A bill to amend title 38, United States Code, to improve the authorities of the Department of Veterans Affairs relating to compensation, dependency and indemnity compensation, pension, education benefits, life insurance benefits, and memorial benefits, to improve the administration of benefits for veterans, and for other purposes.

SECTION 1. SHORT TITLE; REFERENCES TO TITLE 38, UNITED STATES CODE.

    (a) Short Title.--This Act may be cited as the ``Veterans Programs 
Improvement Act of 2003''.
    (b) References.--Except as otherwise expressly provided, wherever 
in this Act an amendment is expressed in terms of an amendment to a 
section or other provision, the reference shall be considered to be 
made to a section or other provision of title 38, United States Code.

SEC. 2. INCREASE IN RATES OF DISABILITY COMPENSATION AND DEPENDENCY AND 
              INDEMNITY COMPENSATION.

    (a) Rate Adjustment.--The Secretary of Veterans Affairs shall, 
effective on December 1, 2003, increase the dollar amounts in effect 
for the payment of disability compensation and dependency and indemnity 
compensation by the Secretary, as specified in subsection (b).
    (b) Amounts To Be Increased.--The dollar amounts to be increased 
pursuant to subsection (a) are the following:
            (1) Compensation.--Each of the dollar amounts in effect 
        under section 1114.
            (2) Additional compensation for dependents.--Each of the 
        dollar amounts in effect under section 1115(1).
            (3) Clothing allowance.--The dollar amount in effect under 
        section 1162.
            (4) New dic rates.--Each of the dollar amounts in effect 
        under paragraphs (1) and (2) of section 1311(a).
            (5) Old dic rates.--Each of the dollar amounts in effect 
        under section 1311(a)(3).
            (6) Additional dic for surviving spouses with minor 
        children.--The dollar amount in effect under section 1311(b);
            (7) Additional dic for disability.--Each of the dollar 
        amounts in effect under subsections (c) and (d) of section 
        1311.
            (8) DIC for dependent children.--Each of the dollar amounts 
        in effect under sections 1313(a) and 1314.
    (c) Determination of Increase.--
            (1) The increase under subsection (a) shall be made in the 
        dollar amounts specified in subsection (b) as in effect on 
        November 30, 2003.
            (2) Except as provided in paragraph (3), each such amount 
        shall be increased by the same percentage as the percentage by 
        which benefit amounts payable under title II of the Social 
        Security Act (42 U.S.C. 401 et seq.) are increased effective 
        December 1, 2003, as a result of a determination under section 
        215(i) of such Act (42 U.S.C. 415(i)).
            (3) Each dollar amount increased pursuant to paragraph (2) 
        shall, if not a whole dollar amount, be rounded down to the 
        next lower whole dollar amount.
    (d) Special Rule.--The Secretary may adjust administratively, 
consistent with the increases made under subsection (a), the rates of 
disability compensation payable to persons within the purview of 
section 10 of Public Law No. 85-857 (72 Stat. 1263) who are not in 
receipt of compensation payable pursuant to chapter 11 of title 38, 
United States Code.
    (e) Publication of Adjusted Rates.--At the same time as the matters 
specified in section 215(i)(2)(D) of the Social Security Act (42 U.S.C. 
415(i)(2)(D)) are required to be published by reason of a determination 
made under section 215(i) of such Act during fiscal year 2004, the 
Secretary of Veterans Affairs shall publish in the Federal Register the 
amounts specified in subsection (b) as increased pursuant to subsection 
(a).

SEC. 3. REPEAL OF 45-DAY RULE FOR EFFECTIVE DATE OF AWARD OF DEATH 
              PENSION.

    Subsection (d) of section 5110 is amended--
            (1) by striking the designation ``(1)'';
            (2) by striking ``death compensation or dependency and 
        indemnity compensation'' and inserting ``death compensation, 
        dependency and indemnity compensation, or death pension''; and
            (3) by striking paragraph (2).

SEC. 4. EXCLUSION OF LUMP-SUM LIFE INSURANCE PROCEEDS FROM 
              DETERMINATIONS OF ANNUAL INCOME FOR PENSION PURPOSES.

    Subsection (a) of section 1503 is amended--
            (1) by striking ``and'' at the end of paragraph (9);
            (2) by striking ``materials.'' at the end of paragraph 
        (10)(B) and inserting ``materials; and''; and
            (3) by adding at the end the following new paragraph:
            ``(11) lump-sum proceeds of any life insurance policy or 
        policies on a veteran, for purposes of pension under subchapter 
        III of this chapter.''.

