[House Report 118-626]
[From the U.S. Government Publishing Office]


118th Congress    }                                      {     Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                      {     118-626

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



 
  DEPARTMENT OF VETERANS AFFAIRS WATCHING OVER ELECTRONIC BENEFITS ACT

                                _______
                                

 August 9, 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. 6874]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 6874) to direct the Secretary of Veterans 
Affairs to implement a system or process to actively monitor 
the veteran self-service and data transmission functions of the 
main internet website of the Department of Veterans Affairs for 
certain adverse events, 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..............................................     3
Background and Need for Legislation..............................     4
Hearings.........................................................     5
Subcommittee Consideration.......................................     6
Committee Consideration..........................................     6
Committee Votes..................................................     7
Committee Oversight Findings.....................................     7
Statement of General Performance Goals and Objectives............     7
Earmarks and Tax and Tariff Benefits.............................     7
Committee Cost Estimate..........................................     7
Budget Authority and Congressional Budget Office Estimate........     7
Federal Mandates Statement.......................................     9
Advisory Committee Statement.....................................    10
Applicability to Legislative Branch..............................    10
Statement on Duplication of Federal Programs.....................    10
Section-by-Section Analysis of the Legislation...................    10
Changes in Existing Law Made by the Bill, as Reported............    11

    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 ``Department of Veterans Affairs 
Watching over Electronic Benefits Act'' or the ``VA WEB Act''.

SEC. 2. SYSTEM OR PROCESS TO ACTIVELY MONITOR CERTAIN FUNCTIONS OF THE 
                    COVERED WEBSITE FOR ADVERSE EVENTS.

  (a) In General.--Not later than one year after the date of the 
enactment of this Act, the Secretary of Veterans Affairs shall develop 
and implement a system or process to actively monitor certain functions 
of the covered website, including covered features and any underlying 
interface or system, for adverse events. The Secretary may use the 
authority under section 701(a) of the Sergeant First Class Heath 
Robinson Honoring our Promise to Address Comprehensive Toxics Act of 
2022 (Public Law 117-168; 38 U.S.C. 324 note) to carry out this 
subsection.
  (b) System or Process Requirements.--The Secretary shall ensure that 
the system or process developed under subsection (a) is designed to 
monitor, and log and store data, with respect to--
          (1) the volume of traffic to the covered website;
          (2) the number of submissions made using a covered feature;
          (3) software updates or other modifications to a covered 
        feature or underlying interface or system;
          (4) needs, deficiencies, or obsolescence of a covered feature 
        or underlying interface or system;
          (5) adverse events, including--
                  (A) the date and time of any such adverse event;
                  (B) the number of users of the covered website who 
                were affected by the adverse event;
                  (C) the number of submissions affected by the adverse 
                event; and
                  (D) any factor related to an underlying interface or 
                system that caused or contributed to the adverse event; 
                and
          (6) any other factors, as determined by the Secretary.
  (c) Notice and Report Regarding Certain Adverse Events.--
          (1) Notice.--In the case of any significant adverse event 
        affecting the covered website, not later than 30 days after the 
        date of such event, the Secretary shall submit to the 
        Committees on Veterans' Affairs of the Senate and House of 
        Representatives notice of the event, including a description of 
        the event.
          (2) Report.--Not later than 30 days after receiving a request 
        from the Chair of the Committee on Veterans' Affairs of the 
        Senate or the Chair of the Committee on Veterans' Affairs of 
        the House of Representatives for a report about an adverse 
        event, including a significant adverse event, the Secretary 
        shall submit to the Committees on Veterans' Affairs of the 
        Senate and the House of Representatives a report on the adverse 
        event covered by the request. Each such report shall include--
                  (A) a description of the adverse event;
                  (B) the date and time when the adverse event began 
                and ended;
                  (C) the number of users of the covered website who 
                were affected;
                  (D) the number of submissions made using a covered 
                feature that were affected; and
                  (E) a description of any underlying interface or 
                system that was affected.
          (3) Sunset.--The requirements under this subsection shall 
        expire on the date that is seven years after the date of the 
        enactment of this Act.
  (d) Report Regarding Exercise of Certain Authority.--If the Secretary 
exercises authority under section 701(a) of the Sergeant First Class 
Heath Robinson Honoring our Promise to Address Comprehensive Toxics Act 
of 2022 (Public Law 117-168; 38 U.S.C. 324 note) to carry out 
subsection (a), not later than 30 days after the date on which the 
Secretary first exercises such authority for such purpose, the 
Secretary shall submit to the Committees on Veterans' Affairs of the 
Senate and the House of Representatives and the Committees on 
Appropriations of the Senate and the House of Representatives a report 
about the exercise of such authority. Such report shall include--
          (1) the cost of implementing the system or process developed 
        under subsection (a);
          (2) a description of any modernization or replacement of an 
        underlying interface or system necessary to implement the 
        system or process;
          (3) an identification of any ways in which the covered 
        website and any underlying interface or system is susceptible 
        to any adverse event; and
          (4) a description of how the Secretary plans to eliminate or 
        mitigate, to the extent possible, any such susceptibility.
  (e) Testing Strategy.--Not later than one year after the date of the 
enactment of this Act, the Assistant Secretary for Information and 
Technology of the Department of Veterans Affairs shall submit to the 
Committees on Veterans' Affairs of the Senate and the House of 
Representatives a strategy to reduce the occurrence of adverse events 
by improving testing for each modification or software update to a 
covered feature or underlying system or interface.
  (f) Definitions.--In this section:
          (1) The term ``adverse event'' means, with respect to the 
        covered website, including covered features--
                  (A) a failure to properly receive or process a 
                submission;
                  (B) a system outage;
                  (C) an error in an underlying interface or system 
                that prevents the transmission of data;
                  (D) a deficiency in information storage capacity;
                  (E) a loss of data;
                  (F) a presentation of incorrect information;
                  (G) an error regarding a status notification; or
                  (H) any similar event that affects a function of the 
                covered website, as determined by the Secretary.
          (2) The term ``covered feature'' means any feature or 
        function of the covered website for use in the facilitation of 
        the application, maintenance, or receipt of benefits under the 
        laws administered by the Secretary.
          (3) The term ``covered website'' means the main internet 
        website of the Department of Veterans Affairs.
          (4) The term ``significant adverse event'', with respect to 
        the covered website, including covered features, means an 
        adverse event that affects users of, or submissions to, the 
        covered website for a period of 24 hours or longer.
          (5) The term ``underlying interface or system'' means--
                  (A) any information technology system that transmits 
                data through, or accepts data from, a covered feature; 
                or
                  (B) any mechanism through which any such information 
                technology system connects and interacts with the 
                covered website.

