[House Report 114-405]
[From the U.S. Government Publishing Office]


114th Congress  }                                      { Report
                        HOUSE OF REPRESENTATIVES
 2d Session     }                                      { 114-405

======================================================================
 
                    AMERICAN HEROES COLA ACT OF 2015

                                _______
                                

February 1, 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Miller of Florida, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 677]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 677) to amend title 38, United States Code, to 
provide for annual cost-of-living adjustments to be made 
automatically by law each year in the rates of disability 
compensation for veterans with service-connected disabilities 
and the rates of dependency and indemnity compensation for 
survivors of certain service-connected disabled veterans, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................    21
Background and Need for Legislation..............................    21
Hearings.........................................................    36
Subcommittee Consideration.......................................    38
Committee Consideration..........................................    39
Committee Votes..................................................    40
Committee Oversight Findings.....................................    41
Statement of General Performance Goals and Objectives............    41
New Budget Authority, Entitlement Authority, and Tax Expenditures    42
Earmarks and Tax and Tariff Benefits.............................    42
Committee Cost Estimate..........................................    42
Congressional Budget Office Estimate.............................    42
Federal Mandates Statement.......................................    50
Advisory Committee Statement.....................................    51
Constitutional Authority Statement...............................    51
Applicability to Legislative Branch..............................    51
Statement on Duplication of Federal Programs.....................    51
Disclosure of Directed Rulemaking................................    51
Section-by-Section Analysis of the Legislation...................    51
Changes in Existing Law Made by the Bill as Reported.............    59

                               Amendment

    The amendment is 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 ``American Heroes COLA 
Act of 2015''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Expansion of eligibility for medallions.
Sec. 3. Definitions relating to claims for benefits under laws 
administered by the Secretary of Veterans Affairs.
Sec. 4. Quarterly reports on formal and informal claims for benefits 
under laws administered by Secretary of Veterans Affairs.
Sec. 5. Expedited payment of survivor's benefits.
Sec. 6. Priority for processing claims of the Department of Veterans 
Affairs.
Sec. 7. Treatment of medical evidence provided by non-Department of 
Veterans Affairs medical professionals in support of claims for 
disability compensation.
Sec. 8. Automatic annual increase in rates of disability compensation 
and dependency and indemnity compensation.
Sec. 9. Improvement of fiduciaries for veterans.
Sec. 10. Board of Veterans' Appeals video hearings.
Sec. 11. Improvements to authority for performance of medical 
disabilities examinations by contract physicians.
Sec. 12. Pilot program on fully developed appeals.
Sec. 13. Deadline for certification of appeals forms by regional 
offices of the Department of Veterans Affairs.
Sec. 14. Evaluation of backlog of disability claims and appeals of 
claims of Department of Veterans Affairs.
Sec. 15. Methods for validating certain World War II Merchant Mariner 
service considered to be active service by the Secretary of Veterans 
Affairs.
Sec. 16. Designation of American World War II Cities.
Sec. 17. Sense of Congress regarding American veterans disabled for 
life.

SEC. 2. EXPANSION OF ELIGIBILITY FOR MEDALLIONS.

  Section 2306(d)(4) of title 38, United States Code, is amended to 
read as follows:
  ``(4)(A) In lieu of furnishing a headstone or marker under this 
subsection to a deceased individual described in subparagraph (B), the 
Secretary may furnish, upon request, a medallion or other device of a 
design determined by the Secretary to signify the deceased individual's 
status as a veteran, to be attached to a headstone or marker furnished 
at private expense.
  ``(B) A deceased individual described in this subsection is an 
individual who--
          ``(i) served in the Armed Forces on or after April 6, 1917; 
        and
          ``(ii) is eligible for a headstone or marker furnished under 
        paragraph (1) (or would be so eligible but for the date of the 
        death of the individual).''.

SEC. 3. DEFINITIONS RELATING TO CLAIMS FOR BENEFITS UNDER LAWS 
                    ADMINISTERED BY THE SECRETARY OF VETERANS AFFAIRS.

  (a) Definitions.--
          (1) In general.--Section 5100 of title 38, United States 
        Code, is amended to read as follows:

``Sec. 5100. Definitions

  ``In this chapter:
          ``(1) The term `claimant' means any individual applying for, 
        or submitting a claim for, any benefit under the laws 
        administered by the Secretary.
          ``(2) The term `claim' means a communication in writing 
        requesting a determination of entitlement or evidencing a 
        belief in entitlement to a benefit under the laws administered 
        by the Secretary.
          ``(3) The term `formal claim' means a claim submitted on an 
        application form prescribed by the Secretary.''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 51 of such title is further amended by 
        striking the item relating to section 5100 and inserting the 
        following new item:

``5100. Definitions.''.

  (b) Effective Date.--Section 5100 of title 38, United States Code, as 
amended by subsection (a), shall take effect on the date of the 
enactment of this Act and shall apply with respect to a claim submitted 
on or after such date.

SEC. 4. QUARTERLY REPORTS ON FORMAL AND INFORMAL CLAIMS FOR BENEFITS 
                    UNDER LAWS ADMINISTERED BY SECRETARY OF VETERANS 
                    AFFAIRS.

  (a) Quarterly Reports.--During the five-year period beginning on the 
date of the enactment of this Act, the Secretary shall submit to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives quarterly reports on formal and informal claims 
submitted to the Secretary. Each such report shall include, for the 
three-month period covered by the report--
          (1) the total number of claims submitted to the Secretary;
          (2) the total number of informal claims submitted to the 
        Secretary;
          (3) the total number of formal claims submitted to the 
        Secretary;
          (4) the total number of forms indicating an intent to file a 
        claim for benefits submitted to the Secretary;
          (5) the total number of claims notification letters that 
        included an invitation to the claimant to submit an additional 
        formal claim that was reasonably raised during the adjudication 
        of the claim for which the notification letter is sent;
          (6) of the claimants who received notification letters 
        described in paragraph (5), the total number who submitted a 
        formal claim in response to the invitation included in the 
        letter;
          (7) the total number of electronically filed claims submitted 
        to the Secretary; and
          (8) the total number of fully-developed claims submitted to 
        the Secretary.
  (b) Sense of Congress.--It is the sense of Congress that the 
Secretary of Veterans Affairs should develop a designated form for an 
increase or reopening of a claim that does not require the resubmittal 
of information previously submitted on a formal claim form.
  (c) Definitions.--In this section:
          (1) The terms ``claim'', ``claimant'', and ``formal claim'' 
        have the meanings given such terms in section 5100 of title 38, 
        United States Code, as amended by section 4.
          (2) The term ``informal claim'' means a communication in 
        writing requesting a determination of entitlement or evidencing 
        a belief in entitlement, to a benefit under the laws 
        administered by the Secretary of Veterans Affairs that--
                  (A) is submitted in a format other than on an 
                application form prescribed by the Secretary;
                  (B) indicates an intent to apply for one or more 
                benefits under the laws administered by the Secretary;
                  (C) identifies the benefit sought;
                  (D) is made or submitted by a claimant, his or her 
                duly authorized representative, a Member of Congress, 
                or another person acting on behalf of a claimant who 
                meets the requirements established by the Secretary for 
                such purpose; and
                  (E) may include a report of examination or 
                hospitalization, if the report relates to a disability 
                which may establish such an entitlement.
          (3) The term ``reasonably raised'' with respect to a claim 
        means that evidence of an entitlement to a benefit under the 
        laws administered by the Secretary is inferred or logically 
        placed at issue upon a sympathetic reading of another claim and 
        the record developed with respect to that claim.

SEC. 5. EXPEDITED PAYMENT OF SURVIVOR'S BENEFITS.

  (a) In General.--Section 5101(a)(1) of title 38, United States Code, 
is amended--
          (1) by striking ``A specific'' and inserting ``(A) Except as 
        provided in subparagraph (B), a specific''; and
          (2) by adding at the end the following new subparagraph:
  ``(B)(i) The Secretary may pay benefits under chapters 13 and 15 and 
sections 2302, 2307, and 5121 of this title to a survivor of a veteran 
who has not filed a formal claim if the Secretary determines that the 
record contains sufficient evidence to establish the entitlement of the 
survivor to such benefits.
  ``(ii) For purposes of this subparagraph and section 5110 of this 
title, the earlier of the following dates shall be treated as the date 
of the receipt of the survivor's application for benefits described in 
clause (i):
          ``(I) The date on which the survivor of a veteran (or the 
        representative of such a survivor) notifies the Secretary of 
        the death of the veteran through a death certificate or other 
        relevant medical evidence indicating that the death was due to 
        a service-connected or compensable disability.
          ``(II) The head of any other department or agency of the 
        Federal Government notifies the Secretary of the death of the 
        veteran.
  ``(iii) In notifying the Secretary of the death of a veteran as 
described in clause (ii)(I), the survivor (or the representative of 
such a survivor) may submit to the Secretary additional documents 
relating to such death without being required to file a formal 
claim.''.
  (b) Report.--
          (1) In general.--Not later than one year after the date of 
        the enactment of this Act, the Secretary of Veterans Affairs 
        shall submit to the Committee on Veterans' Affairs of the 
        Senate and the Committee on Veterans' Affairs of the House of 
        Representatives a report on benefits paid pursuant to covered 
        claims.
          (2) Contents.--The report under paragraph (1) shall include 
        the following:
                  (A) The number of covered claims adjudicated during 
                the one-year period preceding the date of the report, 
                disaggregated by the following:
                          (i) Claims in which the claimant claimed 
                        entitlement to compensation on the basis of the 
                        claimant's status as the spouse of a deceased 
                        veteran.
                          (ii) Claims in which the claimant claimed 
                        entitlement to compensation on the basis of the 
                        claimant's status as the child of a deceased 
                        veteran.
                          (iii) Claims in which the claimant claimed 
                        entitlement to compensation on the basis of the 
                        claimant's status as the parent of a deceased 
                        veteran.
                  (B) The number of covered claims that were 
                adjudicated during such period and for which 
                compensation was not awarded, disaggregated by clauses 
                (i) through (iii) of subparagraph (A).
                  (C) A comparison of the accuracy and timeliness of 
                covered claims adjudicated during such period with non-
                covered claims filed by survivors of a veteran.
                  (D) The findings of the Secretary with respect to 
                adjudicating covered claims.
                  (E) Such recommendations as the Secretary may have 
                for legislative or administrative action to improve the 
                adjudication of claims submitted to the Secretary for 
                benefits under chapters 13 and 15 and sections 2302, 
                2307, and 5121 of title 38, United States Code.
          (3) Covered claim defined.--In this subsection, the term 
        ``covered claim'' means a claim covered by section 
        5101(a)(1)(B) of title 38, United States Code, as added by 
        subsection (a).
  (c) Effective Date.--The amendments made by subsection (a) shall 
apply with respect to claims for benefits based on a death occurring on 
or after the date of the enactment of this Act.

SEC. 6. PRIORITY FOR PROCESSING CLAIMS OF THE DEPARTMENT OF VETERANS 
                    AFFAIRS.

  (a) In General.--Subchapter I of chapter 51 of title 38, United 
States Code, is amended by adding at the end the following new section:

``Sec. 5109C. Priority for processing claims

  ``(a) Priority.--In processing claims for compensation under this 
chapter, the Secretary shall provide the following claimants with 
priority over other claimants:
          ``(1) Veterans who have attained the age of 70.
          ``(2) Veterans who are terminally ill.
          ``(3) Veterans with life-threatening illnesses.
          ``(4) Homeless veterans (as defined in section 2002 of this 
        title).
          ``(5) Veterans who were awarded the Medal of Honor.
          ``(6) Veterans who are former prisoners of war.
          ``(7) Veterans whose claims are being reviewed again in 
        relation to a previously denied claim relating to military 
        sexual trauma.
          ``(8) Veterans whom the Secretary determines, on a case-by-
        case basis, are seriously or very seriously injured.
          ``(9) Veterans whom the Secretary determines, on a case-by-
        case basis, should be given priority under this section based 
        on an application for good cause established by the Secretary.
  ``(b) Regulations.--The Secretary shall prescribe regulations to 
carry out subsection (a).''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
5109B the following new item:

``5109C. Priority for processing claims.''.

SEC. 7. TREATMENT OF MEDICAL EVIDENCE PROVIDED BY NON-DEPARTMENT OF 
                    VETERANS AFFAIRS MEDICAL PROFESSIONALS IN SUPPORT 
                    OF CLAIMS FOR DISABILITY COMPENSATION.

  (a) Acceptance of Reports of Private Physician Examinations.--Section 
5125 of title 38, United States Code, is amended--
          (1) by striking ``For purposes'' and inserting ``(a) In 
        General.--For purposes''; and
          (2) by adding at the end the following new subsections:
  ``(b) Sufficiency of Evidence.--If a veteran has submitted a medical 
opinion or report of a medical examination administered by a private 
physician in support of the veteran's claim, the Secretary may not 
order a medical examination to be administered by a Department 
physician unless the Secretary provides the veteran with a thorough 
explanation of why the medical opinion or report submitted by the 
veteran was not sufficiently complete and the reason why additional 
medical evidence is necessary.
  ``(c) Sufficiently Complete Defined.--For purposes of a medical 
opinion or report described in subsection (a), the term `sufficiently 
complete' means competent, credible, probative, and containing such 
information as may be required to make a decision on the claim for 
which the medical opinion or report is provided.''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
with respect to medical evidence submitted after the date that is one 
year after the date of the enactment of this Act.

SEC. 8. AUTOMATIC ANNUAL INCREASE IN RATES OF DISABILITY COMPENSATION 
                    AND DEPENDENCY AND INDEMNITY COMPENSATION.

  (a) Indexing to Social Security Increases.--Section 5312 of title 38, 
United States Code, is amended by adding at the end the following new 
subsection:
  ``(d)(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 dollar amounts in effect for 
the payment of disability compensation and dependency and indemnity 
compensation by the Secretary, as specified in paragraph (2), as such 
amounts were in effect immediately before 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.
  ``(2) The dollar amounts to be increased pursuant to paragraph (1) 
are the following:
          ``(A) Wartime disability compensation.--Each of the dollar 
        amounts in effect under section 1114 of this title.
          ``(B) Additional compensation for dependents.--Each of the 
        dollar amounts in effect under section 1115(1) of this title.
          ``(C) Clothing allowance.--The dollar amount in effect under 
        section 1162 of this title.
          ``(D) Dependency and indemnity compensation to surviving 
        spouse.--Each of the dollar amounts in effect under subsections 
        (a) through (d) of section 1311 of such title.
          ``(E) Dependency and indemnity compensation to children.--
        Each of the dollar amounts in effect under sections 1313(a) and 
        1314 of such title.
  ``(3) Whenever there is an increase under paragraph (1) in amounts in 
effect for the payment of disability compensation and dependency and 
indemnity compensation, the Secretary shall publish such amounts, as 
increased pursuant to such paragraph, in the Federal Register at the 
same time as the material required by section 215(i)(2)(D) of the 
Social Security Act (42 U.S.C. 415(i)(2)(D)) is published by reason of 
a determination under section 215(i) of such Act (42 U.S.C. 415(i)).
  ``(4) Each dollar amount increased under paragraph (1), if not a 
whole dollar amount, shall be rounded to the next lower whole dollar 
amount.
  ``(5) The Secretary of Veterans Affairs may adjust administratively, 
consistent with the increases made under subsection (a), the rates of 
disability compensation payable to persons under section 10 of Public 
Law 85-857 (72 Stat. 1263) who have not received compensation under 
chapter 11 of this title.''.
  (b) Effective Date.--Subsection (d) of section 5312 of title 38, 
United States Code, as added by subsection (a) of this section, shall 
take effect on December 1, 2015.

SEC. 9. IMPROVEMENT OF FIDUCIARIES FOR VETERANS.

  (a) Appointment and Supervision.--
          (1) Section 5502 of title 38, United States Code, is amended 
        to read as follows:

``Sec. 5502. Appointment of fiduciaries

  ``(a) Appointment.--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 fiduciary 
for the use and benefit of the beneficiary, regardless of any legal 
disability on the part of the beneficiary.
  ``(b) Appeals.--(1) If the Secretary determines a beneficiary to be 
mentally incompetent for purposes of appointing a fiduciary under this 
chapter, the Secretary shall provide such beneficiary with a written 
statement detailing the reasons for such determination.
  ``(2) A beneficiary whom the Secretary has determined to be mentally 
incompetent for purposes of appointing a fiduciary under this chapter 
may appeal such determination.
  ``(c) Modification.--(1) A beneficiary for whom the Secretary 
appoints a fiduciary under this chapter may, at any time, request the 
Secretary to--
          ``(A) remove the fiduciary so appointed; and
          ``(B) have a new fiduciary appointed.
  ``(2) The Secretary shall comply with a request under paragraph (1) 
if the Secretary determines that the request is made in good faith 
and--
          ``(A) the fiduciary requested to be removed receives a fee 
        from the beneficiary and a suitable volunteer fiduciary is 
        available to assist the beneficiary; or
          ``(B) the beneficiary provides credible information that the 
        fiduciary requested to be removed is--
                  ``(i) not acting in the interest of the beneficiary; 
                or
                  ``(ii) unable to effectively serve the beneficiary 
                because of an irreconcilable personality conflict or 
                disagreement.
  ``(3) The Secretary shall ensure that any removal or new appointment 
of a fiduciary under paragraph (1) does not delay or interrupt the 
beneficiary's receipt of benefits administered by the Secretary.
  ``(d) Independence.--A fiduciary appointed by the Secretary shall 
operate independently of the Department to determine the actions that 
are in the interest of the beneficiary.
  ``(e) Predesignation.--A veteran may predesignate a fiduciary by--
          ``(1) submitting written notice to the Secretary of the 
        predesignated fiduciary; or
          ``(2) submitting a form provided by the Secretary for such 
        purpose.
  ``(f) Appointment of Non-Predesignated Fiduciary.--If a beneficiary 
designates an individual to serve as a fiduciary under subsection (e) 
and the Secretary appoints an individual not so designated as the 
fiduciary for such beneficiary, the Secretary shall notify such 
beneficiary of--
          ``(1) the reason why such designated individual was not 
        appointed; and
          ``(2) the ability of the beneficiary to modify the appointed 
        fiduciary under subsection (c).
  ``(g) Priority of Appointment.--In appointing a fiduciary under this 
chapter, if a beneficiary does not designate a fiduciary pursuant to 
subsection (e), to the extent possible the Secretary shall appoint a 
person who is--
          ``(1) a relative of the beneficiary;
          ``(2) appointed as guardian of the beneficiary by a court of 
        competent jurisdiction; or
          ``(3) authorized to act on behalf of the beneficiary under a 
        durable power of attorney.''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 55 of title 38, United States Code, is 
        amended by striking the item relating to section 5502 and 
        inserting the following:

``5502. Appointment of fiduciaries.''.

  (b) Supervision.--
          (1) In general.--Chapter 55 of title 38, United States Code, 
        is amended by inserting after section 5502, as amended by 
        subsection (a)(1), the following new section:

``Sec. 5502A. Supervision of fiduciaries

  ``(a) Commission.--(1)(A) 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 
monthly benefits provided to the beneficiary a reasonable commission 
for fiduciary services rendered, but the commission for any month may 
not exceed the lesser of the following amounts:
          ``(i) The amount that equals three percent of the monthly 
        monetary benefits under laws administered by the Secretary paid 
        on behalf of the beneficiary to the fiduciary.
          ``(ii) $35.
  ``(B) A commission paid under this paragraph may not be derived from 
any award to a beneficiary regarding back pay or retroactive benefits 
payments.
  ``(C) 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.
  ``(D) In accordance with section 6106 of this title, a commission may 
not be paid to a fiduciary if the Secretary determines that the 
fiduciary misused any benefit payments of a beneficiary.
  ``(E) If the Secretary determines that the fiduciary has misused any 
benefit or payments of a beneficiary, the Secretary may revoke the 
fiduciary status of the fiduciary.
  ``(2) 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.
  ``(b) Court.--Whenever it appears that any fiduciary, in the opinion 
of the Secretary, is not properly executing or has not properly 
executed the duties of the trust of such 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 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.
  ``(c) Payment of Certain Expenses.--Authority is hereby granted for 
the payment of any court or other expenses incident to any 
investigation or court proceeding for the appointment of any fiduciary 
or other person for the purpose of payment of benefits payable under 
laws administered by the Secretary or the removal of such fiduciary and 
appointment of another, and of expenses in connection with the 
administration of such benefits by such fiduciaries, or in connection 
with any other court proceeding hereby authorized, when such payment is 
authorized by the Secretary.
  ``(d) Temporary Payment of Benefits.--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 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 patient's 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.
  ``(e) Escheatment.--Any funds in the hands of a fiduciary appointed 
by a State court or the Secretary derived from benefits payable under 
laws administered by the Secretary, which under the law of the State 
wherein the beneficiary had last legal residence would escheat to the 
State, shall escheat to the United States and shall be returned by such 
fiduciary, or by the personal representative of the deceased 
beneficiary, less legal expenses of any administration necessary to 
determine that an escheat is in order, to the Department, and shall be 
deposited to the credit of the applicable revolving fund, trust fund, 
or appropriation.
  ``(f) Assistance.--The Secretary shall provide to a fiduciary 
appointed under section 5502 of this title materials and tools to 
assist the fiduciary in carrying out the responsibilities of the 
fiduciary under this chapter, including--
          ``(1) handbooks, brochures, or other written material that 
        explain the responsibilities of a fiduciary under this chapter;
          ``(2) tools located on an Internet website, including forms 
        to submit to the Secretary required information; and
          ``(3) assistance provided by telephone.''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 55 of title 38, United States Code, is 
        amended by inserting after the item relating to section 5502 
        the following new item:

``5502A. Supervision of fiduciaries.''.

  (c) Definition of Fiduciary.--Section 5506 of title 38, United States 
Code, is amended--
          (1) by striking ``For purposes'' and inserting ``(a) For 
        purposes''; and
          (2) by adding at the end the following new subsection:
  ``(b)(1) For purposes of subsection (a), the term `person' includes 
any--
          ``(A) State or local government agency whose mission is to 
        carry out income maintenance, social service, or health care-
        related activities;
          ``(B) any State or local government agency with fiduciary 
        responsibilities; or
          ``(C) any nonprofit social service agency that the Secretary 
        determines--
                  ``(i) regularly provides services as a fiduciary 
                concurrently to five or more individuals; and
                  ``(ii) is not a creditor of any such individual.
  ``(2) The Secretary shall maintain a list of State or local agencies 
and nonprofit social service agencies under paragraph (1) that are 
qualified to act as a fiduciary under this chapter. In maintaining such 
list, the Secretary may consult the lists maintained under section 
807(h) of the Social Security Act (42 U.S.C. 1007(h)).''.
  (d) Qualifications.--Section 5507 of title 38, United States Code, is 
amended to read as follows:

