[House Report 108-683]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 108-683
======================================================================
SERVICEMEMBERS AND VETERANS LEGAL PROTECTIONS ACT OF 2004
_______
September 13, 2004.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Smith of New Jersey, from the Committee on Veterans' Affairs,
submitted the following
R E P O R T
[To accompany H.R. 4658]
[Including cost estimate of the Congressional Budget Office]
The Committee on Veterans' Affairs, to whom was referred the
bill (H.R. 4658) to amend the Servicemembers Civil Relief Act
to make certain improvements and technical corrections to that
Act, having considered the same, reports favorably thereon with
amendments and recommends that the bill as amended do pass.
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Servicemembers and
Veterans Legal Protections Act of 2004''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--IMPROVEMENTS TO SERVICEMEMBERS CIVIL RELIEF ACT
Sec. 101. Clarification of meaning of ``judgment'' as used in the Act.
Sec. 102. Requirements relating to waiver of rights under the Act.
Sec. 103. Right of servicemember plaintiffs to request stay of civil
proceedings.
Sec. 104. Termination of leases.
Sec. 105. Prevention of double taxation of certain servicemembers.
TITLE II--EMPLOYMENT AND REEMPLOYMENT RIGHTS
Subtitle A--Extension of Health Care Coverage
Sec. 201. Two-year period of continuation of employer-sponsored health
care coverage.
Sec. 202. Reinstatement of reporting requirements.
Subtitle B--Other Matters
Sec. 211. Requirement for employers to provide notice of rights and
duties under USERRA.
Sec. 212. Demonstration project for referral of USERRA claims against
Federal agencies to the Office of Special Counsel.
TITLE III--MATTERS RELATING TO FIDUCIARIES
Sec. 301. Definition of fiduciary.
Sec. 302. Inquiry, investigations, and qualification of fiduciaries.
Sec. 303. Misuse of benefits by fiduciaries.
Sec. 304. Additional protections for beneficiaries with fiduciaries.
Sec. 305. Annual report.
Sec. 306. Annual adjustment in benefits thresholds.
Sec. 307. Effective dates.
TITLE IV--OTHER MATTERS
Sec. 401. Inventory of medical waste management activities at
Department health-care facilities.
Sec. 402. Care for newborn children of veterans receiving maternity
care.
Sec. 403. Technical amendments to education program provisions.
TITLE I--IMPROVEMENTS TO SERVICEMEMBERS CIVIL RELIEF ACT
SEC. 101. CLARIFICATION OF MEANING OF ``JUDGMENT'' AS USED IN THE ACT.
Section 101 of the Servicemembers Civil Relief Act (50 U.S.C. App.
511) is amended by adding at the end the following new paragraph:
``(9) Judgment.--The term `judgment' means any judgment,
decree, order, or ruling, final or temporary.''.
SEC. 102. REQUIREMENTS RELATING TO WAIVER OF RIGHTS UNDER THE ACT.
Section 107 of the Servicemembers Civil Relief Act (50 U.S.C. App.
517) is amended--
(1) In subsection (a), by inserting after the first sentence
the following new sentence: ``Any such waiver that applies to
an action listed in subsection (b) of this section is effective
only if it is in writing and is executed as an instrument
separate from the obligation or liability to which it
applies.'';
(2) by redesignating subsection (c) as subsection (d); and
(3) by inserting after subsection (b) the following new
subsection (c):
``(c) Prominent Display of Certain Contract Rights Waivers.--Any
waiver in writing of a right or protection provided by this Act that
applies to a contract, lease, or similar legal instrument must be in at
least 12 point type.''.
SEC. 103. RIGHT OF SERVICEMEMBER PLAINTIFFS TO REQUEST STAY OF CIVIL
PROCEEDINGS.
Section 202(a) of the Servicemembers Civil Relief Act (50 U.S.C. App.
522(a)) is amended by inserting ``plaintiff or'' before ``defendant''.
SEC. 104. TERMINATION OF LEASES.
(a) Joint Leases.--Subsection (a) of section 305 of the
Servicemembers Civil Relief Act (50 U.S.C. App. 535) is amended to read
as follows:
``(a) Termination by Lessee.--
``(1) In general.--The lessee on a lease described in
subsection (b) may, at the lessee's option, terminate the lease
at any time after--
``(A) the lessee's entry into military service; or
``(B) the date of the lessee's military orders
described in paragraph (1)(B) or (2)(B) of subsection
(b), as the case may be.
``(2) Joint leases.--A lessee's termination of a lease
pursuant to this subsection shall terminate any obligation a
dependent of the lessee may have under the lease.''
(b) Motor Vehicles Leases.--
(1) Applicability to pcs orders from states outside conus.--
Subparagraph (B) of subsection (b)(2) of such section is
amended by striking ``military orders for'' and all that
follows through ``or to deploy'' and inserting ``military
orders--
``(i) for a change of permanent station--
``(I) from a location in the
continental United States to a location
outside the continental United States;
or
``(II) from a location in a State
outside the continental United States
to any location outside that State; or
``(ii) to deploy''.
(2) Definitions.--Such section is further amended by adding
at the end the following new subsection:
``(i) Definitions.--
``(1) Military orders.--The term `military orders', with
respect to a servicemember, means official military orders, or
any notification, certification, or verification from the
servicemember's commanding officer, with respect to the
servicemember's current or future military duty status.
``(2) Conus.--The term `continental United States' means the
48 contiguous States and the District of Columbia.''.
(c) Coverage of Individual Deployments.--Subsection (b) of such
section is further amended in paragraph (1)(B) and paragraph (2)(B)(ii)
(as designated by subsection (b) of this section) by inserting ``, or
as an individual in support of a military operation,'' after ``deploy
with a military unit''.
SEC. 105. PREVENTION OF DOUBLE TAXATION OF CERTAIN SERVICEMEMBERS.
Section 511(c) of the Servicemembers Civil Relief Act (50 U.S.C. App.
571(c)) is amended by adding at the end the following new paragraph:
``(5) Use, excise, or similar taxes.--A tax jurisdiction may
not impose a use, excise, or similar tax on the personal
property of a nonresident servicemember when the laws of the
tax jurisdiction fail to provide a credit against such taxes
for sales, use, excise, or similar taxes previously paid on the
same property to another tax jurisdiction.''.
TITLE II--EMPLOYMENT AND REEMPLOYMENT RIGHTS
Subtitle A--Extension of Health Care Coverage
SEC. 201. TWO-YEAR PERIOD OF CONTINUATION OF EMPLOYER-SPONSORED HEALTH
CARE COVERAGE.
(a) Improvement in Period of Coverage.--Subsection (a)(1)(A) of
section 4317 of title 38, United States Code, is amended by striking
``18-month period'' and inserting ``24-month period''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
to elections made under such section 4317 on or after the date of the
enactment of this Act.
SEC. 202. REINSTATEMENT OF REPORTING REQUIREMENTS.
Section 4332 of title 38, United States Code, is amended in the
matter preceding paragraph (1) by striking ``no later than February 1,
1996, and annually thereafter through 2000'' and inserting ``no later
than February 1, 2005, and annually thereafter''.
Subtitle B--Other Matters
SEC. 211. REQUIREMENT FOR EMPLOYERS TO PROVIDE NOTICE OF RIGHTS AND
DUTIES UNDER USERRA.
(a) Notice.--Chapter 43 of title 38, United States Code, is amended
by adding at the end the following new section:
``Sec. 4334. Notice of rights and duties
``(a) Requirement to Provide Notice.--Each employer shall provide to
persons entitled to rights and benefits under this chapter a notice of
the rights, benefits, and obligations of such persons and such
employers under this chapter. The requirement for the provision of
notice under this section may be met by the posting of the notice where
employers customarily place notices for employees.
``(b) Content of Notice.--The Secretary shall provide to employers
the text of the notice to be provided under this section.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is amended by adding at the end the following new item:
``4334. Notice of rights and duties.''.
(c) Implementation.--(1) Not later than the date that is 90 days
after the date of the enactment of this Act, the Secretary of Labor
shall make available to employers the notice required under section
4334 of title 38, United States Code, as added by subsection (a).
(2) The amendments made by this section shall apply to employers
under chapter 43 of such title on and after the first date referred to
in paragraph (1).
SEC. 212. DEMONSTRATION PROJECT FOR REFERRAL OF USERRA CLAIMS AGAINST
FEDERAL AGENCIES TO THE OFFICE OF SPECIAL COUNSEL.
(a) Establishment of Project.--The Secretary of Labor and the Office
of Special Counsel shall carry out a demonstration project under which
certain claims against Federal executive agencies under the Uniformed
Services Employment and Reemployment Rights Act under chapter 43 of
title 38, United States Code, are referred to, or otherwise received
by, the Office of Special Counsel for assistance, including
investigation and resolution of the claim as well as enforcement of
rights with respect to the claim.
(b) Referral of All Prohibited Personnel Action Claims to the Office
of Special Counsel.--(1) Under the demonstration project, the Office of
Special Counsel shall receive and investigate all claims under the
Uniformed Services Employment and Reemployment Rights Act with respect
to Federal executive agencies in cases where the Office of Special
Counsel has jurisdiction over related claims pursuant to section 1212
of title 5, United States Code.
(2) For purposes of paragraph (1), a related claim is a claim
involving the same Federal executive agency and the same or similar
factual allegations or legal issues as those being pursued under a
claim under the Uniformed Services Employment and Reemployment Rights
Act.
(c) Referral of Other Claims Against Federal Executive Agencies.--(1)
Under the demonstration project, the Secretary--
(A) shall refer to the Office of Special Counsel all claims
described in paragraph (2) made during the period of the
demonstration project; and
(B) may refer any claim described in paragraph (2) filed
before the demonstration project that is pending before the
Secretary at the beginning of the demonstration project.
(2) A claim referred to in paragraph (1) is a claim under chapter 43
of title 38, United States Code, against a Federal executive agency by
a claimant with a social security account number with an odd number as
its terminal digit, or, in the case of a claim that does not contain a
social security account number, a case number assigned to the claim
with an odd number as its terminal digit.
(d) Administration of Demonstration Project.--(1) The Office of
Special Counsel shall administer the demonstration project. The
Secretary shall cooperate with the Office of Special Counsel in
carrying out the demonstration project.
(2) In the case of any claim referred, or otherwise received by, to
the Office of Special Counsel under the demonstration project, any
reference to the ``Secretary'' in sections 4321, 4322, and 4326 of
title 38, United States Code, is deemed a reference to the ``Office of
Special Counsel''.
(3) In the case of any claim referred to, or otherwise received by,
the Office of Special Counsel under the demonstration project, the
Office of Special Counsel shall retain administrative jurisdiction over
the claim.
(e) Period of Project.--The demonstration project shall be carried
out during the period beginning on the date that is 60 days after the
date of the enactment of this Act, and ending on September 30, 2007.
(f) Evaluations and Report.--(1) The Comptroller General of the
United States shall conduct periodic evaluations of the demonstration
project under this section.
(2) Not later than April 1, 2007, the Comptroller General shall
submit to Congress a report on the evaluations conducted under
paragraph (1). The report shall include the following information and
recommendations:
(A) A description of the operation and results of the
demonstration program, including--
(i) the number of claims described in subsection (c)
referred to, or otherwise received by, the Office of
Special Counsel and the number of such claims referred
to the Secretary of Labor, and
(ii) for each Federal executive agency, the number of
claims resolved, the type of corrective action
obtained, the period of time for final resolution of
the claim, and the results obtained.
(B) An assessment of whether referral to the Office of
Special Counsel of claims under the demonstration project--
(i) improved services to servicemembers and veterans;
or
(ii) significantly reduced or eliminated duplication
of effort and unintended delays in resolving
meritorious claims of those servicemembers and
veterans.
(C) An assessment of the feasibility and advisability of
referring all claims under chapter 43 of title 38, United
States Code, against Federal executive agencies to the Office
of Special Counsel for investigation and resolution.
(D) Such other recommendations for administrative action or
legislation as the Comptroller General determines appropriate.
(g) Definitions.--In this section:
(1) The term ``Office of Special Counsel'' means the Office
of Special Counsel established by section 1211 of title 5,
United States Code.
(2) The term ``Secretary'' means the Secretary of Labor.
(3) The term ``Federal executive agency'' has the meaning
given that term in section 4303(5) of title 38, United States
Code.
TITLE III--MATTERS RELATING TO FIDUCIARIES
SEC. 301. DEFINITION OF FIDUCIARY.
(a) In General.--(1) Chapter 55 of title 38, United States Code, is
amended by adding at the end the following new section:
``Sec. 5506. Definition of `fiduciary'
``For purposes of this chapter and chapter 61 of this title, the term
`fiduciary' means--
``(1) a person who is a guardian, curator, conservator,
committee, or person legally vested with the responsibility or
care of a claimant (or a claimant's estate) or of a beneficiary
(or a beneficiary's estate); or
``(2) any other person having been appointed in a
representative capacity to receive money paid under any of the
laws administered by the Secretary for the use and benefit of a
minor, incompetent, or other beneficiary.''.
(2) The table of sections at the beginning of such chapter is amended
by adding at the end the following new item:
``5506. Definition of `fiduciary'.''.
(b) Conforming Amendments to Section 5502.--Section 5502 of such
title is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``other person''
and inserting ``other fiduciary''; and
(B) in the second sentence of paragraph (2), by
inserting ``for benefits under this title'' after ``in
connection with rendering fiduciary services'';
(2) in subsection (b), by striking ``guardian, curator,
conservator, or other person'' each place it appears and
inserting ``fiduciary''; and
(3) in subsection (d), by striking ``guardian, curator, or
conservator'' and inserting ``fiduciary''.
(c) Conforming Amendment to Section 6101.--Section 6101(a) of such
title is amended by striking ``guardian, curator,'' and all that
follows through ``beneficiary,'' and inserting ``fiduciary (as defined
in section 5506 of this title) for the benefit of a minor, incompetent,
or other beneficiary under laws administered by the Secretary,''.
SEC. 302. INQUIRY, INVESTIGATIONS, AND QUALIFICATION OF FIDUCIARIES.
(a) In General.--Chapter 55 of title 38, United States Code, as
amended by section 301(a)(1), is further amended by adding at the end
the following new section:
``Sec. 5507. Inquiry, investigations, and qualification of fiduciaries
``(a) Any certification of a person for payment of benefits of a
beneficiary to that person as such beneficiary's fiduciary under
section 5502 of this title shall be made on the basis of--
``(1) an inquiry or investigation by the Secretary of the
fitness of that person to serve as fiduciary for that
beneficiary, such inquiry or investigation--
``(A) to be conducted in advance of such
certification;
``(B) to the extent practicable, to include a face-
to-face interview with such person; and
``(C) to the extent practicable, to include a copy of
a credit report for such person issued within one year
of the date of the proposed appointment;
``(2) adequate evidence that certification of that person as
fiduciary for that beneficiary is in the interest of such
beneficiary (as determined by the Secretary under regulations);
and
``(3) the furnishing of any bond that may be required by the
Secretary.
``(b) As part of any inquiry or investigation of any person under
subsection (a), the Secretary shall request information concerning
whether that person has been convicted of any offense under Federal or
State law which resulted in imprisonment for more than one year. If
that person has been convicted of such an offense, the Secretary may
certify the person as a fiduciary only if the Secretary makes a
specific finding that the person has been rehabilitated and is an
appropriate person to act as fiduciary for the beneficiary concerned
under the circumstances.
``(c)(1) In the case of a proposed fiduciary described in paragraph
(2), the Secretary, in conducting an inquiry or investigation under
subsection (a)(1), may carry out such inquiry or investigation on an
expedited basis that may include waiver of any specific requirement
relating to such inquiry or investigation, including the otherwise
applicable provisions of subparagraphs (A), (B), and (C) of such
subsection. Any such inquiry or investigation carried out on such an
expedited basis shall be carried out under regulations prescribed for
purposes of this section.
``(2) Paragraph (1) applies with respect to a proposed fiduciary who
is--
``(A) the parent (natural, adopted, or stepparent) of a
beneficiary who is a minor;
``(B) the spouse or parent of an incompetent beneficiary;
``(C) a person who has been appointed a fiduciary of the
beneficiary by a court of competent jurisdiction; or
``(D) being appointed to manage an estate where the annual
amount of veterans benefits to be managed by the proposed
fiduciary does not exceed $3600, as adjusted pursuant to
section 5312 of this title.
``(d) Temporary Fiduciaries.--When in the opinion of the Secretary, a
temporary fiduciary is needed in order to protect the assets of the
beneficiary while a determination of incompetency is being made or
appealed or a fiduciary is appealing a determination of misuse, the
Secretary may appoint one or more temporary fiduciaries for a period
not to exceed 120 days. If a final decision has not been made within
120 days, the Secretary may not continue the appointment of the
fiduciary without obtaining a court order for appointment of a
guardian, conservator, or other fiduciary under the authority provided
in section 5502(b) of this title.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is amended by adding after the item added by section
301(a)(2) the following new item:
``5507. Inquiry, investigations, and qualification of fiduciaries.''.
SEC. 303. MISUSE OF BENEFITS BY FIDUCIARIES.
(a) Protection of Veterans Benefits When Administered by
Fiduciaries.--(1) Chapter 61 of title 38, United States Code, is
amended by adding at the end the following new sections:
``Sec. 6106. Misuse of benefits by fiduciaries
``(a) Fee Forfeiture in Case of Benefit Misuse by Fiduciaries.--A
fiduciary may not collect a fee from a beneficiary for any month with
respect to which the Secretary or a court of competent jurisdiction has
determined that the fiduciary misused all or part of the individual's
benefit, and any amount so collected by the fiduciary as a fee for such
month shall be treated as a misused part of the individual's benefit.
``(b) Liability of Fiduciaries for Misused Benefits.--(1) If the
Secretary or a court of competent jurisdiction determines that a
fiduciary that is not a Federal, State, or local government agency has
misused all or part of a beneficiary's benefit that was paid to such
fiduciary, the fiduciary shall be liable for the amount misused, and
such amount (to the extent not repaid by the fiduciary) shall be
treated as an erroneous payment of benefits under this title to the
fiduciary for purposes of laws pertaining to the recovery of
overpayments. The amount of such overpayment shall constitute a
liability of such fiduciary to the United States and may be recovered
in the same manner as any other debt due the United States. Subject to
paragraph (2), upon recovering all or any part of such amount, the
Secretary shall pay an amount equal to the recovered amount to such
beneficiary or such beneficiary's successor fiduciary.
``(2) The total of the amounts paid to a beneficiary (or a
beneficiary's successor fiduciary) under paragraph (1) and under
section 6107 of this title may not exceed the total benefit amount
misused by the fiduciary with respect to that beneficiary.
``(c) Misuse of Benefits Defined.--For purposes of this chapter,
misuse of benefits by a fiduciary occurs in any case in which the
fiduciary receives payment, under any of laws administered by the
Secretary, for the use and benefit of a beneficiary and uses such
payment, or any part thereof, for a use other than for the use and
benefit of such beneficiary or that beneficiary's dependents. Retention
by a fiduciary of an amount of a benefit payment as a fiduciary fee or
commission, or as attorney's fees (including expenses) and court costs,
if authorized by the Secretary or a court of competent jurisdiction,
shall be considered to be for the use or benefit of such beneficiary.
``(d) Regulations.--The Secretary may prescribe by regulation the
meaning of the term `use and benefit' for purposes of this section.
``(e) Finality of Determinations.--A determination by the Secretary
that a fiduciary has misused benefits is a decision of the Secretary
for purposes of section 511(a) of this title.
``Sec. 6107. Reissuance of benefits
``(a) Negligent Failure by Secretary.--(1) In any case in which the
negligent failure of the Secretary to investigate or monitor a
fiduciary results in misuse of benefits by the fiduciary, the Secretary
shall pay to the beneficiary or the beneficiary's successor fiduciary
an amount equal to the amount of benefits that were so misused.
``(2) There shall be considered to have been a negligent failure by
the Secretary to investigate and monitor a fiduciary in the following
cases:
``(A) A case in which the Secretary failed to timely review a
fiduciary's accounting.
``(B) A case in which the Secretary was notified of
allegations of misuse, but failed to act in a timely manner to
terminate the fiduciary.
``(C) In any other case in which actual negligence is shown.
``(b) Reissuance of Misused Benefits in Other Cases.--(1) In any case
in which a fiduciary described in paragraph (2) misuses all or part of
an individual's benefit paid to such fiduciary, the Secretary shall pay
to the beneficiary or the beneficiary's successor fiduciary an amount
equal to the amount of such benefit so misused.
``(2) Paragraph (1) applies to a fiduciary that--
``(A) is not an individual; or
``(B) is an individual who, for any month during a period
when misuse occurs, serves 10 or more individuals who are
beneficiaries under this title.
``(c) Recoupment of Amounts Reissued.--In any case in which the
Secretary reissues a benefit payment (in whole or in part) under
subsection (a) or (b), the Secretary shall make a good faith effort to
obtain recoupment from the fiduciary to whom the payment was originally
made.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is amended by adding at the end the following new items:
``6106. Misuse of benefits by fiduciaries.
``6107. Reissuance of benefits.''.
SEC. 304. ADDITIONAL PROTECTIONS FOR BENEFICIARIES WITH FIDUCIARIES.
(a) Onsite Reviews and Required Accountings.--(1) Chapter 55 of title
38, United States Code, as amended by section 302(a), is further
amended by adding at the end the following new sections:
``Sec. 5508. Periodic onsite reviews of institutional fiduciaries
``In addition to such other reviews of fiduciaries as the Secretary
may otherwise conduct, the Secretary shall provide for the periodic
onsite review of any person or agency located in the United States that
receives the benefits payable under laws administered by the Secretary
to another individual pursuant to the appointment of such person or
agency as a fiduciary under section 5502(a)(1) of this title in any
case in which the fiduciary is serving in that capacity with respect to
more than 20 beneficiaries and the total annual amount of such benefits
exceeds $50,000, as adjusted pursuant to section 5312 of this title.
``Sec. 5509. Authority to redirect delivery of benefit payments when a
fiduciary fails to provide required accounting
``(a) Required Reports and Accountings.--The Secretary may require a
fiduciary to file a report or accounting pursuant to regulations
prescribed by the Secretary.
``(b) Actions Upon Failure to File.--In any case in which a fiduciary
fails to submit a report or accounting required by the Secretary under
subsection (a), the Secretary may, after furnishing notice to such
fiduciary and the beneficiary entitled to such payment of benefits,
require that such fiduciary appear in person at a regional office of
the Department serving the area in which the beneficiary resides in
order to receive such payments.''.
(2) The table of sections at the beginning of such chapter is amended
by adding after the item added by section 302(b) the following new
items:
``5508. Periodic onsite reviews of institutional fiduciaries.
``5509. Authority to redirect delivery of benefit payments when a
fiduciary fails to provide required accounting.''.
(b) Civil Monetary Penalties; Judicial Orders of Restitution.--(1)
Chapter 61 of title 38, United States Code, as amended by section
303(a), is further amended by adding at the end the following new
sections:
``Sec. 6108. Civil monetary penalties
``(a) Penalty for Conversion.--Any person (including an organization,
agency, or other entity) who, having received, while acting in the
capacity of a fiduciary pursuant to section 5502 of this title, a
payment under a law administered by the Secretary for the use and
benefit of another individual, converts such payment, or any part
thereof, to a use that such person knows or should know is other than
for the use and benefit of such other individual shall be subject to,
in addition to any other penalty that may be prescribed by law, a civil
monetary penalty assessed by the Secretary of not more than $5,000 for
each such conversion.
``(b) Penalty in Lieu of Damages.--Any person who makes a conversion
of a payment described in subsection (a) and is subject to a civil
monetary penalty under that subsection by reason of such conversion
shall also be subject to an assessment by the Secretary, in lieu of
damages sustained by the United States resulting from the conversion,
of not more than twice the amount of any payments so converted.
``(c) Costs of Recovery.--From amounts collected under this section,
the amount necessary to recoup the Department's costs of such
collection shall be credited to appropriations currently available for
the same purpose as the appropriation that incurred those costs, to
remain available until expended.
``Sec. 6109. Authority for judicial orders of restitution
``(a) Any Federal court, when sentencing a defendant convicted of an
offense arising from the misuse of benefits under this title, may
order, in addition to or in lieu of any other penalty authorized by
law, that the defendant make restitution to the Department.
``(b) Sections 3612, 3663, and 3664 of title 18 shall apply with
respect to the issuance and enforcement of orders of restitution under
subsection (a). In so applying those sections, the Department shall be
considered the victim.
``(c) If the court does not order restitution, or orders only partial
restitution, under subsection (a), the court shall state on the record
the reasons therefor.
``(d)(1) Except as provided in paragraph (2), amounts received or
recovered by the Secretary pursuant to an order of restitution under
subsection (a), to the extent and in the amounts provided in advance in
appropriations Acts, shall be available to defray expenses incurred by
the Office of the Inspector General for the investigation of
fiduciaries under this title.
