[House Report 118-425]
[From the U.S. Government Publishing Office]


118th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                     {      118-425

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



 
   RESTORE DEPARTMENT OF VETERANS AFFAIRS ACCOUNTABILITY ACT OF 2023

                                _______
                                

 March 15, 2024.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 4278]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 4278) to amend title 38, United States Code, to 
modify personnel action procedures with respect to employees of 
the Department of Veterans Affairs, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     6
Background and Need for Legislation..............................     7
Hearings.........................................................    13
Subcommittee Consideration.......................................    13
Committee Consideration..........................................    13
Committee Votes..................................................    15
Committee Oversight Findings.....................................    15
Statement of General Performance Goals and Objectives............    15
Earmarks and Tax and Tariff Benefits.............................    15
Committee Cost Estimate..........................................    15
Budget Authority and Congressional Budget Office Estimate........    15
Federal Mandates Statement.......................................    16
Advisory Committee Statement.....................................    17
Applicability to Legislative Branch..............................    17
Statement on Duplication of Federal Programs.....................    17
Section-by-Section Analysis of the Legislation...................    17
Changes in Existing Law Made by the Bill, as Reported............    20
Minority Views...................................................    34

    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 ``Restore Department of Veterans Affairs 
Accountability Act of 2023'' or the ``Restore VA Accountability Act of 
2023''.

SEC. 2. SUPERVISORS: REMOVAL, DEMOTION, OR SUSPENSION BASED ON 
                    PERFORMANCE OR MISCONDUCT.

  (a) Discipline of Supervisors.--
          (1) In general.--Title 38, United States Code, is amended by 
        inserting after section 711 the following:

``Sec. 712. Supervisors: removal, demotion, or suspension based on 
                    performance or misconduct

  ``(a) In General.--The Secretary may remove from civil service, 
demote, or suspend a covered individual who is an employee of the 
Department if the Secretary determines by substantial evidence that the 
performance or misconduct of the covered individual warrants such 
action.
  ``(b) Rights and Procedures.--(1)(A) When making an initial decision 
under subsection (a) with respect to determining whether a covered 
individual should be removed, demoted, or suspended, the deciding 
employee of the Department shall exclusively apply the following 
factors:
          ``(i) The nature and seriousness of the offense, and its 
        relation to the covered individual's duties, position, and 
        responsibilities, including whether the offense was intentional 
        or technical or inadvertent, or was committed maliciously or 
        for gain, or was frequently repeated.
          ``(ii) The covered individual's job level and type of 
        employment, including supervisory or fiduciary role, and 
        prominence of the position.
  ``(B) The Secretary shall review the initial decision and uphold such 
decision if it is supported by substantial evidence.
  ``(2) A covered individual subject to an action under subsection (a) 
is entitled to--
          ``(A) advance notice of the action and a file containing all 
        evidence in support of the proposed action;
          ``(B) be represented by an attorney or other representative 
        of the covered individual's choice; and
          ``(C) grieve the action in accordance with an internal 
        grievance process that the Secretary, in consultation with the 
        Assistant Secretary for Accountability and Whistleblower 
        Protection, shall establish for purposes of this subsection.
  ``(3) A final decision by the Secretary under paragraph (1)(B) that 
is not grieved, and a grievance decision under paragraph (2)(C), shall 
be final and conclusive.
  ``(4) The procedures under chapter 43 of title 5 shall not apply to a 
removal, demotion, or suspension under this section, and the Secretary 
may carry out such a removal, demotion, or suspension without first 
placing a covered individual on a performance improvement plan.
  ``(c) Timing.--(A) The aggregate period for notice, response, and 
final decision by the Secretary of an action under this section may not 
exceed 15 business days.
  ``(B) The period for the response of a covered individual to a notice 
under subsection (b)(2)(A) shall be 7 business days.
  ``(C) The final decision by the Secretary under subsection (b)(1)(B) 
shall--
          ``(i) be issued not later than 15 business days after notice 
        is provided under subsection (b)(2)(A); and
          ``(ii) be in writing and shall include the specific reasons 
        for the decision.
  ``(D) The Secretary shall ensure that the grievance process 
established under paragraph (2)(C) takes fewer than 21 days after the 
final decision.
  ``(d) Judicial Review.--(1) A covered individual adversely affected 
by a final decision under this section that is not grieved, or by a 
grievance decision under subsection (b)(2)(C), may obtain judicial 
review of such decision.
  ``(2) Any removal, demotion, or suspension under this section is not 
appealable to the Merit Systems Protection Board, or to any 
administrative judge or other person appointed by the Merit Systems 
Protection Board.
  ``(3) In any case in which judicial review is sought under paragraph 
(1), the court shall review the record and may set aside any Department 
action found to be--
          ``(A) arbitrary, capricious, an abuse of discretion, or 
        otherwise not in accordance with a provision of law;
          ``(B) obtained without procedures required by a provision of 
        law having been followed; or
          ``(C) unsupported by substantial evidence.
  ``(4) Except to the extent that an appeal under this subsection 
presents a constitutional issue, such court may not review a challenge 
to the penalty imposed against the covered individual or mitigate such 
penalty.
  ``(e) Demoted Individuals.--(1) A demotion under subsection (a) shall 
be carried out as a reduction in grade for which the covered individual 
is qualified, that the Secretary determines is appropriate, and that 
reduces the annual rate of pay of the covered individual.
  ``(2) Notwithstanding any other provision of law, any covered 
individual so demoted--
          ``(A) shall, beginning on the date of such demotion, receive 
        the annual rate of pay applicable to such grade;
          ``(B) may not be placed on administrative leave during the 
        period during which an appeal (if any) under this section is 
        ongoing, and may only receive pay if the covered individual 
        reports for duty or is approved to use accrued unused annual, 
        sick, family medical, military, or court leave; and
          ``(C) who does not report for duty or receive approval to use 
        accrued unused leave shall not receive pay or other benefits.
  ``(f) Whistleblower Protection.--(1) In the case of a covered 
individual seeking corrective action (or on behalf of whom corrective 
action is sought) from the Office of Special Counsel based on an 
alleged prohibited personnel practice described in section 2302(b) of 
title 5, the Secretary may not remove, demote, or suspend such covered 
individual under subsection (a) without the approval of the Special 
Counsel under section 1214(f) of title 5.
  ``(2) In the case of a covered individual who has made a 
whistleblower disclosure to the Assistant Secretary for Accountability 
and Whistleblower Protection, the Secretary may not remove, demote, or 
suspend such covered individual under subsection (a) until--
          ``(A) in the case in which the Assistant Secretary determines 
        to refer the whistleblower disclosure under section 
        323(c)(1)(D) of this title to an office or other investigative 
        entity, a final decision with respect to the whistleblower 
        disclosure has been made by such office or other investigative 
        entity; or
          ``(B) in the case in which the Assistant Secretary determines 
        not to refer the whistleblower disclosure under such section, 
        the Assistant Secretary makes such determination.
  ``(g) Termination of Investigations by Office of Special Counsel.--
(1) Notwithstanding any other provision of law, the Special Counsel 
(established by section 1211 of title 5) may terminate an investigation 
of a prohibited personnel practice alleged by an employee or former 
employee of the Department after the Special Counsel provides to the 
employee or former employee a written statement of the reasons for the 
termination of the investigation.
  ``(2) Such statement may not be admissible as evidence in any 
judicial or administrative proceeding without the consent of such 
employee or former employee.
  ``(h) Application.--This section shall apply to any performance or 
misconduct of a covered individual beginning on the date of enactment 
of the Department of Veterans Affairs Accountability and Whistleblower 
Protection Act of 2017 (Public Law 115-41).
  ``(i) Definitions.--In this section:
          ``(1) The term `civil service' has the meaning given that 
        term in section 2101 of title 5.
          ``(2) The term `covered individual' means an employee of the 
        Department who is a supervisor or management official as 
        defined in section 7103(a) of title 5 occupying a position at 
        the Department, including individuals appointed pursuant to 
        this title, title 5, and hybrid employees appointed pursuant to 
        section 7401 of this title, but does not include--
                  ``(A) an individual occupying a senior executive 
                position (as defined in section 713(d) of this title);
                  ``(B) an individual appointed pursuant to section 
                7306, 7401(1), 7401(4), or 7405 of this title;
                  ``(C) an individual who has not completed a 
                probationary or trial period; or
                  ``(D) a political appointee.
          ``(3) The term `grade' has the meaning given such term in 
        section 7511(a) of title 5.
          ``(4) The term `misconduct' includes neglect of duty, 
        malfeasance, or failure to accept a directed reassignment or to 
        accompany a position in a transfer of function.
          ``(5) The term `political appointee' means an individual who 
        is--
                  ``(A) employed in a position described under sections 
                5312 through 5316 of title 5 (relating to the Executive 
                Schedule);
                  ``(B) a limited term appointee, limited emergency 
                appointee, or noncareer appointee in the Senior 
                Executive Service, as defined under paragraphs (5), 
                (6), and (7), respectively, of section 3132(a) of title 
                5; or
                  ``(C) employed in a position of a confidential or 
                policy-determining character under schedule C of 
                subpart C of part 213 of title 5, Code of Federal 
                Regulations, or successor regulation.
          ``(6) The term `suspend' means the placing of an employee, 
        for disciplinary reasons, in a temporary status without duties 
        and pay for a period in excess of 14 days.
          ``(7) The term `whistleblower disclosure' has the meaning 
        given such term in section 323(g) of this title.''.
          (2) Clerical amendment.--The table of contents for title 38, 
        United States Code, is amended by inserting after the item 
        relating to section 711 the following:

``712. Supervisors: removal, demotion, or suspension based on 
performance or misconduct.''.

SEC. 3. SENIOR EXECUTIVES: MODIFICATION OF PROCEDURES TO REMOVE, 
                    DEMOTE, OR SUSPEND BASED ON PERFORMANCE OR 
                    MISCONDUCT.

  Section 713 of title 38, United States Code, is amended--
          (1) in subsection (a)--
                  (A) by inserting ``by substantial evidence'', after 
                ``determines''; and
                  (B) by adding at the end the following:
  ``(3) When making an initial decision under this subsection with 
respect to determining whether a covered individual should be 
reprimanded or suspended, involuntarily reassigned, demoted, or 
removed, the deciding employee of the Department shall exclusively 
apply the following factors:
          ``(A) The nature and seriousness of the offense, and its 
        relation to the covered individual's duties, position, and 
        responsibilities, including whether the offense was intentional 
        or technical or inadvertent, or was committed maliciously or 
        for gain, or was frequently repeated.
          ``(B) The covered individual's job level and type of 
        employment, including supervisory or fiduciary role, and 
        prominence of the position.
  ``(4) The Secretary shall review the initial decision and uphold such 
decision if it is supported by substantial evidence.'';
          (2) in subsection (b)--
                  (A) in paragraph (3), by inserting ``after the final 
                decision'' after ``21 days''; and
                  (B) by adding at the end the following:
  ``(7) Except to the extent that an appeal under this subsection 
presents a constitutional issue, such court may not review a challenge 
to the penalty imposed against the covered individual or mitigate such 
penalty.''; and
          (3) by inserting after subsection (c) the following (and 
        redesignating subsection (d) as subsection (e)):
  ``(d) Application.--This section shall apply to any misconduct or 
performance of a covered individual beginning on the date of enactment 
of the Department of Veterans Affairs Accountability and Whistleblower 
Protection Act of 2017 (Public Law 115-41).''.

SEC. 4. MODIFICATION OF DISCIPLINARY PROCEDURES FOR EMPLOYEES OF THE 
                    DEPARTMENT OF VETERANS AFFAIRS.

