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[Senate Report 110-449]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 947
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-449

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

 
               VETERANS' BENEFITS IMPROVEMENT ACT OF 2008

                                _______
                                

               September 9, 2008.--Ordered to be printed

                                _______
                                

   Mr. Akaka, from the Committee on Veterans' Affairs, submitted the 
                               following

                              R E P O R T

                             together with

                           SUPPLEMENTAL VIEWS

                         [To accompany S. 3023]

    The Committee on Veterans' Affairs (the Committee), to 
which was referred the bill (S. 3023), to amend title 38, 
United States Code, to require the Secretary of Veterans 
Affairs to prescribe regulations relating to the notice to be 
provided claimants with the Department of Veterans' Affairs 
regarding the substantiation of claims, having considered the 
same, unanimously reports favorably thereon with an amendment, 
and an amendment to the title, and recommends that the bill, as 
amended, do pass.

                              Introduction

    On May 15, 2008, Committee Chairman Daniel K. Akaka 
introduced S. 3023, the proposed ``Veterans' Notice 
Clarification Act of 2008.'' S. 3023 would amend title 38, 
United States Code, to improve notices provided to veterans 
applying for disability compensation, and for other purposes. 
The bill was referred to the Committee.
    Earlier on January 4, 2007, Senator Thune introduced S. 
161, the proposed ``Veterans' Disability Compensation Automatic 
COLA Act.'' Later, Senators Snowe and Tester were added as 
cosponsors. S. 161 would require that, whenever there is an 
increase in benefit amounts payable under title II (Federal 
Old-Age, Survivors, and Disability Insurance Benefits) of the 
Social Security Act, the Secretary of Veterans Affairs shall 
increase by the same percentage the amounts payable as 
veterans' disability compensation and dependency and indemnity 
compensation for surviving spouses and children.
    On June 27, 2007, Senator Brown introduced S. 1718, the 
proposed ``Veterans Education Tuition Support Act,'' with 
Senator Salazar as an original cosponsor. Later, Senators 
Baucus, Boxer, Casey, Domenici, Klobuchar, McCaskill, Menendez, 
Mikulski, Murray, Sessions, Stabenow, Tester, and Webb were 
added as cosponsors. S. 1718 would amend the Servicemembers 
Civil Relief Act (SCRA) to provide protections for 
servicemembers who are called to active duty while enrolled in 
institutions of higher education.
    On September 25, 2007, Chairman Akaka introduced S. 2090 by 
request of the United States Court of Appeals for Veterans 
Claims (CAVC or the Court). S. 2090 would enhance privacy 
protection and alleviate security concerns regarding the 
records of the Court.
    On September 25, 2007, Chairman Akaka introduced S. 2091 by 
request of CAVC. S. 2091 would increase the number of judges on 
the Court from seven to nine.
    On December 13, 2007, Senator Kennedy introduced S. 2471, 
the proposed ``USERRA Enforcement Improvement Act of 2007,'' 
with Chairman Akaka and Senator Obama as original cosponsors. 
Later, Senator Clinton was added as a cosponsor. S. 2471 would 
amend the current Uniformed Services Employment and 
Reemployment Rights Act (USERRA) complaint process and modify 
and expand the reporting requirements with respect to 
enforcement of USERRA.
    On January 23, 2008, Senator Hutchison introduced S. 2550, 
the proposed ``Combat Veterans Debt Elimination Act of 2008,'' 
with Senators Cornyn and Johnson as original cosponsors. Later, 
Ranking Minority Member Burr and Senators Alexander, Allard, 
Bayh, Brown, Brownback, Byrd, Cochran, Conrad, Domenici, 
Ensign, Isakson, McConnell, Murray, Roberts, Sessions, Sununu, 
and Wicker were added as cosponsors. S. 2550 would prohibit the 
Secretary of Veterans Affairs from collecting debts owed to the 
United States by certain members of the Armed Forces or 
veterans who die as a result of an injury incurred or 
aggravated on active duty in a war or a combat zone after 
September 11, 2001.
    On February 28, 2008, Ranking Minority Member Burr 
introduced S. 2674, the proposed ``America's Wounded Warriors 
Act.'' Later, Senators Cochran, Domenici, and Isakson were 
added as cosponsors. Title II of S. 2674 would direct the 
Department of Veterans Affairs (VA or the Department) to 
conduct a series of studies on reforming the disability 
compensation system and then submit to Congress a proposal for 
a new compensation and transition payment rate structure.
    On March 10, 2008, Chairman Akaka introduced S. 2737, the 
proposed ``Veterans' Rating Schedule Review Act.'' S. 2737 
would authorize CAVC to review whether, and the extent to 
which, the rating schedule for veterans' disabilities complies 
with statutory requirements applicable to entitlement to 
veterans' disability compensation for service-connected 
disability or death.
    On March 13, 2008, Chairman Akaka introduced S. 2768, with 
Ranking Minority Member Burr, and Senators Baucus, Boxer, 
Brown, Clinton, Durbin, Kerry, Murray, Obama, Reid, 
Rockefeller, and Sanders as original cosponsors. Later, 
Senators Cantwell, Isakson, Schumer, and Smith were added as 
cosponsors. S. 2768 would provide a temporary increase, during 
the period beginning on the date of enactment of this Act and 
ending on December 31, 2011, in the maximum veterans' loan 
guaranty amount for housing loans guaranteed by VA.
    On April 17, 2008, Chairman Akaka introduced S. 2889, the 
proposed ``Veterans Health Care Act of 2008,'' by request of 
VA. Section 7 of S. 2889 would make permanent VA's authority to 
obtain income information from the Internal Revenue Service and 
the Social Security Administration.
    On April 30, 2008, Senator Vitter introduced S. 2946, with 
Senator Brownback as an original cosponsor. S. 2946 would allow 
a stillborn child to be an insurable dependent under 
Servicemembers' Group Life Insurance (SGLI).
    On May 1, 2008, Senator Baucus introduced S. 2951, with 
Senators Lugar and Tester as original cosponsors. S. 2951 would 
require reports on VA's progress in addressing causes for 
variances in compensation payments to veterans for service-
connected disabilities.
    On May 1, 2008, Chairman Akaka introduced S. 2961. S. 2961 
would enhance the refinancing of home loans by veterans.
    On May 1, 2008, Senator Boxer introduced S. 2965, with 
Senator Lieberman as an original cosponsor. S. 2965 would 
require a report from VA on the inclusion of severe and acute 
Post Traumatic Stress Disorder among the conditions covered by 
traumatic injury protection under SGLI.
    On May 6, 2008, Senator Casey introduced S. 2981, the 
proposed ``Disabled Veterans Home Ownership Preservation Act of 
2008,'' with Senator Isakson as an original cosponsor. S. 2981 
would amend SCRA to provide a one-year period of protection 
against mortgage foreclosures for certain disabled or severely 
injured servicemembers, and for other purposes.
    On May 6, 2008, Chairman Akaka introduced S. 2984, the 
proposed ``Veterans' Benefits Enhancement Act of 2008,'' by 
request of VA. S. 2984 would eliminate the reporting 
requirement for prior training; modify the waiting period 
before the affirmation of enrollment in a correspondence 
course; eliminate the change-of-program application; eliminate 
the wage earning requirement for self-employment on-job 
training; authorize memorial headstones and markers for 
deceased remarried surviving spouses of veterans; make 
permanent VA's authority to contract for medical disability 
examinations; make modifications to SGLI; permit VA to provide 
Temporary Residence Assistance Grants to certain 
servicemembers; and designate a VA Office of Small Business 
Programs.
    On May 7, 2008, the Committee held a hearing on benefits 
legislation at which testimony was offered by: Mr. Keith 
Pedigo, Associate Deputy Under Secretary for Policy and Program 
Management, Department of Veterans Affairs; Mr. Carl Blake, 
National Legislative Director, Paralyzed Veterans of America; 
Mr. Richard Paul Cohen, Executive Director, National 
Organization of Veterans' Advocates; Mr. Eric A. Hilleman, 
Deputy Director of the National Legislative Service, Veterans 
of Foreign Wars of the United States; Mr. Ray Kelley, 
Legislative Director, AMVETS; Mr. Steve Smithson, Deputy 
Director, Veterans Affairs and Rehabilitation Commission, The 
American Legion; Mr. Joseph Violante, National Legislative 
Director, Disabled American Veterans; Mr. Rick Weidman, 
Governmental Affairs Director, Vietnam Veterans of America; Mr. 
Herman Gerald Starnes, U.S. Merchant Marine with service in 
World War II; and Mr. Charles Dana Gibson, U.S. Merchant Marine 
with service in World War II and maritime historian.
    On May 8, 2008, Chairman Akaka introduced S. 3000, the 
proposed ``Native American Veterans Access Act of 2008,'' with 
Senator Inouye as an original cosponsor. S. 3000 would allow 
tribal governments to apply for veterans' program grants that 
are currently limited to States and certain U.S. Territories.
    On June 5, 2008, Senator Snowe introduced S. 3087, the 
proposed ``Helping Our Veterans to Keep Their Homes Act of 
2008.'' S. 3087 would extend VA's authority to guaranty 
adjustable rate mortgages and hybrid adjustable rate mortgages.

                           Committee Meeting

    After carefully reviewing the testimony from the foregoing 
hearing, the Committee met in open session on June 26, 2008, to 
consider, among other legislation, an amended version of S. 
3023, consisting of provisions from S. 3023, as introduced, and 
from the legislation noted above. The Committee voted 
unanimously to report favorably S. 3023, as amended, to the 
Senate.

                     Summary of S. 3023 as Reported

    S. 3023, as reported (the Committee bill), consists of six 
titles, summarized below.

               TITLE I--COMPENSATION AND PENSION MATTERS

    Section 101 would require VA to promulgate regulations 
specifying the content of notices to be provided to claimants 
for original claims, reopened claims and claims for an increase 
in benefits. This would apply to notices sent on or after the 
date the regulations are effective.
    Section 102 would authorize the United States Court of 
Appeals for the Federal Circuit to review VA actions relating 
to the adoption or revision of the VA disability rating 
schedule in the same manner as other actions of the Secretary 
of Veterans Affairs are reviewed.
    Section 103 would provide an automatic annual increase in 
rates of disability compensation and dependency and indemnity 
compensation.
    Section 104 would make a technical correction to the 
National Defense Authorization Act for Fiscal Year 2008.
    Section 105 would require a report describing VA's progress 
in addressing the causes for any unacceptable variances in 
compensation payments to veterans for service-connected 
disabilities.
    Section 106 would require a report on studies regarding 
compensation of veterans for loss of earning capacity, quality 
of life, and long-term transition payments to veterans 
undergoing rehabilitation for service-connected disabilities.

                       TITLE II--HOUSING MATTERS

    Section 201 would temporarily increase the maximum loan 
guaranty amount for certain housing loans guaranteed by VA.
    Section 202 would permit regular loans in excess of 
$144,000 to be refinanced with a loan guaranteed by VA and 
decrease the equity requirement for veterans who refinance to a 
loan backed by VA.
    Section 203 would provide a four-year extension of two 
demonstration projects of adjustable rate mortgages.
    Section 204 would make members of the Armed Forces with 
certain service-connected disabilities eligible for specially 
adapted housing benefits and assistance.
    Section 205 would require a report on the impact of housing 
foreclosures on veterans and the adequacy of protection against 
foreclosure in existing law.

                 TITLE III--LABOR AND EDUCATION MATTERS

                SUBTITLE A--LABOR AND EMPLOYMENT MATTERS

    Section 301 would waive the 24-month limitation on a 
program of independent living services and assistance for 
veterans with a severe disability incurred in the Post-9/11 
Global Operations period.
    Section 302 would reform the USERRA complaint process.
    Section 303 would modify and expand the reporting 
requirements with respect to enforcement of USERRA.
    Section 304 would require USERRA training for the executive 
branch human resources personnel.
    Section 305 would require a report on efforts to address 
the employment needs of Native American veterans living on 
tribal lands.
    Section 306 would require a report on measures that could 
be taken by VA to assist and encourage veterans in completing 
vocational rehabilitation.

                     SUBTITLE B--EDUCATION MATTERS

    Section 311 would provide relief for students who 
discontinue education because of military service.
    Section 312 would extend the period of eligibility for 
Survivors' and Dependents' Educational Assistance of certain 
spouses of individuals with service-connected disabilities 
total and permanent in nature.
    Section 313 would repeal the requirement that an 
educational institution providing non-accredited courses notify 
VA of the credit granted for prior training of certain 
individuals.
    Section 314 would decrease the waiting period before 
affirmation of enrollment in a correspondence course may be 
finalized for purposes of receiving educational assistance from 
VA.
    Section 315 would repeal the requirement that an individual 
notify VA when the individual changes educational programs but 
remains enrolled at the same educational institution.
    Section 316 would exempt on-the-job training programs from 
the requirement to provide participants with wages if the 
training program is offered in connection with the purchase of 
a franchise.

                       SUBTITLE C--OTHER MATTERS

    Section 321 would rename VA's Office of Small and 
Disadvantaged Business Utilization as the VA Office of Small 
Business Programs.

                        TITLE IV--COURT MATTERS

    Section 401 would increase the number of active judges on 
the Court.
    Section 402 would provide for the protection of privacy and 
security concerns in Court records.
    Section 403 would modify the rules governing service and 
payment of retired judges performing recall service for the 
Court.
    Section 404 would require the Court to submit annual 
reports to Congress on its workload.

                       TITLE V--INSURANCE MATTERS

    Section 501 would require a report on the inclusion of 
severe and acute Post Traumatic Stress Disorder among the 
conditions covered by traumatic injury protection coverage 
under SGLI.
    Section 502 would provide for the treatment of stillborn 
children as insurable dependents under SGLI.
    Section 503 would extend SGLI coverage to certain members 
of the Individual Ready Reserve. It would terminate coverage 
under SGLI for a servicemember's dependent 120 days after the 
servicemember separates from service. It would authorize VA to 
set SGLI premiums for Ready Reservists' spouses based on the 
age of the spouse. It would create a forfeiture of insurance 
under the Veterans' Group Life Insurance (VGLI) program for 
actions such as mutiny or treason.

                        TITLE VI--OTHER MATTERS

    Section 601 would create the authority for suspension or 
termination of claims of the United States against individuals 
who died while serving on active duty in the Armed Forces.
    Section 602 would provide memorial headstones and markers 
for deceased remarried surviving spouses of veterans.
    Section 603 would provide a three-year extension of 
authority for VA to carry out income verification using records 
from the Internal Revenue Service (IRS) and Social Security 
Administration (SSA).
    Section 604 would extend the authority for VA to fund 
contract medical disability examinations.

                       Background and Discussion

               TITLE I--COMPENSATION AND PENSION MATTERS

Sec. 101. Regulations on contents of notice to be provided claimants 
        with the Department of Veterans Affairs regarding 
        substantiation of claims.

    Section 101 of the Committee bill, which is derived from S. 
3023 as introduced, would require VA to promulgate regulations 
relating to the notice provided to claimants seeking VA 
benefits.
    Background. VA's system for adjudicating claims for 
service-connected disability benefits is intended to be a 
claimant-friendly and non-adversarial process. Under chapter 51 
of title 38, VA has a duty to assist claimants in gathering the 
necessary information and evidence to fully develop their 
claims.
    A series of CAVC rulings in the 1990s narrowly interpreted 
the duty to assist concept, culminating in Morton v. West, 12 
Vet. App. 477 (1999), which held that VA had no authority to 
assist. claimants absent verification that the claim was well-
grounded. The CVAC found that VA was precluded from assisting a 
claimant ``in any way unless that claimant had first 
established that his or her claim was well-grounded.'' PVA v. 
Secretary, 345 F.3d 1334, 1338 (Fed. Cir. 2003). As a result of 
the Morton decision, VA ceased providing any assistance to 
claimants who did not have a ``well-grounded claim'' except for 
the verification of military service and obtaining service 
medical records.
    Congress disagreed with the Court's interpretation of VA's 
duty to assist and, in 2000, in Public Law 106-475, the 
Veterans Claims Assistance Act of 2000 (VCAA), clarified and 
expanded VA's duty to assist claimants. The VCAA reinstated 
VA's traditional practice of assisting veterans at the 
beginning of the claims process.
    Prior to the enactment of the VCAA, section 5103 of title 
38 provided that, if a claimant's application for benefits was 
incomplete, VA was required to notify the claimant of the 
evidence necessary to complete the application. Under the 
changes made by the VCAA, VA is required to inform the claimant 
of what information and medical or lay evidence is needed to 
substantiate the claim. The notice must also stipulate what 
evidence and information is to be obtained by the claimant and 
what evidence is VA's responsibility. VA is also required to 
notify the claimant when it is unable to obtain the relevant 
records.
    Since the enactment of the VCAA, various actions, including 
decisions of the Court and VA's responses to some of those 
decisions, have led to notices that are not meeting the goal of 
providing claimants with sufficient, clear information on which 
they can then act. Instead of simple, straightforward notices 
that can be easily read and understood by claimants, VA is now 
routinely providing long, frequently convoluted, overly 
legalistic notices that do not meet the objective of the VCAA. 
It is clear to the Committee that there is abundant evidence 
supporting the need to change the current situation and strong 
support for doing so.
    For example, the Committee notes that there have been cases 
subsequent to the enactment of VCAA, such as Dingess v. 
Nicholson, 19 Vet. App. 473 (2006), in which the Court has 
interpreted the notice requirement to include information 
concerning so-called ``downstream'' issues, such as the rating 
schedule and effective date, before a determination of service-
connection is made, a result not contemplated by the original 
law. In other cases, such as Vazquez-Flores v. Peake, 22 Vet. 
App. 37 (2008), it appears that VA has misinterpreted the 
intent of the Court by suggesting that a preadjudication of 
claims would be required prior to sending a VCAA notice. In 
VA's motion to stay its original decision, the Court stated, 
``the Secretary need only identify the assigned DC [diagnostic 
code] and cross-referenced DCs, review them for specific 
criteria for which the generic notice is insufficient, and add 
general notice of the evidence needed to satisfy that 
criteria.'' Vazquez-Flores v. Peake, 22 Vet. App. 91 (2008).
    In recent oversight visits to 19 different VA regional 
offices, a Democratic Committee staff member reviewed 298 
individual claim files and found that VCAA letters sent to 
claimants provide little practical assistance to those 
veterans. In many of the claims examined, information that 
would have been helpful in substantiating the claim was 
missing. However, the files did not indicate that VA had 
requested the missing information. For example, a veteran 
filing an original claim, would indicate ``See SMRs [Service 
Medical Records]'' rather than providing dates of disability 
and treatment locations. In a number of files reviewed, the 
evidence showed that service medical records were missing or 
incomplete. In cases involving combat, time and location 
information may be needed in order for VA to determine if the 
relaxed evidentiary requirements of section 1154 of title 38 
should be applied, but review of the files found that such 
information was neither provided nor requested. The Committee 
believes that time and location information should be requested 
in those cases where it is needed for VA to provide effective 
assistance in locating relevant government records.
    With respect to reopened claims or claims for an increase, 
the VCAA letters are also legalistic and confusing. In over 50 
percent of the claims reviewed at regional offices, VA staff 
agreed that errors involving service-connection or the rating 
assigned were committed. Where service-connection was an issue, 
VCAA letters involving reopened claims generally did not inform 
veterans of the element of the claim for which evidence would 
be needed to reopen the claim. For example, a VCAA letter to a 
veteran with a current disability would not state that the 
evidence needed to reopen the claim was evidence of the 
relationship between the current disability and military 
service. As a result, a veteran would submit considerable 
evidence concerning the extent of the disability but would fail 
to submit needed evidence of the relationship, or nexus, 
between the disability and military service.
    In testimony before the Committee, on July 9, 2008, Kerry 
Baker, Associate National Legislative Director of the Disabled 
American Veterans noted that ``the language of section 5103(a) 
has led to such a procedural quagmire that it is not fulfilling 
its intended benefit to VA claimants.'' During the same 
hearing, William ``Bo'' Rollins, Director of Field Services for 
the Paralyzed Veterans of America stated ``Congress should 
consider amending the [VCAA] law to direct VA to fill in the 
contours of an adequate VCAA notice letter.''
    The Veterans' Disability Benefits Commission (VDBC), in its 
final report, expressed concerns about VA's efforts to comply 
with the VCAA, based on its site visits and general study of VA 
claims adjudication. The VDBC reported receiving numerous 
complaints that the notice letters they were receiving were too 
long and overburdened with legal language. The VDBC recognized 
that the notices are not clear or succinct:

        VA should consider amending Veterans Claims Assistance 
        Act letters by including all claim-specific information 
        to be shown on the first page and all other legal 
        requirements would be reflected, either on a separate 
        form or on subsequent pages. In particular, VA should 
        use plain language in stating how the claimant can 
        request an early decision in his or her case.

    IBM Global Business Services, with which VA contracted in 
the Fall of 2007 to conduct an analysis of VA's business 
processes for adjudicating disability claims and prescribe a 
short-term action plan and long-term strategic plan for 
improving the quality and efficiency of the process, also found 
the current VCAA letter to be ``long and complex, containing a 
great deal of legal language that can be confusing to veterans 
when trying to understand the process for completing their 
disability claim.'' It recommended that the current VCAA letter 
be revised to be shorter and more transparent to veterans. 
According to IBM, ``[c]omplex legal language which is required 
to be in the letter should be translated into layman's terms, 
or else placed in supplemental pages to the letter, while the 
main body of the letter is clear and succinct.''
    It is clear to the Committee that additional Congressional 
guidance and a requirement for the promulgation of regulations 
will aid VA in providing easy-to-read notices that will comply 
with due process and VA's duty to assist under the VCAA.
    Committee Bill. Section 101 of the Committee bill would 
amend subsection (a) of section 5103 of title 38 to add a new 
paragraph that would require VA to promulgate regulations 
specifying the content of VCAA notices provided to claimants. 
The regulations required by the Committee bill would require 
that the notice specify for each type of claim for benefits the 
general information and evidence required to substantiate the 
claim. For example, if a claim involved benefits and services 
based upon need, the notice would advise that information 
concerning income and assets must be submitted. In a claim 
based upon disability, the notice would reference the need for 
evidence of disability, including signs or symptoms of a 
disabling condition. The regulations should also specify 
different content of the notices depending on the type of claim 
concerned, whether it be an original claim, a claim for 
reopening, or a claim for increase in benefits.
    The Committee emphasizes that VCAA notices are required 
only in cases in which additional information or evidence is 
needed to substantiate the claim. If the information and 
evidence needed to substantiate the claim is submitted with the 
application or contained in the claims file, no VCAA notice is 
required. For example, claims for education, health care, 
housing, vocational rehabilitation, and burial benefits might 
contain sufficient information and evidence to substantiate the 
claim without the necessity of a VCAA notice.
    With respect to original claims, the Committee believes 
that the regulations relating to notice for original claims 
should specify that the information and evidence referenced in 
the VCAA notice should be relevant to the basic elements of the 
claim for benefits or services sought: (1) evidence of current 
disability or symptoms of disability; (2) evidence relating to 
a disability, symptoms of disability, one or more incidents or 
events in service giving rise to or aggravating a disability; 
and (3) the relationship between the current disability and 
military service.
    The Committee expects that the regulations will require 
that VCAA notices include a request for clarification of 
missing or ambiguous information contained in a request for 
benefits where it may be necessary or helpful to identify 
evidence that may substantiate the claim. In cases concerning 
service-connection, such requests might include approximate 
dates and locations of treatment and if applicable, approximate 
dates and locations related to combat experiences associated 
with claimed disabilities.
    The Committee is concerned that requiring VA to include in 
notices relating to original claims information concerning 
``downstream elements,'' such as the rating schedule and 
effective date, before a determination of service-connection is 
made, may be misleading and confusing to veterans. Such 
information may lead a veteran into believing that service-
connection has been conceded and the issue on which evidence 
must be submitted relates to the rating or effective date.
    During oversight visits to 19 different VA regional 
offices, a Democratic Committee staff member has identified 
some claims for which VA has no duty to assist, because there 
was no reasonable possibility that such assistance would result 
in substantiating a claim. These claims included claims for 
environmental exposure without any indication that any 
disability is related to the alleged exposure. The regulations 
may provide that notice in such cases may indicate that no 
development will be undertaken, unless the veteran indicates a 
disability that is related to the claimed exposure. Other 
examples of cases in which the notice may indicate that VA 
assistance cannot help include claims involving conditions, 
such as high cholesterol, with no related disability alleged, 
and male pattern baldness, which is not considered a disability 
under VA regulations. In such instances, the regulations may 
provide that the notification will indicate that the claims 
will not be developed because there is no reasonable 
possibility that such assistance would result in substantiating 
the claim.
    With respect to claims to reopen a previously denied claim, 
the Committee believes that different VCAA notice 
considerations should apply. In recent oversight visits by a 
Democratic Committee staff member, it was noted that a number 
of veterans' claims were denied because of a lack of nexus 
between a claimed disability and military service but with no 
indication that a medical opinion was acquired, as required by 
section 5103A of title 38. This error is frequently identified 
by the Board of Veterans' Appeals in remands of appealed cases. 
In other cases, the veteran may have filed an ambiguous, 
potential, or inferred claim that was not clarified before the 
claim was decided. The Democratic Committee staff member also 
identified a number of cases in which a veteran seeking to 
reopen a previously denied claim for service-connection 
submitted substantial and often duplicative documentation 
concerning a current disability, apparently unaware that the 
basis for the denial was a lack of evidence linking the 
disability to military service.
    The Committee does not expect that the regulations would 
require a full pre-adjudication file review prior to issuing a 
VCAA letter involving a reopened claim. However, the 
regulations should require the notice in such cases to 
appropriately reference the prior decision with respect to what 
element of the claim requires new and material evidence to 
reopen the claim and what type of evidence is required. In this 
regard, the Committee notes the opinion of the Court in Kent v. 
Nicholson, 20 Vet. App. 1, 9 (2006), in which the Court 
indicated that ``VA must notify a claimant of the evidence and 
information that is necessary to reopen the claim and VA must 
notify the claimant of the evidence and information that is 
necessary to establish his entitlement to the underlying claim 
for the benefit sought by the claimant.'' The Committee expects 
regulations concerning reopened claims to comply with the Kent 
standard.
    The Committee notes that given the large amount of 
documentation often contained in claims files, it is not 
practical, feasible, or efficient to require that every 
document in an existing claims file be reviewed before a VCAA 
letter is issued. By focusing the regulation on the decision 
sought to be reopened with reference to the evidence considered 
in that decision, the Committee believes that VCAA and Kent 
compliance would be achieved.
    The Committee recognizes that review of the most recent 
prior decision might also result in a finding of ``clear and 
unmistakable error'' (CUE). During Committee oversight visits 
by a Democratic staff member, some claims were identified with 
CUE in the original rating decision. For example, several 
rating decisions for service-connection of asthma acknowledged 
that the veteran required daily inhalation bronchodilator 
therapy but rated such a claim at 10 percent rather than 30 
percent which the same decision recognized as the correct 
rating for such a disability. In most of the claims where CUE 
was found, the veteran had not appealed an erroneous decision 
and, in a few cases, had attempted to reopen the decision 
rather than appeal. Such errors were promptly corrected by the 
regional office during the oversight visits. A review by VA of 
the decision sought to be reopened in preparation for the VCAA 
notice should identify clear examples of CUE, leading to a 
revised decision which would moot the request for reopening.
    With respect to claims for an increase in the degree of 
service-connected disability, the Committee expects that the 
regulation will require VA to review the most recent rating 
decision concerning the disability for which an increased 
rating is claimed and, in the words of the Court in Vazquez-
Flores v. Peake, 22 Vet. App. 91, 93 (2008) make ``a common-
sense assessment whether the criteria for a higher rating under 
the assigned or a cross-referenced DC [diagnostic code] 
includes criteria `that would not be satisfied by the claimant 
demonstrating a noticeable worsening or increase in severity of 
the disability * * *'.''
    The Committee notes that the best evidence upon which to 
evaluate a claim for an increased rating is a complete and 
thorough medical examination that should provide sufficient 
evidence for VA rating staff to determine which rating code is 
appropriate to the findings and diagnosis made by the examiner. 
Unless the medical evidence submitted by the veteran requesting 
an increased rating or the other VA records demonstrate that 
such an increase is warranted, the Committee believes that the 
VCAA notice involving a claim for an increase should indicate 
that a VA medical examination will be ordered. The regulation 
should also require that the veteran be informed as to the 
general information and medical or lay evidence needed to 
establish a claim for extra-schedular consideration.
    The Committee believes that, by notifying the veteran that 
an examination would be scheduled to evaluate the current 
disability involved in the claim for an increase and the 
criteria for establishing extra-schedular consideration, the 
duty to notify would be met. VA would need to comply with the 
Vazquez-Flores requirement for additional diagnostic codes or 
other criteria only when a ``common-sense assessment'', such as 
the identification of cross-referenced codes, is indicated. In 
cases where a common-sense assessment requires information 
concerning additional diagnostic code criteria, the regulations 
may provide that such criteria be included as an appendix 
rather than in the body of the VCAA letter.
    VCAA letters concerning claims for increased ratings should 
be based upon the rating code that was assigned in the most 
recent prior decision and any other cross-referenced rating 
codes that might provide a basis for an increase in benefits. 
However, the Committee does not expect that such a requirement 
should be interpreted to require notice and diagnostic codes 
for all potential disabilities involving a particular body 
system or part.
    Under the amendment proposed in the Committee bill, VA 
would be specifically authorized to issue additional or 
alternative regulations in order to tailor the VCAA notice to 
the specific elements of the claim for the particular type of 
benefits or services sought. In cases in which more than one 
type of claim is filed in the same document, VA would have the 
flexibility to issue separate VCAA notices on the different 
types of claims or to provide the information relevant to each 
type of claim in the same VCAA notice. The Committee intends 
that, in determining whether to require separate or combined 
notices, VA will take into account the intent of Congress to 
promote simple and easy-to-understand VCAA notices.
    The amendment proposed in the Committee bill would also 
require that the regulations contain information concerning the 
time within which the information and evidence to be provided 
by the claimant must be submitted in order for benefits to be 
paid or services rendered under the claim.
    This provision is intended to simplify the notices by 
reducing the amount of extraneous information provided and 
clarifying the responsibilities of the claimant to provide 
relevant information and evidence. The regulations required by 
section 101 would apply to all notices issued on or after the 
date the regulations are made effective.
    The Committee is aware that VA has taken action to revise 
the VCAA letter. VA Deputy Under Secretary for Benefits, 
Michael Walcoff, testified at a February 14, 2008, hearing of 
the House Committee on Veterans' Affairs that the ``current 
VCAA letters are lengthy and contain complex legal language 
that many claimants find difficult to understand.'' At that 
time, Mr. Walcoff reported that the Veterans Benefits 
Administration was working closely with VA's Office of the 
General Counsel to revise and simplify the letters. VA Acting 
Under Secretary for Benefits, Rear Admiral Patrick Dunne, 
testified at the Committee's July 9, 2008, hearing that four 
new VCAA letter templates had been drafted for specific types 
of claims. Admiral Dunne projected that the revised letters 
would be available for use by regional offices by November 
2008.
    The Committee recognizes that VA does not require statutory 
authority to make the proposed changes to its notices and 
welcomes the expected introduction of these revised notices in 
November 2008. However, the Committee believes that, given the 
history of judicial interpretations of the notice requirement, 
a statutory basis for the revised VCAA notice regulations 
should be enacted.
    The Committee notes that the regulations required by 
section 101 of the Committee bill would have prospective effect 
and does not intend that the required changes would be applied 
retroactively.

Sec. 102. Judicial review of adoption and revision by the Secretary of 
        Veterans Affairs of the schedule of ratings for disabilities of 
        veterans.