``(2) Paragraph (1) shall not apply with respect to amounts received
in connection with misuse by a fiduciary of funds paid as benefits
under laws administered by the Secretary. Such amounts shall be paid to
the individual whose benefits were misused unless the Secretary has
previously reissued the misused benefits, in which case the amounts
shall be treated in the same manner as overpayments recouped by the
Secretary and shall be deposited to the credit of the applicable
revolving fund, trust fund, or appropriation.''.
(2) The table of sections at the beginning of such chapter is amended
by adding after the item added by section 303(b) the following new
items:
``6108. Civil monetary penalties.
``6109. Authority for judicial orders of restitution.''.
SEC. 305. ANNUAL REPORT.
(a) In General.--Chapter 55 of title 38, United States Code, as
amended by section 304(a)(1), is further amended by adding at the end
the following new section:
``Sec. 5510. Annual report
``The Secretary shall include in the Annual Benefits Report of the
Veterans Benefits Administration or the Secretary's Annual Performance
and Accountability Report information concerning fiduciaries who have
been appointed to receive payments for beneficiaries of the Department.
As part of such information, the Secretary shall separately set forth
the following:
``(1) The number of beneficiaries in each category (veteran,
surviving spouse, child, adult disabled child, or parent).
``(2) The types of benefit being paid (compensation, pension,
dependency and indemnity compensation, death pension or
benefits payable to a disabled child under chapter 18 of this
title).
``(3) The total annual amounts and average annual amounts of
benefits paid to fiduciaries for each category and type of
benefit.
``(4) The number of fiduciaries who are the (spouse, parent,
legal custodian, court-appointed fiduciary, institutional
fiduciary, custodian in fact, and supervised direct payment).
``(5) The number of cases in which the fiduciary was changed
by the Secretary because of a finding that benefits had been
misused.
``(6) How such cases of misuse of benefits were addressed by
the Secretary.
``(7) The final disposition of such cases of misuse of
benefits, including the number and dollar amount of any civil
or criminal penalties imposed.
``(8) Such other information as the Secretary considers
appropriate.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is amended by adding after the items added by the
amendment made by section 304(a)(2) the following new item:
``5510. Annual report.''.
SEC. 306. ANNUAL ADJUSTMENT IN BENEFITS THRESHOLDS.
Section 5312(b)(1) of title 38, United States Code, is amended by
inserting ``and the annual benefit amount limitations under sections
5507(c)(2)(D) and 5508 of this title,'' after ``(d)(3) of such
section,''.
SEC. 307. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided, this title and the
amendments made by this title shall take effect on the first day of the
seventh month beginning after the date of the enactment of this Act.
(b) Special Rules.--(1) Section 5510 of title 38, United States Code,
as added by section 305(a), shall take effect on the date of the
enactment of this Act.
(2) Sections 6106 and 6107 of title 38, United States Code, as added
by section 303(a), shall apply with respect to any determinations by
the Secretary of Veterans Affairs made after the date of the enactment
of this Act of misuse of funds by a fiduciary.
TITLE IV--OTHER MATTERS
SEC. 401. INVENTORY OF MEDICAL WASTE MANAGEMENT ACTIVITIES AT
DEPARTMENT HEALTH-CARE FACILITIES.
(a) Inventory.-- The Secretary of Veterans Affairs shall establish
and maintain a national inventory of medical waste management
activities in the health-care facilities of the Department of Veterans
Affairs. The inventory shall include the following:
(1) A statement of the current national policy of the
Department on managing and disposing of medical waste,
including regulated medical waste in all its forms.
(2) A description of the program of each geographic service
area of the Department to manage and dispose of medical waste,
including general medical waste and regulated medical waste,
with a description of the primary methods used in those
programs and the associated costs of those programs, with cost
information shown separately for in-house costs (including
full-time equivalent employees) and contract costs.
(b) Report.--Not later than April 15, 2005, the Secretary of Veterans
Affairs shall submit to the Committees on Veterans' Affairs of the
Senate and House of Representatives a report on medical waste
management activities in the facilities of the Department of Veterans
Affairs. The report shall include the following:
(1) The inventory established under subsection (a), including
all the matters specified in that subsection.
(2) A listing of each violation of medical waste management
and disposal regulations reported at any health-care facility
of the Department over the preceding five years by any State or
Federal agency, along with an explanation of any remedial or
other action taken by the Secretary in response to each such
reported violation.
(3) A description of any plans to modernize, consolidate, or
otherwise improve the management of medical waste and disposal
programs at health-care facilities of the Department, including
the projected costs associated with such plans and any barriers
to achieving goals associated with such plans.
(4) An assessment or evaluation of the available methods of
disposing of medical waste and identification of which of those
methods are more desirable from an environmental perspective in
that they would be least likely to result in contamination of
air or water or otherwise cause future cleanup problems.
SEC. 402. CARE FOR NEWBORN CHILDREN OF VETERANS RECEIVING MATERNITY
CARE.
(a) Authority to Provide Newborn Infant Care.--Subchapter VIII of
chapter 17 of title 38, United States Code, is amended by adding at the
end the following new section:
``Sec. 1786. Care for newborn children of veterans receiving maternity
care
``(a) Authority.--Subject to subsections (b) and (c), when a female
veteran who is enrolled in the health-care system established under
section 1705 of this title is receiving maternity care from the
Department delivers of a child in a Department facility or in a non-
Department facility under a Department contract the Secretary may
furnish care to the neonate.
``(b) Care in a Department Facility.--In a case in which a neonate
covered by subsection (a) is born in a Department facility, care
furnished for the neonate at that facility shall be furnished without
charge to the veteran who delivered of that neonate.
``(c) Care in a Non-Department Facility.--In a case in which a
neonate covered by subsection (a) is born in a non-Department facility
or is provided care in a non-Department facility following birth in a
Department facility and transfer from that facility, the Secretary may
provide for the payment of the cost of care and services for the
neonate in the same manner, and subject to the same limitations, as if
such care and services were emergency treatment furnished the veteran
subject to section 1725 of this title, except that--
``(1) the services for which the Secretary may make payment
shall be limited to those items and services for which payment
may be made under the medicare program under title XVIII of the
Social Security Act for post-natal care furnished to a neonate;
and
``(2) the rate of payment for such services may not exceed
the payment rates applicable to those items and services under
the medicare program under such title.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is amended by inserting after the item relating to section
1784 the following new item:
``1786. Care for newborn children of veterans receiving maternity
care.''.
SEC. 403. TECHNICAL AMENDMENTS TO EDUCATION PROGRAM PROVISIONS.
(a) Inapplicability of Wage Requirements for On-Job Training Programs
Leading to Self-employment.--(1) Section 3677(b) is amended by adding
at the end the following new paragraph:
``(3) Notwithstanding paragraph (1)(A) and subsection (c)(8), no
wages shall be required to be paid an eligible person or veteran by a
training establishment described in section 3452(e)(2) of this
title.''.
(2) Section 3452(e), as amended by section 301 of the Veterans
Benefits Act of 2003 (Public Law 108-183; 117 Stat. 2658), is amended
by striking ``An'' in paragraph (2) and inserting ``For the period
beginning on October 1, 2005, and ending on September 30, 2010, an''.
(b) Effective Date.--The amendments made by subsection (a) shall take
effect as if included in the enactment of section 301 of the Veterans
Benefits Act of 2003 (Public Law 108-183; 117 Stat. 2658).
Amend the title so as to read:
A bill to amend the Servicemembers Civil Relief Act to make
certain improvements and technical corrections to that Act, otherwise
to improve legal protections provided to reserve component members
called to active duty, and for other purposes.
Introduction
The reported bill reflects the Committee's consideration of
four bills introduced during the 108th Congress: H.R. 4658,
H.R. 4659, H.R. 4477, and H.R. 4032, and testimony received
from the Office of Special Counsel on June 23, 2004.
On June 16, 2004, the Subcommittee on Benefits held a
hearing on H.R. 4032, the Veterans Fiduciary Act of 2004,
introduced on March 25, 2004, by Honorable Susan A. Davis,
Honorable Michael H. Michaud, Honorable Lane Evans, Honorable
Bob Filner, Honorable Corrine Brown, Honorable Ciro D.
Rodriguez, Honorable Darlene Hooley, Honorable Ted Strickland,
Honorable Raul M. Grijalva, Honorable Barney Frank, Honorable
Timothy H. Bishop, Honorable Tim Holden, Honorable Kevin Brady,
Honorable Grace F. Napolitano, and Honorable Ben Chandler.
On June 23, 2004, the full Committee held a hearing on
legislation, including H.R. 4477, and two draft bills. H.R.
4477, the Patriot Employer Act of 2004, was introduced on June
2, 2004, by Honorable James P. McGovern, Honorable Jeb Bradley
and Honorable Lane Evans. The first draft bill was a proposed
extension of the maximum period of employer-sponsored health
care coverage that a Reservist or National Guardsmember may
voluntarily elect to continue under the Uniformed Services
Employment and Reemployments Rights Act (USERRA), and was
subsequently introduced as H.R. 4659 on June 23, 2004, by the
Chairman and Ranking Member of the Subcommittee on Benefits,
Honorable Henry E. Brown, Jr., and Honorable Michael H.
Michaud, and the Chairman of the Committee, Honorable
Christopher H. Smith. The second draft bill was a proposed
amendment to the Servicemembers Civil Relief Act (SCRA) to make
certain improvements and technical corrections to the Act, and
was subsequently introduced as H.R. 4658 on June 23, 2004, by
the Chairman and Ranking Member of the Committee, Honorable
Christopher H. Smith and Honorable Lane Evans.
On July 21, 2004, the full Committee met and ordered H.R.
4658, as amended, reported favorably to the House by unanimous
voice vote.
Summary of the Reported Bill
H.R. 4658, as amended, would:
Title I--Improvements to Servicemembers Civil Relief Act
1. LDefine in the general provisions of the Servicemembers
Civil Relief Act (SCRA) that the term ``judgment'' would mean
``any judgment, decree, order or ruling, final or temporary.''
2. LClarify that waivers by servicemembers of rights and
protections under SCRA which must be in writing, must also be
executed in a separate instrument; and require that certain
written waivers must be in at least 12 point type.
3. LProvide that plaintiffs as well as defendants may
request stays of civil proceedings under SCRA.
4. LClarify that dependents as well as servicemembers are
covered by SCRA's residential and motor vehicle lease
termination provisions on joint leases.
5. LProvide that SCRA's lease termination provisions also
apply when the servicemember has permanent change of station
orders from a State outside the continental United States to
any location outside that State.
6. LDefine for the purposes of SCRA's lease termination
provisions that the term ``military orders'' would mean, with
respect to a servicemember, ``official military orders, or any
notification, certification, or verification from the
servicemember's commanding officer, with respect to the
servicemember's current or future military duty status.''
7. LDefine for the purposes of SCRA's lease termination
provisions that the term ``continental United States'' would
mean ``the 48 contiguous States and the District of Columbia.''
8. LClarify that SCRA's lease termination provisions cover
individual deployments, as well as military unit deployments.
9. LProhibit double taxation of servicemembers when the
laws of a tax jurisdiction do not provide a credit against use,
excise or similar taxes the servicemember previously paid to
another tax jurisdiction.
Title II--Employment and Reemployment Rights
1. LIncrease from 18 months to 24 months the maximum period
of employer-sponsored health coverage that an employee covered
by USERRA may elect to continue, beginning with the date the
absence from the position of employment begins; and provide
that the effective date of the increased coverage would be the
date of enactment.
2. LReinstate the requirement for comprehensive annual
reports from the Secretary of Labor to Congress on the
disposition of cases filed under USERRA; such reports would
begin no later than February 1, 2005.
3. LRequire employers to provide notice to employees of the
rights, benefits and obligations of employers and employees
that apply under USERRA, and require the Department of Labor to
make available to employers the text of the notice, to be
provided within 90 days after date of enactment.
4. LEstablish a demonstration project for the referral of
complaints by federal executive branch employees under USERRA
to the Office of Special Counsel for investigation and
resolution, and require the Secretary of Labor and the Office
of Special Counsel to carry out the demonstration project.
5. LAllow the Office of Special Counsel for the
demonstration project to receive and investigate all cases
involving both complaints of prohibited personnel actions and
complaints under USERRA.
6. LDefine a complaint for purposes of the demonstration
project as one filed under chapter 43 of title 38, United
States Code, against a Federal executive agency by a claimant
with a social security number with an odd number as its
terminal digit, or a case number assigned to the claim with an
odd number as its terminal digit.
7. LAllow the Secretary of Labor to refer to the Office of
Special Counsel certain pending complaints filed before the
beginning of the demonstration project.
8. LRequire the demonstration project to be carried out
during the period beginning 60 days after the date of
enactment, and ending on September 30, 2007.
9. LRequire the Comptroller General of the United States to
conduct periodic evaluations of the demonstration project;
require a report to Congress no later than April 1, 2007, on
the periodic evaluations; and require the report to address
certain other matters pertaining to the demonstration project.
Title III--Matters Relating to Fiduciaries
1. LFor purposes of payment of VA benefits, define a
fiduciary as a guardian, curator, conservator, committee or
person legally vested with the responsibility or care of a
claimant (or the claimant's estate) or of a beneficiary (or the
beneficiary's estate), or any other person appointed in a
representative capacity to receive money paid by VA.
2. LRequire VA, prior to certification, to conduct an
inquiry or investigation as to the fitness of a fiduciary. Such
inquiry or investigation would include, to the extent
practicable, a face-to-face interview, a copy of a credit
report within one year of appointment, and the furnishing of
any bond that may be required by the Secretary.
3. LRequire the Secretary, as a part of the inquiry or
investigation, to request information about whether the
potential fiduciary has been convicted of any offense under
Federal or State law.
4. LPermit a less rigorous inquiry or investigation of the
parent of a minor beneficiary, spouse or parent of an
incompetent beneficiary, the person appointed by a court of
competent jurisdiction, or the person appointed to manage an
estate where the annual amount of veterans benefits to be
managed does not exceed $3,600.
5. LGive the Secretary the authority to appoint a
temporary fiduciary, for a period not to exceed 120 days, if
needed to protect the assets of the beneficiary when a
determination of incompetence is being made or appealed, or a
fiduciary is appealing a determination of misuse.
6. LProhibit the Secretary from continuing the temporary
fiduciary beyond 120 days if a final decision has not been made
on the competence of the beneficiary or fiduciary, unless the
Secretary has obtained a court order for a guardian.
7. LProhibit a fiduciary from collecting a fee from the
beneficiary for any month when the Secretary or a court has
determined the fiduciary has misused some or all of the
veteran's benefits.
8. LRequire that any fiduciary, except a Federal, State,
or local government agency, shall be liable for any amount
misused, and that such amount shall be treated as an erroneous
payment to the fiduciary for purposes of law pertaining to the
recovery of overpayments.
9. LRequire the Secretary to repay misused benefits if the
misuse is due to the Secretary's failure to investigate or
monitor a fiduciary, when the fiduciary is (1) not an
individual or (2) is an individual who, for any month during a
period when misuse occurs, serves 10 or more individuals who
are beneficiaries.
10. LRequire the Secretary to conduct periodic on-site
reviews of any person or agency located in the United States
that serves as a fiduciary to more than 20 beneficiaries and
the total annual amount of benefits exceeds $50,000.
11. LPermit a fiduciary who converts a payment for some use
other than for the beneficiary to be subject to a civil
monetary penalty, and an assessment by the Secretary in lieu of
damages sustained by the United States, of not more than twice
the amount converted.
12. LPermit that amounts received or recovered from a
fiduciary, to the extent and in the amounts provided in advance
appropriations, shall be available to defray expenses incurred
by the Office of the Inspector General for the inquiry or
investigation of fiduciaries.
13. LRequire the Secretary to include in an annual report
information on the fiduciary program, to include the number of
beneficiaries, the types of benefits being paid, and the number
of cases in which the fiduciary was changed by the Secretary
because of a finding that benefits had been misused.
Title IV--Other Matters
1. LRequire the Secretary to establish and maintain an
inventory of medical waste management activities in VA
facilities.
2. LRequire the Secretary to submit by April 15, 2005, a
report to the Committees on Veterans' Affairs of the Senate and
the House of Representatives on VA's medical waste management
activities, including inventory, regulatory violations, and
plans for management improvements.
3. LAuthorize VA to provide post-natal care to newborns of
enrolled female veterans receiving maternity care who are
without other health insurance coverage. VA's payment would be
the amount Medicare would pay for services related to
delivering the child of a Medicare beneficiary.
4. LMake a technical correction to section 301 of P.L. 108-
183, which expanded the Montgomery GI Bill program to authorize
educational assistance for on-job training in certain self-
employment programs, by clarifying that the veteran or
dependent in on-job training for certain self-employment
programs beginning on October 1, 2005, and ending on September
30, 2010 need not receive a training wage from the employer in
order to receive the VA benefit for that period.
Background and Discussion
Title I--IMPROVEMENTS TO SERVICEMEMBERS CIVIL RELIEF ACT
Clarification of meaning of ``judgment'' as used in the
Act.--Section 101 of the bill would clarify the meaning of the
term ``judgment'' as used in the Servicemembers Civil Relief
Act (SCRA). The term ``judgment'' appears in sections 103, 201,
202, 204 and 601 of the SCRA, but it is not included in section
101, which contains the statute's definitions. The Committee
intends that the term be broadly construed and not be
interpreted as limited to final judgments in cases. The term
``judgment'' would mean ``. . . any judgment, decree, order, or
ruling, final or temporary.''
Requirements relating to waiver of rights under the Act.--
Section 102 of the bill would require that waivers in writing
under section 107 of the SCRA must also be executed in a
separate instrument. This requirement would make the waiver
provisions of section 107 consistent with the waiver provisions
of section 103(d)(1) of the SCRA, which for waivers by certain
persons primarily or secondarily liable on an obligation or
liability, already requires a separate waiver instrument. While
agreements by servicemembers and other persons to waive rights
and protections under the SCRA would remain legal, the
Committee believes that when written waivers are required under
the SCRA, servicemembers should have the additional protection
of a separate waiver instrument. This would prevent an
effective waiver from being placed, for example, in a lengthy
unrelated text. Additionally, section 102 of the bill would
require the prominent display of waivers in 12 point type. This
would prevent an effective waiver from being placed, for
example, in fine print at the bottom of a page.
Right of servicemember plaintiffs to request stay of civil
proceedings.--Section 103 of the bill would allow
servicemembers who are plaintiffs in a legal action to request
a stay of a civil proceeding under section 202 of the SCRA. The
predecessor statute, the Soldiers' and Sailors' Civil Relief
Act, expressly covered plaintiffs for the purpose of stay
requests, and the SCRA should similarly cover plaintiffs.
Termination of leases.--Section 104 of the bill would
clarify that under section 305 of the SCRA, when a
servicemember terminates a residential or motor vehicle lease
entered into jointly with a dependent, the obligations of both
the servicemember and the dependent are terminated. The
Committee's belief that this clarification is necessary based
on sworn testimony at a full committee hearing on June 23,
2004, that some servicemembers and their dependents in the Fort
Hood, Texas, area have experienced refusals by certain property
management companies to release dependents from joint leases.
The large scale deployments of soldiers and unit relocations
from Fort Hood as part of the war against terrorism have
created unusual pressures on providers of rental housing in
that local area, and the Committee is concerned about the
potential for similar occurrences in other places with
significant military populations.
The intent of Congress on this matter did not change with
enactment of the SCRA, which updated and strengthened the
Soldiers' and Sailors' Civil Relief Act. The overall purpose of
the statute is to provide various legal rights and protections
for servicemembers and their dependents. All along, the intent
of Congress has been that, when the servicemember properly
terminates such a lease, it is terminated with respect to all
of the parties to the lease. An interpretation of section 305
that would as a practical matter provide no relief by leaving
the servicemember's dependent bound by a joint lease is clearly
inconsistent with the section's purpose. However, this
clarification, with its more specific language, is intended to
preclude future disputes about the application to dependents of
section 305.
Section 104 of the bill would also modify the language of
section 305 of the SCRA to allow motor vehicle lease
terminations for any permanent change of station move from a
state outside of the continental United States to any other
location outside that state. The term ``continental United
States'' would be defined as meaning the ``48 contiguous states
and the District of Columbia.'' The term ``State'' is currently
defined in section 101(6)(A) of the SCRA to include ``a
commonwealth, territory, or possession of the United States.''
Section 104 would assure that a servicemember who receives a
permanent change of station order to move from a state outside
the continental United States to another location outside that
state is accorded the same protections as a servicemember who
receives a permanent change of station order to move from a
state within the continental United States to a location
outside of the continental United States.
Section 104 of the bill would also amend section 305 to
broaden the definition of the term ``military orders'' to mean
``official military orders, or any notification, certification,
or verification from the servicemember's commanding officer,
with respect to the servicemember's current or future military
duty status.'' The amended definition would allow
servicemembers who must deploy on short notice, who experience
delays in receiving orders, or who for other valid reasons are
without formal ``military orders,'' to provide a suitable
termination notice to lessors.
Section 305 of SCRA would further be amended to include
individual as well as unit deployments. Some servicemembers
receive individual orders to fill unit vacancies, and this
section would allow lease termination for servicemembers who
receive orders to deploy ``as an individual in support of a
military operation.''
Prevention of double taxation of certain servicemembers.--
Section 105 of the bill would not allow a tax jurisdiction to
impose a use, excise, or similar tax on the personal property
of a servicemember who is not a resident, if the tax
jurisdiction's laws do not provide a credit against such taxes
previously paid on the same personal property in another tax
jurisdiction. With this section, the Committee would extend the
long-standing policy of Congress against double taxation of
servicemembers expressed in title V of the SCRA to use, excise,
or other similar taxes.
Title II--EMPLOYMENT AND REEMPLOYMENT RIGHTS
SUBTITLE A--EXTENSION OF HEALTH CARE COVERAGE
Two-year period of continuation of employer-sponsored
health care coverage.--Section 201 of the bill would increase
from 18 months to 24 months the maximum period of employer-
sponsored health coverage that an employee covered by USERRA
may elect to continue. The coverage would become effective for
elections made on or after the date of enactment.
Section 4317 of title 38, United States Code, allows
servicemembers covered under USERRA to elect to continue
employer-sponsored health coverage for up to 18 months while on
active duty, provided the servicemember pays up to 102 percent
of the premiums. A growing number of Guard and Reserve members
are on active duty for longer than 18 months. This change would
bring eligibility for continued health care coverage in line
with the period of time which a member of the Guard or Reserve
may be involuntarily called to active duty.
Reinstatement of reporting requirements.--Section 202 of
the bill would reinstate a requirement that the Secretary of
Labor, in consultation with the Office of Special Counsel and
the U.S. Attorney General, provide annual reports to Congress
on the disposition of cases filed under USERRA, effective
February 1, 2005. The previous reporting requirement expired on
February 1, 1996. With greater reliance on the National Guard
and Reserve components of the Armed Forces for national defense
during the war against terrorism, annual reports are necessary
to evaluate USERRA's effectiveness.
SUBTITLE B--OTHER MATTERS
Requirement for employers to provide notice of rights and
duties under USERRA.--Section 211 of the bill is derived from
H.R. 4477 and would require employers to provide notice to
employees of the rights, benefits and obligations under USERRA.
Section 211 would also require the Department of Labor to make
available to employers, within 90 days after the date of
enactment of this provision, the text of the notice.
Since fiscal year 2002, the number of USERRA complaints
filed with the Department of Labor has increased each year by
approximately 10 percent. According to testimony received by
the Committee, many problems emerge because employers and
employees do not know the legal rights and duties associated
with USERRA. This section is intended to raise awareness among
employers and employees, as well as reduce workplace conflicts
related to USERRA issues. The Committee believes that this
provision would decrease inadvertent violations of the law by
providing timely and accurate information to both employers and
employees.
Demonstration project for referral of USERRA claims against
Federal agencies to the Office of Special Counsel.--Section 212
of the bill would require the Secretary of Labor and the Office
of Special Counsel (OSC) to carry out a three-year
demonstration project on enforcement of USERRA rights for
federal executive branch employees. OSC currently does not
initially investigate USERRA claims made by Federal executive
branch employees. The Department of Labor performs the initial
investigation, resolves certain cases and then refers the
remaining cases it finds to be meritorious to the OSC for
formal enforcement. The demonstration project would allow the
OSC to handle cases from beginning to end, including
investigation, settlement and litigation, to determine whether
that approach would be more effective.
Approximately half of the cases filed after the beginning
of the demonstration project would be sent by the Department of
Labor to the OSC, using a random selection process based on the
last digit of the claimant's social security number or case
number, if a social security number is not available. The
Comptroller General of the United States would be required to
conduct periodic evaluations of the demonstration project and
to submit a report to Congress on the evaluations. The
Comptroller would also be required to provide an assessment of
the feasibility and advisability of referring all USERRA claims
against federal executive agencies to OSC for investigation and
resolution.
Title III--MATTERS RELATING TO FIDUCIARIES
When VA monetary benefits are payable to an individual who
is incapable of managing his or her own affairs, the Secretary
of Veterans Affairs has the authority to appoint a third party
payee as a fiduciary. The fiduciary may be a relative, friend,
guardian, conservator, curator, person with temporary custody
of the beneficiary (``custodian-in-fact''), or other federal
fiduciary appointed by VA.