``Sec. 5507. Inquiry, investigations, and qualification of fiduciaries

  ``(a) Investigation.--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 to be conducted in advance of such certification 
        and in accordance with subsection (b);
          ``(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);
          ``(3) adequate evidence that the person to serve as fiduciary 
        protects the private information of a beneficiary in accordance 
        with subsection (d)(1); and
          ``(4) the furnishing of any bond that may be required by the 
        Secretary in accordance with subsection (f).
  ``(b) Elements of Investigation.--(1) In conducting an inquiry or 
investigation of a proposed fiduciary under subsection (a)(1), the 
Secretary shall conduct--
          ``(A) a face-to-face interview with the proposed fiduciary by 
        not later than 30 days after the date on which such inquiry or 
        investigation begins; and
          ``(B) a background check of the proposed fiduciary to--
                  ``(i) in accordance with paragraph (2), determine 
                whether the proposed fiduciary has been convicted of a 
                crime; and
                  ``(ii) determine whether the proposed fiduciary will 
                serve the best interest of the beneficiary, including 
                by conducting a credit check of the proposed fiduciary 
                and checking the records under paragraph (5).
  ``(2) The Secretary shall request information concerning whether that 
person has been convicted of any offense under Federal or State law. If 
that person has been convicted of such an offense, the Secretary may 
certify the person as a fiduciary only if the Secretary finds that the 
person is an appropriate person to act as fiduciary for the beneficiary 
concerned under the circumstances.
  ``(3) The Secretary shall conduct the background check described in 
paragraph (1)(B)--
          ``(A) each time a person is proposed to be a fiduciary, 
        regardless of whether the person is serving or has served as a 
        fiduciary; and
          ``(B) at no expense to the beneficiary.
  ``(4) Each proposed fiduciary shall disclose to the Secretary the 
number of beneficiaries that the fiduciary acts on behalf of.
  ``(5) The Secretary shall maintain records of any person who has--
          ``(A) previously served as a fiduciary; and
          ``(B) had such fiduciary status revoked by the Secretary.
  ``(6)(A) If a fiduciary appointed by the Secretary is convicted of a 
crime described in subparagraph (B), the Secretary shall notify the 
beneficiary of such conviction by not later than 14 days after the date 
on which the Secretary learns of such conviction.
  ``(B) A crime described in this subparagraph is a crime--
          ``(i) for which the fiduciary is convicted while serving as a 
        fiduciary for any person;
          ``(ii) that is not included in a report submitted by the 
        fiduciary under section 5509(a) of this title; and
          ``(iii) that the Secretary determines could affect the 
        ability of the fiduciary to act on behalf of the beneficiary.
  ``(c) Investigation of Certain Persons.--(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 giving priority to conducting such inquiry or investigation. 
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;
          ``(D) being appointed to manage an estate where the annual 
        amount of veterans benefits to be managed by the proposed 
        fiduciary does not exceed $3,600, as adjusted pursuant to 
        section 5312 of this title; or
          ``(E) a person who is authorized to act on behalf of the 
        beneficiary under a durable power of attorney.
  ``(d) Protection of Private Information.--(1) A fiduciary shall take 
all reasonable precautions to--
          ``(A) protect the private information of a beneficiary, 
        including personally identifiable information; and
          ``(B) securely conducts financial transactions.
  ``(2) A fiduciary shall notify the Secretary of any action of the 
fiduciary that compromises or potentially compromises the private 
information of a beneficiary.
  ``(e) Potential Misuse of Funds.--(1) If the Secretary has reason to 
believe that a fiduciary may be misusing all or part of the benefit of 
a beneficiary, the Secretary shall--
          ``(A) conduct a thorough investigation to determine the 
        veracity of such belief; and
          ``(B) if such veracity is established, transmit to the 
        officials described in paragraph (2) a report of such 
        investigation.
  ``(2) The officials described in this paragraph are the following:
          ``(A) The Attorney General.
          ``(B) Each head of a Federal department or agency that pays 
        to a fiduciary or other person benefits under any law 
        administered by such department of agency for the use and 
        benefit of a minor, incompetent, or other beneficiary.
  ``(f) Bond.--In determining whether a proposed fiduciary is required 
to furnish a bond under subsection (a)(4), the Secretary shall 
consider--
          ``(1) the existence of any familial or other personal 
        relationship between the proposed fiduciary and the 
        beneficiary; and
          ``(2) the care the proposed fiduciary has taken to protect 
        the interests of the beneficiary.
  ``(g) List of Fiduciaries.--Each regional office of the Veterans 
Benefits Administration shall maintain a list of the following:
          ``(1) The name and contact information of each fiduciary, 
        including address, telephone number, and email address.
          ``(2) With respect to each fiduciary described in paragraph 
        (1)--
                  ``(A) the date of the most recent background check 
                and credit check performed by the Secretary under this 
                section;
                  ``(B) the date that any bond was paid under this 
                section;
                  ``(C) the name, address, and telephone number of each 
                beneficiary the fiduciary acts on behalf of; and
                  ``(D) the amount that the fiduciary controls with 
                respect to each beneficiary described in subparagraph 
                (C).''.
  (e) Annual Receipt of Payments.--
          (1) In general.--Section 5509 of title 38, United States 
        Code, is amended--
                  (A) in subsection (a)--
                          (i) by striking ``may require a fiduciary to 
                        file a'' and inserting ``shall require a 
                        fiduciary to file an annual''; and
                          (ii) by adding at the end the following new 
                        sentence: ``The Secretary shall transmit such 
                        annual report or accounting to the beneficiary 
                        and any legal guardian of such beneficiary.'';
                  (B) by adding at the end the following new 
                subsections:
  ``(c) Matters Included.--Except as provided by subsection (f), an 
annual report or accounting under subsection (a) shall include the 
following:
          ``(1) For each beneficiary that a fiduciary acts on behalf 
        of--
                  ``(A) the amount of the benefits of the beneficiary 
                provided under any law administered by the Secretary 
                accrued during the year, the amount spent, and the 
                amount remaining; and
                  ``(B) if the fiduciary serves the beneficiary with 
                respect to benefits not administered by the Secretary, 
                an accounting of all sources of benefits or other 
                income the fiduciary oversees for the beneficiary.
          ``(2) A list of events that occurred during the year covered 
        by the report that could affect the ability of the fiduciary to 
        act on behalf of the beneficiary, including--
                  ``(A) the fiduciary being convicted of any crime;
                  ``(B) the fiduciary declaring bankruptcy; and
                  ``(C) any judgments entered against the fiduciary.
  ``(d) Random Audits.--The Secretary shall annually conduct random 
audits of fiduciaries who receive a commission pursuant to subsection 
5502A(a)(1) of this title.
  ``(e) Status of Fiduciary.--If a fiduciary includes in the annual 
report events described in subsection (c)(2), the Secretary may take 
appropriate action to adjust the status of the fiduciary as the 
Secretary determines appropriate, including by revoking the fiduciary 
status of the fiduciary.
  ``(f) Caregivers and Certain Other Fiduciaries.--(1)(A) In carrying 
out this section, the Secretary shall ensure that a caregiver fiduciary 
is required only to file an annual report or accounting under 
subsection (a) with respect to the amount of the benefits of the 
beneficiary provided under any law administered by the Secretary--
          ``(i) spent on--
                  ``(I) food and housing for the beneficiary; and
                  ``(II) clothing, health-related expenses, recreation, 
                and other personal items for the beneficiary; and
          ``(ii) saved for the beneficiary.
  ``(B) The Secretary shall coordinate with the Under Secretary for 
Benefits and the Under Secretary for Health to--
          ``(i) minimize the frequency with which employees of the 
        Department visit the home of a caregiver fiduciary and 
        beneficiary; and
          ``(ii) limit the extent of supervision by such Under 
        Secretaries with respect to such a fiduciary and beneficiary.
  ``(C) In this paragraph, the term `caregiver fiduciary' means a 
fiduciary who--
          ``(i) in addition to acting as a fiduciary for a beneficiary, 
        is approved by the Secretary to be a provider of personal care 
        services for the beneficiary under paragraph (3)(A)(i) of 
        section 1720G(a) of this title;
          ``(ii) in carrying out such care services to such 
        beneficiary, has undergone not less than four home visits under 
        paragraph (9)(A) of such section; and
          ``(iii) has not been required by the Secretary to take 
        corrective action pursuant to paragraph (9)(C) of such section.
  ``(2) In carrying out this section, the Secretary may adjust the 
matters required under an annual report or accounting under subsection 
(a) with respect to a fiduciary whom the Secretary determines to have 
effectively protected the interests of the beneficiary over a sustained 
period.''; and
                  (C) by striking the section heading and inserting the 
                following: ``Annual reports and accountings of 
                fiduciaries''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 55 of title 38, United States Code, is 
        amended by striking the item relating to section 5509 and 
        inserting the following new item:

``5509. Annual reports and accountings of fiduciaries.''.

  (f) Repayment of Misused Benefits.--Section 6107(a)(2)(C) of title 
38, United States Code, is amended by inserting before the period the 
following: ``, including by the Secretary not acting in accordance with 
section 5507 of this title''.
  (g) Annual Reports.--Section 5510 of title 38, United States Code, is 
amended by striking ``The Secretary shall include in the Annual 
Benefits Report of the Veterans Benefits Administration or the 
Secretary's Annual Performance and Accountability Report'' and 
inserting ``Not later than July 1 of each year, the Secretary shall 
submit to the Committees on Veterans' Affairs of the House of 
Representatives and the Senate a separate report containing''.
  (h) Report.--Not later than two years after the date of the enactment 
of this Act, the Secretary of Veterans Affairs shall submit to the 
Committee on Veterans' Affairs of the Senate and the Committee on 
Veterans' Affairs of the House of Representatives a comprehensive 
report on the implementation of the amendments made by this Act, 
including--
          (1) detailed information on the establishment of new policies 
        and procedures pursuant to such amendments and training 
        provided on such policies and procedures; and
          (2) a discussion of whether the Secretary should provide 
        fiduciaries with standardized financial software to simplify 
        reporting requirements.
  (i) Effective Date.--The amendments made by this section shall take 
effect on the date that is one year after the date of the enactment of 
this Act.

SEC. 10. BOARD OF VETERANS' APPEALS VIDEO HEARINGS.

  Section 7107 of title 38, United States Code, is amended--
          (1) in subsection (d), by amending paragraph (1) to read as 
        follows:
  ``(1)(A) Upon request for a hearing, the Board shall determine, for 
purposes of scheduling the hearing for the earliest possible date, 
whether a hearing before the Board will be held at its principal 
location or at a facility of the Department or other appropriate 
Federal facility located within the area served by a regional office of 
the Department. The Board shall also determine whether to provide a 
hearing through the use of the facilities and equipment described in 
subsection (e)(1) or by the appellant personally appearing before a 
Board member or panel.
  ``(B) The Board shall notify the appellant of the determinations of 
the location and type of hearing made under subparagraph (A). Upon 
notification, the appellant may request a different location or type of 
hearing as described in such subparagraph. If so requested, the Board 
shall grant such request and ensure that the hearing is scheduled at 
the earliest possible date without any undue delay or other prejudice 
to the appellant.''; and
          (2) in subsection (e), by amending paragraph (2) to read as 
        follows:
  ``(2) Any hearing provided through the use of the facilities and 
equipment described in paragraph (1) shall be conducted in the same 
manner as, and shall be considered the equivalent of, a personal 
hearing.''.

SEC. 11. IMPROVEMENTS TO AUTHORITY FOR PERFORMANCE OF MEDICAL 
                    DISABILITIES EXAMINATIONS BY CONTRACT PHYSICIANS.

  (a) Extension of Temporary Authority.--Subsection (c) of section 704 
of the Veterans Benefits Act of 2003 (38 U.S.C. 5101 note) is amended 
by striking ``December 31, 2015'' and inserting ``December 31, 2017''.
  (b) Licensure of Contract Physicians.--
          (1) Temporary authority.--Such section 704 is further 
        amended--
                  (A) by redesignating subsection (d) as subsection 
                (e); and
                  (B) by inserting after subsection (c) the following 
                new subsection (d):
  ``(d) Licensure of Contract Physicians.--
          ``(1) In general.--Notwithstanding any law regarding the 
        licensure of physicians, a physician described in paragraph (2) 
        may conduct an examination pursuant to a contract entered into 
        under subsection (b) at any location in any State, the District 
        of Columbia, or a Commonwealth, territory, or possession of the 
        United States, so long as the examination is within the scope 
        of the authorized duties under such contract.
          ``(2) Physician described.--A physician described in this 
        paragraph is a physician who--
                  ``(A) has a current unrestricted license to practice 
                the health care profession of the physician;
                  ``(B) is not barred from practicing such health care 
                profession in any State, the District of Columbia, or a 
                Commonwealth, territory, or possession of the United 
                States; and
                  ``(C) is performing authorized duties for the 
                Department of Veterans Affairs pursuant to a contract 
                entered into under subsection (b).''.
          (2) Pilot program.--Section 504 of the Veterans' Benefits 
        Improvement Act of 1996 (38 U.S.C. 5101 note) is amended--
                  (A) by redesignating subsections (c) and (d) as 
                subsections (d) and (e), respectively; and
                  (B) by inserting after subsection (b) the following 
                new subsection (c):
  ``(c) Licensure of Contract Physicians.--
          ``(1) In general.--Notwithstanding any law regarding the 
        licensure of physicians, a physician described in paragraph (2) 
        may conduct an examination pursuant to a contract entered into 
        under subsection (a) at any location in any State, the District 
        of Columbia, or a Commonwealth, territory, or possession of the 
        United States, so long as the examination is within the scope 
        of the authorized duties under such contract.
          ``(2) Physician described.--A physician described in this 
        paragraph is a physician who--
                  ``(A) has a current unrestricted license to practice 
                the health care profession of the physician;
                  ``(B) is not barred from practicing such health care 
                profession in any State, the District of Columbia, or a 
                Commonwealth, territory, or possession of the United 
                States; and
                  ``(C) is performing authorized duties for the 
                Department of Veterans Affairs pursuant to a contract 
                entered into under subsection (a).''.

SEC. 12. PILOT PROGRAM ON FULLY DEVELOPED APPEALS.

  (a) In General.--The Secretary of Veterans Affairs shall carry out a 
pilot program to provide the option of an alternative appeals process 
that shall more quickly determine such appeals in accordance with this 
section.
  (b) Election.--
          (1) Filing.--In accordance with paragraph (2), a claimant may 
        elect to file a fully developed appeal under the pilot program 
        under subsection (a) by filing with the Secretary the 
        following:
                  (A) The notice of disagreement under chapter 71 of 
                title 38, United States Code, along with the written 
                election of the claimant to have the appeal determined 
                under the pilot program.
                  (B) All evidence that the claimant believes is needed 
                for the appeal as of the date of the filing.
                  (C) A statement of the argument in support of the 
                claim, if any.
          (2) Timing.--A claimant shall make an election under 
        paragraph (1) as part of the notice of disagreement filed by 
        the claimant in accordance with paragraph (1)(A).
          (3) Reversion.--
                  (A) At any time, a claimant who makes an election 
                under paragraph (1) may elect to revert to the standard 
                appeals process. Such a reversion shall be final.
                  (B) A claimant described in subparagraph (A), or a 
                claimant who makes an election under paragraph (1) but 
                is later determined to be ineligible for the pilot 
                program under subsection (a), shall revert to the 
                standard appeals process without any penalty to the 
                claimant other than the loss of the docket number 
                associated with the fully developed appeal.
          (4) Outreach.--In providing claimants with notices of the 
        determination of a claim during the period in which the pilot 
        program under subsection (a) is carried out, the Secretary 
        shall conduct outreach as follows:
                  (A) The Secretary shall provide to the claimant (and 
                to the representative of record of the claimant, if 
                any) information regarding--
                          (i) the pilot program, including the 
                        advantages and disadvantages of the program;
                          (ii) how to make an election under paragraph 
                        (1);
                          (iii) the limitation on the use of new 
                        evidence described in paragraph (3) of 
                        subsection (c) and the development of 
                        information under paragraph (4) of such 
                        subsection; and
                          (iv) the ability of the claimant to seek 
                        advice and education regarding such process 
                        from veterans service organizations, attorneys, 
                        and claims agents recognized under chapter 59 
                        of title 38, United States Code.
                  (B) The Secretary shall collaborate, partner with, 
                and give weight to the advice of the three veterans 
                service organizations with the most members to publish 
                on the Internet website of the Department of Veterans 
                Affairs an online tutorial explaining the advantages 
                and disadvantages of the pilot program.
  (c) Treatment by Department and Board.--
          (1) Process.--Upon the election of a claimant to file a fully 
        developed appeal pursuant to subsection (b)(1), the Secretary 
        shall--
                  (A) not provide the claimant with a statement of the 
                case nor require the claimant to file a substantive 
                appeal; and
                  (B) transfer jurisdiction over the fully developed 
                appeal directly to the Board of Veterans' Appeals.
          (2) Docket.--
                  (A) The Board of Veterans' Appeals shall--
                          (i) maintain fully developed appeals on a 
                        separate docket than standard appeals;
                          (ii) decide fully developed appeals in the 
                        order that the fully developed appeals are 
                        received on the fully developed appeal docket;
                          (iii) except as provided by subparagraph (B), 
                        decide not more than one fully developed appeal 
                        for each four standard appeals decided; and
                          (iv) to the extent practicable, decide each 
                        fully developed appeal by the date that is one 
                        year following the date on which the claimant 
                        files the notice of disagreement.
                  (B) Beginning one year after the date on which the 
                pilot program under subsection (a) commences, the Board 
                may adjust the number of standard appeals decided for 
                each fully developed appeal under subparagraph (A)(iii) 
                if the Board determines that such adjustment is fair 
                for both standard appeals and fully developed appeals.
          (3) Limitation on use of new evidence.--
                  (A) Except as provided by subparagraphs (B) and (C)--
                          (i) a claimant may not submit or identify to 
                        the Board of Veterans' Appeals any new evidence 
                        relating to a fully developed appeal after 
                        filing such appeal unless the claimant reverts 
                        to the standard appeals process pursuant to 
                        subsection (b)(3); and
                          (ii) if a claimant submits or identifies any 
                        such new evidence, such submission or 
                        identification shall be deemed to be an 
                        election to make such a reversion pursuant to 
                        subsection (b)(3).
                  (B) Subparagraph (A) shall not apply to evidence 
                developed pursuant to paragraphs (4) and (5). The Board 
                shall consider such evidence in the first instance 
                without consideration by the Veterans Benefits 
                Administration.
                  (C) The representative of record of a claimant for 
                appeals purposes, if any, shall be provided an 
                opportunity to review the fully developed appeal of the 
                claimant and submit any additional arguments or 
                evidence that the representative determines necessary 
                during a period specified by the Board for purposes of 
                this subparagraph.
          (4) Prohibition on remand for additional development.--If the 
        Board of Veterans' Appeals determines that a fully developed 
        appeal requires Federal records, independent medical opinions, 
        or new medical examinations, the Board shall--
                  (A) in accordance with paragraph (5), take such 
                actions as may be necessary to develop such records, 
                opinions, or examinations in accordance with section 
                5103A of title 38, United States Code;
                  (B) retain jurisdiction of the fully developed appeal 
                without requiring a determination by the Veterans 
                Benefits Administration based on such records, 
                opinions, or examinations;
                  (C) ensure the claimant, and the representative of 
                record of a claimant, if any, receives a copy of such 
                records, opinions, or examinations; and
                  (D) provide the claimant a period of 90 days after 
                the date of mailing such records, opinions, or 
                examinations during which the claimant may provide the 
                Board any additional evidence without requiring the 
                claimant to make a reversion pursuant to subsection 
                (b)(3).
          (5) Development unit.--
                  (A) The Board of Veterans' Appeals shall establish an 
                office to develop Federal records, independent medical 
                opinions, and new medical examinations pursuant to 
                paragraph (4)(A) that the Board determines necessary to 
                decide a fully developed appeal.
                  (B) The Secretary shall--
                          (i) ensure that the Veterans Benefits 
                        Administration cooperates with the Board of 
                        Veterans' Appeals in carrying out subparagraph 
                        (A); and
                          (ii) transfer employees of the Veterans 
                        Benefits Administration who, prior to the 
                        enactment of this Act, were responsible for 
                        processing claims remanded by the Board of 
                        Veterans' Appeals to positions within the 
                        office of the Board established under 
                        subparagraph (A) in a number the Secretary 
                        determines sufficient to carry out such 
                        subparagraph.
          (6) Hearings.--Notwithstanding section 7107 of title 38, 
        United States Code, the Secretary may not provide hearings with 
        respect to fully developed appeals. If a claimant requests to 
        hold a hearing pursuant to such section 7107, such request 
        shall be deemed to be an election to revert to the standard 
        appeals process pursuant to subsection (b)(3).
  (d) Duration; Application.--The Secretary shall carry out the pilot 
program under subsection (a) for a five-year period beginning one year 
after the date of the enactment of this Act. This section shall apply 
only to fully developed appeals that are filed during such period.
  (e) Reports.--During each year in which the pilot program under 
subsection (a) is carried out, the Secretary shall submit to the 
Committees on Veterans' Affairs of the House of Representatives and the 
Senate a report on the pilot program. The first such report shall be 
submitted by not later than 180 days after the date on which the pilot 
program commences. Each report shall include the following:
          (1) For the period covered by the report--
                  (A) the number of claimants who filed a fully 
                developed appeal under the pilot program;
                  (B) the average processing time for each such appeal, 
                measured by each phase of the appeal, and, if the 
                processing time for appeals exceed one year, the 
                reasons for such processing time;
                  (C) a summary of reasons for which the development of 
                evidence was required under subsection (c)(5);
                  (D) the number of issues decided, listed by the 
                disposition of the issue;
                  (E) of the number identified in subparagraph (D), the 
                number of issues for which evidence was not so 
                developed, listed by the disposition of the issue;
                  (F) of the number of fully developed appeals decided 
                by the Board of Veterans' Appeals, the number of cases 
                from each agency of original jurisdiction, listed by 
                the disposition of the issue;
                  (G) the number of fully developed appeals appealed to 
                the Court of Appeals for Veterans Claims, listed by the 
                disposition of the case;
                  (H) the number of reversions made under subsection 
                (b)(3); and
                  (I) any reasons for why a claimant was determined to 
                be ineligible to participate in the pilot program.
          (2) A review, made in conjunction with veterans service 
        organizations, of the efforts of the Secretary to provide clear 
        rating decisions and improve disability rating notification 
        letters, including with respect to--
                  (A) the opinions of veterans service organizations 
                regarding such efforts; and
                  (B) how the pilot program improves such efforts.
          (3) A recommendation for any changes to improve the pilot 
        program.
          (4) An assessment of the feasibility and advisability of 
        expanding the pilot program.
  (f) Regulations.--Not later than one day after the date of the 
enactment of this Act, the Secretary shall publish interim guidance on 
the pilot program under subsection (a). Not later than 90 days after 
such date of enactment, the Secretary shall prescribe regulations to 
carry out such pilot program.
  (g) Definitions.--In this section:
          (1) The term ``claimant'' has the meaning given that term in 
        section 5100 of title 38, United States Code.
          (2) The term ``compensation'' has the meaning given that term 
        in section 101 of title 38, United States Code.
          (3) The term ``fully developed appeal'' means an appeal of a 
        claim for disability compensation that is--
                  (A) filed by a claimant in accordance with subsection 
                (b)(1); and
                  (B) considered in accordance with this section.
          (4) The term ``standard appeal'' means an appeal of a claim 
        for disability compensation that is not a fully developed 
        appeal.

SEC. 13. DEADLINE FOR CERTIFICATION OF APPEALS FORMS BY REGIONAL 
                    OFFICES OF THE DEPARTMENT OF VETERANS AFFAIRS.

  The Secretary of Veterans Affairs shall take such steps as may be 
necessary to ensure that when a regional office of the Department of 
Veterans Affairs receives a form known as ``VA Form 9, Appeal to Board 
of Veterans' Appeals'', or any successor form, submitted by a veteran 
to appeal a decision relating to a claim, the regional office certifies 
such form by not later than one year after the date of the receipt of 
the form.

SEC. 14. EVALUATION OF BACKLOG OF DISABILITY CLAIMS AND APPEALS OF 
                    CLAIMS OF DEPARTMENT OF VETERANS AFFAIRS.