  (a) Department of Veterans Affairs Employee Discipline 
Modifications.--Section 714 of title 38, United States Code, is 
amended--
          (1) in subsection (a),
                  (A) in paragraph (1), by inserting ``by substantial 
                evidence'' after ``the Secretary determines''; and
                  (B) by adding at the end the following:
  ``(3)(A) When making an initial decision under this subsection with 
respect to determining whether a covered individual should be removed, 
demoted, or suspended, the deciding employee of the Department shall 
exclusively apply the following factors:
          ``(i) The nature and seriousness of the offense, and its 
        relation to the covered individual's duties, position, and 
        responsibilities, including whether the offense was intentional 
        or technical or inadvertent, or was committed maliciously or 
        for gain, or was frequently repeated.
          ``(ii) The covered individual's job level and type of 
        employment, including supervisory or fiduciary role, and 
        prominence of the position.
          ``(iii) The covered individual's past disciplinary record.
          ``(iv) The covered individual's past work record, including 
        length of service, performance on the job, ability to get along 
        with fellow workers, and dependability.
          ``(v) Mitigating circumstances surrounding the offense such 
        as unusual job tensions, personality problems, mental 
        impairment, harassment, or bad faith, malice, or provocation on 
        the part of others involved in the matter.
  ``(B) The Secretary shall review the initial decision and uphold such 
decision if it is supported by substantial evidence.''.
          (2) in subsection (c)--
                  (A) by striking paragraph (1)(D); and
                  (B) in paragraph (3), by inserting before the period 
                the following: ``, and the Secretary may carry out such 
                a removal, demotion, or suspension without first 
                placing a covered individual on a performance 
                improvement plan'';
          (3) in subsection (d)--
                  (A) in paragraph (2), by adding at the end the 
                following:
  ``(C) Except to the extent that an appeal under this subsection 
presents a constitutional issue, the administrative judge may not 
review a challenge to the penalty imposed against the covered 
individual.'';
                  (B) in paragraph (3), by adding at the end the 
                following:
  ``(D) Except to the extent that an appeal under this subsection 
presents a constitutional issue, the Merit Systems Protection Board may 
not review a challenge to the penalty imposed against the covered 
individual.'';
                  (C) in paragraph (5), by adding at the end the 
                following:
  ``(C) Except to the extent that an appeal under this subsection 
presents a constitutional issue, such Court may not review a challenge 
to the penalty imposed against the covered individual or mitigate such 
penalty.''; and
                  (D) by striking paragraph (10);
          (4) by redesignating subsection (h) as subsection (j);
          (5) by inserting after subsection (g) the following:
  ``(h) Collective Bargaining Agreements.--The procedures in this 
section shall supersede any collective bargaining agreement to the 
extent that such agreement is inconsistent with such procedures.
  ``(i) Application.--This section shall apply to any performance or 
misconduct of a covered individual beginning on the date of enactment 
of the Department of Veterans Affairs Accountability and Whistleblower 
Protection Act of 2017 (Public Law 115-41).''; and
          (6) in paragraph (1) of subsection (j), as redesignated by 
        paragraph (4)--
                  (A) by inserting ``including individuals appointed 
                pursuant to this title, title 5, and hybrid employees 
                appointed pursuant to section 7401 of this title'' 
                after ``Department'';
                  (B) in subparagraph (D), by striking the period and 
                inserting ``; or''; and
                  (C) by adding after subparagraph (D) the following:
                  ``(E) a supervisor or management official as defined 
                in section 7103(a) of title 5.''.
  (b) VHA Employee Discipline Modifications.--Section 7403(f)(3) of 
such title is amended--
          (1) by striking ``Notwithstanding any other provision of this 
        title or other law,'' and inserting ``(A) Notwithstanding any 
        other provision of this title or other law, and consistent with 
        subparagraph (B),''; and
          (2) by adding at the end the following:
  ``(B) With respect to any covered individual (as that term is defined 
in section 712 or 714) appointed to such positions, such matters shall 
be resolved, at Secretary's sole discretion, under--
          ``(i) section 712;
          ``(ii) section 714; or
          ``(iii) title 5 as though such individuals had been appointed 
        under that title.''.

SEC. 5. INDEPENDENT STUDY REGARDING MANAGEMENT STRUCTURES OF DEPARTMENT 
                    OF VETERANS AFFAIRS.

  (a) In General.--Not later than 90 days after the date of the 
enactment of this Act, the Secretary of Veterans Affairs shall seek to 
enter into an agreement with the National Academy of Public 
Administration (referred to in this section as the ``Academy'') under 
which the Academy shall conduct a study and review of the oversight, 
accountability, and performance management structures of the Department 
of Veterans Affairs.
  (b) Considerations.--In conducting a study and review under this 
section, the Academy shall--
          (1) consult with the Secretary and outside stakeholders;
          (2) take into account previous reports and recommendations 
        pertaining to oversight, accountability, and performance 
        management of the Department;
          (3) examine alternatives and develop recommendations for 
        improving the oversight, accountability, and performance 
        management of the Department; and
          (4) make recommendations to improve the oversight, 
        accountability, and performance management of the Department.
  (c) Scope.--The scope of the study and review under this section 
shall include--
          (1) the organizational structure of the Department;
          (2) the employee performance management processes of the 
        Department;
          (3) training on performance management processes for 
        employees, supervisors, senior executives, and human resources 
        professionals of the Department;
          (4) employee professional development programs of the 
        Department; and
          (5) leadership development programs of the Department.
  (d) Best Practices.--In conducting the study, the Academy shall 
review best practices of other Federal agencies to determine whether 
they are applicable to the Department.
  (e) Report of the Academy.--Not later than 18 months after the date 
of the enactment of this Act, the Academy shall submit to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives a report that contains--
          (1) the findings of the study and review conducted under this 
        section; and
          (2) any other recommendations that the Academy determines 
        necessary and relevant to the study and review.
  (f) Report of the Secretary.--Not later than 90 days after the 
Academy submits the report under subsection (e), the Secretary shall 
submit to the Committees on Veterans' Affairs of the Senate and House 
of Representatives a report containing--
          (1) the evaluation of the Secretary of the findings and 
        recommendations made by the Academy;
          (2) the determination of the Secretary whether to implement 
        such recommendations and findings;
          (3) a timeline for such implementation; and
          (4) the determination of the Secretary whether such 
        implementation requires legislation.

SEC. 6. COMPTROLLER GENERAL STUDY ON VETERANS HEALTH ADMINISTRATION 
                    OVERSIGHT FUNCTIONS.

  (a) Study.--The Comptroller General of the United States shall 
conduct a study of the oversight functions of the Veterans Health 
Administration. Such study shall include an examination of each of the 
following:
          (1) How the Veterans Health Administration manages and 
        coordinates its oversight functions.
          (2) How the Veterans Health Administration determines the 
        appropriate number and types of employees necessary to carry 
        out such oversight functions.
          (3) How the Veterans Health Administration prioritizes the 
        work conducted pursuant to such oversight functions and the 
        extent to which the findings generated through such functions 
        are used to make system-wide improvements.
  (b) Report.--Not later than one year after the date of the enactment 
of this Act, the Comptroller General shall submit to the Committees on 
Veterans' Affairs of the Senate and House of Representatives a report 
on the results of the study required under subsection (a) and any 
recommendations of the Comptroller General with respect to such 
findings.

                          Purpose and Summary

    H.R. 4278, the ``Restore VA Accountability Act of 2023'' 
was introduced by Rep. Mike Bost of Illinois on June 22, 2023. 
The bill as ameded would amend Title 38 of the United States 
Code (U.S.C.) to modify personnel action procedures with 
respect to U.S. Department of Veterans Affairs (``VA'') 
employees. This bill would restore authorities Congress granted 
VA in 2017 through the 2017 VA Accountability and Whistleblower 
Protection Act (Pub. L. No 115-41) ensuring VA has the 
authority it needs to hold its employees accountable and 
provide quality care and benefits to the veterans it serves.

                  Background and Need for Legislation


Section 1: Short title

    This Act may be cited as the ``Restore Department of 
Veterans Affairs Accountability Act of 2023'' or the ``Restore 
VA Accountability Act of 2023''.

Section 2. Supervisors: Removal, demotion, or suspension based on 
        performance or misconduct

