[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
LEGISLATIVE HEARING ON H.R. 294, H.R. 1169,
H.R. 1182, H.R. 2416, H.R. 2461, H.R. 2614,
H.R. 2696, H.R. 2874, H.R. 2928, H.R. 3223,
H.R. 3554, H.R. 3561, H.R. 3577, AND H.R. 3579
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
of the
COMMITTEE ON VETERANS' AFFAIRS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 24, 2009
__________
Serial No. 111-45
__________
Printed for the use of the Committee on Veterans' Affairs
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COMMITTEE ON VETERANS' AFFAIRS
BOB FILNER, California, Chairman
CORRINE BROWN, Florida STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South HENRY E. BROWN, Jr., South
Dakota Carolina
HARRY E. MITCHELL, Arizona JEFF MILLER, Florida
JOHN J. HALL, New York JOHN BOOZMAN, Arkansas
DEBORAH L. HALVORSON, Illinois BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas VERN BUCHANAN, Florida
JOE DONNELLY, Indiana DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia
Malcom A. Shorter, Staff Director
______
Subcommittee on Economic Opportunity
STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman
THOMAS S.P. PERRIELLO, Virginia JOHN BOOZMAN, Arkansas, Ranking
JOHN H. ADLER, New Jersey JERRY MORAN, Kansas
ANN KIRKPATRICK, Arizona GUS M. BILIRAKIS, Florida
HARRY TEAGUE, New Mexico
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Veterans' Affairs are also
published in electronic form. The printed hearing record remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing record, the process
of converting between various electronic formats may introduce
unintentional errors or omissions. Such occurrences are inherent in the
current publication process and should diminish as the process is
further refined.
C O N T E N T S
__________
September 24, 2009
Page
Legislative Hearing on H.R. 294, H.R. 1169, H.R. 1182, H.R. 2416,
H.R. 2461, H.R. 2614, H.R. 2696, H.R. 2874, H.R. 2928, H.R.
3223, H.R. 3554, H.R. 3561, H.R. 3577, and H.R. 3579........... 1
OPENING STATEMENTS
Hon. John Boozman, Ranking Republican Member..................... 2
Prepared statement of Congressman Boozman.................... 41
Hon. Thomas S.P. Perriello....................................... 1
Prepared statement of Congressman Perriello.................. 41
Hon. Ann Kirkpatrick............................................. 3
Prepared statement of Congresswoman Kirkpatrick.............. 41
Hon. John H. Adler............................................... 13
Prepared statement of Congressman Adler...................... 42
Hon. Harry Teague................................................ 14
Prepared statement of Congressman Teague..................... 43
WITNESSES
U.S. Department of Veterans, Keith M. Wilson, Director, Office of
Education Service, Veterans Benefits Administration............ 33
Prepared statement of Mr. Wilson............................. 71
______
American Legion, Mark Walker, Deputy Director, National Economic
Commission..................................................... 17
Prepared statement of Mr. Walker............................. 60
American Veterans (AMVETS), Christina M. Roof, National Deputy
Legislative Director........................................... 22
Prepared statement of Ms. Roof............................... 70
Carter, Hon. John R., a Representative in Congress from the State
of Texas....................................................... 6
Prepared statement of Congressman Carter..................... 44
Connolly, Hon. Gerald E., a Representative in Congress from the
State of Virginia.............................................. 11
Prepared statement of Congressman Connolly................... 53
Disabled American Veterans, John L. Wilson, Assistant National
Legislative Director........................................... 19
Prepared statement of Mr. Wilson............................. 66
Filner, Hon. Bob, Chairman, Committee on Veterans' Affairs, and a
Representative in Congress from the State of California........ 4
Prepared statement of Congressman Filner..................... 43
Loebsack, Hon. David, a Representative in Congress from the State
of Iowa........................................................ 10
Prepared statement of Congressman Loebsack................... 49
Miller, Hon. Brad, a Representative in Congress from the State of
North Carolina................................................. 8
Prepared statement of Congressman Miller..................... 47
Rodriguez, Hon. Ciro D., a Representative in Congress from the
State of Texas................................................. 5
Prepared statement of Congressman Rodriguez.................. 43
Surety and Fidelity Association of America, Lynn M. Schubert,
President...................................................... 15
Prepared statement of Ms. Schubert........................... 55
Veterans of Foreign Wars of the United States, Justin Brown,
Legislative Associate, National Legislative Service............ 18
Prepared statement of Mr. Brown.............................. 63
Vietnam Veterans of America, Richard F. Weidman, Executive
Director for Policy and Government Affairs..................... 21
Prepared statement of Mr. Weidman............................ 69
SUBMISSIONS FOR THE RECORD
U.S. Department of Defense, Ulric I. Fiore, Jr., Director,
Soldier and Family Legal Services, Office of the Judge Advocate
General, U.S. Army, statement.................................. 74
U.S. Department of Labor, John M. McWilliam, Deputy Assistant
Secretary, Veterans' Employment and Training Service, statement 78
CTIA--The Wireless Association, Jot D. Carpenter, Jr., Vice
President, Government Affairs, letter.......................... 79
Herseth Sandlin, Hon. Stephanie, Chairwoman, Subcommittee on
Economic Opportunity, and a Representative in Congress from the
State of South Dakota.......................................... 40
Iraq and Afghanistan Veterans of America, Patrick Campbell, Chief
Legislative Counsel, statement................................. 80
Military Officers Association of America, statement.............. 84
National Association of Surety Bond Producers, Mark McCallum,
General Counsel and Director of Government Relations, letter... 86
Odom, John S., Jr., Jones, Odom, Davis and Politz, L.L.P.,
Shreveport, LA, letter......................................... 88
Student Veterans of America, Brian Hawthorne, Legislative
Director, statement............................................ 90
MATERIAL SUBMITTED FOR THE RECORD
Post-Hearing Questions and Responses for the Record:
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Lynn Schubert, President, Surety and Fidelity Association
of America, letter dated September 28, 2009, and response
letter dated November 6, 2009.............................. 93
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Mark Walker, Deputy Director, National Economic Commission,
American Legion, letter dated September 28, 2009, and
response letter dated November 9, 2009..................... 96
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Justin Brown, Legislative Associate, National Legislative
Service, Veterans of Foreign Wars of the United States,
letter dated September 28, 2009, and VFW responses
submitted November 9, 2009................................. 97
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Dave Gorman, Executive Director, Disabled American
Veterans, letter dated September 28, 2009, and response
from John L. Wilson, Assistant National Legislative
Director responses......................................... 98
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Richard F. Weidman, Executive Director for Policy and
Government Affairs, Vietnam Veterans of America, letter
dated September 28, 2009, and VVA responses................ 99
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Christina M. Roof, National Deputy Legislative Director,
AMVETS, letter dated September 28, 2009, and AMVETS
responses.................................................. 101
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on
Economic Opportunities, Committee on Veterans' Affairs, to
Keith Wilson, Director, Office of Education Service, U.S.
Department of Veterans Affairs, letter dated September 28,
2009....................................................... 102
LEGISLATIVE HEARING ON H.R. 294, H.R. 1169,
H.R. 1182, H.R. 2416, H.R. 2461, H.R. 2614,
H.R. 2696, H.R. 2874, H.R. 2928, H.R. 3223,
H.R. 3554, H.R. 3561, H.R. 3577, AND H.R. 3579
----------
THURSDAY, SEPTEMBER 24, 2009
U.S. House of Representatives,
Committee on Veterans' Affairs,
Subcommittee on Economic Opportunity,
Washington, DC.
The Subcommittee met, pursuant to notice, at 1:10 p.m., in
Room 334, Cannon House Office Building, Hon. Thomas S.P.
Perriello presiding.
Present: Representatives Perriello, Adler, Kirkpatrick,
Teague, Boozman, and Bilirakis.
OPENING STATEMENT OF HON. THOMAS S.P. PERRIELLO
Mr. Perriello. Good afternoon, ladies and gentlemen, the
Committee on Veterans' Affairs Subcommittee on Economic
Opportunity Hearing on pending legislation will come to order.
I have received word that Chairwoman Herseth Sandlin is
delayed at the moment and will be joining us shortly.
I would like to call attention to the fact that the U.S.
Department of Labor, Military Officers Association of America
(MOAA), CTIA-The Wireless Association, Iraq and Afghanistan
Veterans of America (IAVA), the National Association of Surety
Bond Producers, Student Veterans of America, and Jones, Odom,
Davis and Politz, L.L.P., have asked to submit written
statements for the hearing record.
If there is no objection I ask for unanimous consent that
their statements be entered for the record. Hearing no
objection so entered.
[The prepared statements for the record appear starting on
p. 74.]
Mr. Perriello. I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks, and
that written statements be made part of the record. Hearing no
objection so ordered.
Today we have a full schedule that includes 14 bills before
us that would address the unique needs of our veteran
population. The bills before us today seek to address veteran-
owned small business matters, expand protections provided under
the Servicemembers Civil Relief Act (SCRA), and address the
unmet education needs of our Nation's veterans.
On June 30th, 2008, Congress successfully passed the Post-
9/11 Veterans Educational Assistance Act of 2008 to help pay
for the full cost of tuition at 4-year colleges to veterans of
the wars in Iraq and Afghanistan. Yesterday, the U.S.
Department of Veterans Affairs (VA) announced that it has
provided certificates of eligibility to nearly 200,000
applicants for Post-9/11 GI Bill benefits.
I commend the VA on its administration of the program and
look forward to working with the Veterans Benefits
Administration (VBA) to ensure that our veterans continue to
have easy access to the benefits they have earned and deserve.
Although the Post-9/11 GI Bill provides a number of
benefits, including licensure and certification, it does not
provide on-the-job training (OJT) program benefits.
Servicemembers and veterans interested in OJT benefits would be
unable to take advantage of the Post-9/11 GI Bill and would
have to register under the Montgomery GI Bill, chapter 30
benefit.
On-the-job training offers veterans and members of the
Guard and Reserve an alternative to attending a college or
university by using their education benefit to obtain
employment training. OJT is training that veterans received
while actually performing a job. This program allows veterans
to become gainfully employed since the job for which they are
currently training in should lead to an entry-level job.
Additionally, while they are training, the employer will
provide a wage.
H.R. 2928 would amend title 38, United State Code, to
provide for an apprenticeship and on-the-job training benefit
under the Post-9/11 Veterans Educational Assistance Program.
The bill would entitle those veterans enrolled in a full-time
educational program of apprenticeship or other on-the-job
training to a monthly benefit payment equal to 85 percent of
the national average cost of tuition at an institution of
higher education for each of the first 6 months of the program,
65 percent of such amount for each of the second 6 months of
the program, and 45 percent of such amount for each of the
months following the first 12 months of the program.
We have an obligation to help those who have defended our
country by giving them the tools they need to rejoin the
civilian workforce. H.R. 2928 is a commonsense bill which will
provide America's veterans with the resources they need to join
the workforce.
I would like to thank the VFW, DAV, AMVETS, the Military
Officers Association of America, Student Veterans of America,
Iraq, and Afghanistan Veterans of America, and the U.S.
Department of Labor for their support.
I look forward to receiving feedback on H.R. 2928 and the
other bills before us today.
I now recognize Ranking Member Boozman for any opening
remarks he may have.
[The prepared statement of Congressman Perriello appears on
p. 41.]
OPENING STATEMENT OF HON. JOHN BOOZMAN
Mr. Boozman. Thank you, Mr. Chairman. I want to thank you
for bringing us together to take testimony on 14 bills,
including H.R. 1169, a bill that would increase the amounts
available for the Specially Adapted Housing and Auto Adaptive
Equipment programs, as well as other bills introduced by
Members on our side of the aisle.
We have a lot of ground to cover today, so I will merely
say that this is a good list of bills. Obviously there are some
major PAYGO issues that we are going to have to deal with, and
some might need some minor tweaking to accomplish what the
authors intend.
I am eager to hear from today's witnesses, and I will yield
back.
[The prepared statement of Congressman Boozman appears on
p. 41.]
Mr. Perriello. Thank you, Mr. Boozman. Before we begin with
our first panel, I would like to recognize the Subcommittee
Members with legislation before us today.
Congresswoman Kirkpatrick, you are now recognized to speak
on your bill.
OPENING STATEMENT OF HON. ANN KIRKPATRICK
Mrs. Kirkpatrick. Thank you Mr. Chairman. I appreciate this
opportunity to discuss my bill, H.R. 2614, the ``Veterans
Advisory Committee on Education Reauthorization Act of 2009.''
In recent years, Congress has devoted a whole lot of
attention to the education benefits administered by the
Department of Veterans Affairs, culminating last year in the
introduction and passage of the Post-9/11 GI Bill.
One of the VA's most important tools in this fight has been
the Veterans Advisory Committee on Education. This Committee's
mission includes advising the Secretary of Veterans Affairs on
existing education benefit programs and services, as well as
recommending new education benefit programs.
As the Military Officers Association of America has pointed
out, the Committee was instrumental in the Post-9/11 GI Bill
being constructed, including incorporating recommendations that
limit/mirror the National average cost of a public education,
as well as earn-as-you-serve provisions.
The Committee is now more important than ever with veterans
starting to receive education benefits under the Post-9/11 GI
Bill. However, the Committee's charter is currently set to
expire on December 31st. This bill reauthorizes the Committee
until the end of 2015, allowing it to fulfill its vital role.
With the help of veterans service organizations (VSOs), we
are working hard to better keep our promises to our veterans,
and I have been proud to be a part of it. There is still more
to do to make sure they have the opportunities they have
earned, and reauthorizing this Committee is a useful step in
that effort.
Mr. Chairman, thank you for this opportunity. I would be
happy to answer any questions.
[The prepared statement of Congresswoman Kirkpatrick
appears on p. 41.]
Mr. Perriello. Joining us to speak on their respective
bills today are Committee Chair, the Honorable Bob Filner of
California, the Honorable Ciro Rodriguez of Texas, the
Honorable John Carter of Texas, the Honorable Brad Miller of
North Carolina, the Honorable David Loebsack of Iowa, and the
Honorable Gerry Connolly, if he chooses to join us.
Welcome to the Subcommittee, all of your written statements
will be entered into the hearing. Without further ado, Chairman
Filner, you are now recognized.
STATEMENTS OF HON. BOB FILNER, CHAIRMAN, COMMITTEE ON VETERANS'
AFFAIRS, AND A REPRESENTATIVE IN CONGRESS FROM THE STATE OF
CALIFORNIA; HON. CIRO D. RODRIGUEZ, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS; HON. JOHN R. CARTER, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS; HON. BRAD
MILLER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH
CAROLINA; HON. DAVID LOEBSACK, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF IOWA; AND HON. GERALD E. CONNOLLY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA
STATEMENT OF HON. BOB FILNER
Mr. Filner. Thank you, Mr. Chairman, it is good to see a
new Member in that chair, and we thank you for your service on
this Committee. You have done a great job and we are proud to
see you up there. I want to talk about H.R. 3579. Although it
is very uncomfortable for me, Mr. Chairman, to be here on the
far right of this panel, of course you see me in the direction
I should be, so thank you.
I think you all know some of the history of the GI Bill
that was enacted in 1944. Few changes have been made over the
years until this Subcommittee took the lead into the Post-9/11
GI Bill. Benefits have basically been declining, but I think we
have restored the full intent of the original GI Bill with the
GI Bill for the 21st century.
While that is a significant achievement, I don't think we
have addressed another part of making sure that we do all this
in a timely manner. That is the growing demand placed upon
university certifying officials who are responsible for
assisting student veterans in enrolling in a college and
providing the services while they are on campus.
I know for example at the university where I am a professor
emeritus at San Diego State University, they have close to
1,000 veteran students. To process those applications takes
some time, takes some effort, and takes staffing. Some of the
delay, as you mentioned, may be because we have several hundred
thousand people now enrolling under the current GI Bill, and
that could lead to many of them not getting their checks on
time. The blame is not necessarily on the VA, but on the
university, which has had trouble processing the great increase
in students.
What H.R. 3579 is trying to do is to address the issue by
increasing the reporting fees payable to institutions of higher
learning from $7 a student, which is way outdated, up to $50
per student which will reflect today's demand for the expanded
services.
I think you are all aware of the number of students and how
they want to make sure they get timely receipt, and I think
this will complete an important piece of the puzzle by
providing the university with the needed resources to obtain
up-to-date training on the options that are available to
student veterans and their dependents.
We certainly need to serve our veterans with the very best
advice, and we are going to have to make sure resources are
available.
I thank this Committee, Mr. Perriello, your chair, Ms.
Herseth Sandlin, and Ranking Member Boozman who have done an
incredible job. I look forward to working with you to make sure
that we do meet all the needs as we experience with this first
year of the GI Bill. We are going to have, through your
Subcommittee, a fix for several problems. This is one part of
it, another is the housing stipend for those who elected
distant learning, for example, and try to remedy the
inequalities that we see that especially hit low tuition
States. The States that have low tuition for their public
universities and colleges results in some disparity to the
payments that the student veterans will get.
So I look forward to working with you to clean up what is a
great bill, but we are going to make it even better. Thank you,
Mr. Chairman.
[The prepared statement of Congressman Filner appears on
p. 43.]
Mr. Perriello. Thank you, Mr. Chairman, for all of your
leadership. I don't see you as being a matter of right or left,
or right and wrong. Thank you for doing the right thing for
your veterans.
Mr. Rodriguez, welcome back to the Subcommittee, you are
now recognized.
STATEMENT OF HON. CIRO D. RODRIGUEZ
Mr. Rodriguez. Thank you, very much. Thank you for allowing
me to speak today on H.R. 3577, which will expand the
eligibility for Post-9/11 GI Bill transferability for benefits
to dependents.
Last year Congress passed a groundbreaking GI Bill that
provides a significant increase level of benefits to
servicemembers who served at least 90 days of aggregate
military service after September 10th, 2001.
This new benefit also provides for the transferability of
benefits to dependents. However, whereas the basic eligibility
for the Post-9/11 GI Bill benefits consists of at least 90 days
on active duty after September 10th, 2001, transferability
eligibility is not open to many of those that would otherwise
be eligible for Post-9/11 GI Bill benefits. For
transferability, a member must have served at least 6 years on
active duty and be currently on active duty as of August 1st,
2009.
As a general rule, and necessarily so, the servicemember
must incur an extended commitment to serve an additional 4
years in order to transfer those benefits to their dependents.
These are provisions that were included in the final piece of
legislation for military retention purposes that puts some at a
disadvantage.
The U.S. Department of Defense (DoD) has published its
rules for transferability and has made some exceptions to the
re-enlistment requirement to certain servicemembers who are
near retirement and unable to fulfill the 4-year commitment.
Specifically, personnel that have approved retirements as
of August 1, 2009, do not incur any further commitment in order
to transfer their benefits.
While the option of transferability is a welcomed option
for servicemembers who are eligible to re-enlist, it fails to
provide this option to veterans who have honorably served at
least a minimum of 20 years of honorable active-duty service to
our country.
We have heard from many military personnel and veterans
asking for a legislative change to correct laws to allow
veterans who served after September 10th, 2001, and retired
before July 31, 2009, to transfer their benefits to the
eligible dependent. They argue that retirees are most likely in
a better position to transfer their benefit, considering many
of them have already received their college education, and
their children are more likely to be college age.
Additionally, this bill would help ensure that
transferability is granted to those service men and women who
are otherwise eligible for Post-9/11 GI Bill benefits,
eligibility for Post-9/11 GI Bill benefits and for
transferability remains the same under this bill, simply with
the expanded date range from those that have retired from the
service after having served for 20 years or more.
Mr. Chairman, Members of the Committee, Subcommittee, I
want to thank you for allowing me to testify. Our troops have
earned this, and I would ask that you take this particular
piece of legislation into consideration. More importantly,
their families have sacrificed their way of life and their
careers, and have also earned this transferability eligibility.
Thank you very much.
[The prepared statement of Congressman Rodriguez appears on
p. 43.]
Mr. Perriello. Thank you, Mr. Rodriguez for your advocacy.
Mr. Carter you are now recognized.
STATEMENT OF HON. JOHN R. CARTER
Mr. Carter. Thank you, Mr. Chairman, Members of the
Committee, good afternoon.
First of all I want to thank you for your support you have
already demonstrated for the military spouses by considering
the Military Spouses Residency Relief Act last Congress and
again today.
Since we last discussed this issue, I am pleased to
acknowledge that with hard work and the support of Senators
Burr and Feinstein this legislation was unanimously passed by
the Senate as a stand alone bill. Your Subcommittee's action
will help to ensure that these ccommonsense reforms become a
reality. This small measure will provide invaluable relief for
numerous military spouses who regularly uproot their entire
lives to accommodate the needs of our Armed Forces.
As you are all aware, the Servicemembers Civil Relief Act
provides basic civil relief to our men and women in the Armed
Services in exchange for their voluntary service. These range
from relief from adjudication while deployed in combat to
maintaining a single State of domicile regardless of where
their military orders might send them. This State of domicile
provides an important stability for our soldiers, sailors,
airmen, and Marines. Though their orders may send them to
numerous States, they are able to simplify their State income
tax requirements, maintain property titles, and continue to
vote for the elected officials in their own home area or
hometown.
Without SCRA protections, the servicemember would have to
deal with all of those every time they move to a military
installation located in a different State. But their spouses
are currently not afforded these SCRA protections. They must
still deal with those stresses while facing or being faced with
challenges of moving, finding schools for the children,
balancing unsupported relocation costs, and the loss of spouse
earnings as they leave jobs to go to another location.
However, SCRA protection is already extended to the
military spouses pertaining to other moving challenges such as
entering into contracts for phone service, utilities, the
ability to break leases, as well as protection from eviction if
they fall behind on bills. This precedence clearly illustrates
Congress' long understanding that spouses are a vital component
of our military readiness and they deserve SCRA protection.
The military has changed since SCRA was first written. We
no longer deal with a primarily unmarried force. It is no
longer enough for us to provide just for the men and women who
volunteered to protect us, we have to provide for the families.
We have saying, ``Recruit a soldier but retain the family,''
and you can't meet this because you can't have anything that is
more accurate in today's military.
While our servicemembers receive this important civil
relief, we do not offer the same protections to those that bear
the same stress and responsibility as their members, the
spouse.
Over the course of their spouse's career, they face
multiple voter and vehicle registration changes, pay income tax
to States they never intended to live in, and likely do not
have their name on any property titles leading to a feeling
that they are second class citizens.
This bill, which has drawn the strong support of over 170
bipartisan cosponsors, including more than half the Veterans'
Affairs Committee Members, would amend SCRA to allow the
military spouse to claim the State of domicile of the
servicemember for the purposes of State income tax and property
taxes, as well as voter registration. Spouses could elect to
stand united with their spouse not only in support of our
county, but sharing the same State as a home base.
This policy would prevent a military family from suddenly
losing up to 10 percent of their income if they are called upon
to relocate to a different State. This is a significant loss of
income that occurs as a direct result of government orders.
H.R. 1182, supported by the Military Officers Association
of America, the Air Force Sergeants Associations, AMVETS,
Veterans of Foreign Wars of the United States (VFW), the
Military Spouse Business Association, among other VSOs, will
also provide the impetus for military spouses to put their
names on deeds and titles, which would build and strengthen
their own credit and further ensure legal protection.
Military spouses sacrifice their careers and endure
numerous challenges to support the servicemembers who defend
our country. They share the stress of deployments, relocations,
and ever increasing operational tempos with their
servicemember. Shouldn't they be able to share the same State?
We believe they deserve the choice to have a home base too.
Thank you for your time and consideration for this bill,
and I will be glad to submit copies of those letters that I
mentioned in support.
[The prepared statement of Congressman Carter, and
referenced letters, appear on p. 44.]
Mr. Perriello. Thank you very much, Mr. Carter, and for you
advocacy for the whole military family, it is appreciated.
Mr. Miller, from the great State of North Carolina you are
now recognized to speak on your legislation.
STATEMENT OF HON. BRAD MILLER
Mr. Miller. Thank you, Mr. Perriello, from the great State
of Virginia, and Mr. Boozman and Members of the Committee,
thank you for this opportunity to testify today on H.R. 2696,
the ``Servicemembers' Rights Protection Act.''
I also want to thank Representative Walter Jones for
working with me on this issue. He has been a tireless advocate
for our servicemembers and veterans, and I appreciate his
efforts.
Congress has long recognized the need for legislation to
protect servicemembers who face special burdens when trying to
meet their financial and legal obligations while serving our
country. Congress passed temporary legislation during the Civil
War and again during World War I, and in 1940 Congress passed
permanent legislation, the Soldiers and Sailors Civil Relief
Act. In 2003, Congress updated that legislation and passed the
Servicemembers Civil Relief Act, or SCRA.
The act temporarily suspends certain judicial and
administrative proceedings and transactions that may harm a
servicemembers legal rights during their active duty. The bill
does not extinguish or diminish any rights anyone has against a
servicemember, but legal proceedings are put on hold until a
servicemember can have a fair chance to defend their rights in
the legal proceedings.
The SCRA provides for penalties for violations, but it does
not expressly state whether servicemembers have a private cause
of action, whether they can bring a lawsuit on their own behalf
for violation of the act.
Most courts have recognized the inherent right of
servicemembers to bring suit for a violation of their rights
under SCRA, but a couple recent court decisions have questioned
whether the act does grant servicemembers a private cause of
action. In Batie v. Subway Real Estate Corp. a servicemember
alleged that the defendants had violated his rights when they
evicted him from two commercial spaces while he was deployed in
Afghanistan. In Hurley v. Deutsche Bank Trust Company, a
servicemember sued the defendants after they foreclosed on him
and evicted his family, sold his home, all while he was
deployed in Iraq.
The initial ruling in both of those cases was that the
servicemembers did not have a right to act on their own to
vindicate their rights under the statute because there was not
expressly such a right in the bill, in the legislation itself.
The initial ruling in both cases were overturned on appeal, but
only after the servicemembers and their families had to go
through prolonged legal uncertainty and considerable expense,
and there remains uncertainty in other jurisdictions, other
circuits around the country.
Congressman Jones and I introduced H.R. 2696, the
``Servicemembers' Rights Protection Act,'' to end any question
about a right of action for servicemembers. The legislation
would authorize an Attorney General, the Attorney General to
file civil action for violation of the SCRA, and allow the
servicemember to join in that civil action brought by the
Attorney General. But more important, the legislation provides
that servicemember haves their own private cause of action
regardless of any action taken by the Attorney General.
There have been efforts in the past to strengthen
enforcement provisions of the SCRA for specific kinds of
contracts. Those efforts are worthwhile, but they are a
piecemeal approach to strengthening the SCRA and leaves open
the possibility that something, some contract, some proceeding
will be left out, and a servicemember will be left without any
legal recourse.
The SCRA is a comprehensive statute protecting the rights
of servicemembers, the remedies under the statute should be
comprehensive too. We need a comprehensive approach that will
ensure enforcement provisions for all actions brought to
enforce the SCRA. The ``Servicemembers' Rights Protection Act''
does that.
In February 2009, the American Bar Association (ABA)
unanimously adopted resolution proposed by the ABA's Standing
Committee on Legal Assistance for Military Personnel that
recommended unambiguous authority for a private right of
action, what this bill does. Further in his statement before
the House and Senate Veterans' Affairs Committee on March 12th,
2009, Colonel Robert F. Norton, Deputy Director of Government
Relations of MOAA, stated that MOAA recommends that the
Committees amend the SCRA to clarify the private cause of
action that a private right of action exists under the SCRA
authorizing a servicemember or dependent to file suit.
The DoD has also vetted the language in this legislation.
Our servicemembers should be given the right, the
opportunity to devote their entire energies to the defense of
the Nation when they are deployed. They should not have to
worry about whether their homes are being foreclosed, their
rights are being prejudiced, their families are being evicted
because they are deployed in the service to our country. A
right that cannot be enforced is no right at all. A right
without a remedy is no right at all. The SCRA should have real
teeth or it is meaningless.
Denying individuals a private right of action to enforce
their rights under the SCRA threatens the readiness of our
armed forces and is fundamentally unfair.
Thank you again for allowing me the chance to testify on
this bill.
[The prepared statement of Congressman Miller appears on
p. 47.]
Mr. Perriello. Thank you, Mr. Miller and Mr. Jones for your
advocacy on this. Mr. Loebsack, you are now recognized.
STATEMENT OF HON. DAVID LOEBSACK
Mr. Loebsack. Thank you, Chairman Perriello and Ranking
Member Boozman, Members of the Committee, thank you for
inviting me to testify before this Subcommittee, and in
particular on H.R. 3554, the ``National Guard Education
Equality Act,'' which would amend the Post-9/11 GI Bill to
first include title 32 service in the calculation of benefits
under the Post-9/11 Bill, and second provide a full 4-year
college education to Members of the National Guard who are
discharged with a service-connected disability.
The landmark Post-9/11 Veterans Educational Assistance Act
not only expresses our Nation's gratitude to our men and women
in uniform, it will also help to make this generation of
veterans part of our country's economic recovery.
As a former college professor, I know firsthand the impact
a college education can have on both individuals and families.
It opens doors and it broadens opportunities and it is critical
to the strength of our military, as well as the future of our
economy.
As the representative of Iowa's Second Congressional
District and a Member of the House Armed Services Committee, I
have had the distinct honor to meet many members of the Iowa
National Guard. I have seen them respond to the devastating
floods that inundated my district in 2008, and I visited with
them in Iraq and Afghanistan. The dual role of the National
Guard in both our homeland and national security is unique
among our Armed Forces, and it has only increased since the 9/
11 attacks.
The National Guard is no longer a strategic reserve, it is
an operational one. These soldiers and airmen secure our air
space, respond to disasters, and deploy overseas in support of
our efforts in Iraq and Afghanistan, yet the Post-9/11 GI Bill
did not recognize the dual role of the National Guard. It
counts only their national security service, that is their
title 10 service overseas in Iraq, Afghanistan, and other
strategic locations. It overlooked the role the National Guard
plays in federally-funded homeland security missions under
title 32, including airport security missions directly after
the 9/11 attacks, protection of U.S. air space as part of Air
Sovereignty Alert, disaster response in instances such as
Hurricane Katrina, and border security as part of Operation
Jump Start.
By not including title 32 the Post-9/11 GI Bill, also
overlooked the active Guard and Reserve (AGR). AGRs provide the
full-time support that is necessary to keep our National Guard
ready to respond to missions at home and abroad. Yet while
their counterparts in the Reserve accrue eligibility for the
Post-9/11 GI Bill through their AGR service, National Guard
AGRs serving under title 32 do not.
To put it simply, federally-funded essential homeland
security missions are performed by our National Guard every
day. Their service to our Nation should in fact be counted
toward their Post-9/11 GI Bill benefits.
Furthermore, the Post-9/11 GI Bill made a commitment to
recognize the service and sacrifice of those servicemembers who
are discharged with a service-connected disability providing
them with a full 4-year college education. However, under
current law, only those servicemembers who are discharged under
title 10 are eligible for this benefit.
Members of the National Guard with a service-connected
disability are discharged under title 32 even if they sustain
their injuries while serving under title 10. As a result, they
do not currently receive the full slate of benefits that they
deserve.
To address these inequities, I have introduced the
``National Guard Education Equality Act,'' H.R. 3554. This bill
recognizes, as I have already mentioned, the service of our
National Guard, soldiers, and airmen by counting homeland
security missions in first the calculation of benefits under
the Post-9/11 GI Bill and providing second a full 4-year
college education to members of the National Guard who are
discharged with a service-connected disability.
The ``National Guard Education Equality Act'' recognizes
and honors the contribution of the National Guard to both our
homeland and our National security. It ensures that the roughly
30,000 National Guard soldiers and airmen who are not currently
receiving the full GI benefits they deserve are able to take
advantage of the opportunities a college education provides.
I should mention that this bill has over 30 bipartisan
cosponsors and has been endorsed by the Iraq and Afghanistan
Veterans of America, the National Guard Association of the
United States, the Enlisted Association of the National Guard
of the United States, the Veterans of Foreign Wars, and the
American Legion.
And Mr. Chair, I would like to ask that these letters of
support from each of these organizations be included in the
record as well.
I urge the Subcommittee's support for H.R. 3554 and I thank
you for allowing me to testify thank you. Thank you very much.
[The prepared statement of Congressman Loebsack, and
referenced letters, appear on p. 49.]
Mr. Perriello. Thank you, and so ordered on submitting the
letters.
Mr. Connolly, thank you for joining us, you are now
recognized.
STATEMENT OF HON. GERALD E. CONNOLLY
Mr. Connolly. Thank you, Mr. Chairman, and Members of the
Subcommittee, and once again Ranking Member Boozman, good to
see you again today, having testified before a different
Committee where you were present the other day.
I want to thank you for inviting me to testify on what is
called the ``Helping Active Duty Deployed (HADD) Act of 2009,''
H.R. 2874, which I introduced earlier this year with my fellow
Virginians: Congressman Perriello and Congressman Nye.
As you know, deployment or change of station orders to
leave one's home, community, and family are exceptionally
difficult and disruptive. During times like that, we as Members
of Congress and our Nation as a whole should be doing
everything we can to support our troops and their families.
That is why I was shocked when I met with a group of veterans
and was informed that servicemembers are being charged
penalties when a deployment forces them to terminate contracts
for things like cell phones, residential leases, and even
college tuition.
I find it very difficult to understand why brave men and
women putting their lives on the line, responding to the
country's call would be charged an early termination fee when
deployment, not choice, necessitates the cancelation of such
contracts and leases.
Based on those conversations, I introduced the HADD Act to
provide three additional protections consistent with those
already provided by the servicemembers Civil Relief Act.
First, to build upon action taken by the previous Congress
allowing servicemembers to terminate an individual cell phone
contract without penalty, my bill would compliment that by
extending the same protection from early termination fees to
family cell phone plans as well.
In addition, the HADD Act will provide consistent
protections for troops who need to terminate residential and
motor vehicle leases due to deployment or change of station.
The SCRA already permits the cancelation of motor vehicle
leases and prohibits early termination, but it does permit
cancelation of residential leases, and does not provide the
same protection for early termination fees. Just as with
automobile leases, servicemembers are not choosing to end these
contracts before they are fulfilled, they are doing so because
they have been ordered by the U.S. Government to deploy into
combat or change stations and they should not face a penalty
for obeying that call.
Working with Chairman Filner and Members of the Veterans'
Affairs Committee staff, I was able to work with the House
Armed Services Committee to amend the National Defense
Authorization Act of 2009 to include these two provisions of
the HADD Act, and I am hopeful the language will be retained in
the conference report.
The final provision of the HADD Act would assist
servicemembers in obtaining a refund for the unused tuition
paid to an institution of higher education should they have to
deploy or relocate in the middle of a semester. Just as the
Post-9/11 GI Bill preserves the educational opportunities for
our returning veterans, this provision of the HADD Act would
have preserved the opportunities of those being called into
service.
Mr. Chairman, these are protections that have been
identified by our veterans to make their transition into combat
or a new station that much easier. These are simple requests
for us to fulfill given the tremendous sacrifice we ask of
them.
The HADD Act has the endorsement of the Iraq and
Afghanistan Veterans of America, which worked with me to draft
this legislation, and I am pleased to say with CTIA, the
Wireless Association, which has endorsed the legislation
through correspondence to myself and the Members of the
Subcommittee. They would like some modifications to some of the
provisions. I am happy to pledge to work with them and Members
of this Subcommittee to do just that.
And I thank the Members of the Subcommittee for inviting me
here today to testify on this important endeavor.
[The prepared statement of Congressman Connolly, and
referenced information from IAVA, appear on p. 53.]
Mr. Perriello. Thank you, Mr. Connolly. With that we will
recognize Members of the Subcommittee for 5 minutes of opening
remarks, starting with Mr. Adler.
OPENING STATEMENT OF JOHN H. ADLER
Mr. Adler. Mr. Chairman I thank you, and I thank the
Ranking Member Mr. Boozman and the Members of the Subcommittee.
Thank you all for the opportunity to speak in support of my
bill, H.R. 2416, the ``Success After Service Act.''
We are currently experiencing the worst economic climate
since the Great Depression. The Nation's unemployment rate has
reached or exceeded 9.7 percent, the highest it has been in 23
years. The number of unemployed Iraq and Afghanistan veterans
is now at least at 11.3 percent, which is almost the same as
the number of servicemembers currently deployed abroad. And it
is even worse in terms of unemployment in my State of New
Jersey, where the unemployment rate among Iraq and Afghanistan
veterans is at 14 percent. Our heroes certainly deserve better.
They deserve our help, not just our gratitude.
Many servicemembers are returning home to this tough
economic climate in search of career opportunities that can
support themselves and their families. Some will search for
work among existing jobs, while others will attempt to forge
their way by starting a small business of their own.
I think we all know that small businesses are the backbone
of our economy and they have an important role to play in our
country's economic future. We should incent servicemembers to
live the American dream by pursuing their entrepreneurial
spirit and starting the small businesses, which will aid in our
broad economic recovery.
I have introduced H.R. 2416, the ``Success After Service
Act,'' to increase the opportunities that are available to
veteran-owned small businesses and service-disabled veteran-
owned small businesses (SDVOBs) in obtaining contracts and
subcontracts from the Department of Veterans Affairs.
H.R. 2416 seeks to empower veteran small business owners by
setting aside a set percentage of VA contracts in the Federal
supply schedule for all qualified veteran-owned businesses.
These set asides are the types of incentives, which will
positively influence the marketplace by encouraging
servicemembers to start new businesses to deliver services
needed to meet the VA's goals.
We must ensure that our veterans, who so selflessly served
our country, are given the opportunity to succeed after their
service.
H.R. 2416 will not only serve as a token of appreciation to
these brave men and women from a grateful Nation, but also as a
tool to empower these veteran entrepreneurs to re-ignite our
economy once again.
This measure has strong bipartisan support. It reflects the
will of the Congress, Members of Congress who want to work
together without regard to party labels to help our heroes.
Mr. Chairman, Ranking Member Boozman, I once again thank
you for your time and consideration.
[The prepared statement of Congressman Adler appears on
p. 42.]
Mr. Perriello. Thank you, Mr. Adler. Mr. Teague.
OPENING STATEMENT OF HON. HARRY TEAGUE
Mr. Teague. Yes, Chairman Perriello and Ranking Member
Boozman and fellow Subcommittee Members, thank you for allowing
me to have this opportunity today to speak on behalf of H.R.
3561. I believe that this bill does exactly what this
Subcommittee is supposed to be doing, creating economic
opportunity for our veterans.
H.R. 3561 increases the flight training education
assistance allowance for tuition and fees from 60 percent to 75
percent. Recently, program costs for this training have risen,
but the benefit has not risen to keep up with the increased
cost.
In my home State of New Mexico, the flight schools that
offer this program tell me that a student can expect to pay
anywhere from $60,000 to $90,000. So in a State where the
median family income in my State is $48,798, it is becoming
more difficult for veterans to utilize this program and get a
good job as a result.
By increasing funding for this program by 15 percent, we
can open doors for veterans who need help and assistance and
deserve it after serving our country.
I believe that this bill is a ccommonsense solution to a
problem that we are facing, and I hope that I can garner
support from my colleagues and pass this legislation into law.
I would like to take this time to thank the staff members
of the Economic Opportunity Subcommittee who lent their
expertise during the drafting of this bill, and I thank
Congresswoman Herseth Sandlin and Ranking Member Boozman for
the opportunity to advance this bill.
This concludes my testimony and I am happy to answer any
questions you may have regarding H.R. 3561.
[The prepared statement of Congressman Teague appears on
p. 43.]
Mr. Perriello. Are there any additional questions or
comments on the first panel? To the first panel, thank you very
much for taking the time from your busy day.
Mr. Boozman. Well, I would just like to say, Mr. Chairman,
that I really do appreciate the Members bringing forward these
bills, and I think it is just a great example that these
individuals are really working hard to make the life of our
servicemen and women a little bit easier, and we really do
appreciate their hard work and their efforts in that regard.
Mr. Perriello. Well thank you very much. I want to thank
you as Ranking Member for being a great mentor and supporter
for those of us who are new to the Committee to be able to
translate what we are hearing from veterans in our community
into functional legislation, and we really appreciated that
support.
I want to thank all the Members who joined us on the first
panel for their efforts and their commitment to our Nation's
veterans. We look forward to working with you in the future.
We now invite panel two to the witness table.
Joining us on our second panel of witnesses is Ms. Lynn
Schubert, President of the Surety and Fidelity Association of
America (SFAA); Mr. Mark Walker, Assistant Director, Economic
Commission, the American Legion; Mr. Justin Brown, Legislative
Associate, Veterans of Foreign Wars of the United States; Mr.
John Wilson, Associate National Legislative Director, Disabled
American Veterans (DAV); Mr. Rick Weidman, Executive Director
for Policy and Government Affairs, Vietnam Veterans of America
(VVA); and Ms. Christina Roof, National Deputy Legislative
Director of AMVETS.
In the interest of time and courtesy to all the panelists
here today, we ask that you limit your testimony to 5 minutes,
focusing on your comments and recommendations. Your entire
written statement has been entered into the Committee record.
Ms. Schubert, you are now recognized for 5 minutes.
STATEMENTS OF LYNN M. SCHUBERT, PRESIDENT, SURETY AND FIDELITY
ASSOCIATION OF AMERICA; MARK WALKER, DEPUTY DIRECTOR, NATIONAL
ECONOMIC COMMISSION, AMERICAN LEGION; JUSTIN BROWN, LEGISLATIVE
ASSOCIATE, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN
WARS OF THE UNITED STATES; JOHN L. WILSON, ASSISTANT NATIONAL
LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS; RICHARD F.
WEIDMAN, EXECUTIVE DIRECTOR FOR POLICY AND GOVERNMENT AFFAIRS,
VIETNAM VETERANS OF AMERICA; AND CHRISTINA M. ROOF, NATIONAL
DEPUTY LEGISLATIVE DIRECTOR, AMERICAN VETERANS (AMVETS)
STATEMENT OF LYNN M. SCHUBERT
Ms. Schubert. Thank you, Mr. Chairman, Ranking Member
Boozman, Members of the Subcommittee, thank you very much for
having us here to testify on a matter that is critical to the
surety industry, to the construction industry, and to small
veteran-owned and controlled contractors.
