[House Report 116-58]
[From the U.S. Government Publishing Office]


116th Congress    }                                   {         Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                   {         116-58

======================================================================



 
              BLUE WATER NAVY VIETNAM VETERANS ACT OF 2019

                                _______
                                

  May 10, 2019.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Takano, from the Committee on Veterans' Affairs, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 299]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 299) to amend title 38, United States Code, to 
clarify presumptions relating to the exposure of certain 
veterans who served in the vicinity of the Republic of Vietnam, 
and for other purposes, 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..............................................     9
Background and Need for Legislation..............................     9
Hearings.........................................................    16
Subcommittee Consideration.......................................    17
Committee Consideration..........................................    17
Committee Correspondence.........................................    18
Committee Votes..................................................    21
Committee Oversight Findings.....................................    21
New Budget Authority and CBO Cost Estimate Committee Cost 
  Estimate.......................................................    21
Statement of General Performance Goals and Objectives............    21
New Budget Authority, Entitlement Authority, and Tax Expenditures    21
Earmarks and Tax and Tariff Benefits.............................    22
Federal Mandates Statement.......................................    22
Advisory Committee Statement.....................................    22
Constitutional Authority Statement...............................    22
Applicability to Legislative Branch..............................    22
Statement on Duplication of Federal Programs.....................    22
Section-by-Section Analysis of the Legislation...................    22
Committee Cost Estimate..........................................
Congressional Budget Office Estimate.............................
Changes in Existing Law Made by the Bill as Reported.............    24

    The amendment is as follows:
      Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Blue Water Navy Vietnam Veterans Act 
of 2019''.

SEC. 2. CLARIFICATION OF PRESUMPTIONS OF EXPOSURE FOR VETERANS WHO 
                    SERVED IN VICINITY OF REPUBLIC OF VIETNAM.

  (a) In General.--Chapter 11 of title 38, United States Code, is 
amended by inserting after section 1116 the following new section:

``Sec. 1116A. Presumptions of service connection for veterans who 
                    served offshore of the Republic of Vietnam

  ``(a) Service Connection.--For the purposes of section 1110 of this 
title, and subject to section 1113 of this title, a disease covered by 
section 1116 of this title becoming manifest as specified in that 
section in a veteran who, during active military, naval, or air 
service, served offshore of the Republic of Vietnam during the period 
beginning on January 9, 1962, and ending on May 7, 1975, shall be 
considered to have been incurred in or aggravated by such service, 
notwithstanding that there is no record of evidence of such disease 
during the period of such service.
  ``(b) Exposure.--A veteran who, during active military, naval, or air 
service, served offshore of the Republic of Vietnam during the period 
beginning on January 9, 1962, and ending on May 7, 1975, shall be 
presumed to have been exposed during such service to an herbicide agent 
unless there is affirmative evidence to establish that the veteran was 
not exposed to any such agent during that service.
  ``(c) Effective Date of Award.--(1) Except as provided by paragraph 
(2), the effective date of an award under this section shall be 
determined in accordance with section 5110 of this title.
  ``(2)(A) Notwithstanding subsection (g) of section 5110 of this 
title, the Secretary shall determine the effective date of an award 
based on a claim under this section for an individual described in 
subparagraph (B) by treating the date on which the individual filed the 
prior claim specified in clause (i) of such subparagraph as the date on 
which the individual filed the claim so awarded under this section.
  ``(B) An individual described in this subparagraph is a veteran, or a 
survivor of a veteran, who meets the following criteria:
          ``(i) The veteran or survivor submitted a claim for 
        disability compensation on or after September 25, 1985, and 
        before January 1, 2020, for a disease covered by this section, 
        and the claim was denied by reason of the claim not 
        establishing that the disease was incurred or aggravated by the 
        service of the veteran.
          ``(ii) The veteran or survivor submits a claim for disability 
        compensation on or after January 1, 2020, for the same 
        condition covered by the prior claim under clause (i), and the 
        claim is approved pursuant to this section.
  ``(d) Determination of Offshore.--Notwithstanding any other provision 
of law, for purposes of this section, the Secretary shall treat a 
location as being offshore of Vietnam if the location is not more than 
12 nautical miles seaward of a line commencing on the southwestern 
demarcation line of the waters of Vietnam and Cambodia and intersecting 
the following points:


----------------------------------------------------------------------------------------------------------------
                                                                                     Latitude
                            ``Points Geographic Names                                  North     Longitude  East
----------------------------------------------------------------------------------------------------------------
At Hon Nhan Island, Tho Chu Archipelago Kien Giang Province                             915.0'         10327.0'
----------------------------------------------------------------------------------------------------------------
At Hon Da Island southeast of Hon Khoai Island Minh Hai Province                        822.8'         10452.4'
----------------------------------------------------------------------------------------------------------------
At Tai Lon Islet, Con Dao Islet in Con Dao-Vung Toa Special Sector                      837.8'         10637.5'
----------------------------------------------------------------------------------------------------------------
At Bong Lai Islet, Con Dao Islet                                                        838.9'         10640.3'
----------------------------------------------------------------------------------------------------------------
At Bay Canh Islet, Con Dao Islet                                                        839.7'         10642.1'
----------------------------------------------------------------------------------------------------------------
At Hon Hai Islet (Phu Qui group of islands) Thuan Hai Province                          958.0'          1095.0'
----------------------------------------------------------------------------------------------------------------
At Hon Doi Islet, Thuan Hai Province                                                   1239.0'         10928.0'
----------------------------------------------------------------------------------------------------------------
At Dai Lanh point, Phu Khanh Province                                                  1253.8'         10927.2'
----------------------------------------------------------------------------------------------------------------
At Ong Can Islet, Phu Khanh Province                                                   1354.0'         10921.0'
----------------------------------------------------------------------------------------------------------------
At Ly Son Islet, Nghia Binh Province                                                   1523.1'         109 9.0'
----------------------------------------------------------------------------------------------------------------
At Con Co Island, Binh Tri Thien Province                                              1710.0'         10720.6'
----------------------------------------------------------------------------------------------------------------


  ``(e) Herbicide Agent.--In this section, the term `herbicide agent' 
has the meaning given that term in section 1116(a)(3) of this title.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
1116 the following new item:

``1116A. Presumptions of service connection for veterans who served 
offshore of the Republic of Vietnam.''.

  (c) Implementation.--
          (1) Guidance.--Notwithstanding section 501 of such title, the 
        Secretary of Veterans Affairs may issue guidance to implement 
        section 1116A of title 38, United States Code, as added by 
        subsection (a), before prescribing new regulations under such 
        section.
          (2) Updates.--(A) Not later than 120 days after the date of 
        the enactment of this Act, the Secretary shall submit a report 
        to the Committees on Veterans' Affairs of the House of 
        Representatives and the Senate regarding the plans of the 
        Secretary--
                  (i) to conduct outreach under subsection (d); and
                  (ii) to respond to inquiries from veterans regarding 
                claims for disability compensation under section 1116A 
                of title 38, United States Code, as added by subsection 
                (a) of this section.
          (B) On a quarterly basis during the period beginning on the 
        date of the enactment of this Act and ending on the date on 
        which regulations are prescribed to carry out such section 
        1116A, the Secretary shall submit to the Committees on 
        Veterans' Affairs of the House of Representatives and the 
        Senate updates on the status of such regulations.
          (3) Pending cases.--
                  (A) Authority to stay.--The Secretary may stay a 
                claim described in subparagraph (B) until the date on 
                which the Secretary commences the implementation of 
                such section 1116A.
                  (B) Claims described.--A claim described in this 
                subparagraph is a claim for disability compensation--
                          (i) relating to the service and diseases 
                        covered by such section 1116A; and
                          (ii) that is pending at the Veterans Benefits 
                        Administration or the Board of Veterans' 
                        Appeals on or after the date of the enactment 
                        of this Act and before the date on which the 
                        Secretary commences the implementation of such 
                        section 1116A.
  (d) Outreach.--
          (1) Requirement.--The Secretary of Veterans Affairs shall 
        conduct outreach to inform veterans described in paragraph (2) 
        of the ability to submit a claim for disability compensation 
        under section 1116A of title 38, United States Code, as added 
        by subsection (a). Such outreach shall include the following:
                  (A) The Secretary shall publish on the website of the 
                Department a notice that a veterans described in 
                paragraph (2) may submit or resubmit a claim for 
                disability compensation under such section 1116A.
                  (B) The Secretary shall notify in writing the veteran 
                service organization community of the ability of 
                veterans described in paragraph (2) to submit or 
                resubmit claims for disability compensation under such 
                section 1116A.
          (2) Veteran described.--A veteran described in this paragraph 
        is a veteran who, during active military, naval, or air 
        service, served offshore of the Republic of Vietnam during the 
        period beginning on January 9, 1962, and ending on May 7, 1975.
  (e) Reports.--Not later than January 1, 2021, and annually thereafter 
for two years, the Secretary of Veterans Affairs shall submit to the 
Committees on Veterans' Affairs of the House of Representatives and the 
Senate a report regarding claims for disability compensation under 
section 1116A of title 38, United States Code, as added by subsection 
(a). Each report shall include, with respect to the calendar year 
preceding the report, disaggregated by the regional offices of the 
Department of Veterans Affairs, the following:
          (1) The number of claims filed under such section.
          (2) The number of such claims granted.
          (3) The number of such claims denied.
  (f) Health Care.--Section 1710(e)(4) of title 38, United States Code, 
is amended by inserting ``(including offshore of such Republic as 
described in section 1116A(d) of this title)'' after ``served on active 
duty in the Republic of Vietnam''.
  (g) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2020.

SEC. 3. PRESUMPTION OF HERBICIDE EXPOSURE FOR CERTAIN VETERANS WHO 
                    SERVED IN KOREA.

  (a) In General.--Chapter 11 of title 38, United States Code, is 
amended by inserting after section 1116A, as added by section 2, the 
following new section:

``Sec. 1116B. Presumption of herbicide exposure for certain veterans 
                    who served in Korea

  ``(a) Presumption of Service-Connection.--(1) For the purposes of 
section 1110 of this title, and subject to section 1113 of this title, 
a disease specified in subsection (b) that becomes manifest as 
specified in that subsection in a veteran described in paragraph (2) 
shall be considered to have been incurred or aggravated in the line of 
duty in the active military, naval, or air service, notwithstanding 
that there is no record of evidence of such disease during the period 
of such service.
  ``(2) A veteran described in this paragraph is a veteran who, during 
active military, naval, or air service, served in or near the Korean 
Demilitarized Zone (DMZ), during the period beginning on September 1, 
1967, and ending on August 31, 1971.
  ``(b) Diseases.--A disease specified in this subsection is--
          ``(1) a disease specified in paragraph (2) of subsection (a) 
        of section 1116 of this title that becomes manifest as 
        specified in that paragraph; or
          ``(2) any additional disease that--
                  ``(A) the Secretary determines in regulations 
                warrants a presumption of service-connection by reason 
                of having positive association with exposure to an 
                herbicide agent; and
                  ``(B) becomes manifest within any period prescribed 
                in such regulations.
  ``(c) Herbicide Agent.--For purposes of this section, the term 
`herbicide agent' has the meaning given such term in section 1821(d) of 
this title.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
1116A, as added by section 2, the following new item:

``1116B. Presumption of herbicide exposure for certain veterans who 
served in Korea.''.

  (c) Implementation.--
          (1) Guidance.--Notwithstanding section 501 of such title, the 
        Secretary of Veterans Affairs may issue guidance to implement 
        section 1116B of title 38, United States Code, as added by 
        subsection (a), before prescribing new regulations under such 
        section.
          (2) Updates.--(A) Not later than 120 days after the date of 
        the enactment of this Act, the Secretary shall submit a report 
        to the Committees on Veterans' Affairs of the House of 
        Representatives and the Senate regarding the plans of the 
        Secretary to respond to inquiries from veterans regarding 
        claims for disability compensation under section 1116B of title 
        38, United States Code, as added by subsection (a) of this 
        section.
          (B) On a quarterly basis during the period beginning on the 
        date of the enactment of this Act and ending on the date on 
        which regulations are prescribed to carry out such section 
        1116B, the Secretary shall submit to the Committees on 
        Veterans' Affairs of the House of Representatives and the 
        Senate updates on the status of such regulations.
          (3) Pending cases.--
                  (A) Authority to stay.--The Secretary may stay a 
                claim described in subparagraph (B) until the date on 
                which the Secretary commences the implementation of 
                section 1116B of title 38, United States Code, as added 
                by subsection (a).
                  (B) Claims described.--A claim described in this 
                subparagraph is a claim for disability compensation--
                          (i) relating to the service and diseases 
                        covered by such section 1116B; and
                          (ii) that is pending at the Veterans Benefits 
                        Administration or the Board of Veterans' 
                        Appeals on or after the date of the enactment 
                        of this Act and before the date on which the 
                        Secretary commences the implementation of such 
                        section 1116B.
  (d) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2020.

SEC. 4. BENEFITS FOR CHILDREN OF CERTAIN THAILAND SERVICE VETERANS BORN 
                    WITH SPINA BIFIDA.

  (a) In General.--Subchapter III of chapter 18 of title 38, United 
States Code, is amended by adding at the end the following new section:

``Sec. 1822. Benefits for children of certain Thailand service veterans 
                    born with spina bifida

  ``(a) Benefits Authorized.--The Secretary may provide to any child of 
a veteran of covered service in Thailand who is suffering from spina 
bifida the health care, vocational training and rehabilitation, and 
monetary allowance required to be paid to a child of a Vietnam veteran 
who is suffering from spina bifida under subchapter I of this chapter 
as if such child of a veteran of covered service in Thailand were a 
child of a Vietnam veteran who is suffering from spina bifida under 
such subchapter.
  ``(b) Spina Bifida Conditions Covered.--This section applies with 
respect to all forms and manifestations of spina bifida, except spina 
bifida occulta.
  ``(c) Veteran of Covered Service in Thailand.--For purposes of this 
section, a veteran of covered service in Thailand is any individual, 
without regard to the characterization of that individual's service, 
who--
          ``(1) served in the active military, naval, or air service in 
        Thailand, as determined by the Secretary in consultation with 
        the Secretary of Defense, during the period beginning on 
        January 9, 1962, and ending on May 7, 1975; and
          ``(2) is determined by the Secretary, in consultation with 
        the Secretary of Defense, to have been exposed to a herbicide 
        agent during such service in Thailand.
  ``(d) Herbicide Agent.--For purposes of this section, the term 
`herbicide agent' means a chemical in a herbicide used in support of 
United States and allied military operations in Thailand, as determined 
by the Secretary in consultation with the Secretary of Defense, during 
the period beginning on January 9, 1962, and ending on May 7, 1975.''.
  (b) Conforming Amendment to Definition of ``Child''.--Section 1831(1) 
of such title is amended--
          (1) in subparagraph (B)--
                  (A) by striking ``subchapter III of this chapter'' 
                and inserting ``section 1821 of this title''; and
                  (B) in clause (i), by striking ``section 1821 of this 
                title'' and inserting ``that section''; and
          (2) by adding at the end the following new subparagraph:
                  ``(C) For purposes of section 1822 of this title, an 
                individual, regardless of age or marital status, who--
                          ``(i) is the natural child of a veteran of 
                        covered service in Thailand (as determined for 
                        purposes of that section); and
                          ``(ii) was conceived after the date on which 
                        that veteran first entered service described in 
                        subsection (c) of that section.''.
  (c) Clerical Amendments.--
          (1) Subchapter heading.--The heading for subchapter III of 
        chapter 18 of such title is amended by inserting ``AND 
        THAILAND'' after ``KOREA''.
          (2) Table of sections.--The table of sections at the 
        beginning of chapter 18 of such title is amended--
                  (A) by striking the item relating to subchapter III 
                and inserting the following new item:

   ``subchapter iii--children of certain korea and thailand service 
                   veterans born with spina bifida'';

        and
                  (B) by inserting after the item relating to section 
                1821 the following new item:

``1822. Benefits for children of certain Thailand service veterans born 
with spina bifida.''.

  (d) Implementation.--
          (1) Guidance.--Notwithstanding section 501 of such title, the 
        Secretary of Veterans Affairs may issue guidance to implement 
        section 1822 of title 38, United States Code, as added by 
        subsection (a), before prescribing new regulations under such 
        section.
          (2) Updates.--(A) Not later than 120 days after the date of 
        the enactment of this Act, the Secretary shall submit a report 
        to the Committees on Veterans' Affairs of the House of 
        Representatives and the Senate regarding the plans of the 
        Secretary to respond to inquiries from veterans regarding 
        claims for disability compensation under section 1822 of title 
        38, United States Code, as added by subsection (a) of this 
        section.
          (B) On a quarterly basis during the period beginning on the 
        date of the enactment of this Act and ending on the date on 
        which regulations are prescribed to carry out such section 
        1822, the Secretary shall submit to the Committees on Veterans' 
        Affairs of the House of Representatives and the Senate updates 
        on the status of such regulations.
          (3) Pending cases.--
                  (A) Authority to stay.--The Secretary may stay a 
                claim described in subparagraph (B) until the date on 
                which the Secretary commences the implementation of 
                section 1822 of title 38, United States Code, as added 
                by subsection (a).
                  (B) Claims described.--A claim described in this 
                subparagraph is a claim for benefits--
                          (i) relating to the spina bifida and service 
                        covered by such section 1822; and
                          (ii) that is pending at the Veterans Benefits 
                        Administration or the Board of Veterans' 
                        Appeals on or after the date of the enactment 
                        of this Act and before the date on which the 
                        Secretary commences the implementation of such 
                        section 1822.
  (e) Report.--Not later than 180 days after the date of the enactment 
of this Act, the Secretary of Veterans Affairs, in consultation with 
the Secretary of Defense, shall submit to the Committees on Veterans' 
Affairs of the House of Representatives and the Senate a report 
identifying--
          (1) the military installations of the United States located 
        in Thailand during the period beginning on January 9, 1962, and 
        ending on May 7, 1975, at which an herbicide agent (as defined 
        in section 1822 of title 38, United States Code, as added by 
        subsection (a)) was actively used; and
          (2) the period of such use.
  (f) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2020.