    In 2014, Committee oversight found that as many as forty 
veterans at the Phoenix VA Health Care System died while 
awaiting medical care. Further, the evidence showed that 
Phoenix VA Health Care System employees concealed these long 
wait times. The allegations of several whistleblowers, 
including Drs. Samuel Foote and Kathleen Mitchell from Phoenix, 
shed light on these issues and improper practices, which 
resulted in one of the largest scandals VA has ever endured. 
Subsequently, on August 7, 2014, in part to address the 
problems related to the scandal exposed by the Committee, the 
Veterans Access, Choice and Accountability Act (``Choice Act'') 
was signed into law by President Barack Obama, which, among 
many other provisions, gave the Secretary the expedited 
authority, found in 38 U.S.C. Sec. 714, to remove Senior 
Executive Service employees for poor performance or misconduct.
    After passage of the Choice Act, the Committee continued to 
uncover many instances of poor performance or misconduct by VA 
employees. Instances included allegations of the manipulation 
of disability claims data at the Philadelphia Regional Benefit 
Office;\1\ construction failures of a new medical center in 
Aurora, Colorado that was many years delayed and a billion 
dollars over budget;\2\ allegations of illegal use of 
government purchase cards resulting in the waste of billions of 
dollars annually;\3\ allegations of a VA employee remaining in 
her job after participating in an armed robbery;\4\ and 
numerous instances of not properly disciplining employees 
involved with the opioid theft or missing prescriptions.\5\ 
Throughout all of these incidents, it became clear that VA 
often did not hold individuals appropriately accountable for 
their actions, and additional legislation was needed to hold VA 
employees accountable.
---------------------------------------------------------------------------
    \1\After 10-month probe, report slams Phila. VA, Philly.com, April 
17, 2015 http://articles. philly.com/2015-04-17/news/
61222505_1_allison-hickey-veterans-affairs-benefits-officediana-rubens.
    \2\Aurora VA official: No line-by-line account of where $1 billion 
went, The Denver Post, July 2015 http://www.denverpost.com/news/
ci_28415366/va-deputy-secretary-making-eighth-tripdenver-hospital.
    \3\VA Put Vets at Risk by Spending Billions Unlawfully, 
Whistleblower Says, Government Executive, May 14, 2015 http://
www.govexec.com/contracting/2015/05/va-put-vets-risk-spendingbillions-
unlawfully-whistleblower-says/112828/.
    \4\VA Worker Gets Job Back Despite Armed Robbery Charge, The Daily 
Caller News Foundation, March 22, 2016 https://dailycaller.com/2016/03/
22/va-worker-gets-job-back-despite-armed-robbery-charge/.
    \5\AP: VA data show low rate of discipline for drug loss, theft, 
February 27, 2017 https://www.denverpost.com/2017/02/27/veterans-
affairs-hospitals-opioid-theft/.
---------------------------------------------------------------------------
    To compound these issues, the Committee found that VA was 
often not effectively able to discipline its employees. The 
U.S. Government Accountability Office (GAO), found that, on 
average, it takes six months to a year, if not longer, to 
remove a permanent civil servant in the Federal Government.\6\ 
This problem is epitomized by an example from 2014 where a VA 
peer-support specialist took a veteran, who was an inpatient at 
the substance abuse clinic of the Central Alabama Veterans 
Health Care System, to an off-campus location where he helped 
the veteran purchase illegal drugs and paid for the veteran to 
partake in other illicit behaviors.\7\ It took VA over a year 
to even begin the removal process for this employee.\8\ A study 
by Vanderbilt University's Center for the Study of Democratic 
Institutions found that when they surveyed non-management 
federal workers across the government and asked them how often 
under-performing, non-management employees are reassigned or 
dismissed, 70% said it ``rarely or never happens.''\9\ The 
Committee therefore concluded that VA employees were caught in 
a failed and antiquated bureaucracy in desperate need or 
reform.
---------------------------------------------------------------------------
    \6\U.S. Government Accountability Office, Federal Workforce: 
Improved Supervision and Better Use of Probationary Periods are Needed 
to Address Substandard Employee Performance http://www.gao.gov/assets/
670/668339.pdf.
    \7\Report: VA employee took recovering vet to crack house, 
Montgomery Advertiser, August 16, 2014 http://
www.montgomeryadvertiser.com/story/news/local/alabama/2014/08/17/
reportva-employee-took-recovering-vet-crack-house/14190573/.
    \8\A VA employee, a crack house, and a lengthy firing process, The 
Washington Post, August 29, 2014 https://www.washingtonpost.com/news/
federal-eye/wp/2014/08/29/a-va-employee-a-crack-house-and-a-lengthy-
firing-process/.
    \9\The Fiscal Times, Federal Employees: Can't Hire the Best, Can't 
Fire the Worst, July 17, 2015 http://www.thefiscaltimes.com/2015/07/17/
Federal-Employees-Can-t-Hire-Best-Can-t-Fire-Worst.
---------------------------------------------------------------------------
    In an attempt to reform the failed system, the Committee 
worked on a bipartisan basis to pass the Department of Veterans 
Affairs Accountability and Whistleblower Protection Act of 2017 
(``Accountability Act''). On June 23, 2017, President Trump 
signed the Accountability Act into law.
    The Accountability Act gave VA authorities that were needed 
to hold its employees accountable. The Accountability Act, in 
part, strengthened the authorities intended to keep it Senior 
Executives accountable, found in 38 U.S.C. Sec. 713, and 
created 38 U.S.C. Sec. 714 which was intended to create a more 
fair and efficient disciplinary process at VA for many of its 
supervisory and non-supervisory employees. 38 U.S.C. Sec. 714 
includes provisions intended by Congress to: (a) provide a 
substantial evidence (reasonableness) test to the VA 
Secretary's and MSPB's review of disciplinary proposals; (b) 
mandate an expedited timeline for disciplinary decisions and 
reviews; (c) prevent the Merit System Protections Board (MSPB) 
from mitigating the penalty VA imposed; (d) provide protections 
for employees in the disciplinary process who are also 
whistleblowers; and (e) allow VA to implement these provisions 
without coordination with federal unions.
    Evidence examined shows that the Accountability Act gave VA 
the authority it needed to hold its employees accountable. Data 
provided by VA, excerpted below, shows that removal, 
suspension, and demotion disciplinary actions increased more 
than 50% the year after the Accountability Act was passed, 
compared with the year prior. Slowly, as portions of the 
Accountability Act were stripped of the law, disciplinary 
numbers returned to historical averages. Committee oversight 
suggests that these large changes in disciplinary actions, 
resulted directly from authorities included in the VA 
Accountability and Whistleblower Protection Act.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                    Count of Actions                                                             Pre- or Post-Act
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            1 Year     1st Year    2nd Year    3rd Year    4th Year    5th Year    6th Year
                                                           Pre* (06/  Post* (06/  Post* (06/  Post* (06/  Post* (06/  Post* (06/  Post* (06/     Grand
                    Nature of Action                      23/16- 06/  23/17- 06/  23/18- 06/  23/19- 06/  23/20- 06/  23/21- 06/  23/22- 06/     Total
                                                            22/17)      22/18)      22/19)      22/20)      22/21)      22/22)      22/23)
--------------------------------------------------------------------------------------------------------------------------------------------------------
REMOVAL Total...........................................       1,006       1,567       1,358       1,410       1,252       1,123       1,009       8,725
SUSPENSION More Than 14 Days Total......................         100         136         107         156         117          57          56         739
DEMOTION to Lower Grade, Level, or Band.................          69          88          98          81          56          57          63         512
                                                         -----------------------------------------------------------------------------------------------
    Grand Total.........................................       1,175       1,791       1,563       1,647       1,425       1,247       1,128       9,976
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Unfortunately, starting in 2018, decisions from the U.S. 
Court of Appeals for the Federal Circuit, the MSPB, and the 
Federal Labor Relations Authority (FLRA) significantly reduced 
the effectiveness of the authorities the Accountability Act 
gave VA in 38 U.S.C. Sec. 714, leading to a slow decrease in 
removal, suspension, and demotion actions at VA.\10\ Due to 
these court decision, as of April 30, 2021, VA stopped using 38 
U.S.C. Sec. 714 to take action against AFGE bargaining unit 
employees and on January 17, 2023, VA stopped using 38 U.S.C. 
Sec. 714 to take action against many of its remaining 
employees, called ``hybrid Title 38 employees.''\11\ On April 
3, 2023, VA wholesale stopped using 38 U.S.C. Sec. 714, against 
employees who were still eligible for 38 U.S.C. Sec. 714 
disciplinary action, many of whom are supervisory 
employees.\12\
---------------------------------------------------------------------------
    \10\A January 23, 2023 letter from the Secretary of Veterans 
Affairs Denis McDonough to Committee Chairman Mike Bost, provided the 
following descriptions of relevant court cases:
---------------------------------------------------------------------------

          Sayers vs. VA, 954 F.3d 1370 (Fed. Cir. 2020)--The 
        Federal Circuit ruled that section 714 could not be applied 
        retroactively to misconduct and performance predating VAAWPA. 
        The Court further stated that the MSPB must review not only the 
        evidence establishing the misconduct, but also the penalty to 
        assess whether it is supported by substantial evidence. It 
        acknowledged that the MSPB lacks authority to mitigate the 
        penalty under the statute. See also Brenner v. VA, 990 F.3d 
        1313 (Fed. Cir. 2021).
          Connor vs. VA, 8 F.4th 1319 (Fed. Cir. 2021) and 
        Rodriguez vs. VA, 8 F.4th 1290 (Fed. Cir. 2021)--The Federal 
        Circuit ruled that section 714's reduction of the evidentiary 
        standard to substantial evidence did not apply to VA's deciding 
        official, who was required to use the higher preponderance of 
        the evidence standard. The Court also ruled that VA must 
        consider the relevant factors when assessing the appropriate 
        penalty in section 714 actions.
          Richardson vs. VA, 2023 M.S.P.B 1 (MSPB 2023)--MSPB 
        found that section 714's definition of covered individuals did 
        not include title 38 hybrid employees, meaning they cannot be 
        disciplined using the enhanced authority.
          Labor Decisions, VA has also faced labor challenges 
        to its implementation of section 714 under its collective 
        bargaining agreements (CBA), including but not limited to the 
        following:

                  Performance Improvement Plans (PIP) in 
                AFGE CBA: In 2018, an arbitrator issued an award that 
                was upheld by the FLRA in 2021, following VA's request 
                for reconsideration. The FLRA found that VA violated 
                the American Federation of Government Employees' (AFGE) 
                CBA by failing to provide AFGE bargaining unit 
                employees (BUE) performance improvement plans prior to 
                taking a performance action under section 714. VA was 
                required to resume the use of PIPs for AFGE BUEs and to 
                rescind any actions that violated the CBA and to make 
                all employees whole. VA is currently implementing this 
                award.
                  Impact and Implementation Bargaining: 
                Under VA's CBA, AFGE filed a national grievance 
                alleging VA failed to bargain regarding implementation 
                of section 714. The arbitrator's initial decision in 
                favor of VA was reversed by the FLRA which found that 
                VA violated 5 U.S.C. Sec. 7106(b)(3) by failing to 
                bargain impact and implementation of section 714. 
                Subsequent arbitration led to an order for VA to cease 
                using section 714 against AFGE BUEs until retroactive 
                impact and implementation bargaining was complete and 
                to make impacted AFGE BUEs whole. AFGE has filed unfair 
                labor practice (ULP) complaints with FLRA alleging VA 
                failed to comply with this order. VA and AFGE are 
                currently in confidential mediation to discuss the ULP 
                complaint, the arbitration award, and a memorandum of 
                understanding concerning impact and implementation of 
                section 714 for AFGE BUEs.
---------------------------------------------------------------------------
    \11\Statement of Ms. Tracey Therit, Chief Human Capital Officer 
Human Resources and Administration/ Operations, Security and 
Preparedness, Department of Veterans Affairs, ``Accountability at VA: 
Leadership Decisions Impacting Its Employees And Veterans,'' 
Subcomittee On Oversight and Investigations Subcommittee, Committee On 
Veterans' Affairs, U.S. House Of Representatives, March 9, 2023 https:/
/docs.house.gov/meetings/VR/VR08/20230309/115445/HHRG 118-VR08-Wstate-
TheritT 20230309.pdf.
    \12\VA no longer uses Trump-era law allowing officials to fire feds 
faster, The Washington Post, August 7, 2023, https://
www.washingtonpost.com/politics/2023/04/07/va-trump-rule-federal-
employee-firings/.
---------------------------------------------------------------------------
    Simultaneous with VA's decision to rollback use of 38 
U.S.C. Sec. 714, Committee oversight uncovered situations where 
VA still failed to keep its employees accountable. A recent 
Committee investigation uncovered a supervisor, who was the 
subject of three investigations, including an Administrative 
Investigation Board (AIB) report, which includes roughly 4,000 
pages and 57 hours of incriminating evidence.\13\ The AIB found 
that the supervisory employee made racially charged statements, 
forced subordinates to give him meals and rides, lied to his 
subordinates, bribed his subordinates, retaliated against 
subordinates by giving them the worst work assignments, and 
consistently didn't even do his job.\14\ Under traditional 
authorities VA believed they did not have enough evidence to 
appropriately discipline an obviously problematic employee. 
Because of VA's policy decision to stop using 38 U.S.C. 
Sec. 714, VA believes it does not have the authority to remove 
the individual.
---------------------------------------------------------------------------
    \13\Letters sent to VA about the investigation include those 
referenced in the following: Chairman Bost, Rep. Obernolte Continue to 
Press VA on Lack of Accountability at Loma Linda, House Committee on 
Veterans' Affairs, Press Release, August 3, 2023, https://
veterans.house.gov/news/documentsingle.aspx?DocumentID=6247.
---------------------------------------------------------------------------
    As VA is unwilling or unable to use its 38 U.S.C. Sec. 714 
authority to discipline supervisors, this section would create 
a new disciplinary authority, 38 U.S.C. Sec. 712, under which 
VA would have authority to discipline many of its supervisory 
personnel. Committee oversight has made clear a small 
proportion of VA's middle managers cause disproportionate harm 
for their subordinates and the veterans they serve. 
Furthermore, unlike many of their subordinates, supervisors are 
often not held accountable for their misconduct and poor 
performance. 38 U.S.C. Sec. 712 mirrors the legal authorities 
VA has available to keep its Senior Executives accountable in 
38 U.S.C. Sec. 713. Like Senior Executives, VA supervisors are 
non-union employees with great responsibility. Additionally, VA 
supervisors, like Senior Executives, are often not held 
accountable for their actions and therefore require more 
effective disciplinary procedures.
    Like the preexisting 38 U.S.C. Sec. 713, the proposed 38 
U.S.C. Sec. 712 would remove MSPB review of disciplinary cases 
against VA supervisors, preserving that review right for non-
supervisory union VA employees. The section would create levels 
of VA review, in addition to judicial appeal rights, to ensure 
VA quality supervisors are not unfairly disciplined.
    In addition to applying disciplinary procedures found in 38 
U.S.C. Sec. 713, to supervisors, 38 U.S.C. Sec. 712 also 
specifies factors VA must consider when making disciplinary 
decisions. Court decisions have found that VA must apply a 12-
step-test, called the Douglas Factors, when deciding to 
discipline an employee. The MSPB, an unelected body, created 
the Douglas Factors over 40 years ago. The factors are not 
stated in law and may provide employees unnecessary 
opportunities to dispute, and overturn, their discipline when 
all boxes aren't checked, rather than when leadership 
determines an employee is not providing veterans quality care 
and benefits. To streamline the VA discipline process, and 
provide transparency to VA employees, this section would codify 
the following two Douglas Factors: (A) The nature and 
seriousness of the offense, and its relation to the covered 
individual's duties, position, and responsibilities, including 
whether the offense was intentional or technical or 
inadvertent, or was committed maliciously or for gain, or was 
frequently repeated; and (B) The covered individual's job level 
and type of employment, including supervisory or fiduciary 
role, and prominence of the position. These factors simply 
ensure supervisors are held accountable for their actions, 
whether poor performance or misconduct, and ensure their 
actions are held against the standard expected of a VA employee 
of their seniority.
    Unlike the factors which would apply to bargaining unit 
employees, under 38 U.S.C. Sec. 714 (discussed below), 38 
U.S.C. Sec. 712 would not give supervisors the opportunity to 
argue their past good performance should give them a pass for 
their recent poor performance or misconduct. By removing 
Douglas Factors which enable lawyers to argue that their client 
deserves another chance, despite their client's poor 
performance or misconduct, the Committee believes VA leaders 
would be empowered to quickly discipline supervisors without 
the concern of never-ending legal challenges, allowing VA 
leaders and their subordinates to focus on serving veterans.
    Importantly, this section would maintain the whistleblower 
protections, including those available for supervisors, 
included in the Accountability Act. These protections are 
designed to lessen the risk of VA and its leaders using 
discipline as retaliation against whistleblowers, helping to 
ensure VA whistleblowers will continue to come forward when 
they observe fraud and abuse at the Department.