SFAA is a statistical and advisory organization with more
than 450 members who write collectively the vast majority of
surety bonds that are issued in the United States both
Federally and on State projects. We are here to provide our
assessment of whether or not the surety bond provisions in H.R.
294 would achieve the objective of promoting small veteran-
owned and controlled businesses and how to enhance the bonding
of small veteran-owned and controlled contractors.
We support the intent of this bill and are committed to
establishing this. In fact, one of our members just wrote a $9
million bond for a veteran-owned business down in Florida just
a few days ago.
The bill as drafted, however, will not achieve its intended
purposes, and in fact would hurt the very businesses that it is
designed to help.
To understand our concerns you must first understand just
what performance and payment bonds actually are and why they
are required by the Federal Government, all State governments,
and most local governments for public construction.
A performance bond secures the performance of a
contractor's obligation to complete the contract itself. A
payment bond secures the contractor's obligation to actually
pay the laborers, the subs, and the suppliers on that project.
It is a three-party agreement. The contractor enters into a
contract with the Federal Government agency and the surety
guarantees the performance of that contract. If the contractor
defaults on the contract, the surety actually performs. The
contractor then is liable to the surety for the amount paid on
its behalf.
Although these bonds are written by insurance companies,
the product is similar to a letter of credit or a guarantee
that someone provides for a friend's loan that they might be
taking out.
Therefore, in order to decide whether the surety is going
to write the bond or not, they have to look at the entire
business of the contractor, and whether they believe that
contractor can perform the work. Because that is who they are
going to be standing behind.
The Federal law requiring these bonds on Federal
construction projects, the Miller Act, requires that the
performance bond be in the amount of the contract price, and
that the payment bond also be equal to the performance bond,
the amount of the contract price. This bill, however, would
prohibit the same level of taxpayer and worker protection to be
required from small veteran-owned and controlled contractors.
It would allow bonds of no more than 50 percent of the contract
price, whether the business was acting as a prime or a
subcontractor, and also would allow a prime contractor to
furnish a bond on behalf of its sub.
There are fundamental problems with these proposals that
are addressed in detail in our written testimony. In that
testimony, we explain how surety bonds are underwritten and
priced and the principles behind surety bonds.
We would welcome the chance to meet further with the
Members of the Subcommittee and staff to discuss these
principles, as well as some of our proposals regarding access
to bonding for small veteran-owned and controlled contractors.
For today, however, let me merely highlight some of the
facts.
First, reducing the bond size will not increase access to
surety bonds nor reduce the price of these bonds.
Second, since the subcontractor's bond is to benefit the
prime and not the government, a prime contractor is not going
to provide a bond on behalf of its subcontractor. Federal law
doesn't even require the subs to provide those bonds.
And third, and probably most importantly, reducing the bond
size actually harms the small contractors that this is intended
to help.
Prior to 1999, the payment bond posted under the Miller Act
was in an amount less than 100 percent of the contract price.
In fact, at a sliding scale that was capped at $2.5 million,
subcontractors were not adequately protected and many refused
to work on Federal projects. They then approached Congress with
their concerns and the Miller Act was amended to have the
payment bond equal the performance bond. There is excellent
testimony in the Congressional Record on these concerns.
The statutory bond requirements throughout our country were
put in place to ensure that contractors working on projects
funded with taxpayers' dollars are qualified to complete the
work and pay their laborers and subs. And to ensure that if
they do not complete that work and pay those subs that a surety
steps into its place and does those things.
Sureties evaluate the contractors and provide the necessary
bonds. However, not all contractors have ready access to the
surety bond industry and not all are financially stable enough
to perform the jobs they wish to undertake.
Our written testimony describes numerous types of programs
that SFAA and the surety underwriters and producers have
undertaken at the State, Federal, and local level to address
access to surety bonds for small and emerging contractors. We
have implemented the programs around the country and they are
working. In some cases it has helped contractors get their
first bond, in other cases to increase the size of bonding that
they currently have.
We would be happy to work with the VA on a similar project
for veteran-owned and controlled contractors.
Education and access are not enough. Suffice it to say that
Federal construction projects are being let at sizes that are
much too large for small contractors to perform, they are being
bundled into projects that are much too large to be performed,
and these things must be changed. We have a number of proposals
in our written testimony to address those major fundamental
concerns, and we would very much like to work with Veterans
Affairs and the Subcommittee in implementing some of those
procurement changes that need to be adopted, as well as some
educational and access programs both through the Small Business
Administration (SBA), the U.S. Department of Commence, and the
VA, and put them all together into one coordinated effort,
which was proposed by a bill passed in February of 2008, H.R.
4253, that would coordinate all of these small business
programs.
Thank you for your time today, and we will be happy to meet
with you or answer any questions.
[The prepared statement of Ms. Schubert appears on p. 55.]
Mr. Perriello. Thank you, Ms. Schubert.
Mr. Walker welcome back to the Subcommittee, you are now
recognized for 5 minutes.
STATEMENT OF MARK WALKER
Mr. Walker. Thank you, Mr. Chairman, Ranking Member
Boozman, and Members of the Subcommittee, thank you for this
opportunity to present the American Legion's views on the
several pieces of legislation being considered by the
Subcommittee today. The American Legion commends the
Subcommittee for holding a hearing to discuss these very
important and timely issues.
I would like to say that the American Legion supports H.R.
1169, H.R. 1182, H.R. 2416, H.R. 2614, H.R. 2696, H.R. 2874,
H.R. 2928, H.R. 3223, H.R. 3554, H.R. 3561, and H.R. 3579.
The American Legion believes the increase in grant money
for specially adapted housing and automobiles will provide
severely injured veterans with a specific quality of life that
they are entitled to.
The American Legion believes enacting the legislation that
deals with VA business practices will provide capable veteran
services, disabled veteran businesses the maximum practicable
opportunities to compete and receive contracts from the VA.
The American Legion supports the amendments to the
Servicemembers Civil Relief Act that will protect military
spouses from income tax liability, give these spouses the
ability to vote by absentee ballot in his or her legal
residence, as well as clarify the servicemembers' right to
bring personal cause of action for damages against violators of
SCRA.
The American Legion also supports veterans having
apprenticeship and on-the-job training programs added to the
Post-9/11 GI Bill. We also believe this new education benefit
should be expanded to include title 32, active Guard and
Reserve.
The American legion supports the increase in funding for
flight training, and believes the Veteran Advisory Committee on
Education should be reauthorized so this independent body can
continue to analyze and develop intelligent practical solutions
to difficult issues and to present the solution to VA senior
leadership and Congressional Members and other stake holders.
Last, the American Legion supports the proposed increase in
reporting fees payable to schools that veterans are receiving
educational assistance from the VA. The increased funding could
assist with more staffing, provide better equipment, or allow
school's certified officials to attend training or other
workshops.
The American legion has no official positions on H.R. 294,
H.R. 2461, and H.R. 3577 at this time.
The American Legion appreciates the opportunity to present
this statement for the record. Again, thank you Mr. Chairman,
Ranking Member Boozman, and Members of the Subcommittee for
allowing the American Legion to present its views on these very
important issues today.
[The prepared statement of Mr. Walker appears on p. 60.]
Mr. Perriello. Thank you very much.
Mr. Brown, you are now recognized for 5 minutes.
STATEMENT OF JUSTIN BROWN
Mr. Brown. Thank you, Chairman. Chairman, Ranking Member
Boozman, Representative Bilirakis, on behalf of the 2.2 million
members of the Veterans of Foreign Wars of the United States
and our Auxiliaries, I would like to thank this Committee for
the opportunity to testify. The issues under consideration
today are of great importance to our members and the entire
veteran population.
The economic downturn has impacted the entire Nation, and
nowhere is it more demoralizing than with our recently
separated veterans. The most recent monthly survey from the
Bureau of Labor Statistics highlighted the dire situation
facing America's newest veterans. There are only 9,000 fewer
unemployed Post-9/11 veterans in the United States than there
are servicemembers in Iraq and Afghanistan. That's 185,000
unemployed veterans, compared to 194,000 Operation Enduring
Freedom and Operation Iraqi Freedom servicemembers.
The economic stimulus may or may not be working, but it
surely is not working for America's veterans.
In March of this year, the Veterans of Foreign Wars
testified before this body that the economic stimulus was
largely circumventing this at-risk population. We worked with
the Senate prior to passage of the economic stimulus in an
attempt to pass legislation that would help America help
veterans in the economic stimulus and through these tough
times. However, these changes never occurred.
In consideration of this, and the startling unemployment
numbers for Post-9/11 veterans, the VFW requests that any and
all Federal stimulus money be subjected to the same
requirements it currently is as if it were directly spent by
the Federal Government.
Federal laws relating to veterans preference and
contracting are being circumvented by distributing large sums
of Federal money in the form of State grants.
The VFW believes expansion of any government workforce as a
result of stimulus funds should be bound, as a condition for
use of Federal dollars, to adhere to all veterans' unemployment
laws; specifically the Veterans Employment Opportunity Act and
any government contracts awarded due to Federal stimulus
funding should be bound to set aside 3 percent of all such
contracts and subcontracts for disabled veteran-owned small
businesses as required by Public Law 106-50. Any company that
receives a contract of more than $100,000, and was funded in
any part from the Federal stimulus, should also be bound by the
Jobs for Veterans Act.
Our Nation's economic stimulus package should not be a
mechanism for skirting Federal veterans' employment and small
business laws. Less than one-half of the total stimulus dollars
have been distributed and this needs to be corrected
immediately.
We have submitted our views on the 14 bills in question.
Mr. Chairman, this concludes my testimony, and I will be
pleased to respond to any questions you or the Members of this
Subcommittee may have. Thank you.
[The prepared statement of Mr. Brown appears on p. 63.]
Mr. Perriello. Thank you. Mr. Wilson, you are now
recognized for 5 minutes.
STATEMENT OF JOHN L. WILSON
Mr. John Wilson. Thank you, Mr. Chairman and Members of the
Committee. I am glad to be here this afternoon on behalf of the
Disabled American Veterans to present our views. We are pleased
to support various measures insofar as they fall within the
scope of our mission. I would like to address these bills in my
testimony today: H.R. 294, H.R. 1169, and H.R. 2461.
The first bill the ``Veteran-Owned Small Business Promotion
Act of 2009,'' H.R. 294, reinstates and modifies this program.
While this bill would repeal the authority to make direct
loans, it instead grants loan guarantees for qualified
veterans. It would also address several other issues faced by
veteran-owned small businesses, such as reducing the minimum
disability rating eligibility from 30 percent to 10 percent,
increasing the maximum loan guarantee from $200,000 to
$500,000, authorizing VA to subsidize loans to reduce interest
rates by up to one-half percent, limiting performance bond
requirements for construction alteration or repair of any VA
public building or public work, and other benefits.
Veterans, particularly those with service connected
disabilities, have difficulty obtaining financial support. The
Small Business Administration established the Patriot Express
Loan Initiative to help veterans obtain business loans up to
$500,000 and to qualify for SBA's maximum loan guarantee of up
to 85 percent of the loan value of $150,000 or less, and 75
percent for loans more than $150,000. Unfortunately, lenders
require collateral to secure the 15 percent to 25 percent of
the loan not covered by the SBA guarantee.
It was the Independent Budget's recommendation that the VA
establish a loan guarantee program similar to the VA's Home
Loan Guarantee Program to provide recently discharged veteran
entrepreneurs the security needed to establish a small
business, even though they may be starting with little or no
income or collateral.
While H.R. 294 would not authorize loans, it does provide
VA-backed loan guarantees. Once bond issues are resolved, this
worthy legislation will provide an important tool to help
eligible veterans in these difficult economic times.
The second bill is H.R. 1169, which addresses both
specially adapted housing and the purchase of automobiles and
their adaptive equipment. It increases from $12,000 to $36,000,
the maximum amount authorized the VA can provide for those
veterans eligible for specially adapted housing features; from
$60,000 to $180,000, the amount authorized for the construction
of specially adapted housing; and from $11,000 to $33,000, the
amount authorized for purchase of automobiles and adaptive
automobile equipment.
The Specially Adapted Housing provisions of H.R. 1169 is in
agreement with one of two provisions of DAV's Resolution No.
176, which seeks an increase in specially adapted housing
grants, and we applaud the increase that this bill provides.
We would also ask for the Committee's consideration by
amending this bill to also provide for automatic annual cost of
living adjustments, the second provision of Resolution No. 176.
Such an amendment would allow this program to keep pace with an
expanding economy, eventually, and would be most beneficial to
eligible veterans.
Regarding the sections of H.R. 1169 dealing with the
purchase of automobiles and adaptive equipment, it is in
agreement with the DAV's Resolution No. 171. The current grant
of $11,000 represents only 39 percent of the average cost of an
automobile today. This bill, if enacted, would raise the
maximum amount to $33,000. The IB identified $22,800 based on
2007 data as the amount needed to restore the automobile
allowance to 80 percent of the average cost of a new
automobile. DAV endorses this increased amount to a maximum of
$33,000.
The third bill is H.R. 2461, the ``Veterans Small Business
Verification Act.'' This bill stipulates that those requesting
inclusion in the VA's database as veteran small business
owners, are also granting permission for the VA to verify their
eligibility as a result of that request. Such a database is
critical to Federal agencies when they certify veteran status
and ownership. We, therefore, support this bill.
We do, however, respectively request it be amended to also
require Federal agencies to certify veteran status and
ownership through the VA's Vendor Information Program before
awarding contracts to companies claiming to be veteran or
service-disabled veteran-owned small businesses. Government
agencies need a one-stop access to identify such small
businesses. This bill, if amended, would not only provide the
reliable database for just such usage, but also a one-stop
access point for government agencies.
That concludes my statement, and I look forward to any
questions you may have.
[The prepared statement of Mr. Wilson appears on p. 66.]
Mr. Perriello. Thank you very much, Mr. Wilson.
Mr. Weidman, welcome back, you are now recognized.
STATEMENT OF RICHARD F. WEIDMAN
Mr. Weidman. Thank you, Mr. Chairman. I would like to
associate VVA with the remarks from our distinguished colleague
from the VFW, because the use of the stimulus funds, it is much
deeper even than described. It is not only a veteran-owned
small business, the stimulus fund is basically freezing out
small businesses across the board, and Federal procurement
officers, contracting officers across the board are being
instructed to go to the stimulus funds and disperse those first
before going to dispersing of the regular fiscal year 2009
monies. And as you know, the stimulus package specifically
precludes any special provision for small business.
So we have talked to the White House about it, we have
talked to the National Economic Council about it, and we will
continue to press on that front, and it would help greatly if
in fact this Committee went on record as saying something needs
to be done about all stimulus funds. Expenditures in the future
must focus on small business and those amounts that are given
to the States in great chunks should also be adjusted to 23
percent going to small business, and 3-percent minimum going to
service-disabled veteran business owners. So I want to thank
the VFW for their leadership in this area.
In regard to the specially adapted housing and specially
adapted automobile grants, Mr. Boozman, I thank you for your
leadership in proposing this legislation, and particularly I
want to commend you that instead of a small increment, that you
took a major chunk and raised it significantly to bring it up
to date, so that in fact it is useful to those most profoundly
disabled veterans who need these alleged indications of funds
in order to lead a fairly normal life.
And similarly, Chairman Filner, in introducing the proposed
legislation to increase the amount for reporting by
institutions from $11 to $50 per will help significantly.
While we are on that, I hope that the Committee will some
time this Congress, if not this session, look to the issue of
establishing veterans offices. All that you have done and which
is extraordinary in the last Congress and this with the Post-9/
11 GI Bill is extraordinary in terms of helping people go to
school limited only by their own drive and their own hard work
as to which school they can get in to. But the key is not
getting in school, the key is graduates from school and getting
the degrees. And re-establishing the veterans offices as was
done in the seventies, at that time was funded by the
Department of Health, Education and Welfare, where there is
tutoring, where there are places for people to gather, where
there are lay counselors, if you will, or other students, upper
classmen who will help them through. We know that the veteran
clubs are making a huge difference where they are well
organized, but they are not well organized everywhere, and we
need that kind of support in order to optimize the huge
investment, and it is an investment not an expenditure, that we
have made in the tuition in paying for the Post-9/11 GI Bill.
So we thank you for you.
In regard to the ``Veterans Small Business Verification
Act.'' Both VVA and the Veterans Entrepreneurship Task Force
have consistently wanted the CVE or Center for Veterans
Enterprise database to be the gold standard in the Federal
Government. The reason why we have not pushed this in this
Congress is we are having so many problems with the backlog on
verification period there, number one, and number two is some
things that were not spelled out in the legislation before
were--seemed to make sense, although they don't make any sense
business wise, in terms of imposing requirements of the owner
being on site. Those were addressed in the bill that has been
introduced by Mr. Buyer, and we are grateful for that. You
don't have to be on site to be in control of the business
today. That is certainly the case. And yes, you can be in full
control of more than one business at a time.
So we commend Mr. Buyer for his ``Veteran-Owned Business
Promotion Act,'' and would also support that with two
reservations. One is we are not sure that the way in which the
surety bonding market works will accommodate the 50 percent,
that that is not the way to get to where we need to get to. And
second, that both this legislation and any other, veterans'
preference in employment is not an affirmative action group, a
motivation behind it. It is not to make up for social
economics. And the same thing is true when it comes to
business. It is a reward by the Nation for services rendered
and sacrifices made. It is a wholly different philosophic
basic, and we would object at any point to being treated as
socially and economically disadvantaged, because that is not
the philosophic basic for 106-50, nor for veterans' preference
in Federal hiring, nor for letting contracts, and we would urge
that we instead develop a way where contract officers,
particularly during the last quarter of the year when so many
contracts are let, can reach and directly contract with
service-disabled veterans on a par with any other group.
Mr. Chairman, I am over time, and I thank you for your
indulgence, and be happy to answer any questions, sir.
[The prepared statement of Mr. Weidman appears on p. 69.]
Mr. Perriello. Thank you very much. Ms. Roof, you are now
recognized for 5 minutes.
STATEMENT OF CHRISTINA M. ROOF
Ms. Roof. Thank you. Mr. Chairman, Ranking Member Boozman,
and distinguished Members of the Subcommittee. On behalf of
AMVETS, I would like to extend our gratitude for being given
the opportunity to discuss and share with you our views and
recommendations at today's hearing.
The Committee has my full statement for the record
addressing all pieces of legislation. So in the interest of
time I will limit my statement to three bills.
On a side note, AMVETS applauds the efforts of the
Subcommittee on their continued commitment to creating an
environment of stability and evenhandedness within our
veterans' community so that they may pursue and thrive in their
business and educational endeavors.
AMVETS supports H.R. 1169. Just as section 2604 of the
Housing and Economic Recovery Act of 2008 modestly increased
the adaptive housing benefits for disabled veterans by $2,000
in subsection (B) and 10,000 in paragraph 1, H.R. 1169 stands
to dramatically improve upon those initial steps and improve
the lives of thousands of veterans and their family.
While AMVETS applauds any increase to these benefits, we
believe this bill genuinely sets forth the changes needed to
bring these benefit amounts into the 21st Century and help
align them to the actual costs of living today.
AMVETS strongly recommends the immediate implementation of
these changes and that they shall apply with respect to
payments made in accordance with section 2102 of title 38, as
well as, being reflected in the Secretary's established
residential home cost-of-construction index for the purposes of
this subsection.
AMVETS also urges these benefit amounts to be regularly
reviewed by this Committee to ensure that they stay current
with the actual costs of living.
AMVETS also lends our support to H.R. 2461, introduced by
Representatives Herseth Sandlin and Ranking Member Boozman.
This bill sets forth the standards of business verification and
transparency that has been needed. As AMVETS has urged in prior
hearings, the integrity of VA's procurement process must be
protected, and this bill stands to do that. This bill will also
protect veteran-owned businesses from loss of awards due to
possible untruths or unverified statuses in ownership.
AMVETS agrees with the timetables laid out by H.R. 2461,
but has concerns on whether VA has an accurate and dependable
system and enough trained staff in place to handle the initial
heavy workload of verification and data processing.
As we have very recently seen with the rollout of the Post-
9/11 GI Bill, backlogs are occurring. There needs to be a
temporary plan of action in place and possibly temporary or
maybe even reassigned trained staff to assist with the initial
high volume verification process. As with the implementation of
any new procedure, difficulties and errors can arise. However,
AMVETS believes that VA can overcome any of these hurdles as
long as there is an appropriate action plan in place.
Once again, AMVETS commends the Chairwoman and Ranking
Member Boozman for leading the way in a call for transparency
and accountability as it relates to Federal procurement.
Finally, AMVETS strongly supports H.R. 1182 introduced by
Congressman Carter. AMVETS believes this bill is vital in
supporting our servicemembers and their families well being.
Currently, some SCRA protections are extended to military
spouses regarding certain service contracts, housing
agreements, and protection from eviction. However, AMVETS would
respectfully like to remind the Committee that our
servicemembers population has changed significantly since the
SCRA was originally enacted.
It is in the opinion of AMVETS that for our legislative
system to work correctly and to assist those for who it was
written, it must be kept up to date. Just as many of the pieces
of legislation discussed today will update current legislation
to reflect changes in our servicemember and veteran population,
the SCRA must mirror these changes as well. We most not forget
that military families sacrifice parts of their lives, without
complaint, so that their spouses may selflessly uphold the
rights and freedoms that allow us to meet here today.
Finally, AMVETS urges the Committee to continue on their
great endeavors of helping our veterans and military
communities.
And that is my testimony for today. Thank you.
[The prepared statement of Ms. Roof appears on p. 70.]
Mr. Perriello. Thank you very much, and thanks to all of
you for your ongoing advocacy and for your time today.
Let me begin with Ms. Schubert. Just to clarify, it is your
position that the amount of the bond is not going to affect the
availability within the program? If so, does this mean that no
matter how much the bond is lowered the business will still not
be able to secure a bond in the situations you described?
Ms. Schubert. The size of the bond is 100 percent of the
contract price. It is not that you reduce the size of the bond
as much the percentage. An evaluation of a surety in
determining whether to write a bond or not is based on the
entire contract and whether the contractor can perform that
contract. So when the surety makes its initial determination
whether to write it or not write it, it is based on the size of
the contract, and it is not based on what percentage of the
contract price the bond is.
Bonds are available, and what we would like to do is to
continue to work to make sure that contractors can develop and
grow and be able to obtain those bonds.
Mr. Perriello. Along those lines, what is your opinion of
the SBA Surety Bond Guarantee, which guarantees bonds for
contracts up to $5 million covering bid, performance, and
payment bonds for companies unable to secure bonds through
regular commercial channels?
Ms. Schubert. The SBA Bond Guarantee Program provides a
very valuable service. The use of the bond program has waxed
and waned over the years based on attention to it within the
administration and also the market, whether bonds are readily
available in the marketplace or whether a government program is
needed.
There are changes that are needed in the Bond Guarantee
Program, but the current staff that has been working on that
program for the last few years has made amazing strides, and we
have been working very closely with them on that.
There are some significant fundamental changes that need to
be made in the program. For example, there are currently two
different programs that probably should be merged into one. The
amount of the bond guarantee should be increased. The SBA and
the stimulus package increased the guarantee for the loan
program, but did not increase the size of the guarantee for the
bond program, and they reduced the fees for the loan program,
but they didn't reduce the fees for the bond program. Both of
those things would make a considerable difference in assisting
small businesses to get bonds through the guarantee program.
Mr. Perriello. Thank you. For the various VSOs, I have a
couple of questions. One, are there concerns in any of the
bills, including Mr. Miller's, that if it were to pass that
some employees might be hesitant to hire servicemembers? Are
there concerns about unintended consequences in terms of hiring
members of the National Guard and Reserves?
Mr. Brown. Thank you, which I remember. Could you just give
me the bill number really quick?
Mr. Perriello. H.R. 2696.
Mr. Brown. We only have 14, so my apologies.
Mr. Perriello. Understood.
Mr. Weidman. If I may offer a general comment. That that is
the biggest problem right now, is many employers, particularly
large employers, what they are saying privately is we are going
to take good care of the people we already have, but we are not
going to go hire anymore. And we are hearing that from the
military job boards and from the other people who are in the
placement business of those who are active duty or continuing
on in the Guard and Reserve rather. And you can make it
illegal, but that is not the issue. Because you are never going
to prove a negative, you know, about why somebody didn't hire
someone, particularly when we have high unemployment.
So we need to flip this on the head, if I may suggest, Mr.
Perriello, and we have proposed to the Small Business
Committees on both sides of the Hill that they move toward
doing employer incentives for having Guard and Reservists. That
would include moneys to train a replacement for the period of
time that the individual was deployed, and to retrain the
individual when they return, and you can do it through tax
breaks. We give tax breaks for all kinds of other things, and
this is one of the things that we need to reward.
There are about 10 percent of the Nation's employers who
are bearing 100 percent of the burden of this war for the
portion carried by the National Guard and Reserve, and we need
to equalize that burden among all employers, sir.
Mr. Brown. And Mr. Chairman, just to follow up. I would
agree with most of Rick's sentiments. I think on the front end
incentives always help in consideration of hiring veterans.
There is a tax break for very recently separated
servicemembers. I think that could either be extended or
increased.
But I think overall most of the individuals we are talking
about in regard to SCRA are already employed. I think employees
already know about the Uniformed Services Employment and
Reemployment Rights Act, so if they are hesitant to hire people
due to current laws in place, they probably already are. I
don't think that passage of this legislation would necessarily
greatly increase or lessen that risk. Thank you.
Mr. Perriello. Also to any of the VSOs, under H.R. 3223,
Mr. Buyer's proposal, how many businesses should a veteran be
allowed to have before being disqualified for business set
asides, if any, and is that a concern?
Mr. Weidman. It is actually not a concern to us. Let me
just take an example. We have the current chair of the GSA
Advisory Committee on Veterans Small Business who also sits on
the overall--John Moliere. John has three businesses. And CVE
refused to verify two of those businesses. And one of them is
he divided his Federal business into that which is essentially
clerical and that which is highly skilled and does basically
black contracts. And so there is a reason why he divided both.
Does he run both companies? Absolutely, which he is known about
being a control freak. I know he is in charge of both of those.
And he has a third company that deals with business to business
as opposed to business to Fed. There is a good reason why the
overall enterprise is organized the way in which it is. And I
can assure you that John is very much in control of all three
elements of it.
So the judgment that you can't control X number of
businesses I think, I just find it fallacious and flies in the
face of entrepreneurship in general, and flies in the face of
modern practices in management where you don't have to be on
site at any given time.
Our National President of Vietnam Veterans of America
really is our Chief Executive Officer, but he lives in New York
City. I can assure you that he is very much in control of the
entity.
Mr. Perriello. Should there be any distinction at all
between those that have been verified in terms of that role and
those that have applied but not been verified in terms of the
veteran-owned status?
Mr. Weidman. Not until they eliminate the backlog. We have
talked to the Secretary about this, we have talked to John
Gingrich, the Chief of Staff at VA, they have yet,
unfortunately they are naming a new head of Office of Small and
Disadvantaged Business Utilization (OSDBU), and that process is
taking much longer than it takes, unfortunately. And they have
reorganized that office with the departure of the previous
incumbent, Scott Denison, who rendered great service and
essentially did three jobs, and they broke the job into three
so that there will be a head of the Center for Veterans
Enterprise and then there will be a head of OSDBU and then a
person to head up both divisions. So those people have yet to
be named. And apparently they are waiting to make some of the
changes until then. That is one.
Two, is just last week they started--a contractor finally
started work to assist them with the verification process. But
until such time as they can eliminate that backlog on the
verification of veteran-owned service disabled veteran-owned
and ownership in control we think it would be unfair, and it
already is having a discriminatory effect about those who are
stuck in the queue versus those who already have the little
medallion. And at VA, they know that people are stuck in the
backlog.
The rest of the Federal Government, many people now are
already contract officers are looking as to whether people are
verified are not, and if you are not verified, they are passing
over those folks. So we need to get this problem solved. And
like I say, we brought it to the attention of Secretary
Shinseki and his people repeatedly. They say they are doing
their things and we will see in the next 30 days whether they
can really knock this backlog down and eliminate it, sir.
Mr. Perriello. One last question before I recognize the
Ranking Member. Looking at H.R. 2416 for a moment, with the
issue about VA's purchasing of goods and services through the
Federal supply schedule. Are there any concerns that this could
restrict the VA's acquisition choices? I am referring to H.R.
2416. Perhaps Mr. Walker, could you address?
Mr. Walker. I couldn't comment on that as of now. But the
reason that we are supporting the bill is we want to give the
maximum opportunity for veteran service--disabled veteran
businesses to compete and receive these contracts. We think
there is a lot of money being left on the table and we just
want to make sure that--although now we do applaud the VA has
reached their goals and exceeded in some ways, so the VA is
doing a good job, but we want to continue and not make the sort
of 3-percent goal, or the goals that they said some sort of
ceiling, but that they continue to say if the veterans business
owners are out there that can compete and have the capacity,
every one of them should be recognized to compete and receive
these contracts.
Mr. Weidman. If I may kick in on that. The problem with the
Federal supply schedule, as you know at the VA any way, the
General Services Administration delegates authority to the VA
to administer their supply schedules. We believe that if you
delegate it that you have to adhere to GSA laws, and in fact,
VA is invoking generally what they call value added, which is
very subjective, and/or what is known in some States as a
manufacturer's rule. In other words, if you don't manufacture
something then you can't be the one. What this does is this
knocks most small business, not just veteran-owned small
business, out of getting on the VA supply schedules.
Small business does not make very expensive medical
equipment. Many of the manufacturers of very expensive medical
equipment don't even have a marketing for us anymore, they work
only through brokers.
So the subjective judgment by the folks at VA, and it is
very subjective, I can assure you, as to what is value added
and, therefore, to let those people onto that supply schedule
at VA is just wrong. VA should be adhering to the GSA law, and
if they don't adhere to it, we have told GSA you should revoke
it because these people are breaking the law.
So the problem is not that people--the problem is getting
service-disabled veterans, small business, and other small
businesses on the supply schedules at the VA.
Insofar as the bill, the limited thing about setting aside
3 percent, we don't object to that, but what we do object to is
the difficulty that is much more different at VA than elsewhere
to get our people onto the supply schedule itself.
Mr. Perriello. Thank you. Let me recognize the Ranking
Member Mr. Boozman.
Mr. Boozman. Thank you, Mr. Chairman. I appreciate you all
in the sense that so many veteran-owned businesses are small
business. In fact, I have said the vast majority, and you all
would know the percentage better than I, although I should know
it very well, but you are right, the things that affect small
business affect veteran-owned business. Because if they don't
have the opportunity then you just can't do it. So I really do
appreciate that. And I don't say that in a partisan way at all.
I think that my colleagues on both sides would agree with that
very much. Any way that you can help with us pushing as far as
stimulus money or any money to make things easier really is
very, very important.
Small business is the backbone of our economy. And as you
guys know, it is very tough in the real world right now. It is
just very, very difficult, and so our small businesses really
are hurting at this time.
Let me ask you, Mr. Weidman, about this bond situation, the
ability of the prime contractor purchasing the performance bond
on behalf of their subcontractors. Can you help me better
understand that, your perspective as to whether or not that is
a good thing or a bad thing?
Mr. Weidman. The really sticky wicket for a lot of veteran-
owned construction funds is they partner with larger
individuals who have the organizational capacity. However, if
their partner, which has 49 percent of the enterprise itself is
the one who can get the bonding, then they can't be considered
as Disabled Veteran-Owned Business for the purpose of the joint
enterprise. Am I making sense?
Mr. Boozman. Yes.
Mr. Weidman. So that they have the organizational capacity,
they have the expertise in order to get the job done, but they
can't get the bonding because they don't have the wherewithal,
or even though they may have a successful track record at
smaller jobs. So it becomes a conundrum, if you will, about how
do you get the bonding because otherwise you can't bid? And if
you partner with somebody who can get the bonding, but they are
the ones who have to provide all the bonding, then you are
getting knocked out of being a Service-Disabled Veteran-Owed
Business and, therefore, aren't eligible to compete under the
set-aside.
So we need to figure out a number of things it seems to me.
One is for all small business bidding on major Federal
construction projects is mostly handled by the dams. Dams is a
better example. It is almost all Canadian firms now. You know
why? Because American firms can't get the surety bond, and the
Canadian Government gives the surety bond for those things
happening. So it is Americans doing the subs, but the Canadians
are the primes on dams in America. I mean it is crazy.
We have got to figure out a better way to make this work
and where there is need for a government surety bond we can do
it, one.
Two, is at the VA we have seen them waive surety bonds for
so-called jay water ability one contractors. If they can do it
for them there is no reason why they shouldn't be able to do it
in some cases for service-disabled veteran business owners.
Mr. Boozman. So Ms. Schubert, this is the problem. Is there
a ccommonsense simple way to fix that?
Ms. Schubert. There absolutely is. As he was saying
originally, the major concern is that the small contractor gets
no-certified as a small contractor by being in a joint venture
with the larger contractor providing the bond. There is a very
easy solution to that, which is you should allow the larger
contractor in the joint venture to be able to provide the
access to the bond. Their surety writes the bond for the entire
joint venture, which does two things, as long as you don't then
say that the joint venture no is longer entitled to the small
business set-aside. One, you get the project, and two, the
small contractor then develops a relationship with that surety
who begins to understand their capabilities because they are
with them throughout that project and they move into being able
to get the bonds on their own through that surety or through
another surety.
The Bond Guarantee Program is a good example of how the
government should be involved in surety bonds, not necessarily
providing a direct bond.
So on this particular bill, if we could amend the language
so that we don't have prime contractor and subcontractor, but
instead we address the issue of joint ventures it would go a
long way to solving this problem.
Mr. Boozman. Good. Hopefully we can work on that. And again
that is encouraging.
So let me put you guys on the spot just a little bit. We
have a lot of bills that are very worthwhile, many of them
involve PAYGO. I want to hear from all of you if you would
comment. If we do have a limited amount of money to offsetting
things, what would be your order of preference? I mean, are
there some bills that are more important they others? I get put
on the spot all the time, so it is okay for you guys.
Mr. Weidman. Well some of the bills don't have a major
cause. Like the spouses bill.
Mr. Boozman. Exactly.
Mr. Weidman. We should do that just because--as was said, I
spent a lot of time at Walter Reed in Bethesda with the young
people, and it is the individual soldier or Marine who gets
hit, but it is the whole family that has to recover. And the
families do pay an enormous price. And anything we can do in
the bills currently pending before this Subcommittee aren't
costers.
In terms of priority, it always has to be for those who are
the most disabled, and so the adaptability grants have to come
first. And second, those things cost money. The big one here is
of course the putting $1 billion into business loans. The
question is whether or not that is an investment or is that an
expenditure? Now, I know that the CBO, the Congressional Budget
Office, doesn't care and they don't distinguish between it, but
I think that the use of the GI Bill is a good example. It is
good investment to invest in veteran-owned small business.
Perhaps one way to leap the cost of that dilemma is to do a
guarantee revolving fund. And I would be glad to work with the
Committee on that. That wouldn't be dissimilar to a bill that
was sponsored almost a decade ago for multiple-family
transitional housing. And essentially what it did is provide an
overall guarantee that then would attract--make it probably to
attract private capital. And it seems to me that that might be
something that would be more useful.
But the crux of the issue is for veteran-owned and
particularly for service-disabled veteran-owned, securing
capital is a son of a gun. And when your lender finds out that
they can't garnish your compensation, this is particularly for
100 percenters, a lot of them just don't want anything to do
with you, particularly traditional banks. And so it is very
difficult to get initial funding, and even more difficult to
get the all essential what is known as mezzanine funding. In
other words, you have got it up and running and you need to
take the next steps in terms of expanding in order to be able
to sustain the business, and this is tough for all small
business, but it is particularly tough to service disabled is
to get the funding to take the next step so you can make the
business sustainable over a multi-year period.
Mr. Boozman. Mr. Brown.
Mr. Brown. Thank you for the question, Ranking Member
Boozman. Some of these aren't going to cost a lot of money. We
have SCRA fixes. We should be able to get those done.
The big one on the table that I see that is going to cost
some money would be H.R. 3577, and that is the fix for the
title 32 Guard and Reservists. These guys, many of them already
should have been eligible. We have our men and women who have
fought overseas and are not eligible for the GI Bill. I think
that is a gimmick.
But you know, also getting some of the stimulus money to
small businesses, especially veterans. Veterans hire veterans.
And you know, as far as economic fixes, that is really where I
think we should be looking is the stimulus and regulating
Public Law 10-650. It has been 10 years since we passed Public
Law 10-650 and we are still not even half way there. We are not
even at 1.5 percent. And so I think those are the things that
really could help unemployment for America's veterans. Thank
you.
Mr. Boozman. Very good. Mr. Walker?
Mr. Walker. I would say title 32 is our main priority for
the Legion as well, along with the adaptability for housing.
And I think also that we, although it is a small change, but
the increase for reporting fees for the school certifying
officials. We think they are overloaded and they need some
assistance, and we think that would be well worth a few funds
that would go there.
Mr. Boozman. Very good.
Mr. John Wilson. And I would be pleased to respond on the
record to that question, sir.
[Mr. Wilson subsequently provided the following
information:]
My review of the legislation and preference ranking focuses
on those bills that I supported in my testimony, which fall
within the scope of the DAV missions as they relate to the
needs of service-connected disabled veterans.
Order of Preference
1. LH.R. 1169, addresses specially adapted housing and
purchase of automobiles and their adaptive equipment
2. LH.R. 294, Veteran-Owned Small Business Promotion Act of
2009
I naturally defer questions regarding PAYGO to the due
consideration of Congress.
Mr. Boozman. Sure.
Ms. Roof. Which bill numbers were yours again? I am
kidding. Just real quick. I think I agree with Justin and Rick.
Some of those are going to be really not that difficult to get
through and not cost a lot of money, but I don't think it is
fair necessarily to put one class over another one.
But some bills that do stand out to us are again H.R. 1182,
the military spouses residency. That should be pretty easy in
the long run to get done. Also H.R. 1169. That is so past due.
Bring rates up to where they should be to help these men and
women who come home and need to be able to sustain a good
quality of life.
Mr. Weidman. Those eligible under chapter 32 should have
been included in the original GI Bill, and to some degree there
was recognition of that in a phrase that was coined bid Bob
Norton, ``Same hostile fire, same benefits.'' But the same is
true, the decision about whether or not you say in the States
in the Contiguous United States, and that is where you are most
needed or you go into the combat theater is usually not the
servicemembers choice. And in many cases they would rather go
deploy because their unit is going, but operations require that
their particular skills are most useful to the war effort some
place else that is not in the combat theater of operation, and
they shouldn't be penalized for that. Same service, same
benefits.
We need to rectify it. If we have got to wait for an
emergency appropriation, an emergency supplement in order to
establish that next February then so be it, but it needs to be
made equal across the board. Because even counting the Guard
and Reserve, it is 1 in 100 Americans who are wearing the
uniform today and we need to recognize that service and
sacrifice.
Mr. Boozman. Good. Thank you, Mr. Chairman.
Mr. Perriello. Let me reclaim the time for a couple of
questions. One for Ms. Roof and Mr. Brown.
On the issue about some of this work with small businesses.
Should we be asking the SBA to provide better services or
should we be looking to create sort of a mini SBA within a VA
system?
Ms. Roof. I am going to have quite an extensive answer for
that, so I would like to submit that to you in writing for the
record.
[Ms. Roof subsequently provided the following information:]
I believe we should be asking not only SBA, but OFCCP, DOL,
and all agencies involved with veteran entrepreneurship to
provide better services to our veteran community. These
services should include, but not be limited to, outreach and
education on available resources, better loan programs, new
business and entity formation education, and more staffing to
meet the increasing number of veterans entering into self owned
businesses. I think that placing all of the responsibility
solely on SBA would be a misuse of available programs and staff
already in place, but not being used correctly. I do not
necessarily believe that an entire new agency is warranted,
however I do believe that through agency partnering and proper
delegation of responsibilities throughout the agencies all
ready in place can be very beneficial in fully meeting the
needs of our SDVOSB and VOSBs. The best way to develop a
stronger program is not necessarily through more studies, but
going back to basics by bringing together key figures and solid
data from SBA, OFCCP, VA, DOL, OPM, and all other agencies
tasked with providing services to SDVOSBs and VOSBs. I am
suggesting these agencies regularly meet and quite basically
pool and share all their ideas, successes and failures, and
data to establish what is working, what areas are lacking, and
what areas and activities are being duplicated. Duplication of
efforts is often overlooked and is vital in establishing
necessary metrics of any successful program. Weeding out
duplication also allows for the allocation of misused funds to
new or improvements to current initiatives. There seems to be
an overwhelming, self proclaimed, lack of or nonexistent
communication and exchange of the most basic data between
agencies that are all suppose to be working toward a common
cause. This does not seem reasonable, nor cost effective in
meeting the needs of our veteran entrepreneurs and providing
the best programs, outreach, and assistance that, at minimum,
expected and outlined by law and Federal regulation. The
resources and staff are not necessarily the most adequate in
meeting the huge increase in the VOSB community since 1996,
however I think it would be a vital mistake and misuse of
appropriations not to thoroughly examine all programs currently
in place and to use all the years of experience and data that
is all ready out there. Establishing a solid centralization of
many of these activities and responsibilities to better track
accountability and transparency will, if done correctly, will
immensely benefit our veterans' business community. I believe
they will see faster than normal results and start benefiting
from a system based on accountability, transparency, and
communication. I believe it is important to add, that this
Committee be tasked with holding all parties involved
accountable to timelines and results if the suggested
partnering and/or shifting of responsibilities was to occur. I
also believe that the Committee be permitted to take the
necessary actions they find fitting if certain individuals or
agencies do not openly and actively participate in the
betterment of services we owe our SDVOSB and VOSB communities.
Mr. Brown. Mr. Chairman, I think it is a very good question
and one that has been tossed back and forth. Should a robust
business program for veterans be in the VA or should it be in
the SBA or should we ask the SBA to do more? I think to ask the
SBA to do more without additional resources is going to be
tough. Their funding is for veterans to my understanding is
very low. After they essentially pay their overhead they don't
have a lot for veterans' programs. And in fact, the House did
pass a bill this year to dramatically increase that funding,
but I don't think it has gone anywhere in the Senate.
