107TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 107–156

VETERANS BENEFITS ACT OF 2001

JULY 24, 2001.—Committed to the Committee of the Whole House on the State of

the Union and ordered to be printed

Mr. SMITH of New Jersey, from the Committee on Veterans’ Affairs,

submitted the following

R E P O R T

[To accompany H.R. 2540]

[Including cost estimate of the Congressional Budget Office]

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

bill (H.R. 2540) to amend title 38, United States Code, to make various improvements to veterans benefits programs under laws administered by the Secretary of Veterans Affairs, and for other purposes, having considered the same, reports favorably thereon with

amendments and recommends that the bill as amended do pass.

The amendments (stated in terms of the page and line numbers

of the introduced bill) are as follows:

Page 5, line 20, strike ‘‘section 2’’ and insert ‘‘section 101’’.

Strike section 403 (page 14, line 7, through page 15, line 24) and

insert the following (and conform the table of contents in section

1(b) accordingly):

SEC. 403. DEPARTMENT OF VETERANS AFFAIRS HEALTH

SERVICES IMPROVEMENT FUND MADE SUBJECT

TO APPROPRIATIONS.

(a) AMOUNTS TO BE SUBJECT TO APPROPRIATIONS.—Effective October 1, 2002, subsection (c) of section 1729B is

amended by striking ‘‘Amounts in the fund are hereby

made available,’’ and inserting ‘‘Subject to the provisions of

appropriations Acts, amounts in the fund shall be

available,’’.

(b) TECHNICAL AMENDMENT.—Subsection (b) of such section is amended by striking paragraph (1) and redesig-
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nating paragraphs (2), (3), and (4) as paragraphs (1), (2),

and (3), respectively.

INTRODUCTION

The reported bill reflects the Committee’s consideration of several bills introduced during the 107th Congress, to include H.R.

862, H.R. 1406, H.R. 1435, H.R. 1746, H.R. 2359, and H.R. 2361.

On July 10, 2001, the Subcommittee on Benefits held a hearing

and considered the following bills: H.R. 862, to add Type 2 diabetes

to the list of diseases presumed to be service connected for veterans

exposed to certain herbicide agents; H.R. 1406, the Gulf War

Undiagnosed Illness Act of 2001; H.R. 1435, the Veterans’ Emergency Telephone Service Act of 2001; H.R. 1746, to establish a single ‘‘1–800’’ telephone number for veterans benefits counseling;

H.R. 1929, the Native American Veterans Home Loan Act of 2001;

H.R. 2359, to authorize the payment of National Service Life Insurance and United States Government Life Insurance proceeds to an

alternate beneficiary when the first beneficiary cannot be identified, to improve and extend the Native American veteran housing

loan pilot program, to simplify document requirements for VA

home loans and to eliminate the requirement to provide the Secretary of Veterans Affairs a copy of a notice of appeal to the Court

of Appeals for Veterans Claims; and H.R. 2361, the Veterans’ Compensation Cost-of-Living Adjustment Act of 2001.

On July 12, 2001, the Subcommittee on Benefits met and unanimously ordered a draft bill incorporating provisions from H.R. 862,

H.R. 1406, H.R. 1435, H.R. 1746, H.R. 2359, and H.R. 2361 reported favorably to the full Committee.

On July 18, 2001, the Chairman and Ranking Member, respectively, the Honorable Christopher H. Smith and the Honorable

Lane Evans, and the Chairman and Ranking Member of the Subcommittee on Benefits, respectively, the Honorable Mike Simpson

and the Honorable Silvestre Reyes, along with Mr. Stump, Mr. Filner, Mr. Bilirakis, Ms. Brown of Florida, Mr. Buyer, Mr. Rodriguez,

Mr. Baker, Mr. Shows, Mr. Simmons, Mr. Udall of New Mexico,

Mr. Brown of South Carolina, and Mrs. Capps introduced H.R

2540.

On July 19, 2001, the full Committee met and ordered H.R. 2540

reported favorably, as amended, to the House by unanimous voice

vote.

SUMMARY OF THE REPORTED BILL

H.R. 2540 would:

Title I – Annual Cost-of-Living Adjustment in Compensation and

DIC Rates

1. Provide, effective December 1, 2001, a cost-of-living adjustment to the rates of disability compensation for veterans with

service-connected disabilities and to the rates of dependency

and indemnity compensation for survivors of certain serviceconnected disabled veterans. As in the past, the percentage

amount would be equal to the increase for benefits provided
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under the Social Security Act, which is calculated based upon

changes in the Consumer Price Index.

Title II – Compensation Provisions

1. Add Diabetes Mellitus (Type 2) to the list of diseases presumed to be service-connected in Vietnam veterans exposed to

herbicide agents.

2. Expand, effective April 1, 2002, the definition of undiagnosed

illnesses for Persian Gulf War veterans to include

fibromyalgia, chronic fatigue syndrome, and chronic multisymptom illness and any other illness that cannot be clearly

defined; signs or symptoms that may be a manifestation of

undiagnosed illness include fatigue, unexplained rashes or

other dermatological signs or symptoms, headache, muscle

pain, joint pain, neurologic signs or symptoms, neuropsychological signs or symptoms, signs or symptoms involving

the respiratory system (upper or lower), sleep disturbances,

gastrointestinal signs or symptoms, cardiovascular signs or

symptoms, abnormal weight loss, and/or menstrual disorders.

3. Authorize the Secretary of Veterans Affairs to protect the

grant of service connection of a Persian Gulf War veteran who

participates in a Department of Veterans Affairs (VA)-sponsored medical research project.

Title III – Administration of U.S. Court of Appeals for Veterans

Claims

1. Allow the Court to impose registration fees on persons participating in Court-sponsored activities, including judicial conferences.

2. Provide the Court with the authority to use practice and registration fees for the purposes of disciplinary matters, and for

defraying the expenses of judicial conferences and other activities to support and foster bench-and-bar relationships, veterans law or the work of the Court.

Title IV – Other Matters

1. Authorize the Secretary to pay unclaimed National Service

Life Insurance and United States Government Life Insurance

proceeds to an alternate beneficiary when the first beneficiary

cannot be located within three years of the death of the insured.

2. Extend to September 30, 2006, the copayment requirement for

outpatient prescription medications.

3. Make the availability of funds from the Department of Veterans Affairs Health Services Improvement Fund subject to

appropriations effective October 1, 2002.

4. Extend to December 31, 2005, VA’s direct home loan program

for Native American veterans living on trust lands, and eliminate the requirement for VA to have a separate memorandum

of understanding (MOU) with tribal authorities if another federal agency has an MOU which substantially complies with

VA’s requirement.
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5. Modify the requirement for loan assumption language in home

loan documents.

6. Eliminate the requirement for veterans to furnish the Secretary of Veterans Affairs with a copy of the notice of appeal

filed with the U.S. Court of Appeals for Veterans Claims.

7. Require the Secretary to establish a two-year nationwide pilot

program to expand the available hours of VA’s 1–800 toll-free

information service, and to assess the extent to which a demand for such service exists.

8. Make technical and clerical amendments to title 38, United

States Code.

9. Codify recurring provisions in annual Department of Veterans

Affairs Appropriations Acts.

BACKGROUND AND DISCUSSION

TITLE I – ANNUAL COST-OF-LIVING ADJUSTMENT IN COMPENSATION

AND DIC RATES

Increase in rates of disability compensation and dependency and

indemnity compensation.—Section 101 of the bill would increase,

effective December 1, 2001, the rates of compensation for serviceconnected disabilities and the rates of dependency and indemnity

compensation (DIC) for surviving spouses and children of veterans

who die of service-connected causes, as well as the additional

amounts for dependents and survivors, and clothing allowances for

certain veterans. The percentage of increase would be the same as

that automatically received by Social Security recipients.

The Committee annually reviews the service-connected disability

compensation and DIC programs to ensure that the benefits provide reasonable and adequate compensation for disabled veterans

and their families. Based on this review, the Congress acts annually to provide a cost-of-living adjustment (COLA) in compensation

and DIC benefits. The Congress has provided annual increases in

these rates for every fiscal year since 1976.

TITLE II – COMPENSATION PROVISIONS

Presumption that Diabetes Mellitus (Type 2) is service-connected.—Section 201 would codify VA’s July 9, 2001, regulation providing benefits for Vietnam veterans with Type 2 diabetes. In adding Type 2 diabetes to the list of diseases presumed to be serviceconnected for veterans exposed to herbicides in Vietnam, veterans

will receive priority VA health care and depending on the severity

of their illness, disability compensation. VA estimates that about

nine percent of the 2.3 million Vietnam veterans still alive have

Type 2 diabetes. Approximately 16 percent of veterans currently receiving care in VA medical facilities have been diagnosed with diabetes.

The Agent Orange Act of 1991, Public Law 102–4, directed VA

to seek to enter into an agreement with the National Academy of

Sciences (NAS) to review, summarize and evaluate the scientific

evidence concerning the association between exposure to herbicides

and each disease suspected to be associated with such exposure.

NAS conducted comprehensive reviews and evaluations of available

literature. NAS published its initial report in 1993, with updates
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published approximately every two years. In November 2000, the

NAS’ Institute of Medicine found a ‘‘limited/suggestive’’ association

between adult onset, or Type 2, diabetes and exposure to Agent Orange and other herbicides used in Vietnam. The Committee believes the presumption established in regulation should be made

permanent by statute.

Inclusion of illnesses that cannot be clearly defined in presumption of service connection for Gulf War veterans.—Section 202 expands the definition of ‘‘undiagnosed illness’’ for Persian Gulf War

veterans to include fibromyalgia, chronic fatigue syndrome, and

chronic multisymptom illness, as well as any other illness that cannot be clearly defined.

Public Law 103–446 gave the Secretary the authority to compensate a Persian Gulf War veteran who suffers from disabilities

that cannot be diagnosed or clearly defined, when other causes cannot be identified. In interpreting this law, VA issued General Counsel Opinion 8–98 holding that only disabilities that cannot be attributed to ‘‘any known clinical diagnosis’’ could be compensated.

Many Gulf War veterans, however, report disabilities related to

poorly understood multisymptom disabilities that one physician

may classify as ‘‘undiagnosed’’, and that another physician may diagnose as fibromyalgia or chronic fatigue syndrome. VA data indicates that approximately 2,000 Gulf War veterans diagnosed with

chronic fatigue syndrome, 1,000 diagnosed with irritable bowel syndrome and 400 diagnosed with fibromyalgia have been denied service-connected compensation benefits for undiagnosed conditions.

This provision would also apply to disabilities resulting from a

chronic multisymptom illness, such as those described by Fukada

et al in ‘‘Chronic Multisymptom Illness Affecting Air Force Veterans

of the Gulf War’’, JAMA 1998; 280:981-988, and Reid et al in ‘‘Multiple Chemical Sensitivity and Chronic Fatigue Syndrome in British

Gulf War Veterans’’, American Journal of Epidemiology 2001;

153:604-609. The Committee notes that chronic multisymptom illness may include symptoms attributed by some researchers to

‘‘multiple chemical sensitivity.’’ While the Committee recognizes

there is not a generally accepted medical definition for multiple

chemical sensitivity, the Committee bill explicitly includes such

signs and symptoms.

This section would allow a more consistent interpretation of

‘‘undiagnosed illness’’ in keeping with Congressional intent, and

would take effect for benefits payable on April 1, 2002. The bill also

lists a number of symptoms that have been associated with

undiagnosed or poorly defined illnesses in Gulf War veterans, to include fatigue, unexplained rashes or other dermatological signs or

symptoms, headache, muscle pain, joint pain, neurologic signs or

symptoms, neuropsychological signs or symptoms, signs or symptoms involving the respiratory system (upper or lower), sleep disturbances, gastrointestinal signs or symptoms, cardiovascular signs

or symptoms, abnormal weight loss, and/or menstrual disorders.

The Committee directs the Secretary to submit a report on October 1, 2002, on the Department’s implementation of this section of

the bill. The report would include the number of claims filed pertaining to this section, disposition of such claims, and other appropriate data.
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Current law provides that both diagnosed and undiagnosed disabilities be evaluated under the relevant medical criteria appropriate to each. This bill would not change that requirement.

Preservation of service connection for undiagnosed illnesses to

provide for participation in research projects by Gulf War veterans.—Section 203 would authorize the Secretary to protect the

grant of service connection for a Persian Gulf War veteran who

participates in a VA-sponsored medical research project. In the

case of a Gulf War veteran being compensated for an undiagnosed

illness, VA has taken the position that current law prevents them

from acting to protect the individual’s service-connected grant if, as

a result of participating in a medical research study, the condition

is diagnosed. Medical research studies are designed to increase

knowledge of human disease and appropriate treatment. They often

provide no direct benefit to individual research subjects, but serve

a broader humanitarian goal.

The Committee intends that this section would give the Secretary the authority to protect the service-connected character of

benefits received by veterans participating in such studies in order

to broaden participation by veterans in medical research studies of

rare or ill-defined conditions, such as Amyotrophic Lateral Sclerosis

(ALS or Lou Gehrig’s Disease). The Committee intends by preserving the service-connected character of the veteran’s disabilities,

that in the event of their death from such illnesses, survivors

would qualify for survivor’s benefits.

TITLE III – ADMINISTRATION OF UNITED STATES COURT OF APPEALS

FOR VETERANS CLAIMS

Registration fees.—Section 301 would amend subsection 7285(b)

of title 38, United States Code, so that registration fees (currently

a one-time fee of $30) paid to the Court of Appeals for Veterans

Claims by those admitted to practice before it may be used in connection with practitioner disciplinary proceedings and in support of

certain bench-and-bar and veterans’ law educational activities in

addition to those now identified in that subsection. The Court currently collects these practice fees as well as registration fees paid

by participants at its periodic Judicial Conferences, which are carried out under section 7286 of title 38, United States Code. Collection of the latter fees would be expressly authorized by the proposed amendment to subsection 7285(a) rather than by implication

from section 7286 itself.