SEC. 5. UPDATED REPORT ON CERTAIN GULF WAR ILLNESS STUDY.

  Not later than 180 days after the date of the enactment of this Act, 
the Secretary of Veterans Affairs shall submit to the Committees on 
Veterans' Affairs of the House of Representatives and the Senate an 
updated report on the findings, as of the date of the updated report, 
of the Follow-up Study of a National Cohort of Gulf War and Gulf Era 
Veterans under the epidemiology program of the Department of Veterans 
Affairs.

SEC. 6. LOANS GUARANTEED UNDER HOME LOAN PROGRAM OF DEPARTMENT OF 
                    VETERANS AFFAIRS.

  (a) Adjustment of Loan Limit.--
          (1) In general.--Section 3703(a)(1) of title 38, United 
        States Code, is amended--
                  (A) in subparagraph (A)--
                          (i) in clause (i)(IV), by striking ``the 
                        lesser of the maximum guaranty amount (as 
                        defined in subparagraph (C)) or'';
                          (ii) in clause (ii), by striking 
                        ``subparagraph (B) of this paragraph'' and 
                        inserting ``subparagraph (B) or (C)'';
                  (B) in subparagraph (B)--
                          (i) by striking ``The maximum'' and inserting 
                        ``With respect to loans described in subclauses 
                        (I), (II), or (III) of subparagraph (A)(i), the 
                        maximum''; and
                          (ii) by striking ``or in the case'' and all 
                        that follows through ``subparagraph (C)),''; 
                        and
                  (C) by striking subparagraph (C) and inserting the 
                following new subparagraph (C):
  ``(C)(i) With respect to loans described in subclause (IV) of 
subparagraph (A)(i) made to a veteran not covered by clause (ii), the 
maximum amount of guaranty entitlement available to the veteran shall 
be 25 percent of the loan.
  ``(ii) With respect to loans described in subclause (IV) of 
subparagraph (A)(i) made to a covered veteran, the maximum amount of 
guaranty entitlement available to the veteran shall be 25 percent of 
the Freddie Mac conforming loan limit, reduced by the amount of 
entitlement previously used by the veteran under this chapter and not 
restored as a result of the exclusion in section 3702(b) of this title.
  ``(iii) In this subparagraph:
          ``(I) The term `covered veteran' means a veteran who has 
        previously used entitlement under this chapter and for whom the 
        full amount of entitlement so used has not been restored as a 
        result of the exclusion in section 3702(b) of this title.
          ``(II) The term `Freddie Mac conforming loan limit' means the 
        limit determined under section 305(a)(2) of the Federal Home 
        Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a 
        single-family residence, as adjusted for the year involved.''.
          (2) Loans to native american veterans.--Section 3762(c) of 
        such title is amended--
                  (A) by striking paragraph (1); and
                  (B) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively.
          (3) Conforming amendment.--Section 3710(d)(4) of such title 
        is amended by striking ``section 3703(a)(1)(B) of this title'' 
        and inserting ``subparagraph (B) or (C) of section 3703(a)(1) 
        of this title''.
  (b) Adjustment of Loan Fees.--Section 3729(b)(2) of title 38, United 
States Code, is amended by striking the loan fee table and inserting 
the following:


----------------------------------------------------------------------------------------------------------------
                                                       Active duty
                  ``Type of loan                         veteran             Reservist          Other  obligor
----------------------------------------------------------------------------------------------------------------
(A)(i) Initial loan described in section 3710(a)   2.15                 2.40                 NA
 to purchase or construct a dwelling with 0-down,
 or any other initial loan described in section
 3710(a) other than with 5-down or 10-down
 (closed on or after October 1, 2004, and before
 January 1, 2020)
(A)(ii) Initial loan described in section 3710(a)  2.30                 2.30                 NA
 to purchase or construct a dwelling with 0-down,
 or any other initial loan described in section
 3710(a) other than with 5-down or 10-down
 (closed on or after January 1, 2020, and before
 January 1, 2022)
(A)(iii) Initial loan described in section         2.15                 2.15                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other initial loan described in
 section 3710(a) other than with 5-down or 10-
 down (closed on or after January 1, 2022, and
 before October 1, 2029)
(A)(iv) Initial loan described in section 3710(a)  1.40                 1.40                 NA
 to purchase or construct a dwelling with 0-down,
 or any other initial loan described in section
 3710(a) other than with 5-down or 10-down
 (closed on or after October 1, 2029)
(B)(i) Subsequent loan described in section        3.30                 3.30                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other subsequent loan described
 in section 3710(a) (closed on or after October
 1, 2004, and before January 1, 2020)
(B)(ii) Subsequent loan described in section       3.60                 3.60                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other subsequent loan described
 in section 3710(a) (closed on or after January
 1, 2020, and before January 1, 2022)
(B)(iii) Subsequent loan described in section      3.30                 3.30                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other subsequent loan described
 in section 3710(a) (closed on or after January
 1, 2022, and before October 1, 2029)
(B)(iv) Subsequent loan described in section       1.25                 1.25                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other subsequent loan described
 in section 3710(a) (closed on or after October
 1, 2029)
(C)(i) Loan described in section 3710(a) to        1.50                 1.75                 NA
 purchase or construct a dwelling with 5-down
 (closed before January 1, 2020)
(C)(ii) Loan described in section 3710(a) to       1.65                 1.65                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after January 1, 2020, and before
 January 1, 2022)
(C)(iii) Loan described in section 3710(a) to      1.50                 1.50                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after January 1, 2022, and before
 October 1, 2029)
(C)(iv) Loan described in section 3710(a) to       0.75                 0.75                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after October 1, 2029)
(D)(i) Loan described in section 3710(a) to        1.25                 1.50                 NA
 purchase or construct a dwelling with 10-down
 (closed before January 1, 2020)
(D)(ii) Loan described in section 3710(a) to       1.40                 1.40                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after January 1, 2020, and before
 January 1, 2022)
(D)(iii) Loan described in section 3710(a) to      1.25                 1.25                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after January 1, 2022, and before
 October 1, 2029)
(D)(iv) Loan described in section 3710(a) to       0.50                 0.50                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after October 1, 2029)
(E) Interest rate reduction refinancing loan       0.50                 0.50                 NA
(F) Direct loan under section 3711                 1.00                 1.00                 NA
(G) Manufactured home loan under section 3712      1.00                 1.00                 NA
 (other than an interest rate reduction
 refinancing loan)
(H) Loan to Native American veteran under section  1.25                 1.25                 NA
 3762 (other than an interest rate reduction
 refinancing loan)
(I) Loan assumption under section 3714             0.50                 0.50                 0.50
(J) Loan under section 3733(a)                     2.25                 2.25                 2.25''.
----------------------------------------------------------------------------------------------------------------


  (c) Waiver of Fees for Purple Heart Recipients.--Section 3729(c)(1) 
of such title is amended--
          (1) by striking ``or from a surviving spouse'' and inserting 
        ``, from a surviving spouse''; and
          (2) by inserting before the period at the end the following: 
        ``, or from a member of the Armed Forces who is serving on 
        active duty and who provides, on or before the date of loan 
        closing, evidence of having been awarded the Purple Heart''.
  (d) Effective Date.--The amendments made by this section shall apply 
with respect to a loan guaranteed under section 3710 of title 38, 
United States Code, on or after January 1, 2020.
  (e) Guidance.--Notwithstanding section 501 of title 38, United States 
Code, the Secretary of Veterans Affairs may issue guidance to implement 
this section before prescribing new regulations under sections 3703, 
3729, and 3762 of such title, as amended by this section.

SEC. 7. INFORMATION GATHERING FOR DEPARTMENT OF VETERANS AFFAIRS HOME 
                    LOAN APPRAISALS.

  (a) In General.--Section 3731(b) of title 38, United States Code, is 
amended by adding at the end the following new paragraph:
  ``(3) The Secretary shall permit an appraiser on a list developed and 
maintained under subsection (a)(3) to make an appraisal for the 
purposes of this chapter based solely on information gathered by a 
person with whom the appraiser has entered into an agreement for such 
services.''.
  (b) Effective Date.--The amendments made by this section shall apply 
with respect to an appraisal under section 3731 of such title, on or 
after January 1, 2020.
  (c) Guidance.--Notwithstanding section 501 of such title, the 
Secretary of Veterans Affairs may issue guidance to implement this 
section before prescribing new regulations under sections 3731 of such 
title, as amended by subsection (a).

                          Purpose and Summary

    H.R. 299, as amended, would, effective January 1, 2020, 
extend the presumption of exposure for purposes of entitlement 
to service connection for diseases associated with exposure to 
herbicide agents, such as Agent Orange to Blue Water Navy (BWN) 
Vietnam veterans.\1\ Additionally, H.R. 299, as amended, would 
extend the presumption of exposure to certain herbicide agents 
to veterans who served in or near the Korean Demilitarized Zone 
(DMZ) during the period beginning on September 1, 1967, and 
ending on August 31, 1971.
---------------------------------------------------------------------------
    \1\BWN veterans are defined as veterans who served offshore of the 
Republic of Vietnam (defined below) between the dates of January 9, 
1962, and May 7, 1975.
---------------------------------------------------------------------------
    Consequently, these veterans may be eligible for veterans' 
benefits, such as compensation and healthcare, if they develop 
a disease linked to herbicide exposure. H.R. 299, as amended, 
would require the Secretary of the Department of Veterans 
Affairs (Secretary) to conduct outreach to inform these 
veterans and veterans service organizations of the ability to 
submit a claim for disability compensation if they develop 
certain diseases.
    H.R. 299, as amended, would extend eligibility for U.S. 
Department of Veterans Affairs (VA) benefits to certain 
children with spina bifida (other than spina bifida occulta) 
who were born to veterans who served in Thailand between 
January 9, 1962, and May 7, 1975, and were determined by the 
Secretary to have been exposed to an herbicide agent.
    H.R. 299, as amended, also requires the Secretary to submit 
a report to the Committees on Veterans' Affairs of the House of 
Representatives and the Senate regarding the use of herbicide 
agents in Thailand during the Vietnam era. Further, VA is 
required to submit reports to the Committees on Veterans' 
Affairs of the House of Representatives and the Senate on 
claims filed by BWN veterans for disability compensation under 
this Act, including the numbers of claims granted and denied. 
The bill, as amended, would also require the Secretary to 
submit an update to the Committees regarding the Follow-up 
Study of the National Cohort of Gulf War and Gulf Era Veterans, 
which examines the health of veterans who served in the Gulf 
War elsewhere during the same period.
    H.R. 299, as amended, would also make improvements to VA's 
Home Loan Guaranty program to ensure that veterans can use 
their home loan benefit in high-cost areas, and receive 
appraisals in a timely and cost-efficient manner.
    Representative Mark Takano of California introduced H.R. 
299 on January 8, 2019.

