IB 

Union Calendar No. 95 

113TH CONGRESS 

1ST SESSION H. R. 1405 

[Report No. 113–130] 

To amend title 38, United States Code, to require the Secretary of Veterans 

Affairs to include an appeals form in any notice of decision issued 

for the denial of a benefit sought. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 25, 2013 

Ms. TITUS (for herself and Mr. RUNYAN) introduced the following bill; which 

was referred to the Committee on Veterans’ Affairs 

JUNE 25, 2013 

Additional sponsors: Mr. TAKANO, Mr. CALVERT, Mr. JOHNSON of Ohio, Mr. 

LANCE, Mr. O’ROURKE, Mr. LOEBSACK, Mr. RUIZ, and Mr. RAHALL

JUNE 25, 2013 

Reported with amendments, committed to the Committee of the Whole House 

on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

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A BILL 

To amend title 38, United States Code, to require the Secretary of Veterans Affairs to include an appeals form 

in any notice of decision issued for the denial of a 

benefit sought. 

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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. INCLUSION OF APPEALS FORMS IN NOTICES OF 

4 DECISIONS OF BENEFITS DENIALS ISSUED BY 

5 THE SECRETARY OF VETERANS AFFAIRS. 

6 (a) IN GENERAL.—Section 5104(b) of title 38, 

7 United States Code, is amended— 

8 (1) by striking ‘‘and (2)’’ and inserting ‘‘(2)’’; 

9 and 

10 (2) by inserting before the period at the end the 

11 following: ‘‘, and (3) a form that may be used to file 

12 an appeal of the decision’’. 

13 (b) EFFECTIVE DATE.—The amendments made by 

14 subsection (a) shall apply with respect to decisions made 

15 by the Secretary under section 511 of title 38, United 

16 States Code, on or after the date of the enactment of this 

17 Act. 

18 SECTION 1. INCLUSION OF NOTICE OF DISAGREEMENT 

19 FORMS IN NOTICES OF DECISIONS OF BENE20 FITS DENIALS ISSUED BY SECRETARY OF VET21 ERANS AFFAIRS. 

22 (a) IN GENERAL.—Section 5104(b) of title 38, United 

23 States Code, is amended— 

24 (1) by striking ‘‘and (2)’’ and inserting ‘‘(2)’’; 

25 and 

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1 (2) by inserting before the period at the end the 

2 following: ‘‘, and (3) a form that may be used to file 

3 a notice of disagreement to the decision’’. 

4 (b) EFFECTIVE DATE.—The amendments made by sub5 section (a) shall apply with respect to decisions made by 

6 the Secretary under section 511 of title 38, United States 

7 Code, on or after the date of the enactment of this Act. 

8 SEC. 2. PROVISION OF STATUS UNDER LAW BY HONORING 

9 CERTAIN MEMBERS OF THE RESERVE COMPO10 NENTS AS VETERANS. 

11 (a) VETERAN STATUS.— 

12 (1) IN GENERAL.—Chapter 1 of title 38, United 

13 States Code, is amended by inserting after section 107 

14 the following new section: 

15 ‘‘§ 107A. Honoring as veterans certain persons who 

16 performed service in the reserve compo17 nents 

18 ‘‘Any person who is entitled under chapter 1223 of title 

19 10 to retired pay for nonregular service or, but for age, 

20 would be entitled under such chapter to retired pay for non21 regular service shall be honored as a veteran but shall not 

22 be entitled to any benefit by reason of this section.’’. 

23 (2) CLERICAL AMENDMENT.—The table of sec24 tions at the beginning of such chapter is amended by 

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1 inserting after the item relating to section 107 the fol2 lowing new item: 

‘‘107A. Honoring as veterans certain persons who performed service in the reserve 

components.’’. 

3 (b) CLARIFICATION REGARDING BENEFITS.—No per4 son may receive any benefit under the laws administered 

5 by the Secretary of Veterans Affairs solely by reason of sec6 tion 107A of title 38, United States Code, as added by sub7 section (a). 

8 SEC. 3. PROVISION OF ACCESS TO CASE-TRACKING INFOR9 MATION. 

10 (a) IN GENERAL.—Chapter 59 of title 38, United 

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

12 ‘‘§ 5906. Provision of access to case-tracking informa13 tion 

14 ‘‘(a) IN GENERAL.—(1) In accordance with subsection 

15 (b), the Secretary shall provide a covered employee with ac16 cess to the case-tracking system to provide a veteran with 

17 information regarding the status of a claim submitted by 

18 such veteran if such employee is acting under written per19 mission or a power of attorney executed by such veteran. 