Also, the Committee has added, in consultation with the Court,

authorization for the collection of registration fees for other Courtsponsored activities where appropriate. The types of activities for

which fees collected under section 7285(a) are set forth in Chief

Judge Kramer’s May 24, 2001, letter to the Committee (see p. 20

for text). As is the case with the use of such nonappropriated-fund

accounts in the Article III courts, the Committee intends that section 7285(a) fees would not be used for purposes for which appropriated funds are generally available, and that the support of

bench-and-bar activities would generally follow the practice of the

Article III courts in using such fees.

Administrative authorities.—Section 302 would add a new section

7287 to title 38, United States Code, to make available to the Court
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generally the same management, administrative, and expenditure

authorities that are available to Article III courts of the United

States. The Court, established by the Congress under Article I of

the Constitution to exercise judicial power, has unusual status as

an independent tribunal that was not intended to be subject to the

control of the President or the executive branch. Because of its status, the Court does not have available to it certain general authorities that would normally be available were it part of another administrative structure, such as are the U.S. Court of Federal

Claims (under the Administrative Office of the U.S. Courts), and

the U.S. Court of Appeals for the Armed Forces (under the Department of Defense). Pursuant to section 7282 of title 38, United

States Code, the Court submits its budget directly to and receives

its appropriations directly from Congress.

In the past, the Court has requested the enactment of various

gap-filling statutory provisions, which are described in Chief Judge

Kramer’s May 24 letter. See 5 U.S.C. app. §§ 109(8), 109(10); 38

U.S.C. §§ 7253(g), 7264(c), 7281(i). The Court’s special stand-alone

nature is also reflected in the provisions of section 7281(a) through

(g) of title 38, United States Code, which permit it to develop its

own personnel and job classification system for its judicial and nonjudicial personnel. Hence, unless there was a gap in its personnelrelated authorities, the Court has indicated to the Committee that

it would not use the proposed new section 7287 for purposes of personnel classification, appointment, and compensation. Rather than

the Court’s having to request legislation each time that it becomes

aware of an administrative authority that it is lacking, the proposed new section 7287 would provide a generic authority for it to

use Court-related management, administrative, and fund-expenditure authorities that are appropriate for its efficient operation. For

example, Chief Judge Kramer pointed out in his May 24 letter two

recently enacted authorities that the Court is lacking, but that

seem to be generally available to the rest of the federal government

to reduce the risk of personal liability for official actions. See

U.S.C. Subchapter IV note (found preceding 5 U.S.C. § 5941); 28

U.S.C. § 613; 31 U.S.C. § 3529. Under the proposed new section

7287, the Court would have these types of authorities available to

it, but not have available any provision of law that is inconsistent

with any provision of chapter 72 of title 38. Moreover, the Court

would have to exercise the new gap-filling provision in accordance

with all limitations with respect to the underlying authorities

themselves and do so subject, of course, to the availability of appropriations provided for its operation.

TITLE IV – OTHER MATTERS

Payment of insurance proceeds to an alternate beneficiary when

first beneficiary cannot be identified.—Section 401 would grant the

Secretary of Veterans Affairs the authority to authorize payment of

National Service Life Insurance (NSLI) or United States Government Life Insurance (USGLI) proceeds to an alternate beneficiary

when the proceeds have not been claimed by the first named beneficiary within three years following the death of the policyholder.

Currently, VA is holding an estimated $23 million in insurance

proceeds involving about 4,000 claims because the first beneficiary

has not come forward to file a claim. Under current law, there is
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no time limitation for a first named beneficiary of a NSLI or

USGLI policy to file a claim for proceeds. As a result, when the insured dies and the beneficiary does not file a claim, VA is required

to hold the unclaimed funds indefinitely in order to honor any possible future claims by that beneficiary. While VA employs extensive

efforts to locate and pay these individuals, there are cases where

a beneficiary simply cannot be found.

Currently, VA is not permitted to pay the proceeds to an alternate beneficiary unless VA can determine that the first beneficiary

predeceased the policyholder. The bill would provide that if no first

named beneficiary had claimed the proceeds within three years of

the veteran’s death, benefits could be paid to a secondary beneficiary. If no beneficiary has filed a claim within five years of the

veteran’s death, benefits could be paid to such person as the Secretary determines is equitably entitled to the proceeds of the policy.

As under current law, no benefits will be paid if the proceeds would

escheat to a state.

Extension of copayment requirement for outpatient prescription

medications.—Section 402 would amend section 1722A(c) of title

38, United States Code, to extend until September 30, 2006, the

authority of the Secretary to require a copayment of $2 for each 30-

day supply of medication VA furnishes a veteran on an outpatient

basis for the treatment of a nonservice connected disability or condition. The current authority expires on September 30, 2002.

Department of Veterans Affairs Health Services Improvement

Fund.—Section 403 would amend section 1729B by making the

availability of funds in the VA’s Health Services Improvement

Fund subject to the provisions of appropriations acts. This change

to the Fund would be effective October 1, 2002, and would allow

the Committee to meet the pay-as-you-go requirements of the

Budget Act that apply to the bill.

Native American veteran housing loan pilot program.—Section

404 would extend to December 31, 2005, VA’s direct home loan program for Native American veterans living on trust lands. The Native American veteran direct home loan program, which was enacted in October 1992, has enjoyed limited success. VA has made

over 200 loans under this program to Native American veterans.

The majority of these loans have been to Native Hawaiians.

The bill would also amend section 3762(a)(1) to permit VA to

make home loans to members of a Native American tribe that has

entered in a memorandum of understanding (MOU) with another

federal agency if that MOU generally conforms to the requirements

of VA program. Current law requires a tribe to enter into a separate MOU with VA before VA can make home loans to members

of that tribe. Eliminating the requirement for a separate MOU between each tribe and VA should expand the number of Native

American veterans eligible for VA financing. The changes made by

section 404 would reduce the administrative burden on Indian

housing authorities and bring more uniformity in federal loan program processing procedures.

Modification of loan assumption notice requirement.—Section 405

would modify the requirement in 3714(d) of title 38, United States

Code, that all VA loans and security instruments contain on the
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first page of each such document in letters two and one half times

the size of regular type face used in the document a statement that

the loan is not assumable without the approval of VA. The extremely strict loan assumption notice requirement in the current

law has prevented VA from approving the use of uniform loan instruments now used in FHA, ‘‘Fannie Mae,’’ and ‘‘Freddie Mac’’

transactions. The Committee bill would require that this notice appear conspicuously on at least one instrument (such as a VA rider)

under guidelines established by VA in regulations. The Committee

expects that the Secretary’s regulations would provide for a typeface size to be used that would be sufficiently large and identifiable

to provide notice similar to that provided by current law.

The Committee notes this amendment would implement recommendations made by the executive branch’s One-Stop Mortgage

Initiative, which was an effort to develop a more consistent approach to delivering home ownership opportunities under various

federal programs.

Elimination of requirement for providing a copy of notice of appeal to the Secretary.—Section 406 would repeal the requirement in

section 7266(b) of title 38, United States Code, that requires an individual appealing a decision of the Board of Veterans’ Appeals to

furnish the Secretary of Veterans Affairs with a copy of his or her

notice of appeal to the U.S. Court of Appeals for Veterans Claims.

In a number of instances, appellants have mailed their notices of

appeal to VA, but not to the Court, thinking that they have complied with the statute. Some appeals have been dismissed because

the Court did not receive the notices of appeal within the required

120 days. Rules for the U.S. Court of Appeals for Veterans Claims

currently provide for notification to the Secretary when an appeal

is docketed on the Court’s calendar. Removal of this notice requirement would not impair VA’s ability to receive notice of the filing

of an appeal and to respond to those that are properly filed with

the Court.

Pilot program for expansion of toll-free telephone access to veterans service representatives.—Section 407 would require the Secretary to establish a two-year nationwide pilot program to test the

benefit and cost effectiveness of expanding access to veterans service representatives of VA through a toll-free telephone number.

Under the pilot program, the Secretary would be required to expand the available hours of such access to veterans service representatives to not less than 12 hours on each regular business day

across U.S. time zones and not less than six hours on Saturday.

The Committee views the pilot as a potential opportunity to build

on current VA toll-free information services provided by veterans

service representatives at VA regional offices through expanded

hours and types of information. Currently, VA’s toll-free number

provides 24 hours a day, seven days a week, access to its automated telephone response system and access to veterans service

representatives during most of the business day. Callers may use

the automated system to route inquiries concerning education,

home loan and health care eligibility matters to offices that can

provide the technical information related to those programs. The

Committee intends that the pilot program would not affect calls
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normally routed to or handled by the Education, Loan Guaranty,

or Health Eligibility Center toll-free lines.

Currently, callers on the automated line may also be connected

to a VA employee during certain portions of the business day.

When a caller indicates a desire to speak to a VA employee, the

call is automatically routed to the VA Regional Office with jurisdiction over the area code from which the call is made. Although VA

tracks blocked and abandoned calls on this system, data is not

available concerning the amount of time spent on hold. Testimony

before the Committee indicated a wide variation in waiting times

to speak to a veterans service representative from a few minutes

to more than one-half hour.

VA’s system-wide blocked and abandoned call data show that VA

has made demonstrable improvements in phone services. The Committee applauds these improvements. The Committee notes the following data from ‘‘Number of 800–827–1000 Calls Answered by

ROs,’’ produced by the Veterans Benefits Administration and

Sprint, Inc.:

• In FY 1998 on a volume of 24 million calls, the blocked

call rate was 52 percent and the abandoned call rate was

12.9 percent;

• In FY 2001 on a volume of 6.7 million calls to date, the

blocked call rate is 2.9 percent and the abandoned call

rate is 4.5 percent.

The Committee notes the hearing testimony on July 10, 2001, of

Mr. Joseph A. Violante, Disabled American Veterans (DAV) National Legislative Director, on DAV’s nationwide survey of VA’s national toll-free hotline:

The results of our survey were surprising and somewhat

unexpected. In all but a few cases, our NSOs [National

Service Organizations] were able to access the help line on

the first call. For the most part, services were rendered in

less than five minutes—this was total call time. Overwhelmingly, we were informed that the counselors were

polite and courteous. In some cases, the counselors offered

to provide any additional assistance that might be needed

on other matters.

The pilot program would begin six months after enactment and

would provide information about veterans’ benefits provided by federal departments and agencies and state governments. Not later

than 120 days after the end of the pilot program, the Secretary

would be required to provide the Committees on Veterans’ Affairs

of the Senate and House of Representatives a report on the pilot

program. The report would contain the Secretary’s assessment of

benefits and cost effectiveness of continuing or making permanent

the pilot program, including an assessment of the extent to which

there is a demand for access to veterans service representatives

during the period of expanded access.

To the maximum extent feasible, in addition to collecting blocked

and abandoned call rates in the pilot program, the Committee desires VA to collect data on the number and percentage of calls

placed on hold and the length of time on hold, and the number and

percentage of calls answered by way of Interactive Voice Recorder.
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Codification of recurring provisions in annual Department of Veterans Affairs Appropriations Acts.—Section 409 would codify those

provisions that are recurring in annual Department of Veterans Affairs Appropriations Acts. Each year the Congress appropriates

funds to the Department of Veterans Affairs as part of the Departments of Veterans Affairs and Housing and Urban Development,

Independent Agencies Appropriations Act (VA-HUD appropriations

bill). Although the amount of the appropriations varies from year

to year, the purposes for which appropriations are made are generally fixed, and change little if at all from year to year. Because

the style of appropriations language discourages normal punctuation or sentence structure, some of the ‘‘sentences’’ making appropriations exceed a page in length. In order to make language appropriating funds to VA more comprehensible and easier for the average person to read, the reported bill includes provisions that codify in title 38, United States Code, the authorities for which the

Department may spend appropriated funds. This language has

been enacted in VA-HUD appropriations bill for many years, and

this codification would eliminate the need to repeat this language

in future appropriations bills. It does not have any substantive effect on the purposes for which funds have been appropriated in the

past, and is intended to consolidate in one section of title 38,

United States Code, many of the non-title 38 provisions for which

VA may spend appropriated funds.

SECTION-BY-SECTION ANALYSIS

Section 1 would provide that this Act may be cited as the ‘‘Veterans Benefits Act of 2001’’.

Section 2 states that except as otherwise expressly provided, all

references are to title 38, United States Code.

Section 101(a) would authorize the Secretary of Veterans Affairs

to increase, effective December 1, 2001, the dollar amounts in effect

for the payment of disability compensation and dependency and indemnity compensation.

Section 101(b) would specify the programs to receive increased

dollar amounts: compensation, additional compensation for dependents, clothing allowance, new DIC rates, old DIC rates, additional

DIC for surviving spouses with minor children, additional DIC for

disability, and DIC for dependent children.

Section 101(c)(1) would increase the dollar amounts for those

specified in subsection (b) based on the amount in effect on November 30, 2001.

Section 101(c)(2) would specify that each amount shall be increased by the same percentage by which benefits are increased

under title II of the Social Security Act (42 U.S.C. 401 et seq.).

Section 101(c)(3) would round down to the next lower dollar

amount all compensation and DIC benefits, when the amount is

not a whole dollar amount.

Section 101(d) would provide a special rule authorizing the Secretary of Veterans Affairs to adjust administratively, consistent

with the increases made under subsection (a), the rates of disability compensation payable to persons within the purview of sec-
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tion 10 of Public Law 85–857, who are not in receipt of compensation payable pursuant to chapter 11 of title 38, United States Code.