Section 5502 of title 38, United States Code, permits a
fiduciary to be appointed ``regardless of any legal disability
on the part of the beneficiary.'' Nonetheless, VA has issued
regulations authorizing the appointment of a fiduciary only
when a beneficiary is mentally ill, incompetent, or under a
legal disability. 38 C.F.R. Sec. 13.55. According to VA, there
are currently about 100,000 VA beneficiaries who have payments
made to a fiduciary; approximately 65,000 of these are
veterans, 32,000 are other adults such as surviving spouses and
adult disabled children, and 3,000 are minor children.
At a July 2003 oversight hearing, the Subcommittee on
Benefits learned that under current law, VA is not required to
reissue benefits to a veteran if the fiduciary has
misappropriated some or all of the beneficiary's funds. Title
III of the bill would strengthen the protections afforded to
incompetent veterans and other beneficiaries who receive VA
benefits, as well as require additional oversight of the
fiduciaries.
Definition of fiduciary.--Section 301 of the bill would
define, for the purposes of chapters 55 and 61 of title 38,
United States Code, the term fiduciary as (1) a person who is a
guardian, curator, conservator, committee, or person legally
vested with the responsibility or care of a claimant (or a
claimant's estate) or of a beneficiary (or a beneficiary's
estate); or (2) any other person having been appointed in a
representative capacity to receive money paid under any of the
laws administered by the Secretary for the use and benefit of a
minor, incompetent, or other beneficiary. Under current law, a
fiduciary for VA purposes is not defined.
Inquiry, investigations, and qualification of
fiduciaries.--Section 302 of the bill would require VA to
certify, following an inquiry or investigation, the fitness of
a fiduciary. Such inquiry or investigation would be conducted
through, to the extent practicable, a face-to-face interview,
review of a credit report for the proposed fiduciary issued
within one year of appointment, and the furnishing of any bond
that may be required by the Secretary. Additionally, the
Secretary would be required to request information on whether
that person has been convicted of any offense under Federal or
State law; if so, the Secretary may certify the person as a
fiduciary only if the Secretary makes a specific finding of
rehabilitation and finds that the potential fiduciary is an
appropriate person to act as the fiduciary for the beneficiary.
This provision is not intended to require an extensive criminal
background check of the proposed fiduciary. VA would be
required to have a proposed fiduciary attest as to whether or
not he/she had been imprisoned for more than one year. The
Committee expects that if the proposed fiduciary had been so
imprisoned, the Secretary would make further inquiry concerning
the nature of the offense, the length of time since the offense
occurred, and other indications of rehabilitation in order to
determine if the proposed fiduciary is an appropriate person to
serve as a fiduciary for a beneficiary.
In the case of a parent (natural, adopted, or step) of a
minor beneficiary, spouse or parent of an incompetent
beneficiary, a person who has been appointed by a court of
competent jurisdiction, or appointed to manage an estate where
the annual amount of veterans benefits to be managed does not
exceed $3,600 (adjusted for annual cost-of-living increases),
the Secretary may certify the potential fiduciary on an
expedited basis. In such cases, the Secretary would be
authorized to waive the requirements for a face-to-face
interview, credit report check, or other requirements for
appointment.
If needed to protect the assets of the beneficiary while a
determination of incompetence is being made or appealed, or a
fiduciary is appealing a determination of misusing a veteran's
benefits, the Secretary would have the authority to appoint a
temporary fiduciary, not to exceed 120 days. If a final
decision has not been made within the allotted time frame, the
Secretary would not be able to continue the temporary
appointment without obtaining an order from a court of
competent jurisdiction, such as a state Probate or Family
Court, for the appointment of a guardian, conservator, or
similar legal fiduciary. The Committee intends that the
Secretary have the authority to act promptly to protect the
beneficiary's interest in those unusual cases where the
appointment of a custodian-in-fact is not available or while an
appeal of a proposed finding of incompetency or change of
fiduciary is pending.
Misuse of benefits by fiduciaries.--Section 303 of the bill
would protect a veteran's benefits when administered by a
fiduciary. If the Secretary or a court has determined the
fiduciary has misused some or all of the veterans' benefits, he
or she would be prohibited from collecting a fee from a
beneficiary for any month during which the misuse had occurred,
and any fee collected would be treated as a misused benefit.
Any fiduciary, except a Federal, State, or local government
agency, would be personally liable for the amount misused, and
that amount would be treated as an erroneous payment to the
fiduciary for purposes of laws pertaining to the recovery of
overpayments. The misappropriated amount would be subject to
recovery in the same manner as any other debt due the United
States. The Committee expects the Secretary to vigorously use
the tools available for the collection of debts owed to the
United States in collecting misused benefits. In the event that
any misused benefits are collected, the Secretary would be
required to repay to the beneficiary or the beneficiary's
successor fiduciary, an amount equal to the recovered amount of
misused benefits, unless the benefits had already been
reissued.
In the event the misused benefits are due to the
Secretary's failure to investigate or monitor the fiduciary,
the Secretary would be liable to repay all the benefits without
first having to collect them from the fiduciary. Failure to
adequately monitor a fiduciary would include the Secretary's
failing to review, in a timely manner, a fiduciary's
accounting; failing to act in a timely manner when notified of
allegations of misuse; and any other case when actual
negligence is shown. In addition, the Secretary would be
required to reissue benefits when the misuse involves a
fiduciary who is (1) not an individual, i.e. an agency, or (2)
is an individual who, for any month during a period when misuse
occurs, serves 10 or more individuals who are beneficiaries
under title 38, United States Code. If the Secretary reissues a
benefit payment, a good faith effort would be required to
recoup the funds from the fiduciary to which the original
payment was made.
Additional protections for beneficiaries with
fiduciaries.--Section 304 of the bill would require the
Secretary to conduct periodic onsite reviews of any person or
agency located in the United States that serves as a fiduciary
to more than 20 beneficiaries and the total annual amount of
benefits exceeds $50,000 (to be adjusted annually to reflect
cost-of-living adjustments). As part of the review, the
Secretary would be able to require the fiduciary to submit a
report or accounting of dispersement of benefits, and a
fiduciary who fails to submit the report could be required to
appear in person at a VA regional office in order to receive
such payments.
In the event a fiduciary converts a payment for some use
other than for the use and benefit of the beneficiary, he or
she would be subject to, in addition to any other penalty that
may be prescribed by law, a civil monetary penalty assessed by
the Secretary of not more than $5,000 per conversion. Such
person would also be subject to an assessment by the Secretary
of not more than twice the amount of any payments converted.
Additionally, any federal court, when sentencing a defendant
convicted of an offense arising from the misuse of benefits,
could order, in addition to or in lieu of any other penalty
authorized by law, that the defendant make restitution to the
Department (the court would be required to state on the record
the reasons for not ordering restitution, or only partial
restitution). Any amounts received or recovered, other than
those which would represent the amounts attributed to misuse,
would be available to defray the expenses incurred by the VA's
Office of Inspector General for the inquiry or investigation of
fiduciaries. Recoveries of misused benefits would be made to
the beneficiary or the beneficiary's successor fiduciary unless
benefits had previously been reissued. Recovery of benefits
which have previously been reissued would be credited to the
applicable Department account in the same manner as is done for
recovered overpayments of benefits.
Annual report.--Section 305 of the bill would require the
Secretary to include in one of VA's annual reports information
concerning fiduciaries who have been appointed to receive
benefits, to include: the number of beneficiaries in each
category (veteran, surviving spouse, child, adult disabled
child, parent); types of benefits being paid (compensation,
pension, dependency and indemnity compensation, death pension);
the number of fiduciaries who are the spouse, parent, legal
custodian, court-appointed, institutional, custodian-in-fact,
and supervised direct payment; the number of cases in which the
fiduciary was changed by the Secretary because of a finding
that benefits had been misused; and how such cases of misuse of
benefits were addressed by the Secretary.
Title IV--OTHER MATTERS
Inventory of medical waste management activities at
Department health-care facilities.--Section 401 of the bill
would require VA to establish and maintain an inventory of
medical waste management activities in VA facilities. Not later
than April 15, 2005, VA would be required to submit a report to
the Committees on Veterans' Affairs of the Senate and the House
of Representatives on its inventory, regulatory compliance, and
any violations of record, along with plans for management
improvements.
Under current law, VA is subject to comply with a variety
of Federal, state and local laws and regulations relating to
the collecting, handling and disposing of medical waste.
Failure to adhere to the laws and regulations could jeopardize
the health and safety of patients, employees, and the public,
as well as subject VA to civil or criminal liabilities. This
section would provide a means for Congress to evaluate the
effectiveness of VA's medical waste management policies, to
determine whether additional procedures are needed to reduce
environmental and heath risks, and to assess the costs of waste
disposal.
Care for newborn children of veterans receiving maternity
care.--Section 402 of the bill would authorize VA to provide
post-natal care to the neonate of an eligible female veteran
who is receiving maternity and delivery care from VA, and who
has no other health insurance coverage. The medical community
generally accepts the definition of a neonate as a newborn from
one to 30 days of age. The Committee expects that VA would
follow this definition. This authority would be consistent with
typical insurance coverage of pregnancy and delivery in
community facilities.
Under current law, VA is authorized to provide maternity
and delivery care to eligible female veterans, but does not
have the authority to cover the cost of care of the veteran's
newborn child. VA is only authorized to provide medical care to
children of certain service-connected veterans in a very
limited number of circumstances, such as benefits for children
of Korea and Vietnam veterans who were born with spina bifida.
This section would provide for continuity of care to the
enrolled female veteran as part of a basic health benefit, and
would reduce administrative difficulties associated with
payment for these services at private hospitals. According to
VA, its options for contracting for maternity and delivery care
are greatly impeded because it cannot easily negotiate care for
the mother while excluding care for the newborn.
Technical amendments to education program provisions.--
Section 403 of the bill would make a technical correction to
section 301 of Public Law 108-183, which authorized certain
self-employment and on-job-training programs (franchises) for
less than six months under the Montgomery GI Bill (MGIB). VA
was unable to implement the provision because of a statutory
requirement that participants receive a training wage while
enrolled in on-job training. This section would waive the
training wage requirement for programs of less than six months
beginning October 1, 2005, and ending on September 30, 2010. VA
would be required to review and approve all such programs
before any MGIB educational assistance benefits could be paid.
Section-By-Section Analysis
Section 1 of the bill would provide that this Act may be
cited as the ``Servicemembers and Veterans Legal Protections
Act of 2004''.
Section 101 would amend section 101 of the Servicemembers
Civil Relief Act (SCRA) (50 U.S.C. App. 511) by adding a new
paragraph (a) to the definitions. This new paragraph would
define the term judgment to mean ``any judgment, decree, order
or ruling, final or temporary.''
Section 102 would amend section 107 of SCRA (50 U.S.C. App.
517) to require that written waivers of certain SCRA rights and
protections must also be executed in a separate instrument, and
add a subsection (c) to require that certain written waivers
must be in at least 12 point type.
Section 103 would amend section 202(a) of SCRA (50 U.S.C.
App. 522(a)) by inserting the words ``plaintiff or'' before
``defendant'', to provide that plaintiffs as well as defendants
under SCRA may request stays of civil proceedings.
Section 104(a) would amend subsection(a) of section 305 of
SCRA (50 U.S.C. App. 535) to clarify that dependents as well as
servicemembers are covered by section 305's residential and
motor vehicle lease termination provisions.
Section 104(b)(1) would amend section 305 of SCRA (50
U.S.C. App. 535) to provide that the SCRA's lease termination
provisions also apply when a servicemember has permanent change
of station orders from a State outside the continental United
States to any location outside that State.
Section 104(b)(2) would amend section 305 of SCRA (50 U.S.C
App. 535) to define the term ``military orders'' with respect
to a servicemember, as ``official military orders, or any
notification, certification, or verification from the
servicemember's commanding officer, with respect to the
servicemember's current or future military duty status.'' It
would also define the term ``continental United States'' for
purposes of the SCRA lease termination provisions as ``the 48
contiguous States and the District of Columbia.''
Section 104(c) would amend section 305 of SCRA (50 U.S.C.
App. 535) to clarify that individual deployments are covered
under the protections of the SCRA, as well as military unit
deployments.
Section 105 would add a new paragraph (5) to section 511(c)
of SCRA (50 U.S.C. App. 571(c)) to prohibit a tax jurisdiction
from imposing a use, excise or similar tax on the personal
property of a nonresident servicemember when the laws of the
tax jurisdiction fail to provide a credit against such taxes
for sales, use, excise or similar taxes previously paid on the
same property to another tax jurisdiction.
Section 201(a) would amend section 4317(a)(1)(A) of title
38, United States Code, by striking ``18-month period'' and
inserting ``24-month period'' as the maximum period for health
coverage a person may elect to continue employer-sponsored
health insurance when the employee is absent from employment by
reason of service in the uniformed services.
Section 201(b) would make the change to section
4317(a)(1)(A) effective for elections made on or after date of
enactment of this Act.
Section 202 would amend section 4332 of title 38, United
States Code, by striking ``no later than February 1, 1996, and
annually thereafter through 2000'' and inserting ``no later
than February 1, 2005, and annually thereafter'' for the
requirement that the Secretary of Labor, in consultation with
the Office of Special Counsel and the U.S. Attorney General,
provide annual reports to Congress on the disposition of cases
filed under USERRA.
Section 211(a) would amend chapter 43 of title 38, United
States Code, by adding a new section 4334 entitled: ``Notice of
rights and duties.''
Section 4334(a) would require each employer to provide to
persons entitled to rights and benefits under chapter 43 of
title 38, United States Code, a notice of the rights, benefits,
and obligations of such persons and such employers under this
chapter; this subsection would also provide that the
requirement for this notice could be met by posting of the
notice where employers customarily place notices for employees.
Section 4334(b) would require the Secretary of Labor to
provide to employers the text of the notice required under this
section.
Section 211(c)(1) would require the Secretary of Labor to
make available to employers the notice required under section
4334(a) of title 38, United States Code, not later than 90 days
after date of enactment of this Act.
Section 211(c)(2) would require that the amendments made by
section 211 shall apply to employers under chapter 43 of title
38, United States Code, on and after the first date referred to
in section 211(c)(1).
Section 212(a) would require the Secretary of Labor and the
Office of Special Counsel to carry out a demonstration project
under which certain claims against Federal executive agencies
under USERRA, under chapter 43 of title 38, United States Code,
are referred to, or otherwise received by, the Office of
Special Counsel for assistance, including investigation and
resolution of the claim as well as enforcement of rights with
respect to the claim.
Section 212(b)(1) would allow the Office of Special
Counsel, for purposes of the demonstration project, to receive
and investigate all claims under USERRA with respect to Federal
executive agencies in cases where the Office of Special Counsel
has jurisdiction over the related claims under section 1212 of
title 5, United States Code.
Section 212(b)(2) would define a related claim, for
purposes of the demonstration project, as a claim involving the
same Federal executive agency and the same or similar factual
allegations or legal issues as those being pursued under a
claim under USERRA.
Section 212(c)(1)(A) and (B) would allow the Secretary of
Labor to refer to the Office of Special Counsel pending related
claims filed before and during the demonstration project.
Section 212(c)(2) would define a claim, under chapter 43 of
title 38, United States Code, as a claim against a Federal
executive agency by a claimant with a social security account
number with an odd number as its terminal digit, or in the case
of a claim that does not contain a social security account
number, a case number assigned to the claim with an odd number
as its terminal digit.
Section 212(d) would require the Office of Special Counsel
to administer the demonstration project and require the
Secretary of Labor to cooperate with the Office of Special
Counsel in carrying out the demonstration project.
Section 212(d)(2) would allow for any reference to the
``Secretary'' in sections 4321, 4322, and 4326 of title 38,
United States Code, to be deemed a reference to the ``Office of
Special Counsel''.
Section 212(d)(3) would allow the Office of Special Counsel
to retain administrative jurisdiction over a claim referred to,
or otherwise received under the demonstration project.
Section 212(e) would require the demonstration project to
be carried out during the period beginning 60 days after the
date of enactment of the Act, and ending on September 30, 2007.
Section 212(f) would require the Comptroller General of the
United States to conduct periodic evaluations of the
demonstration project.
Section 212(f)(2) would require the Comptroller General to
submit a report to Congress on the evaluations no later than
April 1, 2007, and require the report to include: (A) a
description of the operations and results of the demonstration
project; (B) an assessment of the referral of claims to the
Office of Special Counsel under the demonstration project; (C)
an assessment of the feasibility and advisability of referring
all claims filed under chapter 43 of title 38, United States
Code, against Federal executive agencies to the Office of
Special Counsel for investigation and resolution; and (D)
recommendations for administrative action or legislation as the
Comptroller General deems appropriate.
Section 212(g)(1) would define the term ``Office of Special
Counsel'' as the Office of Special Counsel established by
section 1211 of title 5, United States Code.
Section 212(g)(2) would define the term ``Secretary'' as
the Secretary of Labor.
Section 212(g)(3) would allow for the term ``Federal
executive agency'' to have the same meaning as the term in
section 4303(5) of title 38, United States Code.
Section 301(a) would amend chapter 55 of title 38, United
States Code, by adding a new section 5506 to define `fiduciary'
as (1) a person who is a guardian, curator, conservator,
committee, or person legally vested with the responsibility or
care of a claimant (or a claimant's estate) or of a beneficiary
(or a beneficiary's estate; or (2) any other person having been
appointed in a representative capacity to receive money paid
under any of the laws administered by the Secretary for the use
and benefit of a minor, incompetent, or other beneficiary.
Section 302(a) would amend chapter 55 of title 38, United
States Code, as amended by section 301(a)(1), by adding at the
end a new section 5507 entitled ``Inquiry, investigations and
qualifications of fiduciaries.''
Section 5507(a) would require certification of a person for
payment of benefits of a beneficiary to that person as such
beneficiary's fiduciary under section 5502 of title 38, United
States Code, on the basis of (1) an inquiry or investigation by
the Secretary of the fitness of that person to serve as
fiduciary for that beneficiary (A) to be conducted in advance
of such certification; (B) to the extent practicable, to
include a face-to-face interview with such person; and (C) to
the extent practicable, to include a copy of a credit report
for such person issued within one year of the date of the
proposed appointment; (2) adequate evidence that certification
of that person as fiduciary for that beneficiary is in the
interest of such beneficiary (as determined by the Secretary
under regulations); and (3) the furnishing of any bond that may
be required by the Secretary.
Section 5507(b) would require that as part of any inquiry
or investigation of any person under subsection (a), the
Secretary would request information concerning whether that
person has been convicted of any offense under Federal or State
law which resulted in imprisonment for more than one year. If
that person has been convicted of such an offense, the
Secretary may certify the person as a fiduciary only if the
Secretary makes a specific finding that the person has been
rehabilitated and is an appropriate person to act as fiduciary
for the beneficiary concerned under the circumstances.
Section 5507(c)(1) would authorize the Secretary, in
conducting an inquiry or investigation under subsection (a)(1),
on an expedited basis that may include waiver of any specific
requirement relating to such inquiry or investigation,
including the otherwise applicable provisions of subparagraphs
(A), (B), and (C) of such subsection. Any such inquiry or
investigation carried out on such an expedited basis would be
carried out under regulations prescribed for purposes of this
section.
Section 5507(c)(2) would permit expedited waiver authority
of subsection (c)(1) with respect to a proposed fiduciary who
is (A) the parent (natural, adopted, or step-parent) of a
beneficiary who is a minor; (B) the spouse or parent of an
incompetent beneficiary; (C) a person who has been appointed a
fiduciary of the beneficiary by a court of competent
jurisdiction; or (D) being appointed to manage an estate where
the annual amount of veterans benefits to be managed by the
proposed fiduciary does not exceed $3600, as adjusted pursuant
to section 5312 of title 38, United States Code.
Section 5507(d) would authorize the Secretary to appoint
one or more temporary fiduciaries, for a period not to exceed
120 days, when needed in order to protect the assets of the
beneficiary while a determination of incompetency is being made
or appealed or a fiduciary is appealing a determination of
misuse. If a final decision has not been made within 120 days,
the Secretary could not continue the appointment of the
fiduciary without obtaining a court order for appointment of a
guardian, conservator, or other fiduciary under the authority
provided in section 5502(b) of title 38, United States Code.
Section 303(a) would amend chapter 61 of title 38, United
States Code, by adding two new sections: 6106 entitled ``Misuse
of benefits by fiduciaries''; and section 6107 ``Reissuance of
benefits.''
Section 6106(a) would prohibit a fiduciary from collecting
a fee from a beneficiary for any month with respect to which
the Secretary or a court of competent jurisdiction has
determined that the fiduciary misused all or part of the
individual's benefit, and any amount so collected by the
fiduciary as a fee for such month would be treated as a misused
part of the individual's benefit.
Section 6106(b)(1) would provide that if the Secretary or a
court of competent jurisdiction determines that a fiduciary
that is not a Federal, State, or local government agency has
misused all or part of a beneficiary's benefit that was paid to
such fiduciary, the fiduciary would be liable for the amount
misused. Such amount (to the extent not repaid by the
fiduciary) would be treated as an erroneous payment of benefits
under title 38, United States Code, to the fiduciary for
purposes of laws pertaining to the recovery of overpayments.
The amount of such overpayment would constitute a liability of
such fiduciary to the United States and could be recovered in
the same amount as any other debt due the United States.
Subject to paragraph (2), upon recovering all or any part of
such amount, the Secretary would pay an amount equal to the
recovered amount to such beneficiary or such beneficiary's
successor fiduciary.
Section 6106(b)(2) would specify that the total of the
amounts paid to a beneficiary (or a beneficiary's successor
fiduciary) under paragraph (1) and under section 6107 of title
38, United States Code, could not exceed the total benefit
amount misused by the fiduciary with respect to that
beneficiary.
Section 6106(c) would specify that, for purposes of this
chapter, misuse of benefits by a fiduciary occurs in any case
in which the fiduciary receives payment, under any laws
administered by the Secretary, for the use and benefit of a
beneficiary and uses such payment, or any part thereof, for a
use other than for the use and benefit of such beneficiary or
that beneficiary's dependents. Retention by a fiduciary of an
amount of a benefit payment as a fiduciary fee or commission,
or as attorney's fees (including expenses) and court costs, if
authorized by the Secretary or a court of competent
jurisdiction, would be considered to be for the use or benefit
of such beneficiary.
Section 6106(d) would authorize the Secretary to prescribe
by regulation the meaning of the term ``use and benefit'' for
purposes of this section.
Section 6106(e) would clarify that a determination by the
Secretary that a fiduciary has misused benefits is a decision
of the Secretary for purposes of section 511(a) of title 38,
United States Code.
Section 6107(a)(1) would require the Secretary to pay to a
beneficiary or the beneficiary's successor fiduciary an amount
equal to the amount of benefits that were misused in any case
in which the negligent failure of the Secretary to investigate
or monitor a fiduciary results in misuse of benefits by the
fiduciary.
Section 6107(a)(2) would state that there shall be
considered to have been a negligent failure by the Secretary to
investigate or monitor a fiduciary in the following cases: (A)
a case in which the Secretary failed to timely review a
fiduciary's accounting; (B) a case in which the Secretary was
notified of allegations of misuse, but failed to act in a
timely manner to terminate the fiduciary; (C) in any other case
in which actual negligence is shown.
6107(b)(1) would require the Secretary to pay to the
beneficiary or the beneficiary's successor fiduciary an amount
equal to the amount of such benefit so misused in any case in
which a fiduciary described in paragraph (2) misuses all or
part of an individual's benefits paid to such fiduciary.
Section 6107(b)(2) would specify that paragraph (b)(2)
applies to a fiduciary that (A) is not an individual; or (B) is
an individual who, for any month during a period when misuse
occurs, serves 10 or more individuals who are beneficiaries
under title 38, United States Code.
6107(c) would specify that in any case in which the
Secretary reissues a benefit payment (in whole or in part)
under subsection (a) or (b) of section 6107, the Secretary
would make a good faith effort to obtain recoupment from the
fiduciary to whom the payment was originally made.
Section 304(a) would amend chapter 55 of title 38, United
States Code, as amended by section 302(a), by adding the
following new sections: section 5508 entitled ``Periodic onsite
reviews of institutional fiduciaries''; and section 5509
entitled ``Authority to redirect delivery of benefit payments
when a fiduciary fails to provide required accounting.''
Section 5508 would require the Secretary, in addition to
such other reviews of fiduciaries as the Secretary may
otherwise conduct, to provide for periodic onsite review of any
person or agency located in the United States that receives the
benefits payable under laws administered by the Secretary
pursuant to the appointment as a fiduciary under section
5502(a)(1) of title 38, United States Code. This section would
apply in any case in which the fiduciary is serving more than
20 beneficiaries and the total annual amount of such benefits
exceeds $50,000, as adjusted pursuant to section 5312 of title
38, United States Code.
Section 5509(a) would permit the Secretary to require a
fiduciary to file a report or accounting pursuant to
regulations prescribed by the Secretary.
Section 5509(b) would permit the Secretary, in any case in
which a fiduciary fails to submit a report or accounting
required by the Secretary under subsection (a) after notices to
do so, to require that such fiduciary appear in person at a
regional office of the Department serving the area in which the
beneficiary resides in order to receive such payments.
