[Congressional Record Volume 143, Number 94 (Monday, July 7, 1997)]
[Senate]
[Pages S6910-S6912]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER (by request):
  S. 987. A bill to amend title 38, United States Code, to authorize a 
cost-of-living adjustment in the rates of disability compensation for 
veterans with service-connected disabilities and dependency and 
indemnity compensation for survivors of such veterans and to revise and 
improve certain veterans compensation, pension, and memorial affairs 
programs; and for other purposes; to the Committee on Veterans' 
Affairs.


   the veterans' compensation cost-of-living adjustment and benefits 
                    program improvement act of 1997

  Mr. SPECTER. Mr. President, as chairman of the Committee on Veterans' 
Affairs, I have today introduced, at the request of the Secretary of 
Veterans' Affairs, S. 987, the proposed Veterans' Compensation Cost-of-
Living Adjustment and Benefits Program Improvement Act of 1997. The 
Secretary of Veterans Affairs submitted this legislation to the 
President of the Senate by letter dated May 9, 1997.
  My introduction of this measure is in keeping with the policy which I 
have adopted of generally introducing--so that there will be specific 
bills to which my colleagues and others may direct their attention and 
comments--all administration-proposed draft legislation referred to the 
Committee on Veterans' Affairs. Thus, I reserve the right to support or 
oppose the provisions of, as well as any amendment to, this 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record, together with the transmittal letter which 
accompanied it.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 987

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

     SECTION 1. SHORT TITLE; REFERENCES TO TITLE 38, UNITED STATES 
                   CODE.

       (a) Short Title.--This Act may be cited as the ``Veterans' 
     Compensation Cost-of-Living Adjustment and Benefit Programs 
     Improvement Act of 1997''.
       (b) References.--Except as otherwise expressly provided, 
     whenever in this Act an amendment or repeal is expressed in 
     terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of title 38, United States Code.

                   TITLE I--COMPENSATION AND PENSIONS

     SEC. 101. INCREASE IN COMPENSATION RATES AND LIMITATIONS.

       (a) In General.--(1) The Secretary of Veterans Affairs 
     shall, as provided in paragraph (2), increase, effective 
     December 1, 1997, the rates of and limitations on Department 
     of Veterans Affairs disability compensation and dependency 
     and indemnity compensations.
       (2) The Secretary shall increase each of the rates and 
     limitations in sections 1114, 1115(1), 1162, 1311, 1313, and 
     1314 of title 38, United States Code, that were increased by 
     the amendments made by the Veterans' Compensation Cost-of-
     Living Adjustment Act of 1996 (Public Law 104-263; 110 Stat. 
     3212). This increase shall be made in such rates and 
     limitations as in effect on November 30, 1997, and shall be 
     by the same percentage that benefit amounts payable under 
     title II of the Social Security Act (42 U.S.C. 401 et seq.) 
     are increased effective December 1, 1997, as a result of a 
     determination under section 215(i) of such Act (42 U.S.C. 
     415(i)).
       (b) Special Rule.--The Secretary may adjust 
     administratively, consistent with the increases made under 
     subsection (a)(2), the rates of disability compensation 
     payable to persons within the purview of section 10 of Public 
     Law 85-857 (72 Stat. 1263) who are not in receipt of 
     compensation payable pursuant to chapter 11 of title 38, 
     United States Code.
       (c) Publication Requirement.--At the same time as the 
     matters specified in section 215(i)(2)(D) of the Social 
     Security Act (42 U.S.C. 415(i)(2)(D)) are required to be 
     published by reason of a determination made under section 
     215(i) of such Act during fiscal year 1998, the Secretary 
     shall publish in the Federal Register the rates and 
     limitations referred to in subsection (a)(2) as increased 
     under this section.

     SEC. 102. ROUNDING DOWN OF COMPENSATION-RATE INCREASES

       In computing rates and limitations pursuant to legislation 
     enacted for fiscal years 1998 and thereafter which increases 
     by a specified percentage, or which directs the Secretary of 
     Veterans Affairs to adjust administratively, the rates and 
     limitations in sections 1114, 1115(1), 1162, 1311, 1313, and 
     1314 of title 38, United States Code, the Secretary of 
     Veterans Affairs shall round down to the next lower whole-
     dollar amount any amount which as so computed is not an even 
     multiple of $1.

