59–006 

114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 114–405 

AMERICAN HEROES COLA ACT OF 2015 

FEBRUARY 1, 2016.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. MILLER of Florida, from the Committee on Veterans’ Affairs, 

submitted the following 

R E P O R T 

[To accompany H.R. 677] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Veterans’ Affairs, to whom was referred the 

bill (H.R. 677) to amend title 38, United States Code, to provide for 

annual cost-of-living adjustments to be made automatically by law 

each year in the rates of disability compensation for veterans with 

service-connected disabilities and the rates of dependency and indemnity compensation for survivors of certain service-connected 

disabled veterans, having considered the same, report favorably 

thereon with an amendment and recommend that the bill as 

amended do pass. 

CONTENTS 

Page 

Amendment .............................................................................................................. 2 

Purpose and Summary ............................................................................................ 21 

Background and Need for Legislation .................................................................... 21 

Hearings ................................................................................................................... 36 

Subcommittee Consideration .................................................................................. 38 

Committee Consideration ........................................................................................ 39 

Committee Votes ...................................................................................................... 40 

Committee Oversight Findings ............................................................................... 41 

Statement of General Performance Goals and Objectives .................................... 41 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 42 

Earmarks and Tax and Tariff Benefits .................................................................. 42 

Committee Cost Estimate ....................................................................................... 42 

Congressional Budget Office Estimate ................................................................... 42 

Federal Mandates Statement ................................................................................. 50 

Advisory Committee Statement .............................................................................. 51 

Constitutional Authority Statement ...................................................................... 51 

Applicability to Legislative Branch ........................................................................ 51 


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Statement on Duplication of Federal Programs .................................................... 51 

Disclosure of Directed Rulemaking ........................................................................ 51 

Section-by-Section Analysis of the Legislation ...................................................... 51 

Changes in Existing Law Made by the Bill as Reported ...................................... 59 

AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘American Heroes COLA Act of 

2015’’. 

(b) TABLE OF CONTENTS.—The table of contents for this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Expansion of eligibility for medallions. 

Sec. 3. Definitions relating to claims for benefits under laws administered by the Secretary of Veterans Affairs. 

Sec. 4. Quarterly reports on formal and informal claims for benefits under laws administered by Secretary of 

Veterans Affairs. 

Sec. 5. Expedited payment of survivor’s benefits. 

Sec. 6. Priority for processing claims of the Department of Veterans Affairs. 

Sec. 7. Treatment of medical evidence provided by non-Department of Veterans Affairs medical professionals 

in support of claims for disability compensation. 

Sec. 8. Automatic annual increase in rates of disability compensation and dependency and indemnity compensation. 

Sec. 9. Improvement of fiduciaries for veterans. 

Sec. 10. Board of Veterans’ Appeals video hearings. 

Sec. 11. Improvements to authority for performance of medical disabilities examinations by contract physicians. 

Sec. 12. Pilot program on fully developed appeals. 

Sec. 13. Deadline for certification of appeals forms by regional offices of the Department of Veterans Affairs. 

Sec. 14. Evaluation of backlog of disability claims and appeals of claims of Department of Veterans Affairs. 

Sec. 15. Methods for validating certain World War II Merchant Mariner service considered to be active service 

by the Secretary of Veterans Affairs. 

Sec. 16. Designation of American World War II Cities. 

Sec. 17. Sense of Congress regarding American veterans disabled for life. 

SEC. 2. EXPANSION OF ELIGIBILITY FOR MEDALLIONS. 

Section 2306(d)(4) of title 38, United States Code, is amended to read as follows: 

‘‘(4)(A) In lieu of furnishing a headstone or marker under this subsection to a deceased individual described in subparagraph (B), the Secretary may furnish, upon 

request, a medallion or other device of a design determined by the Secretary to signify the deceased individual’s status as a veteran, to be attached to a headstone or 

marker furnished at private expense. 

‘‘(B) A deceased individual described in this subsection is an individual who— 

‘‘(i) served in the Armed Forces on or after April 6, 1917; and 

‘‘(ii) is eligible for a headstone or marker furnished under paragraph (1) (or 

would be so eligible but for the date of the death of the individual).’’. 

SEC. 3. DEFINITIONS RELATING TO CLAIMS FOR BENEFITS UNDER LAWS ADMINISTERED BY 

THE SECRETARY OF VETERANS AFFAIRS. 

(a) DEFINITIONS.— 

(1) IN GENERAL.—Section 5100 of title 38, United States Code, is amended to 

read as follows: 

‘‘§ 5100. Definitions 

‘‘In this chapter: 

‘‘(1) The term ‘claimant’ means any individual applying for, or submitting a 

claim for, any benefit under the laws administered by the Secretary. 

‘‘(2) The term ‘claim’ means a communication in writing requesting a determination of entitlement or evidencing a belief in entitlement to a benefit under 

the laws administered by the Secretary. 

‘‘(3) The term ‘formal claim’ means a claim submitted on an application form 

prescribed by the Secretary.’’. 

(2) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 

51 of such title is further amended by striking the item relating to section 5100 

and inserting the following new item: 

‘‘5100. Definitions.’’. 

(b) EFFECTIVE DATE.—Section 5100 of title 38, United States Code, as amended 

by subsection (a), shall take effect on the date of the enactment of this Act and shall 

apply with respect to a claim submitted on or after such date. 


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SEC. 4. QUARTERLY REPORTS ON FORMAL AND INFORMAL CLAIMS FOR BENEFITS UNDER 

LAWS ADMINISTERED BY SECRETARY OF VETERANS AFFAIRS. 

(a) QUARTERLY REPORTS.—During the five-year period beginning on the date of 

the enactment of this Act, the Secretary shall submit to the Committees on Veterans’ Affairs of the Senate and House of Representatives quarterly reports on formal and informal claims submitted to the Secretary. Each such report shall include, 

for the three-month period covered by the report— 

(1) the total number of claims submitted to the Secretary; 

(2) the total number of informal claims submitted to the Secretary; 

(3) the total number of formal claims submitted to the Secretary; 

(4) the total number of forms indicating an intent to file a claim for benefits 

submitted to the Secretary; 

(5) the total number of claims notification letters that included an invitation 

to the claimant to submit an additional formal claim that was reasonably raised 

during the adjudication of the claim for which the notification letter is sent; 

(6) of the claimants who received notification letters described in paragraph 

(5), the total number who submitted a formal claim in response to the invitation 

included in the letter; 

(7) the total number of electronically filed claims submitted to the Secretary; 

and 

(8) the total number of fully-developed claims submitted to the Secretary. 

(b) SENSE OF CONGRESS.—It is the sense of Congress that the Secretary of Veterans Affairs should develop a designated form for an increase or reopening of a 

claim that does not require the resubmittal of information previously submitted on 

a formal claim form. 

(c) DEFINITIONS.—In this section: 

(1) The terms ‘‘claim’’, ‘‘claimant’’, and ‘‘formal claim’’ have the meanings 

given such terms in section 5100 of title 38, United States Code, as amended 

by section 4. 

(2) The term ‘‘informal claim’’ means a communication in writing requesting 

a determination of entitlement or evidencing a belief in entitlement, to a benefit 

under the laws administered by the Secretary of Veterans Affairs that— 

(A) is submitted in a format other than on an application form prescribed 

by the Secretary; 

(B) indicates an intent to apply for one or more benefits under the laws 

administered by the Secretary; 

(C) identifies the benefit sought; 

(D) is made or submitted by a claimant, his or her duly authorized representative, a Member of Congress, or another person acting on behalf of 

a claimant who meets the requirements established by the Secretary for 

such purpose; and 

(E) may include a report of examination or hospitalization, if the report 

relates to a disability which may establish such an entitlement. 

(3) The term ‘‘reasonably raised’’ with respect to a claim means that evidence 

of an entitlement to a benefit under the laws administered by the Secretary is 

inferred or logically placed at issue upon a sympathetic reading of another claim 

and the record developed with respect to that claim. 

SEC. 5. EXPEDITED PAYMENT OF SURVIVOR’S BENEFITS. 

(a) IN GENERAL.—Section 5101(a)(1) of title 38, United States Code, is amended— 

(1) by striking ‘‘A specific’’ and inserting ‘‘(A) Except as provided in subparagraph (B), a specific’’; and 

(2) by adding at the end the following new subparagraph: 

‘‘(B)(i) The Secretary may pay benefits under chapters 13 and 15 and sections 

2302, 2307, and 5121 of this title to a survivor of a veteran who has not filed a formal claim if the Secretary determines that the record contains sufficient evidence 

to establish the entitlement of the survivor to such benefits. 

‘‘(ii) For purposes of this subparagraph and section 5110 of this title, the earlier 

of the following dates shall be treated as the date of the receipt of the survivor’s 

application for benefits described in clause (i): 

‘‘(I) The date on which the survivor of a veteran (or the representative of such 

a survivor) notifies the Secretary of the death of the veteran through a death 

certificate or other relevant medical evidence indicating that the death was due 

to a service-connected or compensable disability. 

‘‘(II) The head of any other department or agency of the Federal Government 

notifies the Secretary of the death of the veteran. 

‘‘(iii) In notifying the Secretary of the death of a veteran as described in clause 

(ii)(I), the survivor (or the representative of such a survivor) may submit to the Secretary additional documents relating to such death without being required to file a 

formal claim.’’. 


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(b) REPORT.— (1) IN GENERAL.—Not later than one year after the date of the enactment of 

this Act, the Secretary of Veterans Affairs shall submit to the Committee on 

Veterans’ Affairs of the Senate and the Committee on Veterans’ Affairs of the 

House of Representatives a report on benefits paid pursuant to covered claims. 

(2) CONTENTS.—The report under paragraph (1) shall include the following: 

(A) The number of covered claims adjudicated during the one-year period 

preceding the date of the report, disaggregated by the following: 

(i) Claims in which the claimant claimed entitlement to compensation 

on the basis of the claimant’s status as the spouse of a deceased veteran. (ii) Claims in which the claimant claimed entitlement to compensation on the basis of the claimant’s status as the child of a deceased veteran. (iii) Claims in which the claimant claimed entitlement to compensation on the basis of the claimant’s status as the parent of a deceased 

veteran. 

(B) The number of covered claims that were adjudicated during such period and for which compensation was not awarded, disaggregated by clauses 

(i) through (iii) of subparagraph (A). 

(C) A comparison of the accuracy and timeliness of covered claims adjudicated during such period with non-covered claims filed by survivors of a 

veteran. 

(D) The findings of the Secretary with respect to adjudicating covered 

claims. 

(E) Such recommendations as the Secretary may have for legislative or 

administrative action to improve the adjudication of claims submitted to the 

Secretary for benefits under chapters 13 and 15 and sections 2302, 2307, 

and 5121 of title 38, United States Code. 

(3) COVERED CLAIM DEFINED.—In this subsection, the term ‘‘covered claim’’ 

means a claim covered by section 5101(a)(1)(B) of title 38, United States Code, 

as added by subsection (a). 

(c) EFFECTIVE DATE.—The amendments made by subsection (a) shall apply with 

respect to claims for benefits based on a death occurring on or after the date of the 

enactment of this Act. 

SEC. 6. PRIORITY FOR PROCESSING CLAIMS OF THE DEPARTMENT OF VETERANS AFFAIRS. 

(a) IN GENERAL.—Subchapter I of chapter 51 of title 38, United States Code, is 

amended by adding at the end the following new section: 

‘‘§ 5109C. Priority for processing claims 

‘‘(a) PRIORITY.—In processing claims for compensation under this chapter, the Secretary shall provide the following claimants with priority over other claimants: 

‘‘(1) Veterans who have attained the age of 70. 

‘‘(2) Veterans who are terminally ill. 

‘‘(3) Veterans with life-threatening illnesses. 

‘‘(4) Homeless veterans (as defined in section 2002 of this title). 

‘‘(5) Veterans who were awarded the Medal of Honor. 

‘‘(6) Veterans who are former prisoners of war. 

‘‘(7) Veterans whose claims are being reviewed again in relation to a previously denied claim relating to military sexual trauma. 

‘‘(8) Veterans whom the Secretary determines, on a case-by-case basis, are seriously or very seriously injured. 

‘‘(9) Veterans whom the Secretary determines, on a case-by-case basis, should 

be given priority under this section based on an application for good cause established by the Secretary. 

‘‘(b) REGULATIONS.—The Secretary shall prescribe regulations to carry out subsection (a).’’. 

(b) CLERICAL AMENDMENT.—The table of sections at the beginning of such chapter 

is amended by inserting after the item relating to section 5109B the following new 

item: 

‘‘5109C. Priority for processing claims.’’. 

SEC. 7. TREATMENT OF MEDICAL EVIDENCE PROVIDED BY NON-DEPARTMENT OF VETERANS 

AFFAIRS MEDICAL PROFESSIONALS IN SUPPORT OF CLAIMS FOR DISABILITY 

COMPENSATION. 

(a) ACCEPTANCE OF REPORTS OF PRIVATE PHYSICIAN EXAMINATIONS.—Section 5125 

of title 38, United States Code, is amended— 

(1) by striking ‘‘For purposes’’ and inserting ‘‘(a) IN GENERAL.—For purposes’’; 

and 


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(2) by adding at the end the following new subsections: 

‘‘(b) SUFFICIENCY OF EVIDENCE.—If a veteran has submitted a medical opinion or 

report of a medical examination administered by a private physician in support of 

the veteran’s claim, the Secretary may not order a medical examination to be administered by a Department physician unless the Secretary provides the veteran 

with a thorough explanation of why the medical opinion or report submitted by the 

veteran was not sufficiently complete and the reason why additional medical evidence is necessary. 

‘‘(c) SUFFICIENTLY COMPLETE DEFINED.—For purposes of a medical opinion or report described in subsection (a), the term ‘sufficiently complete’ means competent, 

credible, probative, and containing such information as may be required to make a 

decision on the claim for which the medical opinion or report is provided.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with 

respect to medical evidence submitted after the date that is one year after the date 

of the enactment of this Act. 

SEC. 8. AUTOMATIC ANNUAL INCREASE IN RATES OF DISABILITY COMPENSATION AND DEPENDENCY AND INDEMNITY COMPENSATION. 

(a) INDEXING TO SOCIAL SECURITY INCREASES.—Section 5312 of title 38, United 

States Code, is amended by adding at the end the following new subsection: 

‘‘(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 before 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) WARTIME DISABILITY 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) DEPENDENCY AND INDEMNITY COMPENSATION TO SURVIVING SPOUSE.— 

Each of the dollar amounts in effect under subsections (a) through (d) of section 

1311 of such title. 

‘‘(E) DEPENDENCY AND INDEMNITY COMPENSATION TO CHILDREN.—Each of the 

dollar amounts in effect under sections 1313(a) and 1314 of such 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)). 

‘‘(4) Each dollar amount increased under paragraph (1), if not a whole dollar 

amount, shall be rounded to the next lower whole dollar amount. 

‘‘(5) The Secretary of Veterans Affairs may adjust administratively, consistent 

with the increases made under subsection (a), the rates of disability compensation 

payable to persons under section 10 of Public Law 85–857 (72 Stat. 1263) who have 

not received compensation under chapter 11 of this title.’’. 

(b) EFFECTIVE DATE.—Subsection (d) of section 5312 of title 38, United States 

Code, as added by subsection (a) of this section, shall take effect on December 1, 

2015. 

SEC. 9. IMPROVEMENT OF FIDUCIARIES FOR VETERANS. 

(a) APPOINTMENT AND SUPERVISION.— 

(1) Section 5502 of title 38, United States Code, is amended to read as follows: 

‘‘§ 5502. Appointment of fiduciaries 

‘‘(a) APPOINTMENT.—Where it appears to the Secretary that the interest of the 

beneficiary would be served thereby, payment of benefits under any law administered by the Secretary may be made directly to the beneficiary or to a relative or 

some other fiduciary for the use and benefit of the beneficiary, regardless of any 

legal disability on the part of the beneficiary. 

‘‘(b) APPEALS.—(1) If the Secretary determines a beneficiary to be mentally incompetent for purposes of appointing a fiduciary under this chapter, the Secretary shall 


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provide such beneficiary with a written statement detailing the reasons for such determination. 

‘‘(2) A beneficiary whom the Secretary has determined to be mentally incompetent 

for purposes of appointing a fiduciary under this chapter may appeal such determination. 

‘‘(c) MODIFICATION.—(1) A beneficiary for whom the Secretary appoints a fiduciary 

under this chapter may, at any time, request the Secretary to— 

‘‘(A) remove the fiduciary so appointed; and 

‘‘(B) have a new fiduciary appointed. 

‘‘(2) The Secretary shall comply with a request under paragraph (1) if the Secretary determines that the request is made in good faith and— 

‘‘(A) the fiduciary requested to be removed receives a fee from the beneficiary 

and a suitable volunteer fiduciary is available to assist the beneficiary; or 

‘‘(B) the beneficiary provides credible information that the fiduciary requested 

to be removed is— 

‘‘(i) not acting in the interest of the beneficiary; or 

‘‘(ii) unable to effectively serve the beneficiary because of an irreconcilable 

personality conflict or disagreement. 

‘‘(3) The Secretary shall ensure that any removal or new appointment of a fiduciary under paragraph (1) does not delay or interrupt the beneficiary’s receipt of 

benefits administered by the Secretary. 

‘‘(d) INDEPENDENCE.—A fiduciary appointed by the Secretary shall operate independently of the Department to determine the actions that are in the interest of the 

beneficiary. 

‘‘(e) PREDESIGNATION.—A veteran may predesignate a fiduciary by— 

‘‘(1) submitting written notice to the Secretary of the predesignated fiduciary; 

or 

‘‘(2) submitting a form provided by the Secretary for such purpose. 

‘‘(f) APPOINTMENT OF NON-PREDESIGNATED FIDUCIARY.—If a beneficiary designates 

an individual to serve as a fiduciary under subsection (e) and the Secretary appoints 

an individual not so designated as the fiduciary for such beneficiary, the Secretary 

shall notify such beneficiary of— 

‘‘(1) the reason why such designated individual was not appointed; and 

‘‘(2) the ability of the beneficiary to modify the appointed fiduciary under subsection (c). 

‘‘(g) PRIORITY OF APPOINTMENT.—In appointing a fiduciary under this chapter, if 

a beneficiary does not designate a fiduciary pursuant to subsection (e), to the extent 

possible the Secretary shall appoint a person who is— 

‘‘(1) a relative of the beneficiary; 

‘‘(2) appointed as guardian of the beneficiary by a court of competent jurisdiction; or 

‘‘(3) authorized to act on behalf of the beneficiary under a durable power of 

attorney.’’. 

(2) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 

55 of title 38, United States Code, is amended by striking the item relating to 

section 5502 and inserting the following: 

‘‘5502. Appointment of fiduciaries.’’. 

(b) SUPERVISION.— 

(1) IN GENERAL.—Chapter 55 of title 38, United States Code, is amended by 

inserting after section 5502, as amended by subsection (a)(1), the following new 

section: 

‘‘§ 5502A. Supervision of fiduciaries 

‘‘(a) COMMISSION.—(1)(A) In a case in which the Secretary determines that a commission is necessary in order to obtain the services of a fiduciary in the best interests of a beneficiary, the Secretary may authorize a fiduciary appointed by the Secretary to obtain from the monthly benefits provided to the beneficiary a reasonable 

commission for fiduciary services rendered, but the commission for any month may 

not exceed the lesser of the following amounts: 

‘‘(i) The amount that equals three percent of the monthly monetary benefits 

under laws administered by the Secretary paid on behalf of the beneficiary to 

the fiduciary. 

‘‘(ii) $35. 

‘‘(B) A commission paid under this paragraph may not be derived from any award 

to a beneficiary regarding back pay or retroactive benefits payments. 

‘‘(C) A commission may not be authorized for a fiduciary who receives any other 

form of remuneration or payment in connection with rendering fiduciary services for 

benefits under this title on behalf of the beneficiary. 


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‘‘(D) In accordance with section 6106 of this title, a commission may not be paid 

to a fiduciary if the Secretary determines that the fiduciary misused any benefit 

payments of a beneficiary. 

‘‘(E) If the Secretary determines that the fiduciary has misused any benefit or 

payments of a beneficiary, the Secretary may revoke the fiduciary status of the fiduciary. 

‘‘(2) Where, in the opinion of the Secretary, any fiduciary receiving funds on behalf 

of a Department beneficiary is acting in such a number of cases as to make it impracticable to conserve properly the estates or to supervise the persons of the beneficiaries, the Secretary may refuse to make future payments in such cases as the 

Secretary may deem proper. 

‘‘(b) COURT.—Whenever it appears that any fiduciary, in the opinion of the Secretary, is not properly executing or has not properly executed the duties of the trust 

of such fiduciary or has collected or paid, or is attempting to collect or pay, fees, 

commissions, or allowances that are inequitable or in excess of those allowed by law 

for the duties performed or expenses incurred, or has failed to make such payments 

as may be necessary for the benefit of the ward or the dependents of the ward, then 

the Secretary may appear, by the Secretary’s authorized attorney, in the court 

which has appointed such fiduciary, or in any court having original, concurrent, or 

appellate jurisdiction over said cause, and make proper presentation of such matters. The Secretary, in the Secretary’s discretion, may suspend payments to any 

such fiduciary who shall neglect or refuse, after reasonable notice, to render an account to the Secretary from time to time showing the application of such payments 

for the benefit of such incompetent or minor beneficiary, or who shall neglect or 

refuse to administer the estate according to law. The Secretary may require the fiduciary, as part of such account, to disclose any additional financial information 

concerning the beneficiary (except for information that is not available to the fiduciary). The Secretary may appear or intervene by the Secretary’s duly authorized 

attorney in any court as an interested party in any litigation instituted by the Secretary or otherwise, directly affecting money paid to such fiduciary under this section. 

‘‘(c) PAYMENT OF CERTAIN EXPENSES.—Authority is hereby granted for the payment of any court or other expenses incident to any investigation or court proceeding for the appointment of any fiduciary or other person for the purpose of payment of benefits payable under laws administered by the Secretary or the removal 

of such fiduciary and appointment of another, and of expenses in connection with 

the administration of such benefits by such fiduciaries, or in connection with any 

other court proceeding hereby authorized, when such payment is authorized by the 

Secretary. 

‘‘(d) TEMPORARY PAYMENT OF BENEFITS.—All or any part of any benefits the payment of which is suspended or withheld under this section may, in the discretion 

of the Secretary, be paid temporarily to the person having custody and control of 

the incompetent or minor beneficiary, to be used solely for the benefit of such beneficiary, or, in the case of an incompetent veteran, may be apportioned to the dependent or dependents, if any, of such veteran. Any part not so paid and any funds of 

a mentally incompetent or insane veteran not paid to the chief officer of the institution in which such veteran is a patient nor apportioned to the veteran’s dependent 

or dependents may be ordered held in the Treasury to the credit of such beneficiary. 

All funds so held shall be disbursed under the order and in the discretion of the 

Secretary for the benefit of such beneficiary or the beneficiary’s dependents. Any 

balance remaining in such fund to the credit of any beneficiary may be paid to the 

beneficiary if the beneficiary recovers and is found competent, or if a minor, attains 

majority, or otherwise to the beneficiary’s fiduciary, or, in the event of the beneficiary’s death, to the beneficiary’s personal representative, except as otherwise provided by law; however, payment will not be made to the beneficiary’s personal representative if, under the law of the beneficiary’s last legal residence, the beneficiary’s estate would escheat to the State. In the event of the death of a mentally 

incompetent or insane veteran, all gratuitous benefits under laws administered by 

the Secretary deposited before or after August 7, 1959, in the personal funds of patient’s trust fund on account of such veteran shall not be paid to the personal representative of such veteran, but shall be paid to the following persons living at the 

time of settlement, and in the order named: The surviving spouse, the children 

(without regard to age or marital status) in equal parts, and the dependent parents 

of such veteran, in equal parts. If any balance remains, such balance shall be deposited to the credit of the applicable current appropriation; except that there may be 

paid only so much of such balance as may be necessary to reimburse a person (other 

than a political subdivision of the United States) who bore the expenses of last sickness or burial of the veteran for such expenses. No payment shall be made under 

the two preceding sentences of this subsection unless claim therefor is filed with the 


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Secretary within five years after the death of the veteran, except that, if any person 

so entitled under said two sentences is under legal disability at the time of death 

of the veteran, such five-year period of limitation shall run from the termination or 

removal of the legal disability. 

‘‘(e) ESCHEATMENT.—Any funds in the hands of a fiduciary appointed by a State 

court or the Secretary derived from benefits payable under laws administered by the 

Secretary, which under the law of the State wherein the beneficiary had last legal 

residence would escheat to the State, shall escheat to the United States and shall 

be returned by such fiduciary, or by the personal representative of the deceased beneficiary, less legal expenses of any administration necessary to determine that an 

escheat is in order, to the Department, and shall be deposited to the credit of the 

applicable revolving fund, trust fund, or appropriation. 

‘‘(f) ASSISTANCE.—The Secretary shall provide to a fiduciary appointed under section 5502 of this title materials and tools to assist the fiduciary in carrying out the 

responsibilities of the fiduciary under this chapter, including— 

‘‘(1) handbooks, brochures, or other written material that explain the responsibilities of a fiduciary under this chapter; 

‘‘(2) tools located on an Internet website, including forms to submit to the Secretary required information; and 

‘‘(3) assistance provided by telephone.’’. 

(2) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 

55 of title 38, United States Code, is amended by inserting after the item relating to section 5502 the following new item: 

‘‘5502A. Supervision of fiduciaries.’’. 

(c) DEFINITION OF FIDUCIARY.—Section 5506 of title 38, United States Code, is 

amended— 

(1) by striking ‘‘For purposes’’ and inserting ‘‘(a) For purposes’’; and 

(2) by adding at the end the following new subsection: 

‘‘(b)(1) For purposes of subsection (a), the term ‘person’ includes any— 

‘‘(A) State or local government agency whose mission is to carry out income 

maintenance, social service, or health care-related activities; 

‘‘(B) any State or local government agency with fiduciary responsibilities; or 

‘‘(C) any nonprofit social service agency that the Secretary determines— 

‘‘(i) regularly provides services as a fiduciary concurrently to five or more 

individuals; and 

‘‘(ii) is not a creditor of any such individual. 

‘‘(2) The Secretary shall maintain a list of State or local agencies and nonprofit 

social service agencies under paragraph (1) that are qualified to act as a fiduciary 

under this chapter. In maintaining such list, the Secretary may consult the lists 

maintained under section 807(h) of the Social Security Act (42 U.S.C. 1007(h)).’’. 

(d) QUALIFICATIONS.—Section 5507 of title 38, United States Code, is amended to 

read as follows: 

‘‘§ 5507. Inquiry, investigations, and qualification of fiduciaries 

‘‘(a) INVESTIGATION.—Any certification of a person for payment of benefits of a 

beneficiary to that person as such beneficiary’s fiduciary under section 5502 of this 

title shall be made on the basis of— 

‘‘(1) an inquiry or investigation by the Secretary of the fitness of that person 

to serve as fiduciary for that beneficiary to be conducted in advance of such certification and in accordance with subsection (b); 

‘‘(2) adequate evidence that certification of that person as fiduciary for that 

beneficiary is in the interest of such beneficiary (as determined by the Secretary 

under regulations); 

‘‘(3) adequate evidence that the person to serve as fiduciary protects the private information of a beneficiary in accordance with subsection (d)(1); and 

‘‘(4) the furnishing of any bond that may be required by the Secretary in accordance with subsection (f). 

‘‘(b) ELEMENTS OF INVESTIGATION.—(1) In conducting an inquiry or investigation 

of a proposed fiduciary under subsection (a)(1), the Secretary shall conduct— 

‘‘(A) a face-to-face interview with the proposed fiduciary by not later than 30 

days after the date on which such inquiry or investigation begins; and 

‘‘(B) a background check of the proposed fiduciary to— 

‘‘(i) in accordance with paragraph (2), determine whether the proposed fiduciary has been convicted of a crime; and 

‘‘(ii) determine whether the proposed fiduciary will serve the best interest 

of the beneficiary, including by conducting a credit check of the proposed 

fiduciary and checking the records under paragraph (5). 

‘‘(2) The Secretary shall request information concerning whether that person has 

been convicted of any offense under Federal or State law. If that person has been 


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convicted of such an offense, the Secretary may certify the person as a fiduciary only 

if the Secretary finds that the person is an appropriate person to act as fiduciary 

for the beneficiary concerned under the circumstances. 