Section 304(b) would amend chapter 61 of title 38, United
States Code, as amended by section 303(a), by adding the
following new sections: 6108 (a) through (c): Civil monetary
penalties; and 6109 (a) through (d): Authority for judicial
orders of restitution.
Section 6108(a) would provide that any person (including an
organization, agency, or other entity) who, having received,
while acting in the capacity of a fiduciary pursuant to section
5502 of title 38, United States Code, a payment under a law
administered by the Secretary for the use and benefit of
another individual, converts such payment, or any part thereof,
to a use that such person knows or should know is other than
for the use and benefit of such other individual shall be
subject to, in addition to any other penalty that may be
prescribed by law, a civil monetary penalty assessed by the
Secretary of not more than $5,000 for each such conversion.
Section 6108(b) would provide that any person who makes a
conversion of a payment described in subsection (a) and is
subject to a civil monetary penalty under that subsection by
reason of such conversion would also be subject to an
assessment by the Secretary, in lieu of damages sustained by
the United States resulting from the conversion, of not more
than twice the amount of any payments so converted.
Section 6108(c) would require that from amounts collected
under this section, the amount necessary to recoup the
Department's costs of such collection be credited to
appropriations currently available for the same purpose as the
appropriation that incurred those costs, to remain available
until expended.
Section 6109(a) would permit any Federal court, when
sentencing a defendant convicted of an offense arising from the
misuse of benefits under title 38, United States Code, to
order, in addition to or in lieu of any other penalty
authorized by law, that the defendant make restitution to the
Department.
Section 6109(b) would require that sections 3612, 3663, and
3664 of title 18, United States Code, pertaining to the
issuance and enforcement of orders of restitution apply under
subsection (a). Also, the section would provide that the
Department is considered the victim.
Section 6109(c) would require the court to state on the
record the reasons for not ordering restitution, or only
partial restitution.
Section 6109(d)(1) would require that except as provided in
paragraph (2), amounts received or recovered by the Secretary
pursuant to an order of restitution under subsection (a), to
the extent and in the amounts provided in advance in
appropriations Acts, be available to defray expenses incurred
by the Office of the Inspector General for the investigation of
fiduciaries under title 38, United States Code.
Section 6109(d)(2) would specify that paragraph (1) would
not apply where the restitution represents the amounts of
benefits misused by a fiduciary. Such restitution would be
repaid to the beneficiary or the beneficiary's successor
fiduciary unless such amounts had previously been repaid to the
beneficiary, in which case such amounts would be treated in the
same manner as overpayments recouped by the Secretary and would
be deposited to the credit of the applicable revolving fund,
trust fun, or appropriation.
Section 305(a) would amend chapter 55 of title 38, United
States Code, by adding a new section 5510 entitled ``Annual
report.''
Section 5510 would require the Secretary to include in the
Annual Benefits Report of the Veterans Benefits Administration
or the Secretary's Annual Performance and Accountability Report
information concerning fiduciaries who have been appointed to
receive payments for beneficiaries of the Department. As part
of such information, the Secretary would be required to
separately set forth the following: (1) the number of
beneficiaries in each category (veteran, surviving spouse,
child, adult disabled child, or parent); (2) the types of
benefit being paid (compensation, pension, dependency and
indemnity compensation, death pension or benefits payable to a
disabled child under chapter 18 of title 38, United States
Code); (3) the total annual amounts and average annual amounts
of benefits paid to fiduciaries for each category and type of
benefit; (4) the number of fiduciaries who are the spouse,
parent, legal custodian, court-appointed fiduciary,
institutional fiduciary, custodian-in-fact, and supervised
direct payment; (5) the number of cases in which the fiduciary
was changed by the Secretary because of a finding that benefits
had been misused; (6) how such cases of misuse of benefits were
addressed by the Secretary; (7) the final disposition of such
cases of misuse of benefits, including the number and dollar
amount of any civil or criminal penalties imposed; and (8) such
other information as the Secretary considers appropriate.
Section 306 would amend section 5312(b)(1) of title 38,
United States Code, to provide that the annual benefit amount
adjustments made under that section would also apply to the
amounts provided under sections 5507(c)(2)(D) and 5508 of title
38, United States Code.
Section 307 would provide that except as otherwise
provided, this title and the amendments made by this title
would take effect on the first day of the seventh month
beginning after the date of enactment of this Act.
Section 401(a) would require the Secretary of Veterans
Affairs to establish and maintain a national inventory of
medical waste management activities in the health-care
facilities of the Department of Veterans Affairs. The inventory
would include the following: (1) a statement of the current
national policy of the Department on managing and disposing of
medical waste, including regulated medical waste in all its
forms; and (2) a description of the program of each geographic
service area of the Department to manage and dispose of medical
waste, including general medical waste and regulated medical
waste, with a description of the primary methods used in those
programs and the associated costs of those programs, with cost
information shown separately for in-house costs (including
full-time equivalent employees) and contract costs.
Section 401(b) would require the Secretary of Veterans
Affairs to submit a report, not later than April 15, 2005, to
the Committees on Veterans' Affairs of the Senate and House of
Representatives on medical waste management activities in the
facilities of the Department of Veterans Affairs. The report
would include the following: (1) the inventory established
under subsection (a), including all the matters specified in
that subsection; (2) a listing of each violation of medical
waste management and disposal regulations reported at any
health-care facility of the Department over the preceding five
years by any State or Federal agency, along with an explanation
of any remedial or other action taken by the Secretary in
response to each such reported violation; (3) a description of
any plans to modernize, consolidate, or otherwise improve the
management of medical waste and disposal programs at health-
care facilities of the Department, including the projected
costs associated with such plans and any barriers to achieving
goals associated with such plans; and (4) an assessment or
evaluation of the available methods of disposing of medical
waste and identification of which of those methods are more
desirable from an environmental perspective in that they would
be least likely to result in contamination of air or water or
otherwise cause future cleanup problems.
Section 402(a) would amend subchapter VIII of chapter 17 of
title 38, United States Code, by adding a new section 1785
entitled ``Care for newborn children of veterans receiving
maternity care.''
Section 1785(a) would authorize the Secretary to furnish
care to a newborn child when a female veteran who is enrolled
in the health-care system established under section 1705 of
title 38, United States Code, is receiving maternity care from
the Department and delivers the child in a Department facility
or in a non-Department facility under a Department contract.
Section 1785(b) would require that in a case in which a
neonate covered by subsection (a) of section 1785 is born in a
Department facility, care furnished for the neonate at that
facility would be furnished without charge to the veteran who
delivered the neonate.
Section 1785(c) would require that in a case in which a
neonate covered by subsection (a) of section 1785 is born in a
non-Department facility or is provided care in a non-Department
facility following birth in a Department facility and transfer
from that facility, the Secretary may provide for the payment
of the cost of care and services for the neonate in the same
manner, and subject to the same limitations, as if such care
and services were emergency treatment furnished the veteran
subject to section 1725 of title 38, United States Code, except
that (1) the services for which the Secretary may make payment
would be limited to those items and services for which payment
may be made under the Medicare program under title XVIII of the
Social Security Act for post-natal care furnished to a neonate;
and (2) the rate of payment for such services may not exceed
the payment rates applicable to those items and services under
the Medicare program. Payments may be made under section 1725
only if there is no other source of payment for the services
and the veteran is personally liable for payment for the health
care provided.
Section 403(a)(1) would amend section 3677(b) of title 38,
United States Code, pertaining to the approval of on the job
training benefits, by adding a new paragraph (3).
Section 3677(b)(3) would clarify that notwithstanding
paragraph (1)(A) and subsection (c)(8), wages are not required
to be paid to an eligible person or veteran by a training
establishment described in section 3452(e)(2) of title 38,
United States Code. Section 3452(e)(2) defines a training
establishment as ``an establishment providing self-employment
on-job training consisting of full-time training for a period
of less than six months that is needed or accepted for purposes
of obtaining licensure to engage in a self-employment
occupation or required for ownership and operation of a
franchise that is the objective of the training.''
Section 403(a)(2) would authorize certain self-employment
training benefits for the five-year period beginning on October
1, 2005 and ending on September 30, 2010.
Section 403(b) would require that the amendments made by
section 403(a) would take effect as if included in the
enactment of section 301 of the Veterans Benefits Act of 2003
(Public Law 108-183; 117 Stat. 2658).
Performance Goals and Objectives
The reported bill would make improvements to laws providing
rights and benefits to veterans and servicemembers. These laws
are variously administered by the Secretary of Veterans
Affairs, the Secretary of Defense, the Secretary of Labor, and
the U.S. Special Counsel. The performance plans and goals for
the Departments of Veterans Affairs, Defense and Labor, and the
Office of Special Counsel are established in annual performance
plans, and are subject to the regular oversight of the
Committee, as well as evaluation by the U.S. Government
Accountability Office.
Statements of the Views of the Administration
STATEMENT OF THE HONORABLE SCOTT J. BLOCH, SPECIAL COUNSEL, UNITED
STATES OFFICE OF SPECIAL COUNSEL, JUNE 23, 2004, BEFORE THE VETERANS'
AFFAIRS COMMITTEE, U.S. HOUSE OF REPRESENTATIVES, CONCERNING THE
UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT (USERRA)
Introduction
Mr. Chairman, and distinguished members of the Committee, I am
honored to speak with you today about the vital role played by the
Office of Special Counsel (OSC) in enforcing the Uniformed Services
Employment and Reemployment Rights Act (USERRA) and to assure you that
OSC is dedicated to enforce the law expeditiously and decisively so
that no one's reemployment rights are denied and no one suffers
invidious discrimination because of military service.
The country is in the midst of an historic and unprecedented
mobilization and forthcoming demobilization of National Guard and
Reserve forces. As of June 9, 2004, there were more than 168,000
members of the Air and Army National Guard and Reserve Forces on active
duty to fight the global war on terrorism. Those brave and talented
servicemen and women have temporarily left their civilian vocations and
joined career servicemen, such as my 20-year old son, Marine Lance
Corporal Michael Bloch, serving in the First Battalion 7th Marine
Regiment, who has been stationed in Iraq once and is soon to be
deployed again to Iraq.
The Federal government is the country's largest employer of
guardsmen and reservists. Indeed, my Deputy and several other OSC
employees are members of the National Guard or Reserve.
God willing, each of the thousands of guardsmen and reservists who
are proudly and valiantly defending our freedom will return safely home
to their families, friends, and civilian jobs and careers.
In light of their dedication and service to our country, I am truly
honored to be among those public servants asked to provide you with
information about the important law that was enacted to protect their
employment and reemployment rights.
Moreover, I am grateful to be here because today's hearing provides
a timely occasion and an appropriate forum to dispel any false
impression regarding my agency's commitment to protecting the
employment rights of those brave military service members who have
served, are currently serving, and who will serve in the uniformed
services.
Before becoming Special Counsel on January 5, 2004, there had been
criticism of OSC's enforcement of USERRA. I examined therefore that
critical commentary in light of OSC's past policies and practices. I
concluded that some of the criticism was born of a lack of prompt
action on USERRA cases.
Mr. Chairman and Committee members, be assured that regardless of
what occurred or did not occur prior to my taking office, OSC, under my
leadership, is steadfastly committed to enforcing USERRA. As you know,
the statute states that it is the sense of the Congress that the
Federal government should be a model employer in fulfilling its
statutory obligations under USERRA. I assure you that as head of the
independent agency with authority to prosecute violations of USERRA, I
share completely in Congress' sense. Indeed, I have given USERRA
matters a new found priority so that it now receives the attention it
justly deserves.
OSC's Role in Enforcing USERRA
Pursuant to Section 4324 of Title 38, OSC is authorized to act as
the attorney for an aggrieved person and initiate legal action against
the involved Federal employer before the U.S. Merit Systems Protection
Board (MSPB). The OSC is the Federal sector's ``special prosecutor'' of
meritorious USERRA cases. As special prosecutor, OSC seeks to obtain
full corrective action on behalf of claimants either via litigation
against, or full corrective action settlements with, the involved
Federal employer.
Under USERRA, a person who has sought relief through the U.S.
Department of Labor (DOL), Veterans' Employment and Training Service
(VETS), may request that OSC review his or her USERRA claim to
determine whether it has merit and, if so, represent the person in
USERRA litigation before the MSPB.
When such a request is made, OSC receives from the DOL's Regional
Solicitor (RSOL) the VETS investigative file and the RSOL's legal
analysis of the claim. As special prosecutor, OSC objectively reviews
the facts and laws applicable to each claim. Where the Office of
Special Counsel is satisfied that a claimant is entitled to relief,
then we may exercise our prosecutorial authority and represent the
claimant before the MSPB and, if required, on appeal to the U.S. Court
of Appeals for the Federal Circuit.
From fiscal years 2000 through 2003, OSC has received more than 50
referrals from VETS. During that time, full corrective action was
successfully negotiated on every USERRA claim that OSC determined had
merit.
Prior to today, OSC had never filed a USERRA action before the
MSPB. Mr. Chairman, unfortunately I had to instruct my staff to file a
case this morning with MSPB because an Agency was not willing to
provide adequate relief for a service member. I assure you that under
my leadership there will be no hesitation to commence litigation
against a Federal agency where the evidence shows that such agency has
failed to comply with any provision of USERRA.
Improving the Process
As mentioned, I have carefully examined USERRA's referral process
since becoming Special Counsel. I have determined that the process
creates unnecessary inefficiency.
For example, it is unclear whether OSC has the authority under
USERRA to investigate claims or pursue disciplinary action against
offending supervisors as we do in other federal employment violations
we enforce. Instead, the investigative function is performed by VETS.
Hence, if deemed necessary during our review of a USERRA claim, OSC
will request that the involved Federal agency voluntarily provide
additional information. Additionally, pursuant to the February 7, 2001,
Memorandum of Understanding (MOU) between OSC and VETS, OSC may request
VETS investigative assistance. Indeed, pursuant to that MOU, VETS
recently assisted OSC in obtaining additional relevant evidence that is
important to our current review of a particular case.
While those methods are adequate for OSC to collect additional
evidence, the bifurcation of the investigative and prosecutorial steps
is not as efficient as OSC's authority to investigate and prosecute
allegations of prohibited personnel practices under Title 5.
I agree with British Prime Minister William Ewart Gladstone that
``justice delayed is justice denied.''
Already, I have made changes to reduce inefficiency by eliminating
duplication and delay. First, through our experience in investigating
and analyzing prohibited personnel practices such as whistleblower
reprisal cases, we have learned that the closer our attorneys are
involved in the investigation, the more efficiently we resolve cases.
For example, the merger of investigative and analytical functions
lessens the chances of ``over-investigating'' cases that are without
merit and increases the chances of identifying cases warranting
prosecution. As to the latter, the sooner we find meritorious claims,
the sooner OSC can move toward obtaining corrective action on behalf of
the aggrieved person.
Thus, at my urging and with my approval, OSC and DOL are drafting
amendments to our MOU concerning the referral process. The changes
under consideration aim to have OSC's investigative and legal expertise
involved at a much earlier stage than under the current referral
process. In particular, we have asked VETS to identify, as soon as
practical, difficult cases that would benefit from OSC's early
involvement. By alerting our office to such cases, there will be a
reduction in duplication of effort.
I appreciate Department of Labor Solicitor Howard Radzely and his
staff for working closely with OSC in bringing about this change, and I
have already seen the benefits of having OSC's enforcement role
triggered sooner. In fact, soon after this idea was presented, an RSOL
invited OSC's involvement in a USERRA matter prior to referring the
matter to us. The OSC contacted the agency and we obtained an extension
of the agency-set deadline for the claimant to accept a settlement
offer that DOL had procured. The OSC thereafter obtained additional
information from the agency and, along with the information obtained by
VETS, was able to guide the claimant to a successful resolution of his
USERRA claim. But for DOL's cooperation in allowing OSC to be involved
earlier than usual, the settlement offer would have expired, and the
claimant may not have secured a favorable resolution.
Moreover, OSC has changed the manner in which USERRA referrals are
handled internally. Since becoming Special Counsel, I have established
a Special Project Unit (SPU). SPU's overriding function is to maximize
OSC's efficiency in fulfilling its many crucial missions. The SPU can
be likened to a SWAT team that can be quickly deployed to address any
deficiency in OSC's ability to fulfill its various missions. When such
an issue arises, OSC personnel having particular expertise in the given
area are detailed to SPU. For example, SPU is examining new ways to
eliminate permanently OSC's chronic backlogs.
Experienced attorneys with specialized knowledge of USERRA have
been detailed to SPU and, at my direction, all USERRA referrals are
assigned to SPU. By assigning all USERRA referrals to SPU, the matters
receive priority attention and consideration. Additionally, OSC is
prepared to detail additional attorneys and investigators to SPU to
handle any surge in USERRA referrals as the result of the record number
of guardsmen and reservists being demobilized and returning to the
Federal workforce.
In summary, OSC has taken steps to speed up the referral process
such that meritorious USERRA claims can be more quickly identified and
prosecuted. I further pledge to devote whatever additional resources
are needed to ensure that the law is vigorously enforced.
Educating the Public
I sense another problem affecting the referral process: lack of
awareness among the Federal workforce about OSC's role in enforcing
USERRA. Regardless of the merit of a USERRA claim, a person has the
right to ask that his or her unresolved claim be referred to OSC. Yet,
in fiscal year 2003, OSC received only seven USERRA referrals while the
total number of Federal sector complaints is in the hundreds.
That low number of referrals may be the result of either: a) people
knowingly choosing to bypass OSC as an avenue of redress, or b) people
lacking accurate information about how OSC can protect their employment
and reemployment rights. As to the latter, we want the public to know
that OSC is here to assist persons who have had their reemployment
rights violated and who have suffered discrimination because of their
military service. We have already taken steps to send that message.
First, I have changed OSC's prohibited personnel practice outreach
program so that it now includes information about OSC's role in
enforcing USERRA. Now, each time OSC visits a Federal agency to provide
prohibited personnel practice training, Federal employees will be
informed of OSC's role in protecting the employment and reemployment
rights of guardsman and reservists.
Second, we have also been working closely with the Department of
Defense's Employer Support for the Guard and Reserve (ESGR) to ensure
that accurate information about OSC is being disseminated more broadly.
I extend my appreciation to ESGR for helping get the word out about
OSC's vital role under USERRA.
Finally, OSC's USERRA Coordinator--a GS-15 Supervisory Attorney
with USERRA expertise--maintains OSC's telephonic and electronic USERRA
``hotlines'' and regularly provides information and assistance to
persons and employers about their respective rights and
responsibilities under USERRA.
We are encouraged that these efforts will lead to a greater public
awareness of our role, and we will continue to look for additional ways
to get out the message that OSC will aggressively enforce the law and
protect veterans, reservists, and guardsmen.
As for the seeming reluctance of persons to seek OSC's assistance,
allow me to make the most of my appearance here today by setting the
record straight:
I say to the brave guardsmen and reservist risking their lives for
our freedom, I am completely and passionately committed to the
protection of your employment and reemployment rights. Your sacrifices
merit no less than OSC's 100% commitment to enforcing USERRA.
I state emphatically before this committee to the heads of every
Federal agency that one USERRA complaint is one too many. As Special
Counsel, I:
1) will not tolerate discrimination against persons because of
their service in the uniformed services;
2) will not permit anything less than the prompt reemployment of
persons upon their return from military service; and
3) will prosecute aggressively the failure to comply with any
provision of USERRA, and I will not hesitate to file an action before
MSPB if necessary.
With that in mind, I challenge every Federal agency to be a model
employer under USERRA by protecting fully, vigilantly, and
enthusiastically the employment and reemployment rights of its
employees and applicants for employment. It is an ambitious goal, but
one that is within reach--and it is the right thing to do.
Indeed, it is a goal that Federal agencies must strive to attain;
and, to every Federal agency trying to do so, OSC pledges its
assistance. As for complacent agencies, be advised that OSC shall not
waiver from its commitment to enforce USERRA aggressively, diligently,
and zealously.
Conclusion
Mr. Chairman and members of the Committee, regardless of what may
have been the past policy, under my leadership; OSC takes its role as
the sole prosecutorial enforcer of USERRA seriously. As you can see, we
have already moved away from past practice and have given USERRA cases
the priority they deserve.
Shakespeare wrote:
There is a tide in the affairs of men, which taken at the
flood, leads on to fortune. Omitted, all the voyage of their
life is bound in shallows and in miseries. On such a full sea
are we now afloat. And we must take the current when it serves,
or lose our ventures.
As the Federal government is facing an historic and unprecedented
number of guardsmen and reservist returning to their federal careers,
OSC will soon be afloat upon a full sea.
Consequently, we are properly focused, and newly invigorated to
fulfill our vital role under USERRA. We will navigate the current with
unwavering commitment to enforce USERRA law expeditiously and
decisively. We will welcome any legislative changes that enhance our
ability to enforce this important law.
Mr. Chairman and members of the Committee, I thank you for the
opportunity to testify today.
----------
STATEMENT OF THE HONORABLE DAN G. BLAIR, DEPUTY DIRECTOR, OFFICE OF
PERSONNEL MANAGEMENT, BEFORE THE COMMITTEE ON VETERANS' AFFAIRS, UNITED
STATES HOUSE OF REPRESENTATIVES
Good morning Mr. Chairman and members of the Committee. I
appreciate the opportunity to appear before you today to discuss the
proposed legislation expanding health insurance coverage for our
deployed service members and the public sector's obligation to veterans
under the Uniformed Services Employment and Reemployment Rights Act
(USERRA).
President George W. Bush and Office of Personnel Management (OPM)
Director, Kay Coles James, are dedicated to ensuring veterans receive
the rights and benefits to which they are entitled under all veterans'
employment laws, including USERRA. In truth, Director James has both a
professional and a personal interest in veterans' rights issues. Her
son-in-law recently returned from active duty in the Naval Reserves. So
you know her dedication is genuine.
The Federal Government is the Nation's leader in employing
veterans. Approximately one out of every four Federal employees is a
veteran. The number of veterans in the Federal workforce is roughly
450,000. What's more, the Federal Government employs more reservists
and National Guard members than any other employer--about 120,000 in
total, of whom nearly 65,000 are military technicians whose civilian
Federal employment requires National Guard or Reserve membership.
Today, over 15,000 Federal employees are serving on active duty
with the Guard and Reserve. These veterans left their employment and
placed their careers on hold to go fight in far-off lands . . . for us.
These brave men and women were not forced to serve--it was by choice.
They volunteered! These veterans deserve more than our thanks. When
they leave the uniformed service, they deserve to know their right to
return to public sector employment is protected.
As the leader in veterans' employment, the Director takes OPM's
obligation to reemploy these men and women under USERRA very seriously.
Again, it is not just the law . . . it is the right thing to do. We
administer veterans' entitlements under the United States Code, in both
title 5, including veterans' preference in employment and reduction in
force, as well as title 38, which covers USERRA reemployment rights.
(Title 38 also governs veterans' entitlement to benefits administered
by the Department of Veterans Affairs (VA)).
Health Benefits Extension
First, I will speak to the proposed legislation to expand health
benefit premium payments for reservists called up for active military
service.
OPM is the Government's chief personnel office, which includes
responsibility for administering the Federal Employees Health Benefits
(FEHB) Program for Federal employees and annuitants. OPM is committed
to finding ways to provide health benefits for our called-up employee
reservists who bravely commit themselves to defending our Country.
Before 1994, Federal law allowed employee reservists to continue
their FEHB enrollment for up to 365 days while on military duty. USERRA
extended the 12 month period to 18 months by amending section 8906 of
title 5 to provide up to 6 months additional coverage for reservists
called to active duty. USERRA also empowered agencies to pay both the
enrollee share and the Government share of the FEHB premium for called-
up reservists for up to the entire 18 months.
On May 13, 2002, OPM Director James issued a Memorandum for Heads
of Executive Departments and Agencies stating that OPM strongly
encourages agencies to assist employees called-up to active duty by
paying both shares of the FEHB premium. Director James specifically
asked agencies to pay both shares of the premium in support of these
reservists supporting Operation Iraqi Freedom, the September 11
terrorist attacks, Kosovo, other ongoing operations and future
operations under title 10 of the United States Code.
Last year, we asked agencies how much of the FEHB premium they pay
for these reservists. I am pleased to report most agencies pay both
shares. Of the 114 agencies surveyed, 96 pay the full premium. We have
learned the Postal Service recently indicated they will pay both shares
of the premium, retroactive to 2003.
OPM will continue to support our called-up employees in every way
possible. If the extension of FEHB coverage to 24 months becomes law,
we will again strongly encourage agencies to pay both shares of the
health benefits premium for the entire 24-month period. Based on the
number of reservists now called to active duty and assuming up to 20
percent are extended to 24 months we estimate the cost to the agencies
of the additional premium to be $9.6 million.
USERRA Reemployment Rights
Now, I would like to discuss reemployment rights under USERRA as it
applies to the public sector.
