[Congressional Record (Bound Edition), Volume 146 (2000), Part 14]
[Extensions of Remarks]
[Pages 19918-19919]
[From the U.S. Government Publishing Office, www.gpo.gov]



                 VETERANS' FAMILY FARM PRESERVATION ACT

                                 ______
                                 

                            HON. LANE EVANS

                              of illinois

                    in the house of representatives

                      Tuesday, September 26, 2000

  Mr. EVANS. Mr. Speaker, on September 25, 2000, I introduced H.R. 
5271, the ``Veterans' Family Farm Preservation Act'', to make it 
possible for more wartime veterans and their survivors to qualify for 
pension benefits from the Department of Veterans Affairs (VA) without 
being forced to sell their family farms and ranches. This legislation 
will also benefit low-income veterans who seek to obtain health care 
from VA.
  The productivity of America's family farms is undisputed. Family 
farms and ranches feed our Nation. Family members and unpaid workers 
account for 70% of farm labor in the

[[Page 19919]]

United States. While America's family farmers and ranchers are 
unmatched in their productivity, they have little or no control over 
many factors which determine the economic results of their labor.
  Veterans who have gone in harm's way and placed their lives on the 
line by serving our nation in the Armed Forces should not be asked to 
relinquish their family farm in order to qualify for veterans' 
benefits. Unfortunately, that is what is occurring today. The Veterans' 
Family Farm Preservation Act addresses this problem.
  Pension benefits administered by the Department of Veterans Affairs 
(VA) are payable to wartime veterans who are totally and permanently 
disabled due to a non-service connected medical condition. A small, but 
important number of these disabled wartime veterans own family farms or 
ranches, which provide the livelihood for their families. Most family 
farms in the United States are very small. Over 75% of family farms 
have less than $50,000 in gross annual sales. After deductions for 
costs of operating the farm or ranch, the net income of the family 
farmer is much lower. Farmers receive an average of 20 cents for every 
dollar of produce sold. In 1995, the average net farm income for very 
small farms was $510. The average net family income for small farms 
with gross sales between $50,000 and $250,000 averaged $14,335. Clearly 
most family farmers have modest annual income.
  In determining eligibility for pension benefits, VA is required to 
consider not only the family income, but also the family's ``net 
worth.'' Currently, unless VA determines that the land can be sold at 
``no substantial sacrifice'', the value of farm and ranch land is 
included in determining net worth. Some veteran farmers are ``land 
rich.'' While having little or no liquid assets, the value of their 
land makes their ``net worth'' appear larger on paper.
  On May 25, 2000, Senator Grassley and I wrote to VA's Under Secretary 
for Benefits, Joseph Thompson, requesting that he recognize the unique 
nature of a family farm and take immediate steps to address the need 
for a fair evaluation of the eligibility of our Nation's family farmers 
for veteran's pension benefits. On June 27, 2000, Mr. Thompson replied 
indicating that VA viewed a family farm in the same light as interest-
producing bank deposits or securities.
  Family farms are important not only for the food and fiber they 
produce, but also for the values they represent. Family farms should 
not be considered as simply substitutes for liquid bank accounts or 
other liquid assets.
  In good years, family farms and ranches provide an adequate income. 
In bad times, adverse crop conditions or illness, the income and liquid 
resources of family farmers and ranchers are quickly depleted. Wartime 
veterans have made a substantial sacrifice on behalf of our Nation by 
serving in the Armed Forces. We should not ask them to sacrifice their 
family farms in order to receive the assistance they have earned by 
their wartime service.
  I believe that an operating family farm can never be liquidated 
without substantial sacrifice on the part of the veteran. It is never 
reasonable to require a veteran to sell his or her means of future 
livelihood in order to obtain pension benefits or VA health care. If 
the farm is sold, the assets which in future years can be expected to 
generate income for the veteran and the veteran's dependents, are 
permanently lost.
  The Veterans' Family Farm Preservation Act would exempt farm and 
ranch land owned by the veteran and the veteran's dependents from being 
counted in determining net worth. The bill would also exclude land used 
for similar agricultural purposes, such as timberland, Christmas tree 
farms, or horticultural purposes.
  During the past century, the number of family farms in our country 
has declined dramatically. When a veteran is required to sell his or 
her farm in order to receive necessary VA assistance, another family 
farm may be lost forever. No veteran should be called on to make this 
additional sacrifice. I urge my colleagues to support H.R. 5271, the 
Veterans' Family Farm Preservation Act. America's family farmers and 
ranchers deserve no less.
  Mr. Speaker, I request the response which the Honorable Joseph 
Thompson, Under Secretary for Benefits of the Department of Veterans 
Affairs, sent to me and Senator Grassley concerning VA's valuation of 
farm lands be included in the Congressional Record at this point.


                                   Department of Veterans Affairs,


                             Veterans Benefits Administration,

                                    Washington, DC, June 27, 2000.
     Hon. Lane Evans,
     Ranking Democratic Member, Committee on Veterans' Affairs, 
         U.S. House of Representatives, Washington, DC.
       Dear Congressman Evans: This is in response to your letter 
     of May 25, 2000, concerning the issue of net worth as it 
     applies to the non service-connected pension program 
     administered by the Department of Veterans Affairs (VA).
       In order to qualify for our pension program, a veteran is 
     required to be permanently and totally disabled. Generally, 
     there are relatively few instances where an individual who is 
     operating a working farm meets the basic requirements for 
     pension eligibility. Although there is no such disability 
     requirement for surviving spouse claimants, it is our belief 
     that an individual operating a farm or other business with 
     assets that could be converted to substantial amounts of cash 
     should not qualify for pension. We view the operator of a 
     business in the same light as an individual owning rental 
     property or an owner of interest-producing bank deposits or 
     securities.
       VA pension, similar to Supplemental Security Income (SSI), 
     is intended to provide an income supplement for needy 
     individuals and not to allow beneficiaries to build up 
     substantial assets. Although countable income limitations for 
     VA pension are in the same range as those for SSI, our net 
     worth guideline of $50,000 for the preparation of an 
     administrative decision is more generous than SSI's $2,000 
     for an individual and $3,000 for a couple.
       As you pointed out, our procedural manual, M21-1, indicates 
     that a determination of excessive net worth is a question of 
     fact for resolution after the consideration of the facts and 
     circumstances in each case. The $50,000 guideline is not to 
     be interpreted as a strict, mechanical limitation. We will 
     issue clarifying guidance on that point.
       We are also conducting an analysis of our recent net worth 
     determinations. Based on these results we will decide whether 
     additional changes to our rules and procedures are 
     appropriate. At that time, we will also consider whether the 
     $50,000 guideline should be increased. You will be apprised 
     of our results.
       In April 2000, representatives from the Veterans Health 
     Administration and the Veterans Benefits Administration met 
     with Senator Grassley, members of his staff, farmers and 
     their representatives in Des Moines, Iowa. We understood 
     their concerns and informed them about our efforts to address 
     their concerns.
       Our reports show that between December 1997 and December 
     1999, an average of 213 beneficiaries had their pension 
     benefits terminated for excessive net worth. In FY 1999, 
     there were 131 terminations for excessive net worth. 
     Unfortunately, no data are available on the number of 
     claimants who are disallowed for excessive net worth, or the 
     number of administrative decisions made annually on the issue 
     of net worth or the type of assets involved.
       I hope this information is helpful to you. I am providing 
     Senator Grassley a similar response.
           Sincerely,
                                                  Joseph Thompson.

     

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