                  Background and Need for Legislation


Toxic exposures

    The Agent Orange Act of 1991 (P.L. 102-4) established the 
presumption of service connection for certain diseases 
associated with exposure to herbicide agents for veterans who 
served in the Republic of Vietnam between January 9, 1962, and 
May 7, 1975. This presumption simplifies the disability claim 
process for veterans who develop conditions linked with 
exposure to toxic herbicide agents due to the difficulty of 
proving actual exposure to herbicide agents, particularly when 
exposure occurred decades earlier. Additionally, this policy 
reduces the expense and time for VA to gather evidence of 
service connection on a case-by-case basis and streamlines the 
adjudication process.
    VA's current guidelines do not acknowledge that BWN 
veterans may have been exposed to Agent Orange during the 
Vietnam era. Instead, VA limits the presumption of herbicide 
exposure to veterans who actually set foot on land in the 
Republic of Vietnam or served in the country's inland 
waterways. H.R. 299, as amended, would remedy this inequity by 
extending the presumption of exposure for service connection 
for herbicide related diseases\2\ to BWN veterans who served in 
the offshore waters of Vietnam between January 9, 1962, and May 
7, 1975.
---------------------------------------------------------------------------
    \2\VA currently acknowledges that the following conditions are 
linked with exposure to herbicides used during the Vietnam era: AL 
Amyloidosis, Chloracne, Type II Diabetes Mellitus, Hodgkin's Disease, 
Ischemic Heart Disease, Chronic B-cell Leukemias, Multiple Myeloma, 
Non-Hodgkin's Lymphoma, Parkinson's Disease, Early-onset Peripheral 
Neuropathy, Porphyria Cutanea Tarda, Prostate Cancer, Respiratory 
Cancers, Soft-tissue Sarcoma. Accordingly, if a Vietnam veteran who 
served on land in Vietnam or on inland waterways develops one of these 
conditions, VA automatically presumes the condition is service 
connected.
---------------------------------------------------------------------------
    This bill is necessary because many veterans' advocates 
contend that BWN veterans likely experienced exposure to 
herbicide agents during the Vietnam era and are now 
experiencing significant health problems as a result. For 
example, it is possible that toxic substances sprayed in 
Vietnam to defoliate the mainland subsequently entered rivers 
and streams that then ran into the seas surrounding Vietnam.\3\ 
U.S. Naval ships used water drawn from the sea to make potable 
water, which BWN veterans used for drinking, bathing, and 
cooking. Because BWN veterans may have been exposed to toxic 
herbicide agents, advocates argue it is unfair that veterans 
who served on land are eligible for presumptive VA benefits, 
while those who served off the coast of Vietnam are not, even 
if they develop the same diseases.
---------------------------------------------------------------------------
    \3\Institute of Medicine Committee on Blue Water Navy Vietnam 
Veterans and Agent Orange Exposure, Blue Water Navy Vietnam Veterans 
and Agent Orange Exposure (2011).
---------------------------------------------------------------------------
    In response to concerns raised by veterans' advocates, in 
2011 the Institute of Medicine (IOM) attempted to determine 
whether BWN veterans experience a comparable range of exposure 
to herbicide agents as those on the ground in Vietnam. However, 
the IOM concluded that given the passage of time and lack of 
sampling data collected during the conflict, there is not 
enough information to conclusively determine whether Blue Water 
Navy personnel came into contact to defoliants during their 
service. IOM also determined that it is unlikely that such data 
will be available in the future. As a result, VA has decided 
that the lack of scientific evidence prevents the Department 
from extending the presumption to BWN veterans.\4\
---------------------------------------------------------------------------
    \4\V.A. Gen. Couns. Op. 27-97 (July 23, 1997).
---------------------------------------------------------------------------
    Tragically, many veterans who served off the coast of the 
Republic of Vietnam are now experiencing health problems that 
are associated with herbicide exposure. However, since BWN 
veterans do not receive an automatic presumption of herbicide 
exposure based on the areas where they served, these veterans 
must provide evidence of actual exposure to herbicide agents to 
successfully file a claim for VA benefits for their herbicide 
related conditions. It is very difficult, if not impossible, 
for BWN veterans to gather such evidence because their service 
records may be missing or incomplete--if contemporaneous 
records documenting exposure were even created in the first 
place. As a result, VA often denies claims for benefits filed 
by BWN veterans.
    Additionally, on January 29, 2019, the Federal Circuit 
decided Procopio v. Wilkie\5\, holding that the ``Republic of 
Vietnam'' unambiguously includes its 12 nautical mile 
territorial sea. As a result, the Court concluded that all BWN 
veterans serving in the 12 nautical mile territorial sea were 
considered Vietnam veterans for purposes of VA benefits, and 
were therefore eligible to receive the presumption of herbicide 
exposure. The Court's decision did not, however, define the 
term ``territorial sea.'' As a result, this bill is necessary 
to codify the Court's decision and mitigate concerns that VA 
may narrowly interpret the decision, thereby excluding some BWN 
veterans.\6\ To ensure that VA construes this bill to extend 
the presumption to all applicable BWN veterans who may have 
been exposed to herbicide agents, the Committee intends that 
VA's definition of the Republic of Vietnam for this purpose be 
broad and comprehensive.
---------------------------------------------------------------------------
    \5\Procopio v. Wilkie, 913 F.3d 1371 (Fed. Cir. 2019).
    \6\Liermann, Shane, Assistant National Legislative Director of the 
Disabled American Veterans, Statement to the House of Representatives 
Committee on Veterans' Affairs Subcommittee on Disability Benefits and 
Memorial Affairs Hearing on May 1, 2019.
---------------------------------------------------------------------------
    For purposes of this bill, a BWN veteran is one who served 
in the offshore waters of Vietnam. As defined by Section 2, 
offshore waters include a 12 nautical mile radius extending off 
a baseline designated by a series of geographic points. The 
bill intends to capture all servicemembers who were present 
between the shoreline and the farthermost reaches of the 12 
nautical mile radius during the relevant timeframe.
    The bill does not specify the evidentiary proof required to 
establish presence within the offshore waters during the 
relevant time frame. Thus, the Secretary may propose guidance 
and regulations relating to the necessary evidence to establish 
qualifying service. The difficulty an individual may experience 
establishing specific whereabouts during a period of war is 
well-known\7\ and deference to lay evidence may be warranted in 
some situations. However, lay evidence generally does not 
supersede objective evidence of location in the offshore 
waters, such as deck logs. Any forthcoming rules or guidance 
should be consistent with the existing rules regarding 
evidentiary proof. VA should assist a veteran, to the extent 
possible, with developing evidence necessary to substantiate 
his or her claim.
---------------------------------------------------------------------------
    \7\Fuentes, Carlos, Director of the National Legislative Service 
for the Veterans of Foreign Wars, Statement to the House of 
Representatives Committee on Veterans' Affairs Subcommittee on 
Disability Benefits and Memorial Affairs Hearing on May 1, 2019 
(stating, ``I was in Afghanistan in 2009 and I could never be able to 
present to you any evidence of where I was at and exactly what I was 
exposed to . . . and I can't even fathom how hard that is for our 
Vietnam vet[erans].'').
---------------------------------------------------------------------------
    This bill contemplates coverage of all vessels that served 
on or below the offshore waters of Vietnam. Though the majority 
of qualifying servicemembers served aboard ships, there may 
also be instances of submarines present within the offshore 
waters, and these vessels are also contemplated under this Act. 
However, an aircraft that passed in the airspace above the 
offshore waters would not have drawn water from the sea and 
therefore is not considered present within the offshore waters 
for purposes of this legislation.
    The bill, as amended, provides a presumption of herbicide 
agent exposure for all BWN veterans except in instances where 
there is affirmative evidence to establish that the veteran was 
not exposed to any such agent during service. Under existing 
law, the presumption of herbicide exposure may be rebutted when 
there is affirmative evidence to the contrary or evidence that 
the disease is due to another cause.\8\
---------------------------------------------------------------------------
    \8\See also 38 U.S.C. Sec. 1113(a).
---------------------------------------------------------------------------
    Additionally, because BWN veterans have generally been 
unable to successfully apply for benefits for conditions that 
may have been caused by service in Vietnam due to the lack of a 
presumption of exposure, Section 2 of H.R. 299, as amended, 
would provide retroactive benefits for veterans who were denied 
benefits between September 1, 1985, and January 1, 2020, if the 
individual veteran or survivor beneficiary of a deceased 
veteran re-files a claim for benefits. This provision is 
consistent with special effective date rules given to Vietnam 
veterans who served on land or on inland waterways under Nehmer 
v. United States Department of Veterans Affairs, to the extent 
that decision contemplated retroactive awards for benefits. 
This ensures parity for BWN veterans and their survivors.\9\ 
However, unlike Nehmer, H.R. 299, as amended, does not require 
VA to automatically re-adjudicate previously denied BWN claims. 
Under this bill, a BWN veteran, or beneficiary, is required to 
submit a new claim for disability compensation on or after 
January 1, 2020, for the same condition that was previously 
denied, to be eligible for retroactive benefits. However, a BWN 
veteran is not limited in seeking benefits for any disease 
added to the Secretary's list of herbicide related diseases at 
a date after enactment of this legislation. Nothing in this 
bill intends to limit the rights of Nehmer class members who 
seek relief for benefits under the Nehmer Consent Decree.
---------------------------------------------------------------------------
    \9\Under Nehmer, for any new conditions or diseases VA recognized 
as linked to exposure to herbicides between September 25, 1985, and 
September 30, 2015, VA was required to automatically readjudicate any 
previously denied claims of Vietnam veterans and their survivors for 
those conditions or diseases. Moreover, if the veteran was awarded 
benefits, VA was required to establish that the effective date of the 
claim was the date the first claim was received. See 38 C.F.R. 
Sec. 3.816(c)(2)-(3). See also: Nehmer v. United States Veterans 
Administration, 712 F. Supp. 1404 (N.D. Cal. 1989) (Nehmer I); Nehmer 
v. United States Veterans Administration, 32 F. Supp. 2d. 1175 (N.D. 
Cal. 1999) (Nehmer II); Nehmer v. Veterans Administration of the 
Government of the United States, 284 F.3d 1158 (9th Cir. 2002) (Nehmer 
III).
---------------------------------------------------------------------------
    To ensure that veterans whose claims were previously denied 
are aware of their rights under this Act, H.R. 299, as amended, 
requires the Secretary to conduct outreach to inform BWN 
veterans of the ability to submit or resubmit a claim for 
benefits related to herbicide agent exposure. The Secretary is 
also directed to share that information with the veteran 
service organization community to allow these representative 
organizations to provide up to date information to their 
veteran members. The VSO community includes the service 
organizations with the most members and other such stakeholders 
as the Secretary considers appropriate to notify of the change 
in law. Furthermore, the bill would mandate that VA submit a 
report to the Committees on Veterans' Affairs of the House of 
Representatives and the Senate on the new claims filed under 
the special effective date rules by BWN veterans, on January 1, 
2021, and annually thereafter for two years.
    In 2000, the Institute of Medicine (IOM) determined there 
may be a link between exposure to chemicals used in Vietnam and 
spina bifida in offspring.\10\ Thus, Congress provides benefits 
to children of some Vietnam era veterans who may have been 
harmed by the use of herbicide agents, such as those who served 
in Vietnam or along the Korean DMZ.\11\ However, even though VA 
recognizes that some veterans who were stationed along the 
perimeter of military installations in Thailand (between 
January 9, 1962, and May 7, 1975), may have come into contact 
with herbicide agents, the Department does not provide benefits 
to these veterans' biological children who were born with spina 
bifida. Section 4 of H.R. 299, as amended, would extend 
benefits to these children if VA determines that the veteran 
was exposed to a recognized herbicide agent during service. To 
be eligible for benefits, the child suffering from spina bifida 
must be the natural child of the exposed veteran and conceived 
after the parent's exposure.
---------------------------------------------------------------------------
    \10\Institute of Medicine, Veterans and Agent Orange Update 2000 
(2001).
    \11\P.L. 108-183, 38 U.S.C. 1802, et. seq.
---------------------------------------------------------------------------
    Additionally, although Congress authorized benefits for 
certain children of veterans who served in or near the Korean 
DMZ between September 1, 1967, and August 31, 1971, VA's 
regulations limit the presumption of exposure for veterans who 
served in or near the Korean DMZ beginning April 1, 1968.\12\ 
As a result of VA's regulation, a veteran who was stationed 
along the Korean DMZ between September 1, 1967, and March 31, 
1968, is not automatically eligible for benefits if the veteran 
develops a condition linked to toxic chemical exposure. 
However, that same veteran's child who was conceived after the 
veteran's service in Korea and was born with spina bifida, may 
be eligible for benefits based on possible exposure to 
herbicide agents. Section 3 of H.R. 299, as amended, would 
resolve this inconsistency between the law and VA's regulation 
by expanding the presumption to include veterans who served in 
or near the Korean DMZ between September 1, 1967, and April 1, 
1968.
---------------------------------------------------------------------------
    \12\38 C.F.R. Sec. 3.307.
---------------------------------------------------------------------------
    Like Section 2, Section 3 does not limit a Korean DMZ 
veteran or family member from seeking compensation for diseases 
recognized by the Secretary as related to herbicide exposure in 
the future. If, at a date following enactment of H.R. 299, as 
amended, the Secretary determines via regulation that 
additional diseases are related to herbicide exposure, any 
veteran or beneficiary identified by Section 3 may seek 
benefits for that disease based on the veteran's qualifying 
service in the Korean DMZ.
    Sections 2, 3 and 4 of the bill also include provisions 
allowing VA to issue guidance regarding the implementation of 
BWN, Korean DMZ and Thailand benefits as described in H.R. 299, 
as amended. This allows the Secretary to begin awarding 
benefits permitted under these sections prior to the completion 
of the rulemaking process. The ability to award immediate 
benefits during the interim period between passage of H.R. 299, 
as amended, and promulgation of relevant regulations reflects 
the urgency of need for veterans and family members afflicted 
by herbicide related diseases. However, the guidance provisions 
are not intended to replace the need for formal regulations. 
Thus, the Secretary is also required to provide quarterly 
updates on the status of the regulations.
    H.R. 299, as amended, would also address concerns of 
veterans who were stationed at U.S. bases in Thailand between 
January 9, 1962, and May 7, 1975, but are excluded from the 
current presumption. Section 4 of H.R. 299, as amended, would 
require the VA Secretary, in consultation with the Secretary of 
Defense, to submit a report within 180 days to the Committees 
on Veterans' Affairs of the House of Representatives and the 
Senate identifying the U.S. military installations located in 
Thailand where an herbicide agent was actively used and 
identify the period of such use.
    Moreover, H.R. 299, as amended, would require the Secretary 
to submit to the Committees on Veterans' Affairs of the House 
of Representatives and the Senate an update on the findings of 
VA's Follow-up Study of a National Cohort of Gulf War and Gulf 
Era Veterans. This study examines the health status of veterans 
who served in the Gulf War in 1990 and 1991 and the health of 
veterans who served in other areas during the same period.

VA's Home Loan Program

    First authorized by the Servicemember's Readjustment Act of 
1944, the VA Home Loan Guaranty program helps hundreds of 
thousands of servicemembers and veterans purchase their part of 
the American dream each year. In FY 2018, the VA Loan Guaranty 
Service guaranteed 610,513 loans at a cost of over $166 
billion.\13\ Section 3703 of title 38, U.S.C., sets the limit 
for the purchase price of a home loan that VA can guarantee. 
VA's maximum loan guaranty amount is calculated as a percentage 
of the Freddie Mac conforming loan limitation determined by the 
Federal Home Loan Mortgage Corporation Act\14\ which varies by 
location and zip code. Since in most cases VA's guaranty must 
be at least 25 percent of the loan, this means that VA's 
maximum loan guaranty amount is effectively capped at the 
Freddie Mac limit. For many veterans who are seeking to 
purchase a home in high cost areas, the Freddie Mac limit is 
too low for VA's zero-down payment loan program. This either 
forces the veteran not to use the VA program, or pay the loan 
principal down.\15\
---------------------------------------------------------------------------
    \13\Fiscal Year 2019 Budget Submission, U.S. Department of Veterans 
Affairs, Volume 3, ``Benefits and Burial Programs and Departmental 
Administration, page 222.
    \14\Section 1454(a)(2) of title 12, U.S.C.
    \15\Murray, Patrick, Deputy Director of the National Legislative 
Service for the Veterans of Foreign Wars, Written Statement to the 
House of Representatives Committee on Veterans' Affairs Subcommittee on 
Economic Opportunity Hearing on April 9, 2019 (``The price of real 
estate has significantly increased in recent years, but the amount VA 
is able to guarantee has not. Veterans in high cost-of-living areas are 
now forced to contribute costly upfront down payments to guarantee 
their home loans with VA. This barrier prohibits veterans from 
achieving their dreams of becoming homeowners.'').
---------------------------------------------------------------------------
    To address this issue and make the home loan benefit 
available to all veterans and servicemembers that qualify, 
Section 6 of this bill would amend section 3703 of title 38, 
U.S.C., to eliminate the maximum loan guaranty amount under the 
VA home loan program by eliminating the Freddie Mac limit for 
VA home loans and would make the maximum guaranty amount 25 
percent of the loan amount.\16\ The Committee is confident VA's 
current strict underwriting standards and low foreclosure rates 
will ensure that veterans still have the required credit and 
income to qualify for the loan, and that this change will not 
result in a significant increased amount of foreclosures.\17\
---------------------------------------------------------------------------
    \16\Kamin, John, Credentialing and Education Policy Associate for 
The American Legion, Written Statement to the House of Representatives 
Committee on Veterans' Affairs Subcommittee on Economic Opportunity 
Hearing on April 9, 2019 (``For example, a veteran purchasing a 1-
million-dollar home would have 25% ($181,631.25) of the maximum 
guaranteed amount of $726.525 backed by the government.'')
    \17\Id. (``Data suggests more expensive VA home loans have a 
smaller default rate.'')
---------------------------------------------------------------------------
    Section 3729 of title 38, U.S.C., requires certain users of 
VA's loan guaranty benefit to pay a funding fee. The amount of 
the funding fee varies based on an individual's active duty or 
reserve status, the amount of down payment brought forward, and 
the date of loan origination. The rates of funding fees 
(expressed as a percentage of the loan) have remained the same 
since 2004. The costs of the funding fee can be rolled into the 
life of the loan and can be waived if the servicemember has a 
service-connected disability. These fees reduce the subsidy 
cost associated with VA's guaranty of mortgage loans and have 
typically been viewed as a reasonable cost to the benefit 
gained by having VA guarantee a mortgage loan. This section 
would adjust the home loan fee for mortgages closed on or after 
January 1, 2020, through September 30, 2029, when the rates 
would be lowered to current rates. The proposed rates are 
listed below:

----------------------------------------------------------------------------------------------------------------
                                                                                 Proposed Rates
                     Down payment and Use                       Current Rates    From 1/1/2020,      Change in
                                                                                through 1/1/2022      Percent
----------------------------------------------------------------------------------------------------------------
No Money Down, 1st Use.......................................           2.15%              2.30%           0.15%
5% or more, 1st Use..........................................           1.50%              1.65%           0.15%
10% or more, 1st Use.........................................           1.25%              1.40%           0.15%
Subsequent Use...............................................           3.30%              3.60%           0.30%
----------------------------------------------------------------------------------------------------------------

    For loans that close on or after January 1, 2022, the 
current loan funding fee rates would be in effect until 
September 30, 2029. The Committee believes that these modest 
increases would have minimal impact on the home loan market and 
would not seriously limit a veteran or a servicemember's 
ability to use their home loan benefit.
    The section would also eliminate the current .25 percent 
premium that members of the National Guard and Reserve pay on 
top of current funding fees rates. The Committee believes this 
change would provide equity between the benefit provided to 
these servicemembers with veterans and active duty 
servicemembers. This section would also make servicemembers on 
active duty who have been awarded a Purple Heart exempt from 
the funding fee. These servicemembers are currently required to 
pay the funding fee, which the Committee believes 
disincentivizes them from using their home loan benefit. In 
most cases, the servicemember could separate from active duty 
and then file for disability compensation (presumably for the 
injury that led to the Purple Heart award). Because a service 
connected veteran is exempt from the funding fee, the 
discharged servicemember would receive the waiver. However, an 
active duty servicemember who has not yet been discharged, but 
has already received the Purple Heart, would not currently 
receive the waiver. H.R. 299, as amended, changes that. The 
Committee believes this change is important to help these 
servicemembers use their earned home loan benefit.
    Section 3731 of title 38, U.S.C., authorizes requirements 
and processes for the use of appraisals for VA-guaranteed home 
loans. Section 7 of H.R. 299, as amended, would amend section 
3731(b) of title 38, U.S.C., to clarify that a VA may permit a 
VA-approved appraiser to make an appraisal based on information 
collected from a third party or what is known as a desktop 
appraisal. This change would increase efficiency and timeliness 
in VA home loan appraisals, which would make it easier for 
veterans to use their home loan benefit.

                                Hearings

    On May 1, 2019, the Subcommittee on Disability Assistance 
and Memorial Affairs conducted a legislative hearing on various 
bills introduced during the 116th Congress, including a draft 
amendment in the nature of a substitute to H.R. 299.
    The following witnesses testified:
          The Honorable Mark Takano, U.S. House of 
        Representatives, 41st Congressional District of 
        California; The Honorable David P. Roe, U.S. House of 
        Representatives, 1st Congressional District of 
        Tennessee; The Honorable Conor Lamb, U.S. House of 
        Representatives, 17th Congressional District of 
        Pennsylvania; The Honorable Greg Steube, U.S. House of 
        Representatives, 17th District of Florida; The 
        Honorable Julia Brownley, U.S. House of 
        Representatives, 26th Congressional District of 
        Florida; Mr. Matthew Sullivan, Deputy Under Secretary 
        for Finance and Planning, National Cemetery 
        Administration; accompanied by Mr. Kevin Friel, Deputy 
        Director for Pension and Fiduciary, Veterans Benefits 
        Administration; Dr. Patricia Hastings, Deputy Chief 
        Consultant, Post Deployment Health Service, Veterans 
        Health; Mr. Derrick Curtis, Director, Software Testing 
        & 508, Enterprise Portfolio Management Division, Office 
        of Information Technology; Ms. Melanie Brunson, 
        Government Relations Officer, Blinded Veterans 
        Association; Mr. Karl R. Horst, Major General, U.S. 
        Army (Ret), President and Chief Executive Officer, 
        Congressional Medal of Honor Foundation; Ms. Allison 
        Adelle Hedge Coke, Distinguished Professor of Creative 
        Writing, University of California, Riverside; Mr. 
        Carlos Fuentes, Director, National Legislative Service, 
        Veterans of Foreign Wars; Mr. Rick Weidman, Executive 
        Director, Policy and Government Affairs, Vietnam 
        Veterans of America; Mr. Chanin Nuntavong, Veterans 
        Affairs and Rehabilitation Division Director, The 
        American Legion; Mr. Shane L. Liermann, Assistant 
        National Legislative Director, Disabled American 
        Veterans; Dr. David A. Butler, Director, Office of 
        Military and Veterans Health, Health and Medicine 
        Division, The National Academies of Sciences, 
        Engineering, and Medicine; Accompanied by Dr. Ourania 
        Kosti, Senior Program Officer, Principal Investigator, 
        Radiation Effects Research Foundation. The National 
        Academies of Sciences, Engineering, and Medicine.
    Statements for the record were submitted by:
          The Honorable Doug LaMalfa, U.S. House of 
        Representatives, First Congressional District of 
        California; Mr. John Wells, Executive Director, The 
        Military-Veterans Advocacy; Mr. Keith Kiefer, National 
        Commander, National Association of Atomic Veterans; Mr. 
        Robert Celestial, SGT, U.S. Army Retired (D.A.V.), 
        Veteran who participated in Enewetak Cleanup; Mr. Ken 
        Brownell, Veteran who participated in Enewetak Cleanup; 
        The American Federation of Government Employees, AFL-
        CIO.
    On April 9, 2019, the Subcommittee on Economic Opportunity 
held a legislative hearing on several bills pending before the 
Subcommittee including a draft bill which incorporated portions 
of section six and seven of H.R. 299, as amended.
    The following witnesses testified:
          Ms. Margarita Devlin, Principal Deputy Under 
        Secretary for Benefits, Veterans Benefits 
        Administration of the U.S. Department of Veterans 
        Affairs; Ms. Ashlynne Haycock, Senior Coordinator of 
        Education Support at the Tragedy Assistance Program for 
        Survivors; Mr. Patrick Murray, Deputy Director of 
        National Legislative Service at The Veterans of Foreign 
        Wars; Mr. John Kamin, Credentialing and Education 
        Policy Association of National Veterans Employment and 
        Education Division at The American Legion; Ms. Rebecca 
        Burgess, Program Manager of Citizen Project at American 
        Enterprise Institute.
    Statements for the record were submitted by:
          Mr. Jeremy M. Villanueva, Associate National 
        Legislative Director at Disabled American Veterans; 
        American Federation of Government Employees, AFL-CIO.