So it is a good question. I think the answer is it needs to
be one or the other, but either way it needs to be an expanded
veterans business program for both training and then access to
those contracts and enforcement of Public Law 10-650 and the
other veteran small business laws that are out there. Thank
you.
Mr. Weidman. Vietnam Veterans of America has favored and we
have it as one of our top four legislative priorities is
creation of a fourth division of the VA that would be the
economic opportunities administration. We need to get the GI
Bill and vocational rehabilitation away from comp and pen and
away from the give me mindset and focused on helping people
become as independent as possible. We need to greatly expand
CVE and find a way to include the loan fund or a version of the
loan fund that was proposed by Mr. Buyer in legislation before
this Subcommittee. And frankly, have much better relationship
and expand the employment placement specialists that are
associated with VA vocational rehabilitation. There are only 62
currently in the entire Nation. We need to have many more.
Last, but not least, in that regard is so that--the real
point here is this, is that we only--everybody looks to the VA,
people don't look to the SBA for any part of veteran services,
one.
Two is there is no organizational capacity after the
ravages of the last 20 years at SBA. They just don't have the
staff, much less staff with expertise as a general rule at the
service delivery point at the district office. What does exist
in every Congressional district is at least one of the 1,000
small business develop centers and some way of incentivizing
the development centers to meet the special needs of veterans
may be the way to do it.
Last, but not least, I just want to say it is not Bill
Elmore. I mean he is not seven people to serve the entire
veterans constituency including Admin. I mean, I don't care who
you are, you can't do the Nation with seven people no matter
how good you are to do that.
So the resources have not been there at SBA. They have more
resources at VA. And each has a piece of that. I don't think
you need to have either or ultimately. SBA is going to be what
it is and we should increase the organization and the capacity,
but we believe very strongly that we need an overall economic
opportunities administration as part of the VA that has a
robust center for veterans enterprise and it is closely
coordinated with the small business develop centers, the PTACs,
and other resources that are out there across the country to
help veteran entrepreneurs get what they need when they need it
in order to succeed at business.
Mr. Perriello. Mr. Boozman, do you have any additional
questions?
Mr. Boozman. I don't think at this time. What we would like
to do, we have got a couple things though that we probably will
submit in writing if that is okay and see if you guys can help
us out in that regard. Thank you.
Thanks very much for being here as always, the panel was
very, very helpful.
Mr. Perriello. Thank you, we will submit additional
questions in writing. Thank you so much for testifying before
the Subcommittee, your feedback on legislation before us today,
and for your dedication to our Nation's veterans. Thank you
very much.
We now invite panel three to the witness table.
Mr. Boozman. We now invite the panel three witnesses to the
table. Joining us on our third panel is Mr. Keith Wilson,
Director of the Office of Education Service, Veterans Benefits
Administration, U.S. Department of Veterans Affairs. Mr. Wilson
is accompanied by Mr. John Brizzi, Deputy Assistant General
Counsel; Ms. Gail Wegner, Acting Director, Office of Small and
Disadvantaged Business Utilization; and Mr. Ford Heard,
Executive Director, Center for Acquisition Innovation Office of
Acquisition and Logistics, U.S. Department of Veterans Affairs.
Your full written statements will be entered into the
record as well.
Mr. Wilson, we welcome you back, and you are now
recognized.
STATEMENT OF KEITH M. WILSON, DIRECTOR, OFFICE OF EDUCATION
SERVICE, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF
VETERANS; ACCOMPANIED BY F. JOHN BRIZZI, JR., DEPUTY ASSISTANT
GENERAL COUNSEL, OFFICE OF GENERAL COUNSEL, U.S. DEPARTMENT OF
VETERANS AFFAIRS; AND GAIL WEGNER, ACTING DIRECTOR, OFFICE OF
SMALL AND DISADVANTAGED BUSINESS UTILIZATION, U.S. DEPARTMENT
OF VETERANS AFFAIRS
Mr. Keith Wilson. Chairman Perriello, Ranking Member
Boozman, good afternoon. I am pleased to be here today to
provide VA's views on pending legislation. I regret VA did not
have sufficient time to formulate Departmental views on five
measures, H.R. 1169, H.R. 3554, H.R. 3561, H.R. 3577, and H.R.
3579. However, we are pleased to provide written views as well
as cost estimates for the record.
[The Departmental views for H.R. 1169, H.R. 3554, H.R.
3561, H.R. 3577, and H.R. 3579, appear in Post-Hearing
Questions and Responses for the Record, which appears on p.
104.]
H.R. 2614, the Veterans Advisory Committee on Education
Reauthorization Act of 2009, extends the current termination
date of the Veterans Advisory Committee on Education for 6
years, from December 31, 2009 to December 31, 2015.
VA supports this legislation; the Secretary looks forward
to continuing to receive recommendations and advice from the
Committee.
H.R. 2928 would amend the Post-9/11 GI Bill by adding a new
section to provide benefits for apprenticeships and on-the-job
training.
VA supports allowing individuals to qualify for the Post-9/
11 GI Bill to receive benefits for OJT and apprenticeship
training, subject to Congress identifying offsets for any
additional costs. However, we do have reservations about this
bill, as drafted, as outlined in my written testimony, and we
would be pleased to work with the Subcommittee to formulate
appropriate legislation.
H.R. 1182, H.R. 2874, and H.R. 2696 cover areas under the
jurisdiction of the Department of Defense, Department of
Justice, and the Department of Education. The VA defers to
those agencies regarding the merits of those bills.
H.R. 294 would re-authorize the Small Business Loan Program
for service-disabled veterans with disability ratings of at
least 10 percent. VA supports reauthorization of the loan
program in order to increase employment opportunity for
veterans and to promote economic stabilization by encouraging
the establishment and expansion of veteran-owned small
businesses.
However, VA believes that a partnership with the Small
Business Administration through an inner agency agreement would
be a more preferable mechanism in order to gain the benefits of
SBA's expertise in administering business loan programs.
Section 4 of the bill would align VA's contracting
processes for veteran-owned small business with SBA's section
8(a) Program. VA is unclear of the intent of the provision.
Under 38 U.S.C. 8127, veteran-owned small businesses already
have priority over section 8(a) contractors. Veterans'
achievements under 38 U.S.C. 8127 since its mid-2007 effective
date demonstrate that the new program's sourcing priority is
helping to ensure equitable consideration of veteran-owned
small businesses in VA contracts.
VA is concerned that the proposed provision would create
confusion and have unintended negative consequences on existing
authorities. For those reasons, VA does not support H.R. 294.
H.R. 2416 would mandate VA use Federal supply schedules to
meet the goals established by the Secretary under statute. We
cannot support this bill since would be far too restrictive for
VA acquisition operations and would remove any business
discretion that VA contractor officers have to consider other
acquisition vehicles such as competitive set asides, soul
source awards, or full and open market competitions when
appropriate.
H.R. 2461, the ``Veterans Small Business Verification
Act,'' would amend title 38 to clarify VA's responsibility to
verify the veteran status of the owners of small businesses
concerns listed in the VA database.
VA awarded a contract for VA Verification Program Advisory
and Assistance Services and the contractor became fully
operational in July 2009. The contractor will benchmark the
existing verification process and recommend improvements.
In addition, the U.S. Government Accountability Office is
completing its own review of the verification program. The cost
to verify the 17,000 businesses in the database in the time
frames contemplated would be approximately $12 million
annually.
For the foregoing reasons, VA does not support enactment of
this bill. However, we would be pleased to work with the
Subcommittee to formulate appropriate legislation.
H.R. 3223 would require a VA contracting officer to award a
contract to a small business concern owner and controlled by
veterans using other than competitive procedures in specified
circumstances.
VA believes that the proposed language would be too
restrictive and would remove necessary business judgment that
would be made at the discretion of VA contracting officers to
acquire goods and services by the best means available for an
applicable acquisition.
Additionally, permitting part-time ownership, remote
ownership, or ownership of multiple businesses by a single
eligible party increases the likelihood that businesses
controlled by ineligible parties may receive contract awards
from the Department. For those reasons VA does not support the
enactment of H.R. 3223.
Mr. Chairman, that includes my statement. I would be happy
to answer questions you or other Members of the Subcommittee
may have.
[The prepared statement of Mr. Wilson appears on p. 71.]
Mr. Perriello. According to your testimony you are
concerned about the on-the-job training bill, that it does not
clarify how monthly rates should be established and that you
recommend a basic amount to help determine a monthly benefit
rate similar to how chapter 30 is determined. If the
legislation would take this approach, would you have a
recommendation?
Mr. Keith Wilson. We would have a recommendation to tie it
to the current rate, which is the existing chapter 30 rate.
Mr. Perriello. If a monthly benefit rate similar to what is
used for a chapter 33, can the VA use its current payment
system in that?
Mr. Keith Wilson. I would have to provide a written
response for the record. We would need to look into the details
of our IT technology.
[The VA subsequently provided the information in the Post-
Hearing Questions and Responses for the Record, which appears
on
p. 104.]
Mr. Perriello. Okay. You state that the VA does not have a
current system to pay OJT and apprenticeship for chapter 33.
What is the difference between the current OJT under chapter 30
and then the potential of this new one?
Mr. Keith Wilson. The amount of dollar benefit that is paid
out is the same; however, the mechanism in which we pay to
calculate the benefit and pay the benefit is done separately in
what we have put together in an interim solution for chapter 33
benefits, and that interim solution was based on paying
schools, IHLs, largely individuals into granting programs.
Mr. Perriello. On the small business side, in your written
testimony you state that the proposed language under H.R. 3223
would change the wording in section 8127 from ``may'' to
``shall.'' You say that that change would be too restrictive.
In your opinion does changing the current wording from ``may''
to ``shall'' benefit or hurt the veteran-owned small
businesses?
Mr. Keith Wilson. I would like to request Ms. Wegner
respond to that question, please.
Ms. Wegner. Thank you for your interest, sir. We believe
that the acquisition community in the Department of Veterans
Affairs has strongly shown their support for veteran-owned
businesses, for that reason we would like for them to have the
flexibility to choose whether to non-competitively negotiate
with a veteran or service-disabled veteran-owned business as a
permitted under 8127 or to compete the requirement.
Mr. Perriello. Does the VA have personnel and expertise to
set up a program as outlined in H.R. 294, the ``Veteran-Owned
Small Business Promotion Act?'' This would be essentially the
mini SBA idea.
Ms. Wegner. We like the idea of a stronger partnership with
the Small Business Administration. We in the Office of Small
and Disadvantaged Business Utilization rely heavily upon the
expertise of the small business development centers in
assisting veterans in establishing more successful businesses.
So anything that we can do to promote greater collaboration and
communications with the SBA offices, especially those offices
that promote government contracting requirements and manage the
SBDCs, we would like to do that.
Mr. Perriello. It is our understanding that VA only needed
assistance in completing the business verification backlog and
then VA would be able to handle the incoming applications with
the people in place. Is that correct?
Ms. Wegner. We do have a number of applications that are
currently in process. We have made great strides in the past 60
days to gain additional resources that will enable us to
process those applications more quickly. Does that answer your
question, sir?
Mr. Perriello. I think so. Well can you explain why it
would cost $12 million annually to process the 17,000
businesses in the database?
Ms. Wegner. We do have an estimate of how those costs are
derived and would be happy to provide that to you.
[The VA subsequently provided the information in the Post-
Hearing Questions and Responses for the Record, which appears
on
p. 104.]
Mr. Perriello. And related to that, did the VA hire a
contractor to assist with the business verification backlog?
And if so, when is that proposed to be finished?
Ms. Wegner. To be finished? It is not going to be finished
for a while, Mr. Chairman. Actually we have multiple
contractors who are assisting us at this point in time. You
have already received information about our advisory and
assistance services contractor who is looking at the entire
program as we have currently developed it, comparing it with
other set aside programs at the Federal level and also in
commercial sector to see if we can learn from best practices
and apply those to our verification program.
In addition to the advisory and assistance services
contractor we also have the services now of an on-site survey
company that will go out and do inspections of the applicant
businesses, and we have most recently acquired additional
supplemental labor to process applications. So we have got lots
of contractors ready to go and tackle our inventory.
Mr. Perriello. Let me just ask one last question. It has
been stated that in the regular world people can have as many
businesses as they would like. Is the set aside program an
artificial world with set asides for specific groups not found
in the regular world? Or in the regular world there is no
competition restriction for contracts? How do we compare these
worlds?
Ms. Wegner. The set aside world as you have heard today has
lots of rules on it, specifically with regard to who you can
partner with and how you can partner with those other entities.
We heard mention earlier of joint ventures and the restrictions
that are placed upon a business owner seeking to establish a
joint venture agreement. Currently if you partner with a large
company that will disqualify you from being able to participate
in a set aside requirement being issued by a Federal agency.
So that has created some conflicts and some loss of
opportunity for some businesses, especially with regard to
bonding. So there are artificial requirements in the set aside
world that don't apply in full and open competition.
Another example of those restrictions concerns the
limitations on subcontracting. In a full and open competition a
business owner can win an award and subcontract as much as he
or she wants to. In a set aside competition where a business
owner wins that award they have to agree to perform X amount of
labor with their own workers or with workers from a like
company. That has been another major impediment. And the owners
come to the small business development centers, and the
advocates for small business and say, ``Why are these extra
rules placed upon us?'' I don't know the answer to that
question. All I know is that the Federal acquisition regulation
is the guidance that the acquisition community follows and we
need to conform to that.
Mr. Perriello. Let me recognize Ranking Member Boozman.
Mr. Boozman. I guess my question would be, Ms. Wegner, how
many businesses have applied? I guess I would like to know how
many have applied and then how many have we approved.
Ms. Wegner. I can give you that answer. I didn't bring the
answer of how many businesses applied only once. I can tell you
with certainty that as of today we have received 4,772
applications. Of those applications that we received we have
approved 1,726 as of today. We have excluded from consideration
500 applications because they came from business owners whose
character of military service could not be identified in the
Veteran Benefits Administration's database. That is about 10
percent of everybody that got approved.
Mr. Boozman. Right.
Ms. Wegner. And we have denied for consideration about, let
us see, a little over 100 businesses have been denied, 122 to
be exact.
Mr. Boozman. Okay. So the other thing would be in the last
year how many have we gotten approved? What I would like to
know is, you know, if you look at this last year, your approval
rate versus who you project we are going to do in the next year
with the increased staff.
Ms. Wegner. Oh, sure. With the additional support that we
now have and with our new ability to work from alternate work
environments, which gets us out of our telephone coaching
requirement in the CVE, we estimate that we are going to be
able to raise our processed application weekly estimate from
what we have historically done, which is 50 applications per
week, to if we exercise all options with our contractor
support, we will be able to go up to 1700 applications a month.
So that is going to go from 50 to about 400 applications a
week.
Now that is going to be a real challenge, and part of those
challenges are, you know, administrative. Where are we going to
put the people? Are we going to keep up with the administrative
processes? But I am feeling, as some of you may be aware, we
encountered some surprising challenges in the first year of
this program. At this point in time we are feeling much better
about the Department's ability to actually get the work done on
time and properly.
Mr. Boozman. Good, very good. Mr. Wilson, I support Mrs.
Kirkpatrick's bill to extend the Advisory Committee. Are you
happy with the current make up of the board? Do you feel like
that that is appropriate? Do we need to make some changes in
that regard? What is your recommendation?
Mr. Keith Wilson. I believe we have a good make up in the
board. We have got diverse representation. We have a high level
of expertise in that area. And we don't have problems
recruiting folks to dedicate their time to being on the
Advisory Committee. So we are satisfied.
Mr. Boozman. Let me ask. SFAA mentioned agreements with
several Federal agencies to promote small businesses. If a
similar venture was concluded between VA and SFAA, which VA
office would be the appropriate office to manage such a
program?
Mr. Keith Wilson. I will ask Ms. Wegner to respond to that,
please.
Ms. Wegner. And Ms. Wegner has no answer for you, sir, but
we will certainly get one after this meeting.
[The VA failed to provide the information for the record.]
Mr. Boozman. Thank you very much. SFAA mentioned their
willingness to work with VA to promote veteran-owned small
businesses. Would the Department welcome such assistance, and
who would be the point of contact at the Department? And that
might be another--go ahead.
Ms. Wegner. I will take that hat temporarily. In the
history of the Small Business Program for veterans we have
heard continually that bonding is a problem.
Mr. Boozman. Right.
Ms. Wegner. Knowing that there is now an education program
established through SFAA we can incorporate that in VA's Small
Business Program to train our contractors through Federal
contractor certification. So we can own that. Education is one
that I don't think we are going to have an issue with. The
other part we will need to get back to you on.
Mr. Boozman. Okay, very good. Well as you said, I think we
all agree that that is a problem, and it does seem that working
together it is a very solvable problem.
Okay, thank you, Mr. Chairman.
Mr. Perriello. Let me just go back to one other question
which many people raise with me and others. The concern about
quote unquote, ``rent a vet'' scenarios. Is this a valid
concern? If so, do you think that that part-time ownership,
remote ownership, and ownership of multiple businesses
contributes to this problem?
Ms. Wegner. Rent a vet is real and it has been getting
worse. It has gotten a lot worse in my opinion over the past 3
or 4 years as we have seen other Federal agencies step up their
interest and ability to issue set asides for service-disabled
veteran-owned businesses.
We have a very good relationship with SBA's Office of
Government Contracting who provides us on the days that they
are issued with protest decisions, decisions that are being
released by their Office of Hearing and Appeals on protests of
eligibility. We get those on a regular basis, and control is
the significant factor in many of these decisions. So we have
used the decisions that we have on file in our organization to
make a decision that says at this point in time we really do
not want to bring part-time owners into the program. We would
like to Reserve that discussion for a later date after we have
had the opportunity to review the other programs in Federal
Government and other commercial sector programs more carefully
to see if they have part-time ownership eligibility.
We do have correspondence from the SBA strongly
recommending to us that we encourage full-time ownership as
much as we can, and if we were to make an exception that we
would have to have a statement from the business owner as to
why they could not run the business on a full-time basis.
Mr. Perriello. Thank you all very much for your time and
for your service to our Nation's veterans. I want to thank
everyone who was part of this hearing today. I look forward to
working with Chairwoman Herseth Sandlin and Ranking Member
Boozman, as well as my colleagues on the Subcommittee and our
panelists as we continue to evaluate the suggestions that were
provided to us today.
This hearing stands adjourned.
[Whereupon, at 3:11 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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Statement of Hon. Stephanie Herseth Sandlin, Chairwoman,
Subcommittee on Economic Opportunity
Today we have a full schedule that includes fourteen bills before
us that would address the unique needs of our veteran population. The
bills before us today seek to: address veteran-owned small business
matters; expand protections provided under the Servicemembers Civil
Relief Act; and address the unmet education needs of our Nation's
veterans.
Included in today's hearing will be legislation I introduced
earlier this year. H.R. 2461, the Veterans Small Business Verification
Act seeks to verify that applicants to the Department of Veterans
Affairs' Vendor Information Pages database, also known as VIP database,
are verified as veteran-owned small businesses or service disabled
veteran-owned small businesses.
As some of my colleagues may know, the Veterans Benefits, Health
Care, and Information Technology Act of 2006 requires the Department of
Veterans Affairs to maintain its VetBiz Vendor Information Pages
database and verify its applicants as veteran-owned small businesses or
service disabled veteran-owned small businesses.
From the feedback that we have received in a previous Subcommittee
hearing, follow-up meetings with VA staff, and veteran's community, I
have been informed that up until this year veteran or service disabled
veteran-owned small business verification was submitted to the VA on a
voluntary basis. Furthermore, once the firms were registered in the VIP
database, they would qualify to receive set-aside or sole-source
awards, regardless if they have been verified.
Because of the current language in the law, there has been
misinterpretation of the requirement on verification of small business
ownership. Currently, the VA has concluded that Public Law 109-461 does
not require veteran-owned small businesses and service disabled
veteran-owned small businesses to submit information for verification,
but rather it be voluntary. According to the most recent U.S.
Government Accountability Office briefing received by Subcommittee
staff in January of this year:
Of the 16,500 registered firms, 484 were verified by the
VA as veteran-owned small businesses or service disabled veteran-owned
small businesses;
Four hundred nineteen submitted information to be
verified and were pending verification; and
Fifteen were denied verification.
I have been informed by Subcommittee staff that VA has begun to
verify applications to their VIP database back in May 2008. In
addition, the VA has supplemented its staff by hiring contractors to
identify best practices in processing applications to the database, and
conduct on-site visits to verify the small business as a veteran-owned
small business or service disabled veteran-owned small business. I
applaud the progress made on verifying existing VIP entries, but more
should be done to ensure our veterans are afforded the small business
opportunities Congress intended then to enjoy.
My legislation seeks to amend Title 38 to clarify current law and
require the Department of Veterans Affairs to verify that firms are
veteran-owned small businesses or service disabled veteran-owned small
businesses in order to be listed in the VIP database. Furthermore, it
requires that VA notify small businesses within 90 days of the need to
verify the status of the small business concern. If after 90 days the
veteran status ownership is not verified, the small business concern
shall be removed from the database.
I look forward to receiving feedback on H.R. 2461 and the other
bills before us today.
Prepared Statement of Hon. John Boozman, Ranking Republican Member,
Subcommittee on Economic Opportunity
Good afternoon. Madam Chair, I thank you for bringing us together
to take testimony on 14 bills including my bill, H.R. 1169, a bill that
would increase the amounts available for the Specially Adapted Housing
and Auto and Adaptive Equipment programs as well as other bills
introduced by Members on our side of the aisle. We have a lot of ground
to cover today so I will merely say that this is a good list of bills.
Obviously there are some major PAYGO issues and some might need some
minor tweaking to accomplish what the authors intend.
I am eager to hear from today's witnesses so I will yield back.
Prepared Statement of Hon. Thomas S.P. Perriello
Good Afternoon--Let me begin by thanking Chairwoman Herseth-Sandlin
and Ranking Member Boozman for holding this important legislative
hearing. I appreciate the opportunity to offer testimony in support of
my bill H.R. 2928.
On June 30, 2008, Congress successfully passed the Post-9/11
Veterans Educational Assistance Act of 2008 (Public Law 110-252) to
help pay for the full cost of tuition at 4-year colleges to veterans of
the wars in Iraq and Afghanistan. Yesterday, the Department of Veterans
Affairs (VA) announced that it has provided certificates of eligibility
to nearly 200,000 applicants for Post-9/11 GI Bill benefits. I commend
the VA on its administration of the program and look forward to working
with the Veterans Benefits Administration to ensure that our veterans
continue to have easy access to the benefits they have earned and
deserve.
Although the Post-9/11 GI Bill provides a number of benefits,
including licensure and certification, it does not provide on-the-job
(OJT) program benefits. Servicemembers and veterans interested in OJT
benefits would be unable to take advantage of the Post-9/11 GI Bill and
would have to register under the Montgomery GI Bill, Chapter 30
benefit.
On-the-Job Training (OJT) offers veterans and members of the Guard
and Reserve an alternative to attending a college or university by
using their education benefit to obtain employment training. OJT is
training that veterans received while actually performing a job. This
program allows veterans to become gainfully employed since the job for
which they are currently training in, should lead to an entry level
job; additionally while they are training the employer will provide a
wage.
H.R. 2928 would amend title 38, United State Code, to provide for
an apprenticeship and on-job training benefit under the Post-9/11
Veterans Educational Assistance Program. The bill would entitle those
veterans enrolled in a full-time educational program of apprenticeship
or other on-job training to a monthly benefit payment equal to: (1) 85
percent of the national average cost of tuition at an institution of
higher education for each of the first six months of the program; (2)
65 percent of such amount for each of the second 6 months of the
program; and (3) 45 percent of such amount for each of the months
following the first 12 months of the program.
We have an obligation to help those who have defended our country
by giving them the tools they need to rejoin the civilian workforce.
H.R. 2928 is a commonsense bill which will provide America's veterans
with the resources they need to join the workforce. I would like to
thank the VFW, DAV, AMVETS, the Military Officers Association of
America, Student Veterans of America, Iraq and Afghanistan Veterans of
America, and the Department of Labor for their support and look forward
to working with you as the legislation progresses. I thank the
Subcommittee for holding this hearing and look forward to answering any
questions you may have.
Prepared Statement of Hon. Ann Kirkpatrick
Thank you Madam Chairwoman for the opportunity to discuss my bill,
H.R. 2614, the Veterans' Advisory Committee on Education
Reauthorization Act of 2009.
In recent years, Congress has devoted a whole lot of attention to
the education benefits administered by the Department of Veterans
Affairs, culminating last year in the introduction and passage of the
Post-9/11 GI Bill.
One of the VA's most important tools in this fight has been the
Veterans Advisory Committee on Education. This Committee's mission
includes advising the Secretary of Veterans Affairs on existing
education benefit programs and services as well as recommending new
education benefit programs. As the Military Officers Association of
America has pointed out, the Committee was instrumental as the Post-9/
11 GI Bill was being constructed, including recommendations that limits
mirror the national average cost of a public education as well as earn-
as-you-serve provisions. The Committee is now more important than ever,
with Veterans starting to receive education benefits under the Post-9/
11 GI Bill.
However, the Committee's charter is currently set to expire on
December 31. This bill reauthorizes the Committee until the end of
2015, allowing it to fulfill its vital role.
With the help of Veterans service organizations, we are working
hard to better keep our promises to our Veterans, and I have been proud
to be a part of it. There is still more to do to make sure they have
the opportunities they have earned, and reauthorizing this Committee is
a useful step in that effort.
Chairwoman, thank you again for the opportunity to speak.
Prepared Statement of Hon. John H. Adler
Madam Chairwoman, Ranking Member Boozman, and Members of the
Subcommittee, thank you for the opportunity to speak in support of my
bill, H.R. 2416, the ``Success After Service Act.''
We are currently experiencing the worst economic climate since the
Great Depression.
The Nation's unemployment rate has just reached 9.7
percent--the highest it's been in 23 years.
The number of unemployed Iraq and Afghanistan veterans is
now at 11.3 percent, which is almost the same as the number of
servicemembers currently deployed abroad.
And it's even worse in my home state of New Jersey, where
the unemployment rate among Iraq and Afghanistan veterans is at 14
percent.
Our heroes deserve better. They deserve our help not just
our gratitude.
Many servicemembers are returning home to this tough economic
climate in search of career opportunities that can support themselves
and their families.
Some will search for work among existing jobs, while others will
attempt to forge their own way by starting a small business of their
own.
Small businesses are the backbone of our economy and they have an
important role to play in our country's economic future.
In addition, we should incent servicemembers to live the
American dream by pursuing their entrepreneurial spirit and starting a
small business which will aid in our broad economic recovery.
As a key component of small business entrepreneurship,
veterans contribute to our great country's economy each year with new
jobs, new ideas, and new employment.
I have introduced H.R. 2416, the ``Success After Service Act,'' to
increase the opportunities that are available to Veteran Owned Small
Businesses and Service-Disabled Veteran Owned Small Businesses in
obtaining contracts and subcontracts from the Department of Veterans
Affairs.
H.R. 2416 seeks to empower veteran small business owners by setting
aside a set percentage of VA contracts in the Federal Supply Schedule
for all qualified veteran owned businesses.
These set asides are the types of incentives which will
positively influence the marketplace by encouraging servicemembers to
start new businesses to deliver services needed to meet the VA's goals.
We must ensure that our veterans, who so selflessly served our
country, are given the opportunity to succeed after their service.
H.R. 2416 will not only serve as a token of appreciation
to these brave men and women from a grateful Nation, but also as a tool
to empower these veteran entrepreneurs and re-ignite our economy once
again.
This measure has strong bipartisan support. It reflects the efforts
of all of us in Congress who want to work together, without regard to
party labels, to help our heroes.
Madam Chairwoman, Ranking Member Boozman, I once again thank you
for your time and consideration.
Prepared Statement of Hon. Harry Teague
Madam Chairwoman and Ranking Member Boozman and fellow Subcommittee
Members, thank you for allowing me to have the opportunity to speak on
behalf of H.R. 3561. I believe that this bill does exactly what this
Subcommittee is supposed to be doing--creating economic opportunity for
our veterans.
H.R. 3561 increases the flight training education assistance
allowance for tuition and fees from 60 percent to 75 percent. Recently,
program costs for this training have risen, but the benefit has not
risen to keep up with the increased cost. In my home state of New
Mexico, the flight schools that offer this program tell me that a
student can expect to pay anywhere from $60,000 to $90,000. So in a
state where the median family income in my state is $48,798, it is
becoming more difficult for veterans to utilize this program and get a
good job as a result.
By increasing funding for this program by 15 percent, we can open
doors for veterans who need help and assistance and deserve it after
serving in our country. I believe that this bill is a common-sense
solution to a problem we're facing, and I hope that I can garner
support from my colleagues and pass this legislation into law.
I would like to take this time to thank the staff members of the
Economic Opportunity Subcommittee who lent their expertise during the
drafting of this bill, and I thank Chairwoman Herseth-Sandlin and
Ranking Member Boozman for the opportunity to advance this bill. This
concludes my testimony and I am happy to answer any questions you may
have regarding H.R. 3561.
Prepared Statement of Hon. Bob Filner, Chairman, Committee on
Veterans' Affairs, and a Representative in Congress from the State of
California
Good afternoon Chairwoman Herseth Sandlin, Ranking Member Boozman
and Members of the Subcommittee. Thank you for the opportunity to speak
on H.R. 3579, legislation to increase veteran reporting fees to
institutions of higher learning.
As many of my colleagues in the Subcommittee know, Congress has
made several changes to education benefits since the enactment of the
first GI Bill of 1944. The same holds true with last year's passage of
the Post-9/11Veterans Education Assistance Act of 2008 to help pay the
full cost of tuition at 4-year colleges to veterans who served after
September 11, 2001.
While we have made significant strides to address the most current
education needs of our veterans, we have not addressed the growing
demand placed upon certifying officials responsible in assisting
student veterans enroll in a college or university program.
My legislation seeks to address this very important issue by
increasing the reporting fees payable to institutions of higher
learning from the outdated $7 per student to $50 per student that
reflects today's increased demand for expanded services.
As some of my colleagues are aware, there is a growing concern
among student veterans in regards to receiving accurate information on
their education benefits and timely receipt of benefits. I share their
concern and am confident that my bill is a significant piece of the
puzzle that will provide school certifying officials with the needed
resources to obtain up-to-date training on the various benefit options
available to student veterans and their dependents. Our Nation's
veterans certainly deserve the best services their school may provide.
I want to thank my colleagues Chairwoman Herseth Sandlin and
Ranking Member Boozman for their continued work in the Subcommittee. I
look forward to working with all of my colleagues to provide our
Nation's veterans with education benefits in a timely manner. I would
be happy to address any questions you may have.
Prepared Statement of Hon. Ciro D. Rodriguez, a Representative
in Congress from the State of Colorado
Thank you Madam Chairwoman for allowing me to speak today on my
bill, H.R. 3577, which will expand the eligibility for Post-9/11 GI
Bill Transferability of benefits to dependents.
Last year Congress passed a ground breaking GI Bill that provides a
significantly increased level of benefits to servicemembers who served
at least 90 days of aggregated military service after September 10,
2001.
This new benefit also provides for the transferability of benefits
to dependents. However, whereas the basic eligibility for the Post-9/11
GI Bill benefits consists of at least 90 days on active duty after
September 10th, 2001, transferability eligibility is not open to many
of those that would otherwise be eligible for Post-9/11 GI Bill
benefits. For transferability, a member must have served at least 6
years on active duty and be currently on active duty as of August 1st,
2009.
As a general rule, and necessarily so, the servicemember must incur
an extended commitment to serve an additional 4 years in order to
transfer those benefits to their dependents. This provision was
included in the final legislation to increase military retention rates.
The Department of Defense has published its rules for transferability
and has made some exceptions to the re-enlistment requirement to
certain servicemembers who are near retirement and unable to fulfill
the 4 year re-enlistment. Specifically, personnel that have approved
retirements as of August 1st, 2009, do not incur any further commitment
in order to transfer their benefits.
While the option of transferability is a welcomed option for
servicemembers who are eligible to re-enlist, it fails to provide this
option to veterans who have honorably served a minimum of 20 years of
honorable active duty military service. We have heard from military
veterans asking for a legislative change to current laws to allow
veterans, who served after September 10, 2001, and retired before July
31, 2009, to transfer their benefits to an eligible dependent. They
argue that retirees are most likely in a better position to transfer
the benefit considering many have already received their college
education and most likely have children who are eligible to attend
college.
Additionally, this bill would help ensure transferability is
granted to those service men and women who are otherwise eligible for
Post-9/11 GI Bill benefits. The eligibility for Post-9/11 GI Bill
benefits and for transferability remains the same under this bill,
simply with the expanded date range for those that have retired from
the service after having served for 20 years or more.
Madam Chairwoman, Members of the Economic Opportunity
Subcommittee--this is the right thing to do. Our troops have earned
this. More importantly, their families have sacrificed their way of
life and often careers of their own in order to follow their military
sponsor around the world, from base to base, country to country, and
have stood steadily by as their loved ones went to war. These families
deserve the ability to receive the unused benefits earned by the
servicemember.
I appreciate your consideration of H.R. 3577 and ask for your
support.
Thank you.
Prepared Statement of Hon. John R. Carter, a Representative
in Congress from the State of Texas
Executive Summary
H.R. 1182 extends the same residency rights to military spouses as
are currently extended to active-duty servicemembers. Under current
law, active-duty military members can keep a home state of residence no
matter where military orders send them. However, military spouses do
not have these rights, even though they move right along with their
servicemember. This means that every time they move, military spouses
have to change their license plates and registrations, voter
registration, and even file state and local tax returns in a different
state than their active-duty spouse.
Many of us take for granted the frequent moves that military
spouses must make to support our armed forces and what these moves mean
not only in terms of the headaches and hassles involved in constantly
changing residency but also the impact on careers. Studies by the RAND
Corp. have found that military wives move farther and more often than
their civilian counterparts; are more likely to be unemployed than the
average civilian spouse; and, even if they do find work, tend to earn
less than civilian wives. Moreover, spouses are also much less likely
to have their names on deeds and titles of family property because of
the implications of moving to another state, leaving many feeling like
second class citizens.
The Military Spouses Residency Relief Act has the support of the
Military Officers Association of America, Veterans of Foreign Wars of
the United States, AMVETS, the Air Force Sergeant's Association, and
the Military Spouse Business Association. Additionally, the
Congressional Budget Office has determined that this legislation ``will
have no significant effect on the Federal budget.''
This is just one easy way we can support our military spouses, who
are instrumental to the readiness and strength of our troops.
__________
Madam Chairwoman and Members of the Committee, good afternoon.
First, allow me to thank you for the support you have demonstrated for
military spouses by considering the Military Spouses Residency Relief
Act last Congress and again today. Since we last discussed this issue,
I am pleased to acknowledge that with the hard work and support of
Senators Burr and Feinstein this legislation was unanimously passed by
the Senate as a stand alone bill. Your Subcommittee's action will help
to ensure that these ccommonsense reforms become a reality. This small
measure will provide invaluable relief to numerous military spouses who
regularly uproot their entire lives to accommodate the needs of our
Armed Forces.
As you are all aware, the Servicemember's Civil Relief Act (SCRA)
provides basic civil relief to our men and women in the Armed Services
in exchange for their voluntary service. These range from relief from
adjudication while deployed in combat to maintaining a single state of
domicile regardless of where their military orders may send them. This
state of domicile provides an important stability for our soldiers,
airmen, and marines. Though their orders may send them to numerous
states, they are able to simplify their state income tax requirements,
maintain property titles, and continue to vote for the elected
officials from their hometown. Without the SCRA protections, the
servicemember would have to deal with all of those every time they move
to a military installation located in a different state.
But their spouses--currently not afforded these SCRA protections--
must still deal with those stresses even while faced with the challenge
of moving, finding schools for children, balancing some unsupported
relocation costs, and the loss of spouse earnings as they leave jobs to
join the servicemember. However, SCRA protection is already extended to
military spouses pertaining to other moving challenges such as entering
into contracts for phone service and utilities, the ability to break
leases, as well as protection from eviction if they fall behind on
bills. This precedence clearly illustrates Congress' long understanding
that spouses are a vital component of our military readiness and
deserving of SCRA protection.
The military has changed since SCRA was first written. We no longer
deal with a primarily unmarried fighting force. It is no longer enough
for Congress to provide relief to just the men and women who
volunteered to protect us. The saying ``We recruit the soldier but
retain the family'' could not be any more accurate. While our
servicemembers receive this important civil relief, we do not offer the
same protections to those that bear the same stress and responsibility
as the member--their spouse. Over the course of their spouse's career,
they face multiple voter and vehicle registration changes, pay income
tax to states they never intended to live in, and likely do not have
their name on any property titles leading to a feeling that they are
second class citizens.
My bill--which has drawn strong significant bipartisan support--
would amend the SCRA to allow a military spouse to claim the same state
of domicile as the servicemember for the purposes of state income and
property taxes as well as voter registration. Spouses could elect to
stand united with their spouse--not only in support of our country--but
sharing the same state as a home base. This policy would prevent a
military family from suddenly losing up to 10 percent of their income
if they are called upon to relocate to a different state. This is a
significant loss of income that occurs as a direct result of government
orders.
H.R. 1182--supported by the Military Officers Association of
America, the Air Force Sergeants Associations, AMVETS and the Military
Spouse Business Association among other VSOs--would also provide the
impetus for military spouses to put their names on deeds and titles,
which would build and strengthen their own credit and further ensure
legal protection.
Military spouses sacrifice their careers and endure numerous
challenges to support the servicemembers who defend our country. They
share the stress of deployments, relocations, and ever increasing ops
tempos with their servicemembers; shouldn't they be able to share the
same state? We believe they deserve the choice to have a home base,
too.
I thank you for your time and thoughtful consideration, and ask
your consent to submit copies of the previously mentioned VSO's support
letters into the record.
__________
Air Force Sergeants Association
Temple Hills, MD.
February 26, 2009
The Honorable John R. Carter
409 Cannon House Office Building
Washington, DC 20515
Dear Representative Carter,
On behalf of the Air Force Sergeants Association's 125,000 members,
I offer our support for H.R. 1182, the ``Military Spouses Residency
Relief Act.'' This legislation is of very high interest to many of our
members. AFSA represents the Total Air Force enlisted corps--current,
veteran, and retired members of the Air Force Active Duty, Air National
Guard, and Air Force Reserve Command and their families.
Your legislation would provide a long-overdue correction of an
unfortunate situation that has had a negative impact on military
families. Whereas military members can vote and pay taxes in one state
throughout their military careers, spouses have not been afforded that
stability. Under your legislation, military spouses would be able to
keep residency in their home state regardless of where military orders
send their family. Your legislation makes sense and is the right thing
to do for those who directly support this Nation's warriors.
Congressman Carter, we applaud your initiative on this issue and
your dedication to those who serve this Nation. I offer this
association's assistance to help this legislation move forward, and we
look forward to working with you on this and other matters of mutual
interest.
Sincerely,
Richard M. Dean, CMSgt (Ret.)
Chief Executive Officer
Serving the Total Air Force Enlisted Corps
And Their Families since 1961
__________
Military Officers Association of America
Alexandria, VA.
February 25, 2009
The Honorable John Carter
U.S. House of Representatives
Washington, DC 20515
Dear Congressman Carter:
On behalf of the more than 370,000 members of the Military Officers
Association of America (MOAA), and their spouses, we applaud your
Military Spouse Residency Relief Act that will allow military spouses
the option to claim the same state of domicile as their servicemember.
This week, MOAA, the Nation's largest association for military
officers and their families, celebrated our 80th anniversary. Over the
past eight decades, we've seen significant changes in our military, and
the majority of servicemembers are now married.
Our Nation has long recognized the importance of servicemembers'
ability to maintain a domicile for voting and taxes. The service of
today's military spouses is such that they deserve that same
opportunity.
That's why MOAA strongly supports this amendment of the
Servicemember's Civil Relief Act (SCRA). We've seen the sacrifices of
military spouses throughout the years, and we've seen their service to
our country.
Military spouses deserve the freedom to vote in the same State with
their servicemember, the elimination of stressors such as getting new
licenses and registering to vote each time they move, and a place to
call ``home'' in the midst of multiple military moves.
We are grateful for your leadership and the support of your
bipartisan co-sponsors for this important initiative.
Sincerely and all the best,
VADM Norbert R. Ryan, Jr., USN (Ret)
President
Prepared Statement of Hon. Brad Miller, a Representative
in Congress from the State of North Carolina
Executive Summary
In 2003 Congress passed the Servicemembers Civil Relief Act (SCRA)
to provide protections for servicemembers when their military service
hinders their ability to meet financial obligations and they are at a
great disadvantage in defending their rights in legal proceedings. The
SCRA provides for penalties for violations but does not specifically
state whether servicemembers have a private right of action for
violation of the Act. While most courts have recognized the inherent
right of individual servicemembers to bring suit for a violation of
their rights under the SCRA, recent court rulings have questioned
whether the Act gives servicemembers the right to protect themselves
and their families against evictions and foreclosure while they are
deployed overseas.
In Batie v. Subway Real Estate Corp, a servicemember alleged that
the defendants had violated his rights when they evicted him from two
commercial spaces while he was deployed in Afghanistan. In another
case, Hurley v. Deutsche Bank Trust Co., a servicemember sued the
defendants after they foreclosed on and sold his home, evicting his
family, while he was deployed in Iraq. The initial ruling in both cases
was that the servicemembers did not have the right to bring a suit
against the defendants because the SCRA does not explicitly provide
servicemembers a private cause of action. The initial rulings were
eventually reversed, but only after the servicemembers and their
families endured prolonged legal uncertainty and considerable expense.
Congressman Walter B. Jones and I introduced H.R. 2696, the
Servicemembers' Rights Protection Act, to end any ambiguity. The
legislation authorizes an Attorney General to file a civil action for
violation of the SCRA and allows a servicemember the right to join the
Attorney General civil action. The legislation also provides that
servicemembers have their own private cause of action, regardless of
any enforcement action taken by an Attorney General.
