' includes--
            ``(1) a retention incentive;
            ``(2) a retention incentive payment;
            ``(3) a retention incentive award; and
            ``(4) any other incentive requiring approval from the 
        Central Office Human Resource Service, the Chief Business 
        Office Workforce Management, or the Corporate Senior Executive 
        Management Office.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by adding at the end the following new item:

``713. Limitation on bonuses.''.

SEC. 12. LIMITATION ON AWARDS AND BONUSES TO EMPLOYEES OF THE 
              DEPARTMENT OF VETERANS AFFAIRS.

    For each of fiscal years 2013 through 2017, the Secretary of 
Veterans Affairs may not pay more than $357,613,229 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.

            Passed the House of Representatives September 19, 2012.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.