[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

                              ----------                              

        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
------------------------------------------------------------------------

                                 
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