A bill to amend title 38, United States Code, to modify the provision of compensation and pension to surviving spouses of veterans in the months of the deaths of the veterans, to improve housing loan benefits for veterans, and for other purposes.

SECTION 1. MODIFICATION OF MONTH OF DEATH BENEFIT FOR SURVIVING SPOUSES 
              OF VETERANS WHO DIE WHILE ENTITLED TO COMPENSATION OR 
              PENSION.

    (a) Surviving Spouse Benefit for Month of Veteran's Death.--
Subsections (a) and (b) of section 5310 of title 38, United States 
Code, are amended to read as follows:
    ``(a) In General.--(1) A surviving spouse of a veteran is entitled 
to a benefit for the month of the veteran's death if at the time of the 
veteran's death--
            ``(A) the veteran was receiving compensation or pension 
        under chapter 11 or 15 of this title; or
            ``(B) the veteran was not receiving compensation or pension 
        under chapter 11 or 15 of this title but the veteran had a 
        claim pending for the month of the veteran's death for which 
        benefits would have been payable under chapter 11 or 15 of this 
        title had the veteran not died.
    ``(2) The amount of benefit under paragraph (1) is the amount that 
the veteran would have received under chapter 11 or 15 of this title 
for the month of the veteran's death had the veteran not died.
    ``(3) Any benefits payable under this section on behalf of a 
veteran who was not in receipt of such benefits as of the month of the 
veteran's death shall be paid to the surviving spouse as accrued 
benefits.
    ``(b) Claims Pending Adjudication.--If a claim for entitlement to 
compensation or additional compensation under chapter 11 of this title 
or pension or additional pension under chapter 15 of this title is 
pending at the time of a veteran's death and the check or other payment 
issued to the veteran's surviving spouse under subsection (a) is less 
than the amount of the benefit the veteran would have been entitled to 
for the month of death pursuant to the adjudication of the pending 
claim, an amount equal to the difference between the amount to which 
the veteran would have been entitled to receive under chapter 11 or 15 
of this title for the month of the veteran's death had the veteran not 
died and the amount of the check or other payment issued to the 
surviving spouse shall be treated in the same manner as an accrued 
benefit under section 5121 of this title.''.
    (b) Month of Death Benefit Exempt From Delayed Commencement of 
Payment.--Section 5111(c)(1) of such title is amended by striking 
``apply to'' and all that follows through ``death occurred'' and 
inserting the following: ``not apply to payments made pursuant to 
section 5310 of this title''.
    (c) Prohibition on Requests for Return of Certain Checks and 
Payments.--In the case of a surviving spouse who was a dependent with 
respect to whom additional compensation for dependents was payable 
under section 1115 of title 38, United States Code, or additional 
pension as a married veteran under chapter 15 of such title, as of the 
date of the veteran's death, if a check or other payment issued to the 
veteran as a benefit payment under chapter 11 or 15 of title 38, United 
States Code, for the month in which death occurs is negotiated, 
deposited, or otherwise accessed by the surviving spouse--
            (1) the check or payment shall be considered to be the 
        benefit payable to the surviving spouse under section 
        5310(a)(1) of title 38, United States Code (as amended by 
        subsection (a)), to the extent that the check or payment equals 
        the amount which would otherwise be payable under such section; 
        and
            (2) the Secretary may not require the surviving spouse to 
        return the check or payment.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act, and shall apply with 
respect to deaths that occur on or after that date.

SEC. 2. ELIGIBILITY FOR PRESIDENTIAL MEMORIAL CERTIFICATES OF 
              INDIVIDUALS WHO DIE WHILE SERVING IN THE ACTIVE MILITARY, 
              NAVAL, OR AIR SERVICE.