SEC. 5. CLARIFICATION OF PROHIBITION ON PAYMENT OF COMPENSATION FOR 
              ALCOHOL OR DRUG-RELATED DISABILITY.

    (a) Clarification.--Chapter 11 is amended--
            (1) in section 1110, by striking ``drugs.'' and inserting 
        ``drugs, even if the abuse is secondary to a service-connected 
        disability.''; and
            (2) in section 1131, by striking ``drugs.'' and inserting 
        ``drugs, even if the abuse is secondary to a service-connected 
        disability.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply to any claim--
            (1) filed on or after the date of enactment of this Act; or
            (2) filed before the date of enactment of this Act and not 
        finally decided as of that date.

SEC. 6. ALTERNATIVE BENEFICIARIES FOR NATIONAL SERVICE LIFE INSURANCE 
              AND UNITED STATES GOVERNMENT LIFE INSURANCE.

    (a) National Service Life Insurance.--
            (1) Section 1917 is amended by adding at the end the 
        following new subsection:
    ``(f)(1) Following the death of the insured and in a case not 
covered by subsection (d)--
            ``(A) if the first beneficiary otherwise entitled to 
        payment of the insurance does not make a claim for such payment 
        within two years after the death of the insured, payment may be 
        made to another beneficiary designated by the insured, in the 
        order of precedence as designated by the insured, as if the 
        first beneficiary had predeceased the insured; and
            ``(B) if, within four years after the death of the insured, 
        no claim has been filed by a person designated by the insured 
        as a beneficiary and the Secretary has not received any notice 
        in writing that any such claim will be made, payment may 
        (notwithstanding any other provision of law) be made to such 
        person as may in the judgment of the Secretary be equitably 
        entitled thereto.
    ``(2) Payment of insurance under paragraph (1) shall be a bar to 
recovery by any other person.''.
    (b) United States Government Life Insurance.--Section 1952 is 
amended by adding at the end the following new subsection:
    ``(c)(1) Following the death of the insured and in a case not 
covered by section 1950 of this title--
            ``(A) if the first beneficiary otherwise entitled to 
        payment of the insurance does not make a claim for such payment 
        within two years after the death of the insured, payment may be 
        made to another beneficiary designated by the insured, in the 
        order of precedence as designated by the insured, as if the 
        first beneficiary had predeceased the insured; and
            ``(B) if, within four years after the death of the insured, 
        no claim has been filed by a person designated by the insured 
        as a beneficiary and the Secretary has not received any notice 
        in writing that any such claim will be made, payment may 
        (notwithstanding any other provision of law) be made to such 
        person as may in the judgment of the Secretary be equitably 
        entitled thereto.
    ``(2) Payment of insurance under paragraph (1) shall be a bar to 
recovery by any other person.''.
    (c) Transition Provision.--In the case of a person insured under 
subchapter I or II of chapter 19, title 38, United States Code, who 
dies before the date of the enactment of this Act, the two-year and 
four-year periods specified in subsection (f)(1) of section 1917 of 
title 38, United States Code, as added by subsection (a), and 
subsection (c)(1) of section 1952 of such title, as added by subsection 
(b), as applicable, shall for purposes of the applicable subsection be 
treated as being the two-year and four-year periods, respectively, 
beginning on the date of the enactment of this Act.

SEC. 7. TIME LIMITATION ON RECEIPT OF CLAIM INFORMATION PURSUANT TO 
              REQUEST BY DEPARTMENT OF VETERANS AFFAIRS.

    (a) In General.--Section 5102 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 subsection (b) 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 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. 8. BURIAL PLOT ALLOWANCE.

    (a) Subsection (b) of section 2303 is amended--
            (1) in the matter preceding paragraph (1), by striking ``a 
        burial allowance under such section 2302, or under such 
        subsection, who was discharged from the active military, naval, 
        or air service for a disability incurred or aggravated in line 
        of duty, or who is a veteran of any war'' and inserting 
        ``burial in a national cemetery under section 2402 of this 
        title''; and
            (2) in paragraph (2), by striking ``(other than a veteran 
        whose eligibility for benefits under this subsection is based 
        on being a veteran of any war)'' and inserting ``is eligible 
        for a burial allowance under section 2302 of this title or 
        under subsection (a) of this section, or was discharged from 
        the active military, naval, or air service for a disability 
        incurred or aggravated in line of duty, and such veteran''.
    (b) Section 2307 is amended in the last sentence by striking ``and 
(b)'' and inserting ``and (b)(2)''.