20 ‘‘(2) In providing a covered employee with access to 

21 the case-tracking system under paragraph (1), the Secretary 

22 shall ensure— 

23 ‘‘(A) that such access— 

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1 ‘‘(i) is provided in a manner that does not 

2 allow such employee to modify the data con3 tained in such system; and 

4 ‘‘(ii) does not include access to medical 

5 records; and 

6 ‘‘(B) that each time a covered employee accesses 

7 such system, the employee must certify that such ac8 cess is for official purposes only. 

9 ‘‘(b) PRIVACY CERTIFICATION COURSE.—The Sec10 retary may not provide a covered employee with access to 

11 the case-tracking system under subsection (a)(1) unless the 

12 covered employee has successfully completed a certification 

13 course on privacy issues provided by the Secretary. 

14 ‘‘(c) TREATMENT OF DISCLOSURE.—The access to in15 formation by a covered employee pursuant to subsection 

16 (a)(1) shall be deemed to be— 

17 ‘‘(1) a covered disclosure under section 552a(b) 

18 of title 5; and 

19 ‘‘(2) a permitted disclosure under regulations 

20 promulgated under section 264(c) of the Health Insur21 ance Portability and Accountability Act of 1996 (42 

22 U.S.C. 1320d–2 note). 

23 ‘‘(d) DEFINITIONS.—In this section: 

24 ‘‘(1) The term ‘case-tracking system’ means the 

25 system of the Department of Veterans Affairs that 

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1 provides information regarding the status of a claim 

2 submitted by a veteran. 

3 ‘‘(2) The term ‘covered employee’ means an em4 ployee of a State or local governmental agency (in5 cluding a veterans service officer) who, in the course 

6 of carrying out the responsibilities of such employ7 ment, assists veterans with claims for any benefit 

8 under the laws administered by the Secretary.’’. 

9 (b) CLERICAL AMENDMENT.—The table of sections at 

10 the beginning of such chapter is amended by adding at the 

11 end the following new item: 

‘‘5906. Provision of access to case-tracking information.’’. 

12 SEC. 4. IMPROVEMENT OF FIDUCIARIES FOR VETERANS. 

13 (a) APPOINTMENT AND SUPERVISION.— 

14 (1) Section 5502 of title 38, United States Code, 

15 is amended to read as follows: 

16 ‘‘§ 5502. Appointment of fiduciaries 

17 ‘‘(a) APPOINTMENT.—(1) Where it appears to the Sec18 retary that the interest of the beneficiary would be served 

19 thereby, payment of benefits under any law administered 

20 by the Secretary may be made directly to the beneficiary 

21 or to a relative or some other fiduciary for the use and ben22 efit of the beneficiary, regardless of any legal disability on 

23 the part of the beneficiary. 

24 ‘‘(2) When in the opinion of the Secretary, a tem25 porary fiduciary is needed in order to protect the benefits 

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1 provided to the beneficiary under any law administered by 

2 the Secretary while a determination of incompetency is 

3 being made or appealed or a fiduciary is appealing a deter4 mination of misuse, the Secretary may appoint one or more 

5 temporary fiduciaries for a period not to exceed 120 days. 

6 If a final decision has not been made within 120 days, the 

7 Secretary may not continue the appointment of the fidu8 ciary without obtaining a court order for appointment of 

9 a guardian, conservator, or other fiduciary under the au10 thority provided in section 5502(b) of this title. 

11 ‘‘(b) APPEALS.—(1) If the Secretary determines a ben12 eficiary to be mentally incompetent for purposes of appoint13 ing a fiduciary under this chapter, the Secretary shall pro14 vide such beneficiary with a written statement detailing the 

15 reasons for such determination. 

16 ‘‘(2) A beneficiary whom the Secretary has determined 

17 to be mentally incompetent for purposes of appointing a 

18 fiduciary under this chapter may appeal such determina19 tion. 

20 ‘‘(c) MODIFICATION.—(1) A beneficiary for whom the 

21 Secretary appoints a fiduciary under this chapter may, at 

22 any time, request the Secretary to— 

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

24 ‘‘(B) have a new fiduciary appointed. 