Also, since many claims under the SCRA will be for relatively small
amounts, the collection of attorneys' fees will encourage settlements
by those who might otherwise refuse to pay damages, calculating that
the cost of litigation would keep people from pursuing relief.
The American Bar Association and the Military Officers Association
of America have both endorsed this type of clarification to the SCRA
and the Department of Defense vetted the language in the bill.
A right that cannot be enforced is no right at all. The SCRA must
have real teeth or it is meaningless. Our servicemembers should not
have to worry whether their homes will be foreclosed or their families
will be evicted while serving their country overseas. Denying
individuals a private cause of action to enforce their rights under the
SCRA threatens the readiness of our Armed Services.
__________
Thank you Chairwoman Herseth Sandlin and Ranking member Boozman for
allowing me the opportunity to testify today on H.R. 2696, the
Servicemembers' Rights Protection Act. I would also like to thank Rep.
Jones for working with me on this issue. He has been a tireless
advocate for our servicemembers and veterans, and I applaud his
efforts.
Congress has long recognized that there is a need for protective
legislation for servicemembers who at times face special burdens when
trying to meet financial obligations while serving their country. In
1940, Congress passed the Soldiers' and Sailors' Civil Relief Act, and
in 2003 Congress updated this legislation and passed the Servicemembers
Civil Relief Act, or SCRA. This Act provides protections for
servicemembers when their military service hinders their ability to
meet financial obligations and they are at a great disadvantage in
defending their rights in legal proceedings.
The SCRA does not require the forgiveness of debts nor does it
provide servicemembers absolute immunity from all civil lawsuits.
Instead, the Act temporarily suspends certain judicial and
administrative proceedings and transactions that may harm their legal
rights during active duty.
The SCRA provides for penalties for violations but does not
specifically state whether servicemembers have a private cause of
action for violation of the Act. While most courts have recognized the
inherent right of individual servicemembers to bring suit for a
violation of their rights under the SCRA, recent court rulings have
questioned whether the Act does indeed grant servicemembers a private
cause of action.
In Batie v. Subway Real Estate Corp. a servicemember alleged that
Subway Corp. violated the SCRA by evicting him from two commercial
spaces while he was deployed to Afghanistan. After obtaining
declaratory judgments in the State of Texas courts, Subway evicted the
servicemember from spaces under lease. Lt. Col. Batie subsequently
filed suit in the Federal district court seeking relief from the
declaratory judgments and for compensatory and punitive damages for the
alleged violations of the SCRA. In addition to denying the claim for
compensatory and punitive damages, the court also found that, even if
the servicemember maintains the SCRA as a basis for damages, ``there is
no provision in SCRA that authorizes a private cause of action to
remedy violations of the statute.'' Lt. Col. Batie's claims were
dismissed by the court. Lt. Col. Batie filed a Motion for
Reconsideration citing cases in which courts have interpreted certain
sections of the SCRA to create a private cause of action and eventually
the court vacated its earlier decision and reinstated the complaint for
further adjudication.
In a second case, Hurley v. Deutsche Bank Trust Co., a
servicemember sued the defendants after they foreclosed on and sold his
home, evicting his family, while he was deployed in Iraq. In this case,
Sgt. Hurley asserted multiple violations of the SCRA, but the
defendants asserted that the SCRA sections cited by Hurley did not
expressly create a private cause of action. The court decided that,
``the SCRA affords certain rights to servicemembers, but a private
cause of action is not among them.'' The judge eventually reversed and
vacated this earlier opinion, and then entered a new opinion in favor
of Sgt. Hurley. But once again, it was only after the servicemembers
and their families had endured prolonged legal uncertainty and
considerable expense.
Congressman Jones and I introduced H.R. 2696, the Servicemembers
Rights Protection Act, to end any ambiguity. The legislation would
authorize an Attorney General to file a civil action for violation of
the SCRA and allows a servicemember the right to join the Attorney
General's civil action. More importantly, the legislation also provides
that servicemembers have their own private cause of action, regardless
of any action taken by the Attorney General.
Also, since many claims under the SCRA will be for relatively small
amounts, the legislation allows for the collection of attorney's fees
to encourage settlements by those who might otherwise refuse to pay
damages, calculating that the cost of litigation would keep people from
pursuing relief. Allowing for the reward of attorney's fees will make
equal access to justice for servicemembers a reality. It should be
noted that the award of attorney's fees for successful litigants is
also authorized by the Uniformed Services Employment and Reemployment
Rights Act, the Fair Debt Collection Practices Act, the Fair Credit
Reporting Act, and the Federal Truth in Lending Act, to name just a few
statutes.
Our servicemembers should not have to worry whether their homes
will be foreclosed or their families will be evicted while serving
their country overseas. Nor should they have to endure months of
litigation, submitting motion after motion, with potentially disastrous
consequences. I would like to share with you part of a letter Rep.
Jones and I received from one of the Nation's leading experts on SCRA
issues, Colonel John Odom (USAF-Ret), regarding this legislation.
He writes, ``While serving a total of 31 years of combined active
and reserve duty in the U.S. Air Force as a judge advocate, I have
maintained a private law practice in which I spend a considerable
amount of my time--much of it pro bono--representing servicemembers in
SCRA matters. Since 2002, I have recovered more than $3.5 million in
damages for servicemembers from banks, mortgage companies, credit
unions and auto finance companies who violated the SCRA. In virtually
every litigated case, I have had to spend many hours of professional
time opposing the inevitable defendants' motions to dismiss the case
because there is no specific provision in the 2003 SCRA authorizing
private causes of action to sue violators for damages. While I have
been successful in every case thus far, on several occasions (including
the Hurley case in Michigan in which I am an expert witness for the
plaintiff) it has required expensive and time-consuming motion practice
before we finally got a judge to uphold the servicemembers' right to
sue SCRA violators for damages. Enough is enough. It is time to amend
the SCRA, and that is precisely what your H.R. 2696 would do in the
correct, broadest possible sense.''
There have been efforts in the past to strengthen the enforcement
provisions of the SCRA for specific types of contracts. While these
efforts are laudable, they are a piecemeal approach to strengthening
the SCRA which leaves open the possibility that something, some
contract, some proceeding, will be left out. And consequently will
leave a servicemember without any legal recourse. The SCRA applies to
all actions in all courts. It is a comprehensive statute protecting the
rights of servicemembers. As such, we need a comprehensive approach
that will ensure enforcement provisions for all actions brought to
enforce the SCRA. The Servicemembers' Rights Protection Act does just
that.
The relief made available in this bill does not constitute a change
of current practice. Judge Quist ruled in the Hurley v. Deutsche Bank
Trust Co. case that punitive damages were one of the remedies available
in an SCRA enforcement action. There are other sections in the current
SCRA that mention the availability of consequential and punitive
damages as remedies under the SCRA. So, the concept of punitive damages
available as relief under the SCRA is not new. This legislation will
provide that consequential and punitive damages, in line with current
statute, and the collection of attorney's fees to deter those
contemplating bad faith abuses of the SCRA, are available in all
actions brought to enforce any provision of the SCRA. It is a
comprehensive approach for a comprehensive statute.
It should be noted that the language in H.R. 2696 is the same as
language that was included in S. 1033, the original version of the
Senate's National Defense Authorization Act for FY 2010, not the bill
that is currently in conference. Col. Shawn Shumake, Director of the
Office of Legal Policy for the Undersecretary of Defense for Personnel
and Readiness, has personally reviewed H.R. 2696 and compared it to the
Senate language and has concluded that except for leaving off the
technical corrections, they are substantively identical. The only
difference is how the conforming amendments were addressed in the
bills. The Senate language addressed changes to sections 301(c),
302(b), 303(d), 305(h), and 307(c) in one paragraph; whereas H.R. 2696
writes out explicitly what those sections would look like as amended.
The language in both of these bills has been vetted by the Department
of Defense.
On February 16, 2009, the American Bar Association unanimously
adopted a resolution proposed by ABA's Standing Committee on Legal
Assistance for Military Personnel, which recommended unambiguous
authority for a private right of action in the SCRA. Furthermore, in
his statement before the House and Senate Veterans' Affairs Committees
on March 12, 2009, Colonel Robert F. Norton (USA-Ret), Deputy Director
of Government Relations of MOAA commented on the lack of a specific
private cause of action provision in the SCRA. He said, ``This issue
goes to fundamental access to justice for service men and women and
their families, recognizing the SCRA protections in the statute are
only as strong as the ability to bring violators to court.'' He
concluded by stating, ``MOAA recommends that the Committees amend the
SCRA to: authorize civil enforcement actions by the Attorney General of
the United States in any Federal District Court; to clarify that a
Private Right of Action exists within the SCRA authorizing a covered
servicemember or dependent to file suit, either independently or in
conjunction with a Dept. of Justice action; and, provide that in such a
case a plaintiff may recover damages or injunctive relief, and that a
prevailing plaintiff may recover reasonable attorney's fees.''
I believe that a right that cannot be enforced is no right at all.
The SCRA must have real teeth or it is meaningless. Denying individuals
a private cause of action to enforce their rights under the SCRA
threatens the readiness of our Armed Services.
Thank you again for allowing me the opportunity to testify on this
bill.
Prepared Statement of Hon. David Loebsack, a Representative
in Congress from the State of Iowa
Chairwoman Herseth Sandlin, Ranking Member Boozman, Members of the
Committee--thank you for inviting me to testify before the Economic
Opportunity Subcommittee today.
The landmark Post-9/11 Veterans Educational Assistance Act not only
expresses our Nation's gratitude to our men and women in uniform, it
will also help to make this generation of veterans part of our
country's economic recovery.
As a former college professor, I know firsthand the impact a
college education can have on both individuals and families. It opens
doors and broadens opportunities-- and it is critical to the strength
of our military as well as the future of our economy.
As the Representative of Iowa's Second Congressional District and a
Member of the House Armed Services Committee, I have had the distinct
honor to meet many members of the Iowa National Guard. I have seen them
respond to the devastating floods that inundated my District in 2008,
and I have visited them in Iraq and Afghanistan.
The dual role of the National Guard in both our homeland and
national security is unique amongst our Armed Forces, and it has only
increased since the 9/11 attacks. The National Guard is no longer a
strategic reserve--it is an operational one. These Soldiers and Airmen
secure our airspace, respond to disasters, and deploy overseas in
support of our efforts in Iraq and Afghanistan.
Yet the Post-9/11 GI Bill did not recognize the dual role of the
National Guard. It counts only their national security service--that
is, their Title 10 service overseas in Iraq, Afghanistan, and other
strategic locations.
It overlooked the role the National Guard plays in federally funded
homeland security missions under Title 32, including airport security
missions directly after the 9/11 attacks; protection of U.S. airspace
as part of Air Sovereignty Alert; disaster response in instances such
as Hurricane Katrina; and border security as part of Operation
Jumpstart.
By not including Title 32, the Post-9/11 GI Bill also overlooked
the Active Guard and Reserve. AGRs provide the full time support that
is necessary to keep our National Guard ready to respond to missions
both at home and abroad. Yet while their counterparts in the Reserve
accrue eligibility for the Post-9/11 GI Bill through their AGR service,
National Guard AGRs serving under Title 32 do not.
To put it simply--federally funded, essential homeland security
missions are performed by our National Guard every day. Their service
to our Nation should be counted toward their Post-9/11 GI Bill
benefits.
Furthermore, the Post-9/11 GI Bill made a commitment to recognize
the service and sacrifice of those servicemembers who are discharged
with a service-connected disability by providing them with a full 4-
year college education. However, under current law, only those
servicemembers who are discharged under Title 10 are eligible for this
benefit. Members of the National Guard with a service-connected
disability are discharged under Title 32, even if they sustain their
injuries while serving under Title 10. As a result, they do not
currently receive the full slate of benefits that they deserve.
To address these inequities, I introduced the National Guard
Education Equality Act. This bill recognizes the service of our
National Guard Soldiers and Airmen by counting homeland security
missions in the calculation of benefits under the Post-9/11 GI Bill and
by providing a full 4-year college education to members of the National
Guard who are discharged with a service-connected disability.
The National Guard Education Equality Act recognizes and honors the
contributions of the National Guard to both our homeland and national
security. It assures that the roughly 30,000 National Guard Soldiers
and Airmen who are not currently receiving the full GI Bill benefits
they deserve are able to take advantage of the opportunities a college
education provides.
The bill has over 30 bipartisan cosponsors and has been endorsed by
the Iraq and Afghanistan Veterans of America; the National Guard
Association of the United States; the Enlisted Association of the
National Guard of the United States; Veterans of Foreign Wars; and the
American Legion. Madam Chairwoman, I ask that letters of support from
each of these organizations be included in the record.
I urge the Subcommittee's support for the National Guard Education
Equality Act and thank you for allowing me to testify today. I look
forward to your questions.
__________
The American Legion
Washington, DC.
September 9, 2009
The Honorable Dave Loebsack
U.S. House of Representatives
1221 Longworth House Office Building
Washington, DC 20515
Dear Representative Loebsack:
On behalf of the 2.5 million members of the American Legion, I
would like to express our appreciation and full support of the National
Guard Education Equality Act, which would amend title 38, United States
Code, to provide for the inclusion of certain active duty service in
the reserve components as qualifying service for purposes of the Post-
9/11 Educational Assistance Program.
This legislation will extend benefits to title 32 Active Guard
Reserve (AGR) servicemembers under the Post-9/11 GI Bill. Many AGR
personnel were called to active duty via title 32 in support of the
response to the attacks on America on September 11, 2001, in addition
to deploying for Operation Iraqi Freedom and Operation Enduring
Freedom. Thus, AGR servicemembers have answered the Nation's call to
arms and should receive equal education benefits for their service.
Additionally, this bill will provide a full 4-year college
education to members of the National Guard who are discharged with a
service-connected disability.
In conclusion, The American Legion fully supports enacting the
National Guard Education Equality Act. We appreciate your leadership in
addressing issues that are important to America's veterans and their
families.
Sincerely,
Clarence Hill
National Commander
__________
Enlisted Association of the National Guard of the United States
Alexandria, VA.
August 18, 2009
The Honorable Dave Loebsack
1221 Longworth House Office Building
United States House of Representatives
Washington, D.C. 20515
The Enlisted Association of the National Guard of the United States
(EANGUS) is the only military service association that represents the
interests of every enlisted soldier and airmen in the Army and Air
National Guard. With a constituency base of over 414,000 soldiers and
airmen, their families, and a large retiree membership, EANGUS engages
Capitol Hill on behalf of courageous Guard personnel across this
Nation.
On behalf of EANGUS, and the soldiers and airmen it represents, I
am both pleased and honored to extend the organization's full support
for the National Guard Education Equality Act. This much needed
legislation will address the inequity between the educational benefits
received by service-disabled Title 10 and Title 32 soldiers and airmen.
As you know, only Title 10 service, that which is federally funded/
controlled, is counted when calculating eligibility for the Post-9/11
GI Bill. Unfortunately, this leaves large numbers of service-disabled
National Guard soldiers and airmen involved in Title 32 (Federally
funded/State controlled) critical missions, with suboptimal educational
benefits.
The National Guard Education Equality Act would rectify this
disparity by including Title 32 service in the calculation of benefits
under the Post-9/11 GI Bill and by providing a full 4-year college
education to members of the National Guard who have been discharged
under Title 32 with service-connected disabilities.
Our association stands solidly behind Congressional action to
alleviate the prejudicial treatment currently being received by so many
enlisted National Guard soldiers and airmen. It's time to treat these
invaluable and selfless members of our national defense team with the
courtesy, respect, and consideration they so rightly deserve.
Thank you for taking the legislative action that is not only
necessary and right, but timely. We look forward to working with your
staff as this legislation works its way into law.
Working for America's Best!
MSG Michael P. Cline, USA (Ret.)
Executive Director
__________
Iraq and Afghanistan Veterans of America
Washington, DC.
September 1st, 2009
The Honorable David Loebsack
1221 Longworth House Office Building
Washington, DC 20515
Dear Congressman Loebsack:
Iraq and Afghanistan Veterans of America (lAVA) is honored to offer
our support for H.R. 3554, the National Guard Education Equality Act.
This bill will compensate full time National Guard soldiers and airmen
for their service. Although the Post-9/11 GI Bill is the greatest
investment in veterans' education since WWII, it has some rough edges
that need to be ground down to better serve our newest generation of
veterans, as they pursue their education.
National Guard members who are serving on active duty called active
guard reserve (AGR) duty do not receive credit for their service under
Chapter 33 and are being denied the education benefits they deserve. It
shouldn't matter if you are in a firefight in Afghanistan or fighting a
fire in California, if you are wearing a military uniform you should be
compensated for your service. Last year, there were almost 30,000 Army
National Guard and 13,500 Air National Guard servicemembers serving on
Title 32 who will benefit from this legislation.
We are proud to offer our assistance on this vital piece of
legislation. If we can be of help please feel free to contact me at
(202) 544-7692 or [email protected]. We look forward to working with
you.
Sincerely,
Patrick Campbell
Chief Legislative Counsel
__________
National Guard Association of the United States, Inc.
Washington, DC.
September 17, 2009
The Honorable David Loebsack
1221 Longworth House Office Building
Washington, D.C. 20515
Dear Representative Loebsack:
Thank you for your sponsorship of H.R. 3554.
Amid rightful celebration and expectations, the historic
legislation which provided educational assistance for members of the
Armed forces who served after September 11, 2001, more commonly known
as the Post-9/11 GI Bill, was hurriedly enacted as part of the
Supplemental Appropriations Act, 2008 Public Law 110-252 but with one
glaring omission; Congress excluded National Guard Title 32 active duty
service after 9/11 from qualifying for benefits under this program.
The impact of this omission is that Congress has effectively denied
significant educational benefits to dedicated men and women who have
served in defense of our homeland after 9/11 on Title 32 active duty in
support of such mission as Operation Noble Eagle, Ballistic Missile
Defense, Operation Jump Start, and the critically needed airport
security operations following the 9/11 attacks. Of particular note is
that the Post-9/11 GI Bill currently provides benefits for the domestic
active duty service of Reserve and other Active forces on Title 10
orders performing virtually the identical duties as National Guard
forces on Title 32 orders.
NGAUS strongly supports The National Guard Education Equity Act,
H.R. 3554, now before the 111th Congress, which would include Title 32
service in the calculation of benefits under the Post-9/11 GI Bill and
provide a 4-year college education to qualifying members of the
National Guard who have been discharged because of a service-connected
disability arising from Title 32 active duty service. The latter
benefit is now only available to qualifying members of the Active
forces who had served on Title 10 orders.
Members of the National Guard deserve to be equitably rewarded and
recognized for their selfless and dedicated service in defense of our
homeland. Thank you again for your efforts
Sincerely,
Stephen M. Koper, Brigadier General, USAF, (Ret.)
President
__________
Veterans of Foreign Wars of the United States
Washington, DC.
August 25, 2009
The Honorable David Loebsack
United States House of Representatives
2448 Rayburn House Office Building
Washington, DC 20515
Dear Representative Loebsack,
On behalf of the 2.2 million members of the Veterans of Foreign
Wars and our Auxiliaries, I would like to offer our support for your
bill, the National Guard Education Equality Act.
Your important legislation proposes to provide the benefits of the
Post-9/11 GI Bill to not only those under Title 10 service, but also
those under Title 32 service. Furthermore, those National Guard members
who have been medically discharged would now be eligible for a full 4-
year college education as well.
Representative Loebsack, the National Guard Education Equality Act
would be greatly beneficial in helping to provide education to over
30,000 members of the National Guard who currently do not enjoy the
benefits of the Post-9/11 GI Bill but have been actively involved in
both Operation Iraqi Freedom and Operation Enduring Freedom. This
crucial legislation is yet another way to take care of the men and
women who serve our country so proudly. The VFW looks forward to
working with you and your staff to ensure the passage of this
legislation.
Thank you for your continued support of America's veterans.
Sincerely,
Dennis Cullinan
Director, National Legislative Service
Prepared Statement of Hon. Gerald E. Connolly, a Representative
in Congress from the State of Virginia
Chairman Herseth Sandlin, Ranking Member Boozman, and distinguished
Members of the Subcommittee, thank you for inviting me to testify on
the Helping Active Duty Deployed Act of 2009, H.R. 2874. I introduced
this legislation along with fellow Virginia Congressmen Glen Nye and
Tom Perriello, who is a Member of this Subcommittee.
As you know, deployment or change of station orders to leave one's
home, community and family, are exceptionally difficult and disruptive.
During times like that, we as Members of Congress and our Nation as a
whole should be doing everything we can to support our servicemembers
and their families. That is why I was shocked when I met with a group
of veterans and was informed that servicemembers are being charged
penalties when a deployment forces them to terminate contracts for
things like cell phones, residential leases and college tuition. I find
it unconscionable that the brave men and women putting their lives on
the line to protect our freedom could be charged an early termination
fee when deployment, not choice, necessitates the cancelation of these
contracts and leases.
Based on my conversations with our veterans, I introduced the HADD
Act to prohibit cell phone companies, landlords and colleges from
imposing such early termination fees. Before providing a brief overview
of the legislation, let me acknowledge that with assistance of Chairman
Filner and Members of the Veterans' Affairs Committee staff, I was able
to work with House Armed Services Committee to amend the National
Defense Authorization Act of 2009 to include two of the three primary
provisions of the HADD Act.
As you know, Congress has long recognized the need to safeguard our
deploying personnel, having enacted the Soldiers and Sailors Civil
Relief Act in 1940. This Act and the more recently enacted
Servicemembers Civil Relief Act (SCRA) of 2003 provide a number of
protections to servicemembers, including allowing them to retain their
state of residence for the purpose of taxation despite a relocation,
providing them protection from court actions against their interests
during a deployment, and allowing for the termination of certain leases
entered into prior to receiving orders, among others.
Unfortunately, servicemembers continue to face undue hardships, and
the HADD Act seeks to provide additional safeguards. First, the Act
would build upon action taken by the 110th Congress allowing
servicemembers to terminate an individual cell phone contract without
penalty. My bill would complement that action by extending the same
protection from early termination fees to family cell phone plans as
well. The provision would affect just designated family plans. It would
not allow members of a family to alter multiple separate accounts.
In addition, the HADD Act would provide consistent protections
within the SCRA for troops who need to terminate a residential or motor
vehicle lease due to deployment or change of station. The SCRA already
permits the cancelation of motor vehicle leases and prohibits early
termination penalties. It also permits cancellation of residential
leases, but it does not provide protection from early termination fees.
Just as with automobile leases, servicemembers are not choosing to end
these contracts before they are fulfilled. They are doing so because
they have been ordered by the U.S. Government to deploy into combat or
change stations, and they should not face a penalty for obeying the
call to duty.
Those two provisions were unanimously adopted on the House floor
during debate on the NDAA in June, and I am hopeful the language will
be retained in the conference report.
The final provision of the HADD Act would assist servicemembers in
obtaining a refund for unused tuition paid to an institution of higher
education should they have to deploy or relocate in the middle of a
semester. Just as the Post-9/11 GI Bill preserves the educational
opportunities for our returning veterans, this provision of the HADD
Act would preserve the opportunities of those being called into
service.
Madam Chairman, these are protections that have been identified by
our veterans to make their transition into combat or a new station that
much easier. For the most part, we are proposing to extend existing
protections. By my estimation, these are simple requests for us to
fulfill given the tremendous sacrifices we ask of these individuals.
The HADD Act has the endorsement of the Iraq and Afghanistan Veterans
of America, which worked with me to draft this legislation. I look
forward to working with the Committee to provide these additional
protections to our men and women in uniform and save them the hassle of
being unfairly penalized for fulfilling their service to our country.
Enclosures:
Section-by-section summary
IAVA letter of support
__________
Summary of H.R. 2874, The Helping Active Duty Deployed (HADD)
Act of 2009--Congressman Gerald E. Connolly (VA-11th)
General Overview: To provide assistance to active duty, deployed
servicemembers who currently face financial penalties for early
terminations of certain contracts entered into prior to their
deployment.
Section 2:
Family Plan Cellular Telephone Service: The 110th Congress amended
the Servicemembers Civil Relief Act (SCRA) to allow deployed
servicemembers to end an individual cellular telephone service contract
prior to its scheduled expiration without incurring an early
termination penalty. However, servicemembers who have a family plan
service are not exempt from such penalties. The HADD Act would allow
any cellular telephone service contract entered into ``on behalf of'' a
servicemember, which courts have ruled to include family plans, to be
terminated by a deployed servicemember without penalty.
Section 3:
Rental Lease Early Termination Penalty: The SCRA currently permits
active duty deployed servicemembers to terminate rental residential
property leases and motor vehicle leases. As currently written, there
is an explicit section stating that there can be no early termination
penalties in the case of a motor vehicle lease. The HADD Act would
provide consistency by amending the SCRA to also prohibit early
termination penalties on real property leases terminated due to a
deployment.
Section 4:
Higher Education Tuition Payments: The 110th Congress amended Title
20 of the U.S. Code to permit active duty servicemembers who were
deployed subsequent to enrollment in an institute of higher education
to regain admittance following the cessation of their deployment. The
HADD Act would amend the Code to permit deployed servicemembers to
obtain a refund of the tuition payments made to an institute of higher
education for the portion of the educational program that the
servicemember had not yet received academic credit prior to being
deployed.
__________
Iraq and Afghanistan Veterans of America
Washington, DC.
May 8, 2009
The Honorable Gerald E. Connolly
327 Cannon House Office Building
Washington, DC 20515
Dear Congressman Connolly:
Iraq and Afghanistan Veterans of America (IAVA) is proud to offer
our support for the Helping Active Duty Deployed Act of 2009 (HADD).
The Servicemember Civil Relief Act must continue to be modernized to
ensure that our men and women in uniform are focusing on their missions
overseas and not bureaucratic morass back at home.
Over 500,000 National Guard and Reservists have been deployed since
9/11 and nearly 1/5th of those are currently enrolled in college.
Without Federal protections these servicemembers who are deployed mid
academic term face a patchwork of refund procedures which are confusing
and inconsistent. HADD will require colleges to refund tuition paid by
the servicemember for courses they could not complete due to a
deployment.
This legislation will also allow servicemembers who have cell phone
contracts on a family plan to suspend their service while they are
overseas. While I was in Iraq, I was required to pay a monthly fee to
my cell phone provider in order to keep my cell phone contract current.
I spent 5 hours of my first day back from Iraq in a Cingular Wireless
store just trying to get my service restored. It took me over 7 months
for the whole issue to get resolved and required filing a complaint to
the FCC and switching service providers.
If we can be of help in securing passage of this bill, please feel
free to contact me at (202) 544-7692 or [email protected]. We look
forward to working with you.
Sincerely,
Patrick Campbell
Chief Legislative Counsel
Prepared Statement of Lynn M. Schubert, President,
Surety and Fidelity Association of America
Madam Chairwoman, thank you for inviting us here today to testify
on a matter that is critical to the surety industry, to the
construction industry and to small veteran-owned and controlled
businesses.
The Surety & Fidelity Association of America (SFAA) is a trade
association of more than 450 insurance companies that are licensed to
write surety and fidelity bonds. SFAA members collectively provide the
vast majority of performance and payment bonds on Federal and state
construction projects in the United States.
We are here to provide our assessment of how and to what extent the
surety bond provisions in H.R. 294 would achieve the objective of
promoting small veteran-owned and controlled businesses. In particular,
we can provide guidance regarding how performance and payment bonds are
underwritten and how to enhance the bonding of small veteran-owned and
controlled contractors.
Summary of the Provisions in H.R. 294 That Impact Surety Bonding
H.R. 294 would: (1) prohibit the Department of Veterans Affairs
from requiring a small veteran-owned and controlled business to furnish
a performance or payment bond in an amount that exceeds 50 percent of
the contract price; (2) prohibit any subcontractor that is a small
veteran-owned and controlled business from being required to furnish a
performance or payment bond in an amount that exceeds 50 percent of the
amount of the subcontract; and (3) permit the prime contractor to
furnish performance and payment bonds on behalf of a small veteran-
owned and controlled subcontractor.
The Impact of the Surety Bonding Provisions in H.R. 294
We support the intent of this bill, to help small veteran-owned and
controlled businesses participate in Federal construction projects, and
are committed to helping accomplish this. In fact, in March of 2007
SFAA was awarded the ``Lane Evans Veteran Entrepreneur Public Service
Award'' for our program providing access to surety bonding for service-
disabled veterans. This bill as drafted, however, will not achieve its
intended purposes, and in fact, would hurt the very businesses it is
designed to help.
A performance bond secures the contractor's obligation to perform
the contract. A payment bond secures the contractor's obligation to pay
its subcontractors and suppliers. In determining whether to provide the
bonds, a surety company makes an assessment of the contractor's
capability and financial strength to perform the obligations of the
contract. A surety's evaluation of a contractor is designed to prevent
defaults on public construction projects. The surety's assessment must
take into account the size and scope of the underlying obligation, the
construction contract. The risk to the surety is that the contractor
will not be able to complete the contract. If the contractor defaults,
the surety's obligations under the bond are triggered. The surety's
financial and other underwriting thresholds are based on the size of
the contract, not the size of the bond. No matter the size of the bond,
the bond secures the performance of the whole contract. A surety never
anticipates a loss in the full amount of the bond when executing the
bond (although that certainly does occur). To a surety underwriter, a
bond that is in the amount of 100 percent of the contract price
presents essentially the same risk to the surety as a bond that is in
the amount of 50 percent of the contract. Therefore, because the
surety's assessment of risk and underwriting thresholds do not change
with a lower bond amount, reducing the required amount of the
performance and payment bonds will not affect availability to any
significant degree.
In addition, a reduced bond amount will not affect the cost of the
bonds. Since the measure of the surety's risk is the contract price,
the premium of a performance bond and payment bond typically is based
on the contract price, not the bond amount. Sureties, like all
insurance companies, are regulated by state insurance departments and
are required to file rates and rating rules based on actuarial
principles with these departments. An SFAA member may develop its own
rules or adopt the rules filed by SFAA. Sureties are required to charge
bond premiums based on these rules. According to the rating rules
approved or accepted by state insurance departments, contract price
(not bond amount) is the basis for determining the cost of performance
and payment bonds.
While not achieving the goal of greater access to surety bonds for
small veteran-owned and controlled contractors, requiring a bond of
less than 100 percent of the contract price unnecessarily exposes the
government to additional costs and subcontractors and suppliers to the
risk of nonpayment if there is a default. Although a surety may not
anticipate a loss of 100 percent of the contract price, those
situations do occur, and when they do that money is there for the
completion of the work and payment of the unpaid laborers,
subcontractors and suppliers.
The performance bond ensures that the project is completed for the
contract price. If the contractor defaults and additional funds are
needed for completion, the surety pays those costs, up to the dollar
amount of the bond. If less than a 100 percent performance bond is
allowed, the taxpayers take on the additional costs if the contractor
defaults.
Mechanics liens cannot be asserted against public property.
Laborers, subcontractors and suppliers on public projects must rely on
the general contractor's payment bond for protection. If less than the
full contract amount is available for protection, these parties can be
left with little or no payment security for their services and supplies
if the contractor is unable or unwilling to pay them. Every time the
surety pays a claim, the penal sum of the bond essentially is reduced
by that amount, leaving less and less protection for workers and
suppliers. Because small and emerging contractors, including veteran-
owned and controlled contractors, are more likely to start out as
subcontractors, these contractors would be the ones deprived of
complete payment protection by this bill.
The most recent revisions to the Miller Act, the statute requiring
performance and payment bond protection on Federal construction
projects, highlighted the importance of full payment bond protection.
Prior to 1999 the payment bond posted under the Miller Act was in an
amount less than the full contract price: 50 percent of the contract
price for contracts up to $1 million, 40 percent of the contract price
if the contract was more than $1 million but not more than $5 million,
and $2.5 million for all contracts in excess of $5 million.
Subcontractors were not adequately protected and many refused to work
on Federal construction projects. They then approached Congress with
their concerns and the Miller Act was amended by the Construction
Industry Payment Act 1999. Now the payment bond is in the same amount
as the performance bond, which is 100 percent of the contract price
pursuant to regulation, except under extremely limited circumstances.
The purpose of the amendments was ``to improve payment bond protections
for persons who furnish labor or material for use on Federal
construction projects.'' H.R. Rep. No. 106-277, at 2. The House report
includes the testimony of several subcontractor and trade contractor
organizations in support of the increase of the payment bond amount.
Id. at 6-7. Decreasing the amount of the payment bond would be a step
backward.
H.R. 294 also permits a general contractor to furnish performance
and payment bonds on behalf of its veteran-owned and controlled small
subcontractors. We are unclear about the intent of this provision. It
is unlikely that a general contractor would post a bond on behalf of
its subcontractor. The general contractor requires bonds from its
subcontractors to protect itself against the risk of subcontractor
default. The general contractor is the party protected under bonds
required of subcontractors. By providing a bond on behalf of its
subcontractor, the general contractor would be providing a bond to
itself. However, if a small business enters into a joint venture with a
larger contractor and the larger contractor were allowed to furnish the
required bonds on behalf of the joint venture, or the surety wrote the
bonds for the joint venture based on the strength and indemnification
of the larger contractor without the small business losing the
opportunity for the set-aside project, that would assist small veteran-
owned and controlled contractors. First, they would be able to obtain
that specific contract with the Federal Government. Second, they would
develop a relationship with a surety through that project, increasing
the likelihood of obtaining bonds on their own in the future.
What Will Work to Assist Small Veteran-Owned Businesses in Obtaining
Bonding
Because underwriting is based on the contractor's ability to
perform contracts of a certain size and type and the contractor's
ability to run its operation successfully, the focus of any program
should be on enhancing the contractor's financial and operational
capabilities--and the bonding will follow. This is the recipe for
success in enhancing job opportunities for small and emerging
contractors. SFAA has a Model Contractor Development Program (MCDP)
that it has implemented in several states to help small and emerging
contractors become ready for and obtain surety bonding. The MCDP has
two parts: 1) Educational Workshops designed to help small and emerging
contractors improve their company's operations, thereby enhancing their
ability to obtain bonding or increase their bonding capacity; and 2) a
Bond Readiness Component, which consists of one-on-one counseling
sessions with surety bond producers, underwriters and other
professionals who work with the contractors to assemble the materials
necessary for a complete bond application and address any omissions
and/or deficiencies that might deter the successful underwriting of a
bond.
Most recently, SFAA has implemented its MCDP in a number of
locations in New York State. To date, more than $30 million in surety
bonding has been offered or underwritten for small and emerging
contractors through this initiative. In some cases, the initiative
helped small contractors obtain their first surety bond, and in other
cases, it helped small contractors increase the size of the bonds they
are able to obtain for a single job or as a total bonding limit.
SFAA would be happy to assist the Department of Veterans Affairs
with such a program specifically designed for veteran-owned and
controlled small contractors.
In addition, we have other initiatives under way at the Federal
level to assist small and emerging contractors in obtaining bonding,
which could help small veteran-owned and controlled businesses as well.
Since 2006, SFAA has worked with the Department of Commerce Minority
Business Development Agency (MBDA) through a Memorandum of
Understanding (MOU) whose objective is for SFAA to share its resources
with MBDA for the benefit of minority owned firms to enhance their
access to bonding and educate them on how to become bondable or
increase their bonding capacity. In meeting this objective, SFAA has
conducted numerous MBDA-sponsored bonding outreach and information
workshops throughout the country and MBDA regional offices and grantees
have been active partners in our MCDP efforts in New York, Illinois and
Texas.
The recent economic stimulus package also added $20 million in
funding for 2009 for the Minority Resource Center (Center) of the U.S.
Department of Transportation (DOT) for its disadvantaged business
enterprise bonding assistance program. Current law provides that the
Center shall provide assistance in obtaining bid, performance and
payment bonds by disadvantaged business enterprises. SFAA was involved
with the DOT when the program was initiated and is entering into a
Memorandum of Agreement (MOA) with the Center to conduct a bond
education program similar to that of the MCDP. SFAA also has offered to
work with the Center on an expanded surety bonding program that would
include a capital access component to provide working capital and
collateral guarantees for contractors seeking bonding. SFAA would be
happy to work with the Department of Veterans Affairs on a similar
program.
In addition to programs that follow the MCDP, there are other
programs that currently exist to assist small contractors. The recent
economic stimulus package made certain amendments to the Surety Bond
Guarantee Program of the Small Business Administration (SBA) that
improve the viability of the program. The maximum size of contracts
eligible for the SBA's bond guarantee was increased from $2 million to
$5 million and can be increased up to $10 million if a Federal agency's
contracting officer certifies that the guarantee is necessary. SFAA
continues to work with the staff of the SBA Office of Surety Guarantees
to make it more attractive to sureties. Ultimately, however,
legislative and regulatory changes will be needed.
What Else is Needed
Capital
Many times, what is perceived to be a bonding problem is not. Small
and emerging contractors that are having difficulties in obtaining
bonding actually may have a capital problem. In the current credit
crunch, they may not be receiving the bank lines of credit that they
need to provide the financial stability in their businesses that would
make them bondable. Small contractors need capital, capacity and
experience in order to obtain bonds. A capital access program combined
with a surety bond access program could be the best solution right now.
Procurement reform
In addition, all Federal agencies have a goal that requires 23
percent of the total dollars awarded in government contracts to be
given to small businesses. This ambitious goal combined with a
stretched procurement workforce within the Federal Government leads to
project opportunities that are set aside for small businesses, but are
too large for them to perform. Contracting agencies argue that they do
not have a sufficient number of contracting officers to manage a higher
number of low-dollar projects. The high dollar value of some Federal
Government construction projects, however, makes these projects
impossible for a small contractor to undertake. (SFAA staff is aware of
instances of small business construction project opportunities valued
in excess of $50 million.) Qualified small contractors that are
``small'' in accordance with the applicable regulations could perform
some of the work and could obtain bonding for that amount, but cannot
perform or obtain bonds for the entire project. There is a disconnect
between the size of projects that are advertised to meet small business
goals and the size of construction projects that these small
contractors are qualified to perform. To address the disconnect, the
Federal Government must set its procurement policy to give small
contractors access to projects they are capable of performing. We offer
some suggested approaches:
Joint Venture and Mentor-Protege Programs That Work to
Permit Small Business Participation. Mentor/protege programs and joint
ventures with larger contractors provide a means for small contractors
to participate in public construction projects. The current Federal
regulations, however, lack clarity and standardization among the
procuring agencies as to what arrangements are acceptable. In addition,
the regulations present a disincentive for smaller contractors to
participate in Federal construction projects with larger contractors in
joint ventures or mentor-protege programs. For example, a small
business may lose its status as ``small'' if it participates in a joint
venture in which the joint venture partner does not qualify as a small
business or, in some cases, such as the 8(a) protege-mentor joint
venture, the protege does not control the joint venture. Once an
otherwise qualified small business loses its status for that particular
set-aside opportunity, the small contractor cannot take advantage of
the set-aside opportunity and the Federal agency letting the
construction contract faces an obstacle in meeting its small business
participation goal. Yet, just because a contractor is too small to
complete all of the work on that project, does not mean that such
contractors cannot do any of the work.
SFAA believes that small businesses should not lose their
status and be disqualified from bidding on a small business opportunity
because of their participation in mentor/protege programs or joint
ventures or because bonds were issued based on the strength of the
joint venture partner. SFAA recommends that the Federal regulations
explicitly permit open joint ventures between the small contractor and
a larger contractor. The larger contractor's indemnity to the surety
for losses under the bond should not threaten the small contractor's
status. The new rules could apply to construction contracts under a
certain dollar value, such as $50 million. An additional requirement
could be that in any project in which the small contractor is in a
joint venture with a larger contractor, the small contractor must self-
perform at least 10 percent of the work in jobs between $25 million and
$50 million and 15 percent of the work in jobs under $25 million.
Unbundling Federal Contracts. As previously described,
Federal agencies increasingly are bundling and letting larger
construction contracts. Added to that, a Federal court recently held
that Federal construction projects were not explicitly subject to the
anti-bundling provisions in the Federal regulations so that contract
bundling cannot be challenged in the construction arena. To address the
needs of small businesses, Federal procurement rules must contain both
mandates and incentives to break construction contracts into smaller
parts to create genuine opportunities for small businesses. We
recommend that the Federal definition of contract bundling be amended
to include specifically Federal construction projects. In addition, a
small business procurement requirement should be established under
which any Federal agency letting construction contracts must let a
certain percentage of its total construction procurement budget in
contracts of no more than $5 million.
Interagency Coordination of All Federal Resources
Targeted for Small Businesses. With loan and bonding programs in the
SBA and DOT, and the loan guarantee program for the Department of
Veterans Affairs proposed in this bill, coordination is needed among
the various Federal programs. H.R. 4253, enacted on February 14, 2008,
provides a model for coordination. The Military Reservist and Veteran
Small Business Reauthorization and Opportunity Act of 2007 requires the
President to establish an interagency task force to coordinate the
efforts of all Federal agencies that are involved in increasing capital
and business development opportunities for small business owners and
service-disabled veterans. The new law directs the interagency task
force to coordinate administrative and regulatory activities and
develop proposals relating to increasing capital access and capacity of
these small business concerns through loans, surety bonding and
franchising.
We believe that this coordination mechanism among the agencies
is all the more important now to assure small business participation in
Federal projects funded with stimulus money.
Summary and Conclusion
SFAA believes that the current surety bonding provisions of H.R.
294 will not have the desired effect of facilitating access to surety
bonding for small veteran-owned and controlled contractors. However,
there are programs available to the Department of Veterans Affairs that
can be effective in enhancing bonding access. In addition, SFAA's
procurement recommendations provide methods to significantly increase
small business participation in Federal construction work, and help
procurement agencies meet their goals.
We hope that the Department of Veterans Affairs will be interested
in working with the surety community to address the needs of veteran-
owned and controlled small businesses for long-term participation and
success in Federal construction projects.
Prepared Statement of Mark Walker, Deputy Director,
National Economic Commission, American Legion
Executive Summary
The American Legion has no official positions on H.R. 294, H.R.