    Section 102 of the Committee bill, which is derived from S. 
2737, would make actions of the Secretary of Veterans Affairs 
relating to the adoption or revision of VA's rating schedule 
for disabilities subject to the same type of review as that 
applied to other actions of the Secretary.
    Background. Until 1988, veterans were generally precluded 
from obtaining judicial review of decisions made by the then-
Veterans Administration. Public Law 100-687, the Veterans' 
Judicial Review Act, removed that bar by authorizing judicial 
review of VA decisions in a newly established court, now known 
as the United States Court of Appeals for Veterans Claims. That 
law also provided for jurisdiction in the United States Court 
of Appeals for the Federal Circuit for challenges to certain 
actions of the Secretary of Veterans Affairs covered by the 
Administrative Procedure Act. However, that law specifically 
precluded review of actions relating to the adoption or 
revision of the schedule of ratings for disabilities adopted 
under section 1155 of title 38, United States Code. As a result 
of that prohibition, a regulation found in the rating schedule 
that is alleged to violate a statutory provision could be 
insulated from judicial review.
    A number of recent reports, including the Institute of 
Medicine's report ``A 21st Century System for Evaluating 
Veterans for Disability Benefits'' and the final report of the 
Veterans' Disability Benefits Commission ``Honoring the Call to 
Duty: Veterans' Disability Benefits in the 21st Century,'' have 
noted the need to update obsolete sections of VA's rating 
schedule. Without a change to current law, any changes to the 
rating schedule regulations would be shielded from judicial 
review.
    S. 2737, the legislation from which section 102 of the 
Committee bill is derived, would have provided for judicial 
review of the rating schedule by CAVC. Such review would have 
been available in order to determine if such regulations were 
in compliance with provisions in chapter 11 of title 38, the 
chapter relating to disability compensation.
    During the Committee's May 7, 2008, hearing which focused 
on pending legislation, including S. 2737, the VA witness, 
Keith Pedigo, Associate Deputy Under Secretary for Policy and 
Program Management of the Veterans Benefits Administration, 
expressed concerns that the bill ``would essentially expose the 
rating schedule to judicial review'' in every case involving 
service-connection of a disability or a claim for an increased 
rating and, as such, could increase litigation in CAVC and 
result in piecemeal review of the rating schedule.
    At that same hearing, several veterans service 
organizations and the National Organization of Veterans' 
Advocates testified in support of the bill.
    Committee Bill. Section 102 of the Committee bill would 
amend section 502 of title 38, relating to judicial review of 
rules and regulations by striking out ``(other than an action 
relating to the adoption or revision of the schedule of ratings 
for disabilities adopted under section 1155 of this title),'' 
thereby providing for review of actions of the Secretary of 
Veterans Affairs relating to adoption or revision of the rating 
schedule by the United States Court of Appeals for the Federal 
Circuit in the same way as other VA actions are reviewed.
    The Committee believes that this approach will avoid the 
concern about the piecemeal approach raised in VA's testimony 
and should prevent multiple and possibly conflicting 
interpretations of the rating schedule in various cases.
    The Committee notes that the level and type of review 
proposed in the Committee bill for the review of the rating 
schedule would be circumscribed by a number of limitations. For 
example, under the Rules of the United States Court of Appeals 
for the Federal Circuit, an action seeking review of a rule or 
regulation must be filed within 60 days of the effective date 
of the rule or regulation.
    Furthermore, under the standards set forth by the Supreme 
Court of the United States in Chevron U.S.A., Inc. v. Natural 
Res. Def. Council, Inc., 467 U.S. 837, 843 (1984), courts must 
give deference to the Secretary's interpretation of a statute 
``if the statute is silent or ambiguous with respect to the 
specific issue.'' If Congress explicitly left a gap in the 
statute for VA to fill, then the Secretary's interpretation is 
controlling unless ``arbitrary, capricious, or manifestly 
contrary to the statute.'' Id. at 843-844. If Congress 
implicitly delegated authority to VA to fill the gap, the 
Secretary's interpretation will be upheld if it is a reasonable 
interpretation of the statute. Id. at 844.
    During consideration of this issue, a concern was raised 
that, under the proposed change allowing for judicial review of 
actions by the Secretary relating to the adoption or revision 
of VA's rating schedule, it was possible that challenges might 
be taken in response to a denial by VA of a request for 
rulemaking under subsection (e) of section 553 of title 5. 
While it is correct that such a challenge is available under 
current law and might be brought in the future, no cases have 
been identified in which such a challenge has been brought with 
reference to VA rulemaking since judicial review was instituted 
in 1988. This lack of such actions may be explained by the 
daunting burden facing a petitioner in such a case.
    The Supreme Court of the United States only recently 
addressed the reviewability of an agency decision to deny a 
petition for rulemaking in Massachusetts v. EPA, 549 U.S. 497 
(2007). In that case, the Supreme Court found that a refusal 
``to promulgate rules are * * * susceptible to judicial review, 
though such review is `extremely limited' and `highly 
deferential.''' The Supreme Court cited two decisions of the 
United States Court of Appeals for the District of Columbia 
Circuit in its decision, American Horse Protection Association, 
Inc. v. Lyng, 812 F.2d 1 (D.C. Cir. 1987), and National Customs 
Brokers & Forwarders Ass'n v. United States, 883 F.2d 93 (D.C. 
Cir. 1989). In National Customs Brokers, 883 F. 2d at 103, the 
circuit court noted that ``[i]t is only in the rarest and most 
compelling of circumstances that [the circuit court] has acted 
to overturn an agency judgment not to institute rulemaking.'' 
In concluding that the agency had not acted improperly in 
refusing to promulgate rules suggested by the petitioners, the 
court found that this was ``not such a rare case'' because the 
issues were ``economic in nature'' and entailed ``policy 
determinations on which agency rulemaking discretion is 
respected.'' Id. Thus, the Committee believes that the general 
authority that would be provided by this section would likely 
afford veterans relief under only very limited circumstances in 
a matter involving a denial on VA's part to engage in 
rulemaking.
    Finally, the Committee notes that as a result of removing 
the prohibition on review of actions of the Secretary relating 
to adoption or revision of the rating schedule in current law, 
the United States Court of Appeals for the Federal Circuit 
would be authorized to review agency records that underlie 
challenges to rules and regulations in the same manner as is 
currently applied to other VA regulations. The Committee 
expects VA's rulemaking procedures and fact-finding to be 
sufficiently robust to permit meaningful review of actions 
relating to the adoption and revision of the rating schedule.

Sec. 103. Automatic annual increase in rates of disability compensation 
        and dependency and indemnity compensation.

    Section 103 of the Committee bill, which is derived from S. 
161, would require that whenever there is an increase in 
benefit amounts payable under title II of the Social Security 
Act, VA would automatically increase the rates of disability 
compensation and dependency and indemnity compensation, among 
other rates, by the same percentage and effective on the same 
date.
    Background. The service-connected disability compensation 
program under chapter 11 of title 38, United States Code, 
provides monthly cash benefits to veterans who have 
disabilities incurred or aggravated during active service in 
the Armed Forces. The amount of compensation paid depends on 
the nature and severity of a veteran's disability or 
combination of disabilities and the extent to which the 
disability impairs earning capacity. Certain veterans with more 
severe disabilities are also eligible to receive additional 
compensation on behalf of the veteran's spouse, children, and 
dependent parents.
    Under chapter 13 of title 38, VA pays dependency and 
indemnity compensation (DIC) to the survivors of servicemembers 
or veterans who died on or after January 1, 1957, from a 
disease or injury incurred or aggravated during military 
service. Survivors eligible for DIC include surviving spouses, 
unmarried children under the age of 18, children age 18 or 
older who are permanently incapable of self-support, children 
between the ages of 18 and 22 who are enrolled in school, and 
certain needy parents.
    Section 415(i) of title 42, provides for an automatic 
annual cost-of-living adjustment (COLA) for benefits payable 
under title II of the Social Security Act based on the annual 
increase in consumer prices. Title II Social Security benefits 
are indexed to the Consumer Price Index for Urban Wage Earners 
and Clerical Workers (CPI-W), which is published on a monthly 
basis by the Bureau of Labor Statistics. The annual COLA 
increase is equivalent to the increase in the CPI-W from the 
most recent period between the third quarter of one calendar 
year to the third quarter of the next.
    Currently, under section 5312 of title 38, there are 
several VA benefits which receive automatic increases tied to 
the annual adjustments in title II Social Security benefits. 
These include pension benefits for indigent, wartime veterans 
who are permanently and totally disabled due to a non-service-
connected condition, or over the age of 65, as well as their 
surviving spouses and children, and DIC benefits for the 
parents of a deceased veteran who are living below a certain 
income threshold.
    However, the majority of disability compensation and DIC 
benefits paid by VA are not indexed to the CPI-W and do not 
increase automatically when title II Social Security benefits 
are increased. Instead, Congress regularly enacts a cost-of-
living adjustment on an annual basis to ensure that inflation 
does not erode the purchasing power of VA benefits. Although 
Congress in recent years has consistently enacted legislation 
on time so as to provide benefit recipients with a COLA 
increase beginning December 1 of each year, veterans service 
organizations and VA now support making the COLA automatic, 
rather than relying on annual legislation.
    Committee Bill. Section 103 of the Committee bill would 
amend section 5312 of title 38, so as to add a new subsection 
(d)(1), which would require VA to increase the amounts of 
certain VA benefits by the same percentage and effective on the 
same date as adjustments made to title II Social Security 
benefits pursuant to section 415(i) of title 42. Proposed new 
subsection (d)(2) would specify the VA benefits which would be 
covered by the mandated COLA increase. The benefits covered 
would be:
          1. Basic compensation rates for veterans with 
        service-connected disabilities and the rates payable 
        for certain severe disabilities;
          2. The allowance for spouses, children, and dependent 
        parents paid to service-connected disabled veterans 
        rated 30 percent or more disabled;
          3. The annual clothing allowance paid to veterans 
        whose compensable disability requires the use of a 
        prosthetic or orthopedic appliance, including a 
        wheelchair, that tends to tear or wear out clothing or 
        which requires the use of a medication prescribed by a 
        physician for a service-connected skin condition if the 
        medication causes irreparable damage to the veteran's 
        outergarments; and
          4. Dependency and indemnity compensation paid to:
                  (a) surviving spouses of veterans whose 
                deaths were service- connected;
                  (b) surviving spouses for dependent children 
                below the age of 18;
                  (c) surviving spouses who are so disabled 
                that they need aid and attendance or are 
                permanently housebound;
                  (d) surviving spouses covered under section 
                1318 of title 38; and
                  (e) the children of veterans whose deaths 
                were service-connected if no surviving spouse 
                is entitled to DIC, the child is age 18 through 
                22 and attending an approved educational 
                institution, or the child is age 18 or over and 
                became permanently incapable of self-support 
                prior to reaching age 18.
    The proposed new subsection (d)(3) would require VA to 
publish any increases under this new authority in the Federal 
Register.
    The effective date of section 103 of the Committee bill 
would be December 1, 2009.

Sec. 104. Conforming amendment relating to non-deductibility from 
        veterans' disability compensation of disability severance pay 
        for disabilities incurred by members of the Armed Forces in 
        combat zones.

    Section 104 of the Committee bill would make a technical 
correction to eliminate the requirement that severance pay for 
a disability incurred in a combat zone be deducted from 
disability compensation from VA.
    Background. Section 1212 of title 10, United States Code, 
stipulates the amount of severance pay available to members of 
the Armed Forces who separate due to a disability incurred in 
the line of duty. Section 1646 of the Wounded Warrior Act, 
title XVI of Public Law 110-181, amended section 1212 to adjust 
the computation of the amount of such severance pay and to 
eliminate the requirement that severance pay received by 
servicemembers for a disability incurred in a combat zone be 
deducted from VA compensation.
    Section 1161 of title 38, United States Code, stipulates 
that the deduction of disability severance pay from disability 
compensation shall be made at a monthly rate not in excess of 
the rate of compensation to which the individual would be 
entitled based on the individual's disability rating. Section 
1161 makes reference to subsection 1212(c) of title 10. 
However, Public Law 110-181 did not include a conforming 
amendment to keep section 1161 consistent with the changes made 
to section 1212.
    Committee Bill. Section 104 of the Committee bill would 
make a conforming amendment, so that section 1161 of title 38 
will be consistent with section 1212 of title 10. Section 1646 
of the Wounded Warrior Act would be amended by redesignating 
subsection (c) as subsection (d) and inserting a new subsection 
(c). The new subsection (c) would amend section 1161 of title 
38 by striking ``as required by section 1212(c) of title 10'' 
and inserting ``to the extent required by section 1212(d) of 
title 10''. The new subsection (c) would take effect on January 
28, 2008, as if it had been included in the Wounded Warrior 
Act. As a result, the amended section 1161 of title 38 would 
reflect the change to section 1212 of title 10 eliminating the 
requirement that severance pay for a disability incurred in a 
combat zone be deducted from disability compensation from VA.

Sec. 105. Report on progress of the Secretary of Veterans Affairs in 
        addressing causes for variances in compensation payments for 
        veterans for service-connected disabilities.

    Section 105 of the Committee bill, which is derived from S. 
2951, would require VA to submit a report to Congress 
describing its progress in addressing the causes for any 
unacceptable variances in compensation payments to veterans.
    Background. In 2004, the Chicago Sun-Times ran a series of 
articles highlighting evidence of low disability compensation 
payments for Illinois veterans compared to veterans from other 
states. In response to Congressional requests, VA's Office of 
the Inspector General (OIG) conducted an investigation into the 
differences in average monthly disability compensation payments 
awarded by the various VA regional offices across the country. 
OIG concluded that the factors influencing the variations were 
complex and intertwined, and included differences in claims 
processing practices, disability examinations, timeliness 
pressures, staffing levels, and rater experience and training. 
OIG also concluded that certain conditions such as Post 
Traumatic Stress Disorder, are inherently prone to subjective 
rating decisions, leading to inconsistency in the decisions. 
OIG recommended that VA further pursue the matter by conducting 
a scientifically sound study of the major factors affecting 
variances for compensation payments.
    VA contracted with the Institute for Defense Analyses (IDA) 
to perform the recommended study. IDA made its findings public 
in July 2007. IDA identified several main causes for the 
variations across states and regional offices. IDA made six 
recommendations to VA aimed at aspects of the adjudication 
process it believed were most likely to affect the consistency 
of claims determinations: standardize initial and on-going 
training for rating specialists; standardize the hospital 
evaluation reporting process; increase oversight and review of 
rating decisions; consider consolidating all or selected parts 
of the rating process to one location; develop and implement 
metrics to monitor consistency in adjudication results; and 
improve and expand data capture and retention.
    Then-VA Deputy Under Secretary for Benefits, Ronald R. 
Aument, testified before the House Veterans' Affairs 
Subcommittee on Oversight and Investigations on October 16, 
2007, regarding VA's efforts to address the IDA recommendations 
on improving the quality and consistency of the claims process. 
Mr. Aument stated that VA concurred with the IDA findings and 
had various initiatives underway to support the IDA 
recommendations.
    Committee Bill. Section 105 of the Committee bill would 
require VA to submit a report to the Committees on Veterans' 
Affairs of the Senate and the House of Representatives 
describing its progress in addressing the causes of 
unacceptable variances in compensation payments to veterans for 
service-connected disabilities. The report would be due to the 
Committees not later than one year after the date of enactment 
of this section.
    The OIG and IDA reports explored the variances among 
various regional offices, identifying many of the factors that 
heavily impact the subjective policies, processes, and training 
methods of individual regional offices. The report called for 
in this section of the Committee bill would require VA to 
report to Congress on how it is mitigating the impact of these 
variables to ensure that the process is as fair and consistent 
as possible, regardless of where the claim is adjudicated.
    The Committee bill would require the report to include 
three specific elements: (1) a description of the Veterans 
Benefits Administration's efforts to coordinate with the 
Veterans Health Administration (VHA) to improve the quality of 
disability examinations performed by VHA and contract 
clinicians, including the use of standardized templates; (2) an 
assessment of the current personnel requirements at each 
regional office for each type of claims adjudication position; 
and (3) a description of the differences, if any, in current 
patterns of submittal rates for claims from various segments of 
the veterans population, including veterans from rural and 
highly rural areas, minority veterans, veterans who served in 
the National Guard or Reserve, and military retirees.

Sec. 106. Report on studies regarding compensation of veterans for loss 
        of earning capacity and quality of life and on long-term 
        transition payments to veterans undergoing rehabilitation for 
        service-connected disabilities.

    Section 106 of the Committee bill, which is derived from S. 
2674, would require VA to provide Congress with a report 
regarding the results of a study examining the appropriate 
compensation to be provided to veterans for loss of earning 
capacity and loss of quality of life caused by service-
connected disabilities and another study examining long-term 
transition payments to veterans undergoing rehabilitation for 
service-connected disabilities.
    Background. In July 2007, the President's Commission on 
Care for America's Returning Wounded Warriors recommended that 
Congress ``restructure VA disability payments to include * * * 
`transition payments.''' Those payments would be equal to three 
months of base pay for veterans with disabilities who are not 
participating in further rehabilitation and would entail 
``longer-term payments to cover family living expenses, if they 
are participating in further rehabilitation or education and 
training programs.'' The Commission further recommended that 
``VA should commission a six-month study to determine the 
appropriate level and duration of longer-term transition 
payments.'' In addition, the Commission recommended that ``VA 
should move swiftly to update (and thereafter keep current) its 
disability rating schedule to reflect current injuries and 
modern concepts of the impact of disability on quality of 
life.''
    In February 2008, VA entered into a contract to conduct two 
studies on those issues. One study will examine the appropriate 
level of disability compensation to be paid to veterans to 
compensate for loss of earning capacity and loss of quality of 
life as a result of service-related disabilities. The other 
study will examine the feasibility and appropriate level of 
long-term transition payments to veterans who are separated 
from the Armed Forces due to a disability while those veterans 
are undergoing a program of rehabilitation. The studies were 
due to be completed in August 2008.
    Committee Bill. Section 106 of the Committee bill would 
require VA to submit to the Committees on Veterans' Affairs of 
the Senate and House of Representatives a report including a 
comprehensive description of the findings and recommendations 
of those studies; a description of the actions proposed to be 
taken by VA in light of those findings and recommendations, 
including a description of any proposed modifications to the VA 
disability rating schedule or to other regulations or policies; 
a schedule for the commencement and completion of any actions 
proposed to be taken; and a description of any legislative 
action required in order to authorize, facilitate, or enhance 
any of the proposed actions. That report would be due no later 
than 210 days after the date of enactment of the Committee 
bill.

                       TITLE II--HOUSING MATTERS

Sec. 201. Temporary increase in maximum loan guaranty amount for 
        certain housing loans guaranteed by the Secretary of Veterans 
        Affairs.

    Section 201 of the Committee bill, which is derived from S. 
2768, would temporarily increase the maximum loan amount 
guaranteed by VA under the VA home loan guaranty program.
    Background. The Servicemen's Readjustment Act of 1944, 
commonly known as the GI Bill of Rights, was signed into law as 
Public Law 78-346 by President Franklin D. Roosevelt on June 
22, 1944, and, among other things, provided veterans with 
federally guaranteed home loans with no down payment. As World 
War II was ending, this landmark legislation made the dream of 
home ownership a reality for millions of returning veterans. 
They were able to build new homes and otherwise begin new lives 
with the assistance of the federal government.
    This guaranty may exempt homeowners from having to make a 
down payment or secure private mortgage insurance, depending on 
the size of the loan and the amount of the VA guaranty. In 
general, eligibility is extended to veterans who served on 
active duty for a minimum of 90 days during wartime or 181 
continuous days during peacetime, and have a discharge other 
than dishonorable. Members of the Guard and Reserve who have 
never been called to active duty must serve a total of six 
years in order to be eligible for the benefit. Certain 
surviving spouses are also eligible for the housing guaranty.
    Public Law 108-454 increased VA's maximum guaranty amount 
to 25 percent of the Freddie Mac conforming loan limit 
determined under section 305(a)(2) of the Federal Home Loan 
Mortgage Corporation Act for a single family residence, as 
adjusted for the year involved.
    The Economic Stimulus Act of 2008 (Stimulus Act), Public 
Law 110-185, temporarily reset the maximum limits on home loans 
that the Federal Housing Administration (FHA) may insure and 
that Fannie Mae and Freddie Mac may purchase on the secondary 
market to 125 percent of metropolitan-area median home prices, 
but did so without reference to the VA home loan program. This 
had the effect of raising the Fannie Mae, Freddie Mac, and FHA 
limits to nearly $730,000, in the highest cost areas, while 
leaving the then-VA limit of $417,000 in place.
    On July 30, 2008, the Housing and Economic Recovery Act of 
2008 was signed into law as Public Law 110-289. That law 
provided a temporary increase in the maximum guaranty amount 
for VA loans originated from July 30, 2008 through December 31, 
2008 to the same level as provided in the Stimulus Act.
    Committee Bill. Section 201 of the Committee bill, in a 
freestanding provision, would apply the temporary increase in 
the maximum guaranty amount until December 31, 2011. This would 
enable more veterans to utilize their VA benefit to purchase 
more costly homes.

Sec. 202. Enhancement of refinancing of home loans by veterans.

    Section 202 of the Committee bill, which is derived from S. 
2961, would increase the maximum guaranty limit for refinance 
loans and increase the percentage of an existing loan that VA 
will refinance under the VA home loan program.
    Background. Under section 3703(a)(1)(A)(i)(IV) of title 38, 
United States Code, the maximum VA home loan guaranty limit for 
most loans in excess of $144,000 is equal to 25 percent of the 
Freddie Mac conforming loan limit for a single family home. 
Public Law 110-289 set this value at approximately $182,437 
through the end of 2008. This means lenders making loans up to 
$729,750 will receive at least a 25 percent guaranty, which is 
typically required to place the loan on the secondary market. 
Under current law, this does not include regular refinance 
loans.
    Section 3703(a)(1)(B) of title 38 limits to $36,000 the 
guaranty that can be used for a regular refinance loan. This 
restriction means a regular refinance over $144,000 will result 
in a lender not receiving 25 percent backing from VA. In this 
situation, the lender is less likely to make the loan to the 
veteran. This situation essentially precludes a veteran from 
being able to refinance his or her existing FHA or conventional 
loan into a VA guaranteed loan if the loan is greater than 
$144,000.
    Under section 3710(b)(8) of title 38, VA is also precluded 
from refinancing a loan if the homeowner does not have at least 
ten percent equity in his or her home.
    Committee Bill. Subsection 202(a) of the Committee bill 
would raise the guaranty on VA refinance loans to the same 
level as conventional loans, which is 25 percent of the Freddie 
Mac conforming loan limit for a single family home.
    Subsection 202(b) would decrease equity requirements from 
90 percent to 95 percent for refinancing from an FHA loan or 
conventional loan to a VA-guaranteed loan. This will allow more 
veterans to use their VA benefit to refinance their mortgages. 
Many veterans do not have ten percent equity and thus are 
precluded from refinancing to a VA-guaranteed home loan.
    Given the anticipated number of non-VA-guaranteed 
adjustable mortgages that are approaching the reset time when 
payments are likely to increase, the Committee believes that it 
is prudent to facilitate veterans refinancing to VA-guaranteed 
loans. In light of today's housing and home loan crises, 
additional refinancing options will help some veterans to 
bridge financial gaps and allow them to stay in their homes and 
escape possible foreclosures. These provisions would allow more 
qualified veterans to refinance their home loans under the VA 
program.

Sec. 203. Four-year extension of demonstration projects on adjustable 
        rate mortgages.

    Section 203 of the Committee bill, which is derived from S. 
3087, would extend VA's authority to guaranty adjustable rate 
mortgages and hybrid adjustable rate mortgages.
    Background. Current law, section 3707(a) of title 38, 
United States Code, authorizes VA, through fiscal year 2008, to 
guaranty adjustable rate mortgages (ARMs). ARMs are loans with 
interest rates that change. Lenders generally charge lower 
initial interest rates for ARMs than for fixed-rate mortgages. 
An ARM allows a borrower to receive a lower initial interest 
rate for assuming the risk that the interest rate could go up. 
Public Law 102-547, the Veterans Home Loan Program Amendments 
of 1992, initially authorized a three-year test of a VA-
guaranteed ARM program modeled after the Federal Housing 
Administration's ARM program. Section 404 of Public Law 108-454 
authorized an extension of the VA program through fiscal year 
2008.
    Section 3707A(a) of title 38 authorizes VA, through fiscal 
year 2008, to guarantee so-called ``hybrid'' adjustable rate 
mortgages (hybrid ARMs). Hybrid ARMs are loans that carry a 
fixed rate of interest for an initial period followed by annual 
interest rate adjustments thereafter. Section 303 of Public Law 
107-330 first authorized this demonstration project. Section 
405 of Public Law 108-454 authorized an extension through 
fiscal year 2008.
    Since the inception of VA's authority to guaranty ARMs and 
hybrid ARMs, VA has guaranteed over 230,000 ARMs and hybrid 
ARMs, 9 percent of VA's home loan guaranty activity.
    Committee Bill. Subsection 203(a) of the Committee bill 
would amend section 3707(a) of title 38 so as to extend VA's 
ARM program through fiscal year 2012. Subsection 203(b) of the 
Committee bill would amend section 3707A(a) of title 38 so as 
to extend VA's demonstration project on hybrid ARMs through 
fiscal year 2012.
    The Committee recognizes that these programs have proven to 
be an important part of VA's home loan guaranty program and 
expects to continue to make these loan options available to 
those eligible for a VA-guaranteed loan.

Sec. 204. Eligibility for specially adapted housing benefits and 
        assistance for members of the Armed Forces with service-
        connected disabilities.

    Section 204 of the Committee bill, which is derived from S. 
2984, would authorize VA to provide specially adapted housing 
assistance under chapter 21 of title 38, United States Code, to 
active duty servicemembers with severe disabilities incurred or 
aggravated in the line of duty in the active military, naval, 
or air service.
    Background. Section 2101 of title 38 permits VA to assist 
veterans who have certain permanent and total service-connected 
disabilities acquire housing with special features or adapt 
their existing residences with special features. These special 
features are those that are deemed appropriate by VA to assist 
the veteran in living independently with the qualifying 
service-connected disability. Under current law, veterans with 
certain severe service-connected disabilities are eligible to 
receive grants of up to either $10,000 or $50,000, depending on 
the nature of the disability.
    Section 2101 includes authority to grant these benefits to 
members of the Armed Forces serving on active duty who are 
similarly disabled as the result of an injury incurred or 
disease aggravated in the line of duty in the active military, 
naval, or air service. Eligibility of members of the Armed 
Forces is subject to the same criteria and conditions as the 
eligibility of veterans.
    However, other sections of chapter 21 of title 38 do not 
contain language that explicitly makes these provisions 
applicable to members of the Armed Forces. Most notably, 
section 2102A, which provides certain assistance to veterans 
residing temporarily in housing owned by a family member, is 
not currently available to members of the Armed Forces.
    Committee Bill. Section 204 of the Committee bill would 
eliminate this disparity by providing, in a free-standing 
provision, explicit authority to VA to provide all specially 
adapted housing benefits under chapter 21 of title 38 to 
eligible members of the Armed Forces on active duty.

Sec. 205. Report on impact of mortgage foreclosures on veterans.

    Section 205 of the Committee bill, which is derived from S. 
2981, would require VA to provide Congress with a report on the 
impact of the recent mortgage foreclosure crisis on veterans.
    Background. The recent troubles in the subprime mortgage 
industry have led to rising foreclosure rates across the 
country. The most recent data from RealtyTrac, the largest 
national database of foreclosures and bank-owned properties, 
shows that there were 252,363 foreclosures filings on U.S. 
properties in June 2008, a 53 percent increase over the number 
of filings in June 2007. That amounts to a foreclosure filing 
on one of every 501 U.S. households during the month of June 
2008. According to data from the Mortgage Bankers Association, 
the rate of foreclosure starts and the percent of loans in the 
process of foreclosure were at their highest recorded levels 
since 1979 during the first quarter of 2008.
    The increase in foreclosures is also a matter of concern 
for veterans, particularly those who have recently separated 
from the military after deployments in Operation Enduring 
Freedom and Operation Iraqi Freedom. The Congressional Joint 
Economic Committee announced on June 12, 2008, that research 
conducted by Committee staff in cooperation with RealtyTrac 
found significantly higher foreclosure rates in the areas 
surrounding the 24 military bases with the highest personnel 
populations.
    Committee Bill. Section 205 of the Committee bill would 
require that VA investigate and report on the impact of the 
mortgage foreclosure crisis on veterans and the adequacy of 
existing mechanisms available to help veterans. Section 205 
would require the report to include four specific elements: (1) 
a general assessment of the income of veterans who have 
recently separated from the Armed Forces; (2) an assessment of 
the effects of the length of the disability adjudication 
process on the capacity of veterans to maintain adequate or 
suitable housing; (3) a description of the extent to which the 
provisions of Servicemembers Civil Relief Act (SCRA) currently 
protect veterans from mortgage foreclosure; and (4) a 
description and assessment of the adequacy of the VA home loan 
guaranty program in preventing foreclosure for recently 
separated veterans. The report would be due to the Committees 
on Veterans' Affairs of the Senate and the House of 
Representatives no later than December 31, 2009.

                 TITLE III--LABOR AND EDUCATION MATTERS

                SUBTITLE A--LABOR AND EMPLOYMENT MATTERS

Sec. 301. Waiver of 24-month limitation on program of independent 
        living services and assistance for veterans with a severe 
        disability incurred in the Post-9/11 Global Operations period.

    Section 301 of the Committee bill would expand VA's 
authority to waive the 24-month limit on independent living 
services that may be provided to veterans of the Post-9/11 
Global Operations period.
    Background. Under current law, VA may provide services to 
certain veterans with severe service-connected disabilities to 
help them achieve maximum independence in daily living. The 
general rule is that no more than 24-months of these services 
may be provided to a veteran. However, under section 3105(d) of 
title 38, United States Code, the period may be extended if 
``the Secretary determines that a longer period is necessary 
and likely to result in a substantial increase in a veteran's 
level of independence in daily living.''
    Committee Bill. Section 301 of the Committee bill would 
amend section 3105(d) of title 38 so as to allow VA, without 
having to make such a determination, to extend the 24-month cap 
on independent living services for any veteran who served on 
active duty during the Post-9/11 Global Operations period and 
incurred or aggravated a severe disability during that service. 
In the view of the Committee, this additional flexibility will 
help ensure that VA is able to provide the appropriate services 
to veterans with severe disabilities, such as traumatic brain 
injury (TBI), that may have lengthy, complex, and unpredictable 
recovery periods.

Sec. 302. Reform of USERRA complaint process.

    Section 302 of the Committee bill, which is derived from S. 
2471, would create deadlines for the Department of Labor, the 
Attorney General, and the Office of Special Counsel to provide 
assistance to servicemembers who believe that their rights 
under the Uniformed Services Employment and Reemployment Rights 
Act of 1994 have been violated.
    Background. USERRA, chapter 43 of title 38, United States 
Code, provides reemployment and employment rights to 
servicemembers, veterans, and those who seek to join a 
uniformed service. USERRA encourages Americans to serve in the 
Armed Forces and reduces the disruption that servicemembers 
face when returning to the civilian workforce. Because the 
National Guard and Reserves have become an essential part of 
the military's operational force, it is imperative that 
employers comply with USERRA and that the statute be rigorously 
enforced by the federal government. If individuals lack 
confidence that their USERRA rights will be respected or 
enforced, they will be far less likely to join or continue to 
serve in the Armed Forces, especially in the Reserve forces.
    Individuals can privately enforce their rights under USERRA 
by filing a complaint in federal or state court, or, in the 
case of a complaint against a federal employer, by submitting a 
complaint to the Merit Systems Protection Board (MSPB). In 
addition, individuals can request assistance from the federal 
government by filing a complaint with the Department of Labor's 
Veterans' Employment and Training Service (DOL VETS), which 
investigates and attempts to resolve complaints, and, if 
requested, will refer complaints for litigation. DOL VETS 
refers complaints against federal agencies to the Office of 
Special Counsel (OSC) and complaints against private sector 
employers and state and local governments to the Attorney 
General. The Special Counsel or Attorney General may represent 
individuals before the MSPB or in federal court, respectively.
    Although the sample size was small and the margin of error 
high, the Department of Defense's 2006 Status of Forces Survey 
of Reserve Component Members does suggest that some 
servicemembers are increasingly dissatisfied with federal 
enforcement of USERRA and, in particular, the length of time it 
takes for USERRA claims to be investigated and resolved or 
referred for litigation. From 2004 to 2006, the percentage of 
Reserve Component members who responded that they were 
dissatisfied with how their complaints were handled by DOL VETS 
increased from 27 to 44 percent. During the same period, the 
percentage of those who said that the government's response to 
their complaints was not prompt rose from 32 to 38 percent.
    The Government Accountability Office (GAO) has also found 
significant delays in the handling of USERRA complaints. In its 
July 2007 report, ``Military Personnel, Improved Quality 
Controls Needed over Servicemembers' Employment Rights Claims 
at DOL,'' GAO found that in the six cases when DOL VETS could 
not resolve complaints of federal employees, who then sought 
referrals for litigation, an average of eight months was 
required for DOL VETS to both investigate and refer those 
complaints to OSC. Id. at 23. In addition, GAO estimated that 
the average processing time of all USERRA complaints received 
by DOL VETS ranged from 53 to 86 days, and concluded that the 
reporting on the number and percentage of claims it closes 
within 90, 120, and 365 days, was not reliable. In one case, 
DOL VETS did not refer the case for litigation until seven 
years after a complaint was filed.
    Committee Bill. Section 302 of the Committee bill would 
amend a number of sections in chapter 43 of title 38 so as to 
expedite federal enforcement of USERRA by imposing deadlines on 
action by DOL VETS, OSC, and the Attorney General to complete 
the tasks assigned to them under the statute:

     Within 5 days of receiving a USERRA complaint, DOL 
VETS would be required to notify a complainant in writing about 
his or her rights to receive governmental assistance, including 
the right to request a referral and the relevant deadlines that 
the federal agencies must meet.
     Within 90 days of receiving the complaint, DOL 
VETS would be required to complete its assistance and 
investigation and notify the complainant of the results and his 
or her rights, including the right to request a referral and 
the deadlines federal agencies must meet.
     Within 48 days after receiving a request for a 
referral, DOL would be required to refer a complaint to the OSC 
or the Attorney General.
     Within 60 days of receiving a referral, OSC or the 
Attorney General would be required to determine whether to 
provide legal representation to the complainant and notify the 
complainant of that decision in writing.

