```

[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3270 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 3270

  To amend title 38, United States Code, to require the Secretary of 
Veterans Affairs to consider the resources of individuals applying for 
pension that were recently disposed of by the individuals for less than 
fair market value when determining the eligibility of such individuals 
               for such pension, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              June 6, 2012

  Mr. Wyden (for himself and Mr. Burr) introduced the following bill; 
which was read twice and referred to the Committee on Veterans' Affairs

_______________________________________________________________________

                                 A BILL

 
  To amend title 38, United States Code, to require the Secretary of 
Veterans Affairs to consider the resources of individuals applying for 
pension that were recently disposed of by the individuals for less than 
fair market value when determining the eligibility of such individuals 
               for such pension, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. CONSIDERATION BY SECRETARY OF VETERANS AFFAIRS OF RESOURCES 
              DISPOSED OF FOR LESS THAN FAIR MARKET VALUE BY 
              INDIVIDUALS APPLYING FOR PENSION.

    (a) Veterans.--Section 1522 of title 38, United States Code, is 
amended--
            (1) in subsection (a)--
                    (A) by inserting ``(1)'' before ``The Secretary''; 
                and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2)(A) If a veteran otherwise eligible for payment of pension 
under section 1513 or 1521 of this title or the spouse of such veteran 
disposes of covered resources for less than fair market value on or 
after the look-back date described in subparagraph (C)(i), the 
Secretary shall deny or discontinue the payment of pension to such 
veteran under section 1513 or 1521 of this title, as the case may be, 
for months during the period beginning on the date described in 
subparagraph (D) and equal to the number of months calculated as 
provided in subparagraph (E).
    ``(B)(i) For purposes of this paragraph, a covered resource is any 
resource that was a part of the corpus of the estate of the veteran or, 
if the veteran has a spouse, the corpus of the estates of the veteran 
and of the veteran's spouse, that the Secretary considers that under 
all the circumstances, if the veteran or spouse had not disposed of 
such resource, it would be reasonable that the resource (or some 
portion of the resource) be consumed for the veteran's maintenance.
    ``(ii) For purposes of this paragraph, the Secretary may consider, 
in accordance with regulations the Secretary shall prescribe, a 
transfer of an asset (including a transfer of an asset to an annuity, 
trust, or other financial instrument or investment) a disposal of a 
covered resource for less than fair market value if such transfer 
reduces the amount in the corpus of the estate of the veteran or, if 
the veteran has a spouse, the corpus of the estates of the veteran and 
of the veteran's spouse, that the Secretary considers, under all the 
circumstances, would be reasonable to be consumed for the veteran's 
maintenance.
    ``(C)(i) The look-back date described in this clause is a date that 
is 36 months before the date described in clause (ii).
    ``(ii) The date described in this clause is the date on which the 
veteran applies for pension under section 1513 or 1521 of this title 
or, if later, the date on which the veteran (or the spouse of the 
veteran) disposes of covered resources for less than fair market value.
    ``(D) The date described in this subparagraph is the first day of 
the first month in or after which covered resources were disposed of 
for less than fair market value and which does not occur in any other 
period of ineligibility under this paragraph.
    ``(E) The number of months calculated under this subparagraph shall 
be equal to--
            ``(i) the total, cumulative uncompensated value of all 
        covered resources so disposed of by the veteran (or the spouse 
        of the veteran) on or after the look-back date described in 
        subparagraph (C)(i); divided by
            ``(ii) the amount of the monthly pension that would be 
        payable to the veteran under section 1513 or 1521 of this title 
        without consideration of such resources under paragraph (1),
rounded, in the case of any fraction, to the nearest whole number, but 
shall not in any case exceed 36 months.
    ``(F) In the case of a transfer by the spouse of a veteran that 
results in a period of ineligibility for the veteran under this 
paragraph, the Secretary shall apportion the period (or any portion of 
the period) among the veteran and the veteran's spouse if the spouse 
becomes eligible for pension under this chapter.'';
            (2) in subsection (b)--
                    (A) by inserting ``(1)'' before ``The Secretary''; 
                and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2)(A) If a veteran otherwise eligible for payment of increased 
pension under subsection (c), (d), (e), or (f) of section 1521 of this 
title on account of a child, the spouse of the veteran, or the child 
disposes of covered resources for less than fair market value on or 
after the look-back date described in subparagraph (C)(i), the 
Secretary shall deny or discontinue payment of such increased pension 
for months during the period beginning on the date described in 
subparagraph (D) and equal to the number of months calculated as 
provided in subparagraph (E).
    ``(B)(i) For purposes of this paragraph, a covered resource is any 
resource that was a part of the corpus of the estate of the child that 
the Secretary considers that under all the circumstances, if the 
veteran, the spouse of the veteran, or the child had not disposed of 
such resource, it would be reasonable that the resource (or some 
portion of the resource) be consumed for the child's maintenance.