     SEC. 103. EXTENSION OF INCOME-VERIFICATION AUTHORITY.

       (a) Section 5317 is amended by striking out subsection (g).
       (b) Subparagraph (D) of section 6103(1)(7) of the Internal 
     Revenue Code of 1986 (relating to disclosure of return 
     information to Federal, State, and local agencies 
     administering certain programs) is amended by striking 
     ``Clause (viii) shall not apply after September 30, 1998.''.

     SEC. 104. EXTENSION OF LIMITATION ON PENSION FOR CERTAIN 
                   RECIPIENTS OF MEDICAID-COVERED NURSING HOME 
                   CARE.

       Section 5503(f) is amended by striking out paragraph (7).

     SEC. 105. PROHIBITION REGARDING PAYMENT OF COMPENSATION FOR 
                   DISABILITY OR DEATH DUE TO TOBACCO USE.

       (a) Service Connection.--Chapter 11 is amended by adding at 
     the end of subchapter I the following new section:

     ``Sec. 1103. Special provisions relating to claims based upon 
       effects of tobacco products

       ``(a) Notwithstanding any other provision of law, a 
     veteran's disability or death shall not be considered to have 
     resulted from personal injury suffered or disease contracted 
     in line of duty in the active military, naval, or air service 
     for purposes of this title on the basis that it resulted from 
     injury or disease attributable in whole or in part to the use 
     of tobacco products by the veteran during the veteran's 
     service.
       ``(b) Nothing in subsection (a) shall be construed as 
     precluding the establishment of service connection for 
     disability or death from a disease or injury which became 
     manifest or was aggravated in active military, naval or air 
     service or became manifest to the requisite degree of 
     disability during any applicable presumptive period specified 
     in section 1112 or 1116 of this title.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 11 is amended by adding the following 
     new item after the item relating to section 1102: ``1103. 
     Special provisions relating to claims based upon effects of 
     tobacco products.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to claims filed after the date of enactment of 
     this Act.

     SEC. 106. REIMBURSEMENT OF COSTS ASSOCIATED WITH COMPENSATION 
                   AND PENSION MEDICAL EXAMINATIONS.

       (a) Authorization.--Chapter 77 of title 38, United States 
     Code, is amended by adding at the end of subchapter I the 
     following new section:

     ``7705. Reimbursement for compensation and pension medical 
       examinations

       ``(a) Reimbursement.--The Under Secretary for Benefits is 
     authorized to reimburse the Veterans Health Administration 
     for costs associated with the conduct of medical examinations 
     requested by the Veterans Benefits Administration in 
     connection with claims for benefits under this title.
       ``(b) Source of Funds.--Reimbursements under this section 
     shall be made from amounts available to the Secretary of 
     Veterans Affairs for payment of general operating 
     expenses.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 77 is amended by adding the following 
     new item after the item relating to section 7703: ``7705.

[[Page S6911]]

     Reimbursement for compensation and pension medical 
     examinations.''.

                       TITLE II--MEMORIAL AFFAIRS

     SEC. 201. STATE CEMETERY GRANTS PROGRAM.

