IB 

Union Calendar No. 422 

108TH CONGRESS 

2D SESSION H. R. 4658 

[Report No. 108–683] 

To amend the Servicemembers Civil Relief Act to make certain improvements 

and technical corrections to that Act. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 23, 2004 

Mr. SMITH of New Jersey (for himself and Mr. EVANS) introduced the 

following bill; which was referred to the Committee on Veterans’ Affairs 

SEPTEMBER 13, 2004 

Additional sponsors: Mr. MICHAUD, Mrs. DAVIS of California, Mr. BRADY of 

Pennsylvania, Mr. STRICKLAND, Mr. HOLDEN, Mr. VITTER, Mr. FILNER, 

Mr. GUTIERREZ, Ms. CORRINE BROWN of Florida, Mr. RYAN of Ohio, 

Ms. HERSETH, and Ms. BORDALLO

SEPTEMBER 13, 2004 

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] 

[For text of introduced bill, see copy of bill as introduced on June 23, 2004] 

A BILL 

To amend the Servicemembers Civil Relief Act to make 

certain improvements and technical corrections to that Act. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Servicemembers and Veterans Legal Protections Act of 

4 2004’’. 

5 (b) TABLE OF CONTENTS.—The table of contents for 

6 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—IMPROVEMENTS TO SERVICEMEMBERS CIVIL RELIEF ACT 

Sec. 101. Clarification of meaning of ‘‘judgment’’ as used in the Act. 

Sec. 102. Requirements relating to waiver of rights under the Act. 

Sec. 103. Right of servicemember plaintiffs to request stay of civil proceedings. 

Sec. 104. Termination of leases. 

Sec. 105. Prevention of double taxation of certain servicemembers. 

TITLE II—EMPLOYMENT AND REEMPLOYMENT RIGHTS 

Subtitle A—Extension of Health Care Coverage 

Sec. 201. Two-year period of continuation of employer-sponsored health care coverage. 

Sec. 202. Reinstatement of reporting requirements. 

Subtitle B—Other Matters 

Sec. 211. Requirement for employers to provide notice of rights and duties under 

USERRA. 

Sec. 212. Demonstration project for referral of USERRA claims against Federal 

agencies to the Office of Special Counsel. 

TITLE III—MATTERS RELATING TO FIDUCIARIES 

Sec. 301. Definition of fiduciary. 

Sec. 302. Inquiry, investigations, and qualification of fiduciaries. 

Sec. 303. Misuse of benefits by fiduciaries. 

Sec. 304. Additional protections for beneficiaries with fiduciaries. 

Sec. 305. Annual report. 

Sec. 306. Annual adjustment in benefits thresholds. 

Sec. 307. Effective dates. 

TITLE IV—OTHER MATTERS 

Sec. 401. Inventory of medical waste management activities at Department 

health-care facilities. 

Sec. 402. Care for newborn children of veterans receiving maternity care. 

Sec. 403. Technical amendments to education program provisions. 
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1 TITLE I—IMPROVEMENTS TO 

2 SERVICEMEMBERS CIVIL RE3 LIEF ACT 

4 SEC. 101. CLARIFICATION OF MEANING OF ‘‘JUDGMENT’’ AS 

5 USED IN THE ACT. 

6 Section 101 of the Servicemembers Civil Relief Act (50 

7 U.S.C. App. 511) is amended by adding at the end the fol8 lowing new paragraph: 

9 ‘‘(9) JUDGMENT.—The term ‘judgment’ means 

10 any judgment, decree, order, or ruling, final or tem11 porary.’’. 

12 SEC. 102. REQUIREMENTS RELATING TO WAIVER OF RIGHTS 

13 UNDER THE ACT. 

14 Section 107 of the Servicemembers Civil Relief Act (50 

15 U.S.C. App. 517) is amended— 

16 (1) In subsection (a), by inserting after the first 

17 sentence the following new sentence: ‘‘Any such waiver 

18 that applies to an action listed in subsection (b) of 

19 this section is effective only if it is in writing and is 

20 executed as an instrument separate from the obliga21 tion or liability to which it applies.’’; 

22 (2) by redesignating subsection (c) as subsection 

23 (d); and 

24 (3) by inserting after subsection (b) the following 

25 new subsection (c): 
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1 ‘‘(c) PROMINENT DISPLAY OF CERTAIN CONTRACT

2 RIGHTS WAIVERS.—Any waiver in writing of a right or 

3 protection provided by this Act that applies to a contract, 

4 lease, or similar legal instrument must be in at least 12 

5 point type.’’. 