    ``(ii) For purposes of this paragraph, the Secretary may consider, 
in accordance with regulations the Secretary shall prescribe, a 
transfer of an asset (including a transfer of an asset to an annuity, 
trust, or other financial instrument or investment) a disposal of a 
covered resource for less than fair market value if such transfer 
reduces the amount in the corpus of the estate of the child that the 
Secretary considers, under all the circumstances, would be reasonable 
to be consumed for the child's maintenance.
    ``(C)(i) The look-back date described in this clause is a date that 
is 36 months before the date described in clause (ii).
    ``(ii) The date described in this clause is the date on which the 
veteran applies for payment of increased pension under subsection (c), 
(d), (e), or (f) of section 1521 of this title on account of a child 
or, if later, the date on which the veteran (or the child) disposes of 
covered resources for less than fair market value.
    ``(D) The date described in this subparagraph is the first day of 
the first month in or after which covered resources were disposed of 
for less than fair market value and which does not occur in any other 
period of ineligibility under this paragraph.
    ``(E) The number of months calculated under this subparagraph shall 
be equal to--
            ``(i) the total, cumulative uncompensated value of all 
        covered resources so disposed of by the veteran (or the child) 
        on or after the look-back date described in subparagraph 
        (C)(i); divided by
            ``(ii) the amount of the increased monthly pension that 
        would be payable to the veteran under subsection (c), (d), (e), 
        or (f) of section 1521 of this title on account of a child 
        without consideration of such resources under paragraph (1),
rounded, in the case of any fraction, to the nearest whole number, but 
shall not in any case exceed 36 months.''; and
            (3) by adding at the end the following new subsection:
    ``(c)(1) The Secretary shall not deny or discontinue payment of 
pension under section 1513 or 1521 of this title or payment of 
increased pension under subsection (c), (d), (e), or (f) of section 
1521 of this title on account of a child by reason of the application 
of subsection (a)(2) or (b)(2) of this section to the disposal of 
resources by an individual to the extent that--
            ``(A) a satisfactory showing is made to the Secretary (in 
        accordance with regulations promulgated by the Secretary) that 
        all resources transferred for less than fair market value have 
        been returned to the transferor; or
            ``(B) the Secretary determines, under procedures 
        established by the Secretary, that the denial or discontinuance 
        of payment would work an undue hardship as determined on the 
        basis of criteria established by the Secretary.
    ``(2) At the time a veteran applies for pension under section 1513 
or 1521 of this title or increased pension under subsection (c), (d), 
(e), or (f) of section 1521 of this title on account of a child, and at 
such other times as the Secretary considers appropriate, the Secretary 
shall--
            ``(A) inform such veteran of the provisions of subsections 
        (a)(2) and (b)(2) providing for a period of ineligibility for 
        payment of pension under such sections for individuals who make 
        certain dispositions of resources for less than fair market 
        value; and
            ``(B) obtain from such veteran information which may be 
        used in determining whether or not a period of ineligibility 
        for such payments would be required by reason of such 
        subsections.''.
    (b) Surviving Spouses and Children.--Section 1543 of such title is 
amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraph (2) as paragraph 
                (3);
                    (B) by inserting after paragraph (1) the following 
                new paragraph (2):
    ``(2)(A) If a surviving spouse otherwise eligible for payment of 
pension under section 1541 of this title disposes of covered resources 
for less than fair market value on or after the look-back date 
described in subparagraph (C)(i), the Secretary shall deny or 
discontinue the payment of pension to such surviving spouse under 
section 1541 of this title for months during the period beginning on 
the date described in subparagraph (D) and equal to the number of 
months calculated as provided in subparagraph (E).
    ``(B)(i) For purposes of this paragraph, a covered resource is any 
resource that was a part of the corpus of the estate of the surviving 
spouse that the Secretary considers that under all the circumstances, 
if the surviving spouse had not disposed of such resource, it would be 
reasonable that the resource (or some portion of the resource) be 
consumed for the surviving spouse's maintenance.
    ``(ii) For purposes of this paragraph, the Secretary may consider, 
in accordance with regulations the Secretary shall prescribe, a 
transfer of an asset (including a transfer of an asset to an annuity, 
trust, or other financial instrument or investment) a disposal of a 
covered resource for less than fair market value if such transfer 
reduces the amount in the corpus of the estate of the surviving spouse 
that the Secretary considers, under all the circumstances, would be 
reasonable to be consumed for the surviving spouse's maintenance.
    ``(C)(i) The look-back date described in this clause is a date that 
is 36 months before the date described in clause (ii).