Section 3. Senior Executives: Modification of procedures to remove, 
        demote, or suspend based on performance or misconduct

    Despite concerted efforts to hold VA senior leadership 
accountable for poor performance and misconduct, a 
disproportionately small number of VA's Senior Executives are 
removed, suspended, or demoted because of their failures. Since 
June 2016, data provided by VA shows that only four Senior 
Executives have been removed by VA because of poor performance 
or misconduct. Committee oversight suggests that many others 
are not properly held accountable.
    This section would ensure that VA has the authority it 
needs to hold its Senior Executives accountable, primarily by 
making technical changes to 38 U.S.C. Sec. 713 designed to make 
Congress's intent in the Accountability Act clear. Court 
decisions, referenced above, which have decreased the 
effectiveness of 38 U.S.C. Sec. 714, have created the risk of 
legal challenges to 38 U.S.C. Sec. 713, which provides VA the 
authorities it needs to hold Senior Executives accountable. The 
technical changes would make Congress's intent in the 
Accountability Act explicitly clear, reinforcing that a 
substantial evidence (reasonableness) test applies to the VA 
Secretary's review of the discipline proposing authority's 
disciplinary recommendation, and that courts reviewing 
disciplinary appeals can review whether VA's disciplinary 
decision is appropriate, but not second guess the appropriate 
level of discipline, if the employee is guilty of misconduct or 
poor performance.
    Additionally, 38 U.S.C. Sec. 713, like in 38 U.S.C. 
Sec. 712 (discussed above), specifies the two most important 
Douglas Factors (the same factors as 38 U.S.C. Sec. 712), which 
must be exclusively considered when determining appropriate 
discipline for VA Senior Executives. Like supervisors, VA 
Senior Executives should not be able to explain away their 
misconduct or poor performance.

Section 4. Modification of disciplinary procedures for employees of the 
        Department of Veterans Affairs

    This Section would make technical changes designed to make 
Congress's intent in the Accountability Act clearer and make 
the disciplinary authorities in 38 U.S.C. Sec. 714 usable so 
that VA can keep its employees accountable and provide veterans 
quality care and benefits.
    The Accountability Act gave VA the authority it needed to 
hold its employees accountable. As discussed in section 2, 
removal, suspension, and demotion disciplinary actions 
increased more than 50% the year after the Accountability Act 
was passed, compared with the year prior. Slowly, as portions 
of the Accountability Act were stripped out of the law, 
disciplinary numbers returned to historical averages.
    As discussed in section 2, the Accountability Act gave VA 
authorities it needed to hold its employees accountable. 38 
U.S.C. Sec. 714 includes provisions intended by Congress to: 
(a) provide a substantial evidence (reasonableness) test to the 
VA Secretary's and MSPB's review of disciplinary proposals; (b) 
mandate an expedited timeline for disciplinary decisions and 
reviews; (c) prevent MSPB from mitigating the penalty VA 
imposed; (d) provide protections for employees in the 
disciplinary process who are also whistleblowers; and (e) allow 
VA to implement these provisions without coordination with 
federal unions. The Restore VA Accountability Act of 2023 would 
clarify these important provisions, so that going forwards 38 
U.S.C. Sec. 714 is not misinterpreted by an administration 
court, to strip away accountability authorities from VA 
leaders.
    Further, this Bill would specify which of the 
aforementioned Douglas Factors apply to union employees. VA 
interpreted the VA Accountability and Whistleblower Protection 
Act to not require VA to apply the Douglas Factors when making 
disciplinary decisions. Subsequent court cases have reimposed 
the 12-factor test requirement. H.R. 4278 would state the five 
factors VA must consider when making disciplinary decisions for 
union employees.\15\ Unlike disciplining supervisory (under 38 
U.S.C. Sec. 712) and senior executive (under 38 U.S.C. 
Sec. 713) VA employees, which would require two factor 
consideration, disciplining non-supervisory, union, employees 
would require five factor consideration. Included in these five 
factors are the employees' past work record and mitigating 
factors that allow non-supervisory employees additional due 
process rights to prove they should remain VA employees even 
after poor performance or misconduct.
---------------------------------------------------------------------------
    \15\The five factors VA must exclusively consider are: (A) The 
nature and seriousness of the offense, and its relation to the covered 
individual's duties, position, and responsibilities, including whether 
the offense was intentional or technical or inadvertent, or was 
committed maliciously or for gain, or was frequently repeated; (B) The 
covered individual's job level and type of employment, including 
supervisory or fiduciary role, and prominence of the position; (C) The 
covered individual's past disciplinary record; (D) The covered 
individual's past work record, including length of service, performance 
on the job, ability to get along with fellow workers, and 
dependability; and (E) Mitigating circumstances surround the offense 
such as unusual job tensions, personality problems, mental impairment, 
harassment, or bad faith, malice, or provocation on the part of others 
involved in the matter.
---------------------------------------------------------------------------

                                Hearings

    On July 12, 2023, the Subcommittee on Oversight and 
Investigation held a legislative hearing on H.R. 4278 and other 
bills that were pending before the subcommittee.
    The following witnesses testified:
           Mr. Lewis Ratchford, Chief Security Officer, 
        U.S. Department of Veterans Affairs;
           Mr. Rondy Waye, Executive Director, Human 
        Capital Programs, U.S. Department of Veterans Affairs;
           Mr. Ray Tellez, Acting Deputy Under 
        Secretary for Automated Benefits Delivery, U.S. 
        Department of Veterans Affairs;
           Dr. Angela Billups, Executive Director, 
        Office of Acquisition and Logistics, U.S. Department of 
        Veterans Affairs;
           Mr. David Case, Deputy Inspector General, 
        U.S. Department of Veterans Affairs;
           Mr. Joshua Hastings, Veterans Benefits 
        Policy Analyst, The American Legion;
           Mr. Patrick Murray, Director, National 
        Legislative Service, Veterans of Foreign Wars;
           Mr. Clint Romesha, SSG (ret.), Board of 
        Director, Emeritus, America's Warrior Partnership;
           Ms. Terry Gerton, President and Chief 
        Executive Officer, National Academy of Public 
        Administration.
    The following individuals and organizations submitted 
statements for the record:
           Concerned Veterans for America;
           National Federation of Federal Employees;
           Senior Executives Association;
           American Federation of Government Employees
           Partnership for Public Service;
           Dr. Donald F. Kettl;
           United Nurses Association of California/
        Union of Health Care Professionals;
           Service Employees International Union.

                       Subcommittee Consideration

    On July 19, 2023, the Subcommittee on Oversight and 
Investigations held a markup on the legislation included in the 
text of this bill. The bill was ordered favorably forwarded to 
the full Committee on Veterans Affairs by voice vote.

                        Committee Consideration

    On July 26, 2023, the full Committee met in open markup 
session, a quorum being present, and ordered H.R. 4278, as 
amended, be reported favorably to the House of Representatives 
by a recorded vote with 14 yays and 11 nays. During the 
consideration of the bill, the following amendments were 
considered:
    1. An amendment offered by Mr. Levin that would strike the 
``substantial'' evidentiary standard and replace it with a 
``preponderance'' for the review of the initial fact-finding. 
The amendment failed by a recorded vote of 11 yays and 14 nays.
    2. An amendment offered by Mr. Takano that would require VA 
to consider all twelve Douglas Factors for disciplinary 
decisions under sections 712, 713, and 714. The amendment 
failed by voice vote.
    3. An amendment offered by Mr. Landsman that would strike a 
provision that gives the Secretary the flexibility to forgo 
implementing a Performance Improvement Plan before initiating 
disciplinary action. The amendment failed by voice vote.
    4. An amendment offered by Ms. Cherfilus-McCormick that 
would strike the provision eliminating MSPB review for non-
union supervisors. This amendment would also strike the 
provision limiting MSPB review to appeals on the facts of the 
case, rather than the chosen penalty. The amendment failed by a 
recorded vote of 11 yays to 14 nays.
    5. An amendment offered by Mr. Deluzio would strike the 
provision that allows the disciplinary authorities in this bill 
to be applied retroactively going back to the enactment of the 
2017 Accountability Act. The amendment failed by a recorded 
vote of 11 yays to 14 nays.
    6. An amendment offered by Mr. McGarvey that would strike 
Section 4 of the underlying bill text. The amendment failed by 
a recorded vote of 11 yays to 14 nays.
    7. An amendment offered by Mrs. Budzinski that would 
require VA's implementation of the Restore VA Accountability 
Act to be collectively bargained with its employee unions. The 
amendment failed by a recorded vote of 11 yays to 14 nays.
    8. An amendment offered by Mr. Mrvan that would authorize 
an independent study performed by the National Academy of 
Public Administration regarding the management structures of 
the Department of Veterans Affairs. The amendment was approved 
by voice vote.
    9. An amendment offered by Ms. Brownley that would 
authorize the Comptroller General to perform a study on 
Veterans Health Administration oversight functions. The 
amendment was approved by voice vote.
    10. An amendment offered by Mr. Mrvan that would require 
the Secretary to report to Congress the Department's costs 
related to the 2017 Accountability Act since its enactment and 
how much money has been spent on attorney's representing the 
Department on appeals related to disciplinary actions taken 
under 38 U.S.C. Sec. 713 and 714 authorities. The amendment 
failed by a recorded vote of 11 yays to 14 nays.
    11. An amendment offered by Mr. Pappas that would require 
training for all employees that are covered under 38 U.S.C. 
Sec. 712 and 713. The amendment would require the training be 
developed in consolation with at least three other federal 
agencies and require refresher training every two years. The 
amendment failed by a recorded vote of 12 yays to 13 nays.
    A motion by Representative Bergman to report H.R. 4278, as 
amended, favorably to the House of Representatives was approved 
by a recorded vote of 14 yays to 11 nays.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, seven recorded votes were taken 
on amendments or in connection with ordering H.R. 4278, as 
amended, reported to the House.

                      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.

         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 of H.R. 4278, as amended, are to restore 
Congress's intent in the VA Accountability and Whistleblower 
Protection Act of 2017 to give VA the authority it needs to 
quickly remove, demote, and suspend employees who are a 
disservice to veterans.