2461, and H.R. 3577 at this time. The American Legion supports the
increase in grants that are provided for severely injured veterans in
H.R. 1169. The American Legion supports H.R. 1182, which expands
Servicemembers Civil Relief Act protection against state income tax
liability that applies to a military spouse. This bill would also
protect the right of the military spouse to vote by absentee ballot in
his/her home state (legal residence), despite their absence from the
state for the purposes of being with the active duty husband/wife in
another state. The American Legion supports H.R. 2416, which would
require VA to use Federal Supply schedules for the purpose of meeting
their veteran and service-disabled veteran-owned businesses procurement
goals. The American Legion supports H.R. 2614. The American Legion
believes there is a definite need to constitute an independent body
that is able to analyze and develop intelligent practical solutions to
difficult issues and to present those solutions to VA's senior
leadership and Congressional Members as well as other stakeholders. The
American Legion supports H.R. 2696. The amendments to SCRA in this bill
will clarify the servicemember's right to bring a personal cause of
action for damages or other appropriate remedies against violators of
the SCRA. The American Legion support H.R. 2874. This bill would give
servicemembers needed relief from early termination charges related to
residential, professional, business, or agricultural rental leases.
This bill would also require an institution of higher learning to
refund the tuition and fees paid by a student whose absence is due to
military service. The American Legion supports H.R. 2928. Many veterans
prefer traditional employment and/or may require employment for
personal or family reasons. The American Legion recommends that these
programs be included under the Post-9/11 GI Bill (Chapter 33); flight
training; correspondence schools; vocational schools; apprentice
programs; and, on-the-job training programs. The American Legion
supports H.R. 3223, which would allow for more qualified veteran and
service-disabled veteran business owners to compete and receive
contracts from the VA. The American Legion fully supports H.R. 3554,
which expands education benefits to title 32 Active Guard Reserve. The
American Legion supports H.R. 3561. The extra funds would eliminate a
considerable amount of the costs to obtain the initial instrument
rating and commercial pilot certifications needed for advancement in
the aviation field. The American Legion supports the drafted
legislation will provide an increase in reporting fees to schools that
enroll veterans. The increased money could assist with more staffing,
provide better equipment (i.e. computers), which would provide self-
serve area for veterans or allow more money to provide for a Veteran
Center. Thank you for the opportunity to submit these opinions of The
American Legion on these issues.
__________
Madam Chairwoman, Ranking Member Boozman, and Members of the
Subcommittee:
Thank you for this opportunity to present The American Legion's
views on the several pieces of legislation being considered by the
Subcommittee today. The American Legion commends the Subcommittee for
holding a hearing to discuss these very important and timely issues.
H.R. 294, Veteran-Owned Small Business Promotion Act of 2009, which
amends title 38, United States Code, to provide for the reauthorization
of the Department of Veterans Affairs (VA) small business loan program.
The American Legion does not have an official position on reauthorizing
the small business loan program within the VA at this time. However,
The American Legion recommends that Congress establish a direct lending
program through the Small Business Administration (SBA). This effort
would offer low-interest loans to otherwise healthy veteran-owned and
service-disabled veteran-owned businesses that are having trouble
obtaining the credit they need for necessary operating expenses or
expansion. The American Legion believes the SBA's Office of Veterans'
Business Development should be the lead agency to ensure that Operation
Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF) veterans are
provided with Entrepreneurial Development Assistance. Comprehensive
training should be handled by the SBA and Resource Training Centers
should include DoD and VA facilities.
H.R. 1169 seeks to amend title 38, United States Code, to increase
the amount of assistance provided by the Secretary of VA to disabled
veterans for specially adapted housing and automobiles and adapted
equipment. This legislation seeks to triple the amount of grants that
are provided to severely injured veterans. Cost of construction has
risen significantly. The increase in funding will assist those severely
wounded veterans with the resources to pay for automobiles, adaptive
automobile equipment, and adaptive housing for their disabilities.
Ultimately, this bill would provide injured veterans with a specific
quality of life that they are entitled to. The American Legion supports
this legislation.
H.R. 1182, Military Spouses Residency Relief Act, would amend the
Servicemembers Civil Relief Act (SCRA) to prohibit, for purposes of
voting for a Federal, state, or local office, deeming a person to have
lost a residence or domicile in a state, acquired a residence or
domicile in any other state, or become a resident in or any other state
solely because the person is absent from a state because the person is
accompanying the person's spouse who is absent from the state in
compliance with military or naval orders. This bill would add a new
subsection (c) of section 571, as follows: ``Income for services
performed by the spouse of a servicemember shall not be deemed to be
income for services performed or from sources within a tax jurisdiction
of the United States if the spouse is not a resident or domiciliary of
the jurisdiction in which the income is earned because the spouse is in
the jurisdiction solely to be with the servicemember serving in
compliance with military orders.'' This bill expands SCRA protection
against state income tax liability that applies to a working military
spouse. This bill would also protect the right of the military spouse
to vote by absentee ballot in his/her home state (legal residence),
despite their absence from the state for the purposes of being with the
active duty spouse in another state. The American Legion supports this
important piece of legislation.
H.R. 2416 seeks to require VA to use purchases of goods or services
through the Federal Supply Schedules for the purpose of meeting certain
contracting goals for participation by small business concerns owned
and controlled by veterans, including veterans with service-connected
disabilities. The American Legion has encouraged Congress to require
reasonable ``set-asides'' of Federal procurements and contracts for
businesses owned and operated by veterans. The American Legion
supported legislation in the past that sought to add service-connected
disabled veterans to the list of specified small business categories
receiving 3 percent set-asides. Public Law (PL) 106-50, ``The Veteran
Entrepreneurship and Small Business Development Act 1999,'' included
veteran-owned small businesses within Federal contracting and
subcontracting goals for small business owners and within goals for the
participation of small businesses in Federal procurement contracts. It
requires the head of each Federal agency to establish agency goals for
the participation by small businesses owned and controlled by service-
connected disabled veteran, within that agency's procurement contracts.
Agency compliance with PL 106-50 has been minimal. In 2004, Executive
Order 13360 was issued to strengthen opportunities in Federal
contracting for service-disabled veteran-owned businesses. The American
Legion supports this legislation.
H.R. 2461, Veterans Small Business Verification Act, amends title
38, United States Code, to clarify the responsibility of the Secretary
of VA to verify the veteran status of the owners of small business
concerns listed in the database maintained by the Secretary. The
American Legion has no official position on this issue at this time.
H.R. 2614, Veterans' Advisory Committee on Education
Reauthorization Act of 2009, seeks to amend title 38, United States
Code, to reauthorize the Veterans' Advisory Committee on Education
(VACOE). VACOE is composed of members who are prominent leaders in
education/training, particularly in veterans' education and training.
They are able to provide valuable insight and advice to the VA
Secretary and Members of Congress. The American Legion believes there
is a definite need to constitute an independent body that is able to
analyze and develop intelligent, practical solutions to difficult
issues and to present those solutions to VA's senior leadership and
Congressional Members as well as other stakeholders. Last, VACOE
meetings are open to the public. Any individual/group can attend and
address VACOE with issues they wish to bring to the attention of VA
leadership. In turn, this Advisory Committee can pass those concerns
onto VA and Members of Congress.
H.R. 2696, Servicemembers' Rights Protection Act, amends the
Servicemembers Civil Relief Act (SCRA) to provide for the enforcement
of rights afforded under that Act. The American Legion supports this
legislation that authorizes the Attorney General to file a civil action
for violation of the SCRA and allows a servicemember the right to join
the Attorney General in a civil action. This bill will also provide
servicemembers their own private cause of action, regardless of any
enforcement action taken by the Attorney General. These amendments to
SCRA will clarify the servicemember's right to bring a personal cause
of action for damages or other appropriate remedies against violators
of the SCRA.
H.R. 2874, Helping Active Duty Deployed Act of 2009, amends the
Servicemembers Civil Relief Act to improve the equitable relief
available for servicemembers called to active duty. This bill would
give servicemembers needed relief from early termination charges
related to residential, professional, business, or agricultural rental
leases. This bill would also require an institution of higher learning
to refund the tuition and fees paid by a student whose absence is due
to military service.
H.R. 2928 seeks to amend title 38, United States Code (U.S.C.), to
provide an apprenticeship and on-the-job training program under the
Post-9/11 Veterans Education Assistance Program. Not all veterans
attend institutions of higher learning (IHLs). Many veterans prefer
traditional employment and/or may require employment for personal or
family reasons. The American Legion recommends that these programs be
included under the Post-9/11 GI Bill (Chapter 33):
flight training;
correspondence schools;
vocational schools;
apprentice programs; and,
on-the-job training programs.
Chapter 33 needs to be modified to include non-college degree
programs. Veterans choosing to use their educational benefits for other
than IHLs are able to use them under the existing Chapter 30 or
Chapters 1606 or 1607, title 10, U.S.C.; however, in those instances
the benefit recipients are not entitled to either the housing stipend
or the allowance for books and supplies. The American Legion believes
that veterans should never be limited in the manner they use their
educational benefits.
H.R. 3223 amends title 38, United States Code, to improve the VA's
contracting goals and preferences for small business concerns owned and
controlled by veterans. This bill will amend section 8127 of title 38,
United States Code, in subsection (c), by striking `may' and inserting
`shall' for the purpose of reaching and surpassing veterans' and
service-disabled veterans' procurement goals. This bill would also not
disqualify a veteran or veterans of more than one small business
concern from being included in the VA's database. The American Legion
supports these amendments that would allow for more qualified veteran
and service-disabled veteran business owners to compete and receive
contracts from VA.
H.R. 3554, National Guard Education Equality Act, amends title 38,
United States Code, to provide for the inclusion of certain active duty
service in the Reserve components as qualifying service for purposes of
Post-9/11 Educational Assistance Program. This legislation will extend
benefits to title 32 Active Guard Reserve (AGR) servicemembers under
the Post-9/11 GI Bill. Many AGR personnel were called to active duty
via title 32 in support of the response to the attacks on America on
September 11, 2001, in addition to deploying for Operation Iraqi
Freedom and Operation Enduring Freedom. Thus, AGR servicemembers have
answered the Nation's call to arms and should receive equal education
benefits for their service. Additionally, this bill will provide a full
4-year college education to members of the National Guard, who are
discharged with a service-connected disability. The American Legion
fully supports enacting the National Guard Education Equality Act.
H.R. 3561 amends title 38, United States Code, to increase the
amount of educational assistance provided for certain veterans for
flight training. The American Legion supports the increase from 60
percent to 75 percent for veterans pursuing flight training. The extra
funds would eliminate a considerable amount of the costs to obtain the
initial instrument rating and commercial pilot certifications needed
for advancement in the aviation field.
H.R. 3577, Education Assistance to Realign New Eligibilities for
Dependents (EARNED) Act of 2009, amends title 38, United States Code,
to provide authority for certain members of the Armed Forces who have
served 20 years on active duty to transfer entitlement to Post-9/11
Educational Assistance to their dependents. The American Legion has no
official position on this issue at this time.
The draft legislation seeks to provide for an increase in the
amount of reporting fees payable to educational institutions that
enroll veterans receiving educational assistance from the VA. Due to
the lack of staffing and budget cuts that are being made at
institutions, an increase in reporting fees is warranted. The school's
certifying official assists veterans with applying for classes and
monitors their enrollment weekly along with ensuring this information
is reported to VA. The increased funding could assist with more
staffing and provide better equipment (i.e. computers) which would
provide a self-serve area for veterans or allow more funds to provide
for a Veterans Center.
The American Legion appreciates the opportunity to present this
statement for the record. Again, thank you Madam Chairwoman, Ranking
Member Boozman, and Members of the Subcommittee for allowing The
American Legion to present its views on these very important issues
today.
Prepared Statement of Justin Brown, Legislative Associate,
National Legislative Service, Veterans of Foreign Wars of the United
States
MADAM CHAIRWOMAN AND MEMBERS OF THIS SUBCOMMITTEE:
On behalf of the 2.2 million members of the Veterans of Foreign
Wars of the United States and our Auxiliaries, I would like to thank
this Committee for the opportunity to testify. The issues under
consideration today are of great importance to our members and the
entire veteran population.
The economic downturn has impacted the entire Nation and nowhere is
it more demoralizing than with our recently separated veterans. The
most recent monthly survey from the Bureau of Labor Statistics
highlighted the dire situation facing America's newest veterans. There
are only 9,000 fewer unemployed Post-9/11 servicemembers in the United
States than there are servicemembers in Iraq and Afghanistan (185,000
unemployed--194,000 in OEF & OIF). The economic stimulus may or may not
be working, but it surely is not working for veterans.
In March of this year, the Veterans of Foreign Wars testified
before this body that the economic stimulus was largely circumventing
this at-risk population. We worked with the Senate prior to passage of
the economic stimulus, in an attempt to pass legislation that would
help America help veterans in the economic stimulus and through these
tough times. However, these changes never occurred.
In consideration of this, and the startling unemployment numbers
for Post-9/11 veterans, the VFW requests that any and all Federal
stimulus money be subjected to the same requirements it currently is as
if it were directly spent by the Federal Government. Federal laws
relating to veterans preference and contracting are being circumvented
by distributing large sums of Federal money in the form of state
grants.
The VFW believes expansion of any government workforce as a result
of stimulus funds should be bound, as a condition for use of Federal
dollars, to adhere to all Federal veterans' employment laws;
specifically the Veterans Employment Opportunity Act. Any government
contracts awarded due to Federal stimulus funding should be bound to
set-aside 3 percent of all such contracts and sub-contracts for
disabled veteran owned small businesses (SDVOSBs) as required by P.L.
106-50. Any company that receives a contract of more than $100,000, and
was funded in any part from the Federal stimulus, should also be bound
by the Jobs for Veterans Act.
Our Nation's economic stimulus package should not be a mechanism
for skirting Federal veterans' employment and small business laws. Less
than one-half of the total stimulus dollars have been distributed and
this needs to be corrected immediately.
H.R. 294, to amend title 38, United States Code, to provide for the
reauthorization of the Department of Veterans Affairs small business
loan program, and for other purposes.
The Veterans of Foreign Wars does not have a formal position on
H.R. 294 at this time. In previous testimony before the House Small
Business Committee, VFW urged Congress to create a direct loan or
hybrid loan program via the Small Business Administration for veterans'
small businesses. Many have argued that the better route is to raise
loan guarantees thereby increasing the lender's incentive to provide
veterans with capital. However, the VFW has found that if lenders are
not lending, as has been the case in the current economic situation,
raising loan guarantees is insufficient. Offering an array of financial
tools, guarantees, and/or a direct loan program, would increase
veterans' options in regard to starting and maintaining businesses.
Clearly, different types of loans would require different conditions of
lending based on the situational factors of the veteran.
H.R. 1169, to amend title 38, United States Code, to increase the
amount of assistance provided by the Secretary of Veterans Affairs to
disabled veterans for specially adapted housing and automobiles and
adapted equipment.
The Veterans of Foreign Wars offers its enthusiastic support for
H.R. 1169; legislation that would increase the amount of assistance
provided by VA to disabled veterans for specially adapted housing,
automobiles and adapted equipment.
For many years the amount of grants provided to certain severely
disabled veterans who need adaptations made to home or automobiles have
not kept pace with inflation causing the benefit to erode. VFW believes
that H.R. 1169 would provide much needed relief by increasing from
$12,000 to $36,000 the maximum amount authorized by VA for specially
adapted features in a home and from $60,000 to $180,000 for the
construction of specially adapted housing. It also makes a much needed
change to the adaptive automobile benefit by providing up to $33,000
for the purchase of an automobile and specially modified automobile
equipment for our severely disabled veterans and servicemembers.
H.R. 1182, to amend the Servicemembers Civil Relief Act to
guarantee the equity of spouses of military personnel with regard to
matters of residency, and for other purposes.
The Veterans of Foreign Wars strongly supports H.R. 1182. This
important legislation would amend the Servicemembers Civil Relief Act
so that certain rights and protections of this act apply not only to
servicemembers, but to their spouses as well. Particularly, this
legislation provides a guarantee of residency for spouses for voting
purposes. Spouses of servicemembers who have moved out of state will no
longer be deemed to have lost residency in their original state, nor be
deemed to have acquired a residence in any other state. Thus, spouses'
voting eligibility will be kept to their original state of residence if
they choose.
Also of importance, this legislation helps determine residency of
spouses of servicemembers in dealing with taxes. A spouse's relocation
will neither cause them to lose nor gain state residency as long as
they moved to their new location for the sole purpose of being with
their spouse who moved due to military orders. A spouse's income will
not be deemed to be income within the new tax jurisdiction. Last, H.R.
1182 applies the suspension of land rights residency requirement to the
spouses of servicemembers.
H.R. 2416, to require the Department of Veterans Affairs to use
purchases of goods or services through the Federal supply schedules for
the purpose of meeting certain contracting goals for participation by
small business concerns owned and controlled by veterans, including
veterans with service-connected disabilities.
The Veterans of Foreign Wars supports this legislation that would
help the Federal Government meet its legally established 3 percent
disabled veteran owned small business (SDVOSB) set-aside mandate of all
Federal contracts. Ten years have gone by since the passage of P.L.
106-50, and the Federal Government has yet to surpass 1.5 percent of
all Federal contracts. The VFW calls on Congress to step up its efforts
to ensure governmental departments meet their established mandates.
This particular legislation would extend an opportunity to veteran
small businesses to fulfill regularly and often needed consumable items
of the VA.
According to the VA, the National Acquisition Center Federal Supply
Schedule Service is responsible for establishing, soliciting, awarding,
and administering the VA's Federal Supply Schedule Program, which
currently consists of 8 active schedules. These schedules encompass
such products as pharmaceuticals; medical equipment and supplies;
dental supplies; x-ray equipment and supplies (including medical and
dental x-ray film); patient mobility devices (including wheelchairs,
scooters, walkers, etc.); antiseptic skin cleansers, detergents and
soaps; in vitro diagnostics, reagents, test kits and sets; and clinical
analyzers, laboratory cost-per-test. There are a total of over 1,200
contracts in place for the various commodity groups. Annual sales
against these contracts exceed $2 billion. All Federal Supply Schedule
contracts are multiple award, indefinite delivery-indefinite quantity
type, and are national in scope. These contracts are available for use
by all government agencies including but not limited to: VA medical
centers, Department of Defense, Bureau of Prisons, Indian Health
Services, Public Health Services, some State Veterans Homes, etc.
Performance periods can be established up to 5 years in length.
H.R. 2461, to amend title 38, United States Code, to clarify the
responsibility of the Secretary of Veterans Affairs to verify the
veteran status of the owners of small business concerns listed in the
database maintained by the secretary.
The Veterans of Foreign Wars strongly supports this legislation
that would verify small businesses that claim to be veteran or disabled
veteran owned are in fact owned and operated by those veterans. The
potential exists for companies to claim veteran status in order to gain
unearned access to veterans' business benefits. These companies then
may become competitors of benefit eligible veteran or disabled veteran
owned businesses.
This legislation would require VA to confirm a small business is
owned and controlled by veterans and a veteran/s are in fact disabled
prior to being listed in the VA's database of veteran owned and service
disabled veterans. The legislation would also require all unverified
parties currently in the database be verified within 60 days of the
passage of this Act. The VFW hopes to see both the VA and Congress
address this issue immediately.
H.R. 2614, to amend title 38, United States Code, to reauthorize
the Veterans' Advisory Committee on Education.
The Veterans of Foreign Wars supports H.R. 2614 which would allow
the Veterans' Advisory Committee on Education to continue to serve our
veterans for another 6 years. The Veterans' Advisory Committee on
Education is an important Committee that provides advice on the
administration of education and training programs to our veterans.
H.R. 2696, to amend the Servicemembers Civil Relief Act to provide
for the enforcement of rights afforded under that Act.
The VFW strongly supports this legislation that would add a new
title VIII to the Servicemembers Civil Relief Act to enhance the
protections provided under that Act for servicemembers and their
dependents.
This legislation would authorize the Attorney General to commence a
civil action in any appropriate United States District Court whenever
the Attorney General has reasonable cause to believe that any person or
group of persons is engaged in, or has engaged in a pattern or practice
of conduct in violation of any provision of the Servicemembers Civil
Relief Act; or any person or group of persons is denying, or has
denied, any person or group of persons any protection afforded by any
provision of this Act, and such denial raises an issue of general
public importance. It establishes the right of those persons
individually protected by the Act to intervene in any action brought by
the Attorney General and to receive injunctive and monetary relief,
along with reasonable attorneys' fees and costs.
The Act would also clarify that those persons individually
protected by the Act have their own personal cause of action,
independent of any enforcement action the Attorney General might
initiate. Those individually protected who bring their own private
action may generally seek and obtain the same remedies available upon
intervention in an action brought by the Attorney General.
Furthermore, this act would make explicit that in addition to
attorneys' fees, consequential and punitive damages may be awarded for
violations of the Act. Although some courts have found such damages to
be implied, others have not. This disparity will now be eliminated.
H.R. 2874, to amend the Servicemembers Civil Relief Act to improve
the equitable relief available for servicemembers called to active
duty, and for other purposes.
The VFW supports this legislation which addresses rent and lease
amounts for premises and motor vehicles for servicemembers. H.R. 2874
states that unpaid lease amounts preceding the effective date of the
lease will be paid on a prorated basis. This legislation also prohibits
the lessor from imposing an early termination charge. However, any
taxes, summonses, title and registration fees, or other obligations and
liabilities would still be paid by the lessee.
This legislation also addresses tuition relief for postsecondary
students who are called to military service. H.R. 2874 would allow for
a student, who is a member of the military, to get reimbursed for their
tuition and fees for school if they are called away to military action
and are thus absent and do not receive school credit. These refunds
however do not include tuition or fees paid on behalf of the student by
scholarships awarded to the student by the institution of higher
learning or through funds awarded under Title 20 U.S.C.
H.R. 2928, to amend title 38, United States Code, to provide for an
apprenticeship and on-job training program under the Post-9/11 Veterans
Educational Assistance Program.
While the VFW fully supports the intent of H.R. 2928 the
legislation needs clarification. The VFW fully supports providing
apprenticeship and on-job training under the purview of the Post-9/11
Veterans Educational Assistance Program. However, H.R. 2928 is not
clear in that it does not provide a clear measurement for the benefit.
The VFW believes that the current suggested criteria would actually
provide less for apprenticeship training than is currently provided
under Chapter 30 educational benefits. Therefore, the VFW suggests that
the minimum that be offered under Chapter 33 be that which is currently
offered under Chapter 30 with that rate being tied to a favorable
annual rate of inflation.
H.R. 3223, to amend title 38, United States Code, to improve the
Department of Veterans Affairs contracting goals and preferences for
small business concerns owned and controlled by veterans.
The Veterans of Foreign Wars strongly supports H.R. 3223. This
important legislation would clarify a longstanding issue in the
veterans' business community by simply changing ``may'' to ``shall'' in
regards to a GAO interpretation of the law that caused massive
confusion in regards to priority of contracting set-asides.
Furthermore, the legislation would clarify that veterans who may own
more than one business would not be a means for disqualification of
small business set-asides. Also, the legislation would clarify the term
``control of management and daily business operations.''
H.R. 3554, to amend title 38, United States Code, to provide for
the inclusion of certain active-duty service in the reserve components
as qualifying service for purposes of Post-9/11 Educational Assistance
Program, and for other purposes.
The Veterans of Foreign Wars strongly supports this legislation
that would qualify certain members of the Army National Guard who were
activated under title 32 orders but due to a clerical error were
excluded from Chapter 33 benefits. Over 30,000 members of the National
Guard who currently do not enjoy the benefits of the Post-9/11 GI Bill
but may have been actively involved in both Operation Iraqi Freedom and
Operation Enduring Freedom would become eligible for it. In regards to
Post-9/11 GI Bill fixes, this is the VFW's number one priority. Certain
veterans who should be eligible for the benefit are not and the VFW
strongly encourages Congress to address this issue as quickly as
possible.
H.R. 3561, to amend title 38, United States Code, to increase the
amount of educational assistance provided to certain veterans for
flight training.
The Veterans of Foreign Wars supports this legislation that would
allow veterans to receive additional assistance paying for their flight
school programs. This important legislation increases the amount of
educational funding for flight programs from 60 percent to 75 percent
of the immediate costs up to the maximum amount of benefit provided
under Chapter 30 educational benefits. H.R. 3561 would help eliminate
funding barriers facing veterans interested in using their educational
benefits to pursue certified flight training programs.
H.R. 3577, to amend title 38, United States Code, to provide
authority for certain members of the Armed Forces who have served 20
years on active duty to transfer entitlement to Post-9/11 Educational
Assistance to their dependants.
The Veterans of Foreign Wars strongly supports this legislation.
H.R. 3577 would make eligible for the transferability of the Post-9/11
GI Bill all active duty military that served at least 90 days after
September 10, 2001 and retired with 20 years of service between the
dates of September 11, 2001 and July 31, 2009. The VFW has received
numerous calls and emails from upset soldiers, sailors, and marines who
found the August 1, 2009 deadline unfair. Had many of these
servicemembers known such a benefit was going to be available many
would have likely extended in order to receive it. The VFW believes
these men and women served their country proudly and honorably during a
time of war and ought to be offered the same benefit as their
counterparts.
H.R. 3579, to amend title 38, United States Code, to provide for an
increase in the amount of the reporting fees payable to educational
institutions that enroll veterans receiving educational assistance from
the Department of Veterans Affairs, and for other purposes.
The VFW supports this legislation that would raise the reporting
fees, payable to institutions that enroll veterans receiving
educational assistance from the VA, from $7 or $11 to $50. This will
raise the funding levels of institutions in order to assist them with
the large influx of veterans using the Post-9/11 GI Bill.
Madam Chairwoman, this concludes my testimony and I will be pleased
to respond to any questions you or the Members of this Subcommittee may
have. Thank you.
Prepared Statement of John L. Wilson, Assistant National Legislative
Director, Disabled American Veterans
Madam Chairwoman and Members of the Subcommittee:
On behalf of the 1.2 million members of the Disabled American
Veterans (DAV), I am honored to present this testimony to address
various bills before the Subcommittee today. In accordance with our
congressional charter, the DAV's mission is to ``advance the interests,
and work for the betterment, of all wounded, injured, and disabled
American veterans.'' We are therefore pleased to support various
measures insofar as they fall within that scope.
The Veteran-Owned Small Business Promotion Act of 2009, H.R. 294,
reinstates and modifies this program, which was terminated at the end
of fiscal year 1986. The previous veteran-owned small business loan
program authorized the Department of Veterans Affairs (VA) to provide
loans to veteran-owned small businesses for:
Financing plant construction, conversion, or expansion;
Financing the acquisition of equipment, facilities,
machinery, supplies, or materials; or
Supplying working capital.
While it would repeal the authority to make direct loans, it would
instead grant loan guarantees for qualified veterans. It would also:
Reduce the minimum disability rating eligibility from 30
percent to 10 percent;
Expands eligibility to all veterans which, under current
law, was limited to Vietnam era veterans and veterans discharged or
released due to a disability incurred or aggravated in the line of
duty;
Increases the maximum loan guaranty amount from $200,000
to $500,000;
Authorizes the VA to subsidize a loan lender in order to
reduce by up to one-half percent the interest rate paid by the veteran-
owned small business;
Includes, under a loan preference, members of the
National Guard and reserves activated in support of the Global War on
Terrorism;
Limits performance bond requirements of veteran-owned
small businesses with respect to the construction, alteration, or
repair of any Department of Veterans Affairs (VA) public building or
public work; and
Treats a small business owned and controlled by veterans
as a socially and economically disadvantaged small business for
purposes of contracts awarded to the latter businesses under provisions
of the Small Business Act.
As noted in the Independent Budget (IB), a policy document prepared
annually by the DAV, AMVETS, Paralyzed Veterans of America, and
Veterans of Foreign Wars of the United States, veterans, particularly
veterans who are service disabled, have difficulties obtaining
financial support to establish or maintain a small business. In an
effort to assist veterans with financing a business, the Small Business
Administration (SBA) has established a new loan program entitled ``The
Patriot Express Loan Initiative.'' Under this program, veterans can
obtain business loans up to $500,000 and qualify for SBA's maximum loan
guarantee of up to 85 percent of the loan value of $150,000 or less,
and 75 percent guarantee for loans more than $150,000. Unfortunately,
lenders require collateral to secure the 15 percent to 25 percent of
the loan not covered by the SBA guarantee. This collateral requirement
actually restricts most recently discharged veterans from obtaining
small business loans due to insufficient collateral.
It was the IB's recommendation that the VA should establish a loan-
guarantee program similar to its current VA Home Loan Guarantee program
to provide recently discharged veteran entrepreneurs the security
needed to establish a small business after they have left the military
service, even though they may be starting with little or no income or
collateral.
While H.R. 294 would not authorize loans, it does provide VA-backed
loan guarantees, the reduction of interest rates by one-half percent,
and limits performance bond requirements of veteran-owned small
businesses with respect to the construction, alteration, or repair of
any Department of Veterans Affairs (VA) public building or public work,
treats a small business owned and controlled by veterans as a socially
and economically disadvantaged small business for Small Business Act-
awarded contracts, and other beneficial provisions. Although the DAV
has no resolution on this issue, we are not opposed to the favorable
consideration of this legislation.
H.R. 1169 addresses both specially adapted housing and the purchase
of automobile and their adaptive equipment. It increases:
from $12,000 to $36,000 the maximum amount authorized to
be provided by the VA to certain disabled veterans for specially
adapted features in a home;
from $60,000 to $180,000 the total amount authorized to
be provided per veteran for the construction of specially adapted
housing; and
from $11,000 to $33,000 the maximum amount authorized to
be provided for the purchase of automobiles and adaptive automobile
equipment.
The specially adapted housing provision is in partial agreement
with one provision of DAV's Resolution No. 176, which seeks to provide
an increase in the specially adapted housing grant to veterans who have
incurred service-connected disabilities consisting of loss or loss of
use of both lower extremities, total blindness together with loss or
loss of use of one lower extremity, or loss or loss of use of one lower
extremity together with either the loss or loss of use of an upper
extremity or other organic disease that requires use of a wheelchair or
the use of braces, crutches, or canes.
We would also ask for the Committee's consideration by amending
this bill to provide for automatic annual adjustments based on
increases in the cost of living to be in concert with the second
provision of Resolution No. 176. Such an amendment would allow this
program to keep pace with an expanding economy and would be most
beneficial to eligible veterans.
Regarding the section of this bill dealing with the purchase of an
automobile and adaptive automobile equipment, it is in agreement with
DAV's Resolution No. 171 which seeks to increase the grant for
automobiles or other conveyances available to certain disabled veterans
and provide for automatic annual adjustments based on the increase in
the cost of living. VA provides a grant to assist eligible disabled
veterans and servicemembers in purchasing specially equipped
automobiles or other conveyances. The amount of the grant was set at an
amount sufficient to cover the full cost of lower-priced automobiles in
1946. The current grant of $11,000 represents only about 39 percent of
the total average cost of automobiles based on most current available
pricing. DAV is pleased to endorse this bill as it increases the
automobile grant to an amount representing 80 percent of the average
cost of new automobiles.
H.R. 1182, the Military Spouses Residency Relief Act. The DAV has
no resolution on this issue. Additionally, this legislation is outside
the scope of the DAV's mission. We nonetheless have no opposition to
its favorable consideration.
H.R. 2416 requires VA contracting officers to use purchases of
goods or services through the Federal supply schedules for the purpose
of meeting the government-wide goal for participation by small
businesses owned and controlled by veterans and service-disabled
veterans. The DAV has no resolution on this issue. We nonetheless have
no opposition to its favorable consideration.
H.R. 2461, the Veterans Small Business Verification Act. This bill
provides that applications by veteran small business owners for
inclusion in a database of veteran-owned small businesses maintained by
the VA constitute as permission for the Secretary to verify information
included in the application. Such small businesses would not be
included in the database until the VA receives sufficient information
to verify their eligibility. The IB noted that the VA's database is
critical to Federal agencies when they certify veteran status and
ownership. We therefore agree with the provisions of this bill.
We do, however, respectively request this bill be amended in such a
way as to require all Federal agencies to certify veteran status and
ownership through the VA's Vendor Information Pages (VIP) program
before awarding contracts to companies claiming to be veteran or
service-disabled veteran-owned small businesses. Government agencies
need a one-stop access to identify veteran and service-disabled
veteran-owned small businesses and verify their veteran status.
H.R. 2614, the Veterans' Advisory Committee on Education
Reauthorization Act of 2009. The DAV has no resolution on this issue.
We nonetheless have no opposition to its favorable consideration.
H.R. 2696, the Servicemembers' Rights Protection Act. The DAV has
no resolution on this issue. Additionally, this legislation is outside
the scope of the DAV's mission. We nonetheless have no opposition to
its favorable consideration.
H.R. 2874, the Helping Active Duty Deployed Act of 2009. The DAV
has no resolution on this issue. Additionally, this legislation is
outside the scope of the DAV's mission. We nonetheless have no
opposition to its favorable consideration.
H.R. 2928, amends title 38, United States Code, to provide for an
apprenticeship and on-the-job training program under the Post-9/11
Veterans Educational Assistance Program. The DAV has no resolution on
this issue. We nonetheless have no opposition to its favorable
consideration.
H.R. 3223, requires under current law, a VA contracting officer to
award a contract to a small business concern owned and controlled by
veterans using other than competitive procedures, often referred to as
a sole source contract. This bill would prohibit using ownership and
control by a veteran or veterans of more than one small business as
grounds for disqualification from inclusion in an existing database of
veteran-owned businesses. The DAV has no resolution on this issue. We
nonetheless have no opposition to its favorable consideration.
H.R. 3554 would amend title 38, United States Code, to provide for
the inclusion of certain active-duty service in the reserve components
as qualifying service for purposes of Post-9/11 Educational Assistance
Program. The DAV has no resolution on this issue. Additionally, this
legislation is outside the scope of the DAV's mission. We nonetheless
have no opposition to its favorable consideration.
H.R. 3561, to amend title 38, United States Code, to increase the
amount of educational assistance provided to certain veterans for
flight training, was introduced by Representative Teague. The DAV has
no resolution on this issue. Additionally, this legislation is outside
the scope of the DAV's mission. We nonetheless have no opposition to
its favorable consideration.
H.R. 3577, the Education Assistance to Realign New Eligibilities
for Dependents (EARNED) Act of 2009. The bill provides the authority
for certain members of the Armed Forces who have served 20 years on
active duty to transfer entitlement to Post-9/11 educational assistance
to their dependents. The DAV has no resolution on this issue. We
nonetheless have no opposition to its favorable consideration.
Madam Chair, this concludes my testimony on behalf of DAV. We hope
you will consider our recommendations.
Prepared Statement of Richard F. Weidman, Executive Director
for Policy and Government Affairs, Vietnam Veterans of America
Chairwoman Herseth-Sandlin, Ranking Member Boozman, and
distinguished Members of the Subcommittee, on behalf of VVA National
President John Rowan, and the Board of Directors and members, I thank
you for giving Vietnam Veterans of America (VVA) the opportunity to
testify today regarding these important items of pending legislation.
In regard to H.R. 294, we strongly support anything that will
inject more capital into small business concerns, especially veteran
owned firms and service disabled veteran owned firms. While this idea
of reviving the business loans at VA, which was so successful following
World War II, is a concept that has been raised time and again over the
past three decades, this is the first piece of legislation that we can
recall that has actually come up for a hearing. We agree with lowering
the percent of disability from 3 percent to 10 percent for eligibility,
and also concur with increasing the guaranty amount. Assuming that the
offset can be found under ``PAYGO'' we favor enactment of this
legislation.
We also support the move in make it easier for service disabled
veteran owned firms and other veteran owned firms to secure bonding.
However, we are not sure that the mechanism suggested in this section
will actually work in the surety bond market, after discussions with
some of the most respected surety bonding leaders in the field.
What is possible is waiver of the bonding requirement by the
Secretary. It is often done for firms doing business with VA pursuant
to the Javits-Wagner-O'Day or JWOD program. This is an area that merits
further exploration.
Last, we are unclear as to how section 4 of this proposal would
work. If it would entail a veteran to have to be certified under 8(a),
then we do not favor this provision. If the effect is to give the
Secretary the authority to essentially use the direct contracting
authority to contract with any verified veteran owned business who
(VOSB) offers a good product at a fair market price without such
certification, then we favor it. However, as written that is unclear to
us as to how it would actually work in practical terms.
VVA favors the provisions of H.R. 1169, which would dramatically
increase the amount of funds available to specially adapt housing and
specially adapt automobiles. Despite increases in recent years, the
amount currently available just does not even begin to cover the costs
for these very necessary aids for significantly disabled veterans. We
thank you for moving this bill.
In regard to H.R. 2461, VVA strongly favors this bill. The need to
ensure the integrity of the program as the service disabled veteran
owned business and veteran owned business authorities become more
accepted and successful is readily apparent to virtually all observers.
VVA concurs with the Veterans Entrepreneurship Task Force (VET-Force)
position that it is essential to do this. However, it is also essential
that VA develop the organizational capacity to verify businesses in a
timely fashion. Currently the backlog is many, many months.
Implementation of this clarification must be accompanied by an
elimination of that backlog, or it will result in many legitimate
veteran owned firms missing out on important opportunities.
VVA favors renewing the authority for the Veterans Advisory
Committee on Education through 2015, as contained in H.R. 2614.
VVA favors the enactment of H.R. 2928, which will provide for
apprenticeship and on the job training (OJT) under the Post-9/11 GI
Bill. While we strongly encourage young veterans to go to school, AND
stick with it to get their degrees, there are many veterans that wish
to pursue trades that do not require college, but rather
apprenticeships or OJT, yet are legitimate and important avenues for
educational advancement on a civilian career path. This legislation
will ensure that these young people have a means of pursuing their
goals when they return from military service.
VVA favors enactment of H.R. 3554, which will move toward better
inclusion of National Guard and reserve servicemembers who are deployed
in the 9/11 GI Bill. VVA's position continues to be that the same
hostile fire from the enemy merits full and equal benefits being
accorded to National Guard and Reserve troops who are deployed.
Thank you, Madam Chairwoman, for the opportunity to present
testimony here today on these important legislative initiatives.
Prepared Statement of Christina M. Roof, National Deputy Legislative
Director, American Veterans (AMVETS)
Madam Chairwoman, Ranking Member Boozman, and distinguished Members
of the Subcommittee, on behalf of AMVETS, I would like to extend our
gratitude for being given the opportunity to discuss and share with you
our views and recommendations on the multiple pieces of pending
legislation regarding our veteran community.
AMVETS feels privileged in having been a leader, since 1944, in
helping to preserve the freedoms secured by the United States Armed
Forces. Today our organization prides itself on the continuation of
this tradition, as well as our undaunted dedication to ensuring that
every past and present member of the armed forces receives all of their
due entitlements. These individuals, who have devoted their entire
lives to upholding our values and freedoms, deserve nothing less.
AMVETS applauds the efforts of the Subcommittee on their continued
commitment to creating an environment of stability and evenhandedness,
where all veterans may pursue and thrive in their business and
educational endeavors. Today we are discussing multiple bills, which
stand to achieve more of the goals set forth by the Committee.
AMVETS supports H.R. 294, the `Veteran-Owned Small Business
Promotion Act of 2009'. It is in the opinion of AMVETS that the changes
this bill proposes could only benefit the veteran small business
community. This bill would open up the procurement process and
eligibility to bid to more Veteran Owned Small Businesses (VOSB), by
decreasing performance bond requirements from 30 percent to 10 percent.
H.R. 294 will also increase the maximum gratuity amounts in Section
3742(b)(2) and decrease the interest rates payable by veteran owned
small business concerns by up to one-half percent. Though these numbers
may not seem staggering at first glance, in the long run they could
actually decide success or failure for a small business concern. Being
a former small business consultant, I have seen firsthand the major
importance of interest rates on a business concerns success. Allowing
the Secretary to enforce reduced rates will prove incredibly beneficial
to veteran owned small business concerns in an economy where every
penny proves to be significantly important.
AMVETS supports H.R. 1169, introduced by Mr. Boozman and Mr. Buyer.
As the Housing and Economic Recovery Act of 2008, Sec 2605, modestly
increased the adaptive housing benefits for disabled veterans by $2000
in subsection (B)(2) and paragraph 2, as well as by $10,000 in
paragraph 1, this bill stands to improve greatly upon those initial
steps and improve the lives of thousands of veterans and their
families. While AMVETS applauds any increase of these benefits, this
bill genuinely sets forth the changes needed to bring the amounts into
the 21st century and help align the benefits to the actual costs.
AMVETS strongly recommends the immediate implementation of these
changes and that they shall apply with respect to payments made in
accordance with section 2102 of title 38, United States Code, as well
as, being reflected in the Secretary's established residential home
cost-of-construction index for the purposes of this subsection.
AMVETS supports H.R. 1182, the `Military Spouses Residency Relief
Act'. This Act will afford the same ``home-of-record'' status as the
servicemember. Allowing spouses the ability to retain residency in a
state regardless of where they are physically living while accompanying
a military spouse who is on official military orders. This legislation
will allow military spouses to retain their voting rights and maintain
current tax status in their home-of-record state, thus relieving any
burdens felt by spouses during transfers or deployments.
AMVETS supports H.R. 2416 by way of the goals it promotes of aiding
VOSB and SDVOSB in regards to the awarding of contracts in the Federal
procurement and acquisition process.
AMVETS supports H.R. 2461 and the standards of business
verification transparency it calls for. As AMVETS has requested in
prior hearings, the integrity of VA's procurement process must be
protected, as well as all business concerns receiving awards be held
accountable for meeting the requirements of said awards. This bill will
also protect the SDVOSBs and VOSBs from loss of awards due to possible
untruths or unverified statuses. AMVETS agrees with the timetables laid
out by H.R. 2461, but has concerns on whether there is an accurate
system and staff in place to handle the initial heavy workload. As we
have seen with the Post-9/11 GI Bill rollout backlogs, there needs to
be a temporary plan in place and possibly temporary staff to assist
with the verification process of existing database businesses. Again
AMVETS commends the Chairwoman and Ranking Member Boozman for leading
the way in a call transparency and accountability as it related to all
Federal procurement.
AMVETS supports H.R. 2614, amendment to date change.