6 SEC. 103. RIGHT OF SERVICEMEMBER PLAINTIFFS TO RE7 QUEST STAY OF CIVIL PROCEEDINGS. 

8 Section 202(a) of the Servicemembers Civil Relief Act 

9 (50 U.S.C. App. 522(a)) is amended by inserting ‘‘plaintiff 

10 or’’ before ‘‘defendant’’. 

11 SEC. 104. TERMINATION OF LEASES. 

12 (a) JOINT LEASES.—Subsection (a) of section 305 of 

13 the Servicemembers Civil Relief Act (50 U.S.C. App. 535) 

14 is amended to read as follows: 

15 ‘‘(a) TERMINATION BY LESSEE.— 

16 ‘‘(1) IN GENERAL.—The lessee on a lease de17 scribed in subsection (b) may, at the lessee’s option, 

18 terminate the lease at any time after— 

19 ‘‘(A) the lessee’s entry into military service; 

20 or 

21 ‘‘(B) the date of the lessee’s military orders 

22 described in paragraph (1)(B) or (2)(B) of sub23 section (b), as the case may be. 

24 ‘‘(2) JOINT LEASES.—A lessee’s termination of a 

25 lease pursuant to this subsection shall terminate any 
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1 obligation a dependent of the lessee may have under 

2 the lease.’’. 

3 (b) MOTOR VEHICLES LEASES.— 

4 (1) APPLICABILITY TO PCS ORDERS FROM

5 STATES OUTSIDE CONUS.—Subparagraph (B) of sub6 section (b)(2) of such section is amended by striking 

7 ‘‘military orders for’’ and all that follows through ‘‘or 

8 to deploy’’ and inserting ‘‘military orders— 

9 ‘‘(i) for a change of permanent sta10 tion— 

11 ‘‘(I) from a location in the conti12 nental United States to a location out13 side the continental United States; or 

14 ‘‘(II) from a location in a State 

15 outside the continental United States 

16 to any location outside that State; or 

17 ‘‘(ii) to deploy’’. 

18 (2) DEFINITIONS.—Such section is further 

19 amended by adding at the end the following new sub20 section: 

21 ‘‘(i) DEFINITIONS.— 

22 ‘‘(1) MILITARY ORDERS.—The term ‘military or23 ders’, with respect to a servicemember, means official 

24 military orders, or any notification, certification, or 

25 verification from the servicemember’s commanding of-
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1 ficer, with respect to the servicemember’s current or 

2 future military duty status. 

3 ‘‘(2) CONUS.—The term ‘continental United 

4 States’ means the 48 contiguous States and the Dis5 trict of Columbia.’’. 

6 (c) COVERAGE OF INDIVIDUAL DEPLOYMENTS.—Sub7 section (b) of such section is further amended in paragraph 

8 (1)(B) and paragraph (2)(B)(ii) (as designated by sub9 section (b) of this section) by inserting ‘‘, or as an indi10 vidual in support of a military operation,’’ after ‘‘deploy 

11 with a military unit’’. 

12 SEC. 105. PREVENTION OF DOUBLE TAXATION OF CERTAIN 

13 SERVICEMEMBERS. 

14 Section 511(c) of the Servicemembers Civil Relief Act 

15 (50 U.S.C. App. 571(c)) is amended by adding at the end 

16 the following new paragraph: 

17 ‘‘(5) USE, EXCISE, OR SIMILAR TAXES.—A tax 

18 jurisdiction may not impose a use, excise, or similar 

19 tax on the personal property of a nonresident 

20 servicemember when the laws of the tax jurisdiction 

21 fail to provide a credit against such taxes for sales, 

22 use, excise, or similar taxes previously paid on the 

23 same property to another tax jurisdiction.’’. 
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1 TITLE II—EMPLOYMENT AND 

2 REEMPLOYMENT RIGHTS 

3 Subtitle A—Extension of Health 

4 Care Coverage 

5 SEC. 201. TWO-YEAR PERIOD OF CONTINUATION OF EM6 PLOYER-SPONSORED HEALTH CARE COV7 ERAGE. 

8 (a) IMPROVEMENT IN PERIOD OF COVERAGE.—Sub9 section (a)(1)(A) of section 4317 of title 38, United States 

10 Code, is amended by striking ‘‘18-month period’’ and in11 serting ‘‘24-month period’’. 

12 (b) EFFECTIVE DATE.—The amendment made by sub13 section (a) shall apply to elections made under such section 

14 4317 on or after the date of the enactment of this Act. 