                  Earmarks and Tax and Tariff Benefits

    H.R. 4278 does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
4278, as amended, prepared by the Director of the Congressional 
Budget Office.

     Budget Authority and Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 4278, as amended, provided by the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974:

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    H.R. 4278 would make several changes to disciplinary 
policies for employees of the Department of Veterans Affairs 
(VA).
    The bill would:
           Allow VA to more quickly remove, demote, or 
        suspend employees;
           Truncate the grievance processes for 
        employees affected by adverse disciplinary action; and
           Require two studies of VA's performance 
        management processes and oversight.
    Allowing VA to remove, demote, or suspend employees more 
quickly would change which people VA employs, but would not 
significantly affect the number of people who work for the 
department. Thus, those changes would have an insignificant 
effect on the budget.
    The bill would require VA to contract with the National 
Academy of Public Administration to study the department's 
performance management systems. The bill also would require the 
Government Accountability Office to conduct a study of the 
oversight functions of the Veterans Health Administration. 
Based on the cost of similar studies, CBO estimates the studies 
required by H.R. 4278 would each cost $1 million. In total, 
implementing H.R. 4278 would cost $2 million over the 2023-2028 
period; any spending would be subject to the availability of 
appropriated funds.
    The CBO staff contact for this estimate is Logan Smith. The 
estimate was reviewed by Christina Hawley Anthony, Deputy 
Director of Budget Analysis.
                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

                       Federal Mandates Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandate Reform Act, P.L. 104-4 is inapplicable to H.R. 4278, as 
amended.

                      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. 
4278, as amended.

                  Applicability to Legislative Branch

    The Committee finds that H.R. 4278, 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. 4278, 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


Section 1: Short title

    Section 1 would establish the short title of the bill as 
``Restore Department of Veterans Affairs Accountability Act of 
2023 or the ``Restore VA Accountability Act of 2023.''

Section 2: Supervisors: Removal, demotion, or suspension based on 
        performance or misconduct

    Section 2(a) would insert a new 38 U.S.C. Sec. 712. This 
section would create a new disciplinary authority, 38 U.S.C. 
Sec. 712, under which VA would have authority to discipline 
many of its supervisory personnel. The new disciplinary 
authority would mirror legal authorities VA has available to 
keep its Senior Executives Accountable in 38 U.S.C. Sec. 713.
          Section 712(a) would give the VA Secretary authority 
        to discipline supervisors who they determine, as 
        supported by substantial evidence, warrant such action 
        because of misconduct or poor performance.
          Section 712(b) details the rights and procedures that 
        would apply to disciplining a VA supervisory employee. 
        Importantly, the section would: codify two factors 
        which must exclusively be considered when deciding 
        whether to discipline a supervisor;\16\ specify that 
        the VA Secretary should review a proposing disciplinary 
        authority's disciplinary decision, using a substantial 
        evidence (reasonableness) test; specify that VA 
        supervisors are entitled to advanced notice of 
        disciplinary actions, and representation by an 
        attorney; and would have a grievance process within VA 
        to dispute proposed discipline.
---------------------------------------------------------------------------
    \16\The two factors are (1) the nature and seriousness of the 
offense, and its relation to the covered individual's duties, position, 
and responsibilities, including whether the offense was intentional or 
technical or inadvertent, or was committed maliciously or for gain, or 
was frequently repeated; and (2) the covered individual's job level and 
type of employment, including supervisory or fiduciary role, and 
prominence of the position.
---------------------------------------------------------------------------
          Section 712(c) would mandate time limits for steps 
        taken by the Secretary and the covered supervisor 
        during the disciplinary process.
          Section 712(d) would provide certain judicial review 
        rights for VA supervisors, including the right to seek 
        judicial review of a disciplinary decision, but would 
        specify that VA supervisors may not appeal a 
        disciplinary decision to the Merit System Protection 
        Board.
          Section 712(e) would specify the required process VA 
        must follow when demoting a supervisor for disciplinary 
        reasons.
          Section 712(f) would create certain whistleblower 
        protection procedures, including Office of Special 
        Counsel investigations, which would create a process 
        which would protect VA supervisors from whistleblower 
        retaliation.
          Section 712(g) would require the Office of Special 
        Counsel to provide a written explanation before 
        terminating an investigation into whistleblower 
        retaliation.
          Section 712(h) would specify that the authorities in 
        38 U.S.C. Sec. 712 can be applied to actions taken by 
        the covered supervisors starting on the date the 
        Accountability Act became law.
          Section 712(i) includes the definitions to be 
        included in the section, and specifies that 38 U.S.C. 
        Sec. 712 applies to certain VA supervisors.

Section 3. Senior Executives: Modification of procedures to remove, 
        demote, or suspend based on performance or misconduct

    Section 3 ensures VA has authority it needs to hold Senior 
Executives accountable by making technical changes to 38 U.S.C. 
Sec. 713 to make Congress's intent in the VA Accountability and 
Whistleblower Protection Act clear. Section 3 would make the 
following modifications to 38 U.S.C. Sec. 713:
          Section 713(a) would be modified by giving the VA 
        Secretary authority to discipline covered senior 
        executives who the Secretary determines, as supported 
        by substantial evidence, warrant such action because of 
        misconduct or poor performance; codifying two 
        factors\17\ VA must exclusively consider when deciding 
        whether to discipline senior executives; and specifying 
        the VA Secretary shall review a proposing disciplinary 
        authority's disciplinary decision using a substantial 
        evidence test.
---------------------------------------------------------------------------
    \17\The two factors are (1) the nature and seriousness of the 
offense, and its relation to the covered individual's duties, position, 
and responsibilities, including whether the offense was intentional or 
technical or inadvertent, or was committed maliciously or for gain, or 
was frequently repeated; and (2) the covered individual's job level and 
type of employment, including supervisory or fiduciary role, and 
prominence of the position.
---------------------------------------------------------------------------
          Section 713(b) would be modified by specifying the 
        Secretary shall ensure the grievance process takes 
        fewer than 21 days after a final disciplinary decision; 
        and adding language specifying absent a constitutional 
        issue, courts may not review a challenge to penalties 
        imposed against covered individuals or mitigate such 
        penalties.
          Section 713(d) would be added specifying that the 
        authorities in 38 U.S.C. Sec. 713 apply to covered 
        senior executives starting on the date the 
        Accountability Act became law.
          Subsection 713(d) would be redesignated as subsection 
        713(e).

Section 4: Modification of disciplinary procedures for employees of the 
        Department of Veterans Affairs

    Section 4(a) would make technical changes to 38 U.S.C. 
Sec. 714 to make Congress's intent in the Accountability Act 
clearer and make the disciplinary authorities in 38 U.S.C. 
Sec. 714 usable so VA can keep employees accountable. Section 
4(a) would make the following modifications to 38 U.S.C. 
Sec. 714:
          Section 714(a) would be modified by giving the VA 
        Secretary authority to discipline covered individuals 
        who the Secretary determines, as supported by 
        substantial evidence, warrant such action because of 
        misconduct or poor performance; codifying five 
        factors\18\ VA must exclusively consider when deciding 
        whether to discipline covered individuals; and adding 
        language specifying the VA Secretary must review a 
        proposing disciplinary authority's disciplinary 
        decision using a substantial evidence test.
---------------------------------------------------------------------------
    \18\The five factors are (1) the nature and seriousness of the 
offense, and its relation to the covered individual's duties, position, 
and responsibilities, including whether the offense was intentional or 
technical or inadvertent, or was committed maliciously or for gain, or 
was frequently repeated; (2) the covered individual's job level and 
type of employment, including supervisory or fiduciary role, and 
prominence of the position; (3) the covered individual's past 
disciplinary record; (4) the covered individual's past work record, 
including length of service, performance on the job, ability to get 
along with fellow workers, and dependability; and (5) mitigating 
circumstances surrounding the offense such as unusual job tensions, 
personality problems, mental impairment, harassment, or bad faith, 
malice, or provocation on the part of others involved in the matter.
---------------------------------------------------------------------------
          Section 714(c) would be modified by striking 
        paragraph (1)(D), which specifies Section 714(c) 
        supersedes inconsistent collective bargaining 
        agreements; and inserting language giving the Secretary 
        the ability to remove, demote, or suspend a covered 
        individual without first placing the individual on a 
        performance improvement plan.
          Section 714(d) would be modified by adding language 
        preventing, absent a constitutional issue, 
        administrative judges or the MSPB from reviewing 
        challenges to penalties imposed against covered 
        individuals; specifying courts, absent a constitutional 
        issue, may not review challenges to penalties imposed 
        against covered individuals or mitigate such penalties; 
        and striking Section 714(d)(10), which states if 
        employees subject to a collective bargaining agreement 
        choose to grieve actions taken under Section 714(d) 
        through procedures provided in the bargaining 
        agreement, Section 714(c) and (d) procedures apply.
          Section 714(h) would be redesignated as Section 
        714(j).
          Section 714(i) would be added to specify Section 714 
        procedures supersede collective bargaining agreements 
        if the agreements are inconsistent with Section 714 and 
        Section 714(i), Application, specifying Section 714 can 
        be applied to actions taken against covered individuals 
        starting on the date the Accountability Act was 
        enacted, would be added after Section 714(g).
          Section 714(j), as redesignated by Section 4(a)(4), 
        would be modified by making the following changes to 
        the covered individual definition: specifying covered 
        individuals include individuals appointed pursuant to 
        Title 38, Title 5, and hybrid employees appointed 
        pursuant to Title 38 Sec. 7401; specifying a 
        supervisors or management officials as defined in Title 
        5 7103(a) are not covered individuals.
          Section 4(b) would amend Title 38 U.S.C. 
        Sec. 7403(f)(3) by adding a subsection (B) stating 
        matters involving covered individuals, as defined in 
        Section 712 or Section 714, will be resolved at the 
        Secretary's sole discretion under Section 712, Section 
        714, or Title 5 as though such individuals had been 
        appointed under that title.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

                      TITLE 38, UNITED STATES CODE



           *       *       *       *       *       *       *
PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


                          CHAPTER 7--EMPLOYEES

                 SUBCHAPTER I--GENERAL EMPLOYEE MATTERS

Sec.
     * * * * * * *
712. Supervisors: removal, demotion, or suspension based on performance 
          or misconduct.
     * * * * * * *

SUBCHAPTER I--GENERAL EMPLOYEE MATTERS

           *       *       *       *       *       *       *


Sec. 712. Supervisors: removal, demotion, or suspension based on 
                    performance or misconduct