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1 ‘‘(2) The Secretary shall comply with a request under 

2 paragraph (1) if the Secretary determines that the request 

3 is made in good faith and— 

4 ‘‘(A) the fiduciary requested to be removed re5 ceives a fee from the beneficiary and a suitable volun6 teer fiduciary is available to assist the beneficiary; or 

7 ‘‘(B) the beneficiary provides credible informa8 tion that the fiduciary requested to be removed is— 

9 ‘‘(i) not acting in the interest of the bene10 ficiary ;or 

11 ‘‘(ii) unable to effectively serve the bene12 ficiary because of an irreconcilable personality 

13 conflict or disagreement. 

14 ‘‘(3) The Secretary shall ensure that any removal or 

15 new appointment of a fiduciary under paragraph (1) does 

16 not delay or interrupt the beneficiary’s receipt of benefits 

17 administered by the Secretary. 

18 ‘‘(d) INDEPENDENCE.—A fiduciary appointed by the 

19 Secretary shall operate independently of the Department to 

20 determine the actions that are in the interest of the bene21 ficiary. 

22 ‘‘(e) PREDESIGNATION.—A veteran may predesignate 

23 a fiduciary by— 

24 ‘‘(1) submitting written notice to the Secretary 

25 of the predesignated fiduciary; or 

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1 ‘‘(2) submitting a form provided by the Sec2 retary for such purpose. 

3 ‘‘(f) APPOINTMENT OF NON-PREDESIGNATED FIDU4 CIARY.—If a beneficiary designates an individual to serve 

5 as a fiduciary under subsection (e) and the Secretary ap6 points an individual not so designated as the fiduciary for 

7 such beneficiary, the Secretary shall notify such beneficiary 

8 of— 

9 ‘‘(1) the reason why such designated individual 

10 was not appointed; and 

11 ‘‘(2) the ability of the beneficiary to modify the 

12 appointed fiduciary under subsection (c). 

13 ‘‘(g) PRIORITY OF APPOINTMENT.—In appointing a fi14 duciary under this chapter, if a beneficiary does not des15 ignate a fiduciary pursuant to subsection (e), to the extent 

16 possible the Secretary shall appoint a person who is— 

17 ‘‘(1) a relative of the beneficiary; 

18 ‘‘(2) appointed as guardian of the beneficiary by 

19 a court of competent jurisdiction; or 

20 ‘‘(3) authorized to act on behalf of the bene21 ficiary under a durable power of attorney.’’. 

22 (2) CLERICAL AMENDMENT.—The table of sec23 tions at the beginning of chapter 55 of title 38, 

24 United States Code, is amended by striking the item 

25 relating to section 5502 and inserting the following: 

‘‘5502. Appointment of fiduciaries.’’. 

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1 (b) SUPERVISION.— 

2 (1) IN GENERAL.—Chapter 55 of title 38, United 

3 States Code, is amended by inserting after section 

4 5502, as amended by subsection (a)(1), the following 

5 new section: 

6 ‘‘§ 5502A. Supervision of fiduciaries 

7 ‘‘(a) COMMISSION.—(1)(A) In a case in which the Sec8 retary determines that a commission is necessary in order 

9 to obtain the services of a fiduciary in the best interests 

10 of a beneficiary, the Secretary may authorize a fiduciary 

11 appointed by the Secretary to obtain from the monthly ben12 efits provided to the beneficiary a reasonable commission 

13 for fiduciary services rendered, but the commission for any 

14 month may not exceed the lesser of the following amounts: 

15 ‘‘(i) The amount that equals three percent of the 

16 monthly monetary benefits under laws administered 

17 by the Secretary paid on behalf of the beneficiary to 

18 the fiduciary. 

19 ‘‘(ii) $35. 

20 ‘‘(B) A commission paid under this paragraph may 

21 not be derived from any award to a beneficiary regarding 

22 back pay or retroactive benefits payments. 

23 ‘‘(C) A commission may not be authorized for a fidu24 ciary who receives any other form of remuneration or paymstockstill on DSK4VPTVN1PROD with BILLS

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1 ment in connection with rendering fiduciary services for 

2 benefits under this title on behalf of the beneficiary. 

3 ‘‘(D) In accordance with section 6106 of this title, a 

4 commission may not be paid to a fiduciary if the Secretary 

5 determines that the fiduciary misused any benefit payments 

6 of a beneficiary. 

7 ‘‘(E) If the Secretary determines that the fiduciary has 

8 misused any benefit or payments of a beneficiary, the Sec9 retary may revoke the fiduciary status of the fiduciary. 