    These deadlines are not intended to adversely affect or 
diminish any of the rights of an individual to enforce his or 
her rights under USERRA or the ability of the government to 
enforce the rights of the servicemember. Nor are the deadlines 
intended to constitute or create any type of defense that an 
employer could raise in a judicial or administrative 
proceeding, or to deprive the MSPB, a federal court, or a state 
court of jurisdiction over a complaint or action filed under 
USERRA. Moreover, if the Secretary, the Attorney General, or 
the Special Counsel is unable to complete a specific task by 
the relevant deadline, the agency may complete the task within 
a time period agreed to by the complainant and the agency.
    Subsection 302(f) of the Committee bill would clarify that 
the original intent of Congress was that USERRA would not be 
subject to a federal or state statute of limitations period and 
specifically states that there is no time limit for a person to 
file a complaint with the Secretary of Labor, or for a person 
or the United States to submit a complaint before the MSPB or 
to file an action in federal or state court. The application of 
a federal statute of limitation period under USERRA is 
inconsistent with the intent of Congress and contrary to the 
Department of Labor's longstanding ``position that no Federal 
statute of limitations applied to actions under USERRA.'' U.S. 
Department of Labor, ``Uniformed Services Employment and 
Reemployment Rights Act of 1994; Final Rules,'' 70 Fed. Reg. 
75246, 75287 (Dec. 19, 2005). This section of the Committee 
bill would implement the Department of Labor's recommendation 
that Congress ``consider amending USERRA to clarify that no 
statute of limitations may apply to USERRA.'' U.S. Department 
of Labor, 2006 Fiscal Year Annual Report to Congress, at 7 
(Feb. 2008) (stating that a least one federal court has applied 
the four-year residual statute of limitations period in 28 
U.S.C. Sec. 1658 to proceedings under USERRA, and citing Rogers 
v. City of San Antonio, 2003 WL 1566502, *7 (W.D. Tex.), 
reversed on other grounds, 392 F.3d 758 (5th Cir. 2004)).

Sec. 303. Modification and expansion of reporting requirements with 
        respect to enforcement of USERRA.

    Section 303 of the Committee bill, which is derived from S. 
2471, would expand the reporting requirements regarding the 
federal government's enforcement of USERRA and change the date 
that the Department of Labor's annual USERRA report is due from 
February 1 to July 1.
    Background. Under current law, the Secretary of Labor must 
file an annual report to Congress that includes the number of 
cases reviewed by DOL VETS and the Department of Defense 
Employer Support of the Guard and Reserve (DoD ESGR), the 
number of cases referred to OSC and the Attorney General, and 
the number of complaints filed by the Attorney General.
    In February 2007, GAO published a report, ``Military 
Personnel: Additional Actions Needed to Improve Oversight of 
Reserve Employment Issues.'' GAO found that ``[t]he four 
agencies * * * responsible for addressing and tracking USERRA 
claims cannot systematically record and track disability-
related employment complaints,'' in particular because ``they 
do not record disability-related complaints using consistent 
and compatible categories to allow information analysis and 
reporting.'' GAO concluded that the failure to consistently 
track disability-related complaints may result in 
underreporting of the number of disability-related USERRA 
complaints, and that the Department of Defense (DOD) ``may not 
be completely aware of the effect that disabilities incurred by 
reservists while on active duty have on their reemployment, and 
what additional assistance may be needed to help transition 
this population back into the workforce.'' Moreover, GAO found 
that this lack of consistency was indicative of a more general 
problem that USERRA complaints ``could not be uniformly 
categorized in order to reveal trends on the kinds of problems 
that returning reservists experience because the four USERRA 
agencies responsible for addressing complaints use different 
complaint categories to characterize these issues.''
    Committee Bill. Section 303 of the Committee bill would 
amend section 4332 of title 38, United States Code, to expand 
the federal government's reporting requirements with regard to 
enforcement of USERRA.
    Section 4332 requires the Department of Labor to report the 
number of complaints the Attorney General files in federal 
courts, but does not require reporting of the number of cases 
OSC initiates before the MSPB. Section 303 would eliminate this 
difference by requiring reporting on the number of cases OSC 
initiates before the MSPB.
    Section 303 of the Committee bill would also require 
reports of the number of individuals whose cases are reviewed 
by both DOD ESGR and the DOL VETS so that the agencies 
responsible for enforcing USERRA can understand how frequently 
aggrieved servicemembers seek assistance from both DOD ESGR and 
DOL VETS and what types of cases are more likely to require 
assistance from both agencies. The Department of Labor would be 
required to report the number of cases handled by DOD ESGR, DOL 
VETS, OSC, and the Attorney General that involve a disability-
related issue and the number of cases that involve a person 
with a service-connected disability. In addition, section 303 
would require the Department of Labor to ensure that all of the 
information collection and reporting of USERRA cases is done in 
a uniform and consistent manner.
    Finally, section 303 would require the Department of Labor, 
OSC, and the Attorney General to issue quarterly reports on 
their compliance with the new deadlines that would be set by 
section 302 of the Committee bill, and it would require the 
Comptroller General to issue a report within two years 
assessing the reliability of the information in the three 
agencies' quarterly reports and the extent to which the three 
agencies are meeting those deadlines.

Sec. 304. Training for executive branch human resources personnel on 
        employment and reemployment rights of members of the uniformed 
        services.

    Section 304 of the Committee bill would require human 
resources personnel employed by Federal executive agencies to 
receive training regarding USERRA.
    Background. USERRA, which is codified in chapter 43 of 
title 38, United States Code, protects the public and private 
sector civilian job rights and benefits of veterans and members 
of the Armed Forces, including National Guard and Reserve 
members. USERRA also prohibits employer discrimination due to 
military obligations and provides reemployment rights to 
returning servicemembers.
    In October 2007, the Committee conducted an oversight 
hearing regarding USERRA. According to testimony provided at 
that hearing, when Federal executive agencies violate USERRA, 
it is often due to a lack of knowledge or understanding about 
the law. In fact, The Honorable Charles Ciccolella, Assistant 
Secretary for Veterans' Employment and Training, U.S. 
Department of Labor, testified that ``about half the [USERRA] 
cases that we do in the Federal government is where the Federal 
hiring manager just doesn't understand the law or the [Office 
of Personnel Management] regulations that spell out how to 
implement the law.''
    Committee Bill. Section 304 of the Committee bill would 
amend chapter 43 of title 38 to add a new section 4335, which 
would require the head of each Federal executive agency to 
provide training for human resources personnel on the rights, 
benefits, and obligations of members of the Armed Forces under 
USERRA and the administration of USERRA by Federal executive 
agencies. It would require that the training be developed and 
provided in consultation with the Office of Personnel 
Management. The training would be provided as often as 
specified by the Director of the Office of Personnel Management 
in order to ensure that the human resources personnel are kept 
fully and currently informed about USERRA.

Sec. 305. Report on the employment needs of Native American veterans 
        living on tribal lands.

    Section 305 of the Committee bill, which is derived from S. 
3000, would require the Department of Labor, in consultation 
with the Departments of Veterans Affairs and the Interior, to 
submit a report assessing the employment needs of Native 
American (American Indian, Alaska Native, Native Hawaiian, and 
other Pacific Islander) veterans living on tribal lands, 
including Indian reservations, Alaska Native villages, and 
Hawaiian Home Lands.
    Background. According to a 2006 VA report entitled 
``American Indian and Alaska Native Veterans: Lasting 
Contributions'', which relied on data from the 2000 Census, the 
unemployment rate among American Indian and Alaska Native 
veterans was approaching twice the unemployment rate among all 
veterans. For those Native American veterans who return to 
their native communities, their employment status may be much 
worse. According to the 2003 American Indian Population and 
Labor Force Report published by the Bureau of Indian Affairs, 
on-reservation or near-reservation unemployment was 49 percent. 
While these statistics indicate a clear employment problem for 
Native American veterans, especially those residing in Native 
American communities, the Committee is in need of more 
information to determine the appropriate steps that need to be 
taken to address the problem. Additionally, the Committee seeks 
to learn how existing employment resources for veterans can be 
leveraged in Native American communities to assist Native 
American veterans.
    Committee Bill. Section 305 of the Committee bill would 
require the Secretary of Labor, in consultation with the 
Secretaries of Veterans Affairs and the Interior, to provide a 
report on the employment needs of Native Americans, including a 
review of current and prior government-to-government 
relationships between tribal organizations, as defined in 
section 3765 of title 38, which the Committee expects would 
include a discussion of the current and projected activities 
within DOL VETS. The report would also be required to include 
recommendations for improving employment and job training 
opportunities for Native American veterans on tribal land, 
especially through the utilization of resources for veterans. 
The report would be due to the Committees on Veterans' Affairs 
of the Senate and House of Representatives no later than 
December 1, 2009.

Sec. 306. Report on measures to assist and encourage veterans in 
        completing vocational rehabilitation.

    Section 306 of the Committee bill, which is derived from S. 
2674, would require VA to conduct a study on factors that may 
prevent veterans with service-connected disabilities from 
completing their vocational rehabilitation plans and measures 
that could be taken to assist and encourage veterans in 
completing vocational rehabilitation.
    Background. In its July 2007 report, the President's 
Commission on Care for America's Returning Wounded Warriors 
found that, ``of the 65,000 who apply for [VA's Vocational 
Rehabilitation and Employment program] each year, at most 
10,000 of all ages complete the employment track in the program 
each year.'' The Commission also found that ``the effectiveness 
of various vocational rehabilitation programs is not well 
established, and the VA should undertake an effort to determine 
which have the greatest long-term success.'' In addition, the 
Commission recommended that ``VA should develop financial 
incentives that would encourage completion'' of vocational 
rehabilitation.
    Committee Bill. Section 306 of the Committee bill would 
require VA to conduct a study that would identify the various 
factors that may prevent or preclude veterans from successfully 
completing their vocational rehabilitation plans. It would also 
require identification of actions that the Secretary may take 
to address such factors.
    In conducting the study, VA would be required to examine 
the measures utilized in other disability systems in the United 
States and in other countries to encourage successful 
completion of vocational rehabilitation; any relevant studies 
or survey data; the extent to which disability compensation may 
be used as an incentive to encourage veterans to undergo and 
complete their vocational rehabilitation programs; the report 
of the Veterans' Disability Benefits Commission; the report of 
the President's Commission on Care for America's Returning 
Wounded Warriors; and any other matters that VA considers 
appropriate. In addition, VA would address the extent to which 
bonus payments or other incentives may be used to encourage 
veterans to complete their vocational rehabilitation plans or 
otherwise achieve their vocational rehabilitation objectives. 
VA would be required to consult with veterans and military 
service organizations and any other organizations or 
individuals as VA deems appropriate and would be authorized to 
employ consultants.
    Finally, not later than 270 days after beginning the study, 
VA would be required to submit to the Committees on Veterans' 
Affairs of the Senate and House of Representatives a report 
including the findings of the study and any recommendations on 
actions that should be taken in light of the study.

                     SUBTITLE B--EDUCATION MATTERS

Sec. 311. Relief for students who discontinue education because of 
        military service.

    Section 311 of the Committee bill, which is derived from S. 
1718, would amend title VII of the Servicemembers Civil Relief 
Act (50 U.S.C. App. 591 et seq.), to provide protections for 
servicemembers who are called to active-duty service while 
enrolled in institutions of higher education.
    Background. Under the law as it was at the time the 
Committee met to mark up the Committee bill, there was no 
uniform financial protection for servicemembers who are called 
to active duty and are required to discontinue a program of 
education prior to the completion of the academic semester or 
quarter for which they are enrolled. Colleges and universities 
were not required to make reasonable accommodations for 
students who are called to active duty in the Armed Forces, 
such as tuition reimbursement and requirements for 
reenrollment. Members of the Armed Forces who return from 
deployment overseas and attempt to reenroll in a program of 
education could be overwhelmed with bureaucracy. In addition, 
the six-percent interest rate cap on all debts of members of 
the Armed Forces called to active duty guaranteed by the 
Servicemembers Civil Relief Act had been interpreted by the 
Secretary of Education not to apply to Federal student loans.
    Since the time of the Committee's meeting on June 26, 2008, 
the Higher Education Opportunity Act was signed on August 14, 
2008, and became Public Law 110-315. This new Public Law 
contains provisions addressing some of the same concerns 
intended to be addressed by the Committee bill, including 
reasonable accommodations and the cap on interest rates for 
Federal student loans. Any future action on the Committee bill 
will reflect the changes made by Public Law 110-315.
    Committee Bill. Section 311 of the Committee bill would 
require institutions of higher education to refund tuition and 
fees paid by a servicemember for courses not completed due to 
performance of military obligations. It would also provide that 
the interest rate for Federal student loans would be held at no 
more than six percent during such obligations.
    This would assist members of the Armed Forces who return 
from a deployment to make the transition from military service 
to civilian life and who wish to re-enter programs of education 
they were forced to discontinue because of such deployment. It 
would further provide the service member an opportunity to 
reenroll at the institution with the same educational and 
academic status that the service member had when the program 
was discontinued because of the military service. It would also 
provide parity with other loan obligations that can are reduced 
during periods of service.
    Some colleges and universities have wide ranging policies 
currently in place to minimize the academic impact of leaving 
for active duty service, including suspending the requirement 
that they reapply for admission and waiving changes to degree 
requirements. The Committee does not intend that policies and 
procedures currently in place at colleges and universities 
would be superseded by the requirements of these new 
protections.

Sec. 312. Modification of period of eligibility for Survivors' and 
        Dependents' Educational Assistance of certain spouses of 
        individuals with service-connected disabilities total and 
        permanent in nature.

    Section 312 of the Committee bill would extend the period 
within which the spouses of certain severely disabled veterans 
must use education benefits from VA.
    Background. Under the Survivors' and Dependents' 
Educational Assistance (DEA) program, VA provides up to 45 
months of education benefits to certain children or spouses of 
military personnel. For instance, the spouse of a veteran or 
servicemember may be eligible for these benefits if the veteran 
died, or is permanently and totally disabled, as the result of 
a service-connected disability or if the veteran died from any 
cause while a permanent and total service-connected disability 
was in existence.
    The spouse generally must use these education benefits 
within ten years after the date on which the veteran dies or is 
found to be permanently and totally disabled. However, if the 
servicemember died while on active duty, the spouse may use the 
education benefits during the twenty-year period after the 
servicemember's death. That extended period was meant to 
recognize the struggles of a surviving spouse in the years 
following the loss of the servicemember. As this Committee 
explained: ``For spouses with children, especially young 
children, using DEA benefits within the [ten-year] period may 
be difficult * * * A host of factors may preclude the use of 
DEA benefits during the ten-year period following a 
servicemember's death, such as an extended grieving process, 
job demands, or simply the lack of an immediate need for 
education or training.'' S. Rep. 108-352, at 10 (2004).
    In recent years, it has become clear that the families of 
those who are severely wounded in service may also face 
significant challenges in the years following the injuries. For 
example, the July 2007 report of the President's Commission on 
Care for America's Returning Wounded Warriors contained these 
findings regarding the family members of servicemembers who 
survive devastating injuries, such as TBI: ``The Commission has 
repeatedly heard about dedicated family members whose 
financial, family, and professional sacrifices allowed them to 
participate in their loved one's TBI care. Some patients with 
severe TBI may need family members or others to provide care 
for an extended period.''
    Committee Bill. Section 312 of the Committee bill would 
extend from ten years to twenty years the time within which the 
spouses of certain severely injured veterans have to use their 
DEA benefits. Specifically, the twenty-year period would be 
available to a spouse of a veteran who becomes permanently and 
totally disabled within three years after discharge from 
service, if the spouse remains married to the injured veteran. 
In the view of the Committee, this extension is necessary to 
recognize that the extensive time and effort spent caring for a 
severely injured veteran may preclude a spouse from using DEA 
benefits during the existing ten-year period.

Sec. 313. Repeal of requirement for report to the Secretary of Veterans 
        Affairs on prior training.

    Section 313 of the Committee bill, which is derived from S. 
2984, would eliminate the current requirement that educational 
institutions providing non-accredited courses report to VA any 
credit that was granted by that institution for an eligible 
person's prior training.
    Background. Under current law, State approving agencies 
approve, for VA education benefits purposes, the application of 
educational institutions providing non-accredited courses if 
the institution and its courses meet certain criteria. Among 
these is the requirement that the institution maintain a 
written record of the previous education and training of the 
eligible person and what credit for that training has been 
given the individual. The institution must notify both VA and 
the eligible person regarding the amount of credit the school 
grants for previous training.
    Committee Bill. Section 313 of the Committee bill would 
amend section 3676(c)(4) of title 38, United States Code, to 
eliminate the notification requirement as it pertains to VA. VA 
will maintain oversight, just as it does with accredited 
courses. VA will review records during compliance visits to 
assure the institution is evaluating and appropriately reducing 
program requirements because of credit given for prior 
training.
    Removing the reporting requirement would shorten claims 
processing time because VA would not have to review each claim 
for the presence of such notice and, if submitted, have to 
check with the school and student to assure the requirement has 
been met. It would also permit more cases to be processed 
through VA's Electronic Certification Automated Processing 
(ECAP) program. The ECAP system cannot process claims where 
proper credit reporting is at issue because those cases require 
manual development and review by a veteran's claims examiner. 
The more claims VA can process through the ECAP system, the 
more timely VA beneficiaries will receive their benefits.
    Following up with schools for the written notification 
burdens the school certifying official and student, as well as 
VA. Often, the school certifying official, who is responsible 
for reporting a veteran's enrollment, is not the individual who 
evaluates credit. The certifying official has no control over 
how long it takes the school to accomplish the review and 
granting of prior credit.
    Further, several of VA's stakeholders, including the 
National Association of Veterans' Program Administrators, have 
recommended that VA review school records to determine granting 
of prior credit during compliance visits rather than require 
the school to submit written reports. Eliminating this 
requirement would streamline the administration of educational 
assistance benefits, and improve the delivery of benefits to 
veterans, reservists, and other eligible individuals.

Sec. 314. Modification of waiting period before affirmation of 
        enrollment in a correspondence course.

    Section 314 of the Committee bill, which is derived from S. 
2984, would reduce from ten to five days the waiting period 
required prior to the student's affirmation of an enrollment 
agreement with an educational institution to pursue a program 
of education exclusively by correspondence.
    Background. Under current law, an enrollment agreement 
signed by a veteran, spouse, or surviving spouse will not be 
effective unless he or she, after ten days from the date of 
signing the agreement, submits a written and signed statement 
to VA affirming the enrollment agreement. In the event the 
individual at any time notifies the institution of his or her 
intention not to affirm the agreement, the institution, without 
imposing any penalty or charging any fee, shall promptly make a 
refund of all amounts paid.
    Committee Bill. Section 314 of the Committee bill would 
amend section 3686(b) of title 38, United States Code, to 
reduce the required waiting period from ten to five days. The 
statutory ten-day period is twice the requirement of the 
Distance Education and Training Council (DETC) accrediting body 
standard, which states that institutions will allow a full 
refund of all tuition expenses paid if a student cancels within 
five days after enrolling in a course. Reducing the affirmation 
waiting period to five days would make the statute consistent 
with the DETC standard and eliminate confusion. It would also 
permit eligible individuals to begin their programs sooner. 
Should they decide at any time not to affirm the enrollment 
agreement, the eligible individuals would still be entitled to 
a refund of all amounts paid. Finally, this proposal would 
allow VA to strengthen its partnership with the National 
Association of State Approving Agencies which has had this 
issue high on its list of legislative priorities.

Sec. 315. Change of programs of education at the same educational 
        institution.

    Section 315 of the bill, which is derived from S. 2984, 
would eliminate the requirement that an individual must file an 
application with VA when changing programs of study while 
enrolled at the same school.
    Background. Under current law, a student who desires to 
initiate a program of education must submit an application to 
VA in the form prescribed by the Department. If the student 
decides a different program is more advantageous to his or her 
needs, that individual may change his or her program of study 
once. However, additional changes require VA to determine that 
the change is suitable to the individual's interests and 
abilities. It is rare for VA to deny a change of program, 
especially if the student is continuing in an approved program 
at the same school.
    Committee Bill. Section 315 of the Committee bill, would 
amend section 3691(d) of title 38, United States Code, to 
eliminate the student application requirement. Under the new 
procedure, VA would accept the new program enrollment based on 
the certification of such enrollment from the school without 
requiring an additional certification from the student. VA 
would still have oversight of program changes by reviewing 
school records during compliance visits and would apply only if 
the individual remains enrolled at the same school. This new 
procedure should allow VA to increase the number of claims 
processed using the ECAP program without manual review by a 
veterans claims examiner--resulting in more timely awards and 
less of a information collection burden.

Sec. 316. Repeal of certification requirement with respect to 
        applications for approval of self-employment on-job training.

    Section 316 of the Committee bill, which is derived from S. 
2984, would eliminate the requirement that wages be earned by 
veterans pursuing self-employment on-job training (OJT) 
authorized under section 301 of Public Law 108-183.
    Background. Section 301 of Public Law 108-183 expanded the 
chapter 30 Montgomery GI Bill program by authorizing 
educational assistance benefits for full-time OJT of less than 
six months needed for obtaining licensure to engage in a self-
employment occupation or required for ownership and operation 
of a franchise. Under current law, all provisions of title 38, 
United States Code, that apply to VA's other OJT programs 
(except the requirement that a training program has to be for 
at least six months) apply to franchise-ownership OJT, 
including the requirement that the trainee earn wages that are 
increased on an incremental basis.
    Committee Bill. Section 316 of the Committee bill would 
amend section 3677(b) of title 38, United States Code, to 
exempt self-employment OJT from the wage-earning requirement. 
Through contact with the International Franchise Association, 
VA has determined that OJT for new franchise owners does not 
involve the payment of wages. Thus, if franchise OJT programs 
are not exempted from the current title 38 wage requirements, 
no franchise-ownership OJT program could be approved for VA 
benefits.

                       SUBTITLE C--OTHER MATTERS

Sec. 321. Designation of the Office of Small Business Programs of the 
        Department of Veterans Affairs.

    Section 321 of the Committee bill, which is derived from S. 
2984, would designate VA's office established to support 
contracting with small businesses as the Office of Small 
Business Programs.
    Background. Section 15(k) of the Small Business Act, 
codified at section 644(k) of title 15, United States Code, 
established, in each federal agency having procurement powers, 
including VA, an office to support contracting with small 
businesses to be known as the ``Office of Small and 
Disadvantaged Business Utilization.''
    Committee Bill. Section 321 of the Committee bill would 
designate the office established under section 15(k) of the 
Small Business Act as the Office of Small Business Programs of 
the Department of Veterans Affairs. The head of the office 
would be designated as the Director of Small Business Programs.
    Designating the office as the Office of Small Business 
Programs would more clearly represent that office's span of 
authority. The name would not reflect any change in emphasis or 
support for disadvantaged small businesses, but rather would 
clarify that the Office of Small Business Programs has the full 
range of authority over many other small business programs. The 
new title would capture the overarching nature of the program, 
which encompasses the small disadvantaged business, the 
service-disabled veteran-owned small business, the veteran-
owned small business, the qualified historically underutilized 
business zone small business, the women-owned small business, 
and the very small business programs.

                        TITLE IV--COURT MATTERS

Sec. 401. Increase in number of active judges on the United States 
        Court of Appeals for Veterans Claims.

    Section 401 of the Committee bill, which is derived from S. 
2091, would increase the number of active judges on the United 
States Court of Appeals for Veterans Claims from seven to nine.
    Background. Under current law, section 7253(a) of title 38, 
the court is limited to seven active judges.
    Over recent years, the Court has experienced a dramatic 
increase in cases filed. For example, in Fiscal Year (FY) 2004 
the Court received 2,234 new cases, in FY 2005 that number grew 
to 3,466, in FY 2006 it was 3,729, and in FY 2007 new appeals 
filed totaled 4,644. This trend has continued into FY 2008. 
According to the Court's most recent quarterly report, covering 
April 1, 2008 to June 30, 2008, the Court received 1,019 cases.
    As these statistics and the Court's annual report depict, 
that increase amounts roughly to a jump from less than 200 
cases filed per month to well over 300 cases filed per month. 
Likewise, the number of cases decided has grown from 1,780 in 
FY 2004, to an all-time high of 4,877 in FY 2007.
    In considering what should be the number of active judges 
for CAVC, the Committee believes it is appropriate to consider 
the Judicial Conference's process for recommending additional 
judgeships for other federal courts. While CAVC is a federal 
Article I court, and thus not a member of the Judicial 
Conference, the Court has adopted many of the practices and 
processes of the Judicial Conference and the Administrative 
Office of the United States Courts.
    The Judicial Conference, in making recommendations to 
Congress on authorization of judgeships, uses a combination of 
objective and discretionary criteria. The Conference relies on 
past trends and current data, and does not consider projected 
future caseloads because they do not utilize predictors of 
future filings. It initially reviews the case statistics of a 
particular court to determine whether the amount of work 
justifies adding judicial resources and, if so, whether that 
addition should be permanent or temporary. The Conference uses 
a formula that assigns varying weight to different types of 
cases at the trial level, and considers a reasonable caseload 
of 430 weighted cases per district court judge; it uses 500 
weighted filings per three-judge appellate panel as a 
reasonable workload.
    CAVC is an unusual appellate tribunal in that it sits both 
in panels in some instances, like most other appellate bodies, 
and also has authority to decide appeals by a single judge. 
Based on the Judicial Conference's model for district court 
caseload of 430 filings per judgeship, CAVC's current caseload 
justifies at least nine judges without even considering that 
many of the appeals filed will be considered by a panel of 
judges. Under the Conference's appellate formula of 500 filings 
per three-judge panel, which equates to a potential requirement 
for each judge to write a decision in 167 cases, seven full-
time judges responsible for over 4,000 appeals per year, or, 
571 per judge, greatly exceeds the normal appellate caseload. 
Thus, the recent trends demonstrate that the Court's workload 
is large and increasing and supports authorizing more 
judgeships.
    In addition to looking at the Judicial Conference process, 
the Committee believes that it is important to recognize that 
CAVC also has a special responsibility as the only national 
court that reviews veterans' benefits decisions. The impacts of 
that mandate are significant and they must be studied and 
weighed when considering the appropriate size of the Court.
    Although the Judicial Conference does not consider future 
projected caseloads when assessing the need for additional 
judgeships, it does consider the specific nature of a 
particular court in carrying out its evaluations. With respect 
to CAVC, there are bellwethers as to the caseload growth trend 
that cannot be ignored. The Nation is at war and there is no 
doubt that the number of veterans who are likely to seek 
benefits will rise as a result. There is great interest within 
VA in expediting administrative adjudications of the hundreds 
of thousands of claims that are filed with VA each year, and 
Congress has increased substantially the resources for VA and 
the Board of Veterans' Appeals (BVA or the Board) to accelerate 
administrative determinations. The Board has established a goal 
of deciding 43,000 cases or more each year, and VA has 
testified to the growing complexity of the claims filed and the 
rising number of issues contained within each claim. Because 
every veteran has an absolute right to appeal an adverse 
decision of the Board, there is significant pool of potential 
cases that may reach the Court.
    Unlike the Federal District Courts, CAVC does not have a 
pool of hundreds of senior judges to draw from at will. In the 
next eight years, it appears likely that only one judge will 
join the ranks of the retired recall-eligible judges. 
Conversely, it is certainly possible during that same period 
that one or more of the six current retired judges may become 
unavailable for recall service. The Committee believes that it 
would be irresponsible not to consider these factors in any 
assessment of the judgeship needs of CAVC.
    In response to the increasing caseload, the Court has 
examined its operational efficiency and taken steps to maximize 
the use of its available resources. To this end, retired 
recall-eligible judges have been convened to provide 
substantial service to the Court, the Court's Central Legal 
Staff has been trained in and has developed an enhanced 
alternative dispute resolution program, and the Court's Rules 
of Practice and Procedure have been amended to require pre-
briefing settlement conferences and to streamline the process 
of preparing the appellate record. Additionally, the Court is 
in the process of implementing an electronic case filing 
system, and is considering summary disposition for some 
appeals. While these steps help in managing the growing numbers 
of appeals, they are not sufficient.
    Committee Bill. The Committee bill would amend section 
7253(a) so as to increase the number of active judges on CAVC 
from seven to nine.

Sec. 402. Protection of privacy and security concerns in court records.

    Section 402 of the Committee bill, which is derived from S. 
2090, would protect privacy and security concerns in records of 
CAVC.
    Background. Current law, section 7268(a) of title 38, 
United States Code, provides that ``all decisions of the Court 
of Appeals for Veterans Claims and all briefs, motions, 
documents, and exhibits received by the Court * * * shall be 
public records open to the inspection of the public.'' Section 
7268(b)(1) provides that ``[t]he Court may make any provision 
which is necessary to prevent the disclosure of confidential 
information, including a provision that any such document or 
information be placed under seal to be opened only as directed 
by the Court.''
    The Court has developed a process to seal, on its own, 
cases involving the conditions identified in section 7332(a)(1) 
of title 38, relating to confidentiality of certain VA medical 
records. Moreover, motions by appellants to seal case records 
for good cause are routinely granted. Even where case records 
remain unsealed, public access to those records presently is 
limited to on-site review in the reading room of the Court's 
Public Office. However, with the Court's implementation of the 
e-filing of records, the present logistical limitation on 
access to unsealed records will not exist.
    E-filing potentially makes sensitive material in court 
records widely accessible. These records generally include 
appellants' Social Security information and medical records. As 
other federal courts implement e-filing, they too are 
attempting to achieve the balance between maintaining court 
records public while providing parties with protection from 
internet data mining and identity theft. The need to reach a 
balance is urgent.
    Committee Bill. The Committee bill would amend section 7268 
of title 38, so as to require the Court to prescribe rules, in 
accordance with section 7264(a) of title 38, to protect privacy 
and security concerns relating to the filing of documents, and 
the public availability of such documents, that are retained by 
CAVC or filed electronically. The Committee bill would require 
that the rules prescribed by the Court be consistent, to the 
extent practicable, with rules that address privacy and 
security issues throughout the Federal courts.

Sec. 403. Recall of retired judges of the United States Court of 
        Appeals for Veterans Claims.

    Section 403 of the Committee bill would eliminate the 
current restrictions on how many days per year a retired judge 
of CAVC may voluntarily serve in recall status; would modify 
the retirement pay structure for CAVC judges appointed on or 
after the date of enactment; and would exempt retired judges 
from involuntary recall once they have served an aggregate of 
five years of recall service.
    Background. Under current law, retiring CAVC judges make an 
election whether to be recall-eligible. If a judge chooses to 
be recall-eligible, the Chief Judge has the authority to 
involuntarily recall that judge for up to 90 days per calendar 
year or, with the consent of the judge, to recall the judge for 
up to 180 days per calendar year. A recall-eligible retired 
judge receives annual pay equal to the annual salary of an 
active judge (pay-of-the-office) and that salary level is not 
impacted by how much recall service is performed during a year.
    Committee Bill. Section 403 of the Committee bill would 
modify the authorities for the recall of retired judges and the 
retirement pay structure. First, this section would repeal the 
180-day limit on how many days per calendar year a recall-
eligible retired judge may voluntarily serve in recall status. 
In addition, for judges appointed on or after the date of 
enactment, it would create a three-tiered retirement pay 
structure. Specifically, pay-of-the-office would be reserved 
for judges who are actively serving, either as a judge of the 
Court or as a retired judge serving in recall status. When not 
serving in recall status, a recall-eligible retired judge would 
receive the rate of pay applicable to that judge as of the date 
the judge retired, as increased by periodic cost-of-living 
adjustments. A retired judge who is not recall-eligible would 
receive the rate of pay applicable to that judge at the time of 
retirement. Finally, section 403 would exempt current and 
future recall-eligible retired judges from involuntary recall 
once they have served an aggregate of five years of recall 
service.
    By removing the cap on voluntary recall service and 
exempting recall-eligible judges from involuntary recall once 
they have served a cumulative total of five years of recall 
service, the Committee intends to provide both the authority 
and an incentive for recall-eligible judges to serve longer or 
more frequent periods of recall service. By reserving pay-of-
the-office for those retired judges actually performing recall 
service, there will be an incentive for retired judges to 
continue offering their expertise in a time of need.