                       Subcommittee Consideration

    H.R. 299 was not considered before the Subcommittee.

                        Committee Consideration

    On May 8, 2019, the Full Committee met in an open markup 
session, a quorum being present, and ordered H.R. 299, as 
amended, favorably reported to the House of Representatives by 
voice vote. During consideration of the bill, the following 
amendments were considered and agreed to by voice vote:
          An amendment in the nature of a substitute offered by 
        Representative Mark Takano of California, the Chairman 
        of the full committee, that would allow VA to issue 
        guidance regarding the implementation of benefits for 
        Korean DMZ veterans and certain children of Thailand 
        veterans, and make adjustments to home loan fees.
          An amendment to the amendment in the nature of a 
        substitute offered by Representative David P. Roe of 
        Tennessee, the Ranking Member of the full committee, 
        that would make improvements to VA's Home Loan Guaranty 
        program to ensure that veterans can use their home loan 
        benefit in high-cost areas and clarify the rules for 
        active duty servicemembers who receive a Purple Heart 
        award are exempt from home loan fees.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        
                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, there were no recorded votes 
taken on amendments or in connection with ordering H.R. 299, as 
amended, reported to the House. A motion by Ranking Member 
David P. Roe of Tennessee to report H.R. 299, as amended, 
favorably to the House of Representatives was adopted 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.

               New Budget Authority and CBO Cost Estimate
                        Committee Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has requested 
but not received a cost estimate for this bill from the 
Director of Congressional Budget Office. The Committee has 
requested but not received from the Director of the 
Congressional Budget Office a statement as to whether this bill 
contains any new budget authority, spending authority, credit 
authority, or an increase or decrease in revenues or tax 
expenditures.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are to establish a presumption of service 
connection for diseases associated with exposure to certain 
herbicide agents to Blue Water Navy veterans who served 
offshore of the Republic of Vietnam and to some veterans who 
served in or near the Korean DMZ between September 1, 1967, and 
August 31, 1971; to expand eligibility for benefits to certain 
children of Vietnam era veterans who served in Thailand; to 
submit reports to the Committees on Veterans' Affairs of the 
House of Representatives and the Senate regarding claims for 
compensation under this act, the use of herbicide agents in 
Thailand between January 9, 1962, and May 7, 1975, and Gulf War 
Illness; and, to improve veterans' and servicemembers' access 
to their home loan benefits.

              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. 299, 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.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 299, 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. 
299, as amended.

                   Constitutional Authority Statement

    Pursuant to Article I, section 8 of the United States 
Constitution, H.R. 299, as amended, 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 H.R. 299, as amended, 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 clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that no provision 
of H.R. 299, 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.

             Section-by-Section Analysis of the Legislation


Sec. 1. Short title

    Section 1 states H.R. 299, as amended, may be cited as the 
``Blue Water Navy Vietnam Veterans Act of 2019.''

Sec. 2. Clarification of presumptions of exposure for veterans who 
        served in vicinity of Republic of Vietnam

    Section 2 would:
    (a) Extend the presumption of exposure to herbicides for 
purposes of entitlement to service connection for certain 
diseases linked to exposure to herbicides to BWN veterans who 
served offshore of the Republic of Vietnam between January 9, 
1962, and May 7, 1975. Veterans who filed a claim for VA 
benefits for diseases and conditions VA recognizes as 
associated with exposure to herbicides for benefits under this 
Act between September 25, 1985, and January 1, 2020, but were 
denied benefits, may file a new claim. The effective date for 
the claim would be the date the veteran filed the first claim. 
This section would also define the term ``herbicide agent.''
    (b) Make a clerical amendment.
    (c) Allows the Secretary to issue guidance to implement 
this section prior to prescribing new regulations, subject to a 
reporting requirement regarding the status of those 
regulations.
    (d) Require the Secretary to conduct outreach to veterans 
who served offshore of the Republic of Vietnam during the 
period beginning on January 9, 1962, and ending on May 7, 1975, 
and who filed a claim for benefits between September 25, 1985, 
and January 1, 2020, of the ability to submit a new claim.
    (e) Require VA to submit reports to the Committees on 
Veterans' Affairs of the House of Representatives and the 
Senate on claims for disability compensation under this 
section.
    (f) Amend section 1710(e)(4) to establish eligibility for 
hospital care, medical services, and nursing home care to 
certain veterans who served offshore of the Republic of 
Vietnam.
    (g) Establish the effective date of this section as January 
1, 2020.

Sec. 3. Presumption of herbicide exposure for certain veterans who 
        served in Korea

    Section 3 would:
    (a) Extend the presumption of herbicide exposure for 
purposes of entitlement to service connection for certain 
diseases to veterans who served in or near the Korean DMZ 
between September 1, 1967, and August 31, 1971. This section 
would also define the terms ``diseases'' and ``herbicide 
agent''
    (b) Make a clerical amendment.
    (c) Allows the Secretary to issue guidance to implement 
this section prior to prescribing new regulations, subject to a 
reporting requirement regarding the status of those 
regulations.
    (d) Establish the effective date of this section as January 
1, 2020.

Sec. 4. Benefits for children of certain Thailand service veterans born 
        with spina bifida

    Section 4 would:
    (a) Extend eligibility for health care, vocational training 
and rehabilitation, and monetary allowance to a child who was 
born with spina bifida, if at least one biological parent of 
such child was a veteran who served in Thailand between January 
9, 1962, and May 7, 1975, and the Secretary determined that at 
least one of the parents may have been exposed to an herbicide 
agent during such service in Thailand.
    (b) Make conforming amendments.
    (c) Make clerical amendments.
    (d) Allows the Secretary to issue guidance to implement 
this section prior to prescribing new regulations, subject to a 
reporting requirement regarding the status of those 
regulations.
    (e) Require, not later than 180 days after the date of 
enactment of this Act, VA, in consultation with DOD, to submit 
a report to the Committees on Veterans' Affairs of the House of 
Representatives and the Senate identifying the military 
installations located in Thailand between January 9, 1962, and 
May 7, 1975, at which an herbicide agent was actively used and 
the period of such use.
    (f) Establish the effective date of this section as January 
1, 2020.

Sec. 5. Report on certain Gulf War illness study

    Section 5 would require, not later than 180 days after the 
date of enactment of this Act, VA to submit to the Committees 
on Veterans' Affairs of the House of Representatives and the 
Senate a report on the Follow-up Study of a National Cohort of 
Gulf War and Gulf Era Veterans under VA's epidemiology program.

Sec. 6. Loans guaranteed under home loan program of Department of 
        Veterans Affairs

    Section 6 would:
    (a) Amend section 3703(a) of title 38, U.S.C., to eliminate 
the limitation of use of the VA home loan program to the 
Freddie Mac Conforming loan limit as set forth by section 
1454(a)(2) of title 12, U.S.C.
    (b) Amend section 3729(b)(2) of title 38, U.S.C., to 
provide temporary increases to home loan funding rates through 
January 1, 2022. This section would also eliminate the 
additional .25 percent funding fee in place for members of the 
National Guard and Reserve.
    (c) Provide waivers of home loan fees for active duty 
servicemembers who were awarded the Purple Heart.
    (d) Establish the effective date of this section as January 
1, 2020.
    (e) Authorize, notwithstanding section 501 of title 38, 
U.S.C., VA to issue guidance for implementing this section in 
advance of regulations.

Sec. 7. Information gathering for Department of Veterans Affairs home 
        loan appraisals

    Section 7 would:
    (a) Amend section 3731(b) of title 38, U.S.C., to authorize 
VA to permit a VA approved appraiser to complete an appraisal 
for a VA-backed loan based solely on information gathered by a 
third party.
    (b) States that the amendments made by this section would 
go into effect on January 1, 2020.
    (c) Authorize, notwithstanding section 501 of title 38, 
U.S.C., VA to issue guidance for implementing this section in 
advance of regulations.

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

         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 11--COMPENSATION FOR SERVICE-CONNECTED DISABILITY OR DEATH

           *       *       *       *       *       *       *



SUBCHAPTER II--WARTIME DISABILITY COMPENSATION

           *       *       *       *       *       *       *



Sec.
1110. Basic entitlement.
     * * * * * * *
1116A. Presumptions of service connection for veterans who served 
          offshore of the Republic of Vietnam.
1116B. Presumption of herbicide exposure for certain veterans who served 
          in Korea.

           *       *       *       *       *       *       *


Sec. 1116A. Presumptions of service connection for veterans who served 
                    offshore of the Republic of Vietnam

  (a) Service Connection.--For the purposes of section 1110 of 
this title, and subject to section 1113 of this title, a 
disease covered by section 1116 of this title becoming manifest 
as specified in that section in a veteran who, during active 
military, naval, or air service, served offshore of the 
Republic of Vietnam during the period beginning on January 9, 
1962, and ending on May 7, 1975, shall be considered to have 
been incurred in or aggravated by such service, notwithstanding 
that there is no record of evidence of such disease during the 
period of such service.
  (b) Exposure.--A veteran who, during active military, naval, 
or air service, served offshore of the Republic of Vietnam 
during the period beginning on January 9, 1962, and ending on 
May 7, 1975, shall be presumed to have been exposed during such 
service to an herbicide agent unless there is affirmative 
evidence to establish that the veteran was not exposed to any 
such agent during that service.
  (c) Effective Date of Award.--(1) Except as provided by 
paragraph (2), the effective date of an award under this 
section shall be determined in accordance with section 5110 of 
this title.
  (2)(A) Notwithstanding subsection (g) of section 5110 of this 
title, the Secretary shall determine the effective date of an 
award based on a claim under this section for an individual 
described in subparagraph (B) by treating the date on which the 
individual filed the prior claim specified in clause (i) of 
such subparagraph as the date on which the individual filed the 
claim so awarded under this section.
  (B) An individual described in this subparagraph is a 
veteran, or a survivor of a veteran, who meets the following 
criteria:
          (i) The veteran or survivor submitted a claim for 
        disability compensation on or after September 25, 1985, 
        and before January 1, 2020, for a disease covered by 
        this section, and the claim was denied by reason of the 
        claim not establishing that the disease was incurred or 
        aggravated by the service of the veteran.
          (ii) The veteran or survivor submits a claim for 
        disability compensation on or after January 1, 2020, 
        for the same condition covered by the prior claim under 
        clause (i), and the claim is approved pursuant to this 
        section.
  (d) Determination of Offshore.--Notwithstanding any other 
provision of law, for purposes of this section, the Secretary 
shall treat a location as being offshore of Vietnam if the 
location is not more than 12 nautical miles seaward of a line 
commencing on the southwestern demarcation line of the waters 
of Vietnam and Cambodia and intersecting the following points:


 
----------------------------------------------------------------------------------------------------------------
                                                                                     Latitude
                             Points Geographic Names                                   North      Longitude East
----------------------------------------------------------------------------------------------------------------
At Hon Nhan Island, Tho Chu Archipelago Kien Giang Province                              915.0          10327.0
At Hon Da Island southeast of Hon Khoai Island Minh Hai Province                         822.8          10452.4
At Tai Lon Islet, Con Dao Islet in Con Dao-Vung Toa Special Sector                       837.8          10637.5
At Bong Lai Islet, Con Dao Islet                                                         838.9          10640.3
At Bay Canh Islet, Con Dao Islet                                                         839.7          10642.1
At Hon Hai Islet (Phu Qui group of islands) Thuan Hai Province                           958.0           1095.0
At Hon Doi Islet, Thuan Hai Province                                                    1239.0          10928.0
At Dai Lanh point, Phu Khanh Province                                                   1253.8          10927.2
At Ong Can Islet, Phu Khanh Province                                                    1354.0          10921.0
At Ly Son Islet, Nghia Binh Province                                                    1523.1          109 9.0
At Con Co Island, Binh Tri Thien Province                                               1710.0          10720.6
----------------------------------------------------------------------------------------------------------------

  (e) Herbicide Agent.--In this section, the term ``herbicide 
agent'' has the meaning given that term in section 1116(a)(3) 
of this title.

Sec. 1116B. Presumption of herbicide exposure for certain veterans who 
                    served in Korea

  (a) Presumption of Service-Connection.--(1) For the purposes 
of section 1110 of this title, and subject to section 1113 of 
this title, a disease specified in subsection (b) that becomes 
manifest as specified in that subsection in a veteran described 
in paragraph (2) shall be considered to have been incurred or 
aggravated in the line of duty in the active military, naval, 
or air service, notwithstanding that there is no record of 
evidence of such disease during the period of such service.
  (2) A veteran described in this paragraph is a veteran who, 
during active military, naval, or air service, served in or 
near the Korean Demilitarized Zone (DMZ), during the period 
beginning on September 1, 1967, and ending on August 31, 1971.
  (b) Diseases.--A disease specified in this subsection is--
          (1) a disease specified in paragraph (2) of 
        subsection (a) of section 1116 of this title that 
        becomes manifest as specified in that paragraph; or
          (2) any additional disease that--
                  (A) the Secretary determines in regulations 
                warrants a presumption of service-connection by 
                reason of having positive association with 
                exposure to an herbicide agent; and
                  (B) becomes manifest within any period 
                prescribed in such regulations.
  (c) Herbicide Agent.--For purposes of this section, the term 
``herbicide agent'' has the meaning given such term in section 
1821(d) of this title.