10 ‘‘(2) Where, in the opinion of the Secretary, any fidu11 ciary receiving funds on behalf of a Department beneficiary 

12 is acting in such a number of cases as to make it impracti13 cable to conserve properly the estates or to supervise the per14 sons of the beneficiaries, the Secretary may refuse to make 

15 future payments in such cases as the Secretary may deem 

16 proper. 

17 ‘‘(b) COURT.—Whenever it appears that any fiduciary, 

18 in the opinion of the Secretary, is not properly executing 

19 or has not properly executed the duties of the trust of such 

20 fiduciary or has collected or paid, or is attempting to collect 

21 or pay, fees, commissions, or allowances that are inequitable 

22 or in excess of those allowed by law for the duties performed 

23 or expenses incurred, or has failed to make such payments 

24 as may be necessary for the benefit of the ward or the de25 pendents of the ward, then the Secretary may appear, by 

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1 the Secretary’s authorized attorney, in the court which has 

2 appointed such fiduciary, or in any court having original, 

3 concurrent, or appellate jurisdiction over said cause, and 

4 make proper presentation of such matters. The Secretary, 

5 in the Secretary’s discretion, may suspend payments to any 

6 such fiduciary who shall neglect or refuse, after reasonable 

7 notice, to render an account to the Secretary from time to 

8 time showing the application of such payments for the ben9 efit of such incompetent or minor beneficiary, or who shall 

10 neglect or refuse to administer the estate according to law. 

11 The Secretary may require the fiduciary, as part of such 

12 account, to disclose any additional financial information 

13 concerning the beneficiary (except for information that is 

14 not available to the fiduciary). The Secretary may appear 

15 or intervene by the Secretary’s duly authorized attorney in 

16 any court as an interested party in any litigation insti17 tuted by the Secretary or otherwise, directly affecting money 

18 paid to such fiduciary under this section. 

19 ‘‘(c) PAYMENT OF CERTAIN EXPENSES.—Authority is 

20 hereby granted for the payment of any court or other ex21 penses incident to any investigation or court proceeding for 

22 the appointment of any fiduciary or other person for the 

23 purpose of payment of benefits payable under laws adminis24 tered by the Secretary or the removal of such fiduciary and 

25 appointment of another, and of expenses in connection with 

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1 the administration of such benefits by such fiduciaries, or 

2 in connection with any other court proceeding hereby au3 thorized, when such payment is authorized by the Secretary. 

4 ‘‘(d) TEMPORARY PAYMENT OF BENEFITS.—All or any 

5 part of any benefits the payment of which is suspended or 

6 withheld under this section may, in the discretion of the 

7 Secretary, be paid temporarily to the person having custody 

8 and control of the incompetent or minor beneficiary, to be 

9 used solely for the benefit of such beneficiary, or, in the case 

10 of an incompetent veteran, may be apportioned to the de11 pendent or dependents, if any, of such veteran. Any part 

12 not so paid and any funds of a mentally incompetent or 

13 insane veteran not paid to the chief officer of the institution 

14 in which such veteran is a patient nor apportioned to the 

15 veteran’s dependent or dependents may be ordered held in 

16 the Treasury to the credit of such beneficiary. All funds so 

17 held shall be disbursed under the order and in the discretion 

18 of the Secretary for the benefit of such beneficiary or the 

19 beneficiary’s dependents. Any balance remaining in such 

20 fund to the credit of any beneficiary may be paid to the 

21 beneficiary if the beneficiary recovers and is found com22 petent, or if a minor, attains majority, or otherwise to the 

23 beneficiary’s fiduciary, or, in the event of the beneficiary’s 

24 death, to the beneficiary’s personal representative, except as 

25 otherwise provided by law; however, payment will not be 

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1 made to the beneficiary’s personal representative if, under 

2 the law of the beneficiary’s last legal residence, the bene3 ficiary’s estate would escheat to the State. In the event of 

4 the death of a mentally incompetent or insane veteran, all 

5 gratuitous benefits under laws administered by the Sec6 retary deposited before or after August 7, 1959, in the per7 sonal funds of patients trust fund on account of such vet8 eran shall not be paid to the personal representative of such 

9 veteran, but shall be paid to the following persons living 

10 at the time of settlement, and in the order named: The sur11 viving spouse, the children (without regard to age or mar12 ital status) in equal parts, and the dependent parents of 

13 such veteran, in equal parts. If any balance remains, such 

14 balance shall be deposited to the credit of the applicable cur15 rent appropriation; except that there may be paid only so 

16 much of such balance as may be necessary to reimburse a 

17 person (other than a political subdivision of the United 

18 States) who bore the expenses of last sickness or burial of 

19 the veteran for such expenses. No payment shall be made 

20 under the two preceding sentences of this subsection unless 

21 claim therefor is filed with the Secretary within five years 

22 after the death of the veteran, except that, if any person 

23 so entitled under said two sentences is under legal disability 

24 at the time of death of the veteran, such five-year period 

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1 of limitation shall run from the termination or removal of 

2 the legal disability. 

