An original bill to amend title 38, United States Code, to improve Servicemembers' Group Life Insurance and Veterans' Group Life Insurance and to modify the provision of compensation and pension to surviving spouses of veterans in months of the deaths of the veterans, and for other purposes.

SECTION 1. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Table of contents.
                        TITLE I--BENEFIT MATTERS

Sec. 101. Repeal of sunset on 2-year extension of Servicemembers' Group 
                            Life Insurance coverage for members of 
                            Armed Forces separating from service while 
                            totally disabled.
Sec. 102. Authorization for increases by individuals of Veterans' Group 
                            Life Insurance coverage upon renewal.
Sec. 103. Modification of month of death benefit for surviving spouses 
                            of veterans who die while entitled to 
                            compensation or pension.
Sec. 104. Eligibility for presidential memorial certificates of 
                            individuals who die while serving in the 
                            active military, naval, or air service.
                    TITLE II--LOAN GUARANTY MATTERS

Sec. 201. Occupancy of property by dependent child of a veteran.
Sec. 202. Covenants and liens created by public entities in response to 
                            disaster-relief assistance.
                        TITLE III--OTHER MATTERS

Sec. 301. Processing of applications for relief from adjudication of 
                            mental incompetence for certain purposes.

                        TITLE I--BENEFIT MATTERS

SEC. 101. REPEAL OF SUNSET ON 2-YEAR EXTENSION OF SERVICEMEMBERS' GROUP 
              LIFE INSURANCE COVERAGE FOR MEMBERS OF ARMED FORCES 
              SEPARATING FROM SERVICE WHILE TOTALLY DISABLED.

    (a) Separation or Release.--Paragraph (1)(A) of section 1968(a) of 
title 38, United States Code, is amended by striking clause (ii) and 
inserting the following new clause (ii):
                            ``(ii) The date that is 2 years after the 
                        date of separation or release from such active 
                        duty or active duty for training, in the case 
                        of such a separation or release occurring on or 
                        after June 15, 2005.''.
    (b) Separation or Release From Certain Reserve Assignments.--
Paragraph (4) of such section is amended by striking subparagraph (B) 
and inserting the following new subparagraph (B):
                    ``(B) The date that is 2 years after the date of 
                separation or release from such assignment, in the case 
                of such a separation or release occurring on or after 
                June 15, 2005.''.

SEC. 102. AUTHORIZATION FOR INCREASES BY INDIVIDUALS OF VETERANS' GROUP 
              LIFE INSURANCE COVERAGE UPON RENEWAL.

    Section 1977(a) of title 38, United States Code, is amended--
            (1) in paragraph (1), by striking the second sentence; and
            (2) by adding at the end the following new paragraph:
            ``(3) Subject to the second sentence of paragraph (1), a 
        veteran who has not attained the age of 60 years and is insured 
        under Veterans' Group Life Insurance for an amount less than 
        the maximum amount of Servicemembers' Group Life Insurance in 
        effect under section 1967(a)(3)(A)(i) of this title at the time 
        of renewal of Veterans' Group Life Insurance under this section 
        may increase the amount of the veteran's coverage under 
        Veterans' Group Life Insurance by not more than $25,000 at the 
        time of renewal.''.

SEC. 103. 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. 104. 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.''.

                    TITLE II--LOAN GUARANTY MATTERS

SEC. 201. OCCUPANCY OF PROPERTY BY DEPENDENT CHILD OF A VETERAN.

    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) of this subsection; 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) of this subsection.''.

SEC. 202. 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 shall have been made prior to the 
recordation of the covenant.''.

                        TITLE III--OTHER MATTERS

SEC. 301. PROCESSING OF APPLICATIONS FOR RELIEF FROM ADJUDICATION OF 
              MENTAL INCOMPETENCE FOR CERTAIN PURPOSES.

    (a) In General.--Chapter 55 of title 38, United States Code, is 
amended by adding at the end the following new section:
``Sec. 5511. Processing of applications for relief from adjudication of 
              mental incompetence for certain purposes
    ``Notwithstanding clause (ii) of section 101(c)(2)(A) of the NICS 
Improvement Amendments Act of 2007 (Public Law 110-180; 18 U.S.C. 922 
note), each application for relief submitted to the Secretary under the 
program required by clause (i) of such section shall be processed by 
the Secretary not later than 180 days after the receipt of the 
application. If the Secretary fails to resolve such application for 
relief within 180 days for any reason, including a lack of appropriated 
funds, the Secretary shall be deemed to have granted such application 
for relief.''.
    (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 55 of such title is amended by adding at the end the following 
new item:

``5511. Processing of applications for relief from adjudication of 
                            mental incompetence for certain 
                            purposes.''.
                                                       

Summary: Title I: Benefit Matters - Extends, for those separated or released on or after June 15, 2005, the termination of Servicemembers' Group Life Insurance (SGLI) coverage for totally disabled veterans to two years after their separation or release from active duty or active duty for training of at least 30 days. Allows a veteran under age 60 and insured under Veterans' Group Life Insurance (VGLI) for less than the maximum SGLI amount ($400,000) to increase at renewal the VGLI coverage by up to $25,000 at the time of renewal. 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. Title II: Loan Guaranty Matters - Deems as satisfying occupancy requirements necessary for a veteran's housing loan the occupancy by a veteran's dependent child, when the veteran is in active duty status and therefore unable to occupy the property. Allows the Secretary, in determining whether a VA-guaranteed housing loan is secured by a first lien, to either disregard or allow for subordination to a superior lien created by a recorded covenant in favor of a public entity that has provided or will provide assistance in response to a major disaster as declared by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Title III: Other Matters - Requires the VA to adjudicate appeals for relief from findings of mental incompetence made under the National Instant Criminal Background Check System (NICS) within 180 days after their receipt. Deems granted any appeals not processed within such period.