SEC. 3. ADJUSTMENT OF CERTAIN LOAN FEES.

  The loan fee table in section 3729(b)(2) of title 38, United States 
Code, is amended by striking ``November 15, 2031'' each place it 
appears and inserting ``November 28, 2031''.

                          Purpose and Summary

    H.R. 6874, the ``Department of Veterans Affairs Watching 
over Electronic Benefits Act,'' or ``VA WEB Act,'' was 
introduced by Representative Matthew Rosendale of Montana on 
December 19, 2023. The bill, as amended, would require the 
Secretary of the Department of Veterans Affairs (VA) to 
implement a process and technology safeguards to monitor 
VA.gov, the VA's primary website, and its underlying systems 
for adverse events, and report any significant adverse event to 
Congress. The legislation would require the Secretary of VA 
(Secretary) to develop and provide Congress with an improved 
testing strategy for software updates to VA.gov and its 
underlying systems. This bill would also authorize the 
Secretary to exercise the authority under section 701(a) of the 
Honoring our PACT Act of 2022, Public Law (P.L.) 117-168, 
relating to the VA Cost of War Toxic Exposures Fund, to cover 
the cost of implementing the system or process as described in 
the bill. Finally, the bill would also provide an offset for 
the cost of these program changes by extending current rates 
for VA home loan funding fees paid by non-service connected 
veterans.

                  Background and Need for Legislation


Section 1: Short Title

    This Act may be cited as the ``Department of Veterans 
Affairs Watching over Electronic Benefits Act'' or the ``VA WEB 
Act.''