3 ‘‘(e) ESCHEATMENT.—Any funds in the hands of a fi4 duciary appointed by a State court or the Secretary derived 

5 from benefits payable under laws administered by the Sec6 retary, which under the law of the State wherein the bene7 ficiary had last legal residence would escheat to the State, 

8 shall escheat to the United States and shall be returned by 

9 such fiduciary, or by the personal representative of the de10 ceased beneficiary, less legal expenses of any administration 

11 necessary to determine that an escheat is in order, to the 

12 Department, and shall be deposited to the credit of the ap13 plicable revolving fund, trust fund, or appropriation. 

14 ‘‘(f) ASSISTANCE.—The Secretary shall provide to a fi15 duciary appointed under section 5502 of this title materials 

16 and tools to assist the fiduciary in carrying out the respon17 sibilities of the fiduciary under this chapter, including— 

18 ‘‘(1) handbooks, brochures, or other written mate19 rial that explain the responsibilities of a fiduciary 

20 under this chapter; 

21 ‘‘(2) tools located on an Internet website, includ22 ing forms to submit to the Secretary required infor23 mation; and 

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

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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions at the beginning of chapter 55 of title 38, 

3 United States Code, is amended by inserting after the 

4 item relating to section 5502 the following new item: 

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

5 (c) DEFINITION OF FIDUCIARY.—Section 5506 of title 

6 38, United States Code is amended— 

7 (1) by striking ‘‘For purposes’’ and inserting 

8 ‘‘(a) For purposes’’; and 

9 (2) by adding at the end the following new sub10 section: 

11 ‘‘(b)(1) For purposes of subsection (a), the term ‘per12 son’ includes any— 

13 ‘‘(A) State or local government agency whose 

14 mission is to carry out income maintenance, social 

15 service, or health care-related activities; 

16 ‘‘(B) any State or local government agency with 

17 fiduciary responsibilities; or 

18 ‘‘(C) any nonprofit social service agency that the 

19 Secretary determines— 

20 ‘‘(i) regularly provides services as a fidu21 ciary concurrently to five or more individuals; 

22 and 

23 ‘‘(ii) is not a creditor of any such indi24 vidual. 

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1 ‘‘(2) The Secretary shall maintain a list of State or 

2 local agencies and nonprofit social service agencies under 

3 paragraph (1) that are qualified to act as a fiduciary under 

4 this chapter. In maintaining such list, the Secretary may 

5 consult the lists maintained under section 807(h) of the So6 cial Security Act (42 U.S.C. 1007(h)).’’. 

7 (d) QUALIFICATIONS.—Section 5507 of title 38, United 

8 States Code, is amended to read as follows: 

9 ‘‘§ 5507. Inquiry, investigations, and qualification of 

10 fiduciaries 

11 ‘‘(a) INVESTIGATION.—Any certification of a person 

12 for payment of benefits of a beneficiary to that person as 

13 such beneficiary’s fiduciary under section 5502 of this title 

14 shall be made on the basis of— 

15 ‘‘(1) an inquiry or investigation by the Secretary 

16 of the fitness of that person to serve as fiduciary for 

17 that beneficiary to be conducted in advance of such 

18 certification and in accordance with subsection (b); 

19 ‘‘(2) adequate evidence that certification of that 

20 person as fiduciary for that beneficiary is in the in21 terest of such beneficiary (as determined by the Sec22 retary under regulations); 

23 ‘‘(3) adequate evidence that the person to serve as 

24 fiduciary protects the private information of a bene25 ficiary in accordance with subsection (d)(1); and 

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1 ‘‘(4) the furnishing of any bond that may be re2 quired by the Secretary in accordance with subsection 

3 (f). 