‘‘(3) The Secretary shall conduct the background check described in paragraph 

(1)(B)— 

‘‘(A) each time a person is proposed to be a fiduciary, regardless of whether 

the person is serving or has served as a fiduciary; and 

‘‘(B) at no expense to the beneficiary. 

‘‘(4) Each proposed fiduciary shall disclose to the Secretary the number of beneficiaries that the fiduciary acts on behalf of. 

‘‘(5) The Secretary shall maintain records of any person who has— 

‘‘(A) previously served as a fiduciary; and 

‘‘(B) had such fiduciary status revoked by the Secretary. 

‘‘(6)(A) If a fiduciary appointed by the Secretary is convicted of a crime described 

in subparagraph (B), the Secretary shall notify the beneficiary of such conviction by 

not later than 14 days after the date on which the Secretary learns of such conviction. 

‘‘(B) A crime described in this subparagraph is a crime— 

‘‘(i) for which the fiduciary is convicted while serving as a fiduciary for any 

person; 

‘‘(ii) that is not included in a report submitted by the fiduciary under section 

5509(a) of this title; and 

‘‘(iii) that the Secretary determines could affect the ability of the fiduciary to 

act on behalf of the beneficiary. 

‘‘(c) INVESTIGATION OF CERTAIN PERSONS.—(1) In the case of a proposed fiduciary 

described in paragraph (2), the Secretary, in conducting an inquiry or investigation 

under subsection (a)(1), may carry out such inquiry or investigation on an expedited 

basis that may include giving priority to conducting such inquiry or investigation. 

Any such inquiry or investigation carried out on such an expedited basis shall be 

carried out under regulations prescribed for purposes of this section. 

‘‘(2) Paragraph (1) applies with respect to a proposed fiduciary who is— 

‘‘(A) the parent (natural, adopted, or stepparent) of a beneficiary who is a 

minor; 

‘‘(B) the spouse or parent of an incompetent beneficiary; 

‘‘(C) a person who has been appointed a fiduciary of the beneficiary by a court 

of competent jurisdiction; 

‘‘(D) being appointed to manage an estate where the annual amount of veterans benefits to be managed by the proposed fiduciary does not exceed $3,600, 

as adjusted pursuant to section 5312 of this title; or 

‘‘(E) a person who is authorized to act on behalf of the beneficiary under a 

durable power of attorney. 

‘‘(d) PROTECTION OF PRIVATE INFORMATION.—(1) A fiduciary shall take all reasonable precautions to— 

‘‘(A) protect the private information of a beneficiary, including personally 

identifiable information; and 

‘‘(B) securely conducts financial transactions. 

‘‘(2) A fiduciary shall notify the Secretary of any action of the fiduciary that compromises or potentially compromises the private information of a beneficiary. 

‘‘(e) POTENTIAL MISUSE OF FUNDS.—(1) If the Secretary has reason to believe that 

a fiduciary may be misusing all or part of the benefit of a beneficiary, the Secretary 

shall— 

‘‘(A) conduct a thorough investigation to determine the veracity of such belief; 

and 

‘‘(B) if such veracity is established, transmit to the officials described in paragraph (2) a report of such investigation. 

‘‘(2) The officials described in this paragraph are the following: 

‘‘(A) The Attorney General. 

‘‘(B) Each head of a Federal department or agency that pays to a fiduciary 

or other person benefits under any law administered by such department of 

agency for the use and benefit of a minor, incompetent, or other beneficiary. 

‘‘(f) BOND.—In determining whether a proposed fiduciary is required to furnish a 

bond under subsection (a)(4), the Secretary shall consider— 

‘‘(1) the existence of any familial or other personal relationship between the 

proposed fiduciary and the beneficiary; and 

‘‘(2) the care the proposed fiduciary has taken to protect the interests of the 

beneficiary. 

‘‘(g) LIST OF FIDUCIARIES.—Each regional office of the Veterans Benefits Administration shall maintain a list of the following: 


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‘‘(1) The name and contact information of each fiduciary, including address, 

telephone number, and email address. 

‘‘(2) With respect to each fiduciary described in paragraph (1)— 

‘‘(A) the date of the most recent background check and credit check performed by the Secretary under this section; 

‘‘(B) the date that any bond was paid under this section; 

‘‘(C) the name, address, and telephone number of each beneficiary the fiduciary acts on behalf of; and 

‘‘(D) the amount that the fiduciary controls with respect to each beneficiary described in subparagraph (C).’’. 

(e) ANNUAL RECEIPT OF PAYMENTS.— 

(1) IN GENERAL.—Section 5509 of title 38, United States Code, is amended— 

(A) in subsection (a)— 

(i) by striking ‘‘may require a fiduciary to file a’’ and inserting ‘‘shall 

require a fiduciary to file an annual’’; and 

(ii) by adding at the end the following new sentence: ‘‘The Secretary 

shall transmit such annual report or accounting to the beneficiary and 

any legal guardian of such beneficiary.’’; 

(B) by adding at the end the following new subsections: 

‘‘(c) MATTERS INCLUDED.—Except as provided by subsection (f), an annual report 

or accounting under subsection (a) shall include the following: 

‘‘(1) For each beneficiary that a fiduciary acts on behalf of— 

‘‘(A) the amount of the benefits of the beneficiary provided under any law 

administered by the Secretary accrued during the year, the amount spent, 

and the amount remaining; and 

‘‘(B) if the fiduciary serves the beneficiary with respect to benefits not administered by the Secretary, an accounting of all sources of benefits or 

other income the fiduciary oversees for the beneficiary. 

‘‘(2) A list of events that occurred during the year covered by the report that 

could affect the ability of the fiduciary to act on behalf of the beneficiary, including— 

‘‘(A) the fiduciary being convicted of any crime; 

‘‘(B) the fiduciary declaring bankruptcy; and 

‘‘(C) any judgments entered against the fiduciary. 

‘‘(d) RANDOM AUDITS.—The Secretary shall annually conduct random audits of fiduciaries who receive a commission pursuant to subsection 5502A(a)(1) of this title. 

‘‘(e) STATUS OF FIDUCIARY.—If a fiduciary includes in the annual report events described in subsection (c)(2), the Secretary may take appropriate action to adjust the 

status of the fiduciary as the Secretary determines appropriate, including by revoking the fiduciary status of the fiduciary. 

‘‘(f) CAREGIVERS AND CERTAIN OTHER FIDUCIARIES.—(1)(A) In carrying out this 

section, the Secretary shall ensure that a caregiver fiduciary is required only to file 

an annual report or accounting under subsection (a) with respect to the amount of 

the benefits of the beneficiary provided under any law administered by the Secretary— 

‘‘(i) spent on— 

‘‘(I) food and housing for the beneficiary; and 

‘‘(II) clothing, health-related expenses, recreation, and other personal 

items for the beneficiary; and 

‘‘(ii) saved for the beneficiary. 

‘‘(B) The Secretary shall coordinate with the Under Secretary for Benefits and the 

Under Secretary for Health to— 

‘‘(i) minimize the frequency with which employees of the Department visit the 

home of a caregiver fiduciary and beneficiary; and 

‘‘(ii) limit the extent of supervision by such Under Secretaries with respect to 

such a fiduciary and beneficiary. 

‘‘(C) In this paragraph, the term ‘caregiver fiduciary’ means a fiduciary who— 

‘‘(i) in addition to acting as a fiduciary for a beneficiary, is approved by the 

Secretary to be a provider of personal care services for the beneficiary under 

paragraph (3)(A)(i) of section 1720G(a) of this title; 

‘‘(ii) in carrying out such care services to such beneficiary, has undergone not 

less than four home visits under paragraph (9)(A) of such section; and 

‘‘(iii) has not been required by the Secretary to take corrective action pursuant to paragraph (9)(C) of such section. 

‘‘(2) In carrying out this section, the Secretary may adjust the matters required 

under an annual report or accounting under subsection (a) with respect to a fiduciary whom the Secretary determines to have effectively protected the interests of 

the beneficiary over a sustained period.’’; and 


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(C) by striking the section heading and inserting the following: ‘‘Annual 

reports and accountings of fiduciaries’’. 

(2) CLERICAL AMENDMENT.—The table of sections at the beginning of chapter 

55 of title 38, United States Code, is amended by striking the item relating to 

section 5509 and inserting the following new item: 

‘‘5509. Annual reports and accountings of fiduciaries.’’. 

(f) REPAYMENT OF MISUSED BENEFITS.—Section 6107(a)(2)(C) of title 38, United 

States Code, is amended by inserting before the period the following: ‘‘, including 

by the Secretary not acting in accordance with section 5507 of this title’’. 

(g) ANNUAL REPORTS.—Section 5510 of title 38, United States Code, is amended 

by striking ‘‘The Secretary shall include in the Annual Benefits Report of the Veterans Benefits Administration or the Secretary’s Annual Performance and Accountability Report’’ and inserting ‘‘Not later than July 1 of each year, the Secretary shall 

submit to the Committees on Veterans’ Affairs of the House of Representatives and 

the Senate a separate report containing’’. 

(h) REPORT.—Not later than two years after the date of the enactment of this Act, 

the Secretary of Veterans Affairs shall submit to the Committee on Veterans’ Affairs 

of the Senate and the Committee on Veterans’ Affairs of the House of Representatives a comprehensive report on the implementation of the amendments made by 

this Act, including— 

(1) detailed information on the establishment of new policies and procedures 

pursuant to such amendments and training provided on such policies and procedures; and 

(2) a discussion of whether the Secretary should provide fiduciaries with 

standardized financial software to simplify reporting requirements. 

(i) EFFECTIVE DATE.—The amendments made by this section shall take effect on 

the date that is one year after the date of the enactment of this Act. 

SEC. 10. BOARD OF VETERANS’ APPEALS VIDEO HEARINGS. 

Section 7107 of title 38, United States Code, is amended— 

(1) in subsection (d), by amending paragraph (1) to read as follows: 

‘‘(1)(A) Upon request for a hearing, the Board shall determine, for purposes of 

scheduling the hearing for the earliest possible date, whether a hearing before the 

Board will be held at its principal location or at a facility of the Department or other 

appropriate Federal facility located within the area served by a regional office of the 

Department. The Board shall also determine whether to provide a hearing through 

the use of the facilities and equipment described in subsection (e)(1) or by the appellant personally appearing before a Board member or panel. 

‘‘(B) The Board shall notify the appellant of the determinations of the location and 

type of hearing made under subparagraph (A). Upon notification, the appellant may 

request a different location or type of hearing as described in such subparagraph. 

If so requested, the Board shall grant such request and ensure that the hearing is 

scheduled at the earliest possible date without any undue delay or other prejudice 

to the appellant.’’; and 

(2) in subsection (e), by amending paragraph (2) to read as follows: 

‘‘(2) Any hearing provided through the use of the facilities and equipment described in paragraph (1) shall be conducted in the same manner as, and shall be 

considered the equivalent of, a personal hearing.’’. 

SEC. 11. IMPROVEMENTS TO AUTHORITY FOR PERFORMANCE OF MEDICAL DISABILITIES EXAMINATIONS BY CONTRACT PHYSICIANS. 

(a) EXTENSION OF TEMPORARY AUTHORITY.—Subsection (c) of section 704 of the 

Veterans Benefits Act of 2003 (38 U.S.C. 5101 note) is amended by striking ‘‘December 31, 2015’’ and inserting ‘‘December 31, 2017’’. 

(b) LICENSURE OF CONTRACT PHYSICIANS.— 

(1) TEMPORARY AUTHORITY.—Such section 704 is further amended— 

(A) by redesignating subsection (d) as subsection (e); and 

(B) by inserting after subsection (c) the following new subsection (d): 

‘‘(d) LICENSURE OF CONTRACT PHYSICIANS.— 

‘‘(1) IN GENERAL.—Notwithstanding any law regarding the licensure of physicians, a physician described in paragraph (2) may conduct an examination pursuant to a contract entered into under subsection (b) at any location in any 

State, the District of Columbia, or a Commonwealth, territory, or possession of 

the United States, so long as the examination is within the scope of the authorized duties under such contract. 

‘‘(2) PHYSICIAN DESCRIBED.—A physician described in this paragraph is a physician who— 

‘‘(A) has a current unrestricted license to practice the health care profession of the physician; 


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‘‘(B) is not barred from practicing such health care profession in any 

State, the District of Columbia, or a Commonwealth, territory, or possession 

of the United States; and 

‘‘(C) is performing authorized duties for the Department of Veterans Affairs pursuant to a contract entered into under subsection (b).’’. 

(2) PILOT PROGRAM.—Section 504 of the Veterans’ Benefits Improvement Act 

of 1996 (38 U.S.C. 5101 note) is amended— 

(A) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; and 

(B) by inserting after subsection (b) the following new subsection (c): 

‘‘(c) LICENSURE OF CONTRACT PHYSICIANS.— 

‘‘(1) IN GENERAL.—Notwithstanding any law regarding the licensure of physicians, a physician described in paragraph (2) may conduct an examination pursuant to a contract entered into under subsection (a) at any location in any 

State, the District of Columbia, or a Commonwealth, territory, or possession of 

the United States, so long as the examination is within the scope of the authorized duties under such contract. 

‘‘(2) PHYSICIAN DESCRIBED.—A physician described in this paragraph is a physician who— 

‘‘(A) has a current unrestricted license to practice the health care profession of the physician; 

‘‘(B) is not barred from practicing such health care profession in any 

State, the District of Columbia, or a Commonwealth, territory, or possession 

of the United States; and 

‘‘(C) is performing authorized duties for the Department of Veterans Affairs pursuant to a contract entered into under subsection (a).’’. 

SEC. 12. PILOT PROGRAM ON FULLY DEVELOPED APPEALS. 

(a) IN GENERAL.—The Secretary of Veterans Affairs shall carry out a pilot program to provide the option of an alternative appeals process that shall more quickly 

determine such appeals in accordance with this section. 

(b) ELECTION.— 

(1) FILING.—In accordance with paragraph (2), a claimant may elect to file a 

fully developed appeal under the pilot program under subsection (a) by filing 

with the Secretary the following: 

(A) The notice of disagreement under chapter 71 of title 38, United States 

Code, along with the written election of the claimant to have the appeal determined under the pilot program. 

(B) All evidence that the claimant believes is needed for the appeal as 

of the date of the filing. 

(C) A statement of the argument in support of the claim, if any. 

(2) TIMING.—A claimant shall make an election under paragraph (1) as part 

of the notice of disagreement filed by the claimant in accordance with paragraph (1)(A). 

(3) REVERSION.— 

(A) At any time, a claimant who makes an election under paragraph (1) 

may elect to revert to the standard appeals process. Such a reversion shall 

be final. 

(B) A claimant described in subparagraph (A), or a claimant who makes 

an election under paragraph (1) but is later determined to be ineligible for 

the pilot program under subsection (a), shall revert to the standard appeals 

process without any penalty to the claimant other than the loss of the docket number associated with the fully developed appeal. 

(4) OUTREACH.—In providing claimants with notices of the determination of 

a claim during the period in which the pilot program under subsection (a) is 

carried out, the Secretary shall conduct outreach as follows: 

(A) The Secretary shall provide to the claimant (and to the representative 

of record of the claimant, if any) information regarding— 

(i) the pilot program, including the advantages and disadvantages of 

the program; 

(ii) how to make an election under paragraph (1); 

(iii) the limitation on the use of new evidence described in paragraph 

(3) of subsection (c) and the development of information under paragraph (4) of such subsection; and 

(iv) the ability of the claimant to seek advice and education regarding 

such process from veterans service organizations, attorneys, and claims 

agents recognized under chapter 59 of title 38, United States Code. 

(B) The Secretary shall collaborate, partner with, and give weight to the 

advice of the three veterans service organizations with the most members 


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to publish on the Internet website of the Department of Veterans Affairs 

an online tutorial explaining the advantages and disadvantages of the pilot 

program. 

(c) TREATMENT BY DEPARTMENT AND BOARD.— (1) PROCESS.—Upon the election of a claimant to file a fully developed appeal 

pursuant to subsection (b)(1), the Secretary shall— 

(A) not provide the claimant with a statement of the case nor require the 

claimant to file a substantive appeal; and 

(B) transfer jurisdiction over the fully developed appeal directly to the 

Board of Veterans’ Appeals. 

(2) DOCKET.— (A) The Board of Veterans’ Appeals shall— 

(i) maintain fully developed appeals on a separate docket than standard appeals; 

(ii) decide fully developed appeals in the order that the fully developed appeals are received on the fully developed appeal docket; 

(iii) except as provided by subparagraph (B), decide not more than 

one fully developed appeal for each four standard appeals decided; and 

(iv) to the extent practicable, decide each fully developed appeal by 

the date that is one year following the date on which the claimant files 

the notice of disagreement. 

(B) Beginning one year after the date on which the pilot program under 

subsection (a) commences, the Board may adjust the number of standard 

appeals decided for each fully developed appeal under subparagraph (A)(iii) 

if the Board determines that such adjustment is fair for both standard appeals and fully developed appeals. 

(3) LIMITATION ON USE OF NEW EVIDENCE.— 

(A) Except as provided by subparagraphs (B) and (C)— 

(i) a claimant may not submit or identify to the Board of Veterans’ 

Appeals any new evidence relating to a fully developed appeal after filing such appeal unless the claimant reverts to the standard appeals 

process pursuant to subsection (b)(3); and 

(ii) if a claimant submits or identifies any such new evidence, such 

submission or identification shall be deemed to be an election to make 

such a reversion pursuant to subsection (b)(3). 

(B) Subparagraph (A) shall not apply to evidence developed pursuant to 

paragraphs (4) and (5). The Board shall consider such evidence in the first 

instance without consideration by the Veterans Benefits Administration. 

(C) The representative of record of a claimant for appeals purposes, if 

any, shall be provided an opportunity to review the fully developed appeal 

of the claimant and submit any additional arguments or evidence that the 

representative determines necessary during a period specified by the Board 

for purposes of this subparagraph. 

(4) PROHIBITION ON REMAND FOR ADDITIONAL DEVELOPMENT.—If the Board of 

Veterans’ Appeals determines that a fully developed appeal requires Federal 

records, independent medical opinions, or new medical examinations, the Board 

shall— 

(A) in accordance with paragraph (5), take such actions as may be necessary to develop such records, opinions, or examinations in accordance 

with section 5103A of title 38, United States Code; 

(B) retain jurisdiction of the fully developed appeal without requiring a 

determination by the Veterans Benefits Administration based on such 

records, opinions, or examinations; 

(C) ensure the claimant, and the representative of record of a claimant, 

if any, receives a copy of such records, opinions, or examinations; and 

(D) provide the claimant a period of 90 days after the date of mailing 

such records, opinions, or examinations during which the claimant may provide the Board any additional evidence without requiring the claimant to 

make a reversion pursuant to subsection (b)(3). 

(5) DEVELOPMENT UNIT.— 

(A) The Board of Veterans’ Appeals shall establish an office to develop 

Federal records, independent medical opinions, and new medical examinations pursuant to paragraph (4)(A) that the Board determines necessary to 

decide a fully developed appeal. 

(B) The Secretary shall— 

(i) ensure that the Veterans Benefits Administration cooperates with 

the Board of Veterans’ Appeals in carrying out subparagraph (A); and 

(ii) transfer employees of the Veterans Benefits Administration who, 

prior to the enactment of this Act, were responsible for processing 


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claims remanded by the Board of Veterans’ Appeals to positions within 

the office of the Board established under subparagraph (A) in a number 

the Secretary determines sufficient to carry out such subparagraph. 

(6) HEARINGS.—Notwithstanding section 7107 of title 38, United States Code, 

the Secretary may not provide hearings with respect to fully developed appeals. 

If a claimant requests to hold a hearing pursuant to such section 7107, such 

request shall be deemed to be an election to revert to the standard appeals process pursuant to subsection (b)(3). 

(d) DURATION; APPLICATION.—The Secretary shall carry out the pilot program 

under subsection (a) for a five-year period beginning one year after the date of the 

enactment of this Act. This section shall apply only to fully developed appeals that 

are filed during such period. 

(e) REPORTS.—During each year in which the pilot program under subsection (a) 

is carried out, the Secretary shall submit to the Committees on Veterans’ Affairs 

of the House of Representatives and the Senate a report on the pilot program. The 

first such report shall be submitted by not later than 180 days after the date on 

which the pilot program commences. Each report shall include the following: 

(1) For the period covered by the report— 

(A) the number of claimants who filed a fully developed appeal under the 

pilot program; 

(B) the average processing time for each such appeal, measured by each 

phase of the appeal, and, if the processing time for appeals exceed one year, 

the reasons for such processing time; 

(C) a summary of reasons for which the development of evidence was required under subsection (c)(5); 

(D) the number of issues decided, listed by the disposition of the issue; 

(E) of the number identified in subparagraph (D), the number of issues 

for which evidence was not so developed, listed by the disposition of the 

issue; 

(F) of the number of fully developed appeals decided by the Board of Veterans’ Appeals, the number of cases from each agency of original jurisdiction, listed by the disposition of the issue; 

(G) the number of fully developed appeals appealed to the Court of Appeals for Veterans Claims, listed by the disposition of the case; 

(H) the number of reversions made under subsection (b)(3); and 

(I) any reasons for why a claimant was determined to be ineligible to participate in the pilot program. 

(2) A review, made in conjunction with veterans service organizations, of the 

efforts of the Secretary to provide clear rating decisions and improve disability 

rating notification letters, including with respect to— 

(A) the opinions of veterans service organizations regarding such efforts; 

and 

(B) how the pilot program improves such efforts. 

(3) A recommendation for any changes to improve the pilot program. 

(4) An assessment of the feasibility and advisability of expanding the pilot 

program. 

(f) REGULATIONS.—Not later than one day after the date of the enactment of this 

Act, the Secretary shall publish interim guidance on the pilot program under subsection (a). Not later than 90 days after such date of enactment, the Secretary shall 

prescribe regulations to carry out such pilot program. 

(g) DEFINITIONS.—In this section: 

(1) The term ‘‘claimant’’ has the meaning given that term in section 5100 of 

title 38, United States Code. 

(2) The term ‘‘compensation’’ has the meaning given that term in section 101 

of title 38, United States Code. 

(3) The term ‘‘fully developed appeal’’ means an appeal of a claim for disability compensation that is— 

(A) filed by a claimant in accordance with subsection (b)(1); and 

(B) considered in accordance with this section. 

(4) The term ‘‘standard appeal’’ means an appeal of a claim for disability compensation that is not a fully developed appeal. 

SEC. 13. DEADLINE FOR CERTIFICATION OF APPEALS FORMS BY REGIONAL OFFICES OF THE 

DEPARTMENT OF VETERANS AFFAIRS. 

The Secretary of Veterans Affairs shall take such steps as may be necessary to 

ensure that when a regional office of the Department of Veterans Affairs receives 

a form known as ‘‘VA Form 9, Appeal to Board of Veterans’ Appeals’’, or any successor form, submitted by a veteran to appeal a decision relating to a claim, the regional office certifies such form by not later than one year after the date of the receipt of the form. 


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SEC. 14. EVALUATION OF BACKLOG OF DISABILITY CLAIMS AND APPEALS OF CLAIMS OF DEPARTMENT OF VETERANS AFFAIRS. 

(a) IN GENERAL.—There is established a commission or task force to evaluate the 

backlog of claims within the Department of Veterans Affairs and the appeals process of claims. 

(b) STUDIES.— (1) BACKLOG STUDY.— (A) IN GENERAL.—The Commission or Task Force, acting through the subcommittee described in subsection (d)(2)(A), shall carry out a study on the 

backlog of claims, including the current process the Secretary of Veterans 

Affairs uses to evaluate claims and appeals and the laws and regulations 

applicable to such claims and appeals. Such study shall be a comprehensive 

evaluation and assessment of the backlog of claims, an analysis of possible 

improvements to the procedures used to process such claims, and any related issues that the Commission or Task Force considers relevant. 

(B) MATTERS INCLUDED.—In carrying out the study under subparagraph 

(A), the Commission or Task Force shall examine the following: 

(i) The backlog of claims, including an analysis of— 

(I) the most effective means to quickly and accurately resolve all 

claims pending as of the date of the study; and 

(II) with respect to the Department, the annual funding, number 

of full-time employees, workload management practices, and the 

progress, as of the date of the study, of the strategic plan. 

(ii) Possible improvements to the claims process, including an evaluation and recommendations with respect to whether substantive and 

structural changes to the overall claims process are required. 

(iii) In carrying out the evaluation and recommendations under subparagraph (B), an examination of— 

(I) options that make no major substantive changes to the claims 

process; 

(II) options that maintain the process but make minor changes; 

and 

(III) options that make broad changes to the process. 

(2) APPEALS PROCESS STUDY.— 

(A) IN GENERAL.—The Commission or Task Force, acting through the subcommittee described in subsection (d)(2)(B), shall carry out a study on the 

anticipated increase of appeals of claims, including the current appeals 

process and the laws and regulations applicable to such appeals. Such study 

shall be a comprehensive evaluation and assessment of such anticipated increase of appeals claims, an analysis of possible improvements to the procedures used to process such appeals, and any related issues that the Commission or Task Force considers relevant. 

(B) MATTERS INCLUDED.—In carrying out the study under subparagraph 

(A), the Commission or Task Force shall examine the following: 

(i) The anticipated surge in appeals of claims, including an analysis 

of— 

(I) the most effective means to quickly and accurately resolve 

pending appeals and future appeals; 

(II) with respect to both the Board and the Court of Appeals for 

Veterans Claims, the annual funding, number of full-time employees, workload management practices, and the progress, as of the 

date of the study, of the strategic plan; and 

(III) the efficiency, effectiveness, and utility of the Veterans Benefits Management System with respect to appeals operations, including an identification of key changes that may need to be implemented to such system. 

(ii) Possible improvements to the appeals process, including an evaluation and recommendations with respect to whether substantive and 

structural changes to the overall appeals process are required. 

(iii) In carrying out the evaluation and recommendations under 

clause (ii), an examination of— 

(I) options that make no major substantive changes to the appeals process; 

(II) options that maintain the process but make minor changes; 

(III) options that make broad changes to the process; 

(IV) the necessity of the multi-tiered levels of appeals at the regional office level, including filing a notice of disagreement, receipt 

of a statement of the case, supplemental statement of the case (if 

applicable), and substantive appeal (VA Form 9); 


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(V) the role of the Board and the Appeals Management Center, 

including— 

(aa) the effectiveness of the workload management of the 

Board and the Center; 

(bb) whether the Board and Center should be regionalized or 

maintain the centralized structure in the District of Columbia; 

(cc) whether Board members should be required to pass the 

administrative law judges certification examination; and 

(dd) whether the Board should continue to require de novo 

review of appeals; and 

(VI) the role of the Court of Appeals for Veterans Claims and the 

United States Court of Appeals for the Federal Circuit, including— 

(aa) the continued effectiveness and necessity of a multitiered structure of judicial review; 

(bb) whether the Court of Appeals for Veterans Claims 

should have Article I or Article III status; 

(cc) expansion of either the Court of Appeals for Veterans 

Claims or the United States Court of Appeals for the Federal 

Circuit jurisdiction, including by allowing such courts to hear 

class action lawsuits with respect to claims; and 

(dd) the possibility of expanding judicial review of claims to 

all Federal circuit courts of appeals or allowing judicial review 

beyond the Court of Appeals for Veterans Claims only by the 

Supreme Court. 

(3) CONSIDERATION.—In carrying out the studies under paragraph (1)(A) and 

(2)(A) and making any recommendations under this section, the Commission or 

Task Force shall consider the following: 

(A) The interests of veterans, including with respect to accuracy, fairness, 

and transparency in the claims process of the Department. 

(B) The values and requirements of the Constitution, including with respect to compliance with procedural and substantive due process. 

(C) The public interest, including with respect to the responsible use of 

available resources. 

(D) With respect to the study conducted under paragraph (1)(A), the importance of the claimant friendly, nonadversarial nature of the claims process. 

(E) With respect to the study conducted under paragraph (2)(A), the importance of an appeals process that is efficient and easily understandable 

by a claimant. 

(4) ROLE OF SECRETARY, CHAIRMAN OF THE BOARD, AND CHIEF JUDGE.— 

(A) INFORMATION.—In carrying out each study under paragraph (1)(A) 

and (2)(A), at times that the Commission or Task Force determines appropriate, the Commission or Task Force shall submit to the Secretary of Veterans Affairs, the Chairman of the Board, and the Chief Judge of the Court 

of Appeals for Veterans Claims, as the case may be, information with respect to remedies and solutions that the Commission or Task Force identifies pursuant to such a study. 