       (a)(1) Amount of Grant Relative to Project Cost.--Section 
     2408(b) is amended by striking out paragraphs (1) and (2) and 
     inserting in lieu thereof the following:
       ``(1) The amount of any grant under this section may not 
     exceed--
       ``(A) in the case of the establishment of a new cemetery, 
     the total of--
       ``(i) the cost of improvements to be made on the land to be 
     converted into a cemetery, and
       ``(ii) the initial cost of equipment necessary to operate 
     the cemetery; or
       ``(B) in the case of the expansion or improvement of an 
     existing cemetery, the total of--
       ``(i) the cost of improvements to be made on any land to be 
     added to the cemetery, and
       ``(ii) the cost of any improvements to be made to the 
     existing cemetery.
       ``(2) If the amount of a grant under this section is less 
     than the amount of costs referred to in paragraph (1), the 
     State receiving the grant shall contribute the amount by 
     which the costs exceed the grant, in addition to any land 
     acquired or dedicated by the State for the cemetery.''.
       (2) Effective Date.--The amendment made by this subsection 
     shall become effective 60 days after the date of enactment of 
     this Act.
       (b) Authorization of No-Year Appropriations.--Section 
     2408(d) is amended by striking out ``the end of the second 
     fiscal year following the fiscal year for which they are 
     appropriated'' and inserting in lieu thereof ``expended''.
                                                                    ____