           *       *       *       *       *       *       *


CHAPTER 17--HOSPITAL, NURSING HOME, DOMICILIARY, AND MEDICAL CARE

           *       *       *       *       *       *       *



SUBCHAPTER II--HOSPITAL, NURSING HOME, OR DOMICILIARY CARE AND MEDICAL 
                               TREATMENT


Sec. 1710. Eligibility for hospital, nursing home, and domiciliary care

  (a)(1) The Secretary (subject to paragraph (4)) shall furnish 
hospital care and medical services which the Secretary 
determines to be needed--
          (A) to any veteran for a service-connected 
        disability; and
          (B) to any veteran who has a service-connected 
        disability rated at 50 percent or more.
  (2) The Secretary (subject to paragraph (4)) shall furnish 
hospital care and medical services, and may furnish nursing 
home care, which the Secretary determines to be needed to any 
veteran--
          (A) who has a compensable service-connected 
        disability rated less than 50 percent or, with respect 
        to nursing home care during any period during which the 
        provisions of section 1710A(a) of this title are in 
        effect, a compensable service-connected disability 
        rated less than 70 percent;
          (B) whose discharge or release from active military, 
        naval, or air service was for a disability that was 
        incurred or aggravated in the line of duty;
          (C) who is in receipt of, or who, but for a 
        suspension pursuant to section 1151 of this title (or 
        both a suspension and the receipt of retired pay), 
        would be entitled to disability compensation, but only 
        to the extent that such veteran's continuing 
        eligibility for such care is provided for in the 
        judgment or settlement provided for in such section;
          (D) who is a former prisoner of war, who was awarded 
        the medal of honor under section 7271, 8291, or 9271 of 
        title 10 or section 491 of title 14, or who was awarded 
        the Purple Heart;
          (E) who is a veteran of the Mexican border period or 
        of World War I;
          (F) who was exposed to a toxic substance, radiation, 
        or other conditions, as provided in subsection (e); or
          (G) who is unable to defray the expenses of necessary 
        care as determined under section 1722(a) of this title.
  (3) In the case of a veteran who is not described in 
paragraphs (1) and (2), the Secretary may, to the extent 
resources and facilities are available and subject to the 
provisions of subsections (f) and (g), furnish hospital care, 
medical services, and nursing home care which the Secretary 
determines to be needed.
  (4) The requirement in paragraphs (1) and (2) that the 
Secretary furnish hospital care and medical services, the 
requirement in section 1710A(a) of this title that the 
Secretary provide nursing home care, the requirement in section 
1710B of this title that the Secretary provide a program of 
extended care services, and the requirement in section 1745 of 
this title to provide nursing home care and prescription 
medicines to veterans with service-connected disabilities in 
State homes shall be effective in any fiscal year only to the 
extent and in the amount provided in advance in appropriations 
Acts for such purposes.
  (5) During any period during which the provisions of section 
1710A(a) of this title are not in effect, the Secretary may 
furnish nursing home care which the Secretary determines is 
needed to any veteran described in paragraph (1), with the 
priority for such care on the same basis as if provided under 
that paragraph.
  (b)(1) The Secretary may furnish to a veteran described in 
paragraph (2) of this subsection such domiciliary care as the 
Secretary determines is needed for the purpose of the 
furnishing of medical services to the veteran.
  (2) This subsection applies in the case of the following 
veterans:
          (A) Any veteran whose annual income (as determined 
        under section 1503 of this title) does not exceed the 
        maximum annual rate of pension that would be applicable 
        to the veteran if the veteran were eligible for pension 
        under section 1521(d) of this title.
          (B) Any veteran who the Secretary determines has no 
        adequate means of support.
  (c) While any veteran is receiving hospital care or nursing 
home care in any Department facility, the Secretary may, within 
the limits of Department facilities, furnish medical services 
to correct or treat any non-service-connected disability of 
such veteran, in addition to treatment incident to the 
disability for which such veteran is hospitalized, if the 
veteran is willing, and the Secretary finds such services to be 
reasonably necessary to protect the health of such veteran. The 
Secretary may furnish dental services and treatment, and 
related dental appliances, under this subsection for a non-
service-connected dental condition or disability of a veteran 
only (1) to the extent that the Secretary determines that the 
dental facilities of the Department to be used to furnish such 
services, treatment, or appliances are not needed to furnish 
services, treatment, or appliances for dental conditions or 
disabilities described in section 1712(a) of this title, or (2) 
if (A) such non-service-connected dental condition or 
disability is associated with or aggravating a disability for 
which such veteran is receiving hospital care, or (B) a 
compelling medical reason or a dental emergency requires 
furnishing dental services, treatment, or appliances (excluding 
the furnishing of such services, treatment, or appliances of a 
routine nature) to such veteran during the period of 
hospitalization under this section.
  (d) In no case may nursing home care be furnished in a 
hospital not under the direct jurisdiction of the Secretary 
except as provided in section 1720 of this title.
  (e)(1)(A) A Vietnam-era herbicide-exposed veteran is eligible 
(subject to paragraph (2)) for hospital care, medical services, 
and nursing home care under subsection (a)(2)(F) for any 
disability, notwithstanding that there is insufficient medical 
evidence to conclude that such disability may be associated 
with such exposure.
  (B) A radiation-exposed veteran is eligible for hospital 
care, medical services, and nursing home care under subsection 
(a)(2)(F) for any disease suffered by the veteran that is--
          (i) a disease listed in section 1112(c)(2) of this 
        title; or
          (ii) any other disease for which the Secretary, based 
        on the advice of the Advisory Committee on 
        Environmental Hazards, determines that there is 
        credible evidence of a positive association between 
        occurrence of the disease in humans and exposure to 
        ionizing radiation.
  (C) Subject to paragraph (2) of this subsection, a veteran 
who served on active duty between August 2, 1990, and November 
11, 1998, in the Southwest Asia theater of operations during 
the Persian Gulf War is eligible for hospital care, medical 
services, and nursing home care under subsection (a)(2)(F) for 
any disability, notwithstanding that there is insufficient 
medical evidence to conclude that such disability may be 
associated with such service.
  (D) Subject to paragraphs (2) and (3), a veteran who served 
on active duty in a theater of combat operations (as determined 
by the Secretary in consultation with the Secretary of Defense) 
during a period of war after the Persian Gulf War, or in combat 
against a hostile force during a period of hostilities after 
November 11, 1998, is eligible for hospital care, medical 
services, and nursing home care under subsection (a)(2)(F) for 
any illness, notwithstanding that there is insufficient medical 
evidence to conclude that such condition is attributable to 
such service.
  (E) Subject to paragraph (2), a veteran who participated in a 
test conducted by the Department of Defense Deseret Test Center 
as part of a program for chemical and biological warfare 
testing from 1962 through 1973 (including the program 
designated as ``Project Shipboard Hazard and Defense (SHAD)'' 
and related land-based tests) is eligible for hospital care, 
medical services, and nursing home care under subsection 
(a)(2)(F) for any illness, notwithstanding that there is 
insufficient medical evidence to conclude that such illness is 
attributable to such testing.
  (F) Subject to paragraph (2), a veteran who served on active 
duty in the Armed Forces at Camp Lejeune, North Carolina, for 
not fewer than 30 days during the period beginning on August 1, 
1953, and ending on December 31, 1987, is eligible for hospital 
care and medical services under subsection (a)(2)(F) for any of 
the following illnesses or conditions, notwithstanding that 
there is insufficient medical evidence to conclude that such 
illnesses or conditions are attributable to such service:
          (i) Esophageal cancer.
          (ii) Lung cancer.
          (iii) Breast cancer.
          (iv) Bladder cancer.
          (v) Kidney cancer.
          (vi) Leukemia.
          (vii) Multiple myeloma.
          (viii) Myelodysplastic syndromes.
          (ix) Renal toxicity.
          (x) Hepatic steatosis.
          (xi) Female infertility.
          (xii) Miscarriage.
          (xiii) Scleroderma.
          (xiv) Neurobehavioral effects.
          (xv) Non-Hodgkin's lymphoma.
  (2)(A) In the case of a veteran described in paragraph 
(1)(A), hospital care, medical services, and nursing home care 
may not be provided under subsection (a)(2)(F) with respect 
to--
          (i) a disability that is found, in accordance with 
        guidelines issued by the Under Secretary for Health, to 
        have resulted from a cause other than an exposure 
        described in paragraph (4)(A)(ii); or
          (ii) a disease for which the National Academy of 
        Sciences, in a report issued in accordance with section 
        3 of the Agent Orange Act of 1991, has determined that 
        there is limited or suggestive evidence of the lack of 
        a positive association between occurrence of the 
        disease in humans and exposure to a herbicide agent.
  (B) In the case of a veteran described in subparagraph (C), 
(D), (E), or (F) of paragraph (1), hospital care, medical 
services, and nursing home care may not be provided under 
subsection (a)(2)(F) with respect to a disability that is 
found, in accordance with guidelines issued by the Under 
Secretary for Health, to have resulted from a cause other than 
the service or testing described in such subparagraph.
  (3) In the case of care for a veteran described in paragraph 
(1)(D), hospital care, medical services, and nursing home care 
may be provided under or by virtue of subsection (a)(2)(F) only 
during the following periods:
          (A) Except as provided by subparagraph (B), with 
        respect to a veteran described in paragraph (1)(D) who 
        is discharged or released from the active military, 
        naval, or air service after January 27, 2003, the five-
        year period beginning on the date of such discharge or 
        release.
          (B) With respect to a veteran described in paragraph 
        (1)(D) who is discharged or released from the active 
        military, naval, or air service after January 1, 2009, 
        and before January 1, 2011, but did not enroll to 
        receive such hospital care, medical services, or 
        nursing home care pursuant to such paragraph during the 
        five-year period described in subparagraph (A), the 
        one-year period beginning on the date of the enactment 
        of the Clay Hunt Suicide Prevention for American 
        Veterans Act.
          (C) With respect to a veteran described in paragraph 
        (1)(D) who is discharged or released from the active 
        military, naval, or air service on or before January 
        27, 2003, and did not enroll in the patient enrollment 
        system under section 1705 of this title on or before 
        such date, the three-year period beginning on January 
        27, 2008.
  (4) For purposes of this subsection--
          (A) The term ``Vietnam-era herbicide-exposed 
        veteran'' means a veteran (i) who served on active duty 
        in the Republic of Vietnam (including offshore of such 
        Republic as described in section 1116A(d) of this 
        title) during the period beginning on January 9, 1962, 
        and ending on May 7, 1975, and (ii) who the Secretary 
        finds may have been exposed during such service to 
        dioxin or was exposed during such service to a toxic 
        substance found in a herbicide or defoliant used for 
        military purposes during such period.
          (B) The term ``radiation-exposed veteran'' has the 
        meaning given that term in section 1112(c)(3) of this 
        title.
  (5) When the Secretary first provides care for veterans using 
the authority provided in paragraph (1)(D), the Secretary shall 
establish a system for collection and analysis of information 
on the general health status and health care utilization 
patterns of veterans receiving care under that paragraph. Not 
later than 18 months after first providing care under such 
authority, the Secretary shall submit to Congress a report on 
the experience under that authority. The Secretary shall 
include in the report any recommendations of the Secretary for 
extension of that authority.
  (f)(1) The Secretary may not furnish hospital care or nursing 
home care (except if such care constitutes hospice care) under 
this section to a veteran who is eligible for such care under 
subsection (a)(3) of this section unless the veteran agrees to 
pay to the United States the applicable amount determined under 
paragraph (2) or (4) of this subsection.
  (2) A veteran who is furnished hospital care or nursing home 
care under this section and who is required under paragraph (1) 
of this subsection to agree to pay an amount to the United 
States in order to be furnished such care shall be liable to 
the United States for an amount equal to--
          (A) the lesser of--
                  (i) the cost of furnishing such care, as 
                determined by the Secretary; or
                  (ii) the amount determined under paragraph 
                (3) of this subsection; and
          (B) before September 30, 2020, an amount equal to $10 
        for every day the veteran receives hospital care and $5 
        for every day the veteran receives nursing home care.
  (3)(A) In the case of hospital care furnished during any 365-
day period, the amount referred to in paragraph (2)(A)(ii) of 
this subsection is--
          (i) the amount of the inpatient Medicare deductible, 
        plus
          (ii) one-half of such amount for each 90 days of care 
        (or fraction thereof) after the first 90 days of such 
        care during such 365-day period.
  (B) In the case of nursing home care furnished during any 
365-day period, the amount referred to in paragraph (2)(A)(ii) 
of this subsection is the amount of the inpatient Medicare 
deductible for each 90 days of such care (or fraction thereof) 
during such 365-day period.
  (C)(i) Except as provided in clause (ii) of this 
subparagraph, in the case of a veteran who is admitted for 
nursing home care under this section after being furnished, 
during the preceding 365-day period, hospital care for which 
the veteran has paid the amount of the inpatient Medicare 
deductible under this subsection and who has not been furnished 
90 days of hospital care in connection with such payment, the 
veteran shall not incur any liability under paragraph (2) of 
this subsection with respect to such nursing home care until--
          (I) the veteran has been furnished, beginning with 
        the first day of such hospital care furnished in 
        connection with such payment, a total of 90 days of 
        hospital care and nursing home care; or
          (II) the end of the 365-day period applicable to the 
        hospital care for which payment was made,
        whichever occurs first.
  (ii) In the case of a veteran who is admitted for nursing 
home care under this section after being furnished, during any 
365-day period, hospital care for which the veteran has paid an 
amount under subparagraph (A)(ii) of this paragraph and who has 
not been furnished 90 days of hospital care in connection with 
such payment, the amount of the liability of the veteran under 
paragraph (2) of this subsection with respect to the number of 
days of such nursing home care which, when added to the number 
of days of such hospital care, is 90 or less, is the difference 
between the inpatient Medicare deductible and the amount paid 
under such subparagraph until--
          (I) the veteran has been furnished, beginning with 
        the first day of such hospital care furnished in 
        connection with such payment, a total of 90 days of 
        hospital care and nursing home care; or
          (II) the end of the 365-day period applicable to the 
        hospital care for which payment was made,
whichever occurs first.
  (D) In the case of a veteran who is admitted for hospital 
care under this section after having been furnished, during the 
preceding 365-day period, nursing home care for which the 
veteran has paid the amount of the inpatient Medicare 
deductible under this subsection and who has not been furnished 
90 days of nursing home care in connection with such payment, 
the veteran shall not incur any liability under paragraph (2) 
of this subsection with respect to such hospital care until--
          (i) the veteran has been furnished, beginning with 
        the first day of such nursing home care furnished in 
        connection with such payment, a total of 90 days of 
        nursing home care and hospital care; or
          (ii) the end of the 365-day period applicable to the 
        nursing home care for which payment was made,
whichever occurs first.
  (E) A veteran may not be required to make a payment under 
this subsection for hospital care or nursing home care 
furnished under this section during any 90-day period in which 
the veteran is furnished medical services under paragraph (3) 
of subsection (a) to the extent that such payment would cause 
the total amount paid by the veteran under this subsection for 
hospital care and nursing home care furnished during that 
period and under subsection (g) for medical services furnished 
during that period to exceed the amount of the inpatient 
Medicare deductible in effect on the first day of such period.
  (F) A veteran may not be required to make a payment under 
this subsection or subsection (g) for any days of care in 
excess of 360 days of care during any 365-calendar-day period.
  (4) In the case of a veteran covered by this subsection who 
is also described by section 1705(a)(7) of this title, the 
amount for which the veteran shall be liable to the United 
States for hospital care under this subsection shall be an 
amount equal to 20 percent of the total amount for which the 
veteran would otherwise be liable for such care under 
subparagraphs (2)(B) and (3)(A) but for this paragraph.
  (5) For the purposes of this subsection, the term ``inpatient 
Medicare deductible'' means the amount of the inpatient 
hospital deductible in effect under section 1813(b) of the 
Social Security Act (42 U.S.C. 1395e(b)) on the first day of 
the 365-day period applicable under paragraph (3) of this 
subsection.
  (g)(1) The Secretary may not furnish medical services (except 
if such care constitutes hospice care) under subsection (a) of 
this section (including home health services under section 1717 
of this title) to a veteran who is eligible for hospital care 
under this chapter by reason of subsection (a)(3) of this 
section unless the veteran agrees to pay to the United States 
in the case of each outpatient visit the applicable amount or 
amounts established by the Secretary by regulation.
  (2) A veteran who is furnished medical services under 
subsection (a) of this section and who is required under 
paragraph (1) of this subsection to agree to pay an amount to 
the United States in order to be furnished such services shall 
be liable to the United States, in the case of each visit in 
which such services are furnished to the veteran, for an amount 
which the Secretary shall establish by regulation.
  (3) This subsection does not apply with respect to the 
following:
          (A) Home health services under section 1717 of this 
        title to the extent that such services are for 
        improvements and structural alterations.
          (B) Education on the use of opioid antagonists to 
        reverse the effects of overdoses of specific 
        medications or substances.
  (h) Nothing in this section requires the Secretary to furnish 
care to a veteran to whom another agency of Federal, State, or 
local government has a duty under law to provide care in an 
institution of such government.

           *       *       *       *       *       *       *


CHAPTER 18--BENEFITS FOR CHILDREN OF VIETNAM VETERANS AND CERTAIN OTHER 
VETERANS

           *       *       *       *       *       *       *



 [SUBCHAPTER III--CHILDREN OF CERTAIN KOREA SERVICE VETERANS BORN WITH 
                              SPINA BIFIDA]

SUBCHAPTER III--CHILDREN OF CERTAIN KOREA AND THAILAND SERVICE VETERANS 
                         BORN WITH SPINA BIFIDA

1821. Benefits for children of certain Korea service veterans born with 
          spina bifida.
1822. Benefits for children of certain Thailand service veterans born 
          with spina bifida.

           *       *       *       *       *       *       *


SUBCHAPTER III--CHILDREN OF CERTAIN KOREA AND THAILAND SERVICE VETERANS 
BORN WITH SPINA BIFIDA

           *       *       *       *       *       *       *



Sec. 1822. Benefits for children of certain Thailand service veterans 
                    born with spina bifida

  (a) Benefits Authorized.--The Secretary may provide to any 
child of a veteran of covered service in Thailand who is 
suffering from spina bifida the health care, vocational 
training and rehabilitation, and monetary allowance required to 
be paid to a child of a Vietnam veteran who is suffering from 
spina bifida under subchapter I of this chapter as if such 
child of a veteran of covered service in Thailand were a child 
of a Vietnam veteran who is suffering from spina bifida under 
such subchapter.
  (b) Spina Bifida Conditions Covered.--This section applies 
with respect to all forms and manifestations of spina bifida, 
except spina bifida occulta.
  (c) Veteran of Covered Service in Thailand.--For purposes of 
this section, a veteran of covered service in Thailand is any 
individual, without regard to the characterization of that 
individual's service, who--
          (1) served in the active military, naval, or air 
        service in Thailand, as determined by the Secretary in 
        consultation with the Secretary of Defense, during the 
        period beginning on January 9, 1962, and ending on May 
        7, 1975; and
          (2) is determined by the Secretary, in consultation 
        with the Secretary of Defense, to have been exposed to 
        a herbicide agent during such service in Thailand.
  (d) Herbicide Agent.--For purposes of this section, the term 
``herbicide agent'' means a chemical in a herbicide used in 
support of United States and allied military operations in 
Thailand, as determined by the Secretary in consultation with 
the Secretary of Defense, during the period beginning on 
January 9, 1962, and ending on May 7, 1975.