Section 2: System or Process to Actively Monitor Certain Functions of 
        the Covered Website for Adverse Events

    VA.gov is VA's primary website, and it includes dozens of 
self-service tools allowing veterans to access and 
administratively manage their healthcare and benefits. Some 
examples include applying for disability compensation, checking 
claim status, enrolling in healthcare, updating personal 
information, ordering prescription refills, and managing 
medical appointments. Interfaces with at least 14 other VA 
systems that fall under VA.gov, which exchange a wide range of 
data and process transactions.
    Between January and November 2023, VA notified the House 
Committee on Veterans' Affairs (the Committee) about a number 
of glitches in VA.gov that impacted benefits for over 120,000 
veterans and survivors. In January 2023, VA notified the 
Committee that roughly 31,000 veterans had been identified 
whose disability compensation claims submitted to VA.gov were 
rejected due to processing errors, going back to November 2018. 
The number of veterans was later increased to 32,000. During 
the week of August 7, 2023 (the last week for veterans to 
submit ``Intents to File'' under the Honoring our PACT Act of 
2022), approximately 5,600 veterans received an error message 
in VA.gov that their submissions did not go through. On 
September 5, 2023, VA disclosed two more problems. First, 
approximately 900 veterans could not access the ``Notice of 
Disagreement'' form on VA.gov to appeal denials of VA benefits 
from July 27 to September 1, 2023. Second, VA disclosed that 
roughly 56,000 veterans' requests to add or remove dependents 
were not processed, potentially causing them to be underpaid or 
overpaid, going back to 2011. The number of dependency requests 
affected later increased to 81,000. In November 2023, VA 
notified the Committee that it has been overpaying pensions to 
at least 9,900 veterans because of inaccurate data from the 
Social Security Administration and a faulty process for 
veterans to self-report their income.
    In response to these disclosures, the Subcommittee on 
Technology Modernization held oversight hearings on September 
26 and December 4, 2023, during which Subcommittee members 
questioned VA witnesses on the causes of these glitches, their 
impacts on veterans, and what steps VA is taking to prevent 
similar issues from occurring in the future. During these 
hearings, VA explained that in September 2023, they began a 
full review of VA.gov systems and a ``code yellow'' process (an 
all-hands-on-deck effort to address an important but non-
critical issue) to resolve the glitches and mitigate the impact 
on veterans. VA's focus has been to stand up a ``watch tower'' 
capability to monitor VA.gov's transaction volume and trace 
transactions across the website and systems it interfaces with, 
in order to detect errors that impact a large number of 
veterans' claims.
    The Committee believes this strategy accepts a certain 
magnitude of errors and testing deficiencies; rather than 
trying to eliminate all errors, it concentrates on remediating 
them after they appear. This section would refine VA's strategy 
by requiring the Department to place more emphasis on testing 
and directly monitoring VA.gov and the various systems it 
interfaces with, not just the transaction volume, thereby 
increasing the likelihood that future errors are caught before 
significant numbers of additional veterans are impacted. Since 
the Committee was not notified about several of these glitches 
until years after they occurred, the Committee believes it is 
important to require VA report to Congress in a timely manner 
if significant adverse events occur in the future.
    In section 701(a) of the Honoring our PACT Act of 2022, 
Congress granted VA the authority to use the Cost of War Toxic 
Exposures Fund (TEF) to modernize and develop Veterans Benefits 
Administration (VBA) information technology systems to enhance 
claims processing capacity and automation. This section would 
also provide VA with explicit authority to expend TEF dollars 
for its implementation, in accordance with section 701(a).

Section 3: Adjustment of Certain Loan Fees

    Veterans who utilize the VA Home Loan Program pay a small 
fee that is included in their monthly mortgage payments. This 
section would offset the costs of the legislation's other 
sections by extending the expiration of the current rates for 
VA home loan funding fees by two weeks to November 28, 2031. 
Veterans with service-connected disabilities do not pay the 
funding fee and would not be affected by this extension of the 
home loan fees. The Committee believes this short-term 
extension of current funding fee rates is a reasonable way to 
cover the costs associated with this legislation.