(B) IMPLEMENTATION.—The Secretary, the Chairman of the Board, and 

the Chief Judge shall each— 

(i) fully consider the remedies and solutions submitted to the Secretary, the Chairman, or the Chief Judge, as the case may be, under 

subparagraph (A); 

(ii) implement such remedies and solutions as the Secretary, the 

Chairman, or the Chief Judge, respectively, determines appropriate; 

and 

(iii) submit to Congress justification for failing to implement any such 

remedy or solution. 

(C) PLAN.—The Commission or Task Force shall submit to the Secretary, 

the Chairman of the Board, and the Chief Judge a feasible, timely, and 

cost-effective plan to eliminate the backlog of appeals of claims based on the 

remedies and solutions identified pursuant to the study under paragraph 

(2)(A) and the information submitted under subparagraph (A). 

(c) COMPREHENSIVE REPORTS.— 

(1) INITIAL COMPREHENSIVE REPORT.—Not later than 60 days after the date 

on which the Commission or Task Force first meets, the Commission or Task 

Force shall submit to the President and Congress an initial comprehensive report on the studies conducted under paragraphs (1)(A) and (2)(A) of subsection 

(b), including— 

(A) the findings of the causes of the backlog of claims; 


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17 

(B) a proposed plan to handle the anticipated surge in appeals of claims; 

and 

(C) the level of cooperation the Commission or Task Force has received 

from the Secretary and the heads of other departments or agencies of the 

Federal Government. 

(2) INTERIM COMPREHENSIVE REPORTS.—Not later than 90 days after the date 

on which the Commission or Task Force first meets, and each 30-day period 

thereafter ending on the date on which the Commission or Task Force submits 

the final comprehensive report under paragraph (3), the Commission or Task 

Force shall submit to the President and Congress a comprehensive report on— 

(A) the progress of the Secretary with respect to implementing solutions 

to expedite the elimination of the backlog of claims pursuant to subsection 

(b)(4)(B)(ii); 

(B) the progress of the Secretary, the Chairman of the Board, and the 

Chief Judge of the Court of Appeals for Veterans Claims with respect to implementing solutions to complete appeals of claims in a timely manner in 

a timely manner pursuant to such subsection; and 

(C) the level of cooperation the Commission or Task Force has received 

from the Secretary and the heads of other departments or agencies of the 

Federal Government. 

(3) FINAL COMPREHENSIVE REPORT.—Not later than 180 days after the date 

on which the Commission or Task Force first meets, the Commission or Task 

Force shall submit to the President and Congress a comprehensive report on the 

following: 

(A) With respect to the study conducted under subsection (b)(1)(A)— 

(i) The findings, conclusions, and recommendations of the Commission or Task Force with respect to the matters referred to in such subsection. 

(ii) The recommendations of the Commission or Task Force for revising and improving the backlog of claims and the procedures used to 

process claims. 

(iii) The progress of the Secretary with respect to implementing solutions to expedite the elimination of the backlog of claims pursuant to 

subsection (b)(4)(B)(ii). 

(iv) Other information and recommendations with respect to claims 

as the Commission or Task Force considers appropriate. 

(B) With respect to the study conducted under subsection (b)(2)(A)— 

(i) The findings, conclusions, and recommendations of the Commission or Task Force with respect to the matters referred to in such subsection. 

(ii) The recommendations of the Commission or Task Force for revising and improving the appeals process; 

(iii) The information described in subsection (b)(4)(A). 

(iv) The feasible, timely, and cost effective plan described in subsection (b)(4)(C). 

(v) The progress of the Secretary, the Chairman of the Board, and 

the Chief Judge of the Court of Appeals for Veterans Claims with respect to implementing solutions to provide timely appeals of claims. 

(vi) Other information and recommendations with respect to the appeals process as the Commission or Task Force considers appropriate. 

(d) MEMBERSHIP.— 

(1) NUMBER AND APPOINTMENT.—The Commission or Task Force shall be composed of 15 members, appointed as follows: 

(A) Two members appointed by the Speaker of the House of Representatives, one of whom shall be designated to serve upon the Subcommittee on 

the Backlog of Claims and one of whom shall be designated to serve upon 

the Subcommittee on Appeals. 

(B) Two members appointed by the minority leader of the House of Representatives, one of whom shall be designated to serve upon the Subcommittee on the Backlog of Claims and one of whom shall be designated 

to serve upon the Subcommittee on Appeals. 

(C) Two members appointed by the majority leader of the Senate, one of 

whom shall be designated to serve upon the Subcommittee on the Backlog 

of Claims and one of whom shall be designated to serve upon the Subcommittee on Appeals. 

(D) Two members appointed by the minority leader of the Senate, one of 

whom shall be designated to serve upon the Subcommittee on the Backlog 

of Claims and one of whom shall be designated to serve upon the Subcommittee on Appeals. 


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18 

(E) Three members appointed by the President, two of whom shall be designated to serve upon the Subcommittee on the Backlog of Claims and one 

of whom shall be designated to serve upon the Subcommittee on Appeals. 

(F) One member appointed by the Secretary of Defense, whom shall be 

designated to serve upon the Subcommittee on the Backlog of Claims. 

(G) Two members appointed by the Secretary of Veterans Affairs, one of 

whom shall be designated to serve upon the Subcommittee on the Backlog 

of Claims and one of whom shall be designated to serve upon the Subcommittee on Appeals. 

(H) One member appointed by the Chief Judge of the Court of Appeals 

for Veterans Claims, whom shall be designated to serve upon the Subcommittee on Appeals. 

(2) SUBCOMMITTEES.—The Commission or Task Force shall have two subcommittees as follows: 

(A) A Subcommittee on the Backlog of Claims consisting of the eight 

members designated in accordance with paragraph (1). 

(B) A Subcommittee on Appeals consisting of the seven members designated in accordance with paragraph (1). 

(3) QUALIFICATIONS.—Each member appointed under paragraph (1) shall be 

appointed based on the experience of the member as a veteran or on the subject 

matter expertise or other relevant experience of the member. 

(4) ADVISORS.— 

(A) IN GENERAL.—In addition to the 15 members appointed under paragraph (1), the Commission or Task Force shall— 

(i) have five nonvoting, nonmember advisors, appointed by a majority 

of the Commission or Task Force, each from a different organization 

that represents the interests of veterans; and 

(ii) seek advice from experts from nongovernmental organizations (including veterans service organizations and military organizations), the 

Internet technology industry, and the insurance industry. 

(B) ADVICE.—Individuals described in clause (i) and (ii) of subparagraph 

(A) shall provide advice to both subcommittees described in paragraph (2). 

(5) CHAIRMAN.—The President shall designate a member of the Commission 

or Task Force who is appointed by the President and designated to serve upon 

the Subcommittee on the Backlog of Claims to serve as the chairman of the 

Commission or Task Force. The chairman may designate a member to serve as 

the chairman of the Subcommittee on the Backlog of Claims and a member to 

serve as the chairman of the Subcommittee on Appeals to chair such subcommittees as the designee of the chairman of the Commission or Task Force. 

(6) PERIOD OF APPOINTMENT.—Members of the Commission or Task Force 

shall be appointed for the life of the Commission or Task Force. A vacancy shall 

not affect its powers. 

(7) VACANCY.—A vacancy on the Commission or Task Force shall be filled in 

the manner in which the original appointment was made. 

(8) APPOINTMENT DEADLINE.—The appointment of members of the Commission or Task Force established in this section shall be made not later than 15 

days after the date of the enactment of this Act. 

(e) MEETINGS.— 

(1) INITIAL MEETING.—The Commission or Task Force shall hold its first meeting not later than 15 days after the date on which a majority of the members 

are appointed. 

(2) MEETINGS.—The Commission or Task Force shall meet at the call of the 

chairman. 

(3) QUORUM.—A majority of the members of the Commission or Task Force 

shall constitute a quorum, but a lesser number may hold hearings. 

(f) POWERS OF THE COMMISSION OR TASK FORCE.— 

(1) HEARINGS.—The Commission or Task Force may hold such hearings, sit 

and act at such times and places, take such testimony, and receive such evidence as the Commission or Task Force considers advisable to carry out the 

purposes of this section. 

(2) INFORMATION FROM FEDERAL AGENCIES.—The Commission or Task Force 

may secure directly from any department or agency of the Federal Government 

such information as the Commission or Task Force considers necessary to carry 

out the provisions of this section. Upon request of the chairman, the head of 

such department or agency shall furnish such information to the Commission 

or Task Force. 

(3) POSTAL SERVICES.—The Commission or Task Force may use the United 

States mails in the same manner and under the same conditions as other departments and agencies of the Federal Government. 


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19 

(4) GIFTS.—The Commission or Task Force may accept, use, and dispose of 

gifts or donations of service or property. 

(g) PERSONNEL MATTERS.— (1) COMPENSATION OF MEMBERS.—Each member of the Commission or Task 

Force who is not an officer or employee of the United States shall be compensated at a rate equal to the daily equivalent of the annual rate of basic pay 

prescribed for level IV of the Executive Schedule under section 5315 of title 5, 

United States Code, for each day (including travel time) during which the member is engaged in the performance of the duties of the Commission or Task 

Force. All members of the Commission or Task Force who are officers or employees of the United States shall serve without compensation in addition to 

that received for their services as officers or employees of the United States. 

(2) TRAVEL EXPENSES.—The members of the Commission or Task Force shall 

be allowed travel expenses, including per diem in lieu of subsistence, at rates 

authorized for employees of agencies under subchapter I of chapter 57 of title 

5, United States Code, while away from their homes or regular places of business in the performance of service of the Commission or Task Force. 

(3) STAFF.— (A) APPOINTMENT.—The chairman of the Commission or Task Force may, 

without regard to the civil service laws and regulations, appoint an executive director and such other personnel as may be necessary to enable the 

Commission or Task Force to perform its duties. The appointment of an executive director shall be subject to the approval of the Commission or Task 

Force. 

(B) COMPENSATION.—The chairman of the Commission or Task Force may 

fix the compensation of the executive director and other personnel without 

regard to the provisions of chapter 51 and subchapter III of chapter 53 of 

title 5, United States Code, relating to classification of positions and General Schedule pay rates, except that the rate of pay for the executive director and other personnel may not exceed the rate payable for level V of the 

Executive Schedule under section 5316 of such title. 

(4) DETAIL OF GOVERNMENT EMPLOYEES.—Upon request of the chairman of the 

Commission or Task Force, the head of any department or agency of the Federal 

Government may detail, on a nonreimbursable basis, any personnel of that department or agency to the Commission or Task Force to assist it in carrying 

out its duties. 

(5) PROCUREMENT OF TEMPORARY AND INTERMITTENT SERVICES.—The chairman of the Commission or Task Force may procure temporary and intermittent 

services under section 3109(b) of title 5, United States Code, at rates for individuals which do not exceed the daily equivalent of the annual rate of basic pay 

prescribed for level V of the Executive Schedule under section 5316 of such title. 

(h) TERMINATION OF COMMISSION OR TASK FORCE.—The Commission or Task 

Force shall terminate 60 days after the date on which the Commission or Task 

Force submits the final comprehensive report under subsection (c)(3). 

(i) FUNDING.— (1) IN GENERAL.—The Secretary shall, upon the request of the chairman of the 

Commission or Task Force, make available to the Commission or Task Force 

such amounts as the Commission or Task Force may require to carry out the 

duties of the Commission or Task Force under this section. 

(2) AVAILABILITY.—Any sums made available to the Commission or Task 

Force shall remain available, without fiscal year limitation, until the termination of the Commission or Task Force. 

(j) DEFINITIONS.—In this section: 

(1) The term ‘‘appeals process’’ means the process to appeal the determination 

by the Secretary of a claim beginning with the notice of disagreement filed pursuant to section 7105 of title 38, United States Code, and ending with the review of a decision by the Supreme Court pursuant to section 7292(c) of such 

title. 

(2) The term ‘‘Board’’ means the Board of Veterans’ Appeals. 

(3) The term ‘‘strategic plan’’ means the Strategic Plan to Eliminate the Compensation Claims Backlog, published by the Secretary of Veterans Affairs on 

January 25, 2013. 

(k) EFFECTIVE DATE.—This section shall take effect on the date that is one year 

after the date of the enactment of this Act. 

SEC. 15. METHODS FOR VALIDATING CERTAIN WORLD WAR II MERCHANT MARINER SERVICE 

CONSIDERED TO BE ACTIVE SERVICE BY THE SECRETARY OF VETERANS AFFAIRS. 

(a) IN GENERAL.—For the purposes of verifying that an individual performed service under honorable conditions that satisfies the requirements of a coastwise merchant seaman who is recognized pursuant to section 401 of the GI Bill Improvement 


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Act of 1977 (Public Law 95–202; 38 U.S.C. 106 note) as having performed active 

duty service for the purposes described in subsection (c)(1), the Secretary of Homeland Security shall accept the following: 

(1) In the case of an individual who served on a coastwise merchant vessel 

seeking such recognition for whom no applicable Coast Guard shipping or discharge form, ship logbook, merchant mariner’s document or Z-card, or other official employment record is available, the Secretary shall provide such recognition 

on the basis of applicable Social Security Administration records submitted for 

or by the individual, together with validated testimony given by the individual 

or the primary next of kin of the individual that the individual performed such 

service during the period beginning on December 7, 1941, and ending on December 31, 1946. 

(2) In the case of an individual who served on a coastwise merchant vessel 

seeking such recognition for whom the applicable Coast Guard shipping or discharge form, ship logbook, merchant mariner’s document or Z-card, or other official employment record has been destroyed or otherwise become unavailable by 

reason of any action committed by a person responsible for the control and 

maintenance of such form, logbook, or record, the Secretary shall accept other 

official documentation demonstrating that the individual performed such service 

during period beginning on December 7, 1941, and ending on December 31, 

1946. 

(3) For the purpose of determining whether to recognize service allegedly performed during the period beginning on December 7, 1941, and ending on December 31, 1946, the Secretary shall recognize masters of seagoing vessels or 

other officers in command of similarly organized groups as agents of the United 

States who were authorized to document any individual for purposes of hiring 

the individual to perform service in the merchant marine or discharging an individual from such service. 

(b) TREATMENT OF OTHER DOCUMENTATION.—Other documentation accepted by 

the Secretary of Homeland Security pursuant to subsection (a)(2) shall satisfy all 

requirements for eligibility of service during the period beginning on December 7, 

1941, and ending on December 31, 1946. 

(c) BENEFITS ALLOWED.— 

(1) BURIAL BENEFITS ELIGIBILITY.—Service of an individual that is considered 

active duty pursuant to subsection (a) shall be considered as active duty service 

with respect to providing burial benefits under chapters 23 and 24 of title 38, 

United States Code, to the individual. 

(2) MEDALS, RIBBONS, AND DECORATIONS.—An individual whose service is recognized as active duty pursuant to subsection (a) may be awarded an appropriate medal, ribbon, or other military decoration based on such service. 

(3) STATUS OF VETERAN.—An individual whose service is recognized as active 

duty pursuant to subsection (a) shall be honored as a veteran but shall not be 

entitled by reason of such recognized service to any benefit that is not described 

in this subsection. 

(d) DETERMINATION OF COASTWISE MERCHANT SEAMAN.—The Secretary of Homeland Security shall verify that an individual performed service under honorable conditions that satisfies the requirements of a coastwise merchant seaman pursuant to 

this section without regard to the sex, age, or disability of the individual during the 

period in which the individual served as such a coastwise merchant seaman. 

(e) DEFINITION OF PRIMARY NEXT OF KIN.—In this section, the term ‘‘primary next 

of kin’’ with respect to an individual seeking recognition for service under this section means the closest living relative of the individual who was alive during the period of such service. 

(f) EFFECTIVE DATE.—This section shall take effect 90 days after the date of the 

enactment of this Act. 

SEC. 16. DESIGNATION OF AMERICAN WORLD WAR II CITIES. 

(a) IN GENERAL.—The Secretary of Veterans Affairs shall designate at least one 

city in the United States each year as an ‘‘American World War II City’’. 

(b) CRITERIA FOR DESIGNATION.—After the designation made under subsection (c), 

the Secretary, in consultation with the Secretary of Defense, shall make each designation under subsection (a) based on the following criteria: 

(1) Contributions by a city to the war effort during World War II, including 

those related to defense manufacturing, bond drives, service in the Armed 

Forces, and the presence of military facilities within the city. 

(2) Efforts by a city to preserve the history of the city’s contributions during 

World War II, including through the establishment of preservation organizations or museums, restoration of World War II facilities, and recognition of 

World War II veterans. 


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(c) FIRST AMERICAN WORLD WAR II CITY.—The city of Wilmington, North Carolina, is designated as an ‘‘American World War II City’’. 

SEC. 17. SENSE OF CONGRESS REGARDING AMERICAN VETERANS DISABLED FOR LIFE. 

(a) FINDINGS.—Congress makes the following findings: 

(1) There are at least 3,600,000 veterans currently living with service-connected disabilities. 

(2) As a result of their service, many veterans are permanently disabled 

throughout their lives and in many cases must rely on the support of their families and friends when these visible and invisible burdens become too much to 

bear alone. 

(3) October 5, which is the anniversary of the dedication of the American Veterans Disabled for Life Memorial, has been recognized as an appropriate day 

on which to honor American veterans disabled for life each year. 

(b) SENSE OF CONGRESS.—Congress— 

(1) expresses its appreciation to the men and women left permanently wounded, ill, or injured as a result of their service in the Armed Forces; 

(2) supports the annual recognition of American veterans disabled for life 

each year; and 

(3) encourages the American people to honor American veterans disabled for 

life each year with appropriate programs and activities. 

PURPOSE AND SUMMARY

H.R. 677, the American Heroes COLA Act of 2015 was introduced by Representative Abraham of Louisiana on February 3, 

2015, H.R. 677, as amended, incorporates the text H.R. 677 and 

provisions from the following bills: H.R. 245, introduced by Representative Abraham of Louisiana on January 9, 2015; H.R. 517, 

introduced by Representative Titus of Nevada on February 6, 2015; 

H.R. 732, introduced by Representative Ruiz of California on February 4, 2015; H.R. 800, introduced by Representative O’Rourke of 

Texas on February 5, 2015; H.R. 1288, introduced by Representative Butterfield of North Carolina on March 4, 2015; H.R. 1302, introduced by Representative Latta of Ohio on March 4, 2015; H.R. 

1331, introduced by Representative Walz of Minnesota on March 4, 

2015; H.R. 1380, introduced by Representative Miller of Florida on 

March 16, 2015; H.R. 1512, introduced by Representative Rouzer of 

North Carolina on April 7, 2015; H.R. 2214, introduced by Representative Abraham of Louisiana on May 1, 2015; H.R. 2286, as 

introduced by Representative Paul Cook of California on May 13, 

2015; H.R. 2605, introduced by Representative Johnson of Ohio on 

June 2, 2015; H.R. 2691, introduced by Representative Ruiz of California on June 9, 2015; and, H. Con. Res. 53, introduced by Representative Frankel of Florida on May 26, 2015. Together, these 

provisions would improve the expedient and accurate processing of 

benefits claims and appeals, ensure appropriate availability of benefits and headstone adornments, increase availability of medical 

evidence for benefits cases, as well as bestow honors and make 

other crucial changes as it pertains to veterans’ status and designations. 

BACKGROUND AND NEED FOR LEGISLATION

Section 2. Expansion of eligibility for medallions 

Under current law, the Department of Veterans Affairs (VA) may 

provide a medallion that signifies an individual’s status as a veteran to be attached to a privately purchased headstone or marker 

for veterans who died on or after November 1, 1990. The reason 

that this medallion is currently only available to veterans who died 


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22 

1McLenachen, David R., Acting Deputy Under Secretary for Disability Assistance, Veterans 

Benefits Administration, U.S. Department of Veterans Affairs, Statement to the House of Representatives Committee on Veterans’ Affairs, Subcommittee on Disability Assistance and Memorial Affairs Hearing on June 24, 2015. 

after October 31, 1990, is because from November 1, 1990, through 

September 11, 2001, VA did not pay for a private headstone or 

marker for veterans who were qualified for interment in a national 

or state veterans’ cemetery. Thus, the medallions were provided as 

a way to distinguish the privately purchased headstones of veterans who died after November 1, 1990. 

These medallions have been very much appreciated by veterans 

and their families and VA has received many requests for such medallions. According to VA testimony, since the Department began 

providing medallions in 2009, 91 percent of requests for these emblems have been denied because otherwise qualifying veterans died 

between 1960 and November 1, 1990.1

During the Subcommittee on Disability Assistance and Memorial 

Affairs hearing on June 24, 2015, The American Legion, Disabled 

American Veterans, Veterans of Foreign Wars, Iraq and Afghanistan Veterans of America, and Paralyzed Veterans of America testified in support of expanding the eligibility for such medallions. 

AMVETS and VA also testified in support of allowing more veterans to qualify for the medallions, but recommended that eligibility be restricted to help protect antique headstones and ensure 

that the landscape of historic cemeteries be preserved. Providing 

such medallions to veterans who served in the military after April 

6, 1917, would help distinguish the final resting place of veterans 

who are buried in private cemeteries, while allowing the National 

Cemetery Administration to comply with historic preservation and 

federal stewardship statutes and regulations. 

Section 3. Definitions relating to claims for benefits under laws administered by the Secretary of Veterans Affairs 

This section would establish uniform definitions for the following 

terms: ‘‘claimant,’’ ‘‘claim,’’ and ‘‘formal claim.’’ Establishing uniform definitions would ensure consistency in the types of information included in VA’s reports to Congress with respect to VA’s 

claims processing procedures. 

Section 4. Quarterly reports on formal and informal claims for benefits under laws administered by the Secretary of Veterans Affairs 

To improve congressional oversight of VA’s claims processing procedures, this section would mandate that VA submit quarterly reports to the Committees on Veterans’ Affairs of the Senate and 

House of Representatives. Such reports would include the following 

information: (1) the total number of claims submitted to VA; (2) the 

total number of informal claims submitted to VA; (3) the total number of formal claims submitted to VA; (4) the total number of forms 

indicating an intent to file a claim for benefits submitted to VA; (5) 

the total number of claims notification letters sent by VA that included an invitation to the claimant to submit an additional formal 

claim, and of those, the total number who submitted a formal claim 

in response to such notification letters; (6) the total number of elecVerDate Sep 11 2014 00:56 Feb 05, 2016 Jkt 059006 PO 00000 Frm 00022 Fmt 6659 Sfmt 6602 E:\HR\OC\HR405.XXX HR405

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tronically filed claims submitted to VA; and, (7) the total number 

of fully-developed claims submitted to VA. 

It is inefficient to require a veteran who is seeking an increased 

rating or to reopen a claim to submit information that is already 

in VA’s possession. Therefore, section 4 would express the sense of 

Congress that VA should develop a designated form for an increased rating claim or reopening of a claim that does not require 

the resubmittal of information previously submitted on a formal 

claim form. 

Section 5. Expedited payment of survivors benefits 

VA provides several benefits to qualifying family members of certain deceased veterans, including Dependency and Indemnity Compensation (DIC), survivors’ pension, home loans, and the Dependents’ Educational Assistance Program. In most cases, VA’s records 

already include many of the documents necessary to grant benefits 

to his or her survivors, such as the veteran’s DD–214. However, to 

qualify for benefits, the survivor is required to file a formal claim 

and resubmit evidence that VA already has, such as the veteran’s 

service-connected disability ratings. 

The current system for processing survivor’s benefits is inefficient because VA employees are required to review paperwork that 

may already be in the veteran’s file. Furthermore, the application 

process places a burden on the veteran’s grieving family members, 

who are forced to file a formal claim and resubmit documents that 

may already be in VA’s possession. 

Section 5 of H.R. 677, as amended, would authorize VA to automatically pay benefits to qualified survivors of veterans, as long as 

VA has the information necessary to establish entitlement to benefits. The survivor would be able to submit new evidence, such as 

the death certificate and other information, but the survivor would 

not have to file a formal claim. Additionally, Section 5 would establish that the date the survivor notified VA of the death of the veteran would serve as the date of receipt of such a claim. 

This section would also require that not later than one year after 

the date of enactment of this Act, VA would submit to the Committees on Veterans’ Affairs of the Senate and the House of Representatives a report with certain information regarding survivors’ claims 

adjudicated during the period of time covered by such report. Such 

report would include any recommendations VA may have for legislative or administrative action to improve the adjudication of survivors’ claims submitted to VA. Finally, section 5 would establish 

that the effective date of this section would apply with respect to 

claims for benefits based on a death occurring on or after the date 

of enactment of this Act. 

Section 6. Priority for processing claims of the Department of Veterans Affairs 

Section 6 of H.R. 677, as amended, would require the Secretary 

of Veterans Affairs to prioritize disability benefits claims submitted 

by veterans who: (1) have attained the age of 70; (2) are terminally 

ill; (3) have life-threatening illnesses; (4) are homeless; (5) have received the Medal of Honor; (6) were prisoners of war; (7) have 

claims being reviewed again in relation to a previously denied 

claim relating to military sexual trauma; (8) the Secretary deterVerDate Sep 11 2014 00:56 Feb 05, 2016 Jkt 059006 PO 00000 Frm 00023 Fmt 6659 Sfmt 6602 E:\HR\OC\HR405.XXX HR405

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mines, on a case-by-case basis, are seriously or very seriously injured; and, (9) the Secretary determines a good cause justifies 

prioritization. 

Current VA practice allows the prioritization of certain claims, to 

include applications filed by Medal of Honor recipients, homeless 

veterans, veterans experiencing extreme financial hardships, and 

veterans suffering from terminal illness. Thus, current VA policy 

has already identified certain classes of claimants and determined 

that expedited treatment may be appropriate in some instances. 

Most of the classes of claimants enumerated in Section 6 currently 

qualify for prioritization and expedited process under VA’s policy. 

However, on June 28, 2013, at a Subcommittee on Disability Assistance and Memorial Affairs legislative hearing on this proposal, 

Veterans Benefits Administration Director of Compensation Service, Thomas Murphy, testified that it is not guaranteed that this 

VA practice is uniformly applied across all regional offices. Accordingly, it is the intent of this Section to create a statutory requirement in order to ensure uniform prioritization for veterans who 

have the most urgent claims. The codification of this requirement 

would ensure uniform application of the priority classes, while still 

giving discretion to the Secretary of Veterans Affairs to provide for 

the prioritization of additional claims on a case-by-case basis. 

Section 7. Treatment of medical evidence provided by non-department of Veterans Affairs medical professionals in support of 

claims for disability compensation 

VA may afford medical examinations to veterans seeking disability benefits, but there is often a long wait time before these examinations can be scheduled by VA. Moreover, many veterans prefer to submit private medical evidence to support their claims for 

disability benefits. 

Section 1525 of title 38, U.S.C., currently states: ‘‘For purposes 

of establishing any claim for benefits under chapter 11 or 15 of this 

title [38 USCS §§ 1101 et seq. or 1501 et seq.], a report of a medical 

examination administered by a private physician that is provided 

by a claimant in support of a claim for benefits under that chapter 

may be accepted without a requirement for confirmation by an examination by a physician employed by the Veterans Health Administration if the report is sufficiently complete to be adequate for the 

purpose of adjudicating such claim.’’ 

During the April 14, 2015, Subcommittee on Disability Assistance and Memorial Affairs hearing, The American Legion testified 

that it had documented many instances of VA scheduling unnecessary and duplicative examinations with a VA physician, even 

though there was already sufficient medical evidence in the claims 

file from a private physician to decide the claim. These duplicative 

examinations add unnecessary delays to the disability claims process. 

Section 7 would require VA to accept a medical examination administered by a private physician if such examination report is sufficiently complete. This Section would define ‘‘sufficiently complete’’ 

to mean ‘‘competent, credible, probative, and containing such information as may be required to make a decision on the claim from 

which the report is provided.’’ However, if VA decides that the evidence submitted by a non-VA physician is not sufficiently complete, 


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Section 7 would require VA to provide the veteran with a thorough 

explanation of why such medical opinion does not include adequate 

information for VA to issue a decision on the claim, and the reason 

why additional medical evidence is necessary. Finally, this section 

would establish that the effective date of this Section would apply 

with respect to medical evidence submitted after the date that is 

one year after the date of enactment. 

Section 7 would improve VA’s claims processing system by eliminating the requirement that claimants undergo unnecessary examinations. Moreover, requiring VA to accept a sufficiently complete 

report from a private physician would result in a reduction in the 

number of disability examinations conducted by VA physicians. 

This would allow VA’s medical professionals to devote more resources to providing care for our nation’s veterans and improve 

timeliness for those VA compensation examinations conducted by 

VA physicians. 