                   SUBCHAPTER IV--GENERAL PROVISIONS


Sec. 1831. Definitions

  In this chapter:
          (1) The term ``child'' means the following:
                  (A) For purposes of subchapters I and II of 
                this chapter, an individual, regardless of age 
                or marital status, who--
                          (i) is the natural child of a Vietnam 
                        veteran; and
                          (ii) was conceived after the date on 
                        which that veteran first entered the 
                        Republic of Vietnam during the Vietnam 
                        era.
                  (B) For purposes of [subchapter III of this 
                chapter] section 1821 of this title, an 
                individual, regardless of age or marital 
                status, who--
                          (i) is the natural child of a veteran 
                        of covered service in Korea (as 
                        determined for purposes of [section 
                        1821 of this title] that section); and
                          (ii) was conceived after the date on 
                        which that veteran first entered 
                        service described in subsection (c) of 
                        that section.
                  (C) For purposes of section 1822 of this 
                title, an individual, regardless of age or 
                marital status, who--
                          (i) is the natural child of a veteran 
                        of covered service in Thailand (as 
                        determined for purposes of that 
                        section); and
                          (ii) was conceived after the date on 
                        which that veteran first entered 
                        service described in subsection (c) of 
                        that section.
          (2) The term ``Vietnam veteran'' means an individual 
        who performed active military, naval, or air service in 
        the Republic of Vietnam during the Vietnam era, without 
        regard to the characterization of that individual's 
        service.
          (3) The term ``Vietnam era'' with respect to--
                  (A) subchapter I of this chapter, means the 
                period beginning on January 9, 1962, and ending 
                on May 7, 1975; and
                  (B) subchapter II of this chapter, means the 
                period beginning on February 28, 1961, and 
                ending on May 7, 1975.

           *       *       *       *       *       *       *


PART III--READJUSTMENT AND RELATED BENEFITS

           *       *       *       *       *       *       *


CHAPTER 37--HOUSING AND SMALL BUSINESS LOANS

           *       *       *       *       *       *       *



SUBCHAPTER I--GENERAL

           *       *       *       *       *       *       *



Sec. 3703. Basic provisions relating to loan guaranty and insurance

  (a)(1)(A) Any loan to a veteran eligible for benefits under 
this chapter, if made for any of the purposes specified in 
section 3710 of this title and in compliance with the 
provisions of this chapter, is automatically guaranteed by the 
United States in an amount not to exceed the lesser of--
          (i)(I) in the case of any loan of not more than 
        $45,000, 50 percent of the loan;
          (II) in the case of any loan of more than $45,000, 
        but not more than $56,250, $22,500;
          (III) except as provided in subclause (IV) of this 
        clause, in the case of any loan of more than $56,250, 
        the lesser of $36,000 or 40 percent of the loan; or
          (IV) in the case of any loan of more than $144,000 
        for a purpose specified in clause (1), (2), (3), (5), 
        (6), or (8) of section 3710(a) of this title, [the 
        lesser of the maximum guaranty amount (as defined in 
        subparagraph (C)) or] 25 percent of the loan; or
          (ii) the maximum amount of guaranty entitlement 
        available to the veteran as specified in [subparagraph 
        (B) of this paragraph] subparagraph (B) or (C).
  (B) [The maximum] With respect to loans described in 
subclauses (I), (II), or (III) of subparagraph (A)(i), the 
maximum amount of guaranty entitlement available to a veteran 
for purposes specified in section 3710 of this title shall be 
$36,000, [or in the case of a loan described in subparagraph 
(A)(i)(IV) of this paragraph, the maximum guaranty amount (as 
defined in subparagraph (C)),] reduced by the amount of 
entitlement previously used by the veteran under this chapter 
and not restored as a result of the exclusion in section 
3702(b) of this title.
  [(C) In this paragraph, the term ``maximum guaranty amount'' 
means the dollar amount that is equal to 25 percent of the 
Freddie Mac conforming loan limit limitation determined under 
section 305(a)(2) of the Federal Home Loan Mortgage Corporation 
Act (12 U.S.C. 1454(a)(2)) for a single-family residence, as 
adjusted for the year involved.]
  (C)(i) With respect to loans described in subclause (IV) of 
subparagraph (A)(i) made to a veteran not covered by clause 
(ii), the maximum amount of guaranty entitlement available to 
the veteran shall be 25 percent of the loan.
  (ii) With respect to loans described in subclause (IV) of 
subparagraph (A)(i) made to a covered veteran, the maximum 
amount of guaranty entitlement available to the veteran shall 
be 25 percent of the Freddie Mac conforming loan limit, reduced 
by the amount of entitlement previously used by the veteran 
under this chapter and not restored as a result of the 
exclusion in section 3702(b) of this title.
  (iii) In this subparagraph:
          (I) The term ``covered veteran'' means a veteran who 
        has previously used entitlement under this chapter and 
        for whom the full amount of entitlement so used has not 
        been restored as a result of the exclusion in section 
        3702(b) of this title.
          (II) The term ``Freddie Mac conforming loan limit'' 
        means the limit determined under section 305(a)(2) of 
        the Federal Home Loan Mortgage Corporation Act (12 
        U.S.C. 1454(a)(2)) for a single-family residence, as 
        adjusted for the year involved.
  (2)(A) Any housing loan which might be guaranteed under the 
provisions of this chapter, when made or purchased by any 
financial institution subject to examination and supervision by 
any agency of the United States or of any State may, in lieu of 
such guaranty, be insured by the Secretary under an agreement 
whereby the Secretary will reimburse any such institution for 
losses incurred on such loan up to 15 per centum of the 
aggregate of loans so made or purchased by it.
  (B) Loans insured under this section shall be made on such 
other terms, conditions, and restrictions as the Secretary may 
prescribe within the limitations set forth in this chapter.
  (b) The liability of the United States under any guaranty, 
within the limitations of this chapter, shall decrease or 
increase pro rata with any decrease or increase of the amount 
of the unpaid portion of the obligation.
  (c)(1) Loans guaranteed or insured under this chapter shall 
be payable upon such terms and conditions as may be agreed upon 
by the parties thereto, subject to the provisions of this 
chapter and regulations of the Secretary issued pursuant to 
this chapter, and shall bear interest not in excess of such 
rate as the Secretary may from time to time find the loan 
market demands, except that in establishing the rate of 
interest that shall be applicable to such loans, the Secretary 
shall consult with the Secretary of Housing and Urban 
Development regarding the rate of interest applicable to home 
loans insured under section 203(b) of the National Housing Act 
(12 U.S.C. 1709(b)). In establishing rates of interest under 
this paragraph for one or more of the purposes described in 
clauses (4) and (7) of section 3710(a) of this title, the 
Secretary may establish a rate or rates higher than the rate 
specified for other purposes under such section, but any such 
rate may not exceed such rate as the Secretary may from time to 
time find the loan market demands for loans for such purposes.
  (2) The provisions of the Servicemen's Readjustment Act of 
1944 which were in effect before April 1, 1958, with respect to 
the interest chargeable on loans made or guaranteed under such 
Act shall, notwithstanding the provisions of paragraph (1) of 
this subsection, continue to be applicable--
          (A) to any loan made or guaranteed before April 1, 
        1958; and
          (B) to any loan with respect to which a commitment to 
        guarantee was entered into by the Secretary before 
        April 1, 1958.
  (3) This section shall not be construed to prohibit a veteran 
from paying to a lender any reasonable discount required by 
such lender, when the proceeds from the loan are to be used--
          (A) to refinance indebtedness pursuant to clause (5), 
        (8), or (9)(B)(i) of section 3710(a) of this title or 
        section 3712(a)(1)(F) of this title;
          (B) to repair, alter, or improve a farm residence or 
        other dwelling pursuant to clauses (4) and (7) of 
        section 3710(a) of this title;
          (C) to construct a dwelling or farm residence on land 
        already owned or to be acquired by the veteran except 
        where the land is directly or indirectly acquired from 
        a builder or developer who has contracted to construct 
        such dwelling for the veteran;
          (D) to purchase a dwelling from a class of sellers 
        which the Secretary determines are legally precluded 
        under all circumstances from paying such a discount if 
        the best interest of the veteran would be so served; or
          (E) to refinance indebtedness and purchase a 
        manufactured-home lot pursuant to section 
        3710(a)(9)(B)(ii) or 3712(a)(1)(G) of this title, but 
        only with respect to that portion of the loan used to 
        refinance such indebtedness.
  (4)(A) In guaranteeing or insuring loans under this chapter, 
the Secretary may elect whether to require that such loans bear 
interest at a rate that is--
          (i) agreed upon by the veteran and the mortgagee; or
          (ii) established under paragraph (1).
The Secretary may, from time to time, change the election under 
this subparagraph.
  (B) Any veteran, under a loan described in subparagraph 
(A)(i), may pay reasonable discount points in connection with 
the loan. Except in the case of a loan for the purpose 
specified in section 3710(a)(8), 3710(b)(7), or 3712(a)(1)(F) 
of this title, discount points may not be financed as part of 
the principal amount of a loan guaranteed or insured under this 
chapter.
  (C) Not later than 10 days after an election under 
subparagraph (A), the Secretary shall transmit to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives a notification of the election, together with 
an explanation of the reasons therefor.
  (d)(1) The maturity of any housing loan at the time of 
origination shall not be more than thirty years and thirty-two 
days.
  (2)(A) Any loan for a term of more than five years shall be 
amortized in accordance with established procedure.
  (B) The Secretary may guarantee loans with provisions for 
various rates of amortization corresponding to anticipated 
variations in family income. With respect to any loan 
guaranteed under this subparagraph--
          (i) the initial principal amount of the loan may not 
        exceed the reasonable value of the property as of the 
        time the loan is made; and
          (ii) the principal amount of the loan thereafter 
        (including the amount of all interest to be deferred 
        and added to principal) may not at any time be 
        scheduled to exceed the projected value of the 
        property.
  (C) For the purposes of subparagraph (B) of this paragraph, 
the projected value of the property shall be calculated by the 
Secretary by increasing the reasonable value of the property as 
of the time the loan is made at a rate not in excess of 2.5 
percent per year, but in no event may the projected value of 
the property for the purposes of such subparagraph exceed 115 
percent of such reasonable value. A loan made for a purpose 
other than the acquisition of a single-family dwelling unit may 
not be guaranteed under such subparagraph.
  (3)(A) Any real estate housing loan (other than for repairs, 
alterations, or improvements) shall be secured by a first lien 
on the realty. In determining whether a loan is so secured, the 
Secretary may either disregard or allow for subordination to a 
superior lien created by a duly recorded covenant running with 
the realty in favor of either of the following:
          (i) A public entity that has provided or will provide 
        assistance in response to a major disaster as 
        determined by the President under the Robert T. 
        Stafford Disaster Relief and Emergency Assistance Act 
        (42 U.S.C. 5121 et seq.).
          (ii) A private entity to secure an obligation to such 
        entity for the homeowner's share of the costs of the 
        management, operation, or maintenance of property, 
        services, or programs within and for the benefit of the 
        development or community in which the veteran's realty 
        is located, if the Secretary determines that the 
        interests of the veteran borrower and of the Government 
        will not be prejudiced by the operation of such 
        covenant.
  (B) With respect to any superior lien described in 
subparagraph (A) created after June 6, 1969, the Secretary's 
determination under clause (ii) of such subparagraph shall have 
been made prior to the recordation of the covenant.
  (e)(1) Except as provided in paragraph (2) of this 
subsection, an individual who pays a fee under section 3729 of 
this title, or who is exempted under section 3729(c) of this 
title from paying such fee, with respect to a housing loan 
guaranteed or insured under this chapter that is closed after 
December 31, 1989, shall have no liability to the Secretary 
with respect to the loan for any loss resulting from any 
default of such individual except in the case of fraud, 
misrepresentation, or bad faith by such individual in obtaining 
the loan or in connection with the loan default.
  (2) The exemption from liability provided by paragraph (1) of 
this subsection shall not apply to--
          (A) an individual from whom a fee is collected (or 
        who is exempted from such fee) under section 
        3729(b)(2)(I) of this title; or
          (B) a loan made for any purpose specified in section 
        3712 of this title.
  (f) The application for or obtaining of a loan made, insured, 
or guaranteed under this chapter shall not be subject to 
reporting requirements applicable to requests for, or receipts 
of, Federal contracts, grants, loans, loan guarantees, loan 
insurance, or cooperative agreements except to the extent that 
such requirements are provided for in, or by the Secretary 
pursuant to, this title.

           *       *       *       *       *       *       *


                          SUBCHAPTER II--LOANS


Sec. 3710. Purchase or construction of homes

  (a) Except as provided in section 3704(c)(2) of this title, 
any loan to a veteran, if made pursuant to the provisions of 
this chapter, is automatically guaranteed if such loan is for 
one or more of the following purposes:
          (1) To purchase or construct a dwelling to be owned 
        and occupied by the veteran as a home.
          (2) To purchase a farm on which there is a farm 
        residence to be owned and occupied by the veteran as 
        the veteran's home.
          (3) To construct on land owned by the veteran a farm 
        residence to be occupied by the veteran as the 
        veteran's home.
          (4) To repair, alter, or improve a farm residence or 
        other dwelling owned by the veteran and occupied by the 
        veteran as the veteran's home.
          (5) To refinance existing mortgage loans or other 
        liens which are secured of record on a dwelling or farm 
        residence owned and occupied by the veteran as the 
        veteran's home.
          (6) To purchase a one-family residential unit in a 
        condominium housing development or project, if such 
        development or project is approved by the Secretary 
        under criteria which the Secretary shall prescribe in 
        regulations.
          (7) To improve a dwelling or farm residence owned by 
        the veteran and occupied by the veteran as the 
        veteran's home through energy efficiency improvements, 
        as provided in subsection (d).
          (8) To refinance in accordance with subsection (e) of 
        this section an existing loan guaranteed, insured, or 
        made under this chapter.
          (9)(A)(i) To purchase a manufactured home to be 
        permanently affixed to a lot that is owned by the 
        veteran.
          (ii) To purchase a manufactured home and a lot to 
        which the home will be permanently affixed.
          (B)(i) To refinance, in accordance with the terms and 
        conditions applicable under the provisions of 
        subsection (e) of this section (other than paragraph 
        (1)(E) of such subsection) to the guaranty of a loan 
        for the purpose specified in clause (8) of this 
        subsection, an existing loan guaranteed, insured, or 
        made under this chapter that is secured by a 
        manufactured home permanently affixed to a lot that is 
        owned by the veteran.
          (ii) To refinance, in accordance with section 
        3712(a)(5) of this title, an existing loan that was 
        made for the purchase of, and that is secured by, a 
        manufactured home that is permanently affixed to a lot 
        and to purchase the lot to which the manufactured home 
        is affixed.
          (10) To purchase a dwelling to be owned and occupied 
        by the veteran as a home and make energy efficiency 
        improvements, as provided in subsection (d).
          (11) To refinance in accordance with subsection (e) 
        an existing loan guaranteed, insured, or made under 
        this chapter, and to improve the dwelling securing such 
        loan through energy efficiency improvements, as 
        provided in subsection (d).
          (12) With respect to a loan guaranteed after the date 
        of the enactment of this paragraph and before the date 
        that is five years after that date, to purchase stock 
        or membership in a cooperative housing corporation for 
        the purpose of entitling the veteran to occupy for 
        dwelling purposes a single family residential unit in a 
        development, project, or structure owned or leased by 
        such corporation, in accordance with subsection (h).
If there is an indebtedness which is secured by a lien against 
land owned by the veteran, the proceeds of a loan guaranteed 
under this section or made under section 3711 of this title for 
construction of a dwelling or farm residence on such land may 
be used also to liquidate such lien, but only if the reasonable 
value of the land is equal to or greater than the amount of the 
lien.
  (b) No loan may be guaranteed under this section or made 
under section 3711 of this title unless--
          (1) the proceeds of such loan will be used to pay for 
        the property purchased, constructed, or improved;
          (2) the contemplated terms of payment required in any 
        mortgage to be given in part payment of the purchase 
        price or the construction cost bear a proper relation 
        to the veteran's present and anticipated income and 
        expenses;
          (3) the veteran is a satisfactory credit risk, as 
        determined in accordance with the credit underwriting 
        standards established pursuant to subsection (g) of 
        this section;
          (4) the nature and condition of the property is such 
        as to be suitable for dwelling purposes;
          (5) except in the case of a loan described in clause 
        (7) or (8) of this subsection, the loan to be paid by 
        the veteran for such property or for the cost of 
        construction, repairs, or alterations, does not exceed 
        the reasonable value thereof as determined pursuant to 
        section 3731 of this title;
          (6) if the loan is for repair, alteration, or 
        improvement of property, such repair, alteration, or 
        improvement substantially protects or improves the 
        basic livability or utility of such property;
          (7) in the case of a loan (other than a loan made for 
        a purpose specified in subsection (a)(8) of this 
        section) that is made to refinance--
                  (A) a construction loan,
                  (B) an installment land sales contract, or
                  (C) a loan assumed by the veteran that 
                provides for a lower interest rate than the 
                loan being refinanced,
        the amount of the loan to be guaranteed or made does 
        not exceed the lesser of--
                  
                  (i) the reasonable value of the dwelling or 
                farm residence securing the loan, as determined 
                pursuant to section 3731 of this title; or
                  