Sec. 404. Annual reports on workload of the United States Court of 
        Appeals for Veterans Claims.

    Section 404 of the Committee bill would establish an annual 
reporting requirement for CAVC. The Court would be required to 
submit to the Committees on Veterans' Affairs of the Senate and 
House of Representatives an annual report summarizing the 
workload of the Court.
    Background. The Court's workload has increased dramatically 
in recent years. Between FY 1998 and FY 2004, approximately 200 
cases were filed monthly with the Court. In FY 2005, that 
number began to increase, reaching an average of 387 cases per 
month in FY 2007. The FY 2007 total of 4,644 cases exceeded the 
Court's previous single year high by approximately 900 cases. 
This dramatic increase has raised concerns that CAVC may not 
have the resources it needs to keep pace with its workload. 
However, there is currently a dearth of specific information on 
the unique characteristics of the Court's workload.
    Committee Bill. Section 404 of the Committee bill would 
require CAVC to report to Congress annually on various details 
of its workload. The information required to be in the report 
would include the number of appeals, petitions, and 
applications for fees under the Equal Access to Justice Act 
(EAJA) filed with the Court. It would also include the total 
number of dispositions by the Court as a whole, by the Clerk of 
the Court, by a single judge, by multi-judge panels, and by the 
full Court and the number of each type of disposition by the 
Court, including settlement, affirmation, remand, vacation, 
dismissal, reversal, grant, and denial. In addition, the 
required information would include the median time from filing 
an appeal to disposition by the Court as a whole, by the Clerk 
of the Court, by a single judge, or by multiple judges; the 
median time from the filing of a petition to disposition by the 
Court; the median time from filing an EAJA application to 
disposition by the Court; and the median time from completion 
of the briefing requirements by the parties to disposition by 
the Court. The report would also include the number of oral 
arguments held by the Court; the number of cases appealed to 
the United States Court of Appeals for the Federal Circuit; the 
number and status of appeals, petitions, and EAJA applications 
pending at the end of the fiscal year; the number of cases 
pending for more than 18 months at the end of the fiscal year; 
and a summary of any service performed by recalled retired 
judges during the fiscal year.
    In the view of the Committee, this information would be 
helpful in monitoring whether the Court has sufficient 
resources to provide claimants with timely and appropriate 
service.

                       TITLE V--INSURANCE MATTERS

Sec. 501. Report on inclusion of severe and acute Post Traumatic Stress 
        Disorder among conditions covered by traumatic injury 
        protection coverage under Servicemembers' Group Life Insurance.

    Section 501 of the Committee bill, which is derived from S. 
2965, would require VA, in consultation with the Department of 
Defense, to submit a report to Congress assessing the 
feasibility of and advisability of including severe and acute 
Post Traumatic Stress Disorder (PTSD) among the conditions 
covered by traumatic injury protection coverage under 
Servicemembers' Group Life Insurance (SGLI).
    Background. Section 1032 of Public Law 109-13, the 
Emergency Supplemental Appropriations Act for Defense, the 
Global War on Terror, and Tsunami Relief, 2005 established 
traumatic injury protection coverage under the SGLI program. 
Traumatic Servicemembers' Group Life Insurance (TSGLI) provides 
coverage against qualifying losses incurred as a result of a 
traumatic injury event. In the event of a loss, VA will pay 
between $25,000 and $100,000 depending on the severity of the 
qualifying loss. A key factor in analyzing the severity of a 
particular traumatic injury is the impact it has on the length 
of hospitalization and rehabilitation for the injured 
servicemember.
    At present, active duty and reserve component 
servicemembers with any amount of SGLI coverage are 
automatically covered under TSGLI. A premium (currently $1 
monthly) is collected from covered members to meet peacetime 
program expenses; DOD is required to fund TSGLI program costs 
associated with the extra hazards of military service.
    TSGLI was designed to provide severely injured 
servicemembers who suffer a loss as a direct result of a 
traumatic injury with short-term monetary assistance to lessen 
the economic burden on them and their families, who often incur 
financial hardships when they relocate to be with the member 
during long and difficult treatment and rehabilitation periods. 
Section 1980A(b)(1) of title 38, United States Code, lists some 
qualifying losses for which injured servicemembers are covered 
under TSGLI, including, among others, complete loss of vision, 
complete loss of hearing, amputation of a hand or foot and the 
inability to carry out the activities of daily living resulting 
from injury to the brain. PTSD is not currently among the 
conditions classified as qualifying losses. However, recent 
research on the severity of the problem suggests the concept 
should be studied.
    In April 2008, the RAND Corporation released a study on 
post-deployment PTSD, major depression and traumatic brain 
injury entitled: ``Invisible Wounds of War.'' Based on the 
results of a telephone survey of 1,965 previously deployed 
individuals, the study estimated that approximately 300,000 of 
the 1.64 million servicemembers who have returned from Iraq and 
Afghanistan suffer from symptoms of PTSD or major depression. 
These findings suggest a widespread problem, which, in its most 
severe and acute manifestations, can have a significant impact 
on readjustment and earning capacity. RAND estimated that the 
cost of an invisible wound in terms of lost productivity, 
treatment, and other impacts over the two-year period 
immediately following deployment ranges from $5,904 to $25,757 
per person. RAND noted that this estimate does not include 
potential costs associated with homelessness, domestic 
violence, family strain, and substance abuse.
    Committee Bill. Section 501 of the Committee bill would 
require VA, in consultation with DOD, to submit a report to 
House and Senate Committees on Veterans' Affairs and Committees 
on Armed Services assessing the feasibility and advisability of 
including severe and acute PTSD among the conditions covered by 
TSGLI. The report would be due to the Committees not later than 
180 days after enactment of this bill.
    The Committee bill would require VA to specifically 
consider certain factors in preparation of the assessment: the 
advisability of providing TSGLI coverage to individuals who 
suffer from PTSD as a result of military service in a combat 
zone which renders them unable to carry out the daily 
activities of living; the unique circumstances of military 
service in a combat zone; any financial strain incurred by 
family members of those suffering from severe and acute PTSD; 
the recovery time, and any particular difficulties of the 
recovery process, associated with severe and acute PTSD; and 
other matters as VA considers appropriate.

Sec. 502. Treatment of stillborn children as insurable dependents under 
        Servicemembers' Group Life Insurance.

    Section 502 of the Committee bill, which is derived from S. 
2946, would allow a stillborn child to be an insurable 
dependent under SGLI.
    Background. In 2001, section 4 of the ``Veterans' Survivor 
Benefits Improvements Act of 2001'', Public Law 107-14, 
established a program of family insurance coverage under SGLI 
through which an SGLI-insured member's insurable dependents, 
defined as the member's spouse and children, could also be 
insured. A member's spouse may be insured in an amount up to 
$100,000. Coverage of a member's children is automatic and is 
in the amount of $10,000 for each child. Under current law, 
stillborn children are not eligible for coverage as insurable 
dependents under SGLI.
    A lawsuit, Warnock v. Office of Servicemembers' Group Life 
Insurance, No. 1:03-cv-1329-DFH, 2004 U.S. Dist. LEXIS 8533 
(S.D. Ind. April 28, 2004), raised the issue as to whether a 
member's stillborn child is covered as an insurable dependent 
under SGLI. The plaintiff argued that the stillbirth of his 
child at 38 weeks gestational age should be covered under SGLI. 
The Court dismissed the lawsuit for failure to state a claim 
upon which relief could be granted, ruling that applicable 
statutes and the SGLI policy do not extend life insurance 
coverage to stillborn infants. In its ruling, the Court noted 
that ``Congress could write the statute, or an insurer could 
write a policy, to cover future stillbirths.''
    In 2005, the Senate passed S. 1235, the ``Veterans' Housing 
Opportunity and Benefits Improvement Act of 2006.'' That 
legislation included a provision, section 102, which would have 
included stillborn children as insurable dependents under SGLI. 
This provision was subsequently dropped in negotiations between 
the House and the Senate.
    Committee Bill. Section 502 of the Committee bill would 
amend section 1965(10) of title 38, United States Code, so as 
to cover a servicemembers ``stillborn child'' as an insurable 
dependent under the SGLI program. The Committee does not expect 
the term ``stillborn child'' to cover the deaths of children at 
any gestational age or under every circumstance. Rather, the 
Committee expects VA to issue regulations that would define the 
term in a manner consistent with the 1992 recommended reporting 
requirements of the Model State Vital Statistics Act and 
Regulations as drafted by the Centers for Disease Control and 
Prevention's National Center for Health Statistics. The Model 
Act recommends a state reporting requirement of fetal deaths 
involving fetuses weighing 350 grams or more, if the weight is 
unknown, or 20 or more completed weeks of gestation, calculated 
from the date last normal menstrual began to the date of 
delivery.

Sec. 503. Other enhancements of Servicemembers' Group Life Insurance 
        coverage.

    Section 503 of the Committee bill, which is derived from S. 
2984, makes changes to and clarifies the SGLI and Veterans' 
Group Life Insurance programs.
    Background. SGLI is a VA-supervised life insurance program 
that provides group coverage for members on active duty in the 
uniformed services (Army, Navy, Air Force, Marine Corps, and 
Coast Guard), members of the Commissioned Corps of the United 
States Public Health Service and the National Oceanic and 
Atmospheric Administration, Reserve and National Guard members, 
Reserve Officer Training Corps members engaged in authorized 
training, service academy cadets and midshipmen, Ready Reserve 
and Retired Reserve members, and Individual Ready Reserve 
members who are subject to involuntary recall to active duty 
service. VA purchases a group policy on behalf of participating 
members from a commercial provider. Since the inception of the 
SGLI program in 1965, The Prudential Insurance Company of 
America has been the provider. VA's FY 2009 budget submission 
projects that 2,342,000 individuals will be covered under SGLI 
in FY 2009.
    Full coverage under SGLI is provided automatically at the 
maximum coverage amount when an individual begins covered 
service. Partial coverage at prorated premium rates is 
available for Reserve and National Guard members for active and 
inactive duty training periods. To be covered in an amount less 
than the maximum, or to decline coverage altogether, a member 
must make a written election to that effect. Coverage amounts 
may be reduced in multiples of $10,000. A member may also name, 
at any time, one or more beneficiaries of his or her choice. 
Decisions concerning coverage amounts and designation of 
beneficiaries are made at the sole discretion of members 
insured under SGLI.
    The ``Veterans' Insurance Act of 1974'', Public Law 93-289, 
established a new program of post-separation insurance known as 
Veterans Group Life Insurance (VGLI). Like SGLI, VGLI is 
supervised by VA but administered by Prudential. VGLI provides 
for the post-service conversion of SGLI to a renewable term 
policy of insurance. Persons eligible for full-time coverage 
include former servicemembers who were insured full-time under 
SGLI and who were released from active duty or the Reserves, 
Ready Reservists who have part-time SGLI coverage and who incur 
certain disabilities during periods of active or inactive duty 
training, and members of the Individual Ready Reserve and 
Inactive National Guard. Like SGLI, VGLI is issued in multiples 
of $10,000 up to the maximum coverage amount, but in no case 
can VGLI coverage exceed the amount of SGLI coverage a member 
had in force at the time of separation from active duty service 
or the Reserves.
    Committee Bill. Section 503 of the Committee bill would 
correct the disparity in eligibility for SGLI coverage for 
Ready Reservists and members the Individual Ready Reserve; 
correct an inequity in termination dates of SGLI coverage 
between dependents and separating servicemembers; clarify VA's 
authority to set SGLI premiums for spouses of Ready Reservists 
to make it consistent with current VA practice; and make 
consistent VA's forfeiture provisions.
    Subsection 503(a) would extend full-time and family SGLI 
coverage to Individual Ready Reservists (IRRs), those 
individuals referred to in section 1965(5)(C) of title 38, 
United States Code. This group of individuals volunteer for 
assignment to a mobilization category in the Individual Ready 
Reserve, as defined in section 12304(i)(1) of title 10. The 
``Veterans' Survivor Benefits Improvement Act of 2001,'' Public 
Law 107-14, provided SGLI coverage for Ready Reservists, 
referred to in section 1965(5)(B), but not to IRRs. The 
Committee believes IRRs should be afforded comparable coverage 
given that many of them have been called up to serve in 
Operation Enduring Freedom and Operation Iraqi Freedom.
    Subsection 503(b) would provide that a dependent's SGLI 
coverage would terminate 120 days after the date of the 
member's separation or release from service, rather than 120 
days after the member's SGLI terminates. Under current law, 
section 1968(a)(1)(A) of title 38, provides for a 120-day 
period after separation from active duty service or the 
Reserves for a member to receive premium-free SGLI coverage and 
elect to convert the coverage to VGLI. However, under section 
1968(a)(5)(B)(ii) a dependent retains coverage for 120 days 
after that, for a total of 240 days after the member's 
separation from service, twice the period of coverage for most 
policyholders. This provision would correct the inequity 
between members and dependents.
    Subsection 503(c) would clarify that VA has the authority 
to set premiums for SGLI coverage for the spouses of Ready 
Reservists based on the spouse's age. This provision would 
correct an inconsistency between section 1969(g)(1)(A) of title 
38, which does not require identical premiums for coverage of 
active duty members' spouses, and section 1969(g)(1)(B), which 
may be read to imply that identical premiums for coverage of 
Ready Reservists' spouses are required.
    Subsection 503(d) would clarify that any person guilty of 
mutiny, treason, spying, or desertion, or who, because of 
conscientious objections, refuses to perform service in the 
Armed Forces or refuses to wear the uniform of the Armed 
Forces, forfeits all rights to VGLI. Under section 1973 of 
title 38, forfeiture of SGLI is required, but not VGLI. The 
inconsistency between these two insurance programs was 
highlighted when it was discovered that former Federal Bureau 
of Investigation Agent Robert Hannsen, who was charged, and 
later plead guilty, to committing espionage by providing highly 
classified national security information to Russia and the 
former Soviet Union, was a VGLI policyholder. Under section 
503(d) of the Committee bill, Hannsen's VGLI would remain in 
force and be payable upon his death, however offenses occurring 
after passage of this provision would result in forfeiture.

                        TITLE VI--OTHER MATTERS

Sec. 601. Authority for suspension or termination of claims of the 
        United States against individuals who died while serving on 
        active duty in the Armed Forces.

    Section 601 of the Committee bill, which is derived from S. 
2550, would authorize VA to suspend or terminate the collection 
of debts owed to it by individuals who die while serving on 
active duty in the Armed Forces.
    Background. In January 2008, VA disclosed that, in an 
attempt to collect debts owed to VA, the Department had 
contacted the estates of twenty-two servicemembers who died 
while serving in either Operation Enduring Freedom or Operation 
Iraqi Freedom. Under the relevant law in effect at that time, 
section 5302 of title 38, any veteran or active duty 
servicemember indebted to VA due to the overpayment or 
erroneous payment of benefits was able to apply for a waiver 
from VA so as to remove the obligation to pay the debt. 
However, under that law, VA was required to notify the 
beneficiary, or his or her estate if the beneficiary was 
deceased, when an outstanding debt arose and to provide 
information on the right to apply for a waiver. This left VA in 
the position of having to compound the grief of bereaved 
families by burdening them with a debt waiver process, despite 
the fact that the circumstances would likely warrant a waiver.
    In an attempt to address this situation, S. 2550 was 
introduced and testimony was taken on the bill at the 
Committee's May 7, 2008, legislative hearing. Subsequent to 
that hearing but before the Committee met to act on pending 
legislation, a provision derived from that bill was reported by 
the Senate Appropriations Committee and included in the 
Supplemental Appropriations Act, 2008, Public Law 110-252.
    The provision in the appropriations measure added a new 
section 5302A to title 38, which prohibits VA from collecting 
all or any part of a debt owed to VA by a servicemember or 
veteran who dies as the result of an injury incurred or 
aggravated in the line of duty while serving in a theater of 
combat operations in a war or in combat against a hostile force 
during a period of hostilities after September 11, 2001. The 
Secretary is required to determine that termination of 
collection is in the best interest of the United States
    This new provision provides relief only to the families of 
certain indebted servicemembers who die while serving on active 
duty. By its terms, new section 5302A only exempts the estates 
of individuals who die as the result of an injury incurred or 
aggravated in the line of duty while serving in a theater of 
combat operations in a war or in combat against a hostile force 
during a period of hostilities from the burden of filing an 
application for waiver of the debt.
    The Committee believes this new provision is too narrowly 
constructed to provide adequate relief to all individuals and 
families who should be protected from unnecessary efforts by VA 
to collect a debt. Because it is limited solely to indebted 
individuals who die as the result of injuries incurred while 
serving in combat with a hostile force, it does not include 
individuals who die in training exercises or while otherwise 
preparing to serve in a combat zone. This new provision gives 
VA no discretion to consider exceptional cases that fall 
outside of its limited parameters. In certain cases, waiver of 
VA debts before notification of the estate may be in the best 
interest of VA but the new provision does not accord the 
Department the legal authority to avoid the notification and 
waiver application process.
    Committee Bill. Section 601 of the Committee bill would 
amend section 3711 of title 31, United States Code, so as to 
grant VA discretionary authority to suspend or terminate the 
collection of debts owed to it by individuals who die while 
serving on active duty in the Armed Forces. The authority to 
suspend collection would cover all individuals who die while 
serving on active duty as a member of the Army, Navy, Air 
Force, Marine Corps, or Coast Guard during a period when the 
Coast Guard is operating as a service in the Navy.
    Section 3711 of title 31 provides overall guidance with 
respect to requirements for collection and compromise by each 
executive, judicial or legislative agency of claims owed to the 
United States Government. Public Law 104-106, the National 
Defense Authorization Act for Fiscal Year 1996, amended section 
3711 so as to exempt the Secretary of Defense from that 
section's requirements relating to the initiation and pursuit 
of collection action with respect to the estates of indebted 
servicemembers who die while serving on active duty. Public Law 
104-201, the National Defense Authorization Act for Fiscal Year 
1997, granted the same authority to the Secretary of 
Transportation--now the Secretary of Homeland Security--with 
respect to individuals who die while serving on active duty as 
a member of the Coast Guard. The Committee bill would put VA on 
equal footing with these two Departments, allowing VA to 
forgive debts owed to the Department by individuals who die 
while serving on active duty when the Secretary determines it 
is appropriate under the circumstances.
    The Committee bill also includes a freestanding provision 
that would permit VA to provide an equitable refund to any 
estate from which it collected a debt that it otherwise would 
have waived had this provision been in effect at the time. VA 
would have the discretion to determine in which cases, if any, 
the use of this authority would be appropriate.

Sec. 602. Memorial headstones and markers for deceased remarried 
        surviving spouses of veterans.

    Section 602 of the Committee bill, which is derived from S. 
2984, would eliminate the disparity that exists between 
eligibility for burial and eligibility for a memorial headstone 
or marker for deceased remarried surviving spouses of veterans 
whose remains are unavailable.
    Background. Section 2306(b)(4)(B) of title 38, United 
States Code, authorizes VA to furnish an appropriate memorial 
headstone or marker to commemorate eligible individuals whose 
remains are unavailable. Individuals currently eligible for 
memorial headstones or markers include a veteran's surviving 
spouse, which is defined to include ``an unremarried surviving 
spouse whose subsequent remarriage was terminated by death or 
divorce.'' Thus, a surviving spouse who remarried after the 
veteran's death is not eligible for a memorial headstone or 
marker unless the remarriage was terminated by death or divorce 
before the surviving spouse died. However, a surviving spouse 
who remarried after the veteran's death is eligible for burial 
in a VA national cemetery without regard to whether any 
subsequent remarriage ended.
    Committee Bill. Section 602 of the Committee bill would 
eliminate the disparity between eligibility for burial and 
eligibility for a memorial headstone or marker. It would extend 
eligibility for memorial headstones or markers to a deceased 
veteran's remarried surviving spouse, without regard to whether 
any subsequent remarriage ended.

Sec. 603. Three-year extension of authority to carry out income 
        verification.

    Section 603 of the Committee bill would extend for three 
years, until September 30, 2011, VA's authority to obtain 
information from the Internal Revenue Service (IRS) or the 
Social Security Administration (SSA) for income verification 
purposes for needs-based benefits.
    Background. Under current law, certain benefits programs 
administered by VA, including pensions for wartime veterans and 
compensation for Individual Unemployability are available only 
to beneficiaries whose annual income is below a certain level. 
VA must have access to verifiable income information in order 
to ensure that those receiving benefits under its income-based 
programs are not earning a greater annual income than the law 
permits.
    Section 6103(l)(7)(D)(viii) of title 26, United States 
Code, authorizes the release of certain income information by 
the IRS or the SSA to VA for the purposes of verifying the 
incomes of applicants for VA needs-based benefits. Section 
5317(g) of title 38, United States Code, provides VA with 
temporary authority to obtain and use this information. Under 
current law, this authority expires on September 30, 2008.
    Committee Bill. Section 603 of the Committee bill would 
amend subsection 5317(g) of title 38 to extend VA's authority 
to obtain income information from the IRS or the SSA until 
September 30, 2011.

Sec. 604. Three-year extension of temporary authority for the 
        performance of medical disability examinations by contract 
        physicians.

    Section 604 of the Committee bill, which is derived from S. 
2984, would extend VA's temporary authority to contract for 
medical disability examinations using appropriated funds for 
three years, until December 31, 2012.
    Background. In order to determine the type and severity of 
disabilities of veterans filing for VA compensation or pension 
benefits, VA often requires thorough medical disability 
examinations. Because these examinations form the basis of 
disability ratings, their accurate and timely completion is 
essential. In recent years, the demand for medical disability 
examinations has increased beyond the number of requests that 
the current in-house system was designed to accommodate. This 
rise in demand is due to an increase in the complexity of 
disability claims, an increase in the number of disabilities 
claimed by veterans, and changes in eligibility requirements 
for disability benefits.
    In 1996, in Public Law 104-275, the Veterans' Benefits 
Improvements Act of 1996, VA was authorized to carry out a 
pilot program of contract disability examinations through ten 
VA regional offices using amounts available for payment of 
compensation and pensions. During the initial pilot program, 
one contractor--QTC Management, Inc.--performed all contract 
examinations at the ten selected regional offices. The pilot 
was deemed a success, with general satisfaction reported from 
all stakeholders. According to the VA Claims Processing Task 
Force's 2001 report to the Secretary of Veterans Affairs, 
``[t]he quality of QTC Management examinations has been 
reported to exceed a 99 percent adequacy rate, and the Task 
Force found high approval from Regional Office employees. 
Reported medical examination timeliness was within contract 
compliance with positive feedback in customer service 
surveys.''
    In 2003, in Public Law 108-183, the Veterans Benefits Act 
of 2003, VA was temporarily authorized to contract for 
disability examinations using appropriated funds. This 
authority expires on December 31, 2009. High demand for 
compensation and pension examinations continues and VA reports 
continued satisfaction with the contracted exams, so the 
Committee views extension of the program to be warranted.
    Committee Bill. Section 604 of the Committee bill would 
extend VA's authority, through December 31, 2012, to use 
appropriated funds for the purpose of contracting with non-VA 
providers to conduct disability examinations. The examinations 
would be conducted pursuant to contracts entered into and 
administered by the Under Secretary for Benefits. The Committee 
notes that the authority to contract for disability 
examinations through the regional offices, using amounts 
available for payment of compensation and pension, is an 
ongoing authority with no time limitation.

                      Committee Bill Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee, based on 
information supplied by the CBO, estimates that enactment of 
the Committee bill would, relative to current law, increase 
discretionary spending by $9 million in 2009 and by $169 
million over the 2009-2013 period, assuming appropriation of 
the necessary amounts. The Committee bill would decrease direct 
spending by $7 million in 2009, and by $29 million over the 
2009-2013. According to CBO, S. 3023 would impose an 
intergovernmental mandate as defined in the Unfunded Mandates 
Reform Act (UMRA) by placing new requirements on state 
governments, including public institutions of higher education 
that operate as lenders of student loans. CBO estimates that 
the aggregate costs of the mandate would be well below the 
threshold established in UMRA.
    The cost estimate provided by CBO, setting forth a detailed 
breakdown of costs, follows:

                                Congressional Budget Office
                                     Washington, DC, July 23, 2008.
Hon. Daniel K. Akaka
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 3023, the Veterans' 
Benefits Improvement Act of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                           Peter R. Orszag,
                                                          Director.
    Enclosure

S. 3023--Veterans' Benefits Improvement Act of 2008
    Summary: S. 3023 would affect several veterans' programs, 
including housing, pension, burial, life insurance, and 
readjustment benefits. CBO estimates that implementing this 
legislation would incur discretionary costs of $9 million in 
2009 and $169 million over the 2009-2013 period, assuming 
appropriation of the necessary amounts.
    The bill also contains provisions that would both increase 
and decrease direct spending for veterans benefits. On balance, 
CBO estimates that enacting S. 3023 would decrease direct 
spending by $7 million in 2009, $29 million over the 2009-2013 
period, and $18 million over the 2009-2018 period. Enacting the 
bill would have no effect on federal revenues.
    S. 3023 would impose an intergovernmental mandate as 
defined in the Unfunded Mandates Reform Act (UMRA) by placing 
new requirements on state governments, including public 
institutions of higher education that operate as lenders of 
student loans. CBO estimates that the aggregate costs of the 
mandate would be well below the threshold established in UMRA 
($68 million in 2008, adjusted annually for inflation).
    Public institutions of higher education also would incur 
costs to implement a provision in the bill that would require 
those institutions, as participants in federal student loan 
programs, to refund tuition and fees to servicemembers if they 
must leave school because of military service commitments. 
However, those costs, estimated to total at least $40 million 
in 2008, would result from conditions of a voluntary federal 
program, not intergovernmental mandates.
    Section 311 of S. 3023 contains private-sector mandates as 
defined in UMRA. CBO estimates that the annual cost of those 
mandates would not exceed the threshold established in UMRA 
($136 million for private-sector mandates in 2008, adjusted 
annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 3023 is summarized in Table 1. The costs 
of this legislation fall mostly within budget function 700 
(veterans benefits and services).

           Table 1.--Estimated Budgetary Impact of S. 3023, Veterans' Benefits Improvement Act of 2008
----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                    ------------------------------------------------------------
                                                       2009      2010      2011      2012      2013    2009-2013
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level......................         9        39        51        53        17        169
Estimated Outlays..................................         9        39        51        53        17        169

                                           CHANGES IN DIRECT SPENDINGa

Estimated Budget Authority.........................        -7       -10       -13         1        -1        -29
Estimated Outlays..................................        -7       -10       -13         1        -1        -29
----------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding.
aIn addition to the direct spending effects shown here, enacting S. 3023 would affect direct spending after 2013
  (see Table 3). The estimated net reduction in direct spending sums to $18 million over the 2009-2018 period.

    Basis of estimate: For this estimate, CBO assumes the 
legislation will be enacted near the beginning of fiscal year 
2009, that the estimated authorization amounts will be 
appropriated near the start of each fiscal year, and that 
outlays will follow historical spending patterns for existing 
or similar programs.
Spending subject to appropriation
    S. 3023 contains several provisions that would increase 
spending subject to appropriation. CBO estimates that 
implementing the bill would result in discretionary outlays of 
$9 million in 2009 and $169 million over the 2009-2013 period, 
subject to appropriation of the necessary amounts (see Table 
2).

 Table 2.--Estimated Changes to Discretionary Spending Under S. 3023, Veterans' Benefits Improvement Act of 2008
----------------------------------------------------------------------------------------------------------------
                                                               By fiscal year, in millions of dollars--
                                                    ------------------------------------------------------------
                                                       2009      2010      2011      2012      2013    2009-2013
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Extension of Authority for Medical Exams by
 Contract Physicians
    Estimated Authorization Level..................         0        35        47        49        13        144
    Estimated Outlays..............................         0        35        47        49        13        144
Human Resources Training
    Estimated Authorization Level..................         5         2         2         2         2         13
    Estimated Outlays..............................         5         2         2         2         2         13
Active Judges on the Court of Appeals for Veterans
 Claims
    Estimated Authorization Level..................         2         2         2         2         2         10
    Estimated Outlays..............................         2         2         2         2         2         10
Reports
    Estimated Authorization Level..................         2         *         *         *         *          2
    Estimated Outlays..............................         2         *         *         *         *          2
                                                    ------------------------------------------------------------
      Total Changes
        Estimated Authorization Level..............         9        39        51        53        17        169
        Estimated Outlays..........................         9        39        51        53        17        169
----------------------------------------------------------------------------------------------------------------
Note: * = less than $500,000.

    Extension of Authority for Medical Exams by Contract 
Physicians. Section 604 would extend the temporary authority 
for the performance of medical examinations by contract 
physicians through December 31, 2012. Under current law, that 
authority expires on December 31, 2009. Although that authority 
has been in existence for several years, the Department of 
Veterans Affairs (VA) first used it in 2008. Based on 
information from VA, CBO estimates that, in 2009, VA will use 
the current authority to have about 37,000 exams completed by 
contract physicians at a cost of about $900 per exam. CBO 
further estimates that if the authority is extended beyond 
2009, VA would use contract physicians for about 47,000 exams a 
year. Taking inflation into account, CBO estimates that 
implementing section 604 would cost $144 million over the 2010-
2013 period.
    Human Resources Training. Section 304 would require every 
federal agency to provide training to human resources personnel 
on the employment and reemployment rights under the Uniformed 
Services Employment and Reemployment Rights Act (USERRA) of 
federal employees who leave their positions to undertake 
military service. The training would be developed and provided 
in consultation with the Office of Personnel Management (OPM). 
Using information provided by OPM and the Department of Labor 
(DOL), CBO estimates that there are over 20,000 human resources 
professionals in the federal government. USERRA training, 
although currently available, is not required. CBO expects that 
most of the training would be Internet-based, with some 
individual conferences in large agencies or cities. Based on 
those assumptions and using information provided by OPM, DOL, 
and various human resource professionals, CBO estimates that 
implementing mandatory training for federal employees would 
cost $5 million in 2009 and $2 million annually in subsequent 
years.
    Active Judges on the Court of Appeals for Veterans Claims 
(CAVC). Section 401 would increase the number of active judges 
on the CAVC from seven to nine. According to the CAVC, in 2007, 
the average annual cost for a judge's chamber--which includes 
salaries of the judges and their staff, infrastructure, and 
incidentals--was about $1 million. Therefore, CBO estimates 
that implementing section 401 would cost $10 million over the 
2009-2013 period.
    Reports. S. 3023 would require VA to complete a series of 
reports and studies for the Congress on varying topics and 
issues. Those issues include: VA's progress in addressing 
geographic variance in veterans' disability payments; the 
appropriate levels of disability compensation for service-
connected disabilities and of long-term transition payments for 
veterans undergoing vocational rehabilitation; the effect of 
mortgage foreclosures on veterans; the employment needs of 
Native American veterans living on tribal lands; ways to assist 
and encourage veterans to complete vocational rehabilitation; 
and the feasibility of including acute and severe Post 
Traumatic Stress Disorder under the traumatic injury protection 
insurance covered by Servicemembers Group Life Insurance (SGLI) 
program. Based on information from VA, CBO estimates that 
completing those reports would cost about $2 million over the 
2009-2013 period.
Direct Spending
    S. 3023 contains provisions that would both increase and 
decrease direct spending. CBO estimates that, on net, enacting 
S. 3023 would decrease direct spending by $7 million in 2009, 
by $29 million over the 2009-2013 period, and by $18 million 
over the 2009-2018 period (see Table 3).

