SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans' Benefits Programs 
Modification Act of 2001''.

SEC. 2. EXCLUSION OF CERTAIN ADDITIONAL INCOME FROM DETERMINATIONS OF 
              ANNUAL INCOME FOR PENSION PURPOSES.

    (a) Life Insurance Proceeds.--Section 1503(a) of title 38, United 
States Code, is amended--
            (1) in paragraph (9), by striking ``and'' at the end;
            (2) in paragraph (10), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following new paragraph (11):
            ``(11) proceeds of any life insurance policy of a veteran; 
        and''.
    (b) Other Non-Recurring Income.--That section is further amended by 
inserting after paragraph (11), as added by subsection (a)(3) of this 
section, the following new paragraph (12):
            ``(12) any other non-recurring income from any source.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2002, and shall apply with respect to 
determinations of annual income under section 1503 of title 38, United 
States Code, as so amended, on or after that date.

SEC. 3. EFFECTIVE DATES OF AWARDS AND REDUCTIONS AND DISCONTINUANCES OF 
              BENEFITS.

    (a) Repeal of 45-Day Rule for Effective Date of Award of Death 
Pension.--Section 5110(d) of title 38, United States Code, is amended--
            (1) by striking ``(1)''; and
            (2) by striking paragraph (2).
    (b) Effective Date of Change in Recurring Income for Benefits 
Purposes.--Section 5112(b)(4) of that title is amended by striking 
subparagraph (A) and inserting the following new subparagraph (A):
                    ``(A) change in recurring income will be the last 
                day of the calendar year in which the change occurred 
                (with the pension rate for the following calendar year 
                based on all anticipated countable income); and''.

SEC. 4. TIME LIMITATION ON RECEIPT OF CLAIM INFORMATION PURSUANT TO 
              REQUEST BY DEPARTMENT OF VETERANS AFFAIRS.

    (a) In General.--Section 5102 of title 38, United States Code, is 
amended by adding at the end the following new subsection:
    ``(c) Time Limitation.--(1) If information that a claimant and the 
claimant's representative, if any, are notified under section 5103(a) 
of this title is necessary to complete an application is not received 
by the Secretary within one year from the date of such notification, no 
benefit may be paid or furnished by reason of the claimant's 
application.
    ``(2) This subsection shall not apply to any application or claim 
for Government life insurance benefits.''.
    (b) Repeal of Superseded Provisions.--Section 5103 of that title is 
amended--
            (1) by striking ``(a) Required Information and Evidence.--
        ''; and
            (2) by striking subsection (b).
    (c) Effective Date.--The amendments made by this section shall take 
effect as if enacted on November 9, 2000, immediately after the 
enactment of the Veterans Claims Assistance Act of 2000 (Public Law 
106-475; 114 Stat. 2096).

SEC. 5. CLARIFICATION OF EFFECTIVE DATE OF MODIFICATIONS OF DUTY TO 
              ASSIST.

    (a) Clarification.--Section 7 of the Veterans Claims Assistance Act 
of 2000 (Public Law 106-475; 114 Stat. 2096; 38 U.S.C. 5107 note) is 
amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``the provisions of section 5107 of title 38, 
                United States Code, as amended by section 4 of this 
                Act'' and inserting ``the amendments to chapter 51 of 
                title 38, United States Code, made by this Act''; and
                    (B) in paragraph (2), by striking
                ``and not final as of that date'' and inserting ``in 
                which a decision had not been issued by the Secretary 
                of Veterans Affairs before that date''; and
            (2) in subsection (b)--
                    (A) by striking ``Rule for Claims the Denial of 
                Which Became Final After the Court of Appeals for 
                Veterans Claims Decision in the Morton Case.--(1)'' and 
                inserting ``(1)''; and
                    (B) in paragraph (2), by striking
                ``that--'' and all that follows through the end of the 
                paragraph and inserting the following: ``that--
                    ``(A) became final during the period beginning on 
                July 14, 1999, and ending on the date of the enactment 
                of this Act and was issued by the Secretary or a court 
                because the claim was not well grounded (as that term 
                was used in section 5107(a) of title 38, United States 
                Code, as in effect during that period); or
                    ``(B) did not become final before the date of the 
                enactment of this Act.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect as if included in the enactment of the Veterans Claims 
Assistance Act of 2000, to which such amendments relate.

SEC. 6. PROHIBITION ON PROVIDING CERTAIN BENEFITS WITH RESPECT TO 
              VETERANS WHO ARE FUGITIVE FELONS.