Section 102 would require the Secretary of Veterans Affairs to

publish in the Federal Register the amounts specified in subsection

(b), as increased pursuant to that section.

Section 201 would amend section 1116(a)(2). It would add a new

subparagraph (H) authorizing the Secretary to include Diabetes

Mellitus (Type 2) to the list of diseases presumed to be service connected for Vietnam veterans exposed to herbicides.

Section 202 (a) would amend subsection (a) of section 1117 by

adding fibromyalgia, chronic fatigue syndrome, chronic multisymptom illness, or any other illness that cannot be clearly defined (or

combination of illnesses that cannot be clearly defined) as illnesses

presumed to be service connected in Persian Gulf War veterans.

Section 202 (b) would add a new subsection (g) of section 1117

by listing signs and symptoms that may be a manifestation of an

undiagnosed illness, including fatigue, unexplained rashes or other

dermatological signs or symptoms, headache, muscle pain, joint

pain, neurologic signs or symptoms, neuropsychological signs or

symptoms, signs or symptoms involving the respiratory system

(upper or lower), sleep disturbances, gastrointestinal signs or

symptoms, cardiovascular signs or symptoms, abnormal weight

loss, menstrual disorders.

Section 202(c) provides an effective date of April 1, 2002 for the

provisions contained in this section.

Section 203(a) would amend section 1117 by adding a new subsection (h) authorizing the Secretary to preserve a grant of service

connection for an undiagnosed illness when a Persian Gulf veteran

in receipt of compensation participates in a medical research

project sponsored by the Department. This section does not apply

in a case in which the original award for compensation or service

connection was based on fraud or it is clearly shown from military

records that the person concerned did not have the requisite service

or character of discharge. The Secretary would be required to publish in the Federal Register a notice of each determination made

by the Secretary under this section with respect to a medical research project.

Section 203(b) would provide that this section would be effective

with respect to any medical research project of the Department of

Veterans Affairs whether commenced before, on, or after the date

of enactment of this Act.

Section 301(a) would amend subsection (a) of section 7285 by authorizing the U.S. Court of Appeals for Veterans Claims to impose

registration fees on persons participating in a judicial conference

convened pursuant to section 7286 of this title or in any other

court-sponsored activity.

Section 301(b) would amend subsection (b) of section 7285 to specifically authorize the U.S. Court of Appeals for Veterans Claims

to use fees for Court-sponsored activities for conducting investigations and proceedings, including employing independent counsel, to

pursue disciplinary matters; to defray the expenses of judicial conferences convened pursuant to section 7286 of this title; and for

other activities and programs that are designed to support and fos-
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ter bench and bar communication and relationships or the study,

understanding, public commemoration, or improvement of veterans

law or of the work of the Court.

Section 302(a) would amend subchapter III of chapter 72 by specifically authorizing the Court of Appeals for Veterans Claims to

exercise, for purposes of management, administration, and expenditure of funds, the authorities provided for such purposes by any

provision of law (including any limitation with respect to such provision) applicable to a court of the United States as defined in section 451 of title 28, United States Code, except to the extent that

such provision of law is inconsistent with a provision of chapter 72.

Section 401(a) would amend section 1917 by authorizing the payment of insurance proceeds under the National Service Life Insurance program to another beneficiary designated by the insured, if

the first beneficiary otherwise entitled to payment does not make

a claim within three years after the death of the insured. If within

five years after the death of the insured, no claim has been filed

by a person designated by the insured as a beneficiary, and the

Secretary has not received any notice in writing that any such

claim will be made, payment of the insurance proceeds would be

authorized (notwithstanding any other provision of law) to be made

to such person as may in the judgment of the Secretary be equitably entitled to the proceeds of the policy.

Section 401(b) would amend section 1951 by authorizing the payment of insurance proceeds under the United States Government

Life Insurance program to another beneficiary designated by the

insured, if the first beneficiary otherwise entitled to payment does

not make a claim within three years after the death of the insured.

If within five years after the death of the insured, no claim has

been filed by a person designated by the insured as a beneficiary,

and the Secretary has not received any notice in writing that any

such claim will be made, payment of the insurance proceeds would

be authorized (notwithstanding any other provision of law) to be

made to such person as may in the judgment of the Secretary be

equitably entitled to the proceeds of the policy.

Section 401(c) would provide that in the case of a person insured

under subchapter I or II of chapter 19 who dies before the date of

enactment of this Act, would for purposes of the applicable subsection be treated as being the three-year and five-year periods, respectively, beginning on the date of enactment of this Act.

Section 402 would amend section 1722A(c) by extending the copayment requirement for outpatient prescription medications from

September 30, 2002 to September 30, 2006.

Section 403(a) would amend section 1729B that establishes the

Department of Veterans Affairs Health Services Improvement

Fund and by making availability of its funds subject to the provisions of appropriations acts, effective October 1, 2002.

Section 404(a) would amend section 3761(c) by extending the Native American Veteran Housing Loan pilot program from December

31, 2001 to December 31, 2005.

Section 404(b) would permit VA to make a direct housing loan

to a Native American veteran of a tribe that has entered into a

memorandum of understanding (MOU) with any department or
14

agency of the United States that the Secretary determines substantially complies with the requirements of section 3762(b).

Section 405 would amend section 3714(d) to require that for any

loan guaranteed, insured, or made under chapter 37, the Secretary

shall provide, by regulation, that at least one instrument evidencing either the loan or the mortgage or deed of trust therefore,

would be required to conspicuously contain, in such form as specified by the Secretary, a notice in substantially the following form:

‘‘This loan is not assumable without the approval of the Department of Veterans Affairs or its authorized agent.’’.

Section 406(a) would repeal subsection (b) of section 7266, by

eliminating the requirement for an appellant to furnish the Secretary with a copy of notice of appeal.

Section 407(a) would require the Secretary of Veterans Affairs to

conduct a pilot program to test the benefits and cost effectiveness

of expanding access to veterans service representatives of the Department of Veterans Affairs through a toll-free telephone number.

Under the pilot program, the Secretary would be required to expand the available hours of such access to veterans service representatives to not less than 12 hours on each regular business day

and not less than six hours on Saturday.

Section 407(b) would require that the Secretary ensure that veterans service representatives have available to them information

about veterans benefits provided by all other departments and

agencies of the United States and state governments, in addition

to the laws administered by the Secretary.

Section 407(c) would require the Secretary to establish the pilot

program in consultation with the heads of other departments and

agencies of the United States that provide veterans benefits.

Section 407(d) would define ’veterans benefits’ for purposes of

this section as benefits provided to a person based upon the person’s own service, or the service of someone else, in the Armed

Forces.

Section 407(e)(1) and (2) would provide that the pilot program

begin not later than six months after date of enactment of this Act

and end at the end of the two-year period beginning on the date

on which the program begins.

Section 407(f) would require the Secretary to submit to the Committees on Veterans’ Affairs of the Senate and House a report on

the pilot program not later than 120 days after the end of the pilot.

The report would provide the Secretary’s assessment of the benefits

and cost effectiveness of continuing or making permanent the pilot

program, including an assessment of the extent to which there is

a demand for access to veterans service representatives during the

period of expanded access to such counselors.

Section 408 would make certain technical and clerical amendments to title 38.

Section 409 would codify certain recurring provisions in annual

Department of Veterans Affairs Appropriations Acts.

PERFORMANCE GOALS AND OBJECTIVES

The reported bill would authorize veteran benefits enhancements

and program improvements under laws administered by the Sec-
15

retary of Veterans Affairs. It also would authorize additional administrative authorities for the U.S. Court of Appeals for Veterans

Claims. All veterans programs and activities affected by the reported bill are currently authorized. Their performance goals and

objectives are established in annual performance plans and are

subject to the Committee’s regular oversight.

STATEMENTS OF THE VIEWS OF THE ADMINISTRATION AND THE

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

STATEMENT OF JOSEPH THOMPSON, UNDER SECRETARY FOR BENEFITS,

DEPARTMENT OF VETERANS AFFAIRS, BEFORE THE SUBCOMMITTEE ON

BENEFITS, HOUSE COMMITTEE ON VETERANS’ AFFAIRS, JULY 10, 2001

Mr. Chairman and Members of the Committee:

Thank you for the opportunity to testify today on several legislative items of great

interest to veterans. Accompanying me today is Dr. John Feussner, Chief Research

and Development Officer.

H.R. 862

The first measure I will discuss, Mr. Chairman, is H.R. 862. This bill would

amend section 1116 of title 38, United States Code, by adding diabetes mellitus

(Type 2) to the list of diseases presumed to be service connected in veterans exposed

to certain herbicide agents. In view of final rules recently issued by VA concerning

this subject, we believe this bill is not necessary.

Section 1116(b)(1) of title 38, United States Code, directs VA to establish presumptions of service connection for diseases shown to have a ‘‘positive association’’

with exposure to herbicide agents. On May 8, 2001, VA published in the Federal

Register a final rule which adds Type 2 diabetes to the regulatory list, contained

in 38 C.F.R. § 3.309(e), of diseases VA presumes to be service connected in veterans

exposed to certain herbicide agents in service. This final rule effectuates the purpose

of H.R. 862.

Section 1116(a)(1)(B) of title 38, United States Code, expressly establishes a presumption of service connection for each disease that ‘‘the Secretary determines in

regulations prescribed under this section warrants a presumption of service-connection by reason of having a positive association with exposure to an herbicide agent.’’

Inasmuch as the statute already incorporates by reference the diseases identified in

VA regulations issued pursuant to section 1116, and VA has included diabetes

mellitus, Type 2 in those regulations, we believe it is unnecessary to amend section

1116 to specifically mention diabetes mellitus, Type 2.

Congress has not amended section 1116 to include specific reference to each disease for which VA has previously established a presumption of service connection

by regulation. For example, in 1996, VA issued a final rule establishing presumptions of service connection for prostate cancer and acute and subacute peripheral

neuropathy in veterans exposed to certain herbicide agents. We see no need for legislative action ratifying these regulatory determinations.

Because H.R. 862 would merely reiterate requirements of existing statute and

regulation, its enactment would result in no additional costs to VA.

H.R. 1406

The ‘‘Gulf War Undiagnosed Illness Act of 2001,’’ H.R. 1406, would amend section

1117 of title 38, United States Code, which governs compensation for certain Gulf

War veterans. We cannot support the enactment of section 2 of this bill, but we support the enactment of section 3.

Section 2 of H.R. 1406 would amend section 1117 to include ‘‘fibromyalgia, chronic

fatigue syndrome, a chronic multisymptom illness, or any other ill-defined illness (or

combination of ill-defined illnesses)’’ among the illnesses for which a presumption

of service connection may be established for resulting chronic disability suffered by

Gulf War veterans. Currently, section 1117 provides that the Secretary may pay

compensation to any Gulf War veteran suffering from a chronic disability resulting

from an undiagnosed illness (or combination of undiagnosed illnesses) that became

manifest during active service in the Southwest Asia theater of operations during

the Gulf War or became manifest to a compensable degree within a presumptive period (currently ending on December 31, 2001) as determined by regulation.

With regard to fibromyalgia and chronic fatigue syndrome, under current law

service connection may be established on a direct basis for disability resulting from
16

either of these conditions. Each is recognized as diagnosable under VA’s schedule

for rating disabilities. Accordingly, we cannot support the inclusion of either condition in section 1117. With regard to other ‘‘conditions’’ that would be added by section 2, the descriptions of those conditions (‘‘chronic multisymptom illness’’ and ‘‘any

other ill-defined illness’’) are very vague and would result in great uncertainty regarding proper implementation. The Department is pursuing multiple research initiatives intended to identify diseases or conditions that may be associated with service in the Gulf. The results of this research will provide a scientific foundation for

decisions on possible presumptive service-connection of diseases or conditions found

in veterans of the Persian Gulf War.

Section 3 of the bill would authorize the Secretary, with respect to medical research projects sponsored by VA, to render a determination that medical information derived directly or indirectly from the participation in such a project by a Gulf

War veteran who is in receipt of disability compensation under either section 1117

or 1118 of title 38, United States Code, may not be used in adjudicating such veteran’s entitlement to such compensation. Such determination would be based on a

finding that it is necessary for the conduct of the project that Gulf War veterans

participate without fear of loss of compensation. The Secretary would be required

to publish in the Federal Register a notice of each determination made under this

authority with respect to each medical research project concerned. This authority

would be available for the Secretary’s use with respect to any VA medical research

project whether commenced before, on, or after the date of enactment of the bill.

Veterans who suffer from undiagnosed illnesses should not be discouraged from

participation in significant research projects that may result in a better understanding of illnesses associated with Gulf War service or in beneficial treatment of

their disabling conditions. In addition, if significant numbers of Gulf War veterans

who suffer from undiagnosed illnesses refuse to participate in such research projects

out of fear that their entitlement to compensation may be adversely affected, the

results of such studies may be rendered unreliable. Accordingly, Mr. Chairman, we

support this provision.

H.R. 1406 is subject to the PAYGO requirements of the Omnibus Budget Reconciliation Act of 1990, and, if enacted, it would increase direct spending. We estimate that enactment of H.R. 1406 would result in benefit costs of $15.3 million in

Fiscal Year 2002 and a total benefit cost of $87.4 million for the five-year period

from FY 2002 through FY 2006. In addition, we estimate that administrative costs

associated with enactment of this provision would total $819,000 during that fiveyear period. Because undiagnosed illnesses of Gulf War veterans are already subject

to a presumption of service connection under 38 U.S.C. § 1117 and it is not clear

whether any additional illness would be service connected as an ‘‘ill-defined illness,’’

the estimates reflected above relate only to the addition of fibromyalgia and chronic

fatigue syndrome as new presumptive conditions under that section.