AMVETS supports H.R. 2696, the `Servicemembers' Rights Protection
Act'. One of AMVETS founding principles and current legislative goal is
to ensure the protection of rights of all current and past military
members and their families. H.R. 2696 will help further enforce current
laws and penalties for violation of any act of unjust imposed upon a
member of the United States military or their family while serving.
AMVETS believes that the amendment called for in section 307(c) is
crucial to holding employers accountable for any violation of
servicemembers rights.
AMVETS supports H.R. 2874, `Helping Active Duty Deployed Act of
2009'. AMVETS believes it is vital to the success of our country's
servicemembers called to active duty, to relieve any undue stress and/
or obligations in regards to outstanding financial obligations and
education.
AMVETS supports H.R. 2928, with the contingency that proposed
section 3319 of Title 38, Chapter 33 reflects any changes to Department
of Labor's apprenticeship pay standards and/or changes to 29 CFR.
Whereas, the veteran or designee is receiving: ``entry wage shall be
not less than the minimum wage prescribed by the Fair Labor Standards
Act, where applicable, unless a higher wage is required by other
applicable Federal law, State law, respective regulations, or by
collective bargaining agreement;'' AMVETS strongly believes that all
veterans should receive equal and fair industry standard pay,
regardless of title.
AMVETS supports H.R. 3223; however, we do have some concerns over
the wording of the proposed new paragraph in subsection l. AMVETS
understands that the paragraph's intent is to clarify the definition of
`control of management and daily business operations', nonetheless
AMVETS believes that by adding this definition and not referencing the
qualifying percentage of ownership, if even in footnotes, there could
be misunderstanding by business concerns, thus opening the door to
unwanted disputes.
AMVETS supports H.R. 3554, the `National Guard Education Equality
Act'. AMVETS supports the entitlements of the Post-9/11 GI Bill to any
Active Guard Reserve (AGR) solider or Guard member who is called to
active duty by their state, and who engages in activities designed to
support and protect this country and our borders, regardless of title.
AMVETS supports H.R. 3561 in increasing the educational assistance
for flight training from `60 percent' to `75 percent'. This will ease
some of the financial burden and enable more eligible veterans and
reservist to utilize such benefits.
AMVETS supports H.R. 3577, the `Education Assistance to Realign New
Eligibilities for Dependents (EARNED) Act 2009'. Many of our Nation's
servicemembers have chosen to devote their lives to a military career.
AMVETS believes that having served 20 years, qualifying them as career
service and retirement, the educational benefits of the Post-9/11 GI
Bill should not be lost because of that choice.
AMVETS supports H.R. 3579, allowing the increase in fees to
educational facilities from $7.00 to $50.00 and $11.00 to $50.00.
AMVETS believes these increases will better reflect the funds necessary
to pay the salaries or employment costs of the requisite processing
staff.
Prepared Statement of Keith M. Wilson, Director, Office of Education
Service, Veterans Benefits Administration, U.S. Department of Veterans
Madam Chairwoman and other Members of the Subcommittee, good
afternoon. I am pleased to be here today to provide the Department of
Veterans Affairs' (VA) views on pending legislation.
I regret we did not have sufficient time to formulate Departmental
views on five measures, H.R. 1169, H.R. 3554, H.R. 3561, H.R. 3577, and
H.R. 3579. However, we will be pleased to provide written views and
estimates of costs of enactment for these bills for the record.
EDUCATION PROGRAMS
H.R. 2614
H.R. 2614, the ``Veterans' Advisory Committee on Education
Reauthorization Act of 2009,'' would amend section 3692(c) of title 38,
United States Code, to extend the current termination date of the
Veterans' Advisory Committee on Education (VACOE) for 6 years--from
December 31, 2009, to December 31, 2015.
The VACOE was established to provide advice to the Secretary of
Veterans Affairs on the administration of education and training
programs for veterans and servicepersons, reservists and guard
personnel, and for dependents of veterans. The Committee may also make
such reports and recommendations as it considers appropriate to the
Secretary and Congress.
VA supports this legislation; the Secretary looks forward to
continuing to receive recommendations and advice from the VACOE.
We estimate that the cost associated with the enactment of H.R.
2614 would be insignificant.
H.R. 2928
H.R. 2928 would amend the Post-9/11 GI Bill (chapter 33 of title
38, United States Code) by adding a new section to provide benefits for
apprenticeship and on-the-job training (OJT). The new section 3320
would provide for a monthly benefit payment to individuals pursuing
full-time programs of apprenticeship or other OJT under chapter 33,
using the graduated structure for similar training under other VA
educational assistance programs, such as the Montgomery GI Bill--Active
Duty (MGIB-AD) and Selected Reserve (MGIB-SR) programs, and the Post-
Vietnam Era Veterans Educational Assistance program. For each of the
first 6 months of an individual's pursuit of such a program, the
individual would be paid 85 percent of the amount equal to the national
average cost of tuition at an institution of higher education; for the
second 6 months of such pursuit, the individual would be paid 65
percent of such amount; and for each of the months following that the
individual would be paid 45 percent of such amount. Any apprenticeship
or other OJT benefit payment would be in addition to any other
educational assistance benefit payment made under chapter 33.
H.R. 2928 would also amend section 3313 of title 38 to include
apprenticeship or other OJT under the definition of approved programs
of education for purposes of the Post-9/11 GI Bill.
VA supports allowing individuals who qualify for the Post-9/11 GI
Bill to receive benefits for OJT and apprenticeship training, subject
to Congress identifying offsets for any additional costs. However, we
have reservations about this bill, as drafted, due to implementation
challenges presented by the current legislative language. We do not
understand what is meant by the ``national average cost of tuition at
an institution of higher education,'' or how we should establish
monthly rates under it. We suggest instead language that would specify
a basic amount that VA could use to determine the monthly benefit rate,
similar to the current approach used in the MGIB-AD program. We would
appreciate the opportunity to work with the Committee to address these
concerns.
If approved, this legislation would take effect 90 days after the
date of the enactment. This would present some difficulty to VA because
we currently do not have a payment system to support OJT and
apprenticeship payments under the Post-9/11 GI Bill. We estimate a new
payment system would not be available until December 2010.
Additionally, administration of the Post-9/11 GI Bill would be
impacted by the increase in beneficiaries who could elect to receive
the Post-9/11 GI Bill in lieu of the MGIB-AD, the MGIB-SR, or the
Reserve Educational Assistance Program (REAP).
In view of the difficulty in understanding the ``national average''
tuition provision, we are unable to estimate the cost of enactment of
this bill. Accordingly, in view of this difficulty, and for the
foregoing reasons, we are not able to support H.R. 2928 as drafted.
SERVICEMEMBERS CIVIL RELIEF ACT
H.R. 1182
H.R. 1182, the ``Military Spouses Residency Relief Act,'' would
amend the Servicemembers Civil Relief Act to guarantee the equity of
spouses of military personnel with regard to matters of residency for
voting, tax, and land right purposes. H.R. 1182 affects programs
administered by the Department of Defense (DoD). We, therefore, defer
to DoD on the merits of this bill.
H.R. 2696
H.R. 2696, the ``Servicemembers' Rights Protection Act,'' would
amend the Servicemembers Civil Relief Act to authorize the U.S.
Attorney General, or any person protected by any provision of that Act,
to enforce rights afforded under the Act. This bill relates to active-
duty service personnel and would not affect VA programs. Therefore, we
defer to DoD and the Department of Justice regarding the merits of this
bill.
H.R. 2874
H.R. 2874, the ``Helping Active Duty Deployed Act of 2009,'' would
amend the Servicemembers Civil Relief Act, and the Higher Education Act
of 1965, to improve the equitable relief available for servicemembers
called to active duty with respect to cellular telephone service,
residential and motor vehicle leases, and tuition and fees for
education. Section 2 of H.R. 2874 affects programs administered by DoD.
Section 3 would amend the Higher Education Act 1965 to provide for
tuition relief for students called to military service. VA, therefore,
respectfully defers to DoD and the Department of Education regarding
the merits of H.R. 2874.
PROCUREMENT, CONTRACTING, AND SMALL BUSINESS MATTERS
H.R. 294
Section 2 of H.R. 294 would re-authorize the small business loan
program for service-disabled Veterans with disability ratings of at
least 10 percent. VA supports re-authorization of the loan program, in
order to increase employment opportunities for Veterans and to promote
economic stabilization by encouraging the establishment and expansion
of Veteran-owned small businesses (VOSB).
Section 2(f) of the bill states that ``[t]he Secretary shall enter
into a contract with an appropriate entity for the purpose of carrying
out the program under this subchapter.'' VA believes that a partnership
with the Small Business Administration (SBA), through an interagency
agreement, would be preferable in order to gain the benefit of SBA's
expertise in administering business loan programs.
VA is formulating its views regarding section 3 of the bill and
will forward our comments for the record.
Section 4 of the bill would align VA's contracting processes for
Veteran-owned small business with SBA's section 8(a) program. VA is
unclear on the intent of the provision. Under 38 U.S.C. 8127, veteran-
owned small businesses already have priority over section 8(a)
contractors. Veterans' achievements under 38 U.S.C. Sec. 8127 since its
mid-2007 effective date demonstrate that the new law's sourcing
priority is helping to ensure equitable consideration of Veteran-owned
small businesses in VA contracts. VA is concerned that the proposed
provision could create confusion and have unintended negative
consequences on existing authorities.
For the reasons noted, VA does not support H.R. 294. The Department
is formulating its estimate of the cost associated with enactment of
the bill and will provide that information for the record.
H.R. 2416
H.R. 2416 would amend 38 U.S.C. Sec. 8127 to mandate that VA use
Federal Supply Schedules to meet the goals established by the Secretary
under this statute.
We cannot support this bill since it would be far too restrictive
for VA acquisition operations and would remove any business discretion
that VA contracting officers have to consider other acquisition
vehicles, such as competitive set-asides, sole source awards, or full
and open market competition, when appropriate.
VA estimates that there are no direct costs to VA associated with
the enactment of H.R. 2416.
H.R. 2461
H.R. 2461, the ``Veterans Small Business Verification Act,'' would
amend title 38 to clarify VA's responsibility to verify the veteran
status of the owners of small business concerns listed in the VA
database.
VA awarded a contract for VA Verification Program Advisory and
Assistance Services (A&AS) and the contractor was fully operational by
late July 2009. The contractor will benchmark the existing verification
process and recommend improvements. The contractor is comparing our
verification program to other small business certification programs in
existence today to determine best practices in certification
procedures. VA expects to receive the report by the end of September
2009.
In addition, the Government Accountability Office (GAO) is
completing its own review of the verification program. GAO is
conducting research and fact-finding in September and October of this
year. It plans to complete report writing and follow-up in November
2009, submit its draft report to VA for comments in December, and
publish the results of a 3-year study in January 2010. This
investigation will provide GAO's review of the verification program,
with recommendations for improvements, from a third-party observer's
viewpoint.
The reviews by GAO and by the A&AS contractor are under way. The
funding to support both reviews has already been allocated. GAO is
considered an authoritative, independent body whose recommendations
will be respected by both VA and external stakeholders. The A&AS
contractor is also an independent body with the responsibility to
review other certification programs and compare VA's verification
program to validate VA's processes.
The cost to verify the 17,000 businesses in the database in the
time frames contemplated by H.R. 2461 would be approximately $12
million annually. For the foregoing reasons, VA does not support
enactment of this bill. However, we would be pleased to work with the
Subcommittee to formulate appropriate legislation upon completion of
above-noted reviews.
H.R. 3223
H.R. 3223 would require a VA contracting officer to award a
contract to a small business concern owned and controlled by veterans
using other than competitive procedures in specified circumstances. It
would also prohibit using ownership and control by a veteran or
veterans of more than one small business as grounds for
disqualification as a veteran-owned business for purposes of VA
procurements.
Section 1(a)(1) of H.R. 3223 would change the wording in section
8127 of title 38 from ``may'' to ``shall,'' to require contracting
officers to contract with service-disabled Veteran-owned or Veteran-
owned small businesses for all VA procurements under $5 million. VA
believes that the proposed language would be too restrictive and would
remove necessary business judgments that must be made at the discretion
of VA contracting officers to acquire goods and services by the best
means available for an applicable acquisition.
Sections 1(a)(2) and (3) would allow owners with multiple
businesses, as well as owners who work part-time in the business or at
a location outside the proximity of the business location, to qualify
for verification. Permitting part-time ownership, remote ownership or
ownership of multiple businesses by a single eligible party increases
the likelihood that businesses controlled by ineligible parties may
receive contract awards from the Department. Eligible individuals must
have at least 51 percent ownership and day-to-day control of businesses
in small business programs. VA's position is developed after review of
other Federal small business programs, examination of protest and
appeal decisions and study of Government Accountability Program reports
which establish that day-to-day control is very difficult to sustain in
part-time or remote ownership.
Section 1(b) would require VA to issue interim policy change
guidance within 30 days that would be in direct contradiction of the
current verification regulation published in 38 CFR part 74. Thirty
days would be insufficient time for the necessary rulemaking.
For the foregoing reasons, VA does not support the enactment of
H.R. 3223.
Madam Chairwoman, this concludes my statement. I would be happy to
respond to questions you or the other Members of the Subcommittee may
have regarding our views as presented.
Statement of Ulric I. Fiore, Jr., Director, Soldier and
Family Legal Services, Office of the Judge Advocate General,
U.S. Army, U.S. Department of Defense
Chairwoman Herseth Sandlin and Members of the Subcommittee, thank
you for extending the invitation to the Department of Defense to
address three bills that would significantly affect our servicemembers:
H.R. 2696, H.R. 1182, and section 2 of H.R. 2874. Each of these bills
would either amend or add new sections to the Servicemembers Civil
Relief Act, Public Law 108-189 (2003) (The Act) (50 U.S.C. App.
Sec. Sec. 501-596).
The Department strongly supports H.R. 2696, which would clarify
that the Attorney General and those individually protected may enforce
the rights afforded under the Act.
The Department has no objections to section 2 of H.R. 1182, which
states that for purposes of voting, spouses of military members neither
lose nor gain a domicile simply by being absent from their State of
domicile to accompany their spouse when the spouse is moving to a new
State in compliance with military orders. The Department has no
objections to section 4 of H.R. 1182, which would suspend certain
residency requirement for spouses of military members with respect to
land rights protections.
The Department has concerns regarding section 3 of H.R. 1182, which
purports to relieve spouses of military members from paying income
taxes to a State if the spouse is not a resident or domiciliary of the
State, when the spouse is in the State solely to be with the
servicemember who is serving in compliance with military orders.
The Department supports section 2 of H.R. 2874, which expands the
ability of servicemembers to terminate certain cellular phone contracts
under the Act when the contract is made ``on behalf of the
servicemember.'' This section also amends the Act to make clear that
when a servicemember is allowed to terminate a residential lease due to
a covered relocation under military orders, the lessor may not impose
an early termination charge.
H.R. 2696
This proposal is the most important and beneficial amendment to the
Act since the sweeping 2003 amendments greatly increased the strength
of the Act by codifying several decades of the Act's judicial
interpretations.
New section 801 would clarify the authority of the Attorney General
to commence a civil action in any appropriate United States District
Court whenever the Attorney General has reasonable cause to believe
that any person or group of persons is engaged in, or has engaged in, a
pattern or practice of conduct in violation of any provision of the
Act; or any person or group of persons is denying, or has denied, any
person or group of persons any protection afforded by any provision of
this Act, and such denial raises an issue of general public importance.
It establishes the right of those persons individually protected by the
Act to intervene in any action brought by the Attorney General and to
receive injunctive and monetary relief, along with reasonable
attorneys' fees and costs.
New section 802 would also clarify that those persons individually
protected by the Act have their own personal cause of action,
independent of any enforcement action the Attorney General might
initiate. Those individually protected who bring their own private
action may generally seek and obtain the same remedies available upon
intervention in an action brought by the Attorney General.
Although most courts have recognized this essential implied right
of the servicemember to bring a personal cause of action for damages or
other appropriate remedies, other courts have done so only after costly
and protracted litigation. The recent decision in Hurley v. Deutsche
Bank (W.D. MI) (Case No. 1:08-CV-361) illustrates these concerns. Such
decisions that do not recognize the right to a personal cause of action
threaten the readiness of our servicemembers. These amendments to the
Act are designed to clarify the existence of enforcement authority that
the Department believes has always been implied.
This proposal's explicit authorization of attorneys' fees supports
the underlying theme of this clarifying amendment to the Act: access to
justice. This explicitly stated right will ensure that upon prevailing
on the merits, those protected by the Act can indeed be made completely
whole.
Many claims under the Act will be for relatively small amounts. The
ability to recover attorney's fees for the small claims will provide
all servicemembers a voice and ensure that their rights are taken
seriously. In addition, the right to collect attorneys' fees would
likely reduce litigation and induce settlements by those who might have
previously refused to pay damages, hoping that the amount was too small
to warrant the cost of litigation.
The right to collect attorneys' fees would also bring the Act in
line with somewhat similarly focused statutes such as the Uniformed
Services Employment and Reemployment Rights Act, the Fair Debt
Collection Practices Act, the Fair Credit Reporting Act, the Federal
Truth in Lending Act, 42 U.S.C. 1983, title VII of the Civil Rights Act
1964, the Employee Retirement Income Security Act, and virtually every
state unfair and deceptive trade practices and consumer protection
statute.
New section 802 would also make explicit that in addition to
attorneys' fees, consequential and punitive damages may be awarded for
violations of the Act. Although some courts have found such damages to
be implied, others have not. This disparity will now be eliminated.
New section 803 consolidates references to the preservation of
remedies found in several other provisions in the Act and expands the
specific references in current sections 301(c), 302(d), 303(d), 305(h),
306(e), and 307(c) beyond conversion to include any other causes of
action available under Federal or State law. It also recognizes that
consequential and punitive damages that might flow from those causes of
action could also be awarded.
The effectiveness of any law is measured by the ease with which it
can be enforced. Rules that can be ignored without consequence crush
morale. Expectations of fair play give way to the realities of self-
interest. Those who do not appreciate the sacrifices that our
servicemembers make every day, those who do not appreciate what it
means to drop one's own affairs to take on the burden of the Nation
should face the full range of enforcement options the judicial system
has to offer. The playing field must be leveled so that servicemembers
can actually receive all the protections the law was drafted to
provide.
H.R. 1182
The report on H.R. 1182 states that this legislation ``would
provide military spouses with SCRA residency protections similar to
those afforded to servicemembers.'' We appreciate their stated
intention, and would like to discuss our concerns with section 3, which
would amend section 511 of the Act (50 U.S.C. App. Sec. 571), to shield
the income of a spouse (under the stated conditions) from taxation in
the non-domiciliary State where the spouse is currently located with
the servicemember. Although, the provision would provide a financial
benefit for military families whose State of domicile would not tax the
income earned in the non-domiciliary State, it could have significant
and detrimental long-term effects that would offset the arbitrary tax
benefit that some would receive.
This provision changes the normal theory of taxation as it has
traditionally applied to the spouse of a servicemember. In general, a
State imposes taxation on the worldwide income of individuals who are
resident or domiciled in that State. States impose taxation on
nonresidents of the State to the extent the nonresident receives income
earned or derived from that State. The burden on a spouse who is
employed in a tax jurisdiction where the member is assigned is the same
as that of every other citizen of that State--no greater or less.
Furthermore, the spouse receives the benefits of services and
employment protections provided by the State.
There would be, great Federal interest in ensuring that the
spouse's income is not taxed in both the domiciliary State and the non-
domiciliary State where earned, but we are not aware that this is
happening or that this bill is in any way intended to address such a
possibility.
The limited interest noted above also highlights concerns raised in
the statement of R. Chuck Mason, Legislative Attorney, American Law
Division, Congressional Research Service before the Committee on
Veterans' Affairs, United States Senate, April 29, 2009, commenting on
a virtually identical bill, S. 475. Mr. Mason noted that the
constitutionality of the provision appears to raise a question of first
impression. He stated ``It is unclear if the Constitutional power of
the Congress to raise and support the armies or to declare war also
encompasses the ability to exempt an individual, not actually in the
armed forces, from taxation in the jurisdiction where his or her spouse
is stationed.'' The Department shares these concerns and believes that
the fiscal impact on the affected States could provide ample
justification for the States to challenge the constitutionality of the
provision, which would leave military families with a significant
period of uncertainty as to their tax liabilities.
The above-noted limited benefit also compounds any State's
legitimate concerns if prohibited from taxing compensation earned
within its borders by those who live there and use its resources and
services. The Department is and should always be concerned with the
proper and fair balancing of interests under the Act, which is designed
to counterbalance the obligations assumed by servicemembers. This could
create ill-will in States so affected, especially when many States are
already expanding protections for servicemembers and their families.
This provision in essence shifts the traditional emphasis of the
Act as one that provides protection to one that provides benefits. It
is at this point that the Department believes that the appropriate
balancing of interests and obligations that has been the hallmark of
the Act is threatened.
This imbalance could lead to unanticipated consequences. The loss
of revenue for the States could cause them to challenge assertions of
domicile not only for the spouse, but also for the servicemember.
Proving domicile can be complicated and time consuming. It may well
prove impossible if the servicemember and spouse have not established
the appropriate contacts to prove their intent with respect to
domicile. The unintended consequence of increased scrutiny of the
spouse's assertion of domicile, and the likely scrutiny of the
servicemember's domicile as well, could lead to the collection of back
taxes that would offset any benefits this provision might provide.
This bill would also likely have the unintended consequence of
damaging the Department's efforts to convince those States (about 25)
that currently provide unemployment benefits to spouses who must leave
their jobs to accompany their spouses who must move under military
orders. These States would have no incentive to pay unemployment
benefits to someone who was exempt from paying taxes on income earned
within that State in the first place. Likewise, those States that
currently pay such benefits would have no incentive to continue to pay
them.
This proposal also gives rise to the anomaly of providing greater
tax protection for the spouse than for the servicemember. It would
shield all income by the spouse (at least in the non-domiciliary State)
under the noted conditions. Conversely, only military compensation for
the servicemember is shielded. Thus, the servicemember who moonlighted
on the weekend would pay State taxes on that income to the non-
domiciliary State, but the spouse would pay none for any work performed
in the non-domiciliary State, and, depending on the law of the
domiciliary State, may not pay any taxes at all.
The Department is aware that proponents of the bill have stated
that a servicemember is allowed to declare a ``home state'' that is a
permanent State of residency (domicile) for the duration of his or her
service. The belief is that the spouse should be able to do the same
and that this bill accomplishes just that and frees military spouses
from burdens within the new, non-domiciliary State, such as registering
their vehicles and obtaining new drivers' licenses. These
misunderstandings and the misunderstandings of the effect of this bill
confuse the issues and obscure the limited benefits of this bill as
drafted.
The Act does not allow a servicemember to simply declare a ``home
state.'' Rather a ``home state'' (which is actually meant to reflect a
domicile), must generally be established by one's physical presence and
the co-existing formulation of an intent to remain in that State for
the indefinite future. The intent to remain for the indefinite future
is demonstrated by various contacts with the State such as registering
to vote, owning property, paying taxes, and registering vehicles and
obtaining drivers' licenses. Also, one does not lose an established
domicile until a new one is formed. These rules apply not only to
servicemembers, but spouses as well.
H.R. 1182 does not change the normal rules of domicile for spouses.
It would be more accurate to say that it simply re-states the law:
neither a servicemember nor his or her spouse loses or acquires a
domicile simply by being present in a State solely because of military
orders. Creation of a domicile depends on one's intent. That intent is
reflected by certain contacts with the State. At best, the language of
the bill would serve as a reminder that a State should not presume
domicile based simply on physical presence of a spouse of a
servicemember.
The misunderstanding of the effect of this bill is compounded by
those who seem to believe that domicile controls the requirement for a
servicemember or the spouse of a servicemember to register a vehicle or
obtain a driver's license in the non-domiciliary State. Domiciliary
status has nothing to do with this requirement. The simple presence in
a State for a minimal period of time could trigger such a requirement.
This is a simple matter of State law and such laws vary across the
country. Nothing in the Act addresses these requirements and nothing in
H.R. 1182 would affect the requirement for military spouses to register
their vehicles or obtain new driver's licenses in a non-domiciliary
State. We note however, that most States do exempt the servicemembers
themselves from these requirements, but, again, that is a function of
State law and not of the Act.
The Department recognizes that relieving both servicemembers and
their spouses (and dependents as well) from the requirement to re-
register a vehicle or obtain a driver's license in a non-domiciliary
State in which they reside under military orders would be a worthy
effort. We are happy to work with the Committee and discuss our
concerns further.
H.R. 2874
This proposal expands section 305A of the Act (50 U.S.C. App.
Sec. 535A) to include contracts for cellular phone service ``entered
into on behalf of the servicemember'' in those contracts that the
servicemember may terminate upon a covered deployment or change of
station reassignment.
This proposal also amends section 305 of the Act (50 U.S.C. App.
Sec. 535A) to specifically state that if a servicemember terminates a
lease of premises upon a covered deployment or change of station
reassignment, the lessor may not impose an early termination fee. This
makes the lease of premises provision consistent with a similar
provision for a lease of a motor vehicle.
The Department supports both of these amendments to the Act.
Statement of John M. McWilliam, Deputy Assistant Secretary,
Veterans' Employment and Training Service, U.S. Department of Labor
Chairwoman Herseth Sandlin and Members of the Subcommittee. Thank
you for extending the invitation to address a series of bills before
the Subcommittee intended to improve services to Veterans. With regard
to those bills that solely concern programs that are administered by
the Department of Veterans Affairs (VA), the Department of Labor (DOL)
respectfully defers to the VA.
In particular, I would like to address H.R. 2928, which amends
title 38, United States Code, to allow registered apprenticeship
programs and on-the-job training programs under the Post-9/11 Veterans
Educational Assistance Program.
When Secretary of Labor Hilda L. Solis took office, she immediately
established a strong vision for the Department of Labor--``good jobs
for everyone.'' The Department's workforce programs have a critical
role to play in realizing the Secretary's vision of good jobs by
contributing to the following goals:
Increasing workers' incomes and narrowing wage and income
inequality;
Ensuring skills and knowledge that prepare workers to
succeed in a knowledge-based economy, including in high-growth and
emerging industry sectors like ``green'' jobs;
Helping workers who are in low-wage jobs or out of the
labor market find a path to middle class jobs; and
Helping middle-class families remain in the middle class.
These goals have important meaning for providing veterans and
transitioning servicemembers with the resources and services to succeed
in the 21st century workforce, particularly given the economic
challenges facing our Nation.
The Department has a strong history of funding training and
employment services for veterans. The Veterans' Employment and Training
Service (VETS) provides veterans and transitioning servicemembers with
the resources and services to succeed in the civilian workforce by
maximizing their opportunities to obtain good jobs, protecting their
employment rights, and meeting the demands of employers for skilled
workers with qualified veterans.
The Employment and Training Administration (ETA) also works to
provide training and employment services to veterans and eligible
spouses through Workforce Investment Act (WIA) and Wagner-Peyser funded
activities; the Senior Community Service Employment Program (SCSEP);
Indian and Native American Programs (INAP); National Farmworker Jobs
Training Programs (NFJP); and the Trade Adjustment Assistance Programs
(TAA).
Veterans or eligible spouses of veterans (covered persons) who are
determined eligible for DOL-funded employment preparation programs
receive priority over non-covered persons in the receipt of employment
and training services. This means that a veteran or eligible spouse
receives access to DOL-funded employment preparation programs earlier
in time than non-covered persons, or instead of non-covered persons if
resources are limited.
Registered apprenticeship programs, authorized by the National
Apprenticeship Act, are also available to help veterans and are of
particular relevance to the Subcommittee's consideration of H.R. 2928.
Registered Apprenticeship programs, one of the Nation's oldest, most
effective and innovative workforce programs, can provide veterans
critical career training, guaranteed incremental wages increases, and
nationally recognized and portable certificates that lead to good jobs
in many industries. This ``earn and learn'' model allows veterans to
support themselves and their families while receiving the training and
education they need to enter sustainable careers.
Upon completion of an apprenticeship, workers earn hourly wages and
yearly salaries that can help them secure sustainable employment.
Registered Apprenticeship has among the highest earnings for completers
of any workforce or education program, as apprenticeship completers'
yearly salaries have averaged almost $50,000 from 2004 to 2008. Today,
almost 30,000 program sponsors representing 225,000 distinct employers
offer registered apprenticeships in over 1,000 career areas, including
advanced construction, manufacturing, health care, transportation,
information technology, and emerging occupations such as green jobs.
The Department of Labor supports the intent of H.R. 2928 to amend
the Post-9/11 Veterans Educational Assistance Program to include
registered apprenticeship and approved on-the-job training programs
under this benefit. However, because the amendment concerns a program
solely administered by the Department of Veterans Affairs, we defer to
VA on this new program.
In conclusion, the Department of Labor continues to work
collaboratively with the Department of Veterans Affairs and State
Approving Agencies to implement title 38 benefit programs that provide
registered apprenticeship and approved on-the-job training
opportunities to veterans. Such opportunities allow veterans to receive
education and training while supporting themselves and their families,
and enable them to build on the skills gained during their military
service to obtain good jobs in the civilian workforce. The Department
is pleased to submit a statement for the record of this hearing, and is
available to assist the Committee in any way it can as it continues to
examine issues pertaining to economic opportunities for America's
veterans. Again, thank you, and I would be pleased to answer any
questions you may have.
CTIA--The Wireless Association
Washington, DC.
September 24, 2009
The Honorable Bob Filner
Chairman
House Committee on Veterans' Affairs
335 Cannon House Office Building
The Honorable Steve Buyer
Ranking Member
House Committee on Veterans'
Affairs
333 Cannon House Office
Building
The Honorable Stephanie Herseth Sandlin
Chairwoman
House Veterans' Affairs Subcommittee
on Economic Opportunity
335 Cannon House Office Building
The Honorable John Boozman
Ranking Member
House Veterans' Affairs
Subcommittee
on Economic Opportunity
333 Cannon House Office
Building
Re: H.R. 2874, the Helping Active Duty Deployed Act of 2009
Dear Chairman Filner, Ranking Member Buyer, Chairwoman Herseth-Sandlin,
and Ranking Member Boozman:
On behalf of CTIA--The Wireless Association, I write to express
the wireless industry's support for America's servicemembers and for
H.R. 2874, the Helping Active Duty Deployed Act of 2009. As the
Committee considers H.R. 2874, CTIA urges the adoption of minor
modifications to ensure that the bill achieves its important goal while
also guarding against potential abuse by non-servicemembers.
The wireless industry has supported efforts to amend the
Servicemembers Civil Relief Act to provide for the penalty-free
termination or suspension of wireless service contracts when military
personnel are subject to deployment or a permanent change of station to
a location where the servicemember's carrier of choice is unable to
support the contract. We were pleased last year to support H.R. 3298,
which was favorably reported by the Subcommittee on Economic
Opportunity and then included in H.R. 6225 when that bill was approved
by the full Veterans' Affairs Committee. While neither H.R. 3298 nor
H.R. 6225 became law during the 110th Congress, language amending the
SCRA to provide for penalty-free termination or suspension of wireless
service contracts was enacted as section 805 of S. 3023, which became
P.L. 110-389.
While the industry supports addressing the ``family plan'' issue
identified by H.R. 2874, CTIA is concerned that as introduced, the bill
unintentionally leaves open the possibility of abuse by non-
servicemembers. CTIA supports permitting ``family plan'' termination or
suspension when a servicemember who is the accountholder is being
deployed or moved to a permanent change of station, when a
servicemember is being deployed or moved and his or her family (those
covered by a ``family plan'' contract) are moving too, and the wireless
industry does not object to permitting an individual ``line'' to be
terminated or suspended when a family member who is on a ``family
plan'' is subject to deployment or a permanent change of station. The
industry is concerned, however, that the language in H.R. 2874 opens
the possibility that deployment of, or a permanent change of station
for, a non-accountholder servicemember could trigger contract
cancelation for an entire family when other covered individuals have no
change in circumstance or residence, which could harm the impacted
wireless carrier.
As the Committee considers H.R. 2874, CTIA would be pleased to work
with the Committee to address this matter in a way that protects
servicemembers and wireless carriers alike.
CTIA respectfully requests that this letter be made part of the
record of the Subcommittee on Economic Opportunity's September 24, 2009
hearing on H.R. 2874.
Sincerely,
Jot D. Carpenter, Jr.
Vice President, Government Affairs
cc: Hon. Gerry Connolly
Statement of Patrick Campbell, Chief Legislative
Counsel, Iraq and Afghanistan Veterans of America
Madam Chairwoman, Ranking Member, and Members of the Subcommittee,
on behalf of Iraq and Afghanistan Veterans of America (IAVA), thank you
for the opportunity to submit written testimony for this legislative
hearing. There are 14 bills being discussed today, many of which have a
profound affect on our members.
Executive Summary:
----------------------------------------------------------------------------------------------------------------
IAVA
Bill # Bill Title Author Position
----------------------------------------------------------------------------------------------------------------
H.R. 0294 Veteran Owned Small Business Buyer Partially
Promotion Act Support
----------------------------------------------------------------------------------------------------------------
H.R. 1169 Increasing Assistance for Specially Boozman Support
Adapted Housing, Automobiles and
Equipment
----------------------------------------------------------------------------------------------------------------
H.R. 1182 Miliary Spouses Residency Relief Act Carter Support
----------------------------------------------------------------------------------------------------------------
H.R. 2416 Requiring VA to Use Federal Supply Adler Support
Schedules
----------------------------------------------------------------------------------------------------------------
H.R. 2461 Veterans Small Business Verification Herseth Support
Act Sandlin
----------------------------------------------------------------------------------------------------------------
H.R. 2614 Veterans' Advisory Committee on Kirkpatrick Support
Education Reauthorization
----------------------------------------------------------------------------------------------------------------
H.R. 2696 Servicemembers' Rights Protection Act Miller Partially
Support
----------------------------------------------------------------------------------------------------------------
H.R. 2874 Helping Active Duty Deployed Act Connolly Support
----------------------------------------------------------------------------------------------------------------
H.R. 2928 Include OJT/Apprenticeship programs Perriello Partially
to Post-9/11 GI Bill Support
----------------------------------------------------------------------------------------------------------------
H.R. 3223 Improving VA goals and preferences Buyer Support
for veteran owned small businesses
----------------------------------------------------------------------------------------------------------------
H.R. 3554 National Guard Education Equality Act LoebsacSupport
----------------------------------------------------------------------------------------------------------------
H.R. 3561 Increase MGIB rates for Flight School Teague Support
----------------------------------------------------------------------------------------------------------------
H.R. 3577 Education Assistance to Realign New Rodriguez Support
Eligibilities for Dependents (EARNED)
----------------------------------------------------------------------------------------------------------------
H.R. 3579 Increasing GI Bill Reporting Fees Filner Support
----------------------------------------------------------------------------------------------------------------
Full Testimony:
H.R. 294, Veteran owned Small Business Promotion Act (Buyer)
H.R. 294, the Veteran owned Small Business Promotion Act, would
reinstate the VA's small business loan program, which was terminated in
1986, to provide loan guaranties to veteran owned small businesses.
Veteran small business owners must have at least a 10 percent
disability rating. Loans may be guaranteed up to $500,000, and the
Secretary will also be granted the authority to subsidize a loan lender
in order to reduce the interest rate paid by the veteran owned small
business by up to 0.5 percent. The bill also provides for preferential
treatment of National Guard and reservists activated in support of the
Global War On Terror (GWOT), and authorizes veteran owned small
businesses to be treated as a ``socially and economically
disadvantaged'' small business for purposes of contracts awarding under
provisions of the Small Business Act.
The VA does not currently provide loans for the start up or
expansion of small businesses. If veterans are looking to obtain
capital for their small business, they can access it through the SBA,
and specifically, the Patriot Express Loan Program. While veteran small
business owners, especially reservists, have a critical need for
greater access to capital, the VA may not be the best department to
administer the new program. According to the GAO, ``the VA's lack of
experience in administering a small business loan guarantee program
could create administrative challenges and may lead to higher
administrative costs than current SBA programs.'' \1\ IAVA supports the
key provisions of the program as long as they are administered by the
SBA, with the VA conducting extensive outreach to veterans to let them
know of its availability.
---------------------------------------------------------------------------
\1\ GAO-00-158, ``Department of Veterans Affairs: Credit Costs and
Risks of Proposed VA Small Business Loan Guarantee Program,'' June
2000: http://www.gao.gov/archive/2000/gg00158.pdf.
---------------------------------------------------------------------------
H.R. 1169, Increasing Assistance for Specially Adapted Housing,
Automobiles and Equipment (Boozman)
We are proud to offer support for H.R. 1169, increasing the amount
of assistance the Department of Veterans Affairs provides to disabled
veterans for adaptive housing and automobiles. In difficult economic
times it is critical that we do not leave behind those injured on our
behalf. H.R. 1169 triples the amount of assistance that veterans may
receive when purchasing or adapting a home or automobile to accommodate
their service connected disability; bringing the amount of aid to a
level more consistent with the current market.
H.R. 1182, Military Spouses Residency Relief Act (Carter)
IAVA supports H.R. 1182. Each year, thousands of military spouses
follow their husbands and wives to military installations overseas.
These men and women selflessly leave behind their lives in order to
support our Nation's servicemembers. We should not punish these model
citizens by taking away their right to vote or stripping them of tax
residency. Overseas, military spouses should be entitled to the same
rights as the servicemember they support. H.R. 1182 will ensure that
these rights are protected.
H.R. 2416, Requiring VA to use Federal Supply Schedules (Adler)
IAVA supports H.R. 2416. This legislation would help veterans
obtain contracts and subcontracts from the Department of Veterans
Affairs, helping to increase opportunities for veteran small business
owners. This bill would specifically require contracting officers of
the Department of Veterans Affairs (VA) to purchase goods and services
through the Federal supply schedules. This would help achieve the
government-wide goal for participation by small businesses owned and
controlled by veterans, including service-disabled veterans. In FY2007,
only 1 percent of Federal contracts were awarded to businesses owned by
service disabled veterans. While the VA has met its Federal contracting
obligations for veterans in FY2007, this has not always been the case.
This legislation would help the VA continue to meet its obligations,
and increase opportunities for veteran small business owners. IAVA
would like to see this program extended to all Federal agencies.
H.R. 2461, Veterans Small Business Verification Act (Herseth Sandlin)
IAVA strongly supports H.R. 2461, the Veterans Small Business
Verification Act, as it will help safeguard against fraudulent
activity, namely small businesses posing as veteran owned for the
purposes of receiving preferential treatment. This legislation would
require the Secretary of the VA to verify the veteran status of small
business owners who submit applications to be listed in the VA's small
business database. It would also require the Secretary to verify
service-connected disabilities for those small business owners who
indicate that their business is owned and controlled by a veteran with
a service-connected disability. Until these statuses are verified, the
businesses should not be included in the database.
H.R. 2614, Veterans' Advisory Committee on Education Reauthorization
(Kirkpatrick)
IAVA strongly supports reauthorizing the Veterans' Advisory
Committee of Education (VACoE), H.R. 2614. As a former member of the
VACoE, I can attest that this Committee gives the Secretary of Veterans
Affairs critical feedback on a benefits program that affects nearly
half a million veterans each year. The committee has consisted of a
diverse mix of veterans' advocates, higher education officials and VA
personnel all of whom thoroughly know GI Bill benefits. The VA would
have greatly benefited from the advice and counsel of the VACoE during
the implementation of the Post-9/11 GI Bill. Unfortunately, without the
VACoE the VA has been left without a system for formal feedback on
their implementation plans since the Federal Register notice and
comment period closed back in January.
H.R. 2696, Servicemembers' Rights Protection Act (Miller)
IAVA believes that parts of H.R. 2696, the Servicemembers' Rights
Protection Act, will help strengthen critical protections for the over
550,000 National Guard and Reservists who have been called to national
service since 9/11. This bill empowers the Attorney General to enforce
the Servicemember Civil Relief Act (SCRA) when the Attorney General
believes a pattern of violating the SCRA has occurred. Although the
SCRA grants broad protections, many servicemembers who SCRA's rights
have been violated do not pursue a remedy in court. As one veteran
recently told me, ``What's the point? It will cost me more to hire the
lawyer and spend the time fixing the problem.'' H.R. 2696, will help
veterans by aligning the SCRA with other protections for servicemembers
like the Uniformed Servicemembers Employment and Reemployment Rights
Act (USERRA) by allowing the Federal Government to take action against
a SCRA violator on behalf of veterans generally.
IAVA does have one strong reservation with section 803 of the bill.
This section proposes to rewrite the penalties for violating various
provisions of the SCRA. The bill removes the mechanism for a
servicemember to be compensated under Title 18 and specifically
excludes the SCRA provision for the ``preservation of other remedies
and rights.'' IAVA is unclear why removing this provision is necessary,
unless the bill is trying to incorporate the remedies available to the
Attorney General for servicemembers themselves. If that is the intent,
the bill does not say that. If that is not the intent, IAVA must
strongly oppose stripping servicemembers' of their ability sue under
the SCRA.
H.R. 2874, Helping Active Duty Deployed Act (Connolly)
IAVA supports the Helping Active Duty Deployed Act of 2009 (HADD).
The Servicemember Civil Relief Act must continue to be modernized to
ensure that our men and women in uniform are focusing on their missions
overseas and not bureaucratic morass back at home. Over 500,000
National Guard and Reservists have been deployed since 9/11 and nearly
1/5th of those are currently enrolled in college. Without Federal
protections these servicemembers who are deployed mid academic term
face a patchwork of refund procedures, which are confusing and
inconsistent. HADD will require colleges to refund tuition paid by the
servicemember for courses they could not complete due to a deployment.
This legislation will also allow servicemembers who have cell phone
contracts on a family plan to suspend their service while they are
overseas. While I was in Iraq, I was required to pay a monthly fee to
my cell phone provider in order to keep my cell phone contract current.
I spent 5 hours of my first day back from Iraq in a Cingular Wireless
store just trying to get my service restored. It took me over 7 months
for the whole issue to get resolved and required filing a complaint to
the FCC and switching service providers.