  (a) In General.--There is established a commission or task force to 
evaluate the backlog of claims within the Department of Veterans 
Affairs and the appeals process of claims.
  (b) Studies.--
          (1) Backlog study.--
                  (A) In general.--The Commission or Task Force, acting 
                through the subcommittee described in subsection 
                (d)(2)(A), shall carry out a study on the backlog of 
                claims, including the current process the Secretary of 
                Veterans Affairs uses to evaluate claims and appeals 
                and the laws and regulations applicable to such claims 
                and appeals. Such study shall be a comprehensive 
                evaluation and assessment of the backlog of claims, an 
                analysis of possible improvements to the procedures 
                used to process such claims, and any related issues 
                that the Commission or Task Force considers relevant.
                  (B) Matters included.--In carrying out the study 
                under subparagraph (A), the Commission or Task Force 
                shall examine the following:
                          (i) The backlog of claims, including an 
                        analysis of--
                                  (I) the most effective means to 
                                quickly and accurately resolve all 
                                claims pending as of the date of the 
                                study; and
                                  (II) with respect to the Department, 
                                the annual funding, number of full-time 
                                employees, workload management 
                                practices, and the progress, as of the 
                                date of the study, of the strategic 
                                plan.
                          (ii) Possible improvements to the claims 
                        process, including an evaluation and 
                        recommendations with respect to whether 
                        substantive and structural changes to the 
                        overall claims process are required.
                          (iii) In carrying out the evaluation and 
                        recommendations under subparagraph (B), an 
                        examination of--
                                  (I) options that make no major 
                                substantive changes to the claims 
                                process;
                                  (II) options that maintain the 
                                process but make minor changes; and
                                  (III) options that make broad changes 
                                to the process.
          (2) Appeals process study.--
                  (A) In general.--The Commission or Task Force, acting 
                through the subcommittee described in subsection 
                (d)(2)(B), shall carry out a study on the anticipated 
                increase of appeals of claims, including the current 
                appeals process and the laws and regulations applicable 
                to such appeals. Such study shall be a comprehensive 
                evaluation and assessment of such anticipated increase 
                of appeals claims, an analysis of possible improvements 
                to the procedures used to process such appeals, and any 
                related issues that the Commission or Task Force 
                considers relevant.
                  (B) Matters included.--In carrying out the study 
                under subparagraph (A), the Commission or Task Force 
                shall examine the following:
                          (i) The anticipated surge in appeals of 
                        claims, including an analysis of--
                                  (I) the most effective means to 
                                quickly and accurately resolve pending 
                                appeals and future appeals;
                                  (II) with respect to both the Board 
                                and the Court of Appeals for Veterans 
                                Claims, the annual funding, number of 
                                full-time employees, workload 
                                management practices, and the progress, 
                                as of the date of the study, of the 
                                strategic plan; and
                                  (III) the efficiency, effectiveness, 
                                and utility of the Veterans Benefits 
                                Management System with respect to 
                                appeals operations, including an 
                                identification of key changes that may 
                                need to be implemented to such system.
                          (ii) Possible improvements to the appeals 
                        process, including an evaluation and 
                        recommendations with respect to whether 
                        substantive and structural changes to the 
                        overall appeals process are required.
                          (iii) In carrying out the evaluation and 
                        recommendations under clause (ii), an 
                        examination of--
                                  (I) options that make no major 
                                substantive changes to the appeals 
                                process;
                                  (II) options that maintain the 
                                process but make minor changes;
                                  (III) options that make broad changes 
                                to the process;
                                  (IV) the necessity of the multi-
                                tiered levels of appeals at the 
                                regional office level, including filing 
                                a notice of disagreement, receipt of a 
                                statement of the case, supplemental 
                                statement of the case (if applicable), 
                                and substantive appeal (VA Form 9);
                                  (V) the role of the Board and the 
                                Appeals Management Center, including--
                                          (aa) the effectiveness of the 
                                        workload management of the 
                                        Board and the Center;
                                          (bb) whether the Board and 
                                        Center should be regionalized 
                                        or maintain the centralized 
                                        structure in the District of 
                                        Columbia;
                                          (cc) whether Board members 
                                        should be required to pass the 
                                        administrative law judges 
                                        certification examination; and
                                          (dd) whether the Board should 
                                        continue to require de novo 
                                        review of appeals; and
                                  (VI) the role of the Court of Appeals 
                                for Veterans Claims and the United 
                                States Court of Appeals for the Federal 
                                Circuit, including--
                                          (aa) the continued 
                                        effectiveness and necessity of 
                                        a multi-tiered structure of 
                                        judicial review;
                                          (bb) whether the Court of 
                                        Appeals for Veterans Claims 
                                        should have Article I or 
                                        Article III status;
                                          (cc) expansion of either the 
                                        Court of Appeals for Veterans 
                                        Claims or the United States 
                                        Court of Appeals for the 
                                        Federal Circuit jurisdiction, 
                                        including by allowing such 
                                        courts to hear class action 
                                        lawsuits with respect to 
                                        claims; and
                                          (dd) the possibility of 
                                        expanding judicial review of 
                                        claims to all Federal circuit 
                                        courts of appeals or allowing 
                                        judicial review beyond the 
                                        Court of Appeals for Veterans 
                                        Claims only by the Supreme 
                                        Court.
          (3) Consideration.--In carrying out the studies under 
        paragraph (1)(A) and (2)(A) and making any recommendations 
        under this section, the Commission or Task Force shall consider 
        the following:
                  (A) The interests of veterans, including with respect 
                to accuracy, fairness, and transparency in the claims 
                process of the Department.
                  (B) The values and requirements of the Constitution, 
                including with respect to compliance with procedural 
                and substantive due process.
                  (C) The public interest, including with respect to 
                the responsible use of available resources.
                  (D) With respect to the study conducted under 
                paragraph (1)(A), the importance of the claimant 
                friendly, nonadversarial nature of the claims process.
                  (E) With respect to the study conducted under 
                paragraph (2)(A), the importance of an appeals process 
                that is efficient and easily understandable by a 
                claimant.
          (4) Role of secretary, chairman of the board, and chief 
        judge.--
                  (A) Information.--In carrying out each study under 
                paragraph (1)(A) and (2)(A), at times that the 
                Commission or Task Force determines appropriate, the 
                Commission or Task Force shall submit to the Secretary 
                of Veterans Affairs, the Chairman of the Board, and the 
                Chief Judge of the Court of Appeals for Veterans 
                Claims, as the case may be, information with respect to 
                remedies and solutions that the Commission or Task 
                Force identifies pursuant to such a study.
                  (B) Implementation.--The Secretary, the Chairman of 
                the Board, and the Chief Judge shall each--
                          (i) fully consider the remedies and solutions 
                        submitted to the Secretary, the Chairman, or 
                        the Chief Judge, as the case may be, under 
                        subparagraph (A);
                          (ii) implement such remedies and solutions as 
                        the Secretary, the Chairman, or the Chief 
                        Judge, respectively, determines appropriate; 
                        and
                          (iii) submit to Congress justification for 
                        failing to implement any such remedy or 
                        solution.
                  (C) Plan.--The Commission or Task Force shall submit 
                to the Secretary, the Chairman of the Board, and the 
                Chief Judge a feasible, timely, and cost-effective plan 
                to eliminate the backlog of appeals of claims based on 
                the remedies and solutions identified pursuant to the 
                study under paragraph (2)(A) and the information 
                submitted under subparagraph (A).
  (c) Comprehensive Reports.--
          (1) Initial comprehensive report.--Not later than 60 days 
        after the date on which the Commission or Task Force first 
        meets, the Commission or Task Force shall submit to the 
        President and Congress an initial comprehensive report on the 
        studies conducted under paragraphs (1)(A) and (2)(A) of 
        subsection (b), including--
                  (A) the findings of the causes of the backlog of 
                claims;
                  (B) a proposed plan to handle the anticipated surge 
                in appeals of claims; and
                  (C) the level of cooperation the Commission or Task 
                Force has received from the Secretary and the heads of 
                other departments or agencies of the Federal 
                Government.
          (2) Interim comprehensive reports.--Not later than 90 days 
        after the date on which the Commission or Task Force first 
        meets, and each 30-day period thereafter ending on the date on 
        which the Commission or Task Force submits the final 
        comprehensive report under paragraph (3), the Commission or 
        Task Force shall submit to the President and Congress a 
        comprehensive report on--
                  (A) the progress of the Secretary with respect to 
                implementing solutions to expedite the elimination of 
                the backlog of claims pursuant to subsection 
                (b)(4)(B)(ii);
                  (B) the progress of the Secretary, the Chairman of 
                the Board, and the Chief Judge of the Court of Appeals 
                for Veterans Claims with respect to implementing 
                solutions to complete appeals of claims in a timely 
                manner in a timely manner pursuant to such subsection; 
                and
                  (C) the level of cooperation the Commission or Task 
                Force has received from the Secretary and the heads of 
                other departments or agencies of the Federal 
                Government.
          (3) Final comprehensive report.--Not later than 180 days 
        after the date on which the Commission or Task Force first 
        meets, the Commission or Task Force shall submit to the 
        President and Congress a comprehensive report on the following:
                  (A) With respect to the study conducted under 
                subsection (b)(1)(A)--
                          (i) The findings, conclusions, and 
                        recommendations of the Commission or Task Force 
                        with respect to the matters referred to in such 
                        subsection.
                          (ii) The recommendations of the Commission or 
                        Task Force for revising and improving the 
                        backlog of claims and the procedures used to 
                        process claims.
                          (iii) The progress of the Secretary with 
                        respect to implementing solutions to expedite 
                        the elimination of the backlog of claims 
                        pursuant to subsection (b)(4)(B)(ii).
                          (iv) Other information and recommendations 
                        with respect to claims as the Commission or 
                        Task Force considers appropriate.
                  (B) With respect to the study conducted under 
                subsection (b)(2)(A)--
                          (i) The findings, conclusions, and 
                        recommendations of the Commission or Task Force 
                        with respect to the matters referred to in such 
                        subsection.
                          (ii) The recommendations of the Commission or 
                        Task Force for revising and improving the 
                        appeals process;
                          (iii) The information described in subsection 
                        (b)(4)(A).
                          (iv) The feasible, timely, and cost effective 
                        plan described in subsection (b)(4)(C).
                          (v) The progress of the Secretary, the 
                        Chairman of the Board, and the Chief Judge of 
                        the Court of Appeals for Veterans Claims with 
                        respect to implementing solutions to provide 
                        timely appeals of claims.
                          (vi) Other information and recommendations 
                        with respect to the appeals process as the 
                        Commission or Task Force considers appropriate.
  (d) Membership.--
          (1) Number and appointment.--The Commission or Task Force 
        shall be composed of 15 members, appointed as follows:
                  (A) Two members appointed by the Speaker of the House 
                of Representatives, one of whom shall be designated to 
                serve upon the Subcommittee on the Backlog of Claims 
                and one of whom shall be designated to serve upon the 
                Subcommittee on Appeals.
                  (B) Two members appointed by the minority leader of 
                the House of Representatives, one of whom shall be 
                designated to serve upon the Subcommittee on the 
                Backlog of Claims and one of whom shall be designated 
                to serve upon the Subcommittee on Appeals.
                  (C) Two members appointed by the majority leader of 
                the Senate, one of whom shall be designated to serve 
                upon the Subcommittee on the Backlog of Claims and one 
                of whom shall be designated to serve upon the 
                Subcommittee on Appeals.
                  (D) Two members appointed by the minority leader of 
                the Senate, one of whom shall be designated to serve 
                upon the Subcommittee on the Backlog of Claims and one 
                of whom shall be designated to serve upon the 
                Subcommittee on Appeals.
                  (E) Three members appointed by the President, two of 
                whom shall be designated to serve upon the Subcommittee 
                on the Backlog of Claims and one of whom shall be 
                designated to serve upon the Subcommittee on Appeals.
                  (F) One member appointed by the Secretary of Defense, 
                whom shall be designated to serve upon the Subcommittee 
                on the Backlog of Claims.
                  (G) Two members appointed by the Secretary of 
                Veterans Affairs, one of whom shall be designated to 
                serve upon the Subcommittee on the Backlog of Claims 
                and one of whom shall be designated to serve upon the 
                Subcommittee on Appeals.
                  (H) One member appointed by the Chief Judge of the 
                Court of Appeals for Veterans Claims, whom shall be 
                designated to serve upon the Subcommittee on Appeals.
          (2) Subcommittees.--The Commission or Task Force shall have 
        two subcommittees as follows:
                  (A) A Subcommittee on the Backlog of Claims 
                consisting of the eight members designated in 
                accordance with paragraph (1).
                  (B) A Subcommittee on Appeals consisting of the seven 
                members designated in accordance with paragraph (1).
          (3) Qualifications.--Each member appointed under paragraph 
        (1) shall be appointed based on the experience of the member as 
        a veteran or on the subject matter expertise or other relevant 
        experience of the member.
          (4) Advisors.--
                  (A) In general.--In addition to the 15 members 
                appointed under paragraph (1), the Commission or Task 
                Force shall--
                          (i) have five nonvoting, nonmember advisors, 
                        appointed by a majority of the Commission or 
                        Task Force, each from a different organization 
                        that represents the interests of veterans; and
                          (ii) seek advice from experts from 
                        nongovernmental organizations (including 
                        veterans service organizations and military 
                        organizations), the Internet technology 
                        industry, and the insurance industry.
                  (B) Advice.--Individuals described in clause (i) and 
                (ii) of subparagraph (A) shall provide advice to both 
                subcommittees described in paragraph (2).
          (5) Chairman.--The President shall designate a member of the 
        Commission or Task Force who is appointed by the President and 
        designated to serve upon the Subcommittee on the Backlog of 
        Claims to serve as the chairman of the Commission or Task 
        Force. The chairman may designate a member to serve as the 
        chairman of the Subcommittee on the Backlog of Claims and a 
        member to serve as the chairman of the Subcommittee on Appeals 
        to chair such subcommittees as the designee of the chairman of 
        the Commission or Task Force.
          (6) Period of appointment.--Members of the Commission or Task 
        Force shall be appointed for the life of the Commission or Task 
        Force. A vacancy shall not affect its powers.
          (7) Vacancy.--A vacancy on the Commission or Task Force shall 
        be filled in the manner in which the original appointment was 
        made.
          (8) Appointment deadline.--The appointment of members of the 
        Commission or Task Force established in this section shall be 
        made not later than 15 days after the date of the enactment of 
        this Act.
  (e) Meetings.--
          (1) Initial meeting.--The Commission or Task Force shall hold 
        its first meeting not later than 15 days after the date on 
        which a majority of the members are appointed.
          (2) Meetings.--The Commission or Task Force shall meet at the 
        call of the chairman.
          (3) Quorum.--A majority of the members of the Commission or 
        Task Force shall constitute a quorum, but a lesser number may 
        hold hearings.
  (f) Powers of the Commission or Task Force.--
          (1) Hearings.--The Commission or Task Force may hold such 
        hearings, sit and act at such times and places, take such 
        testimony, and receive such evidence as the Commission or Task 
        Force considers advisable to carry out the purposes of this 
        section.
          (2) Information from federal agencies.--The Commission or 
        Task Force may secure directly from any department or agency of 
        the Federal Government such information as the Commission or 
        Task Force considers necessary to carry out the provisions of 
        this section. Upon request of the chairman, the head of such 
        department or agency shall furnish such information to the 
        Commission or Task Force.
          (3) Postal services.--The Commission or Task Force may use 
        the United States mails in the same manner and under the same 
        conditions as other departments and agencies of the Federal 
        Government.
          (4) Gifts.--The Commission or Task Force may accept, use, and 
        dispose of gifts or donations of service or property.
  (g) Personnel Matters.--
          (1) Compensation of members.--Each member of the Commission 
        or Task Force who is not an officer or employee of the United 
        States shall be compensated at a rate equal to the daily 
        equivalent of the annual rate of basic pay prescribed for level 
        IV of the Executive Schedule under section 5315 of title 5, 
        United States Code, for each day (including travel time) during 
        which the member is engaged in the performance of the duties of 
        the Commission or Task Force. All members of the Commission or 
        Task Force who are officers or employees of the United States 
        shall serve without compensation in addition to that received 
        for their services as officers or employees of the United 
        States.
          (2) Travel expenses.--The members of the Commission or Task 
        Force shall be allowed travel expenses, including per diem in 
        lieu of subsistence, at rates authorized for employees of 
        agencies under subchapter I of chapter 57 of title 5, United 
        States Code, while away from their homes or regular places of 
        business in the performance of service of the Commission or 
        Task Force.
          (3) Staff.--
                  (A) Appointment.--The chairman of the Commission or 
                Task Force may, without regard to the civil service 
                laws and regulations, appoint an executive director and 
                such other personnel as may be necessary to enable the 
                Commission or Task Force to perform its duties. The 
                appointment of an executive director shall be subject 
                to the approval of the Commission or Task Force.
                  (B) Compensation.--The chairman of the Commission or 
                Task Force may fix the compensation of the executive 
                director and other personnel without regard to the 
                provisions of chapter 51 and subchapter III of chapter 
                53 of title 5, United States Code, relating to 
                classification of positions and General Schedule pay 
                rates, except that the rate of pay for the executive 
                director and other personnel may not exceed the rate 
                payable for level V of the Executive Schedule under 
                section 5316 of such title.
          (4) Detail of government employees.--Upon request of the 
        chairman of the Commission or Task Force, the head of any 
        department or agency of the Federal Government may detail, on a 
        nonreimbursable basis, any personnel of that department or 
        agency to the Commission or Task Force to assist it in carrying 
        out its duties.
          (5) Procurement of temporary and intermittent services.--The 
        chairman of the Commission or Task Force may procure temporary 
        and intermittent services under section 3109(b) of title 5, 
        United States Code, at rates for individuals which do not 
        exceed the daily equivalent of the annual rate of basic pay 
        prescribed for level V of the Executive Schedule under section 
        5316 of such title.
  (h) Termination of Commission or Task Force.--The Commission or Task 
Force shall terminate 60 days after the date on which the Commission or 
Task Force submits the final comprehensive report under subsection 
(c)(3).
  (i) Funding.--
          (1) In general.--The Secretary shall, upon the request of the 
        chairman of the Commission or Task Force, make available to the 
        Commission or Task Force such amounts as the Commission or Task 
        Force may require to carry out the duties of the Commission or 
        Task Force under this section.
          (2) Availability.--Any sums made available to the Commission 
        or Task Force shall remain available, without fiscal year 
        limitation, until the termination of the Commission or Task 
        Force.
  (j) Definitions.--In this section:
          (1) The term ``appeals process'' means the process to appeal 
        the determination by the Secretary of a claim beginning with 
        the notice of disagreement filed pursuant to section 7105 of 
        title 38, United States Code, and ending with the review of a 
        decision by the Supreme Court pursuant to section 7292(c) of 
        such title.
          (2) The term ``Board'' means the Board of Veterans' Appeals.
          (3) The term ``strategic plan'' means the Strategic Plan to 
        Eliminate the Compensation Claims Backlog, published by the 
        Secretary of Veterans Affairs on January 25, 2013.
  (k) Effective Date.--This section shall take effect on the date that 
is one year after the date of the enactment of this Act.

SEC. 15. METHODS FOR VALIDATING CERTAIN WORLD WAR II MERCHANT MARINER 
                    SERVICE CONSIDERED TO BE ACTIVE SERVICE BY THE 
                    SECRETARY OF VETERANS AFFAIRS.

  (a) In General.--For the purposes of verifying that an individual 
performed service under honorable conditions that satisfies the 
requirements of a coastwise merchant seaman who is recognized pursuant 
to section 401 of the GI Bill Improvement Act of 1977 (Public Law 95-
202; 38 U.S.C. 106 note) as having performed active duty service for 
the purposes described in subsection (c)(1), the Secretary of Homeland 
Security shall accept the following:
          (1) In the case of an individual who served on a coastwise 
        merchant vessel seeking such recognition for whom no applicable 
        Coast Guard shipping or discharge form, ship logbook, merchant 
        mariner's document or Z-card, or other official employment 
        record is available, the Secretary shall provide such 
        recognition on the basis of applicable Social Security 
        Administration records submitted for or by the individual, 
        together with validated testimony given by the individual or 
        the primary next of kin of the individual that the individual 
        performed such service during the period beginning on December 
        7, 1941, and ending on December 31, 1946.
          (2) In the case of an individual who served on a coastwise 
        merchant vessel seeking such recognition for whom the 
        applicable Coast Guard shipping or discharge form, ship 
        logbook, merchant mariner's document or Z-card, or other 
        official employment record has been destroyed or otherwise 
        become unavailable by reason of any action committed by a 
        person responsible for the control and maintenance of such 
        form, logbook, or record, the Secretary shall accept other 
        official documentation demonstrating that the individual 
        performed such service during period beginning on December 7, 
        1941, and ending on December 31, 1946.
          (3) For the purpose of determining whether to recognize 
        service allegedly performed during the period beginning on 
        December 7, 1941, and ending on December 31, 1946, the 
        Secretary shall recognize masters of seagoing vessels or other 
        officers in command of similarly organized groups as agents of 
        the United States who were authorized to document any 
        individual for purposes of hiring the individual to perform 
        service in the merchant marine or discharging an individual 
        from such service.
  (b) Treatment of Other Documentation.--Other documentation accepted 
by the Secretary of Homeland Security pursuant to subsection (a)(2) 
shall satisfy all requirements for eligibility of service during the 
period beginning on December 7, 1941, and ending on December 31, 1946.
  (c) Benefits Allowed.--
          (1) Burial benefits eligibility.--Service of an individual 
        that is considered active duty pursuant to subsection (a) shall 
        be considered as active duty service with respect to providing 
        burial benefits under chapters 23 and 24 of title 38, United 
        States Code, to the individual.
          (2) Medals, ribbons, and decorations.--An individual whose 
        service is recognized as active duty pursuant to subsection (a) 
        may be awarded an appropriate medal, ribbon, or other military 
        decoration based on such service.
          (3) Status of veteran.--An individual whose service is 
        recognized as active duty pursuant to subsection (a) shall be 
        honored as a veteran but shall not be entitled by reason of 
        such recognized service to any benefit that is not described in 
        this subsection.
  (d) Determination of Coastwise Merchant Seaman.--The Secretary of 
Homeland Security shall verify that an individual performed service 
under honorable conditions that satisfies the requirements of a 
coastwise merchant seaman pursuant to this section without regard to 
the sex, age, or disability of the individual during the period in 
which the individual served as such a coastwise merchant seaman.
  (e) Definition of Primary Next of Kin.--In this section, the term 
``primary next of kin'' with respect to an individual seeking 
recognition for service under this section means the closest living 
relative of the individual who was alive during the period of such 
service.
  (f) Effective Date.--This section shall take effect 90 days after the 
date of the enactment of this Act.

SEC. 16. DESIGNATION OF AMERICAN WORLD WAR II CITIES.

  (a) In General.--The Secretary of Veterans Affairs shall designate at 
least one city in the United States each year as an ``American World 
War II City''.
  (b) Criteria for Designation.--After the designation made under 
subsection (c), the Secretary, in consultation with the Secretary of 
Defense, shall make each designation under subsection (a) based on the 
following criteria:
          (1) Contributions by a city to the war effort during World 
        War II, including those related to defense manufacturing, bond 
        drives, service in the Armed Forces, and the presence of 
        military facilities within the city.
          (2) Efforts by a city to preserve the history of the city's 
        contributions during World War II, including through the 
        establishment of preservation organizations or museums, 
        restoration of World War II facilities, and recognition of 
        World War II veterans.
  (c) First American World War II City.--The city of Wilmington, North 
Carolina, is designated as an ``American World War II City''.

SEC. 17. SENSE OF CONGRESS REGARDING AMERICAN VETERANS DISABLED FOR 
                    LIFE.

  (a) Findings.--Congress makes the following findings:
          (1) There are at least 3,600,000 veterans currently living 
        with service-connected disabilities.
          (2) As a result of their service, many veterans are 
        permanently disabled throughout their lives and in many cases 
        must rely on the support of their families and friends when 
        these visible and invisible burdens become too much to bear 
        alone.
          (3) October 5, which is the anniversary of the dedication of 
        the American Veterans Disabled for Life Memorial, has been 
        recognized as an appropriate day on which to honor American 
        veterans disabled for life each year.
  (b) Sense of Congress.--Congress--
          (1) expresses its appreciation to the men and women left 
        permanently wounded, ill, or injured as a result of their 
        service in the Armed Forces;
          (2) supports the annual recognition of American veterans 
        disabled for life each year; and
          (3) encourages the American people to honor American veterans 
        disabled for life each year with appropriate programs and 
        activities.

                          Purpose and Summary

    H.R. 677, the American Heroes COLA Act of 2015 was 
introduced by Representative Abraham of Louisiana on February 
3, 2015, H.R. 677, as amended, incorporates the text H.R. 677 
and provisions from the following bills: H.R. 245, introduced 
by Representative Abraham of Louisiana on January 9, 2015; H.R. 
517, introduced by Representative Titus of Nevada on February 
6, 2015; H.R. 732, introduced by Representative Ruiz of 
California on February 4, 2015; H.R. 800, introduced by 
Representative O'Rourke of Texas on February 5, 2015; H.R. 
1288, introduced by Representative Butterfield of North 
Carolina on March 4, 2015; H.R. 1302, introduced by 
Representative Latta of Ohio on March 4, 2015; H.R. 1331, 
introduced by Representative Walz of Minnesota on March 4, 
2015; H.R. 1380, introduced by Representative Miller of Florida 
on March 16, 2015; H.R. 1512, introduced by Representative 
Rouzer of North Carolina on April 7, 2015; H.R. 2214, 
introduced by Representative Abraham of Louisiana on May 1, 
2015; H.R. 2286, as introduced by Representative Paul Cook of 
California on May 13, 2015; H.R. 2605, introduced by 
Representative Johnson of Ohio on June 2, 2015; H.R. 2691, 
introduced by Representative Ruiz of California on June 9, 
2015; and, H. Con. Res. 53, introduced by Representative 
Frankel of Florida on May 26, 2015. Together, these provisions 
would improve the expedient and accurate processing of benefits 
claims and appeals, ensure appropriate availability of benefits 
and headstone adornments, increase availability of medical 
evidence for benefits cases, as well as bestow honors and make 
other crucial changes as it pertains to veterans' status and 
designations.

                  Background and Need for Legislation


Section 2. Expansion of eligibility for medallions

    Under current law, the Department of Veterans Affairs (VA) 
may provide a medallion that signifies an individual's status 
as a veteran to be attached to a privately purchased headstone 
or marker for veterans who died on or after November 1, 1990. 
The reason that this medallion is currently only available to 
veterans who died after October 31, 1990, is because from 
November 1, 1990, through September 11, 2001, VA did not pay 
for a private headstone or marker for veterans who were 
qualified for interment in a national or state veterans' 
cemetery. Thus, the medallions were provided as a way to 
distinguish the privately purchased headstones of veterans who 
died after November 1, 1990.
    These medallions have been very much appreciated by 
veterans and their families and VA has received many requests 
for such medallions. According to VA testimony, since the 
Department began providing medallions in 2009, 91 percent of 
requests for these emblems have been denied because otherwise 
qualifying veterans died between 1960 and November 1, 1990.\1\
---------------------------------------------------------------------------
    \1\McLenachen, David R., Acting Deputy Under Secretary for 
Disability Assistance, Veterans Benefits Administration, U.S. 
Department of Veterans Affairs, Statement to the House of 
Representatives Committee on Veterans' Affairs, Subcommittee on 
Disability Assistance and Memorial Affairs Hearing on June 24, 2015.
---------------------------------------------------------------------------
    During the Subcommittee on Disability Assistance and 
Memorial Affairs hearing on June 24, 2015, The American Legion, 
Disabled American Veterans, Veterans of Foreign Wars, Iraq and 
Afghanistan Veterans of America, and Paralyzed Veterans of 
America testified in support of expanding the eligibility for 
such medallions. AMVETS and VA also testified in support of 
allowing more veterans to qualify for the medallions, but 
recommended that eligibility be restricted to help protect 
antique headstones and ensure that the landscape of historic 
cemeteries be preserved. Providing such medallions to veterans 
who served in the military after April 6, 1917, would help 
distinguish the final resting place of veterans who are buried 
in private cemeteries, while allowing the National Cemetery 
Administration to comply with historic preservation and federal 
stewardship statutes and regulations.

Section 3. Definitions relating to claims for benefits under laws 
        administered by the Secretary of Veterans Affairs

    This section would establish uniform definitions for the 
following terms: ``claimant,'' ``claim,'' and ``formal claim.'' 
Establishing uniform definitions would ensure consistency in 
the types of information included in VA's reports to Congress 
with respect to VA's claims processing procedures.

Section 4. Quarterly reports on formal and informal claims for benefits 
        under laws administered by the Secretary of Veterans Affairs

    To improve congressional oversight of VA's claims 
processing procedures, this section would mandate that VA 
submit quarterly reports to the Committees on Veterans' Affairs 
of the Senate and House of Representatives. Such reports would 
include the following information: (1) the total number of 
claims submitted to VA; (2) the total number of informal claims 
submitted to VA; (3) the total number of formal claims 
submitted to VA; (4) the total number of forms indicating an 
intent to file a claim for benefits submitted to VA; (5) the 
total number of claims notification letters sent by VA that 
included an invitation to the claimant to submit an additional 
formal claim, and of those, the total number who submitted a 
formal claim in response to such notification letters; (6) the 
total number of electronically filed claims submitted to VA; 
and, (7) the total number of fully-developed claims submitted 
to VA.
    It is inefficient to require a veteran who is seeking an 
increased rating or to reopen a claim to submit information 
that is already in VA's possession. Therefore, section 4 would 
express the sense of Congress that VA should develop a 
designated form for an increased rating claim or reopening of a 
claim that does not require the resubmittal of information 
previously submitted on a formal claim form.

Section 5. Expedited payment of survivors benefits

    VA provides several benefits to qualifying family members 
of certain deceased veterans, including Dependency and 
Indemnity Compensation (DIC), survivors' pension, home loans, 
and the Dependents' Educational Assistance Program. In most 
cases, VA's records already include many of the documents 
necessary to grant benefits to his or her survivors, such as 
the veteran's DD-214. However, to qualify for benefits, the 
survivor is required to file a formal claim and resubmit 
evidence that VA already has, such as the veteran's service-
connected disability ratings.
    The current system for processing survivor's benefits is 
inefficient because VA employees are required to review 
paperwork that may already be in the veteran's file. 
Furthermore, the application process places a burden on the 
veteran's grieving family members, who are forced to file a 
formal claim and resubmit documents that may already be in VA's 
possession.
    Section 5 of H.R. 677, as amended, would authorize VA to 
automatically pay benefits to qualified survivors of veterans, 
as long as VA has the information necessary to establish 
entitlement to benefits. The survivor would be able to submit 
new evidence, such as the death certificate and other 
information, but the survivor would not have to file a formal 
claim. Additionally, Section 5 would establish that the date 
the survivor notified VA of the death of the veteran would 
serve as the date of receipt of such a claim.
    This section would also require that not later than one 
year after the date of enactment of this Act, VA would submit 
to the Committees on Veterans' Affairs of the Senate and the 
House of Representatives a report with certain information 
regarding survivors' claims adjudicated during the period of 
time covered by such report. Such report would include any 
recommendations VA may have for legislative or administrative 
action to improve the adjudication of survivors' claims 
submitted to VA. Finally, section 5 would establish that the 
effective date of this section would apply with respect to 
claims for benefits based on a death occurring on or after the 
date of enactment of this Act.

Section 6. Priority for processing claims of the Department of Veterans 
        Affairs

    Section 6 of H.R. 677, as amended, would require the 
Secretary of Veterans Affairs to prioritize disability benefits 
claims submitted by veterans who: (1) have attained the age of 
70; (2) are terminally ill; (3) have life-threatening 
illnesses; (4) are homeless; (5) have received the Medal of 
Honor; (6) were prisoners of war; (7) have claims being 
reviewed again in relation to a previously denied claim 
relating to military sexual trauma; (8) the Secretary 
determines, on a case-by-case basis, are seriously or very 
seriously injured; and, (9) the Secretary determines a good 
cause justifies prioritization.
    Current VA practice allows the prioritization of certain 
claims, to include applications filed by Medal of Honor 
recipients, homeless veterans, veterans experiencing extreme 
financial hardships, and veterans suffering from terminal 
illness. Thus, current VA policy has already identified certain 
classes of claimants and determined that expedited treatment 
may be appropriate in some instances. Most of the classes of 
claimants enumerated in Section 6 currently qualify for 
prioritization and expedited process under VA's policy. 
However, on June 28, 2013, at a Subcommittee on Disability 
Assistance and Memorial Affairs legislative hearing on this 
proposal, Veterans Benefits Administration Director of 
Compensation Service, Thomas Murphy, testified that it is not 
guaranteed that this VA practice is uniformly applied across 
all regional offices. Accordingly, it is the intent of this 
Section to create a statutory requirement in order to ensure 
uniform prioritization for veterans who have the most urgent 
claims. The codification of this requirement would ensure 
uniform application of the priority classes, while still giving 
discretion to the Secretary of Veterans Affairs to provide for 
the prioritization of additional claims on a case-by-case 
basis.