    Section 112 of title 38, United States Code, is amended--
            (1) by amending subsection (a) to read as follows:
    ``(a)(1) At the request of the President, the Secretary may conduct 
a program for honoring the memory of covered individuals by preparing 
and sending to eligible recipients a certificate bearing the signature 
of the President and expressing the country's recognition of the 
covered individual's service in the Armed Forces.
    ``(2) The award of a certificate to one eligible recipient shall 
not preclude authorization of another certificate if a request is 
received from some other eligible recipient.'';
            (2) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively; and
            (3) by inserting after subsection (a) the following new 
        subsection (b):
    ``(b) For purposes of this section, a covered individual is any of 
the following:
            ``(1) A deceased veteran discharged under honorable 
        conditions.
            ``(2) An individual who dies while serving in the active 
        military, naval, or air service.''.

SEC. 3. MODIFICATION TO AUTHORIZE SATISFACTION OF OCCUPANCY REQUIREMENT 
              ON PROPERTY FINANCED WITH HOUSING LOAN BENEFITS FOR 
              VETERANS BY OCCUPANCY OF DEPENDENT CHILDREN.

    Paragraph (2) of section 3704(c) of title 38, United States Code, 
is amended to read as follows:
    ``(2) In any case in which a veteran is in active duty status as a 
member of the Armed Forces and is unable to occupy a property because 
of such status, the occupancy requirements of this chapter shall be 
considered to be satisfied if--
            ``(A) the veteran's spouse occupies or intends to occupy 
        the property as a home and the spouse makes the certification 
        required by paragraph (1); or
            ``(B) the veteran's dependent child occupies or will occupy 
        the property as a home and the veteran's attorney-in-fact or a 
        legal guardian of the veteran's dependent child makes the 
        certification required by paragraph (1).''.

SEC. 4. COVENANTS AND LIENS CREATED BY PUBLIC ENTITIES IN RESPONSE TO 
              DISASTER-RELIEF ASSISTANCE.

    Paragraph (3) of section 3703(d) of title 38, United States Code, 
is amended to read as follows:
    ``(3)(A) Any real estate housing loan (other than for repairs, 
alterations, or improvements) shall be secured by a first lien on the 
realty. In determining whether a loan is so secured, the Secretary may 
either disregard or allow for subordination to a superior lien created 
by a duly recorded covenant running with the realty in favor of--
            ``(i) a public entity that has provided or will provide 
        assistance in response to a major disaster as declared by the 
        President under section 401 of the Robert T. Stafford Disaster 
        Relief and Emergency Assistance Act (42 U.S.C. 5170); or
            ``(ii) a private entity to secure an obligation to such 
        entity for the homeowner's share of the costs of the 
        management, operation, or maintenance of property, services, or 
        programs within and for the benefit of the development or 
        community in which the veteran's realty is located, if the 
        Secretary determines that the interests of the veteran borrower 
        and of the Government will not be prejudiced by the operation 
        of such covenant.
    ``(B) With respect to any superior lien described in subparagraph 
(A) created after June 6, 1969, the Secretary's determination under 
clause (ii) of such subparagraph must have been made prior to the 
recordation of the covenant.''.

Summary: Entitles a surviving spouse to a benefit for the month of a veteran's death if, at the time of the veteran's death: (1) the veteran was receiving veterans' disability compensation or veteran's pension, or (2) the veteran was not receiving such compensation or pension but had a claim pending for the month of the veteran's death for which benefits would have been payable had the veteran not died. Prohibits the Secretary of Veterans Affairs (VA) from requesting the return of a check or payment made to a surviving spouse, in the month in which the veteran's death occurs, as additional compensation for a dependent or additional pension as a married veteran. Includes under the VA's presidential memorial certificate program an individual who dies during active service. Considers a veteran who is unable to occupy a home because of active-duty status to have satisfied the occupancy requirement relating to housing financed through the VA if the veteran's dependent child is occupying or will occupy the home and the veteran's attorney or a legal guardian of the dependent child makes the VA-required occupancy certification. Authorizes the VA to guarantee a veterans' housing loan regardless of whether such loan is subordinate to a lien created in favor of a public entity that provides assistance in response to a major disaster.