4 ‘‘(b) ELEMENTS OF INVESTIGATION.—(1) In con5 ducting an inquiry or investigation of a proposed fiduciary 

6 under subsection (a)(1), the Secretary shall conduct— 

7 ‘‘(A) a face-to-face interview with the proposed 

8 fiduciary by not later than 30 days after the date on 

9 which such inquiry or investigation begins; and 

10 ‘‘(B) a background check of the proposed fidu11 ciary to— 

12 ‘‘(i) in accordance with paragraph (2), de13 termine whether the proposed fiduciary has been 

14 convicted of a crime; and 

15 ‘‘(ii) determine whether the proposed fidu16 ciary will serve the best interest of the bene17 ficiary, including by conducting a credit check of 

18 the proposed fiduciary and checking the records 

19 under paragraph (5). 

20 ‘‘(2) The Secretary shall request information con21 cerning whether that person has been convicted of any of22 fense under Federal or State law. If that person has been 

23 convicted of such an offense, the Secretary may certify the 

24 person as a fiduciary only if the Secretary finds that the 

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1 person is an appropriate person to act as fiduciary for the 

2 beneficiary concerned under the circumstances. 

3 ‘‘(3) The Secretary shall conduct the background check 

4 described in paragraph (1)(B)— 

5 ‘‘(A) each time a person is proposed to be a fidu6 ciary, regardless of whether the person is serving or 

7 has served as a fiduciary; and 

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

9 ‘‘(4) Each proposed fiduciary shall disclose to the Sec10 retary the number of beneficiaries that the fiduciary acts 

11 on behalf of. 

12 ‘‘(5) The Secretary shall maintain records of any per13 son who has— 

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

15 ‘‘(B) had such fiduciary status revoked by the 

16 Secretary. 

17 ‘‘(6)(A) If a fiduciary appointed by the Secretary is 

18 convicted of a crime described in subparagraph (B), the 

19 Secretary shall notify the beneficiary of such conviction by 

20 not later than 14 days after the date on which the Secretary 

21 learns of such conviction. 

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

23 crime— 

24 ‘‘(i) for which the fiduciary is convicted while 

25 serving as a fiduciary for any person; 

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1 ‘‘(ii) that is not included in a report submitted 

2 by the fiduciary under section 5509(a) of this title; 

3 and 

4 ‘‘(iii) that the Secretary determines could affect 

5 the ability of the fiduciary to act on behalf of the ben6 eficiary. 

7 ‘‘(c) INVESTIGATION OF CERTAIN PERSONS.—(1) In 

8 the case of a proposed fiduciary described in paragraph (2), 

9 the Secretary, in conducting an inquiry or investigation 

10 under subsection (a)(1), may carry out such inquiry or in11 vestigation on an expedited basis that may include giving 

12 priority to conducting such inquiry or investigation. Any 

13 such inquiry or investigation carried out on such an expe14 dited basis shall be carried out under regulations prescribed 

15 for purposes of this section. 

16 ‘‘(2) Paragraph (1) applies with respect to a proposed 

17 fiduciary who is— 

18 ‘‘(A) the parent (natural, adopted, or stepparent) 

19 of a beneficiary who is a minor; 

20 ‘‘(B) the spouse or parent of an incompetent ben21 eficiary; 

22 ‘‘(C) a person who has been appointed a fidu23 ciary of the beneficiary by a court of competent juris24 diction; 

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1 ‘‘(D) being appointed to manage an estate where 

2 the annual amount of veterans benefits to be managed 

3 by the proposed fiduciary does not exceed $3,600, as 

4 adjusted pursuant to section 5312 of this title; or 

5 ‘‘(E) a person who is authorized to act on behalf 

6 of the beneficiary under a durable power of attorney. 

7 ‘‘(d) PROTECTION OF PRIVATE INFORMATION.—(1) A 

8 fiduciary shall take all reasonable precautions to— 

9 ‘‘(A) protect the private information of a bene10 ficiary, including personally identifiable information; 

11 and 

12 ‘‘(B) securely conducts financial transactions. 

13 ‘‘(2) A fiduciary shall notify the Secretary of any ac14 tion of the fiduciary that compromises or potentially com15 promises the private information of a beneficiary. 

16 ‘‘(e) POTENTIAL MISUSE OF FUNDS.—(1) If the Sec17 retary has reason to believe that a fiduciary may be mis18 using all or part of the benefit of a beneficiary, the Sec19 retary shall— 

20 ‘‘(A) conduct a thorough investigation to deter21 mine the veracity of such belief; and 

22 ‘‘(B) if such veracity is established, transmit to 

23 the officials described in paragraph (2) a report of 

24 such investigation. 