Section 8. Automatic annual increase in rates of disability compensation and dependency and indemnity compensation 

The basic purpose of the disability compensation program is to 

provide relief from the impaired earning capacity of veterans who 

are disabled as a result of their military service. The amount of 

compensation payable varies according to the degree of disability. 

This amount in turn is required by law to represent, to the extent 

practicable, the average impairment in earning capacity in civilian 

occupations resulting from such disability or combination of disabilities. To be eligible to receive disability compensation, a veteran 

must have a disability incurred in or aggravated by military service, which is not the result of willful misconduct, and must have 

been discharged under other than dishonorable conditions. The responsibility for determining a veteran’s entitlement to service-connection for a disability rests with VA. 

Surviving spouses and dependent children of veterans who died 

as a result of disabilities determined by VA to be service-connected 

(including veterans who died while on active duty), or who had a 

service-connected disability rated at 100 percent for a specified 

minimum amount of time prior to death, are entitled to receive 

monthly DIC benefits. Additional amounts are paid to survivors 

who are housebound, in need of aid and attendance, or who have 

minor children. The purpose of DIC benefits authorized under 

chapter 13 of title 38, U.S.C., is to provide partial compensation to 

the appropriate survivors for the loss in financial support due to 

the veteran’s service-connected death. Income and need are not factors in determining a surviving spouse’s or child’s entitlement because the nation, in part, assumes the legal and moral obligation 

of the veteran to support the spouse and children. 

Each year, the Committee approves and reports legislation that 

sets the cost-of-living adjustment (COLA) by reference to the Social 

Security increase. Although the Committee typically passes such 

legislation each year, veterans must wait for Congress to act before 

they are granted such an increase. In contrast, Social Security 

beneficiaries receive an automatic and annual COLA if there is an 

increase in the Consumer Price Index for Urban Wage Earners and 


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2 Under current law, the COLA equals the percentage increase in the average CPI-W from 

the third quarter of the base year (the last year for which a COLA was applied) to the third 

quarter of the current year. 

Clerical Workers (CPI-W) in the previous year.2 Accordingly, service-disabled veterans who are receiving disability benefits from VA 

should also automatically receive their benefits increase, particularly in light of the current economic climate. 

To correct this inequity, rather than being subject to the uncertainty of an annual COLA bill, this Section would make compensation to veterans and their dependents permanently subject to the 

same COLA as Social Security recipients. By making such an increase automatic, veterans would not have to wait for Congress to 

pass an annual COLA bill before receiving the COLA increase in 

benefits. Further, because a COLA is assumed in the Congressional 

Budget Office’s baseline, there is no projected increase in mandatory spending relative to the baseline projected for this provision. 

Section 9. Improvement of fiduciaries for veterans 

Section 9 would provide reforms to VA’s fiduciary program. Specifically, chapter 55 of title 38, U.S.C., provides authority for the 

VA fiduciary program, which is intended to help veterans and other 

VA beneficiaries who are deemed by the Secretary of Veterans Affairs to be mentally incompetent for purposes of handling their financial affairs. In such cases, the Secretary appoints a fiduciary 

who, by statute, is only authorized to receive and manage benefits 

administered by the Secretary on behalf of the beneficiary. The fiduciary is responsible for ensuring that a beneficiary’s bills are 

paid on time and that a beneficiary receives money to pay for food, 

shelter, clothing, medical expenses, and other necessities. 

The framework established in chapter 55 allows VA a great deal 

of latitude in implementing the fiduciary program. Section 9 is designed to transform VA’s fiduciary program to better serve the 

needs of our most vulnerable veterans and their hardworking fiduciaries, and to protect veterans in the program from falling victim 

to deceitful and criminal fiduciaries. Section 9 would overhaul the 

VA fiduciary program, making many necessary reforms to address 

problems identified in recent years and would realign chapter 55 

to a structure more consistent with other amended sections of title 

38, U.S.C. 

Under current law, a VA beneficiary may appeal VA’s decision to 

appoint a fiduciary. However, the appeals process within VA’s fiduciary program is difficult, slow, and often results in healthy, capable veterans being unable to remove themselves from the program. 

Section 9 would require that whenever the Secretary appoints a fiduciary, the Secretary must provide a written statement detailing 

the reasons why such beneficiary is unable to handle his or her VA 

funds. Furthermore, the beneficiary would be allowed to appeal the 

finding of incompetence at any time. This provision not only enables a veteran to remain out of the fiduciary program if medical 

evidence supports such a position, it would also allow a veteran 

who has sufficiently recovered at a later time to return to managing his or her own financial affairs. 

This Section would also permit a veteran or other VA beneficiary 

to request the appointment of a new fiduciary if it is perceived that 

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eran or has an irreconcilable personality conflict or disagreement. 

The Secretary may deny the removal of an appointed fiduciary if 

it is determined that the request was not made in good faith, and 

would ensure that the delivery of benefits is not interrupted if a 

previous fiduciary is removed and a new one appointed. 

This section would enable a veteran or other VA beneficiary to 

designate a preferred fiduciary ahead of time, such as a family 

member or guardian. While the Secretary would not be required to 

appoint the designated fiduciary, the reason for not appointing that 

fiduciary would have to be presented in writing to the veteran as 

would a notice of the veteran’s right to modify the appointment. In 

many cases, a veteran or other VA beneficiary may already have 

a family member or court-appointed guardian acting as a fiduciary 

for other benefits, and in cases where the veteran is happy with 

the fiduciary’s performance of those duties, a sensible approach 

would be to maintain that relationship. 

In response to due process concerns raised by the Veterans of 

Foreign Wars, during the July 9, 2015, Disability Assistance and 

Memorial Affairs subcommittee legislative hearing, an amendment 

was adopted that removed the provision authorizing the appointment of a temporary fiduciary in cases where the veteran was not 

yet afforded a hearing. If a beneficiary does not designate a preferred fiduciary in advance, Section 9 would also establish the priority for VA to follow when determining whom to appoint as the 

veteran’s fiduciary. Such priority would include a relative of the 

beneficiary, the person appointed as guardian of the beneficiary by 

a court of competent jurisdiction, and anyone authorized to act on 

behalf of the beneficiary under a durable power of attorney. 

Under certain circumstances, the Secretary may decide that a 

paid fiduciary is in a veteran’s or other VA beneficiary’s best interest. Currently, Section 5502(a)(2) of title 38, U.S.C., states that a 

fiduciary may receive a commission for his or her efforts, but that 

commission may not exceed four percent of the monetary benefits 

a beneficiary receives in one year. Investigations, hearings, and 

media reports have identified many problems in the fiduciary program arising from paid fiduciaries receiving more than the amount 

authorized under law, including receiving commissions from retroactive and lump sum payments to veterans. Further, evidence has 

also revealed VA field examiners directing fiduciaries to take income from non-VA benefits as well, an action explicitly not authorized by law. In some cases, the veteran beneficiary had not received 

basic funding for food, clothing, and shelter that should have been 

administered by the fiduciary. 

The Committee has continued to hold hearings and conduct investigations that have indicated that current law and policy regarding commissions paid to fiduciaries are frequently violated 

throughout the nation. Additionally, the commission rate paid to 

VA-appointed fiduciaries is already higher than that paid by the 

Social Security Administration (SSA) under the Representative 

Payee Program, the SSA’s equivalent to VA’s fiduciary program. 

Section 9 would reduce the commission rate paid to fiduciaries, 

if the Secretary determines that a paid fiduciary is in the best interest of the veteran, to not more than 3 percent of the veteran’s 

monthly benefits, or $35 per month, whichever is less. Any desire 

by VA to increase this rate would require congressional authorizaVerDate Sep 11 2014 00:56 Feb 05, 2016 Jkt 059006 PO 00000 Frm 00027 Fmt 6659 Sfmt 6602 E:\HR\OC\HR405.XXX HR405

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3 Abe, Gary, K., Deputy Assistant Inspector General for Audits and Evaluations, Office of Inspector General, U.S. Department of Veterans Affairs, Statement to the House of Representatives Committee on Veterans’ Affairs, Subcommittee on Disability Assistance and Memorial Affairs Hearing on June 11, 2015. 4 Ibid, at page 3. 

tion. This commission rate would give VA’s fiduciary program a 

similar structure to the SSA’s Representative Payee Program and 

would reduce the profit motive of predatory fiduciaries. This section 

would also clarify that (1) commission payments are not to be derived from retroactive or lump sum payments; (2) fiduciaries who 

are determined to misuse a veteran’s benefits may not receive commissions; (3) fiduciaries found to be misusing funds may have their 

status as fiduciaries revoked; (4) the Secretary may seek compensation in a court of law from fiduciaries found to misuse benefits or 

fiduciaries who fail to adequately account for a veteran’s benefits; 

and, (5) funds remaining with a paid fiduciary after a veteran’s 

passing would escheat to the federal government. Reducing the financial incentive for a predatory fiduciary to apply to VA’s fiduciary program provides further assurance that participants are 

working in the best interest of vulnerable veterans. 

According to testimony provided by the VA Office of Inspector 

General (OIG), from April 1, 2010, to March 31, 2015, the OIG conducted 216 investigations involving fiduciary fraud and arrested 94 

fiduciaries and/or associates.3 Furthermore, Committee investigations have documented cases of convicted felons serving as fiduciaries, as well as fiduciaries with no knowledge of or training regarding their duties to the veteran. Many cases of embezzlement 

of a veteran’s funds could have been prevented with a basic background check of a fiduciary. However, VA frequently used its authority to waive the current background check requirement for appointment of a fiduciary, and failed to follow up at a later point in 

time to determine the suitability of the appointed fiduciary. 

Furthermore, on June 1, 2015, the OIG issued a report finding 

that VA failed to schedule required field examinations in a timely 

manner. The purpose of VA’s field examinations is to assess the 

welfare of the veteran through personal contact via a visit to the 

veteran’s home. Field examinations are also used to review fund 

usage and the overall performance of the fiduciary. OIG reported 

that during Calendar Year 2013, VA did not meet timeliness standards for about 45,500 of approximately 109,000 (42%) field examinations. Of those 45,500 examinations, approximately 18,100 were 

still not completed as of December 31, 2013. 

Moreover, the Veterans Benefits Administration (VBA) did not 

meet timeliness standards for about 54,000 of approximately 

106,400 field examinations for the first three quarters of Calendar 

Year 2014. Of the 54,000 field examinations that did not meet 

timeliness standards in the first three quarters of Calendar Year 

2014, approximately 21,900 were still not completed as of September 2014. As a result, the OIG concluded that untimely field examinations placed approximately $360.7 million in benefit payments and $487.6 million in estate values at increased risk of misuse. In addition, the OIG determined that VBA had failed to schedule required field examinations for approximately 1,800 beneficiaries in Calendar Year 2013.4


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5 Rosinski, Doug, Attorney, Law Office of Douglas J. Rosinski, Esq., Testimony to the House 

of Representatives Committee on Veterans’ Affairs Subcommittee on Oversight and Investigations Hearing on February 9, 2012. 6 Eagle, Katrina, Attorney, Law office of Katrina J. Eagle, Esq, Testimony to the House of 

Representatives Committee on Veterans’ Affairs Subcommittee on Oversight and Investigations 

Hearing on February 9, 2012. 

Field examinations are essential to ensure that the veteran is 

adequately protected. The Committee is concerned that VA’s failure 

to conduct timely field examinations may be evidence that VA is 

not adequately fulfilling its required oversight of fiduciaries. The 

lack of oversight may place the general health and well-being of 

beneficiaries at risk. 

Section 9 would improve the oversight and the qualification processes for fiduciaries by requiring the Secretary to perform civil and 

criminal background investigations, and conduct a face-to-face 

interview prior to certifying an individual as a fiduciary. In response to concerns that performing background checks may slow 

the fiduciary appointment process, authority would be provided to 

the Secretary, to expedite background checks where necessary. 

This Section would also protect veterans’ sensitive personal information and would mandate the furnishing of a bond when required 

by the Secretary, before certifying an individual as a fiduciary. Veterans service organizations (VSOs) raised concerns that the requirement of a bond for family or caregiver fiduciaries causes 

undue hardship upon those closest to the veteran; to address these 

concerns, Section 9 would allow the Secretary to consider the existence of a familial or personal relationship between the proposed fiduciary and beneficiary, as well as the care the proposed fiduciary 

has taken to protect the interests of the beneficiary. 

Committee investigations have yielded information regarding 

cases where a veteran or other VA beneficiary had never met nor 

heard from his or her fiduciary.5 According to one witness at an 

oversight hearing conducted on February 9, 2012, this lack of accountability on the part of fiduciaries, coupled with VA’s lack of 

oversight, contributed to allegations that some veterans did not receive the necessary funds to pay basic utilities and predatory fiduciaries making a profit at the expense of the veteran.6

To improve VA oversight of fiduciaries, Section 9 contains a provision that would require an annual accounting by fiduciaries of 

benefits earned, benefits disbursed, and the remaining balance as 

well as other fiduciary-controlled sources of income of that veteran. 

The fiduciary would also be required to report any events affecting 

his or her ability to serve the veteran, including criminal convictions, bankruptcy filings, and judgments filed against the fiduciary. 

Any events reported in the annual accounting may be considered 

by the Secretary in determining a fiduciary’s ability to continue 

serving the best interest of the veteran. This annual report would 

be transmitted to the beneficiary or the beneficiary’s guardian. 

Under current law, VA is not required to review a fiduciary’s annual accounting. VA’s current policy generally requires fiduciaries 

to submit an annual accounting in cases where: the beneficiary’s 

annual VA benefit amount equals or exceeds the compensation payable to a veteran with a service-connected disability that is rated 

totally disabling; the beneficiary’s accumulated VA funds under 

management by a fiduciary is $10,000 or more; the fiduciary was 

appointed by a court; or, the fiduciary receives a fee. Such audits 


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7P.L. 111–163 (May 5, 2010) 

8 Eskenazi testimony, op. cit. 

generally require a statement of the beginning account balance, a 

detailed accounting of the funds managed on behalf of the beneficiary, a detailed list of the expenses paid, and the ending account 

balance. 

Section 9 would provide for specific treatment of caregiver fiduciaries, ensuring that a limited annual report is required. However, 

Section 9 would give VA the opportunity to audit fiduciaries whose 

accounting is suspect. The Secretary would be given discretion to 

adjust the content required under an annual report or accounting 

with respect to a caregiver fiduciary whom the Secretary determines to have effectively protected the interests of the beneficiary 

over a sustained period, including the parameters for the posting 

of bond as mentioned above. Additionally, the VBA and the Veterans Health Administration (VHA) would be required to coordinate and minimize the frequency with which employees of VA visit 

the home of a caregiver fiduciary and beneficiary, and limit the extent of supervision by Under Secretaries with respect to such a fiduciary and beneficiary. 

Although it is important for VA to periodically audit fiduciaries, 

particularly fiduciaries who receive a commission, a comprehensive 

annual reporting requirement may place a burden on volunteer fiduciaries. This burden may be particularly onerous if the fiduciary 

is also serving as the veteran’s caregiver. Caregivers are often loving family members, who are making tremendous sacrifices to ensure the care and comfort of the veteran. Furthermore, many caregivers are already being supervised by the VHA under the Caregivers and Veterans Omnibus Health Services Act of 2010 7 (Caregivers Act). Fiduciaries who also receive VA assistance are subject 

to periodic home visits by VHA employees to assess the welfare of 

the veteran. If the VHA home visits reveal that the veteran is not 

receiving proper care, VHA may terminate caregiver support. 

Therefore, requiring caregivers to provide a detailed annual accounting would be an unnecessary burden and would not provide 

additional protections for the beneficiary. 

Section 10. Board of Veterans’ Appeals video hearings 

Although a hearing is not required in order for the Board of Veterans’ Appeals (Board) to issue a final decision in a veteran’s appeal, a veteran is entitled to a hearing upon request. In FY 2014, 

the Board held almost 11,000 hearings. Many of these hearings 

were conducted at the Board offices, but Board Members also travel 

to VA regional benefits offices around the country for the purpose 

of holding hearings in locations more convenient for veterans. In 

addition, the Board offers veterans the option of having a videoconference hearing. 

During the January 22, 2015, Subcommittee on Disability Assistance and Memorial Affairs hearing, the Board’s Vice Chairman, 

Laura Eskenazi, testified that there is no statistical difference in 

the ultimate disposition of in-person hearings as compared to videoconference hearings. Veterans who had videoconference hearings 

had an allowance rate for their appeals that was virtually the same 

as veterans who had an in-person hearing.8 Furthermore, during 


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the April 14, 2015, Subcommittee on Disability Assistance and Memorial Affairs hearing, VA testified that the Board has historically 

been able to schedule videoconference hearings more quickly than 

in-person hearings. For example, in FY 2014, on average, videoconference hearings were held 124 days sooner than in-person 

hearings. 

Section 10 would permit the Board to schedule the earliest possible hearing for the appellant, which may be a videoconference 

hearing. This provision, however, would preserve the right of the 

appellant to request a different type of hearing, such as a hearing 

at the Board offices in Washington, D.C., or a hearing by a Board 

Member held at the appellant’s local regional office. 

Section 10 would encourage the additional use of videoconferencing at the Board for the purpose of expediting the scheduling 

of appeals hearings. This Section would also improve efficiencies at 

the Board by reducing time lost due to the Veterans Law Judges 

having to travel to regional benefits offices to conduct in-person 

hearings. 

Section 11. Improvements to authority for performance of medical 

disabilities examinations by contract physicians 

Some veterans are afforded a VA medical examination to evaluate their application for disability benefits. Unfortunately, there 

are not enough VA examiners to perform these evaluations in a 

timely manner, and some veterans experience lengthy delays before 

VA is able to schedule such examinations. It may be especially difficult for VA to timely schedule these examinations if the veteran 

needs to see a specialist, such as a cardiologist or orthopedic surgeon. Moreover, veterans who live in rural areas may have to travel for miles to a VA facility in order to see a VA examiner for a 

disability examination. 

During the July 29, 2015, Subcommittee on Disability Assistance 

and Memorial Affairs hearing, VA testified that enabling licensed 

physicians operating under a VA contract to conduct more examinations would allow VA doctors to devote more time to treating veterans, rather than conducting disability examinations. In 2003, 

Congress gave VA temporary authority to contract with non-VA 

physicians to perform disability examinations. However, such authorization expires on December 31, 2016. 

Section 11 would extend VA’s authority to contract with non-VA 

physicians to conduct disability examinations through December 

31, 2017. This Section would also revise provisions of the Veterans 

Benefits Act of 2003 and the Veterans’ Benefits Improvement Act 

of 1996 relating to contract examinations. Section 11 would clarify 

that, notwithstanding any law regarding the licensure of physicians, a physician who has a current unrestricted license would be 

authorized to conduct disability examinations for VA in any state, 

the District of Columbia, or a commonwealth, territory, or possession of the United States. However, this authorization would only 

extend to physicians conducting an examination within the scope 

of the physician’s authorized duties under a contract with VA. Furthermore, VA would only be able to contract with physicians who 

are not barred from conducting such an examination in any state, 

the District of Columbia, or a commonwealth, territory, or possession of the United States. 


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9 Ryan, Patty, ‘‘VA Contractor Sent Patients to Tampa Doctor as Prosecutors Tried to Send 

Him to Prison, Tampa Bay Times, August 22, 2015. 10McLenachen testimony, op. cit., April 14, 2015. 

Moreover, the Committee is concerned about a news report indicating that some veterans have been referred to a physician who 

was under criminal investigation and practicing medicine with a 

restricted license.9 A restricted license limits a physician’s practice, 

generally because the physician has a health problem or is being 

disciplined for professional misconduct. Section 11 would ensure 

that VA would not be able to contract with any physician who is 

practicing medicine with a restricted license. 

It would benefit veterans to extend VA’s temporary authority to 

contract with private physicians to conduct disability examinations. 

However, VA should only contract with physicians who have current unrestricted licenses and are not barred from conducting medical examinations within the United States or its territories. 

Section 12. Pilot program on fully developed appeals 

Under the current VA appeals system, a veteran who disagrees 

with VA’s decision with respect to his or her claim for benefits may 

file a Notice of Disagreement (NOD). The VA regional benefits office then determines whether additional development is needed 

and, if so, undertakes that development and provides the veteran 

with a statement of the case (SOC). The SOC includes a summary 

of the evidence considered, a summary of the applicable laws and 

regulations, and a discussion of how such laws and regulations affect VA’s decision. The veteran may then file a substantive appeal 

via a VA Form 9, and is permitted to submit additional evidence 

to support his or her appeal. Each time the veteran submits new 

information, the regional benefits office will generally issue a new 

decision or supplemental statement of the case (SSOC). 

The requirement that VA issue a SSOC every time new evidence 

is submitted increases the wait time for veterans. In FY 2014, the 

average time between the date a veteran filed an NOD and the 

issuance of an SOC was 330 days. The time from issuance of an 

SOC to filing of a substantive appeal averaged 39 days. The period 

between the filing of a substantive appeal and certification of an 

appeal to the Board was 681 days.10

To determine whether the fully developed appeals (FDA) process 

would help expedite VA’s appeals process, Section 12 would create 

a five-year FDA pilot program. This Section would require VA to 

provide the claimant with information about the pilot program, including the limitation on providing new evidence after filing an appeal and the advantages and disadvantages of participating in the 

program. Further, VA would be required to collaborate with veterans service organizations to publish an online tutorial explaining 

the advantages and disadvantages of the pilot program. 

Under Section 12, a claimant who elects to participate in the 

pilot program would file a NOD, along with a written election to 

have the appeal determined under the pilot program. At the time 

of filing the NOD, the claimant would submit all evidence that the 

claimant believes is needed for the appeal, as of the date of filing, 

and a statement of argument, if any, in support of the claim. Furthermore, the claimant’s representative of record, if any, would 

have the opportunity to review the claimant’s FDA and submit any 


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additional arguments or evidence that the representative determines necessary. After the claimant elects to file a FDA, jurisdiction over the appeal would transfer to the Board. 

Section 12 would allow a veteran to revert to the traditional appeals process at any time after making an FDA election, with no 

penalty other than the time lost whereby the appeal may have 

been reviewed under the traditional appeals process. If the claimant decides to submit new evidence, the claimant would be required to revert to the traditional appeals process. Additionally, if 

the claimant requests to hold a hearing, such request would be 

deemed to be an election to revert to the standard appeals process. 

Upon the election of a claimant to file a FDA, the jurisdiction of 

the appeal would transfer directly to the Board. The Board would 

maintain FDA on a separate docket than the standard appeals 

docket. The Board would also be directed to decide FDAs in the 

order they are received, however, the Board would not decide more 

than one FDA for each four traditional appeals decided. Finally, to 

the extent practicable, Section 12 would require that the Board decide each FDA within one year of the date on which the claimant 

files the NOD. 

In addition, Section 12 would require the Board to establish an 

office to develop any evidence the Board determines necessary to 

decide a FDA. VA would be required to cooperate with the Board 

in developing evidence. Furthermore, VA would be required to 

transfer employees who were responsible for processing remanded 

cases to positions within the Board in a number VA determines 

sufficient to carry out this section. 

Section 12 would, in cases where the Board determines that a 

FDA requires additional evidence, direct the Board to take such action as may be necessary to develop such new evidence without remanding the case to the VBA. The Board would consider such evidence in the first instance without consideration by the VBA. Moreover, the claimant or the representative of the claimant, if any, 

would have the opportunity to review a copy of such new evidence 

and is able to respond within 90 days after the date of mailing such 

evidence, without requiring the claimant to make a reversion to the 

traditional appeals process. 

Section 12 would also require VA to provide an annual report 

that would include recommendations for changes to improve the 

pilot program and an assessment of the feasibility and advisability 

of expanding the pilot program. Such annual reports would begin 

180 days after the date on which the pilot program commences. 

VA’s current rating notification letters fail to clearly explain the 

rationale for its conclusions. If veterans better understood why VA 

denied their initial claim, the number of appeals may be reduced. 

More complete and clear decision letters would provide veterans 

and their representatives with a better understanding of what is 

needed to prevail in their appeal, regardless of which option they 

choose. To ensure VA works cooperatively with VSOs to develop a 

better, more understandable rating notification letter, this Section 

would require the annual report to include a review, made in conjunction with VSOs, of VA’s efforts to improve disability rating notification letters. Moreover, the report would include the opinions 

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11 Ibid. 

ance on the pilot program not later than one day after the date of 

enactment and would require VA to prescribe regulations to carry 

out such pilot program not later than 90 days after enactment. 

Section 13. Deadline for certification of appeals forms by regional 

offices of the Department of Veterans Affairs 

After a veteran files a substantive appeal, VA employees are required to review the claims file to ensure that all administrative 

and adjudicative procedures have been completed before the appeal 

is certified to the Board. The purpose of the review is to avoid unnecessary remands by ensuring that all issues have been addressed 

before certification to the Board. Despite the fact that this review 

is simply an administrative procedure, it currently takes 681 days 

on average for VA to complete the process of certifying an appeal 

to the Board.11

During the June 24, 2015, Subcommittee on Disability Assistance 

and Memorial Affairs hearing, The American Legion and the Iraq 

and Afghanistan Veterans of America testified in support of the 

provisions of Section 13, which would require VA to complete the 

certification process within one year. 

Section 14. Evaluation of backlog of disability claims and appeals 

of claims of Department of Veterans Affairs 

Section 14 would establish a commission or task force to provide 

a comprehensive evaluation and assessment of the backlog of VA 

disability claims, as well as the lesser noted backlog of appeals of 

initial decisions, an analysis of possible improvements to VA disability claims processing, and any related issues that the commission or task force considers relevant. This Section would require 

VA to submit interim and final reports to Congress within 180 days 

of commencement of work. 

The VA disability compensation program provides monetary support to veterans with disabling conditions that were incurred or aggravated during military service. In FY 2015, the program provided 

approximately $63.7 billion in disability compensation benefits to 

nearly 4.1 million veterans. For years, the disability compensation 

claims process has been the subject of concern and attention by VA, 

Congress, and VSOs, due in large part to long waits for decisions 

and the large number of claims pending a decision. Against this 

backdrop, thousands of servicemembers are expected to become veterans in the coming years according to VA officials, with a significant number expected to apply for disability benefits. 

VA has installed sweeping technological changes in recent years, 

and has implemented various initiatives under its Strategic Plan. 

However, VA has also layered new initiative upon new initiative, 

including short-notice mandatory overtime, focused deadlines for 

claims dated in excess of one year, and alteration of the VA tracking and reporting figures of backlogged claims in its Monday Morning Workload Report. In December 2012, the GAO issued a report 

entitled, ‘‘Veterans’ Disability Benefits: Challenges to Timely Processing Remains a Daunting Challenge’’ that reviewed VA’s disability adjudication process. The GAO noted that, although VA is 

attempting to address processing challenges through various imVerDate Sep 11 2014 00:56 Feb 05, 2016 Jkt 059006 PO 00000 Frm 00034 Fmt 6659 Sfmt 6602 E:\HR\OC\HR405.XXX HR405

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12 U.S. Government Accountability Office, Veterans’ Disability Benefits: Challenges to Timely 

Processing Remains a Daunting Challenge (GAO–13–89) (December 2012). 

provement initiatives, without a comprehensive plan to strategically manage resources and evaluate the effectiveness of these efforts, the agency risks spending limited resources on initiatives 

that may not speed up the disability claims and appeals processes. 

This may, in turn, result in forcing veterans to continue to wait 

months and even years to receive compensation for injuries incurred during their service to the country.12

Furthermore, numerous recent reports from VA OIG demonstrate that VA regional offices across the nation continue to lack 

effective controls and accuracy in processing disability claims, fail 

to adequately interpret policy requirements, lack effective training, 

and further lack proper managerial oversight. While VA has set 

concrete goals for processing times and reduction of backlogged veterans’ disability compensation claims, it is evident that more must 

be done to ensure that VA implements a workload management 

strategy that will not only eliminate the current backlog, but will 

also improve the system in a holistic manner, provide capacity for 

anticipated and unanticipated surges, ensure accurate processing of 

claims, and prevent future backlog occurrences. 

The need for legislation establishing a commission or task force 

has been highlighted before the Committee by independent subject 

matter expert academics, organizations who advocate on behalf of 

veterans, and by the CAVC. An outside analysis is necessary to 

clearly identify, first, why the backlog exists, and second, how to 

prevent this situation from recurring, whether by amendment to 

law, regulation, policy, or process. 

