[House Report 118-457]
[From the U.S. Government Publishing Office]


118th Congress  }                                           { Report
                        HOUSE OF REPRESENTATIVES
 2d Session     }                                           {  118-457

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



 
                    VETERAN FRAUD REIMBURSEMENT ACT

                                _______
                                

 April 12, 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

                        [To accompany H.R. 4016]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 4016) to amend title 38, United States Code, to 
improve the repayment by the Secretary of Veterans Affairs of 
benefits misused by a fiduciary, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Subcommittee Consideration.......................................     3
Committee Consideration..........................................     3
Committee Votes..................................................     3
Committee Oversight Findings.....................................     3
Statement of General Performance Goals and Objectives............     3
Earmarks and Tax and Tariff Benefits.............................     4
Committee Cost Estimate..........................................     4
Budget Authority and Congressional Budget Office Estimate........     4
Federal Mandates Statement.......................................     5
Advisory Committee Statement.....................................     5
Applicability to Legislative Branch..............................     5
Statement on Duplication of Federal Programs.....................     5
Section-by-Section Analysis of the Legislation...................     5
Changes in Existing Law Made by the Bill as Reported.............     6

                          Purpose and Summary

    H.R. 4016, the ``Veteran Fraud Reimbursement Act,'' was 
introduced by Rep. Gerry Connolly of Virginia on June 12, 2023. 
The bill would require the Secretary of the Department of 
Veterans Affairs (VA) to promptly pay to a beneficiary (or a 
beneficiary's successor fiduciary) the amount of benefits that 
has been misused by that beneficiary's fiduciary. Specifically, 
the bill would require the Secretary to establish methods and 
timing with respect to determining whether an instance of 
misuse by a fiduciary was the result of negligence by the 
Secretary, and the bill would prohibit the Secretary from 
withholding repayment of misused benefits by reason of a 
pending negligence determination.

                  Background and Need for Legislation


Section 1: Short title

    This Act may be cited as the ``Veteran Fraud Reimbursement 
Act.''

Section 2: Improvement to repayment by Secretary of Veterans Affairs of 
        certain misused benefits

    VA appoints fiduciaries for veterans who are unable to 
manage their VA benefits. Fiduciaries receive payments of VA 
funds on behalf of veterans and disburse those funds for the 
veterans' care and support. ``Misuse'' is when a fiduciary 
spends a veteran's VA benefit payments for something other than 
the veteran's benefit.
    Under current law, before a veteran who is a victim of 
misuse can be made financially whole, VA is required to make a 
determination as to whether the misuse was the result of VA 
negligence. According to a July 21, 2021, report by the VA 
Office of Inspector General,\1\ there have been significant 
wait times for veterans to recoup misused benefits because of 
the requirement that VA make a negligence determination before 
repaying veterans their misused benefits. In some cases, 
veterans have died before receiving their reimbursements. 
Delays in repaying veterans have largely been the result of VA 
inadequately monitoring whether VA is making timely negligence 
determinations and inadequately managing the workload related 
to negligence determinations.
---------------------------------------------------------------------------
    \1\VA Office of Inspector General, VBA's Fiduciary Program Needs to 
Improve the Timeliness of Determinations and Reimbursements of Misused 
Funds, July 21, 2021.
---------------------------------------------------------------------------
    To address this issue, this section would reduce delays in 
the repayment of misused funds to beneficiaries of VA benefits. 
Specifically, it would require the Secretary to establish 
methods and timing with respect to determining whether an 
instance of misuse by a fiduciary was the result of negligence 
by the Secretary, and would prohibit the Secretary from 
withholding repayment of misused benefits by reason of a 
pending negligence determination.
    The Committee believes that this legislation is crucial to 
ensure that victims of misuse promptly recoup their misused VA 
benefits. Veterans with fiduciaries should not have to wait to 
be made financially whole because of delays in VA's processing 
of negligence determinations. The Committee also believes that 
this legislation is crucial to ensure that VA implements 
effective methods to decrease the processing time for VA 
negligence determinations.

