II 

108TH CONGRESS 

1ST SESSION S. 257

To amend title 38, United States Code, to clarify the applicability of the 

prohibition on assignment of veterans benefits to agreements regarding 

future receipt of compensation, pension, or dependency and indemnity 

compensation, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 30, 2003

Mr. NELSON of Florida (for himself, Mr. MCCAIN, Mr. INOUYE, Mr. LEVIN, 

Mr. BINGAMAN, Mr. KERRY, Mr. BREAUX, Mr. CONRAD, Mr. JOHNSON, 

Ms. LANDRIEU, Mr. SESSIONS, and Mr. NELSON of Nebraska) 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 clarify the applicability of the prohibition on assignment of veterans benefits to agreements regarding future receipt of compensation, pension, or dependency and indemnity compensation, and for other purposes.

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Veterans Benefits and 

5 Pensions Protection Act of 2003’’. 
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1 SEC. 2. APPLICABILITY OF PROHIBITION ON ASSIGNMENT 

2 OF VETERANS BENEFITS TO AGREEMENTS 

3 ON FUTURE RECEIPT OF CERTAIN BENEFITS. 

4 (a) IN GENERAL.—Section 5301(a) of title 38, 

5 United States Code, is amended—

6 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’; 

7 (2) by designating the last sentence as para8 graph (2) and indenting such paragraph, as so des9 ignated, two ems from the left margin; and 

10 (3) by adding at the end the following new 

11 paragraph: 

12 ‘‘(3)(A) For purposes of this subsection, in any case 

13 where a beneficiary entitled to compensation, pension, or 

14 dependency and indemnity compensation enters into an 

15 agreement with another person under which agreement 

16 such other person acquires for consideration the right to 

17 receive payment of such compensation, pension, or de18 pendency and indemnity compensation, as the case may 

19 be, whether by payment from the beneficiary to such other 

20 person, deposit into an account from which such other per21 son may make withdrawals, or otherwise, such agreement 

22 shall be deemed to be an assignment and is prohibited. 

23 ‘‘(B) Any agreement or arrangement for collateral for 

24 security for an agreement that is prohibited under sub25 paragraph (A) is also prohibited. 
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1 ‘‘(C)(i) Any person who enters into an agreement 

2 that is prohibited under subparagraph (A), or an agree3 ment or arrangement that is prohibited under subpara4 graph (B), shall be fined under title 18, imprisoned for 

5 not more than one year, or both. 

6 ‘‘(ii) This subparagraph does not apply to a bene7 ficiary with respect to compensation, pension, or disability 

8 and indemnity compensation to which the beneficiary is 

9 entitled under a law administered by the Secretary.’’. 

10 (b) EFFECTIVE DATES.—(1) Subparagraphs (A) and 

11 (B) of paragraph (3) of section 5301(a) of title 38, United 

12 States Code (as added by subsection (a) of this section), 

13 shall apply with respect to any agreement or arrangement 

14 described in such subparagraphs, whether entered into be15 fore, on, or after the date of the enactment of this Act, 

16 and any such agreement or arrangement entered into be17 fore the date of the enactment of this Act is void and un18 enforceable as of such date. 

19 (2) Subparagraph (C) of such paragraph shall apply 

20 with respect to any agreement or arrangement covered by 

21 such subparagraph that is entered into on or after the 

22 date of the enactment of this Act. 

23 (c) OUTREACH.—The Secretary of Veterans Affairs 

24 shall, during the five-year period beginning on the date 

25 of the enactment of this Act, carry out a program of out-
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1 reach to inform veterans and other recipients or potential 

2 recipients of compensation, pension, or disability and in3 demnity compensation benefits under the laws adminis4 tered by the Secretary of the prohibition on the assign5 ability of such benefits under law. The program shall in6 clude information on various schemes to evade the prohibi7 tion, and means of avoiding such schemes. 

8 (d) AUTHORIZATION OF APPROPRIATIONS.—There is 

9 hereby authorized to be appropriated for the Department 

10 of Veterans Affairs for each of fiscal years 2004 through 

11 2008, $3,000,000 for purposes of carrying out the pro12 gram of outreach required by subsection (c).

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