Basically, USERRA:
Prohibits discrimination against persons because of their
service in the Armed Forces Reserve, the National Guard, or other
uniformed services;
Prohibits an employer from denying any employment benefit
based on an individual's membership or application for membership, or
performance of, application for, or obligation for service in the
uniformed services;
Applies to all executive branch agencies, including the
U.S. Postal Service; and
Provides the right of called-up Reservists and National
Guard members, as well as individuals who left their jobs to enlist in
the Armed Forces, to be reemployed in their jobs when their military
service obligation is over.
OPM is responsible for, and may order the placement of, a returning
military service member in a different agency if it is impossible or
unreasonable for the original agency to reemploy the returning veteran,
if, for instance, the original agency was abolished.
Any Federal employee, permanent or temporary, who performs duty
with a uniformed service whether voluntary or involuntary, is entitled
to be restored to the position he or she would have attained had the
employee not entered the uniformed service, provided the employee:
Gave the agency advance notice of departure, except where
prevented by military circumstances;
Was released from uniformed service under honorable
conditions;
Served not more than a cumulative total of 5 years, with
certain exceptions; and
Applies for restoration within statutory time limits.
Pursuant to OPM's regulations in part 353 of title 5 of the Code of
Federal Regulations, agencies must tell their employees who enter the
uniformed service about their entitlements, obligations, benefits, and
appeal rights. Also, we note that under the proposed H.R. 4477, all
public and private employers with employees having USERRA rights, would
be required to post a notice, with text to be provided by the Secretary
of Labor, of those rights and benefits.
Those employees completing their military service obligation must
apply for reemployment within specific timeframes, depending on how
long they served. Agencies must reemploy these employees as soon as
possible after receiving the reemployment application but no later than
30 days after receipt.
Generally, returning employees must be treated as if their
employment had not been interrupted by military service. They must be
reemployed in the position for which they would have been qualified. If
they are not qualified for that position and cannot become qualified
through reasonable employer efforts, the employee is entitled to be
placed in the position he or she left.
Employees reemployed under USERRA are treated like they never left
for most purposes including seniority, pay increases, retirement (a
deposit to the retirement fund is usually required to cover the
military service period), and leave rate accrual. Reemployed veterans
are protected from not-for-cause separations (for example, by reduction
in force) for 1 year after their return for those who served more than
180 days and 6 months for those who served more than 30 days but less
than 180 days.
Applicants or employees who believe that an agency has not complied
with the law or with OPM regulations governing USERRA restoration
rights may file a complaint with the Department of Labor's local
Veterans' Employment and Training Service (VETS) or, if VETS is
unsuccessful in resolving the complaint, appeal to the Merit Systems
Protection Board.
OPM Actions for Veterans
Director James has directed OPM to take a number of steps to
guarantee that the rights and entitlements of our veterans are not
compromised as they return to their Federal jobs. We provide guidance
to Federal agencies and departments as well as directly to veterans.
On September 14, 2001, 3 days after the tragedy of
September 11, we published extensive guidance to agencies on the rights
and benefits of employees called to active duty.
On October 29, 2001, we published a set of Frequently
Asked Questions on military leave.
We update ``VetGuide'' on OPM's Web site to ensure it
remains the most comprehensive site for veterans' information.
As a part of our general oversight authority, which we execute
through Human Resource Operations audits and Delegated Examining Unit
(DEU) audits, OPM ensures that veterans are protected against
discrimination. Each year, we conduct approximately 20 operations
audits and 125 DEU audits Governmentwide. We notify agencies of our
coverage of veterans' issues and programs before each review and
discuss key OPM initiatives.
Through the newly created OPM Veteran Invitational Program (VIP),
we are providing veterans with timely, accurate, and useful information
to inform them of their rights and employment opportunities with the
Federal Government. The VIP provides assistance to military personnel
who are transitioning to civilian life through various informational
tools and publications. In this regard, OPM works with Transition
Assistance Program offices on military bases to recruit and assist
veterans. We distribute posters, pamphlets, and wallet size information
cards as well as inform veterans through an accessible Web link. OPM
has also produced the DVD ``What Veterans Need to Know About Veterans'
Preference,'' a comprehensive 40-minute video seminar of veterans'
preference rights and eligibilities.
In addition to the VIP, Director James and the OPM Team:
Have developed outreach material to distribute at
military bases' Transition Assistance Programs (TAP); Veterans Affairs
Regional Offices; Veterans Service Organizations at the national, State
and local levels; the U.S. Department of Labor's Veterans Employment
and Training Service; and at recruitment fairs, including our recent
Nationwide Working for America Recruitment Fairs.
Have improved our USAJOBS Web site to make it more
veteran-friendly by adding several veterans' links and additional
veterans' employment information.
Continue to explain veterans' rights at national
conventions, conferences, workshops, and service officer training
sponsored by the Veterans Service Organizations (VSOs). Also, we have
reestablished quarterly meetings with VSO representatives for updates
on issues of interest and provide an opportunity for them to share
their concerns with OPM. I personally chair these meetings in which we
invite leading experts on veterans' employment issues to share
information.
Actively participate as a member of the National
Committee for Employer Support of the Guard and Reserve (ESGR), which
is a Department of Defense-sponsored organization that seeks to
minimize issues and misunderstandings that may arise between Reservists
serving on active duty and their employers.
Are actively involved with and a member of the National
Task Force on Disability (assisting with the employment of Disabled
Veterans) and the President's National Hire Veterans Committee, on
which I personally serve.
Work with the Department of Labor and the Department of
Veterans Affairs to facilitate the employment of veterans, and share
program information with the human resources community and others.
Have staffed booths during the recent series of OPM-
sponsored nationwide recruitment fairs to provide information
concerning the VIP and other veterans' employment benefits and
protections, such as that offered under USERRA. We also conducted
workshops at each fair to provide veterans with information on
employment preference, special appointment authorities, and complaint
procedures.
OPM has been at the forefront of efforts to preserve and protect
veterans' rights in Federal employment. We share the view held by
Veterans Service Organizations that our Nation owes a debt of gratitude
to its veterans. Veterans' preference laws provide a measure of
compensation for those brave young men and women who left their
families and homes to answer our Nation's call to arms.
Recently, Director James convened a meeting of the Chief Human
Capital Officers Council and the leaders of America's Veterans Service
Organizations at Walter Reed Army Medical Center. She took advantage of
this opportunity to remind attendees that there are no longer any
excuses for not using the many hiring authorities available to Federal
agencies to bring veterans into the Federal service.
At a recent visit to Walter Reed, Director James stated that OPM
will continue ``aggressive'' audits to ensure veterans' preference law
is upheld. The day-long event included a personal message of thanks
from Director James on behalf of the nation's 1.8 million civil
servants, as well as training seminars and informational workshops for
the soldiers conducted by OPM experts. OPM staff offered seminars
including one which explained veterans' preference, appointing
authorities, basis of preference, and veterans' preference types and
benefits. Other seminars and workshops covered navigation of the
USAJOBS.opm.gov Web site, resume writing, interviewing skills, and the
Federal application process. Staff also met one-on-one with military
personnel about the opportunities and benefits within the Government
and the processes for obtaining a Federal job.
OPM recently hosted a special Veteran Employment Symposium on
veterans' preference and recruitment. The all-day event, attended by
agency human capital leaders, human resources specialists, and program
managers, focused on advancing existing policies and strategies to
recruit veterans into the Federal workforce, and to reiterate that
veterans' preference is the law and not a courtesy. As Director James
told the audience of over 250 attendees:
Today's veteran brings the same level of dedication to the job
as previous generations of veterans, but in addition they bring
many of the high-tech skills needed in the current Federal work
force. The Federal Government has a responsibility to help
these men and women as they transition back to civilian life.
As members of the best trained and volunteer military in the
world, veterans have demonstrated an appreciation and
competence for excellence and teamwork, and I cannot think of a
better source of talent for the Federal Government than those
who have completed their service in uniform.
And just yesterday, as part of our VIP, OPM staff conducted an
outreach effort at the Department of Veterans Affairs Hampton
Rehabilitation Medical Center in Hampton, Virginia. OPM experts
provided employment information to veterans seeking careers in the
Federal civil service, including training on maximizing our
USAJOBS.opm.gov website in Federal job searches and writing resumes.
Conclusion
The Federal human resources community understands our veterans are
a valued resource who have earned, through their very life's blood,
hiring preference and reemployment rights we should be so very honored
to provide. We must never forget disabled veterans have paid a very
personal price for our freedom. Veterans are assets to any
organization. They bring strength, courage and commitment in a way that
cannot be fully imagined by those who have never stood in harm's way
for the cause of their country.
I would be glad to answer questions you might have.
----------
STATEMENT OF THE HONORABLE DAVID C. IGLESIAS, UNITED STATES ATTORNEY FOR
THE DISTRICT OF NEW MEXICO, DEPARTMENT OF JUSTICE, BEFORE THE HOUSE
VETERANS AFFAIRS COMMITTEE, UNITED STATES HOUSE OF REPRESENTATIVES
CONCERNING THE UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT
JUNE 23, 2004
Mr. Chairman and Members of the Committee:
I appreciate the opportunity to appear before you today to discuss
the Department of Justice's (``DOJ's'') representation of service
members pursuant to the Uniformed Services Employment and Reemployment
Rights Act of 1994 (``USERRA''). USERRA provides the fundamental right
to reinstatement to civilian employment (under specified conditions)
following non-career military service. USERRA also includes a broad
anti-discrimination provision, prohibiting discrimination or acts of
reprisal against an employee or prospective employee based upon past,
current, or future military obligations. The Committee's interest in
this important area is especially timely in light of the large number
of Reserve and National Guard members serving on active duty in the
Persian Gulf and elsewhere.
In this statement, we address first the procedures we follow in
handling USERRA claims. Next, we provide pertinent data on the number
and disposition of claims we received during FY 2002, FY 2003, and the
first half of FY 2004. Finally, we identify the steps the Department of
Justice has taken recently to provide guidance to our attorneys
handling USERRA cases and to publicize to employers their obligations
under the law.
I. Procedures
Members of the uniformed services alleging a violation of USERRA
may obtain representation by DOJ, provided that the member first
submits a complaint to the Department of Labor's (``DOL's'') Veterans
Employment and Training Service (``VETS'') and VETS is unable to
successfully resolve it.
Where DOL is unable to resolve a complaint and the service member
requests referral of his or her claim for consideration of
representation, DOL, through its Regional Solicitors (``RSOL''), refers
the claim to DOJ's Civil Division. Each referral includes the VETS
investigative file, a memorandum prepared by VETS, and a letter or
memorandum to DOJ from the RSOL analyzing the merits of the claim based
upon the facts and the law and providing a recommendation as to whether
DOJ should or should not represent the claimant.
DOJ's Civil Division serves as the gateway for DOL's USERRA
referrals. Based upon its review of the investigative file, the VETS
memorandum, the RSOL's memorandum, and its own analysis, the Civil
Division either forwards the case to a United States Attorney's Office
(``USAO'') for appropriate action or declines representation and
returns the matter to the RSOL because the claim lacks merit. When we
return a claim, DOL informs the service member of our decision against
representation and reminds the claimant that he or she remains free to
pursue the claim through private counsel. Our determination not to
provide representation nearly always accords with DOL's conclusion that
the claim lacks merit.
When the Civil Division refers a claim to a USAO, the United States
Attorney assigns the matter to an Assistant United States Attorney
(``AUSA''), who reviews the investigative file and the VETS and RSOL
memoranda and then interviews the claimant and potential witnesses. The
AUSA may recommend that the United States Attorney decline to represent
the service member because further review and investigation
demonstrates that the claim lacks merit. If the AUSA determines that
the claim is meritorious, and the United States Attorney agrees, the
USAO represents the service member. Where representation is provided,
the AUSA will typically contact the employer and attempt to resolve the
matter without litigation. If this proves impossible, the AUSA will
file a complaint against the employer in Federal district court.
Once suit is filed, a USERRA case proceeds much like any other
litigation. After the complaint is filed, discovery may be undertaken,
dispositive motions may be filed, and a trial and subsequent appeal may
occur. Alternatively, a settlement may be negotiated at any stage of
the litigation.
One type of case is somewhat unusual: a suit against a State.
Recent case law curtailed employee suits against State governments
based upon Federal law because of the immunity provisions of the
Eleventh Amendment to the Constitution. E.g., Velasquez v. Frapwell,
160 F.3d 389 (7th Cir. 1998) (affirming dismissal of USERRA claim
brought by employee against State employer as barred by Eleventh
Amendment), vacated in part, 165 F.3d 593 (7th Cir. 1999). In response,
Congress amended USERRA in 1998, to allow DOJ to sue States in the name
of the United States on behalf of State employees. (Alternatively,
USERRA allows a service member represented by private counsel to sue in
his or her own name in State court, in accordance with the laws of the
State.) As set forth below, DOL referrals involving claims against
States represent a relatively small percentage of total referrals in
recent years, and in many of those cases DOL recommended against
representation.
II. Statistics
FY 2002 and 2003.
The number of USERRA claims DOL referred to DOJ annually has
increased approximately 20 percent since September 11, 2001. During FY
2002, DOJ received 52 cases; 14 were referred to USAOs and 38 were
returned to DOL because the facts were insufficient for action. During
FY 2003, DOJ received 53 cases; 12 were referred to USAOs and 41 were
returned to DOL due to a lack of merit. By way of comparison, during FY
2001 and 2000, DOJ received 45 and 43 cases, respectively.
Of the 105 cases DOJ received during FY 2002 and 2003, 16 (or
approximately 15 percent) involved claims against States. We declined
representation in 12 of the 16 cases because we agreed with DOL's
conclusion that the claims lacked merit. Of the 4 claims against States
referred to USAOs, DOJ agreed to represent 3 of the claimants and has
since settled 2 of those 3 claims without litigation. The fourth case
was returned to DOL by agreement between DOL and the USAO.
Of the 26 cases the Civil Division referred to USAOs during FY 2002
and 2003 (including the 4 involving States), the USAOs agreed to
represent the claimants in 12 cases and declined representation in 11
cases. 2 cases are under review at the USAOs and no representation
decisions have yet been made. The remaining case was returned to DOL by
agreement. In the 12 cases where representation was provided, the USAOs
settled 4 of the claims without litigation and 4 after filing suit; 3
cases are pending and 1 was closed due to the claimant's failure to
cooperate with the USAO. In the 11 cases where representation was
declined, 7 declinations were due to a lack of merit, 3 due to the
claimant's failure to cooperate, and 1 due to mootness. A summary of
the status or disposition of the 26 cases referred to USAOs during FY
2002 and 2003 is attached. Attachment A.
First Half of FY 2004. During the first six months of FY 2004, DOJ
received 31 USERRA claims (12 of the 31 claims presented a similar
legal issue and they were referred as a group). The Civil Division
referred 5 claims to USAOs and declined representation in 26 because
they lacked merit (the 26 declinations included the 12 claims referred
as a group). Of the 5 cases referred to USAOs, the USAOs declined
representation in 3 and the remaining 2 are presently under review. 14
of the 31 FY 2004 referrals--almost 50 percent--involved claims against
States. The percentage is skewed because the 12 referred as a group
were against States. Of the 14 claims against States, the Civil
Division declined representation in 13 and a USAO declined 1.
One factor which may affect the number of referrals to DOJ is
USERRA's new provision permitting the district court to award (in
addition to other relief) attorney fees, expert witness fees, and other
litigation expenses to a service member who prevails in the litigation
and is represented by private counsel. This may provide greater
incentives for the private bar to provide representation and also
motivate private employers to comply voluntarily to avoid additional
costs. On the other hand, members incur no cost when being represented
by the Department of Justice. The fee provisions may encourage
litigation that could otherwise be avoided. Claimants may choose to
retain private counsel and institute lawsuits, rather than seek the
assistance of DOL, which historically has had a high rate of success in
resolving these disputes amicably and obtaining employers' voluntary
compliance with the law.
III. DOJ's Recent Proactive Efforts
DOJ recognizes the important role it plays in enforcing USERRA. We
are committed to working closely with DOL in these matters and to
representing vigorously USERRA claimants with meritorious claims. In
addition to promptly processing USERRA referrals, the Civil Division
and the United States Attorneys have taken the following recent steps
in this area:
The most recent edition of DOJ's Federal Civil Practice
Manual (February 2003) includes a new chapter on USERRA.
In April 2003, because of the mobilization of Reserve and
National Guard members, the Military Issues Working Group of the
Attorney General's Advisory Committee sent to all United States
Attorneys a memorandum on USERRA to highlight the importance of USERRA
cases and provide guidance in handling such claims.
In June 2003, in a collaborative effort, lawyers from DOJ
(both the Civil Division and the United States Attorneys) and DOL
presented a Justice Television Network program entitled ``A Practical
Legal Guide to USERRA for AUSAs.'' The program was broadcast to United
States Attorneys' offices nationwide from our National Advocacy Center.
In September 2003, a Civil Division lawyer participated
in the ``USERRA Compliance Assistance'' program at DOL headquarters The
program was held for DOD and DOL employees, as well as private
employers interested in learning about USERRA.
Several United States Attorneys have conducted press
conferences, lectured at Chamber of Commerce meetings, written articles
and, in general, got the word out to the business community and the
Guard and Reserve communities that DOJ is taking this issue very
seriously.
Summary of Status or Disposition, By Category, of 26 USERRA Cases
Referred to USAOs during FY 2002-2003
As of June 9, 2004
Category
----------------------------------------------------------------------------------------------------------------------
Representation granted ..............................
a) settled without 4.............................
litigation
b) settled after filing 4.............................
complaint
c) pending (pre-filing) 3.............................
d) closed due to failure to 1.............................
cooperate
12............................
Total:
Representation declined ..............................
a) due to lack of merit 7.............................
b) due to failure to 3.............................
cooperate
c) due to mootness 1.............................
11............................
Total:
Under review (no representation decision made)
Returned to DOL by agreement
----------------------------------------------------------------
Total Cases: 26
----------
STATEMENT OF CHARLES CICCOLELLA, DEPUTY ASSISTANT SECRETARY FOR
VETERANS' EMPLOYMENT AND TRAINING, U.S. DEPARTMENT OF LABOR, BEFORE THE
UNITED STATES HOUSE OF REPRESENTATIVES COMMITTEE ON VETERANS' AFFAIRS
JUNE 23, 2004
Chairman Smith, Ranking Member Evans, and other distinguished
members of the House Veterans' Affairs Committee, the Department of
Labor is pleased to have this opportunity to provide comments on
compliance with the Uniformed Services Employment and Reemployment
Rights Act (USERRA). As you know, USERRA has been very much in the news
for nearly three years now. Within days after the attacks of September
11, 2001, the President authorized a partial mobilization, under which
up to one million members of the Ready Reserve could be activated for
up to 24 months. Since this historic mobilization began, over 385,854
of these citizen-soldiers have been called, of whom 156,667 currently
remain on active duty. This includes 76 employees of the Department of
Labor, 16 of whom currently remain on active duty.
USERRA is particularly important now as it provides reemployment
rights to those men and women called from civilian jobs to serve in the
nation's defense. In addition, the law prohibits employer
discrimination against veterans and reservists because of their
military service or obligations.
HISTORY
USERRA's roots go back to 1940, when the Congress was considering
the nation's first peacetime draft. At the same time, the lawmakers
resolved to provide newly inducted service members the right to return
to their pre-service employers. To achieve this, what came to be
popularly known as the Veterans' Reemployment Rights (VRR) law was
enacted.
By the early 1990s, the VRR law had become a complex and often
difficult patchwork of legislative amendments and court decisions. It
was severely tested by the mobilization and subsequent return of some
265,000 Guard and Reserve members from Operation Desert Shield/Desert
Storm in 1991. USERRA revised and restructured the VRR law, continuing
or clarifying most of its provisions. It also made some substantive
changes.
The legislative history of USERRA makes it clear that pre-USERRA
case law developed under the VRR remains useful in interpreting the
statute, to the extent it is consistent with USERRA. For example, in
fulfilling our obligations to administer and help enforce USERRA, we
are ever mindful of the two principles laid down by the United States
Supreme Court in its first reemployment rights case, Fishgold v.
Sullivan Drydock. Those principles are as valid today as they were in
1946--first, that the law is to be construed liberally to the benefit
of those it protects; and second, that upon completion of service, the
returning servicemember is to be reemployed in the position he or she
would have occupied had employment continued during the period of
service--this is known as the ``escalator principle.''
USERRA is experiencing its greatest test due to the current war, as
well as Operations Noble Eagle and Enduring Freedom. The Department of
Labor believes that USERRA has worked extremely well in the face of its
current challenges. I would like to turn now to our USERRA experiences
and activities since September 11, 2001.
CURRENT DATA
Since USERRA was enacted in October 1994, the Veterans' Employment
and Training Service (VETS) has reported periodically to this Committee
on our activities related to the administration and enforcement of the
statute. For Fiscal Years 1995 through 2001, which ended September 30,
2001, we reported a steady decline in the number of USERRA cases opened
year-by-year. We opened nearly 1,400 cases in FY 1995, but by FY 2001
the number had declined to 895. In the wake of the mobilization that
began in September 2001, this trend has reversed.
I should say here that while we have experienced an increase in
cases opened, it is not proportional to the enormous number of men and
women who have been called to duty. The nation's employer community is
overwhelmingly supportive of employees who have been activated under
the ongoing mobilization.
During FY 2002, we opened 1,195 new USERRA cases, an increase of
less than 35 percent over the previous fiscal year. For FY 2003, the
number of cases opened increased again, but at a lower rate. For that
year, we opened 1,315 new USERRA cases, an increase of 10 percent over
the previous year. As of mid-June, we had opened 979 new cases for FY
2004, which, on an annualized basis, would yield a further increase of
about 10 percent over FY 2003.
I can report with pride that the VETS' staff has been up to the
challenge of dealing with the increased USERRA caseload. Despite the
increase of USERRA claims filed, our case handling statistics have
remained generally consistent with prior years. As of mid-June, we have
closed 954 cases during FY 2004. We closed 86 percent of these cases
within 90 days after opening and 93 percent within 120 days. Of the
cases closed, slightly more than one-third of the claims filed were
found to be without merit or the claimants were found to be not
eligible for USERRA protection, and about another 25 percent were
closed because the claimant withdrew or did not pursue the complaint.
One-third of the claims were successfully resolved in favor of the
claimant, either because the claim was granted, or a mutually agreeable
settlement was achieved. About 7 percent of cases closed were referred
for further legal action. Of those cases, about nine in ten were
referred to the Department of Justice because they involved a non-
Federal employer, and the remaining cases were referred to the Office
of Special Counsel because they involve Federal executive agencies.
The percentage of USERRA complaints that are filed against
governmental employers has remained fairly consistent in recent years.
Since FY 2001, 30 to 35 percent of cases opened each year have involved
public employers. Federal cases have made up 10 to 14 percent of the
total, while State or local governments have accounted for around 20
percent.
With respect to the types of issues arising under USERRA, we have
found that two issues have recurred with the greatest frequency. Those
issues involve discrimination of employees, due to their status as
either current or former members of the armed forces, and reinstatement
of demobilized service members seeking to return to their civilian
employment. Here, the term ``reinstatement'' refers not only to those
employees who were not reemployed in their former positions, but may
also include cases in which the employees were improperly reinstated in
positions that were not commensurate with the status or pay grade to
which they would otherwise be entitled. Thus far, in fiscal year 2004,
discrimination accounts for thirty-one percent of issues raised in
USERRA cases, and reinstatement accounts for twenty-three percent of
the issues raised in those cases.
COMPLIANCE ASSISTANCE EFFORTS
While our staff has been extremely effective at resolving
complaints, a major focus for the Department remains the resolution of
problems before complaints arise. Secretary Chao has made compliance
assistance a priority with respect to all the laws administered and
enforced by the Department, including USERRA.
Since September 2001, VETS' staff nationwide have responded to more
than 23,000 requests for USERRA information from employers, members of
Congress, Guard and Reserve component members, the media and the
general public. In addition, we have delivered USERRA briefings and
presentations to more than 147,000 people nationwide. Most of these
briefings were for members of mobilized Guard and Reserve units, but we
have also reached many employers and employer groups. Just a few
examples--Web casts for the U.S. Chamber of Commerce, the Society for
Human Resource Management, the H.R. Policy Association (formerly known
as the Labor Policy Association) and others; two appearances as a
featured guest on the national FEDtalk radio broadcast; an appearance
on a television broadcast to all the offices of the United States
Attorneys and a nationwide network of National Guard units; a
television broadcast co-presented by the Department of Veterans Affairs
that addressed USERRA entitlements for disabled veterans; and an
interactive conference call with employer members of the Equal
Employment Advisory Council.
In fulfilling our statutory obligations to provide help and
educational outreach, we have received tremendous support and
assistance from colleagues both inside and outside the Department of
Labor. The Department's Office of the Solicitor has provided support in
all areas, particularly by participating in briefings and helping us
respond to technical questions. They also helped draft proposed USERRA
regulations, which I am pleased to report are in the final stages of
review and I expect the regulations to be available for public comment
in September 2004.