                        Table 3.--Estimated Changes to Direct Spending Under S. 3023,  Veterans' Benefits Improvement Act of 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   By fiscal year, outlays in millions of dollarsa--
                                                             -------------------------------------------------------------------------------------------
                                                              2009   2010    2011   2012   2013   2014   2015   2016   2017   2018  2009-2013  2009-2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDINGb

Extension of Income Verification............................    -2      -4     -6     -5     -6     -6     -5     -5     -5     -5      -24        -50
Guarantees of Mortgage Refinancing Loans....................     *       *      *      3      3      3      3      5      4      5        6         26
Guarantees of Adjustable-Rate Mortgages.....................    -4      -4     -4     -1      0      0      0      1      0      1      -13        -11
Temporary Increase in the Maximum Loan Guarantee............    -1      -3     -4      2      0      1      0      1      0      1       -6         -3
Educational Assistance for Spouses of Severely Disabled          0       1      1      2      2      2      2      1      1      1        6         13
 Veterans...................................................
Certification Requirement for Self-Employment On-the-Job         *       *      *      *      *      1      1      1      1      1        2          7
 Training...................................................
                                                             -------------------------------------------------------------------------------------------
    Total Changes...........................................    -7     -10     13      1     -1      1      1      4      1      4      -29        -18
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * = less than $500,000.
aAnnual changes in budget authority would be equal to the estimated changes in outlays.
bComponents may not sum to totals because of rounding.

    Extension of Income Verification. Section 603 would extend 
authorities in current law that allow VA to acquire information 
on income reported to the Internal Revenue Service (IRS) to 
verify income reported by recipients of VA pension benefits. 
The authorization allowing the IRS to provide income 
information to VA was made permanent by Public Law 110-245, but 
the authorization allowing VA to acquire the information is 
scheduled to expire on September 30, 2008. Section 603 would 
extend VA's authority to acquire IRS data through September 30, 
2011. According to VA, the department saved, on average, 
approximately $5 million each year in new pension benefit 
payments by verifying veterans' incomes over the 2001-2007 
period using the IRS data.
    In 2007, the President signed into law Public Law 110-157, 
which includes a provision allowing VA to use the National 
Directory of New Hires (NDNH) database as an alternate source 
of income-verification data. That authority is set to expire on 
September 30, 2011. The NDNH database, though using more up-to-
date information, does not include a large segment of the 
workforce that might self-report work income. The IRS data 
reflect information on self-reported income.
    If VA were to use both systems over the three-year period 
from 2009 through 2011, CBO estimates that the incremental 
savings from utilizing the IRS data for income verification 
would be about $2 million in new savings each year. Those 
savings would compound in subsequent years (rising to about $4 
million in year two, and so on), with cost-of-living and 
mortality adjustments, until 2011 when savings would decline 
after the authority to use IRS data expires. CBO estimates that 
section 603 would reduce direct spending by $50 million over 
the 2009-2018 period.
    Guarantees of Mortgage Refinancing Loans. Section 202 would 
authorize VA to provide the same maximum loan guarantee for 
veterans refinancing a non-VA loan as is provided for loans 
that are guaranteed by VA. Under current law, VA can provide a 
guarantee of only $36,000 for refinancing non-VA loans compared 
with a guarantee of $104,250 for refinancing VA loans. The 
section also would decrease the equity requirement for such 
refinancing loans from 10 percent of the loan amount to 5 
percent.
    Based on information from VA, CBO estimates that those 
changes would result in an additional 1,000 loans in 2009, 
increasing to an additional 2,000 loans a year in 2012 and 
subsequent years. CBO and VA estimate that the VA loan 
guarantees currently have a negative subsidy rate reflecting 
relatively low default rates and the collection of up-front 
fees. However, certain loan fees will be reduced (under current 
law) on October 11, 2011, resulting in a positive subsidy rate 
after that date. Because most of the additional loans would 
occur after the loan fees are reduced, the additional loans 
would increase direct spending by $26 million over the 2009-
2018 period, CBO estimates.
    Guarantees of Adjustable-Rate Mortgages. Section 203 would 
extend, through 2012, VA's authority to guarantee adjustable-
rate mortgages and hybrid adjustable rate-mortgages. 
Adjustable-rate mortgages have interest rates that may change 
annually. Hybrid adjustable-rate mortgages have a fixed 
interest rate for an initial period of a few years, after which 
the rate may be adjusted annually. The authority to provide 
guarantees for such loans expires at the end of fiscal year 
2008.
    Based on data from VA, CBO estimates that extending that 
authority would result in an additional 1,400 loans a year. 
Because the VA loan guarantee program has a negative subsidy 
rate during the period covered by the authority in section 203, 
those additional loans would increase receipts by $13 million 
over the 2009-2012 period. CBO expects that some of those 
additional loans would become delinquent and go to foreclosure. 
When a guaranteed loan goes into foreclosure, VA often acquires 
the property and issues a new direct loan (called a vendee 
loan) when the property is sold. VA sells most vendee loans on 
the secondary-mortgage market and guarantees their timely 
repayment. Those vendee loans carry a positive subsidy, 
reflecting their potential defaults. Thus, the increased 
receipts for the new VA guarantees of adjustable-rate mortgages 
would be slightly offset by an additional $2 million in subsidy 
costs related to vendee loans. In total, extending the 
authority to guarantee adjustable-rate mortgages would reduce 
direct spending by $11 million over the 2008-2018 period.
    Temporary Increase in the Maximum Loan Guarantee. VA can 
provide lenders a guarantee of up to 25 percent of the value of 
home-acquisition loans made to veterans. Under current law, the 
maximum loan amount for which VA can provide a 25 percent 
guarantee is the Freddie Mac conforming loan limit of $417,000. 
Section 201 would increase the maximum amount of the loan for 
which a veteran could receive a 25 percent loan guarantee to 
125 percent of the area median home price, not to exceed 175 
percent of the current Freddie Mac limit, or $729,750. The 
authority to increase the guarantee would expire on December 
31, 2011.
    Based on nationwide mortgage data and information from the 
VA, CBO estimates that a total of 4,700 additional guaranteed 
loans would be made for an average loan amount of 10 percent 
more than the amount of the current maximum guarantee. CBO and 
VA estimate that the VA loan guarantees currently have a 
negative subsidy rate of about 0.4 percent. Because of that 
negative subsidy rate, CBO estimates that the added loans and 
higher loan amounts would increase receipts by $8 million 
during fiscal years 2009 through 2011. However, certain loan 
fees will be reduced on October 1, 2011, resulting in higher 
subsidy rates. The additional loan guarantees that CBO 
estimates would occur in the final quarter before the authority 
expires would thus increase subsidy outlays by $2 million.
    CBO expects that some of those additional loans would 
become delinquent and go to foreclosure. As noted above, when a 
guaranteed loan goes into foreclosure, VA often acquires the 
property and issues a vendee loan when the property is sold. 
CBO estimates that the subsidy cost for those vendee loans in 
subsequent years would total $3 million over the 2014-2018 
period.
    Taking into account the initial savings estimated for new 
loan guarantees and the expected costs for vendee loans, CBO 
estimates that this provision would reduce direct spending by 
$6 million over the 2009-2013 period and by $3 million over the 
2009-2018 period.
    Educational Assistance for Spouses of Severely Disabled 
Veterans. Section 312 would allow spouses of veterans who are 
permanently and totally disabled to use education assistance 
over a 20-year period. Under current law, eligible spouses have 
a 10-year window in which to use their benefits.
    CBO estimates that nearly 6,000 spouses would be eligible 
for the extended entitlement period during some or all of the 
next 10 years. The Department of Defense reports that more than 
9,000 veterans have separated from the armed forces with a 
permanent, total disability over the last 20 years. Of those 
9,000 veterans, about 65 percent have spouses or children. CBO 
anticipates that more than 2,000 spouses will be eligible for 
the benefit each year and that 10 percent would use the benefit 
annually. CBO expects that the approximately 200 users each 
year would receive an average benefit that would equal $5,200 
in 2009 and would grow by an annual cost-of-living increase 
thereafter. Therefore, CBO estimates that, over the 2009-2018 
period, enacting section 312 would increase direct spending by 
$13 million.
    Certification Requirement for Self-Employment On-the-Job 
Training. Under section 316, veterans participating in on-the-
job training for self-employment or operation of a franchise 
would no longer be required to provide VA certification that 
they are being paid for the training and that the training will 
lead to employment. Because self-employment and franchise 
training are typically unpaid, veterans pursuing those goals 
who are otherwise eligible to receive payments for training are 
effectively excluded due to the existing requirement that they 
certify that they are being paid for the training.
    CBO estimates that most of the veterans receiving on-the-
job training benefits under section 316 would be franchise 
owners. The International Franchise Association runs a well-
publicized program that enables veterans to purchase franchises 
at discounted rates. Based on information from the association 
and other national franchise information, CBO estimates that 
under section 316 about 400 veterans annually would purchase 
franchises and qualify for on-the-job training benefits during 
their training period. For a typical training period of five 
weeks, veterans would receive around $1,600. In total, CBO 
estimates that enacting section 316 would increase direct 
spending by $7 million over the 2009-2018 period.
    Automatic Cost-of-Living Adjustment (COLA). Section 103 
would provide a permanent annual cost-of-living adjustment to 
the amounts paid to veterans for disability compensation and to 
their survivors for dependency and indemnity compensation. The 
COLA would equal the cost-of-living adjustment payable to 
Social Security recipients. The increase would take effect on 
December 1 of each year, and the results of the adjustment 
would be rounded to the next lower dollar.
    The COLA that would be authorized by this bill is assumed 
in CBO's baseline, pursuant to section 257 of the Balanced 
Budget and Emergency Deficit Control Act, and savings from 
rounding it down were achieved by the Balanced Budget Act of 
1997 (Public Law 105-33) and extended to 2013 by the Veterans 
Benefits Act of 2003 (Public Law 108-183). Because the COLA is 
assumed in CBO's baseline, this provision would have no 
budgetary effect relative to that baseline. CBO estimates that 
the COLA for 2010, which would take effect in the second 
quarter of fiscal year 2010, would equal $1.2 billion. The 
full-year cost of that increase would equal $1.6 billion. 
Similar increases are estimated in subsequent years.
    Other provisions. The following provisions would have an 
insignificant impact on federal direct spending:

     Section 204 would allow severely disabled members 
of the armed forces to receive certain housing grants from VA 
before they leave the service. CBO expects this provision would 
affect very few individuals and, in most cases, would serve 
only to accelerate the benefit by several months.
     Section 301 would extend the 24-month limitation 
on receiving Independent Living assistance for severely 
disabled veterans of the war on terrorism. The Independent 
Living program provides services to maximize independence in 
daily living for veterans who are too severely disabled to 
pursue employment. Based on current program usage rates from 
VA, CBO estimates that fewer than 20 veterans will use more 
than 24 months of Independent Living services.
     Section 602 would grant eligibility for VA-
provided memorial headstones to certain deceased surviving 
spouses of veterans. Based on information from VA, CBO expects 
that there would be very few requests for VA-memorial 
headstones from the survivors of those surviving spouses.
Estimated Impact on State, Local, and Tribal Governments
    Intergovernmental Mandates. Currently, fewer than 20 public 
institutions of higher education make or originate Federal 
Stafford Loans to graduate students under the Federal Family 
Education Loan program. S. 3023 would prohibit those 
institutions from applying an annual interest rate higher than 
6 percent on student loans made to servicemembers during their 
period of military service. The duty to comply with the 
interest rate cap would be an intergovernmental mandate as 
defined in UMRA. Because Graduate Stafford Loans (both 
subsidized and unsubsidized) currently have a fixed interest 
rate of 6.8 percent through 2013 and because the provision 
would apply to a small number of individuals attending fewer 
than 20 public institutions of higher education, CBO estimates 
that the mandate costs to governmental entities, in the form of 
lost interest revenue due to the cap, would be small and would 
not exceed the threshold in UMRA ($68 million in 2008, adjusted 
annually for inflation).
    Other Impacts. Public institutions of higher education that 
participate in federal financial aid programs also would be 
required to extend educational benefits to servicemembers 
because of their military service. However, those requirements 
would not be intergovernmental mandates as defined in UMRA, but 
rather conditions of participating in a voluntary federal 
program.
    Public institutions of higher education would be required 
to refund tuition and fees paid by servicemembers who had to 
leave school because of military service commitments. In 
addition, those institutions would be required to provide 
servicemembers who discontinued an educational program because 
of military service an opportunity to reenroll with the same 
educational and academic status held prior to their military 
service. Information from state and higher education officials 
indicate that public institutions of higher education in 
approximately half the states already extend similar benefits 
to servicemembers either because of state law or institutional 
policies. Public institutions that do not extend these benefits 
would be required to do so because of their participation in 
federal financial aid programs. CBO estimates that those 
institutions would incur costs of at least $40 million in 2008. 
Costs could be higher because enrollment data for all 
servicemembers attending public institutions of higher 
education, including active-duty members, were not available 
for this analysis. The CBO estimate includes only costs 
associated with members in the reserves who might discontinue 
their education because of military service.
Estimated Impact on the Private Sector
    The bill contains private-sector mandates as defined in 
UMRA. Section 311 would require institutions of higher 
education to refund tuition and fees paid by students called to 
military service, for the portion of the education program for 
which such servicemembers did not receive academic credit. 
Section 311 also would limit the interest rate on student loans 
to 6 percent per year for servicemembers during their period of 
military service.
    CBO expects that the number of servicemembers called to 
military service while enrolled at an institution of higher 
education would be small. Based on estimates of total student 
loan debt for servicemembers entering the military, CBO also 
expects that the annual costs to lenders resulting from a 
reduction in the maximum allowable interest rate for those 
loans also would be small. Thus, CBO estimates that the total 
cost of the mandates would be below the annual threshold 
established in UMRA ($136 million for private-sector mandates 
in 2008, adjusted annually for inflation).
    Previous CBO estimates: On July 17, 2008, CBO transmitted a 
cost estimate for S. 2617, the Veterans' Compensation Cost-of-
Living Adjustment Act of 2008, as ordered reported by the 
Senate Committee on Veterans' Affairs on June 26, 2008. On May 
12, 2008, CBO transmitted a cost estimate for H.R. 5826, also 
titled the Veterans' Compensation Cost-of-Living Adjustment Act 
of 2008, as ordered reported by the House Committee on 
Veterans' Affairs on April 30, 2008. Section 103 of S. 3023 is 
similar to both S. 2617 and H.R. 5826. However, section 103 
would automatically increase benefit levels for disability 
compensation and dependency and indemnity compensation each 
year by the same COLA that Social Security recipients would 
receive. S. 2617 and H.R. 5826 would only make the adjustment 
for 2009. Because the COLA is assumed in CBO's baseline, those 
proposals would have no budgetary effect relative to that 
baseline.
    Estimate prepared by: Federal Costs: Federal Courts, 
Benefits--Dwayne M. Wright (226-2840), Housing--DavidNewman 
(226-2840), Education and Vocational Rehabilitation--Camille 
Woodland (226-2840), Government Training--Matthew Pickford 
(226-2860); Impact on State, Local, and Tribal Governments: 
Lisa Ramirez-Branum (225-3220); Impact on the Private Sector: 
Daniel Frisk (226-2900).
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                      Regulatory Impact Statement

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee on Veterans' 
Affairs has made an evaluation of the regulatory impact that 
would be incurred in carrying out the Committee bill. The 
Committee finds that the Committee bill would not entail any 
regulation of individuals or businesses or result in any impact 
on the personal privacy of any individuals and that the 
paperwork resulting from enactment would be minimal.

                 Tabulation of Votes Cast in Committee

    In compliance with paragraph 7 of rule XXVI of the Standing 
Rules of the Senate, the following is a tabulation of votes 
cast in person or by proxy by members of the Committee on 
Veterans' Affairs at its June 26, 2008, meeting. The Committee, 
by voice vote, ordered S. 3023 reported favorably to the 
Senate, subject to amendment.
    On that date, the Committee considered two amendments 
offered by Senator Burr regarding the recall of retired judges 
and an annual reporting requirement on the workload of the 
United States Court of Appeal for Veterans Claims. The 
amendments were accepted by voice vote.
    The Committee then considered an amendment offered by 
Senator Burr regarding a contingent increase in the number of 
judges on the United States Court of Appeals for Veterans 
Claims. The amendment was defeated by a 7 to 7 vote.

----------------------------------------------------------------------------------------------------------------
                Yeas                                 Senator                                 Nays
----------------------------------------------------------------------------------------------------------------
                                     Mr. Rockefeller                                                          X
                                     Ms. Murray                                                               X
                                     Mr. Obama
                                     Mr. Sanders                                                              X
                                     Mr. Brown                                                                X
                                     Mr. Webb                                                                 X
                                     Mr. Tester                                                               X
                                 X   Mr. Burr
                      X (by proxy)   Mr. Specter
                                 X   Mr. Craig
                                 X   Mr. Isakson
                      X (by proxy)   Mr. Graham
                      X (by proxy)   Ms. Hutchison
                                 X   Mr. Wicker
                                     Mr. Chairman                                                             X
----------------------------------------------------------------------------------------------------------------
                                 7   TALLY                                                                    7
----------------------------------------------------------------------------------------------------------------

    The Committee then considered an amendment offered by 
Senator Burr regarding temporary expansion in the number of 
judges on the United States Court of Appeals for Veterans 
Claims. The amendment was defeated by a 7 to 7 vote.

----------------------------------------------------------------------------------------------------------------
                Yeas                                 Senator                                 Nays
----------------------------------------------------------------------------------------------------------------
                                     Mr. Rockefeller                                                          X
                                     Ms. Murray                                                               X
                                     Mr. Obama
                                     Mr. Sanders                                                              X
                                     Mr. Brown                                                                X
                                     Mr. Webb                                                      X (by proxy)
                                     Mr. Tester                                                               X
                                 X   Mr. Burr
                      X (by proxy)   Mr. Specter
                                 X   Mr. Craig
                                 X   Mr. Isakson
                      X (by proxy)   Mr. Graham
                      X (by proxy)   Ms. Hutchison
                                 X   Mr. Wicker
                                     Mr. Chairman                                                             X
----------------------------------------------------------------------------------------------------------------
                                 7   TALLY                                                                    7
----------------------------------------------------------------------------------------------------------------

    The Committee then considered an amendment offered by 
Senator Burr regarding the retirement rules applicable to any 
judge appointed to fill one of the additional judicial 
positions on the United States Court of Appeals for Veterans 
Claims proposed by section 401 of the Committee bill. The 
amendment was defeated by a 7 to 7 vote.

----------------------------------------------------------------------------------------------------------------
                Yeas                                 Senator                                 Nays
----------------------------------------------------------------------------------------------------------------
                                     Mr. Rockefeller                                                          X
                                     Ms. Murray                                                               X
                                     Mr. Obama
                                     Mr. Sanders                                                              X
                                     Mr. Brown                                                                X
                                     Mr. Webb                                                                 X
                                     Mr. Tester                                                               X
                                 X   Mr. Burr
                      X (by proxy)   Mr. Specter
                                 X   Mr. Craig
                                 X   Mr. Isakson
                                 X   Mr. Graham
                      X (by proxy)   Ms. Hutchison
                                 X   Mr. Wicker
                                     Mr. Chairman                                                             X
----------------------------------------------------------------------------------------------------------------
                                 7   TALLY                                                                    7
----------------------------------------------------------------------------------------------------------------

                             Agency Report

    On May 7, 2008, Keith Pedigo, Associate Deputy Under 
Secretary for Policy and Program Management of the Department 
of Veterans Affairs, appeared before the Committee and 
submitted testimony of the Department's views of the bills. 
Excerpts from this statement are reprinted below:

STATEMENT OF KEITH PEDIGO, ASSOCIATE DEPUTY UNDER SECRETARY FOR POLICY 
      AND PROGRAM MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS

    Mr. Chairman and members of the Committee, good morning. I 
am pleased to be here today to provide the Department of 
Veterans Affairs' (VA) views on pending benefits legislation. I 
will not be able to address a few of the bills on today's 
agenda because VA received them in insufficient time to 
coordinate the Administration's position and cost estimates, 
but we will provide that information in writing for the record.

           *       *       *       *       *       *       *

                                S. 1718

    S. 1718, the ``Veterans Education Tuition Support Act,'' 
would amend the Servicemembers Civil Relief Act to provide 
servicemembers reimbursement of tuition for programs of 
education interrupted by military service, deferment of student 
loans, and reduced interest rates for servicemembers during 
periods of military service. Because that Act is implemented by 
DOD, we defer to that department regarding the merits of S. 
1718.

                                S. 2090

    S. 2090 would require the U.S. Court of Appeals for 
Veterans Claims (Veterans Court) to adopt rules to protect the 
privacy and security of documents retained by, or 
electronically filed with, the court. It would require the 
rules to be consistent with other Federal courts' rules and to 
take into consideration the best practices in Federal and state 
courts to protect private information.
    This bill would extend the Veterans Court's existing 
authority and anticipates the upcoming conversion from paper 
filing to electronic filing. The court's current Rules of 
Practice and Procedure provide several tools to safeguard 
sensitive information. For example, Rule 11 (c)(2) permits the 
Veterans Court, on its own initiative or on motion of a party, 
to ``take appropriate action to prevent disclosure of 
confidential information.'' Rule 48 permits the Veterans Court 
to seal the Record on Appeal in appropriate cases. Rule 6 
provides: ``Because the Court records are public records, 
parties will refrain from putting the appellant's or 
petitioner's VA claims file number on motions, briefs, and 
responses (but not the Notice of Appeal (see Rule 3(c)(1))); 
use of the Court's docket number is sufficient identification. 
In addition, parties should redact the appellant's or 
petitioner's VA claims file number from documents submitted to 
the Court in connection with motions, briefs, and responses.'' 
This rule prevents the public from easily accessing a veteran's 
Social Security number. VA supports efforts to protect Social 
Security numbers.
    The Secretary supports enactment of S. 2090 because the 
importance of safeguarding sensitive information in a veteran's 
files cannot be overemphasized. The proposal is logical given 
the impending conversion from paper filing to electronic 
filing, particularly in this distressing era of internet data 
mining and identity theft.

                                S. 2091

    S. 2091 would expand the number of active judges sitting on 
the Veterans Court from seven to nine. We have witnessed the 
progress that the Veterans Court has made in reducing its 
inventory of cases through temporary recall of retired judges. 
Under the current system, we believe the Court can effectively 
manage its projected caseload within the funds requested in the 
FY 2009 President's Budget.

           *       *       *       *       *       *       *

                                S. 2471

    S. 2471, the ``USERRA Enforcement Improvement Act of 
2007,'' would make several changes to the enforcement of the 
Uniformed Services Employment and Reemployment Rights Act. 
Because that Act is implemented by the Department of Labor, we 
defer to that department regarding the merits of S. 2471.

                                S. 2550

    S. 2550, as proposed to be amended, the ``Combat Veterans 
Debt Elimination Act of 2008,'' would authorize VA to refrain 
from collecting all or part of a debt owed to the United States 
under any program administered by VA (other than a housing or 
small business program under chapter 37 of title 38, United 
States Code) by a service member or veteran who dies as a 
result of an injury incurred or aggravated in the line of duty 
while serving in a theater of combat operations in a war or in 
combat against a hostile force during a period of hostilities 
after September 11, 2001, if the Secretary determines that 
termination of collection is in the best interest of the United 
States.
    In response to the Committee Chairman's request, we 
provided VA's views on this bill, as introduced, in a letter 
dated February 13, 2008. In that letter, we raised certain 
concerns and suggested revisions. The bill, as proposed to be 
amended, appears to address VA's concerns. Accordingly, VA 
supports S. 2550, as proposed to be amended.
    We estimate that enactment of this bill would result in 
additional benefits cost of $5,000 for FY 2009, and a 10-year 
cost of $50,000. In determining the costs, VA used the amount 
of debt of 21 fallen service members. In relative terms, the 
total amount of accumulated debt over almost 4 years of 
collecting the information is so small, and the pattern of that 
accumulation so sporadic, that we would have little expectation 
of a material increase in the amount of benefit indebtedness.

           *       *       *       *       *       *       *

                                S. 2674

    S. 2674, the ``America's Wounded Warriors Act,'' would 
implement the recommendation of the President's Commission on 
Care for America's Returning Wounded Warriors (``Dole-Shalala 
Commission'') to ``Completely Restructure the Disability and 
Compensation Systems.''
    VA defers to DOD with regard to title I of S. 2674, which 
would amend chapter 61 of title 10, United States Code, to 
create an alternative disability retirement system for certain 
servicemembers.
    Title II would completely restructure the VA disability 
compensation program. Section 201 would require VA to conduct a 
study to determine the amount of compensation to be paid for 
each rating of disability assignable to veterans for service-
connected disabilities. It would require VA to ensure that its 
determinations reflect current concepts of medicine and 
disability and take into account loss of quality of life and 
average loss of earning capacity resulting from specific 
injuries. In conducting the study, VA could take into account 
the findings, determinations, and results of any completed or 
on-going study or report that is applicable. Section 201 also 
would require VA to submit to the Committees on Veterans' 
Affairs of the Senate and House of Representatives a report 
that would include VA's findings under the required study, as 
well as VA's findings with respect to matters covered by the 
study arising from the report of the Veterans' Disability 
Benefits Commission (VDBC) and the reports of such other 
independent advisory commissions that have studied the same 
matters. The report would be due to the Committees not later 
than 270 days after commencement of the required study.
    Section 202 of the bill would require VA to conduct a study 
to determine the appropriate amounts and duration of transition 
payments to veterans who are participating in a rehabilitation 
program under chapter 31 or chapter 17 of title 38, United 
States Code. In conducting the study, VA could take into 
account the findings, determinations, and results of any 
completed or on-going study or report that is applicable. 
Section 202 also would require VA to submit to the Committees 
on Veterans' Affairs of the Senate and House of Representatives 
a report that would include VA's findings under the required 
study, as well as VA's findings with respect to matters covered 
by the study arising from the report of the VDBC and the 
reports of such other independent advisory commissions that 
have studied the same matters. The report would be due to the 
Committees not later than 270 days after commencement of the 
required study.
    These two sections are similar to section 201 of the 
Administration's proposal to implement the report of the Dole-
Shalala Commission. VA supports efforts to improve procedures 
for disability retirement of service members, to enhance 
authorities for the rating and compensation of service-
connected disabilities, and to develop procedures to encourage 
completion of vocational rehabilitation plans under chapter 31. 
However, we do not believe that enactment of these sections is 
necessary in light of actions already undertaken by VA to study 
the same matters as these sections would require. In February 
2008, VA entered into a contract with Economic Systems, Inc., 
of Falls Church, Virginia, to study the appropriate levels of 
compensation necessary to compensate veterans for loss of 
earning capacity and loss of quality of life caused by service-
related disabilities and the nature and feasibility of making 
long-term transition payments to veterans separated from the 
Armed Forces due to disability while such individuals are 
undergoing rehabilitation under chapter 31 or chapter 17. These 
studies are expected to be completed by August of this year. We 
will provide the Committees with copies of these studies.
    Section 203 of S. 2674 would require VA to conduct a study 
to identify factors that may preclude veterans from completing 
their vocational rehabilitation plans and actions VA may take 
to assist and encourage veterans in overcoming such factors. 
The study would examine: (1) measures used in other disability 
systems to encourage completion of vocational rehabilitation 
plans; (2) any survey data available to VA that relate to 
matters covered by the study; (3) the results of the studies 
required by sections 201 and 202 of this bill; (4) the report 
of the VDBC; and (5) the report of the Dole-Shalala Commission. 
The study would also consider the extent to which bonus 
payments or other incentives may be used to encourage 
completion of vocational rehabilitation plans under chapter 31 
and such other matters VA considers appropriate. Not later than 
270 days after commencement of the study, VA would be required 
to submit to the Committees on Veterans' Affairs a report 
including the findings of the study and any appropriate 
recommendations and proposals for legislative or administrative 
action needed to implement the recommendations.
    There is no similar provision in the Administration's 
proposal. However, the Administration's proposal would 
authorize the payment of bonuses as an incentive to completing 
a vocational rehabilitation program. Thus, S. 2674 would 
further the same objective as the Administration's proposal. In 
addition, we believe that the study conducted by Economic 
Systems, Inc., which is already in progress, is consistent with 
the intent of this section.
    Section 204 of the bill would require VA, not later than 
one year after the later of the dates of the reports required 
by sections 201(f) and 202(e)1 of the bill, to submit to 
Congress a proposal including a statement of purpose of the 
disability compensation and transition payments that would be 
required pursuant to enactment of section 207 of the bill, a 
statement of the amounts of compensation for service-connected 
disability that would be required pursuant to enactment of that 
section, and a statement of the amounts and duration of 
transition benefits to be payable pursuant to enactment of 
section 207 of this bill to veterans participating in a 
rehabilitation program under chapter 31 or chapter 17 of title 
38. The rates, amounts, and duration of these benefits would be 
exempt from judicial review. We do not support enactment of 
this section; we prefer the Administration's proposal.
    The new compensation system would apply to veterans who 
have a disability rated as service connected under chapter 11 
of title 38, United States Code on the effective date of the 
new chapter 12 compensation system, and who file a claim with 
respect to such disability or another disability on or after 
that date, as well as to veterans who do not have a disability 
rated as service connected under chapter 11 of title 38, United 
States Code on the effective date of the new chapter 12 
compensation system, and who file a claim with respect to 
disability on or after that date. The disability rating for 
claims filed under chapter 12 would have to take into account 
all service-connected disabilities. The new chapter 12 
compensation system would become effective, if at all, at most 
85 days after VA submitted to Congress its proposal as to 
amounts of compensation and amounts and duration of transition 
benefits that are payable under the system. An award or 
increase of compensation with regard to a compensation claim 
filed during the 3-year period beginning on the effective date 
of implementation of the new VA compensation system could be 
retroactive for 3 years from the date of application or 
administrative determination of entitlement, whichever is 
earlier.
    The new VA compensation system would also include 
transition payments to cover living expenses for disabled 
veterans and their families, consisting of either 3 months of 
base pay if the veterans are returning to their community 
following retirement and not participating in further 
rehabilitation or longer-term payments to cover family living 
expenses if they are participating in further rehabilitation 
under chapter 31 or chapter 17. VA would also have authority to 
make transition payments to eligible veterans who are retired 
or separated under the alternate DOD system.
    Section 208 of S. 2674 would also add a new chapter 14 to 
title 38, United States Code, which would permit a veteran 
retired under the new DOD system and entitled to compensation 
under new chapter 12 to elect a 6.5-percent reduction in the 
entire amount of compensation to provide a supplemental 
survivor benefit for a surviving spouse or child(ren). A 
survivor would be entitled to 55 percent of the veteran's total 
compensation payable at the time of the veteran's death. Also 
under section 208, if a veteran elects to provide a survivor 
benefit to the veteran's child(ren) rather than spouse, VA 
would have to notify the veteran's spouse of the veteran's 
election.
    VA has the following concerns regarding title II of S. 
2674.
    Currently, 2.7 million veterans are in receipt of VA 
disability compensation under chapter 11 of title 38, United 
States Code. By simply filing a compensation claim when or 
after chapter 12 goes into effect, all of these veterans would 
become eligible for compensation under chapter 12, and all of 
their service-connected disabilities would have to be rerated 
under the rating schedule applicable to chapter 12. Our initial 
review of new chapter 12 indicates that benefits under the new 
VA compensation system would be far more favorable than 
benefits under current chapter 11. As a result, VA could be 
overwhelmed with claims by veterans seeking to have their 
service-connected disabilities compensated under new chapter 
12.
    VA would be required to submit to Congress its proposals 
regarding amounts of disability compensation and the amounts 
and duration of transition benefits not later than one year 
after submitting the later of its reports on compensation and 
transition benefits. VA would have 270 days from commencement 
of each study to report to Congressional committees on the 
study results. VA would have to wait for completion of the 
compensation study before drafting a rating schedule. As a 
result, VA would have approximately 15 months to draft a rating 
schedule compensating for loss of earnings and quality of life, 
propose it through notice-and-comment rulemaking, consider 
comments received, and issue a final rule. This is insufficient 
time considering the scope and complexity of the rating 
schedule.
    The requirement that the Secretary of Veterans Affairs 
propose the amounts of disability compensation and the amounts 
and duration of transition benefits is insufficiently 
prescriptive for VA to formulate a proposal that will achieve 
the statutory objectives. The bill should provide more specific 
guidance in this regard. The legislature must give specific 
guidance to executive agencies when authorizing them to 
establish entitlement programs administratively. In addition, 
if S. 2674 were enacted and later challenged on constitutional 
grounds, the provision purporting to exempt the rates, amounts, 
and duration of these benefits from judicial review may be 
unavailing because Federal courts generally will interpret 
statutory provisions to avoid the serious constitutional 
questions that would arise if a statute were construed to deny 
any judicial forum for a colorable constitutional claim.
    Although it would require VA to study actions VA could take 
to help and encourage veterans to overcome impediments to 
completing their vocational rehabilitation plans, S. 2674 would 
not authorize an achievement bonus payable upon completion of 
certain milestones of a chapter 31 vocational rehabilitation 
program. We believe that such payments are necessary to serve 
as incentives to encourage veterans to remain in the VA 
vocational rehabilitation program and complete their vocational 
rehabilitation objectives.
    S. 2674 would authorize a survivor benefit that would be 
based upon a percentage of a veteran's compensation for loss of 
quality of life as well as earnings loss. Compensation for the 
effect of a disability on the veteran's quality of life would 
be similar to damages for pain and suffering awarded to an 
injured person in a tort lawsuit. Compensation for a veteran's 
survivors under title 38, United States Code, on the other 
hand, is intended to replace the economic loss to the veteran's 
survivors resulting from the veteran's death. It would 
therefore be inconsistent to calculate survivors benefits under 
new chapter 14 based in part upon the compensation paid to a 
veteran for pain and suffering rather than based upon the loss 
to the veterans' survivors caused by loss of the veteran's 
earning capacity.
    S. 2674 does not authorize VA to provide services to family 
members of eligible veterans as necessary to facilitate the 
family members' assistance in treatment, rehabilitation, or 
long-term care of the veteran, i.e., education concerning the 
veteran's injuries and expected progress and caregiver 
training, counseling, and psychological services. Because the 
Administration's proposed bill does authorize such services, we 
favor that bill over S. 2674.
    All in all, we prefer the Administration's proposal to S. 
2674.