H.R. 1435 & H.R. 1746

H.R. 1435 and H.R. 1746 address the same basic issue, Mr. Chairman, so I will

discuss these two measures together. Both bills deal with VA having a centralized

toll-free telephone number that enables veterans Nationwide to receive complete

and accurate information regarding benefits for veterans from not only VA but also

from a variety of federal and state agencies.

Although we fully support this goal, we are unable to support H.R. 1435 and believe we are already in substantial compliance with the implied mandate of H.R.

1746.

H.R. 1435 would authorize the Secretary to award a grant to a private, nonprofit

entity to develop and operate a national, toll-free telephone hotline to provide information and assistance to veterans and their families. This hotline would provide

general information about VA benefits, and also provide crisis intervention counseling, information regarding emergency shelter and food, substance-abuse rehabilitation, employment training and opportunities, and small business assistance

programs.

H.R. 1746 would require VA to provide a single toll-free phone number to enable

the public to have access to veterans benefits counselors. The Secretary must ensure

that these counselors have information about veterans benefits provided by all federal and state agencies.

We would first note, Mr. Chairman, that the Veterans Benefits Administration

has had a national toll-free number, 1–800–827–1000, since 1993. This number is

listed in the blue pages of telephone books under the heading ‘‘benefits information.’’

Veterans call this number every day and receive information not only about VBA

benefits, but also benefits administered by the Veterans Health Administration and
17

the National Cemetery Administration as well as benefits offered by other federal

and state agencies.

VBA’s telecommunications concept is based on three customer service objectives:

• Accessibility (the call gets through);

• Responsiveness (get call to the right place); and

• Reliability (VA gives the correct answer).

Our goals for our telephone system include:

• Reduce blocked calls to 1 percent;

• Reduce abandoned calls to 2 percent;

• Reduce the volume of calls and misdirected calls; and

• Direct calls to program experts based on business rules.

While VA believes our efforts substantially comply with the intent of H.R. 1746,

we recognize that there is more we can do. For this reason, we continue to monitor

and modify our telephone service to ensure veterans receive the highest quality

service from VA consistent with these goals and objectives. In May, the Secretary

directed the Department to explore establishing a cost-effective centralized call center available on a 24/7 basis which would be able to respond to general inquiries

about the full range of veterans benefits and health care services. That study is ongoing and will be completed shortly. VBA is also currently implementing initiatives,

such as Virtual Information Center and Case Call Routing, that will improve telephone service and utilize our Veterans Service Representatives more efficiently.

Case Call Routing will allow callers to call their case management team. Virtual Information Centers (VIC) allows us to adopt a Service Delivery Network (SDN) strategy to handle general calls.

We also developed the State Benefit Reference System in FY 2001. This system

provides VA employees computer-based information about veterans benefits offered

by State agencies. We are investigating the development of a similar system for VA

and non-VA federal benefits for use by VA counselors and veterans self-service on

the internet.

VA should have the flexibility to use the latest technologies in a way that will

be of the greatest assistance to our veterans and other customers. Certain types of

benefit issues may require a separate toll-free number to direct calls to subject-matter experts. In addition, the issue as to whether a private entity, as envisioned by

H.R. 1435, rather than VA personnel should operate such a system requires further

study.

We would be pleased to meet with your staff and discuss VA telecommunications

concerns and initiatives.

H.R. 2359

VA supports the enactment of H.R. 2359, if the bill’s PAYGO costs of $15 million

over five years can be accommodated within the budget limits agreed to by the

President and the Congress.

Section 1 of H.R. 2359 would authorize the payment of unclaimed National Service Life Insurance (NSLI) and United States Government Life Insurance (USGLI)

proceeds to an alternate beneficiary. VA supports the enactment of section 1 of this

bill.

Under current law, there is no time limitation under which a named beneficiary

of an NSLI or USGLI policy is required to file a claim for proceeds. Consequently,

when the insured dies and the beneficiary does not file a claim for the proceeds,

VA is required to hold the unclaimed funds indefinitely in order to honor any possible future claims by the beneficiary. VA holds the proceeds as a liability. While

extensive efforts are made to locate and pay these individuals, there are cases where

the beneficiary simply cannot be found. Under current law, we are not permitted

to pay the proceeds to a contingent or alternate beneficiary unless we can determine

that the principal beneficiary predeceased the policyholder. Consequently, payment

of the proceeds to other beneficiaries is withheld.

A majority of the existing liabilities of unclaimed proceeds were established over

ten years ago. As time passes, the likelihood of locating and paying the principal

beneficiary becomes more remote. In fact, the older the liability becomes, the more

unlikely it is that it will ever be paid even though other legitimate heirs of the insured have been located.

This bill would grant the Secretary authority to authorize payment of NSLI and

USGLI proceeds to an alternate beneficiary when the proceeds have not been

claimed by the named beneficiary within two years following the death of the policy-
18

holder or within two years of this bill’s enactment, whichever is later. The principal

beneficiary would have two years following the death of the insured to file a claim.

Afterwards, a contingent beneficiary would then have two years to file a claim. Payment would be made as if the principal beneficiary had predeceased the insured.

If there is no contingent beneficiary to receive the proceeds, payment would be made

to those equitably entitled, as determined by the Secretary. As occurs under current

law, no payment would be made if payment would escheat to a State. Such payment

would be a bar to recovery of the proceeds by any other individual.

Section 1 of H.R. 2359 would apply retroactively as well as prospectively, and is

similar to the time-limitation provisions of the Servicemembers’ and Veterans’ Group Life Insurance programs and the Federal Employees Group Life Insurance

program.

Insofar as payment to beneficiaries is made from the insurance trust funds, there

are no direct appropriated benefit costs associated with this section. The liabilities

are already set aside and would eventually be paid, either as payment to beneficiaries that eventually claim the proceeds, or released from liability reserves and

paid as dividends.

There are approximately 4,000 existing policies in which payment has not been

made due to the fact that we cannot locate the primary beneficiary, despite extensive efforts. Over the years, the sum of moneys held has aggregated to approximately $23 million. On a yearly basis, about 200 additional policies (with an average face value of $9600, or approximately $1.9 million annually) are placed into this

liability because the law prohibits payment to a contingent beneficiary or to the veteran’s heirs. It is estimated that approximately two-thirds of the 4,000 policies will

eventually be paid as a result of this legislation. Additionally, in anticipation of the

fact that about one-third of these policies will not be able to be paid, nearly $7 million has already been released to surplus and available for dividend distribution.

This section is subject to the PAYGO requirements of the Omnibus Budget Reconciliation Act of 1990, and, if enacted, it would increase direct spending. The Administration estimates that its enactment would result in PAYGO costs of $15 million during Fiscal Years 2002–2006 and a total of $25 million during Fiscal Years

2002–2011.

Adjudication of these 4,000 policies would entail administrative costs of approximately $154,000, representing two full-time employee equivalence (FTE) in claims

processing and support. Approximately 94 percent of this cost would be reimbursed

to the Veterans Benefits Administration’s General Operating Expense (GOE) account from the surplus of the trust funds, leaving about $9,000 in government costs

(which assumes that about six percent of the policies are Service-Disabled Veterans

Insurance, which has no surplus and for which appropriated funds are used to cover

administrative costs).

Section 2 of H.R. 2359 would extend, by 4 years, the sunset for the VA’s direct

loan program for Native American veterans living on trust lands. VA strongly supports this program, and favors enactment of this provision.

The Native American veteran direct loan program, which was enacted in October

1992, has enjoyed limited success. VA has made over 200 loans under this program

to Native American veterans. The majority of these loans have been to Native Hawaiians. This program is currently set to expire December 31, 2001. This provision

extends the program until December 31, 2005.

VA recently participated in the Executive Branch’s One-Stop Mortgage Initiative,

which was an effort to develop a more consistent approach to delivering home ownership opportunities to Native Americans. VA is hopeful that this initiative will increase opportunities and remove barriers to participation in the VA loan program

for Native American veterans living on trust lands. VA is also aware of efforts by

the Federal National Mortgage Association to increase private-sector lender willingness to make loans on tribal lands.

VA believes a four-year extension of the Native American veteran direct loan program would give both the Executive Branch and the Congress an opportunity to see

how various initiatives regarding Native American housing loans affect the ability

of these veterans to obtain VA financing, and whether further program modifications are indicated.

H.R. 2359 would also make two changes to the current law.

First, the bill would permit VA to make loans to members of a Native American

tribe that has entered into a memorandum of understanding (MOU) with another

federal agency if that MOU contemplates loans made by VA and the MOU generally

conforms to the requirements of the law governing the VA program. Current law

requires a tribe to enter into an MOU with VA before we can make loans to members of that tribe.

The bill would also modify the current requirement that all VA loan and security

instruments contain, on the first page of each such document, in letters two-and-
19

a-half times the size of the regular type face used in the document, a statement that

the loan is not assumable without the approval of VA. H.R. 2359 would require that

this notice appear conspicuously on at least one instrument (such as a VA rider)

under guidelines established by VA in regulations.

Those two amendments would implement recommendations by the One-Stop Initiative. These changes would reduce the administrative burden on Indian housing

authorities and bring more uniformity in federal loan program processing procedures. Eliminating the requirement for a separate MOU between each tribe and VA

should expand the number of Native American veterans eligible for VA financing.

The extremely strict loan assumption notice requirement in the current law has prevented VA from approving the use of uniform loan instruments now used in FHA,

‘‘Fannie Mae,’’ and ‘‘Freddie Mac’’ transactions.

We recommend that section 2 of H.R. 2359 be further amended to repeal the requirement that VA outstation, on a part-time basis, Loan Guaranty specialists at

tribal facilities if requested to do so by a tribe. We have consolidated loan processing

and servicing operations from 46 regional offices to nine Regional Loan Centers, and

do not have the resources to outstation loan personnel at various tribal locations.

VA continues to make periodic outreach visits to all tribes, and provides training

to tribal housing authorities. We believe that we can provide all necessary services

to Native American veterans seeking VA housing loans without outstationing employees in remote tribal locations.

We estimate that enactment of section 2 of H.R. 2359 would not require any additional appropriation of loan subsidy. Public Law No. 102–389 appropriated $4.5 million ‘‘to remain available until expended’’ to subsidize gross obligations for direct loans to Native American veterans of up to $58.4 million. We estimate that sufficient funds would be available to cover projected Native American veteran loan volume until at least FY 2005. This section is subject to the PAYGO requirements of

the Omnibus Budget Reconciliation Act of 1990, but we estimate the annual cost

to be less than $500,000 annually over five years.

Section 3 of H.R. 2359 would eliminate the requirement for appellants to furnish

the Secretary of Veterans Affairs with a copy of the notice of appeal filed with the

United States Court of Appeals for Veterans Claims (CAVC). VA supports the enactment of section 3 of this bill.

Section 7266(a) of title 38, United States Code, provides that a claimant adversely

affected by a decision of the Board of Veterans’ Appeals (Board) must file a notice

of appeal with the CAVC within 120 days after the date on which the Board mailed

notice of the decision to the appellant, in order to obtain review of the Board’s decision. Subsection (b) of section 7266 requires such a claimant to furnish VA with a

copy of the notice of appeal that he or she files with the CAVC.

Failure to comply with the requirement to file a notice of appeal with the CAVC

within 120 days of receiving notice of an adverse Board decision ordinarily will result in a dismissal of the appeal for lack of jurisdiction. Unfortunately, in a number

of instances, appellants have mailed their notices of appeal to VA, but not to the

CAVC, thinking that they have complied with the statute. Some such appeals have

been dismissed because the notices of appeal were not received by the CAVC within

the required 120 days. We believe that removal of the requirement that an appellant furnish the Secretary with a copy of his or her notice of appeal will clarify to

which entity the notice must be provided, thereby resulting in fewer cases in which

appellants, through inadvertence, lose their opportunity to appeal. Removal of this

notice requirement will not impair VA’s ability to respond to those appeals that are

properly filed with the CAVC, because the court routinely notifies VA when an appeal has been docketed. This notice is normally provided to VA within a day or two

of the receipt by the CAVC of the veteran’s notice of appeal.

There would be no costs associated with the enactment of this section.

H.R. 1929

Mr. Chairman, H.R. 1929 would also extend the sunset for the Native American

veteran housing loan program and amend the requirements concerning MOUs. Unlike section 2 of H.R. 2359, it does not address the loan assumption notice. Accordingly, Mr. Chairman, we prefer the language of H.R. 2359, with the additional

amendment we have recommended.

H.R. 2361

The ‘‘Veterans’ Compensation Cost-of-Living Adjustment Act of 2001,’’ H.R. 2361,

would authorize a cost-of-living adjustment (COLA) for Fiscal Year 2002 in the rates

of disability compensation and dependency and indemnity compensation (DIC). Section 2 of this bill would direct the Secretary of Veterans Affairs to increase administratively the rates of compensation for service-disabled veterans and of DIC for the
20

survivors of veterans whose deaths are service related, effective December 1, 2001.

As provided in the President’s FY 2002 budget request, the rate of increase would

be the same as the COLA that will be provided under current law to veterans’ pension and Social Security recipients, which is currently estimated to be 2.5 percent.

We estimate that enactment of this section would cost $376 million during FY

2002, $7.1 billion over the period FYs 2002–2006 and $28.5 billion over the period

FYs 2002–2011. Although this section is subject to the PAYGO requirement of the

Omnibus Budget Reconciliation Act of 1990 (OBRA), the PAYGO effect would be

zero because OBRA requires that the full compensation COLA be assumed in the

baseline. We believe this proposed COLA is necessary and appropriate in order to

protect the benefits of affected veterans and their survivors from the eroding effects

of inflation. These worthy beneficiaries deserve no less.

Mr. Chairman, this concludes my statement. I will be pleased to respond to any

questions you or the members of the Subcommittee may have.