Section 7. Treatment of medical evidence provided by non-department of 
        Veterans Affairs medical professionals in support of claims for 
        disability compensation

    VA may afford medical examinations to veterans seeking 
disability benefits, but there is often a long wait time before 
these examinations can be scheduled by VA. Moreover, many 
veterans prefer to submit private medical evidence to support 
their claims for disability benefits.
    Section 1525 of title 38, U.S.C., currently states: ``For 
purposes of establishing any claim for benefits under chapter 
11 or 15 of this title [38 USCS Sec. Sec. 1101 et seq. or 1501 
et seq.], a report of a medical examination administered by a 
private physician that is provided by a claimant in support of 
a claim for benefits under that chapter may be accepted without 
a requirement for confirmation by an examination by a physician 
employed by the Veterans Health Administration if the report is 
sufficiently complete to be adequate for the purpose of 
adjudicating such claim.''
    During the April 14, 2015, Subcommittee on Disability 
Assistance and Memorial Affairs hearing, The American Legion 
testified that it had documented many instances of VA 
scheduling unnecessary and duplicative examinations with a VA 
physician, even though there was already sufficient medical 
evidence in the claims file from a private physician to decide 
the claim. These duplicative examinations add unnecessary 
delays to the disability claims process.
    Section 7 would require VA to accept a medical examination 
administered by a private physician if such examination report 
is sufficiently complete. This Section would define 
``sufficiently complete'' to mean ``competent, credible, 
probative, and containing such information as may be required 
to make a decision on the claim from which the report is 
provided.'' However, if VA decides that the evidence submitted 
by a non-VA physician is not sufficiently complete, Section 7 
would require VA to provide the veteran with a thorough 
explanation of why such medical opinion does not include 
adequate information for VA to issue a decision on the claim, 
and the reason why additional medical evidence is necessary. 
Finally, this section would establish that the effective date 
of this Section would apply with respect to medical evidence 
submitted after the date that is one year after the date of 
enactment.
    Section 7 would improve VA's claims processing system by 
eliminating the requirement that claimants undergo unnecessary 
examinations. Moreover, requiring VA to accept a sufficiently 
complete report from a private physician would result in a 
reduction in the number of disability examinations conducted by 
VA physicians. This would allow VA's medical professionals to 
devote more resources to providing care for our nation's 
veterans and improve timeliness for those VA compensation 
examinations conducted by VA physicians.

Section 8. Automatic annual increase in rates of disability 
        compensation and dependency and indemnity compensation

    The basic purpose of the disability compensation program is 
to provide relief from the impaired earning capacity of 
veterans who are disabled as a result of their military 
service. The amount of compensation payable varies according to 
the degree of disability. This amount in turn is required by 
law to represent, to the extent practicable, the average 
impairment in earning capacity in civilian occupations 
resulting from such disability or combination of disabilities. 
To be eligible to receive disability compensation, a veteran 
must have a disability incurred in or aggravated by military 
service, which is not the result of willful misconduct, and 
must have been discharged under other than dishonorable 
conditions. The responsibility for determining a veteran's 
entitlement to service-connection for a disability rests with 
VA.
    Surviving spouses and dependent children of veterans who 
died as a result of disabilities determined by VA to be 
service-connected (including veterans who died while on active 
duty), or who had a service-connected disability rated at 100 
percent for a specified minimum amount of time prior to death, 
are entitled to receive monthly DIC benefits. Additional 
amounts are paid to survivors who are housebound, in need of 
aid and attendance, or who have minor children. The purpose of 
DIC benefits authorized under chapter 13 of title 38, U.S.C., 
is to provide partial compensation to the appropriate survivors 
for the loss in financial support due to the veteran's service-
connected death. Income and need are not factors in determining 
a surviving spouse's or child's entitlement because the nation, 
in part, assumes the legal and moral obligation of the veteran 
to support the spouse and children.
    Each year, the Committee approves and reports legislation 
that sets the cost-of-living adjustment (COLA) by reference to 
the Social Security increase. Although the Committee typically 
passes such legislation each year, veterans must wait for 
Congress to act before they are granted such an increase. In 
contrast, Social Security beneficiaries receive an automatic 
and annual COLA if there is an increase in the Consumer Price 
Index for Urban Wage Earners and Clerical Workers (CPI-W) in 
the previous year.\2\ Accordingly, service-disabled veterans 
who are receiving disability benefits from VA should also 
automatically receive their benefits increase, particularly in 
light of the current economic climate.
---------------------------------------------------------------------------
    \2\Under current law, the COLA equals the percentage increase in 
the average CPI-W from the third quarter of the base year (the last 
year for which a COLA was applied) to the third quarter of the current 
year.
---------------------------------------------------------------------------
    To correct this inequity, rather than being subject to the 
uncertainty of an annual COLA bill, this Section would make 
compensation to veterans and their dependents permanently 
subject to the same COLA as Social Security recipients. By 
making such an increase automatic, veterans would not have to 
wait for Congress to pass an annual COLA bill before receiving 
the COLA increase in benefits. Further, because a COLA is 
assumed in the Congressional Budget Office's baseline, there is 
no projected increase in mandatory spending relative to the 
baseline projected for this provision.

Section 9. Improvement of fiduciaries for veterans

    Section 9 would provide reforms to VA's fiduciary program. 
Specifically, chapter 55 of title 38, U.S.C., provides 
authority for the VA fiduciary program, which is intended to 
help veterans and other VA beneficiaries who are deemed by the 
Secretary of Veterans Affairs to be mentally incompetent for 
purposes of handling their financial affairs. In such cases, 
the Secretary appoints a fiduciary who, by statute, is only 
authorized to receive and manage benefits administered by the 
Secretary on behalf of the beneficiary. The fiduciary is 
responsible for ensuring that a beneficiary's bills are paid on 
time and that a beneficiary receives money to pay for food, 
shelter, clothing, medical expenses, and other necessities.
    The framework established in chapter 55 allows VA a great 
deal of latitude in implementing the fiduciary program. Section 
9 is designed to transform VA's fiduciary program to better 
serve the needs of our most vulnerable veterans and their 
hardworking fiduciaries, and to protect veterans in the program 
from falling victim to deceitful and criminal fiduciaries. 
Section 9 would overhaul the VA fiduciary program, making many 
necessary reforms to address problems identified in recent 
years and would realign chapter 55 to a structure more 
consistent with other amended sections of title 38, U.S.C.
    Under current law, a VA beneficiary may appeal VA's 
decision to appoint a fiduciary. However, the appeals process 
within VA's fiduciary program is difficult, slow, and often 
results in healthy, capable veterans being unable to remove 
themselves from the program. Section 9 would require that 
whenever the Secretary appoints a fiduciary, the Secretary must 
provide a written statement detailing the reasons why such 
beneficiary is unable to handle his or her VA funds. 
Furthermore, the beneficiary would be allowed to appeal the 
finding of incompetence at any time. This provision not only 
enables a veteran to remain out of the fiduciary program if 
medical evidence supports such a position, it would also allow 
a veteran who has sufficiently recovered at a later time to 
return to managing his or her own financial affairs.
    This Section would also permit a veteran or other VA 
beneficiary to request the appointment of a new fiduciary if it 
is perceived that the current fiduciary is not acting in the 
best interest of the veteran or has an irreconcilable 
personality conflict or disagreement. The Secretary may deny 
the removal of an appointed fiduciary if it is determined that 
the request was not made in good faith, and would ensure that 
the delivery of benefits is not interrupted if a previous 
fiduciary is removed and a new one appointed.
    This section would enable a veteran or other VA beneficiary 
to designate a preferred fiduciary ahead of time, such as a 
family member or guardian. While the Secretary would not be 
required to appoint the designated fiduciary, the reason for 
not appointing that fiduciary would have to be presented in 
writing to the veteran as would a notice of the veteran's right 
to modify the appointment. In many cases, a veteran or other VA 
beneficiary may already have a family member or court-appointed 
guardian acting as a fiduciary for other benefits, and in cases 
where the veteran is happy with the fiduciary's performance of 
those duties, a sensible approach would be to maintain that 
relationship.
    In response to due process concerns raised by the Veterans 
of Foreign Wars, during the July 9, 2015, Disability Assistance 
and Memorial Affairs subcommittee legislative hearing, an 
amendment was adopted that removed the provision authorizing 
the appointment of a temporary fiduciary in cases where the 
veteran was not yet afforded a hearing. If a beneficiary does 
not designate a preferred fiduciary in advance, Section 9 would 
also establish the priority for VA to follow when determining 
whom to appoint as the veteran's fiduciary. Such priority would 
include a relative of the beneficiary, the person appointed as 
guardian of the beneficiary by a court of competent 
jurisdiction, and anyone authorized to act on behalf of the 
beneficiary under a durable power of attorney.
    Under certain circumstances, the Secretary may decide that 
a paid fiduciary is in a veteran's or other VA beneficiary's 
best interest. Currently, Section 5502(a)(2) of title 38, 
U.S.C., states that a fiduciary may receive a commission for 
his or her efforts, but that commission may not exceed four 
percent of the monetary benefits a beneficiary receives in one 
year. Investigations, hearings, and media reports have 
identified many problems in the fiduciary program arising from 
paid fiduciaries receiving more than the amount authorized 
under law, including receiving commissions from retroactive and 
lump sum payments to veterans. Further, evidence has also 
revealed VA field examiners directing fiduciaries to take 
income from non-VA benefits as well, an action explicitly not 
authorized by law. In some cases, the veteran beneficiary had 
not received basic funding for food, clothing, and shelter that 
should have been administered by the fiduciary.
    The Committee has continued to hold hearings and conduct 
investigations that have indicated that current law and policy 
regarding commissions paid to fiduciaries are frequently 
violated throughout the nation. Additionally, the commission 
rate paid to VA-appointed fiduciaries is already higher than 
that paid by the Social Security Administration (SSA) under the 
Representative Payee Program, the SSA's equivalent to VA's 
fiduciary program.
    Section 9 would reduce the commission rate paid to 
fiduciaries, if the Secretary determines that a paid fiduciary 
is in the best interest of the veteran, to not more than 3 
percent of the veteran's monthly benefits, or $35 per month, 
whichever is less. Any desire by VA to increase this rate would 
require congressional authorization. This commission rate would 
give VA's fiduciary program a similar structure to the SSA's 
Representative Payee Program and would reduce the profit motive 
of predatory fiduciaries. This section would also clarify that 
(1) commission payments are not to be derived from retroactive 
or lump sum payments; (2) fiduciaries who are determined to 
misuse a veteran's benefits may not receive commissions; (3) 
fiduciaries found to be misusing funds may have their status as 
fiduciaries revoked; (4) the Secretary may seek compensation in 
a court of law from fiduciaries found to misuse benefits or 
fiduciaries who fail to adequately account for a veteran's 
benefits; and, (5) funds remaining with a paid fiduciary after 
a veteran's passing would escheat to the federal government. 
Reducing the financial incentive for a predatory fiduciary to 
apply to VA's fiduciary program provides further assurance that 
participants are working in the best interest of vulnerable 
veterans.
    According to testimony provided by the VA Office of 
Inspector General (OIG), from April 1, 2010, to March 31, 2015, 
the OIG conducted 216 investigations involving fiduciary fraud 
and arrested 94 fiduciaries and/or associates.\3\ Furthermore, 
Committee investigations have documented cases of convicted 
felons serving as fiduciaries, as well as fiduciaries with no 
knowledge of or training regarding their duties to the veteran. 
Many cases of embezzlement of a veteran's funds could have been 
prevented with a basic background check of a fiduciary. 
However, VA frequently used its authority to waive the current 
background check requirement for appointment of a fiduciary, 
and failed to follow up at a later point in time to determine 
the suitability of the appointed fiduciary.
---------------------------------------------------------------------------
    \3\Abe, Gary, K., Deputy Assistant Inspector General for Audits and 
Evaluations, Office of Inspector General, U.S. Department of Veterans 
Affairs, Statement to the House of Representatives Committee on 
Veterans' Affairs, Subcommittee on Disability Assistance and Memorial 
Affairs Hearing on June 11, 2015.
---------------------------------------------------------------------------
    Furthermore, on June 1, 2015, the OIG issued a report 
finding that VA failed to schedule required field examinations 
in a timely manner. The purpose of VA's field examinations is 
to assess the welfare of the veteran through personal contact 
via a visit to the veteran's home. Field examinations are also 
used to review fund usage and the overall performance of the 
fiduciary. OIG reported that during Calendar Year 2013, VA did 
not meet timeliness standards for about 45,500 of approximately 
109,000 (42%) field examinations. Of those 45,500 examinations, 
approximately 18,100 were still not completed as of December 
31, 2013.
    Moreover, the Veterans Benefits Administration (VBA) did 
not meet timeliness standards for about 54,000 of approximately 
106,400 field examinations for the first three quarters of 
Calendar Year 2014. Of the 54,000 field examinations that did 
not meet timeliness standards in the first three quarters of 
Calendar Year 2014, approximately 21,900 were still not 
completed as of September 2014. As a result, the OIG concluded 
that untimely field examinations placed approximately $360.7 
million in benefit payments and $487.6 million in estate values 
at increased risk of misuse. In addition, the OIG determined 
that VBA had failed to schedule required field examinations for 
approximately 1,800 beneficiaries in Calendar Year 2013.\4\
---------------------------------------------------------------------------
    \4\Ibid, at page 3.
---------------------------------------------------------------------------
    Field examinations are essential to ensure that the veteran 
is adequately protected. The Committee is concerned that VA's 
failure to conduct timely field examinations may be evidence 
that VA is not adequately fulfilling its required oversight of 
fiduciaries. The lack of oversight may place the general health 
and well-being of beneficiaries at risk.
    Section 9 would improve the oversight and the qualification 
processes for fiduciaries by requiring the Secretary to perform 
civil and criminal background investigations, and conduct a 
face-to-face interview prior to certifying an individual as a 
fiduciary. In response to concerns that performing background 
checks may slow the fiduciary appointment process, authority 
would be provided to the Secretary, to expedite background 
checks where necessary. This Section would also protect 
veterans' sensitive personal information and would mandate the 
furnishing of a bond when required by the Secretary, before 
certifying an individual as a fiduciary. Veterans service 
organizations (VSOs) raised concerns that the requirement of a 
bond for family or caregiver fiduciaries causes undue hardship 
upon those closest to the veteran; to address these concerns, 
Section 9 would allow the Secretary to consider the existence 
of a familial or personal relationship between the proposed 
fiduciary and beneficiary, as well as the care the proposed 
fiduciary has taken to protect the interests of the 
beneficiary.
    Committee investigations have yielded information regarding 
cases where a veteran or other VA beneficiary had never met nor 
heard from his or her fiduciary.\5\ According to one witness at 
an oversight hearing conducted on February 9, 2012, this lack 
of accountability on the part of fiduciaries, coupled with VA's 
lack of oversight, contributed to allegations that some 
veterans did not receive the necessary funds to pay basic 
utilities and predatory fiduciaries making a profit at the 
expense of the veteran.\6\
---------------------------------------------------------------------------
    \5\Rosinski, Doug, Attorney, Law Office of Douglas J. Rosinski, 
Esq., Testimony to the House of Representatives Committee on Veterans' 
Affairs Subcommittee on Oversight and Investigations Hearing on 
February 9, 2012.
    \6\Eagle, Katrina, Attorney, Law office of Katrina J. Eagle, Esq, 
Testimony to the House of Representatives Committee on Veterans' 
Affairs Subcommittee on Oversight and Investigations Hearing on 
February 9, 2012.
---------------------------------------------------------------------------
    To improve VA oversight of fiduciaries, Section 9 contains 
a provision that would require an annual accounting by 
fiduciaries of benefits earned, benefits disbursed, and the 
remaining balance as well as other fiduciary-controlled sources 
of income of that veteran. The fiduciary would also be required 
to report any events affecting his or her ability to serve the 
veteran, including criminal convictions, bankruptcy filings, 
and judgments filed against the fiduciary. Any events reported 
in the annual accounting may be considered by the Secretary in 
determining a fiduciary's ability to continue serving the best 
interest of the veteran. This annual report would be 
transmitted to the beneficiary or the beneficiary's guardian.
    Under current law, VA is not required to review a 
fiduciary's annual accounting. VA's current policy generally 
requires fiduciaries to submit an annual accounting in cases 
where: the beneficiary's annual VA benefit amount equals or 
exceeds the compensation payable to a veteran with a service-
connected disability that is rated totally disabling; the 
beneficiary's accumulated VA funds under management by a 
fiduciary is $10,000 or more; the fiduciary was appointed by a 
court; or, the fiduciary receives a fee. Such audits generally 
require a statement of the beginning account balance, a 
detailed accounting of the funds managed on behalf of the 
beneficiary, a detailed list of the expenses paid, and the 
ending account balance.
    Section 9 would provide for specific treatment of caregiver 
fiduciaries, ensuring that a limited annual report is required. 
However, Section 9 would give VA the opportunity to audit 
fiduciaries whose accounting is suspect. The Secretary would be 
given discretion to adjust the content required under an annual 
report or accounting with respect to a caregiver fiduciary whom 
the Secretary determines to have effectively protected the 
interests of the beneficiary over a sustained period, including 
the parameters for the posting of bond as mentioned above. 
Additionally, the VBA and the Veterans Health Administration 
(VHA) would be required to coordinate and minimize the 
frequency with which employees of VA visit the home of a 
caregiver fiduciary and beneficiary, and limit the extent of 
supervision by Under Secretaries with respect to such a 
fiduciary and beneficiary.
    Although it is important for VA to periodically audit 
fiduciaries, particularly fiduciaries who receive a commission, 
a comprehensive annual reporting requirement may place a burden 
on volunteer fiduciaries. This burden may be particularly 
onerous if the fiduciary is also serving as the veteran's 
caregiver. Caregivers are often loving family members, who are 
making tremendous sacrifices to ensure the care and comfort of 
the veteran. Furthermore, many caregivers are already being 
supervised by the VHA under the Caregivers and Veterans Omnibus 
Health Services Act of 2010\7\ (Caregivers Act). Fiduciaries 
who also receive VA assistance are subject to periodic home 
visits by VHA employees to assess the welfare of the veteran. 
If the VHA home visits reveal that the veteran is not receiving 
proper care, VHA may terminate caregiver support. Therefore, 
requiring caregivers to provide a detailed annual accounting 
would be an unnecessary burden and would not provide additional 
protections for the beneficiary.
---------------------------------------------------------------------------
    \7\P.L. 111-163 (May 5, 2010)
---------------------------------------------------------------------------

Section 10. Board of Veterans' Appeals video hearings

    Although a hearing is not required in order for the Board 
of Veterans' Appeals (Board) to issue a final decision in a 
veteran's appeal, a veteran is entitled to a hearing upon 
request. In FY 2014, the Board held almost 11,000 hearings. 
Many of these hearings were conducted at the Board offices, but 
Board Members also travel to VA regional benefits offices 
around the country for the purpose of holding hearings in 
locations more convenient for veterans. In addition, the Board 
offers veterans the option of having a videoconference hearing.
    During the January 22, 2015, Subcommittee on Disability 
Assistance and Memorial Affairs hearing, the Board's Vice 
Chairman, Laura Eskenazi, testified that there is no 
statistical difference in the ultimate disposition of in-person 
hearings as compared to videoconference hearings. Veterans who 
had videoconference hearings had an allowance rate for their 
appeals that was virtually the same as veterans who had an in-
person hearing.\8\ Furthermore, during the April 14, 2015, 
Subcommittee on Disability Assistance and Memorial Affairs 
hearing, VA testified that the Board has historically been able 
to schedule videoconference hearings more quickly than in-
person hearings. For example, in FY 2014, on average, 
videoconference hearings were held 124 days sooner than in-
person hearings.
---------------------------------------------------------------------------
    \8\Eskenazi testimony, op. cit.
---------------------------------------------------------------------------
    Section 10 would permit the Board to schedule the earliest 
possible hearing for the appellant, which may be a 
videoconference hearing. This provision, however, would 
preserve the right of the appellant to request a different type 
of hearing, such as a hearing at the Board offices in 
Washington, D.C., or a hearing by a Board Member held at the 
appellant's local regional office.
    Section 10 would encourage the additional use of 
videoconferencing at the Board for the purpose of expediting 
the scheduling of appeals hearings. This Section would also 
improve efficiencies at the Board by reducing time lost due to 
the Veterans Law Judges having to travel to regional benefits 
offices to conduct in-person hearings.

Section 11. Improvements to authority for performance of medical 
        disabilities examinations by contract physicians

    Some veterans are afforded a VA medical examination to 
evaluate their application for disability benefits. 
Unfortunately, there are not enough VA examiners to perform 
these evaluations in a timely manner, and some veterans 
experience lengthy delays before VA is able to schedule such 
examinations. It may be especially difficult for VA to timely 
schedule these examinations if the veteran needs to see a 
specialist, such as a cardiologist or orthopedic surgeon. 
Moreover, veterans who live in rural areas may have to travel 
for miles to a VA facility in order to see a VA examiner for a 
disability examination.
    During the July 29, 2015, Subcommittee on Disability 
Assistance and Memorial Affairs hearing, VA testified that 
enabling licensed physicians operating under a VA contract to 
conduct more examinations would allow VA doctors to devote more 
time to treating veterans, rather than conducting disability 
examinations. In 2003, Congress gave VA temporary authority to 
contract with non-VA physicians to perform disability 
examinations. However, such authorization expires on December 
31, 2016.
    Section 11 would extend VA's authority to contract with 
non-VA physicians to conduct disability examinations through 
December 31, 2017. This Section would also revise provisions of 
the Veterans Benefits Act of 2003 and the Veterans' Benefits 
Improvement Act of 1996 relating to contract examinations. 
Section 11 would clarify that, notwithstanding any law 
regarding the licensure of physicians, a physician who has a 
current unrestricted license would be authorized to conduct 
disability examinations for VA in any state, the District of 
Columbia, or a commonwealth, territory, or possession of the 
United States. However, this authorization would only extend to 
physicians conducting an examination within the scope of the 
physician's authorized duties under a contract with VA. 
Furthermore, VA would only be able to contract with physicians 
who are not barred from conducting such an examination in any 
state, the District of Columbia, or a commonwealth, territory, 
or possession of the United States.
    Moreover, the Committee is concerned about a news report 
indicating that some veterans have been referred to a physician 
who was under criminal investigation and practicing medicine 
with a restricted license.\9\ A restricted license limits a 
physician's practice, generally because the physician has a 
health problem or is being disciplined for professional 
misconduct. Section 11 would ensure that VA would not be able 
to contract with any physician who is practicing medicine with 
a restricted license.
---------------------------------------------------------------------------
    \9\Ryan, Patty, ``VA Contractor Sent Patients to Tampa Doctor as 
Prosecutors Tried to Send Him to Prison, Tampa Bay Times, August 22, 
2015.
---------------------------------------------------------------------------
    It would benefit veterans to extend VA's temporary 
authority to contract with private physicians to conduct 
disability examinations. However, VA should only contract with 
physicians who have current unrestricted licenses and are not 
barred from conducting medical examinations within the United 
States or its territories.

Section 12. Pilot program on fully developed appeals

    Under the current VA appeals system, a veteran who 
disagrees with VA's decision with respect to his or her claim 
for benefits may file a Notice of Disagreement (NOD). The VA 
regional benefits office then determines whether additional 
development is needed and, if so, undertakes that development 
and provides the veteran with a statement of the case (SOC). 
The SOC includes a summary of the evidence considered, a 
summary of the applicable laws and regulations, and a 
discussion of how such laws and regulations affect VA's 
decision. The veteran may then file a substantive appeal via a 
VA Form 9, and is permitted to submit additional evidence to 
support his or her appeal. Each time the veteran submits new 
information, the regional benefits office will generally issue 
a new decision or supplemental statement of the case (SSOC).
    The requirement that VA issue a SSOC every time new 
evidence is submitted increases the wait time for veterans. In 
FY 2014, the average time between the date a veteran filed an 
NOD and the issuance of an SOC was 330 days. The time from 
issuance of an SOC to filing of a substantive appeal averaged 
39 days. The period between the filing of a substantive appeal 
and certification of an appeal to the Board was 681 days.\10\
---------------------------------------------------------------------------
    \10\McLenachen testimony, op. cit., April 14, 2015.
---------------------------------------------------------------------------
    To determine whether the fully developed appeals (FDA) 
process would help expedite VA's appeals process, Section 12 
would create a five-year FDA pilot program. This Section would 
require VA to provide the claimant with information about the 
pilot program, including the limitation on providing new 
evidence after filing an appeal and the advantages and 
disadvantages of participating in the program. Further, VA 
would be required to collaborate with veterans service 
organizations to publish an online tutorial explaining the 
advantages and disadvantages of the pilot program.
    Under Section 12, a claimant who elects to participate in 
the pilot program would file a NOD, along with a written 
election to have the appeal determined under the pilot program. 
At the time of filing the NOD, the claimant would submit all 
evidence that the claimant believes is needed for the appeal, 
as of the date of filing, and a statement of argument, if any, 
in support of the claim. Furthermore, the claimant's 
representative of record, if any, would have the opportunity to 
review the claimant's FDA and submit any additional arguments 
or evidence that the representative determines necessary. After 
the claimant elects to file a FDA, jurisdiction over the appeal 
would transfer to the Board.
    Section 12 would allow a veteran to revert to the 
traditional appeals process at any time after making an FDA 
election, with no penalty other than the time lost whereby the 
appeal may have been reviewed under the traditional appeals 
process. If the claimant decides to submit new evidence, the 
claimant would be required to revert to the traditional appeals 
process. Additionally, if the claimant requests to hold a 
hearing, such request would be deemed to be an election to 
revert to the standard appeals process.
    Upon the election of a claimant to file a FDA, the 
jurisdiction of the appeal would transfer directly to the 
Board. The Board would maintain FDA on a separate docket than 
the standard appeals docket. The Board would also be directed 
to decide FDAs in the order they are received, however, the 
Board would not decide more than one FDA for each four 
traditional appeals decided. Finally, to the extent 
practicable, Section 12 would require that the Board decide 
each FDA within one year of the date on which the claimant 
files the NOD.
    In addition, Section 12 would require the Board to 
establish an office to develop any evidence the Board 
determines necessary to decide a FDA. VA would be required to 
cooperate with the Board in developing evidence. Furthermore, 
VA would be required to transfer employees who were responsible 
for processing remanded cases to positions within the Board in 
a number VA determines sufficient to carry out this section.
    Section 12 would, in cases where the Board determines that 
a FDA requires additional evidence, direct the Board to take 
such action as may be necessary to develop such new evidence 
without remanding the case to the VBA. The Board would consider 
such evidence in the first instance without consideration by 
the VBA. Moreover, the claimant or the representative of the 
claimant, if any, would have the opportunity to review a copy 
of such new evidence and is able to respond within 90 days 
after the date of mailing such evidence, without requiring the 
claimant to make a reversion to the traditional appeals 
process.
    Section 12 would also require VA to provide an annual 
report that would include recommendations for changes to 
improve the pilot program and an assessment of the feasibility 
and advisability of expanding the pilot program. Such annual 
reports would begin 180 days after the date on which the pilot 
program commences.
    VA's current rating notification letters fail to clearly 
explain the rationale for its conclusions. If veterans better 
understood why VA denied their initial claim, the number of 
appeals may be reduced. More complete and clear decision 
letters would provide veterans and their representatives with a 
better understanding of what is needed to prevail in their 
appeal, regardless of which option they choose. To ensure VA 
works cooperatively with VSOs to develop a better, more 
understandable rating notification letter, this Section would 
require the annual report to include a review, made in 
conjunction with VSOs, of VA's efforts to improve disability 
rating notification letters. Moreover, the report would include 
the opinions of the VSOs regarding VA's efforts to provide 
clear notification letters. Finally, section 12 would require 
VA to publish interim guidance on the pilot program not later 
than one day after the date of enactment and would require VA 
to prescribe regulations to carry out such pilot program not 
later than 90 days after enactment.