15 SEC. 202. REINSTATEMENT OF REPORTING REQUIREMENTS. 

16 Section 4332 of title 38, United States Code, is amend17 ed in the matter preceding paragraph (1) by striking ‘‘no 

18 later than February 1, 1996, and annually thereafter 

19 through 2000’’ and inserting ‘‘no later than February 1, 

20 2005, and annually thereafter’’. 
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1 Subtitle B—Other Matters 

2 SEC. 211. REQUIREMENT FOR EMPLOYERS TO PROVIDE NO3 TICE OF RIGHTS AND DUTIES UNDER 

4 USERRA. 

5 (a) NOTICE.—Chapter 43 of title 38, United States 

6 Code, is amended by adding at the end the following new 

7 section: 

8 ‘‘§ 4334. Notice of rights and duties 

9 ‘‘(a) REQUIREMENT TO PROVIDE NOTICE.—Each em10 ployer shall provide to persons entitled to rights and bene11 fits under this chapter a notice of the rights, benefits, and 

12 obligations of such persons and such employers under this 

13 chapter. The requirement for the provision of notice under 

14 this section may be met by the posting of the notice where 

15 employers customarily place notices for employees. 

16 ‘‘(b) CONTENT OF NOTICE.—The Secretary shall pro17 vide to employers the text of the notice to be provided under 

18 this section.’’. 

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

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

21 end the following new item: 

‘‘4334. Notice of rights and duties.’’. 

22 (c) IMPLEMENTATION.—(1) Not later than the date 

23 that is 90 days after the date of the enactment of this Act, 

24 the Secretary of Labor shall make available to employers 
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1 the notice required under section 4334 of title 38, United 

2 States Code, as added by subsection (a). 

3 (2) The amendments made by this section shall apply 

4 to employers under chapter 43 of such title on and after 

5 the first date referred to in paragraph (1). 

6 SEC. 212. DEMONSTRATION PROJECT FOR REFERRAL OF 

7 USERRA CLAIMS AGAINST FEDERAL AGEN8 CIES TO THE OFFICE OF SPECIAL COUNSEL. 

9 (a) ESTABLISHMENT OF PROJECT.—The Secretary of 

10 Labor and the Office of Special Counsel shall carry out a 

11 demonstration project under which certain claims against 

12 Federal executive agencies under the Uniformed Services 

13 Employment and Reemployment Rights Act under chapter 

14 43 of title 38, United States Code, are referred to, or other15 wise received by, the Office of Special Counsel for assist16 ance, including investigation and resolution of the claim 

17 as well as enforcement of rights with respect to the claim. 

18 (b) REFERRAL OF ALL PROHIBITED PERSONNEL AC19 TION CLAIMS TO THE OFFICE OF SPECIAL COUNSEL.—(1) 

20 Under the demonstration project, the Office of Special 

21 Counsel shall receive and investigate all claims under the 

22 Uniformed Services Employment and Reemployment 

23 Rights Act with respect to Federal executive agencies in 

24 cases where the Office of Special Counsel has jurisdiction 
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1 over related claims pursuant to section 1212 of title 5, 

2 United States Code. 

3 (2) For purposes of paragraph (1), a related claim is 

4 a claim involving the same Federal executive agency and 

5 the same or similar factual allegations or legal issues as 

6 those being pursued under a claim under the Uniformed 

7 Services Employment and Reemployment Rights Act. 

8 (c) REFERRAL OF OTHER CLAIMS AGAINST FEDERAL

9 EXECUTIVE AGENCIES.—(1) Under the demonstration 

10 project, the Secretary— 

11 (A) shall refer to the Office of Special Counsel all 

12 claims described in paragraph (2) made during the 

13 period of the demonstration project; and 

14 (B) may refer any claim described in paragraph 

15 (2) filed before the demonstration project that is pend16 ing before the Secretary at the beginning of the dem17 onstration project. 

18 (2) A claim referred to in paragraph (1) is a claim 

19 under chapter 43 of title 38, United States Code, against 

20 a Federal executive agency by a claimant with a social se21 curity account number with an odd number as its terminal 

22 digit, or, in the case of a claim that does not contain a 

23 social security account number, a case number assigned to 

24 the claim with an odd number as its terminal digit. 
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1 (d) ADMINISTRATION OF DEMONSTRATION PROJECT.— 

2 (1) The Office of Special Counsel shall administer the dem3 onstration project. The Secretary shall cooperate with the 

4 Office of Special Counsel in carrying out the demonstration 

5 project. 