    ``(ii) The date described in this clause is the date on which the 
surviving spouse applies for pension under section 1541 of this title 
or, if later, the date on which the surviving spouse disposes of 
covered resources for less than fair market value.
    ``(D) The date described in this subparagraph is the first day of 
the first month in or after which covered resources were disposed of 
for less than fair market value and which does not occur in any other 
period of ineligibility under this paragraph.
    ``(E) The number of months calculated under this subparagraph shall 
be equal to--
            ``(i) the total, cumulative uncompensated value of all 
        covered resources so disposed of by the surviving spouse on or 
        after the look-back date described in subparagraph (C)(i); 
        divided by
            ``(ii) the amount of the monthly pension that would be 
        payable to the surviving spouse under section 1541 of this 
        title without consideration of such resources under paragraph 
        (1),
rounded, in the case of any fraction, to the nearest whole number, but 
shall not in any case exceed 36 months.''; and
                    (C) by adding at the end the following new 
                paragraph:
    ``(4)(A) If a surviving spouse otherwise eligible for payment of 
increased pension under subsection (c), (d), or (e) of section 1541 of 
this title on account of a child or the child disposes of covered 
resources for less than fair market value on or after the look-back 
date described in subparagraph (C)(i), the Secretary shall deny or 
discontinue payment of such increased pension for months during the 
period beginning on the date described in subparagraph (D) and equal to 
the number of months calculated as provided in subparagraph (E).
    ``(B)(i) For purposes of this paragraph, a covered resource is any 
resource that was a part of the corpus of the estate of the child that 
the Secretary considers that under all the circumstances, if the 
surviving spouse or the child had not disposed of such resource, it 
would be reasonable that the resource (or some portion of the resource) 
be consumed for the child's maintenance.
    ``(ii) For purposes of this paragraph, the Secretary may consider, 
in accordance with regulations the Secretary shall prescribe, a 
transfer of an asset (including a transfer of an asset to an annuity, 
trust, or other financial instrument or investment) a disposal of a 
covered resource for less than fair market value if such transfer 
reduces the amount in the corpus of the estate of the child that the 
Secretary considers, under all the circumstances, would be reasonable 
to be consumed for the child's maintenance.
    ``(C)(i) The look-back date described in this clause is a date that 
is 36 months before the date described in clause (ii).
    ``(ii) The date described in this clause is the date on which the 
surviving spouse applies for payment of increased pension under 
subsection (c), (d), or (e) of section 1541 of this title on account of 
a child or, if later, the date on which the surviving spouse (or the 
child) disposes of covered resources for less than fair market value.
    ``(D) The date described in this subparagraph is the first day of 
the first month in or after which covered resources were disposed of 
for less than fair market value and which does not occur in any other 
period of ineligibility under this paragraph.
    ``(E) The number of months calculated under this clause shall be 
equal to--
            ``(i) the total, cumulative uncompensated value of all 
        covered resources so disposed of by the surviving spouse (or 
        the child) on or after the look-back date described in 
        subparagraph (C)(i); divided by
            ``(ii) the amount of the increased monthly pension that 
        would be payable to the surviving spouse under subsection (c), 
        (d), or (e) of section 1541 of this title on account of a child 
        without consideration of such resources under paragraph (3),
rounded, in the case of any fraction, to the nearest whole number, but 
shall not in any case exceed 36 months.'';
            (2) in subsection (b)--
                    (A) by inserting ``(1)'' before ``The Secretary''; 
                and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2)(A) If a child otherwise eligible for payment of pension under 
section 1542 of this title or any person with whom such child is 
residing who is legally responsible for such child's support disposes 
of covered resources for less than fair market value on or after the 
look-back date described in subparagraph (C)(i), the Secretary shall 
deny or discontinue the payment of pension to such child under section 
1542 of this title for months during the period beginning on the date 
described in subparagraph (D) and equal to the number of months 
calculated as provided in subparagraph (E).
    ``(B)(i) For purposes of this paragraph, a covered resource is any 
resource that was a part of the corpus of the estate of the child or 
the corpus of the estate of any person with whom such child is residing 
who is legally responsible for such child's support that the Secretary 
considers that under all the circumstances, if the child or person had 
not disposed of such resource, it would be reasonable that the resource 
(or some portion of the resource) be consumed for the child's 
maintenance.
    ``(ii) For purposes of this paragraph, the Secretary may consider, 
in accordance with regulations the Secretary shall prescribe, a 
transfer of an asset (including a transfer of an asset to an annuity, 
trust, or other financial instrument or investment) a disposal of a 
covered resource for less than fair market value if such transfer 
reduces the amount in the corpus of the estate described in clause (i) 
that the Secretary considers, under all the circumstances, would be 
reasonable to be consumed for the child's maintenance.