The commission or task force created by this Section would augment and support VA’s ongoing work, contribute added value to 

VA’s efforts, report on its findings early and often, and increase 

transparency throughout the process. Additionally, while much 

focus is placed upon the backlog of veterans’ disability benefit 

claims, a commensurate focus upon the backlog of veterans’ appealed claims does not exist. With a current caseload of more than 

420,000 appeals and a projected workload of hundreds of thousands 

of appealed claims in the coming years, the appeals system must 

also be considered with thoughtful analysis, evaluation, and recommendations for improvement. 

Section 15. Methods for validating certain World War II Merchant 

Mariner service considered to be active service by the Secretary 

of Veterans Affairs 

Historically, merchant mariners were private citizens employed 

by freight shipping companies. In an effort to support the American 

war effort during World War II, these freight shipping companies 

and their employees became an auxiliary to the United States 

Navy. Their mission was to transport bulk war materials including 

food, clothing, weapons, and even troops to all areas of conflict and 

coastal installations here at home. 

Currently, a certificate of shipping and discharge forms, continuous deck or engine logbooks, and shipping company records that 

indicate the vessel names and dates of voyages are the only documents that are considered acceptable to determine an individual’s 


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service in the merchant marine. Unfortunately, such documentation may no longer exist or can be difficult to find. 

Section 15 would expand the official documentation accepted by 

the Secretary of Homeland Security to grant veterans status with 

limited benefits to World War II merchant marine and coastwise 

merchant seamen. This Section would expand the acceptable forms 

of documentation used to determine eligible service in the merchant marine, and would allow acceptance of Social Security Administration records, validated testimony by the applicant or closest living relative, and other official records that provide sufficient 

proof of service. The limited benefits that would be conferred by 

Section 15 include burial benefits and the awarding of any commendations, ribbons, or honors earned during an individual’s time 

of service. 

Section 16. Designation of American World War II Cities 

Section 16 would mandate that the VA Secretary designate one 

city in the United States each year as an ‘‘American World War II 

City’’ based on a set of criteria that includes: contributions to the 

war effort, efforts to preserve the history of the city’s contributions, 

and the presence of military facilities within the city. The Committee believes that American cities provided critical and distinguished contributions to the World War II effort and should be 

honored and celebrated accordingly. This Section would set in place 

a procedure for other cities to receive this designation. 

Section 17. Sense of Congress Regarding American Veterans Disabled for Life 

There are 3.6 million veterans of the United States Armed Forces 

living today that are recognized by the VA to be service-disabled 

veterans. These American heroes carry the lasting scars of their 

service to our nation throughout their lives. 

In recognition of these veterans, Congress approved construction 

of the American Veterans Disabled For Life Memorial, located in 

Washington, DC, which was dedicated on October 5, 2014 to serve 

as a permanent reminder of the enduring human sacrifices of war. 

Section 17 would express the sense of Congress that our nation 

honors the service and sacrifice made by the men and women left 

permanently wounded, ill, or injured as a result of their service in 

the United States Armed Forces. 

HEARINGS

On January 27, 2015, the full Committee conducted a legislative 

hearing on various bills introduced during the 114th Congress, including H.R. 245. 

The following witnesses testified: 

The Honorable Alan Grayson, U.S. House of Representatives; 

Mr. David R. McLenachen, Acting Deputy Under Secretary for 

Disability Assistance, Veterans Benefits Administration, U.S. 

Department of Veterans Affairs; Mr. Zachary Hearn, Deputy 

Director for Claims, Veterans Affairs and Rehabilitation Division, The American Legion; Mr. Joseph A. Violante, National 

Legislative Director, Disabled American Veterans; Mr. Blake 


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C. Ortner, Deputy Government Relations Director, Paralyzed 

Veterans of America; and, Mr. Aleks Morosky, Deputy Director, National Legislative Service, Veterans of Foreign Wars. 

Statements for the record were submitted by the following: 

Vietnam Veterans of America and the Housing Policy Council. 

On April 14, 2015, the Subcommittee on Disability Assistance 

and Memorial Affairs conducted a legislative hearing on various 

bills introduced during the 114th Congress, including H.R. 677, 

H.R. 800, H.R. 1331, and H.R. 1379. 

The following witnesses testified: 

The Honorable Chellie Pingree, U.S. House of Representatives; Mr. David R. McLenachen, Acting Deputy Under Secretary for Disability Assistance, Veterans Benefits Administration, U.S. Department of Veterans Affairs; Mr. Zachary Hearn, 

Deputy Director for Claims, Veterans Affairs and Rehabilitation Division, The American Legion; Mr. Blake C. Ortner, Deputy Government Relations Director, Paralyzed Veterans of 

America; Mr. Paul R. Varela, Assistant National Legislative 

Director, Disabled American Veterans; Mr. Ronald B. Abrams, 

Joint Executive Director, National Veterans Legal Services 

Program; and, Mr. Kenneth M. Carpenter, Founding Member, 

National Organization of Veterans’ Advocates. 

Statements for the record were submitted by the following: 

The Veterans of Foreign Wars and the U.S. Court of Appeals 

for Veterans Claims. 

On June 24, 2015, the Subcommittee on Disability Assistance 

and Memorial Affairs conducted a legislative hearing on various 

bills introduced during the 114th Congress, including H.R. 1302, 

H.R. 1338, H.R. 1380, H.R. 2214, H.R. 2605, and, H.R. 2691. 

The following witnesses testified: 

The Honorable Bill Johnson, U.S. House of Representatives; 

Mr. David R. McLenachen, Acting Deputy Under Secretary for 

Disability Assistance, Veterans Benefits Administration, U.S. 

Department of Veterans Affairs; Mr. Zachary Hearn, Deputy 

Director for Claims, Veterans Affairs and Rehabilitation Division, The American Legion; Mr. Paul R. Varela, Assistant National Legislative Director, Disabled American Veterans; Mr. 

Aleks Morosky, Deputy Director, National Legislative Service, 

Veterans of Foreign Wars; Ms. Diane Zumatto, National Legislative Director, AMVETS; and, Mr. Chris Neiweem, Legislative 

Associate, Iraq and Afghanistan Veterans of America. 

Statements for the record were submitted by the following: 

The Honorable Bob Latta, U.S. House of Representatives; 

the Honorable Bill Shuster, U.S. House of Representatives; 

and, the Paralyzed Veterans of America. 


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SUBCOMMITTEE CONSIDERATION

On May 14, 2015, the Subcommittee on Disability Assistance and 

Memorial Affairs met in open markup session, a quorum being 

present, and favorably forwarded to the full Committee H.R. 732, 

as amended, and, H.R. 1331. During consideration of H.R. 732, the 

following amendment was considered and agreed to by voice vote: 

An amendment offered by Mr. Ruiz of California that retained the original language regarding appeals hearings, and 

includes additional language that would provide priority for 

processing claims for certain veterans. The amended version 

would establish a commission or task force to evaluate and assess the backlog of VA disability claims and the backlog of appealed claims. The commission or task force would provide regular reports to the President and Congress. 

On July 9, 2015, the Subcommittee on Disability Assistance and 

Memorial Affairs met in open markup session, a quorum being 

present, and favorably forwarded to the full Committee H.R. 800, 

as amended; H.R. 1380, as amended; H.R. 2214, as amended; H.R. 

2605, as amended; H.R. 1302; H.R. 1338; and, H.R. 2691. 

During consideration of H.R. 800, the following amendment in 

the nature of a substitute was considered and agreed to by voice 

vote: 

An amendment in the nature of a substitute offered by Ms. 

Titus of Nevada that retained the original language regarding 

the five-year fully developed appeals (FDA) pilot program. The 

amendment in the nature of a substitute eliminated the provision that would have allowed a claimant who had already filed 

a traditional appeal to transfer to the pilot program. The 

amendment in the nature of a substitute would require that: 

(1) the Secretary provide the claimant and claimant’s representative, if any, information regarding the advantages and 

disadvantages of the pilot program, including the limitation on 

the use of new evidence; (2) VA collaborate with the three veterans service organizations with the most members in developing and publishing an online tutorial explaining the advantages and disadvantages of the pilot program; and, (3) the Secretary prescribe regulations to carry out such pilot program not 

later than 90 days after the date of enactment. Further, the 

amendment in the nature of a substitute would clarify that (1) 

participants in the pilot program may seek advice from claims 

agents recognized under chapter 59 of Title 38, U.S.C.; (2) 

claimants who are not eligible to participate in the pilot program would be allowed to revert to the standard appeals process without any penalty to the claimant other than the loss of 

the docket number associated with the FDA; the Board would 

consider newly developed evidence in the first instance without 

prior consideration by the Veterans Benefits Administration; 

(3) if the claimant requests a hearing, such request would be 

deemed to be an election to revert to the standard appeals 

process; (4) the Secretary would transfer employees of the VBA 

who were responsible for processing claims remanded by the 

Board to positions within the office of the Board. Finally, the 

amendment in the nature of a substitute would require that 


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the claimant and the claimant’s representative of record receive a copy of any new evidence developed by the Board. The 

claimant would have 45 days to respond to such evidence. The 

amendment in the nature of a substitute would clarify that responding to such evidence would not cause the case to revert 

to the standard appeals process. 

During consideration of H.R. 1380, the following amendment in 

the nature of a substitute was considered and agreed to by voice 

vote: 

An amendment in the nature of a substitute offered by Mr. 

Abraham of Louisiana that retained the original language that 

would authorize VA to furnish a medallion to signify the veterans status of a deceased individual in certain cases. However, the amendment in the nature of a substitute modified the 

original text to limit eligibility for such medallions to persons 

who served in the Armed Forces on or after April 6, 1917. 

During consideration of H.R. 2214, the following amendment was 

considered and agreed to by voice vote: 

An amendment offered by Mr. Abraham of Louisiana that retained the original language extending VA’s authority to contract with private physicians to conduct disability examinations until December 31, 2017. The amendment removed the 

limit on the number of VA regional offices through which the 

Secretary is authorized to carry out the pilot program. The 

amendment also removed the provision that required the Secretary to conduct an annual data analysis of the regional offices participating in the pilot program. 

During consideration of H.R. 2605, the following amendment was 

considered and agreed to by voice vote: 

An amendment in the nature of a substitute offered by Mr. 

Abraham of Louisiana that incorporated the text of H.R. 2605, 

but removed the provision authorizing the appointment of a 

temporary fiduciary under certain conditions. 

COMMITTEE CONSIDERATION

On September 17, 2015, the full Committee met in open markup 

session, a quorum being present, and ordered H.R. 677, as amended, reported favorably to the House of Representatives by voice 

vote. During consideration of the bill, the following amendments 

were considered: 

An amendment offered by Mr. Abraham of Louisiana that 

would (1) expand the eligibility for medallions signifying veteran status that adorn a privately purchased headstone or 

marker; (2) codify the meaning of certain terms; (3) require VA 

to submit quarterly reports with respect to claims processing, 

and express the sense of Congress that VA should streamline 

the application process for certain claims; (4) expedite payment 

of survivor’s benefits; (5) provide priority of processing claims 

for certain veterans; (6) provide guidelines for the treatment of 

medical evidence provided by non-VA medical professionals in 


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support of claims for disability compensation; (7) require that, 

whenever there is an increase in benefit amounts payable 

under title II (Old Age, Survivors and Disability Insurance) of 

the Social Security Act, VA would increase by the same percentage the amounts payable as veterans’ disability compensation, additional compensation for dependents, the clothing allowance for certain disabled adult children, and dependency 

and indemnity compensation for surviving spouses and children; (8) improve VA’s fiduciary program; (9) require the Board 

of Veterans’ Appeals, for purposes of scheduling a veteran’s appeals hearing at the earliest possible date, to determine whether to provide such hearing at the principal location or another 

VA facility or other federal facility or through the use of 

videoconferencing or by an appellant’s personal appearance; 

(10) improve the authority for performance of medical disabilities examinations by contract physicians; (11) establish a pilot 

program on fully developed appeals; (12) direct VA to certify an 

appeal to the Board of Veterans’ Appeals within one year after 

receiving an appeal form; (13) establish a commission or task 

force to evaluate and assess the backlog of VA disability claims 

and the backlog of appealed claims; (14) expand the acceptable 

forms of documentation used to determine eligible service in 

the merchant marine and provides for certain limited burial 

benefits; (15) designate certain cities as American World War 

II cities; and, (16) express the sense of Congress honoring 

American veterans disabled for life, was agreed to by voice 

vote. 

An amendment to the Amendment in the Nature of a Substitute to H.R. 677 was offered by Ms. Titus of Nevada to revise the definition of marriage under title 38 United States 

Code and was rejected by a record vote of 12 nays and 10 yeas 

with 1 present and 1 absent (Record vote no. 1). 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report the legislation and amendments thereto. The following reflects the record vote taken during the Committee consideration: 

An amendment to the Amendment in the Nature of a Substitute to H.R. 677 was offered by Ms. Titus of Nevada to revise the definition of marriage under Title 38 United States 

Code. This amendment was defeated by a record vote of 10 

yeas and 12 nays, with one member voting present, and one 

member not voting (Record vote no. 1). The names of the members voting for and against follow. 


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A motion by Ranking Member Corrine Brown of Florida to report 

H.R. 677, as amended, favorably to the House of Representatives 

was offered and adopted by the Full Committee by voice vote. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII and clause (2)(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee establishes the following 

performance related goals and objectives for this legislation: 

The Secretary of VA will use the authority granted by this 

legislation to improve VA’s claims and appeals procedures; ensure veterans’ benefits keep pace with inflation; better protect 

beneficiaries who are in the fiduciary program; recognize and 

honor members of the merchant marine who served during 

World War II; and, help ensure that our nation remembers and 

honors the service and sacrifice of certain deceased veterans, 

veterans disabled for life, and cities who served our nation during World War II. Specifically, the legislation would expand 

the eligibility for a medallions signifying veteran status that 

would adorn a privately purchased headstone or marker; expedite and improve VA’s claims processing and appeals processing; provide for an automatic COLA for veterans’ benefits; 

improve VA’s fiduciary program; expand the official documentation accepted by the Secretary of Homeland Security to 

grant veteran status with limited benefits to World War II 

merchant marine and coastwise merchant seamen; designate 

certain cities as American World War II cities; and express the 

sense of Congress honoring American veterans disabled for life. 


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NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

EARMARKS AND TAX AND TARIFF BENEFITS

H.R. 677, as amended, does not contain any Congressional earmarks, limited tax benefits, or limited tariff benefits as defined in 

clause 9 of rule XXI of the Rules of the House of Representatives. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate on H.R. 677, 

as amended, prepared by the Director of the Congressional Budget 

Office pursuant to section 402 of the Congressional Budget Act of 

1974. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate for H.R. 677, 

as amended, provided by the Congressional Budget Office pursuant 

to section 402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, January 22, 2016. 

Hon. JEFF MILLER, 

Chairman, Committee on Veterans’ Affairs, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 677, the American Heroes 

COLA Act of 2015. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Dwayne M. Wright. 

Sincerely, 

KEITH HALL. 

Enclosure. 

H.R. 677—American Heroes COLA Act of 2015 

Summary: H.R. 677 would modify several mandatory programs 

administered by the Department of Veterans Affairs (VA), including disability compensation and burial benefits. H.R. 677 also 

would provide a permanent annual cost-of-living adjustment 

(COLA) to the amounts paid to veterans for disability compensation 

and to their survivors for dependency and indemnity compensation. 

That provision would increase direct spending for veterans’ benefits 

by $72.7 billion over the 2016–2025 period. However, because the 

COLA is assumed in CBO’s baseline pursuant to section 257 of the 

Balanced Budget and Emergency Deficit Control Act, enacting that 

provision would have no budgetary effect relative to that baseline. 


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CBO estimates that the other provisions of H.R. 677, including 

a requirement that the increases resulting from the COLA be 

rounded down to the next whole dollar, would increase net direct 

spending by $5.8 billion over the 2016–2025 period relative to 

CBO’s baseline. Because the bill would affect direct spending, payas-you-go procedures would apply. Enacting H.R. 677 would not affect revenues. 

In addition, the bill would change the administration of VA’s fiduciary program and several other programs in ways that would 

require an increase in the number of VA employees. CBO estimates 

that implementing those changes would cost $176 million over the 

2016–2020 period, assuming appropriation of the estimated 

amounts. 

CBO estimates that enacting the legislation would increase net direct spending and on-budget deficits by more than $5 billion in 

each of the four consecutive 10-year periods beginning in 2026. 

H.R. 677 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would not affect the budgets of state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary effect of H.R. 677 is shown in Table 1. The costs of this legislation fall within budget function 700 (veterans benefits and services). 

TABLE 1—ESTIMATED BUDGETARY EFFECTS OF H.R. 677 

By fiscal year, in millions of dollars— 

2016 2017 2018 2019 2020 2016– 

2020 

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority ......................................................... ¥24 ¥30 13 104 258 321 

Estimated Outlays ........................................................................ ¥24 ¥30 13 104 258 321 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Estimated Authorization Level ...................................................... * 45 47 41 42 176 

Estimated Outlays ........................................................................ * 45 47 41 42 176 

Notes: In addition to the direct spending effects shown here, enacting H.R. 677 would affect direct spending beyond 2020 (see Table 2). 

CBO estimates that total direct spending would increase by $5.8 billion over the 2016–2025 period. 

Components may not sum to totals because of rounding; * = less than $500,000. 

Basis of estimate: For the purposes of this estimate, CBO assumes the legislation will be enacted early in calendar year 2016, 

that the necessary amounts will be appropriated each year, and 

that outlays will follow historical spending patterns for similar and 

existing programs. 

Direct spending 

H.R. 677 would modify veterans’ compensation, pension, and burial benefits. In total, CBO estimates that enacting the legislation 

would, on net, increase direct spending for those programs by $5.8 

billion over the 2016–2025 period (see Table 2). 


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TABLE 2—IMPACT OF H.R. 677 ON DIRECT SPENDING 

By fiscal year, in millions of dollars— 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016–2020 2016–2025 

Use of Non-VA Medical Opinions in Claims for Disability 

Compensation: 

Estimated Budget Authority .......................................... 0 23 93 216 404 678 1,016 1,364 1,695 2,009 736 7,498 Estimated Outlays ......................................................... 0 23 93 216 404 678 1,016 1,364 1,695 2,009 736 7,498

Annual COLA: 

Estimated Budget Authority .......................................... ¥24 ¥53 ¥81 ¥113 ¥147 ¥181 ¥219 ¥255 ¥288 ¥326 ¥418 ¥1,687 

Estimated Outlays ......................................................... ¥24 ¥53 ¥81 ¥113 ¥147 ¥181 ¥219 ¥255 ¥288 ¥326 ¥418 ¥1,687 

Expansion of Eligibility for Medallions: 

Estimated Budget Authority .......................................... * * 1 1 1 1 1 1 1 1 3 5 Estimated Outlays ......................................................... * * 1 1 1 1 1 1 1 1 3 5 

Benefits for Coastwise Merchant Mariners: 

Estimated Budget Authority .......................................... * * * * * * * * * * * 1 Estimated Outlays ......................................................... * * * * * * * * * * * 1 Total Changes in Direct Spending: 

Estimated Budget Authority ................................. ¥24 ¥30 13 104 258 498 798 1,110 1,408 1,684 321 5,817 

Estimated Outlays ................................................ ¥24 ¥30 13 104 258 498 798 1,110 1,408 1,684 321 5,817 

Note: Components may not sum to totals because of rounding; COLA = cost-of-living adjustment; * = less than $500,000. 


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1Simen Markussen, Knut Roed*, Ole Rogeberg, ‘‘The changing of the guards: Can family doctors contain worker absenteeism?’’, Journal of Health Economics, vol 32 (2013), pp. 1230–1239, 

http://dx.doi.org/10.1016/j.jhealeco.2013.10.005. 

Use of Non-VA Medical Opinions in Claims for Disability Compensation. Section 7 would prohibit VA from conducting its own 

medical examination in cases where a veteran submits a private 

medical opinion in support of a claim for disability compensation 

unless VA can substantiate why the private medical opinion is insufficient to decide the claim. Currently, VA almost always conducts its own medical exams even if veterans submit private medical opinions. Section 7 would take effect one year from the date 

of enactment of the bill. 

CBO expects that allowing veterans to choose the physician that 

would provide the deciding medical opinion on whether a veteran 

is disabled and whether that disability could be traced to their time 

in service would lead to significantly more veterans receiving disability ratings and to higher levels of disability ratings. Furthermore, we expect that effect would increase over time as private doctors gained experience with the VA system. Medical literature 

shows that doctors who have an established relationship with a patient tend to provide more favorable reports for those patients than 

doctors who are seeing the patient for the first time, as is the case 

with a VA-ordered examination.1 Furthermore, veterans would be 

able to visit multiple doctors in order to gain the most favorable 

medical report. 

CBO expects that the majority of claims for disability where a 

private medical exam would make a difference are those for subjective disabilities (i.e., mental disorders, nerve disorders, and back 

pain) or disabilities for which different examiners are more likely 

to provide different conclusions. Over time, CBO anticipates that 

the percentage of veterans submitting private medical opinions 

would increase. In CBO’s analysis, enacting section 7 would: • Increase the average amount of disability compensation for 

veterans who currently receive compensation, as those veterans can request a reevaluation at any time and would be 

more likely to do so under the bill; 

• Increase the average amount of disability compensation paid 

to veterans newly awarded a disability compensation rating; 

and 

• Increase the number of veterans who receive compensation 

by enabling some of those who would be denied benefits under 

current law to be awarded a disability rating. 

In total, CBO estimates that enacting section 7 would result in 

about 360,000 more veterans receiving an additional $7.5 billion in 

disability compensation over the 2016–2025 period. 

Current Beneficiaries. On average, about 15 percent of veterans 

currently receiving disability compensation come to VA to be reevaluated every year. In recent years, current beneficiaries have 

had their disability ratings increased by an average of 10 percentage points as a result of those reevaluations. CBO estimates that 

under current law about 4.1 million veterans will be receiving disability compensation in 2017, and that 653,000 will return to VA 

to be reevaluated. 

Based on information from VA, CBO estimates that about 40 percent of rated disabilities fall into the subjective category. Under 


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2 Helge Liebert, Medical Screening and Moral Hazard in Disability Insurance: Evidence from 

Switzerland (Center for Disability and Integration, School of Economics and Political Science, 

University of St. Gallen, 2014) http://www.hha.dk/nat/larss/CAFE2014/HLiebert.pdf. 

section 7, CBO expects about 60 percent of the reevaluations (increasing to 75 percent by 2025) would involve a private medical 

opinion. Based on a review of existing literature, CBO expects that 

the average disability rating would increase by 10 percentage 

points for 10 percent of the claims reevaluated in 2017 (increasing 

to 30 percent of such claims in 2021 and thereafter).2 Thus, about 

8,200 veterans currently on the rolls in 2017 (about 49,000 in 2025) 

would receive an increase of 10 percentage points in their disability 

rating. The average disability rating for a veteran who has been reevaluated is 50 percent; increasing that rating to 60 percent would 

represent an annual benefit increase of $4,900 in 2017 (increasing 

to $5,900 in 2025). After accounting for inflation and mortality, 

CBO estimates that enacting section 7 would increase direct spending for veterans currently on the rolls by $6.9 billion over the 

2016–2025 period. 

Annual Accessions. Over the 2012–2014 period, the VA disability 

compensation program added an average of 290,000 new beneficiaries per year. As with current beneficiaries, CBO estimates 

that about 40 percent of rated disabilities for those new accessions 

fall into the subjective category. Under section 7, CBO expects that 

those veterans who did not file a claim immediately after being discharged from military service would provide private medical opinions and receive increased disability ratings at the same rates and 

with the same incremental increase as current beneficiaries. CBO 

expects that veterans who apply to VA immediately after being discharged from military service would be much less likely than other 

veterans to obtain private medical opinions, but those that do 

would see the same increases as other new accessions. Thus, we estimate that 15 percent (increasing to 25 percent by 2025) of newly 

discharged veterans would submit a private medical opinion. On 

that basis, CBO estimates that about 1,700 veterans in 2017 (increasing to about 6,200 veterans in 2025) would receive a 10 percentage point increase in their disability rating (from an average 

of 40 percent to 50 percent). That would amount to an average annual increase of about $3,200 in 2017 (increasing to about $3,900 

in 2025). After accounting for inflation and mortality, CBO estimates that enacting section 7 would increase direct spending for 

new accessions by $525 million over the 2016–2025 period. 

Newly Eligible Applicants. On average, VA denies about 20 percent of all claims for disability compensation. Under section 7, CBO 

expects that some veterans who would otherwise be denied would 

receive a disability rating because of their use of private medical 

opinions. Based on the number of new accessions per year and 

similar rates of subjective disabilities, use of private medical opinions, and award rates, CBO estimates that about 630 veterans who 

will be denied under current law would under the bill receive a disability rating in 2017, increasing to 1,725 by 2025. CBO estimates 

that this cohort would receive an average rating of 10 percent 

(about $1,630 annually in 2017). After accounting for inflation and 

mortality, CBO estimates that section 7 would increase direct 

spending for veterans who would be denied a disability rating 

under current law by $87 million over the 2015–2026 period. 


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Annual COLA. Section 8 would provide a permanent annual costof-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 and would take effect on December 1 of each year. 

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. Because the COLA is assumed 

in CBO’s baseline, enacting this provision would have no budgetary 

effect relative to that baseline (the COLA effect assumed in the 

baseline over the 2016–2025 period amounts to $72.7 billion). On 

October 15, 2015, the Social Security Administration announced 

that the COLA for 2016 would be zero percent, and thus have no 

effect on disability compensation payments in 2016. 

Section 2 also would require that increases in the monthly rates 

resulting from the COLA be rounded down to the next lower whole 

dollar. This provision would apply to both disability compensation 

and dependency and indemnity compensation payments. A similar 

requirement expired at the end of 2013. CBO expects that, on average, this requirement would reduce each monthly payment issued 

in the first year by 50 cents. In the second year, the COLA would 

be applied to that reduced amount and again rounded down by an 

average of 50 cents. Those savings would continue to compound in 

subsequent years, with the resultant amount rounded down again 

each year. Based on information from VA, CBO projects that an average of 5.5 million veterans and survivors will receive 12 monthly 

payments each year over the next decade. On that basis, CBO estimates that this section would result in direct spending savings of 

about $1.7 billion over the 2016–2025 period. 

Expansion of Eligibility for Medallions. Section 2 would allow the 

survivor of an eligible deceased veteran to receive a VA-furnished 

medallion instead of a headstone or marker for use in a private 

cemetery. Eligible veterans are those who served in the armed 

forces on or after April 6, 1917. Under current law, VA can only 

provide a medallion for eligible veterans buried in private cemeteries who died on or after November 1, 1990. Based on information from VA, CBO expects about 5,400 such requests to be made 

per year. At a cost of about $100 per medallion, CBO estimates 

that enacting section 2 would increase direct spending by about $5 

million over the 2016–2025 period. 

Benefits for Coastwise Merchant Mariners. Section 15 would extend eligibility for burial benefits and medals, ribbons, or decorations to merchant mariners who served off of the coast of the 

United States between December 7, 1941, and December 31, 1946. 

Based on information from VA and the U.S. Coastwise Merchant 

Seamen’s Association, CBO estimates that in 2016, the survivors of 

roughly 100 eligible merchant mariners would apply for a burial 

marker (and be eligible for an outer-burial receptacle) and a ribbon 

or medallion at a cost of about $1,200 per request. CBO expects the 

number of applications would decline steadily in subsequent years. 

Thus, CBO estimates that section 15 would increase direct spending by about $1 million over the 2016–2025 period. 

Other Provisions. H.R. 677 contains other provisions that would 

have a negligible effect on direct spending, primarily because they 


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would shift the timing but not the amount of benefit payments. 

Specifically: • Section 5 would allow eligible survivors to begin receiving 

any survivor’s benefits due them before filing a formal claim. • Section 6 would create a priority list for processing claims 

for disability compensation. 

Spending subject to appropriation 

H.R. 677 would modify the fiduciary program for veterans and 

extend a pilot program that allows VA to use contract physicians 

to complete disability exams. It also would create a pilot program 

for adjudicating fully developed appeals, require an evaluation of 

the disability backlog, and require several reports on various functions of VA. CBO estimates that implementing those provisions of 

the bill would cost $176 million over the 2016–2020 period, assuming appropriation of the estimated amounts (see Table 3). 