Additionally, we have received numerous briefings and invaluable
technical assistance support from the Employee Benefits Security
Administration. The Employment Standards Administration has helped us
develop interpretations of the relationships between USERRA and other
laws, such as the Family and Medical Leave Act and the Fair Labor
Standards Act. Our web site's resource guide for the general public was
revised in March 2003 to update and clarify VETS position on pension
issues. And, VETS participates in DOL's Internet based Employment Laws
Assistance for Workers and Small Businesses (elaws) Advisor program,
whereby the Department provides interactive Advisors for USERRA and
other laws. The e-VETS Resource Advisor, a portal site to numerous web
sites with information and resources helpful to veterans, has been
released and is available through the VETS homepage as well as through
the elaws Advisor program on the DOL web site.
In July 2002, a joint memorandum was issued on the ``Protection of
Uniformed Service Members' Rights to Family and Medical Leave.'' The
memorandum was signed by the Solicitor of Labor, the Assistant
Secretary for VETS, and the Administrator of the Wage and Hour
Division. The memorandum is posted on the VETS' web site.
Outside of the Department, I would like to mention the
extraordinary efforts by our colleagues at the National Committee for
Employer Support of the Guard and Reserve (ESGR) headed by General
Bobby Hollingsworth, its Executive Director. Their small national staff
and more than 4,000 volunteers nationwide perform prodigious service in
promoting understanding between employers and their reservist-employees
and in helping to informally resolve disputes when they arise. We would
be hard pressed to do what we do without ESGR. Additionally, the Office
of Personnel Management (OPM) remains a steadfast partner in helping to
distribute information to federal agencies on the employment rights of
the Reserve and National Guard. The Federal Government is the largest
single employer of members of the Armed Forces Reserves, and we are
proud of their dedication and commitment. You may be interested to know
that Federal agencies have the authority to pay both the employee and
government health benefit contributions for up to 18 months when
employees are called to active duty. OPM took the lead in promulgating
guidance and encouraging Federal agencies to pay the employees' portion
of the health benefit premiums. Finally, the Department of Justice and
the Office of Special Counsel provide valuable assistance with respect
to referred cases and providing technical assistance and outreach on
USERRA.
LEGISLATION
I am also pleased to present the Department's views on two
introduced bills and a draft bill, which pertain primarily to
protecting the employment rights of service members.
* * *
Patriotic Employer Act of 2004
H.R. 4477, the ``Patriotic Employer Act of 2004,'' would amend
USERRA to require employers to post a notice of the rights and duties
that apply under that Act. The Department is always interested in
finding new and effective ways to convey the rights and
responsibilities of employers under USERRA. As part of its ongoing
compliance assistance efforts, the Department continues to reach out to
employers and, as such, is not opposed to this bill.
USERRA Health Care Coverage Extension Act of 2004
Section 2 of the draft bill, ``USERRA Health Care Coverage
Extension Act of 2004,'' would extend the period of USERRA continuation
coverage from 18 to 24 months for service members who elect such
coverage, which would align this coverage period with the length of
time reservists can be mobilized under the current mobilization
authority. The bill provides that the 24-month period applies to all
continuation coverage elections occurring on or after the date of
enactment.
The Department supports the intent of this bill and would be
pleased to work with the Committee on any technical issues.
In Section 3, the bill would reinstate the requirement to report on
certain cases and complaints in consultation with the U.S. Attorney
General and the U.S. Special Counsel. In the past, the Department found
this requirement to be useful. As such, the Department has no objection
to the reinstatement of these reporting requirements. The Department
would defer to the Attorney General and the Special Counsel for their
respective views on the implementation of this provision.
CONCLUSION
We remain committed to informing employers about USERRA and
continuing our mission of protecting the reemployment rights of our
service members, including the 76 service members employed by this
Department. Mr. Chairman and members of the Committee, this concludes
my statement. I will be happy to answer any questions.
----------
TESTIMONY OF CRAIG W. DUEHRING, PRINCIPAL DEPUTY ASSISTANT SECRETARY OF
DEFENSE, RESERVE AFFAIRS, BEFORE THE COMMITTEE ON VETERANS' AFFAIRS,
HOUSE OF REPRESENTATIVES
* * *
JUNE 23, 2004
Mr. Chairman and members of the Committee, thank you for giving me
the opportunity to come before you this morning to discuss several
proposed improvements to the Servicemembers Civil Relief Act (SCRA) and
the Uniformed Services Employment and Reemployment Rights Act (USERRA).
The Department of Defense supports enactment of the Servicemembers
Legal Protection Act of 2004, which would amend several provisions of
the SCRA to reflect our experience with the SCRA during its first six
months. Each proposed amendment in the draft bill addresses a problem
that has been encountered by servicemembers and brought to the
attention of the Department through the legal assistance programs of
the Military Services. Legal assistance attorneys play a key role in
ensuring that servicemembers are able to fully exercise the rights and
protections afforded by the SCRA, and we have been attentive to their
experiences during this initial shakedown period under the new law. The
Department passed on its concerns and recommendations to your staff,
and you have responded expeditiously with this draft bill and this
hearing. I commend and thank the Committee and its staff for this
impressive responsiveness to the needs of our servicemembers.
Section 2 of the draft bill would amend the SCRA by defining the
term ``judgment'' to include any judgment, decree, order, or ruling,
final or temporary. Defining this term, which is used in several key
provisions of the Act, will ensure that servicemembers are not excluded
from any of the Act's rights or protections, such as the section 201
protection against default judgments, by a narrower State definition of
the term ``judgment.''
Section 3 of the draft bill would require that written waivers of
SCRA rights or protections be executed as an instrument separate from
the obligation or liability to which they apply and that any such
waiver that applies to a contract, lease, or similar legal instrument
be in at least 12-point type. This amendment would protect
servicemembers from fine print embedded in, for example, residential
and motor vehicle leases that would waive the right under section 305
of the SCRA to terminate those leases under certain circumstances.
Section 4 of the draft bill would simply clarify that the right to
request a stay of proceedings under section 202 of the SCRA applies to
servicemembers who are plaintiffs in civil proceedings as well as those
who are defendants. The applicability of the stay provisions to both
plaintiffs and defendants was clear in the predecessor Soldiers' and
Sailors' Civil Relief Act, and this amendment would provide the same
clarity in the SCRA.
Section 5 of the draft bill has several purposes. First, it would
clarify that when a servicemember terminates a residential or motor
vehicle lease under section 305 of the SCRA, any obligation of a
dependent who is jointly liable under the lease is also terminated.
This clarification is essential if the full intent of this lease-
termination provision is to be realized and military family members are
to have the flexibility they need when a servicemember is deployed. For
example, this amendment will ensure that if a servicemember's spouse
chooses to return to his or her hometown and the family support network
there, he or she will not be deterred from doing so because of a
residential lease obligation.
Second, section 5 would also extend the ability to terminate a
motor vehicle lease upon a permanent change-of-station to
servicemembers stationed in States or Territories outside the
continental United States, such as Alaska, Hawaii, and Puerto Rico.
This amendment would simply correct the unintentional exclusion of
these servicemembers resulting from the current wording of section 305
of the SCRA.
Third, section 5 would define the term ``military orders'' to mean
official military orders, or any notification, certification, or
verification from a servicemember's commanding officer with respect to
the servicemember's current or future military-duty status. This
amendment recognizes that, in the case of deployments, servicemembers
are usually not issued official orders that could be provided to a
lessor as required by section 305 of the SCRA when terminating a
residential or motor vehicle lease. Under this broad definition of
``military orders'', a servicemember could satisfy this procedural
requirement by presenting the lessor with, for example, a letter from
his or her commanding officer confirming the particulars of an upcoming
deployment.
Fourth, section 5 would clarify that the deployments that trigger a
servicemember's ability to terminate a residential or motor vehicle
lease under section 305 of the SCRA include not only deployments with a
military unit, but also deployments by individuals in support of a
military operation. This amendment recognizes that some servicemembers
deployed in support of a military operation do not deploy with a unit,
but as individuals.
Section 6 of the draft bill would amend section 511 of the SCRA to
state that a tax jurisdiction may not impose a use, excise, or similar
tax on the property of a nonresident servicemember when the laws of the
tax jurisdiction fail to provide a credit against such sales, use,
exercise, or similar taxes previously paid on the same property to
another tax jurisdiction. This amendment is needed to protect
servicemembers from double taxation, which is possible under the
current wording of section 511, as interpreted by the Supreme Court
(Sullivan v. United States, 395 U.S. 169 (1969)) when it considered
identical language in the Soldiers' and Sailors' Civil Relief Act.
* * *
The Department of Defense supports section 2 of the draft USERRA
Health Care Coverage Extension Act of 2004. Increasing from 18 months
to 24 months the maximum period of employer-provided health care plan
coverage that an employee covered by USERRA may elect to continue is an
important amendment that will align this coverage period with the
length of time for which reservists can be mobilized under the current
mobilization authority.
We defer to the Department of Labor on section 3 of the draft bill,
which would reinstate the requirement for a comprehensive annual report
on the disposition of cases filed under USERRA.
The Department also defers to the Department of Labor on section 2
of H.R. 4477, the Patriotic Employer Act of 2004, which would require
employers to post notice of USERRA rights, benefits, and obligations in
the place of employment of individuals protected by that Act.
I would again like to thank the Committee and its staff for all of
your efforts on behalf of our servicemembers. The Department of Defense
appreciates this opportunity to discuss these important matters with
you.
----------
STATEMENT OF JACK McCOY, DIRECTOR, VA EDUCATION SERVICE, BEFORE THE
SUBCOMMITTEE ON BENEFITS, HOUSE COMMITTEE ON VETERANS' AFFAIRS
JUNE 16, 2004
Mr. Chairman and Members of the Subcommittee, thank you for the
opportunity to appear today before this Subcommittee. I am pleased to
testify today on H.R. 4032 and the draft bill, the ``Veterans Self-
Employment Act of 2004.'' Let me first discuss H.R. 4032, the
``Veterans Fiduciary Act of 2004.''
H.R. 4032
Background
During testimony before this Subcommittee in July of last year, we
provided extensive background information about VA's Fiduciary Program,
as well as statistics relating to quality reviews and to other steps VA
is taking to oversee payments made to beneficiaries who are incapable
of managing funds. The information we provided then remains accurate,
and VA has not experienced any significant problems carrying out
activities related to the Fiduciary Program since our July 2003
testimony.
Summary of VA's Position
Before getting into the specifics of the bill, I would first like
to summarize VA's position. We agree that there is a value in
strengthening the protections afforded to incompetent beneficiaries and
for close oversight of fiduciaries. However, we see the current bill as
imposing restrictions and requirements that are, in many instances, too
broad for VA's unqualified support.
Key Provisions of H.R. 4032
Section 2(a) of H.R. 4032 would define, for purposes of chapters 55
and 61 of title 38, United States Code, the term ``fiduciary'' as: (1)
a person who is a guardian, curator, conservator, committee, or person
legally vested with the responsibility or care of a claimant (or a
claimant's estate) or of a beneficiary (or a beneficiary's estate); or
(2) any other person having been appointed in a representative capacity
to receive money paid under any of the laws administered by the
Secretary for the use and benefit of a minor, incompetent, or other
beneficiary. Section 2(b) would make conforming changes to 38 U.S.C.
Sec. Sec. 5502 and 6101. This definition provides needed clarity, and
we can support this provision. There would be no costs associated with
this change.
Section 3 of H.R. 4032 would require the Secretary to base any
certification of a person as a beneficiary's fiduciary on an
investigation of that person's fitness to serve as that beneficiary's
fiduciary, adequate evidence that certification of that person would be
in the beneficiary's interest, and the furnishing of any bond that may
be required. Proposed 38 U.S.C. Sec. 5507 would also require the
Secretary to conduct investigations in advance of certification as a
fiduciary, would require a face-to-face interview with the person to
the extent practicable, and would require the Secretary to request
information about whether the person has a criminal record that
resulted in imprisonment for more than one year. If a person has such a
criminal record, VA could certify the person as a fiduciary only if the
Secretary specifically finds that the person has been rehabilitated and
is the most appropriate person to act as fiduciary for the beneficiary.
For certain proposed fiduciaries (the parent of a minor beneficiary,
the spouse or parent of an incompetent beneficiary, or a court-
appointed fiduciary), VA would be permitted to investigate the
fiduciary's fitness on an expedited basis, which may include waiver of
any specific requirement relating to investigations.
This provision would codify requirements already contained in VA's
Adjudication Procedures Manual (M21-1MR, Part XI, Ch. 2, Section D.12)
concerning initial appointment of fiduciaries and would add a
requirement to investigate a person's fitness to serve as a fiduciary.
Because VA has directives in place that generally parallel the
requirements of this proposal, the provision is unnecessary. We also
note that the requirement for investigation of potential fiduciaries
carries a cost of about $527,000 annually. We believe the current
screening procedure is sound and see little benefit in routinely
requiring investigations that could unnecessarily delay urgently needed
appointments of fiduciaries. Accordingly, we do not support this
provision.
Should the committee decide to proceed with this portion of the
legislation, we suggest that an additional category be added to
proposed 38 U.S.C. Sec. 5507(c)(2) that would authorize VA to expedite
investigation of fiduciaries if the amount of benefits the fiduciary
will be handling is minimal.
Finally, in this regard, the proposed statutory language requiring
heightened scrutiny of potential fiduciaries that have been convicted
of an offense that resulted in imprisonment for more than one year is
also unnecessary. VA believes that it would be unnecessarily burdensome
to determine if such a potential fiduciary were rehabilitated,
particularly since VA already has the authority to make payment to any
fiduciary who we determine will serve the best interest of a
beneficiary. Further, VA already strives to avoid appointing as
fiduciaries individuals who have criminal records.
In summary, we believe that VA's current process of appointing
fiduciaries is working well and do not feel that the legislation would
provide any significant improvements. Indeed, addition of proposed 38
U.S.C. Sec. 5507 may unnecessarily complicate a process that, in most
instances, achieves VA's goal of appointing well-qualified fiduciaries.
If it is enacted, we estimate that 6 additional FTE at the GS 10/5
level would be required to carry out these functions in VBA's field
offices. Additionally, 1 FTE at the GS 13/5 level would be required to
support these functions in VA's Central Office. We estimate that the
total annual cost of this provision would be $447,000.
Section 4 of H.R. 4032 would add two new provisions to title 38 to
enhance VA's ability to protect incompetent beneficiaries. The first,
proposed 38 U.S.C. Sec. 6106, would have five subsections. The first
subsection would prohibit a fiduciary from collecting a fee from a
beneficiary for any month for which VA or a court of competent
jurisdiction has determined that the fiduciary misused all or a part of
the benefits provided to the fiduciary. We support enactment of this
provision.
The second subsection, 38 U.S.C. Sec. 6106(b), would make a
fiduciary liable to the United States if the Secretary or a court of
competent jurisdiction has determined that the fiduciary has misused
benefits entrusted to him or her in a fiduciary capacity. This
provision, which excludes Federal, State, or local government agency
fiduciaries, would direct VA to treat misused funds that are not repaid
by the fiduciary as erroneous benefits payments, which may be recovered
as debts owed to the United States and subsequently repaid by VA to the
beneficiary. We support enactment of this provision.
The third, fourth, and fifth subsections of proposed section 6106
would define ``misuse of benefits by a fiduciary,'' authorize certain
VA regulations, and subject VA's decision that a fiduciary has misused
benefits to appeal to the Board of Veterans' Appeals and the Court of
Appeals for Veterans Claims. Making these decisions appealable would be
consistent with the fact that VA determinations concerning overpayments
of benefits are currently appealable. Accordingly, we support these
provisions provided that savings found in another VA program can offset
any new costs. However, we have reservations about the recourse of
appeal through the Board of Veterans' Appeals (BVA). Our concerns
involve both appropriateness of this venue and administrative
efficiency. The BVA traditionally handles appeals relating to veterans'
(or dependents' or survivors') claims for benefits. If this appeal
mechanism would prove to be unduly burdensome to the claims-
adjudication process in practice, we would recommend an alternative
process. We currently cannot provide costs concerning these provisions,
and will forward this information as soon as it becomes available.
Section 4 of H.R. 4032 would also add to title 38 a new section
6107. That provision would consist of three new subsections. The first
subsection, 38 U.S.C. Sec. 6107(a), would require VA to reissue
benefits to the beneficiary or alternative fiduciary in any case in
which the Secretary's negligent failure to investigate or monitor a
fiduciary results in the misuse of benefits by the fiduciary. VA,
through its Fiduciary Program staff, field examinations, review of
fiduciary accountings, general monitoring, and quality control, strives
to avoid all instances of misuse of VA funds by fiduciaries.
Nevertheless, VA recognizes that in isolated incidents its fiduciary
staff may fail to meet the high standards set for this program. We do
not believe that a beneficiary should suffer financially because of
VA's negligent failure to oversee a fiduciary. Accordingly, we support
enactment of 38 U.S.C. Sec. 6107(a) provided that savings found in
another VA program can offset any new costs.
The second subsection, 38 U.S.C. Sec. 6107(b), would require VA to
reissue benefits in a case of benefit misuse by a fiduciary who is not
an individual or is an individual who serves fifteen or more
beneficiaries. VA supports enactment of this provision provided that
savings found in another VA program can offset any new costs. We
estimate that subsections (a) and (b) together would cost $364,000 in
the first year and approximately $4 million over ten years.
The third subsection, 38 U.S.C. Sec. 6107(c), would require VA to
make a good-faith effort to recoup from the original fiduciary funds
reissued to a beneficiary or alternative fiduciary under subsection (a)
or (b). VA supports enactment of this provision provided that savings
found in another VA program can offset any new costs. At this time, we
do not know what the costs of the provision would be.
Section 5 of H.R. 4032 would add four new sections to title 38. The
first of these, 38 U.S.C. Sec. 5508, has three major requirements. The
first would require the Secretary to provide for periodic onsite review
of any fiduciary who is a person who serves fifteen or more
individuals, is a certified community-based nonprofit social service
agency, or is an agency that provides VA-related fiduciary services for
50 or more individuals. Section 5508(b) would define ``certified
community-based nonprofit social service agency'' for these purposes.
Proposed 38 U.S.C. Sec. 5508(c) would require VA, within 120 days of
the end of each even-numbered fiscal year, to report the results of the
periodic onsite reviews conducted under 38 U.S.C. Sec. 5508(a) and (b)
during the previous two fiscal years, as well as any other fiduciary
reviews conducted during that time.
The requirement to conduct the onsite reviews described in this
provision appears to duplicate a requirement in the recently enacted
Social Security Protection Act of 2004 (Public Law 108-203). Section
102 of Public Law 108-203 contains extensive requirements pertaining to
oversight of entities that serve as representative payees for Social
Security Administration (SSA) beneficiaries, including an annual report
on the results of reviews conducted during that year. Because SSA has
6.7 million beneficiaries in their representative payee program,
compared to VA's 100,000 beneficiaries, we believe it would be
preferable for VA to use SSA's reports on such representative payees.
In cases where the payee is not on the SSA list of payees, VA would
either ask SSA to add that payee to its list or VA would conduct an on-
site review of that payee.
We believe the requirements in proposed 38 U.S.C. Sec. 5508(a) and
(b) are too broad to serve VA purposes and that alternative means are
available to accomplish the intended purpose. The reporting
requirements in proposed section 5508(c) are also nearly identical to
those in section 102 of Public Law 108-203. See Pub. L. No. 108-203,
Sec. 102(b), 118 Stat. 493, 498 (2004). We also believe that the
resources devoted to producing such a report would be better used
elsewhere.
Accordingly, we cannot support enactment of proposed 38 U.S.C.
Sec. 5508. We estimate that 6 additional FTE at the GS 10/5 level, and
1 FTE at the GS 13/5 level would be required to carry out the functions
associated with enactment of 38 U.S.C. Sec. 5508. We estimate that the
total annual cost of this FTE would be approximately $447,000.
Additionally, we estimate that there will be a cost of $350,000 in the
first year associated with updating several VA computer systems in
order to generate the data necessary for the biennial report to
Congress.
Section 5 would also add a new section entitled ``Authority to
redirect delivery of benefit payments when a fiduciary fails to provide
required accounting.'' This provision, which would be codified at 38
U.S.C. Sec. 5509, would include the authority both to require reports
and accountings from fiduciaries and to direct a fiduciary who fails to
file a required report or accounting to personally appear at the local
regional office to receive benefit payments. VA's current procedures
already require certain fiduciaries to submit regular accountings and
authorizes the replacement of a fiduciary that fails to provide a
required accounting. The new provision has a purpose very similar to
that of the current 38 U.S.C. Sec. 5502(b), which states in pertinent
part:
The Secretary, in the Secretary's discretion, may suspend
payments to any such guardian, curator, conservator, or other
person who shall neglect or refuse, after reasonable notice, to
render an account to the Secretary from time to time showing
the application of such payments for the benefit of such
incompetent or minor beneficiary, or who shall neglect or
refuse to administer the estate according to law.
Although proposed 38 U.S.C. Sec. 5509 essentially restates
authority already provided by 38 U.S.C. Sec. 5502(b), we have no
objection to including it in the current legislation provided that
savings found in another VA program can offset any new costs. Indeed,
the addition of this provision may provide a means by which VA can
emphasize to fiduciaries the need to submit timely reports and
accountings. Accordingly, we have no objection to this provision. We
are currently evaluating whether this provision will result in any
additional costs; our preliminary conclusion is that there will be no
costs.
Section 5 of H.R. 4032 would also add two new sections to chapter
61 of title 38. The first would be 38 U.S.C. Sec. 6108, ``Civil
monetary penalties,'' authorizing a civil penalty of not more than
$5,000 for each conversion by a fiduciary appointed under 38 U.S.C.
Sec. 5502 of a VA benefit payment to a use that the fiduciary knows or
should know is for a use other than for the intended beneficiary.
Section 6108(b) would subject a fiduciary who improperly converts a VA
benefit payment to an assessment, in lieu of damages sustained by the
United States, of not more than twice the amount of any payments
converted. Under section 6108(c), any amounts collected as civil
penalties or assessments would be credited to applicable appropriations
to recoup VA's costs in pursuing civil collection actions against
fiduciaries. Although we have no objection to these provisions,
provided that any costs associated with them could be offset from
savings found in another VA program, VA does not have a process in
place for pursuing civil penalties against persons who misuse VA
benefit payments. Costs associated with pursuing civil collection
actions against fiduciaries would be borne primarily by VA's Office of
General Counsel, through its various regional counsels. Such costs
would depend directly on the number of civil penalty cases pursued by
those offices. At this point, it is impossible to estimate such costs.
The final new provision that H.R. 4032 would add is a new 38 U.S.C.
Sec. 6109, ``Authority for judicial orders of restitution.'' Section
6109(a) would authorize a Federal court, as part of the sentencing of a
defendant convicted of an offense involving the misuse of VA benefits,
to order the defendant to make restitution to VA. Section 6109(b) would
make various provisions of title 18, United States Code, applicable to
such restitution orders, and section 6109(c) would require a court that
does not order full restitution to state its reasons on the record.
Proposed 38 U.S.C. Sec. 6109(d) would describe the framework for
handling payments obtained as a result of a court-ordered restitution.
Subsection (d)(1) would authorize use of amounts recovered under
restitution orders to defray expenses incurred in the supervision and
investigation of fiduciaries. Subsection (d)(2) would require that
``amounts received in connection with misuse by a fiduciary of funds
paid as benefits'' be paid to the individual whose benefits were
misused or, if VA has reissued the benefits, be treated as a recouped
overpayment and deposited into the applicable revolving fund, trust
fund, or appropriation. VA has no objection to this amendment and does
not expect to incur any costs as a result of this provision.
Section 6 of H.R. 4032 would make the provisions of this act, with
the exception of new 38 U.S.C. Sec. Sec. 6106 and 6107, effective the
first day of the seventh month beginning after the date of the
enactment of this Act. Sections 6106 and 6107, which concern
fiduciaries' misuse and reissuance of benefits, would apply to
determinations of fiduciary misuse of funds made by VA after the date
of enactment. VA has no objection to this provision.
Section 7 of H.R. 4032 would require VA to prepare a report
evaluating whether the existing procedures and reviews for the
qualification of fiduciaries are sufficient to enable the Secretary to
protect benefits paid to such individuals from being misused by
fiduciaries and to submit the report no later than 270 days after
enactment. This provision would direct the Secretary to include in the
report any recommendations the Secretary considers appropriate. The
purpose such a report would serve 270 days following enactment (and
less than 90 days following the proposed effective date) is uncertain
to us, and we therefore oppose this requirement.
In closing my remarks on H.R. 4032, Mr. Chairman, I want to
emphasize again that VA's fiduciary program has a long history of
providing oversight for those veterans who cannot manage their VA
benefits. We take this responsibility seriously. I look forward to
working with you and your committee to strengthen the safeguards
available to provide additional protection to these beneficiaries. Now
I would like to address the Veterans Self-Employment Act of 2004.
* * *
Mr. Chairman, this concludes my statement. I will be pleased to
respond to any questions you or the members of the Subcommittee may
have.
Roll Call Votes
During Committee consideration of H.R. 4658, there was a
recorded vote on an amendment offered by Mr. Buyer to strike
section 402, ``Care for newborn children of veterans receiving
maternity care.'' The amendment was rejected on a roll call
vote of 21-1. The vote of Committee Members is as follows:
Date: Wednesday, July 21, 2004
Call to Order: 1:15 p.m.