    ``(C)(i) The look-back date described in this clause is a date that 
is 36 months before the date described in clause (ii).
    ``(ii) The date described in this clause is the date on which the 
child applies for pension under section 1542 of this title or, if 
later, the date on which the child (or person described in subparagraph 
(B)) disposes of covered resources for less than fair market value.
    ``(D) The date described in this clause is the first day of the 
first month in or after which covered resources were disposed of for 
less than fair market value and which does not occur in any other 
period of ineligibility under this paragraph.
    ``(E) The number of months calculated under this clause shall be 
equal to--
            ``(i) the total, cumulative uncompensated value of all 
        covered resources so disposed of by the child (or person 
        described in subparagraph (B)) on or after the look-back date 
        described in subparagraph (C)(i); divided by
            ``(ii) the amount of the monthly pension that would be 
        payable to the child under section 1542 of this title without 
        consideration of such resources under paragraph (1),
rounded, in the case of any fraction, to the nearest whole number, but 
shall not in any case exceed 36 months.''; and
            (3) by adding at the end the following new subsection:
    ``(c)(1) The Secretary shall not deny or discontinue payment of 
pension under section 1541 or 1542 of this title or payment of 
increased pension under subsection (c), (d), or (e) of section 1541 of 
this title on account of a child by reason of the application of 
subsection (a)(2), (a)(4), or (b)(2) of this section to the disposal of 
resources by an individual to the extent that--
            ``(A) a satisfactory showing is made to the Secretary (in 
        accordance with regulations promulgated by the Secretary) that 
        all resources transferred for less than fair market value have 
        been returned to the transferor; or
            ``(B) the Secretary determines, under procedures 
        established by the Secretary, that the denial or discontinuance 
        of payment would work an undue hardship as determined on the 
        basis of criteria established by the Secretary.
    ``(2) At the time a surviving spouse or child applies for pension 
under section 1541 or 1542 of this title or increased pension under 
subsection (c), (d), or (e) of section 1541 of this title on account of 
a child, and at such other times as the Secretary considers 
appropriate, the Secretary shall--
            ``(A) inform such surviving spouse or child of the 
        provisions of subsections (a)(2), (a)(4), and (b)(2), as 
        applicable, providing for a period of ineligibility for payment 
        of pension or increased pension under such sections for 
        individuals who make certain dispositions of resources for less 
        than fair market value; and
            ``(B) obtain from such surviving spouse or child 
        information which may be used in determining whether or not a 
        period of ineligibility for such payments would be required by 
        reason of such subsections.''.
    (c) Effective Date.--Subsections (a)(2), (b)(2), and (c) of section 
1522 of title 38, United States Code, as added by subsection (a), and 
subsections (a)(2), (a)(4), (b)(2), and (c) of section 1543 of such 
title, as added by subsection (b), shall take effect on the date that 
is one year after the date of the enactment of this Act and shall apply 
with respect to payments of pension and increased pension applied for 
after such date and to payments of pension and increased pension for 
which eligibility is redetermined after such date.
    (d) Annual Reports.--
            (1) In general.--Not later than two years after the date of 
        the enactment of this Act and not less frequently than once 
        each year thereafter through 2023, the Secretary of Veterans 
        Affairs shall submit to the appropriate committees of Congress 
        a report on the administration of subsections (a)(2), (b)(2), 
        and (c) of section 1522 of title 38, United States Code, as 
        added by subsection (a), and subsections (a)(2), (a)(4), 
        (b)(2), and (c) of section 1543 of such title, as added by 
        subsection (b), during the most recent 12-month period.
            (2) Elements.--Each report submitted under paragraph (1) 
        shall include the following, for the period covered by the 
        report:
                    (A) The number of individuals who applied for 
                pension under chapter 15 of such title.
                    (B) The number of individuals who received pension 
                under such chapter.
                    (C) The number of individuals with respect to whom 
                the Secretary denied or discontinued payment of pension 
                under the subsections referred to in paragraph (1).
                    (D) For each individual for whom the Secretary 
                denied or discontinued payment of pension under the 
                subsections referred to in paragraph (1)--
                            (i) the age of the individual;
                            (ii) if the individual was denied or 
                        discontinued payment of pension because of a 
                        transfer of resources, the value of such 
                        transfer; and
                            (iii) such other information relating to 
                        such denial or discontinuance as the Secretary 
                        considers appropriate.
                    (E) Such other information as the Secretary 
                considers appropriate.
            (3) Appropriate committees of congress defined.--In this 
        subsection, the term ``appropriate committees of Congress'' 
        means--
                    (A) the Committee on Veterans' Affairs and the 
                Select Committee on Aging of the Senate; and
                    (B) the Committee on Veterans' Affairs of the House 
                of Representatives.
                                 <all>
```