6 (2) In the case of any claim referred, or otherwise re7 ceived by, to the Office of Special Counsel under the dem8 onstration project, any reference to the ‘‘Secretary’’ in sec9 tions 4321, 4322, and 4326 of title 38, United States Code, 

10 is deemed a reference to the ‘‘Office of Special Counsel’’. 

11 (3) In the case of any claim referred to, or otherwise 

12 received by, the Office of Special Counsel under the dem13 onstration project, the Office of Special Counsel shall retain 

14 administrative jurisdiction over the claim. 

15 (e) PERIOD OF PROJECT.—The demonstration project 

16 shall be carried out during the period beginning on the date 

17 that is 60 days after the date of the enactment of this Act, 

18 and ending on September 30, 2007. 

19 (f) EVALUATIONS AND REPORT.—(1) The Comptroller 

20 General of the United States shall conduct periodic evalua21 tions of the demonstration project under this section. 

22 (2) Not later than April 1, 2007, the Comptroller Gen23 eral shall submit to Congress a report on the evaluations 

24 conducted under paragraph (1). The report shall include 

25 the following information and recommendations: 
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1 (A) A description of the operation and results of 

2 the demonstration program, including— 

3 (i) the number of claims described in sub4 section (c) referred to, or otherwise received by, 

5 the Office of Special Counsel and the number of 

6 such claims referred to the Secretary of Labor, 

7 and 

8 (ii) for each Federal executive agency, the 

9 number of claims resolved, the type of corrective 

10 action obtained, the period of time for final reso11 lution of the claim, and the results obtained. 

12 (B) An assessment of whether referral to the Of13 fice of Special Counsel of claims under the demonstra14 tion project— 

15 (i) improved services to servicemembers and 

16 veterans; or 

17 (ii) significantly reduced or eliminated du18 plication of effort and unintended delays in re19 solving meritorious claims of those 

20 servicemembers and veterans. 

21 (C) An assessment of the feasibility and advis22 ability of referring all claims under chapter 43 of 

23 title 38, United States Code, against Federal executive 

24 agencies to the Office of Special Counsel for investiga25 tion and resolution. 
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1 (D) Such other recommendations for administra2 tive action or legislation as the Comptroller General 

3 determines appropriate. 

4 (g) DEFINITIONS.—In this section: 

5 (1) The term ‘‘Office of Special Counsel’’ means 

6 the Office of Special Counsel established by section 

7 1211 of title 5, United States Code. 

8 (2) The term ‘‘Secretary’’ means the Secretary of 

9 Labor. 

10 (3) The term ‘‘Federal executive agency’’ has the 

11 meaning given that term in section 4303(5) of title 

12 38, United States Code. 

13 TITLE III—MATTERS RELATING 

14 TO FIDUCIARIES 

15 SEC. 301. DEFINITION OF FIDUCIARY. 

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

17 States Code, is amended by adding at the end the following 

18 new section: 

19 ‘‘§ 5506. Definition of ‘fiduciary’

20 ‘‘For purposes of this chapter and chapter 61 of this 

21 title, the term ‘fiduciary’ means— 

22 ‘‘(1) a person who is a guardian, curator, con23 servator, committee, or person legally vested with the 

24 responsibility or care of a claimant (or a claimant’s 
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1 estate) or of a beneficiary (or a beneficiary’s estate); 

2 or 

3 ‘‘(2) any other person having been appointed in 

4 a representative capacity to receive money paid under 

5 any of the laws administered by the Secretary for the 

6 use and benefit of a minor, incompetent, or other ben7 eficiary.’’. 

8 (2) The table of sections at the beginning of such chap9 ter is amended by adding at the end the following new item: 

‘‘5506. Definition of ‘fiduciary’.’’. 

10 (b) CONFORMING AMENDMENTS TO SECTION 5502.— 

11 Section 5502 of such title is amended— 

12 (1) in subsection (a)— 

13 (A) in paragraph (1), by striking ‘‘other 

14 person’’ and inserting ‘‘other fiduciary’’; and 

15 (B) in the second sentence of paragraph (2), 

16 by inserting ‘‘for benefits under this title’’ after 

17 ‘‘in connection with rendering fiduciary serv18 ices’’; 

19 (2) in subsection (b), by striking ‘‘guardian, cu20 rator, conservator, or other person’’ each place it ap21 pears and inserting ‘‘fiduciary’’; and 

22 (3) in subsection (d), by striking ‘‘guardian, cu23 rator, or conservator’’ and inserting ‘‘fiduciary’’. 