                  (ii) the sum of the outstanding balance on 
                the loan to be refinanced and the closing costs 
                (including discounts) actually paid by the 
                veteran, as specified by the Secretary in 
                regulations; and
          (8) in the case of a loan to refinance a loan (other 
        than a loan or installment sales contract described in 
        clause (7) of this subsection or a loan made for a 
        purpose specified in subsection (a)(8) of this 
        section), the amount of the loan to be guaranteed or 
        made does not exceed 100 percent of the reasonable 
        value of the dwelling or farm residence securing the 
        loan, as determined pursuant to section 3731 of this 
        title.
  (d)(1) The Secretary shall carry out a program to demonstrate 
the feasibility of guaranteeing loans for the acquisition of an 
existing dwelling and the cost of making energy efficiency 
improvements to the dwelling or for energy efficiency 
improvements to a dwelling owned and occupied by a veteran. A 
loan may be guaranteed under this subsection only if it meets 
the requirements of this chapter, except as those requirements 
are modified by this subsection.
  (2) The cost of energy efficiency measures that may be 
financed by a loan guaranteed under this section may not exceed 
the greater of--
          (A) the cost of the energy efficiency improvements, 
        up to $3,000; or
          (B) $6,000, if the increase in the monthly payment 
        for principal and interest does not exceed the likely 
        reduction in monthly utility costs resulting from the 
        energy efficiency improvements.
  (3) Notwithstanding the provisions of section 3703(a)(1)(A) 
of this title, any loan guaranteed under this subsection shall 
be guaranteed in an amount equal to the sum of--
          (A) the guaranty that would be provided under those 
        provisions for the dwelling without the energy 
        efficiency improvements; and
          (B) an amount that bears the same relation to the 
        cost of the energy efficiency improvements as the 
        guaranty referred to in subparagraph (A) bears to the 
        amount of the loan minus the cost of such improvements.
  (4) The amount of the veteran's entitlement, calculated in 
accordance with [section 3703(a)(1)(B) of this title] 
subparagraph (B) or (C) of section 3703(a)(1) of this title, 
shall not be affected by the amount of the guaranty referred to 
in paragraph (3)(B).
  (5) The Secretary shall take appropriate actions to notify 
eligible veterans, participating lenders, and interested 
realtors of the availability of loan guarantees under this 
subsection and the procedures and requirements that apply to 
the obtaining of such guarantees.
  (6) For the purposes of this subsection:
          (A) The term ``energy efficiency improvement'' 
        includes a solar heating system, a solar heating and 
        cooling system, or a combined solar heating and cooling 
        system, and the application of a residential energy 
        conservation measure.
          (B) The term ``solar heating'' has the meaning given 
        such term in section 3(1) of the Solar Heating and 
        Cooling Demonstration Act of 1974 (42 U.S.C. 5502(1)) 
        and, in addition, includes a passive system based on 
        conductive, convective, or radiant energy transfer.
          (C) The terms ``solar heating and cooling'' and 
        ``combined solar heating and cooling'' have the meaning 
        given such terms in section 3(2) of the Solar Heating 
        and Cooling Demonstration Act of 1974 (42 U.S.C. 
        5502(2)) and, in addition, include a passive system 
        based on conductive, convective, or radiant energy 
        transfer.
          (D) The term ``passive system'' includes window and 
        skylight glazing, thermal floors, walls, and roofs, 
        movable insulation panels (when in conjunction with 
        glazing), portions of a residential structure that 
        serve as solar furnaces so as to add heat to the 
        structure, double-pane window insulation, and such 
        other energy-related components as are determined by 
        the Secretary to enhance the natural transfer of energy 
        for the purpose of heating or heating and cooling a 
        residence.
          (E) The term ``residential energy conservation 
        measure'' means--
                  (i) caulking and weatherstripping of all 
                exterior doors and windows;
                  (ii) furnace efficiency modifications limited 
                to--
                          (I) replacement burners, boilers, or 
                        furnaces designed to reduce the firing 
                        rate or to achieve a reduction in the 
                        amount of fuel consumed as a result of 
                        increased combustion efficiency,
                          (II) devices for modifying flue 
                        openings which will increase the 
                        efficiency of the heating system, and
                          (III) electrical or mechanical 
                        furnace ignition systems which replace 
                        standing gas pilot lights;
                  (iii) clock thermostats;
                  (iv) ceiling, attic, wall, and floor 
                insulation;
                  (v) water heater insulation;
                  (vi) storm windows and doors;
                  (vii) heat pumps; and
                  (viii) such other energy conservation 
                measures as the Secretary may identify for the 
                purposes of this subparagraph.
  (e)(1) For a loan to be guaranteed for the purpose specified 
in subsection (a)(8) or for the purpose specified in subsection 
(a)(11) of this section--
          (A) the interest rate of the loan must be less than 
        the interest rate of the loan being refinanced or, in a 
        case in which the loan is a fixed rate loan and the 
        loan being refinanced is an adjustable rate loan, the 
        loan bears interest at a rate that is agreed upon by 
        the veteran and the mortgagee;
          (B) the loan must be secured by the same dwelling or 
        farm residence as was the loan being refinanced;
          (C) the amount of the loan may not exceed--
                  (i) an amount equal to the sum of the balance 
                of the loan being refinanced and such closing 
                costs (including any discount permitted 
                pursuant to section 3703(c)(3)(A) of this 
                title) as may be authorized by the Secretary 
                (under regulations which the Secretary shall 
                prescribe) to be included in the loan; or
                  (ii) in the case of a loan for the purpose 
                specified in subsection (a)(11), an amount 
                equal to the sum of the amount referred to with 
                respect to the loan under clause (i) and the 
                amount specified under subsection (d)(2);
          (D) notwithstanding section 3703(a)(1) of this title, 
        the amount of the guaranty of the loan may not exceed 
        the greater of (i) the original guaranty amount of the 
        loan being refinanced, or (ii) 25 percent of the loan;
          (E) the term of the loan may not exceed the original 
        term of the loan being refinanced by more than 10 
        years; and
          (F) the veteran must own the dwelling or farm 
        residence securing the loan and--
                  (i) must occupy such dwelling or residence as 
                such veteran's home;
                  (ii) must have previously occupied such 
                dwelling or residence as such veteran's home 
                and must certify, in such form as the Secretary 
                shall require, that the veteran has previously 
                so occupied such dwelling or residence; or
                  (iii) in any case in which a veteran is in 
                active duty status as a member of the Armed 
                Forces and is unable to occupy such residence 
                or dwelling as a home because of such status, 
                the spouse of the veteran must occupy, or must 
                have previously occupied, such dwelling or 
                residence as such spouse's home and must 
                certify such occupancy in such form as the 
                Secretary shall require.
  (2) A loan to a veteran may be guaranteed by the Secretary 
under this chapter for the purpose specified in clause (8) of 
subsection (a) of this section without regard to the amount of 
outstanding guaranty entitlement available for use by such 
veteran, and the amount of such veteran's guaranty entitlement 
shall not be charged as a result of any guaranty provided for 
such purpose. For purposes of section 3702(b) of this title, 
such loan shall be deemed to have been obtained with the 
guaranty entitlement used to obtain the loan being refinanced.
  (3) If a veteran is deceased and if such veteran's surviving 
spouse was a co-obligor under an existing loan guaranteed, 
insured, or made under this chapter, such surviving spouse 
shall, only for the purpose specified in subsection (a)(8) of 
this section, be deemed to be a veteran eligible for benefits 
under this chapter.
  (f)(1) For a loan to be guaranteed for the purpose specified 
in subclause (A)(ii) or (B)(ii) of subsection (a)(9) of this 
section, the purchase of (or the refinancing of a loan secured 
by) the manufactured home and the lot for that home shall be 
considered as one loan and must comply with such criteria as 
may be prescribed by the Secretary in regulations.
  (2) A loan may not be guaranteed for the purposes of 
subsection (a)(9) of this section unless the manufactured home 
purchased, upon being permanently affixed to the lot, is 
considered to be real property under the laws of the State 
where the lot is located.
  (g)(1) For the purposes of this subsection, the term 
``veteran'', when used with respect to a loan guaranteed or to 
be guaranteed under this chapter, includes the veteran's spouse 
if the spouse is jointly liable with the veteran under the 
loan.
  (2) For the purpose of determining whether a veteran meets 
the standards referred to in subsection (b)(3) of this section 
and section 3712(e)(2) of this title, the Secretary shall 
prescribe regulations which establish--
          (A) credit underwriting standards to be used in 
        evaluating loans to be guaranteed under this chapter; 
        and
          (B) standards to be used by lenders in obtaining 
        credit information and processing loans to be 
        guaranteed under this chapter.
          (3) In the regulations prescribed under paragraph (2) 
        of this subsection, the Secretary shall establish 
        standards that include--
          (A) debt-to-income ratios to apply in the case of the 
        veteran applying for the loan;
          (B) criteria for evaluating the reliability and 
        stability of the income of the veteran applying for the 
        loan; and
          (C) procedures for ascertaining the monthly income 
        required by the veteran to meet the anticipated loan 
        payment terms.
        If the procedures described in clause (C) of this 
        paragraph include standards for evaluating residual 
        income, the Secretary shall, in establishing such 
        standards, give appropriate consideration to State 
        statistics (in States as to which the Secretary 
        determines that such statistics are reliable) pertinent 
        to residual income and the cost of living in the State 
        in question rather than in a larger region.
  (4)(A) Any lender making a loan under this chapter shall 
certify, in such form as the Secretary shall prescribe, that 
the lender has complied with the credit information and loan 
processing standards established under paragraph (2)(B) of this 
subsection, and that, to the best of the lender's knowledge and 
belief, the loan meets the underwriting standards established 
under paragraph (2)(A) of this subsection.
  (B) Any lender who knowingly and willfully makes a false 
certification under subparagraph (A) of this paragraph shall be 
liable to the United States Government for a civil penalty 
equal to two times the amount of the Secretary's loss on the 
loan involved or to another appropriate amount, not to exceed 
$10,000, whichever is greater. All determinations necessary to 
carry out this subparagraph shall be made by the Secretary.
  (5) Pursuant to regulations prescribed to carry out this 
paragraph, the Secretary may, in extraordinary situations, 
waive the application of the credit underwriting standards 
established under paragraph (2) of this subsection when the 
Secretary determines, considering the totality of 
circumstances, that the veteran is a satisfactory credit risk.
  (h)(1) A loan may not be guaranteed under subsection (a)(12) 
unless--
          (A) the development, project, or structure of the 
        cooperative housing corporation complies with such 
        criteria as the Secretary prescribes in regulations; 
        and
          (B) the dwelling unit that the purchase of stock or 
        membership in the development, project, or structure of 
        the cooperative housing corporation entitles the 
        purchaser to occupy is a single family residential 
        unit.
  (2) In this subsection, the term ``cooperative housing 
corporation'' has the meaning given such term in section 
216(b)(1) of the Internal Revenue Code of 1986.
  (3) When applying the term ``value of the property'' to a 
loan guaranteed under subsection (a)(12), such term means the 
appraised value of the stock or membership entitling the 
purchaser to the permanent occupancy of the dwelling unit in 
the development, project, or structure of the cooperative 
housing corporation.

           *       *       *       *       *       *       *


SUBCHAPTER III--ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *



Sec. 3729. Loan fee

  (a) Requirement of Fee.--(1) Except as provided in subsection 
(c), a fee shall be collected from each person obtaining a 
housing loan guaranteed, insured, or made under this chapter, 
and each person assuming a loan to which section 3714 of this 
title applies. No such loan may be guaranteed, insured, made, 
or assumed until the fee payable under this section has been 
remitted to the Secretary.
  (2) The fee may be included in the loan and paid from the 
proceeds thereof.
  (b) Determination of Fee.--(1) The amount of the fee shall be 
determined from the loan fee table in paragraph (2). The fee is 
expressed as a percentage of the total amount of the loan 
guaranteed, insured, or made, or, in the case of a loan 
assumption, the unpaid principal balance of the loan on the 
date of the transfer of the property.
  (2) The loan fee table referred to in paragraph (1) is as 
follows:


                             [LOAN FEE TABLE
------------------------------------------------------------------------
                                                                  Other
   [Type of loan     Active duty veteran        Reservist        obligor
------------------------------------------------------------------------
(A)(i) Initial      2.00                  2.75                     NA
 loan described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 0-
 down, or any
 other initial
 loan described in
 section 3710 (a)
 other than with 5-
 down or 10-down
 (closed before
 January 1, 2004)
(A)(ii) Initial     2.20                  2.40                     NA
 loan described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 0-
 down, or any
 other initial
 loan described in
 section 3710 (a)
 other than with 5-
 down or 10-down
 (closed on or
 after January 1,
 2004, and before
 October 1, 2004)
(A)(iii) Initial    2.15                  2.40                     NA
 loan described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 0-
 down, or any
 other initial
 loan described in
 section 3710 (a)
 other than with 5-
 down or 10-down
 (closed on or
 after October 1,
 2004, and before
 September 30,
 2028)
(A)(iv) Initial     1.40                  1.65                     NA
 loan described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 0-
 down, or any
 other initial
 loan described in
 section 3710 (a)
 other than with 5-
 down or 10-down
 (closed on or
 after September
 30, 2028)
(B)(i) Subsequent   3.30                  3.30                     NA
 loan described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 0-
 down, or any
 other subsequent
 loan described in
 section 3710 (a)
 (closed before
 September 30,
 2028)
(B)(ii) Subsequent  1.25                  1.25                     NA
 loan described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 0-
 down, or any
 other subsequent
 loan described in
 section 3710 (a)
 (closed on or
 after September
 30, 2028)
(C)(i) Loan         1.50                  1.75                     NA
 described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 5-
 down (closed
 before September
 30, 2028)
(C)(ii) Loan        0.75                  1.00                     NA
 described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 5-
 down (closed on
 or after
 September 30,
 2028)
(D)(i) Initial      1.25                  1.50                     NA
 loan described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 10-
 down (closed
 before September
 30, 2028)
(D)(ii) Initial     0.50                  0.75                     NA
 loan described in
 section 3710 (a)
 to purchase or
 construct a
 dwelling with 10-
 down (closed on
 or after
 September 30,
 2028)
(E) Interest rate   0.50                  0.50                     NA
 reduction
 refinancing loan
(F) Direct loan     1.00                  1.00                     NA
 under section
 3711
(G) Manufactured    1.00                  1.00                     NA
 home loan under
 section 3712
 (other than an
 interest rate
 reduction
 refinancing loan)
(H) Loan to Native  1.25                  1.25                     NA
 American veteran
 under section
 3762 (other than
 an interest rate
 reduction
 refinancing loan)
(I) Loan            0.50                  0.50                   0.50
 assumption under
 section 3714
(J) Loan under      2.25                  2.25                   2.25]
 section 3733 (a)
------------------------------------------------------------------------



 
----------------------------------------------------------------------------------------------------------------
                                                       Active duty
                   Type of loan                          veteran             Reservist          Other obligor
----------------------------------------------------------------------------------------------------------------
(A)(i) Initial loan described in section 3710(a)   2.15                 2.40                 NA
 to purchase or construct a dwelling with 0-down,
 or any other initial loan described in section
 3710(a) other than with 5-down or 10-down
 (closed on or after October 1, 2004, and before
 January 1, 2020)
(A)(ii) Initial loan described in section 3710(a)  2.30                 2.30                 NA
 to purchase or construct a dwelling with 0-down,
 or any other initial loan described in section
 3710(a) other than with 5-down or 10-down
 (closed on or after January 1, 2020, and before
 January 1, 2022)
(A)(iii) Initial loan described in section         2.15                 2.15                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other initial loan described in
 section 3710(a) other than with 5-down or 10-
 down (closed on or after January 1, 2022, and
 before October 1, 2029)
(A)(iv) Initial loan described in section 3710(a)  1.40                 1.40                 NA
 to purchase or construct a dwelling with 0-down,
 or any other initial loan described in section
 3710(a) other than with 5-down or 10-down
 (closed on or after October 1, 2029)
(B)(i) Subsequent loan described in section        3.30                 3.30                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other subsequent loan described
 in section 3710(a) (closed on or after October
 1, 2004, and before January 1, 2020)
(B)(ii) Subsequent loan described in section       3.60                 3.60                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other subsequent loan described
 in section 3710(a) (closed on or after January
 1, 2020, and before January 1, 2022)
(B)(iii) Subsequent loan described in section      3.30                 3.30                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other subsequent loan described
 in section 3710(a) (closed on or after January
 1, 2022, and before October 1, 2029)
(B)(iv) Subsequent loan described in section       1.25                 1.25                 NA
 3710(a) to purchase or construct a dwelling with
 0-down, or any other subsequent loan described
 in section 3710(a) (closed on or after October
 1, 2029)
(C)(i) Loan described in section 3710(a) to        1.50                 1.75                 NA
 purchase or construct a dwelling with 5-down
 (closed before January 1, 2020)
(C)(ii) Loan described in section 3710(a) to       1.65                 1.65                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after January 1, 2020, and before
 January 1, 2022)
(C)(iii) Loan described in section 3710(a) to      1.50                 1.50                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after January 1, 2022, and before
 October 1, 2029)
(C)(iv) Loan described in section 3710(a) to       0.75                 0.75                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after October 1, 2029)
(D)(i) Loan described in section 3710(a) to        1.25                 1.50                 NA
 purchase or construct a dwelling with 10-down
 (closed before January 1, 2020)
(D)(ii) Loan described in section 3710(a) to       1.40                 1.40                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after January 1, 2020, and before
 January 1, 2022)
(D)(iii) Loan described in section 3710(a) to      1.25                 1.25                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after January 1, 2022, and before
 October 1, 2029)
(D)(iv) Loan described in section 3710(a) to       0.50                 0.50                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after October 1, 2029)
(E) Interest rate reduction refinancing loan       0.50                 0.50                 NA
(F) Direct loan under section 3711                 1.00                 1.00                 NA
(G) Manufactured home loan under section 3712      1.00                 1.00                 NA
 (other than an interest rate reduction
 refinancing loan)
(H) Loan to Native American veteran under section  1.25                 1.25                 NA
 3762 (other than an interest rate reduction
 refinancing loan)
(I) Loan assumption under section 3714             0.50                 0.50                 0.50
(J) Loan under section 3733(a)                     2.25                 2.25                 2.25
----------------------------------------------------------------------------------------------------------------