TABLE 3—IMPACT OF H.R. 677 ON SPENDING SUBJECT TO APPROPRIATION 

By fiscal year, in millions of dollars— 

2016 2017 2018 2019 2020 2016– 

2020 

Fiduciary Program: 

Estimated Authorization Level ............................................. 0 19 38 39 40 136 

Estimated Outlays ............................................................... 0 19 38 39 40 136 

Disability Examinations by Contract Physicians: 

Estimated Authorization Level ............................................. 0 22 7 0 0 29 

Estimated Outlays ............................................................... 0 22 7 0 0 29 

Pilot Program on Fully Developed Appeals: 

Estimated Authorization Level ............................................. 0 2 2 2 2 8 

Estimated Outlays ............................................................... 0 2 2 2 2 8 

Evaluation of Backlog of Disability Claims: 

Estimated Authorization Level ............................................. 0 2 0 0 0 2 

Estimated Outlays ............................................................... 0 2 0 0 0 2 

Reports: 

Estimated Authorization Level ............................................. * * * * * 1 

Estimated Outlays ............................................................... * * * * * 1 

Total Changes in Discretionary Spending: 

Estimated Authorization Level .................................... * 45 47 41 42 176 

Estimated Outlays ...................................................... * 45 47 41 42 176 

Notes: Components may not sum to totals because of rounding; * = less than $500,000. 

Fiduciary Program. Effective one year after the legislation’s enactment, section 9 would make significant changes to VA’s fiduciary program. That program provides or approves fiduciaries for 

veterans who cannot manage their financial affairs. The fiduciaries 

receive and manage the veterans’ benefits on their behalf. The provision would require VA to: 

• Determine the competency of individuals appointed as fiduciaries; 

• Remove certain fiduciaries deemed incompetent and review the files of fiduciaries appealing such decisions; 

• Maintain a list of state, local, or nonprofit agencies that 

could perform fiduciary duties; 

• Require that all fiduciaries provide pertinent accounting 

details for VA verification; 

• Update the qualifications and procedures for certifying a 

fiduciary to include: visits to proposed fiduciaries, Internet 

training, and criminal background and credit checks; and 


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49 

• Notify veterans if a requested fiduciary is unqualified and 

why, and provide veterans with a notice of certified fiduciaries. 

Section 9 also would require VA to maintain a database of all fiduciaries and to submit a report to the Congress on the progress 

of the program. 

Based on information from VA, CBO estimates that the department would need to hire 460 additional employees to carry out the 

requirements of section 9 at an average cost of about $80,000 per 

employee in 2016 and increasing thereafter with inflation. We also 

estimate that the information technology systems necessary to 

maintain the database would cost about $1 million per year. In 

total, CBO estimates that implementing section 9 would cost $136 

million over the 2016–2020 period. 

Disability Examinations by Contract Physicians. Section 11 

would extend the pilot program that allows VA to use contract physicians to perform medical disability examinations through December 31, 2017. Under current law, that authority will expire on December 31, 2016. In 2015, about 36,000 exams were completed by 

contract physicians under the pilot program at a cost of about $800 

per exam. Under section 11, we expect a similar number of exams 

would be performed annually over the 2017–2018 period. In the absence of such authority, VA physicians who would otherwise be 

providing other types of health care to veterans will perform the 

exams, at no additional cost to VA. Thus, after accounting for expected inflation, CBO estimates that implementing section 201 

would cost $29 million over the 2017–2018 period. 

Pilot Program on Fully Developed Appeals. Section 12 would establish a pilot program within the Board of Veterans Appeals 

(BVA) for veterans who wish to file a fully developed appeal (an appeal for which no further evidence or information will be submitted). Such appellants, upon choosing to file a notice of disagreement with VA, could chose to file a claim using the regular appeals 

process, or if they believe they have provided all of the necessary 

information for the BVA to make a decision, could elect to file 

under the pilot program in order to receive a more immediate decision. Appellants could chose at any point to revert to the standard 

appeals process. The pilot program established under section 12 

would run for five years, beginning one year from the date of enactment of H.R. 677. 

Section 12 would require the BVA to establish a development 

unit that would provide the Board with any federal records, independent medical opinions, and new medical exams that it needs to 

decide appeals. VA would be required to transfer certain employees 

from the Veterans Benefits Administration to this new unit inside 

the BVA. According to VA, about 10 additional employees also 

would be necessary to achieve the goals of the pilot program while 

not reducing the timeliness of the current process. VA further reports that such employees (primarily lawyers) would receive salary 

and benefits amounting to about $150,000 in 2016. On that basis, 

and accounting for projected inflation, CBO estimates that implementing the pilot program would cost $8 million over the 2016– 

2020 period. 

Evaluation of Backlog of Disability Claims. Effective one year 

after the date of enactment, section 14 would establish a commission tasked with creating a plan to eliminate the disability claims 


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backlog, improve the disability claims process, and reduce the number of appeals filed for disapproved claims. The commission would 

have 21 members plus a paid staff and would exist for about seven 

months. The commission would be required to submit interim reports and a final report within 180 days of the commission’s first 

meeting. Based on the costs of similar commissions, CBO estimates 

that implementing section 14 would cost about $2 million over the 

2017–2018 period. 

Reports. Several provisions of H.R. 677 would require VA to submit reports to the Congress. CBO estimates that implementing 

H.R. 677 would increase costs for preparing reports by $1 million 

over the 2016–2020 period. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. The net 

changes in outlays and revenues that are subject to those pay-asyou-go procedures are shown in the following table. 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 677 AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON VETERANS’ AFFAIRS ON SEPTEMBER 17, 2015 

By fiscal year, in millions of dollars— 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2016– 

2020 

2016– 

2025 

NET DECREASE IN THE DEFICIT 

Statutory Pay-As-YouGo Impact ................ ¥24 ¥30 13 104 258 498 798 1,110 1,408 1,684 321 5,817 

Increase in long term direct spending and deficits: CBO estimates that enacting the legislation would increase net direct 

spending and on-budget deficits by more than $5 billion in each of 

the four consecutive 10-year periods beginning in 2026. 

Intergovernmental and private-sector impact: H.R. 677 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA and would not affect the budgets of state, local, or tribal 

governments. 

Previous CBO estimate: On September 29, 2015, CBO transmitted a cost estimate for S. 2082, the Department of Veterans Affairs Expiring Authorities Act of 2015, as cleared by the Congress 

on September 25, 2015. Section 409 of S. 2082 extended the authority for contract physicians to conduct disability exams from December 31, 2015, to December 31, 2016. Section 11 of H.R. 677 would 

extend the authority from December 31, 2015, to December 31, 

2017. Because S. 2082 is now Public Law 114–158, section 11 

would extend the provision for one year instead of two years. The 

estimated difference in costs is reflected in this estimate. 

Estimate prepared by: Federal costs: Dwayne M. Wright; Impact 

on state, local, and tribal governments: Jon Sperl; Impact on the 

private sector: Paige Piper-Bach. 

Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates regarding H.R. 677, as amended, prepared by the Director of 


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the Congressional Budget Office pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act would be created by H.R. 677, as 

amended. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to Article I, section 8 of the United States Constitution, 

the reported bill is authorized by Congress’ power to ‘‘provide for 

the common Defense and general Welfare of the United States.’’ 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of Section 102(b)(3) of the 

Congressional Accountability Act. 

STATEMENT ON DUPLICATION OF FEDERAL PROGRAMS

Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), the 

Committee finds that no provision of H.R. 677, as amended, establishes or reauthorizes a program of the Federal Government known 

to be duplicative of another Federal program, a program that was 

included in any report from the Government Accountability Office 

to Congress pursuant to section 21 of Public Law 111–139, or a 

program related to a program identified in the most recent Catalog 

of Federal Domestic Assistance. 

DISCLOSURE OF DIRECTED RULEMAKING

Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), the 

Committee estimates that H.R. 677, as amended, contains directed 

rule making at sections 4, 6, and 13 which would require the Secretary to prescribe regulations to carry out these sections. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1—Short title; Table of contents 

Section 1(a) would establish that this Act may be cited as the 

‘‘American Heroes COLA Act of 2015.’’ 

Section 1(b) would contain the table of contents for this Act. 

Section 2—Expansion of eligibility for medallions 

Section 2 would authorize VA to furnish, upon request, a medallion or other device to signify a deceased individual’s status as a 

veteran, to be attached to a headstone or marker furnished at private expense. To be eligible for such medallion or other device, the 

deceased individual must have served in the Armed Forces on or 

after April 6, 1917. 


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Section 3—Definitions relating to claims for benefits under laws administered by the Secretary of Veterans Affairs 

Section 3(a) would define the terms ‘‘claimant,’’ ‘‘claim,’’ and ‘‘formal claim’’ and includes a clerical amendment. 

Section 3(b) would establish that the effective date of Section 3 

would be the date of enactment and would apply with respect to 

a claim submitted on or after such date. 

Section 4—Quarterly reports on formal and informal claims for benefits under laws administered by Secretary of Veterans Affairs 

Section 4(a) would require that VA submit to the Committees on 

Veterans’ Affairs of the Senate and the House of Representatives 

quarterly reports on formal and informal claims. Such report would 

include: (1) the total number of claims submitted to VA; (2) the 

total number of informal claims submitted to VA; (3) the total number of formal claims submitted to VA; (4) the total number of forms 

indicating an intent to file a claim for benefits submitted to VA; (5) 

the total number of claims notification letters sent by VA that included an invitation to the claimant to submit an additional formal 

claim; (6) and of those, the total number who submitted a formal 

claim in response to such notification letters; (6) the total number 

of electronically filed claims submitted to VA; and, (7) the total 

number of fully-developed claims submitted to VA. 

Section 4(b) would express the sense of Congress that the Secretary should develop a designated form for a claim for an increased rating or reopening of a claim that does not require the resubmittal of information previously submitted on a formal claim 

form. 

Section 4(c) would define the terms ‘‘informal claim’’ and ‘‘reasonably raised.’’ 

Section 5—Expedited payment of survivor’s benefits 

Section 5(a) would authorize VA to pay benefits under chapters 

13 and 15 and sections 2302, 2307, and 5121 of title 38, U.S.C. to 

a survivor of a veteran who has not filed a formal claim if VA determines that the record contains sufficient evidence to establish 

the entitlement of the survivor to such benefits. Section 5(a) would 

also establish that the date on which a survivor of a veteran notifies VA of the death of the veteran would serve as the date of receipt of the survivor’s application for benefits. 

Section 5(b) would, not later than one year after the date of enactment, require VA to submit a report to the Committees on Veterans’ Affairs of the Senate and the House of Representatives on 

benefits paid pursuant to covered claims. 

Section 5(c) would establish that the amendments made by Section 5 would apply with respect to claims for benefits based on a 

death occurring on or after such date. 

Section 6—Priority for processing claims of the Department of Veterans Affairs 

Section 6(a) would add a new section to subchapter I of chapter 

51 of title 38, U.S.C., which would require VA to prioritize disability benefits claims submitted by veterans who have attained 

the age of 70; are terminally ill; have life-threatening illnesses; are 

homeless; have received the Medal of Honor; were prisoners of war; 


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have claims being reviewed again in relation to a previously denied 

claim relating to military sexual trauma; and on a case-by-case 

basis, are seriously or very seriously injured. Additionally, this Section allows prioritization for good cause shown at the discretion of 

the Secretary on a case-by-case basis. Section 6(a) would also require VA to prescribe such regulations as would be necessary to 

carry out this section. 

Section 6(b) would provide a clerical amendment. 

Section 7—Treatment of medical evidence provided by non-Department of Veterans Affairs medical professionals in support of 

claims for disability compensation 

Section 7(a) would require VA to accept a sufficiently complete 

medical opinion or report of a medical examination administered by 

a private physician in support of the veteran’s claim. Furthermore, 

this Section would provide that if the veteran submits a medical 

opinion or report of a medical examination administered by a private physician in support of the veteran’s claim, the Secretary 

would be prohibited from ordering a medical examination administered by VA, unless the Secretary provides the veteran with a thorough explanation of why the medical opinion or report submitted 

by the veteran was not sufficiently complete and the reason why 

additional medical evidence is necessary. Section 7(a) would also 

define the term ‘‘sufficiently complete.’’ 

Section 7(b) would establish that the effective date of Section 7 

would apply with respect to medical evidence submitted after the 

date that is 90 days after the date of the enactment. 

Section 8—Automatic annual increase in rates of disability compensation and dependency and indemnity compensation 

Section 8(a) would make the cost-of-living adjustment for veterans’ disability payments automatic whenever there is an increase 

in benefit amounts payable under Title II of the Social Security 

Act. Section 8(a) would also require the Secretary to publish any 

such increase in the Federal Register, and would require that each 

dollar amount increased, if not a whole dollar amount, be rounded 

to the next lower whole dollar amount. This Section would allow 

the Secretary to administratively adjust the rates of disability compensation payable to persons under section 10 of Public Law 85– 

857 (72 Stat. 1263) who have not received compensation under 

chapter 11 of title 38, U.S.C. 

Section 8(b) would establish that the effective date of section 8 

would be December 1, 2015. 

Section 9—Improvement of fiduciaries for veterans 

Section 9(a) would revise the process for appointment of fiduciaries. Section 9(a) would require VA to provide a written statement to the veteran detailing the reasons for the appointment of 

a fiduciary and implement an appeals process which would allow 

a veteran to challenge the finding of mental incompetence. This 

Section would also allow a veteran to predesignate a fiduciary, request the modification of an appointed fiduciary, and establish that 

a fiduciary operates independently of VA to act in the best interest 

of the beneficiary. 


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Section 9(b) would decrease the commission appointed fiduciaries 

may receive to the lesser of 3 percent of monthly benefits or $35. 

It would also allow VA attorneys to appear in a court of appropriate jurisdiction against any fiduciary who has failed to execute 

the duties of a VA appointed fiduciary. Section 9(b) would permit 

VA to temporarily make payments to the person or institution having custody and control of an incompetent or minor beneficiary. 

Upon the death of a beneficiary, Section 9(b) would direct fiduciaries to pay all remaining funds overseen by fiduciaries to any 

surviving spouse, or in equal parts to any children, or in equal 

parts to any dependent parents. It would also require that if a beneficiary did not have a spouse, children, or dependent parents and 

lived in a state where the beneficiary’s assets would then escheat 

to the state, any funds derived from VA benefits would then escheat to the United States. 

Section 9(c) would require VA to expand the definition of a person eligible to serve as a fiduciary to include state and local government agencies and nonprofits, and compel VA to maintain a list 

of state or local agencies and nonprofit social agencies who qualify 

to act as a fiduciary. 

Section 9(d) would mandate that VA investigate each fiduciary 

before appointment and allow VA to expedite the investigation for 

certain proposed fiduciaries. The investigation would include a 

face-to-face interview no more than 30 days after the investigation 

begins and a background check which would include a criminal 

background check and a credit check. The background check would 

be performed each time a person is proposed as a fiduciary. It 

would also require VA to notify the beneficiary if a fiduciary is convicted of certain crimes. This Section would also require VA to 

maintain records of any person who previously served as a fiduciary and any fiduciary whose status was revoked and would require each regional office to maintain a list with the name and contact information of each fiduciary and include pertinent information related to each fiduciary’s background investigation, bond payment, and the amount the fiduciary controls for each beneficiary 

served. 

Section 9(d) would also require VA to investigate alleged misuse 

of benefits, and, if substantiated, to transmit the results of the investigation to the Attorney General and each head of a federal department or agency that pays benefits to fiduciaries or beneficiaries. It would also require VA to ensure that any bond furnished by a fiduciary was not paid using funds from the beneficiary 

and to consider the care a proposed fiduciary has taken to protect 

the interests of the beneficiary while also considering the capacity 

of the proposed fiduciary to meet the financial requirements of the 

bond. 

Section 9(e) would require fiduciaries to file an annual report to 

include the amount of benefits the beneficiary accrued during the 

year, if the fiduciary serves the beneficiary for non-VA benefits, an 

accounting of all other sources of income the fiduciary oversees for 

the beneficiary, and whether the fiduciary was convicted of any 

crime, filed bankruptcy, and any judgments entered against the fiduciary. It would also require VA to perform random audits of fiduciaries who receive a commission. 


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Section 9(f) would clarify that the Secretary would pay to the 

beneficiary an amount equal to the amounts of benefits that were 

misused in any case in which actual negligence is shown by the 

Secretary not acting in accordance with section 5507 of chapter 55, 

title 38, U.S.C. 

Section 9(g) would mandate VA provide the Committees on Veterans’ Affairs of the Senate and the House of Representatives a report on the implementation of the new policies and procedures outlined in Section 9 and a discussion on whether VA should offer fiduciaries standardized financial software to comply with reporting 

requirements. 

Section 9(h) would require that not later than two years after the 

date of enactment, the Secretary would submit to the Committees 

on Veterans’ Affairs of the Senate and the House of Representatives a report on the implementation of the amendments made by 

the Act. 

Section 9(i) would establish that the effective date of Section 9 

is one year after the date of enactment. 

Section 10—Board of Veterans’ appeals video hearings 

Section 10 would require that the Board, upon request for a 

hearing, determine whether such hearing will be held at the principle location, or VA facility, or other appropriate Federal facility. 

The Board would also be required to determine whether to provide 

a hearing that would enable participation through voice transmission or through picture and voice transmission, by electronic or 

other means, in a hearing with a Board member or members sitting at the Board’s principle location. However, if the appellant requests a different location or type of hearing, the Board shall grant 

the appellant’s request and ensure that the hearing is scheduled at 

the earliest possible date without any undue delay or other prejudice to the appellant. 

Section 11—Improvements to authority for performance of medical 

disabilities examinations by contract physicians 

Section 11(a) would extend until December 31, 2017, the temporary authority to conduct examinations with respect to the medical disabilities of applicants for benefits under laws administered 

by the Secretary of VA by persons other than employees of the Department. 

Section 11(b) would authorize non-VA physicians with a current 

unrestricted license to conduct medical disability examinations in 

any location in any state, the District of Columbia, or a commonwealth, territory or possession of the United States, notwithstanding any law regarding the licensure of physicians. However, 

such authority is limited to the scope of authorized duties under 

such contract. Furthermore, the authority would not authorize a 

physician to conduct disability examinations if such physician is 

barred from conducting such an examination in any state, the District of Columbia, or a commonwealth, territory or possession of the 

United States. 

Section 12—Pilot program on fully developed appeals 

Section 12(a) would authorize VA to carry out a pilot program to 

provide the option of an alternative appeals process that would 


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more quickly determine such appeals in accordance with this Section. 

Section 12(b) would allow a claimant to elect to file a fully developed appeal (FDA). The claimant would be required to elect to file 

a FDA at the time the claimant files the Notice of Disagreement. 

At the time the claimant would elect to file a FDA, the claimant 

would submit all evidence that the claimant believes is needed for 

the appeal as of the date of filing, and a statement of the argument 

in support of the claim, if any. Section 12(b) would clarify that the 

claimant may elect to revert to the standard appeals process at any 

time, but such reversion would be final. Furthermore, a claimant 

who is determined to be ineligible for the pilot program would revert to the standard appeals process without any penalty. During 

the period in which the pilot program is carried out, VA would be 

required to provide information to the claimant and the claimant’s 

representative of record, if any, notice about the pilot program, including the advantages and disadvantages of such program, how to 

elect to participate in the pilot program, the limitation on the use 

of new evidence and development of information, and the ability of 

the claimant to seek advice from VSOs, attorneys, and claims 

agents. Finally, this Section would require VA to collaborate with 

and give weight to the advice of the three VSOs with the most 

members to stand up an online tutorial explaining the advantages 

and disadvantages of the pilot program. 

Section 12(c) would transfer jurisdiction over the FDA directly to 

the Board. VA would not provide the claimant with a statement of 

the case or require the claimant to file a substantive appeal. Further, Section 12(c) would require the Board to (1) maintain the 

FDA on a separate docket; (2) decide FDAs in the order received; 

(3) decide not more than one FDA for each four traditional appeals 

decided, though this ratio may be adjusted for fairness purposes beginning one year after the pilot program begins; and, (4) decide, to 

the extent practicable, each FDA within one year of a claimant’s 

filing the Notice of Disagreement. Section 12(c) would clarify that 

the claimant may not submit any new evidence related to a FDA, 

unless the claimant reverts to the standard appeals process. If a 

claimant does submit or identify new evidence, such submission or 

identification would be deemed to be an election to make a reversion to the standard appeals process. 

If the Board determines that a FDA requires additional evidence, 

Section 12(c) would grant the Board authority to develop such evidence without remand to the VBA. This Section would also clarify 

that any new evidence developed by the Board would be considered 

by the Board in the first instance. Further, this section would ensure the claimant and the representative of record, if any, receives 

a copy of such newly developed evidence. Ninety days after the 

claimant received such newly developed evidence, the claimant may 

provide the Board with additional evidence, without requiring the 

claimant to make a reversion to the standard appeals process. Section 12(c) would require the Board to establish an office to develop 

evidence needed to decide a FDA. The VBA would transfer employees who were responsible for processing claims remanded by the 

Board to positions within the office of the Board in a number the 

Secretary determines sufficient. Section 12(c) would prohibit the 

Board from providing hearings for FDAs. 


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Section 12(d) would establish that the Secretary shall carry out 

the pilot program for a five year period beginning one year after 

the date of enactment. This Section would apply only to FDAs that 

are filed during such period. 

Section 12(e) would require the Secretary to submit to the Committees on Veterans’ Affairs of the Senate and the House of Representatives a report on the implementation of the pilot program. 

The first such report would be submitted not later than 180 days 

after the date on which the pilot program commences. Such reports 

would include: (1) the number of claimants who filed a FDA under 

the pilot program; (2) the average processing time for each such appeal; (3) a summary of reasons for which development of evidence 

was required by the Board; (4) the number of issues decided, listed 

by the disposition of the issue; (5) the number of issues decided and 

the number of issues for which evidence was not developed; (6) the 

number of FDAs decided by the Board, the number of cases from 

each agency of original jurisdiction, listed by the disposition of the 

issue; (7) the number of FDAs appealed to the CAVC, listed by the 

disposition of the case; (8) the number of reversions; and, (9) any 

reasons why a claimant was determined to be ineligible to participate in the pilot program. Additionally, the report would include a 

review, made in conjunction with VSOs, of the efforts of VA to provide clear rating decisions and improve disability rating notification letters, including with respect to: (1) the opinions of VSOs regarding such efforts; and (2) how the pilot program improves such 

efforts. The report would also include a recommendation for any 

changes to improve the pilot program and an assessment of the feasibility and advisability of expanding the pilot program. 

Section 12(f) would require that the Secretary publish interim 

guidance on the pilot program not later than one day after the date 

of enactment. Not later than 90 days after the date of enactment, 

the Secretary would prescribe regulations to carry out such pilot 

program. 

Section 12(g) would define the terms ‘‘claimant,’’ ‘‘compensation,’’ 

‘‘fully developed appeal,’’ and ‘‘standard appeal.’’ 

Section 13—Deadline for certification of appeals forms by regional 

offices of the Department of Veterans Affairs 

Section 13 would require VA regional benefits offices to certify a 

form submitted by the veteran to appeal a VA determination to the 

Board within one year after receiving such form. 

Section 14—Evaluation of backlog of disability claims and appeals 

of claims of Department of Veterans Affairs 

Section 14(a) would establish a commission or taskforce to evaluate and assess the backlog of VA disability claims and the backlog 

of appeals claims. 

Section 14(b) would require such commission or taskforce to 

carry out a study on the backlog of claims. Such study would be 

a comprehensive evaluation and assessment of the backlog of 

claims, an analysis of possible improvements to the procedures 

used to process such claims, and any related issues that such commission or task force considers relevant. This Section would also 

set out the matters the commission or task force would examine define the role of the commission or task force. 


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Section 14(c) would require the commission or task force to submit periodic reports to the President and Congress. 

Section 14(d) would establish membership requirements for such 

commission or task force. 

Section 14(e) would clarify the meeting requirements for the commission or task force. 

Section 14(f) would define the powers of the commission or task 

force. 

Section 14(g) would authorize compensation, travel expenses, 

staff, detail or government employees, and procurement of temporary and intermittent services. 

Section 14(h) would authorize the termination of the commission 

or task force within 60 days after which the commission or 

taskforce submits the final comprehensive report. 

Section 14(i) would authorize VA to make available to the commission or task force such amounts as the commission or task force 

may require to carry out the duties of such commission or task 

force. 

Section 14(j) would define the terms ‘‘appeals process,’’ ‘‘Board,’’ 

and ‘‘strategic plan.’’ 

Section 15—Methods for validating certain World War II Merchant 

Mariner service considered to be active service by the Secretary 

of Veterans Affairs 

Section 15(a) would direct the Secretary of Homeland Security to 

accept additional documentation when considering the application 

for veterans’ status of an individual who performed service as a 

coastwise merchant seaman during World War II. 

Section 15(b) would provide that other documentation accepted 

by the Secretary of Homeland Security pursuant to this Section 

shall satisfy all requirements for eligibility of service during the period beginning on December 7, 1941, and ending on December 31, 

1946. 

Section 15(c) would provide that qualified merchant mariners 

would be honored as veterans and would be entitled to veteran designation, burial benefits, and military decoration, that they shall 

not be entitled by reason of such recognized service to any benefit 

that is not described in this subsection. 

Section 15(d) would require the Secretary of Homeland Security 

to verify that an individual performed service under honorable conditions that satisfies the requirements of a coastwise merchant seaman pursuant to this Section without regard to the sex, age, or disability of the individual during the period in which the individual 

served as such a coastwise merchant seaman. 

Section 15(e) would define the term ‘‘primary next of kin.’’ 

Section 15(f) would establish that the effective date of Section 15 

would be 90 days after the date of enactment. 

Section 16—Designation of American World War II Cities 

Section 16(a) would require the Secretary of Veterans Affairs to 

designate at least one city in the United States each year as an 

‘‘American World War II City.’’ 

Section 16(b) would provide criteria for consideration of the designation as an ‘‘American World War II City.’’ 


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Section 16(c) would establish that the city of Wilmington, North 

Carolina, would be designated as the first American World War II 

City. 

Section 17—Sense of Congress regarding American veterans disabled for life 

Section 17(a) would establish Congressional findings. 

Section 17(b) would provide that Congress expresses its appreciation to the men and women left permanently wounded, ill, or injured, as a result of their service in the Armed Forces; supports the 

annual recognition of American veterans disabled for life each year; 

and, encourages the American people to honor American veterans 

disabled for life each year with appropriate programs and activities. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, 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, 

and existing law in which no change is proposed is shown in 

roman): 

TITLE 38, UNITED STATES CODE 

* * * * * * * 

PART II—GENERAL BENEFITS 

* * * * * * * 

CHAPTER 23—BURIAL BENEFITS 

* * * * * * * 

§ 2306. Headstones, markers, and burial receptacles 

(a) The Secretary shall furnish, when requested, appropriate 

Government headstones or markers at the expense of the United 

States for the unmarked graves of the following: 

(1) Any individual buried in a national cemetery or in a post 

cemetery. 

(2) Any individual eligible for burial in a national cemetery (but 

not buried there), except for those persons or classes of persons 

enumerated in section 2402(a)(4), (5), and (6) of this title. 

(3) Soldiers of the Union and Confederate Armies of the Civil 

War. 

(4) Any individual described in section 2402(a)(5) of this title who 

is buried in a veterans’ cemetery owned by a State. 

(5) Any individual who at the time of death was entitled to retired pay under chapter 1223 of title 10 or would have been entitled to retired pay under that chapter but for the fact that the person was under 60 years of age. 

(b)(1) The Secretary shall furnish, when requested, an appropriate memorial headstone or marker for the purpose of commemorating an eligible individual whose remains are unavailable. Such 

a headstone or marker shall be furnished for placement in a naVerDate Sep 11 2014 00:56 Feb 05, 2016 Jkt 059006 PO 00000 Frm 00059 Fmt 6659 Sfmt 6602 E:\HR\OC\HR405.XXX HR405

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tional cemetery area reserved for that purpose under section 2403 

of this title, a veterans’ cemetery owned by a State, or, in the case 

of a veteran, in a State, local, or private cemetery. 

(2) For purposes of paragraph (1), an eligible individual is any 

of the following: 

(A) A veteran. 

(B) The spouse or surviving spouse of a veteran. 

(C) An eligible dependent child of a veteran. 

(3) For purposes of paragraph (1), the remains of an individual 

shall be considered to be unavailable if the individual’s remains— 

(A) have not been recovered or identified; 

(B) were buried at sea, whether by the individual’s own 

choice or otherwise; 

(C) were donated to science; or 

(D) were cremated and the ashes scattered without interment of any portion of the ashes. 

(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 a surviving spouse 

who had a subsequent remarriage. 