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

2 following: 

3 ‘‘(A) The Attorney General. 

4 ‘‘(B) Each head of a Federal department or 

5 agency that pays to a fiduciary or other person bene6 fits under any law administered by such department 

7 of agency for the use and benefit of a minor, incom8 petent, or other beneficiary. 

9 ‘‘(f) BOND.—In determining whether a proposed fidu10 ciary is required to furnish a bond under subsection (a)(4), 

11 the Secretary shall consider— 

12 ‘‘(1) the existence of any familial or other per13 sonal relationship between the proposed fiduciary and 

14 the beneficiary; and 

15 ‘‘(2) the care the proposed fiduciary has taken to 

16 protect the interests of the beneficiary. 

17 ‘‘(g) LIST OF FIDUCIARIES.—Each regional office of 

18 the Veterans Benefits Administration shall maintain a list 

19 of the following: 

20 ‘‘(1) The name and contact information of each 

21 fiduciary, including address, telephone number, and 

22 email address. 

23 ‘‘(2) With respect to each fiduciary described in 

24 paragraph (1)— 

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1 ‘‘(A) the date of the most recent background 

2 check and credit check performed by the Sec3 retary under this section; 

4 ‘‘(B) the date that any bond was paid 

5 under this section; 

6 ‘‘(C) the name, address, and telephone num7 ber of each beneficiary the fiduciary acts on be8 half of; and 

9 ‘‘(D) the amount that the fiduciary controls 

10 with respect to each beneficiary described in sub11 paragraph (C).’’. 

12 (e) ANNUAL RECEIPT OF PAYMENTS.— 

13 (1) IN GENERAL.—Section 5509 of title 38, 

14 United States Code, is amended— 

15 (A) in subsection (a)—— 

16 (i) by striking ‘‘may require a fidu17 ciary to file a’’ and inserting ‘‘shall require 

18 a fiduciary to file an annual’’; and 

19 (ii) by adding at the end the following 

20 new sentence: ‘‘The Secretary shall transmit 

21 such annual report or accounting to the 

22 beneficiary and any legal guardian of such 

23 beneficiary.’’; 

24 (B) by adding at the end the following new 

25 subsections: 

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1 ‘‘(c) MATTERS INCLUDED.—Except as provided by 

2 subsection (f), an annual report or accounting under sub3 section (a) shall include the following: 

4 ‘‘(1) For each beneficiary that a fiduciary acts 

5 on behalf of— 

6 ‘‘(A) the amount of the benefits of the bene7 ficiary provided under any law administered by 

8 the Secretary accrued during the year, the 

9 amount spent, and the amount remaining; and 

10 ‘‘(B) if the fiduciary serves the beneficiary 

11 with respect to benefits not administered by the 

12 Secretary, an accounting of all sources of benefits 

13 or other income the fiduciary oversees for the 

14 beneficiary. 

15 ‘‘(2) A list of events that occurred during the 

16 year covered by the report that could affect the ability 

17 of the fiduciary to act on behalf of the beneficiary, in18 cluding— 

19 ‘‘(A) the fiduciary being convicted of any 

20 crime; 

21 ‘‘(B) the fiduciary declaring bankruptcy; 

22 and 

23 ‘‘(C) any judgments entered against the fi24 duciary. 

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1 ‘‘(d) RANDOM AUDITS.—The Secretary shall annually 

2 conduct random audits of fiduciaries who receive a commis3 sion pursuant to subsection 5502A(a)(1) of this title. 

4 ‘‘(e) STATUS OF FIDUCIARY.—If a fiduciary includes 

5 in the annual report events described in subsection (c)(2), 

6 the Secretary may take appropriate action to adjust the sta7 tus of the fiduciary as the Secretary determines appro8 priate, including by revoking the fiduciary status of the fi9 duciary. 

10 ‘‘(f) CAREGIVERS AND CERTAIN OTHER FIDU11 CIARIES.—(1)(A) In carrying out this section, the Secretary 

12 shall ensure that a caregiver fiduciary is required only to 

13 file an annual report or accounting under subsection (a) 

14 with respect to the amount of the benefits of the beneficiary 

15 provided under any law administered by the Secretary— 

16 ‘‘(i) spent on— 

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

18 and 

19 ‘‘(II) clothing, health-related expenses, recre20 ation, and other personal items for the bene21 ficiary; and 

22 ‘‘(ii) saved for the beneficiary. 