U.S. COURT OF APPEALS FOR VETERANS CLAIMS, CHAMBERS OF CHIEF JUDGE KENNETH B. KRAMER, Washington, DC, May 24, 2001.

Hon. CHRISTOPHER H. SMITH,

Chairman, Committee on Veterans’ Affairs,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: On behalf of the Board of Judges of the

United States Court of Appeals for Veterans Claims, I am transmitting to you draft legislation for the consideration of your Committee. We request that the bill be introduced on behalf of the

Court and considered by the Committee for action at your earliest

convenience.

The draft legislation proposes amendments to 38 U.S.C. § 7285

and to add a new section 7287 to chapter 72 of title 38, U.S. Code.

The purpose of the proposed amendment to section 7285 is to clarify and expand the uses that may be made of the registration fees

that the Court collects from its practitioners in connection with

their admission to practice before the Court and from participants

at the Court’s Judicial Conferences carried out under 38 U.S.C.

§ 7286. The purpose of the proposed new section 7287 (‘‘Administration’’) would be to permit the Court to exercise an administrative,

management, or fund-expenditure authority available to the Article

III courts where such a specific authority is not available to this

Court and where its exercise would not be inconsistent with any

provision of chapter 72 of title 38. A more detailed justification for

each provision follows.

Section 7285

The Court requests the enactment of legislation to amend section

7285 so that the provision as amended would read as follows (material to be added is shown in bold face and material to be deleted

is shown in brackets):

§ 7285. Practice Fee

(a) The Court of Appeals for Veterans Claims may impose a periodic registration fee on persons admitted to

practice before the Court. The frequency and amount of

such fee shall be determined by the Court, except that

such amount may not exceed $30 per year. In order to defray the expenses of judicial conferences convened pursuant

to section 7286 of this title, the Court may also impose a
21

registration fee on the active participation at such conferences by persons described in that section.

(b) Amounts received by the Court under subsection (a)

of this section shall be available to the Court for the purposes of (1) conducting investigations and proceedings, including employing independent øcounsel¿ counsel, to pursue disciplinary matters, and (2) defraying øadministrative

costs for the implementation of the standards of proficiency prescribed for practice before the Court¿ the expenses of judicial conferences convened pursuant to section

7286 of this title and other activities and programs that are

designed to support and foster bench and bar communication and relationships or the study, understanding, public

commemoration, or improvement of veterans law or of the

work of the Court.

The principal purpose of the proposal is to amend section 7285(b)

of title 38, U.S. Code, so that registration fees (currently a one-time

fee of $30) paid to the Court by those admitted to practice before

the Court (sometimes called ‘‘practice fees’’) may be used for certain

activities in addition to those now identified in that subsection. The

Court currently collects these practice fees as well as the registration fees paid by participants at the Court’s periodic Judicial Conferences, which are carried out under 38 U.S.C. § 7286 (collection

of the latter fees would be expressly authorized by the proposed

amendment to section 7285(a) rather than by implication from section 7286 itself). Currently, the Court has accumulated a balance

of approximately $55,000 from these receipts after having expended

only the relatively small amounts needed to engage the services of

an ethics speaker at the last four Judicial Conferences (considered

part of the presently authorized ‘‘implementing standards of proficiency prescribed for practice before the Court’’).

The revised language would expand present category (1) in the

subsection to include disciplinary-proceeding activities other than

employing independent counsel, and would expand present category (2) so as to authorize the use of these funds to support activities (including the preparation, or procurement, and use, display,

or dissemination of appropriate materials) and programs designed

to support and foster bench and bar activities or the study, understanding, public commemoration, or improvement of veterans law

generally or the work of the Court in particular. This expanded authority would be used to defray the expenses of, for example, activities for the following purposes: (a) To provide education programs

for persons admitted to practice before the Court or persons, such

as law students, eligible to seek permission to provide such representation on a pro hac vice basis; (b) to promote and support the

formation and programs of a bar association for the Court (something that private practitioners and the Secretary’s attorneys are

actively pursuing now); (c) to encourage and support the development of law-school courses or clinical programs in veterans law;

and (d) to sponsor appropriate public activities and events designed

to foster communication and relationships among the Court’s practitioners and potential practitioners and between bench and bar—

for example, a Passing of the Gavel Ceremony (where a new Chief

Judge takes office); the swearing in of a new judge; and a public
22

commemoration (such as the presentation of a portrait of a retired

or deceased judge, the dedication of the courtroom, or the establishment or presentation of a Court special public service award). As

is the case with the use of such nonappropriated fund accounts in

the Article III courts, the funds would not be used for purposes for

which appropriated funds are generally available. The support of

bench-and-bar activities would generally follow the practice of the

Article III courts in using practice fees for the benefit of bench and

bar in the administration of justice.

Section 7287

The Court also requests the enactment of legislation to add the

following new section 7287 to make available to the Court generally the same management, administrative, and expenditure authorities that are available to Article III courts of the United

States:

§ 7287. Administration

Notwithstanding any other provision of law, the Court of

Appeals for Veterans Claims may exercise, for purposes of

management, administration, and expenditure of funds,

the authorities provided for such purposes by any provision of law (including any limitation with respect to such

provision) applicable to a court of the United States as defined in section 451 of title 28, except to the extent that

such provision of law is inconsistent with a provision of

this chapter.

The proposed new section 7287 would generally make available

to the Court the same management, administrative, and fund-expenditure authorities that are available to the Article III courts of

the United States. Because of this Court’s unusual status as an

independent tribunal, established by the Congress under Article I

of the Constitution to exercise judicial power, that was not intended to be subject to the control of the President or the executive

branch (for example, the Court submits its budget directly to the

Congress pursuant to 38 U.S.C. § 7282 and receives its appropriation directly from the Congress), the Court does not have available

to it certain general authorities that would normally be available

were the Court part of another administrative structure, such as

are the U.S. Court of Federal Claims (under the Administrative Office of the U.S. Courts (AO)), and the U.S. Court of Appeals for the

Armed Forces (under the Department of Defense). (The situation

regarding the U.S. Tax Court also is unusual in that it receives its

appropriation directly from the Congress and is considered for

some purposes, apparently, to be part of the legislative branch, see

H.R. Rep. No. 105–217, 105th Cong., 1st Sess., at 1042–43 (1997)

(listing U.S. Tax Court under Legislative Branch budget

accounts) .)

In the past, this Court has requested the enactment of various

gap-filling statutory provisions; for example, in 1990, the Congress

specifically added to title 5 U.S.C. App. §§ 109(8) and 109(10) a reference to this Court so that financial disclosure reports by its

judges and certain nonjudicial personnel would be filed with and

reviewed by the AO (Pub. L. No. 101–280, § 3, 104 Stat. 152, 155
23

(1990) (amendments to Ethics in Government Act of 1978, as

amended by Ethics Reform Act of 1989)); in 1991, the Congress

added subsection (g) to 38 U.S.C. § 7253 to provide that a process

comparable to that prescribed by 28 U.S.C. § 372(c) for consideration of complaints of judicial conduct would apply to the Court’s

judges (Pub. L. No. 102–82, § 3, 105 Stat. 375 (1991)); in 1991, the

Congress added subsection (c) to 38 U.S.C. § 7264 to make applicable to the Court’s judges 28 U.S.C. § 455 relating to the disqualification of judges (Pub. L. No. 102–82, § 4, 105 Stat. 375, 376

(1991)); also in 1991, the Congress added subsection (i) to 38 U.S.C.

§ 7281 to give the Court specific authority to accept and utilize voluntary services (Pub. L. No. 102–82, § 7, 105 Stat. 375, 377 (1991))

. The Court’s special stand-alone nature is also reflected in the provisions of 38 U.S.C. § 7281(a) through (g), which permit the Court

to develop its own personnel and job classification system for its judicial and nonjudicial personnel. Accordingly, unless there were a

gap in the Court’s personnel-related authorities, the Court would

not intend to use the proposed new section 7287 for purposes of

personnel classification. appointment, and compensation.

Rather than having to request legislation each time that the

Court becomes aware of an administrative authority that is lacking, the proposed new section 7287 would provide a generic authority that would enable the Court to utilize already existing court-related management, administrative, and fund-expenditure authorities that are appropriate for the efficient operation of the Court.

Recently, for example, the Court has become aware of two authorities that it is lacking that seem to be generally available to the rest

of the Federal Government. They both relate to reducing the risk

of personal liability for official actions taken by the Court’s judges

or certain of its employees. In 1999, the Congress enacted, at the

request of the AO, a provision that would permit certifying and disbursing officers in Article III and certain other courts to receive the

same protection against personal liability for their expenditure decisions, by requesting a decision from the Comptroller General,

that is available to certifying and disbursing officers in the executive and legislative branches. See Federal Courts Improvement Act

of 2000, Pub. L. No. 106–518, § 304(c), 114 Stat. 2410, 2417 (2000),

adding a new provision codified at 28 U.S.C. § 613; 31 U.S.C. § 3529

(executive branch certifying and disbursing officers authorized to

seek Comptroller General opinions). Also, authority was made

available in 1999 to those courts to pay one half of the cost of premiums for personal-liability insurance policies that are obtained to

protect judges and certain employees against liability for official actions. See Pub. L. No. 105–277, § 101(h), 112 Stat. 2681–526 (1998)

(amending 5 U.S.C. Subchapter IV note (found preceding 5 U.S.C.

§ 5941); see also Pub. L. No. 106–58, § 642(a), 113 Stat. 430, 477

(1999) (making such reimbursement mandatory). Such authority

has been available to certain law-enforcement employees and supervisors or management officials in the executive or legislative

branch since 1996, pursuant to 5 U.S.C. Subchapter IV note (found

preceding 5 U.S.C. § 5941). See Pub. L. No. 104–208, 110 Stat.

3009–363 (1996).

Under the proposed new section 7287, the Court would not have

available to it any provision of law that is inconsistent with any

provision of chapter 72 of title 38 and would have to abide by all
24

limitations with respect to the authorities themselves. The Court

would intend to exercise any authority made available by the new

provision in a manner consistent with the exercise of such authority by the Article III courts and would notify the Committees on

Veterans’ Affairs whenever the Court established a procedure for

the exercise of or otherwise exercised such an authority.

* * * * *

I would be glad to answer any questions that you or the Committee may have about the proposed legislation we are submitting.

The Court greatly appreciates your continued support and that of

the Committee.

Sincerely,

KENNETH B. KRAMER, Chief Judge.

U.S. COURT OF APPEALS FOR VETERANS CLAIMS,

CHAMBERS OF CHIEF JUDGE KENNETH B. KRAMER,

Washington, DC, June 27, 2001.

Hon. CHRISTOPHER H. SMITH, Chairman, Committee on Veterans’ Affairs,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: In response to concerns raised by your

Committee staff about the proposed legislation that I submitted on

May 24, 2001, on behalf of the Court, enclosed is page 2 of that

draft bill with changes that would make the registration-fee discretionary authority more generic and avoid a possible need for additional legislation in the future. We greatly appreciate the suggestion and your interest in proceeding with our proposed bill.

If you have any questions on this matter, please let me know.

Sincerely,

KENNETH B. KRAMER,

Chief Judge

Enclosure.

June 27, 2001.

[Enclosure first page.]

2

SEC. 2. REGISTRATION FEES.

(a) Section 7285(a) of title 38, United States Code, is

amended by adding the following sentence at the end: ‘‘The

Court may also impose registration fees on persons participating at judicial conferences convened pursuant to section

7286 of this title and in other Court-sponsored activities.’’.

(b) Section 7285(b) of such title is amended by ——

(1) inserting ‘‘conducting investigations and proceedings, including’’ in clause (1) after ‘‘(1)’’;

(2) inserting a comma after ‘‘counsel’’ in clause (1);

and

(3) striking ‘‘administrative costs for the implementation of the standards of proficiency prescribed

for practice before the Court’’ in clause (2) and insert-
25

ing in lieu thereof ‘‘the expenses of judicial conferences

convened pursuant to section 7286 of this title and

other activities and programs that are designed to

support and foster bench and bar communication and

relationships or the study, understanding, public commemoration, or improvement of veterans law or of the

work of the Court.’’.

(c)(1) The heading for such section is amended by

striking ‘‘Practice fee’’ and inserting in lieu thereof ‘‘Registration fees’’.

(2) The table of sections at the beginning of chapter 72

of such title is amended by striking ‘‘Practice fee.’’ and

inserting in lieu thereof ‘‘Registration fees.’’ in the item

related to section 7285.

SEC. 3. ADMINISTRATIVE AUTHORITIES.

(a) Subchapter III of chapter 72 of title 38, United

States, is amended by inserting after section 7286 the following new section:

[Enclosure second page.]

3

‘‘§ 7287. Administration

‘‘Notwithstanding any other provision of law, the

Court of Appeals for Veterans Claims may exercise, for

purposes of management, administration, and expenditure

of funds, the authorities provided for such purposes by any

provision of law (including any limitation with respect to

such provision) applicable to a court of the United States

as defined in section 451 of title 28, except to the extent

that such provision of law is inconsistent with a provision

of this chapter.’’.

(b) The table of sections at the beginning of such chapter is amended by inserting after the item related to section 7286 the following new item:

‘‘7287. Administration.’’.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

The following letter was received from the Congressional Budget

Office concerning the cost of the reported bill:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, July 20, 2001.

Hon. CHRISTOPHER H. SMITH

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. 2540, the Veterans Benefits Act of 2001.
26

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Michelle Patterson, who

can be reached at 226–2840.

Sincerely,

DAN L. CRIPPEN, Director

Enclosure.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

July 20, 2001.