24 (c) CONFORMING AMENDMENT TO SECTION 6101.— 

25 Section 6101(a) of such title is amended by striking ‘‘guard-
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1 ian, curator,’’ and all that follows through ‘‘beneficiary,’’ 

2 and inserting ‘‘fiduciary (as defined in section 5506 of this 

3 title) for the benefit of a minor, incompetent, or other bene4 ficiary under laws administered by the Secretary,’’. 

5 SEC. 302. INQUIRY, INVESTIGATIONS, AND QUALIFICATION 

6 OF FIDUCIARIES. 

7 (a) IN GENERAL.—Chapter 55 of title 38, United 

8 States Code, as amended by section 301(a)(1), is further 

9 amended by adding at the end the following new section: 

10 ‘‘§ 5507. Inquiry, investigations, and qualification of 

11 fiduciaries 

12 ‘‘(a) Any certification of a person for payment of bene13 fits of a beneficiary to that person as such beneficiary’s fi14 duciary under section 5502 of this title shall be made on 

15 the basis of— 

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

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

18 that beneficiary, such inquiry or investigation— 

19 ‘‘(A) to be conducted in advance of such cer20 tification; 

21 ‘‘(B) to the extent practicable, to include a 

22 face-to-face interview with such person; and 

23 ‘‘(C) to the extent practicable, to include a 

24 copy of a credit report for such person issued 
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1 within one year of the date of the proposed ap2 pointment; 

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

4 person as fiduciary for that beneficiary is in the in5 terest of such beneficiary (as determined by the Sec6 retary under regulations); and 

7 ‘‘(3) the furnishing of any bond that may be re8 quired by the Secretary. 

9 ‘‘(b) As part of any inquiry or investigation of any 

10 person under subsection (a), the Secretary shall request in11 formation concerning whether that person has been con12 victed of any offense under Federal or State law which re13 sulted in imprisonment for more than one year. If that per14 son has been convicted of such an offense, the Secretary may 

15 certify the person as a fiduciary only if the Secretary makes 

16 a specific finding that the person has been rehabilitated and 

17 is an appropriate person to act as fiduciary for the bene18 ficiary concerned under the circumstances. 

19 ‘‘(c)(1) In the case of a proposed fiduciary described 

20 in paragraph (2), the Secretary, in conducting an inquiry 

21 or investigation under subsection (a)(1), may carry out 

22 such inquiry or investigation on an expedited basis that 

23 may include waiver of any specific requirement relating to 

24 such inquiry or investigation, including the otherwise ap25 plicable provisions of subparagraphs (A), (B), and (C) of 
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1 such subsection. Any such inquiry or investigation carried 

2 out on such an expedited basis shall be carried out under 

3 regulations prescribed for purposes of this section. 

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

5 fiduciary who is— 

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

7 of a beneficiary who is a minor; 

8 ‘‘(B) the spouse or parent of an incompetent ben9 eficiary; 

10 ‘‘(C) a person who has been appointed a fidu11 ciary of the beneficiary by a court of competent juris12 diction; or 

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

14 the annual amount of veterans benefits to be managed 

15 by the proposed fiduciary does not exceed $3600, as 

16 adjusted pursuant to section 5312 of this title. 

17 ‘‘(d) TEMPORARY FIDUCIARIES.—When in the opinion 

18 of the Secretary, a temporary fiduciary is needed in order 

19 to protect the assets of the beneficiary while a determination 

20 of incompetency is being made or appealed or a fiduciary 

21 is appealing a determination of misuse, the Secretary may 

22 appoint one or more temporary fiduciaries for a period not 

23 to exceed 120 days. If a final decision has not been made 

24 within 120 days, the Secretary may not continue the ap25 pointment of the fiduciary without obtaining a court order 
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1 for appointment of a guardian, conservator, or other fidu2 ciary under the authority provided in section 5502(b) of 

3 this title.’’. 