Adjourn: 2:25 p.m.
Subject: Markup of H.R. 4658, the Servicemembers and
Veterans Legal Protections Act of 2004
----------------------------------------------------------------------------------------------------------------
NAME YEA NAY NOT VOTING
----------------------------------------------------------------------------------------------------------------
Chris Smith, NJ, Chairman............ ..................... x......................
Michael Bilirakis, FL................ ..................... x......................
Terry Everett, AL.................... ..................... ..................... x
Steve Buyer, IN...................... x...................... .....................
Jack Quinn, NY....................... ..................... ..................... x
Cliff Stearns, FL.................... ..................... ..................... x
Jerry Moran, KS...................... ..................... x......................
Richard Baker, LA.................... ..................... ..................... x
Rob Simmons, CT...................... ..................... x......................
Henry Brown, SC...................... ..................... x......................
Jeff Miller, FL...................... ..................... x......................
John Boozman, AR..................... ..................... x......................
Jeb Bradley, NH...................... ..................... x......................
Bob Beauprez, CO..................... ..................... x......................
Ginny Brown-Waite, FL................ ..................... x......................
Rick Renzi, AZ....................... ..................... ..................... x
Tim Murphy, PA....................... ..................... x......................
Lane Evans, IL, Ranking.............. ..................... x......................
Bob Filner, CA....................... ..................... ..................... x
Luis Gutierrez, IL................... ..................... ..................... x
Corrine Brown, FL.................... ..................... ..................... x
Vic Snyder, AR....................... ..................... x......................
Ciro Rodriguez, TX................... ..................... x......................
Michael Michaud, ME.................. ..................... x......................
Darlene Hooley, OR................... ..................... x......................
Ted Strickland, OH................... ..................... ..................... x
Shelley Berkley, NV.................. ..................... x......................
Tom Udall, NM........................ ..................... x......................
Susan Davis, CA...................... ..................... x......................
Tim Ryan, OH......................... ..................... x......................
Stephanie Herseth, SD................ ..................... x......................
TOTAL...................... 1...................... 21..................... 9
----------------------------------------------------------------------------------------------------------------
Congressional Budget Office Cost Estimate
The following letter was received from the Congressional
Budget Office concerning the cost of the reported bill:
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 24, 2004
Honorable Christopher H. Smith
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC
Dear Mr. Chairman: As you requested, the Congressional
Budget Office has prepared the enclosed cost estimate for H.R.
4658, the Servicemembers and Veterans Legal Protections Act of
2004.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Dwayne
Wright, who can be reached at 226-2840.
Sincerely,
Douglas Holtz-Eakin,
Director
Enclosure.
------
Congressional Budget Office Cost Estimate
H.R. 4658, Servicemembers and Veterans Legal Protections Act of 2004
As ordered reported by the House Committee on Veterans' Affair on July
21, 2004
SUMMARY
H.R. 4658 would affect several veterans programs, including
education, health care, disability compensation, and pensions.
CBO estimates that enacting this legislation would raise direct
spending for veterans programs by $11 million over the 2005-
2009 period and by $16 million over the 2005-2014 period. In
addition, CBO estimates that discretionary spending resulting
from H.R. 4658 would total almost $28 million over the 2005-
2009 period, assuming appropriation of the necessary amounts.
H.R. 4658 contains both intergovernmental and private-
sector mandates as defined in the Unfunded Mandates Reform Act
(UMRA), but CBO estimates that the costs for state, local, and
tribal governments and the private sector to comply with those
mandates would be well below the thresholds established by UMRA
($60 million in 2004 and $120 million in 2004, respectively,
adjusted annually for inflation).
ESTIMATED COST TO THE FEDERAL GOVERNMENT
The estimated budgetary impact of H.R. 4658 is shown in
Table 1. The costs of this legislation fall within budget
function 700 (veterans benefits and services).
TABLE 1. ESTIMATED BUDGETARY IMPACT OF H.R. 4658
----------------------------------------------------------------------------------------------------------------
By Fiscal Year, in Millions of Dollars
--------------------------------------------
2005 2006 2007 2008 2009
----------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING
Estimated Budget Authority......................................... * 2 2 2 2
Estimated Outlays.................................................. * 2 2 2 2
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Estimated Authorization Level...................................... 4 5 5 6 6
Estimated Outlays.................................................. 4 5 5 6 6
----------------------------------------------------------------------------------------------------------------
NOTES: Five and 10-year costs in the text may differ slightly from
a summation of the annual costs listed here because of rounding.
* = less than $50,000.
BASIS OF ESTIMATE
For this estimate, CBO assumes that the bill will be
enacted before the end of calendar year 2004, and that the
amounts necessary to implement the bill will be appropriated
for each year.
Direct Spending
H.R. 4658 would affect direct spending in veterans'
programs for education, compensation, and pensions. Table 2
summarizes those effects, and the individual provisions that
would affect direct spending are described below. In total, CBO
estimates that enacting this legislation would increase direct
spending by about $11 million over the 2005-2009 period and by
$16 million over the 2005-2014 period.
TABLE 2. ESTIMATED CHANGES IN DIRECT SPENDING FOR VETERANS' BENEFITS UNDER H.R. 4658
--------------------------------------------------------------------------------------------------------------------------------------------------------
By Fiscal Year, in Millions of Dollars
Description of Provisions ------------------------------------------------------------------------------------------
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
MGIB for Self-Employment Training............................ 0 2 2 2 2 3 * 0 0 0
Misuse of Benefits by a Fiduciary............................ * * * * * * * * * *
Total Changes................................................ * 2 2 2 2 3 1 * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOTES: Five and 10-year costs in the text may differ slightly from
a summation of the annual costs listed here because of rounding.
MGIB = Montgomery GI Bill
* = less than $500,000.
Montgomery GI Bill (MGIB) for Self-Employment Training.
Section 403 would allow veterans to use their education
benefits to receive on-the-job training without pay for periods
of less than six months, when that training is needed to obtain
a license to engage in a self-employment occupation or is
required for ownership and operation of a franchise. This
provision would take effect October 1, 2005, and remain in
force through September 30, 2010. Under current law, education
benefits for on-the-job training would only be approved if the
veteran was paid wages that, at the start of training, equaled
at least 50 percent of the wage paid for the job for which the
veteran was to be trained, and increased over the course of the
training to at least 85 percent of the prevailing wage. Based
on information from the Department of Veterans Affairs (VA),
CBO believes this temporary waiver of the wage requirement
would be of use primarily to those seeking to own and operate a
franchise. Franchise companies typically require prospective
owners to undergo a four-to-six week program of on-the-job
training and they do not pay wages to the prospective owners.
Based on information from the Department of Labor, CBO
estimates that about 6,500 eligible veterans took self-
employment classes through Small Business Development Centers
in 2002, and we assume that about 1,600 of these also completed
an average of five weeks of on-the-job training that was
associated with the purchase of a franchise. Because the
population eligible for and using MGIB benefits is growing, we
estimate this number will increase to about 1,700 in 2006 and
2,000 by 2014. Under current law, the MGIB benefit, currently
$1,000 a month, is adjusted annually for increases in the cost
of living. CBO estimates that by 2006 the MGIB benefit will
increase to about $1,020 a month or about $1,270 for a five-
week period. Thus, CBO estimates that enacting section 403
would increase direct spending for veterans' education benefits
by $2 million in 2006, $9 million over the 2006-2009 period,
and $12 million over the 2006-2011 period.
Misuse of Veterans' Benefits by a Fiduciary. H.R. 4658
contains several provisions dealing with fiduciary fraud. Taken
together, CBO estimates that enactment of those provisions
would increase direct spending for veterans compensation and
pensions by about $2 million over the 2005-2009 period and $4
million over the 2005-2014 period.
Reissuing of Benefits Associated with Fiduciary Fraud.
Section 303 would require VA to reissue veterans' compensation
and pension benefits to beneficiaries when those benefits were
misused by a fiduciary if the fraud can be attributed to
negligence by VA. (A fiduciary is the guardian, curator,
organization, or person legally vested to care for a claimant
or beneficiary's estate.) Under the bill, VA negligence would
be defined as:
VA's failure to review a fiduciary's accounting
in a timely manner, or
VA's failure to act on allegations of fraud by
a fiduciary in a timely manner, or
Any other case in which actual negligence is
shown.
Under section 303, VA also would be required to reissue
benefits to a beneficiary in cases where a fiduciary represents
10 or more beneficiaries, regardless of whether or not the
benefits are recouped from the fiduciary. Currently, VA only
reissues benefits that were recouped from the fiduciary through
court-ordered restitution. Any benefits that are not recovered
from the fiduciary are not reissued to the beneficiary.
CBO assumes that under the bill, VA would be held liable
for any fraud that stems from certifying fiduciaries. (Under
section 302 of the bill, VA would be required to complete in-
depth investigations to determine the fitness of an individual
before certifying him or her as a fiduciary.) According to data
provided by VA for the 1999-2003 period, it received about 50
referrals a year for fiduciary fraud on average. Those
referrals resulted in about 10 arrests a year and about
$350,000 annually in recoveries. CBO assumes that roughly 90
percent of the recoveries are for actual benefit payments which
would be reissued under the bill and that under the conditions
specified most fiduciary fraud would be found to stem from VA
negligence. After adjusting for inflation, CBO estimates that
this provision would raise direct spending for veterans'
disability compensation and pensions by less than $500,000 in
2005, about $2 million over the 2005-2009 period, and about $4
million over the 2005-2014 period.
Judicial Orders of Restitution. Section 304 would give VA
the ability to pursue civil monetary penalties against
fiduciaries of no more than $5,000 for each fraudulent act, and
would subject a fiduciary to an assessment, in lieu of damages,
of no more than twice the amount of any payments recovered.
Section 304 also would allow VA to use court-ordered amounts
recovered as penalties or fines that are not received in
connection with misuse of benefits by a fiduciary to defray the
costs of investigations of fiduciaries.
Under current law, all amounts received due to restitution,
penalties, or court-ordered fines are returned to the Treasury.
Thus, the spending of these receipts under section 304 by VA
would be considered direct spending. Absent more information
from VA, CBO cannot determine the amount of fines and penalties
that VA might expect to recover and spend over the 2005-2014
period.
Spending Subject to Appropriation
CBO estimates that implementing H.R. 4658 also would
increase discretionary spending for veterans' medical care and
operating expenses within the Veterans Benefits Administration
by about $28 million over the 2005-2009 period, assuming
appropriation of the necessary amounts.
Veterans Receiving Maternity Care. Section 402 would allow
VA to provide care to newborn infants when the mother is a
veteran receiving maternity care from VA. According to VA, a
little more than 700 women a year are expected to receive
maternity care from VA. Based on data from VA, CBO estimates
that the cost of providing neonatal care to those infants would
be about $5,700 per infant in 2005. (Providing neonatal care
for most infants would cost much less; the high average cost is
driven by those infants who require extensive care for longer
periods of time.) Based on assumed enactment late in calendar
year 2004, CBO estimates that implementing section 402 would
cost $3 million in 2005 and $21 million over the 2005-2009
period, assuming appropriation of the estimated amounts.
Qualification of Fiduciaries. Section 302 would both codify
and expand upon current requirements for VA certification of
status as a fiduciary. Under section 302, VA would be required
to certify a fiduciary based upon an inquiry or investigation
into the fitness of an individual to serve as a fiduciary,
adequate evidence that certification of the fiduciary would be
in the beneficiary's best interest, and the furnishing of any
bond as required by VA.
Under current practice, when required, VA conducts
investigations to determine the type of fiduciary best suited
to a beneficiary. Using its field examiners, VA contacts the
beneficiary or their family and through face-to-face
interviews, if possible, determines the ability of the
beneficiary to manage their benefit payments. The field
examiner then certifies a fiduciary based upon his or her
observations. VA also maintains periodic contact with certified
fiduciaries to observe the performance of the fiduciary and
also completes a review to determine whether the continued use
of a fiduciary is necessary.
Under this section, VA would be required to review the
proposed fiduciary's credit report and conduct a criminal
background check to determine if that person has been convicted
of any federal or state offense resulting in imprisonment for
more than a year. If that person had been convicted and
imprisoned, VA would be allowed to certify that person as a
fiduciary only if it determines that the proposed fiduciary has
been rehabilitated and is an appropriate person to act as a
fiduciary for a beneficiary.
Based on information from VA, CBO estimates that requiring
more in-depth reviews would require VA to hire seven additional
people at an annual cost of about $500,000. Based on the cost
of similar investigations conducted by the Social Security
Administration, and using VA's estimate of new fiduciaries
(excluding the number of family members who might become a
fiduciary), CBO also estimates that conducting the required
criminal background investigations would cost an additional
$500,000 a year. Thus, CBO estimates that implementing section
302 would cost about $4 million over the 2005-2009 period,
assuming appropriation of the necessary amounts
Additional Protections for Beneficiaries. Section 304 would
codify and expand current procedures that protect beneficiaries
from misuse of their benefits by fiduciaries. These protections
include:
Requiring VA to complete periodic on-site reviews
of fiduciaries who serve 20 or more beneficiaries and manage
benefits greater that $50,000;
Requiring a report of accounting from the
fiduciary;
Allowing VA to pursue civil monetary penalties
against persons who commit fraud; and
Requiring any federal court to order a defendant
convicted of fraud involving benefits to make restitution to
VA, or to explain why no restitution was ordered.
Based on information from VA, CBO estimates that to
complete the tasks of completing periodic on-site reviews and
pursuing civil penalties, VA would hire an additional seven
people at an annual cost of about $500,000. Thus, CBO estimates
implementing section 304 would cost about $2 million over the
2005-2009 period, subject to appropriation of the necessary
amounts.
Annual Report on Fiduciary Program. Section 305 would
require VA to prepare an annual report on the fiduciary
program. The report would include the number of beneficiaries,
total amount of benefits involved, number of fiduciaries, and
information regarding fiduciary fraud and results of
investigations. According to VA, preparation of the report
would require an update to their computer systems to comply
with the data requirements for the report. Based on information
provided by VA, CBO estimates that implementing section 305
would cost less than $500,000 in 2005, subject to appropriation
of the necessary amounts.
INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT
H.R. 4658 contains both intergovernmental and private-
sector mandates as defined in UMRA, but CBO estimates that the
costs for state, local, and tribal governments and the private
sector to comply with those mandates would be well below the
thresholds established by UMRA ($60 million in 2004 and $120
million in 2004, respectively, adjusted annually for
inflation).
Extension of Health Insurance
Current law imposes a mandate on public and private-sector
employers by requiring them to continue to provide health
insurance coverage to certain workers, including those who are
absent from work because of military service. Although those
workers can be required to pay the employer 102 percent of the
average cost of the insurance, research suggests that the
actual cost of providing that coverage generally is greater
than that amount.
This bill would increase, from 18 months to 24 months, the
amount of time those reservists who are mobilized are eligible
to continue their health insurance. That extension would
increase the cost of the existing mandate on both public and
private-sector employers to provide continued coverage.
However, CBO estimates that few workers would participate in
the program and the total direct cost for employers to comply
with that mandate would be about $2 million annually.
State and Local Government Authority to Tax
H.R. 4658 also contains an intergovernmental mandate as
defined by UMRA because it would prohibit state and local
jurisdictions from collecting certain taxes from
servicemembers. Specifically, the bill would prohibit those
governments from collecting sales, use, and excise taxes from
nonresident servicemembers unless they provided a credit for
fees paid on the same property in other jurisdictions.
The Servicemembers' Civil Relief Act (SCRA) protects
servicemembers from paying the same tax in multiple
jurisdictions and provides that, for certain tax purposes, a
servicemember's place of residence is his or her home state,
not the state in which he or she is stationed. This bill would
extend the SCRA tax provisions to explicitly include excise and
other use taxes. Currently, no state or local governments
collect those taxes from nonresident servicemembers. It would
require jurisdictions, if they choose to collect such revenues,
to credit payments made in other locations. CBO estimates that
the cost, if any, for those governments to comply with that
mandate would be minimal.
Termination of Leases
Section 104 of this bill would provide that, in the case of
joint leases, the termination of a lease (residential and motor
vehicle) by a servicemember under the provisions of section 305
of the Servicemembers Civil Relief Act also terminates the
obligation of a dependent under that lease. However,
implementation of current law has typically extended coverage
of lease termination to both servicemembers and their
dependents. In particular, the disputes that have arisen about
dependents' rights to terminate leases have usually been
resolved in favor of a servicemember's dependent. Therefore,
CBO estimates that this section of H.R. 4658 would not create
new costs for the private sector. The joint lease language in
H.R. 4658 is predominantly clarifying and would not create a
new mandate.
ESTIMATE PREPARED BY:
Federal Costs:
Readjustment Benefits: Sarah T. Jennings (226-2840)
Compensation and Pensions: Dwayne M. Wright (226-2840)
Health Care: Sam Papenfuss (226-2840)
Impact on State, Local, and Tribal Governments: Melissa
Merrell (225-3220)
Impact on the Private Sector: Adebayo Adedeji (226-2900)
ESTIMATE APPROVED BY:
Peter H. Fontaine,
Deputy Assistant Director for Budget Analysis
Statement of Federal Mandates
The preceding Congressional Budget Office (CBO) cost
estimate states that the bill contains intergovernmental or
private sector mandates as defined in the Unfunded Mandates
Reform Act, but CBO estimates that those mandates would be well
below the thresholds established by the Act.
Statement of Constitutional Authority
Pursuant to Article I, section 8 of the United States
Constitution, the reported bill is authorized by Congress'
power to ``provide for the common Defense and general Welfare
of the United States.''
Exchange of Letters Regarding H.R. 4658 Between the Committee on
Government Reform and the Committee on Veterans' Affairs
Committee on Veterans' Affairs,
Washington, DC, September 7, 2004
Honorable Tom Davis
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC
Dear Mr. Chairman: The Committee on Veterans' Affairs
wishes to schedule for rapid Floor consideration H.R. 4658, the
Servicemembers and Veterans Legal Protections Act of 2004, a
bill that would, among other things, under section 212
authorize a demonstration project for referral of claims under
the Uniformed Services Employment and Reemployment Act against
Federal agencies to the Office of Special Counsel.
It is my understanding that the Committee on Government
Reform does not intend to request an additional referral of the
bill and has no objection to Floor consideration of the bill.
Of course, this would not be construed as affecting in any way
the jurisdiction of the Committee on Government Reform over the
Office of Special Counsel or as precedent for other bills. Upon
confirmation of my understanding, I will include our exchange
of letters in the report on H.R. 4658 or place the letters in
the record during Floor consideration of the bill.
Thank you for your cooperation in this matter and I look
forward to working with you again on other legislation of
mutual interest.
Sincerely,
Christopher H. Smith
Chairman
------
Committee on Government Reform,
Washington, DC, September 7, 2004
Honorable Christopher H. Smith
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC
Dear Mr. Chairman: Thank you for consulting with the
Government Reform Committee regarding H.R. 4658, ``the
Servicemembers and Veterans Legal Protections Act,'' and for
your recent letter. Section 212 of H.R. 4658 authorizes a
demonstration project for referral of claims under the
Uniformed Services Employment and Reemployment Act against
Federal agencies to the Office of Special Counsel. As you know,
the Committee on Government Reform has jurisdiction over the
Office of Special Counsel. In order to expedite the
consideration of this important bill in the house and because
of your willingness to consult with my committee, I do not
intend to seek a sequential referral of H.R. 4658 to the
Committee on Government Reform.
By agreeing to waive its consideration of the bill, the
Government Reform Committee does not waive its jurisdiction
over H.R. 4658 or the Office of Special Counsel. In addition,
the Committee on Government Reform reserves its authority to
seek outside conferees on this bill or a similar Senate bill
and I would ask for your support in the event of a conference
with the Senate on this or similar legislation.
I respectfully request that you include this letter and
your response in your committee report and Congressional Record
during consideration of this legislation on the House floor.
Thank you for your attention to these matters.
Sincerely,
Tom Davis
Chairman
------
Committee on Veterans' Affairs,
Washington, DC, September 9, 2004
Honorable Tom Davis
Chairman, Committee on Government Reform,
House of Representatives, Washington, DC
Dear Mr. Chairman: Thank you for your letter of September
7, 2004, regarding the jurisdictional interest of the Committee
on Government Reform in section 212 of H.R. 4658, the
``Servicemembers and Veterans Legal Protections Act.''
Your willingness to forego a sequential referral to
expedite House consideration of H.R. 4658 is most appreciated.
The Committee on Veterans' Affairs understands that your letter
does not waive jurisdiction of the Committee on Government
Reform over the bill and is not a precedent for other bills. In
addition, if a conference on H.R. 4658 should become necessary,
I will support any request by you for the Committee on
Government Reform to be represented on the conference.
Again, thank you for your cooperation in this matter.
Sincerely,
Christopher H. Smith
Chairman
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
SERVICEMEMBERS CIVIL RELIEF ACT
* * * * * * *
TITLE I--GENERAL PROVISIONS
SEC. 101. DEFINITIONS.
For the purposes of this Act:
(1) * * *
* * * * * * *
(9) Judgment.--The term ``judgment'' means any
judgment, decree, order, or ruling, final or temporary.
* * * * * * *
SEC. 107. WAIVER OF RIGHTS PURSUANT TO WRITTEN AGREEMENT.
(a) In General.--A servicemember may waive any of the rights
and protections provided by this Act. Any such waiver that
applies to an action listed in subsection (b) of this section
is effective only if it is in writing and is executed as an
instrument separate from the obligation or liability to which
it applies. In the case of a waiver that permits an action
described in subsection (b), the waiver is effective only if
made pursuant to a written agreement of the parties that is
executed during or after the servicemember's period of military
service. The written agreement shall specify the legal
instrument to which the waiver applies and, if the
servicemember is not a party to that instrument, the
servicemember concerned.
* * * * * * *
(c) Prominent Display of Certain Contract Rights Waivers.--
Any waiver in writing of a right or protection provided by this
Act that applies to a contract, lease, or similar legal
instrument must be in at least 12 point type.
[(c)] (d) Coverage of Periods After Orders Received.--For the
purposes of this section--
(1) * * *
* * * * * * *
TITLE II--GENERAL RELIEF
* * * * * * *
SEC. 202. STAY OF PROCEEDINGS WHEN SERVICEMEMBER HAS NOTICE.
(a) Applicability of Section.--This section applies to any
civil action or proceeding in which the plaintiff or defendant
at the time of filing an application under this section--
(1) * * *
* * * * * * *
TITLE III--RENT, INSTALLMENT CONTRACTS, MORTGAGES, LIENS, ASSIGNMENT,
LEASES
* * * * * * *
SEC. 305. TERMINATION OF RESIDENTIAL OR MOTOR VEHICLE LEASES.
[(a) Termination by Lessee.--The lessee on a lease described
in subsection (b) may, at the lessee's option, terminate the
lease at any time after--
[(1) the lessee's entry into military service; or
[(2) the date of the lessee's military orders
described in paragraph (1)(B) or (2)(B) of subsection
(b), as the case may be.]
(a) Termination by Lessee.--
(1) In general.--The lessee on a lease described in
subsection (b) may, at the lessee's option, terminate
the lease at any time after--
(A) the lessee's entry into military service;
or
(B) the date of the lessee's military orders
described in paragraph (1)(B) or (2)(B) of
subsection (b), as the case may be.
(2) Joint leases.--A lessee's termination of a lease
pursuant to this subsection shall terminate any
obligation a dependent of the lessee may have under the
lease.
(b) Covered Leases.--This section applies to the following
leases:
(1) Leases of premises.--A lease of premises
occupied, or intended to be occupied, by a
servicemember or a servicemember's dependents for a
residential, professional, business, agricultural, or
similar purpose if--
(A) * * *
(B) the servicemember, while in military
service, executes the lease and thereafter
receives military orders for a permanent change
of station or to deploy with a military unit,
or as an individual in support of a military
operation, for a period of not less than 90
days.
(2) Leases of motor vehicles.--A lease of a motor
vehicle used, or intended to be used, by a
servicemember or a servicemember's dependents for
personal or business transportation if--
(A) * * *
(B) the servicemember, while in military
service, executes the lease and thereafter
receives [military orders for a permanent
change of station outside of the continental
United States or to deploy] military orders--
(i) for a change of permanent
station--
(I) from a location in the
continental United States to a
location outside the
continental United States; or
(II) from a location in a
State outside the continental
United States to any location
outside that State; or
(ii) to deploy with a military unit,
or as an individual in support of a
military operation, for a period of not
less than 180 days.
* * * * * * *
(i) Definitions.--
(1) Military orders.--The term ``military orders'',
with respect to a servicemember, means official
military orders, or any notification, certification, or
verification from the servicemember's commanding
officer, with respect to the servicemember's current or
future military duty status.
(2) Conus.--The term ``continental United States''
means the 48 contiguous States and the District of
Columbia.
* * * * * * *
TITLE V--TAXES AND PUBLIC LANDS
* * * * * * *
SEC. 511. RESIDENCE FOR TAX PURPOSES.