                            The Secretary of Veterans Affairs,

                                      Washington, DC, May 9, 1997.
     Hon. Albert Gore, Jr.,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: Transmitted herewith is a draft bill, 
     the ``Veterans' Compensation Cost-of-Living Adjustment and 
     Benefit programs Improvement Act of 1997,'' to authorize a 
     cost-of-living adjustment (COLA) for fiscal year (FY) 1998 in 
     the rates of disability compensation and dependency and 
     indemnity compensation (DIC), and to revise and improve 
     certain veterans compensation, pension, and memorial affairs 
     programs, and for other purposes. I request that this draft 
     bill be referred to the appropriate committee for prompt 
     consideration and enactment.
       Section 101 of the draft bill would direct the Secretary of 
     Veterans Affairs to increase administratively the rates of 
     compensation for service-disabled veterans and of DIC for the 
     survivors of veterans whose deaths are service related, 
     effective December 1, 1997. The rate of increase would be the 
     same as the COLA that will be provided under current law to 
     veterans' pension and Social Security recipients, which is 
     currently estimated to be 2.7 percent. We believe this 
     proposed COLA is necessary and appropriate in order to 
     protect the benefits of these most deserving recipients from 
     the eroding effects of inflation. We estimate that enactment 
     of this section, in conjunction with section 102 of this 
     draft bill, would result in benefit costs of $330.7 million 
     during FY 1998 and $1.94 billion over the five-year period 
     beginning in FY 1998. The costs associated with the 
     compensation COLA are considered to be part of the 
     compensation baseline and not subject to the pay-as-you-go 
     provisions of the Omnibus Budget Reconciliation Act of 1990.
       Section 102 would require the Secretary of Veterans 
     Affairs, in computing new rates of (or limitations affecting) 
     disability compensation and DIC pursuant to the enactment of 
     any legislation requiring the Secretary to increase such 
     rates to provide a COLA for fiscal year 1998 and thereafter, 
     to round down to the next lower whole dollar any rate that is 
     not evenly divisible by one dollar. This proposal is 
     consistent with the congressionally-mandated calculation 
     methods applied to COLA's for fiscal years 1994, 1995, and 
     1996. We estimate this proposal would reduce FY 1998 benefit 
     cost associated with the COLA proposed in section 101 of this 
     draft bill by $17 million and reduce the five-year benefit 
     cost for FY 1998 through FY 2002 by $287 million, as 
     compared to the cost of the COLA and future COLAs based on 
     rounding odd dollar amounts to the nearest whole dollar. 
     The savings are subject to the pay-as-you-go provisions of 
     the Omnibus Budget Reconciliation Act of 1990.
       Section 103 would amend titles 26 and 38 of the United 
     States Code to make permanent the authority of the Department 
     of Veterans Affairs (VA) to access unearned income 
     information from the Internal Revenue Services (IRS) and 
     wage, self-employment, and retirement income information from 
     the Social Security Administration (SSA) for purposes of 
     income verification in determining eligibility for VA means-
     tested benefits such as pension and medical care for certain 
     non-service-related illnesses or conditions.
       Experience has shown that authority to match unearned 
     income information from IRS and wage, self-employment, and 
     retirement income information from SSA with VA data for 
     purposes of income verification in determining eligibility 
     for or the proper amount of VA means-tested benefits has been 
     an effective savings measure and has had a significant 
     program-abuse deterrent effect. We estimate that enactment of 
     this proposal would result in savings in monetary benefits of 
     $10 million in FY 1999 and $120 million during the four-year 
     period beginning in FY 1999. These savings are subject to the 
     pay-as-you-go provisions of the Omnibus Budget Reconciliation 
     Act of 1990.
       Section 104 should amend section 5503(f) of title 38, 
     United States Code, to make permanent the $90 limitation on 
     monthly VA pension payments that may be made to 
     beneficiaries, without dependents, who are receiving 
     Medicaid-covered nursing-home care. The current payment 
     limitation, which is due to expire at the end of fiscal year 
     1998, works to the advantage of these nursing-home residents 
     because it permits them to keep the $90 to apply toward 
     personal expenses rather than have it ``pass through'' to the 
     Medicaid program. This section would simply remove the 
     existing September 30, 1998, expiration date for section 
     5503(f). We estimate this proposal would result in 
     government-wide savings because a beneficiary's nursing-home 
     care costs, previously paid for with VA pension benefits, 
     would be paid for by the Medicaid program, which shares a 
     portion of the costs with the States. Government-wide savings 
     are estimated to be $206 million in FY 1999 and a total of 
     $893 million during the four-year period beginning in FY 
     1999.
       Under current law, direct service connection of a 
     disability or death may be established if the evidence 
     establishes that injury or disease resulted from tobacco use 
     in line of duty in the active military, naval, or air 
     service, notwithstanding that the disability or death did 
     not occur until after service and expiration of any 
     applicable presumptive period. Section 105 would amend 
     tile 38, United States Code, by adding a new section that 
     would have the effect of prohibiting service connection of 
     a death or disability on the basis that it resulted from 
     injury or disease attributable, in whole or in part, to 
     the use of tobacco products by the veteran during the 
     veteran's service. This amendment is consistent with the 
     1990 budget reconciliation act, in which Congress 
     prohibited compensation for disabilities which are the 
     result of veterans' abuse of alcohol and drugs. This was 
     fiscally responsible action which enhanced the integrity 
     of our compensation program, and our proposal regarding 
     tobacco use is offered in that same spirit. In addition, 
     claims based upon tobacco-related disorders present 
     medical and legal issues which could impede ongoing 
     efforts to speed claim processing by placing significant 
     additional demands on the adjudicative system. This 
     provision would not preclude establishment of service 
     connection for disability or death from a disease or 
     injury which became manifest or was aggravated during 
     active service or became manifest to the requisite degree 
     of disability during any applicable presumptive period 
     specified in section 1112 or 1116 of title 38, United 
     States Code. This amendment would apply to claims filed 
     after the date of its enactment.
       This provision would result in some level of benefit cost 
     avoidance and avoid potential delays in claim processing 
     resulting from increased workload.
       Section 106 would authorize the Veterans Benefits 
     Administration (VBA) to reimburse, from the general operating 
     expenses account, the Veterans Health Administration (VHA) 
     for the cost of medical examinations conducted with respect 
     to veterans' claims for compensation or pension. Currently, 
     such examinations are paid for out of VA's medical-care fund.
       In order to assure the funding for compensation and pension 
     medical examinations is available throughout FY 1998, 
     appropriate language would need to be included in both the 
     ``Medical care'' and ``General operating expenses'' 
     appropriations. It is contemplated that VBA will enter into a 
     memorandum of understanding with VHA to provide that, should 
     funds budgeted under general operating expenses for the 
     purpose of ``purchasing'' compensation and pension medical 
     examinations prove insufficient, alternate funding under 
     ``Medical care'' would be available to permit VHA to continue 
     to provide these examinations. Medical care funds would be 
     used for this purpose only in the event of a shortfall in 
     general operating expenses. There are no costs or savings 
     associated with this proposal.
       Section 201(a) would amend section 2408(b) of title 38, 
     United States Code, to make state cemetery grants more 
     attractive to States. Section 2408 authorizes the Secretary 
     of Veterans Affairs to make grants to States to assist them 
     in establishing, expanding, or improving State veterans' 
     cemeteries. Currently, the amount of a State cemetery grant 
     is limited to 50 percent of the total of the value of the 
     land to be acquired or dedicated for a cemetery and the cost 
     of improvement to be made on the land. The remaining amount 
     must be contributed by the State receiving the grant. 
     Pursuant to the amendments proposed in this section, the 
     amount of a State cemetery grant could not exceed, in the 
     case of the establishment of a new cemetery, the total of the 
     cost of improvements to be made on land to be converted into 
     a cemetery and the initial cost of equipment necessary to 
     operate the cemetery. In the case of the expansion or 
     improvement of an existing cemetery, the amount of the grant 
     could not exceed the total of the cost of improvements to be 
     made on any land to be added to the cemetery combined with 
     the cost of improvements to be made to the existing cemetery. 
     If the amount of a grant should, for any reason, be less than 
     the amount of those costs, the State receiving the grant 
     would be required