Section 13. Deadline for certification of appeals forms by regional 
        offices of the Department of Veterans Affairs

    After a veteran files a substantive appeal, VA employees 
are required to review the claims file to ensure that all 
administrative and adjudicative procedures have been completed 
before the appeal is certified to the Board. The purpose of the 
review is to avoid unnecessary remands by ensuring that all 
issues have been addressed before certification to the Board. 
Despite the fact that this review is simply an administrative 
procedure, it currently takes 681 days on average for VA to 
complete the process of certifying an appeal to the Board.\11\
---------------------------------------------------------------------------
    \11\Ibid.
---------------------------------------------------------------------------
    During the June 24, 2015, Subcommittee on Disability 
Assistance and Memorial Affairs hearing, The American Legion 
and the Iraq and Afghanistan Veterans of America testified in 
support of the provisions of Section 13, which would require VA 
to complete the certification process within one year.

Section 14. Evaluation of backlog of disability claims and appeals of 
        claims of Department of Veterans Affairs

    Section 14 would establish a commission or task force to 
provide a comprehensive evaluation and assessment of the 
backlog of VA disability claims, as well as the lesser noted 
backlog of appeals of initial decisions, an analysis of 
possible improvements to VA disability claims processing, and 
any related issues that the commission or task force considers 
relevant. This Section would require VA to submit interim and 
final reports to Congress within 180 days of commencement of 
work.
    The VA disability compensation program provides monetary 
support to veterans with disabling conditions that were 
incurred or aggravated during military service. In FY 2015, the 
program provided approximately $63.7 billion in disability 
compensation benefits to nearly 4.1 million veterans. For 
years, the disability compensation claims process has been the 
subject of concern and attention by VA, Congress, and VSOs, due 
in large part to long waits for decisions and the large number 
of claims pending a decision. Against this backdrop, thousands 
of servicemembers are expected to become veterans in the coming 
years according to VA officials, with a significant number 
expected to apply for disability benefits.
    VA has installed sweeping technological changes in recent 
years, and has implemented various initiatives under its 
Strategic Plan. However, VA has also layered new initiative 
upon new initiative, including short-notice mandatory overtime, 
focused deadlines for claims dated in excess of one year, and 
alteration of the VA tracking and reporting figures of 
backlogged claims in its Monday Morning Workload Report. In 
December 2012, the GAO issued a report entitled, ``Veterans' 
Disability Benefits: Challenges to Timely Processing Remains a 
Daunting Challenge'' that reviewed VA's disability adjudication 
process. The GAO noted that, although VA is attempting to 
address processing challenges through various improvement 
initiatives, without a comprehensive plan to strategically 
manage resources and evaluate the effectiveness of these 
efforts, the agency risks spending limited resources on 
initiatives that may not speed up the disability claims and 
appeals processes. This may, in turn, result in forcing 
veterans to continue to wait months and even years to receive 
compensation for injuries incurred during their service to the 
country.\12\
---------------------------------------------------------------------------
    \12\U.S. Government Accountability Office, Veterans' Disability 
Benefits: Challenges to Timely Processing Remains a Daunting Challenge 
(GAO-13-89) (December 2012).
---------------------------------------------------------------------------
    Furthermore, numerous recent reports from VA OIG 
demonstrate that VA regional offices across the nation continue 
to lack effective controls and accuracy in processing 
disability claims, fail to adequately interpret policy 
requirements, lack effective training, and further lack proper 
managerial oversight. While VA has set concrete goals for 
processing times and reduction of backlogged veterans' 
disability compensation claims, it is evident that more must be 
done to ensure that VA implements a workload management 
strategy that will not only eliminate the current backlog, but 
will also improve the system in a holistic manner, provide 
capacity for anticipated and unanticipated surges, ensure 
accurate processing of claims, and prevent future backlog 
occurrences.
    The need for legislation establishing a commission or task 
force has been highlighted before the Committee by independent 
subject matter expert academics, organizations who advocate on 
behalf of veterans, and by the CAVC. An outside analysis is 
necessary to clearly identify, first, why the backlog exists, 
and second, how to prevent this situation from recurring, 
whether by amendment to law, regulation, policy, or process.
    The commission or task force created by this Section would 
augment and support VA's ongoing work, contribute added value 
to VA's efforts, report on its findings early and often, and 
increase transparency throughout the process. Additionally, 
while much focus is placed upon the backlog of veterans' 
disability benefit claims, a commensurate focus upon the 
backlog of veterans' appealed claims does not exist. With a 
current caseload of more than 420,000 appeals and a projected 
workload of hundreds of thousands of appealed claims in the 
coming years, the appeals system must also be considered with 
thoughtful analysis, evaluation, and recommendations for 
improvement.

Section 15. Methods for validating certain World War II Merchant 
        Mariner service considered to be active service by the 
        Secretary of Veterans Affairs

    Historically, merchant mariners were private citizens 
employed by freight shipping companies. In an effort to support 
the American war effort during World War II, these freight 
shipping companies and their employees became an auxiliary to 
the United States Navy. Their mission was to transport bulk war 
materials including food, clothing, weapons, and even troops to 
all areas of conflict and coastal installations here at home.
    Currently, a certificate of shipping and discharge forms, 
continuous deck or engine logbooks, and shipping company 
records that indicate the vessel names and dates of voyages are 
the only documents that are considered acceptable to determine 
an individual's service in the merchant marine. Unfortunately, 
such documentation may no longer exist or can be difficult to 
find.
    Section 15 would expand the official documentation accepted 
by the Secretary of Homeland Security to grant veterans status 
with limited benefits to World War II merchant marine and 
coastwise merchant seamen. This Section would expand the 
acceptable forms of documentation used to determine eligible 
service in the merchant marine, and would allow acceptance of 
Social Security Administration records, validated testimony by 
the applicant or closest living relative, and other official 
records that provide sufficient proof of service. The limited 
benefits that would be conferred by Section 15 include burial 
benefits and the awarding of any commendations, ribbons, or 
honors earned during an individual's time of service.

Section 16. Designation of American World War II Cities

    Section 16 would mandate that the VA Secretary designate 
one city in the United States each year as an ``American World 
War II City'' based on a set of criteria that includes: 
contributions to the war effort, efforts to preserve the 
history of the city's contributions, and the presence of 
military facilities within the city. The Committee believes 
that American cities provided critical and distinguished 
contributions to the World War II effort and should be honored 
and celebrated accordingly. This Section would set in place a 
procedure for other cities to receive this designation.

Section 17. Sense of Congress Regarding American Veterans Disabled for 
        Life

    There are 3.6 million veterans of the United States Armed 
Forces living today that are recognized by the VA to be 
service-disabled veterans. These American heroes carry the 
lasting scars of their service to our nation throughout their 
lives.
    In recognition of these veterans, Congress approved 
construction of the American Veterans Disabled For Life 
Memorial, located in Washington, DC, which was dedicated on 
October 5, 2014 to serve as a permanent reminder of the 
enduring human sacrifices of war. Section 17 would express the 
sense of Congress that our nation honors the service and 
sacrifice made by the men and women left permanently wounded, 
ill, or injured as a result of their service in the United 
States Armed Forces.

                                Hearings


    On January 27, 2015, the full Committee conducted a 
legislative hearing on various bills introduced during the 
114th Congress, including H.R. 245.
    The following witnesses testified:

          The Honorable Alan Grayson, U.S. House of 
        Representatives; Mr. David R. McLenachen, Acting Deputy 
        Under Secretary for Disability Assistance, Veterans 
        Benefits Administration, U.S. Department of Veterans 
        Affairs; Mr. Zachary Hearn, Deputy Director for Claims, 
        Veterans Affairs and Rehabilitation Division, The 
        American Legion; Mr. Joseph A. Violante, National 
        Legislative Director, Disabled American Veterans; Mr. 
        Blake C. Ortner, Deputy Government Relations Director, 
        Paralyzed Veterans of America; and, Mr. Aleks Morosky, 
        Deputy Director, National Legislative Service, Veterans 
        of Foreign Wars.

    Statements for the record were submitted by the following:

          Vietnam Veterans of America and the Housing Policy 
        Council.

    On April 14, 2015, the Subcommittee on Disability 
Assistance and Memorial Affairs conducted a legislative hearing 
on various bills introduced during the 114th Congress, 
including H.R. 677, H.R. 800, H.R. 1331, and H.R. 1379.
    The following witnesses testified:

          The Honorable Chellie Pingree, U.S. House of 
        Representatives; Mr. David R. McLenachen, Acting Deputy 
        Under Secretary for Disability Assistance, Veterans 
        Benefits Administration, U.S. Department of Veterans 
        Affairs; Mr. Zachary Hearn, Deputy Director for Claims, 
        Veterans Affairs and Rehabilitation Division, The 
        American Legion; Mr. Blake C. Ortner, Deputy Government 
        Relations Director, Paralyzed Veterans of America; Mr. 
        Paul R. Varela, Assistant National Legislative 
        Director, Disabled American Veterans; Mr. Ronald B. 
        Abrams, Joint Executive Director, National Veterans 
        Legal Services Program; and, Mr. Kenneth M. Carpenter, 
        Founding Member, National Organization of Veterans' 
        Advocates.

    Statements for the record were submitted by the following:

          The Veterans of Foreign Wars and the U.S. Court of 
        Appeals for Veterans Claims.

    On June 24, 2015, the Subcommittee on Disability Assistance 
and Memorial Affairs conducted a legislative hearing on various 
bills introduced during the 114th Congress, including H.R. 
1302, H.R. 1338, H.R. 1380, H.R. 2214, H.R. 2605, and, H.R. 
2691.
    The following witnesses testified:

          The Honorable Bill Johnson, U.S. House of 
        Representatives; Mr. David R. McLenachen, Acting Deputy 
        Under Secretary for Disability Assistance, Veterans 
        Benefits Administration, U.S. Department of Veterans 
        Affairs; Mr. Zachary Hearn, Deputy Director for Claims, 
        Veterans Affairs and Rehabilitation Division, The 
        American Legion; Mr. Paul R. Varela, Assistant National 
        Legislative Director, Disabled American Veterans; Mr. 
        Aleks Morosky, Deputy Director, National Legislative 
        Service, Veterans of Foreign Wars; Ms. Diane Zumatto, 
        National Legislative Director, AMVETS; and, Mr. Chris 
        Neiweem, Legislative Associate, Iraq and Afghanistan 
        Veterans of America.

    Statements for the record were submitted by the following:

          The Honorable Bob Latta, U.S. House of 
        Representatives; the Honorable Bill Shuster, U.S. House 
        of Representatives; and, the Paralyzed Veterans of 
        America.

                       Subcommittee Consideration

    On May 14, 2015, the Subcommittee on Disability Assistance 
and Memorial Affairs met in open markup session, a quorum being 
present, and favorably forwarded to the full Committee H.R. 
732, as amended, and, H.R. 1331. During consideration of H.R. 
732, the following amendment was considered and agreed to by 
voice vote:

          An amendment offered by Mr. Ruiz of California that 
        retained the original language regarding appeals 
        hearings, and includes additional language that would 
        provide priority for processing claims for certain 
        veterans. The amended version would establish a 
        commission or task force to evaluate and assess the 
        backlog of VA disability claims and the backlog of 
        appealed claims. The commission or task force would 
        provide regular reports to the President and Congress.

    On July 9, 2015, the Subcommittee on Disability Assistance 
and Memorial Affairs met in open markup session, a quorum being 
present, and favorably forwarded to the full Committee H.R. 
800, as amended; H.R. 1380, as amended; H.R. 2214, as amended; 
H.R. 2605, as amended; H.R. 1302; H.R. 1338; and, H.R. 2691.
    During consideration of H.R. 800, the following amendment 
in the nature of a substitute was considered and agreed to by 
voice vote:

          An amendment in the nature of a substitute offered by 
        Ms. Titus of Nevada that retained the original language 
        regarding the five-year fully developed appeals (FDA) 
        pilot program. The amendment in the nature of a 
        substitute eliminated the provision that would have 
        allowed a claimant who had already filed a traditional 
        appeal to transfer to the pilot program. The amendment 
        in the nature of a substitute would require that: (1) 
        the Secretary provide the claimant and claimant's 
        representative, if any, information regarding the 
        advantages and disadvantages of the pilot program, 
        including the limitation on the use of new evidence; 
        (2) VA collaborate with the three veterans service 
        organizations with the most members in developing and 
        publishing an online tutorial explaining the advantages 
        and disadvantages of the pilot program; and, (3) the 
        Secretary prescribe regulations to carry out such pilot 
        program not later than 90 days after the date of 
        enactment. Further, the amendment in the nature of a 
        substitute would clarify that (1) participants in the 
        pilot program may seek advice from claims agents 
        recognized under chapter 59 of Title 38, U.S.C.; (2) 
        claimants who are not eligible to participate in the 
        pilot program would be allowed to revert to the 
        standard appeals process without any penalty to the 
        claimant other than the loss of the docket number 
        associated with the FDA; the Board would consider newly 
        developed evidence in the first instance without prior 
        consideration by the Veterans Benefits Administration; 
        (3) if the claimant requests a hearing, such request 
        would be deemed to be an election to revert to the 
        standard appeals process; (4) the Secretary would 
        transfer employees of the VBA who were responsible for 
        processing claims remanded by the Board to positions 
        within the office of the Board. Finally, the amendment 
        in the nature of a substitute would require that the 
        claimant and the claimant's representative of record 
        receive a copy of any new evidence developed by the 
        Board. The claimant would have 45 days to respond to 
        such evidence. The amendment in the nature of a 
        substitute would clarify that responding to such 
        evidence would not cause the case to revert to the 
        standard appeals process.

    During consideration of H.R. 1380, the following amendment 
in the nature of a substitute was considered and agreed to by 
voice vote:

          An amendment in the nature of a substitute offered by 
        Mr. Abraham of Louisiana that retained the original 
        language that would authorize VA to furnish a medallion 
        to signify the veterans status of a deceased individual 
        in certain cases. However, the amendment in the nature 
        of a substitute modified the original text to limit 
        eligibility for such medallions to persons who served 
        in the Armed Forces on or after April 6, 1917.

    During consideration of H.R. 2214, the following amendment 
was considered and agreed to by voice vote:

          An amendment offered by Mr. Abraham of Louisiana that 
        retained the original language extending VA's authority 
        to contract with private physicians to conduct 
        disability examinations until December 31, 2017. The 
        amendment removed the limit on the number of VA 
        regional offices through which the Secretary is 
        authorized to carry out the pilot program. The 
        amendment also removed the provision that required the 
        Secretary to conduct an annual data analysis of the 
        regional offices participating in the pilot program.

    During consideration of H.R. 2605, the following amendment 
was considered and agreed to by voice vote:

          An amendment in the nature of a substitute offered by 
        Mr. Abraham of Louisiana that incorporated the text of 
        H.R. 2605, but removed the provision authorizing the 
        appointment of a temporary fiduciary under certain 
        conditions.

                        Committee Consideration


    On September 17, 2015, the full Committee met in open 
markup session, a quorum being present, and ordered H.R. 677, 
as amended, reported favorably to the House of Representatives 
by voice vote. During consideration of the bill, the following 
amendments were considered:

          An amendment offered by Mr. Abraham of Louisiana that 
        would (1) expand the eligibility for medallions 
        signifying veteran status that adorn a privately 
        purchased headstone or marker; (2) codify the meaning 
        of certain terms; (3) require VA to submit quarterly 
        reports with respect to claims processing, and express 
        the sense of Congress that VA should streamline the 
        application process for certain claims; (4) expedite 
        payment of survivor's benefits; (5) provide priority of 
        processing claims for certain veterans; (6) provide 
        guidelines for the treatment of medical evidence 
        provided by non-VA medical professionals in support of 
        claims for disability compensation; (7) require that, 
        whenever there is an increase in benefit amounts 
        payable under title II (Old Age, Survivors and 
        Disability Insurance) of the Social Security Act, VA 
        would increase by the same percentage the amounts 
        payable as veterans' disability compensation, 
        additional compensation for dependents, the clothing 
        allowance for certain disabled adult children, and 
        dependency and indemnity compensation for surviving 
        spouses and children; (8) improve VA's fiduciary 
        program; (9) require the Board of Veterans' Appeals, 
        for purposes of scheduling a veteran's appeals hearing 
        at the earliest possible date, to determine whether to 
        provide such hearing at the principal location or 
        another VA facility or other federal facility or 
        through the use of videoconferencing or by an 
        appellant's personal appearance; (10) improve the 
        authority for performance of medical disabilities 
        examinations by contract physicians; (11) establish a 
        pilot program on fully developed appeals; (12) direct 
        VA to certify an appeal to the Board of Veterans' 
        Appeals within one year after receiving an appeal form; 
        (13) establish a commission or task force to evaluate 
        and assess the backlog of VA disability claims and the 
        backlog of appealed claims; (14) expand the acceptable 
        forms of documentation used to determine eligible 
        service in the merchant marine and provides for certain 
        limited burial benefits; (15) designate certain cities 
        as American World War II cities; and, (16) express the 
        sense of Congress honoring American veterans disabled 
        for life, was agreed to by voice vote.
          An amendment to the Amendment in the Nature of a 
        Substitute to H.R. 677 was offered by Ms. Titus of 
        Nevada to revise the definition of marriage under title 
        38 United States Code and was rejected by a record vote 
        of 12 nays and 10 yeas with 1 present and 1 absent 
        (Record vote no. 1).

                            Committee Votes


    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report the legislation and amendments thereto. 
The following reflects the record vote taken during the 
Committee consideration:

          An amendment to the Amendment in the Nature of a 
        Substitute to H.R. 677 was offered by Ms. Titus of 
        Nevada to revise the definition of marriage under Title 
        38 United States Code. This amendment was defeated by a 
        record vote of 10 yeas and 12 nays, with one member 
        voting present, and one member not voting (Record vote 
        no. 1). The names of the members voting for and against 
        follow.
        
        

    A motion by Ranking Member Corrine Brown of Florida to 
report H.R. 677, as amended, favorably to the House of 
Representatives was offered and adopted by the Full Committee 
by voice vote.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

                    Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:

          The Secretary of VA will use the authority granted by 
        this legislation to improve VA's claims and appeals 
        procedures; ensure veterans' benefits keep pace with 
        inflation; better protect beneficiaries who are in the 
        fiduciary program; recognize and honor members of the 
        merchant marine who served during World War II; and, 
        help ensure that our nation remembers and honors the 
        service and sacrifice of certain deceased veterans, 
        veterans disabled for life, and cities who served our 
        nation during World War II. Specifically, the 
        legislation would expand the eligibility for a 
        medallions signifying veteran status that would adorn a 
        privately purchased headstone or marker; expedite and 
        improve VA's claims processing and appeals processing; 
        provide for an automatic COLA for veterans' benefits; 
        improve VA's fiduciary program; expand the official 
        documentation accepted by the Secretary of Homeland 
        Security to grant veteran status with limited benefits 
        to World War II merchant marine and coastwise merchant 
        seamen; designate certain cities as American World War 
        II cities; and express the sense of Congress honoring 
        American veterans disabled for life.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                  Earmarks and Tax and Tariff Benefits

    H.R. 677, as amended, does not contain any Congressional 
earmarks, limited tax benefits, or limited tariff benefits as 
defined in clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
677, as amended, prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

               Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 677, as amended, provided by the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 22, 2016.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 677, the American 
Heroes COLA Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                                       Keith Hall. 
    Enclosure.

H.R. 677--American Heroes COLA Act of 2015

    Summary: H.R. 677 would modify several mandatory programs 
administered by the Department of Veterans Affairs (VA), 
including disability compensation and burial benefits. H.R. 677 
also would provide a permanent annual cost-of-living adjustment 
(COLA) to the amounts paid to veterans for disability 
compensation and to their survivors for dependency and 
indemnity compensation. That provision would increase direct 
spending for veterans' benefits by $72.7 billion over the 2016-
2025 period. However, because the COLA is assumed in CBO's 
baseline pursuant to section 257 of the Balanced Budget and 
Emergency Deficit Control Act, enacting that provision would 
have no budgetary effect relative to that baseline.
    CBO estimates that the other provisions of H.R. 677, 
including a requirement that the increases resulting from the 
COLA be rounded down to the next whole dollar, would increase 
net direct spending by $5.8 billion over the 2016-2025 period 
relative to CBO's baseline. Because the bill would affect 
direct spending, pay-as-you-go procedures would apply. Enacting 
H.R. 677 would not affect revenues.
    In addition, the bill would change the administration of 
VA's fiduciary program and several other programs in ways that 
would require an increase in the number of VA employees. CBO 
estimates that implementing those changes would cost $176 
million over the 2016-2020 period, assuming appropriation of 
the estimated amounts.
    CBO estimates that enacting the legislation would increase 
net direct spending and on-budget deficits by more than $5 
billion in each of the four consecutive 10-year periods 
beginning in 2026.
    H.R. 677 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 677 is shown in Table 1. The costs of 
this legislation fall within budget function 700 (veterans 
benefits and services).

                                TABLE 1--ESTIMATED BUDGETARY EFFECTS OF H.R. 677
----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2016     2017     2018     2019     2020   2016-2020
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority..............................      -24      -30       13      104      258       321
Estimated Outlays.......................................      -24      -30       13      104      258       321
 
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level...........................        *       45       47       41       42       176
Estimated Outlays.......................................        *       45       47       41       42      176
----------------------------------------------------------------------------------------------------------------
Notes: In addition to the direct spending effects shown here, enacting H.R. 677 would affect direct spending
  beyond 2020 (see Table 2). CBO estimates that total direct spending would increase by $5.8 billion over the
  2016-2025 period.
Components may not sum to totals because of rounding; * = less than $500,000.

    Basis of estimate: For the purposes of this estimate, CBO 
assumes the legislation will be enacted early in calendar year 
2016, that the necessary amounts will be appropriated each 
year, and that outlays will follow historical spending patterns 
for similar and existing programs.

Direct spending

    H.R. 677 would modify veterans' compensation, pension, and 
burial benefits. In total, CBO estimates that enacting the 
legislation would, on net, increase direct spending for those 
programs by $5.8 billion over the 2016-2025 period (see Table 
2).

                                                                         TABLE 2--IMPACT OF H.R. 677 ON DIRECT SPENDING
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           By fiscal year, in millions of dollars--
                                                             -----------------------------------------------------------------------------------------------------------------------------------
                                                                 2016       2017       2018       2019       2020       2021       2022       2023       2024       2025    2016-2020  2016-2025
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use of Non-VA Medical Opinions in Claims for Disability
 Compensation:
    Estimated Budget Authority..............................          0         23         93        216        404        678      1,016      1,364      1,695      2,009        736      7,498
    Estimated Outlays.......................................          0         23         93        216        404        678      1,016      1,364      1,695      2,009        736      7,498
Annual COLA:
    Estimated Budget Authority..............................        -24        -53        -81       -113       -147       -181       -219       -255       -288       -326       -418     -1,687
    Estimated Outlays.......................................        -24        -53        -81       -113       -147       -181       -219       -255       -288       -326       -418     -1,687
Expansion of Eligibility for Medallions:
    Estimated Budget Authority..............................          *          *          1          1          1          1          1          1          1          1          3          5
    Estimated Outlays.......................................          *          *          1          1          1          1          1          1          1          1          3          5
Benefits for Coastwise Merchant Mariners:
    Estimated Budget Authority..............................          *          *          *          *          *          *          *          *          *          *          *          1
    Estimated Outlays.......................................          *          *          *          *          *          *          *          *          *          *          *          1
    Total Changes in Direct Spending:
        Estimated Budget Authority..........................        -24        -30         13        104        258        498        798      1,110      1,408      1,684        321      5,817
        Estimated Outlays...................................        -24        -30         13        104        258        498        798      1,110      1,408      1,684        321     5,817
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding; COLA = cost-of-living adjustment; * = less than $500,000.