SEC. 9. PROVISION OF MARKERS FOR PRIVATELY MARKED GRAVES.

    (a) In General.--Subsection (d) of section 502 of the Veterans 
Education and Benefits Expansion Act of 2001 (Public Law 107-103; 115 
Stat. 995), as amended by section 203 of the Veterans Benefits Act of 
2002 (Public Law 107-330; 116 Stat. 2824), is further amended by 
striking ``September 11, 2001'' and inserting ``November 1, 1990''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of section 502 of Public 
Law 107-103.

SEC. 10. EXPANSION OF BURIAL ELIGIBILITY FOR REMARRIED SPOUSES.

    (a) In General.--Paragraph (5) of section 2042 is amended by 
striking ``(which for purposes of this chapter includes an unremarried 
surviving spouse who had a subsequent remarriage which was terminated 
by death or divorce)'' and inserting ``(which for purposes of this 
chapter includes a surviving spouse who remarries following the 
veteran's death)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to deaths occurring on or after the date of the enactment of this 
Act.

SEC. 11. MAKE PERMANENT AUTHORITY FOR STATE CEMETERY GRANTS PROGRAM.

    (a) Permanent Authorization.--Paragraph (2) of section 2408(a) is 
amended--
            (1) by striking ``for fiscal year 1999 and for each 
        succeeding fiscal year through fiscal year 2004''; and
            (2) by adding at the end ``Funds appropriated under the 
        preceding sentence shall remain available until expended.''.
    (b) Technical Amendment.--Subsection (e) of section 2408 is amended 
by striking ``Sums appropriated under subsection (a) of this section 
shall remain available until expended.''.

SEC. 12. FORFEITURE OF BENEFITS FOR SUBVERSIVE ACTIVITIES.

    (a) Addition of Certain Offenses.--Paragraph (2) of section 6105(b) 
is amended by striking ``sections 792, 793, 794, 798, 2381, 2382, 2383, 
2384, 2385, 2837, 2388, 2389, 2390, and chapter 105 of title 18'' and 
inserting ``sections 175, 229, 792, 793, 794, 798, 831, 1091, 2332a, 
2332b, 2381, 2382, 2383, 2384, 2385, 2387, 2388, 2389, 2390, and 
chapter 105 of title 18''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to claims filed after the date of the enactment of this Act.

SEC. 13. VETERANS' ADVISORY COMMITTEE ON EDUCATION.

    Section 3692 is amended--
            (1) in subsection (a), by inserting ``as far as 
        practicable'' after ``include'';
            (2) in subsections (a) and (b), by striking ``chapter 106'' 
        and inserting ``chapter 1606'' both places it appears; and
            (3) in subsection (c), by striking ``2003'' and inserting 
        ``2013''.

SEC. 14. REPEAL OF EDUCATION LOAN PROGRAM.

    (a) Termination of Program.--No loans shall be made under 
subchapter III of chapter 36 after the date of the enactment of this 
Act, and such subchapter shall be repealed 90 days after such date of 
enactment.
    (b) Closing of Loan Fund.--All monies in the revolving fund 
established in the Treasury of the United States of America known as 
the ``Department of Veterans Affairs Education Loan Fund'' (the 
``Fund'') on the day before the date of repeal of such subchapter III 
shall be transferred to the Department of Veterans Affairs Readjustment 
Benefits Account, and the Fund shall be closed.
    (c) Discharge of Liability.--The liability on any education loan 
debt outstanding under such subchapter III shall be discharged, and any 
overpayments declared under section 3698(e)(1) of that subchapter shall 
be waived without further process on the date funds are transferred as 
referred to in subsection (b) of this section.
    (d) Technical Amendment.--On the date of repeal of such subchapter 
III, as provided herein, the table of sections at the beginning of 
chapter 36 shall be amended by striking the items relating to 
subchapter III.
    (e) Conforming Amendments.--
            (1) Chapter 34 is amended--
                    (A) by repealing paragraph (2) of section 3462(a); 
                and
                    (B) in paragraph (1) of section 3485(e), by 
                striking ``(other than an education loan under 
                subchapter III)''.
            (2) Section 3512 is amended by repealing subsection (f).
            (3) The amendments made by paragraphs (1)(B) and (2) shall 
        take effect 90 days after the date of the enactment of this 
        Act.