                                Hearings

    On November 8, 2023, the Subcommittee on Disability 
Assistance and Memorial Affairs held a legislative hearing on 
H.R. 4016 and other bills that were pending before the 
subcommittee.
    The following witnesses testified:
          Ms. Beth Murphy, Executive Director, Compensation 
        Service, Veterans Benefits Administration, U.S. 
        Department of Veterans Affairs; Mr. Kevin Friel, Deputy 
        Director, Pension & Fiduciary Service, Veterans 
        Benefits Administration, U.S. Department of Veterans 
        Affairs; Mr. Kenneth Arnold, Vice Chairman, Board of 
        Veterans' Appeals, U.S. Department of Veterans Affairs; 
        Mr. Shane Liermann, Deputy National Legislative 
        Director, Disabled American Veterans; Ms. Quandrea N. 
        Patterson, Associate Director, Veterans of Foreign Wars 
        of the United States; and Mr. Zachary M. Stolz, 
        Partner, Chisholm, Chisholm, & Kilpatrick LTD.
    The following organizations submitted statements for the 
record:
          American Veterans; National Organization of Veterans' 
        Advocates; Paralyzed Veterans of America; Quality. 
        Timeliness. Customer Service; Special Operations 
        Association of America; ALS Association; and Service 
        Women's Action Network.

                       Subcommittee Consideration

    On November 29, 2023, the Subcommittee on Disability 
Assistance and Memorial Affairs held a markup on proposed 
legislation, including H.R. 4016. There were no amendments to 
this bill. A motion was made by Mr. Pappas to favorably forward 
H.R. 4016 to the Full Committee.

                        Committee Consideration

    On December 5, 2023, the Full Committee met in open markup 
session, a quorum being present, and ordered H.R. 4016 be 
reported favorably to the House of Representatives by voice 
vote.
    A motion by Ranking Member Takano to report H.R. 4016 
favorably to the House of Representatives was agreed to by 
voice vote.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, no recorded votes were taken on 
amendments or in connection with ordering H.R. 4016 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. 4016 are to ensure access to VA 
disability compensation and pension for veterans and their 
families, including ensuring that VA's fiduciary program is 
managed efficiently and that there is no delay in any veteran 
being repaid any VA benefits that a fiduciary used for anything 
other than the veteran's care and welfare.

                  Earmarks and Tax and Tariff Benefits

    H.R. 4016 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 Congressional Budget 
Office cost estimate on this measure.

     Budget Authority and Congressional Budget Office Cost Estimate




    H.R. 4016 would modify the process that the Department of 
Veterans Affairs (VA) follows when replacing benefits for 
veterans who have been defrauded by fiduciaries appointed to 
manage those benefits.
    Under current law, veterans and survivors who are deemed 
unable to manage benefits they receive from VA may have someone 
assigned to administer those benefits on their behalf. Those 
fiduciaries, who are appointed and supervised by VA, are 
responsible for accepting the benefits and ensuring that they 
are used to support the intended recipient. When fiduciaries 
misuse some or all of those benefits, VA must reissue the 
misused portion to the intended beneficiary or a successor 
fiduciary. Before the department reissues those benefits it 
must assess whether negligence by VA contributed to the misuse 
of benefits, but VA reissues misused benefits regardless of the 
results of those assessments.
    H.R. 4016 would allow VA to reissue benefits before it 
determines whether its negligence contributed to the misuse. 
Because the bill would change the timing--but not the amounts--
of benefit payments (which are paid from mandatory 
appropriations), enacting the bill would not affect direct 
spending for VA benefits.
    The bill also would require VA to establish oversight 
methods to determine when misuse may have occurred. VA's new 
oversight process could cost more or less than the current one. 
CBO expects that any change in costs would be insignificant. 
Any changes in spending would be subject to appropriation.
    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. 4016.

                      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. 
4016.

                  Applicability to Legislative Branch

    The Committee finds that H.R. 4016 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. 4016 would establish or reauthorize 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 
the ``Veteran Fraud Reimbursement Act.''