H.R. 2540, VETERANS BENEFITS ACT OF 2001, AS ORDERED REPORTED

BY THE HOUSE COMMITTEE ON VETERANS’ AFFAIRS ON JULY 19, 2001

SUMMARY. The Veterans Benefits Act of 2001 would affect several veterans’ programs, including compensation, insurance, medical care, and housing. CBO estimates that enacting this legislation

would reduce direct spending by $801 million over the 2002–2006

period and $702 million over the 2002–2011 period. Because the

bill would affect direct spending, pay-as-you-go procedures would

apply. In addition, CBO estimates that implementing H.R.2540

would increase spending subject to appropriation by $1 million in

2001, $47 million in 2002, and $781 million over the 2001–2006 period, assuming appropriation of the necessary amounts.

The bill also would increase the amounts paid to veterans for disability compensation and to their survivors for dependency and indemnity compensation by the same cost-of-living adjustment

(COLA) payable to Social Security recipients. Because the COLA

authorized by this bill is assumed in the budget resolution baseline, the bill would have no budgetary effect relative to the baseline. Relative to current law, CBO estimates that enacting this bill

would increase spending for these programs by about $407 million

in 2002. (The increase would take effect on December 1, 2001, and

would amount to $543 million on an annualized basis.)

H.R. 2540 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 impact of H.R. 2540 is shown in Table 1. This

estimate assumes the legislation will be enacted by September

2001. The costs of this legislation fall within budget function 700

(veterans benefits and services).

Table 1. Estimated Budgetary Impact of H.R. 2540

By Fiscal Year, in Millions of Dollars

2001 2002 2003 2004 2005 2006

CHANGES IN DIRECT SPENDING

Estimated Budget Authority ...... 0 a –181 –201 –202 –222

Estimated Outlays ....................... 0 a –169 –208 –202 –222

SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level .. 50 3 219 226 237 245
27

Table 1. Estimated Budgetary Impact of H.R. 2540—Continued

By Fiscal Year, in Millions of Dollars

2001 2002 2003 2004 2005 2006

Estimated Outlays ....................... 1 47 104 191 215 223

aSavings of less than $500,000.

BASIS OF ESTIMATE.

DIRECT SPENDING

The legislation would affect direct spending in veterans’ programs for compensation, insurance, and housing, as well as offsetting receipts related to veterans’ medical care (see Table 2).

HEALTH SERVICES IMPROVEMENT FUND. Section 402 would extend

the authority to collect copayments for outpatient prescriptions

through September 30, 2006. Under current law, this authority expires on September 30, 2002. The Department of Veterans Affairs

(VA) currently collects a $2 copayment for each outpatient prescription it fills; using statutory authority, it is planning to increase the

copayment to $7 per prescription. The $2 copayment is currently

deposited into the Medical Care Collections Fund (MCCF). Under

current law, amounts deposited to the MCCF are considered to be

offsets to discretionary appropriations and spending from the

MCCF is subject to annual appropriations. The $5 increase in the

prescription copayment and other receipts will be deposited into

the Health Services Improvement Fund (HSIF). Under current law,

amounts deposited to the HSIF are considered offsets to direct

spending, and VA may spend amounts in the HSIF without appropriations action. CBO estimates that extending the authority to collect prescription copayments would result in receipts of $300 million to $340 million a year, totaling about $1.3 billion over the

2003–2006 period. Of that amount, $0.9 billion would be an offset to direct spending (from the $5 increase in copayments) and $0.4

billion would be an offset to discretionary spending (from the $2 copayments).

Section 403 of the bill would remove the automatic spending authority for funds in the HSIF and make spending from the HSIF

subject to appropriation, beginning on October 1, 2002. Consequently, extension of the copayment requirement would not result in additional direct spending. Rather, about $11 million in direct spending currently projected over the 2003–2011 period would

be eliminated.

Table 2. Estimated Changes in Direct Spending under H.R. 2540

By Fiscal Year, Outlays in Millions of Dollars

2001 2002 2003 2004 2005 2006

DIRECT SPENDING

Health Services Improvement

Fund

Estimated Budget Authority ... 0 0 –217 –225 –236 –245

Estimated Outlays ................... 0 0 –205 –232 –236 –245
28

Table 2. Estimated Changes in Direct Spending under H.R. 2540—Continued

By Fiscal Year, Outlays in Millions of Dollars

2001 2002 2003 2004 2005 2006

Compensation Related to

Undiagnosed Illnesses

Estimated Budget Authority ... 0 0 36 24 23 22

Estimated Outlays ................... 0 0 36 24 23 22

Veterans Insurance

Estimated Budget Authority ... 0 0 0 0 11 1

Estimated Outlays ................... 0 0 0 0 11 1

Home Loans for Native American Veterans

Estimated Budget Authority ... 0 aaaaa

Estimated Outlays ................... 0 aaaaa

SUMMARY OF CHANGES IN DIRECT SPENDING

Estimated Budget Authority ...... 0 a –181 –201 –202 –222

Estimated Outlays ....................... 0 a –169 –208 –202 –222

aLess than $500,000.

COMPENSATION RELATED TO UNDIAGNOSED ILLNESSES. Section

202 would expand the definition of undiagnosed illness for the purpose of granting service-connected disability compensation to more

Persian Gulf War veterans. Under current law, veterans who

served in the Persian Gulf from August 2, 1990, to the present can

be presumed to have a compensable disability if they exhibit symptoms that cannot be attributed to any diagnosable illness before

December 31, 2001. Such symptoms include joint pain, headaches,

sleep disorders, and respiratory problems. This section would expand eligibility to those Gulf War veterans who are diagnosed with

any illness that cannot be clearly defined, including chronic fatigue

syndrome (CFS), fibromyalgia, and chronic multisymptom illness.

In addition to the diseases listed in the bill, CBO assumes that

other diseases for which veterans could receive service-connected

disability include irritable bowel syndrome, multiple chemical sensitivity (MCS), and autoimmune disorder.

CBO obtained data from the VA on the number of Gulf War veterans who have been diagnosed with ill-defined illnesses like CFS

and fibromyalgia and have had their claims for compensation denied. VA was unable to provide similar data for MCS or chronic

multisymptom illness because it does not have diagnostic codes for

these illnesses. CBO used data from a comprehensive study of Gulf

War veterans’ health to estimate the incidence of MCS within that

population. Because chronic multisymptom illness often exhibits

similar symptoms as CFS or fibromyalgia, CBO assumed that most

veterans with this illness are likely to have already been diagnosed

as having these other diseases.

From the data provided by VA, CBO could not estimate the prevalence of autoimmune disorders that might be attributed to service

in the Gulf War. VA does not have a single diagnostic code for this

illness but, instead, classifies over a dozen widely varying diseases

as autoimmune disorders.

Assuming that some of the diagnoses are overlapping and that

some previously denied cases would likely be resubmitted, CBO estimates that enactment of this bill would result in about 3,000 additional veterans being granted compensation for a service-con-
29

nected disability. Under current law, a veteran must have exhibited and documented signs and symptoms of an illness before December 31, 2001, to receive benefits for a service-connected disability relating to Persian Gulf service, so most claims would probably be submitted in 2002. Because this section of the bill would

take effect on April 1, 2002, and since VA takes an average of six

months to adjudicate reopened claims, CBO expects that no payments would be made in 2002. Based on payment data from VA for

approved claims for CFS, fibromyalgia, and similar illnesses, CBO

estimates the average annual benefit for such illnesses would be

about $8,000 in 2003. As a result, CBO estimates that enacting section 202 would increase direct spending by $36 million in 2003,

$105 million from 2002 through 2006, and $204 million over the

2002–2011 period. (Under current law, we estimate that disability

compensation payments to veterans will total $254 billion over the

10-year period.)

VETERANS INSURANCE. Section 401 of the bill would allow for the

payment of certain insurance proceeds to an alternate beneficiary

when the primary beneficiary cannot be identified. Under current

law, there is no time limitation for when a named primary beneficiary of a National Service Life Insurance or United States Government Life Insurance policy must file a claim for the insurance

proceeds. VA is currently required to hold the unclaimed proceeds

indefinitely. According to the VA, there are about 4,000 existing

policies in these two programs for which payments have not been

made because the primary beneficiary cannot be located. The bill

would authorize VA to pay an alternate beneficiary if no claim has

been made by the primary beneficiary within three years of the policyholder’s death. If no designated beneficiary makes a claim within five years of the policyholder’s death, VA would be allowed to

make a payment to any such person who may be judged to be entitled to the proceeds. If the policyholder died before the enactment

of this bill, the above time requirements would begin on the date

of the bill’s enactment.

Based on information provided by VA, CBO assumes an eventual

payment of proceeds would be made on about two-thirds of the policies when the primary beneficiary cannot be located. As a result,

CBO estimates that enacting this section would increase direct

spending by $11 million in 2005, $12 million over the 2002–2006

period, and $22 million over the 2002–2011 period. VA indicates

that two additional employees would need to be hired to process

these claims. CBO estimates that the resulting increase in discretionary spending for salaries and benefits would be less than

$500,000 per year, assuming appropriation of necessary amounts.

HOME LOANS FOR NATIVE AMERICAN VETERANS. Section 404

would extend the Native American Veteran Housing Loan Pilot

Program through December 31, 2005. Under the program, VA

makes direct loans to veterans living on trust lands for the purchase, construction, or improvement of a home. In 1993, Public

Law 102–389 provided appropriations of $4.5 million for the subsidy cost of these loans. Since the program’s inception, VA has made about 200 loans at a subsidy cost of $2 million.

CBO estimates that under the bill, VA would subsidize about 30

loans a year at an annual cost of about $250,000. Because these
30

outlays would be from funds already appropriated and would not

depend on future appropriation action, they would be considered direct spending. In addition, CBO estimates that VA’s administrative

expenses, a discretionary cost, would be roughly $500,000 in 2002

and $2 million over the 2002–2006 period, assuming appropriation

of the necessary amounts.

OTHER PROVISIONS. CBO estimates that the following provisions

would have no net effect on direct spending.

Compensation Related to Diabetes Mellitus.—Section 201 would

codify diabetes mellitus (type 2) as a disability with presumed service connection based on exposure to Agent Orange and other herbicides during the Vietnam War. Under current law, VA may add to

the regulations establishing service-connected disability any disease that scientific study has determined to have a positive association with herbicide agents. Specifically, the Institute of Medicine

(IOM) produces a report every two years that evaluates current research findings and categorizes diseases according to the amount of

evidence suggesting an association with herbicides. In October

2000, the IOM concluded there was evidence suggesting an association for diabetes mellitus. VA began the appropriate procedures to

establish this condition as one of the diseases for which there is a

presumption of service connection for Vietnam War veterans. On

July 9, 2001, this regulation went into effect. Because this bill

would codify a regulation already in existence, no costs would be

associated with this section.

Cost-of-Living Adjustment—.Section 101 of the bill would increase the amounts paid to veterans for disability compensation

and to their survivors for dependency and indemnity compensation

by the same COLA payable to Social Security recipients. The increase would take effect on December 1, 2001, and the results of

the adjustment would be rounded to the next lower dollar.

The COLA that would be authorized by this bill is assumed in

the budget resolution baseline, pursuant to section 257 of the Balanced Budget and Emergency Deficit Control Act, and savings from

rounding it down were achieved by the Balanced Budget Act of

1997 (Public Law 105–33). As a result, the bill would have no

budgetary effect relative to the baseline. Relative to current law,

CBO estimates that enacting this bill would increase spending for

these programs by about $407 million in 2002. This estimate assumes that the COLA effective on December 1, 2001, would be 2.7

percent. (The 2002 cost on an annualized basis would be $543 million, which would be the approximate cost in subsequent years.)

SPENDING SUBJECT TO APPROPRIATION

Table 3 shows the estimated effects of H.R. 2540 on discretionary

spending for veterans’ programs, assuming that appropriations are

provided and receipts are collected in the amount of the estimated

authorizations.

DISCRETIONARY OFFSETTING RECEIPTS. Section 402 would extend

the authority to collect prescription copayments through September

30, 2006. As discussed above under ‘‘Health Services Improvement

Fund,’’ a portion of those receipts are deposited to the MCCF and

recorded as an offset to discretionary appropriations. CBO esti-
31

mates that under H.R. 2540, discretionary offsetting receipts would

be $86 million in 2003 and would total $366 million through the

end of 2006.