SEC. 15. RESTORATION OF CHAPTER 35 EDUCATION BENEFITS OF CERTAIN 
              INDIVIDUALS.

    (a) Restoration.--Subsection (h) of section 3512 is amended by 
inserting ``or is involuntarily ordered to full-time National Guard 
duty under section 502(f) of title 32'' following ``title 10''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as of September 11, 2001.

SEC. 16. EXPANSION OF MONTGOMERY GI BILL EDUCATION BENEFITS FOR CERTAIN 
              SELF-EMPLOYMENT TRAINING.

    (a) Self-Employment Training.--Subparagraph (B) of section 3002(3) 
is amended--
            (1) in clause (i) by striking ``and'';
            (2) by adding at the end the following clause:
                            ``(iii) a program of self-employment on-job 
                        training approved as provided in section 
                        3677(d) of this title; and''.
    (b) Program Approval.--Section 3677 is amended--
            (1) in subsections (a) and (c), by inserting ``self-
        employment on-job training or'' after ``(other than'';
            (2) in subsection (b)(1), by inserting ``described in 
        subsection (a)'' after ``offering training''; and
            (3) by adding at the end the following new subsection:
    ``(d)(1) Any State approving agency may approve a program of self-
employment on-job training for purposes of chapter 30 of this title 
only when it finds that the training is generally recognized as needed 
or accepted for purposes of obtaining licensure to engage in the self-
employment occupation or is required for ownership and operation of a 
franchise that is the objective of the training.
    ``(2) The training entity offering the training for which approval 
is sought under this chapter must submit to the State approving agency 
a written application for approval, in the form and with the content as 
prescribed by the Secretary, which shall include such information as is 
required by the State approving agency.
    ``(3) As a condition for approving a program of self-employment on-
job training, the State approving agency must find upon investigation 
that the following criteria are met:
            ``(A) The training content is adequate to qualify the 
        eligible individual for the self-employment occupation that is 
        the objective of the training.
            ``(B) The training consists of full-time training for a 
        period of less than six months.
            ``(C) The length of the training period is not longer than 
        that customarily required to obtain the knowledge, skills, and 
        experience needed to successfully engage in the particular 
        self-employment occupation that is the objective of the 
        training.
            ``(D) The training entity has adequate instructional space, 
        equipment, materials, and personnel to provide satisfactory 
        training on the job.
            ``(E) The training entity keeps adequate records of each 
        trainee's progress toward the self-employment objective and, at 
        the end of the training period, issues a license, certificate, 
        or other document recording the individual's successful 
        completion of the training program.
            ``(F) The training entity and the self-employment on-job 
        training program meet such other criteria as the Secretary may 
        prescribe and as the State approving agency, with the 
        Secretary's approval, may establish.''.
    (c) Conforming Amendment.--Paragraph (2) of section 3687(a) is 
amended by inserting ``subsections (a), (b), and (c) of'' before 
``section 3677''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date six months after the enactment of this Act and shall 
apply to self-employment on-job training approved and pursued on or 
after that date.

Summary: Veterans Programs Improvement Act of 2003 - Directs the Secretary of Veterans Affairs to increase, as of December 1, 2003, the rates of veterans' disability compensation, additional compensation for dependents, the clothing allowance for certain disabled adult children, and dependency and indemnity compensation for surviving spouses and children. Makes the effective date for the award of death pension the same as that for the award of death compensation or dependency and indemnity compensation. Excludes lump-sum insurance proceeds from income for purposes of eligibility for veterans' pensions. Prohibits the payment of veterans' disability compensation for an alcohol- or drug-abuse related disability even if the the alcohol or drug abuse is secondary to a service-connected disability. Provides alternative beneficiaries for National Service Life Insurance and United States Government Life Insurance proceeds when the first beneficiary does not make a claim. Provides burial benefit eligibility for a veteran's surviving spouse who remarries following the veteran's death. Makes permanent the authority for the State cemetery grants program. Repeals the Department of Veterans Affairs Education Loan program. Includes self-employment training under the Montgomery GI Bill.