(5) For purposes of this section, the term ‘‘eligible dependent 

child’’ means a child— 

(A) who is under 21 years of age, or under 23 years of age 

if pursuing a course of instruction at an approved educational 

institution; or 

(B) who is unmarried and became permanently physically or 

mentally disabled and incapable of self-support before reaching 

21 years of age, or before reaching 23 years of age if pursuing 

a course of instruction at an approved educational institution. 

(c) A headstone or marker furnished under subsection (a), (b), or 

(d) of this section may be of any material, including but not limited 

to marble, granite, bronze, or slate, requested by the person entitled to request such headstone or marker if the material requested 

is determined by the Secretary (1) to be cost effective, and (2) in 

a case in which the headstone or marker is to be placed in a national cemetery, to be aesthetically compatible with the area of the 

cemetery in which it is to be placed. 

(d)(1) The Secretary shall furnish, when requested, an appropriate Government headstone or marker at the expense of the 

United States for the grave of an individual described in paragraph 

(2) or (5) of subsection (a) who is buried in a private cemetery, notwithstanding that the grave is marked by a headstone or marker 

furnished at private expense. Such a headstone or marker may be 

furnished only if the individual making the request for the Government headstone or marker certifies to the Secretary that the headstone or marker will be placed on the grave for which the headstone or marker is requested, or, if placement on the grave is impossible or impracticable, as close as possible to the grave within 

the grounds of the cemetery in which the grave is located. 

(2) Any headstone or marker furnished under this subsection 

shall be delivered by the Secretary directly to the cemetery where 

the grave is located or to a receiving agent for delivery to the cemetery. 


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61 

(3) The headstone or marker furnished under this subsection 

shall be the headstone or marker selected by the individual making 

the request from among all the headstones and markers made 

available by the Government for selection. 

ø(4) In lieu of furnishing a headstone or marker under this subsection, the Secretary may furnish, upon request, a medallion or 

other device of a design determined by the Secretary to signify the 

deceased’s status as a veteran, to be attached to a headstone or 

marker furnished at private expense.¿ 

(4)(A) In lieu of furnishing a headstone or marker under this subsection to a deceased individual described in subparagraph (B), the 

Secretary may furnish, upon request, a medallion or other device of 

a design determined by the Secretary to signify the deceased individual’s status as a veteran, to be attached to a headstone or marker 

furnished at private expense. 

(B) A deceased individual described in this subsection is an individual who— 

(i) served in the Armed Forces on or after April 6, 1917; and 

(ii) is eligible for a headstone or marker furnished under 

paragraph (1) (or would be so eligible but for the date of the 

death of the individual). 

(e)(1) The Secretary of Veterans Affairs shall provide an outer 

burial receptacle for each new grave in an open cemetery under the 

control of the National Cemetery Administration in which remains 

are interred in a casket. The Secretary of the Army may provide 

an outer burial receptacle for such a grave in the Arlington National Cemetery. 

(2) The use of outer burial receptacles in a cemetery under the 

control of the National Cemetery Administration or in the Arlington National Cemetery shall be in accordance with regulations or 

procedures approved by the Secretary of Veterans Affairs or Secretary of the Army, respectively. 

(3) Regulations or procedures under paragraph (2) may specify 

that— 

(A) an outer burial receptacle other than a grave liner be 

provided in lieu of a grave liner at the election of the survivors 

of the interred veteran; and 

(B) if an outer burial receptacle other than a grave liner is 

provided in lieu of a grave liner upon an election of such survivors, such survivors be required— 

(i) to pay the amount by which the cost of the outer burial receptacle exceeds the cost of the grave liner that would 

otherwise have been provided in the absence of the election; and 

(ii) to pay the amount of the administrative costs incurred by the Secretary (or, with respect to Arlington National Cemetery, the Secretary of the Army) in providing 

the outer burial receptacle in lieu of such grave liner. 

(4) Regulations or procedures under paragraph (2) may provide 

for the use of a voucher system, or other system of reimbursement 

approved by the Secretary (or, with respect to Arlington National 

Cemetery, the Secretary of the Army), for payment for outer burial 

receptacles other than grave liners provided under such regulations 

or procedures. 


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62 

(f) The Secretary may furnish a casket or urn, of such quality as 

the Secretary considers appropriate for a dignified burial, for burial 

in a national cemetery of a deceased veteran in any case in which 

the Secretary— 

(1) is unable to identify the veteran’s next of kin, if any; and 

(2) determines that sufficient resources for the furnishing of 

a casket or urn for the burial of the veteran in a national cemetery are not otherwise available. 

(g)(1) When the Secretary has furnished a headstone or marker 

under subsection (a) for the unmarked grave of an individual, the 

Secretary shall, if feasible, add a memorial inscription to that headstone or marker rather than furnishing a separate headstone or 

marker under that subsection for the surviving spouse or eligible 

dependent child of such individual. 

(2) When the Secretary has furnished a memorial headstone or 

marker under subsection (b) for purposes of commemorating a veteran or an individual who died in the active military, naval, or air 

service, the Secretary shall, if feasible, add a memorial inscription 

to that headstone or marker rather than furnishing a separate memorial headstone or marker under that subsection for the surviving 

spouse or eligible dependent child of such individual. 

(h)(1) A headstone or marker may not be furnished under subsection (a) for the unmarked grave of a person described in section 

2411(b) of this title. 

(2) A memorial headstone or marker may not be furnished under 

subsection (b) for the purpose of commemorating a person described 

in section 2411(b) of this title. 

(3) A headstone or marker may not be furnished under subsection (d) for the grave of a person described in section 2411(b) of 

this title. 

(4) A casket or urn may not be furnished under subsection (f) for 

burial of a person described in section 2411(b) of this title. 

* * * * * * * 

PART IV—GENERAL ADMINISTRATIVE 

PROVISIONS 

* * * * * * * 

CHAPTER 51—CLAIMS, EFFECTIVE DATES, AND 

PAYMENTS 

SUBCHAPTER I—CLAIMS 

Sec. 

ø5100. Definition of ‘‘claimant’’.¿ 

5100. Definitions. 

* * * * * * * 

5109C. Priority for processing claims. 

SUBCHAPTER I—CLAIMS 

ø§ 5100. Definition of ‘‘claimant’’ 

For purposes of this chapter, the term ‘‘claimant’’ means any individual applying for, or submitting a claim for, any benefit under 

the laws administered by the Secretary.¿ 


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63 

§ 5100. Definitions 

In this chapter: 

(1) The term ‘‘claimant’’ means any individual applying for, 

or submitting a claim for, any benefit under the laws administered by the Secretary. 

(2) The term ‘‘claim’’ means a communication in writing requesting a determination of entitlement or evidencing a belief in 

entitlement to a benefit under the laws administered by the Secretary. 

(3) The term ‘‘formal claim’’ means a claim submitted on an 

application form prescribed by the Secretary. 

§ 5101. Claims and forms 

(a)(1) øA specific¿ (A) Except as provided in subparagraph (B), a 

specific claim in the form prescribed by the Secretary (or jointly 

with the Commissioner of Social Security, as prescribed by section 

5105 of this title) must be filed in order for benefits to be paid or 

furnished to any individual under the laws administered by the 

Secretary. 

(B)(i) The Secretary may pay benefits under chapters 13 and 15 

and sections 2302, 2307, and 5121 of this title to a survivor of a 

veteran who has not filed a formal claim if the Secretary determines 

that the record contains sufficient evidence to establish the entitlement of the survivor to such benefits. 

(ii) For purposes of this subparagraph and section 5110 of this 

title, the earlier of the following dates shall be treated as the date 

of the receipt of the survivor’s application for benefits described in 

clause (i): 

(I) The date on which the survivor of a veteran (or the representative of such a survivor) notifies the Secretary of the 

death of the veteran through a death certificate or other relevant medical evidence indicating that the death was due to a 

service-connected or compensable disability. 

(II) The head of any other department or agency of the Federal Government notifies the Secretary of the death of the veteran. 

(iii) In notifying the Secretary of the death of a veteran as described in clause (ii)(I), the survivor (or the representative of such 

a survivor) may submit to the Secretary additional documents relating to such death without being required to file a formal claim. 

(2) If an individual has not attained the age of 18 years, is mentally incompetent, or is physically unable to sign a form, a form 

filed under paragraph (1) for the individual may be signed by a 

court- appointed representative, a person who is responsible for the 

care of the individual, including a spouse or other relative, or an 

attorney in fact or agent authorized to act on behalf of the individual under a durable power of attorney. If the individual is in the 

care of an institution, the manager or principal officer of the institution may sign the form. 

(b)(1) A claim by a surviving spouse or child for compensation or 

dependency and indemnity compensation shall also be considered 

to be a claim for death pension and accrued benefits, and a claim 

by a surviving spouse or child for death pension shall be considered 

to be a claim for death compensation (or dependency and indemnity 

compensation) and accrued benefits. 


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64 

(2) A claim by a parent for compensation or dependency and indemnity compensation shall also be considered to be a claim for accrued benefits. 

(c)(1) Any person who applies for, signs a form on behalf of an 

individual to apply for, or is in receipt of any compensation or pension benefit under laws administered by the Secretary shall, if requested by the Secretary, furnish the Secretary with the social security number of such person, or TIN in the case that the person 

is not an individual, and the social security number of any claimant, dependent, or beneficiary on whose behalf, or based upon 

whom, such person applies for or is in receipt of such benefit. A 

person is not required to furnish the Secretary with a social security number for any person to whom a social security number has 

not been assigned. 

(2) The Secretary shall deny the application of or terminate the 

payment of compensation or pension to a person who fails to furnish the Secretary with a social security number or TIN required 

to be furnished pursuant to paragraph (1) of this subsection. The 

Secretary may thereafter reconsider the application or reinstate 

payment of compensation or pension, as the case may be, if such 

person furnishes the Secretary with such social security number or 

TIN. 

(3) The costs of administering this subsection shall be paid for 

from amounts available to the Department of Veterans Affairs for 

the payment of compensation and pension. 

(d) In this section: 

(1) The term ‘‘mentally incompetent’’ with respect to an individual means that the individual lacks the mental capacity— 

(A) to provide substantially accurate information needed 

to complete a form; or 

(B) to certify that the statements made on a form are 

true and complete. 

(2) The term ‘‘TIN’’ has the meaning given the term in section 7701(a)(41) of the Internal Revenue Code of 1986. 

* * * * * * * 

§ 5109C. Priority for processing claims 

(a) PRIORITY.—In processing claims for compensation under this 

chapter, the Secretary shall provide the following claimants with 

priority over other claimants: 

(1) Veterans who have attained the age of 70. 

(2) Veterans who are terminally ill. 

(3) Veterans with life-threatening illnesses. 

(4) Homeless veterans (as defined in section 2002 of this title). 

(5) Veterans who were awarded the Medal of Honor. 

(6) Veterans who are former prisoners of war. 

(7) Veterans whose claims are being reviewed again in relation to a previously denied claim relating to military sexual 

trauma. 

(8) Veterans whom the Secretary determines, on a case-bycase basis, are seriously or very seriously injured. 

(9) Veterans whom the Secretary determines, on a case-bycase basis, should be given priority under this section based on 

an application for good cause established by the Secretary. 


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65 

(b) REGULATIONS.—The Secretary shall prescribe regulations to 

carry out subsection (a). 

* * * * * * * 

SUBCHAPTER III—PAYMENT OF BENEFITS 

* * * * * * * 

§ 5125. Acceptance of reports of private physician examinations 

øFor purposes¿ (a) IN GENERAL.—For purposes of establishing 

any claim for benefits under chapter 11 or 15 of this title, a report 

of a medical examination administered by a private physician that 

is provided by a claimant in support of a claim for benefits under 

that chapter may be accepted without a requirement for confirmation by an examination by a physician employed by the Veterans 

Health Administration if the report is sufficiently complete to be 

adequate for the purpose of adjudicating such claim. 

(b) SUFFICIENCY OF EVIDENCE.—If a veteran has submitted a 

medical opinion or report of a medical examination administered by 

a private physician in support of the veteran’s claim, the Secretary 

may not order a medical examination to be administered by a Department physician unless the Secretary provides the veteran with 

a thorough explanation of why the medical opinion or report submitted by the veteran was not sufficiently complete and the reason 

why additional medical evidence is necessary. 

(c) SUFFICIENTLY COMPLETE DEFINED.—For purposes of a medical 

opinion or report described in subsection (a), the term ‘‘sufficiently 

complete’’ means competent, credible, probative, and containing 

such information as may be required to make a decision on the 

claim for which the medical opinion or report is provided. 

* * * * * * * 

CHAPTER 53—SPECIAL PROVISIONS RELATING TO 

BENEFITS 

* * * * * * * 

§ 5312. Annual adjustment of certain benefit rates 

(a) 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 each maximum annual rate 

of pension under sections 1521, 1541, and 1542 of this title, the 

rate of increased pension paid under such sections 1521 and 1541 

on account of children, and each rate of monthly allowance paid 

under section 1805 of this title, as such rates 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. 

(b)(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 


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66 

(42 U.S.C. 415(i)), the Secretary shall, effective on the date of such 

increase in benefit amounts, increase the maximum monthly rates 

of dependency and indemnity compensation for parents payable 

under subsections (b), (c), and (d), and the monthly rate provided 

in subsection (g), of section 1315 of this title and the annual income 

limitations prescribed in subsections (b)(3), (c)(3), and (d)(3) of such 

section, and the annual benefit amount limitations under sections 

5507(c)(2)(D) and 5508 of this title, as such rates and limitations 

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)(A) Whenever there is an increase under paragraph (1) of this 

subsection in such rates and annual income limitations, the Secretary shall, effective on the date of such increase in such rates and 

limitations, adjust (as provided in subparagraph (B) of this paragraph) the rates of dependency and indemnity compensation payable under subsection (b)(1) or (c)(1) of section 1315 of this title to 

any parent whose annual income is more than $800 but not more 

than the annual income limitation in effect under subsection (b)(3) 

or (c)(3) of such section, as appropriate, and adjust the rates of 

such compensation payable under subsection (d)(1) of such section 

to any parent whose annual income is more than $1,000 but not 

more than the annual income limitation in effect under subsection 

(d)(3) of such section. 

(B) The adjustment in rates of dependency and indemnity compensation referred to in subparagraph (A) of this paragraph shall 

be made by the Secretary in accordance with regulations which the 

Secretary shall prescribe. 

(c)(1) Whenever there is an increase under subsection (a) in benefit rates payable under sections 1521, 1541, 1542, and 1805 of this 

title and an increase under subsection (b) in benefit rates and annual income limitations under section 1315 of this title, the Secretary shall publish such rates and limitations (including those 

rates adjusted by the Secretary under subsection (b)(2) of this section), as increased pursuant to such subsections, 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)). 

(2) Whenever such rates and income limitations are so increased, 

the Secretary may round such rates and income limitations in such 

manner as the Secretary considers equitable and appropriate for 

ease of administration. 

(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 before 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. 


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67 

(2) The dollar amounts to be increased pursuant to paragraph (1) 

are the following: 

(A) WARTIME DISABILITY 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) DEPENDENCY AND INDEMNITY COMPENSATION TO SUR- VIVING SPOUSE.—Each of the dollar amounts in effect under 

subsections (a) through (d) of section 1311 of such title. 

(E) DEPENDENCY AND INDEMNITY COMPENSATION TO CHILDREN.—Each of the dollar amounts in effect under sections 

1313(a) and 1314 of such 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)). 

(4) Each dollar amount increased under paragraph (1), if not a 

whole dollar amount, shall be rounded to the next lower whole dollar amount. 

(5) The Secretary of Veterans Affairs may adjust administratively, 

consistent with the increases made under subsection (a), the rates 

of disability compensation payable to persons under section 10 of 

Public Law 85–857 (72 Stat. 1263) who have not received compensation under chapter 11 of this title. 

* * * * * * * 

CHAPTER 55—MINORS, INCOMPETENTS, AND OTHER 

WARDS 

Sec. 

5501. Commitment actions. 

ø5502. Payments to and supervision of fiduciaries.¿ 

5502. Appointment of fiduciaries. 

5502A. Supervision of fiduciaries. 

* * * * * * * 

ø5509. Authority to require fiduciary to receive payments at regional offices of the 

Department when failing to provide required accounting.¿ 

5509. Annual reports and accountings of fiduciaries. 

* * * * * * * 

* * * * * * * 

ø§ 5502. Payments to and supervision of fiduciaries 

ø(a)(1) Where it appears to the Secretary that the interest of the 

beneficiary would be served thereby, payment of benefits under any 

law administered by the Secretary may be made directly to the 

beneficiary or to a relative or some other fiduciary for the use and 

benefit of the beneficiary, regardless of any legal disability on the 

part of the beneficiary. Where, in the opinion of the Secretary, any 

fiduciary receiving funds on behalf of a Department beneficiary is 


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68 

acting in such a number of cases as to make it impracticable to 

conserve properly the estates or to supervise the persons of the 

beneficiaries, the Secretary may refuse to make future payments in 

such cases as the Secretary may deem proper. 

ø(2) In a case in which the Secretary determines that a commission is necessary in order to obtain the services of a fiduciary in 

the best interests of a beneficiary, the Secretary may authorize a 

fiduciary appointed by the Secretary to obtain from the beneficiary’s estate a reasonable commission for fiduciary services rendered, but the commission for any year may not exceed 4 percent 

of the monetary benefits under laws administered by the Secretary 

paid on behalf of the beneficiary to the fiduciary during such year. 

A commission may not be authorized for a fiduciary who receives 

any other form of remuneration or payment in connection with rendering fiduciary services for benefits under this title on behalf of 

the beneficiary. 

ø(b) Whenever it appears that any fiduciary, in the opinion of the 

Secretary, is not properly executing or has not properly executed 

the duties of the trust of such fiduciary or has collected or paid, or 

is attempting to collect or pay, fees, commissions, or allowances 

that are inequitable or in excess of those allowed by law for the duties performed or expenses incurred, or has failed to make such 

payments as may be necessary for the benefit of the ward or the 

dependents of the ward, then the Secretary may appear, by the 

Secretary’s authorized attorney, in the court which has appointed 

such fiduciary, or in any court having original, concurrent, or appellate jurisdiction over said cause, and make proper presentation 

of such matters. The Secretary, in the Secretary’s discretion, may 

suspend payments to any such fiduciary who shall neglect or 

refuse, after reasonable notice, to render an account to the Secretary from time to time showing the application of such payments 

for the benefit of such incompetent or minor beneficiary, or who 

shall neglect or refuse to administer the estate according to law. 

The Secretary may require the fiduciary, as part of such account, 

to disclose any additional financial information concerning the beneficiary (except for information that is not available to the fiduciary). The Secretary may appear or intervene by the Secretary’s 

duly authorized attorney in any court as an interested party in any 

litigation instituted by the Secretary or otherwise, directly affecting 

money paid to such fiduciary under this section. 

ø(c) Authority is hereby granted for the payment of any court or 

other expenses incident to any investigation or court proceeding for 

the appointment of any fiduciary or other person for the purpose 

of payment of benefits payable under laws administered by the Secretary or the removal of such fiduciary and appointment of another, and of expenses in connection with the administration of 

such benefits by such fiduciaries, or in connection with any other 

court proceeding hereby authorized, when such payment is authorized by the Secretary. 

ø(d) All or any part of any benefits the payment of which is suspended or withheld under this section may, in the discretion of the 

Secretary, be paid temporarily to the person having custody and 

control of the incompetent or minor beneficiary, to be used solely 

for the benefit of such beneficiary, or, in the case of an incompetent 

veteran, may be apportioned to the dependent or dependents, if 


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69 

any, of such veteran. Any part not so paid and any funds of a mentally incompetent or insane veteran not paid to the chief officer of 

the institution in which such veteran is a patient nor apportioned 

to the veteran’s dependent or dependents may be ordered held in 

the Treasury to the credit of such beneficiary. All funds so held 

shall be disbursed under the order and in the discretion of the Secretary for the benefit of such beneficiary or the beneficiary’s dependents. Any balance remaining in such fund to the credit of any 

beneficiary may be paid to the beneficiary if the beneficiary recovers and is found competent, or if a minor, attains majority, or otherwise to the beneficiary’s fiduciary, or, in the event of the beneficiary’s death, to the beneficiary’s personal representative, except 

as otherwise provided by law; however, payment will not be made 

to the beneficiary’s personal representative if, under the law of the 

beneficiary’s last legal residence, the beneficiary’s estate would escheat to the State. In the event of the death of a mentally incompetent or insane veteran, all gratuitous benefits under laws administered by the Secretary deposited before or after August 7, 1959, 

in the personal funds of patients trust fund on account of such veteran shall not be paid to the personal representative of such veteran, but shall be paid to the following persons living at the time 

of settlement, and in the order named: The surviving spouse, the 

children (without regard to age or marital status) in equal parts, 

and the dependent parents of such veteran, in equal parts. If any 

balance remains, such balance shall be deposited to the credit of 

the applicable current appropriation; except that there may be paid 

only so much of such balance as may be necessary to reimburse a 

person (other than a political subdivision of the United States) who 

bore the expenses of last sickness or burial of the veteran for such 

expenses. No payment shall be made under the two preceding sentences of this subsection unless claim therefor is filed with the Secretary within five years after the death of the veteran, except that, 

if any person so entitled under said two sentences is under legal 

disability at the time of death of the veteran, such five-year period 

of limitation shall run from the termination or removal of the legal 

disability. 

ø(e) Any funds in the hands of a fiduciary appointed by a State 

court or the Secretary derived from benefits payable under laws administered by the Secretary, which under the law of the State 

wherein the beneficiary had last legal residence would escheat to 

the State, shall escheat to the United States and shall be returned 

by such fiduciary, or by the personal representative of the deceased 

beneficiary, less legal expenses of any administration necessary to 

determine that an escheat is in order, to the Department, and shall 

be deposited to the credit of the applicable revolving fund, trust 

fund, or appropriation.¿ 

§ 5502. Appointment of fiduciaries 

(a) APPOINTMENT.—Where it appears to the Secretary that the interest of the beneficiary would be served thereby, payment of benefits 

under any law administered by the Secretary may be made directly 

to the beneficiary or to a relative or some other fiduciary for the use 

and benefit of the beneficiary, regardless of any legal disability on 

the part of the beneficiary. 


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70 

(b) APPEALS.—(1) If the Secretary determines a beneficiary to be 

mentally incompetent for purposes of appointing a fiduciary under 

this chapter, the Secretary shall provide such beneficiary with a 

written statement detailing the reasons for such determination. 

(2) A beneficiary whom the Secretary has determined to be mentally incompetent for purposes of appointing a fiduciary under this 

chapter may appeal such determination. 

(c) MODIFICATION.—(1) A beneficiary for whom the Secretary appoints a fiduciary under this chapter may, at any time, request the 

Secretary to— 

(A) remove the fiduciary so appointed; and 

(B) have a new fiduciary appointed. 

(2) The Secretary shall comply with a request under paragraph 

(1) if the Secretary determines that the request is made in good faith 

and— 

(A) the fiduciary requested to be removed receives a fee from 

the beneficiary and a suitable volunteer fiduciary is available 

to assist the beneficiary; or 

(B) the beneficiary provides credible information that the fiduciary requested to be removed is— 

(i) not acting in the interest of the beneficiary; or 

(ii) unable to effectively serve the beneficiary because of 

an irreconcilable personality conflict or disagreement. 

(3) The Secretary shall ensure that any removal or new appointment of a fiduciary under paragraph (1) does not delay or interrupt 

the beneficiary’s receipt of benefits administered by the Secretary. 

(d) INDEPENDENCE.—A fiduciary appointed by the Secretary shall 

operate independently of the Department to determine the actions 

that are in the interest of the beneficiary. 

(e) PREDESIGNATION.—A veteran may predesignate a fiduciary 

by— 

(1) submitting written notice to the Secretary of the 

predesignated fiduciary; or 

(2) submitting a form provided by the Secretary for such purpose. 

(f) APPOINTMENT OF NON-PREDESIGNATED FIDUCIARY.—If a beneficiary designates an individual to serve as a fiduciary under subsection (e) and the Secretary appoints an individual not so designated as the fiduciary for such beneficiary, the Secretary shall notify such beneficiary of— 

(1) the reason why such designated individual was not appointed; and 

(2) the ability of the beneficiary to modify the appointed fiduciary under subsection (c). 

(g) PRIORITY OF APPOINTMENT.—In appointing a fiduciary under 

this chapter, if a beneficiary does not designate a fiduciary pursuant to subsection (e), to the extent possible the Secretary shall appoint a person who is— 

(1) a relative of the beneficiary; 

(2) appointed as guardian of the beneficiary by a court of 

competent jurisdiction; or 

(3) authorized to act on behalf of the beneficiary under a durable power of attorney. 


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71 

§ 5502A. Supervision of fiduciaries 

(a) COMMISSION.—(1)(A) In a case in which the Secretary determines that a commission is necessary in order to obtain the services 

of a fiduciary in the best interests of a beneficiary, the Secretary 

may authorize a fiduciary appointed by the Secretary to obtain from 

the monthly benefits provided to the beneficiary a reasonable commission for fiduciary services rendered, but the commission for any 

month may not exceed the lesser of the following amounts: 

(i) The amount that equals three percent of the monthly monetary benefits under laws administered by the Secretary paid on 

behalf of the beneficiary to the fiduciary. (ii) $35. 

(B) A commission paid under this paragraph may not be derived 

from any award to a beneficiary regarding back pay or retroactive 

benefits payments. 

(C) A commission may not be authorized for a fiduciary who receives any other form of remuneration or payment in connection 

with rendering fiduciary services for benefits under this title on behalf of the beneficiary. 

(D) In accordance with section 6106 of this title, a commission 

may not be paid to a fiduciary if the Secretary determines that the 

fiduciary misused any benefit payments of a beneficiary. 

(E) If the Secretary determines that the fiduciary has misused any 

benefit or payments of a beneficiary, the Secretary may revoke the 

fiduciary status of the fiduciary. 

(2) Where, in the opinion of the Secretary, any fiduciary receiving 

funds on behalf of a Department beneficiary is acting in such a 

number of cases as to make it impracticable to conserve properly the 

estates or to supervise the persons of the beneficiaries, the Secretary 

may refuse to make future payments in such cases as the Secretary 

may deem proper. 

(b) COURT.—Whenever it appears that any fiduciary, in the opinion of the Secretary, is not properly executing or has not properly 

executed the duties of the trust of such fiduciary or has collected or 

paid, or is attempting to collect or pay, fees, commissions, or allowances that are inequitable or in excess of those allowed by law for 

the duties performed or expenses incurred, or has failed to make 

such payments as may be necessary for the benefit of the ward or 

the dependents of the ward, then the Secretary may appear, by the 

Secretary’s authorized attorney, in the court which has appointed 

such fiduciary, or in any court having original, concurrent, or appellate jurisdiction over said cause, and make proper presentation 

of such matters. The Secretary, in the Secretary’s discretion, may 

suspend payments to any such fiduciary who shall neglect or refuse, 

after reasonable notice, to render an account to the Secretary from 

time to time showing the application of such payments for the benefit of such incompetent or minor beneficiary, or who shall neglect 

or refuse to administer the estate according to law. The Secretary 

may require the fiduciary, as part of such account, to disclose any 

additional financial information concerning the beneficiary (except 

for information that is not available to the fiduciary). The Secretary 

may appear or intervene by the Secretary’s duly authorized attorney 

in any court as an interested party in any litigation instituted by 

the Secretary or otherwise, directly affecting money paid to such fiduciary under this section. 


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(c) PAYMENT OF CERTAIN EXPENSES.—Authority is hereby granted 

for the payment of any court or other expenses incident to any investigation or court proceeding for the appointment of any fiduciary or 

other person for the purpose of payment of benefits payable under 

laws administered by the Secretary or the removal of such fiduciary 

and appointment of another, and of expenses in connection with the 

administration of such benefits by such fiduciaries, or in connection 

with any other court proceeding hereby authorized, when such payment is authorized by the Secretary. 