    (a) Prohibition.--(1) Chapter 53 of title 38, United States Code, 
is amended by inserting after section 5313A the following new section:
``Sec. 5313B. Prohibition on providing certain benefits with respect to 
              veterans who are fugitive felons
    ``(a) A veteran described in subsection (b), or dependent of the 
veteran, who is otherwise eligible for a benefit described in 
subsection (c) may not be paid or otherwise provided such benefit 
during any period in which the veteran is a fugitive as described in 
subsection (b).
    ``(b)(1) A veteran described in this subsection is a veteran who is 
a fugitive by reason of--
            ``(A) fleeing to avoid prosecution, or custody or 
        confinement after conviction, for an offense, or an attempt to 
        commit an offense, which is a felony under the laws of the 
        place from which the veteran flees; or
            ``(B) violating a condition of probation or parole imposed 
        under Federal or State law.
    ``(2) For purposes of this subsection, the term `felony' includes a 
high misdemeanor under the laws of a State which characterizes as high 
misdemeanors offenses that would be felony offenses under Federal law.
    ``(c) A benefit described in this subsection is any benefit under 
the following:
            ``(1) Chapter 11 of this title.
            ``(2) Chapter 15 of this title.
            ``(3) Chapter 17 of this title.
            ``(4) Chapter 19 of this title.
            ``(5) Chapters 30, 31, 32, and 34 of this title.
            ``(6) Chapter 37 of this title.
    ``(d)(1) The Secretary shall furnish to any Federal, State, or 
local law enforcement official, upon the written request of such 
official, the most current address maintained by the Secretary of a 
veteran who is eligible for a benefit described in subsection (c) if 
such official--
            ``(A) provides the Secretary such information as the 
        Secretary may require to fully identify the veteran;
            ``(B) identifies the veteran as being a fugitive described 
        in subsection (b); and
            ``(C) certifies to the Secretary that the location and 
        apprehension of the veteran is within the official duties of 
        such official.
    ``(2) The Secretary shall enter into memoranda of understanding 
with Federal law enforcement agencies, and may enter into agreements 
with State and local law enforcement agencies, for purposes of 
furnishing information to such agencies under paragraph (1).''.
    (2) The table of sections at the beginning of that chapter is 
amended by inserting after the item relating to section 5313A the 
following new item:

``5313B. Prohibition on providing certain benefits with respect to 
                            veterans who are fugitive felons.''.
    (b) Sense of Congress on Entry Into Memoranda of Understanding and 
Agreements.--It is the sense of Congress that the memoranda of 
understanding and agreements referred to in section 5313B(d)(2) of 
title 38, United States Code (as added by subsection (a)), should be 
entered into as soon as practicable after the date of the enactment of 
this Act, but not later than six months after that date.

SEC. 7. LIMITATION ON PAYMENT OF COMPENSATION FOR VETERANS REMAINING 
              INCARCERATED FOR FELONIES COMMITTED BEFORE OCTOBER 7, 
              1980.

    (a) Limitation.--Notwithstanding any other provision of law, the 
payment of compensation to or with respect to a veteran described in 
subsection (b) shall, for the remainder of the period of incarceration 
of the veteran described in that subsection, be subject to the 
provisions of section 5313 of title 38, United States Code, other than 
subsection (d) of that section.
    (b) Covered Veterans.--A veteran described in this subsection is 
any veteran entitled to compensation who--
            (1) was incarcerated on October 7, 1980, for a felony 
        committed before that date; and
            (2) remains incarcerated for conviction of that felony 
        after the date of the enactment of this Act.
    (c) Effective Date.--This section shall take effect 90 days after 
the date of the enactment of this Act, and shall apply with respect to 
the payment of compensation for months beginning on or after that date.
    (d) Compensation Defined.--For purposes of this section, the term 
``compensation'' shall have the meaning given that term in section 5313 
of title 38, United States Code.

SEC. 8. ELIGIBILITY FOR SURVIVORS' AND DEPENDENTS' EDUCATIONAL 
              ASSISTANCE OF SPOUSES AND SURVIVING SPOUSES OF VETERANS 
              WITH TOTAL SERVICE-CONNECTED DISABILITIES.