Table 3. Estimated Changes in Spending Subject to Appropriation for H.R. 2540

By Fiscal Year, in Millions of Dollars

2001 2002 2003 2004 2005 2006

SPENDING SUBJECT TO APPROPRIATION

Spending Under Current Law for VA

Medical Care

Estimated Authorization Levela .......... 20,863 21,767 22,150 33,888 23,603 24,344

Estimated Outlays ............................... 20,418 21,447 22,021 22,654 23,353 24,085

Proposed Changes

Offsetting Receipts

Estimated Authorization Level ....... 0 0 –86 –90 –93 –97

Estimated Outlays ............................ 0 0 –86 –90 –93 –97

Spending of Receipts

Estimated Authorization Level ....... 0 0 303 315 329 342

Estimated Outlays ............................ 0 0 183 280 307 320

Homeless Veterans Programs

Authorization Level .......................... 50 0 0 0 0 0

Estimated Outlays ............................ 1 44 5 0 0 0

Subtotal-Proposed Changes

Estimated Authorization Level .... 50 0 217 225 236 245

Estimated Outlays ........................ 1 44 102 190 214 223

————————————————————————————————————————————

Spending Under H.R. 2540 for VA Medical Care

Authorization Level ............................. 20,913 21,767 22,367 23,113 23,839 24,589

Estimated Outlays ............................... 20,419 21,491 22,123 22,844 23,567 24,308

Spending Under Current Law for General Operating Expenses

Estimated Authorization Levela .......... 1,080 1,129 1,168 1,209 1,249 1,290

Estimated Outlays ................................... 1,066 1,124 1,164 1,205 1,245 1,286

Proposed Changes:

Toll-Free Number Pilot Program

Estimated Authorization Level ....... 0 2 1 0 0 0

Estimated Outlays ............................ 0 2 1 0 0 0

Spending Under H.R. 2540 for General

Operating Expenses

Estimated Authorization Level ........... 1,080 1,131 1,169 1,209 1,249 1,290

Estimated Outlays ............................... 1,066 1,126 1,165 1,205 1,245 1,286

Spending Under Current Law for Housing Loans

Estimated Authorization Levela,c ....... 1 1 1 1 1 1

Estimated Outlays ............................... 1 1 1 1 1 1

Proposed Changes

Estimated Authorization Level ........... 0 1 1 1 1 b

Estimated Outlays ............................... 0 1 1 1 1 b

Spending Under H.R. 2540 for Housing

Loans

Estimated Authorization Levelc .......... 1 1 1 1 1 1

Estimated Outlays ............................... 1 1 1 1 1 1

SUMMARY OF CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level .............. 50 3 219 226 237 245

Estimated Outlays ................................... 1 47 104 191 215 223

aThe 2001 level is the estimated amount appropriated for that year including the

spending of MCCF receipts. The current-law amounts for the 2002–2006 period assume that appropriations continue at the 2001 level with adjustments for anticipated

inflation, and that the current appropriation to spend MCCF receipts continues. bLess than $500,000

c Both the current program and the proposed change are more than $500,000 but

less than $1 million.
32

As under current law, any spending from the MCCF would need

to be provided through annual appropriation. In addition, spending

from the HSIF also would be subject to annual appropriation under

H.R. 2540. If the full amount of the receipts is appropriated each

year, CBO estimates that outlays from these appropriations would

total $183 million in 2003 and more than $1 billion over the period

ending in 2006.

TOLL-FREE NUMBER PILOT PROGRAM. Section 406 would require

the VA to conduct a pilot program to test the benefits and cost-effectiveness of expanding access to veterans service representatives

through a toll-free telephone number. Under the pilot program, veterans benefits counselors would be available to take the calls from

veterans for not less than 12 hours on regular business days and

not less than six hours on Saturday. In addition, the counselors

would have to be able to provide information on veterans benefits

provided by state governments and other federal departments and

agencies. The pilot program would begin within six months after

enactment of the bill and run for two years.

Today, veterans who call the primary toll-free number for VA (1–

800–827–1000) are routed to the nearest regional office that specializes in the benefits for which the veteran has indicated he or

she has most interest. These offices answer the telephones about

7 hours per business day. The VA has recently modified its computer system to enable veterans benefits counselors to provide information on state benefits to callers, and the department is working to expand its data system to include those programs offered to

veterans by other federal agencies. Based on information provided

by VA, CBO assumes that additional staff would have to be hired

to handle the increased work load. CBO estimates that implementing this section will increase discretionary spending by $2 million in 2002 and $3 million over the 2002–2006 period, assuming

appropriation of the necessary amounts.

HOMELESS VETERANS PROGRAMS. Section 408 would amend the

Homeless Veterans Comprehensive Service Programs Act of 1992

and would authorize $50 million for fiscal year 2001 for programs

under that act. Assuming appropriation of the authorized amount

by early in September 2001, CBO estimates that outlays would increase by $1 million in 2001 and by $50 million over the 2001–2006

period.

PAY–AS–YOU–GO CONSIDERATIONS. The Balanced Budget

and Emergency Deficit Control Act sets up pay-as-you-go procedures for legislation affecting direct spending or receipts. The net

changes in outlays and governmental receipts that are subject to

pay-as-you-go procedures are shown in the following table. For the

purposes of enforcing pay-as-you-go procedures, only the effects in

the current year, the budget year, and the succeeding four years

are counted.

Table 4. Estimated Impact of H.R. 2540 on Direct Spending and Receipts

By Fiscal Year, in Millions of Dollars

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Changes in outlays .. 0 0 –169 –208 –202 –222 25 20 19 18 17
33

Table 4. Estimated Impact of H.R. 2540 on Direct Spending and Receipts—Continued

By Fiscal Year, in Millions of Dollars

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Changes in receipts Not Applicable

INTERGOVERNMENTAL AND PRIVATE–SECTOR IMPACT.

H.R. 2540 contains no intergovernmental or private-sector mandates as defined in UMRA and would not affect the budgets of

state, local, or tribal governments. The bill would amend an existing home loan program for Native American veterans to simplify

the role of tribal governments. Under current law, a veteran living

on tribal trust land may participate in this program only if his or

her tribal government has entered into a memorandum of understanding with the Department of Veterans Affairs. The proposed

change would allow similar memorandums of understanding with

other federal agencies to fulfill this requirement.

PREVIOUS CBO ESTIMATE. On July 5, 2001, CBO prepared a

cost estimate for H.R.1929, the Native American Veterans Home

Loan Act of 2001, as introduced in the House on May 21, 2001. Section 402 of H.R. 2540 is similar to H.R. 1929, and its costs are

identical.

ESTIMATE PREPARED BY:

Compensation and Insurance: Michelle Patterson (226–2840).

Health Care: Sam Papenfuss (226–2840).

Housing: Sunita D’Monte (226–2840).

Impact on State, Local, and Tribal Governments: Elyse

Goldman (225–3220).

Impact on the Private Sector: Allison Percy (226–2900).

ESTIMATE APPROVED BY:

Robert A. Sunshine, Assistant Director for Budget Analysis.

STATEMENT OF FEDERAL MANDATES

The preceding Congressional Budget Office cost estimate states

that the bill contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act.

STATEMENT OF CONSTITUTIONAL AUTHORITY

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.’’

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 italics,

existing law in which no change is proposed is shown in roman):
34

TITLE 38, UNITED STATES CODE

* * * * * * *

PART I—GENERAL PROVISIONS

* * * * * * *

CHAPTER 1—GENERAL

Sec.

101. Definitions.

* * * * * * *

117. Definition of cost of direct and guaranteed loans.

* * * * * * *

§ 117. Definition of cost of direct and guaranteed loans

For the purpose of any provision of law appropriating funds to

the Department for the cost of direct or guaranteed loans, the cost

of any such loan, including the cost of modifying any such loan,

shall be as defined in section 502 of the Congressional Budget Act

of 1974 (2 U.S.C. 661a).

* * * * * * *

CHAPTER 3—DEPARTMENT OF VETERANS AFFAIRS

* * * * * * *

§ 313. Availability of appropriations

(a) * * *

* * * * * * *

(c) COMPENSATION AND PENSION.—Funds appropriated for Compensation and Pensions are available for the following purposes:

(1) The payment of compensation benefits to or on behalf of

veterans as authorized by section 107 and chapters 11, 13, 51,

53, 55, and 61 of this title.

(2) Pension benefits to or on behalf of veterans as authorized

by chapters 15, 51, 53, 55, and 61 of this title and section 306

of the Veterans’ and Survivors’ Pension Improvement Act of

1978.

(3) The payment of benefits as authorized under chapter 18

of this title.

(4) Burial benefits, emergency and other officers’ retirement

pay, adjusted-service credits and certificates, payments of premiums due on commercial life insurance policies guaranteed

under the provisions of article IV of the Soldiers’ and Sailors’

Civil Relief Act of 1940 (50 U.S.C. App. 540 et seq.), and other

benefits as authorized by sections 107, 1312, 1977, and 2106

and chapters 23, 51, 53, 55, and 61 of this title and the World

War Adjusted Compensation Act (43 Stat. 122, 123), the Act of

May 24, 1928 (Public Law No. 506 of the 70th Congress; 45

Stat. 735), and Public Law 87–875 (76 Stat. 1198).
35

(d) MEDICAL CARE.—Funds appropriated for Medical Care are

available for the following purposes:

(1) The maintenance and operation of hospitals, nursing

homes, and domiciliary facilities.

(2) Furnishing, as authorized by law, inpatient and outpatient care and treatment to beneficiaries of the Department,

including care and treatment in facilities not under the jurisdiction of the Department.

(3) Furnishing recreational facilities, supplies, and equipment.

(4) Funeral and burial expenses and other expenses incidental

to funeral and burial expenses for beneficiaries receiving care

from the Department.

(5) Administrative expenses in support of planning, design,

project management, real property acquisition and disposition,

construction, and renovation of any facility under the jurisdiction or for the use of the Department.

(6) Oversight, engineering, and architectural activities not

charged to project cost.

(7) Repairing, altering, improving, or providing facilities in

the medical facilities and homes under the jurisdiction of the

Department, not otherwise provided for, either by contact or by

the hire of temporary employees and purchase of materials.

(8) Uniforms or uniform allowances, as authorized by sections

5901 and 5902 of title 5.

(9) Aid to State homes, as authorized by section 1741 of this

title.

(10) Administrative and legal expenses of the Department for

collecting and recovering amounts owed the Department as authorized under chapter 17 of this title and Public Law 87–693,

popularly known as the Federal Medical Care Recovery Act (42

U.S.C. 2651 et seq.).

(e) MEDICAL ADMINISTRATION AND MISCELLANEOUS OPERATING

EXPENSES.—Funds appropriated for Medical Administration and

Miscellaneous Operating Expenses are available for the following

purposes:

(1) The administration of medical, hospital, nursing home,

domiciliary, construction, supply, and research activities authorized by law.

(2) Administrative expenses in support of planning, design,

project management, architectural work, engineering, real property acquisition and disposition, construction, and renovation of

any facility under the jurisdiction or for the use of the Department, including site acquisition.

(3) Engineering and architectural activities not charged to

project costs.

(4) Research and development in building construction technology.

(f) GENERAL OPERATING EXPENSES.—Funds appropriated for

General Operating Expenses are available for the following purposes:

(1) Uniforms or allowances therefor.

(2) Hire of passenger motor vehicles.

(3) Reimbursement of the General Services Administration for

security guard services.
36

(4) Reimbursement of the Department of Defense for the cost

of overseas employee mail.

(5) Administration of the Service Members Occupational Conversion and Training Act of 1992 (10 U.S.C. 1143 note).

(g) CONSTRUCTION.—Funds appropriated for Construction, Major

Projects, and for Construction, Minor Projects, are available, with

respect to a project, for the following purposes:

(1) Planning.

(2) Architectural and engineering services.

(3) Maintenance or guarantee period services costs associated

with equipment guarantees provided under the project.

(4) Services of claims analysts.

(5) Offsite utility and storm drainage system construction

costs.

(6) Site acquisition.

(h) CONSTRUCTION, MINOR PROJECTS.—In addition to the purposes specified in subsection (g), funds appropriated for Construction, Minor Projects, are available for— (1) repairs to any of the nonmedical facilities under the jurisdiction or for the use of the Department which are necessary because of loss or damage caused by a natural disaster or catastrophe; and

(2) temporary measures necessary to prevent or to minimize

further loss by such causes.

* * * * * * *

CHAPTER 7—EMPLOYEES

Sec.

701. Placement of employees in military installations.

* * * * * * *

ø712. Full-time equivalent positions: limitation on reduction.¿

* * * * * * *

ø§ 712. Full-time equivalent positions: limitation on reduction

ø(a) Notwithstanding any other provision of law, the number of

full-time equivalent positions in the Department of Veterans Affairs during the period beginning on the date of the enactment of

this section and ending on September 30, 1999, may not (except as

provided in subsection (c)) be less than 224,377.

ø(b) In determining the number of full-time equivalent positions

in the Department of Veterans Affairs during a fiscal year for purposes of ensuring under section 5(b) of the Federal Workforce Restructuring Act of 1994 (Public Law 103–226; 108 Stat. 115; 5

U.S.C. 3101 note) that the total number of full-time equivalent positions in all agencies of the Federal Government during a fiscal

year covered by that section does not exceed the limit prescribed

for that fiscal year under that section, the total number of full-time

equivalent positions in the Department of Veterans Affairs during

that fiscal year shall be the number equal to—

ø(1) the number of such positions in the Department during

that fiscal year, reduced by

ø(2) the sum of the following:
37

ø(A) The number of such positions in the Department

during that fiscal year that are filled by employees whose

salaries and benefits are paid primarily from funds other

than appropriated funds.

ø(B) The number of such positions in the Department

during that fiscal year held by persons involved in providing health-care resources under section 8111 or 8153 of

this title or under section 201 of the Veterans Health Care

Act of 1992 (Public Law 102–585; 106 Stat. 4949; 38

U.S.C. 8111 note).

ø(c) The Secretary shall not be required to make a reduction in

the number of full-time equivalent positions in the Department unless such reduction—

ø(1) is necessary due to a reduction in funds available to the

Department; or

ø(2) is required under a law that is enacted after the date

of the enactment of this section and that refers specifically to

this section.

ø(d) The Secretary shall submit to the Committees on Veterans’

Affairs of the Senate and House of Representatives an annual report, through the year 2000, on the number and type of full-time

equivalent positions in the Department that are reduced under this

section. The report shall include a justification for the reductions

and shall be submitted with the materials provided in support of

the budget for the Department contained in the President’s budget

submitted to Congress for a fiscal year pursuant to section 1105 of

title 31.¿

* * * * * * *

PART II—GENERAL BENEFITS

* * * * * * *

CHAPTER 11—COMPENSATION FOR SERVICE–

CONNECTED DISABILITY OR DEATH

* * * * * * *

SUBCHAPTER II—WARTIME DISABILITY COMPENSATION

* * * * * * *

§ 1116. Presumptions of service connection for diseases associated with exposure to certain herbicide agents

(a)(1)***

(2) The diseases referred to in paragraph (1)(A) of this subsection

are the following:

(A) * * *

* * * * * * *

(H) Diabetes Mellitus (Type 2).