(d) TEMPORARY PAYMENT OF BENEFITS.—All or any part of any 

benefits the payment of which is suspended or withheld under this 

section may, in the discretion of the Secretary, be paid temporarily 

to the person having custody and control of the incompetent or 

minor beneficiary, to be used solely for the benefit of such beneficiary, or, in the case of an incompetent veteran, may be apportioned to the dependent or dependents, if any, of such veteran. Any 

part not so paid and any funds of a mentally incompetent or insane 

veteran not paid to the chief officer of the institution in which such 

veteran is a patient nor apportioned to the veteran’s dependent or 

dependents may be ordered held in the Treasury to the credit of 

such beneficiary. All funds so held shall be disbursed under the 

order and in the discretion of the Secretary for the benefit of such 

beneficiary or the beneficiary’s dependents. Any balance remaining 

in such fund to the credit of any beneficiary may be paid to the beneficiary if the beneficiary recovers and is found competent, or if a 

minor, attains majority, or otherwise to the beneficiary’s fiduciary, 

or, in the event of the beneficiary’s death, to the beneficiary’s personal representative, except as otherwise provided by law; however, 

payment will not be made to the beneficiary’s personal representative if, under the law of the beneficiary’s last legal residence, the 

beneficiary’s estate would escheat to the State. In the event of the 

death of a mentally incompetent or insane veteran, all gratuitous 

benefits under laws administered by the Secretary deposited before 

or after August 7, 1959, in the personal funds of patient’s trust fund 

on account of such veteran shall not be paid to the personal representative of such veteran, but shall be paid to the following persons living at the time of settlement, and in the order named: The 

surviving spouse, the children (without regard to age or marital status) in equal parts, and the dependent parents of such veteran, in 

equal parts. If any balance remains, such balance shall be deposited 

to the credit of the applicable current appropriation; except that 

there may be paid only so much of such balance as may be necessary to reimburse a person (other than a political subdivision of 

the United States) who bore the expenses of last sickness or burial 

of the veteran for such expenses. No payment shall be made under 

the two preceding sentences of this subsection unless claim therefor 

is filed with the Secretary within five years after the death of the 

veteran, except that, if any person so entitled under said two sentences is under legal disability at the time of death of the veteran, 

such five-year period of limitation shall run from the termination 

or removal of the legal disability. 

(e) ESCHEATMENT.—Any funds in the hands of a fiduciary appointed by a State court or the Secretary derived from benefits payable under laws administered by the Secretary, which under the law 

of the State wherein the beneficiary had last legal residence would 


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escheat to the State, shall escheat to the United States and shall be 

returned by such fiduciary, or by the personal representative of the 

deceased beneficiary, less legal expenses of any administration necessary to determine that an escheat is in order, to the Department, 

and shall be deposited to the credit of the applicable revolving fund, 

trust fund, or appropriation. 

(f) ASSISTANCE.—The Secretary shall provide to a fiduciary appointed under section 5502 of this title materials and tools to assist 

the fiduciary in carrying out the responsibilities of the fiduciary 

under this chapter, including— 

(1) handbooks, brochures, or other written material that explain the responsibilities of a fiduciary under this chapter; 

(2) tools located on an Internet website, including forms to 

submit to the Secretary required information; and 

(3) assistance provided by telephone. 

* * * * * * * 

§ 5506. Definition of ‘‘fiduciary’’ 

øFor purposes¿ (a) For purposes of this chapter and chapter 61 

of this title, the term ‘‘fiduciary’’ means— 

(1) a person who is a guardian, curator, conservator, committee, or person legally vested with the responsibility or care 

of a claimant (or a claimant’s estate) or of a beneficiary (or a 

beneficiary’s estate); or 

(2) any other person having been appointed in a representative capacity to receive money paid under any of the laws administered by the Secretary for the use and benefit of a minor, 

incompetent, or other beneficiary. 

(b)(1) For purposes of subsection (a), the term ‘‘person’’ includes 

any— 

(A) State or local government agency whose mission is to 

carry out income maintenance, social service, or health care-related activities; 

(B) any State or local government agency with fiduciary responsibilities; or 

(C) any nonprofit social service agency that the Secretary determines— 

(i) regularly provides services as a fiduciary concurrently 

to five or more individuals; and 

(ii) is not a creditor of any such individual. 

(2) The Secretary shall maintain a list of State or local agencies 

and nonprofit social service agencies under paragraph (1) that are 

qualified to act as a fiduciary under this chapter. In maintaining 

such list, the Secretary may consult the lists maintained under section 807(h) of the Social Security Act (42 U.S.C. 1007(h)). 

ø§ 5507. Inquiry, investigations, and qualification of fiduciaries 

ø(a) Any certification of a person for payment of benefits of a 

beneficiary to that person as such beneficiary’s fiduciary under section 5502 of this title shall be made on the basis of— 


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ø(1) an inquiry or investigation by the Secretary of the fitness of that person to serve as fiduciary for that beneficiary, 

such inquiry or investigation— 

ø(A) to be conducted in advance of such certification; 

ø(B) to the extent practicable, to include a face-to-face 

interview with such person; and 

ø(C) to the extent practicable, to include a copy of a 

credit report for such person issued within one year of the 

date of the proposed appointment; 

ø(2) adequate evidence that certification of that person as fiduciary for that beneficiary is in the interest of such beneficiary (as determined by the Secretary under regulations); and 

ø(3) the furnishing of any bond that may be required by the 

Secretary. 

ø(b) As part of any inquiry or investigation of any person under 

subsection (a), the Secretary shall request information concerning 

whether that person has been convicted of any offense under Federal or State law which resulted in imprisonment for more than 

one year. If that person has been convicted of such an offense, the 

Secretary may certify the person as a fiduciary only if the Secretary finds that the person is an appropriate person to act as fiduciary for the beneficiary concerned under the circumstances. 

ø(c)(1) In the case of a proposed fiduciary described in paragraph 

(2), the Secretary, in conducting an inquiry or investigation under 

subsection (a)(1), may carry out such inquiry or investigation on an 

expedited basis that may include waiver of any specific requirement relating to such inquiry or investigation, including the otherwise applicable provisions of subparagraphs (A), (B), and (C) of 

such subsection. Any such inquiry or investigation carried out on 

such an expedited basis shall be carried out under regulations prescribed for purposes of this section. 

ø(2) Paragraph (1) applies with respect to a proposed fiduciary 

who is— 

ø(A) the parent (natural, adopted, or stepparent) of a beneficiary who is a minor; 

ø(B) the spouse or parent of an incompetent beneficiary; 

ø(C) a person who has been appointed a fiduciary of the beneficiary by a court of competent jurisdiction; or 

ø(D) being appointed to manage an estate where the annual 

amount of veterans benefits to be managed by the proposed fiduciary does not exceed $3,600, as adjusted pursuant to section 

5312 of this title. 

ø(d) TEMPORARY FIDUCIARIES.—When in the opinion of the Secretary, a temporary fiduciary is needed in order to protect the assets of the beneficiary while a determination of incompetency is 

being made or appealed or a fiduciary is appealing a determination 

of misuse, the Secretary may appoint one or more temporary fiduciaries for a period not to exceed 120 days. If a final decision has 

not been made within 120 days, the Secretary may not continue 

the appointment of the fiduciary without obtaining a court order 

for appointment of a guardian, conservator, or other fiduciary 

under the authority provided in section 5502(b) of this title.¿ 


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§ 5507. Inquiry, investigations, and qualification of fiduciaries 

(a) INVESTIGATION.—Any certification of a person for payment of 

benefits of a beneficiary to that person as such beneficiary’s fiduciary under section 5502 of this title shall be made on the basis of— 

(1) an inquiry or investigation by the Secretary of the fitness 

of that person to serve as fiduciary for that beneficiary to be 

conducted in advance of such certification and in accordance 

with subsection (b); 

(2) adequate evidence that certification of that person as fiduciary for that beneficiary is in the interest of such beneficiary 

(as determined by the Secretary under regulations); 

(3) adequate evidence that the person to serve as fiduciary 

protects the private information of a beneficiary in accordance 

with subsection (d)(1); and 

(4) the furnishing of any bond that may be required by the 

Secretary in accordance with subsection (f). 

(b) ELEMENTS OF INVESTIGATION.—(1) In conducting an inquiry 

or investigation of a proposed fiduciary under subsection (a)(1), the 

Secretary shall conduct— 

(A) a face-to-face interview with the proposed fiduciary by not 

later than 30 days after the date on which such inquiry or investigation begins; and 

(B) a background check of the proposed fiduciary to— 

(i) in accordance with paragraph (2), determine whether 

the proposed fiduciary has been convicted of a crime; and 

(ii) determine whether the proposed fiduciary will serve 

the best interest of the beneficiary, including by conducting 

a credit check of the proposed fiduciary and checking the 

records under paragraph (5). 

(2) The Secretary shall request information concerning whether 

that person has been convicted of any offense under Federal or State 

law. If that person has been convicted of such an offense, the Secretary may certify the person as a fiduciary only if the Secretary 

finds that the person is an appropriate person to act as fiduciary 

for the beneficiary concerned under the circumstances. 

(3) The Secretary shall conduct the background check described in 

paragraph (1)(B)— 

(A) each time a person is proposed to be a fiduciary, regardless of whether the person is serving or has served as a fiduciary; and 

(B) at no expense to the beneficiary. 

(4) Each proposed fiduciary shall disclose to the Secretary the 

number of beneficiaries that the fiduciary acts on behalf of. 

(5) The Secretary shall maintain records of any person who has— 

(A) previously served as a fiduciary; and 

(B) had such fiduciary status revoked by the Secretary. 

(6)(A) If a fiduciary appointed by the Secretary is convicted of a 

crime described in subparagraph (B), the Secretary shall notify the 

beneficiary of such conviction by not later than 14 days after the 

date on which the Secretary learns of such conviction. 

(B) A crime described in this subparagraph is a crime— 

(i) for which the fiduciary is convicted while serving as a fiduciary for any person; 


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(ii) that is not included in a report submitted by the fiduciary 

under section 5509(a) of this title; and 

(iii) that the Secretary determines could affect the ability of 

the fiduciary to act on behalf of the beneficiary. 

(c) INVESTIGATION OF CERTAIN PERSONS.—(1) In the case of a proposed fiduciary described in paragraph (2), the Secretary, in conducting an inquiry or investigation under subsection (a)(1), may 

carry out such inquiry or investigation on an expedited basis that 

may include giving priority to conducting such inquiry or investigation. Any such inquiry or investigation carried out on such an expedited basis shall be carried out under regulations prescribed for 

purposes of this section. 

(2) Paragraph (1) applies with respect to a proposed fiduciary 

who is— 

(A) the parent (natural, adopted, or stepparent) of a beneficiary who is a minor; 

(B) the spouse or parent of an incompetent beneficiary; 

(C) a person who has been appointed a fiduciary of the beneficiary by a court of competent jurisdiction; 

(D) being appointed to manage an estate where the annual 

amount of veterans benefits to be managed by the proposed fiduciary does not exceed $3,600, as adjusted pursuant to section 

5312 of this title; or 

(E) a person who is authorized to act on behalf of the beneficiary under a durable power of attorney. 

(d) PROTECTION OF PRIVATE INFORMATION.—(1) A fiduciary shall 

take all reasonable precautions to— 

(A) protect the private information of a beneficiary, including 

personally identifiable information; and 

(B) securely conducts financial transactions. 

(2) A fiduciary shall notify the Secretary of any action of the fiduciary that compromises or potentially compromises the private information of a beneficiary. 

(e) POTENTIAL MISUSE OF FUNDS.—(1) If the Secretary has reason 

to believe that a fiduciary may be misusing all or part of the benefit 

of a beneficiary, the Secretary shall— 

(A) conduct a thorough investigation to determine the veracity 

of such belief; and 

(B) if such veracity is established, transmit to the officials described in paragraph (2) a report of such investigation. 

(2) The officials described in this paragraph are the following: 

(A) The Attorney General. 

(B) Each head of a Federal department or agency that pays 

to a fiduciary or other person benefits under any law administered by such department of agency for the use and benefit of 

a minor, incompetent, or other beneficiary. 

(f) BOND.—In determining whether a proposed fiduciary is required to furnish a bond under subsection (a)(4), the Secretary shall 

consider— 

(1) the existence of any familial or other personal relationship 

between the proposed fiduciary and the beneficiary; and 

(2) the care the proposed fiduciary has taken to protect the interests of the beneficiary. 

(g) LIST OF FIDUCIARIES.—Each regional office of the Veterans 

Benefits Administration shall maintain a list of the following: 


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(1) The name and contact information of each fiduciary, including address, telephone number, and email address. 

(2) With respect to each fiduciary described in paragraph 

(1)— 

(A) the date of the most recent background check and 

credit check performed by the Secretary under this section; 

(B) the date that any bond was paid under this section; 

(C) the name, address, and telephone number of each 

beneficiary the fiduciary acts on behalf of; and 

(D) the amount that the fiduciary controls with respect to 

each beneficiary described in subparagraph (C). 

* * * * * * * 

§ 5509. øAuthority to require fiduciary to receive payments 

at regional offices of the Department when failing 

to provide required accounting¿ Annual reports 

and accountings of fiduciaries 

(a) REQUIRED REPORTS AND ACCOUNTINGS.—The Secretary ømay 

require a fiduciary to file a¿ shall require a fiduciary to file an annual report or accounting pursuant to regulations prescribed by the 

Secretary. The Secretary shall transmit such annual report or accounting to the beneficiary and any legal guardian of such beneficiary. 

(b) ACTIONS UPON FAILURE TO FILE.—In any case in which a fiduciary fails to submit a report or accounting required by the Secretary under subsection (a), the Secretary may, after furnishing notice to such fiduciary and the beneficiary entitled to such payment 

of benefits, require that such fiduciary appear in person at a regional office of the Department serving the area in which the beneficiary resides in order to receive such payments. 

(c) MATTERS INCLUDED.—Except as provided by subsection (f), an 

annual report or accounting under subsection (a) shall include the 

following: 

(1) For each beneficiary that a fiduciary acts on behalf of— 

(A) the amount of the benefits of the beneficiary provided 

under any law administered by the Secretary accrued during the year, the amount spent, and the amount remaining; 

and 

(B) if the fiduciary serves the beneficiary with respect to 

benefits not administered by the Secretary, an accounting of 

all sources of benefits or other income the fiduciary oversees 

for the beneficiary. 

(2) A list of events that occurred during the year covered by 

the report that could affect the ability of the fiduciary to act on 

behalf of the beneficiary, including— 

(A) the fiduciary being convicted of any crime; 

(B) the fiduciary declaring bankruptcy; and 

(C) any judgments entered against the fiduciary. 

(d) RANDOM AUDITS.—The Secretary shall annually conduct random audits of fiduciaries who receive a commission pursuant to 

subsection 5502A(a)(1) of this title. 

(e) STATUS OF FIDUCIARY.—If a fiduciary includes in the annual 

report events described in subsection (c)(2), the Secretary may take 

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retary determines appropriate, including by revoking the fiduciary 

status of the fiduciary. 

(f) CAREGIVERS AND CERTAIN OTHER FIDUCIARIES.—(1)(A) In carrying out this section, the Secretary shall ensure that a caregiver fiduciary is required only to file an annual report or accounting 

under subsection (a) with respect to the amount of the benefits of the 

beneficiary provided under any law administered by the Secretary— 

(i) spent on— 

(I) food and housing for the beneficiary; and 

(II) clothing, health-related expenses, recreation, and 

other personal items for the beneficiary; and 

(ii) saved for the beneficiary. 

(B) The Secretary shall coordinate with the Under Secretary for 

Benefits and the Under Secretary for Health to— 

(i) minimize the frequency with which employees of the Department visit the home of a caregiver fiduciary and beneficiary; and 

(ii) limit the extent of supervision by such Under Secretaries 

with respect to such a fiduciary and beneficiary. 

(C) In this paragraph, the term ‘‘caregiver fiduciary’’ means a fiduciary who— 

(i) in addition to acting as a fiduciary for a beneficiary, is approved by the Secretary to be a provider of personal care services for the beneficiary under paragraph (3)(A)(i) of section 

1720G(a) of this title; 

(ii) in carrying out such care services to such beneficiary, has 

undergone not less than four home visits under paragraph 

(9)(A) of such section; and 

(iii) has not been required by the Secretary to take corrective 

action pursuant to paragraph (9)(C) of such section. 

(2) In carrying out this section, the Secretary may adjust the matters required under an annual report or accounting under subsection (a) with respect to a fiduciary whom the Secretary determines to have effectively protected the interests of the beneficiary 

over a sustained period. 

§ 5510. Annual report 

øThe Secretary shall include in the Annual Benefits Report of 

the Veterans Benefits Administration or the Secretary’s Annual 

Performance and Accountability Report¿ Not later than July 1 of 

each year, the Secretary shall submit to the Committees on Veterans’ 

Affairs of the House of Representatives and the Senate a separate 

report containing information concerning fiduciaries who have been 

appointed to receive payments for beneficiaries of the Department. 

As part of such information, the Secretary shall separately set 

forth the following: 

(1) The number of beneficiaries in each category (veteran, 

surviving spouse, child, adult disabled child, or parent). 

(2) The types of benefit being paid (compensation, pension, 

dependency and indemnity compensation, death pension or 

benefits payable to a disabled child under chapter 18 of this 

title). 

(3) The total annual amounts and average annual amounts 

of benefits paid to fiduciaries for each category and type of benefit. 


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(4) The number of fiduciaries who are the spouse, parent, 

legal custodian, court-appointed fiduciary, institutional fiduciary, custodian in fact, and supervised direct payees. 

(5) The number of cases in which the fiduciary was changed 

by the Secretary because of a finding that benefits had been 

misused. 

(6) How such cases of misuse of benefits were addressed by 

the Secretary. 

(7) The final disposition of such cases of misuse of benefits, 

including the number and dollar amount of any benefits reissued to beneficiaries. 

(8) The number of fiduciary cases referred to the Office of the 

Inspector General and the nature of the actions taken by the 

Inspector General. 

(9) The total amount of money recovered by the Government 

in cases arising from the misuse of benefits by a fiduciary. 

(10) Such other information as the Secretary considers appropriate. 

* * * * * * * 

CHAPTER 61—PENAL AND FORFEITURE PROVISIONS 

* * * * * * * 

§ 6107. Reissuance of benefits 

(a) NEGLIGENT FAILURE BY SECRETARY.—(1) In any case in which 

the negligent failure of the Secretary to investigate or monitor a fiduciary results in misuse of benefits by the fiduciary, the Secretary 

shall pay to the beneficiary or the beneficiary’s successor fiduciary 

an amount equal to the amount of benefits that were so misused. 

(2) There shall be considered to have been a negligent failure by 

the Secretary to investigate and monitor a fiduciary in the following cases: 

(A) A case in which the Secretary failed to review a fiduciary’s accounting within 60 days of the date on which that accounting is scheduled for review. 

(B) A case in which the Secretary was notified of allegations 

of misuse, but failed to act within 60 days of the date of such 

notification to terminate the fiduciary. 

(C) In any other case in which actual negligence is shown, 

including by the Secretary not acting in accordance with section 

5507 of this title. 

(b) REISSUANCE OF MISUSED BENEFITS IN OTHER CASES.—(1) In 

any case in which a fiduciary described in paragraph (2) misuses 

all or part of an individual’s benefit paid to such fiduciary, the Secretary shall pay to the beneficiary or the beneficiary’s successor fiduciary an amount equal to the amount of such benefit so misused. 

(2) Paragraph (1) applies to a fiduciary that— 

(A) is not an individual; or 

(B) is an individual who, for any month during a period 

when misuse occurs, serves 10 or more individuals who are 

beneficiaries under this title. 

(3) In any other case in which the Secretary obtains recoupment 

from a fiduciary who has misused benefits, the Secretary shall 

promptly remit payment of the recouped amounts to the beneficiary 

or the beneficiary’s successor fiduciary as the case may be. 


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(c) LIMITATION ON TOTAL AMOUNT PAID.—The total of the 

amounts paid to a beneficiary (or a beneficiary’s successor fiduciary) under this section may not exceed the total benefit amount 

misused by the fiduciary with respect to that beneficiary. 

(d) RECOUPMENT OF AMOUNTS REISSUED.—In any case in which 

the Secretary reissues a benefit payment (in whole or in part) 

under subsection (a) or (b), the Secretary shall make a good faith 

effort to obtain recoupment from the fiduciary to whom the payment was originally made. 

* * * * * * * 

PART V—BOARDS, ADMINISTRATIONS, AND 

SERVICES 

* * * * * * * 

CHAPTER 71—BOARD OF VETERANS’ APPEALS 

* * * * * * * 

§ 7107. Appeals: dockets; hearings 

(a)(1) Except as provided in paragraphs (2) and (3) and in subsection (f), 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. 

(2) A case referred to in paragraph (1) may, for cause shown, be 

advanced on motion for earlier consideration and determination. 

Any such motion shall set forth succinctly the grounds upon which 

the motion is based. Such a motion may be granted only— 

(A) if the case involves interpretation of law of general application affecting other claims; 

(B) if the appellant is seriously ill or is under severe financial hardship; or 

(C) for other sufficient cause shown. 

(3) A case referred to in paragraph (1) may be postponed for later 

consideration and determination if such postponement is necessary 

to afford the appellant a hearing. 

(b) The Board shall decide any appeal only after affording the appellant an opportunity for a hearing. 

(c) A hearing docket shall be maintained and formal recorded 

hearings shall be held by such member or members of the Board 

as the Chairman may designate. Such member or members designated by the Chairman to conduct the hearing shall, except in 

the case of a reconsideration of a decision under section 7103 of 

this title, participate in making the final determination of the 

claim. 

(d)ø(1) An appellant may request that a hearing before the Board 

be held at its principal location or at a facility of the Department 

located within the area served by a regional office of the Department.¿ (1)(A) Upon request for a hearing, the Board shall determine, for purposes of scheduling the hearing for the earliest possible 

date, whether a hearing before the Board will be held at its principal location or at a facility of the Department or other appropriate 

Federal facility located within the area served by a regional office 

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scribed in subsection (e)(1) or by the appellant personally appearing 

before a Board member or panel. 

(B) The Board shall notify the appellant of the determinations of 

the location and type of hearing made under subparagraph (A). 

Upon notification, the appellant may request a different location or 

type of hearing as described in such subparagraph. If so requested, 

the Board shall grant such request and ensure that the hearing is 

scheduled at the earliest possible date without any undue delay or 

other prejudice to the appellant. 

(2) A hearing to be held within an area served by a regional office of the Department shall (except as provided in paragraph (3)) 

be scheduled to be held in accordance with the place of the case on 

the docket under subsection (a) relative to other cases on the docket for which hearings are scheduled to be held within that area. 

(3) A hearing to be held within an area served by a regional office of the Department may, for cause shown, be advanced on motion for an earlier hearing. Any such motion shall set forth succinctly the grounds upon which the motion is based. Such a motion 

may be granted only— 

(A) if the case involves interpretation of law of general application affecting other claims; 

(B) if the appellant is seriously ill or is under severe financial hardship; or 

(C) for other sufficient cause shown. 

(e)(1) At the request of the Chairman, the Secretary may provide 

suitable facilities and equipment to the Board or other components 

of the Department to enable an appellant located at a facility within the area served by a regional office to participate, through voice 

transmission or through picture and voice transmission, by electronic or other means, in a hearing with a Board member or members sitting at the Board’s principal location. 

ø(2) When such facilities and equipment are available, the Chairman may afford the appellant an opportunity to participate in a 

hearing before the Board through the use of such facilities and 

equipment in lieu of a hearing held by personally appearing before 

a Board member or panel as provided in subsection (d). Any such 

hearing shall be conducted in the same manner as, and shall be 

considered the equivalent of, a personal hearing. If the appellant 

declines to participate in a hearing through the use of such facilities and equipment, the opportunity of the appellant to a hearing 

as provided in such subsection (d) shall not be affected.¿ 

(2) Any hearing provided through the use of the facilities and 

equipment described in paragraph (1) shall be conducted in the 

same manner as, and shall be considered the equivalent of, a personal hearing. 

(f) Nothing in this section shall preclude the screening of cases 

for purposes of— 

(1) determining the adequacy of the record for decisional purposes; or 

(2) the development, or attempted development, of a record 

found to be inadequate for decisional purposes. 

* * * * * * * 


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82 

VETERANS BENEFITS ACT OF 2003 

* * * * * * * 

TITLE VII—OTHER MATTERS 

* * * * * * * 

SEC. 704. TEMPORARY AUTHORITY FOR PERFORMANCE OF MEDICAL 

DISABILITIES EXAMINATIONS BY CONTRACT PHYSICIANS. 

(a) AUTHORITY.—Using appropriated funds, other than funds 

available for compensation and pension, the Secretary of Veterans 

Affairs may provide for the conduct of examinations with respect 

to the medical disabilities of applicants for benefits under laws administered by the Secretary by persons other than Department of 

Veterans Affairs employees. The authority under this section is in 

addition to the authority provided in section 504(b) of the Veterans’ 

Benefits Improvement Act of 1996 (Public Law 104-275; 38 U.S.C. 

5101 note). 

(b) PERFORMANCE BY CONTRACT.—Examinations under the authority provided in subsection (a) shall be conducted pursuant to 

contracts entered into and administered by the Under Secretary for 

Benefits. 

(c) EXPIRATION.—The authority in subsection (a) shall expire on 

øDecember 31, 2015¿ December 31, 2017. No examination may be 

carried out under the authority provided in that subsection after 

that date. 

(d) LICENSURE OF CONTRACT PHYSICIANS.— 

(1) IN GENERAL.—Notwithstanding any law regarding the licensure of physicians, a physician described in paragraph (2) 

may conduct an examination pursuant to a contract entered 

into under subsection (b) at any location in any State, the District of Columbia, or a Commonwealth, territory, or possession 

of the United States, so long as the examination is within the 

scope of the authorized duties under such contract. 

(2) PHYSICIAN DESCRIBED.—A physician described in this 

paragraph is a physician who— 

(A) has a current unrestricted license to practice the 

health care profession of the physician; 

(B) is not barred from practicing such health care profession in any State, the District of Columbia, or a Commonwealth, territory, or possession of the United States; and 

(C) is performing authorized duties for the Department of 

Veterans Affairs pursuant to a contract entered into under 

subsection (b). 

ø(d)¿ (e) REPORT.—Not later than four years after the date of the 

enactment of this Act, the Secretary shall submit to Congress a report on the use of the authority provided in subsection (a). The Secretary shall include in the report an assessment of the effect of examinations under that authority on the cost, timeliness, and thoroughness of examinations with respect to the medical disabilities of 

applicants for benefits under laws administered by the Secretary. 

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83 

SECTION 504 OF THE VETERANS’ BENEFITS 

IMPROVEMENT ACT OF 1996 

SEC. 504 PILOT PROGRAM FOR USE OF CONTRACT PHYSICIANS FOR 

DISABILITY EXAMINATIONS. 

(a) AUTHORITY.—The Secretary of Veterans Affairs, acting 

through the Under Secretary for Benefits, may conduct a pilot program under this section under which examinations with respect to 

medical disability of applicants for benefits under laws administered by the Secretary that are carried out through the Under Secretary for Benefits may be made by persons other than employees 

of the Department of Veterans Affairs. Any such examination shall 

be performed pursuant to contracts entered into by the Under Secretary for Benefits with those persons. 

(b) LIMITATION.—The Secretary may carry out the pilot program 

under this section as follows: 

(1) In fiscal years before fiscal year 2015, through not more 

than 10 regional offices of the Department of Veterans Affairs. 

(2) In fiscal year 2015, through not more than 12 regional offices of the Department. 

(3) In fiscal year 2016, through not more than 15 regional offices of the Department. 

(4) In fiscal year 2017 and each fiscal year thereafter, 

through such regional offices of the Department as the Secretary considers appropriate. 

(c) LICENSURE OF CONTRACT PHYSICIANS.— 

(1) IN GENERAL.—Notwithstanding any law regarding the licensure of physicians, a physician described in paragraph (2) 

may conduct an examination pursuant to a contract entered 

into under subsection (a) at any location in any State, the District of Columbia, or a Commonwealth, territory, or possession 

of the United States, so long as the examination is within the 

scope of the authorized duties under such contract. 

(2) PHYSICIAN DESCRIBED.—A physician described in this 

paragraph is a physician who— 

(A) has a current unrestricted license to practice the 

health care profession of the physician; 

(B) is not barred from practicing such health care profession in any State, the District of Columbia, or a Commonwealth, territory, or possession of the United States; and 

(C) is performing authorized duties for the Department of 

Veterans Affairs pursuant to a contract entered into under 

subsection (a). 

ø(c)¿ (d) SOURCE OF FUNDS.—Payments for contracts under the 

pilot program under this section shall be made from amounts available to the Secretary of Veterans Affairs for payment of compensation and pensions. 

ø(d)¿ (e) REPORT TO CONGRESS.—Not later than three years after 

the date of the enactment of this Act, the Secretary shall submit 

to the Congress a report on the effect of the use of the authority 

provided by subsection (a) on the cost, timeliness, and thoroughness of medical disability examinations. 

Æ 


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