                                Hearings

    On September 26, 2023, the Subcommittee on Technology 
Modernization held an oversight hearing titled ``Examining 
VA.gov,'' on the various technical problems with the website.
    The following witnesses testified:
          The Honorable Kurt DelBene, Assistant Secretary for 
        Information and Technology, Department of Veterans 
        Affairs; Mr. Charles Worthington, Chief Technology 
        Officer, Office of Information and Technology, 
        Department of Veterans Affairs; Mr. Ray Tellez, Acting 
        Assistant Deputy Under Secretary for Automated Benefits 
        Delivery, Veterans Benefits Administration, Department 
        of Veterans Affairs.
    On December 4, 2023, the Subcommittee on Technology 
Modernization held an oversight hearing titled ``Reexamining 
VA.gov,'' as a follow-up to the earlier oversight hearing.
    The following witnesses testified:
          The Honorable Kurt DelBene, Assistant Secretary for 
        Information and Technology, Department of Veterans 
        Affairs; Mr. Charles Worthington, Chief Technology 
        Officer, Office of Information and Technology, 
        Department of Veterans Affairs; Mr. Ray Tellez, Acting 
        Assistant Deputy Under Secretary for Automated Benefits 
        Delivery, Veterans Benefits Administration, Department 
        of Veterans Affairs; Mr. Paul Shute, Deputy Under 
        Secretary for Automated Benefits Delivery, Veterans 
        Benefits Administration, Department of Veterans 
        Affairs.
    On March 21, 2024, the Subcommittee on Oversight & 
Investigations held a legislative hearing on H.R. 6874 and 
other bills that were pending before the subcommittee.
    The following witnesses testified:
          Mr. John W. Boerstler, Chief Veterans Experience 
        Officer, Office of Human Resources and Administration/
        Operations, Security, and Preparedness, Department of 
        Veterans Affairs; Ms. Tracey Therit, Chief Human 
        Capital Officer, Office of Human Resources and 
        Administration/Operations, Security, and Preparedness, 
        Department of Veterans Affairs; Mr. David Perry, Chief 
        Officer for Workforce Management and Consulting, 
        Veterans Health Administration, Department of Veterans 
        Affairs; Mr. Charles Worthington, Chief Technology 
        Officer, Office of Information and Technology, 
        Department of Veterans Affairs; Ms. Joycelyn 
        Westbrooks, RN, Secretary-Treasurer, American 
        Federation of Government Employees Local 1633, 
        Department of Veterans Affairs.
    The following organizations submitted statements for the 
record:
          The National Federation of Federal Employees and 
        Service Employees International Union; the American 
        Association of Nurse Anesthesiology; Paralyzed Veterans 
        of America; Representative Michael Turner; 
        Representative Brandon Williams; United Nurses 
        Associations of California/Union of Health Care 
        Professionals; the Senior Executives Association.

                       Subcommittee Consideration

    On April 17, 2024, the Subcommittee on Oversight and 
Investigations held a markup on pending legislation which 
included H.R. 6874. There were no amendments to H.R. 6874 
during the Subcommittee markup. A motion by Representative 
Mrvan to report H.R. 6874 as part of an en bloc was favorably 
forwarded to the Full Committee.

                        Committee Consideration

    On May 1, 2024, the Full Committee met in open markup 
session, a quorum being present, and ordered H.R. 6874, as 
amended, to be reported favorably to the House of 
Representatives by voice vote. During consideration of the 
bill, the following amendment was considered:
          An amendment in the nature of a substitute offered by 
        Representative Cherfilus-McCormick to change the 
        definition of ``significant adverse event'' to be an 
        adverse event lasting more than 24-hours instead of an 
        adverse event impacting over 1,000 users. The amendment 
        in the nature of a substitute also added section three, 
        which extends the current rates for VA home loan 
        funding fees as an offset for the other sections of the 
        bill. The amendment in the nature of a substitute was 
        approved by voice vote.
    A motion by Ranking Member Takano to report H.R. 6874, as 
amended, 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. 6874, 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. 6874, as amended, are to allow VA 
to implement a process and technology safeguards to monitor its 
primary website for adverse events impacting the delivery of 
health care and benefits.

                  Earmarks and Tax and Tariff Benefits

    H.R. 6874, as amended, does not contain any Congressional 
earmarks, limited tax benefits, or limited tariff benefits as 
defined in clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
6874, 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. 6874, 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. 6874 would require the Department of Veterans Affairs 
(VA) to monitor and collect information about the use of VA's 
main website, to report to the Congress on any adverse events 
that affect that website, and to develop a testing strategy to 
reduce issues that affect the website. Under the bill, costs 
associated with those requirements would be paid from the Toxic 
Exposures Fund (TEF), a mandatory appropriation. The bill also 
would increase the fees that VA charges borrowers for its home 
loan guarantees. All told, CBO estimates that implementing H.R. 
6874 would increase direct spending by $44 million over the 
2024-2034 period.
    The costs of the legislation, detailed in Table 1, fall 
within budget function 700 (veterans benefits and services).