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

5 the beginning of such chapter is amended by adding after 

6 the item added by section 301(a)(2) the following new item: 

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

7 SEC. 303. MISUSE OF BENEFITS BY FIDUCIARIES. 

8 (a) PROTECTION OF VETERANS BENEFITS WHEN AD9 MINISTERED BY FIDUCIARIES.—(1) Chapter 61 of title 38, 

10 United States Code, is amended by adding at the end the 

11 following new sections: 

12 ‘‘§ 6106. Misuse of benefits by fiduciaries 

13 ‘‘(a) FEE FORFEITURE IN CASE OF BENEFIT MISUSE

14 BY FIDUCIARIES.—A fiduciary may not collect a fee from 

15 a beneficiary for any month with respect to which the Sec16 retary or a court of competent jurisdiction has determined 

17 that the fiduciary misused all or part of the individual’s 

18 benefit, and any amount so collected by the fiduciary as 

19 a fee for such month shall be treated as a misused part of 

20 the individual’s benefit. 

21 ‘‘(b) LIABILITY OF FIDUCIARIES FOR MISUSED BENE22 FITS.—(1) If the Secretary or a court of competent jurisdic23 tion determines that a fiduciary that is not a Federal, 

24 State, or local government agency has misused all or part 

25 of a beneficiary’s benefit that was paid to such fiduciary, 
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1 the fiduciary shall be liable for the amount misused, and 

2 such amount (to the extent not repaid by the fiduciary) 

3 shall be treated as an erroneous payment of benefits under 

4 this title to the fiduciary for purposes of laws pertaining 

5 to the recovery of overpayments. The amount of such over6 payment shall constitute a liability of such fiduciary to the 

7 United States and may be recovered in the same manner 

8 as any other debt due the United States. Subject to para9 graph (2), upon recovering all or any part of such amount, 

10 the Secretary shall pay an amount equal to the recovered 

11 amount to such beneficiary or such beneficiary’s successor 

12 fiduciary. 

13 ‘‘(2) The total of the amounts paid to a beneficiary 

14 (or a beneficiary’s successor fiduciary) under paragraph (1) 

15 and under section 6107 of this title may not exceed the total 

16 benefit amount misused by the fiduciary with respect to 

17 that beneficiary. 

18 ‘‘(c) MISUSE OF BENEFITS DEFINED.—For purposes 

19 of this chapter, misuse of benefits by a fiduciary occurs in 

20 any case in which the fiduciary receives payment, under 

21 any of laws administered by the Secretary, for the use and 

22 benefit of a beneficiary and uses such payment, or any part 

23 thereof, for a use other than for the use and benefit of such 

24 beneficiary or that beneficiary’s dependents. Retention by 

25 a fiduciary of an amount of a benefit payment as a fidu-
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1 ciary fee or commission, or as attorney’s fees (including ex2 penses) and court costs, if authorized by the Secretary or 

3 a court of competent jurisdiction, shall be considered to be 

4 for the use or benefit of such beneficiary. 

5 ‘‘(d) REGULATIONS.—The Secretary may prescribe by 

6 regulation the meaning of the term ‘use and benefit’ for pur7 poses of this section. 

8 ‘‘(e) FINALITY OF DETERMINATIONS.—A determina9 tion by the Secretary that a fiduciary has misused benefits 

10 is a decision of the Secretary for purposes of section 511(a) 

11 of this title. 

12 ‘‘§ 6107. Reissuance of benefits 

13 ‘‘(a) NEGLIGENT FAILURE BY SECRETARY.—(1) In 

14 any case in which the negligent failure of the Secretary to 

15 investigate or monitor a fiduciary results in misuse of bene16 fits by the fiduciary, the Secretary shall pay to the bene17 ficiary or the beneficiary’s successor fiduciary an amount 

18 equal to the amount of benefits that were so misused. 

19 ‘‘(2) There shall be considered to have been a negligent 

20 failure by the Secretary to investigate and monitor a fidu21 ciary in the following cases: 

22 ‘‘(A) A case in which the Secretary failed to 

23 timely review a fiduciary’s accounting. 
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1 ‘‘(B) A case in which the Secretary was notified 

2 of allegations of misuse, but failed to act in a timely 

3 manner to terminate the fiduciary. 

4 ‘‘(C) In any other case in which actual neg5 ligence is shown. 

6 ‘‘(b) REISSUANCE OF MISUSED BENEFITS IN OTHER

7 CASES.—(1) In any case in which a fiduciary described 

8 in paragraph (2) misuses all or part of an individual’s ben9 efit paid to such fiduciary, the Secretary shall pay to the 

10 beneficiary or the beneficiary’s successor fiduciary an 

11 amount equal to the amount of such benefit so misused. 