H.R. 2928, Include OJT/Apprenticeship programs to Post-9/11 GI Bill
(Perriello)
IAVA agrees strongly with the intent of H.R. 2928, that On The Job
(OTJ) and apprenticeship programs should be explicitly included in the
Post-9/11 GI Bill. The WWII GI Bill sent over 8 million veterans to
school, many of whom did not seek college degrees but rather
participated in vocational and apprenticeship training programs.
Unfortunately modern veterans who are pursuing vocational training will
not be able to access the new GI Bill. Veterans pursuing a vocational
program should not be penalized.
While we support the intent of this legislation, we are confused by
the mechanism H.R. 2928 uses to determine the level of monthly
benefits. Section 3320(a)(1) states the amount of ``monthly benefit''
is ``85 percent of the amount equal to the national average cost of
tuition at an institution of higher education.'' H.R. 2928 appears to
erroneously base the monthly benefit on the yearly rate. The national
average cost of tuition for 2008 according to NCES is about $12,334/
year. If the VA were to follow H.R. 2928 to the letter that would
result in veterans involved in OJT/Apprenticeship receiving 85 percent
of that national rate per month ($10,483/month) for the first 6 months.
If H.R. 2928, intends to spread $10,483 over the length of an average
academic year ($1,164/month) it should be explicitly stated in the
legislation. IAVA believes that using the national average cost is an
unwieldy baseline and that we should simply adopt Montgomery GI Bill
levels for OJT/Apprenticeship directly into the Post-9/11 GI Bill.
Using the same percentages proposed in H.R. 2928, 85 percent of the new
MGIB rates would equal $1,159/month, yielding a substantially similar
result without the hassle of creating a new mechanism for determining
benefits.
H.R. 3223, Improving VA goals and preferences for veteran owned small
businesses (Buyer)
IAVA supports H.R. 3223, Improving VA goals and preferences for
veteran owned small businesses, as it will help increase contracting
opportunities for veteran small business owners. This legislation would
change existing law to require a contracting officer of the Department
of Veterans Affairs award a contract to a small business concern owned
and controlled by veterans using other than competitive procedures
(often referred to as a sole source contract) in specified
circumstances. It would also prohibit using ownership and control by a
veteran or veterans of more than one small business as grounds for
disqualification from inclusion in an existing database of veteran
owned businesses.
H.R. 3554, National Guard Education Equality Act (Loebsack)
We are honored to offer our support for H.R. 3554, the National
Guard Education Equality Act. This bill will compensate full time
National Guard soldiers and airmen for their service. Although the
Post-9/11 GI Bill is the greatest investment in veterans' education
since WWII, it has some rough edges that need to be ground down to
better serve our newest generation of veterans, as they pursue their
education. National Guard members who are serving on active duty called
active guard reserve (AGR) duty do not receive credit for their service
under Chapter 33 and are being denied the education benefits they
deserve. It shouldn't matter if you are in a firefight in Afghanistan
or fighting a fire in California, if you are wearing a military uniform
you should be compensated for your service. Last year there were almost
30,000 Army National Guard and 13,500 Air National Guard servicemembers
serving on Title 32 who will benefit from this legislation.
H.R. 3561, Increasing MGIB rates for Flight School (Teague)
IAVA supports H.R. 3561, which would increase education benefits
for veterans taking Flight School courses under the Montgomery GI Bill.
This bill would simply raise the cap to pay for flight school tuition
and fees from 60 percent of the MGIB rates to 75 percent. We believe
that a veteran should not be penalized for pursuing nontraditional
forms of education with their earned benefits.
H.R. 3577, Education Assistance to Realign New Eligibilities for
Dependents (EARNED) (Rodriguez)
The Education Assistance to Realign New Eligibilities for
Dependents (EARNED) Act would allow active duty servicemembers, who
retired between September 10, 2001 and August 1st, 2009, the
opportunity to transfer their unused Post-9/11 GI Bill benefits. IAVA
supports expanding a veterans ability to transfer their Post-9/11 GI
Bill benefits to both retirees and medical retirees during this same
period. We believe that both types of retirees have EARNED the right to
transfer their unused GI Bill benefits.
However, we caution the Committee to ensure that any consideration
of H.R. 3577 does not compromise passage of critical Post-9/11 GI Bill
upgrade legislation that would include:
1. Authorizing Post-9/11 GI Bill benefits for Title 32 Active
Guard Reserve (AGRs);
2. Providing a living allowance for full time distance learners;
3. Adopting MGIB program eligibility for non degree vocational,
OJT, apprenticeship and flight training programs; and
4. Sustaining full tuition and fees reimbursement for veterans
attending public undergraduate colleges, while setting a national
standard for private and graduate schools.
H.R. 3579, Increasing GI Bill Reporting Fees (Filner)
IAVA strongly supports H.R. 3579, which would increase reporting
fees that the VA pays to schools for processing veterans' GI Bill
claims from $7/veteran to $50/veteran. We believe that low reporting
fees has caused some schools to assign the role of school certifying
officials to already overworked clerical employees. Couple this with
that fact that the complexity of the new Post-9/11 GI Bill requires
these same certifying officials to report more information and monitor
veterans enrollment status closer than ever before. It takes a school
certifying official almost an hour to input a veteran in the VA online
enrollment certification program, $7/veteran is well below minimum
wage. By increasing the annual reporting rate, veterans certifying
officials will be given the status at schools they deserve. This new
reporting rate will also provide the VA a real bargaining chip when
they work with schools to ensure that GI Bill paperwork is filed
properly.
Statement of Military Officers Association of America
The Military Officers Association of America (MOAA), respectfully
requests that its views on certain bills before the Economic
Opportunity Subcommittee be entered in the official record of this
hearing.
MOAA does not receive any grants or contracts from the Federal
Government.
WOUNDED WARRIOR ASSISTANCE
H.R. 1169 would increase the amount of assistance provided by the
Secretary of Veterans Affairs to disabled veterans for specially
adapted housing and automobiles, and adapted equipment. The legislation
would increase from $12,000 to $15,000 the maximum amount available
from the VA to certain disabled veterans for specially adapted features
in a home; increase from $60,000 to $180,000 the total amount
authorized for a qualifying disabled veteran for the construction of
specially adapted housing; and increase from $11,000 to $33,000 the
maximum amount for the purchase of an automobile and adaptive
automobile equipment.
MOAA strongly supports H.R. 1169 and recommends priority passage by
the Subcommittee and full House Veterans Affairs Committee.
NEEDED POST-9/11 GI BILL IMPROVEMENTS
The legislation before the Subcommittee addresses two of MOAA's and
The Military Coalition's highest priorities for correcting inequities
and improving the Post-9/11 GI Bill: authorizing vocational and related
non-degree training under the program and permitting full-time active
duty members of the National Guard with Post-September 10, 2001 service
to receive benefits.
H.R. 2928 would authorize servicemembers and veterans who are
eligible for the Post-9/11 GI Bill to use the benefits for
apprenticeship and on-the-job (OJT) training programs.
The monumental World War II GI Bill is regarded by historians as
the greatest social legislation of the second half of the 20th century.
Seventy percent of WWII GI Bill users sought job and vocational
training, not college degrees. All succeeding GI Bill programs except
for the Post-9/11 GI Bill built upon that established precedent
permitting participants to enroll in traditional academic programs or
in vocational, OJT, apprenticeship or flight training programs in non-
degree granting institutions.
MOAA supports H.R. 2928 as a first step toward the goal of allowing
veterans to use their Post-9/11 benefits for any approved study or
training program currently authorized under the Montgomery GI Bill
(Chapter 30, 38 U.S. Code).
H.R. 3554, the National Guard Education Equity Act. This bill would
permit members of the National Guard on full-time active duty (AGR)
under Title 32 orders to qualify for Post-9/11 GI Bill benefits.
Title 32 AGRs qualify for educational benefits under the Montgomery
GI Bill (Chapter 30, 38 U.S. Code). Moreover, all other Federal Reserve
servicemembers with qualifying active duty service after September 10,
2001 are eligible for the Post-9/11 GI Bill.
Last year, there were almost 30,000 Army National Guard and 13,500
Air National Guard servicemembers serving on Title 32 active duty
orders. Guard AGRs are responsible for planning, coordinating and
executing national security missions at home in the continental United
States and preparing Guard forces for operational deployments. Under
the Nation's operational reserve policy, there is no reason to deny
them access to benefits earned on active duty in service to the
country.
MOAA strongly supports enactment of H.R. 3554, the National Guard
Education Equity Act.
SERVICEMEMBERS' CIVIL RELIEF ACT (SCRA) PROTECTIONS
H.R. 1182, the Military Spouse Residency Relief Act. The
legislation would amend the SCRA by giving military spouses of active
duty servicemembers the opportunity to select the same domicile as her
or his servicemember. The legislation affects very fundamental
considerations for military spouses, including voting rights and state
tax requirements.
MOAA believes that military spouses deserve the right to share the
same domicile as their servicemembers. Military spouses share the
burden of multiple deployments, reduced ``dwell'' time following re-
deployment, frequent and costly relocations, and enormous stresses on
themselves and their families. They share in the sacrifices of their
servicemember for our country. They should be able to choose the same
state of residence as their military spouse, to vote in the same
jurisdiction, and to own property in their own names without tax
penalties. Many military spouses--and their families as a result--
suffer significant income losses due to relocations and the time it
takes to find new employment. Many spouses with portable careers often
face cumbersome challenges in tax filings.
H.R. 1182 currently has 164 bipartisan co-sponsors. The Senate has
included the provisions of the companion bill, S.475, in its version of
the FY 2010 National Defense Authorization Act.
MOAA testified in favor of H.R. 1182 in a joint hearing before the
House and Senate Veterans Affairs Committees on 12 March 2009 and we
strongly recommend that the Subcommittee favorably report the bill and
work toward its early enactment.
H.R. 2696, the Servicemembers' Rights Protection Act. This bill
would establish a right of ``private cause of action'' in the SCRA for
servicemembers, their dependents or other person protected under the
Act. The bill would remove any ambiguity in the statute that service
men and women may pursue their legal rights under the law. H.R. 2696
also would empower the Attorney General of the United States to bring
civil action in U.S. district court to enforce provisions of the SCRA.
Civil relief in such cases may include restraining orders and
injunctions, damages, and penalties.
The continuing activation and deployment of hundreds of thousands
of service men and women has given rise to countless personal legal
challenges, landlord-tenant, family, property and business matters
governed by the SCRA.
In a 2008 case (Hurley v. Deutsche Bank Trust Co. Americas, et al),
National Guard Sergeant James Hurley's house was foreclosed and his
dependents were evicted from the property, and the property was sold to
a third party during his deployment to Iraq. Sergeant Hurley sued in
Federal district court in Michigan seeking damages for violation of his
rights under the SCRA. The Federal court ruled, however, that there is
no ``right of private cause of action'' to enforce violations of the
SCRA. Although this case ultimately was resolved in favor of Sergeant
Hurley, it points out that some courts do not recognize a right of
private cause of action under the SCRA.
This issue goes to fundamental access to justice for service men
and women and their families, recognizing that SCRA protections in the
statute are only as strong as the ability to bring violators to court.
MOAA testified on 12 March 2009 before a joint hearing of the House
and Senate Veterans' Affairs Committees that the SCRA should be amended
to establish a right of private cause of action under the SCRA and to
authorize the Attorney General to bring a civil action to enforce the
SCRA as necessary. MOAA strongly supports passage of H.R. 2696.
H.R. 2874, the Helping Active Duty Deployed Act of 2009. This bill
would amend the SCRA to prohibit a cell phone company from charging an
early termination fee to servicemembers who receive military orders for
foreign deployment or for a permanent change of station (PCS) in the
United States. (Current law provides such protection for a contract
entered into by a servicemember.) The bill also would prohibit lessors
from charging early termination fees associated with residential,
professional, business, agricultural rental lease or a motor vehicle to
persons entering military service or for servicemembers with deployment
or PCS orders.
H.R. 2874 also would amend the Higher Education Act 1965 to require
institutions of higher learning to refund tuition and fees paid by a
student who is called into active military service for the enrollment
period for which the student did not receive academic credit because of
the military duty.
MOAA is pleased to see that aspects of H.R. 2874 are included as
provisions in the House version of the FY 2010 National Defense
Authorization Act (NDAA), H.R. 2674.
Section 583 of the House NDAA would prohibit under the SCRA a
termination or suspension fee for cell phone contracts. In addition,
section 583 also would apply to a contract for telephone exchange
service, multichannel video programming service, Internet access
service, water, electricity, oil, gas, or other utility if the
servicemember enters into the contract and thereafter receives military
orders.
Importantly, section 583 of the House NDAA also would establish a
right of private action under the SCRA for servicemembers harmed by
violation of the law.
Section 594 of the House NDAA (H.R. 2674) would prohibit early
termination charges for residential leases and leases of motor vehicles
with certain stipulations related to the lessee's obligations under a
lease agreement such as taxes, title and registration, and so forth.
MOAA strongly agrees with the action taken by the House in
incorporating into its version of the FY 2010 National Defense
Authorization Act (H.R. 2674) needed servicemember protections for
service contract, residential and motor vehicle lease terminations in
the SCRA.
MOAA recommends that H.R. 2874 be favorably reported by the
Subcommittee, including the provision that would reimburse activated
students for payment of enrollment periods for which no academic credit
was given.
VETERANS' ADVISORY COMMITTEE ON EDUCATION (VACOE)
H.R. 2614 would reauthorize the VACOE charter to December 31, 2015.
In recent years, the VACOE developed and recommended to the Secretary
of Veterans Affairs and the House and Senate Veterans Committees a
concept for the integration and improvement of various GI Bill
programs, a concept known as the ``Total Force GI Bill.''
The Total Force GI Bill concept called for integrating the active
duty and reserve programs of the Montgomery GI Bill into a single
Chapter in Title 38 and to set a benefits benchmark that would enable
the GI Bill to keep pace with the average cost of a public college
education.
The VACOE also recommended that reservists should earn GI Bill
benefits in proportion to the length and type of military duty served.
Both the ``national average cost of a public college / university
education'' and ``earn as you serve'' recommendations put forward by
the VACOE helped inform key components of the Post-9/11 GI Bill
legislation.
The current VACOE statute permits the Secretary of Veterans Affairs
to name all of the members of the VACOE. MOAA would recommend that the
Subcommittee consider expanding the appointment procedure in the
statute to facilitate the appointment of a wide-range of experts on GI
Bill programs, education, military and veterans' groups representatives
and others to serve on the Committee. The VACOE should routinely be
invited to testify on GI Bill programs before the House and Senate
Veterans' Affairs Committees.
MOAA supports H.R. 2614, a bill to extend the charter of the
Veterans' Advisory Committee on Education to 31 December 2015.
National Association of Surety Bond Producers
Washington, DC.
September 23, 2009
Mr. Javier Martinez
Professional Staff
U.S. House Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
335 Cannon House Office
Washington, DC 20510
Dear Mr. Martinez,
On behalf of the members of the National Association of Surety Bond
Producers (NASBP), a national trade association of surety bond
producers who assist construction firms of every size to position
themselves to qualify for surety credit, I am submitting for the record
for the hearing on September 24, 2009 in U.S. House Committee on
Veterans' Affairs Subcommittee on Economic Opportunity NASBP' s
opposition to section 3 of H.R. 294, the ``Veteran-Owned Small Business
Promotion Act of 2009.''
Although NASBP is supportive of most sections of H.R. 294,
including those to renew the Department of Veterans Affairs' authority
to guarantee small veteran-owned business loans up to $500,000, NASBP
strongly opposes section 3, entitled ``LIMITATION ON REQUIREMENT OF
SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY VETERANS TO FURNISH
CERTAIN BONDS,'' that limits the amounts of performance and payment
bonds that can be required of small, veteran-owned businesses
performing construction contracts for the Department of Veterans
Affairs to no more than 50 percent of the contract amount. NASBP
believes that this limitation on bonding is unwise and detrimental to
the interests of the Federal Government, taxpayers, and the many small
businesses, including those owned and controlled by veterans, that
serve as subcontractors and suppliers on these projects.
Section 3 of H.R. 294 carves out an unnecessary and nonsensical
exception to the bonding requirements of Federal construction projects.
The Federal Miller Act (40 USCA Sec. 3131 et seq.) requires that,
before any contract exceeding $100,000 is awarded for the construction,
alteration, or repair of any Federal public building or Federal public
work in the United States, the construction contractor must furnish
performance and payment bonds to the contracting agency.
The Miller Act states that the amount of the payment bond ``shall
equal the total amount payable by the terms of the contract unless the
officer awarding the contract determines, in a writing supported by
specific findings, that a payment bond in that amount is impractical,
in which case the contracting officer shall set the amount of the
payment bond.'' The Miller Act then states that ``[t]he amount of the
payment bond shall not be less than the amount of the performance
bond.'' In short, unless there is a compelling reason, such as bonds
are not available in the amount of the contract, performance and
payment bonds are to be set in 100 percent of the contract amount. By
receiving performance and payment bonds in the total contract amount,
the contracting agency receives assurance that, in the event of a
default, it has the necessary funds available to cover the total cost
of the project and to cover payment for those who supply labor and
materials on the project. Given the current tumultuous economy, it
would seem to make little sense to lessen or reduce requirements that
protect U.S. taxpayers funds from the losses that may arise from
construction defaults.
It is worth noting that, before a surety underwrites a bond, the
surety will conduct a careful and thorough process, often referred to
as prequalification, to assess the contractor's ability to perform the
construction contract and to pay its subcontractors and suppliers. The
surety reviews the character, capacity, and capital of the contractor,
and provides a bond or bonds only if the surety finds that the
contractor possesses the capability to fulfill its contract
obligations. Only contractors with the necessary experience, equipment,
management, and financial wherewithal will receive surety credit.
Partial bonds--bonds for less than 100 percent of the contract
amount--do not lessen the surety's underwriting scrutiny of the
contractor. The surety views the contract risk as the total contract
obligation, not simply the face amount of the bond. The surety also
will base its bond premiums--that is, the fees charged for the bond--on
rates filed with State agencies regulating insurance. These filed rates
are predicated on contract amounts, not bond amounts. In short, partial
bonds neither make bonds easier to obtain nor reduce bond premium
costs. Partial bonds, however, do provide less coverage (reduced bond
amount) to the bond obligee (the contracting entity) and to claimants
(subcontractors and suppliers) should the bond principal (the
contractor) default.
Without a full payment bond in place, project subcontractors and
suppliers, which may be small businesses, including veteran-owned
businesses, are at significant risk for nonpayment. Subcontractors and
suppliers cannot sue the Federal Government in the event of nonpayment,
since they do not have direct contracts with the Federal Government.
Furthermore, subcontractors and suppliers do not have lien rights on
Federal construction projects, since they cannot place liens against
public property. The payment bond is their sole payment remedy in the
event that the prime contractor becomes insolvent or fails to pay them.
Reducing the amount of the payment bond may mean that bond funds are
available only for some, but not all, claimants.
For the foregoing reasons, section 3 of H.R. 294 is not in the best
interest of the Department of Veteran Affairs or veteran-owned small
construction firms. By significantly reducing the amount of bonds
furnished by veteran-owned small construction firms, H.R. 294 would
undermine the performance guarantees afforded the Department of
Veterans Affairs and the payment guarantees afforded subcontractors and
suppliers working on its construction projects. Moreover, partial bonds
neither would ease surety underwriting requirements for these firms nor
reduce the costs of bonds.
NASBP remains committed to advocating for policies and programs
that assist small construction businesses to succeed in the Federal
marketplace. This is why NASBP advocated for reforms to the U.S. Small
Business (SBA) Surety Bond Guarantee Program that were included in
``The American Recovery and Reinvestment Act of 2009.'' This Economic
Stimulus Package made significant statutory changes to the SBA Surety
Bond Guarantee Program that NASBP believes will enhance the Program to
allow greater participation from surety companies and small
construction firms including veteran-owned businesses. NASBP continues
to advocate for additional reforms to the SBA Surety Bond Guarantee
Program to ensure that it remains a viable program for small
construction firms for years to come.
NASBP urges that H.R. 294 be amended to delete section 3 since this
section fails to serve any parties interests, including those of
veteran-owned construction businesses.
Thank you for your time and consideration with this matter.
Sincerely,
Mark McCallum
General Counsel and Director of Government Relations
Jones, Odom, Davis and Politz, L.L.P.
Shreveport, LA.
September 23, 2009
Honorable Stephanie Herseth Sandlin
331 Cannon House Office Building
Washington, DC 20515
Honorable John Boozman
1519 Longworth House Office
Building
Washington, DC 20515
Re: Subcommittee Hearing on H.R. 2696
Madam Chairwoman, Ranking Member Boozman, Members of the Subcommittee:
I am John S. Odom, Jr., a practicing attorney from Shreveport,
Louisiana. From 1973 to 2005, I served as a judge advocate in the
United States Air Force, retiring in 2005 in the grade of Colonel. I
continue to teach the Servicemembers Civil Relief Act (SCRA) as a
volunteer member of the adjunct faculty at the Air Force Judge Advocate
General's School at Maxwell AFB, Alabama, the Army TJAGLC at
Charlottesville, Virginia and the Naval Justice School at Newport,
Rhode Island. I have lectured and taught extensively for local, state
and national bar associations, judges' conferences, consumer advocacy
groups, bankruptcy trustee associations and financial service groups
around the country on the SCRA. In my civilian practice, I have
represented servicemembers in a number of Federal actions throughout
the country in suits against violators of the SCRA for damages. I have
been accepted as an expert witness for the plaintiff in Hurley v.
Deutsche Bank Trust Company Americas, an action pending in the Western
District of Michigan (Case No. 1:08-CV-361). I was also counsel for the
plaintiff in Cathey v. First Republic Bank, 2001 U.S. Dist. LEXIS 13150
(W.D. La.) which, after a similar motion to dismiss by the defendant
was denied by the court, settled for $2.35 million. In each of the
major SCRA cases I have handled, the defendants have caused extensive,
expensive and time-consuming motion practice by seeking--unsuccessfully
thus far--to have the servicemembers' suit dismissed on a claim that
the SCRA has no specific provision for private causes of action to sue
violators for damages.
This testimony is submitted in support of H.R. 2696. There is a
problem with the current SCRA that is hurting our troops. With the
passage of H.R. 2696, Congress could immediately fix the problem by
amending the SCRA to specifically provide that violators can be pursued
by the Department of Justice or by private attorneys who are willing to
represent servicemembers in such cases. A similar amendment to the SCRA
was proposed in section 513 of S. 1033.
When the working group (comprised of four judge advocates, one each
from the Army, Air Force, Navy and Marine Corps) re-drafted what
ultimately became the SCRA, they did their work in 1992-93. However, it
was not until the House Committee on Veterans Affairs re-engaged after
the commencement of the war in 2001 that the old Soldiers' and Sailors'
Civil Relief Act (SSCRA), a venerable statute that had survived in one
form or another since 1917, was updated and re-enacted as the SCRA. I
have a close professional relationship with Gregory Huckabee, Lt Col,
USA (Retired), who chaired that 1992-93 working group. He and I have
team taught the SCRA on a number of occasions and served together on
the ABA's Standing Committee on Legal Assistance to Military Personnel.
I asked Col Huckabee why the drafting Committee did not add a specific
provision authorizing private causes of action. He advised me that they
did not think one was needed, because there were already so many
reported cases involving the SSCRA (the predecessor statute) that they
assumed no one would question whether or not Congress would have
enacted such a comprehensive set of protections for servicemembers
unless those same servicemembers had a right to go to court and sue for
damages when a violation occurred.
While Col. Huckabee's answer makes perfectly good sense from an
intellectual standpoint, that is not how counsel defending banks,
mortgage companies, automobile finance companies and apartment complex
management companies--just to name a few--are defending lawsuits
brought against them by servicemembers. In virtually every major case,
I encounter either a motion for summary judgment or a motion under Rule
12(b)(6) of the Federal Rules of Civil Procedure, seeking to dismiss
the servicemember's suit because there is no specific provision in the
SCRA authorizing suits for damages under the statute. In every case
thus far, we have been successful in convincing the court that unless a
cause of action is inferred from the SCRA, the Act would constitute a
right without a remedy, which would lead to an absurd end result.
However, getting from Point A to Point Z and protecting the rights of
servicemembers--both those in the particular cases involved and all
those whose future cases have yet to develop--has required literally
hundreds and hundreds of unnecessary hours in briefing and arguing
these defense motions.
The Hurley case in Michigan is a prime example of why this
amendment is so badly needed. Sergeant James Hurley's house was
foreclosed upon in violation of the SCRA while he was protected by the
SCRA (50 U.S.C. App Sec. Sec. 516, 533). His Michigan National Guard
unit had been mobilized and deployed to Iraq, where he served for over
a year. While Sergeant Hurley was in Iraq fighting, his home was sold
by Deutsche Bank Trust Co. Americas after the expiration of a 180 day
period during which foreclosed property could have been redeemed by the
debtor. However, pursuant to 50 U.S.C. App Sec. 526, that redemption
period never commenced to run against Sergeant Hurley for as long as he
was on active duty. He came home from the war to find his wife and
children evicted from their home, his house and property owned by
someone else and the mortgage company claiming he owed them a huge
deficiency judgment on property he no longer owned.
When Sergeant Hurley sued the mortgage company and their
foreclosure attorneys for damages--since his rights had been violated
not just once (as a result of the bank's non-judicial foreclosure in
violation of section 533) but also when the property was thereafter
sold despite the fact that the redemption period had never commenced to
run much less expired (in violation of section 526), the bank defended
with a motion for summary judgment claiming that there was no private
cause of action under the SCRA to sue them for damages resulting from
their actions. I had been retained as an expert in the SCRA by Hurley's
attorneys and I assured them that we would answer the bank's motion and
the court would find, as almost all courts had previously held, that
there was a private cause of action under the SCRA, even though it had
to be inferred.
Imagine our shock and concern when the district court ruled in
favor of the defendants and dismissed Hurley's SCRA claims altogether,
finding that the SCRA did not provide for a private cause of action.
The court's ruling was based on a case from the Northern District of
Texas (Batie v. Subway Real Estate Corp., Case No. 3:07-CV-1415-M).
However, because I had also consulted with Lt. Col. Batie's counsel in
his case in Dallas, I knew that the Batie decision (finding no private
cause of action under the SCRA) cited by the Michigan Federal court had
subsequently been vacated by the Texas Federal court after we filed a
motion for reconsideration and pointed out to the court several
previous cases in that same court in which a private cause of action to
enforce the SCRA had, in fact, been allowed to proceed. In other words,
the Michigan court just did not pick up on the fact that Batie I had
been vacated and overruled by Batie II. No problem, we thought--just
file a motion for reconsideration in the Michigan case and all will be
well. But, it did not work out that way at all. The court in Michigan
denied Sergeant Hurley's motion for reconsideration despite the fact
that we pointed out that the earlier decision had been based on a
decision of the Texas court that had been vacated. The Michigan court
simply reiterated that the SCRA does not contain a specific provision
authorizing suits for damages against violators.
By this point in time, all of us were working on a case that had
consumed tens of thousands of dollars of legal talent time, and no one
had been paid a penny for all the work we had done on the
servicemember's behalf. However, the issue was so vitally important
that we had to keep on working. A Federal district court had ruled that
a servicemember whose property was literally stolen from him in
violation of Federal law could not go to court and sue for damages.
With Hurley on the books, every servicemember thereafter who had
someone violate their SCRA rights was at risk of their future case
being thrown out of court based on the Hurley court's ruling of ``no
private cause of action.'' Without the future protections that would
result from the enactment of H.R. 2696, the same nightmare of endless
litigation motion practice initiated by counsel for the creditors--who
are always paid by the hour--will continue to be an unnecessary risk
encountered by every servicemember and a burden to our courts.
In Hurley, the procedural solution to seek a reversal of the
Michigan Federal district court's incorrect ruling was to file a motion
with the court seeking certification of the ruling for an appeal to the
Court of Appeals for the Sixth Circuit under 28 U.S.C. Sec. 1292(b).
After that motion was filed, on March 13, 2009, the district court
reversed itself, vacated the grant of summary judgment in favor of the
bank and granted summary judgment in favor of Sergeant Hurley. The
court went on to find that as a matter of Federal law, punitive damages
were available under the SCRA. As satisfying as that ruling was,
nevertheless, 5 years after his property was seized in violation of the
SCRA, Sergeant Hurley still has not been compensated for his damages
and his fight continues.
This overly long saga about the Hurley case is merely illustrative
of the need for H.R. 2696. Unless Sergeant Hurley had found several
really hard-headed counsel who simply decided that fighting the first
two incorrect decisions was more important than collecting a fee
practicing law, he would have been poured out in the Michigan case.
This is not what our servicemembers should expect. Not every soldier,
sailor, airman or Marine is going to find Sergeant Hurley's legal team,
a group of supporters of our military who simply refused to quit when
such an important principle was at stake. A relatively simple
legislative fix, such as H.R. 2696, would eliminate the need for such
battles in the future.
When our National Guardsmen and Reservists get their mobilization
orders, they have to know that ``someone has their Six'' as we say in
the Air Force. They have to know that if something goes wrong while
they are off fighting for their country, when they come home someone
can seek to straighten things out and if it takes a lawsuit to do it,
they will have the right to go to court and seek damages if their
rights under the SCRA have been violated.
The provisions in H.R. 2696 concerning damages and attorneys fees
are consistent with numerous other Federal consumer-oriented statutes.
From personal experience I can assure you that many of these cases in
which there are clear violations of servicemembers' SCRA rights involve
relatively small sums of money. This has two ramifications: it makes it
much more difficult for the servicemember to find an attorney willing
to take the case and it gives the violator a feeling of ``what have I
got to lose?'' If those same violators knew that they might be exposed
to payment of attorneys fees if they fought the case and lost, there
would be significantly more voluntary settlements to properly
compensate servicemembers and, ultimately, fewer violations of the
SCRA.
I appreciate the opportunity to have presented testimony to this
Subcommittee and thank you for all you do and continue to do for the
men and women in our Armed Forces. I ask that this statement be
included in the record of the Subcommittee's hearing on H.R. 2696.
Respectfully,
John S. Odom, Jr.,
Colonel, USAF (Ret.)
Statement of Brian Hawthorne, Legislative Director,
Student Veterans of America
Madam Chairwoman, and Ranking Member Boozman, thank you for giving
Student Veterans of America the opportunity to submit testimony on this
important legislation. We appreciate the opportunity to comment on and
contribute to legislation that could impact our members and their
families.
Today, as you review the legislation that has been put before you,
we would like to bring to your attention the way that these Bills
affect our constituency more than most. As veterans who are currently
attending colleges and universities around the country, including in
your districts, any modification to current or future economic and
educational legislation can have fantastic or dire consequences. The
top priority on our Legislative Agenda is the improvement and upgrade
of the Post-9/11 GI Bill. To that end, many of our chief concerns are
being considered today by the Bills before you, and we are proud to be
a part of this process to ensure that those who are most affected, the
veterans currently enrolled in school or considering such an important
decision, are properly represented. Student Veterans of America
represents more than 200 college and university veterans' organizations
across the country, from small community colleges to Ivy League
schools. We firmly believe that all veterans deserve access to the
quality education of their choosing, and in their own terms. It is
essential that this Congress legislate as such.
To assist in that vital process, we have prepared our opinion on
five of the Bills that you consider here today, and will address each
in turn.
Mr. Connolly's H.R. 2874, allowing for relief of tuition for
servicemembers called to active service during one of their
postsecondary semesters is a vital protection to the student veterans
who remain bound to their obligatory uniformed service, be it Active
Duty, National Guard, Reserve Forces, or the Inactive Ready Reserves.
It is very important for a student to know that, regardless of their
military affiliation, they will be able to recoup any funds spent on
tuition and fees should they be called to active duty for contingency
or support operations. This protection not only gives peace of mind,
but also ensures that the financial stability of their family is not
disrupted because of these expenditures.
In addition to this protection, however, we call upon Congress to
enable the subsequential return of Post-9/11 GI Bill Benefits to the
veteran, as the Department of Veterans Affairs would be receiving the
funding paid to the institution of higher education. This creates a
situation where the VA has made an investment in a veteran, but did not
receive a return on its investment due to the recall to active service.
The student veteran, therefore, should be able to use those months
expended on another term following their activation.
Mr. Perriello's H.R. 2928 Bill rectifies one of the most glaring
omissions of the Post-9/11 GI Bill: supporting benefits for
Apprenticeships and On-The-Job Training Programs. We have heard from
many of our constituents that this creates a serious financial burden
on them, and is openly discriminatory to the important industries that
are supported by these programs, which form the majority of our unions
across the country. Many veterans leaving the military service have
extensive experience in these exact careers, and should be supported in
attaining professional certifications and journeyman's licenses.
Additionally, the economy of our Nation and the maintenance of its
industry depend on such skilled laborers, and this Congressional body
in no way should be seen as looking down on such contributors simply
because their extensive education does not result in a college degree.
We believe that these veterans should be fully supported by both
the tuition and fees payments as well as the housing and book stipends
available to their degree-seeking counterparts who are assigned a
commiserate amount of work. Additionally, given the important nature of
this amendment, we call upon this body to implement it ``as if included
in the enactment of the Veterans Educational Assistance Act of 2008,''
so as to not continue denying benefits to these very worthy student
veterans.
Our changes read as follows:
See 3320 (a)
(1) amend the amount of benefit to 90 percent,
(2) amend the amount of benefit to 70 percent,
(3) amend the amount of benefit to 50 percent, in addition to the
increased percentage the veterans should be entitled to both the
$1000.00 annual book stipend and the BAH commensurate to the locale of
the training facility.
Justification
Apprentices and OJT individuals include mandatory in classroom
training, generally those who are pursuing a trade in skilled labor
such as welding, pipefitting, and carpentry. Most of the skilled trades
have contract with the local community colleges to facilitate the
mathematical and technical comprehension needed to obtain journeyman
status. Increasing the benefits to those in pursuit of a journeymen's
certificate of the equivalent may lessen the burden of increased hours
of employment to provide for themselves or their families and will
allow for sufficient time to devote to their studies.
In a Bureau of Labor and Statistics report dated March 20, 2009,
1.7 million Americans have served in the Global War on Terror (GWOT).
Among these veterans, 30 percent of employed male veterans of the
GWOT--era worked in management, professional, and related occupations,
compared with about 34 percent of male non-veterans. Sales and office
occupations; natural resources, construction, and maintenance
occupations; and production, transportation, and material moving
occupations each accounted for about 18 percent of employed male
veterans and nonveterans.
Generally, apprentices learn through both classroom and on-the-job
training. The 5-year apprenticeship period most common to building and
maintenance trades in the U.S. is divided into 1-year segments, each of
which includes 1,700 to 2,000 hours of on-the-job training and a
minimum of 216 hours of related classroom instruction. In-class
instruction of 216 hours over 5 years (or 60 months) is averaging 43.2
hours per school year of in-class instruction; broken down by semester
the individual is tasked with three-quarter time or full time course
load in addition to full daytime employment. The veteran is a student
and has earned the benefit; the career path of the veteran should be
irrelevant so as long as the veteran is showing satisfactory progress
in the educational program of the apprenticeship.
The Apprenticeship or OJT skilled craftsman programs vary widely
from each other. An example of the apprenticeship from one such
industry is that of the heating, venting, air conditioning and
refrigeration apprenticeship. The admission requirements are just as
selective and competitive to that of a 4-year institution. The
following outlines the requirements for one such course: the candidate
for apprenticeship must be a minimum of 18 years of age, a High School
Graduate, must have 10 high school credits or one college semester of
algebra and geometry, or a Certificate of Completion or Associate of
Science degree in Air Conditioning & Refrigeration curriculum from a
Joint Journeymen and Apprenticeship Training Center-approved Community
College, Trade or Technical School, or achieve a passing score on a
test written and administered by the Joint Journeymen and
Apprenticeship Training Center that encompasses Algebra and Geometry.
For these programs, all education requirements must be submitted by
Official Transcripts and the selection process is a critical component
in obtaining the apprenticeship. The veteran must pass an admissions
test, and applicants fulfilling requirements by date of submission will
be given a written English and Mathematics exam. All applicants who
have completed the written test will be scheduled for an oral
interview. Then, applicants who have completed the testing and oral
interview will be ranked according to their combined scores. Finally,
applicants will be required to submit to a drug test prior to being
offered an apprenticeship position.
In closing, the proposed amendment will allow veterans who so
choose to become a critical member of infrastructure maintenance and
construction. This career field and curriculum is just as demanding and
competitive as those attending or attempting to attend a 4-year
institution. Close to twenty percent of the Nation's newest generation
of veterans are employed in these and similar fields, and this
legislation is a key component to advance those with technical and
mechanical inclination. It is the opinion and recommendation of Student
Veterans of America that this legislation be forwarded and passed with
nothing less than the stipulations previously stated above.
Congressman Loebsack's H.R. 3554, granting Post-9/11 GI Bill
benefits to those servicemembers activated under Title 32, is
absolutely essential to the future of the Post-9/11 GI Bill. Excluding
these well-deserving servicemembers from a benefit that the majority of
their fellow veterans are receiving is simply discriminating. We must
ensure that legislation is applied evenly across the spectrum of
beneficiaries, regardless of affiliation to the military. H.R. 3554,
and others like it, close this gap that has been identified by many
Veteran Service Organizations as among their top priorities for
amendment, especially those who represent the National Guard and
Reservists. Student Veterans of America is proud to stand with them in
this advocacy.
We are extremely pleased that the Committee is bringing to
consideration H.R. 3561, the proposed amendment of Mr. Teague, to amend
title 38 in order to increase the educational assistance to veterans
pursuing flight training. Flight training is very expensive and the
time commitment is just as great as any traditional educational
program. Increasing the funding to those seeking flight training will
enable them to focus more on their training and instruction and free
them from having to gain employment to pay for such training, ensuring
their success in these challenging academic and technical programs.
Finally, SVA is honored to support H.R. 3577 from Mr. Rodriguez,
which would allow military retirees, those who have truly devoted their
lives to our Nation and its ideals, to transfer their Post-9/11 GI Bill
benefits to their dependents. Those servicemembers who have committed
such an extensive amount of time to the military deserve to be able to
support their dependent's educational dreams without having to extend
their obligation. We support this honorable population and their desire
to be able to use their earned benefits as they choose.
Thank you for your time and consideration of our opinion on these
very important legislative matters. We look forward to working with you
all in the future.
Very Respectfully.
MATERIAL SUBMITTED FOR THE RECORD
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
September 28, 2009
Ms. Lynn Schubert
President
Surety and Fidelity Association of America
1101 Connecticut Ave, SW, Suite 800
Washington, DC 20036
Dear Ms. Schubert:
I would like to request your response to the enclosed questions for
the record and deliverable I am submitting in reference to our House
Committee on Veterans' Affairs Subcommittee on Economic Opportunity
Legislative Hearing on September 24, 2009. Please answer the enclosed
hearing questions by no later than Monday, November 9, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-5491.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
JL/ot
__________
The Surety & Fidelity Association of America
Washington, DC.
November 6, 2009
The Honorable Stephanie Herseth Sandlin
Chairwoman--Subcommittee on Economic Opportunity
U.S. House Committee on Veterans' Affairs
335 Cannon House Office Building
Washington D.C. 20515
Re: Questions from the Subcommittee at the Legislative Hearing on
September 24, 2009
Dear Representative Herseth Sandlin:
Thank you again for giving The Surety & Fidelity Association of
America (SFAA) an opportunity to present its views on H.R. 294. The
following are our responses to the additional questions that were asked
of us after the hearing on September 29.
Question 1: You state that you would be happy to assist the VA with
developing a Model Contractor Development Program. Do you think that
this would be better suited for the Small Business Administration?
Response: Historically, SFAA has implemented its Model Contractor
Development Program (MCDP) in response to specific requests from
Federal, state and local governmental entities, as well as from
organizations and associations involved in developing contractor
capability and capacity. While it would seem that SBA would be the
logical candidate to partner with SFAA in such an endeavor as part of
its Surety Bond Guarantee Program (the Program), thus far the SBA
headquarters has not indicated an interest in expanding its bond
guarantee program to include a contractor development component to
assist contractors in becoming bondable in the private market, with or
without the government guarantee. Over the years, we have had an
excellent relationship in working with SBA in addressing many of the
issues associated with implementing its bond guarantee program, but
establishing a national, SBA-sponsored bond education and technical
assistance program for small and emerging contractors has not been a
part of that dialog. To be sure, we have worked closely with SBA-funded
Business Development Centers (most notably in New York, Rhode Island
and Texas) in implementing our MCDP initiatives nationwide and the
Rhode Island District Office of SBA is our primary local partner in
that state's program. We feel the SBA could do more in terms of
offering education, technical assistance and bond readiness support of
the sort offered through our MCDP and we would welcome more
opportunities to work with SBA headquarters, its regional and district
offices, and its network of SBDC grantees.
Working more extensively with SBA, however, would not and should
not preclude our also working with other Federal agencies and with
state and local governments. In many instances, our programs with other
agencies and governmental entities have come out of a need for more
targeted efforts, either in terms of constituencies or in terms of
construction industry sectors. For example, as referenced in my
testimony, since 2006 we have had a Memorandum of Understanding with
the Minority Business Development Agency (MDBA) ``to share [SFAA]
resources with MBDA for the benefit of minority-owned firms to enhance
their access to bonding and/or educate them on how to become bondable
or increase their bonding capacity.'' Under this agreement, SFAA has
conducted a number of bonding information workshops around the country
and has implemented the MCDP program jointly with MBDA in New York,
Chicago and Texas. Also, we are about to enter into a Memorandum of
Agreement with the Federal Department of Transportation (DOT), Office
of Small and Disadvantaged Business Utilization (OSDBU), to design,
develop and implement a surety bond assistance program that will offer
bond assistance for transportation-related projects for minority,
women-owned and disadvantaged business enterprises.
While either of these efforts theoretically could have been
undertaken with SBA, we believe that, in these instances, MDBA's
specific experience in providing assistance to minority companies and
DOT's focus on transportation and transportation-related projects give
them a programmatic advantage over SBA's more broadly based mandate to
support small business in general, thus leading to more immediate and
more direct impact on the contractors involved.