[[Page S6912]]

     to contribute the remaining amount, in addition to providing 
     any land necessary for the cemetery project.
       Also, under current law, if at the time of a grant the 
     State receiving the grant dedicates for the cemetery land 
     which it already owns, the value of the land may constitute 
     up to 50 percent of the State's contribution. Once that land 
     value is so used, it may not constitute part of the State's 
     contribution for any subsequent grant under section 2408. 
     Under the amendments proposed in section 201(a) of this draft 
     bill, a State would be responsible for providing any land 
     required for a cemetery project, since the grant amount would 
     not longer be based partly on the value of land to be 
     acquired or dedicated for a cemetery.
       We believe that excluding the value of land to be acquired 
     for a cemetery from the basis of a grant would encourage 
     states to be active partners in the cemetery grants program. 
     In our experience, no State has acquired land for a cemetery 
     in connection with a grant under section 2408. In every case, 
     the State has dedicated land that was donated or transferred 
     for that purpose, or land that it already owned. Further, any 
     reduction of the basis from which a grant is calculated may 
     be offset by an increase from 50 percent to up to 100 percent 
     in the proportion of the amount of a project's cost that 
     could be assumed by the Federal Government. Moreover, since, 
     under the proposal, a grant may cover the entire cost of 
     improvements (and initial cost of equipment in certain 
     cases), a State may not have to contribute cash toward the 
     initial cost of a project.
       Another feature that would make grants more attractive to 
     States is the inclusion in the basis of a grant of the 
     initial cost of equipment necessary to operate the cemetery. 
     Providing funds to acquire the equipment necessary to operate 
     a cemetery will, we believe, be a critical financial 
     incentive to encourage States to establish new cemeteries. 
     Such equipment is as essential to the establishment of an 
     operational cemetery as are the land and the improvements 
     made on it. However, because our proposed amendment includes 
     only the initial cost of equipment for the establishment of a 
     cemetery, the State would retain the responsibility for long-
     term maintenance and operation of the cemetery, including 
     costs associated with the acquisition of replacement 
     equipment. Each Federal grant would assist in the 
     establishment and activation of new veterans' cemeteries, or 
     in the expansion or improvement of existing cemeteries, but 
     the States would bear the costs of continuing operation and 
     long-term maintenance.
       Section 201(b) of the draft bill would authorize ``no-
     year'' appropriations for the State cemetery grants program. 
     Under current 38 U.S.C. Sec. 2408(d), funds appropriated for 
     State cemetery grants remain available only until the end of 
     the second fiscal year following the fiscal year for which 
     they are appropriated. However, in Public Law No. 104-204, 
     110 Stat. 2874 (1996), Congress appropriated funds for State 
     cemetery grants, ``to remain available until expended.'' 
     Section 201(b) would amend section 2408(d) to reflect this 
     no-year-funding policy.
       The Office of Management and Budget advises that there is 
     no objection to the submission of this draft bill to the 
     Congress, and that its enactment would be in accord with the 
     Administration's program.
           Sincerely yours,
                                                      Jesse Brown.
                                 ______