           *       *       *       *       *       *       *

                                S. 2737

    S. 2737, the ``Veterans' Rating Schedule Review Act,'' 
would give the Veterans Court jurisdiction to review whether, 
and the extent to which, the VA Schedule for Rating 
Disabilities (rating schedule) complies with ``applicable 
requirements of chapter 11'' of title 38, United States Code.
    VA opposes S. 2737 for the following reasons. First, 
extending the Veterans Court's jurisdiction to include review 
of the rating schedule for compliance with applicable statutes 
would likely increase litigation, over both the validity of 
rating schedule provisions and the scope of the jurisdictional 
extension itself. Every claim in which VA grants service 
connection involves consideration of some portion of the 
schedule for purposes of rating the service-connected 
disability, as does every claim for an increased rating. S. 
2737 would essentially expose the rating schedule to judicial 
review in every such claim appealed to the Veterans Court. Any 
case in which the court feels that a rating-schedule provision 
prevents a veteran from receiving the full amount of 
compensation to which the court considers the veteran entitled 
could be viewed as posing a reviewable conflict between the 
rating schedule and some statute in chapter 11. If S. 2737 were 
enacted, the number of appeals to the Veterans Court could 
skyrocket, an increase in case load the Veterans Court could 
ill afford. According to the Veterans Court's annual reports, 
the court's caseload has doubled since 1998. Adding the 
increase of appeals resulting from the jurisdictional extension 
to the already growing case load could delay final resolution 
of all appeals before that court.
    A change in the court's jurisdiction would itself stimulate 
litigation. Undoubtedly, claimants' counsel would test the 
limits of the court's jurisdiction, giving rise to protracted 
litigation of uncertain outcome. The courts are still grappling 
with the parameters of the Veterans Claims Assistance Act of 
2000 notice provisions some 8 years after the passage of that 
statute. Besides burdening the courts, S. 2737 would require 
additional VA resources to handle the increase in litigation 
resulting from judicial review of whether the rating schedule 
complies with chapter 11 requirements.
    Second, S. 2737 would permit piecemeal review of individual 
rating classifications, which are matters particularly within 
VA's expertise. Establishing the criteria for rating 
disabilities and the rates of compensation payable under those 
criteria depends on gathering and analysis of medical facts, 
matters of technical and medical judgment, including judgment 
about what disabilities and levels of disability should be 
included in the schedule. The prevention of piecemeal review 
was Congress's rationale in originally proscribing review of 
the rating schedule in the Veterans' Judicial Review Act. 
Congress intended that no court should substitute its judgment 
for the Secretary's as to what rating a particular type of 
disability should be assigned.
    Third, S. 2737 would create a jurisdictional inconsistency. 
The bill would permit the Veterans Court to decide whether the 
VA rating schedule is consistent with statutes in chapter 11, 
but the United States Court of Appeals for the Federal Circuit 
(Federal Circuit) would remain without jurisdiction under 38 
U.S.C. Sec. 502 to review an action of the Secretary relating 
to the adoption or revision of the rating schedule. 
Nonetheless, the Federal Circuit would have jurisdiction under 
38 U.S.C. Sec. 7292(a) to review a Veterans Court 
interpretation of statute or regulation. Thus, the Federal 
Circuit would be barred from reviewing the content of the 
rating schedule on direct review but could review a Veterans 
Court decision on whether the rating schedule complies with 
chapter 11 requirements, which would likely require review of 
the content of the rating schedule.
    Finally, under current case law, the Veterans Court is not 
totally without authority to review the rating schedule. The 
Federal Circuit has held that 38 U.S.C. Sec. 7252(b) bars 
judicial review of the content of the rating schedule and the 
Secretary's actions in adopting or revising the content. 
However, the Federal Circuit has also held that the courts, 
including the Veterans Court, have jurisdiction to review the 
correct interpretation of rating-criteria content, the 
Secretary's actions in adopting or revising the criteria for 
compliance with the Administrative Procedure Act, and 
constitutional challenges to the rating schedule.
    We cannot estimate the costs that would result from 
enactment of S. 2737.

                                S. 2768

    S. 2768 would temporarily increase the maximum loan 
guaranty amount for certain housing loans guaranteed by VA. 
Currently, the maximum guaranty amount is 25 percent of the 
Freddie Mac conforming loan limitation, for a single family 
home, as adjusted annually. This means that the current VA 
maximum guaranty is $104,250 on a no-downpayment loan of 
$417,000. In high-cost areas, defined by Freddie Mac as Alaska, 
Guam, Hawaii, and the Virgin Islands, the maximum guaranty 
amount is $156,375 on a no-downpayment loan of $625,500.
    S. 2768 would provide VA similar authorizations related to 
loan limitations such as those established by the recently 
enacted Economic Stimulus Act, Public Law 110-185. 
Specifically, it would increase the maximum guaranty amount to 
be equal to 25 percent of the higher of: (1) the Freddie Mac 
conforming loan limit; or (2) 125 percent of the area median 
price for a single-family residence, not to exceed 175 percent 
of the conforming loan limit. The higher guaranty amounts would 
be authorized through calendar year 2011. An increase in the 
maximum loan limit generally translates to more purchasing 
power for veterans. VA supports the increase in loan guarantee 
limits through December 31, 2008, consistent with the Economic 
Stimulus Act's other loan provisions. However, we need 
additional analysis to determine how the change in limit would 
affect our loan program beyond that date.

           *       *       *       *       *       *       *

                           S. 2889, Section 7

    S. 2889, the ``Veterans Health Care Act of 2008,'' contains 
legislative proposals that the Administration recently 
submitted to Congress as part of the annual budget submission.
    Section 7 would make permanent VA's authority to verify the 
eligibility of recipients of, or applicants for, VA need-based 
benefits and services using income data from the Internal 
Revenue Service and the Social Security Administration. The 
existing authority has been instrumental in correcting amounts 
of benefits payments and determining health care eligibility, 
co-payment status, and enrollment priority assignment; however, 
this authority expires on September 30, 2008. Expiration of 
this authority would interrupt the income verification process.
    VA estimates that enactment of section 7 would result in 
net discretionary savings of $8.2 million in FY 2009 and $270 
million over 10 years.

           *       *       *       *       *       *       *

Unnumbered Housing Refinance Legislation
    S. xxxx would increase the maximum guaranty amount for 
certain refinance loans, sometimes referred to as ``regular'' 
refinances, and would reduce the existing equity requirement 
for such loans from 10 percent to 5 percent. In general, a 
regular refinance loan is one in which a veteran refinances a 
loan not already guaranteed by VA. The law currently limits 
VA's guaranty to $36,000 on regular refinance loans and limits 
the loan-to-value ratio (LTV) to 90 percent of the value of the 
security. This means that the maximum loan amount a veteran 
effectively may borrow with a VA guarantee is $144,000 and that 
a veteran who has no equity in his or her home may obtain a 
regular VA refinance loan for only 90 percent of the home's 
appraised value.
    The change proposed by S. xxxx would increase the maximum 
guaranty amount on regular refinances by tying such amount to 
the Freddie Mac Conforming Loan Limit. This means that a 
veteran who meets VA's underwriting criteria could obtain a 
guaranty of as much as $104,250 on a loan of $417,000. 
Furthermore, S. xxxx would change the existing LTV requirement 
for regular refinance loans by increasing the limit from 90 
percent to 95 percent of the home's appraised value.
Unnumbered Foreclosure Relief Legislation
    S. XXXX, the ``Preventing Unnecessary Foreclosure for 
Servicemembers Act of 2008,'' would amend the Servicemembers 
Civil Relief Act to protect against mortgage foreclosures for 
certain disabled or severely injured servicemembers. Because 
that Act would be implemented by DOD, we defer to that 
department regarding the merits of this proposal.
Unnumbered Benefits Enhancement Legislation
    Mr. Chairman, thank you for introducing S. xxxx, the 
``Veterans' Benefits Enhancement Act of 2008,'' on behalf of 
VA. Titles I and II of this bill would expand and enhance 
veterans' benefits, as noted below.

                      TITLE I--EDUCATION BENEFITS

    Section 101 of S. xxxx would eliminate the requirement that 
educational institutions providing non-accredited courses must 
report to VA any credit that was granted by that institution 
for an eligible person's prior training.
    Under current law, State approving agencies approve, for VA 
education benefits purposes, the application of educational 
institutions providing nonaccredited courses if the institution 
and its courses meet certain criteria. Among these is the 
requirement that the institution maintain a written record of 
the previous education and training of the eligible person and 
what credit for that training has been given the individual. 
The institution must notify both VA and the eligible person 
regarding the amount of credit the school grants for previous 
training.
    VA proposes to eliminate that notification requirement as 
it pertains to VA. VA will still have oversight, just as it 
does with accredited courses. VA will review records during 
compliance visits to assure the institution is evaluating and 
appropriately reducing program requirements because of credit 
given for prior training.
    Removing the reporting requirement would shorten claims 
processing time because VA would not have to review each claim 
for the presence of such notice and, if not submitted, have to 
check with the school and student to assure the requirement has 
been met. It would also permit more cases to be processed 
through VA's Electronic Certification Automated Processing 
(ECAP) program. The ECAP system cannot process claims where 
proper credit reporting is at issue because those cases require 
manual development and review by a veteran's claims examiner. 
The more claims VA can process through the ECAP system, the 
more timely VA beneficiaries will receive their benefits.
    Following up with schools for the written notification 
burdens the school certifying official and student, as well as 
VA. Often the school certifying official, who is responsible 
for reporting a veteran's enrollment, is not the individual who 
evaluates credit. The certifying official has no control over 
how long it takes the school to accomplish the review and 
granting of prior credit.
    Further, several of VA's stakeholders, including the 
National Association of Veterans' Program Administrators, have 
recommended that VA review school records to determine granting 
of prior credit during compliance visits rather than require 
the school to submit written reports. Eliminating this 
requirement would streamline the administration of educational 
assistance benefits and improve the delivery of benefits to 
veterans, reservists, and other eligible individuals.
    There would be no costs associated with enactment of this 
section.
    Section 102 of this bill would reduce from 10 days to 5 
days the current waiting period required prior to the student's 
affirmation of an enrollment agreement with an educational 
institution to pursue a program of education exclusively by 
correspondence.
    Under current law, an enrollment agreement signed by a 
veteran, spouse, or surviving spouse is not effective unless he 
or she, after 10 days from the date of signing the agreement, 
submits a written and signed statement to VA affirming the 
enrollment agreement. If the veteran, spouse, or surviving 
spouse at any time notifies the institution of his or her 
intention not to affirm the agreement, the institution, without 
imposing any penalty or charging any fee, promptly refunds all 
amounts paid.
    The statutory 10-day period is twice the requirement of the 
Distance Education and Training Council (DETC) accrediting body 
standard, which states that institutions will allow a full 
refund of all tuition expenses paid if a student cancels within 
5 days after enrolling in a course. Reducing the affirmation 
waiting period to 5 days would make the statute consistent with 
the DETC standard and eliminate confusion. It would also permit 
eligible individuals to begin their programs sooner. Should 
they decide at any time not to affirm the enrollment agreement, 
the eligible individuals would still be entitled to a refund of 
all amounts paid.
    Finally, this proposal would allow VA to strengthen its 
partnership with the National Association of State Approving 
Agencies, which has had this issue high on its list of 
legislative priorities. There would be no costs associated with 
enactment of this section. Section 103 of the bill would 
eliminate the requirement that an individual must file an 
application with VA when that individual remains enrolled at 
the same school but changes his or her program of study.
    Under current law, a student who desires to initiate a 
program of education must submit an application to VA in the 
form prescribed by VA. If the student decides a different 
program is more advantageous to his or her needs, that 
individual may change his or her program of study once. 
However, additional changes require VA to determine that the 
change is suitable to the individual's interests and abilities. 
It is rare for VA to deny a change of program, especially if 
the student is continuing in an approved program at the same 
school.
    Under this provision, VA would accept the new program 
enrollment based on the certification of such enrollment from 
the school without requiring additional certification from the 
student. VA would still have oversight of program changes by 
reviewing school records when VA conducts its compliance 
visits. Again, this requirement would be eliminated for program 
changes only when the student remains enrolled at the same 
school.
    Section 103 also would allow VA to increase the number of 
claims processed using the ECAP program without manual review 
by a veterans claims examiner. Thus, since VA could award 
benefits based only on the school's certification, without 
having to wait for additional certification from the student, 
VA could award benefits more timely and with less of a public 
information collection burden.
    There would be no costs associated with enactment of this 
section.
    Section 104 of the bill would eliminate the requirement 
that wages be earned by veterans pursuing self-employment on-
job training authorized under section 301 of Public Law 108-
183. That section expanded the chapter 30 Montgomery GI Bill 
program by authorizing educational assistance benefits for 
full-time on-job training (OJT) of less than 6 months needed 
for obtaining licensure to engage in a self-employment 
occupation or required for ownership and operation of a 
franchise.
    Currently, all the provisions of title 38, United States 
Code, that apply to VA's other OJT programs (except the 
requirement that a training program has to be for least 6 
months) apply to franchise-ownership OJT, including the 
requirement that the trainee earn wages that are increased 
incrementally. Through contact with the International Franchise 
Association, VA has determined that OJT for new franchise 
owners does not involve the payment of wages. Thus, if 
franchise OJT programs are not exempted from the current title 
38 wage requirements, no franchise-ownership OJT program will 
ever be approved for VA benefits.
    VA has determined that no direct costs would result from 
enactment of this proposal. The estimated costs for 
implementing the section 301 authority have been included in 
the budget base each year since its enactment.

                    TITLE II--OTHER BENEFITS MATTERS

    Section 201(a) of the bill would explicitly authorize VA to 
stay temporarily its adjudication of a claim pending before 
either a VA regional office (or other agency of original 
jurisdiction) or the Board of Veterans' Appeals (Board) when 
the stay is necessary to preserve the integrity of a program 
administered under title 38, United States Code.
    It is widely accepted that courts and administrative 
adjudicative agencies generally have the authority to manage 
their case loads and to stay cases as necessary for proper 
management. VA has historically used such authority sparingly 
to avoid waste and delay and to ensure consistency on important 
issues of law, usually when VA has appealed a controlling 
adverse decision by the U.S. Court of Appeals for Veterans 
Claims (Veterans Court). However, the Veterans Court recently 
curtailed this authority in Ramsey v. Nicholson, 20 Vet. App. 
16, (2006), and Ribaudo v. Nicholson, 20 Vet. App. 552 (2007) 
(en banc), effectively assuming supervisory control of VA's 
adjudication docket.
    In Ramsey, the Veterans Court held that VA could not stay 
cases while it appealed the Veterans Court's decision in Smith 
v. Nicholson, 19 Vet. App. 63 (2005), which required VA to pay 
benefits in a manner VA believed to be unauthorized by law and 
which VA had appealed to the Federal Circuit. Ramsey would have 
required VA to pay those benefits, irrespective of VA's 
position on appeal, if VA had not prevailed in its Federal 
Circuit appeal soon after Ramsey was issued. Had VA's appeal 
not been resolved so quickly, VA would have been required to 
grant claims pursuant to Ramsey while the Federal Circuit 
reviewed the appeal, and many veterans would have received 
benefits to which they were not entitled under the law.
    Similarly, in Ribaudo, the Veterans Court held that VA 
could not stay cases while it appealed Haas v. Nicholson, 20 
Vet. App. 257 (2006). Haas is a significant decision, with 
broad and costly implications, in which the Veterans Court 
ordered VA to presume that veterans who served exclusively on 
ships off the shores of Vietnam were nevertheless exposed to 
defoliants (including Agent Orange) that were sprayed only over 
land. In Ribaudo, the Veterans Court granted VA's request for a 
stay of cases, but only after holding that VA's own authority 
did not allow it to effect such a stay, thereby placing under 
the control of the Veterans Court VA's entire docket of claims 
affected by Haas, claims over which the Veterans Court does not 
yet have direct jurisdiction.
    Section 201(a) would also require VA to issue regulations 
describing the factors it will consider in determining whether 
and to what extent such stays are warranted and would permit 
claimants to seek review of a stay in the Federal Circuit. 
Because the Federal Circuit has exclusive jurisdiction over 
appeals from the Veterans Court, it is in the best position to 
determine whether a case should be stayed pending such an 
appeal.
    Under section 201(c), these new provisions would apply to 
benefit claims received by VA on or after the date of enactment 
and to claims received by VA before that date but not finally 
adjudicated by VA as of that date.
    Section 202(a) of the bill would clarify that the Board has 
the authority to decide cases out of docket-number order when a 
case has been stayed or when there is sufficient evidence to 
decide a claim but a claim with an earlier docket number is not 
ready for decision.
    Current law requires that ``each case received pursuant to 
application for review on appeal shall be considered and 
decided in regular order according to its place upon the 
docket.'' Section 202(a) would clarify that compliance with 
that requirement does not require the Board to refrain from 
deciding a case unaffected by a stay simply because that case 
has a higher docket number than a stayed case. Expressly 
authorizing the Board to decide cases out of docket order, when 
a later case is ready for decision sooner than an earlier case, 
would reflect current Board practice of allowing later cases 
that are ready for decision to proceed while earlier cases are 
still being developed. The Veterans Court's Ribaudo decision 
rested in part on its interpretation of current law, and the 
express recognition of the Board's practice will clarify that 
that statute does not relieve VA of its duty to decide 
administrative appeals quickly and efficiently.
    Under section 202(b), this provision would apply to benefit 
claims received by VA on or after the date of enactment and to 
claims received by VA before that date but not finally 
adjudicated by VA as of that date.
    The provisions in sections 201 and 202, governing staying 
of claims and management of the Board's docket, would save the 
benefit costs and administrative expenses associated with 
granting benefits under court precedents that are later 
overturned on appeal. The amount of savings cannot be 
predicted, because it would depend upon the nature of the court 
decisions at issue, the extent to which those decisions compel 
payments or other expenses, and the number of claimants 
affected. However, VA has estimated that the Veterans Court's 
decision in Haas will result in approximately $22.9 million in 
administrative costs and approximately $2.1 billion in benefit 
costs in the initial year of implementation.
    Section 203 of the bill would eliminate the disparity 
between eligibility for burial and eligibility for a memorial 
headstone or marker. It would extend eligibility for memorial 
headstones or markers to a veteran's deceased remarried 
surviving spouse whose remains are unavailable for burial, 
without regard to whether any subsequent remarriage ended, and 
would ensure that the burial needs of veterans and their 
survivors are more adequately met.
    Current law authorizes VA to furnish an appropriate 
memorial headstone or marker to commemorate eligible 
individuals whose remains are unavailable. Individuals 
currently eligible for such memorial headstones or markers 
include a veteran's surviving spouse, which includes ``an 
unremarried surviving spouse whose subsequent remarriage was 
terminated by death or divorce.'' Thus, a surviving spouse who 
remarried after the veteran's death is not eligible for a 
memorial headstone or marker unless the remarriage was 
terminated by death or divorce before the surviving spouse 
died. However, a surviving spouse who remarried after the 
veteran's death is eligible for burial in a VA national 
cemetery without regard to whether any subsequent remarriage 
ended.
    Enactment of this provision would result in only nominal 
benefit costs.
    Section 204 of this bill would make permanent the authority 
given by section 704 of Public Law 108-183 that allows VA to 
contract for medical disability examinations using appropriated 
funds other than funds available for compensation and pension. 
Currently, that authority will expire on December 31, 2009.
    This change would provide VA with flexibility needed to 
effectively utilize supplemental and other appropriated funds 
in responding to unanticipated needs and emergencies. The 
demand for medical disability examinations has increased beyond 
the limited number of requests that the current system was 
designed to accommodate. The rise in demand is largely due to 
an increase in the complexity of disability claims, an increase 
in the number of disabilities claimed by veterans, and changes 
in eligibility requirements for disability benefits. The 
permanent authority to provide examinations to veterans through 
non-VA medical providers would continue this important resource 
for VA in providing high-quality patient care and improving 
benefit delivery.
    We estimate that enactment of section 204 would have no 
significant financial impact.
    Section 205(a) of the bill would extend full-time and 
family Servicemembers' Group Life Insurance (SGLI) coverage to 
Individual Ready Reservists (IRRs), individuals referred to in 
38 U.S.C. Sec. 1965(5)(C). It would correct an oversight in the 
Veterans' Survivor Benefits Improvements Act of 2001, which 
provided such coverage for Ready Reservists, referred to in 
section 1965(5)(B), but not for IRRs. IRRs should be provided 
comparable coverage because many of them have been called up to 
serve in Operation Enduring Freedom or Operation Iraqi Freedom.
    Section 205(b) would provide that a dependent's SGLI 
coverage would terminate 120 days after the date of the 
member's separation or release from service, rather than 120 
days after the member's SGLI terminates, as currently provided. 
Under current law, a member retains SGLI coverage for 120 days 
after separation or release from service, but a dependent 
retains coverage for 120 days after that, for a total of 240 
days after the member's separation from service, twice the 
period of coverage for most insureds. This provision would 
correct that inequity.
    Section 205(c) would clarify that VA has the authority to 
set premiums for SGLI coverage for the spouses of Ready 
Reservists based on the spouse's age. This provision would 
correct an inconsistency between 38 U.S.C. Sec. 1969(g)(1)(A), 
which does not require identical premiums for coverage of 
active duty members' spouses, and section 1969(g)(1)(B), which 
may be read to imply that identical premiums for coverage of 
Ready Reservists' spouses are required. This change would make 
the law consistent with VA practice.
    Section 205(d) would clarify that any person guilty of 
mutiny, treason, spying, or desertion, or who, because of 
conscientious objections, refuses to perform service in the 
Armed Forces or refuses to wear the uniform of the Armed 
Forces, forfeits all rights to Veterans' Group Life Insurance 
(VGLI), as well as SGLI. This provision would be consistent 
with public policy and would eliminate a distinction between 
SGLI and VGLI insureds that has no rational basis.
    There would be no costs associated with enactment of this 
section.
    Section 206 of the bill would authorize the Secretary to 
provide Specially Adapted Housing (SAH) grants to active duty 
servicemembers who reside temporarily with a family member. 
Public Law 109-233 authorized the Secretary to provide such 
assistance to veterans by adding a new section 2102A to title 
38, United States Code. However, the new section did not 
expressly include active duty servicemembers, nor did it amend 
section 2101(c), the section that provides eligibility to 
active duty servicemembers for other SAH grants.
    This amendment also would ensure that, absent express 
language to the contrary, active duty servicemembers would be 
covered by future SAH benefit program amendments. Due to the 
structure of chapter 21, active duty servicemembers on occasion 
have been overlooked, inadvertently, in the course of amending 
the SAH program. For instance, a renumbering of SAH provisions 
in Public Law 108-454 inadvertently omitted the provision that 
created SAH eligibility for active duty servicemembers. 
Similarly, Public Law 109-233, failed to include authority for 
VA to assist active duty servicemembers temporarily residing 
with family members. This proposal would correct the latter 
oversight and, by amending section 2101(c) more broadly, would 
make the inclusion of otherwise eligible active duty 
servicemembers the rule, rather than the exception.
    There would be no costs associated with enactment of this 
section.
    Section 207 of the bill would designate the VA office 
established to support contracting with small businesses, which 
was required by section 15(k) of the Small Business Act (15 
U.S.C. Sec. 644(k)), as the Office of Small Business Programs, 
to more clearly represent that office's scope of authority. The 
name would not reflect any change in emphasis or support for 
disadvantaged small businesses, but rather would clarify that 
the Office of Small Business Programs has the full range of 
authority over many other small business programs. The new 
title would capture the overarching nature of the program, 
which encompasses the small disadvantaged business, the 
service-disabled veteran-owned small business, the veteran-
owned small business, the qualified historically underutilized 
business zone small business, the women-owned small business, 
and the very small business programs.
    There would be no costs associated with enactment of this 
section.

           *       *       *       *       *       *       *

    VA does not have comments on the other bills included on 
the agenda for today's hearing because it did not receive them 
in time to develop and clear views and estimate costs.
    This concludes my statement, Mr. Chairman. I would be happy 
now to entertain any questions you or the other members of the 
Committee may have.

           *       *       *       *       *       *       *

                         The Secretary of Veterans Affairs.
                                      Washington, DC, June 2, 2008.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: I am pleased to provide the Committee 
with the views of the Department of Veterans Affairs (VA) on 
five bills that were not covered in VA's statement at the 
Committee's May 7, 2008, hearing: S. 161, S. 2934, S. 2946, S. 
2951, and S. 2965, 110th Cong. For the reasons explained below, 
we support S. 161 and do not support S. 2934, S. 2946, S. 2951, 
and S. 2965.

                                 S. 161

    S. 161, the ``Veterans' Disability Compensation Automatic 
COLA Act,'' would provide for an automatic cost-of-living 
increase in the rates of disability compensation for veterans 
with service-connected disabilities and of dependency and 
indemnity compensation (DIC) for the survivors of veterans 
whose deaths are service related, whenever there is such an 
increase in Social Security benefits and by the same percentage 
as the percentage by which Social Security benefits are 
increased. VA benefits would increase on the date Social 
Security benefits are increased, which is December 1st of each 
year. The new statutory provision authorizing this automatic 
cost-of-living adjustment (COLA) would become effective on 
January 1st of the year following enactment of this bill.
    VA supports enactment of S. 161. We believe this proposed 
automatic COLA would simplify the annual rate-increase 
assessment process for compensation and DIC in the same manner 
that the process for pension was simplified by indexing pension 
increases to Social Security COLAs. We believe the annual 
increases are necessary and appropriate to provide continuous 
protection of the affected benefits from the eroding effects of 
inflation. The worthy beneficiaries of these benefits deserve 
no less.
    Because future COLA estimates are already included in the 
baseline President's budget, this legislation would not result 
in additional costs.

                                S. 2934

    S. 2934 would require VA to pay states a $300 plot 
allowance for the burial in a state cemetery of the spouse, 
surviving spouse, minor child, and (in the Secretary's 
discretion) unmarried adult child of specified persons who are 
eligible for burial in a national cemetery. The measure would 
apply to individuals who die on or after the date of enactment.
    VA does not support enactment of S. 2934. We believe 
current law provides an adequate plot allowance if family 
members are buried in the same plot as the veteran, which is 
usually the case in state cemeteries, whether or not the 
veteran dies first. An additional plot allowance for burial of 
a family member in the same plot as the veteran would be 
gratuitous. This bill would result in additional direct costs 
for which no offsets have been identified, and also additional 
administrative costs that must be considered in light of the 
competing demands for scarce VA resources in meeting veterans' 
burial needs.
    We estimate that enactment of this bill would result in 
mandatory costs of $2.1 million for FY 2009, $12.1 million over 
the 5-year period from FY 2009 through FY 2013, and $28.6 
million over the 10-year period from FY 2009 through FY 2018. 
It would result in administrative costs of $245,000 for the 
first year, $1.7 million over 5 years, and $4.6 million over 10 
years.

                                S. 2946

    S. 2946 would make a servicemember's natural stillborn 
child an insurable dependent for purposes of the 
Servicemembers' Group Life Insurance (SGLI) program. The term 
``stillborn natural child'' would not include any fetus or 
child extracted for purposes of an abortion.
    VA does not support enactment of S. 2946. Private insurers 
do not generally insure stillborn children. In fact, private 
insurance coverage for a child typically does not begin until 
the fourteenth day after a live birth.
    The total cost to the SGLI program for adding stillborn 
coverage would be $4 million annually based on an estimate of 
400 stillbirths per year with a benefit of $10,000 per 
stillbirth.

                                 S.2951

    S. 2951 would require the Secretary to report annually to 
Congressional veterans' affairs committees on VA's progress in 
addressing the causes of variances in veterans' compensation 
payments. The reports would have to include a description of 
the Veterans Benefits Administration's (VBA) efforts to 
coordinate with the Veterans Health Administration (VHA) to 
improve the quality of disability examinations, an assessment 
of VBA's current personnel requirements, and a description of 
any differences in the claim-submittal rates among various 
veteran populations, as well as a description and assessment of 
efforts undertaken to eliminate the differences.
    VA does not support enactment of S. 2951 because it is 
unnecessary. Over the past few years, VBA has achieved major 
improvements in the delivery of benefits, including the quality 
and consistency of benefit decisions. For instance, VBA has 
made all regional offices consistent in organizational 
structure and work process. VBA performs site surveys of 
regional offices to ensure compliance with procedures, with 
particular emphasis on current consistency issues. VBA has also 
deployed new training tools and centralized training programs 
that support accurate and consistent decision-making. In 
addition, VBA has established specialized processing centers to 
consolidate adjudication of certain types of claims to provide 
better and more consistent decisions.
    VBA has established an aggressive and comprehensive program 
of quality assurance and oversight to increase the accuracy and 
consistency of benefit decisions. As part of its quality 
assurance program for disability evaluations, in FY 2008 VBA 
began regularly monitoring the most frequently rated diagnostic 
codes to assess the consistency of service-connection 
determinations and assignment of disability ratings across 
regional offices. These studies are used to identify where 
additional guidance and training are needed to improve 
consistency and accuracy, as well as to drive procedural or 
regulatory changes. VBA also plans to begin studying the 
consistency of decisions among raters late this summer.
    VBA has developed jointly with VHA the Compensation and 
Pension Examination Project (CPEP) to improve the quality and 
consistency of compensation and pension examinations. CPEP is 
developing computerized templates to ensure that examinations 
are complete and to capture examination data.
    Although we realize the importance of providing reports on 
VA's progress regarding variances in compensation payments, we 
believe that the measures VBA has taken sufficiently address 
the need for accuracy and consistency in veterans' compensation 
decisions and believe that VA's resources need to be directed, 
instead, to address the growing challenge of timely 
adjudicating veterans' claims. VA is committed to providing 
accurate, consistent, and timely adjudications for those who 
have so admirably served our Nation.
    There are no mandatory costs associated with this bill 
because it does not affect entitlement to benefits. However, 
this legislation would require studies of patterns in claims 
adjudication and the development of an enhanced tracking 
mechanism to capture the required data. It would result in 
total administrative costs of $10 million.

                                S. 2965

    S. 2965 would require VA, in consultation with the 
Department of Defense (DOD), to report to the Congressional 
veterans' affairs committees on the feasibility and 
advisability of including severe and acute Post Traumatic 
Stress Disorder (PTSD) among the conditions covered by 
traumatic injury protection coverage under SGLI. Section 1980A 
of title 38, U.S. Code, provides an automatic injury protection 
rider to SGLI for any SGLI insured who sustains a traumatic 
injury that results in certain losses (TSGLI).
    VA does not support enactment of S. 2965. We do not believe 
that the TSGLI program is the appropriate vehicle for 
addressing the needs of veterans and servicemembers afflicted 
with PTSD, and we cannot foresee that undertaking the 
assessment required under this bill would affect that position.
    The intent of Congress in establishing the TSGLI program 
was to provide rapid financial relief to traumatically injured 
servicemembers and their families during periods of recovery 
and rehabilitation. The program is designed to provide 
servicemembers the equivalent of accidental-dismemberment 
coverage available under civilian life-insurance plans. We are 
unaware of any equivalent private-sector life-insurance riders 
covering PTSD or other mental disorders. Further, the nature of 
PTSD, with periods of remission and reappearance, the range of 
its severity, and the variable time of its onset, make PTSD 
unsuitable for this kind of financial benefit. For these 
reasons, we believe that disability resulting from PTSD and 
other service-connected mental disorders, like other diseases, 
is most appropriately addressed by the existing disability-
compensation program.
    The Office of Management and Budget has advised that there 
is no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely yours,
James B. Peake, M.D.