(a) * * *
* * * * * * *
(c) Personal Property.--
(1) * * *
* * * * * * *
(5) Use, excise, or similar taxes.--A tax
jurisdiction may not impose a use, excise, or similar
tax on the personal property of a nonresident
servicemember when the laws of the tax jurisdiction
fail to provide a credit against such taxes for sales,
use, excise, or similar taxes previously paid on the
same property to another tax jurisdiction.
* * * * * * *
----------
TITLE 38, UNTIED STATES CODE
* * * * * * *
PART II--GENERAL BENEFITS
* * * * * * *
CHAPTER 17--HOSPITAL, NURSING HOME, DOMICILIARY, AND MEDICAL CARE
subchapter i--general
Sec.
1701. Definitions.
* * * * * * *
subchapter viii--health care of persons other than veterans
1781. Medical care for survivors and dependents of certain veterans.
* * * * * * *
1786. Care for newborn children of veterans receiving maternity care.
* * * * * * *
SUBCHAPTER VIII--HEALTH CARE OF PERSONS OTHER THAN VETERANS
* * * * * * *
Sec. 1786. Care for newborn children of veterans receiving maternity
care
(a) Authority.--Subject to subsections (b) and (c), when a
female veteran who is enrolled in the health-care system
established under section 1705 of this title is receiving
maternity care from the Department delivers of a child in a
Department facility or in a non-Department facility under a
Department contract the Secretary may furnish care to the
neonate.
(b) Care in a Department Facility.--In a case in which a
neonate covered by subsection (a) is born in a Department
facility, care furnished for the neonate at that facility shall
be furnished without charge to the veteran who delivered of
that neonate.
(c) Care in a Non-Department Facility.--In a case in which a
neonate covered by subsection (a) is born in a non-Department
facility or is provided care in a non-Department facility
following birth in a Department facility and transfer from that
facility, the Secretary may provide for the payment of the cost
of care and services for the neonate in the same manner, and
subject to the same limitations, as if such care and services
were emergency treatment furnished the veteran subject to
section 1725 of this title, except that--
(1) the services for which the Secretary may make
payment shall be limited to those items and services
for which payment may be made under the medicare
program under title XVIII of the Social Security Act
for post-natal care furnished to a neonate; and
(2) the rate of payment for such services may not
exceed the payment rates applicable to those items and
services under the medicare program under such title.
* * * * * * *
PART III--READJUSTMENT AND RELATED BENEFITS
* * * * * * *
CHAPTER 34--VETERANS' EDUCATIONAL ASSISTANCE
* * * * * * *
SUBCHAPTER I--PURPOSE; DEFINITIONS
Sec. 3452. Definitions
For the purposes of this chapter and chapter 36 of this
title--
(a) * * *
* * * * * * *
(e) The term ``training establishment'' means any
establishment providing apprentice or other training on the
job, including those under the supervision of a college or
university or any State department of education, or any State
apprenticeship agency, or any State board of vocational
education, or any joint apprenticeship committee, or the Bureau
of Apprenticeship and Training established pursuant to the Act
of August 16, 1937, popularly known as the ``National
Apprenticeship Act'' (29 U.S.C. 50 et seq.), or any agency of
the Federal Government authorized to supervise such training.
(1) * * *
(2) [An] For the period beginning on October 1, 2005,
and ending on September 30, 2010, an establishment
providing self-employment on-job training consisting of
full-time training for a period of less than six months
that is needed or accepted for purposes of obtaining
licensure to engage in a self-employment occupation or
required for ownership and operation of a franchise
that is the objective of the training.
* * * * * * *
CHAPTER 36--ADMINISTRATION OF EDUCATIONAL BENEFITS
* * * * * * *
SUBCHAPTER I--STATE APPROVING AGENCIES
* * * * * * *
Sec. 3677. Approval of training on the job
(a) * * *
(b)(1) * * *
* * * * * * *
(3) Notwithstanding paragraph (1)(A) and subsection (c)(8),
no wages shall be required to be paid an eligible person or
veteran by a training establishment described in section
3452(e)(2) of this title.
* * * * * * *
CHAPTER 43--EMPLOYMENT AND REEMPLOYMENT RIGHTS OF MEMBERS OF THE
UNIFORMED SERVICES
subchapter i--general
4301. Purposes; sense of Congress.
* * * * * * *
subchapter iv--miscellaneous provisions
4331. Regulations.
* * * * * * *
4334. Notice of rights and duties.
* * * * * * *
SUBCHAPTER II--EMPLOYMENT AND REEMPLOYMENT RIGHTS AND LIMITATIONS;
PROHIBITIONS
* * * * * * *
Sec. 4317. Health plans
(a)(1) In any case in which a person (or the person's
dependents) has coverage under a health plan in connection with
the person's position of employment, including a group health
plan (as defined in section 607(1) of the Employee Retirement
Income Security Act of 1974), and such person is absent from
such position of employment by reason of service in the
uniformed services, the plan shall provide that the person may
elect to continue such coverage as provided in this subsection.
The maximum period of coverage of a person and the person's
dependents under such an election shall be the lesser of--
(A) the [18-month period] 24-month period beginning
on the date on which the person's absence begins; or
* * * * * * *
SUBCHAPTER IV--MISCELLANEOUS PROVISIONS
* * * * * * *
Sec. 4332. Reports
The Secretary shall, after consultation with the Attorney
General and the Special Counsel referred to in section
4324(a)(1) and [no later than February 1, 1996, and annually
thereafter through 2000] no later than February 1, 2005, and
annually thereafter, transmit to the Congress, a report
containing the following matters for the fiscal year ending
before such February 1:
(1) * * *
* * * * * * *
Sec. 4334. Notice of rights and duties
(a) Requirement to Provide Notice.--Each employer shall
provide to persons entitled to rights and benefits under this
chapter a notice of the rights, benefits, and obligations of
such persons and such employers under this chapter. The
requirement for the provision of notice under this section may
be met by the posting of the notice where employers customarily
place notices for employees.
(b) Content of Notice.--The Secretary shall provide to
employers the text of the notice to be provided under this
section.
* * * * * * *
PART IV--GENERAL ADMINISTRATIVE PROVISIONS
* * * * * * *
CHAPTER 53--SPECIAL PROVISIONS RELATING TO BENEFITS
* * * * * * *
Sec. 5312. Annual adjustment of certain benefit rates
(a) * * *
(b)(1) Whenever there is an increase in benefit amounts
payable under title II of the Social Security Act (42 U.S.C.
401 et seq.) as a result of a determination made under section
215(i) of such Act (42 U.S.C. 415(i)), the Secretary shall,
effective on the date of such increase in benefit amounts,
increase the maximum monthly rates of dependency and indemnity
compensation for parents payable under subsections (b), (c),
and (d), and the monthly rate provided in subsection (g), of
section 1315 of this title and the annual income limitations
prescribed in subsections (b)(3), (c)(3), and (d)(3) of such
section, and the annual benefit amount limitations under
sections 5507(c)(2)(D) and 5508 of this title, as such rates
and limitations were in effect immediately prior to the date of
such increase in benefit amounts payable under title II of the
Social Security Act, by the same percentage as the percentage
by which such benefit amounts are increased.
* * * * * * *
CHAPTER 55--MINORS, INCOMPETENTS, AND OTHER WARDS
Sec.
5501. Commitment actions.
* * * * * * *
5506. Definition of ``fiduciary''.
5507. Inquiry, investigations, and qualification of fiduciaries.
5508. Periodic onsite reviews of institutional fiduciaries.
5509. Authority to redirect delivery of benefit payments when a
fiduciary fails to provide required accounting.
5510. Annual report.
* * * * * * *
Sec. 5502. Payments to and supervision of fiduciaries
(a)(1) Where it appears to the Secretary that the interest of
the beneficiary would be served thereby, payment of benefits
under any law administered by the Secretary may be made
directly to the beneficiary or to a relative or some [other
person] other fiduciary for the use and benefit of the
beneficiary, regardless of any legal disability on the part of
the beneficiary. Where, in the opinion of the Secretary, any
fiduciary receiving funds on behalf of a Department beneficiary
is acting in such a number of cases as to make it impracticable
to conserve properly the estates or to supervise the persons of
the beneficiaries, the Secretary may refuse to make future
payments in such cases as the Secretary may deem proper.
(2) In a case in which the Secretary determines that a
commission is necessary in order to obtain the services of a
fiduciary in the best interests of a beneficiary, the Secretary
may authorize a fiduciary appointed by the Secretary to obtain
from the beneficiary's estate a reasonable commission for
fiduciary services rendered, but the commission for any year
may not exceed 4 percent of the monetary benefits under laws
administered by the Secretary paid on behalf of the beneficiary
to the fiduciary during such year. A commission may not be
authorized for a fiduciary who receives any other form of
remuneration or payment in connection with rendering fiduciary
services for benefits under this title on behalf of the
beneficiary.
(b) Whenever it appears that any [guardian, curator,
conservator, or other person] fiduciary, in the opinion of the
Secretary, is not properly executing or has not properly
executed the duties of the trust of such [guardian, curator,
conservator, or other person] fiduciary or has collected or
paid, or is attempting to collect or pay, fees, commissions, or
allowances that are inequitable or in excess of those allowed
by law for the duties performed or expenses incurred, or has
failed to make such payments as may be necessary for the
benefit of the ward or the dependents of the ward, then the
Secretary may appear, by the Secretary's authorized attorney,
in the court which has appointed such fiduciary, or in any
court having original, concurrent, or appellate jurisdiction
over said cause, and make proper presentation of such matters.
The Secretary, in the Secretary's discretion, may suspend
payments to any such [guardian, curator, conservator, or other
person] fiduciary who shall neglect or refuse, after reasonable
notice, to render an account to the Secretary from time to time
showing the application of such payments for the benefit of
such incompetent or minor beneficiary, or who shall neglect or
refuse to administer the estate according to law. The Secretary
may require the fiduciary, as part of such account, to disclose
any additional financial information concerning the beneficiary
(except for information that is not available to the
fiduciary). The Secretary may appear or intervene by the
Secretary's duly authorized attorney in any court as an
interested party in any litigation instituted by the Secretary
or otherwise, directly affecting money paid to such fiduciary
under this section.
* * * * * * *
(d) All or any part of any benefits the payment of which is
suspended or withheld under this section may, in the discretion
of the Secretary, be paid temporarily to the person having
custody and control of the incompetent or minor beneficiary, to
be used solely for the benefit of such beneficiary, or, in the
case of an incompetent veteran, may be apportioned to the
dependent or dependents, if any, of such veteran. Any part not
so paid and any funds of a mentally incompetent or insane
veteran not paid to the chief officer of the institution in
which such veteran is a patient nor apportioned to the
veteran's dependent or dependents may be ordered held in the
Treasury to the credit of such beneficiary. All funds so held
shall be disbursed under the order and in the discretion of the
Secretary for the benefit of such beneficiary or the
beneficiary's dependents. Any balance remaining in such fund to
the credit of any beneficiary may be paid to the beneficiary if
the beneficiary recovers and is found competent, or if a minor,
attains majority, or otherwise to the beneficiary's [guardian,
curator, or conservator] fiduciary, or, in the event of the
beneficiary's death, to the beneficiary's personal
representative, except as otherwise provided by law; however,
payment will not be made to the beneficiary's personal
representative if, under the law of the beneficiary's last
legal residence, the beneficiary's estate would escheat to the
State. In the event of the death of a mentally incompetent or
insane veteran, all gratuitous benefits under laws administered
by the Secretary deposited before or after August 7, 1959, in
the personal funds of patients trust fund on account of such
veteran shall not be paid to the personal representative of
such veteran, but shall be paid to the following persons living
at the time of settlement, and in the order named: The
surviving spouse, the children (without regard to age or
marital status) in equal parts, and the dependent parents of
such veteran, in equal parts. If any balance remains, such
balance shall be deposited to the credit of the applicable
current appropriation; except that there may be paid only so
much of such balance as may be necessary to reimburse a person
(other than a political subdivision of the United States) who
bore the expenses of last sickness or burial of the veteran for
such expenses. No payment shall be made under the two preceding
sentences of this subsection unless claim therefor is filed
with the Secretary within five years after the death of the
veteran, except that, if any person so entitled under said two
sentences is under legal disability at the time of death of the
veteran, such five-year period of limitation shall run from the
termination or removal of the legal disability.
* * * * * * *
Sec. 5506. Definition of ``fiduciary''
For purposes of this chapter and chapter 61 of this title,
the term ``fiduciary'' means--
(1) a person who is a guardian, curator, conservator,
committee, or person legally vested with the
responsibility or care of a claimant (or a claimant's
estate) or of a beneficiary (or a beneficiary's
estate); or
(2) any other person having been appointed in a
representative capacity to receive money paid under any
of the laws administered by the Secretary for the use
and benefit of a minor, incompetent, or other
beneficiary.
Sec. 5507. Inquiry, investigations, and qualification of fiduciaries
(a) Any certification of a person for payment of benefits of
a beneficiary to that person as such beneficiary's fiduciary
under section 5502 of this title shall be made on the basis
of--
(1) an inquiry or investigation by the Secretary of
the fitness of that person to serve as fiduciary for
that beneficiary, such inquiry or investigation--
(A) to be conducted in advance of such
certification;
(B) to the extent practicable, to include a
face-to-face interview with such person; and
(C) to the extent practicable, to include a
copy of a credit report for such person issued
within one year of the date of the proposed
appointment;
(2) adequate evidence that certification of that
person as fiduciary for that beneficiary is in the
interest of such beneficiary (as determined by the
Secretary under regulations); and
(3) the furnishing of any bond that may be required
by the Secretary.
(b) As part of any inquiry or investigation of any person
under subsection (a), the Secretary shall request information
concerning whether that person has been convicted of any
offense under Federal or State law which resulted in
imprisonment for more than one year. If that person has been
convicted of such an offense, the Secretary may certify the
person as a fiduciary only if the Secretary makes a specific
finding that the person has been rehabilitated and is an
appropriate person to act as fiduciary for the beneficiary
concerned under the circumstances.
(c)(1) In the case of a proposed fiduciary described in
paragraph (2), the Secretary, in conducting an inquiry or
investigation under subsection (a)(1), may carry out such
inquiry or investigation on an expedited basis that may include
waiver of any specific requirement relating to such inquiry or
investigation, including the otherwise applicable provisions of
subparagraphs (A), (B), and (C) of such subsection. Any such
inquiry or investigation carried out on such an expedited basis
shall be carried out under regulations prescribed for purposes
of this section.
(2) Paragraph (1) applies with respect to a proposed
fiduciary who is--
(A) the parent (natural, adopted, or stepparent) of a
beneficiary who is a minor;
(B) the spouse or parent of an incompetent
beneficiary;
(C) a person who has been appointed a fiduciary of
the beneficiary by a court of competent jurisdiction;
or
(D) being appointed to manage an estate where the
annual amount of veterans benefits to be managed by the
proposed fiduciary does not exceed $3600, as adjusted
pursuant to section 5312 of this title.
(d) Temporary Fiduciaries.--When in the opinion of the
Secretary, a temporary fiduciary is needed in order to protect
the assets of the beneficiary while a determination of
incompetency is being made or appealed or a fiduciary is
appealing a determination of misuse, the Secretary may appoint
one or more temporary fiduciaries for a period not to exceed
120 days. If a final decision has not been made within 120
days, the Secretary may not continue the appointment of the
fiduciary without obtaining a court order for appointment of a
guardian, conservator, or other fiduciary under the authority
provided in section 5502(b) of this title.
Sec. 5508. Periodic onsite reviews of institutional fiduciaries
In addition to such other reviews of fiduciaries as the
Secretary may otherwise conduct, the Secretary shall provide
for the periodic onsite review of any person or agency located
in the United States that receives the benefits payable under
laws administered by the Secretary to another individual
pursuant to the appointment of such person or agency as a
fiduciary under section 5502(a)(1) of this title in any case in
which the fiduciary is serving in that capacity with respect to
more than 20 beneficiaries and the total annual amount of such
benefits exceeds $50,000, as adjusted pursuant to section 5312
of this title.
Sec. 5509. Authority to redirect delivery of benefit payments when a
fiduciary fails to provide required accounting
(a) Required Reports and Accountings.--The Secretary may
require a fiduciary to file a report or accounting pursuant to
regulations prescribed by the Secretary.
(b) Actions Upon Failure to File.--In any case in which a
fiduciary fails to submit a report or accounting required by
the Secretary under subsection (a), the Secretary may, after
furnishing notice to such fiduciary and the beneficiary
entitled to such payment of benefits, require that such
fiduciary appear in person at a regional office of the
Department serving the area in which the beneficiary resides in
order to receive such payments.
Sec. 5510. Annual report
The Secretary shall include in the Annual Benefits Report of
the Veterans Benefits Administration or the Secretary's Annual
Performance and Accountability Report information concerning
fiduciaries who have been appointed to receive payments for
beneficiaries of the Department. As part of such information,
the Secretary shall separately set forth the following:
(1) The number of beneficiaries in each category
(veteran, surviving spouse, child, adult disabled
child, or parent).
(2) The types of benefit being paid (compensation,
pension, dependency and indemnity compensation, death
pension or benefits payable to a disabled child under
chapter 18 of this title).
(3) The total annual amounts and average annual
amounts of benefits paid to fiduciaries for each
category and type of benefit.
(4) The number of fiduciaries who are the (spouse,
parent, legal custodian, court-appointed fiduciary,
institutional fiduciary, custodian in fact, and
supervised direct payment).
(5) The number of cases in which the fiduciary was
changed by the Secretary because of a finding that
benefits had been misused.
(6) How such cases of misuse of benefits were
addressed by the Secretary.
(7) The final disposition of such cases of misuse of
benefits, including the number and dollar amount of any
civil or criminal penalties imposed.
(8) Such other information as the Secretary considers
appropriate.
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PART IV--GENERAL ADMINISTRATIVE PROVISIONS
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CHAPTER 61--PENAL AND FORFEITURE PROVISIONS
Sec.
6101. Misappropriation by fiduciaries.
* * * * * * *
6106. Misuse of benefits by fiduciaries.
6107. Reissuance of benefits.
6108. Civil monetary penalties.
6109. Authority for judicial orders of restitution.
* * * * * * *
Sec. 6101. Misappropriation by fiduciaries
(a) Whoever, being a [guardian, curator, conservator,
committee, or person legally vested with the responsibility or
care of a claimant or a claimant's estate, or any other person
having charge and custody in a fiduciary capacity of money
heretofore or hereafter paid under any of the laws administered
by the Secretary for the benefit of any minor, incompetent, or
other beneficiary,] fiduciary (as defined in section 5506 of
this title) for the benefit of a minor, incompetent, or other
beneficiary under laws administered by the Secretary, shall
lend, borrow, pledge, hypothecate, use, or exchange for other
funds or property, except as authorized by law, or embezzle or
in any manner misappropriate any such money or property derived
therefrom in whole or in part and coming into such fiduciary's
control in any manner whatever in the execution of such
fiduciary's trust, or under color of such fiduciary's office or
service as such fiduciary, shall be fined in accordance with
title 18, or imprisoned not more than five years, or both.
* * * * * * *
Sec. 6106. Misuse of benefits by fiduciaries
(a) Fee Forfeiture in Case of Benefit Misuse by
Fiduciaries.--A fiduciary may not collect a fee from a
beneficiary for any month with respect to which the Secretary
or a court of competent jurisdiction has determined that the
fiduciary misused all or part of the individual's benefit, and
any amount so collected by the fiduciary as a fee for such
month shall be treated as a misused part of the individual's
benefit.
(b) Liability of Fiduciaries for Misused Benefits.--(1) If
the Secretary or a court of competent jurisdiction determines
that a fiduciary that is not a Federal, State, or local
government agency has misused all or part of a beneficiary's
benefit that was paid to such fiduciary, the fiduciary shall be
liable for the amount misused, and such amount (to the extent
not repaid by the fiduciary) shall be treated as an erroneous
payment of benefits under this title to the fiduciary for
purposes of laws pertaining to the recovery of overpayments.
The amount of such overpayment shall constitute a liability of
such fiduciary to the United States and may be recovered in the
same manner as any other debt due the United States. Subject to
paragraph (2), upon recovering all or any part of such amount,
the Secretary shall pay an amount equal to the recovered amount
to such beneficiary or such beneficiary's successor fiduciary.
(2) The total of the amounts paid to a beneficiary (or a
beneficiary's successor fiduciary) under paragraph (1) and
under section 6107 of this title may not exceed the total
benefit amount misused by the fiduciary with respect to that
beneficiary.
(c) Misuse of Benefits Defined.--For purposes of this
chapter, misuse of benefits by a fiduciary occurs in any case
in which the fiduciary receives payment, under any of laws
administered by the Secretary, for the use and benefit of a
beneficiary and uses such payment, or any part thereof, for a
use other than for the use and benefit of such beneficiary or
that beneficiary's dependents. Retention by a fiduciary of an
amount of a benefit payment as a fiduciary fee or commission,
or as attorney's fees (including expenses) and court costs, if
authorized by the Secretary or a court of competent
jurisdiction, shall be considered to be for the use or benefit
of such beneficiary.
(d) Regulations.--The Secretary may prescribe by regulation
the meaning of the term ``use and benefit'' for purposes of
this section.
(e) Finality of Determinations.--A determination by the
Secretary that a fiduciary has misused benefits is a decision
of the Secretary for purposes of section 511(a) of this title.
Sec. 6107. Reissuance of benefits
(a) Negligent Failure by Secretary.--(1) In any case in which
the negligent failure of the Secretary to investigate or
monitor a fiduciary results in misuse of benefits by the
fiduciary, the Secretary shall pay to the beneficiary or the
beneficiary's successor fiduciary an amount equal to the amount
of benefits that were so misused.
(2) There shall be considered to have been a negligent
failure by the Secretary to investigate and monitor a fiduciary
in the following cases:
(A) A case in which the Secretary failed to timely
review a fiduciary's accounting.
(B) A case in which the Secretary was notified of
allegations of misuse, but failed to act in a timely
manner to terminate the fiduciary.
(C) In any other case in which actual negligence is
shown.
(b) Reissuance of Misused Benefits in Other Cases.--(1) In
any case in which a fiduciary described in paragraph (2)
misuses all or part of an individual's benefit paid to such
fiduciary, the Secretary shall pay to the beneficiary or the
beneficiary's successor fiduciary an amount equal to the amount
of such benefit so misused.
(2) Paragraph (1) applies to a fiduciary that--
(A) is not an individual; or
(B) is an individual who, for any month during a
period when misuse occurs, serves 10 or more
individuals who are beneficiaries under this title.
(c) Recoupment of Amounts Reissued.--In any case in which the
Secretary reissues a benefit payment (in whole or in part)
under subsection (a) or (b), the Secretary shall make a good
faith effort to obtain recoupment from the fiduciary to whom
the payment was originally made.
Sec. 6108. Civil monetary penalties
(a) Penalty for Conversion.--Any person (including an
organization, agency, or other entity) who, having received,
while acting in the capacity of a fiduciary pursuant to section
5502 of this title, a payment under a law administered by the
Secretary for the use and benefit of another individual,
converts such payment, or any part thereof, to a use that such
person knows or should know is other than for the use and
benefit of such other individual shall be subject to, in
addition to any other penalty that may be prescribed by law, a
civil monetary penalty assessed by the Secretary of not more
than $5,000 for each such conversion.
(b) Penalty in Lieu of Damages.--Any person who makes a
conversion of a payment described in subsection (a) and is
subject to a civil monetary penalty under that subsection by
reason of such conversion shall also be subject to an
assessment by the Secretary, in lieu of damages sustained by
the United States resulting from the conversion, of not more
than twice the amount of any payments so converted.
(c) Costs of Recovery.--From amounts collected under this
section, the amount necessary to recoup the Department's costs
of such collection shall be credited to appropriations
currently available for the same purpose as the appropriation
that incurred those costs, to remain available until expended.
Sec. 6109. Authority for judicial orders of restitution
(a) Any Federal court, when sentencing a defendant convicted
of an offense arising from the misuse of benefits under this
title, may order, in addition to or in lieu of any other
penalty authorized by law, that the defendant make restitution
to the Department.
(b) Sections 3612, 3663, and 3664 of title 18 shall apply
with respect to the issuance and enforcement of orders of
restitution under subsection (a). In so applying those
sections, the Department shall be considered the victim.
(c) If the court does not order restitution, or orders only
partial restitution, under subsection (a), the court shall
state on the record the reasons therefor.
(d)(1) Except as provided in paragraph (2), amounts received
or recovered by the Secretary pursuant to an order of
restitution under subsection (a), to the extent and in the
amounts provided in advance in appropriations Acts, shall be
available to defray expenses incurred by the Office of the
Inspector General for the investigation of fiduciaries under
this title.
(2) Paragraph (1) shall not apply with respect to amounts
received in connection with misuse by a fiduciary of funds paid
as benefits under laws administered by the Secretary. Such
amounts shall be paid to the individual whose benefits were
misused unless the Secretary has previously reissued the
misused benefits, in which case the amounts shall be treated in
the same manner as overpayments recouped by the Secretary and
shall be deposited to the credit of the applicable revolving
fund, trust fund, or appropriation.
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