    Use of Non-VA Medical Opinions in Claims for Disability 
Compensation. Section 7 would prohibit VA from conducting its 
own medical examination in cases where a veteran submits a 
private medical opinion in support of a claim for disability 
compensation unless VA can substantiate why the private medical 
opinion is insufficient to decide the claim. Currently, VA 
almost always conducts its own medical exams even if veterans 
submit private medical opinions. Section 7 would take effect 
one year from the date of enactment of the bill.
    CBO expects that allowing veterans to choose the physician 
that would provide the deciding medical opinion on whether a 
veteran is disabled and whether that disability could be traced 
to their time in service would lead to significantly more 
veterans receiving disability ratings and to higher levels of 
disability ratings. Furthermore, we expect that effect would 
increase over time as private doctors gained experience with 
the VA system. Medical literature shows that doctors who have 
an established relationship with a patient tend to provide more 
favorable reports for those patients than doctors who are 
seeing the patient for the first time, as is the case with a 
VA-ordered examination.\1\ Furthermore, veterans would be able 
to visit multiple doctors in order to gain the most favorable 
medical report.
---------------------------------------------------------------------------
    \1\Simen Markussen, Knut Roed*, Ole Rogeberg, ``The changing of the 
guards: Can family doctors contain worker absenteeism?'', Journal of 
Health Economics, vol 32 (2013), pp. 1230-1239, http://dx.doi.org/
10.1016/j.jhealeco.2013.10.005.
---------------------------------------------------------------------------
    CBO expects that the majority of claims for disability 
where a private medical exam would make a difference are those 
for subjective disabilities (i.e., mental disorders, nerve 
disorders, and back pain) or disabilities for which different 
examiners are more likely to provide different conclusions. 
Over time, CBO anticipates that the percentage of veterans 
submitting private medical opinions would increase. In CBO's 
analysis, enacting section 7 would:
         Increase the average amount of disability 
        compensation for veterans who currently receive 
        compensation, as those veterans can request a 
        reevaluation at any time and would be more likely to do 
        so under the bill;
         Increase the average amount of disability 
        compensation paid to veterans newly awarded a 
        disability compensation rating; and
         Increase the number of veterans who receive 
        compensation by enabling some of those who would be 
        denied benefits under current law to be awarded a 
        disability rating.
    In total, CBO estimates that enacting section 7 would 
result in about 360,000 more veterans receiving an additional 
$7.5 billion in disability compensation over the 2016-2025 
period.
    Current Beneficiaries. On average, about 15 percent of 
veterans currently receiving disability compensation come to VA 
to be reevaluated every year. In recent years, current 
beneficiaries have had their disability ratings increased by an 
average of 10 percentage points as a result of those 
reevaluations. CBO estimates that under current law about 4.1 
million veterans will be receiving disability compensation in 
2017, and that 653,000 will return to VA to be reevaluated.
    Based on information from VA, CBO estimates that about 40 
percent of rated disabilities fall into the subjective 
category. Under section 7, CBO expects about 60 percent of the 
reevaluations (increasing to 75 percent by 2025) would involve 
a private medical opinion. Based on a review of existing 
literature, CBO expects that the average disability rating 
would increase by 10 percentage points for 10 percent of the 
claims reevaluated in 2017 (increasing to 30 percent of such 
claims in 2021 and thereafter).\2\ Thus, about 8,200 veterans 
currently on the rolls in 2017 (about 49,000 in 2025) would 
receive an increase of 10 percentage points in their disability 
rating. The average disability rating for a veteran who has 
been reevaluated is 50 percent; increasing that rating to 60 
percent would represent an annual benefit increase of $4,900 in 
2017 (increasing to $5,900 in 2025). After accounting for 
inflation and mortality, CBO estimates that enacting section 7 
would increase direct spending for veterans currently on the 
rolls by $6.9 billion over the 2016-2025 period.
---------------------------------------------------------------------------
    \2\Helge Liebert, Medical Screening and Moral Hazard in Disability 
Insurance: Evidence from Switzerland  (Center for Disability and 
Integration, School of Economics and Political Science, University of 
St. Gallen, 2014) http://www.hha.dk/nat/larss/CAFE2014/HLiebert.pdf.
---------------------------------------------------------------------------
    Annual Accessions. Over the 2012-2014 period, the VA 
disability compensation program added an average of 290,000 new 
beneficiaries per year. As with current beneficiaries, CBO 
estimates that about 40 percent of rated disabilities for those 
new accessions fall into the subjective category. Under section 
7, CBO expects that those veterans who did not file a claim 
immediately after being discharged from military service would 
provide private medical opinions and receive increased 
disability ratings at the same rates and with the same 
incremental increase as current beneficiaries. CBO expects that 
veterans who apply to VA immediately after being discharged 
from military service would be much less likely than other 
veterans to obtain private medical opinions, but those that do 
would see the same increases as other new accessions. Thus, we 
estimate that 15 percent (increasing to 25 percent by 2025) of 
newly discharged veterans would submit a private medical 
opinion. On that basis, CBO estimates that about 1,700 veterans 
in 2017 (increasing to about 6,200 veterans in 2025) would 
receive a 10 percentage point increase in their disability 
rating (from an average of 40 percent to 50 percent). That 
would amount to an average annual increase of about $3,200 in 
2017 (increasing to about $3,900 in 2025). After accounting for 
inflation and mortality, CBO estimates that enacting section 7 
would increase direct spending for new accessions by $525 
million over the 2016-2025 period.
    Newly Eligible Applicants. On average, VA denies about 20 
percent of all claims for disability compensation. Under 
section 7, CBO expects that some veterans who would otherwise 
be denied would receive a disability rating because of their 
use of private medical opinions. Based on the number of new 
accessions per year and similar rates of subjective 
disabilities, use of private medical opinions, and award rates, 
CBO estimates that about 630 veterans who will be denied under 
current law would under the bill receive a disability rating in 
2017, increasing to 1,725 by 2025. CBO estimates that this 
cohort would receive an average rating of 10 percent (about 
$1,630 annually in 2017). After accounting for inflation and 
mortality, CBO estimates that section 7 would increase direct 
spending for veterans who would be denied a disability rating 
under current law by $87 million over the 2015-2026 period.
    Annual COLA. Section 8 would provide a permanent annual 
cost-of-living adjustment to the amounts paid to veterans for 
disability compensation and to their survivors for dependency 
and indemnity compensation. The COLA would equal the cost-of-
living adjustment payable to Social Security recipients and 
would take effect on December 1 of each year.
    The COLA that would be authorized by this bill is assumed 
in CBO's baseline, pursuant to section 257 of the Balanced 
Budget and Emergency Deficit Control Act. Because the COLA is 
assumed in CBO's baseline, enacting this provision would have 
no budgetary effect relative to that baseline (the COLA effect 
assumed in the baseline over the 2016-2025 period amounts to 
$72.7 billion). On October 15, 2015, the Social Security 
Administration announced that the COLA for 2016 would be zero 
percent, and thus have no effect on disability compensation 
payments in 2016.
    Section 2 also would require that increases in the monthly 
rates resulting from the COLA be rounded down to the next lower 
whole dollar. This provision would apply to both disability 
compensation and dependency and indemnity compensation 
payments. A similar requirement expired at the end of 2013. CBO 
expects that, on average, this requirement would reduce each 
monthly payment issued in the first year by 50 cents. In the 
second year, the COLA would be applied to that reduced amount 
and again rounded down by an average of 50 cents. Those savings 
would continue to compound in subsequent years, with the 
resultant amount rounded down again each year. Based on 
information from VA, CBO projects that an average of 5.5 
million veterans and survivors will receive 12 monthly payments 
each year over the next decade. On that basis, CBO estimates 
that this section would result in direct spending savings of 
about $1.7 billion over the 2016-2025 period.
    Expansion of Eligibility for Medallions. Section 2 would 
allow the survivor of an eligible deceased veteran to receive a 
VA-furnished medallion instead of a headstone or marker for use 
in a private cemetery. Eligible veterans are those who served 
in the armed forces on or after April 6, 1917. Under current 
law, VA can only provide a medallion for eligible veterans 
buried in private cemeteries who died on or after November 1, 
1990. Based on information from VA, CBO expects about 5,400 
such requests to be made per year. At a cost of about $100 per 
medallion, CBO estimates that enacting section 2 would increase 
direct spending by about $5 million over the 2016-2025 period.
    Benefits for Coastwise Merchant Mariners. Section 15 would 
extend eligibility for burial benefits and medals, ribbons, or 
decorations to merchant mariners who served off of the coast of 
the United States between December 7, 1941, and December 31, 
1946. Based on information from VA and the U.S. Coastwise 
Merchant Seamen's Association, CBO estimates that in 2016, the 
survivors of roughly 100 eligible merchant mariners would apply 
for a burial marker (and be eligible for an outer-burial 
receptacle) and a ribbon or medallion at a cost of about $1,200 
per request. CBO expects the number of applications would 
decline steadily in subsequent years. Thus, CBO estimates that 
section 15 would increase direct spending by about $1 million 
over the 2016-2025 period.
    Other Provisions. H.R. 677 contains other provisions that 
would have a negligible effect on direct spending, primarily 
because they would shift the timing but not the amount of 
benefit payments. Specifically:
           Section 5 would allow eligible survivors to 
        begin receiving any survivor's benefits due them before 
        filing a formal claim.
           Section 6 would create a priority list for 
        processing claims for disability compensation.

Spending subject to appropriation

    H.R. 677 would modify the fiduciary program for veterans 
and extend a pilot program that allows VA to use contract 
physicians to complete disability exams. It also would create a 
pilot program for adjudicating fully developed appeals, require 
an evaluation of the disability backlog, and require several 
reports on various functions of VA. CBO estimates that 
implementing those provisions of the bill would cost $176 
million over the 2016-2020 period, assuming appropriation of 
the estimated amounts (see Table 3).

                        TABLE 3--IMPACT OF H.R. 677 ON SPENDING SUBJECT TO APPROPRIATION
----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2016     2017     2018     2019     2020   2016-2020
----------------------------------------------------------------------------------------------------------------
Fiduciary Program:
    Estimated Authorization Level.......................        0       19       38       39       40       136
    Estimated Outlays...................................        0       19       38       39       40       136
Disability Examinations by Contract Physicians:
    Estimated Authorization Level.......................        0       22        7        0        0        29
    Estimated Outlays...................................        0       22        7        0        0        29
Pilot Program on Fully Developed Appeals:
    Estimated Authorization Level.......................        0        2        2        2        2         8
    Estimated Outlays...................................        0        2        2        2        2         8
Evaluation of Backlog of Disability Claims:
    Estimated Authorization Level.......................        0        2        0        0        0         2
    Estimated Outlays...................................        0        2        0        0        0         2
Reports:
    Estimated Authorization Level.......................        *        *        *        *        *         1
    Estimated Outlays...................................        *        *        *        *        *         1
    Total Changes in Discretionary Spending:
        Estimated Authorization Level...................        *       45       47       41       42       176
        Estimated Outlays...............................        *       45       47       41       42      176
----------------------------------------------------------------------------------------------------------------
Notes:Components may not sum to totals because of rounding; * = less than $500,000.

    Fiduciary Program. Effective one year after the 
legislation's enactment, section 9 would make significant 
changes to VA's fiduciary program. That program provides or 
approves fiduciaries for veterans who cannot manage their 
financial affairs. The fiduciaries receive and manage the 
veterans' benefits on their behalf. The provision would require 
VA to:
           Determine the competency of individuals 
        appointed as fiduciaries;
           Remove certain fiduciaries deemed 
        incompetent and review the files of fiduciaries 
        appealing such decisions;
           Maintain a list of state, local, or 
        nonprofit agencies that could perform fiduciary duties;
           Require that all fiduciaries provide 
        pertinent accounting details for VA verification;
           Update the qualifications and procedures for 
        certifying a fiduciary to include: visits to proposed 
        fiduciaries, Internet training, and criminal background 
        and credit checks; and
           Notify veterans if a requested fiduciary is 
        unqualified and why, and provide veterans with a notice 
        of certified fiduciaries.
    Section 9 also would require VA to maintain a database of 
all fiduciaries and to submit a report to the Congress on the 
progress of the program.
    Based on information from VA, CBO estimates that the 
department would need to hire 460 additional employees to carry 
out the requirements of section 9 at an average cost of about 
$80,000 per employee in 2016 and increasing thereafter with 
inflation. We also estimate that the information technology 
systems necessary to maintain the database would cost about $1 
million per year. In total, CBO estimates that implementing 
section 9 would cost $136 million over the 2016-2020 period.
    Disability Examinations by Contract Physicians. Section 11 
would extend the pilot program that allows VA to use contract 
physicians to perform medical disability examinations through 
December 31, 2017. Under current law, that authority will 
expire on December 31, 2016. In 2015, about 36,000 exams were 
completed by contract physicians under the pilot program at a 
cost of about $800 per exam. Under section 11, we expect a 
similar number of exams would be performed annually over the 
2017-2018 period. In the absence of such authority, VA 
physicians who would otherwise be providing other types of 
health care to veterans will perform the exams, at no 
additional cost to VA. Thus, after accounting for expected 
inflation, CBO estimates that implementing section 201 would 
cost $29 million over the 2017-2018 period.
    Pilot Program on Fully Developed Appeals. Section 12 would 
establish a pilot program within the Board of Veterans Appeals 
(BVA) for veterans who wish to file a fully developed appeal 
(an appeal for which no further evidence or information will be 
submitted). Such appellants, upon choosing to file a notice of 
disagreement with VA, could chose to file a claim using the 
regular appeals process, or if they believe they have provided 
all of the necessary information for the BVA to make a 
decision, could elect to file under the pilot program in order 
to receive a more immediate decision. Appellants could chose at 
any point to revert to the standard appeals process. The pilot 
program established under section 12 would run for five years, 
beginning one year from the date of enactment of H.R. 677.
    Section 12 would require the BVA to establish a development 
unit that would provide the Board with any federal records, 
independent medical opinions, and new medical exams that it 
needs to decide appeals. VA would be required to transfer 
certain employees from the Veterans Benefits Administration to 
this new unit inside the BVA. According to VA, about 10 
additional employees also would be necessary to achieve the 
goals of the pilot program while not reducing the timeliness of 
the current process. VA further reports that such employees 
(primarily lawyers) would receive salary and benefits amounting 
to about $150,000 in 2016. On that basis, and accounting for 
projected inflation, CBO estimates that implementing the pilot 
program would cost $8 million over the 2016-2020 period.
    Evaluation of Backlog of Disability Claims. Effective one 
year after the date of enactment, section 14 would establish a 
commission tasked with creating a plan to eliminate the 
disability claims backlog, improve the disability claims 
process, and reduce the number of appeals filed for disapproved 
claims. The commission would have 21 members plus a paid staff 
and would exist for about seven months. The commission would be 
required to submit interim reports and a final report within 
180 days of the commission's first meeting. Based on the costs 
of similar commissions, CBO estimates that implementing section 
14 would cost about $2 million over the 2017-2018 period.
    Reports. Several provisions of H.R. 677 would require VA to 
submit reports to the Congress. CBO estimates that implementing 
H.R. 677 would increase costs for preparing reports by $1 
million over the 2016-2020 period.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

        CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 677 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON VETERANS' AFFAIRS ON SEPTEMBER 17, 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 By fiscal year, in millions of dollars--
                                                --------------------------------------------------------------------------------------------------------
                                                  2016    2017    2018    2019    2020    2021    2022     2023     2024     2025   2016-2020  2016-2025
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET DECREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact.................     -24     -30      13     104     258     498     798    1,110    1,408    1,684       321      5,817
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long term direct spending and deficits: CBO 
estimates that enacting the legislation would increase net 
direct spending and on-budget deficits by more than $5 billion 
in each of the four consecutive 10-year periods beginning in 
2026.
    Intergovernmental and private-sector impact: H.R. 677 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Previous CBO estimate: On September 29, 2015, CBO 
transmitted a cost estimate for S. 2082, the Department of 
Veterans Affairs Expiring Authorities Act of 2015, as cleared 
by the Congress on September 25, 2015. Section 409 of S. 2082 
extended the authority for contract physicians to conduct 
disability exams from December 31, 2015, to December 31, 2016. 
Section 11 of H.R. 677 would extend the authority from December 
31, 2015, to December 31, 2017. Because S. 2082 is now Public 
Law 114-158, section 11 would extend the provision for one year 
instead of two years. The estimated difference in costs is 
reflected in this estimate.
    Estimate prepared by: Federal costs: Dwayne M. Wright; 
Impact on state, local, and tribal governments: Jon Sperl; 
Impact on the private sector: Paige Piper-Bach.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 677, as amended, prepared by the 
Director of the Congressional Budget Office pursuant to section 
423 of the Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
677, as amended.

                   Constitutional Authority Statement

    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.''

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of Section 
102(b)(3) of the Congressional Accountability Act.

              Statement on Duplication of Federal Programs

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee finds that no provision of H.R. 677, as amended, 
establishes or reauthorizes a program of the Federal Government 
known to be duplicative of another Federal program, a program 
that was included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139, or a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee estimates that H.R. 677, as amended, contains 
directed rule making at sections 4, 6, and 13 which would 
require the Secretary to prescribe regulations to carry out 
these sections.

             Section-by-Section Analysis of the Legislation


Section 1--Short title; Table of contents

    Section 1(a) would establish that this Act may be cited as 
the ``American Heroes COLA Act of 2015.''
    Section 1(b) would contain the table of contents for this 
Act.

Section 2--Expansion of eligibility for medallions

    Section 2 would authorize VA to furnish, upon request, a 
medallion or other device to signify a deceased individual's 
status as a veteran, to be attached to a headstone or marker 
furnished at private expense. To be eligible for such medallion 
or other device, the deceased individual must have served in 
the Armed Forces on or after April 6, 1917.

Section 3--Definitions relating to claims for benefits under laws 
        administered by the Secretary of Veterans Affairs

    Section 3(a) would define the terms ``claimant,'' 
``claim,'' and ``formal claim'' and includes a clerical 
amendment.
    Section 3(b) would establish that the effective date of 
Section 3 would be the date of enactment and would apply with 
respect to a claim submitted on or after such date.

Section 4--Quarterly reports on formal and informal claims for benefits 
        under laws administered by Secretary of Veterans Affairs

    Section 4(a) would require that VA submit to the Committees 
on Veterans' Affairs of the Senate and the House of 
Representatives quarterly reports on formal and informal 
claims. Such report would include: (1) the total number of 
claims submitted to VA; (2) the total number of informal claims 
submitted to VA; (3) the total number of formal claims 
submitted to VA; (4) the total number of forms indicating an 
intent to file a claim for benefits submitted to VA; (5) the 
total number of claims notification letters sent by VA that 
included an invitation to the claimant to submit an additional 
formal claim; (6) and of those, the total number who submitted 
a formal claim in response to such notification letters; (6) 
the total number of electronically filed claims submitted to 
VA; and, (7) the total number of fully-developed claims 
submitted to VA.
    Section 4(b) would express the sense of Congress that the 
Secretary should develop a designated form for a claim for an 
increased rating or reopening of a claim that does not require 
the resubmittal of information previously submitted on a formal 
claim form.
    Section 4(c) would define the terms ``informal claim'' and 
``reasonably raised.''

Section 5--Expedited payment of survivor's benefits

    Section 5(a) would authorize VA to pay benefits under 
chapters 13 and 15 and sections 2302, 2307, and 5121 of title 
38, U.S.C. to a survivor of a veteran who has not filed a 
formal claim if VA determines that the record contains 
sufficient evidence to establish the entitlement of the 
survivor to such benefits. Section 5(a) would also establish 
that the date on which a survivor of a veteran notifies VA of 
the death of the veteran would serve as the date of receipt of 
the survivor's application for benefits.
    Section 5(b) would, not later than one year after the date 
of enactment, require VA to submit a report to the Committees 
on Veterans' Affairs of the Senate and the House of 
Representatives on benefits paid pursuant to covered claims.
    Section 5(c) would establish that the amendments made by 
Section 5 would apply with respect to claims for benefits based 
on a death occurring on or after such date.

Section 6--Priority for processing claims of the Department of Veterans 
        Affairs

    Section 6(a) would add a new section to subchapter I of 
chapter 51 of title 38, U.S.C., which would require VA to 
prioritize disability benefits claims submitted by veterans who 
have attained the age of 70; are terminally ill; have life-
threatening illnesses; are homeless; have received the Medal of 
Honor; were prisoners of war; have claims being reviewed again 
in relation to a previously denied claim relating to military 
sexual trauma; and on a case-by-case basis, are seriously or 
very seriously injured. Additionally, this Section allows 
prioritization for good cause shown at the discretion of the 
Secretary on a case-by-case basis. Section 6(a) would also 
require VA to prescribe such regulations as would be necessary 
to carry out this section.
    Section 6(b) would provide a clerical amendment.

Section 7--Treatment of medical evidence provided by non-Department of 
        Veterans Affairs medical professionals in support of claims for 
        disability compensation

    Section 7(a) would require VA to accept a sufficiently 
complete medical opinion or report of a medical examination 
administered by a private physician in support of the veteran's 
claim. Furthermore, this Section would provide that if the 
veteran submits a medical opinion or report of a medical 
examination administered by a private physician in support of 
the veteran's claim, the Secretary would be prohibited from 
ordering a medical examination administered by VA, unless the 
Secretary provides the veteran with a thorough explanation of 
why the medical opinion or report submitted by the veteran was 
not sufficiently complete and the reason why additional medical 
evidence is necessary. Section 7(a) would also define the term 
``sufficiently complete.''
    Section 7(b) would establish that the effective date of 
Section 7 would apply with respect to medical evidence 
submitted after the date that is 90 days after the date of the 
enactment.

Section 8--Automatic annual increase in rates of disability 
        compensation and dependency and indemnity compensation

    Section 8(a) would make the cost-of-living adjustment for 
veterans' disability payments automatic whenever there is an 
increase in benefit amounts payable under Title II of the 
Social Security Act. Section 8(a) would also require the 
Secretary to publish any such increase in the Federal Register, 
and would require that each dollar amount increased, if not a 
whole dollar amount, be rounded to the next lower whole dollar 
amount. This Section would allow the Secretary to 
administratively adjust the rates of disability compensation 
payable to persons under section 10 of Public Law 85-857 (72 
Stat. 1263) who have not received compensation under chapter 11 
of title 38, U.S.C.
    Section 8(b) would establish that the effective date of 
section 8 would be December 1, 2015.

Section 9--Improvement of fiduciaries for veterans

    Section 9(a) would revise the process for appointment of 
fiduciaries. Section 9(a) would require VA to provide a written 
statement to the veteran detailing the reasons for the 
appointment of a fiduciary and implement an appeals process 
which would allow a veteran to challenge the finding of mental 
incompetence. This Section would also allow a veteran to 
predesignate a fiduciary, request the modification of an 
appointed fiduciary, and establish that a fiduciary operates 
independently of VA to act in the best interest of the 
beneficiary.
    Section 9(b) would decrease the commission appointed 
fiduciaries may receive to the lesser of 3 percent of monthly 
benefits or $35. It would also allow VA attorneys to appear in 
a court of appropriate jurisdiction against any fiduciary who 
has failed to execute the duties of a VA appointed fiduciary. 
Section 9(b) would permit VA to temporarily make payments to 
the person or institution having custody and control of an 
incompetent or minor beneficiary. Upon the death of a 
beneficiary, Section 9(b) would direct fiduciaries to pay all 
remaining funds overseen by fiduciaries to any surviving 
spouse, or in equal parts to any children, or in equal parts to 
any dependent parents. It would also require that if a 
beneficiary did not have a spouse, children, or dependent 
parents and lived in a state where the beneficiary's assets 
would then escheat to the state, any funds derived from VA 
benefits would then escheat to the United States.
    Section 9(c) would require VA to expand the definition of a 
person eligible to serve as a fiduciary to include state and 
local government agencies and nonprofits, and compel VA to 
maintain a list of state or local agencies and nonprofit social 
agencies who qualify to act as a fiduciary.
    Section 9(d) would mandate that VA investigate each 
fiduciary before appointment and allow VA to expedite the 
investigation for certain proposed fiduciaries. The 
investigation would include a face-to-face interview no more 
than 30 days after the investigation begins and a background 
check which would include a criminal background check and a 
credit check. The background check would be performed each time 
a person is proposed as a fiduciary. It would also require VA 
to notify the beneficiary if a fiduciary is convicted of 
certain crimes. This Section would also require VA to maintain 
records of any person who previously served as a fiduciary and 
any fiduciary whose status was revoked and would require each 
regional office to maintain a list with the name and contact 
information of each fiduciary and include pertinent information 
related to each fiduciary's background investigation, bond 
payment, and the amount the fiduciary controls for each 
beneficiary served.
    Section 9(d) would also require VA to investigate alleged 
misuse of benefits, and, if substantiated, to transmit the 
results of the investigation to the Attorney General and each 
head of a federal department or agency that pays benefits to 
fiduciaries or beneficiaries. It would also require VA to 
ensure that any bond furnished by a fiduciary was not paid 
using funds from the beneficiary and to consider the care a 
proposed fiduciary has taken to protect the interests of the 
beneficiary while also considering the capacity of the proposed 
fiduciary to meet the financial requirements of the bond.
    Section 9(e) would require fiduciaries to file an annual 
report to include the amount of benefits the beneficiary 
accrued during the year, if the fiduciary serves the 
beneficiary for non-VA benefits, an accounting of all other 
sources of income the fiduciary oversees for the beneficiary, 
and whether the fiduciary was convicted of any crime, filed 
bankruptcy, and any judgments entered against the fiduciary. It 
would also require VA to perform random audits of fiduciaries 
who receive a commission.
    Section 9(f) would clarify that the Secretary would pay to 
the beneficiary an amount equal to the amounts of benefits that 
were misused in any case in which actual negligence is shown by 
the Secretary not acting in accordance with section 5507 of 
chapter 55, title 38, U.S.C.
    Section 9(g) would mandate VA provide the Committees on 
Veterans' Affairs of the Senate and the House of 
Representatives a report on the implementation of the new 
policies and procedures outlined in Section 9 and a discussion 
on whether VA should offer fiduciaries standardized financial 
software to comply with reporting requirements.
    Section 9(h) would require that not later than two years 
after the date of enactment, the Secretary would submit to the 
Committees on Veterans' Affairs of the Senate and the House of 
Representatives a report on the implementation of the 
amendments made by the Act.
    Section 9(i) would establish that the effective date of 
Section 9 is one year after the date of enactment.

Section 10--Board of Veterans' appeals video hearings

    Section 10 would require that the Board, upon request for a 
hearing, determine whether such hearing will be held at the 
principle location, or VA facility, or other appropriate 
Federal facility. The Board would also be required to determine 
whether to provide a hearing that would enable participation 
through voice transmission or through picture and voice 
transmission, by electronic or other means, in a hearing with a 
Board member or members sitting at the Board's principle 
location. However, if the appellant requests a different 
location or type of hearing, the Board shall grant the 
appellant's request and ensure that the hearing is scheduled at 
the earliest possible date without any undue delay or other 
prejudice to the appellant.

Section 11--Improvements to authority for performance of medical 
        disabilities examinations by contract physicians

    Section 11(a) would extend until December 31, 2017, the 
temporary authority to conduct examinations with respect to the 
medical disabilities of applicants for benefits under laws 
administered by the Secretary of VA by persons other than 
employees of the Department.
    Section 11(b) would authorize non-VA physicians with a 
current unrestricted license to conduct medical disability 
examinations in any location in any state, the District of 
Columbia, or a commonwealth, territory or possession of the 
United States, notwithstanding any law regarding the licensure 
of physicians. However, such authority is limited to the scope 
of authorized duties under such contract. Furthermore, the 
authority would not authorize a physician to conduct disability 
examinations if such physician is barred from conducting such 
an examination in any state, the District of Columbia, or a 
commonwealth, territory or possession of the United States.