                                                   TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 6874
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                By fiscal year, millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                             2024    2025    2026    2027    2028    2029    2030    2031    2032    2033    2034   2024-2029  2024-2034
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Increases in Direct Spending
Estimated Budget Authority................       *       5       5       5       5       5       5       5       5       4       4        24         48
Estimated Outlays.........................       *       3       4       4       5       5       5       5       5       4       4        21         44
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = between zero and $500,000.


    Website Monitoring, Reporting, and Testing: The bill would 
require VA to monitor and collect certain information about the 
use of its website. VA would be required to report the 
information to the Congress within 30 days after any events 
that affect the availability or functionality of the website 
for a period of longer than 24 hours. The department would also 
be required to provide information about any event that affects 
the website's performance within 30 days of receiving a request 
from the Congress for such information. (Those reporting 
requirements would expire after seven years.) Finally, the bill 
would require VA to develop a testing strategy to reduce issues 
that affect the department's website.
    Using information from VA, CBO estimates that VA's current 
testing strategy would satisfy that requirement of the bill. 
However, the department would require $4 million each year in 
additional information technology resources and three full-time 
employees to implement the bill's monitoring and reporting 
requirements. Compensation for each of those employees would 
average about $200,000 per year. In total, implementing the 
bill's website monitoring and reporting requirements would cost 
$44 million over the 2024-2034 period, CBO estimates.
    H.R. 6874 would authorize VA to use the TEF for the cost of 
implementing the bill. The TEF is a mandatory appropriation 
that VA uses to pay for health care, disability claims 
processing, medical research, and IT modernization that 
benefits veterans who were exposed to environmental hazards. 
Thus, satisfying the bill's website requirements would increase 
direct spending.
    Home Loans: H.R. 6874 would increase the fees that VA 
charges borrowers for its loan guarantees. VA provides loan 
guarantees to lenders that allow eligible borrowers to obtain 
better loan terms--such as lower interest rates or smaller down 
payments--to purchase, construct, improve, or refinance a home. 
VA typically pays lenders up to 25 percent of the outstanding 
mortgage balance if a borrower's home is foreclosed upon. Those 
payments, net of fees paid by borrowers and recoveries by 
lenders, constitute the subsidy cost for the loan 
guarantees.\1\ That subsidy cost is recorded in the budget as 
direct spending.
---------------------------------------------------------------------------
    \1\Under the Federal Credit Reform Act of 1990, the subsidy cost of 
a loan guarantee is the net present value of estimated payments by the 
government to cover defaults and delinquencies, interest subsidies, or 
other expenses offset by any payments to the government, including 
origination or other fees, penalties, and recoveries on defaulted 
loans. Such subsidy costs are calculated by discounting those expected 
cash flows using the rate on Treasury securities of comparable 
maturity. The resulting estimated subsidy costs are recorded in the 
budget when the loans are disbursed or modified. A positive subsidy 
indicates that the loan results in net outlays from the Treasury; a 
negative subsidy indicates that the loan results in net receipts to the 
Treasury.
---------------------------------------------------------------------------
    Under current law, the rates for most of the fees that 
borrowers pay to VA for loans guaranteed after November 15, 
2031, will drop from a weighted average of about 2.3 percent to 
about 1.2 percent of the loan amount. The bill would extend the 
higher rates through November 28, 2031. CBO estimates that 
extending the higher rates for such a short duration would not 
significantly change direct spending because most borrowers 
would be able to delay their closing date to avoid paying the 
higher fee rates.
    The CBO staff contacts for this estimate are Logan Smith 
(for information technology) and Paul B.A. Holland (for home 
loans). 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. 6874 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. 
6874, as amended.

                  Applicability to Legislative Branch

    The Committee finds that H.R. 6874, 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. 6874, as amended, 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

    This section would establish the short title of the bill as 
the ``Department of Veterans Affairs Watching over Electronic 
Benefits Act,'' or the ``VA WEB Act''.