  (a) In General.--The Secretary may remove from civil service, 
demote, or suspend a covered individual who is an employee of 
the Department if the Secretary determines by substantial 
evidence that the performance or misconduct of the covered 
individual warrants such action.
  (b) Rights and Procedures.--(1)(A) When making an initial 
decision under subsection (a) with respect to determining 
whether a covered individual should be removed, demoted, or 
suspended, the deciding employee of the Department shall 
exclusively apply the following factors:
          (i) The nature and seriousness of the offense, and 
        its relation to the covered individual's duties, 
        position, and responsibilities, including whether the 
        offense was intentional or technical or inadvertent, or 
        was committed maliciously or for gain, or was 
        frequently repeated.
          (ii) The covered individual's job level and type of 
        employment, including supervisory or fiduciary role, 
        and prominence of the position.
  (B) The Secretary shall review the initial decision and 
uphold such decision if it is supported by substantial 
evidence.
  (2) A covered individual subject to an action under 
subsection (a) is entitled to--
          (A) advance notice of the action and a file 
        containing all evidence in support of the proposed 
        action;
          (B) be represented by an attorney or other 
        representative of the covered individual's choice; and
          (C) grieve the action in accordance with an internal 
        grievance process that the Secretary, in consultation 
        with the Assistant Secretary for Accountability and 
        Whistleblower Protection, shall establish for purposes 
        of this subsection.
  (3) A final decision by the Secretary under paragraph (1)(B) 
that is not grieved, and a grievance decision under paragraph 
(2)(C), shall be final and conclusive.
  (4) The procedures under chapter 43 of title 5 shall not 
apply to a removal, demotion, or suspension under this section, 
and the Secretary may carry out such a removal, demotion, or 
suspension without first placing a covered individual on a 
performance improvement plan.
  (c) Timing.--(A) The aggregate period for notice, response, 
and final decision by the Secretary of an action under this 
section may not exceed 15 business days.
  (B) The period for the response of a covered individual to a 
notice under subsection (b)(2)(A) shall be 7 business days.
  (C) The final decision by the Secretary under subsection 
(b)(1)(B) shall--
          (i) be issued not later than 15 business days after 
        notice is provided under subsection (b)(2)(A); and
          (ii) be in writing and shall include the specific 
        reasons for the decision.
  (D) The Secretary shall ensure that the grievance process 
established under paragraph (2)(C) takes fewer than 21 days 
after the final decision.
  (d) Judicial Review.--(1) A covered individual adversely 
affected by a final decision under this section that is not 
grieved, or by a grievance decision under subsection (b)(2)(C), 
may obtain judicial review of such decision.
  (2) Any removal, demotion, or suspension under this section 
is not appealable to the Merit Systems Protection Board, or to 
any administrative judge or other person appointed by the Merit 
Systems Protection Board.
  (3) In any case in which judicial review is sought under 
paragraph (1), the court shall review the record and may set 
aside any Department action found to be--
          (A) arbitrary, capricious, an abuse of discretion, or 
        otherwise not in accordance with a provision of law;
          (B) obtained without procedures required by a 
        provision of law having been followed; or
          (C) unsupported by substantial evidence.
  (4) Except to the extent that an appeal under this subsection 
presents a constitutional issue, such court may not review a 
challenge to the penalty imposed against the covered individual 
or mitigate such penalty.
  (e) Demoted Individuals.--(1) A demotion under subsection (a) 
shall be carried out as a reduction in grade for which the 
covered individual is qualified, that the Secretary determines 
is appropriate, and that reduces the annual rate of pay of the 
covered individual.
  (2) Notwithstanding any other provision of law, any covered 
individual so demoted--
          (A) shall, beginning on the date of such demotion, 
        receive the annual rate of pay applicable to such 
        grade;
          (B) may not be placed on administrative leave during 
        the period during which an appeal (if any) under this 
        section is ongoing, and may only receive pay if the 
        covered individual reports for duty or is approved to 
        use accrued unused annual, sick, family medical, 
        military, or court leave; and
          (C) who does not report for duty or receive approval 
        to use accrued unused leave shall not receive pay or 
        other benefits.
  (f) Whistleblower Protection.--(1) In the case of a covered 
individual seeking corrective action (or on behalf of whom 
corrective action is sought) from the Office of Special Counsel 
based on an alleged prohibited personnel practice described in 
section 2302(b) of title 5, the Secretary may not remove, 
demote, or suspend such covered individual under subsection (a) 
without the approval of the Special Counsel under section 
1214(f) of title 5.
  (2) In the case of a covered individual who has made a 
whistleblower disclosure to the Assistant Secretary for 
Accountability and Whistleblower Protection, the Secretary may 
not remove, demote, or suspend such covered individual under 
subsection (a) until--
          (A) in the case in which the Assistant Secretary 
        determines to refer the whistleblower disclosure under 
        section 323(c)(1)(D) of this title to an office or 
        other investigative entity, a final decision with 
        respect to the whistleblower disclosure has been made 
        by such office or other investigative entity; or
          (B) in the case in which the Assistant Secretary 
        determines not to refer the whistleblower disclosure 
        under such section, the Assistant Secretary makes such 
        determination.
  (g) Termination of Investigations by Office of Special 
Counsel.--(1) Notwithstanding any other provision of law, the 
Special Counsel (established by section 1211 of title 5) may 
terminate an investigation of a prohibited personnel practice 
alleged by an employee or former employee of the Department 
after the Special Counsel provides to the employee or former 
employee a written statement of the reasons for the termination 
of the investigation.
  (2) Such statement may not be admissible as evidence in any 
judicial or administrative proceeding without the consent of 
such employee or former employee.
  (h) Application.--This section shall apply to any performance 
or misconduct of a covered individual beginning on the date of 
enactment of the Department of Veterans Affairs Accountability 
and Whistleblower Protection Act of 2017 (Public Law 115-41).
  (i) Definitions.--In this section:
          (1) The term ``civil service'' has the meaning given 
        that term in section 2101 of title 5.
          (2) The term ``covered individual'' means an employee 
        of the Department who is a supervisor or management 
        official as defined in section 7103(a) of title 5 
        occupying a position at the Department, including 
        individuals appointed pursuant to this title, title 5, 
        and hybrid employees appointed pursuant to section 7401 
        of this title, but does not include--
                  (A) an individual occupying a senior 
                executive position (as defined in section 
                713(d) of this title);
                  (B) an individual appointed pursuant to 
                section 7306, 7401(1), 7401(4), or 7405 of this 
                title;
                  (C) an individual who has not completed a 
                probationary or trial period; or
                  (D) a political appointee.
          (3) The term ``grade'' has the meaning given such 
        term in section 7511(a) of title 5.
          (4) The term ``misconduct'' includes neglect of duty, 
        malfeasance, or failure to accept a directed 
        reassignment or to accompany a position in a transfer 
        of function.
          (5) The term ``political appointee'' means an 
        individual who is--
                  (A) employed in a position described under 
                sections 5312 through 5316 of title 5 (relating 
                to the Executive Schedule);
                  (B) a limited term appointee, limited 
                emergency appointee, or noncareer appointee in 
                the Senior Executive Service, as defined under 
                paragraphs (5), (6), and (7), respectively, of 
                section 3132(a) of title 5; or
                  (C) employed in a position of a confidential 
                or policy-determining character under schedule 
                C of subpart C of part 213 of title 5, Code of 
                Federal Regulations, or successor regulation.
          (6) The term ``suspend'' means the placing of an 
        employee, for disciplinary reasons, in a temporary 
        status without duties and pay for a period in excess of 
        14 days.
          (7) The term ``whistleblower disclosure'' has the 
        meaning given such term in section 323(g) of this 
        title.

           *       *       *       *       *       *       *


Sec. 713. Senior executives: removal, demotion, or suspension based on 
                    performance or misconduct

  (a) Authority.--(1) The Secretary may, as provided in this 
section, reprimand or suspend, involuntarily reassign, demote, 
or remove a covered individual from a senior executive position 
at the Department if the Secretary determines by substantial 
evidence that the misconduct or performance of the covered 
individual warrants such action.
  (2) If the Secretary so removes such an individual, the 
Secretary may remove the individual from the civil service (as 
defined in section 2101 of title 5).
  (3) When making an initial decision under this subsection 
with respect to determining whether a covered individual should 
be reprimanded or suspended, involuntarily reassigned, demoted, 
or removed, the deciding employee of the Department shall 
exclusively apply the following factors:
          (A) The nature and seriousness of the offense, and 
        its relation to the covered individual's duties, 
        position, and responsibilities, including whether the 
        offense was intentional or technical or inadvertent, or 
        was committed maliciously or for gain, or was 
        frequently repeated.
          (B) The covered individual's job level and type of 
        employment, including supervisory or fiduciary role, 
        and prominence of the position.
  (4) The Secretary shall review the initial decision and 
uphold such decision if it is supported by substantial 
evidence.
  (b) Rights and Procedures.--(1) A covered individual who is 
the subject of an action under subsection (a) is entitled to--
          (A) advance notice of the action and a file 
        containing all evidence in support of the proposed 
        action;
          (B) be represented by an attorney or other 
        representative of the covered individual's choice; and
          (C) grieve the action in accordance with an internal 
        grievance process that the Secretary, in consultation 
        with the Assistant Secretary for Accountability and 
        Whistleblower Protection, shall establish for purposes 
        of this subsection.
  (2)(A) The aggregate period for notice, response, and 
decision on an action under subsection (a) may not exceed 15 
business days.
  (B) The period for the response of a covered individual to a 
notice under paragraph (1)(A) of an action under subsection (a) 
shall be 7 business days.
  (C) A decision under this paragraph on an action under 
subsection (a) shall be issued not later than 15 business days 
after notice of the action is provided to the covered 
individual under paragraph (1)(A). The decision shall be in 
writing, and shall include the specific reasons therefor.
  (3) The Secretary shall ensure that the grievance process 
established under paragraph (1)(C) takes fewer than 21 days 
after the final decision.
  (4) A decision under paragraph (2) that is not grieved, and a 
grievance decision under paragraph (3), shall be final and 
conclusive.
  (5) A covered individual adversely affected by a decision 
under paragraph (2) that is not grieved, or by a grievance 
decision under paragraph (3), may obtain judicial review of 
such decision.
  (6) In any case in which judicial review is sought under 
paragraph (5), the court shall review the record and may set 
aside any Department action found to be--
          (A) arbitrary, capricious, an abuse of discretion, or 
        otherwise not in accordance with a provision of law;
          (B) obtained without procedures required by a 
        provision of law having been followed; or
          (C) unsupported by substantial evidence.
  (7) Except to the extent that an appeal under this subsection 
presents a constitutional issue, such court may not review a 
challenge to the penalty imposed against the covered individual 
or mitigate such penalty.
  (c) Relation to Other Provisions of Law.--Section 3592(b)(1) 
of title 5 and the procedures under section 7543(b) of such 
title do not apply to an action under subsection (a).
  (d) Application.--This section shall apply to any misconduct 
or performance of a covered individual beginning on the date of 
enactment of the Department of Veterans Affairs Accountability 
and Whistleblower Protection Act of 2017 (Public Law 115-41).
  [(d)] (e) Definitions.--In this section:
          (1) The term ``covered individual'' means--
                  (A) a career appointee (as that term is 
                defined in section 3132(a)(4) of title 5); or
                  (B) any individual who occupies an 
                administrative or executive position and who 
                was appointed under section 7306(a), section 
                7401(1), or section 7401(4) of this title.
          (2) The term ``misconduct'' includes neglect of duty, 
        malfeasance, or failure to accept a directed 
        reassignment or to accompany a position in a transfer 
        of function.
          (3) The term ``senior executive position'' means--
                  (A) with respect to a career appointee (as 
                that term is defined in section 3132(a) of 
                title 5), a Senior Executive Service position 
                (as such term is defined in such section); and
                  (B) with respect to a covered individual 
                appointed under section 7306(a) or section 
                7401(1) of this title, an administrative or 
                executive position.