12 ‘‘(2) Paragraph (1) applies to a fiduciary that— 

13 ‘‘(A) is not an individual; or 

14 ‘‘(B) is an individual who, for any month dur15 ing a period when misuse occurs, serves 10 or more 

16 individuals who are beneficiaries under this title. 

17 ‘‘(c) RECOUPMENT OF AMOUNTS REISSUED.—In any 

18 case in which the Secretary reissues a benefit payment (in 

19 whole or in part) under subsection (a) or (b), the Secretary 

20 shall make a good faith effort to obtain recoupment from 

21 the fiduciary to whom the payment was originally made.’’. 

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

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

24 end the following new items: 

‘‘6106. Misuse of benefits by fiduciaries. 

‘‘6107. Reissuance of benefits.’’. 
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1 SEC. 304. ADDITIONAL PROTECTIONS FOR BENEFICIARIES 

2 WITH FIDUCIARIES. 

3 (a) ONSITE REVIEWS AND REQUIRED ACCOUNT4 INGS.—(1) Chapter 55 of title 38, United States Code, as 

5 amended by section 302(a), is further amended by adding 

6 at the end the following new sections: 

7 ‘‘§ 5508. Periodic onsite reviews of institutional fidu8 ciaries 

9 ‘‘In addition to such other reviews of fiduciaries as the 

10 Secretary may otherwise conduct, the Secretary shall pro11 vide for the periodic onsite review of any person or agency 

12 located in the United States that receives the benefits pay13 able under laws administered by the Secretary to another 

14 individual pursuant to the appointment of such person or 

15 agency as a fiduciary under section 5502(a)(1) of this title 

16 in any case in which the fiduciary is serving in that capac17 ity with respect to more than 20 beneficiaries and the total 

18 annual amount of such benefits exceeds $50,000, as adjusted 

19 pursuant to section 5312 of this title. 

20 ‘‘§ 5509. Authority to redirect delivery of benefit pay21 ments when a fiduciary fails to provide 

22 required accounting 

23 ‘‘(a) REQUIRED REPORTS AND ACCOUNTINGS.—The 

24 Secretary may require a fiduciary to file a report or ac25 counting pursuant to regulations prescribed by the Sec26 retary. 
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1 ‘‘(b) ACTIONS UPON FAILURE TO FILE.—In any case 

2 in which a fiduciary fails to submit a report or accounting 

3 required by the Secretary under subsection (a), the Sec4 retary may, after furnishing notice to such fiduciary and 

5 the beneficiary entitled to such payment of benefits, require 

6 that such fiduciary appear in person at a regional office 

7 of the Department serving the area in which the beneficiary 

8 resides in order to receive such payments.’’. 

9 (2) The table of sections at the beginning of such chap10 ter is amended by adding after the item added by section 

11 302(b) the following new items: 

‘‘5508. Periodic onsite reviews of institutional fiduciaries. 

‘‘5509. Authority to redirect delivery of benefit payments when a fiduciary fails 

to provide required accounting.’’. 

12 (b) CIVIL MONETARY PENALTIES; JUDICIAL ORDERS

13 OF RESTITUTION.—(1) Chapter 61 of title 38, United States 

14 Code, as amended by section 303(a), is further amended by 

15 adding at the end the following new sections: 

16 ‘‘§ 6108. Civil monetary penalties 

17 ‘‘(a) PENALTY FOR CONVERSION.—Any person (in18 cluding an organization, agency, or other entity) who, hav19 ing received, while acting in the capacity of a fiduciary 

20 pursuant to section 5502 of this title, a payment under a 

21 law administered by the Secretary for the use and benefit 

22 of another individual, converts such payment, or any part 

23 thereof, to a use that such person knows or should know 

24 is other than for the use and benefit of such other individual 
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1 shall be subject to, in addition to any other penalty that 

2 may be prescribed by law, a civil monetary penalty assessed 

3 by the Secretary of not more than $5,000 for each such con4 version. 

5 ‘‘(b) PENALTY IN LIEU OF DAMAGES.—Any person 

6 who makes a conversion of a payment described in sub7 section (a) and is subject to a civil monetary penalty under 

8 that subsection by reason of such conversion shall also be 

9 subject to an assessment by the Secretary, in lieu of dam10 ages sustained by the United States resulting from the con11 version, of not more than twice the amount of any payments 

12 so converted. 