  (3) Any reference to a section in the ``Type of loan'' column 
in the loan fee table in paragraph (2) refers to a section of 
this title.
  (4) For the purposes of paragraph (2):
          (A) The term ``active duty veteran'' means any 
        veteran eligible for the benefits of this chapter other 
        than a Reservist.
          (B) The term ``Reservist'' means a veteran described 
        in section 3701(b)(5)(A) of this title who is eligible 
        under section 3702(a)(2)(E) of this title.
          (C) The term ``other obligor'' means a person who is 
        not a veteran, as defined in section 101 of this title 
        or other provision of this chapter.
          (D) The term ``initial loan'' means a loan to a 
        veteran guaranteed under section 3710 or made under 
        section 3711 of this title if the veteran has never 
        obtained a loan guaranteed under section 3710 or made 
        under section 3711 of this title.
          (E) The term ``subsequent loan'' means a loan to a 
        veteran, other than an interest rate reduction 
        refinancing loan, guaranteed under section 3710 or made 
        under section 3711 of this title if the veteran has 
        previously obtained a loan guaranteed under section 
        3710 or made under section 3711 of this title.
          (F) The term ``interest rate reduction refinancing 
        loan'' means a loan described in section 3710(a)(8), 
        3710(a)(9)(B)(i), 3710(a)(11), 3712(a)(1)(F), or 
        3762(h) of this title.
          (G) The term ``0-down'' means a downpayment, if any, 
        of less than 5 percent of the total purchase price or 
        construction cost of the dwelling.
          (H) The term ``5-down'' means a downpayment of at 
        least 5 percent or more, but less than 10 percent, of 
        the total purchase price or construction cost of the 
        dwelling.
          (I) The term ``10-down'' means a downpayment of 10 
        percent or more of the total purchase price or 
        construction cost of the dwelling.
  (c) Waiver of Fee.--(1) A fee may not be collected under this 
section from a veteran who is receiving compensation (or who, 
but for the receipt of retirement pay or active service pay, 
would be entitled to receive compensation) [or from a surviving 
spouse], from a surviving spouse of any veteran (including a 
person who died in the active military, naval, or air service) 
who died from a service-connected disability, or from a member 
of the Armed Forces who is serving on active duty and who 
provides, on or before the date of loan closing, evidence of 
having been awarded the Purple Heart.
  (2)(A) A veteran described in subparagraph (B) shall be 
treated as receiving compensation for purposes of this 
subsection as of the date of the rating described in such 
subparagraph without regard to whether an effective date of the 
award of compensation is established as of that date.
  (B) A veteran described in this subparagraph is a veteran who 
is rated eligible to receive compensation--
          (i) as the result of a pre-discharge disability 
        examination and rating; or
          (ii) based on a pre-discharge review of existing 
        medical evidence (including service medical and 
        treatment records) that results in the issuance of a 
        memorandum rating.

           *       *       *       *       *       *       *


Sec. 3731. Appraisals

  (a) The Secretary shall--
          (1) subject to subsection (b)(2) and in consultation 
        with appropriate representatives of institutions which 
        are regularly engaged in making housing loans, 
        prescribe uniform qualifications for appraisers, 
        including the successful completion of a written test, 
        submission of a sample appraisal, certification of an 
        appropriate number of years of experience as an 
        appraiser, and submission of recommendations from other 
        appraisers;
          (2) use such qualifications in determining whether to 
        approve an appraiser to make appraisals of the 
        reasonable value of any property, construction, 
        repairs, or alterations for the purposes of this 
        chapter; and
          (3) in consultation with local representatives of 
        institutions described in clause (1) of this 
        subsection, develop and maintain lists of appraisers 
        who are approved under clause (2) of this subsection to 
        make appraisals for the purposes of this chapter.
  (b)(1) The Secretary shall select appraisers from a list 
required by subsection (a)(3) of this section on a rotating 
basis to make appraisals for the purposes of this chapter.
  (2) If uniform qualifications become applicable for 
appraisers who perform appraisals for or in connection with the 
Federal Government, the qualifications required by subsection 
(a)(1) of this section may be more stringent than such uniform 
qualifications, but the Secretary may use no written test in 
determining the qualifications of appraisers other than the 
test prescribed to implement such uniform qualifications.
  (3) The Secretary shall permit an appraiser on a list 
developed and maintained under subsection (a)(3) to make an 
appraisal for the purposes of this chapter based solely on 
information gathered by a person with whom the appraiser has 
entered into an agreement for such services.
  (c) Except as provided in subsection (f) of this section, the 
appraiser shall forward an appraisal report to the Secretary 
for review. Upon receipt of such report, the Secretary shall 
determine the reasonable value of the property, construction, 
repairs, or alterations for purposes of this chapter, and 
notify the veteran of such determination. Upon request, the 
Secretary shall furnish a copy of the appraisal made of 
property for the purposes of this chapter to the lender 
proposing to make the loan which is to be secured by such 
property and is to be guaranteed under this chapter.
  (d) If a lender (other than a lender authorized under 
subsection (f) of this section to determine reasonable value)--
          (1) has proposed to make a loan to be guaranteed 
        under this chapter,
          (2) has been furnished a certificate of reasonable 
        value of any property or of any construction, repairs, 
        or alterations of property which is to be the security 
        for such loan, and
          (3) within a reasonable period prescribed by the 
        Secretary, has furnished to the Secretary an additional 
        appraisal of the reasonable value of such property, 
        construction, repairs, or alterations which was made by 
        an appraiser selected by the lender from the list 
        required by subsection (a)(3) of this section,
the Secretary shall consider both the initial appraisal and the 
additional appraisal and shall, if appropriate, issue a revised 
certificate of reasonable value of such property, construction, 
repairs, or alterations.
  (e)(1) In no case may a veteran be required to pay all or any 
portion of the cost of the additional appraisal described in 
subsection (d)(3) of this section.
  (2) If a veteran, within a reasonable period prescribed by 
the Secretary, has furnished to the Secretary an additional 
appraisal of the reasonable value of such property, 
construction, repairs, or alterations which was made by an 
appraiser selected by the veteran from the list required by 
subsection (a)(3) of this section, the Secretary shall consider 
such appraisal, along with other appraisals furnished to the 
Secretary, and shall, if appropriate, issue a revised 
certificate of reasonable value of such property, construction, 
repairs, or alterations.
  (f)(1) Subject to the provisions of paragraphs (2) and (3) of 
this subsection, the Secretary may, in accordance with 
standards and procedures established in regulations prescribed 
by the Secretary, authorize a lender to determine the 
reasonable value of property for the purposes of this chapter 
if the lender is authorized to make loans which are 
automatically guaranteed under section 3702(d) of this title. 
In such a case, the appraiser selected by the Secretary 
pursuant to subsection (b) of this section shall submit the 
appraisal report directly to the lender for review, and the 
lender shall, as soon as possible thereafter, furnish a copy of 
the appraisal to the veteran who is applying for the loan 
concerned and to the Secretary.
  (2) In exercising the authority provided in paragraph (1) of 
this subsection, the Secretary shall assign a sufficient number 
of personnel to carry out an appraisal-review system to 
monitor, on at least a random-sampling basis, the making of 
appraisals by appraisers and the effectiveness and the 
efficiency of the determination of reasonable value of property 
by lenders.
  (4) Not later than April 30 of each year following a year in 
which the Secretary authorizes lenders to determine reasonable 
value of property under this subsection, the Secretary shall 
submit to the Committees on Veterans' Affairs of the Senate and 
the House of Representatives a report relating to the exercise 
of that authority during the year in which the authority was 
exercised.
  (5) A report submitted pursuant to paragraph (4) of this 
subsection shall include, for the period covered by each 
report--
          (A) the number and value of loans made by lenders 
        exercising the authority of this subsection;
          (B) the number and value of such loans reviewed by 
        the appraisal-review monitors referred to in paragraph 
        (2) of this subsection;
          (C) the number and value of loans made under this 
        subsection of which the Secretary received notification 
        of default;
          (D) the amount of guaranty paid by the Secretary to 
        such lenders by reason of defaults on loans as to which 
        reasonable value was determined under this subsection; 
        and
          (E) such recommendations as the Secretary considers 
        appropriate to improve the exercise of the authority 
        provided for in this subsection and to protect the 
        interests of the United States.

           *       *       *       *       *       *       *


SUBCHAPTER V--DIRECT HOUSING LOANS FOR NATIVE AMERICAN VETERANS

           *       *       *       *       *       *       *



Sec. 3762. Direct housing loans to Native American veterans; program 
                    administration

  (a) The Secretary may make a direct housing loan to a Native 
American veteran under this subchapter if--
          (1)(A) the Secretary has entered into a memorandum of 
        understanding with respect to such loans with the 
        tribal organization that has jurisdiction over the 
        veteran; or
                  (B) the tribal organization that has 
                jurisdiction over the veteran has entered into 
                a memorandum of understanding with any 
                department or agency of the United States with 
                respect to direct housing loans to Native 
                Americans that the Secretary determines 
                substantially complies with the requirements of 
                subsection (b); and
          (2) the memorandum is in effect when the loan is 
        made.
  (b)(1) Subject to paragraph (2), the Secretary shall ensure 
that each memorandum of understanding that the Secretary enters 
into with a tribal organization shall provide for the 
following:
          (A) That each Native American veteran who is under 
        the jurisdiction of the tribal organization and to whom 
        the Secretary makes a direct loan under this 
        subchapter--
                  (i) holds, possesses, or purchases using the 
                proceeds of the loan a meaningful interest in a 
                lot or dwelling (or both) that is located on 
                trust land; and
                  (ii) will purchase, construct, or improve (as 
                the case may be) a dwelling on the lot using 
                the proceeds of the loan.
          (B) That each such Native American veteran will 
        convey to the Secretary by an appropriate instrument 
        the interest referred to in subparagraph (A) as 
        security for a direct housing loan under this 
        subchapter.
          (C) That the tribal organization and each such Native 
        American veteran will permit the Secretary to enter 
        upon the trust land of that organization or veteran for 
        the purposes of carrying out such actions as the 
        Secretary determines are necessary--
                  (i) to evaluate the advisability of the loan; 
                and
                  (ii) to monitor any purchase, construction, 
                or improvements carried out using the proceeds 
                of the loan.
          (D) That the tribal organization has established 
        standards and procedures that apply to the foreclosure 
        of the interest conveyed by a Native American veteran 
        pursuant to subparagraph (B), including--
                  (i) procedures for foreclosing the interest; 
                and
                  (ii) procedures for the resale of the lot or 
                the dwelling (or both) purchased, constructed, 
                or improved using the proceeds of the loan.
          (E) That the tribal organization agrees to such other 
        terms and conditions with respect to the making of 
        direct loans to Native American veterans under the 
        jurisdiction of the tribal organization as the 
        Secretary may require in order to ensure that loans 
        under this subchapter are made in a responsible and 
        prudent manner.
          (2) The Secretary may not enter into a memorandum of 
        understanding with a tribal organization under this 
        subsection unless the Secretary determines that the 
        memorandum provides for such standards and procedures 
        as are necessary for the reasonable protection of the 
        financial interests of the United States.
  (c)[(1)(A) Except as provided in subparagraph (B), the 
principal amount of any direct housing loan made to a Native 
American veteran under this section may not exceed $80,000.
  [(B)(i) Subject to clause (ii), the Secretary may make loans 
exceeding the amount specified in subparagraph (A) in a 
geographic area if the Secretary determines that housing costs 
in the area are significantly higher than average housing costs 
nationwide. The amount of such increase shall be the amount 
that the Secretary determines is necessary in order to make 
direct housing loans under this subchapter to Native American 
veterans who are located in a variety of geographic areas and 
in geographic areas experiencing a variety of economic 
conditions.
  [(ii) The amount of a loan made by the Secretary under this 
subchapter may not exceed the maximum loan amount authorized 
for loans guaranteed under section 3703(a)(1)(C) of this 
title.]
          [(2)] (1) Loans made under this section shall bear 
        interest at a rate determined by the Secretary, which 
        rate may not exceed the appropriate rate authorized for 
        guaranteed loans under section 3703(c)(1) or section 
        3712(f) of this title, and shall be subject to such 
        requirements or limitations prescribed for loans 
        guaranteed under this title as the Secretary may 
        prescribe.
          [(3)] (2) Notwithstanding section 3704(a) of this 
        title, the Secretary shall establish minimum 
        requirements for planning, construction, improvement, 
        and general acceptability relating to any direct loan 
        made under this section.
  (d)(1) The Secretary shall establish credit underwriting 
standards to be used in evaluating loans made under this 
subchapter. In establishing such standards, the Secretary shall 
take into account the purpose of this program to make available 
housing to Native American veterans living on trust lands.
  (2) The Secretary shall determine the reasonable value of the 
interest in property that will serve as security for a loan 
made under this section and shall establish procedures for 
appraisals upon which the Secretary may base such 
determinations. The procedures shall incorporate generally the 
relevant requirements of section 3731 of this title, unless the 
Secretary determines that such requirements are impracticable 
to implement in a geographic area, on particular trust lands, 
or under circumstances specified by the Secretary.
  (e) Loans made under this section shall be repaid in monthly 
installments.
  (f) In connection with any loan under this section, the 
Secretary may make advances in cash to provide for repairs, 
alterations, and improvements and to meet incidental expenses 
of the loan transaction. The Secretary shall determine the 
amount of any expenses incident to the origination of loans 
made under this section, which expenses, or a reasonable flat 
allowance in lieu thereof, shall be paid by the veteran in 
addition to the loan closing costs.
  (g) Without regard to any provision of this chapter (other 
than a provision of this section), the Secretary may--
          (1) take any action that the Secretary determines to 
        be necessary with respect to the custody, management, 
        protection, and realization or sale of investments 
        under this section;
          (2) determine any necessary expenses and expenditures 
        and the manner in which such expenses and expenditures 
        shall be incurred, allowed, and paid;
          (3) make such rules, regulations, and orders as the 
        Secretary considers necessary for carrying out the 
        Secretary's functions under this section; and
          (4) in a manner consistent with the provisions of 
        this chapter and with the Secretary's functions under 
        this subchapter, employ, utilize, and compensate any 
        persons, organizations, or departments or agencies 
        (including departments and agencies of the United 
        States) designated by the Secretary to carry out such 
        functions.
  (h)(1) The Secretary may make direct loans to Native American 
veterans in order to enable such veterans to refinance existing 
loans made under this section.
  (2)(A) The Secretary may not make a loan under this 
subsection unless the loan meets the requirements set forth in 
subparagraphs (B), (C), and (E) of paragraph (1) of section 
3710(e) of this title.
  (B) The Secretary may not make a loan under this subsection 
unless the loan will bear an interest rate at least one 
percentage point less than the interest rate borne by the loan 
being refinanced.
  (C) Paragraphs (2) and (3) of such section 3710(e) shall 
apply to any loan made under this subsection, except that for 
the purposes of this subsection the reference to subsection 
(a)(8) of section 3710 of this title in such paragraphs (2) and 
(3) shall be deemed to be a reference to this subsection.
  (i)(1) The Secretary shall, in consultation with tribal 
organizations (including the National Congress of American 
Indians and the National American Indian Housing Council), 
carry out an outreach program to inform and educate Native 
American veterans of the availability of direct housing loans 
for Native American veterans who live on trust lands.
  (2) Activities under the outreach program shall include the 
following:
          (A) Attending conferences and conventions conducted 
        by the National Congress of American Indians in order 
        to work with the National Congress in providing 
        information and training to tribal organizations and 
        Native American veterans regarding the availability of 
        housing benefits under this subchapter and in assisting 
        such organizations and veterans with respect to such 
        housing benefits.
          (B) Attending conferences and conventions conducted 
        by the National American Indian Housing Council in 
        order to work with the Housing Council in providing 
        information and training to tribal organizations and 
        tribal housing entities regarding the availability of 
        such benefits.
          (C) Attending conferences and conventions conducted 
        by the Department of Hawaiian Homelands in order to 
        work with the Department of Hawaiian Homelands in 
        providing information and training to tribal housing 
        entities in Hawaii regarding the availability of such 
        benefits.
          (D) Producing and disseminating information to tribal 
        governments, tribal veterans service organizations, and 
        tribal organizations regarding the availability of such 
        benefits.
          (E) Assisting tribal organizations and Native 
        American veterans with respect to such benefits.
          (F) Outstationing loan guarantee specialists in 
        tribal facilities on a part-time basis if requested by 
        the tribal government.
  (j) The Secretary shall include as part of the annual 
benefits report of the Veterans Benefits Administration 
information concerning the cost and number of loans provided 
under this subchapter for the fiscal year covered by the 
report.

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