Section 2. Improvement to repayment by Secretary of Veterans Affairs of 
        certain misused benefits

    This section would amend 38 U.S.C. Sec.  6107 to require 
the Secretary to establish methods and timing with respect to 
determining whether an instance of misuse by a fiduciary, of 
all or part of an individual's benefit paid to such fiduciary, 
is the result of negligence by the Secretary. This section 
would also prohibit the Secretary from withholding repayment of 
misused benefits by reason of a pending negligence 
determination.

         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



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PART IV--GENERAL ADMINISTRATIVE PROVISIONS

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CHAPTER 61--PENAL AND FORFEITURE PROVISIONS

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[Sec. 6107. Reissuance of benefits

  [(a) Negligent Failure by Secretary.--(1) In any case in 
which the negligent failure of the Secretary to investigate or 
monitor a fiduciary results in misuse of benefits by the 
fiduciary, the Secretary shall pay to the beneficiary or the 
beneficiary's successor fiduciary an amount equal to the amount 
of benefits that were so misused.
  [(2) There shall be considered to have been a negligent 
failure by the Secretary to investigate and monitor a fiduciary 
in the following cases:
          [(A) A case in which the Secretary failed to review a 
        fiduciary's accounting within 60 days of the date on 
        which that accounting is scheduled for review.
          [(B) A case in which the Secretary was notified of 
        allegations of misuse, but failed to act within 60 days 
        of the date of such notification to terminate the 
        fiduciary.
          [(C) In any other case in which actual negligence is 
        shown.
  [(b) Reissuance of Misused Benefits in Other Cases.--(1) In 
any case not covered by subsection (a) in which a fiduciary 
misuses all or part of an individual's benefit paid to such 
fiduciary, the Secretary shall pay to the beneficiary or the 
beneficiary's successor fiduciary an amount equal to the amount 
of such benefit so misused.
  [(2) In any other case in which the Secretary obtains 
recoupment from a fiduciary who has misused benefits, the 
Secretary shall promptly remit payment of the recouped amounts 
to the beneficiary or the beneficiary's successor fiduciary as 
the case may be.
  [(c) Limitation on Total Amount Paid.--The total of the 
amounts paid to a beneficiary (or a beneficiary's successor 
fiduciary) under this section may not exceed the total benefit 
amount misused by the fiduciary with respect to that 
beneficiary.
  [(d) Recoupment of Amounts Reissued.--In any case in which 
the Secretary reissues a benefit payment (in whole or in part) 
under subsection (a) or (b), the Secretary shall make a good 
faith effort to obtain recoupment from the fiduciary to whom 
the payment was originally made.]

Sec. 6107. Reissuance of benefits

  (a) Reissuance of Misused Benefits.--(1) In any case in which 
a fiduciary misuses all or part of an individual's benefit paid 
to such fiduciary, the Secretary shall pay to the beneficiary 
or the beneficiary's successor fiduciary an amount equal to the 
amount of such benefit so misused.
  (2) In any case in which the Secretary reissues a benefit 
payment (in whole or in part) under paragraph (1), the 
Secretary shall make a good faith effort to obtain recoupment 
from the fiduciary to whom the payment was originally made.
  (3) In any case in which the Secretary obtains recoupment 
from a fiduciary who has misused benefits, the Secretary shall 
promptly remit payment of the recouped amounts to the 
beneficiary or the beneficiary's successor fiduciary, as the 
case may be, to the extent that such amounts have not been paid 
under paragraph (1).
  (b) Limitation on Total Amount Paid.--The total of the 
amounts paid to a beneficiary or the beneficiary's successor 
fiduciary under this section may not exceed the total benefit 
amount misused by the fiduciary with respect to that 
beneficiary.
  (c) Oversight of Negligence.--(1) The Secretary shall 
establish methods and timing with respect to determining 
whether an instance of misuse by a fiduciary, of all or part of 
an individual's benefit paid to such fiduciary, is the result 
of negligence by the Secretary.
  (2) The Secretary may not withhold the reissuing of a benefit 
payment under subsection (a)(1) by reason of a pending 
determination under paragraph (1).
  (3) The Secretary is not required to make a determination 
under paragraph (1) for each instance of misuse by a fiduciary, 
of all or part of an individual's benefit paid to such 
fiduciary.

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