    (a) Designation of Eligibility.--Section 3501(a)(1)(D) of title 38, 
United States Code, is amended--
            (1) by inserting ``(i)'' after ``(D)''; and
            (2) by inserting ``(ii)'' after ``or''.
    (b) Restatement and Expansion of Treatment of Use of Eligibility.--
(1) Section 3511 of that title is amended by adding at the end the 
following new subsection:
    ``(c) Any entitlement used by any eligible person as a result of 
eligibility under section 3501(a)(1)(A)(iii), 3501(a)(1)(C), or 
3501(a)(1)(D)(i) of this title shall be deducted from any entitlement 
to which such person may subsequently become entitled under this 
chapter.''.
    (2) Section 3512 of that title is amended by striking subsection 
(g).
    (c) Delimiting Period.--
            (1) In general.--Section 3512(b) of that title is amended--
                    (A) by striking paragraph (1) and inserting the 
                following new paragraph (1):
    ``(1)(A) Except as provided in subparagraph (B), a person made 
eligible by subparagraph (B) or (D) of section 3501(a)(1) of this title 
may be afforded educational assistance under this chapter during the 
10-year period beginning on the date (as determined by the Secretary) 
the person became an eligible person within the meaning of section 
3501(a)(1)(B), 3501(D)(i), or 3501(D)(ii) of this title. In the case of 
a surviving spouse made eligible by clause (ii) of section 
3501(a)(1)(D) of this title, the 10-year period may not be reduced by 
any earlier period during which the person was afforded educational 
assistance under this chapter as a spouse made eligible by clause (i) 
of that section.
    ``(B) Notwithstanding subparagraph (A), an eligible person referred 
to in that subparagraph may, subject to the Secretary's approval, elect 
a later beginning date for the 10-year period than would otherwise be 
applicable to the person under that subparagraph. The beginning date so 
elected may be any date between the beginning date determined for the 
person under subparagraph (A) and whichever of the following dates 
applies:
            ``(i) The date the Secretary notifies the veteran from whom 
        eligibility is derived that the veteran has a service-connected 
        total disability permanent in nature.
            ``(ii) The date on which the Secretary determines that the 
        veteran from whom eligibility is derived died of a service-
        connected disability.''; and
                    (B) by striking paragraph (3).
            (2) Applicability.--The amendment made by paragraph (1) 
        shall apply with respect to any determination (whether 
        administrative or judicial) of the eligibility of a spouse or 
        surviving spouse for educational assistance under chapter 35 of 
        title 38, United States Code, made on or after the date of the 
        enactment of this Act, whether pursuant to an original claim 
        for such assistance or pursuant to a reapplication or attempt 
        to reopen or readjudicate a claim for such assistance.

SEC. 9. REPEAL OF FISCAL YEAR LIMITATION ON NUMBER OF VETERANS IN 
              PROGRAMS OF INDEPENDENT LIVING SERVICES AND ASSISTANCE.

    (a) Repeal of Limitation.--Section 3120(e) of title 38, United 
States Code, is amended by striking ``Programs'' and all that follows 
through ``such programs'' and inserting ``First priority in the 
provision of programs of independent living services and assistance 
under this section''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on September 30, 2001.

SEC. 10. INCREASE IN HOME LOAN GUARANTY AMOUNT FOR CONSTRUCTION AND 
              PURCHASE OF HOMES.

    Section 3703(a)(1) of title 38, United States Code, is amended by 
striking ``$50,750'' each place it appears in subparagraphs (A)(i)(IV) 
and (B) and inserting ``$63,175''.
Veterans' Benefits Programs Modification Act of 2001 - Amends Federal veterans' benefits provisions to: (1) exclude from annual income, for purposes of eligibility for veterans' pension, the proceeds of any life insurance policy or any other non-recurring income from any source; (2) repeal a provision providing an effective date for the award of death pension for which application is received within 45 days of such death; (3) provide an effective date for the reduction or discontinuance of compensation or pension by reason of a change in recurring income; (4) prohibit the payment of any benefit if information required of a claimant is not received by the Secretary of Veterans Affairs within one year; (5) prohibit veterans who are fugitive felons, or their dependents, from receiving any veterans' benefit during such fugitive period (requiring the Secretary to enter into a memorandum of understanding with State and local law enforcement agencies to furnish latest address information on such veteran); (6) prohibit payment of compensation to veterans remaining incarcerated for felonies committed before October 7, 1980; (7) revise, generally, the delimiting period for the use of educational assistance by a veteran with a total service-connected disability or by his or her survivors or dependents; (8) repeal the 500 per fiscal year limit on the number of veterans authorized to participate in programs of independent living services and assistance; and (9) increase from $50,750 to $63,175 the veterans home loan guaranty limit.
A bill to amend title 38, United States Code, to exclude certain income from annual income determinations for pension purposes, to limit provision of benefits for fugitive and incarcerated veterans, to increase the home loan guaranty amount for construction and purchase of homes, to modify and enhance other authorities relating to veterans' benefits, and for other purposes.