Section 12--Pilot program on fully developed appeals

    Section 12(a) would authorize VA to carry out a pilot 
program to provide the option of an alternative appeals process 
that would more quickly determine such appeals in accordance 
with this Section.
    Section 12(b) would allow a claimant to elect to file a 
fully developed appeal (FDA). The claimant would be required to 
elect to file a FDA at the time the claimant files the Notice 
of Disagreement. At the time the claimant would elect to file a 
FDA, the claimant would submit all evidence that the claimant 
believes is needed for the appeal as of the date of filing, and 
a statement of the argument in support of the claim, if any. 
Section 12(b) would clarify that the claimant may elect to 
revert to the standard appeals process at any time, but such 
reversion would be final. Furthermore, a claimant who is 
determined to be ineligible for the pilot program would revert 
to the standard appeals process without any penalty. During the 
period in which the pilot program is carried out, VA would be 
required to provide information to the claimant and the 
claimant's representative of record, if any, notice about the 
pilot program, including the advantages and disadvantages of 
such program, how to elect to participate in the pilot program, 
the limitation on the use of new evidence and development of 
information, and the ability of the claimant to seek advice 
from VSOs, attorneys, and claims agents. Finally, this Section 
would require VA to collaborate with and give weight to the 
advice of the three VSOs with the most members to stand up an 
online tutorial explaining the advantages and disadvantages of 
the pilot program.
    Section 12(c) would transfer jurisdiction over the FDA 
directly to the Board. VA would not provide the claimant with a 
statement of the case or require the claimant to file a 
substantive appeal. Further, Section 12(c) would require the 
Board to (1) maintain the FDA on a separate docket; (2) decide 
FDAs in the order received; (3) decide not more than one FDA 
for each four traditional appeals decided, though this ratio 
may be adjusted for fairness purposes beginning one year after 
the pilot program begins; and, (4) decide, to the extent 
practicable, each FDA within one year of a claimant's filing 
the Notice of Disagreement. Section 12(c) would clarify that 
the claimant may not submit any new evidence related to a FDA, 
unless the claimant reverts to the standard appeals process. If 
a claimant does submit or identify new evidence, such 
submission or identification would be deemed to be an election 
to make a reversion to the standard appeals process.
    If the Board determines that a FDA requires additional 
evidence, Section 12(c) would grant the Board authority to 
develop such evidence without remand to the VBA. This Section 
would also clarify that any new evidence developed by the Board 
would be considered by the Board in the first instance. 
Further, this section would ensure the claimant and the 
representative of record, if any, receives a copy of such newly 
developed evidence. Ninety days after the claimant received 
such newly developed evidence, the claimant may provide the 
Board with additional evidence, without requiring the claimant 
to make a reversion to the standard appeals process. Section 
12(c) would require the Board to establish an office to develop 
evidence needed to decide a FDA. The VBA would transfer 
employees who were responsible for processing claims remanded 
by the Board to positions within the office of the Board in a 
number the Secretary determines sufficient. Section 12(c) would 
prohibit the Board from providing hearings for FDAs.
    Section 12(d) would establish that the Secretary shall 
carry out the pilot program for a five year period beginning 
one year after the date of enactment. This Section would apply 
only to FDAs that are filed during such period.
    Section 12(e) would require the Secretary to submit to the 
Committees on Veterans' Affairs of the Senate and the House of 
Representatives a report on the implementation of the pilot 
program. The first such report would be submitted not later 
than 180 days after the date on which the pilot program 
commences. Such reports would include: (1) the number of 
claimants who filed a FDA under the pilot program; (2) the 
average processing time for each such appeal; (3) a summary of 
reasons for which development of evidence was required by the 
Board; (4) the number of issues decided, listed by the 
disposition of the issue; (5) the number of issues decided and 
the number of issues for which evidence was not developed; (6) 
the number of FDAs decided by the Board, the number of cases 
from each agency of original jurisdiction, listed by the 
disposition of the issue; (7) the number of FDAs appealed to 
the CAVC, listed by the disposition of the case; (8) the number 
of reversions; and, (9) any reasons why a claimant was 
determined to be ineligible to participate in the pilot 
program. Additionally, the report would include a review, made 
in conjunction with VSOs, of the efforts of VA to provide clear 
rating decisions and improve disability rating notification 
letters, including with respect to: (1) the opinions of VSOs 
regarding such efforts; and (2) how the pilot program improves 
such efforts. The report would also include a recommendation 
for any changes to improve the pilot program and an assessment 
of the feasibility and advisability of expanding the pilot 
program.
    Section 12(f) would require that the Secretary publish 
interim guidance on the pilot program not later than one day 
after the date of enactment. Not later than 90 days after the 
date of enactment, the Secretary would prescribe regulations to 
carry out such pilot program.
    Section 12(g) would define the terms ``claimant,'' 
``compensation,'' ``fully developed appeal,'' and ``standard 
appeal.''

Section 13--Deadline for certification of appeals forms by regional 
        offices of the Department of Veterans Affairs

    Section 13 would require VA regional benefits offices to 
certify a form submitted by the veteran to appeal a VA 
determination to the Board within one year after receiving such 
form.

Section 14--Evaluation of backlog of disability claims and appeals of 
        claims of Department of Veterans Affairs

    Section 14(a) would establish a commission or taskforce to 
evaluate and assess the backlog of VA disability claims and the 
backlog of appeals claims.
    Section 14(b) would require such commission or taskforce to 
carry out a study on the backlog of claims. Such study would be 
a comprehensive evaluation and assessment of the backlog of 
claims, an analysis of possible improvements to the procedures 
used to process such claims, and any related issues that such 
commission or task force considers relevant. This Section would 
also set out the matters the commission or task force would 
examine define the role of the commission or task force.
    Section 14(c) would require the commission or task force to 
submit periodic reports to the President and Congress.
    Section 14(d) would establish membership requirements for 
such commission or task force.
    Section 14(e) would clarify the meeting requirements for 
the commission or task force.
    Section 14(f) would define the powers of the commission or 
task force.
    Section 14(g) would authorize compensation, travel 
expenses, staff, detail or government employees, and 
procurement of temporary and intermittent services.
    Section 14(h) would authorize the termination of the 
commission or task force within 60 days after which the 
commission or taskforce submits the final comprehensive report.
    Section 14(i) would authorize VA to make available to the 
commission or task force such amounts as the commission or task 
force may require to carry out the duties of such commission or 
task force.
    Section 14(j) would define the terms ``appeals process,'' 
``Board,'' and ``strategic plan.''

Section 15--Methods for validating certain World War II Merchant 
        Mariner service considered to be active service by the 
        Secretary of Veterans Affairs

    Section 15(a) would direct the Secretary of Homeland 
Security to accept additional documentation when considering 
the application for veterans' status of an individual who 
performed service as a coastwise merchant seaman during World 
War II.
    Section 15(b) would provide that other documentation 
accepted by the Secretary of Homeland Security pursuant to this 
Section shall satisfy all requirements for eligibility of 
service during the period beginning on December 7, 1941, and 
ending on December 31, 1946.
    Section 15(c) would provide that qualified merchant 
mariners would be honored as veterans and would be entitled to 
veteran designation, burial benefits, and military decoration, 
that they shall not be entitled by reason of such recognized 
service to any benefit that is not described in this 
subsection.
    Section 15(d) would require the Secretary of Homeland 
Security to verify that an individual performed service under 
honorable conditions that satisfies the requirements of a 
coastwise merchant seaman pursuant to this Section without 
regard to the sex, age, or disability of the individual during 
the period in which the individual served as such a coastwise 
merchant seaman.
    Section 15(e) would define the term ``primary next of 
kin.''
    Section 15(f) would establish that the effective date of 
Section 15 would be 90 days after the date of enactment.

Section 16--Designation of American World War II Cities

    Section 16(a) would require the Secretary of Veterans 
Affairs to designate at least one city in the United States 
each year as an ``American World War II City.''
    Section 16(b) would provide criteria for consideration of 
the designation as an ``American World War II City.''
    Section 16(c) would establish that the city of Wilmington, 
North Carolina, would be designated as the first American World 
War II City.

Section 17--Sense of Congress regarding American veterans disabled for 
        life

    Section 17(a) would establish Congressional findings.
    Section 17(b) would provide that Congress expresses its 
appreciation to the men and women left permanently wounded, 
ill, or injured, as a result of their service in the Armed 
Forces; supports the annual recognition of American veterans 
disabled for life each year; and, encourages the American 
people to honor American veterans disabled for life each year 
with appropriate programs and activities.

         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 italic, and existing law in which no 
change is proposed is shown in roman):

TITLE 38, UNITED STATES CODE

           *       *       *       *       *       *       *



PART II--GENERAL BENEFITS

           *       *       *       *       *       *       *


CHAPTER 23--BURIAL BENEFITS

           *       *       *       *       *       *       *



Sec. 2306. Headstones, markers, and burial receptacles

  (a) The Secretary shall furnish, when requested, appropriate 
Government headstones or markers at the expense of the United 
States for the unmarked graves of the following:
  (1) Any individual buried in a national cemetery or in a post 
cemetery.
  (2) Any individual eligible for burial in a national cemetery 
(but not buried there), except for those persons or classes of 
persons enumerated in section 2402(a)(4), (5), and (6) of this 
title.
  (3) Soldiers of the Union and Confederate Armies of the Civil 
War.
  (4) Any individual described in section 2402(a)(5) of this 
title who is buried in a veterans' cemetery owned by a State.
  (5) Any individual who at the time of death was entitled to 
retired pay under chapter 1223 of title 10 or would have been 
entitled to retired pay under that chapter but for the fact 
that the person was under 60 years of age.
  (b)(1) The Secretary shall furnish, when requested, an 
appropriate memorial headstone or marker for the purpose of 
commemorating an eligible individual whose remains are 
unavailable. Such a headstone or marker shall be furnished for 
placement in a national cemetery area reserved for that purpose 
under section 2403 of this title, a veterans' cemetery owned by 
a State, or, in the case of a veteran, in a State, local, or 
private cemetery.
  (2) For purposes of paragraph (1), an eligible individual is 
any of the following:
          (A) A veteran.
          (B) The spouse or surviving spouse of a veteran.
          (C) An eligible dependent child of a veteran.
  (3) For purposes of paragraph (1), the remains of an 
individual shall be considered to be unavailable if the 
individual's remains--
          (A) have not been recovered or identified;
          (B) were buried at sea, whether by the individual's 
        own choice or otherwise;
          (C) were donated to science; or
          (D) were cremated and the ashes scattered without 
        interment of any portion of the ashes.
  (4) For purposes of this subsection:
          (A) The term ``veteran'' includes an individual who 
        dies in the active military, naval, or air service.
          (B) The term ``surviving spouse'' includes a 
        surviving spouse who had a subsequent remarriage.
  (5) For purposes of this section, the term ``eligible 
dependent child'' means a child--
          (A) who is under 21 years of age, or under 23 years 
        of age if pursuing a course of instruction at an 
        approved educational institution; or
          (B) who is unmarried and became permanently 
        physically or mentally disabled and incapable of self-
        support before reaching 21 years of age, or before 
        reaching 23 years of age if pursuing a course of 
        instruction at an approved educational institution.
  (c) A headstone or marker furnished under subsection (a), 
(b), or (d) of this section may be of any material, including 
but not limited to marble, granite, bronze, or slate, requested 
by the person entitled to request such headstone or marker if 
the material requested is determined by the Secretary (1) to be 
cost effective, and (2) in a case in which the headstone or 
marker is to be placed in a national cemetery, to be 
aesthetically compatible with the area of the cemetery in which 
it is to be placed.
  (d)(1) The Secretary shall furnish, when requested, an 
appropriate Government headstone or marker at the expense of 
the United States for the grave of an individual described in 
paragraph (2) or (5) of subsection (a) who is buried in a 
private cemetery, notwithstanding that the grave is marked by a 
headstone or marker furnished at private expense. Such a 
headstone or marker may be furnished only if the individual 
making the request for the Government headstone or marker 
certifies to the Secretary that the headstone or marker will be 
placed on the grave for which the headstone or marker is 
requested, or, if placement on the grave is impossible or 
impracticable, as close as possible to the grave within the 
grounds of the cemetery in which the grave is located.
  (2) Any headstone or marker furnished under this subsection 
shall be delivered by the Secretary directly to the cemetery 
where the grave is located or to a receiving agent for delivery 
to the cemetery.
  (3) The headstone or marker furnished under this subsection 
shall be the headstone or marker selected by the individual 
making the request from among all the headstones and markers 
made available by the Government for selection.
  [(4) In lieu of furnishing a headstone or marker under this 
subsection, the Secretary may furnish, upon request, a 
medallion or other device of a design determined by the 
Secretary to signify the deceased's status as a veteran, to be 
attached to a headstone or marker furnished at private 
expense.]
  (4)(A) In lieu of furnishing a headstone or marker under this 
subsection to a deceased individual described in subparagraph 
(B), the Secretary may furnish, upon request, a medallion or 
other device of a design determined by the Secretary to signify 
the deceased individual's status as a veteran, to be attached 
to a headstone or marker furnished at private expense.
  (B) A deceased individual described in this subsection is an 
individual who--
          (i) served in the Armed Forces on or after April 6, 
        1917; and
          (ii) is eligible for a headstone or marker furnished 
        under paragraph (1) (or would be so eligible but for 
        the date of the death of the individual).
  (e)(1) The Secretary of Veterans Affairs shall provide an 
outer burial receptacle for each new grave in an open cemetery 
under the control of the National Cemetery Administration in 
which remains are interred in a casket. The Secretary of the 
Army may provide an outer burial receptacle for such a grave in 
the Arlington National Cemetery.
  (2) The use of outer burial receptacles in a cemetery under 
the control of the National Cemetery Administration or in the 
Arlington National Cemetery shall be in accordance with 
regulations or procedures approved by the Secretary of Veterans 
Affairs or Secretary of the Army, respectively.
  (3) Regulations or procedures under paragraph (2) may specify 
that--
          (A) an outer burial receptacle other than a grave 
        liner be provided in lieu of a grave liner at the 
        election of the survivors of the interred veteran; and
          (B) if an outer burial receptacle other than a grave 
        liner is provided in lieu of a grave liner upon an 
        election of such survivors, such survivors be 
        required--
                  (i) to pay the amount by which the cost of 
                the outer burial receptacle exceeds the cost of 
                the grave liner that would otherwise have been 
                provided in the absence of the election; and
                  (ii) to pay the amount of the administrative 
                costs incurred by the Secretary (or, with 
                respect to Arlington National Cemetery, the 
                Secretary of the Army) in providing the outer 
                burial receptacle in lieu of such grave liner.
  (4) Regulations or procedures under paragraph (2) may provide 
for the use of a voucher system, or other system of 
reimbursement approved by the Secretary (or, with respect to 
Arlington National Cemetery, the Secretary of the Army), for 
payment for outer burial receptacles other than grave liners 
provided under such regulations or procedures.
  (f) The Secretary may furnish a casket or urn, of such 
quality as the Secretary considers appropriate for a dignified 
burial, for burial in a national cemetery of a deceased veteran 
in any case in which the Secretary--
          (1) is unable to identify the veteran's next of kin, 
        if any; and
          (2) determines that sufficient resources for the 
        furnishing of a casket or urn for the burial of the 
        veteran in a national cemetery are not otherwise 
        available.
  (g)(1) When the Secretary has furnished a headstone or marker 
under subsection (a) for the unmarked grave of an individual, 
the Secretary shall, if feasible, add a memorial inscription to 
that headstone or marker rather than furnishing a separate 
headstone or marker under that subsection for the surviving 
spouse or eligible dependent child of such individual.
  (2) When the Secretary has furnished a memorial headstone or 
marker under subsection (b) for purposes of commemorating a 
veteran or an individual who died in the active military, 
naval, or air service, the Secretary shall, if feasible, add a 
memorial inscription to that headstone or marker rather than 
furnishing a separate memorial headstone or marker under that 
subsection for the surviving spouse or eligible dependent child 
of such individual.
  (h)(1) A headstone or marker may not be furnished under 
subsection (a) for the unmarked grave of a person described in 
section 2411(b) of this title.
  (2) A memorial headstone or marker may not be furnished under 
subsection (b) for the purpose of commemorating a person 
described in section 2411(b) of this title.
  (3) A headstone or marker may not be furnished under 
subsection (d) for the grave of a person described in section 
2411(b) of this title.
  (4) A casket or urn may not be furnished under subsection (f) 
for burial of a person described in section 2411(b) of this 
title.

           *       *       *       *       *       *       *


PART IV--GENERAL ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *


           CHAPTER 51--CLAIMS, EFFECTIVE DATES, AND PAYMENTS


                          SUBCHAPTER I--CLAIMS

Sec.
[5100. Definition of ``claimant''.]
5100. Definitions.
     * * * * * * *
5109C. Priority for processing claims.

                          SUBCHAPTER I--CLAIMS

[Sec. 5100. Definition of ``claimant''

  For purposes of this chapter, the term ``claimant'' means any 
individual applying for, or submitting a claim for, any benefit 
under the laws administered by the Secretary.]

Sec. 5100. Definitions

  In this chapter:
          (1) The term ``claimant'' means any individual 
        applying for, or submitting a claim for, any benefit 
        under the laws administered by the Secretary.
          (2) The term ``claim'' means a communication in 
        writing requesting a determination of entitlement or 
        evidencing a belief in entitlement to a benefit under 
        the laws administered by the Secretary.
          (3) The term ``formal claim'' means a claim submitted 
        on an application form prescribed by the Secretary.

Sec. 5101. Claims and forms

  (a)(1) [A specific] (A) Except as provided in subparagraph 
(B), a specific claim in the form prescribed by the Secretary 
(or jointly with the Commissioner of Social Security, as 
prescribed by section 5105 of this title) must be filed in 
order for benefits to be paid or furnished to any individual 
under the laws administered by the Secretary.
  (B)(i) The Secretary may pay benefits under chapters 13 and 
15 and sections 2302, 2307, and 5121 of this title to a 
survivor of a veteran who has not filed a formal claim if the 
Secretary determines that the record contains sufficient 
evidence to establish the entitlement of the survivor to such 
benefits.
  (ii) For purposes of this subparagraph and section 5110 of 
this title, the earlier of the following dates shall be treated 
as the date of the receipt of the survivor's application for 
benefits described in clause (i):
          (I) The date on which the survivor of a veteran (or 
        the representative of such a survivor) notifies the 
        Secretary of the death of the veteran through a death 
        certificate or other relevant medical evidence 
        indicating that the death was due to a service-
        connected or compensable disability.
          (II) The head of any other department or agency of 
        the Federal Government notifies the Secretary of the 
        death of the veteran.
  (iii) In notifying the Secretary of the death of a veteran as 
described in clause (ii)(I), the survivor (or the 
representative of such a survivor) may submit to the Secretary 
additional documents relating to such death without being 
required to file a formal claim.
  (2) If an individual has not attained the age of 18 years, is 
mentally incompetent, or is physically unable to sign a form, a 
form filed under paragraph (1) for the individual may be signed 
by a court- appointed representative, a person who is 
responsible for the care of the individual, including a spouse 
or other relative, or an attorney in fact or agent authorized 
to act on behalf of the individual under a durable power of 
attorney. If the individual is in the care of an institution, 
the manager or principal officer of the institution may sign 
the form.
  (b)(1) A claim by a surviving spouse or child for 
compensation or dependency and indemnity compensation shall 
also be considered to be a claim for death pension and accrued 
benefits, and a claim by a surviving spouse or child for death 
pension shall be considered to be a claim for death 
compensation (or dependency and indemnity compensation) and 
accrued benefits.
  (2) A claim by a parent for compensation or dependency and 
indemnity compensation shall also be considered to be a claim 
for accrued benefits.
  (c)(1) Any person who applies for, signs a form on behalf of 
an individual to apply for, or is in receipt of any 
compensation or pension benefit under laws administered by the 
Secretary shall, if requested by the Secretary, furnish the 
Secretary with the social security number of such person, or 
TIN in the case that the person is not an individual, and the 
social security number of any claimant, dependent, or 
beneficiary on whose behalf, or based upon whom, such person 
applies for or is in receipt of such benefit. A person is not 
required to furnish the Secretary with a social security number 
for any person to whom a social security number has not been 
assigned.
  (2) The Secretary shall deny the application of or terminate 
the payment of compensation or pension to a person who fails to 
furnish the Secretary with a social security number or TIN 
required to be furnished pursuant to paragraph (1) of this 
subsection. The Secretary may thereafter reconsider the 
application or reinstate payment of compensation or pension, as 
the case may be, if such person furnishes the Secretary with 
such social security number or TIN.
  (3) The costs of administering this subsection shall be paid 
for from amounts available to the Department of Veterans 
Affairs for the payment of compensation and pension.
  (d) In this section:
          (1) The term ``mentally incompetent'' with respect to 
        an individual means that the individual lacks the 
        mental capacity--
                  (A) to provide substantially accurate 
                information needed to complete a form; or
                  (B) to certify that the statements made on a 
                form are true and complete.
          (2) The term ``TIN'' has the meaning given the term 
        in section 7701(a)(41) of the Internal Revenue Code of 
        1986.

           *       *       *       *       *       *       *


Sec. 5109C. Priority for processing claims

  (a) Priority.--In processing claims for compensation under 
this chapter, the Secretary shall provide the following 
claimants with priority over other claimants:
          (1) Veterans who have attained the age of 70.
          (2) Veterans who are terminally ill.
          (3) Veterans with life-threatening illnesses.
          (4) Homeless veterans (as defined in section 2002 of 
        this title).
          (5) Veterans who were awarded the Medal of Honor.
          (6) Veterans who are former prisoners of war.
          (7) Veterans whose claims are being reviewed again in 
        relation to a previously denied claim relating to 
        military sexual trauma.
          (8) Veterans whom the Secretary determines, on a 
        case-by-case basis, are seriously or very seriously 
        injured.
          (9) Veterans whom the Secretary determines, on a 
        case-by-case basis, should be given priority under this 
        section based on an application for good cause 
        established by the Secretary.
  (b) Regulations.--The Secretary shall prescribe regulations 
to carry out subsection (a).

           *       *       *       *       *       *       *


SUBCHAPTER III--PAYMENT OF BENEFITS

           *       *       *       *       *       *       *



Sec. 5125. Acceptance of reports of private physician examinations

   [For purposes] (a) In General._For purposes of establishing 
any claim for benefits under chapter 11 or 15 of this title, a 
report of a medical examination administered by a private 
physician that is provided by a claimant in support of a claim 
for benefits under that chapter may be accepted without a 
requirement for confirmation by an examination by a physician 
employed by the Veterans Health Administration if the report is 
sufficiently complete to be adequate for the purpose of 
adjudicating such claim.
  (b) Sufficiency of Evidence.--If a veteran has submitted a 
medical opinion or report of a medical examination administered 
by a private physician in support of the veteran's claim, the 
Secretary may not order a medical examination to be 
administered by a Department physician unless the Secretary 
provides the veteran with a thorough explanation of why the 
medical opinion or report submitted by the veteran was not 
sufficiently complete and the reason why additional medical 
evidence is necessary.
  (c) Sufficiently Complete Defined.--For purposes of a medical 
opinion or report described in subsection (a), the term 
``sufficiently complete'' means competent, credible, probative, 
and containing such information as may be required to make a 
decision on the claim for which the medical opinion or report 
is provided.

           *       *       *       *       *       *       *


CHAPTER 53--SPECIAL PROVISIONS RELATING TO BENEFITS

           *       *       *       *       *       *       *



Sec. 5312. Annual adjustment of certain benefit rates

  (a) 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 each 
maximum annual rate of pension under sections 1521, 1541, and 
1542 of this title, the rate of increased pension paid under 
such sections 1521 and 1541 on account of children, and each 
rate of monthly allowance paid under section 1805 of this 
title, as such rates 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.
  (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.
  (2)(A) Whenever there is an increase under paragraph (1) of 
this subsection in such rates and annual income limitations, 
the Secretary shall, effective on the date of such increase in 
such rates and limitations, adjust (as provided in subparagraph 
(B) of this paragraph) the rates of dependency and indemnity 
compensation payable under subsection (b)(1) or (c)(1) of 
section 1315 of this title to any parent whose annual income is 
more than $800 but not more than the annual income limitation 
in effect under subsection (b)(3) or (c)(3) of such section, as 
appropriate, and adjust the rates of such compensation payable 
under subsection (d)(1) of such section to any parent whose 
annual income is more than $1,000 but not more than the annual 
income limitation in effect under subsection (d)(3) of such 
section.
  (B) The adjustment in rates of dependency and indemnity 
compensation referred to in subparagraph (A) of this paragraph 
shall be made by the Secretary in accordance with regulations 
which the Secretary shall prescribe.
  (c)(1) Whenever there is an increase under subsection (a) in 
benefit rates payable under sections 1521, 1541, 1542, and 1805 
of this title and an increase under subsection (b) in benefit 
rates and annual income limitations under section 1315 of this 
title, the Secretary shall publish such rates and limitations 
(including those rates adjusted by the Secretary under 
subsection (b)(2) of this section), as increased pursuant to 
such subsections, in the Federal Register at the same time as 
the material required by section 215(i)(2)(D) of the Social 
Security Act (42 U.S.C. 415(i)(2)(D)) is published by reason of 
a determination under section 215(i) of such Act (42 U.S.C. 
415(i)).
  (2) Whenever such rates and income limitations are so 
increased, the Secretary may round such rates and income 
limitations in such manner as the Secretary considers equitable 
and appropriate for ease of administration.
  (d)(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 dollar amounts in effect for the payment of 
disability compensation and dependency and indemnity 
compensation by the Secretary, as specified in paragraph (2), 
as such amounts were in effect immediately before 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.
  (2) The dollar amounts to be increased pursuant to paragraph 
(1) are the following:
          (A) Wartime disability compensation.--Each of the 
        dollar amounts in effect under section 1114 of this 
        title.
          (B) Additional compensation for dependents.--Each of 
        the dollar amounts in effect under section 1115(1) of 
        this title.
          (C) Clothing allowance.--The dollar amount in effect 
        under section 1162 of this title.
          (D) Dependency and indemnity compensation to 
        surviving spouse.--Each of the dollar amounts in effect 
        under subsections (a) through (d) of section 1311 of 
        such title.
          (E) Dependency and indemnity compensation to 
        children.--Each of the dollar amounts in effect under 
        sections 1313(a) and 1314 of such title.
  (3) Whenever there is an increase under paragraph (1) in 
amounts in effect for the payment of disability compensation 
and dependency and indemnity compensation, the Secretary shall 
publish such amounts, as increased pursuant to such paragraph, 
in the Federal Register at the same time as the material 
required by section 215(i)(2)(D) of the Social Security Act (42 
U.S.C. 415(i)(2)(D)) is published by reason of a determination 
under section 215(i) of such Act (42 U.S.C. 415(i)).
  (4) Each dollar amount increased under paragraph (1), if not 
a whole dollar amount, shall be rounded to the next lower whole 
dollar amount.
  (5) The Secretary of Veterans Affairs may adjust 
administratively, consistent with the increases made under 
subsection (a), the rates of disability compensation payable to 
persons under section 10 of Public Law 85-857 (72 Stat. 1263) 
who have not received compensation under chapter 11 of this 
title.