           *       *       *       *       *       *       *

                         The Secretary of Veterans Affairs.
                                      Washington, DC, July 8, 2008.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: I am pleased to provide the Committee 
with the views of the Department of Veterans Affairs (VA) on S. 
3023, 110th Cong., the ``Veterans' Notice Clarification Act of 
2008.'' VA supports S. 3023.
    Section 5103(a) of title 38, U.S. Code, requires that, upon 
receipt of a complete or substantially complete application for 
veterans benefits, VA must notify a claimant of the information 
and evidence necessary to substantiate the claim and the 
respective obligations of VA and the claimant to obtain the 
requisite information and evidence. S. 3023 would amend 38 
U.S.C. Sec. 5103(a) to authorize the Secretary of Veterans 
Affairs to prescribe regulations regarding the content of the 
notice to be provided by VA. The bill would require the 
Secretary to prescribe regulations that specify: (1) the 
content of the notice based upon the type of claim filed, e.g., 
original claim, claim to reopen a previously disallowed claim, 
or a claim for increased benefits; (2) the general information 
and evidence required to substantiate the basic elements of 
such type of claim; and (3) the timing of the issuance of the 
notice. The bill would also authorize the Secretary to 
prescribe regulations providing additional or alternative 
contents for notice if appropriate to the benefit or services 
sought under the claim.
    When VA promulgated 38 C.F.R. 3.159(b)(1) to implement 
current section 5103(a), VA interpreted the statute to require 
generic rather than specific notice after the initial claim for 
benefits has been filed. 66 Fed. Reg. 45,620, 45,622 (2001). In 
adopting this approach, VA explained that ``[t]he statutory 
notice required by [section 5103(a)] occurs at an early point 
in the claims process when * * * VA does not yet know what 
kinds of specific evidence to try to obtain on behalf of the 
claimant.'' Id. VA also declined a public commenter's 
suggestion to provide in the regulation that, ``if VA receives 
evidence that is inadequate to substantiate the claim,'' VA 
would ``contact the claimant and give him or her the 
opportunity to correct the inadequacy or bolster the 
evidence.'' Id. at 45,623. VA concluded that section 5103(a) 
does not require such ongoing and specific notification, that 
undertaking to provide such notice would be administratively 
unworkable and would cause undue delays in claim adjudications, 
and that the type of notice sought is properly provided at the 
point that VA adjudicates the claim. Id. The United States 
Court of Appeals for the Federal Circuit (Federal Circuit) held 
that VA's decision to provide generic rather than case-specific 
notice under section 3.159(b)(1) is consistent with the statute 
and is a ``reasonable interpretation'' of 38 U.S.C. 
Sec. 5103(a) to which a court must defer. Wilson v. Mansfield, 
506 F.3d 1055, 1059-60 (Fed. Cir. 2007); Paralyzed Veterans of 
Am. v. Secretary of Veterans Affairs, 345 F.3d 1334, 1337 (Fed. 
Cir. 2003).
    Notwithstanding this direction from the Federal Circuit, 
the United States Court of Appeals for Veterans Claims 
(Veterans Court) continues to impose increasingly numerous and 
case-specific notice requirements under 38 U.S.C. Sec. 5103(a) 
for each type of claim as to which a VA notice letter has come 
before it for review. E.g., Palor v. Nicholson, 21 Vet. App. 
325 (2007) (claim from person who served in Philippine guerilla 
forces); Hupp v. Nicholson, 21 Vet. App. 342, 352-53 (2007) 
(claim for dependency and indemnity compensation); Kent v. 
Nicholson, 20 Vet. App. 1, 9-10 (2006) (claim to reopen); 
Dingess v. Nicholson, 19 Vet. App. 473, 488-89 (2006), aff'd 
per curiam, Nos. 2006-7247 & 2006-7312, 2007 WL 1686737 (Fed. 
Cir. June 5, 2007) (claim for service connection). Most 
recently, the Veterans Court held that, when VA receives a 
claim for an increased rating, if the diagnostic code (DC) in 
the VA rating schedule under which a claimant's disability is 
rated contains criteria necessary for entitlement to a higher 
disability rating that would not be satisfied by the claimant 
demonstrating a noticeable worsening or increase in severity of 
the disability and the effect that worsening has on the 
claimant's employment and daily life, VA must provide at least 
general notice of the requirements of the particular DC to the 
claimant. Vazquez-Flores v. Peake, 22 Vet. App. 37, 43 (2008), 
motion for stay denied, 22 Vet. App. 91 (2008), motion for 
recon. denied, 2008 WL 1990812 (Vet. App. May 9, 2008), motion 
for en banc review denied, 2008 WL 2132309 (Vet. App. May 21, 
2008). The Veterans Court also held that section 5103(a) 
requires VA to provide notice of the criteria of any DC that is 
cross-referenced in the previously assigned DC. Vazquez-Flores, 
22 Vet. App. at 93.
    The pattern of imposing increasing specificity on VA's 
notices has several burdensome effects on the Department. 
First, it potentially requires remand of numerous previously-
decided cases involving similar section 5103(a) notices, 
diverting adjudication resources from other pending claims. 
Each time the Veterans Court finds that a particular type of 
notice letter is inadequate, the erroneous notice that VA 
provided in all similar cases before the decision is 
presumptively prejudicial to appellants, potentially requiring 
wide-scale remands and readjudications. See Sanders v. 
Nicholson, 487 F.3d 881 (Fed. Cir. 2007), and Simmons v. 
Nicholson, 487 F.3d 892 (Fed. Cir. 2007), cert. granted, 76 
U.S.L.W. 3654 (U.S. June 16, 2008) (No. 07-1209). Second, 
enormous administrative burdens are incurred in reprogramming 
computers and revising VA's notices to comply with each 
Veterans Court decision interpreting section 5103(a). Third, 
requiring case-specific notice at the initial stages of a claim 
requires a substantially greater expenditure of time and 
resources in each case than VA's existing practice of providing 
generally-applicable notice based on the type of claim filed. 
Finally, the increased specificity required by the Veterans 
Court threatens to make VA's notice increasingly complex and 
difficult for claimants to read and understand, threatening the 
very purpose and utility of the notice.
    S. 3023 would address these concerns. First, this 
legislation would incorporate the Federal Circuit's conclusion 
that VA must provide only generic notice under 38 U.S.C. 
Sec. 5103(a), a holding which is consistent with the point in 
the claims process at which VA provides notice, i.e., 
immediately upon receipt of an application for veterans 
benefits, when VA does not yet know what kinds of specific 
evidence to try to obtain on behalf of the claimant. The bill 
would also reinforce VA's ability to fill gaps or address any 
ambiguities in 38 U.S.C. Sec. 5103(a) via the promulgation of 
regulations to which a reviewing court would have to defer so 
long as the regulations are not arbitrary, capricious, or 
manifestly contrary to the statute. Chevron U.S.A., Inc. v. 
Natural Res. Def. Council, Inc., 467 U.S. 837, 843-44 (1984). 
As a result, the legislation would eliminate the need for VA to 
continually revise its notice letters and to reissue notices to 
claimants and would allow VA to dedicate its resources to 
adjudicating the more than 800,000 claims filed annually. S. 
3023 would also allow VA to make its notice more readily 
understandable and useful to claimants by providing generic 
notice of the evidence necessary to substantiate the type of 
claim filed.
    There would be no costs associated with enactment of S. 
3023.
    The Office of Management and Budget has advised that there 
is no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely yours,
James B. Peake, M.D.

           *       *       *       *       *       *       *

                   SUPPLEMENTAL VIEWS OF SENATOR BURR

    On June 26, 2008, the Senate Committee on Veterans' Affairs 
(hereinafter, ``Committee'') voted to favorably report S. 3023, 
as amended, the Veterans' Benefits Improvement Act of 2008 
(hereinafter, ``Committee bill''). This bill contains many 
valuable provisions, including an extension of the time within 
which spouses of seriously disabled veterans may use their 
education benefits from the Department of Veterans Affairs 
(hereinafter, ``VA'') and a requirement that human resources 
specialists in the Federal executive branch receive training on 
the Uniformed Services Employment and Reemployment Rights Act. 
I am pleased that these provisions and others were included in 
the Committee bill and, on the whole, believe this is a 
worthwhile piece of legislation.
    These supplemental views are primarily meant to express my 
concerns about section 401 of the Committee bill, which would 
permanently expand the size of the United States Court of 
Appeals for Veterans Claims (hereinafter, ``CAVC'' or 
``Court'') from seven to nine judges. At the outset, I want to 
be clear that I fully support providing the Court with the 
resources it needs to timely decide veterans' cases and that I 
sincerely appreciate the tremendous effort of the Court's 
judges and staff in recent years to increase productivity. 
However, I do not believe we have sufficient information at 
this time to determine whether the permanent addition of judges 
is the best way to help the Court deal with its caseload. In 
addition, I think the approach taken in the Committee bill 
would miss an important opportunity to strategically plan ahead 
to ensure that service to veterans will not be disrupted again 
in the future by multiple judicial retirements at the Court.

                          I. Court's Workload

    By way of background, the CAVC provides judicial review of 
decisions rendered by VA's Board of Veterans' Appeals on claims 
for VA benefits and is authorized to have seven judges. In 
September 2007, the CAVC submitted a legislative proposal to 
the Committee, requesting an increase in authorized judges from 
seven to nine. The Court noted that the number of incoming 
cases at the Court reached a record high in fiscal year 2007 
and that the Court's ``per-judge average for incoming cases 
each year now ranks among the highest in the federal appellate 
system.'' In addition, the Court pointed to recent staffing 
increases at VA, which may increase the volume of cases being 
decided by the Board of Veterans' Appeals. The Court projected 
that its incoming caseload will ``increase proportionally'' if 
the volume of cases decided by the Board of Veterans' Appeals 
grows. In sum, the Court's primary reason for requesting more 
judges is based on the raw number of incoming cases expected 
now and in the future.
    Although the level of incoming cases is certainly one 
indicator of the Court's resource needs, it does not answer the 
key question in assessing the need for more judgeships: What is 
the actual workload burden on the Court's existing judges? 
Indeed, not all cases that are filed at the Court will 
eventually reach a judge and not every case will require the 
same amount of judge-time to resolve. Some cases are resolved 
by the Clerk of the Court, such as when an appellant fails to 
pay the required filing fee. Other cases may be resolved 
through the efforts of the Court's Central Legal Staff, which 
conducts pre-briefing conferences with the parties. In 
addition, the complexity of cases that ultimately reach a judge 
may vary significantly, based on such factors as the arguments 
raised, the number of issues involved, and the size of the 
record. In my view, to determine the actual workload burden on 
the judges would require more information about how many cases 
the judges actually handle, the nature and complexity of the 
cases before the judges, and how much judge-time is required to 
handle various types of cases.
    In fact, that type of analysis is used elsewhere in the 
Federal judiciary to help determine which courts may need 
additional judgeships. For example, the Judicial Conference of 
the United States uses a weighting system to gauge the workload 
burden on Federal district court judges. Cases that would 
consume a significant amount of judge-time are assigned larger 
weights than cases that generally would consume a small amount 
of judge-time. According to the Administrative Office of the 
U.S. Courts, this weighting 
system ``predict[s] caseload burden more accurately than the 
raw number of filings.'' See, ``Case Weights Help Federal 
Courts Assess Demands on Judges' Time,'' found at http://
www.uscourts.gov/
newsroom/weights.htm (last visited July 12, 2008). Similarly, 
the workload burden of Federal appellate court judges is gauged 
using an ``adjusted'' number of filings, which factors in the 
relative ease of certain cases and the percentage of cases that 
normally would require a merits decision from a judge.
    At this point, we simply do not have sufficient data 
regarding the workload of the CAVC to conduct that type of 
weighting of the Court's caseload. We do not have historical 
data as to the percentage of cases decided by judges or about 
the time it takes to decide cases of various levels of 
complexity. Also, the information that we do have suggests that 
the raw volume of cases received at the Court is not a good 
indicator of the workload burden on judges. For example, in 
fiscal year 2007, the Court received 4,644 new cases and 
decided 4,877 cases. The seven active judges decided about 39 
percent of those 4,877 cases, recalled retired judges decided 
about 6 percent, and the Clerk of the Court resolved 55 
percent. This means that, even though the Court received over 
660 cases per active judge, the seven judges decided about 270 
cases each--less than half of the number that the Court 
received.
    In view of this lack of data about the Court's workload, 
the Disabled American Veterans testified last year that, 
``[u]ntil this information is made available to Congress, it is 
* * * premature to expand the number of judges to nine.'' S. 
Hrg. 110-360, at 44 (2007). I agree that we need additional 
information about the Court's workload, about who is doing the 
work, and about where there are bottlenecks. Then we could 
determine what measures--such as increasing the Court's Public 
Office, expanding the Central Legal Staff, authorizing 
magistrates, or adding judges--would be the most effective in 
helping the Court provide timely decisions to veterans. In sum, 
although I am committed to making sure the Court has adequate 
resources, my preference would be to follow a more deliberate, 
searching approach in assessing whether to expand the size of 
the Court.

                  II. Temporary vs. Permanent Increase

    In addition to concerns about the lack of data on the 
Court's workload, it appears to me that we do not have 
sufficient information at this time to determine whether a 
permanent increase in the size of the Court is warranted. Over 
the years, the incoming caseload at the Court has varied 
significantly, ranging from less than 1,200 new cases to more 
than 4,600 new cases. Although the number of incoming cases 
reached a record high in fiscal year 2007, the Court is now on 
pace to receive about 700 fewer cases during fiscal year 2008. 
Also, it is worth mentioning that in 1996 the Court requested 
that Congress reduce the size of the Court from seven judges to 
five judges, reasoning that ``[i]t does not appear that there 
will be any reasonably foreseeable surge in the number of 
appeals filed in the Court.'' S. Hrg. 104-722, at 178 (1996). 
Yet, the following year the Court experienced a 38 percent 
increase in incoming cases.
    To me, this volatility in the Court's caseload would weigh 
in favor of a temporary, rather than permanent, increase in the 
size of the Court at this point. In fact, for other Federal 
courts, the Judicial Conference of the United States 
``recommends temporary judgeships in all situations where the 
caseload level justifying additional judgeships occurred only 
in the most recent years.'' H. Hrg. 108-30, at 18 (2003). In 
addition, the CAVC itself has recognized that it may not be 
necessary for the Court to have nine judges in future years. As 
the Chief Judge stated in the Court's September 2007 
legislative proposal, ``Congress could reexamine the need for 
nine judges when the 13-year terms of Judges Kasold and Hagel 
expire in 2016.''
    Perhaps more importantly, a temporary increase would 
provide Congress with an opportunity to monitor the Court's 
progress with additional judges and gather more information 
about the Court's workload before deciding whether a permanent 
expansion is the best way to make sure veterans receive timely 
decisions. To me, a temporary expansion of the Court would 
appear to be a more reasonable approach for this Committee 
given the information we have at this time.

                          III. Staggered Terms

    As a final matter, I want to discuss another important 
issue facing the Court--the prospect of having multiple 
judicial vacancies when the current judges retire. By way of 
background, when the CAVC was created in 1988, the 15-year 
terms of the original judges were not staggered, which led to 
six judges retiring between 2000 and 2005. This left the Court 
without a full complement of judges for much of that period, 
which, in turn, contributed to a disruption in service to 
veterans. In total, the Court received over 1,800 more cases 
than it decided from 2000 to 2005, and the number of cases 
pending at the Court grew from almost 2,300 in 1999 to over 
4,600 in 2005.
    Now, it is possible that this second generation of judges 
will also retire in a cluster. The terms of six judges will 
expire between 2016 and 2019, with four terms expiring in a 
two-week period in 2019. In fact, in the September 2007 
legislative proposal, the Court pointed to this possibility of 
en masse retirements as another reason for expanding the Court. 
According to the Chief Judge, ``[c]reating two new vacancies in 
FY 2008-09 would avoid a significant number of simultaneous 
vacancies followed by a period of time when a majority of the 
judges would be new and unseasoned at the same time.''
    However, the addition of judgeships would only help 
alleviate the impact of multiple retirements if the new judges 
serve beyond 2019. Yet, under current law, judges who have 
served at least 10 years may retire before the expiration of 
their 15-year term when their age plus years of service on the 
bench equals 80--a provision known as the ``Rule of 80.'' That 
means a judge confirmed next year could potentially be eligible 
to retire in 2019--the same year that the terms of four 
existing judges will expire.
    In summary, we would simply be repeating past mistakes if 
we add two more judges to the Court in the next year and allow 
them to retire under the Rule of 80. That is why I filed an 
amendment at the Committee markup to require that any judge 
confirmed to fill the two new judgeships must serve out the 
full balance of the 15-year term before retiring and receiving 
100 percent of their salary--currently $169,000--for the rest 
of their lives. That would help ensure that the new judges will 
serve well beyond the retirement dates of the existing judges 
and hopefully ensure the Court consistently has the judicial 
resources necessary to provide timely service to our nation's 
veterans.
    In my view, if Congress simply expands the size of the 
Court without addressing this ongoing problem of en masse 
retirements by planning ahead, our veterans will, 
unfortunately, pay the price with a disruption in service. I 
hope that, before Congress moves forward with any expansion in 
the size of the Court, measures will be taken to address this 
very real problem that is confronting veterans who are seeking 
justice from the Court.

                          IV. Committee Report

    As a final matter, I find it necessary to express 
reservations about the methodologies used for some portions of 
this report. A Committee report serves as a key source of 
legislative history. It preserves the Committee's assessment of 
the laws and circumstances that exist today, how the Committee 
bill would change the law, and more importantly why the 
Committee has determined that changes are necessary. A 
Committee report will be relied upon for many years to come by 
legislators, judges, historians, and other practitioners 
seeking to gain insight into the actions and intentions of this 
Committee. That is why I believe it is our responsibility as a 
Committee to ensure that the information contained in each 
Committee report is held to the highest standards of quality, 
reliability, and accuracy befitting this historical document.
    Unfortunately, this Committee report--principally the 
material in the discussion of section 101--contains numerous 
conclusions that were reached by a single member of the 
Chairman's Committee staff after she reviewed claims files at 
several VA offices. Although I have no reason to doubt the 
intentions of the Chairman's staff, I would suggest that the 
views of a single staff member should not be included in this 
report until they have been verified.
    For the Committee to determine whether this information is 
reliable, we would--at a minimum--need information about the 
methodology used in conducting these reviews, such as the 
standards used to determine whether errors were committed, the 
method used to choose the case files that were reviewed, and 
the reviewer's training in auditing. In the absence of that 
basic information, there is simply no means to gauge the 
accuracy or reliability of the opinions expressed in that 
section of the report.
    This is not meant to suggest that oversight work performed 
by staff members is unimportant. To the contrary, it plays a 
key role in helping identify problems and trends that should be 
examined by the entire Committee. It may also reveal the need 
to engage independent entities--such as the Government 
Accountability Office or VA's Office of Inspector General--to 
thoroughly and rigorously review specific benefits or services 
provided by VA. Those entities conduct their studies in 
accordance with generally accepted government auditing 
standards, which helps ensure that their findings are 
objective, independent, fact-based, and nonpartisan.
    That type of exacting standard should be expected of work 
that will be relied upon by Congressional Committees in 
performing their legislative functions. That caliber of work 
also provides the type of objective, factual, and verifiable 
information that is appropriate for a Committee report.

           *       *       *       *       *       *       *

                        Changes in Existing Law

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, 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 italic, existing law in which no change is 
proposed is shown in roman).

TITLE 31. MONEY AND FINANCE

           *       *       *       *       *       *       *

SUBTITLE III. FINANCIAL MANAGEMENT

           *       *       *       *       *       *       *

CHAPTER 37. CLAIMS

           *       *       *       *       *       *       *

Subchapter II. Claims of The United States Government

           *       *       *       *       *       *       *

SEC. 3711. COLLECTION AND COMPROMISE

           *       *       *       *       *       *       *

    (f)(1) * * *

           *       *       *       *       *       *       *

    (3) The Secretary of Veterans Affairs may suspend or 
terminate an action by the Secretary under subsection (a) to 
collect a claim against the estate of a person who died while 
serving on active duty as a member of the Army, Navy, Air 
Force, Marine Corps, or Coast Guard during a period when the 
Coast Guard is operating as a service in the Navy if the 
Secretary determines that, under the circumstances applicable 
with respect to the deceased person, it is appropriate to do 
so.
    (4) [(3)] * * *

           *       *       *       *       *       *       *

                      TITLE 38. VETERANS' BENEFITS

                       PART I. GENERAL PROVISIONS

                           CHAPTER 1. GENERAL

SEC. 101. DEFINITIONS

           *       *       *       *       *       *       *

    (4)(A) The term ``child'' means (except for purposes of 
chapter 19 of this title (other than with respect to a child 
who is an insurable dependent under [section 1965(10)(B)] 
subparagraph (B) or (C) of section 1965(10) of such chapter) 
and section 8502(b) of this title) a person who is unmarried 
and--

           *       *       *       *       *       *       *

                  CHAPTER 5. AUTHORITY AND DUTIES OF 
                             THE SECRETARY

Subchapter I. General Authorities

           *       *       *       *       *       *       *

SEC. 502. JUDICIAL REVIEW OF RULES AND REGULATIONS

    An action of the Secretary to which section 552(a)(1) or 
553 of title 5 (or both) refers [(other than an action relating 
to the adoption or revision of the schedule of ratings for 
disabilities adopted under section 1155 of this title)] is 
subject to judicial review. Such review shall be in accordance 
with chapter 7 of title 5 and may be sought only in the United 
States Court of Appeals for the Federal Circuit. However, if 
such review is sought in connection with an appeal brought 
under the provisions of chapter 72 of this title, the 
provisions of that chapter shall apply rather than the 
provisions of chapter 7 of title 5.

           *       *       *       *       *       *       *

PART II. GENERAL BENEFITS

           *       *       *       *       *       *       *

CHAPTER 19. INSURANCE

           *       *       *       *       *       *       *

          Subchapter III. Servicemembers' Group Life Insurance

SEC. 1965. DEFINITIONS

           *       *       *       *       *       *       *

          (10) The term ``insurable dependent'', with respect 
        to a member, means the following:
                  (A) The member's spouse.
                  (B) The member's child, as defined in the 
                first sentence of section 101(4)(A) of this 
                title.
                  (C) The member's stillborn child.

           *       *       *       *       *       *       *

SEC. 1967. PERSONS INSURED; AMOUNT

    (a)(1) * * *
          (A) * * *

           *       *       *       *       *       *       *

          (C) In the case of any member of the Ready Reserve of 
        a uniformed service who meets the qualifications set 
        forth in [section 1965(5)(B) of this title] 
        subparagraph (B) or (C) of section 1965(5) of this 
        title--

           *       *       *       *       *       *       *

    (5) * * *
          (A) * * *

           *       *       *       *       *       *       *

          (C) The first day a member of the Ready Reserve meets 
        the qualifications set forth in [section 1965(5)(B) of 
        this title] subparagraph (B) or (C) of section 1965(5) 
        of this title.

           *       *       *       *       *       *       *

SEC. 1968. DURATION AND TERMINATION OF COVERAGE; CONVERSION

    (a) * * *

           *       *       *       *       *       *       *

          (5) With respect to an insurable dependent of the 
        member, insurance under this subchapter shall cease--
                  (A) 120 days after the date of an election 
                made in writing by the member to terminate the 
                coverage; or
                  (B) on the earliest of--
                          (i) 120 days after the date of the 
                        member's death;
                          (ii) [120 days after] the date of 
                        termination of the insurance on the 
                        member's life under this subchapter; or
                          (iii) 120 days after the termination 
                        of the dependent's status as an 
                        insurable dependent of the member.

           *       *       *       *       *       *       *

SEC. 1969. DEDUCTIONS; PAYMENT; INVESTMENT; EXPENSES

           *       *       *       *       *       *       *

    (g)(1)(A) * * *
    (B) During any month in which a member is assigned to the 
Ready Reserve of a uniformed service under conditions which 
meet the qualifications set forth in [section 1965(5)(B) of 
this title] subparagraph (B) or (C) of section 1965(5) of this 
title and the spouse of the member is insured under a policy of 
insurance purchased by the Secretary under section 1966 of this 
title, there shall be contributed from the appropriation made 
for active duty pay of the uniformed service concerned an 
amount determined by the Secretary [(which shall be the same 
for all such members)] as the share of the cost attributable to 
insuring the spouse of such member under this policy, less any 
costs traceable to the extra hazards of such duty in the 
uniformed services. Any amounts so contributed on behalf of any 
individual shall be collected by the Secretary concerned from 
such individual (by deduction from pay or otherwise) and shall 
be credited to the appropriation from which such contribution 
was made.

           *       *       *       *       *       *       *

SEC. 1973. FORFEITURE

    Any person guilty of mutiny, treason, spying, or desertion, 
or who, because of conscientious objections, refuses to perform 
service in the Armed Forces of the United States or refuses to 
wear the uniform of such force, shall forfeit all rights to 
Servicemembers' Group Life Insurance [under this subchapter] 
and Veterans' Group Life Insurance under this subchapter. No 
such insurance shall be payable for death inflicted as a lawful 
punishment for crime or for military or naval offense, except 
when inflicted by an enemy of the United States.

           *       *       *       *       *       *       *

CHAPTER 23. BURIAL BENEFITS

           *       *       *       *       *       *       *

SEC. 2306. HEADSTONES, MARKERS, AND BURIAL RECEPTACLES

           *       *       *       *       *       *       *

    (b)(1) * * *

           *       *       *       *       *       *       *

    (4) For purposes of this subsection:
          (A) The term ``veteran'' includes an individual who 
        dies in the active military, naval, or air service.
          (B) The term ``surviving spouse'' includes [an 
        unremarried surviving spouse whose subsequent 
        remarriage was terminated by death or divorce] a 
        surviving spouse who had a subsequent remarriage.

           *       *       *       *       *       *       *

                      PART III. READJUSTMENT AND 
RELATED BENEFITS

           *       *       *       *       *       *       *

   CHAPTER 31. TRAINING AND REHABILITATION FOR VETERANS WITH SERVICE-
CONNECTED DISABILITIES

           *       *       *       *       *       *       *

SEC. 3105. DURATION OF REHABILITATION PROGRAMS

           *       *       *       *       *       *       *

    (d) [Unless the Secretary determines that a longer period 
is necessary and likely to result in a substantial increase in 
a veteran's level of independence in daily living, the period 
of a program] (1) Except as provided in paragraph (2), the 
period of a program of independent living services and 
assistance for a veteran under this chapter (following a 
determination by the Secretary that such veteran's disability 
or disabilities are so severe that the achievement of a 
vocational goal currently is not reasonably feasible) may not 
exceed twenty-four months.
    (2)(A) The period of a program of independent living 
services and assistance for a veteran under this chapter may 
exceed twenty-four months as follows:
          (i) If the Secretary determines that a longer period 
        is necessary and likely to result in a substantial 
        increase in the veteran's level of independence in 
        daily living.
          (ii) If the veteran served on active duty during the 
        Post-9/11 Global Operations period and has a severe 
        disability (as determined by the Secretary for purposes 
        of this clause) incurred or aggravated in such service.
    (B) In this paragraph, the term ``Post-9/11 Global 
Operations period'' means the period of the Persian Gulf War 
beginning on September 11, 2001, and ending on the date 
thereafter prescribed by Presidential proclamation or by law.

           *       *       *       *       *       *       *

CHAPTER 35. SURVIVORS' AND DEPENDENTS' EDUCATIONAL ASSISTANCE

           *       *       *       *       *       *       *

Subchapter II. Eligibility and Entitlement

           *       *       *       *       *       *       *

SEC. 3512. PERIODS OF ELIGIBILITY

           *       *       *       *       *       *       *

    (b)(1)(A) Except as provided in [subparagraph (B) or (C)] 
subparagraphs (B), (C), or (D), a person made eligible by 
subparagraph (B) or (D) of section 3501(a)(1) of this title or 
a person made eligible by the disability of a spouse under 
section 3501(a)(1)(E) 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 becomes an eligible person within the meaning of section 
3501(a)(1)(B), 3501(a)(1)(D)(i), 3501(a)(1)(D)(ii), or 
3501(a)(1)(E) 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 eligible for educational 
assistance under this chapter as a spouse made eligible by 
clause (i) of that section.

           *       *       *       *       *       *       *

    (D) Notwithstanding subparagraph (A), an eligible person 
referred to in that subparagraph who is made eligible under 
section 3501(a)(1)(D)(i) of this title by reason of a service-
connected disability that was determined to be a total 
disability permanent in nature not later than three years after 
discharge from service may be afforded educational assistance 
under this chapter during the 20-year period beginning on the 
date the disability was so determined to be a total disability 
permanent in nature, but only if the eligible person remains 
the spouse of the disabled person throughout the period.

           *       *       *       *       *       *       *

                     CHAPTER 36. ADMINISTRATION OF 
                          EDUCATIONAL BENEFITS

Subchapter I. State Approving Agencies

           *       *       *       *       *       *       *

SEC. 3676. APPROVAL OF NONACCREDITED COURSES

           *       *       *       *       *       *       *

    (c) * * *

           *       *       *       *       *       *       *

          (4) The institution maintains a written record of the 
        previous education and training of the eligible person 
        and clearly indicates that appropriate credit has been 
        given by the institution for previous education and 
        training, with the training period shortened 
        proportionately and the eligible person [and the 
        Secretary] so notified.

           *       *       *       *       *       *       *

SEC. 3677. APPROVAL OF TRAINING ON THE JOB

           *       *       *       *       *       *       *

    (b)(1) * * *

           *       *       *       *       *       *       *

    (3) The requirement for certification under paragraph (1) 
shall not apply to training described in section 3452(e)(2) of 
this title.

           *       *       *       *       *       *       *

Subchapter II. Miscellaneous Provisions

           *       *       *       *       *       *       *

SEC. 3686. CORRESPONDENCE COURSES

           *       *       *       *       *       *       *

    (b) The enrollment agreement shall fully disclose the 
obligation of both the institution and the veteran or spouse or 
surviving spouse and shall prominently display the provisions 
for affirmance, termination, refunds, and the conditions under 
which payment of the allowance is made by the Secretary to the 
veteran or spouse or surviving spouse. A copy of the enrollment 
agreement shall be furnished to each such veteran or spouse or 
surviving spouse at the time such veteran or spouse or 
surviving spouse signs such agreement. No such agreement shall 
be effective unless such veteran or spouse or surviving spouse 
shall, after the expiration of [ten] five days after the 
enrollment agreement is signed, have signed and submitted to 
the Secretary a written statement, with a signed copy to the 
institution, specifically affirming the enrollment agreement. 
In the event the veteran or spouse or surviving spouse at any 
time notifies the institution of such veteran's or spouse's 
intention not to affirm the agreement in accordance with the 
preceding sentence, the institution, without imposing any 
penalty or charging any fee shall promptly make a full refund 
of all amounts paid.

           *       *       *       *       *       *       *

SEC. 3691. CHANGE OF PROGRAM

           *       *       *       *       *       *       *

    (d) (1) For the purposes of this section, the term ``change 
of program of education'' shall not be deemed to include a 
change by a veteran or eligible person from the pursuit of one 
program to the pursuit of another program if--
          [(1)] (A) the veteran or eligible person has 
        successfully completed the former program;
          [(2)] (B) the program leads to a vocational, 
        educational, or professional objective in the same 
        general field as the former program;
          [(3)] (C) the former program is a prerequisite to, or 
        generally required for, pursuit of the subsequent 
        program; [or]
          [(4)] (D) in the case of a change from the pursuit of 
        a subsequent program to the pursuit of a former 
        program, the veteran or eligible person resumes pursuit 
        of the former program without loss of credit or 
        standing in the former program[.] ; or
          (E) the change from the program to another program is 
        at the same educational institution and such 
        educational institution determines that the new program 
        is suitable to the aptitudes, interests, and abilities 
        of the veteran or eligible person and certifies to the 
        Secretary the enrollment of the veteran or eligible 
        person in the new program.
    (2) A veteran or eligible person undergoing a change from 
one program of education to another program of education as 
described in paragraph (1)(E) shall not be required to apply to 
the Secretary for approval of such change.