Section 2. System or process to actively monitor certain functions of 
        the covered website for adverse events

    Subsection (a) would require the Secretary to develop and 
implement a system or process to actively monitor VA.gov, and 
its underlying systems or interfaces, for adverse events no 
later than one year after of the enactment of this Act and 
allow the Secretary to use certain authorities granted under 
P.L. 117-168 to carry out this subsection.
    Subsection (b) defines the requirements for the system or 
process described in subsection (a).
    Subsection (c) would require a report in the event of a 
``significant adverse event,'' as defined in subsection (f).
    Subsection (d) would require a report to certain 
congressional committees about the exercise of such authorities 
as described in subsection (a).
    Subsection (e) would require the Secretary to submit a 
report to certain congressional committees on a strategy to 
reduce the occurrence of adverse events by improving testing 
for software updates to VA.gov or underlying system or 
interface.
    Subsection (f) includes definitions of key terms in this 
section.

Section 3. Adjustment of certain loan fees

    This section would offset the costs of the other sections 
of the bill by extending current VA home loan funding fee rates 
as established in 38 U.S.C. Sec. 3729, from November 14, 2031, 
to November 28, 2031.

         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 III--READJUSTMENT AND RELATED BENEFITS

           *       *       *       *       *       *       *


CHAPTER 37--HOUSING AND SMALL BUSINESS LOANS

           *       *       *       *       *       *       *


SUBCHAPTER III--ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *


Sec. 3729. Loan fee

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


 
----------------------------------------------------------------------------------------------------------------
             Type of loan                Active duty  veteran          Reservist              Other obligor
----------------------------------------------------------------------------------------------------------------
(A)(i) Initial loan described in       2.15                     2.40                     NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down, or
 any other initial loan described in
 section 3710(a) other than with 5-
 down or 10-down (closed on or after
 October 1, 2004, and before January
 1, 2020).
(A)(ii) Initial loan described in      2.30                     2.30                     NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down, or
 any other initial loan described in
 section 3710(a) other than with 5-
 down or 10-down (closed on or after
 January 1, 2020, and before April 7,
 2023).
(A)(iii) Initial loan described in     2.15                     2.15                     NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down, or
 any other initial loan described in
 section 3710(a) other than with 5-
 down or 10-down (closed on or after
 April 7, 2023, and before November
 [15] 28 , 2031).
(A)(iv) Initial loan described in      1.40                     1.40                     NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down, or
 any other initial loan described in
 section 3710(a) other than with 5-
 down or 10-down (closed on or after
 November [15] 28 , 2031).
(B)(i) Subsequent loan described in    3.30                     3.30                     NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down, or
 any other subsequent loan described
 in section 3710(a) (closed on or
 after October 1, 2004, and before
 January 1, 2020).
(B)(ii) Subsequent loan described in   3.60                     3.60                     NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down, or
 any other subsequent loan described
 in section 3710(a) (closed on or
 after January 1, 2020, and before
 April 7, 2023).
(B)(iii) Subsequent loan described in  3.30                     3.30                     NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down, or
 any other subsequent loan described
 in section 3710(a) (closed on or
 after April 7, 2023, and before
 November [15] 28 , 2031).
(B)(iv) Subsequent loan described in   1.25                     1.25                     NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down, or
 any other subsequent loan described
 in section 3710(a) (closed on or
 after November [15] 28 , 2031).
(C)(i) Loan described in section       1.50                     1.75                     NA
 3710(a) to purchase or construct a
 dwelling with 5-down (closed before
 January 1, 2020).
(C)(ii) Loan described in section      1.65                     1.65                     NA
 3710(a) to purchase or construct a
 dwelling with 5-down (closed on or
 after January 1, 2020, and before
 April 7, 2023).
(C)(iii) Loan described in section     1.50                     1.50                     NA
 3710(a) to purchase or construct a
 dwelling with 5-down (closed on or
 after April 7, 2023, and before
 November [15] 28 , 2031).
(C)(iv) Loan described in section      0.75                     0.75                     NA
 3710(a) to purchase or construct a
 dwelling with 5-down (closed on or
 after November [15] 28 , 2031).
(D)(i) Loan described in section       1.25                     1.50                     NA
 3710(a) to purchase or construct a
 dwelling with 10-down (closed before
 January 1, 2020).
(D)(ii) Loan described in section      1.40                     1.40                     NA
 3710(a) to purchase or construct a
 dwelling with 10-down (closed on or
 after January 1, 2020, and before
 April 7, 2023).
(D)(iii) Loan described in section     1.25                     1.25                     NA
 3710(a) to purchase or construct a
 dwelling with 10-down (closed on or
 after April 7, 2023, and before
 November [15] 28 , 2031).
(D)(iv) Loan described in section      0.50                     0.50                     NA
 3710(a) to purchase or construct a
 dwelling with 10-down (closed on or
 after November [15] 28 , 2031).
(E) Interest rate reduction            0.50                     0.50                     NA
 refinancing loan.
(F) Direct loan under section 3711...  1.00                     1.00                     NA
(G) Manufactured home loan under       1.00                     1.00                     NA
 section 3712 (other than an interest
 rate reduction refinancing loan).
(H) Loan to Native American veteran    1.25                     1.25                     NA
 under section 3762 (other than an
 interest rate reduction refinancing
 loan).
(I) Loan assumption under section      0.50                     0.50                     0.50
 3714.
(J) Loan under section 3733(a).......  2.25                     2.25                     2.25.
----------------------------------------------------------------------------------------------------------------