In addition, we have had great success in working with small and
emerging contractors in our educational programs in connection with
large construction projects that are underway in a given location. The
states or cities we have assisted with bonding education and technical
assistance have been able to target their resources to help local
contractors get bonded. Similarly, there has been an incentive for
small and emerging contractors to participate in our MCDP in areas in
which they would have an opportunity to bid for jobs upon completion of
the MCDP on a large public construction project in the area.
Soon after our testimony at the Subcommittee hearing, we met with
the Acting Director of the Veterans Administration's Center for
Veterans Enterprise to discuss the MCDP and how it might fit into the
VA's plans for a Federal Contractor Certification Program (FCCP) which
currently is being developed. The VA would like to utilize our MCDP
workshops as the course modules for the construction industry-specific
component of its FCCP, again a very narrowly tailored application of
the MCDP in a targeted setting. We have agreed in principle to the VA's
request and look forward to working with it. The time frame for getting
this initiative off the ground is the end of the 2010 fiscal year. Were
we not able to provide these workshops, the VA would have to look
elsewhere to obtain this very important component of its FCCP
initiative.
Question 2: You state that you have worked with the SBA Bond
Guarantee Program to make it more attractive to sureties, but that
legislative and regulatory changes are needed. What would you say are
the changes that are needed?
Response: The major change necessary to address the fundamental
issues with the Program is legislation to reflect the true nature of
the relationship of the SBA to the participating surety, which is that
of a reinsurer. For long term success, the SBA should reorganize the
Program around the reinsurance model that it has been studying and that
hopefully will be included as part of the SBA Reauthorization now
before Congress. Under this model the SBA regulations would be
rewritten to fundamentally change the Program from a rules-based
approach to a principles-based approach. The Plan A and B programs
described below would be combined into a single program in which the
SBA assesses the risk of each surety participating and enters into a
separate ``treaty'' with each surety. Rather than continuing its
current practice of ``re-underwriting'' each surety bond, the SBA
should be evaluating and underwriting the surety in the same manner a
reinsurance company would, incorporating knowledge about the surety's
strengths and weaknesses, as well as its overall business plan and
strategy. SBA has had a consultant reviewing this type of an approach
for quite some time now, and implementation of such a change is timely
and necessary. Congressional action to do this could quickly revitalize
this necessary program.
In the past 10 years, over $8 billion in bonds have been issued to
small and emerging contractors through the Program. The Program has
provided bonding assistance to small and emerging contractors who might
not otherwise be able to obtain bonds. This has been especially true in
times of economic downturn when bonding sometimes becomes more scarce
and difficult to obtain. According to SBA data, it would appear that
participation in the Program is declining. In 1997, the Program
guaranteed 16,336 bonds; in 1999, it guaranteed 9,448 bonds; and in
2009 it is projected to guarantee 6,100 bonds. In 1992, the Program
guaranteed 32,000 bonds, which was its peak. In 1999, there were 32
sureties participating in the Program. Currently, 12 sureties write
through the Program. Four companies account for 89 percent of the
bonds, and one company accounts for 45 percent.
While there are several reasons for the decline in surety
participation and the number of bonds guaranteed under the Program,
including the fact that the availability of bonds to small contractors
outside of the SBA impacts the bonds guaranteed, there remain some
major impediments within the Program operation itself that prevent
optimal participation by surety companies and agents. In fact, SFAA
member companies have expressed the opinion that, over the course of
time, the Program has become increasingly unattractive for sureties.
For example, for many sureties, the Program has become an expensive, if
not a commercially unreasonable, partner, now that the Program charges
26 percent of the premium as fees from the sureties. In 2006, the SBA
finalized changes to its regulations that would implement an increase
in the guarantee fee to surety companies from 20 percent to 26 percent
of the premium on bonds issued and guaranteed under the Program. This
fee increase, which was decreased from the hike that SBA sought to 32
percent, still has made the Program economically unattractive for most
sureties and affects its continued viability. Therefore, any changes in
the Program should include a reduction in fees, at least down to the 20
percent level prior to the 2006 fee increase.
Another area of concern is the disparity in the level of bond
guarantee between the Prior Approval Plan (called ``Plan A'') which is
90 percent, and the level of bond guarantee for the Preferred Plan
(called ``Plan B'') which is 70 percent. When Plan A was put in place,
traditional surety companies chose not to participate for a variety of
reasons. The two primary reasons were that: (1) their business focus
was on lower risk, larger contractors, and (2) the administrative costs
of submitting each bond for prior approval of a guaranty were
significant. Over time the SBA determined not enough contractors were
graduating out of the program. The SBA at the time believed that if it
could encourage traditional sureties to participate, more contractors
would be able to obtain bonds, and more contractors would graduate from
the program. Therefore, the SBA went to the SFAA for advice and
assistance. Both the sureties who specialized in higher risk
contractors, as well as the ``traditional'' sureties, were members of
the SFAA, and through the input of those members, the SFAA and the SBA
were able to create a program that encouraged more sureties to
participate in the program, while not detrimentally impacting the
existing SBA sureties. This new program was called the Preferred Surety
Bond Program. Plan B addressed the concerns of the non-SBA sureties in
a number of ways. First, the program provided that if a surety was
approved by the SBA for Plan B, it would be granted a dollar value of
guaranties from the SBA that would be automatically valid, without
prior approval of each bond. In exchange for this reduction of
paperwork, the sureties would receive only a 70 percent guaranty of
loss on each bond rather than a 90 percent guaranty. While Plan B has
worked fairly well, the 70 percent guarantee has always been a
detriment in attracting enough sureties to participate and a raising of
this guarantee to the level of Plan A would undoubtedly result in a
significant increase in surety participation in the Program. The SBA
should amend the regulation so that the same rule applies to both Plan
A and Plan B sureties.
For several years, SFAA has been working to address these and other
issues through the SBA reauthorization legislation in order to fix the
problems sureties have had in the past with the Program. In addition to
the fee structure and level of bond guarantee, these include unraveling
of bond guarantees, rescinding of the requirement that the Program be
self-sufficient, instituting a non-binding alternative dispute
resolution process to resolve claims issues, and increasing regional
staffing. We acknowledge that several critical changes needed in the
Program have been accomplished, but they have not made the difference
the SBA hoped. The Program staff is committed to making the Program
work well, and the industry supports them in these efforts.
The change to a reinsurer based model would be the most
comprehensive solution likely to provide the largest benefit to small
contractors.
If you or other Members of the Subcommittee have any additional
questions, we would be happy to address them.
Sincerely,
Lynn M. Schubert
President
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
September 28, 2009
Mark Walker
Deputy Director, National Economic Commission
The American Legion
1608 K Street, N.W.
Washington, DC 20006
Dear Mr. Walker:
I would like to request your response to the enclosed questions for
the record and deliverable I am submitting in reference to our House
Committee on Veterans' Affairs Subcommittee on Economic Opportunity
Legislative Hearing on September 24, 2009. Please answer the enclosed
hearing questions by no later than Monday, November 9, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-5491.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
JL/ot
__________
American Legion
Washington, DC.
November 9, 2009
Honorable Stephanie Herseth Sandlin, Chair
Subcommittee on Economic Opportunity
Committee on Veterans' Affairs
U.S. House of Representatives
335 Cannon House Office Building
Washington, DC 20515
Dear Chair Herseth Sandlin:
Thank you for allowing The American Legion to participate in the
Subcommittee hearing on several pieces of legislation on September 24,
2009. I respectfully submit the following in response to your
additional questions:
Question 1: Does The American Legion support listing service-
disabled veterans as part of the list of disadvantaged groups?
Response: The American Legion does not support Service-Disabled
Veteran-Owned Small Businesses (SDVOSBs) being included in the list of
disadvantaged groups for the following reasons:
Under the 8(a) program a veteran must be in business for
2 years prior to application for 8(a) approval;
Restriction on the amount of assets one can accumulate to
qualify for 8(a) and while under 8(a) (no such restrictions for
SDVOSBs); and,
Under the 8(a) program there is too much bureaucracy and
reporting requirements along with restrictions on Teaming, etc. (no
such bureaucracy with the SDVOSB program).
Inclusion into the 8(a) program would not be an advantage for the
SDVOSB. The SDVOSB program is a reward for honorable service to this
great Nation.
Question 2: Do you have concerns that there may be ``rent-a-vet''
enterprises if veterans are not required to be involved in the day-to-
day operations of a business?
Response: Yes, The American Legion is concerned about companies
(large and/or non-veteran) getting veterans within their companies to
start SDVOSBs. These startup SDVOSBs seem to be serving as the Prime,
but they do not have control over the contract. You can call it
``affiliation or fronting,'' but it is all the same: a SDVOSB being
used by a large and/or non-veteran firm to obtain SDVOSB contracts that
are in essence not run by the SDVOSB. This is tough to prove, but it is
occurring frequently. However, The American Legion strongly believes
that a veteran business owner can start and build successful companies
simultaneously. With developed business acumen, current technology, and
a solid network, a veteran business owner can navigate the demands of
successfully operating more than one company at a time.
Question 3: Do you think businesses could be potentially set-up for
failure by receiving bonds they would not normally secure as stated
under Mr. Buyer's bill H.R. 3223?
Response: The American Legion believes veteran business owners who
are capable and prudent, will not be ``set-up'' for failure. These
veteran business owners have learned how to conduct business
professionally and consistent with commonsense and time-tested
processes.
Thank you for your continued commitment to America's veterans and
their families.
Sincerely,
Mark Walker
Deputy Director, National Economic Commission
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
September 28, 2009
Mr. Justin Brown
Legislative Associate, National Legislative Service
Veterans of Foreign Wars of the United States
200 Maryland Avenue, NE
Washington, DC 20002
Dear Mr. Brown:
I would like to request your response to the enclosed questions for
the record and deliverable I am submitting in reference to our House
Committee on Veterans' Affairs Subcommittee on Economic Opportunity
Legislative Hearing on September 24, 2009. Please answer the enclosed
hearing questions by no later than Monday, November 9, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-5491.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
JL/ot
__________
RESPONSE TO QUESTIONS SUBMITTED BY
JUSTIN BROWN, LEGISLATIVE ASSOCIATE
NATIONAL LEGISLATIVE SERVICE
VETERANS OF FOREIGN WARS OF THE UNITED STATES
H.R. 294, H.R. 1169, H.R. 1182, H.R. 2416, H.R. 2461, H.R. 2614,
H.R. 2696, H.R. 2874, H.R. 2928, H.R. 3223, H.R. 3554, H.R. 3561,
H.R. 3577, and H.R. 3579.
November 9, 2009
Question 1: Regarding H.R. 2928 The Federal Career Intern Program,
how would you recommend that his legislative proposal provide a clear
measurement for the on the job training benefit?
Response: The VFW believes the measurement for the job training
benefit is not clear because the national average cost of tuition at an
institution of higher education is poorly defined. The VFW suggests,
offering the rate which is currently offered under chapter 30 with that
rate being tied to a favorable annual rate of inflation. This would
clarify the amount of payment to be distributed to those interested in
pursuing the program while not substantially lowering or increasing the
benefit.
Question 2: Does Veterans of Foreign Wars recommend that refunds
under Representative Connolly's SCRA bill, H.R. 2874, include tuition
or fees paid on behalf of the student by institutions of higher
learning or funds awarded under Title 20 United States Code?
Response: The VFW currently has no formal position on this question
and supports the legislation as it is written.
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
September 28, 2009
Mr. Dave Gorman
Executive Director
Disabled American Veterans
807 Maine Avenue, SW
Washington, DC 20024
Dear Mr. Gorman:
I would like to request your response to the enclosed questions for
the record and deliverable I am submitting in reference to our House
Committee on Veterans' Affairs Subcommittee on Economic Opportunity
Legislative Hearing on September 24, 2009. Please answer the enclosed
hearing questions by no later than Monday, November 9, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-5491.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
JL/ot
__________
POST-HEARING QUESTIONS FOR JOHN L. WILSON
ASSISTANT NATIONAL LEGISLATIVE DIRECTOR OF THE
DISABLED AMERICAN VETERANS
FROM THE SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
COMMITTEE ON VETERANS' AFFAIRS
UNITED STATES HOUSE OF REPRESENTATIVES
SEPTEMBER 24, 2009
Question: Do you have concerns that there may be ``rent-a-vet''
enterprises if veterans are not required to be involved in the day-to-
day operations of a business?
Answer: There are likely thousands of veterans and non-veterans
alike that own one or more businesses in today's economy. Given the
benefit of Internet access, software business tools, and
teleconferencing capability, business owners can easily operate
multiple businesses, manage day-to-day operations, make decisions
affecting financial, operational, management policy, and employment
issues as needed, without having to be on-site. Successful owners of
multiple businesses may also have the assets necessary to hire
personnel to attend too many of the daily operational needs of their
businesses, affording them even greater flexibility.
While DAV has no resolution on this matter, we believe the number
of hours worked, or location of the owner, should not be the exclusive
factors to consider. Rather, controlling interest in the business and a
record of successful operations should also be considered. Any efforts
to restrict such flexibility for veterans and service-disabled veterans
who own more than one business would unnecessarily place them at a
disadvantage under non-veteran business owners. These business owners
should instead, be afforded the opportunity to expand into as many
business lines as they find of interest based on their expertise and
the financial resources available.
Question: Do you think businesses could be potentially set-up for
failure by receiving bonds they would not normally secure as stated
under Mr. Buyer's bill H.R. 3223?
Answer: H.R. 3223 would prohibit using ownership and control by a
veteran or veterans of more than one small business as grounds for
disqualification from inclusion in an existing database of veteran-
owned businesses. Although DAV has no resolution on this issue,
ownership and control of more than one small business should not be the
grounds for disqualifying veterans from being listed in a service
disabled veteran-owned small business database. Veterans and non-
veterans alike have successfully demonstrated their ability to manage
multiple businesses for generations. Decisions on inclusion in a
database, or awarding bonds, should be based on the veterans'
controlling interest in the business or businesses, available financial
resources, the soundness of the business plan, and their demonstrated
expertise.
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
September 28, 2009
Mr. Richard F. Weidman
Executive Director for Policy and Government Affairs
Vietnam Veterans of America
8605 Cameron Street, Suite 400
Silver Spring, MD 20910
Dear Mr. Weidman:
I would like to request your response to the enclosed questions for
the record and deliverable I am submitting in reference to our House
Committee on Veterans' Affairs Subcommittee on Economic Opportunity
Legislative Hearing on September 24, 2009. Please answer the enclosed
hearing questions by no later than Monday, November 9, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-5491.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
JL/ot
__________
Deliverable from the House Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Legislative Hearing
September 24, 2009
Questions for the Record:
1. Do you have concerns that there may be ``rent-a-vet''
enterprises if veterans are not required to be involved in the day-to-
day operations of a business?
There is a marked difference between being involved in the running
of a company and being on-site every day, which is the litmus test that
the VA Center for Veterans Enterprise (CVE) is (inappropriately)
applying to veteran owned small businesses (VOSB) and service disabled
veteran owned small businesses (SDVOSB) today. In this day of modern
communication it is foolishness to think that one cannot own and
control two or more businesses at the same time. In fact we have many
examples of legitimate SDVOSB where that is the case, but the CVE has
heretofore not certified them.
In order to cut down on this problem we first need to eliminate the
outrageous backlog in verification of VOSB/SDVOSB status at the CVE as
soon as possible.
Second, there needs to be a affidavit filed with tax returns and
other info to show verification that acknowledges that the
individual(s) claiming ownership/control are indeed who and what they
claim to be, and acknowledging that they understand that falsification
of answers is a felony.
Third, there needs to be random on-site inspections of verified
VOSB.
And last, where it is found that fraud has been committed we need
to disbar businesses and all of the individuals involved for a period
of at least 5 years, and in egregious cases they need to be convicted
of a Federal felony, as well as fined and/or put in jail. It will only
take one or two instances and the rest of the phonies will pursue other
schemes.
The notion, made up by the people at CVE who have never run a
business that you can only have one business and have to be on site
every day was copied by the current staff at CVE from the early
criteria for the 8(a) program at the Small Business Administration
(SBA). The 8(a) program is a business development program with a great
deal of logistical support, and is in no way comparable to the `SDVOSB
program. (Incidentally, we are given to understand that this is no
longer rigorously enforced in the 8(a) programs.)
2. Do you think businesses could be potentially set-up for failure
by receiving bonds they would not normally secure as stated under Mr.
Buyer's bill H.R. 3223?
No. There are a great number of VOSB and SDVOSB that clearly have
the organizational capacity and the track record to successfully
complete a job, but cannot, in these tight fiscal times, get the
bonding necessary so that they can bid on it. What in happening is that
virtually ALL small businesses are thus frozen out, leaving the way
clear for the same dozen or so large firms to get all of the work. We
will continue to work with the surety bond organizations to find ways
to surmount this significant barrier, especially for SDVOSB.
3. Is VVA against listing service disabled veterans as a socially
disadvantaged group?
Yes, VVA is adamantly opposed to listing service disabled veterans
as a socially disadvantaged group. Both VVA and the Veterans'
Entrepreneurship Task Force (VET-Force) have discussed this numerous
times and have always come down as being unanimously against any such
move.
4. Under the proposed Veterans Small Business Verification Act,
would VVA support having two lists in the database that would have one
``verified'' and eligible for special consideration for Federal
contracting opportunities and another for ``applied but not yet
verified'' which is ineligible for special consideration for Federal
contracting opportunities?
Frankly, this should be a short term ``fix'' only. There is no
excuse for VA to have a long standing list of applicants waiting to be
verified, through no fault of their own. VA now has finally named the
Senior Executive Service level official to be in charge of the entire
small business program, and we expect that they will move soon to name
the GS-15 to actually head the CVE. We have made it clear to the
Secretary and to the Deputy Secretary, as well as to the new small
business director, Mr. Foreman, that cleaning up the long wait and
backlog for verification at CVE simply must be a top priority.
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
September 28, 2009
Ms. Christina M. Roof
National Deputy Legislative Director
AMVETS
4647 Forbes Boulevard
Lanham, MD 20706-4380
Dear Ms. Roof:
I would like to request your response to the enclosed questions for
the record and deliverable I am submitting in reference to our House
Committee on Veterans' Affairs Subcommittee on Economic Opportunity
Legislative Hearing on September 24, 2009. Please answer the enclosed
hearing questions by no later than Monday, November 9, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-5491.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
JL/ot
__________
Deliverable from the House Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Legislative Hearing
September 24, 2009
Question 1: Do you feel confident that the U.S. Department of
Veterans Affairs has the right personnel who understands and are
trained in making small business loans as needed under H.R. 294?
Response: AMVETS believes that from the limited knowledge on VA's
entire staff an accurate response would be based on assumptions.
However, AMVETS does believe that having staff armed with the knowledge
and clear understanding of SDVOSB and VOSB business lending concerns is
vital to the implementation of a successful lending program within VA.
AMVETS speculates that as of current VA has not demonstrated that they
are equipped with all the necessary tools to successfully carryout H.R.
294 and achieve all the benefits to VOSB it serves to benefit. We would
recommend an intense internal review of current staff knowledge and
capabilities in the efforts to ensure the success of all parts of the
bill. Recent studies of our newly returning and current veteran
population show a 33 percent increase in the formation of new business
entities over the past 5 years. VA must be prepared with the proper
staff to assist in all aspects of the lending process.
Question 2: Is the set-aside program more of an environment to help
individuals start companies?
Response: AMVETS does not believe the set-aside program only stands
to benefit new business owners. The original intent of the program was
to help ensure all veteran owned businesses had a fair chance at
government contracts. Public Law 109-461, The Veterans Benefits, Health
Care and Information Technology Act of 2006, was signed into law by
President Bush on December 22, 2006, and required the law to take
effect by June 20, 2007. The law allows VA special authority to provide
set-aside and sole source contracts to small businesses owned and
operated by veterans and service-disabled veterans. This legislation is
codified in 38 U.S.C. Sec. 8127 and 8128. Over 2 years have passed with
still no significant change in regards to how Federal contracting
officers are trained in identifying set-asides properly. Supporting
Service Disabled Veteran Owned Small Businesses (SDVOSBs) contributes
significantly in restoring their quality of life while aiding in their
transition from active duty to civilian life. While many private sector
businesses have spent years in developing the strategies and knowledge
to win government procurements, many of our SDVOSB and VOSB have not
had the same luxury. Many returning war fighters often turn to self
employment and entrepreneurship as a means of sustaining their new way
of life. Respectfully, the SDVOSB and VOSB programs stand to not only
not benefit veterans, but utterly fail unless VA, DOL, SBA, and OFCCP
exercise oversight and stronger enforcement of consequences. There also
needs to be an immediate focus on proactive measures to eliminate
untruths, such as ``rent a vet'', and cease only exercising
``reactive'' strategies. VA, DOL, SBA, and OFCCP should pool all their
resources and successful strategies to ensure swift action and non-
duplication of measures.
Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Washington, DC.
September 28, 2009
Mr. Keith Wilson
Director, Office of Education Service
U.S. Department of Veterans Affairs
810 Vermont Avenue, N.W.
Washington, DC 20420
Dear Mr. Wilson:
I would like to request your response to the enclosed questions for
the record and deliverable I am submitting in reference to our House
Committee on Veterans' Affairs Subcommittee on Economic Opportunity
Legislative Hearing on September 24, 2009. Please answer the enclosed
hearing questions by no later than Monday, November 9, 2009.
In an effort to reduce printing costs, the Committee on Veterans'
Affairs, in cooperation with the Joint Committee on Printing, is
implementing some formatting changes for material for all Full
Committee and Subcommittee hearings. Therefore, it would be appreciated
if you could provide your answers consecutively on letter size paper,
single-spaced. In addition, please restate the question in its entirety
before the answer.
Due to the delay in receiving mail, please provide your response to
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions,
please call (202) 226-5491.
Sincerely,
Stephanie Herseth Sandlin
Chairwoman
JL/ot
__________
Questions for the Record
The Honorable Stephanie Herseth Sandlin
House Committee on Veterans' Affairs
Subcommittee on Economic Opportunity
Legislative Hearing on H.R. 294, H.R. 1169, H.R. 1182, H.R. 2416,
H.R. 2461, H.R. 2614, H.R. 2696, H.R. 2874, H.R. 2928, H.R. 3223,
H.R. 3554, H.R. 3561, H.R. 3577, and Draft
September 24, 2009
Question 1: According to your testimony, you are concerned that
Congressman Perriello's on-the-job training bill does not clarify how
monthly rates should be established and that you would recommend a
basic amount to help determine a monthly benefit rate similar to how
Chapter 30 is determined. If the legislation would take this approach,
do you have a recommendation?
Response: The Department of Veterans Affairs (VA) recommends that
the legislation base the monthly benefit rate for on-the-job training
(OJT) and apprenticeship under the Post-9/11 GI Bill on the full-time
institutional training rate for the Montgomery GI Bill-Active Duty
(MGIB-AD) chapter 30 program and the current percentage of the full-
time basic rate.
For example, for the first 6 months of training, VA would pay 75
percent of the full-time institutional training rate. During the second
6 months of training, VA would pay 55 percent of the full-time
institutional training rate. During the remainder of training, VA would
pay 35 percent of the full-time institutional training rate. The
chapter 30 full-time institutional training rate for individuals with
three or more years of active duty service is $1,368. Therefore,
individuals enrolled in an OJT or apprenticeship program under the
Post-9/11 GI Bill would receive $1,026 per month for the first 6 months
of training; $752.40 per month for the second 6 months of training; and
$478.80 per month for the remainder of training. Under this
hypothetical payment structure, additional benefit costs to VA are
expected to be $4.2 million during the first year, $21.8 million for
five years, and $56.7 million over 10 years.
Question 2: How many applications do VA process a day for business
verification?
Response: Calculating production during the first quarter of the
fiscal year, VA finalized an average of 22 applications per workday.
Question 3: Under H.R. 3223 instead of having ``shall'' for
everyone would it be better to have ``may'' for everyone? (Have ``may''
for all socially disadvantaged groups to which Veterans would be added
to the list.)
Response: Revising 38 USC 8127(c) to permit sole sourcing with any
small business group is not expected to result in a dramatic change in
small business program goaling achievements. 38 USC 8128 establishes an
order of priority in VA contracting, establishing that the Secretary
shall give priority to small businesses owned and controlled by
Veterans. The proposed bill does not modify that language.
Question 4: Would the change under H.R. 3223 affect the VA only? If
so, how would this impact the VA's procurement goals for Veterans and
service-disabled Veteran enterprise?
Response: VA has exceeded its goals for prime contracting with
service-disabled Veteran-owned small businesses (SDVOSBs) and with
Veteran-owned small businesses (VOSBs) for the past several years,
principally using competitive procedures. The proposed change is not
expected to have significant impact on goal achievements with SDVOSBs
or VOSBs.
Deliverables:
Question 1: If a monthly benefit rate similar to Chapter 30 is used
for Chapter 33, can the VA use its current payment system (In reference
to Rep. Perriello's bill H.R. 2928)?
Response: VA would have to modify current systems or develop new
information technology systems to pay OJT and apprenticeship
beneficiaries under the Post-9/11 GI Bill if the monthly benefit rate
is based on the full-time institutional training rate for the MGIB-AD
chapter 30 program.
Question 2: Regarding H.R. 3223, can you explain why it would cost
$12 million annually to process the 17,000 businesses in the database?
Response: Two internally-developed spreadsheets are enclosed for
your review. They are:
(1) Verification Program cost estimate MAR 2009 090306
(2) Verification Program cost estimate NOV 2009 091123.
In developing the cost estimates, we first examined our
procedural guidelines for each of the major phases of
Verification. We then interviewed staff members who regularly
perform that function and asked how long each task takes.
Because some applications are more complicated than others, we
took the approach used in PERT estimates with the following
formula:
Best time + 4(most likely time) + Worst time
This formula gave us a weighted average of the time associated
with each task.
The next step was to determine the cost associated with the pay
grade of the staff members who perform the task. This was
broken down by the minute. The cost per minute was multiplied
by the time determined in the previous step to determine the
cost per task.
Step three was to group the tasks together by phase of the
process and add them. Completion of different outcomes of the
process each have different times and costs depending on the
complexity of the outcome (i.e. approval, denial, unverified,
etc.)
The final step was to determine the percentage of applications
that, when completed, were approved, denied, etc. We took the
percentage for each type of outcome and multiplied it by the
number of companies that need to be verified, then added the
totals.
There are also some estimates for what it would be to verify
all VOSBs in the Dynamic Small Business Search and in the
Central Contractor Registry, should the program be expanded
government-wide. These figures are considerably higher.
The final set of numbers reflects the potential Federal dollars
that would be spent with VOSBs and SDVOSBs in both prime and
subcontracting if the entire government were to reach the 3
percent goal. This represents the total opportunities for these
companies.
Question 3: Please provide the Subcommittee with your views and
estimates on the following bills: H.R. 1169, H.R. 3554, H.R. 3561, H.R.
3577, and H.R. 3579.
Response: Please see below VA's views and cost estimates for the
requested education bills. [H.R. 3579 was addressed in HVAC testimony
on January 25, 2010.]
H.R. 1169 Views and Cost Estimate
Issue
To amend title 38, United States Code, to increase the amount of
assistance provided by the Secretary of Veterans Affairs to disabled
Veterans for specially adapted housing and automobiles and adapted
equipment.
Purpose
H.R. 1169 would triple the maximum aggregate amount of assistance
available for the following grants:
Specially Adapted Housing (SAH) grants from $60,000 to
$180,000 (section 2102 (d)(1) of title 38 U.S.C.);
Special Housing Adaptation (SHA) grants from $12,000 to
$36,000 (sections 2102 (b)(2) and (d)(2) of title 38 U.S.C.); and
Automobile and adaptive equipment grants from $11,000 to
$33,000 (section 3902(a) of title 38 U.S.C.).
Views
VA supports the intent of ensuring the grant programs are
sufficient to meet Veterans' needs. However, the Department cannot
support H.R. 1169 due to the additional benefit costs which are not
included in the Budget.
Benefits Cost (Mandatory)
Costs to the Readjustment Benefits account for the VA are estimated
to be almost $365.5 million in 2010, $1.9 billion for 5 years, and $4.3
billion over 10 years.
Benefits Methodology
The increase in costs to VA for the following programs is shown in
the table below.
Specially Adapted Housing (SAH): The proposed legislation
increases the maximum SAH grant from $60,000 to $180,000 in 2010. The
maximum grant amount will continue to increase with a Cost of
Construction Index that follows the Turner Cost of Building Index in
2011 and beyond. Loan Guaranty Service assumes that caseload will
increase from 900 to 2,150 due to the benefit increase in conjunction
with the effects of the Cost of Construction Index and the multiple use
provision. All cases are assumed to receive the maximum grant amount.
Special Housing Adaptation (SHA): The proposed
legislation increases the maximum SHA grant from $12,000 to $36,000 in
2010. The maximum grant amount will continue to increase with a Cost of
Construction Index that follows the Turner Cost of Building Index in
2011 and beyond. Caseload is expected to remain at 350. All cases are
assumed to receive a percentage of the maximum grant based on
historical data.
Automobile: The proposed legislation increases the
maximum automobile grant from $11,000 to $33,000 in 2010. The maximum
grant amount is expected to remain at $33,000 in 2011 and beyond.
Compensation and Pension Service is expecting caseload to remain
unchanged. All cases are assumed to receive the maximum grant amount.
----------------------------------------------------------------------------------------------------------------
Total
Fiscal Year SAH $(000) SHA $(000) Housing Automobile Grand Total
$(000) $(000) $(000)
----------------------------------------------------------------------------------------------------------------
2010 $329,598 $5,258 $334,856 $30,600 $365,456
2011 $329,598 $5,258 $334,856 $30,500 $365,356
2012 $345,419 $5,510 $350,929 $30,400 $381,329
2013 $361,999 $5,774 $367,773 $30,300 $398,073
2014 $379,375 $6,052 $385,426 $30,200 $415,626
2015 $397,585 $6,342 $403,927 $30,100 $434,027
2016 $416,669 $6,646 $423,315 $30,000 $453,315
2017 $436,669 $6,965 $443,634 $30,000 $473,634
2018 $457,629 $7,300 $464,929 $29,900 $494,829
2019 $479,595 $7,650 $487,245 $29,800 $517,045
----------------------------------------------------------------------------------------------------------------
Total $3,934,135 $62,755 $3,996,890 $301,800 $4,298,690
----------------------------------------------------------------------------------------------------------------
Administrative Cost (GOE)
Due to the increased housing grant caseload, VA anticipates an
additional 112 full-time equivalent, costing $6.9 million in 2010 and
$117.5 million over 10 years.
Caseload associated with automobile grants by specific criteria as
outlined at chapter 39, section 3902 in title 38. Due to the nature of
section 3902, VA does not believe an increase in the grant allowance
will correspond with additional workload.
H.R. 3554 Views and Cost Estimate
Issue
H.R. 3554, National Guard Education Equality Act, 111th Congress.
Purpose
To amend title 38 to include certain active duty service in the
reserve components as qualifying service under the Post-9/11 GI Bill.
This bill also proposes to qualify individuals who serve at least 30
continuous days in a reserve component and are released for a service-
connected disability.
Background
Currently, under section 3301 of title 38 U.S.C., members of the
Active Guard and Reserve (AGR) who are called up to full-time active
duty under title 32 do not qualify for the Post-9/11 GI Bill. Further,
under section 3311(b)(2)(B), individuals discharged or released from
active duty in the Armed Forces for a service-connected disability are
entitled to educational assistance under the Post-9/11 GI Bill.
This legislation proposes to amend title 38 by adding active duty
service under title 32 U.S.C. in the Army National Guard and Air
National Guard as qualifying service for the Post-9/11 GI Bill. It
would also add individuals discharged with service-connected
disabilities with at least 30 continuous days of full-time active duty
under title 32 in a reserve component as having qualifying service.
This qualifying active-duty service would include members who are
called up under title 32 U.S.C. under orders from the Governor of a
state or territory in the United States in response to a domestic
emergency; as a part of the Active Guard Reserve; Air Sovereignty
Alert; Operation Jump Start; in response to Hurricane Katrina; as part
of an airport security mission; and as part of a counter-drug activity.
On average, the Army National Guard has the largest number of
beneficiaries in other education benefit programs, including Reserve
Educational Assistance Program (REAP) as well as the Montgomery GI
Bill--Selected Reserve program. The Air National Guard has the third
largest number of beneficiaries in these programs. Enrollments in these
programs would be impacted negatively by making title 32 active duty
service as qualifying service under the Post-9/11 GI Bill.
Views
VA does not oppose the intent to make administration of the Post-9/
11 GI Bill more equitable across different groups with similar service
records. However, because the Budget does not include the additional
costs that this legislation would incur, VA cannot support H.R. 3554.
In addition, the administration of the Post-9/11 GI Bill would be
impacted by both the anticipated increase in the number of individuals
who would qualify for the Post-9/11 GI Bill and the manual process of
determining eligibility. VA currently receives some servicemember and
service period data electronically from Department of Defense for
individuals who served under title 32 U.S.C. and are eligible for
either the Montgomery GI Bill - Active Duty, REAP, and Montgomery GI
Bill-Select Reserve. However, because this bill would make everyone
with title 32 service eligible for the Post-9/11 GI Bill, VA and DoD
would need to manually verify servicemember and service period data
until a mechanism was in place for all title 32 service data to be
electronically exchanged.
Cost Estimate
Benefit costs to VA are expected to be $120.6 million in 2011, $1.1
billion over 5 years and $2.3 billion over 10 years. This proposed
legislation would result in an eligible population beginning in Fiscal
Year 2010; however, the costs associated would be insignificant until
2011, and can be absorbed in the baseline budget for FY 2010.
Methodology
For purposes of this cost estimate, enactment date is assumed to be
October 1, 2010. Based on data from DoD, the proposed legislation would
grant chapter 33 eligibility to an additional 23,785 soldiers that,
under current law, do not have qualifying service, but have title 32
active duty service since September 11, 2001. This increase in
servicemembers eligible for chapter 33 was projected for FY 2011 and
annualized for FY 2012-2020. Other assumptions, including participation
rates, benefit eligibility rates, cost of tuition, and cost-of-living
adjustments are consistent with the assumptions used to prepare the FY
2010 mid-session budget review used to update the FY 2010 Congressional
submission. The increase in chapter 33 obligations is displayed in the
table below.
Under the proposed legislation, servicemembers activated under
title 32 most likely would elect to receive benefits under chapter 33
because it is a larger benefit than they may have otherwise been
eligible for (chapters 30, 1606 and 1607). As a result, there would be
less participation in chapter 30 resulting in a decrease in chapter 30
obligations to VA. Additionally, participation and obligations for
chapter 1606 would decrease. Note that the decrease in chapter 1606
obligations will decrease the VA gross obligations. However, since
chapter 1606 payments made by VA are reimbursed by DoD, the
reimbursements from DoD will decrease by the same amount. The VA net
obligations, therefore, will not be affected by the decrease in chapter
1606 obligations. Chapter 1607 obligations are expected to be zero for
FY 2011-2020, and therefore will not be affected by the proposed
legislation.
----------------------------------------------------------------------------------------------------------------
VA Chapter VA Chapter DoD Chapter Total VA
33 30 1606 Net
Fiscal Year Caseload Obligations Obligations Obligations Obligations
($000s) ($000s) ($000s) ($000s)
----------------------------------------------------------------------------------------------------------------
2011 8,146 $155,478 ($34,831) ($5,387) $120,647
2012 13,641 $270,832 ($59,668) ($9,148) $211,164
2013 14,378 $297,529 ($64,343) ($9,806) $233,186
2014 14,620 $315,908 ($66,929) ($10,170) $248,979
2015 13,287 $299,966 ($62,228) ($9,428) $237,738
5-Year Total $1,339,714 ($287,998) ($43,938) $1,051,716
2016 11,960 $282,265 ($57,298) ($8,656) $224,967
2017 11,352 $280,237 ($55,635) ($8,380) $224,602
2018 11,516 $297,637 ($57,735) ($8,680) $239,902
2019 12,327 $328,711 ($63,220) ($9,486) $265,491
2020 13,659 $377,086 ($71,663) ($10,732) $305,423
10-Year Total $2,905,649 ($593,550) ($89,872) $2,312,099
----------------------------------------------------------------------------------------------------------------
H.R. 3561 Views and Cost Estimate
Issue
H.R. 3561, 111th Congress.
Purpose
To amend title 38 to increase the amount of educational assistance
provided to certain Veterans for flight training.
Background
Currently, under section 3032(e)(1) of title 38, U.S.C., an
individual pursuing a program of education consisting exclusively of
flight training receives 60 percent of the established charges for
tuition and fees.
This legislation proposes to amend subsection (e) (1) of section
3032 to increase the amount of educational assistance provided to
certain Veterans pursuing flight training from 60 percent to 75
percent.
Views
VA does not oppose the intent to enable Veterans to use their
benefits to pursue a wider variety of educational programs. However,
because the Budget does not include the additional costs that this
legislation would incur, VA cannot support H.R. 3561. If enacted, this
legislation would increase costs to pay for flight training to
individuals under the Montgomery GI Bill Educational Assistance program
and Reserve Educational Assistance program (REAP). The REAP rates are
derived from the Montgomery GI Bill rate of approved charges and by the
length of service of the reservist.
Cost Estimate
Benefit costs to VA are expected to be $2.1 million in the first
year, $10.6 million over 5 years and $21.2 million over 10 years.
Methodology
For purposes of this cost estimate, enactment date is assumed to be
October 1, 2009. Based on historical data from FY 2006-FY 2008,
caseload and costs have averaged 800 and $10,617 respectively and have
remained at a consistent level annually. We assumed that the average
cost of $10,617 represents 60 percent of the total cost for flight
training, and calculated the increase in average cost that would result
from the amount of educational assistance provided for flight training
from 60 percent to 75 percent. This increase was then applied to the
caseload of 800 annually to calculate the total cost to VA.
------------------------------------------------------------------------
Fiscal Year Caseload Cost ($000)
------------------------------------------------------------------------
2010 800 $2,124
2011 800 $2,124
2012 800 $2,124
2013 800 $2,124
2014 800 $2,124
5-Year Total $10,622
2015 800 $2,124
2016 800 $2,124
2017 800 $2,124
2018 800 $2,124
2019 800 $2,124
10-Year Total $21,243
------------------------------------------------------------------------
H.R. 3577 Views and Cost Estimate
Issue
H.R. 3577, ``Education Assistance to Realign New Eligibilities for
Dependents (EARNED) Act of 2009.'' 111th Congress.
Purpose
To amend title 38 to provide authority for certain members of the
Armed Forces who have served 20 years on active duty to transfer
entitlement to Post-9/11 Educational Assistance to their dependents.
Background
Public Law 110-252 authorized the Department of Defense (DoD) to
allow individuals who, on or after August 1, 2009, have served at least
6 years in the Armed Forces and agree to serve at least an additional 4
years in the Armed Forces to transfer unused entitlement to their
dependents (spouse, children). This program serves primarily as a
recruitment and retention tool for DoD to offset increased separations
due to the more advantageous Post-9/11 GI Bill. DoD is responsible for
determining who is eligible to transfer unused entitlement. The
Department of Veteran Affairs (VA) is responsible for administering and
paying the individual's claim for education benefits.
This legislation proposes to amend title 38 U.S.C. Sec. 3319 (b) to
include additional individuals as eligible to transfer entitlement
under the Post-9/11 GI Bill. Eligible individuals would include those
with 20 years of active duty service in the Armed Forces, as of any
date between September 11, 2001, and July 31, 2009, including at least
90 days of such service after September 11, 2001, who were honorably
discharged. This legislation is effective date of enactment and shall
take effect as if included in Public Law 110-252.
Section 3319(a) provides the Secretary of Defense sole authority to
determine who may transfer benefits. VA is responsible for payment of
benefits to those family members approved to receive benefits. Members
of the Armed Forces requesting approval to transfer unused entitlement
do so through a web portal operated by DoD. DoD officials approve an
individual's request and pass information electronically to VA. VA uses
the electronic information to determine if the family member applying
for benefits is authorized to use the benefits. Currently, retirees do
not have access to DoD's web portal to seek approval by DoD to transfer
benefits.
If enacted as currently written, DoD would be responsible for
determining which retirees are eligible to transfer, the amount of
benefits the retiree may transfer, and providing that approval
information to VA.
Views
Since the intent of the transferability provisions of the Post-9/11
GI Bill was to serve as a recruitment and retention tool for DoD to
offset increased separations, VA defers to DoD in regards to the merits
and impact of expanding eligibility to include individuals who have
already separated/retired. However, because the bill would generate
benefit costs not accounted for in the Budget, VA does not support H.R.
3577.
VA also notes that VA and DoD would need to develop an application
process for these individuals to transfer their Post-9/11 GI Bill
entitlement. This would be necessary because this proposed legislation
would be effective on the date of enactment and DoD does not currently
have a mechanism for retirees to request approval to transfer unused
entitlement. This would result in a considerable delay in VA's ability
to pay claims under this program.
Cost Estimate
Benefit costs to VA are expected to be $618.1 million in 2010, $2.4
billion over 5 years, and $4.2 billion over 10 years. The $618.1
million cost during 2010 includes $121.4 million in retroactive
payments for costs incurred during August and September 2009.
Methodology
Based on data provided by DoD, VA estimated the number of Veterans
that would meet the following eligibility requirements for
transferability under this bill: an honorable discharge and 20 years of
active duty service in the Armed Forces as of any date between
September 11, 2001, and July 31, 2009, including at least 90 days of
such service after September 10, 2001. The assumptions for usage and
average cost are consistent with those used to calculate costs to VA
for those currently eligible for this benefit. Estimated costs to VA
are shown in the table below.
------------------------------------------------------------------------
Fiscal Year Caseload Cost ($000)
------------------------------------------------------------------------
2010 34,429 $618,072
2011 40,772 $683,130
2012 29,899 $457,576
2013 19,027 $305,789
2014 19,027 $318,352
5-Year Total $2,382,918
2015 19,027 $331,598
2016 19,027 $345,568
2017 19,027 $360,307
2018 19,027 $375,864
2019 19,027 $379,922
10-Year Total $4,176,177
------------------------------------------------------------------------