Sec. 714. Employees: removal, demotion, or suspension based on 
                    performance or misconduct

  (a) In General.--(1) The Secretary may remove, demote, or 
suspend a covered individual who is an employee of the 
Department if the Secretary determines by substantial evidence 
the performance or misconduct of the covered individual 
warrants such removal, demotion, or suspension.
  (2) If the Secretary so removes, demotes, or suspends such a 
covered individual, the Secretary may--
          (A) remove the covered individual from the civil 
        service (as defined in section 2101 of title 5);
          (B) demote the covered individual by means of a 
        reduction in grade for which the covered individual is 
        qualified, that the Secretary determines is 
        appropriate, and that reduces the annual rate of pay of 
        the covered individual; or
          (C) suspend the covered individual.
  (3)(A) When making an initial decision under this subsection 
with respect to determining whether a covered individual should 
be removed, demoted, or suspended, the deciding employee of the 
Department shall exclusively apply the following factors:
          (i) The nature and seriousness of the offense, and 
        its relation to the covered individual's duties, 
        position, and responsibilities, including whether the 
        offense was intentional or technical or inadvertent, or 
        was committed maliciously or for gain, or was 
        frequently repeated.
          (ii) The covered individual's job level and type of 
        employment, including supervisory or fiduciary role, 
        and prominence of the position.
          (iii) The covered individual's past disciplinary 
        record.
          (iv) The covered individual's past work record, 
        including length of service, performance on the job, 
        ability to get along with fellow workers, and 
        dependability.
          (v) Mitigating circumstances surrounding the offense 
        such as unusual job tensions, personality problems, 
        mental impairment, harassment, or bad faith, malice, or 
        provocation on the part of others involved in the 
        matter.
  (B) The Secretary shall review the initial decision and 
uphold such decision if it is supported by substantial 
evidence.
  (b) Pay of Certain Demoted Individuals.--(1) Notwithstanding 
any other provision of law, any covered individual subject to a 
demotion under subsection (a)(2) shall, beginning on the date 
of such demotion, receive the annual rate of pay applicable to 
such grade.
  (2)(A) A covered individual so demoted may not be placed on 
administrative leave during the period during which an appeal 
(if any) under this section is ongoing, and may only receive 
pay if the covered individual reports for duty or is approved 
to use accrued unused annual, sick, family medical, military, 
or court leave.
  (B) If a covered individual so demoted does not report for 
duty or receive approval to use accrued unused leave, such 
covered individual shall not receive pay or other benefits 
pursuant to subsection (d)(5).
  (c) Procedure.--(1)(A) The aggregate period for notice, 
response, and final decision in a removal, demotion, or 
suspension under this section may not exceed 15 business days.
  (B) The period for the response of a covered individual to a 
notice of a proposed removal, demotion, or suspension under 
this section shall be 7 business days.
  (C) Paragraph (3) of subsection (b) of section 7513 of title 
5 shall apply with respect to a removal, demotion, or 
suspension under this section.
  [(D) The procedures in this subsection shall supersede any 
collective bargaining agreement to the extent that such 
agreement is inconsistent with such procedures.]
  (2) The Secretary shall issue a final decision with respect 
to a removal, demotion, or suspension under this section not 
later than 15 business days after the Secretary provides 
notice, including a file containing all the evidence in support 
of the proposed action, to the covered individual of the 
removal, demotion, or suspension. The decision shall be in 
writing and shall include the specific reasons therefor.
  (3) The procedures under chapter 43 of title 5 shall not 
apply to a removal, demotion, or suspension under this section, 
and the Secretary may carry out such a removal, demotion, or 
suspension without first placing a covered individual on a 
performance improvement plan.
  (4)(A) Subject to subparagraph (B) and subsection (d), any 
removal or demotion under this section, and any suspension of 
more than 14 days under this section, may be appealed to the 
Merit Systems Protection Board, which shall refer such appeal 
to an administrative judge pursuant to section 7701(b)(1) of 
title 5.
  (B) An appeal under subparagraph (A) of a removal, demotion, 
or suspension may only be made if such appeal is made not later 
than 10 business days after the date of such removal, demotion, 
or suspension.
  (d) Expedited Review.--(1) Upon receipt of an appeal under 
subsection (c)(4)(A), the administrative judge shall expedite 
any such appeal under section 7701(b)(1) of title 5 and, in any 
such case, shall issue a final and complete decision not later 
than 180 days after the date of the appeal.
  (2)(A) Notwithstanding section 7701(c)(1)(B) of title 5, the 
administrative judge shall uphold the decision of the Secretary 
to remove, demote, or suspend an employee under subsection (a) 
if the decision is supported by substantial evidence.
  (B) Notwithstanding title 5 or any other provision of law, if 
the decision of the Secretary is supported by substantial 
evidence, the administrative judge shall not mitigate the 
penalty prescribed by the Secretary.
  (C) Except to the extent that an appeal under this subsection 
presents a constitutional issue, the administrative judge may 
not review a challenge to the penalty imposed against the 
covered individual.
  (3)(A) The decision of the administrative judge under 
paragraph (1) may be appealed to the Merit Systems Protection 
Board.
  (B) Notwithstanding section 7701(c)(1)(B) of title 5, the 
Merit Systems Protection Board shall uphold the decision of the 
Secretary to remove, demote, or suspend an employee under 
subsection (a) if the decision is supported by substantial 
evidence.
  (C) Notwithstanding title 5 or any other provision of law, if 
the decision of the Secretary is supported by substantial 
evidence, the Merit Systems Protection Board shall not mitigate 
the penalty prescribed by the Secretary.
  (D) Except to the extent that an appeal under this subsection 
presents a constitutional issue, the Merit Systems Protection 
Board may not review a challenge to the penalty imposed against 
the covered individual.
  (4) In any case in which the administrative judge cannot 
issue a decision in accordance with the 180-day requirement 
under paragraph (1), the Merit Systems Protection Board shall, 
not later than 14 business days after the expiration of the 
180-day period, submit to the Committee on Veterans' Affairs of 
the Senate and the Committee on Veterans' Affairs of the House 
of Representatives a report that explains the reasons why a 
decision was not issued in accordance with such requirement.
  (5)(A) A decision of the Merit Systems Protection Board under 
paragraph (3) may be appealed to the United States Court of 
Appeals for the Federal Circuit pursuant to section 7703 of 
title 5 or to any court of appeals of competent jurisdiction 
pursuant to subsection (b)(1)(B) of such section.
  (B) Any decision by such Court shall be in compliance with 
section 7462(f)(2) of this title.
  (C) Except to the extent that an appeal under this subsection 
presents a constitutional issue, such Court may not review a 
challenge to the penalty imposed against the covered individual 
or mitigate such penalty.
  (6) The Merit Systems Protection Board may not stay any 
removal or demotion under this section, except as provided in 
section 1214(b) of title 5.
  (7) During the period beginning on the date on which a 
covered individual appeals a removal from the civil service 
under subsection (c) and ending on the date that the United 
States Court of Appeals for the Federal Circuit issues a final 
decision on such appeal, such covered individual may not 
receive any pay, awards, bonuses, incentives, allowances, 
differentials, student loan repayments, special payments, or 
benefits related to the employment of the individual by the 
Department.
  (8) To the maximum extent practicable, the Secretary shall 
provide to the Merit Systems Protection Board such information 
and assistance as may be necessary to ensure an appeal under 
this subsection is expedited.
  (9) If an employee prevails on appeal under this section, the 
employee shall be entitled to backpay (as provided in section 
5596 of title 5).
  [(10) If an employee who is subject to a collective 
bargaining agreement chooses to grieve an action taken under 
this section through a grievance procedure provided under the 
collective bargaining agreement, the timelines and procedures 
set forth in subsection (c) and this subsection shall apply.]
  (e) Whistleblower Protection.--(1) In the case of a covered 
individual seeking corrective action (or on behalf of whom 
corrective action is sought) from the Office of Special Counsel 
based on an alleged prohibited personnel practice described in 
section 2302(b) of title 5, the Secretary may not remove, 
demote, or suspend such covered individual under subsection (a) 
without the approval of the Special Counsel under section 
1214(f) of title 5.
  (2) In the case of a covered individual who has made a 
whistleblower disclosure to the Assistant Secretary for 
Accountability and Whistleblower Protection, the Secretary may 
not remove, demote, or suspend such covered individual under 
subsection (a) until--
          (A) in the case in which the Assistant Secretary 
        determines to refer the whistleblower disclosure under 
        section 323(c)(1)(D) of this title to an office or 
        other investigative entity, a final decision with 
        respect to the whistleblower disclosure has been made 
        by such office or other investigative entity; or
          (B) in the case in which the Assistant Secretary 
        determines not to refer the whistleblower disclosure 
        under such section, the Assistant Secretary makes such 
        determination.
  (f) Termination of Investigations by Office of Special 
Counsel.--(1) Notwithstanding any other provision of law, the 
Special Counsel (established by section 1211 of title 5) may 
terminate an investigation of a prohibited personnel practice 
alleged by an employee or former employee of the Department 
after the Special Counsel provides to the employee or former 
employee a written statement of the reasons for the termination 
of the investigation.
  (2) Such statement may not be admissible as evidence in any 
judicial or administrative proceeding without the consent of 
such employee or former employee.
  (g) Vacancies.--In the case of a covered individual who is 
removed or demoted under subsection (a), to the maximum extent 
feasible, the Secretary shall fill the vacancy arising as a 
result of such removal or demotion.
  (h) Collective Bargaining Agreements.--The procedures in this 
section shall supersede any collective bargaining agreement to 
the extent that such agreement is inconsistent with such 
procedures.
  (i) Application.--This section shall apply to any performance 
or misconduct of a covered individual beginning on the date of 
enactment of the Department of Veterans Affairs Accountability 
and Whistleblower Protection Act of 2017 (Public Law 115-41).
  [(h)] (j) Definitions.--In this section:
          (1) The term ``covered individual'' means an 
        individual occupying a position at the Department 
        including individuals appointed pursuant to this title, 
        title 5, and hybrid employees appointed pursuant to 
        section 7401 of this title, but does not include--
                  (A) an individual occupying a senior 
                executive position (as defined in section 
                713(d) of this title);
                  (B) an individual appointed pursuant to 
                sections 7306, 7401(1), 7401(4), or 7405 of 
                this title;
                  (C) an individual who has not completed a 
                probationary or trial period; or
                  (D) a political appointee[.]; or
                  (E) a supervisor or management official as 
                defined in section 7103(a) of title 5.
          (2) The term ``suspend'' means the placing of an 
        employee, for disciplinary reasons, in a temporary 
        status without duties and pay for a period in excess of 
        14 days.
          (3) The term ``grade'' has the meaning given such 
        term in section 7511(a) of title 5.
          (4) The term ``misconduct'' includes neglect of duty, 
        malfeasance, or failure to accept a directed 
        reassignment or to accompany a position in a transfer 
        of function.
          (5) The term ``political appointee'' means an 
        individual who is--
                  (A) employed in a position described under 
                sections 5312 through 5316 of title 5 (relating 
                to the Executive Schedule);
                  (B) a limited term appointee, limited 
                emergency appointee, or noncareer appointee in 
                the Senior Executive Service, as defined under 
                paragraphs (5), (6), and (7), respectively, of 
                section 3132(a) of title 5; or
                  (C) employed in a position of a confidential 
                or policy-determining character under schedule 
                C of subpart C of part 213 of title 5, Code of 
                Federal Regulations, or successor regulation.
          (6) The term ``whistleblower disclosure'' has the 
        meaning given such term in section 323(g) of this 
        title.