  (3) Any reference to a section in the ``Type of loan'' column 
in the loan fee table in paragraph (2) refers to a section of 
this title.
  (4) For the purposes of paragraph (2):
          (A) The term ``active duty veteran'' means any 
        veteran eligible for the benefits of this chapter other 
        than a Reservist.
          (B) The term ``Reservist'' means a veteran described 
        in section 3701(b)(5)(A) of this title who is eligible 
        under section 3702(a)(2)(E) of this title.
          (C) The term ``other obligor'' means a person who is 
        not a veteran, as defined in section 101 of this title 
        or other provision of this chapter.
          (D)(i) The term ``initial loan'' means a loan to a 
        veteran guaranteed under section 3710 or made under 
        section 3711 of this title if the veteran has never 
        obtained a loan guaranteed under section 3710 or made 
        under section 3711 of this title.
          (ii) If a veteran has obtained a loan guaranteed 
        under section 3710 or made under section 3711 of this 
        title and the dwelling securing such loan was 
        substantially damaged or destroyed by a major disaster 
        declared by the President under section 401 of the 
        Robert T. Stafford Disaster Relief and Emergency 
        Assistance Act (42 U.S.C. 5170), the Secretary shall 
        treat as an initial loan, as defined in clause (i), the 
        next loan the Secretary guarantees or makes to such 
        veteran under section 3710 or 3711, respectively, if--
                  (I) such loan is guaranteed or made before 
                the date that is three years after the date on 
                which the dwelling was substantially damaged or 
                destroyed; and
                  (II) such loan is only for repairs or 
                construction of the dwelling, as determined by 
                the Secretary.
          (E) The term ``subsequent loan'' means a loan to a 
        veteran, other than an interest rate reduction 
        refinancing loan, guaranteed under section 3710 or made 
        under section 3711 of this title that is not an initial 
        loan.
          (F) The term ``interest rate reduction refinancing 
        loan'' means a loan described in section 3710(a)(8), 
        3710(a)(9)(B)(i), 3710(a)(11), 3712(a)(1)(F), or 
        3762(h) of this title.
          (G) The term ``0-down'' means a downpayment, if any, 
        of less than 5 percent of the total purchase price or 
        construction cost of the dwelling.
          (H) The term ``5-down'' means a downpayment of at 
        least 5 percent or more, but less than 10 percent, of 
        the total purchase price or construction cost of the 
        dwelling.
          (I) The term ``10-down'' means a downpayment of 10 
        percent or more of the total purchase price or 
        construction cost of the dwelling.
  (c) Waiver of Fee.--(1) A fee may not be collected under this 
section from a veteran who is receiving compensation (or who, 
but for the receipt of retirement pay or active service pay, 
would be entitled to receive compensation), from a surviving 
spouse of any veteran (including a person who died in the 
active military, naval, air, or space service) who died from a 
service-connected disability, or from a member of the Armed 
Forces who is serving on active duty and who provides, on or 
before the date of loan closing, evidence of having been 
awarded the Purple Heart.
  (2)(A) A veteran described in subparagraph (B) shall be 
treated as receiving compensation for purposes of this 
subsection as of the date of the rating described in such 
subparagraph without regard to whether an effective date of the 
award of compensation is established as of that date.
  (B) A veteran described in this subparagraph is a veteran who 
is rated eligible to receive compensation--
          (i) as the result of a pre-discharge disability 
        examination and rating; or
          (ii) based on a pre-discharge review of existing 
        medical evidence (including service medical and 
        treatment records) that results in the issuance of a 
        memorandum rating.

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