* * * * * * *
38

§ 1117. Compensation for disabilities occurring in Persian

Gulf War veterans

(a) The Secretary may pay compensation under this subchapter

to any Persian Gulf veteran suffering from a chronic disability resulting from an undiagnosed illness (or combination of undiagnosed

illnesses) or fibromyalgia, chronic fatigue syndrome, a chronic

multisymptom illness, or any other illness that cannot be clearly defined (or combination of illnesses that cannot be clearly defined)

that—(1) * * *

* * * * * * *

(c)(1) Whenever the Secretary determines under section 1118(c)

of this title that a presumption of service connection for an

undiagnosed illness (or combination of undiagnosed illnesses) or

fibromyalgia, chronic fatigue syndrome, a chronic multisymptom illness, or any other illness that cannot be clearly defined (or combination of illnesses that cannot be clearly defined) previously established under this section is no longer warranted— (A) a veteran who was awarded compensation under this section for such illness (or combination of illnesses) on the basis

of the presumption shall continue to be entitled to receive compensation under this section on that basis; and

(B) a survivor of a veteran who was awarded dependency

and indemnity compensation for the death of a veteran resulting from the disease on the basis of the presumption before

that date shall continue to be entitled to receive dependency

and indemnity compensation on that basis.

* * * * * * *

(g) For purposes of this section, signs or symptoms that may be

a manifestation of an undiagnosed illness include the following:

(1) Fatigue.

(2) Unexplained rashes or other dermatological signs or

symptoms.

(3) Headache.

(4) Muscle pain.

(5) Joint pain.

(6) Neurologic signs or symptoms.

(7) Neuropsychological signs or symptoms.

(8) Signs or symptoms involving the respiratory system (upper

or lower).

(9) Sleep disturbances.

(10) Gastrointestinal signs or symptoms.

(11) Cardiovascular signs or symptoms.

(12) Abnormal weight loss.

(13) Menstrual disorders.

(h)(1) If the Secretary determines with respect to a medical research project sponsored by the Department that it is necessary for

the conduct of the project that Persian Gulf veterans in receipt of

compensation under this section or section 1118 of this title participate in the project without the possibility of loss of service connection under either such section, the Secretary shall provide that service connection granted under either such section for disability of a

veteran who participated in the research project may not be terminated.
39

(2) Paragraph (1) does not apply in a case in which— (A) the original award of compensation or service connection

was based on fraud; or

(B) it is clearly shown from military records that the person

concerned did not have the requisite service or character of discharge.

(3) The Secretary shall publish in the Federal Register a notice

of each determination made by the Secretary under paragraph (1)

with respect to a medical research project.

§ 1118. Presumptions of service connection for illnesses associated with service in the Persian Gulf during

the Persian Gulf War

(a)(1)***

* * * * * * *

(4) For purposes of this section, signs or symptoms that may be

a manifestation of an undiagnosed illness include the signs and

symptoms listed in section 1117(g) of this title.

* * * * * * *

CHAPTER 17—HOSPITAL, NURSING HOME,

DOMICILIARY, AND MEDICAL CARE

* * * * * * *

SUBCHAPTER II—HOSPITAL, NURSING HOME OR

DOMICILIARY CARE AND MEDICAL TREATMENT

* * * * * * *

§ 1710B. Extended care services

(a) * * *

* * * * * * *

(c)(1)***

(2) Paragraph (1) shall not apply—

(A) * * *

(B) with respect to an episode of extended care services that

a veteran is being furnished by the Department on November

30, 1999.

* * * * * * *

SUBCHAPTER III—MISCELLANEOUS PROVISIONS RELATING

TO HOSPITAL AND NURSING HOME CARE AND MEDICAL

TREATMENT OF VETERANS

* * * * * * *

§ 1722A. Copayment for medications

(a) * * *

* * * * * * *

(d) The provisions of subsection (a) expire on September 30,

ø2002¿ 2006.

* * * * * * *
40

§ 1729B. Health Services Improvement Fund

(a) * * *

(b) Amounts received or collected after the date of the enactment

of this section under any of the following provisions of law shall be

deposited in the fund:

ø(1) Section 1713A of this title.¿

ø(2)¿ (1) Section 1722A(b) of this title.

ø(3)¿ (2) Section 8165(a) of this title.

ø(4)¿ (3) Section 113 of the Veterans Millennium Health

Care and Benefits Act.

(c) øAmounts in the fund are hereby available,¿ Subject to the

provisions of appropriations Acts, amounts in the fund shall be

available, without fiscal year limitation, to the Secretary for the

purposes stated in subparagraphs (A) and (B) of section 1729A(c)(1)

of this title.

* * * * * * *

CHAPTER 19—INSURANCE

* * * * * * *

SUBCHAPTER I—NATIONAL SERVICE LIFE INSURANCE

* * * * * * *

§ 1917. Insurance maturing on or after August 1, 1946

(a) * * *

* * * * * * *

(f)(1) Following the death of the insured—

(A) if the first beneficiary otherwise entitled to payment of the

insurance proceeds does not make a claim for such payment

within three years after the death of the insured, payment of the

proceeds may be made to another beneficiary designated by the

insured, in the order of precedence as designated by the insured, as if the first beneficiary had predeceased the insured;

and

(B) if within five years after the death of the insured, no

claim has been filed by a person designated by the insured as

a beneficiary and the Secretary has not received any notice in

writing that any such claim will be made, payment of the insurance proceeds may (notwithstanding any other provision of

law) be made to such person as may in the judgment of the Secretary be equitably entitled to the proceeds of the policy.

(2) Payment of insurance proceeds under paragraph (1) shall be

a bar to recovery by any other person.

* * * * * * *

SUBCHAPTER II—UNITED STATES GOVERNMENT LIFE

INSURANCE

* * * * * * *

§ 1951. Payment of insurance

(a) United States Government life insurance, except as provided

in this subchapter, shall be payable in two hundred and forty equal
41

monthly installments. When the amount of an individual monthly

payment is less than $5, such amount may in the discretion of the

Secretary be allowed to accumulate without interest and be disbursed annually.

(b)(1) Following the death of the insured— (A) if the first beneficiary otherwise entitled to payment of the

insurance proceeds does not make a claim for such payment

within three years after the death of the insured, payment of the

proceeds may be made to another beneficiary designated by the

insured, in the order of precedence as designated by the insured, as if the first beneficiary had predeceased the insured;

and

(B) if within five years after the death of the insured, no

claim has been filed by a person designated by the insured as

a beneficiary and the Secretary has not received any notice in

writing that any such claim will be made, payment of the insurance proceeds may (notwithstanding any other provision of

law) be made to such person as may in the judgment of the Secretary be equitably entitled to the proceeds of the policy.

(2) Payment of insurance proceeds under paragraph (1) shall be

a bar to recovery by any other person.

* * * * * * *

CHAPTER 36—ADMINISTRATION OF EDUCATIONAL

BENEFITS

* * * * * * *

SUBCHAPTER II—MISCELLANEOUS PROVISIONS

* * * * * * *

§ 3695. Limitation on period of assistance under two or

more programs

(a) The aggregate period for which any person may receive assistance under two or more of the provisions of law listed below may

not exceed 48 months (or the part-time equivalent thereof):

(1) * * *

* * * * * * *

(5) Chapters 107, 1606, and ø1610¿ 1611 of title 10.

* * * * * * *

CHAPTER 37—HOUSING AND SMALL BUSINESS LOANS

* * * * * * *

SUBCHAPTER II—LOANS

* * * * * * *

§ 3714. Assumptions; release from liability

(a) * * *

* * * * * * *

ø(d) The Secretary shall provide that the mortgage or deed of

trust and any other instrument evidencing the loan entered into by
42

a person with respect to a loan guaranteed, insured, or made under

this chapter shall contain provisions, in such form as the Secretary

shall specify, implementing the requirements of this section, and

shall bear in conspicuous position in capital letters on the first

page of the document in type at least 2 and 1/2 times larger than

the regular type on such page the following: This loan is not assumable without the approval of the Department of Veterans Affairs or its authorized agent.¿

(d) With respect to a loan guaranteed, insured, or made under

this chapter, the Secretary shall provide, by regulation, that at least

one instrument evidencing either the loan or the mortgage or deed

of trust therefor, shall conspicuously contain, in such form as the

Secretary shall specify, a notice in substantially the following form:

‘‘This loan is not assumable without the approval of the Department

of Veterans Affairs or its authorized agent’’.

* * * * * * *

SUBCHAPTER V—NATIVE AMERICAN VETERAN HOUSING

LOAN PILOT PROGRAM

§ 3761. Pilot program

(a) * * *

* * * * * * *

(c) No loans may be made under this subchapter after December

31, ø2001¿ 2005.

§ 3762. Direct housing loans to Native American veterans

(a) The Secretary may make a direct housing loan to a Native

American veteran if— (1)(A) the Secretary has entered into a memorandum of understanding with respect to such loans with the tribal organization that has jurisdiction over the veteran; øand¿ or

(B) the tribal organization that has jurisdiction over the veteran has entered into a memorandum of understanding with

any department or agency of the United States with respect to

direct housing loans to Native Americans that the Secretary determines substantially complies with the requirements of subsection (b); and

* * * * * * *

PART V—BOARDS, ADMINISTRATIONS, AND

SERVICES

* * * * * * *

CHAPTER 72—UNITED STATES COURT OF APPEALS FOR

VETERANS CLAIMS

SUBCHAPTER I—ORGANIZATION AND JURISDICTION

Sec.

7251. Status.

* * * * * * *
43

SUBCHAPTER III—MISCELLANEOUS PROVISIONS

* * * * * * *

7285. øPractice fee¿ Practice and registration fees.

7286. Judicial Conference of the Court.

7287. Administration.

* * * * * * *

SUBCHAPTER II—PROCEDURE

* * * * * * *

§ 7266. Notice of appeal

(a)ø(1)¿ In order to obtain review by the Court of Appeals for

Veterans Claims of a final decision of the Board of Veterans’ Appeals, a person adversely affected by such decision shall file a notice of appeal with the Court within 120 days after the date on

which notice of the decision is mailed pursuant to section 7104(e)

of this title.

ø(2)¿ (b) An appellant shall file a notice of appeal under this section by delivering or mailing the notice to the Court.

ø(3)¿ (c) A notice of appeal shall be deemed to be received by the

Court as follows:

ø(A)¿ (1) On the date of receipt by the Court, if the notice

is delivered.

ø(B)¿ (2) On the date of the United States Postal Service

postmark stamped on the cover in which the notice is posted,

if the notice is properly addressed to the Court and is mailed.

ø(4)¿ (d) For a notice of appeal mailed to the Court to be deemed

to be received under øparagraph (3)(B)¿ subsection (c)(2) on a particular date, the United States Postal Service postmark on the

cover in which the notice is posted must be legible. The Court shall

determine the legibility of any such postmark and the Court’s determination as to legibility shall be final and not subject to review

by any other Court.

ø(b) The appellant shall also furnish the Secretary with a copy

of such notice, but a failure to do so shall not constitute a failure

of timely compliance with subsection (a) of this section.¿

* * * * * * *

SUBCHAPTER III—MISCELLANEOUS PROVISIONS

* * * * * * *

§ 7285. øPractice fee¿ Practice and registration fees

(a) The Court of Appeals for Veterans Claims may impose a periodic registration fee on persons admitted to practice before the

Court. The frequency and amount of such fee shall be determined

by the Court, except that such amount may not exceed $30 per

year. The Court may also impose registration fees on persons participating in a judicial conference convened pursuant to section

7286 of this title or any other court-sponsored activity.

(b) Amounts received by the Court under subsection (a) of this

section shall be available to the Court øfor the purposes of (1) employing independent counsel to pursue disciplinary matters, and (2)

defraying administrative costs for the implementation of the stand-
44

ards of proficiency prescribed for practice before the Court¿ for the

following purposes:

(1) Conducting investigations and proceedings, including employing independent counsel, to pursue disciplinary matters.

(2) Defraying the expenses of— (A) judicial conferences convened pursuant to section

7286 of this title; and

(B) other activities and programs that are designed to

support and foster bench and bar communication and relationships or the study, understanding, public commemoration, or improvement of veterans law or of the work of the

Court.

* * * * * * *

§ 7287. Administration

Notwithstanding any other provision of law, the Court of Appeals

for Veterans Claims may exercise, for purposes of management, administration, and expenditure of funds, the authorities provided for

such purposes by any provision of law (including any limitation

with respect to such provision) applicable to a court of the United

States as defined in section 451 of title 28, except to the extent that

such provision of law is inconsistent with a provision of this chapter.

* * * * * * *

SECTION 1001 OF THE VETERANS’ BENEFITS

IMPROVEMENTS ACT OF 1994

SEC. 1001. REPORTS ON ACTIVITIES OF THE DEPARTMENT OF VETERANS AFFAIRS TO ASSIST HOMELESS VETERANS.

(a) ANNUAL REPORT.—(1) * * *

(2) The report shall— (A) * * *

* * * * * * *

(C) provide any other information on those programs and on

the provision of such assistance that the Secretary considers

appropriate; øand¿

* * * * * * *
45

SECTION 12 OF THE HOMELESS VETERANS

COMPREHENSIVE SERVICE PROGRAMS ACT OF 1992

SEC. 12. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated øto carry out this Act

(other than section 8) $48,000,000 for each of fiscal years 1993

through 1997 and $50,000,000 for each of fiscal years 2000 and

2001¿ to carry out this Act $50,000,000 for fiscal year 2001. Nothing in this Act shall be construed to diminish funds for, continuation of, or expansion of existing programs administered by the

Secretary of Veterans Affairs to serve veterans.

Æ