           *       *       *       *       *       *       *


PART V--BOARDS, ADMINISTRATIONS, AND SERVICES

           *       *       *       *       *       *       *


CHAPTER 74--VETERANS HEALTH ADMINISTRATION--PERSONNEL

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SUBCHAPTER I--APPOINTMENTS

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Sec. 7403. Period of appointments; promotions

  (a)(1) Appointments under this chapter of health-care 
professionals to whom this section applies may be made only 
after qualifications have been satisfactorily established in 
accordance with regulations prescribed by the Secretary, 
without regard to civil-service requirements.
  (2) This section applies to the following persons appointed 
under this chapter:
          (A) Physicians.
          (B) Dentists.
          (C) Podiatrists.
          (D) Optometrists.
          (E) Nurses.
          (F) Physician assistants.
          (G) Expanded-function dental auxiliaries.
          (H) Chiropractors.
  (b)(1) Except as otherwise provided in this subsection, 
appointments described in subsection (a) shall be for a 
probationary period of two years.
  (2) With respect to the appointment of a registered nurse 
under this chapter, paragraph (1) shall apply with respect to 
such appointment regardless of whether such appointment is on a 
full-time basis or a part-time basis.
  (3) An appointment described in subsection (a) on a part-time 
basis of a person who has previously served on a full-time 
basis for the probationary period for the position concerned 
shall be without a probationary period.
  (4) The record of each person serving under such an 
appointment in the Medical, Dental, and Nursing Services shall 
be reviewed from time to time by a board, appointed in 
accordance with regulations of the Secretary. If such a board 
finds that such person is not fully qualified and satisfactory, 
such person shall be separated from the service.
  (c) Promotions of persons to whom this section applies shall 
be made only after examination given in accordance with 
regulations prescribed by the Secretary. Advancement within 
grade may be made in increments of the minimum rate of basic 
pay of the grade in accordance with regulations prescribed by 
the Secretary.
  (d) In determining eligibility for reinstatement in the 
Federal civil service of persons appointed to positions in the 
Administration under this chapter who at the time of 
appointment have a civil-service status, and whose employment 
in the Administration is terminated, the period of service 
performed in the Administration shall be included in computing 
the period of service under applicable civil-service rules and 
regulations.
  (e) In accordance with regulations prescribed by the 
Secretary, the grade and annual rate of basic pay of a person 
to whom this section applies whose level of assignment is 
changed from a level of assignment in which the grade level is 
based on both the nature of the assignment and personal 
qualifications may be adjusted to the grade and annual rate of 
basic pay otherwise appropriate.
  (f)(1) Upon the recommendation of the Under Secretary for 
Health, the Secretary may--
          (A) use the authority in subsection (a) to establish 
        the qualifications for and (subject to paragraph (2)) 
        to appoint individuals to positions listed in section 
        7401(3) of this title; and
          (B) use the authority provided in subsection (c) for 
        the promotion and advancement of Department employees 
        serving in such positions.
  (2) In using such authority to appoint individuals to such 
positions, the Secretary shall apply the principles of 
preference for the hiring of veterans and other persons 
established in subchapter I of chapter 33 of title 5.
  (3) [Notwithstanding any other provision of this title or 
other law,] (A) Notwithstanding any other provision of this 
title or other law, and consistent with subparagraph (B),  all 
matters relating to adverse actions, reductions-in-force, the 
applicability of the principles of preference referred to in 
paragraph (2), rights of part-time employees, disciplinary 
actions, and grievance procedures involving individuals 
appointed to such positions, whether appointed under this 
section or section 7405(a)(1)(B) of this title (including 
similar actions and procedures involving an employee in a 
probationary status), shall be resolved under the provisions of 
title 5 as though such individuals had been appointed under 
that title.
  (B) With respect to any covered individual (as that term is 
defined in section 712 or 714) appointed to such positions, 
such matters shall be resolved, at Secretary's sole discretion, 
under--
          (i) section 712;
          (ii) section 714; or
          (iii) title 5 as though such individuals had been 
        appointed under that title.
  (g)(1) The Secretary may appoint in the competitive civil 
service without regard to the provisions of subchapter I of 
chapter 33 of title 5 (other than sections 3303 and 3328 of 
such title) an individual who--
          (A) has a recognized degree or certificate from an 
        accredited institution in a health-care profession or 
        occupation; and
          (B) has successfully completed a clinical education 
        program affiliated with the Department.
  (2) In using the authority provided by this subsection, the 
Secretary shall apply the principles of preference for the 
hiring of veterans and other persons established in subchapter 
I of chapter 33 of title 5.
  (h)(1) If the Secretary uses the authority provided in 
subsection (c) for the promotion and advancement of an 
occupational category of employees described in section 7401(3) 
of this title, as authorized by subsection (f)(1)(B), the 
Secretary shall do so through one or more systems prescribed by 
the Secretary. Each such system shall be planned, developed, 
and implemented in collaboration with, and with the 
participation of, exclusive employee representatives of such 
occupational category of employees.
  (2)(A) Before prescribing a system of promotion and 
advancement of an occupational category of employees under 
paragraph (1), the Secretary shall provide to exclusive 
employee representatives of such occupational category of 
employees a written description of the proposed system.
  (B) Not later than 30 days after receipt of the description 
of a proposed system under subparagraph (A), exclusive employee 
representatives may submit to the Secretary the 
recommendations, if any, of such exclusive employee 
representatives with respect to the proposed system.
  (C) The Secretary shall give full and fair consideration to 
any recommendations received under subparagraph (B) in deciding 
whether and how to proceed with a proposed system.
  (3) The Secretary shall implement immediately any part of a 
system of promotion and advancement under paragraph (1) that is 
proposed under paragraph (2) for which the Secretary receives 
no recommendations from exclusive employee representatives 
under paragraph (2).
  (4) If the Secretary receives recommendations under paragraph 
(2) from exclusive employee representatives on any part of a 
proposed system of promotion and advancement under that 
paragraph, the Secretary shall determine whether or not to 
accept the recommendations, either in whole or in part. If the 
Secretary determines not to accept all or part of the 
recommendations, the Secretary shall--
          (A) notify the congressional veterans' affairs 
        committees of the recommendations and of the portion of 
        the recommendations that the Secretary has determined 
        not to accept;
          (B) meet and confer with such exclusive employee 
        representatives, for a period not less than 30 days, 
        for purposes of attempting to reach an agreement on 
        whether and how to proceed with the portion of the 
        recommendations that the Secretary has determined not 
        to accept;
          (C) at the election of the Secretary, or of a 
        majority of such exclusive employee representatives who 
        are participating in negotiations on such matter, 
        employ the services of the Federal Mediation and 
        Conciliation Service during the period referred to in 
        subparagraph (B) for purposes of reaching such 
        agreement; and
          (D) if the Secretary determines that activities under 
        subparagraph (B), (C), or both are unsuccessful at 
        reaching such agreement and determines (in the sole and 
        unreviewable discretion of the Secretary) that further 
        meeting and conferral under subparagraph (B), mediation 
        under subparagraph (C), or both are unlikely to reach 
        such agreement--
                  (i) notify the congressional veterans' 
                affairs committees of such determinations, 
                identify for such committees the portions of 
                the recommendations that the Secretary has 
                determined not to accept, and provide such 
                committees an explanation and justification for 
                determining to implement the part of the system 
                subject to such portions of the recommendations 
                without regard to such portions of the 
                recommendations; and
                  (ii) commencing not earlier than 30 days 
                after notice under clause (i), implement the 
                part of the system subject to the 
                recommendations that the Secretary has 
                determined not to accept without regard to 
                those recommendations.
  (5) If the Secretary and exclusive employee representatives 
reach an agreement under paragraph (4) providing for the 
resolution of a disagreement on one or more portions of the 
recommendations that the Secretary had determined not to accept 
under that paragraph, the Secretary shall immediately implement 
such resolution.
  (6) In implementing a system of promotion and advancement 
under this subsection, the Secretary shall--
          (A) develop and implement mechanisms to permit 
        exclusive employee representatives to participate in 
        the periodic review and evaluation of the system, 
        including peer review, and in any further planning or 
        development required with respect to the system as a 
        result of such review and evaluation; and
          (B) provide exclusive employee representatives 
        appropriate access to information to ensure that the 
        participation of such exclusive employee representative 
        in activities under subparagraph (A) is productive.
  (7)(A) The Secretary may from time to time modify a system of 
promotion and advancement under this subsection.
  (B) In modifying a system, the Secretary shall take into 
account any recommendations made by the exclusive employee 
representatives concerned.
  (C) In modifying a system, the Secretary shall comply with 
paragraphs (2) through (5) and shall treat any proposal for the 
modification of a system as a proposal for a system for 
purposes of such paragraphs.
  (D) The Secretary shall promptly submit to the congressional 
veterans' affairs committees a report on any modification of a 
system. Each report shall include--
          (i) an explanation and justification of the 
        modification; and
          (ii) a description of any recommendations of 
        exclusive employee representatives with respect to the 
        modification and a statement whether or not the 
        modification was revised in light of such 
        recommendations.
  (8) In the case of employees who are not within a unit with 
respect to which a labor organization is accorded exclusive 
recognition, the Secretary may develop procedures for input 
from representatives under this subsection from any appropriate 
organization that represents a substantial percentage of such 
employees or, if none, in such other manner as the Secretary 
considers appropriate, consistent with the purposes of this 
subsection.
  (9) In this subsection, the term ``congressional veterans' 
affairs committees'' means the Committees on Veterans' Affairs 
of the Senate and the House of Representatives.

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                             MINORITY VIEWS

    This legislation presents significant due process issues 
and constitutional concerns. In its written testimony for the 
July 12, 2023, Oversight & Investigations Subcommittee 
legislative hearing, where H.R. 4278 was on the agenda, the 
Department of Veterans Affairs (VA) stated:

    We are confident that the authorities currently available 
to the VA are sufficient to hold employees accountable for 
misconduct and poor performance. We do not believe any 
legislation is necessary right now to ensure accountability. VA 
has legal concerns regarding some of the language in the draft 
bill. Specifically, VA is concerned this language will continue 
to be the subject of extensive litigation and constitutional 
challenges, creating uncertainty and potentially leading to a 
continued pattern of overturned disciplinary actions.

    If this legislation becomes law, it will be challenged in 
the courts, making VA no better off than it has been in its 
attempts to utilize the authorities provided under the VA 
Accountability and Whistleblower Protection Act of 2017 (P.L. 
115-41). At the same time, VA--particularly, its healthcare 
system--is struggling with widespread post-pandemic 
understaffing, while rapidly trying to staff up to implement 
the landmark Honoring Our PACT Act (P.L. 117-168). Veterans 
would be much better served if the Committee instead focused on 
legislation that would help fill VA staff vacancies, rather 
than create more of them.
    VA officials contend there is much better predictability 
and lower likelihood of disciplinary actions being mitigated or 
overturned when they exercise existing Title 5 disciplinary 
authorities, as there are decades of case law that stakeholders 
and the courts are familiar with. Furthermore, contrary to 
claims made by the Majority, H.R. 4278 would do very little to 
expedite processes for addressing employee misconduct at VA. 
Compared to existing authorities under Title 5 and Title 38, 
this bill does not make significant adjustments to the number 
of days allowed for each step of the process--from the point at 
which a disciplinary action is proposed by the deciding 
official until it is finalized. Properly and thoroughly 
investigating misconduct takes much longer than proposing and 
finalizing disciplinary actions.
    Among the most problematic provisions of H.R. 4278 are 
those that would strip VA civil servants of due process rights 
that are afforded to all other federal employees and upend 
existing collective bargaining agreements. This legislation 
would have a chilling effect on VA recruitment and retention--
especially for supervisors and senior executives, as H.R. 4278 
is particularly harsh in its treatment of these two categories 
of employees. In addition, there is significant risk that 
implementing this legislation will be quite costly, as it is 
likely to be challenged, leading to VA incurring costs related 
to litigation and the potential award of monetary damages. It 
is therefore concerning that Rep. Mrvan's amendment to examine 
the costs of implementing P.L. 115-41 was not adopted, as it 
would have provided the committee valuable insight about the 
potential cost of H.R. 4278.
    It is also perplexing that all but one member of the 
Majority voted against the amendment offered by Rep. Pappas, 
which would have improved management training for VA 
supervisors, management officials, and senior executives and 
improved their understanding of the disciplinary options and 
procedures available to address poor performance and 
misconduct. Specifically, the amendment would have required VA 
to develop mandatory training focusing on areas such as 
developing and discussing relevant performance goals and 
objectives with employees; communicating and discussing 
employees' progress relative to the performance goals and 
objectives; conducting performance appraisals; mentoring and 
motivating employees; and effectively managing employees with 
unacceptable performance. Congress cannot simply strip away 
constitutional rights as a means of arriving at accountability. 
Rather, Congress must provide VA with the resources and tools 
to develop and support effective management.
                                               Mark Takano,
                                                    Ranking Member.

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