           *       *       *       *       *       *       *


           CHAPTER 55--MINORS, INCOMPETENTS, AND OTHER WARDS


Sec.
5501. Commitment actions.
[5502. Payments to and supervision of fiduciaries.]
5502. Appointment of fiduciaries.
5502A. Supervision of fiduciaries.
     * * * * * * *
[5509. Authority to require fiduciary to receive payments at regional 
          offices of the Department when failing to provide required 
          accounting.]
5509. Annual reports and accountings of fiduciaries.
     * * * * * * *

           *       *       *       *       *       *       *


[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 
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 fiduciary, in the opinion 
of the Secretary, is not properly executing or has not properly 
executed the duties of the trust of such 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 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.
  [(c) Authority is hereby granted for the payment of any court 
or other expenses incident to any investigation or court 
proceeding for the appointment of any fiduciary or other person 
for the purpose of payment of benefits payable under laws 
administered by the Secretary or the removal of such fiduciary 
and appointment of another, and of expenses in connection with 
the administration of such benefits by such fiduciaries, or in 
connection with any other court proceeding hereby authorized, 
when such payment is authorized by the Secretary.
  [(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 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.
  [(e) Any funds in the hands of a fiduciary appointed by a 
State court or the Secretary derived from benefits payable 
under laws administered by the Secretary, which under the law 
of the State wherein the beneficiary had last legal residence 
would escheat to the State, shall escheat to the United States 
and shall be returned by such fiduciary, or by the personal 
representative of the deceased beneficiary, less legal expenses 
of any administration necessary to determine that an escheat is 
in order, to the Department, and shall be deposited to the 
credit of the applicable revolving fund, trust fund, or 
appropriation.]

Sec. 5502. Appointment of fiduciaries

  (a) Appointment.--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 
fiduciary for the use and benefit of the beneficiary, 
regardless of any legal disability on the part of the 
beneficiary.
  (b) Appeals.--(1) If the Secretary determines a beneficiary 
to be mentally incompetent for purposes of appointing a 
fiduciary under this chapter, the Secretary shall provide such 
beneficiary with a written statement detailing the reasons for 
such determination.
  (2) A beneficiary whom the Secretary has determined to be 
mentally incompetent for purposes of appointing a fiduciary 
under this chapter may appeal such determination.
  (c) Modification.--(1) A beneficiary for whom the Secretary 
appoints a fiduciary under this chapter may, at any time, 
request the Secretary to--
          (A) remove the fiduciary so appointed; and
          (B) have a new fiduciary appointed.
  (2) The Secretary shall comply with a request under paragraph 
(1) if the Secretary determines that the request is made in 
good faith and--
          (A) the fiduciary requested to be removed receives a 
        fee from the beneficiary and a suitable volunteer 
        fiduciary is available to assist the beneficiary; or
          (B) the beneficiary provides credible information 
        that the fiduciary requested to be removed is--
                  (i) not acting in the interest of the 
                beneficiary; or
                  (ii) unable to effectively serve the 
                beneficiary because of an irreconcilable 
                personality conflict or disagreement.
  (3) The Secretary shall ensure that any removal or new 
appointment of a fiduciary under paragraph (1) does not delay 
or interrupt the beneficiary's receipt of benefits administered 
by the Secretary.
  (d) Independence.--A fiduciary appointed by the Secretary 
shall operate independently of the Department to determine the 
actions that are in the interest of the beneficiary.
  (e) Predesignation.--A veteran may predesignate a fiduciary 
by--
          (1) submitting written notice to the Secretary of the 
        predesignated fiduciary; or
          (2) submitting a form provided by the Secretary for 
        such purpose.
  (f) Appointment of Non-predesignated Fiduciary.--If a 
beneficiary designates an individual to serve as a fiduciary 
under subsection (e) and the Secretary appoints an individual 
not so designated as the fiduciary for such beneficiary, the 
Secretary shall notify such beneficiary of--
          (1) the reason why such designated individual was not 
        appointed; and
          (2) the ability of the beneficiary to modify the 
        appointed fiduciary under subsection (c).
  (g) Priority of Appointment.--In appointing a fiduciary under 
this chapter, if a beneficiary does not designate a fiduciary 
pursuant to subsection (e), to the extent possible the 
Secretary shall appoint a person who is--
          (1) a relative of the beneficiary;
          (2) appointed as guardian of the beneficiary by a 
        court of competent jurisdiction; or
          (3) authorized to act on behalf of the beneficiary 
        under a durable power of attorney.

Sec. 5502A. Supervision of fiduciaries

  (a) Commission.--(1)(A) 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 monthly benefits provided 
to the beneficiary a reasonable commission for fiduciary 
services rendered, but the commission for any month may not 
exceed the lesser of the following amounts:
          (i) The amount that equals three percent of the 
        monthly monetary benefits under laws administered by 
        the Secretary paid on behalf of the beneficiary to the 
        fiduciary.
          (ii) $35.
  (B) A commission paid under this paragraph may not be derived 
from any award to a beneficiary regarding back pay or 
retroactive benefits payments.
  (C) 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.
  (D) In accordance with section 6106 of this title, a 
commission may not be paid to a fiduciary if the Secretary 
determines that the fiduciary misused any benefit payments of a 
beneficiary.
  (E) If the Secretary determines that the fiduciary has 
misused any benefit or payments of a beneficiary, the Secretary 
may revoke the fiduciary status of the fiduciary.
  (2) 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.
  (b) Court.--Whenever it appears that any fiduciary, in the 
opinion of the Secretary, is not properly executing or has not 
properly executed the duties of the trust of such 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 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.
  (c) Payment of Certain Expenses.--Authority is hereby granted 
for the payment of any court or other expenses incident to any 
investigation or court proceeding for the appointment of any 
fiduciary or other person for the purpose of payment of 
benefits payable under laws administered by the Secretary or 
the removal of such fiduciary and appointment of another, and 
of expenses in connection with the administration of such 
benefits by such fiduciaries, or in connection with any other 
court proceeding hereby authorized, when such payment is 
authorized by the Secretary.
  (d) Temporary Payment of Benefits.--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 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 
patient's 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.
  (e) Escheatment.--Any funds in the hands of a fiduciary 
appointed by a State court or the Secretary derived from 
benefits payable under laws administered by the Secretary, 
which under the law of the State wherein the beneficiary had 
last legal residence would escheat to the State, shall escheat 
to the United States and shall be returned by such fiduciary, 
or by the personal representative of the deceased beneficiary, 
less legal expenses of any administration necessary to 
determine that an escheat is in order, to the Department, and 
shall be deposited to the credit of the applicable revolving 
fund, trust fund, or appropriation.
  (f) Assistance.--The Secretary shall provide to a fiduciary 
appointed under section 5502 of this title materials and tools 
to assist the fiduciary in carrying out the responsibilities of 
the fiduciary under this chapter, including--
          (1) handbooks, brochures, or other written material 
        that explain the responsibilities of a fiduciary under 
        this chapter;
          (2) tools located on an Internet website, including 
        forms to submit to the Secretary required information; 
        and
          (3) assistance provided by telephone.

           *       *       *       *       *       *       *


Sec. 5506. Definition of ``fiduciary''

    [For purposes] (a) 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.
  (b)(1) For purposes of subsection (a), the term ``person'' 
includes any--
          (A) State or local government agency whose mission is 
        to carry out income maintenance, social service, or 
        health care-related activities;
          (B) any State or local government agency with 
        fiduciary responsibilities; or
          (C) any nonprofit social service agency that the 
        Secretary determines--
                  (i) regularly provides services as a 
                fiduciary concurrently to five or more 
                individuals; and
                  (ii) is not a creditor of any such 
                individual.
  (2) The Secretary shall maintain a list of State or local 
agencies and nonprofit social service agencies under paragraph 
(1) that are qualified to act as a fiduciary under this 
chapter. In maintaining such list, the Secretary may consult 
the lists maintained under section 807(h) of the Social 
Security Act (42 U.S.C. 1007(h)).

[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 finds that the 
person 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 $3,600, 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. 5507. Inquiry, investigations, and qualification of fiduciaries

  (a) Investigation.--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 to be conducted in advance of such 
        certification and in accordance with subsection (b);
          (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);
          (3) adequate evidence that the person to serve as 
        fiduciary protects the private information of a 
        beneficiary in accordance with subsection (d)(1); and
          (4) the furnishing of any bond that may be required 
        by the Secretary in accordance with subsection (f).
  (b) Elements of Investigation.--(1) In conducting an inquiry 
or investigation of a proposed fiduciary under subsection 
(a)(1), the Secretary shall conduct--
          (A) a face-to-face interview with the proposed 
        fiduciary by not later than 30 days after the date on 
        which such inquiry or investigation begins; and
          (B) a background check of the proposed fiduciary to--
                  (i) in accordance with paragraph (2), 
                determine whether the proposed fiduciary has 
                been convicted of a crime; and
                  (ii) determine whether the proposed fiduciary 
                will serve the best interest of the 
                beneficiary, including by conducting a credit 
                check of the proposed fiduciary and checking 
                the records under paragraph (5).
  (2) The Secretary shall request information concerning 
whether that person has been convicted of any offense under 
Federal or State law. If that person has been convicted of such 
an offense, the Secretary may certify the person as a fiduciary 
only if the Secretary finds that the person is an appropriate 
person to act as fiduciary for the beneficiary concerned under 
the circumstances.
  (3) The Secretary shall conduct the background check 
described in paragraph (1)(B)--
          (A) each time a person is proposed to be a fiduciary, 
        regardless of whether the person is serving or has 
        served as a fiduciary; and
          (B) at no expense to the beneficiary.
  (4) Each proposed fiduciary shall disclose to the Secretary 
the number of beneficiaries that the fiduciary acts on behalf 
of.
  (5) The Secretary shall maintain records of any person who 
has--
          (A) previously served as a fiduciary; and
          (B) had such fiduciary status revoked by the 
        Secretary.
  (6)(A) If a fiduciary appointed by the Secretary is convicted 
of a crime described in subparagraph (B), the Secretary shall 
notify the beneficiary of such conviction by not later than 14 
days after the date on which the Secretary learns of such 
conviction.
  (B) A crime described in this subparagraph is a crime--
          (i) for which the fiduciary is convicted while 
        serving as a fiduciary for any person;
          (ii) that is not included in a report submitted by 
        the fiduciary under section 5509(a) of this title; and
          (iii) that the Secretary determines could affect the 
        ability of the fiduciary to act on behalf of the 
        beneficiary.
  (c) Investigation of Certain Persons.--(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 giving priority to conducting 
such inquiry or investigation. 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;
          (D) being appointed to manage an estate where the 
        annual amount of veterans benefits to be managed by the 
        proposed fiduciary does not exceed $3,600, as adjusted 
        pursuant to section 5312 of this title; or
          (E) a person who is authorized to act on behalf of 
        the beneficiary under a durable power of attorney.
  (d) Protection of Private Information.--(1) A fiduciary shall 
take all reasonable precautions to--
          (A) protect the private information of a beneficiary, 
        including personally identifiable information; and
          (B) securely conducts financial transactions.
  (2) A fiduciary shall notify the Secretary of any action of 
the fiduciary that compromises or potentially compromises the 
private information of a beneficiary.
  (e) Potential Misuse of Funds.--(1) If the Secretary has 
reason to believe that a fiduciary may be misusing all or part 
of the benefit of a beneficiary, the Secretary shall--
          (A) conduct a thorough investigation to determine the 
        veracity of such belief; and
          (B) if such veracity is established, transmit to the 
        officials described in paragraph (2) a report of such 
        investigation.
  (2) The officials described in this paragraph are the 
following:
          (A) The Attorney General.
          (B) Each head of a Federal department or agency that 
        pays to a fiduciary or other person benefits under any 
        law administered by such department of agency for the 
        use and benefit of a minor, incompetent, or other 
        beneficiary.
  (f) Bond.--In determining whether a proposed fiduciary is 
required to furnish a bond under subsection (a)(4), the 
Secretary shall consider--
          (1) the existence of any familial or other personal 
        relationship between the proposed fiduciary and the 
        beneficiary; and
          (2) the care the proposed fiduciary has taken to 
        protect the interests of the beneficiary.
  (g) List of Fiduciaries.--Each regional office of the 
Veterans Benefits Administration shall maintain a list of the 
following:
          (1) The name and contact information of each 
        fiduciary, including address, telephone number, and 
        email address.
          (2) With respect to each fiduciary described in 
        paragraph (1)--
                  (A) the date of the most recent background 
                check and credit check performed by the 
                Secretary under this section;
                  (B) the date that any bond was paid under 
                this section;
                  (C) the name, address, and telephone number 
                of each beneficiary the fiduciary acts on 
                behalf of; and
                  (D) the amount that the fiduciary controls 
                with respect to each beneficiary described in 
                subparagraph (C).

           *       *       *       *       *       *       *


Sec. 5509. [Authority to require fiduciary to receive payments at 
                    regional offices of the Department when failing to 
                    provide required accounting]  Annual reports and 
                    accountings of fiduciaries

  (a) Required Reports and Accountings.--The Secretary [may 
require a fiduciary to file a] shall require a fiduciary to 
file an annual report or accounting pursuant to regulations 
prescribed by the Secretary. The Secretary shall transmit such 
annual report or accounting to the beneficiary and any legal 
guardian of such beneficiary.
  (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.
  (c) Matters Included.--Except as provided by subsection (f), 
an annual report or accounting under subsection (a) shall 
include the following:
          (1) For each beneficiary that a fiduciary acts on 
        behalf of--
                  (A) the amount of the benefits of the 
                beneficiary provided under any law administered 
                by the Secretary accrued during the year, the 
                amount spent, and the amount remaining; and
                  (B) if the fiduciary serves the beneficiary 
                with respect to benefits not administered by 
                the Secretary, an accounting of all sources of 
                benefits or other income the fiduciary oversees 
                for the beneficiary.
          (2) A list of events that occurred during the year 
        covered by the report that could affect the ability of 
        the fiduciary to act on behalf of the beneficiary, 
        including--
                  (A) the fiduciary being convicted of any 
                crime;
                  (B) the fiduciary declaring bankruptcy; and
                  (C) any judgments entered against the 
                fiduciary.
  (d) Random Audits.--The Secretary shall annually conduct 
random audits of fiduciaries who receive a commission pursuant 
to subsection 5502A(a)(1) of this title.
  (e) Status of Fiduciary.--If a fiduciary includes in the 
annual report events described in subsection (c)(2), the 
Secretary may take appropriate action to adjust the status of 
the fiduciary as the Secretary determines appropriate, 
including by revoking the fiduciary status of the fiduciary.
  (f) Caregivers and Certain Other Fiduciaries.--(1)(A) In 
carrying out this section, the Secretary shall ensure that a 
caregiver fiduciary is required only to file an annual report 
or accounting under subsection (a) with respect to the amount 
of the benefits of the beneficiary provided under any law 
administered by the Secretary--
          (i) spent on--
                  (I) food and housing for the beneficiary; and
                  (II) clothing, health-related expenses, 
                recreation, and other personal items for the 
                beneficiary; and
          (ii) saved for the beneficiary.
  (B) The Secretary shall coordinate with the Under Secretary 
for Benefits and the Under Secretary for Health to--
          (i) minimize the frequency with which employees of 
        the Department visit the home of a caregiver fiduciary 
        and beneficiary; and
          (ii) limit the extent of supervision by such Under 
        Secretaries with respect to such a fiduciary and 
        beneficiary.
  (C) In this paragraph, the term ``caregiver fiduciary'' means 
a fiduciary who--
          (i) in addition to acting as a fiduciary for a 
        beneficiary, is approved by the Secretary to be a 
        provider of personal care services for the beneficiary 
        under paragraph (3)(A)(i) of section 1720G(a) of this 
        title;
          (ii) in carrying out such care services to such 
        beneficiary, has undergone not less than four home 
        visits under paragraph (9)(A) of such section; and
          (iii) has not been required by the Secretary to take 
        corrective action pursuant to paragraph (9)(C) of such 
        section.
  (2) In carrying out this section, the Secretary may adjust 
the matters required under an annual report or accounting under 
subsection (a) with respect to a fiduciary whom the Secretary 
determines to have effectively protected the interests of the 
beneficiary over a sustained period.

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] Not later than 
July 1 of each year, the Secretary shall submit to the 
Committees on Veterans' Affairs of the House of Representatives 
and the Senate a separate report containing 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 payees.
          (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 
        benefits reissued to beneficiaries.
          (8) The number of fiduciary cases referred to the 
        Office of the Inspector General and the nature of the 
        actions taken by the Inspector General.
          (9) The total amount of money recovered by the 
        Government in cases arising from the misuse of benefits 
        by a fiduciary.
          (10) Such other information as the Secretary 
        considers appropriate.

           *       *       *       *       *       *       *


CHAPTER 61--PENAL AND FORFEITURE PROVISIONS

           *       *       *       *       *       *       *



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 review a 
        fiduciary's accounting within 60 days of the date on 
        which that accounting is scheduled for review.
          (B) A case in which the Secretary was notified of 
        allegations of misuse, but failed to act within 60 days 
        of the date of such notification to terminate the 
        fiduciary.
          (C) In any other case in which actual negligence is 
        shown, including by the Secretary not acting in 
        accordance with section 5507 of this title.
  (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.
  (3) In any other case in which the Secretary obtains 
recoupment from a fiduciary who has misused benefits, the 
Secretary shall promptly remit payment of the recouped amounts 
to the beneficiary or the beneficiary's successor fiduciary as 
the case may be.
  (c) Limitation on Total Amount Paid.--The total of the 
amounts paid to a beneficiary (or a beneficiary's successor 
fiduciary) under this section may not exceed the total benefit 
amount misused by the fiduciary with respect to that 
beneficiary.
  (d) 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.

           *       *       *       *       *       *       *


PART V--BOARDS, ADMINISTRATIONS, AND SERVICES

           *       *       *       *       *       *       *


CHAPTER 71--BOARD OF VETERANS' APPEALS

           *       *       *       *       *       *       *



Sec. 7107. Appeals: dockets; hearings

  (a)(1) Except as provided in paragraphs (2) and (3) and in 
subsection (f), each case received pursuant to application for 
review on appeal shall be considered and decided in regular 
order according to its place upon the docket.
  (2) A case referred to in paragraph (1) may, for cause shown, 
be advanced on motion for earlier consideration and 
determination. Any such motion shall set forth succinctly the 
grounds upon which the motion is based. Such a motion may be 
granted only--
          (A) if the case involves interpretation of law of 
        general application affecting other claims;
          (B) if the appellant is seriously ill or is under 
        severe financial hardship; or
          (C) for other sufficient cause shown.
  (3) A case referred to in paragraph (1) may be postponed for 
later consideration and determination if such postponement is 
necessary to afford the appellant a hearing.
  (b) The Board shall decide any appeal only after affording 
the appellant an opportunity for a hearing.
  (c) A hearing docket shall be maintained and formal recorded 
hearings shall be held by such member or members of the Board 
as the Chairman may designate. Such member or members 
designated by the Chairman to conduct the hearing shall, except 
in the case of a reconsideration of a decision under section 
7103 of this title, participate in making the final 
determination of the claim.
  (d)[(1) An appellant may request that a hearing before the 
Board be held at its principal location or at a facility of the 
Department located within the area served by a regional office 
of the Department.] (1)(A) Upon request for a hearing, the 
Board shall determine, for purposes of scheduling the hearing 
for the earliest possible date, whether a hearing before the 
Board will be held at its principal location or at a facility 
of the Department or other appropriate Federal facility located 
within the area served by a regional office of the Department. 
The Board shall also determine whether to provide a hearing 
through the use of the facilities and equipment described in 
subsection (e)(1) or by the appellant personally appearing 
before a Board member or panel.
  (B) The Board shall notify the appellant of the 
determinations of the location and type of hearing made under 
subparagraph (A). Upon notification, the appellant may request 
a different location or type of hearing as described in such 
subparagraph. If so requested, the Board shall grant such 
request and ensure that the hearing is scheduled at the 
earliest possible date without any undue delay or other 
prejudice to the appellant.
  (2) A hearing to be held within an area served by a regional 
office of the Department shall (except as provided in paragraph 
(3)) be scheduled to be held in accordance with the place of 
the case on the docket under subsection (a) relative to other 
cases on the docket for which hearings are scheduled to be held 
within that area.
  (3) A hearing to be held within an area served by a regional 
office of the Department may, for cause shown, be advanced on 
motion for an earlier hearing. Any such motion shall set forth 
succinctly the grounds upon which the motion is based. Such a 
motion may be granted only--
          (A) if the case involves interpretation of law of 
        general application affecting other claims;
          (B) if the appellant is seriously ill or is under 
        severe financial hardship; or
          (C) for other sufficient cause shown.
  (e)(1) At the request of the Chairman, the Secretary may 
provide suitable facilities and equipment to the Board or other 
components of the Department to enable an appellant located at 
a facility within the area served by a regional office to 
participate, through voice transmission or through picture and 
voice transmission, by electronic or other means, in a hearing 
with a Board member or members sitting at the Board's principal 
location.
  [(2) When such facilities and equipment are available, the 
Chairman may afford the appellant an opportunity to participate 
in a hearing before the Board through the use of such 
facilities and equipment in lieu of a hearing held by 
personally appearing before a Board member or panel as provided 
in subsection (d). Any such hearing shall be conducted in the 
same manner as, and shall be considered the equivalent of, a 
personal hearing. If the appellant declines to participate in a 
hearing through the use of such facilities and equipment, the 
opportunity of the appellant to a hearing as provided in such 
subsection (d) shall not be affected.]
  (2) Any hearing provided through the use of the facilities 
and equipment described in paragraph (1) shall be conducted in 
the same manner as, and shall be considered the equivalent of, 
a personal hearing.
  (f) Nothing in this section shall preclude the screening of 
cases for purposes of--
          (1) determining the adequacy of the record for 
        decisional purposes; or
          (2) the development, or attempted development, of a 
        record found to be inadequate for decisional purposes.

           *       *       *       *       *       *       *

                              ----------                              


VETERANS BENEFITS ACT OF 2003

           *       *       *       *       *       *       *



TITLE VII--OTHER MATTERS

           *       *       *       *       *       *       *


SEC. 704. TEMPORARY AUTHORITY FOR PERFORMANCE OF MEDICAL DISABILITIES 
                    EXAMINATIONS BY CONTRACT PHYSICIANS.

  (a) Authority.--Using appropriated funds, other than funds 
available for compensation and pension, the Secretary of 
Veterans Affairs may provide for the conduct of examinations 
with respect to the medical disabilities of applicants for 
benefits under laws administered by the Secretary by persons 
other than Department of Veterans Affairs employees. The 
authority under this section is in addition to the authority 
provided in section 504(b) of the Veterans' Benefits 
Improvement Act of 1996 (Public Law 104-275; 38 U.S.C. 5101 
note).
  (b) Performance by Contract.--Examinations under the 
authority provided in subsection (a) shall be conducted 
pursuant to contracts entered into and administered by the 
Under Secretary for Benefits.
  (c) Expiration.--The authority in subsection (a) shall expire 
on [December 31, 2015] December 31, 2017. No examination may be 
carried out under the authority provided in that subsection 
after that date.
  (d) Licensure of Contract Physicians.--
          (1) In general.--Notwithstanding any law regarding 
        the licensure of physicians, a physician described in 
        paragraph (2) may conduct an examination pursuant to a 
        contract entered into under subsection (b) at any 
        location in any State, the District of Columbia, or a 
        Commonwealth, territory, or possession of the United 
        States, so long as the examination is within the scope 
        of the authorized duties under such contract.
          (2) Physician described.--A physician described in 
        this paragraph is a physician who--
                  (A) has a current unrestricted license to 
                practice the health care profession of the 
                physician;
                  (B) is not barred from practicing such health 
                care profession in any State, the District of 
                Columbia, or a Commonwealth, territory, or 
                possession of the United States; and
                  (C) is performing authorized duties for the 
                Department of Veterans Affairs pursuant to a 
                contract entered into under subsection (b).
  [(d)] (e) Report.--Not later than four years after the date 
of the enactment of this Act, the Secretary shall submit to 
Congress a report on the use of the authority provided in 
subsection (a). The Secretary shall include in the report an 
assessment of the effect of examinations under that authority 
on the cost, timeliness, and thoroughness of examinations with 
respect to the medical disabilities of applicants for benefits 
under laws administered by the Secretary.

           *       *       *       *       *       *       *

                              ----------                              


     SECTION 504 OF THE VETERANS' BENEFITS IMPROVEMENT ACT OF 1996


SEC. 504 PILOT PROGRAM FOR USE OF CONTRACT PHYSICIANS FOR DISABILITY 
                    EXAMINATIONS.

  (a) Authority.--The Secretary of Veterans Affairs, acting 
through the Under Secretary for Benefits, may conduct a pilot 
program under this section under which examinations with 
respect to medical disability of applicants for benefits under 
laws administered by the Secretary that are carried out through 
the Under Secretary for Benefits may be made by persons other 
than employees of the Department of Veterans Affairs. Any such 
examination shall be performed pursuant to contracts entered 
into by the Under Secretary for Benefits with those persons.
  (b) Limitation.--The Secretary may carry out the pilot 
program under this section as follows:
          (1) In fiscal years before fiscal year 2015, through 
        not more than 10 regional offices of the Department of 
        Veterans Affairs.
          (2) In fiscal year 2015, through not more than 12 
        regional offices of the Department.
          (3) In fiscal year 2016, through not more than 15 
        regional offices of the Department.
          (4) In fiscal year 2017 and each fiscal year 
        thereafter, through such regional offices of the 
        Department as the Secretary considers appropriate.
  (c) Licensure of Contract Physicians.--
          (1) In general.--Notwithstanding any law regarding 
        the licensure of physicians, a physician described in 
        paragraph (2) may conduct an examination pursuant to a 
        contract entered into under subsection (a) at any 
        location in any State, the District of Columbia, or a 
        Commonwealth, territory, or possession of the United 
        States, so long as the examination is within the scope 
        of the authorized duties under such contract.
          (2) Physician described.--A physician described in 
        this paragraph is a physician who--
                  (A) has a current unrestricted license to 
                practice the health care profession of the 
                physician;
                  (B) is not barred from practicing such health 
                care profession in any State, the District of 
                Columbia, or a Commonwealth, territory, or 
                possession of the United States; and
                  (C) is performing authorized duties for the 
                Department of Veterans Affairs pursuant to a 
                contract entered into under subsection (a).
  [(c)] (d) Source of Funds.--Payments for contracts under the 
pilot program under this section shall be made from amounts 
available to the Secretary of Veterans Affairs for payment of 
compensation and pensions.
  [(d)] (e) Report to Congress.--Not later than three years 
after the date of the enactment of this Act, the Secretary 
shall submit to the Congress a report on the effect of the use 
of the authority provided by subsection (a) on the cost, 
timeliness, and thoroughness of medical disability 
examinations.

                                  [all]