           *       *       *       *       *       *       *

              CHAPTER 37. HOUSING AND SMALL BUSINESS LOANS

Subchapter I. General

           *       *       *       *       *       *       *

SEC. 3703. BASIC PROVISIONS RELATING TO LOAN GUARANTY AND 
                    INSURANCE

    (a)(1)(A) * * *
          (i)(I) * * *

           *       *       *       *       *       *       *

          (IV) in the case of any loan of more than $144,000 
        for a purpose specified in clause (1), (2), (3), (5), 
        (6), or (8) of section 3710(a) of this title, the 
        lesser of the maximum guaranty amount (as defined in 
        subparagraph (C)) or 25 percent of the loan; or

           *       *       *       *       *       *       *

SEC. 3707. ADJUSTABLE RATE MORTGAGES

    (a) The Secretary shall carry out a demonstration project 
under this section [during fiscal years 1993 through 2008] 
during the period beginning with the beginning of fiscal year 
1993 and ending at the end of fiscal year 2012 for the purpose 
of guaranteeing loans in a manner similar to the manner in 
which the Secretary of Housing and Urban Development insures 
adjustable rate mortgages under section 251 of the National 
Housing Act.

           *       *       *       *       *       *       *

SEC. 3707A. HYBRID ADJUSTABLE RATE MORTGAGES

    (a) The Secretary shall carry out a demonstration project 
under this section during fiscal years 2004 [through 2008] 
through 2012 for the purpose of guaranteeing loans in a manner 
similar to the manner in which the Secretary of Housing and 
Urban Development insures adjustable rate mortgages under 
section 251 of the National Housing Act in accordance with the 
provisions of this section with respect to hybrid adjustable 
rate mortgages described in subsection (b).

           *       *       *       *       *       *       *

                          Subchapter II. Loans

SEC. 3710. PURCHASE OR CONSTRUCTION OF HOMES

           *       *       *       *       *       *       *

    (b) * * *

           *       *       *       *       *       *       *

          (8) in the case of a loan to refinance a loan (other 
        than a loan or installment sales contract described in 
        clause (7) of this subsection or a loan made for a 
        purpose specified in subsection (a)(8) of this 
        section), the amount of the loan to be guaranteed or 
        made does not exceed [90 percent] 95 percent of the 
        reasonable value of the dwelling or farm residence 
        securing the loan, as determined pursuant to section 
        3731 of this title.

           *       *       *       *       *       *       *

   CHAPTER 43. EMPLOYMENT AND REEMPLOYMENT RIGHTS OF MEMBERS OF THE 
UNIFORMED SERVICES

           *       *       *       *       *       *       *

      SUBCHAPTER III. PROCEDURES FOR ASSISTANCE, ENFORCEMENT, AND 
INVESTIGATION

           *       *       *       *       *       *       *

SEC.

4326. CONDUCT OF INVESTIGATION; SUBPOENAS.

4327. NONCOMPLIANCE OF FEDERAL OFFICIALS WITH DEADLINES; 
                    INAPPLICABILITY OF STATUTES OF LIMITATIONS.

           *       *       *       *       *       *       *

SUBCHAPTER IV. MISCELLANEOUS PROVISIONS

           *       *       *       *       *       *       *

4334. NOTICE OF RIGHTS AND DUTIES.

4335. TRAINING FOR FEDERAL EXECUTIVE AGENCY HUMAN RESOURCES PERSONNEL 
                    ON EMPLOYMENT AND REEMPLOYMENT RIGHTS AND 
                    LIMITATIONS.

           *       *       *       *       *       *       *

      Subchapter III. Procedures for Assistance, Enforcement, and 
Investigation

           *       *       *       *       *       *       *

SEC. 4322. ENFORCEMENT OF EMPLOYMENT OR REEMPLOYMENT RIGHTS

           *       *       *       *       *       *       *

    [(c) The Secretary shall, upon request, provide technical 
assistance to a potential claimant with respect to a complaint 
under this subsection, and when appropriate, to such claimant's 
employer.]
    (c)(1) Not later than five days after the Secretary 
receives a complaint submitted by a person under subsection 
(a), the Secretary shall notify such person in writing of his 
or her rights with respect to such complaint under this section 
and section 4323 or 4324, as the case may be.
    (2) The Secretary shall, upon request, provide technical 
assistance to a potential claimant with respect to a complaint 
under this subsection, and when appropriate, to such claimant's 
employer.

           *       *       *       *       *       *       *

    (e) If the efforts of the Secretary with respect to any 
complaint filed under subsection (a) do not resolve the 
complaint, the Secretary shall notify the person who submitted 
the complaint in writing of--

           *       *       *       *       *       *       *

    (f) Any action required by subsections (d) and (e) with 
respect to a complaint submitted by a person to the Secretary 
under subsection (a) shall be completed by the Secretary not 
later than 90 days after receipt of such complaint.
    (g) [(f)] This subchapter does not apply to any action 
relating to benefits to be provided under the Thrift Savings 
Plan under title 5.

SEC. 4323. ENFORCEMENT OF RIGHTS WITH RESPECT TO A STATE OR PRIVATE 
                    EMPLOYER

    (a) Action for relief.--
          (1) A person who receives from the Secretary a 
        notification pursuant to section 4322(e) of this title 
        of an unsuccessful effort to resolve a complaint 
        relating to a State (as an employer) or a private 
        employer may request that the Secretary refer the 
        complaint to the Attorney General. Not later than 60 
        days after the Secretary receives such a request with 
        respect to a complaint, the Secretary shall refer the 
        complaint to the Attorney General. If the Attorney 
        General is reasonably satisfied that the person on 
        whose behalf the complaint is referred is entitled to 
        the rights or benefits sought, the Attorney General may 
        appear on behalf of, and act as attorney for, the 
        person on whose behalf the complaint is submitted and 
        commence an action for relief under this chapter for 
        such person. In the case of such an action against a 
        State (as an employer), the action shall be brought in 
        the name of the United States as the plaintiff in the 
        action.
          (2) Not later than 60 days after the date the 
        Attorney General receives a referral under paragraph 
        (1), the Attorney General shall--
                  (A) make a decision whether to appear on 
                behalf of, and act as attorney for, the person 
                on whose behalf the complaint is submitted; and
                  (B) notify such person in writing of such 
                decision.
          (3) [(2)] A person may commence an action for relief 
        with respect to a complaint against a State (as an 
        employer) or a private employer if the person--

           *       *       *       *       *       *       *

    [(i) Inapplicability of State statute of limitations.--No 
State statute of limitations shall apply to any proceeding 
under this chapter.]
    (i) [(j)] Definition.--In this section, the term ``private 
employer'' includes a political subdivision of a State.

SEC. 4324. ENFORCEMENT OF RIGHTS WITH RESPECT TO FEDERAL EXECUTIVE 
                    AGENCIES

    (a)(1) A person who receives from the Secretary a 
notification pursuant to section 4322(e) may request that the 
Secretary refer the complaint for litigation before the Merit 
Systems Protection Board. [The Secretary shall refer] Not later 
than 60 days after the date the Secretary receives such a 
request, the Secretary shall refer the complaint to the Office 
of Special Counsel established by section 1211 of title 5.
    (2)(A) * * *
    (B) [If the Special Counsel declines to initiate an action 
and represent a person before the Merit Systems Protection 
Board under subparagraph (A), the Special Counsel shall notify 
such person of that decision.] Not later than 60 days after the 
date the Special Counsel receives a referral under paragraph 
(1), the Special Counsel shall--
          (i) make a decision whether to represent a person 
        before the Merit Systems Protection Board under 
        subparagraph (A); and
          (ii) notify such person in writing of such decision.

           *       *       *       *       *       *       *

SEC. 4327. NONCOMPLIANCE OF FEDERAL OFFICIALS WITH DEADLINES; 
                    INAPPLICABILITY OF STATUTES OF LIMITATIONS

    (a) Effect of Noncompliance of Federal Officials With 
Deadlines.--(1) The inability of the Secretary, the Attorney 
General, or the Special Counsel to comply with a deadline 
applicable to such official under section 4322, 4323, or 4324 
of this title--
          (A) shall not affect the authority of the Attorney 
        General or the Special Counsel to represent and file an 
        action or submit a complaint on behalf of a person 
        under section 4323 or 4324 of this title;
          (B) shall not affect the right of a person--
                  (i) to commence an action under section 4323 
                of this title;
                  (ii) to submit a complaint under section 4324 
                of this title; or
                  (iii) to obtain any type of assistance or 
                relief authorized by this chapter;
          (C) shall not deprive a Federal court, the Merit 
        Systems Protection Board, or a State court of 
        jurisdiction over an action or complaint filed by the 
        Attorney General, the Special Counsel, or a person 
        under section 4323 or 4324 of this title; and
          (D) shall not constitute a defense, including a 
        statute of limitations period, that any employer 
        (including a State, a private employer, or a Federal 
        executive agency) or the Office of Personnel Management 
        may raise in an action filed by the Attorney General, 
        the Special Counsel, or a person under section 4323 or 
        4324 of this title.
    (2) If the Secretary, the Attorney General, or the Special 
Counsel is unable to meet a deadline applicable to such 
official in section 4322(f), 4323(a)(1), 4323(a)(2), 
4324(a)(1), or 4324(a)(2)(B) of this title, and the person 
agrees to an extension of time, the Secretary, the Attorney 
General, or the Special Counsel, as the case may be, shall 
complete the required action within the additional period of 
time agreed to by the person.
    (b) Inapplicability of Statutes of Limitations.--If any 
person seeks to file a complaint or claim with the Secretary, 
the Merit Systems Protection Board, or a Federal or State court 
under this chapter alleging a violation of this chapter, there 
shall be no limit on the period for filing the complaint or 
claim.

Subchapter IV. Miscellaneous Provisions

           *       *       *       *       *       *       *

SEC. 4332. REPORTS

    (a) Annual Report by Secretary._The Secretary shall [The 
Secretary shall], after consultation with the Attorney General 
and the Special Counsel referred to in section 4324(a)(1) [and 
no later than February 1, 2005, and annually thereafter, 
transmit to the Congress, a report containing the following 
matters for the fiscal year ending before such February 1:] , 
transmit to Congress not later than July 1 each year a report 
on matters for the fiscal year ending in the year before the 
year in which such report is transmitted as follows:
          (1) * * *
          (2) * * *
          (3) The number of cases referred to the Attorney 
        General or the Special Counsel pursuant to section 4323 
        or 4324, respectively, during such fiscal year and the 
        number of actions initiated by the Office of Special 
        Counsel before the Merit Systems Protection Board 
        pursuant to section 4324 during such fiscal year.
          (4) * * *
          (5) The number of cases reviewed by the Secretary and 
        the Secretary of Defense through the National Committee 
        for Employer Support of the Guard and Reserve of the 
        Department of Defense that involve the same person.
          (6) With respect to the cases reported on pursuant to 
        paragraphs (1), (2), (3), (4), and (5)--
                  (A) the number of such cases that involve a 
                disability-related issue; and
                  (B) the number of such cases that involve a 
                person who has a service-connected disability.
          (7) [(5)] The nature and status of each case reported 
        on pursuant to paragraph (1), (2), (3), [or (4)] (4), 
        or (5).
          (8) With respect to the cases reported on pursuant to 
        paragraphs (1), (2), (3), (4), and (5) the number of 
        such cases that involve persons with different 
        occupations or persons seeking different occupations, 
        as designated by the Standard Occupational 
        Classification System.
          (9) [(6)] An indication of whether there are any 
        apparent patterns of violation of the provisions of 
        this chapter, together with an explanation thereof.
          (10) [(7)] Recommendations for administrative or 
        legislative action that the Secretary, the Attorney 
        General, or the Special Counsel considers necessary for 
        the effective implementation of this chapter, including 
        any action that could be taken to encourage mediation, 
        before claims are filed under this chapter, between 
        employers and persons seeking employment or 
        reemployment.
    (b) Quarterly Reports.--
          (1) Quarterly report by secretary.--Not later than 30 
        days after the end of each fiscal quarter, the 
        Secretary shall submit to Congress, the Secretary of 
        Defense, the Attorney General, and the Special Counsel 
        a report setting forth, for the previous full quarter, 
        the following:
                  (A) The number of cases for which the 
                Secretary did not meet the requirements of 
                section 4322(f) of this title.
                  (B) The number of cases for which the 
                Secretary received a request for a referral 
                under paragraph (1) of section 4323(a) of this 
                title but did not make such referral within the 
                time period required by such paragraph.
          (2) Quarterly report by attorney general.--Not later 
        than 30 days after the end of each fiscal quarter, the 
        Attorney General shall submit to Congress, the 
        Secretary, the Secretary of Defense, and the Special 
        Counsel a report setting forth, for the previous full 
        quarter, the number of cases for which the Attorney 
        General received a referral under paragraph (1) of 
        section 4323(a) of this title but did not meet the 
        requirements of paragraph (2) of section 4323(a) of 
        this title for such referral.
          (3) Quarterly report by special counsel.--Not later 
        than 30 days after the end of each fiscal quarter, the 
        Special Counsel shall submit to Congress, the 
        Secretary, the Secretary of Defense, and the Attorney 
        General a report setting forth, for the previous full 
        quarter, the number of cases for which the Special 
        Counsel received a referral under paragraph (1) of 
        section 4324(a) of this title but did not meet the 
        requirements of paragraph (2)(B) of section 4324(a) of 
        this title for such referral.
    (c) Uniform Categorization of Data.--The Secretary shall 
coordinate with the Secretary of Defense, the Attorney General, 
and the Special Counsel to ensure that--
          (1) the information in the reports required by this 
        section is categorized in a uniform way; and
          (2) the Secretary, the Secretary of Defense, the 
        Attorney General, and the Special Counsel each have 
        electronic access to the case files reviewed under this 
        chapter by the Secretary, the Secretary of Defense, the 
        Attorney General, and the Special Counsel with due 
        regard for the provisions of section 552a of title 5.

           *       *       *       *       *       *       *

SEC. 4335. TRAINING FOR FEDERAL EXECUTIVE AGENCY HUMAN RESOURCES 
                    PERSONNEL ON EMPLOYMENT AND REEMPLOYMENT RIGHTS AND 
                    LIMITATIONS

    (a) Training Required.--The head of each Federal executive 
agency shall provide training for the human resources personnel 
of such agency on the following:
          (1) The rights, benefits, and obligations of members 
        of the uniformed services under this chapter.
          (2) The application and administration of the 
        requirements of this chapter by such agency with 
        respect to such members.
    (b) Consultation.--The training provided under subsection 
(a) shall be developed and provided in consultation with the 
Director of the Office of Personnel Management.
    (c) Frequency.--The training under subsection (a) shall be 
provided with such frequency as the Director of the Office of 
Personnel Management shall specify in order to ensure that the 
human resources personnel of Federal executive agencies are 
kept fully and currently informed of the matters covered by the 
training.
    (d) Human Resources Personnel Defined.--In this section, 
the term ``human resources personnel'', in the case of a 
Federal executive agency, means any personnel of the agency who 
are authorized to recommend, take, or approve any personnel 
action that is subject to the requirements of this chapter with 
respect to employees of the agency.

           *       *       *       *       *       *       *

               PART IV. GENERAL ADMINISTRATIVE PROVISIONS

           CHAPTER 51. CLAIMS, EFFECTIVE DATES, AND PAYMENTS

Subchapter I. Claims

           *       *       *       *       *       *       *

SEC. 5103. NOTICE TO CLAIMANTS OF REQUIRED INFORMATION AND EVIDENCE

    (a) Required information and evidence.--(1) Upon receipt of 
a complete or substantially complete application, the Secretary 
shall notify the claimant and the claimant's representative, if 
any, of any information, and any medical or lay evidence, not 
previously provided to the Secretary that is necessary to 
substantiate the claim. As part of that notice, the Secretary 
shall indicate which portion of that information and evidence, 
if any, is to be provided by the claimant and which portion, if 
any, the Secretary, in accordance with section 5103A of this 
title and any other applicable provisions of law, will attempt 
to obtain on behalf of the claimant.
    (2)(A) The Secretary shall prescribe in regulations 
requirements relating to the contents of notice to be provided 
under this subsection.
    (B) The regulations required by this paragraph--
          (i) shall specify different contents for notice 
        depending on whether the claim concerned is an original 
        claim, a claim for reopening a prior decision on a 
        claim, or a claim for increase in benefits;
          (ii) may provide additional or alternative contents 
        for notice if appropriate to the benefit or services 
        sought under the claim;
          (iii) shall specify for each type of claim for 
        benefits the general information and evidence required 
        to substantiate the basic elements of such type of 
        claim; and
          (iv) shall specify the time period limitations 
        required pursuant to subsection (b).

           *       *       *       *       *       *       *

CHAPTER 53. SPECIAL PROVISIONS RELATING TO BENEFITS

           *       *       *       *       *       *       *

SEC. 5312. ANNUAL ADJUSTMENT OF CERTAIN BENEFIT RATES

           *       *       *       *       *       *       *

    (d)(1) Whenever there is an increase in benefit amounts 
payable under title II of the Social Security Act (42 U.S.C. 
401 et seq.) as a result of a determination made under section 
215(i) of such Act (42 U.S.C. 415(i)), the Secretary shall, 
effective on the date of such increase in benefit amounts, 
increase the dollar amounts in effect for the payment of 
disability compensation and dependency and indemnity 
compensation by the Secretary, as specified in paragraph (2), 
as such amounts were in effect immediately prior to the date of 
such increase in benefit amounts payable under title II of the 
Social Security Act, by the same percentage as the percentage 
by which such benefit amounts are increased.
    (2) The dollar amounts to be increased pursuant to 
paragraph (1) are the following:
          (A) Compensation.--Each of the dollar amounts in 
        effect under section 1114 of this title.
          (B) Additional compensation for dependents.--Each of 
        the dollar amounts in effect under section 1115(1) of 
        this title.
          (C) Clothing allowance.--The dollar amount in effect 
        under section 1162 of this title.
          (D) New dic rates.--Each of the dollar amounts in 
        effect under paragraphs (1) and (2) of section 1311(a) 
        of this title.
          (E) Old dic rates.--Each of the dollar amounts in 
        effect under section 1311(a)(3) of this title.
          (F) Additional dic for surviving spouses with minor 
        children.--The dollar amount in effect under section 
        1311(b) of this title.
          (G) Additional dic for disability.--Each of the 
        dollar amounts in effect under sections 1311(c) and 
        1311(d) of this title.
          (H) Dic for dependent children.--Each of the dollar 
        amounts in effect under sections 1313(a) and 1314 of 
        this title.
    (3) Whenever there is an increase under paragraph (1) in 
amounts in effect for the payment of disability compensation 
and dependency and indemnity compensation, the Secretary shall 
publish such amounts, as increased pursuant to such paragraph, 
in the Federal Register at the same time as the material 
required by section 215(i)(2)(D) of the Social Security Act (42 
U.S.C. 415(i)(2)(D)) is published by reason of a determination 
under section 215(i) of such Act (42 U.S.C. 415(i)).

           *       *       *       *       *       *       *

SEC. 5317. USE OF INCOME INFORMATION FROM OTHER AGENCIES: NOTICE AND 
                    VERIFICATION

           *       *       *       *       *       *       *

    (g) The authority of the Secretary to obtain information 
from the Secretary of the Treasury or the Commissioner of 
Social Security under section 6103(1)(7)(D)(viii) of the 
Internal Revenue Code of 1986 expires on [September 30, 2008] 
September 30, 2011.

           *       *       *       *       *       *       *

             PART V. BOARDS, ADMINISTRATIONS, AND SERVICES

CHAPTER 72. UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

           *       *       *       *       *       *       *

SUBCHAPTER III. MISCELLANEOUS PROVISIONS

           *       *       *       *       *       *       *

SEC.

7287. ADMINISTRATION.

7288. ANNUAL REPORT.

           *       *       *       *       *       *       *

Subchapter I. Organization and Jurisdiction

           *       *       *       *       *       *       *

SEC. 7253. COMPOSITION

    (a) Composition.--The Court of Appeals for Veterans Claims 
is composed of at least three and not more than [seven judges] 
nine judges, one of whom shall serve as chief judge in 
accordance with subsection (d).

           *       *       *       *       *       *       *

SEC. 7257. RECALL OF RETIRED JUDGES

    (a)(1) A retired judge of the Court may be recalled for 
further service on the Court in accordance with this section. 
To be eligible to be recalled for such service, a retired judge 
must at the time of the judge's retirement provide to the chief 
judge of the Court (or, in the case of the chief judge, to the 
clerk of the Court) notice in writing that the retired judge is 
available for further service on the Court in accordance with 
this section and is willing to be recalled under this section. 
[Such a notice provided by a retired judge is irrevocable.] 
Such a notice provided by a retired judge to whom section 
7296(c)(1)(B) of this title applies is irrevocable.

           *       *       *       *       *       *       *

    (b)(1) * * *
    (2) A recall-eligible retired judge may not be recalled for 
more than 90 days (or the equivalent) during any calendar year 
without the judge's consent [or for more than a total of 180 
days (or the equivalent) during any calendar year].
    (3) If a recall-eligible retired judge is recalled by the 
chief judge in accordance with this section and (other than in 
the case of a judge who has previously during that calendar 
year served at least 90 days (or the equivalent) of recalled 
service on the court) declines (other than by reason of 
disability) to perform the service to which recalled, the chief 
judge shall remove that retired judge from the status of a 
recall-eligible judge. This paragraph shall not apply to a 
judge to whom section 7296(c)(1)(A) or 7296(c)(1)(B) of this 
title applies and who has, in the aggregate, served at least 
five years of recalled service on the Court under this section.

           *       *       *       *       *       *       *

    [(d)(1) The pay of a recall-eligible retired judge who 
retired under section 7296 of this title is specified in 
subsection (c) of that section.
    [(2) A judge who is recalled under this section who retired 
under chapter 83 or 84 of title 5 shall be paid, during the 
period for which the judge serves in recall status, pay at the 
rate of pay in effect under section 7253(e) of this title for a 
judge performing active service, less the amount of the judge's 
annuity under the applicable provisions of chapter 83 or 84 of 
title 5.]
    (d)(1) The pay of a recall-eligible retired judge to whom 
section 7296(c)(1)(B) of this title applies is the pay 
specified in that section.
    (2) A judge who is recalled under this section who retired 
under chapter 83 or 84 of title 5 or to whom section 
7296(c)(1)(A) of this title applies shall be paid, during the 
period for which the judge serves in recall status, pay at the 
rate of pay in effect under section 7253(e) of this title for a 
judge performing active service, less the amount of the judge's 
annuity under the applicable provisions of chapter 83 or 84 of 
title 5 or the judge's annuity under section 7296(c)(1)(A) of 
this title, whichever is applicable.

           *       *       *       *       *       *       *

                        Subchapter II. Procedure

SEC. 7268. AVAILABILITY OF PROCEEDINGS

           *       *       *       *       *       *       *

    (c)(1) The Court shall prescribe rules, in accordance with 
section 7264(a) of this title, to protect privacy and security 
concerns relating to all filing of documents and the public 
availability under this subsection of documents retained by the 
Court or filed electronically with the Court.
    (2) The rules prescribed under paragraph (1) shall be 
consistent to the extent practicable with rules addressing 
privacy and security issues throughout the Federal courts.
    (3) The rules prescribed under paragraph (1) shall take 
into consideration best practices in Federal and State courts 
to protect private information or otherwise maintain necessary 
information security.

           *       *       *       *       *       *       *

Subchapter III. Miscellaneous Provisions

           *       *       *       *       *       *       *

SEC. 7288. ANNUAL REPORT

    (a) In General.--The chief judge of the Court shall submit 
to the appropriate committees of Congress each year a report 
summarizing the workload of the Court for the fiscal year 
ending during the preceding year.
    (b) Elements.--Each report under subsection (a) shall 
include, with respect to the fiscal year covered by such 
report, the following information:
          (1) The number of appeals filed with the Court.
          (2) The number of petitions filed with the Court.
          (3) The number of applications filed with the Court 
        under section 2412 of title 28.
          (4) The total number of dispositions by each of the 
        following:
                  (A) The Court as a whole.
                  (B) The Clerk of the Court.
                  (C) A single judge of the Court.
                  (D) A multi-judge panel of the Court.
                  (E) The full Court.
          (5) The number of each type of disposition by the 
        Court, including settlement, affirmation, remand, 
        vacation, dismissal, reversal, grant, and denial.
          (6) The median time from filing an appeal to 
        disposition by each of the following:
                  (A) The Court as a whole.
                  (B) The Clerk of the Court.
                  (C) A single judge of the Court.
                  (D) Multiple judges of the Court (including a 
                multi-judge panel of the Court or the full 
                Court).
          (7) The median time from filing a petition to 
        disposition by the Court.
          (8) The median time from filing an application under 
        section 2412 of title 28 to disposition by the Court.
          (9) The median time from the completion of briefing 
        requirements by the parties to disposition by the 
        Court.
          (10) The number of oral arguments before the Court.
          (11) The number of cases appealed to the United 
        States Court of Appeals for the Federal Circuit.
          (12) The number and status of appeals and petitions 
        pending with the Court and of applications described in 
        paragraph (3) as of the end of such fiscal year.
          (13) The number of cases pending with the Court more 
        than 18 months as of the end of such fiscal year.
          (14) A summary of any service performed for the Court 
        by a recalled retired judge of the Court.
    (c) Appropriate Committees of Congress Defined.--In this 
section, the term ``appropriate committees of Congress'' 
means--
          (1) the Committee on Veterans' Affairs of the Senate; 
        and
          (2) the Committee on Veterans' Affairs of the House 
        of Representatives.

           *       *       *       *       *       *       *

            Subchapter V. Retirement and Survivors Annuities

SEC. 7296. RETIREMENT OF JUDGES

           *       *       *       *       *       *       *

    (c)[(1) An individual who retires under subsection (b) of 
this section and elects under subsection (d) of this section to 
receive retired pay under this subsection shall (except as 
provided in paragraph (2) of this subsection) receive retired 
pay as follows:
          [(A) In the case of a judge who is a recall-eligible 
        retired judge under section 7257 of this title or who 
        was a recall-eligible retired judge under that section 
        and was removed from recall status under subsection 
        (b)(4) of that section by reason of disability, the 
        retired pay of the judge shall be the pay of a judge of 
        the court.
          [(B) In the case of a judge who at the time of 
        retirement did not provide notice under section 7257 of 
        this title of availability for service in a recalled 
        status, the retired pay of the judge shall be the rate 
        of pay applicable to that judge at the time of 
        retirement.
          [(C) In the case of a judge who was a recall-eligible 
        retired judge under section 7257 of this title and was 
        removed from recall status under subsection (b)(3) of 
        that section, the retired pay of the judge shall be the 
        pay of the judge at the time of the removal from recall 
        status.]
    (1)(A) A judge who is appointed on or after the date of the 
enactment of the Veterans' Benefits Improvement Act of 2008 and 
who retires under subsection (b) and elects under subsection 
(d) to receive retired pay under this subsection shall (except 
as provided in paragraph (2)) receive retired pay as follows:
          (i) In the case of a judge who is a recall-eligible 
        retired judge under section 7257 of this title, the 
        retired pay of the judge shall (subject to section 
        7257(d)(2) of this title) be the rate of pay applicable 
        to that judge at the time of retirement, as adjusted 
        from time to time under subsection (f)(3).
          (ii) In the case of a judge other than a recall-
        eligible retired judge, the retired pay of the judge 
        shall be the rate of pay applicable to that judge at 
        the time of retirement.
    (B) A judge who retired before the date of the enactment of 
the Veterans' Benefits Improvement Act of 2008 and elected 
under subsection (d) to receive retired pay under this 
subsection, or a judge who retires under subsection (b) and 
elects under subsection (d) to receive retired pay under this 
subsection, shall (except as provided in paragraph (2)) receive 
retired pay as follows:
          (i) In the case of a judge who is a recall-eligible 
        retired judge under section 7257 of this title or who 
        was a recall-eligible retired judge under that section 
        and was removed from recall status under subsection 
        (b)(4) of that section by reason of disability, the 
        retired pay of the judge shall be the pay of a judge of 
        the court.
          (ii) In the case of a judge who at the time of 
        retirement did not provide notice under section 7257 of 
        this title of availability for service in a recalled 
        status, the retired pay of the judge shall be the rate 
        of pay applicable to that judge at the time of 
        retirement.
          (iii) In the case of a judge who was a recall-
        eligible retired judge under section 7257 of this title 
        and was removed from recall status under subsection 
        (b)(3) of that section, the retired pay of the judge 
        shall be the pay of the judge at the time of the 
        removal from recall status.

           *       *       *       *       *       *       *

    (f)(1) * * *

           *       *       *       *       *       *       *

    (3)(A) A cost-of-living adjustment provided by law in 
annuities payable under civil service retirement laws shall 
apply to retired pay under this section only in the case of 
retired pay computed under [paragraph (2) of subsection (c)] 
paragraph (1)(A)(i) or (2) of subsection (c).

           *       *       *       *       *       *       *

                   TITLE 50. WAR AND NATIONAL DEFENSE

TITLE 50 APPENDIX--WAR AND NATIONAL DEFENSE

           *       *       *       *       *       *       *

Servicemembers Civil Relief Act

           *       *       *       *       *       *       *

TITLE VII. FURTHER RELIEF

           *       *       *       *       *       *       *

SEC.

596. BUSINESS OR TRADE OBLIGATIONS

707. TUITION, REENROLLMENT, AND STUDENT LOAN RELIEF FOR POSTSECONDARY 
                    STUDENTS CALLED TO MILITARY SERVICE.

           *       *       *       *       *       *       *

Title VII. Further Relief

           *       *       *       *       *       *       *

SEC. 707. TUITION, REENROLLMENT, AND STUDENT LOAN RELIEF FOR 
                    POSTSECONDARY STUDENTS CALLED TO MILITARY SERVICE.

    (a) Tuition and Reenrollment.--In the case of a 
servicemember who because of military service discontinues a 
program of education at a covered institution of higher 
education that administers a Federal financial aid program, 
such institution of higher education shall--
          (1) refund to such servicemember the tuition and fees 
        paid by such servicemember from personal funds, or from 
        a loan, for the portion of the program of education for 
        which such servicemember did not receive academic 
        credit because of such military service; and
          (2) provide such servicemember an opportunity to 
        reenroll in such program of education with the same 
        educational and academic status such servicemember had 
        when such servicemember discontinued such program of 
        education because of such military service.
    (b) Interest Rate Limitation on Student Loans.--
          (1) In general.--Except as provided in paragraph (2) 
        of this subsection, a student loan shall be considered 
        an obligation or liability for the purposes of section 
        207.
          (2) Exception.--Subsection (c) of section 207 shall 
        not apply to a student loan.
    (c) Definitions.--In this section:
          (1) The term ``covered institution of higher 
        education'' means a 2-year or 4-year institution of 
        higher education as defined in section 102 of the 
        Higher Education Act of 1965 (20 U.S.C. 1002) that 
        participates in a loan program under title IV of that 
        Act (20 U.S.C. 1070 et seq.).
          (2) The term ``Federal financial aid program'' means 
        a program providing loans made, insured, or guaranteed 
        under part B, D, or E of title IV of the Higher 
        Education Act of 1965 (20 U.S.C. 1077 et seq., 1087a et 
        seq., 1087aa et seq.).
          (3) The term ``student loan'' means any loan, whether 
        Federal, State, or private, to assist an individual to 
        attend an institution of higher education, including a 
        loan made, insured, or guaranteed under part B, D, or E 
        of title IV of the Higher Education Act of 1965 (20 
        U.S.C. 1077 et seq., 1087a et seq., 1087aa et seq.).

           *       *       *       *       *       *       *

                          WOUNDED WARRIOR ACT

(Public Law 110-181; 122 Stat. 472)

           *       *       *       *       *       *       *

TITLE XVI. WOUNDED WARRIOR MATTERS

           *       *       *       *       *       *       *

Subtitle D. Disability Matters

           *       *       *       *       *       *       *

SEC. 1646. ENHANCEMENT OF DISABILITY SEVERANCE PAY FOR MEMBERS OF THE 
                    ARMED FORCES.

    (a) * * *
    (b) * * *
    (c) Conforming Amendment.--Section 1161 of title 38, United 
States Code, is amended by striking ``as required by section 
1212(c) of title 10'' and inserting ``to the extent required by 
section 1212(d) of title 10''.
    (d) [(c)] * * *

           *       *       *       *       *       *       *

                     VETERANS BENEFITS ACT OF 2003

(Public Law 108-183; 117 Stat. 2651; 38 U.S.C. 5101 note)

           *       *       *       *       *       *       *

TITLE VII. OTHER MATTERS

           *       *       *       *       *       *       *

SEC. 704. TEMPORARY AUTHORITY FOR PERFORMANCE OF MEDICAL DISABILITIES 
                    EXAMINATIONS BY CONTRACT PHYSICIANS.

    (a) * * *
    (b) * * *
    (c) Expiration.--The authority in subsection (a) shall 
expire on [December 31, 2009] December 31, 2012. No examination 
may be carried out under the authority provided in that 
subsection after that date.
    (d) * * *

           *       *       *       *       *       *       *

                                  
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