23 ‘‘(B) The Secretary shall coordinate with the Under 

24 Secretary for Benefits and the Under Secretary for Health 

25 to— 

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1 ‘‘(i) minimize the frequency with which employ2 ees of the Department visit the home of a caregiver fi3 duciary and beneficiary; and 

4 ‘‘(ii) limit the extent of supervision by such 

5 Under Secretaries with respect to such a fiduciary 

6 and beneficiary. 

7 ‘‘(C) In this paragraph, the term ‘caregiver fiduciary’ 

8 means a fiduciary who— 

9 ‘‘(i) in addition to acting as a fiduciary for a 

10 beneficiary, is approved by the Secretary to be a pro11 vider of personal care services for the beneficiary 

12 under paragraph (3)(A)(i) of section 1720G(a) of this 

13 title; 

14 ‘‘(ii) in carrying out such care services to such 

15 beneficiary, has undergone not less than four home 

16 visits under paragraph (9)(A) of such section; and 

17 ‘‘(iii) has not been required by the Secretary to 

18 take corrective action pursuant to paragraph (9)(C) 

19 of such section. 

20 ‘‘(2) In carrying out this section, the Secretary may 

21 adjust the matters required under an annual report or ac22 counting under subsection (a) with respect to a fiduciary 

23 whom the Secretary determines to have effectively protected 

24 the interests of the beneficiary over a sustained period.’’; 

25 and 

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1 (C) by striking the section heading and in2 serting the following: ‘‘Annual reports and 

3 accountings of fiduciaries’’. 

4 (2) CLERICAL AMENDMENT.—The table of sec5 tions at the beginning of chapter 55 of title 38, 

6 United States Code, is amended by striking the item 

7 relating to section 5509 and inserting the following 

8 new item: 

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

9 (f) REPAYMENT OF MISUSED BENEFITS.—Section 

10 6107(a)(2)(C) of title 38, United States Code, is amended 

11 by inserting before the period the following: ‘‘, including 

12 by the Secretary not acting in accordance with section 5507 

13 of this title’’. 

14 (g) ANNUAL REPORTS.—Section 5510 of title 38, 

15 United States Code, is amended by striking ‘‘The Secretary 

16 shall include in the Annual Benefits Report of the Veterans 

17 Benefits Administration or the Secretary’s Annual Per18 formance and Accountability Report’’ and inserting ‘‘Not 

19 later than July 1 of each year, the Secretary shall submit 

20 to the Committees on Veterans’ Affairs of the House of Rep21 resentatives and the Senate a separate report containing’’. 

22 (h) REPORT.—Not later than one year after the date 

23 of the enactment of this Act, the Secretary of Veterans Af24 fairs shall submit to the Committee on Veterans’ Affairs of 

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

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1 House of Representatives a comprehensive report on the im2 plementation of the amendments made by this Act, includ3 ing— 

4 (1) detailed information on the establishment of 

5 new policies and procedures pursuant to such amend6 ments and training provided on such policies and 

7 procedures; and 

8 (2) a discussion of whether the Secretary should 

9 provide fiduciaries with standardized financial soft10 ware to simplify reporting requirements. 

11 SEC. 5. LIMITATION ON AWARDS AND BONUSES TO EM12 PLOYEES OF DEPARTMENT OF VETERANS AF13 FAIRS. 

14 For each of fiscal years 2014 through 2018, the Sec15 retary of Veterans Affairs may not pay more than 

16 $345,000,000 in awards or bonuses under chapter 45 or 53 

17 of title 5, United States Code, or any other awards or bo18 nuses authorized under such title. 

Amend the title so as to read: ‘‘A bill to amend title 

38, United States Code, to require the Secretary of Veterans Affairs to include a notice of disagreement form in 

any notice of decision issued for the denial of a benefit 

sought, to improve the supervision of fiduciaries of veterans under the laws administered by the Secretary of 

Veterans Affairs, and for other purposes.’’. 

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Union Calendar No. 95 

113TH CONGRESS 

1ST SESSION H. R. 1405 

[Report No. 113–130] 

A BILL 

To amend title 38, United States Code, to require 

the denial of a benefit sought. appeals form in any notice of decision issued for the Secretary of Veterans Affairs to include an 

JUNE 25, 2013 

Reported with amendments, committed to the Committee 

dered to be printed of the Whole House on the State of the Union, and ormstockstill on DSK4VPTVN1PROD with BILLS