13 ‘‘(c) COSTS OF RECOVERY.—From amounts collected 

14 under this section, the amount necessary to recoup the De15 partment’s costs of such collection shall be credited to appro16 priations currently available for the same purpose as the 

17 appropriation that incurred those costs, to remain available 

18 until expended. 

19 ‘‘§ 6109. Authority for judicial orders of restitution 

20 ‘‘(a) Any Federal court, when sentencing a defendant 

21 convicted of an offense arising from the misuse of benefits 

22 under this title, may order, in addition to or in lieu of 

23 any other penalty authorized by law, that the defendant 

24 make restitution to the Department. 
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1 ‘‘(b) Sections 3612, 3663, and 3664 of title 18 shall 

2 apply with respect to the issuance and enforcement of orders 

3 of restitution under subsection (a). In so applying those sec4 tions, the Department shall be considered the victim. 

5 ‘‘(c) If the court does not order restitution, or orders 

6 only partial restitution, under subsection (a), the court 

7 shall state on the record the reasons therefor. 

8 ‘‘(d)(1) Except as provided in paragraph (2), amounts 

9 received or recovered by the Secretary pursuant to an order 

10 of restitution under subsection (a), to the extent and in the 

11 amounts provided in advance in appropriations Acts, shall 

12 be available to defray expenses incurred by the Office of the 

13 Inspector General for the investigation of fiduciaries under 

14 this title. 

15 ‘‘(2) Paragraph (1) shall not apply with respect to 

16 amounts received in connection with misuse by a fiduciary 

17 of funds paid as benefits under laws administered by the 

18 Secretary. Such amounts shall be paid to the individual 

19 whose benefits were misused unless the Secretary has pre20 viously reissued the misused benefits, in which case the 

21 amounts shall be treated in the same manner as overpay22 ments recouped by the Secretary and shall be deposited to 

23 the credit of the applicable revolving fund, trust fund, or 

24 appropriation.’’. 
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1 (2) The table of sections at the beginning of such chap2 ter is amended by adding after the item added by section 

3 303(b) the following new items: 

‘‘6108. Civil monetary penalties. 

‘‘6109. Authority for judicial orders of restitution.’’. 

4 SEC. 305. ANNUAL REPORT. 

5 (a) IN GENERAL.—Chapter 55 of title 38, United 

6 States Code, as amended by section 304(a)(1), is further 

7 amended by adding at the end the following new section: 

8 ‘‘§ 5510. Annual report 

9 ‘‘The Secretary shall include in the Annual Benefits 

10 Report of the Veterans Benefits Administration or the Sec11 retary’s Annual Performance and Accountability Report 

12 information concerning fiduciaries who have been ap13 pointed to receive payments for beneficiaries of the Depart14 ment. As part of such information, the Secretary shall sepa15 rately set forth the following: 

16 ‘‘(1) The number of beneficiaries in each cat17 egory (veteran, surviving spouse, child, adult disabled 

18 child, or parent). 

19 ‘‘(2) The types of benefit being paid (compensa20 tion, pension, dependency and indemnity compensa21 tion, death pension or benefits payable to a disabled 

22 child under chapter 18 of this title). 
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1 ‘‘(3) The total annual amounts and average an2 nual amounts of benefits paid to fiduciaries for each 

3 category and type of benefit. 

4 ‘‘(4) The number of fiduciaries who are the 

5 (spouse, parent, legal custodian, court-appointed fidu6 ciary, institutional fiduciary, custodian in fact, and 

7 supervised direct payment). 

8 ‘‘(5) The number of cases in which the fiduciary 

9 was changed by the Secretary because of a finding 

10 that benefits had been misused. 

11 ‘‘(6) How such cases of misuse of benefits were 

12 addressed by the Secretary. 

13 ‘‘(7) The final disposition of such cases of misuse 

14 of benefits, including the number and dollar amount 

15 of any civil or criminal penalties imposed. 

16 ‘‘(8) Such other information as the Secretary 

17 considers appropriate.’’. 

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

19 the beginning of such chapter is amended by adding after 

20 the items added by the amendment made by section 

21 304(a)(2) the following new item: 

‘‘5510. Annual report.’’. 

22 SEC. 306. ANNUAL ADJUSTMENT IN BENEFITS THRESH23 OLDS. 

24 Section 5312(b)(1) of title 38, United States Code, is 

25 amended by inserting ‘‘and the annual benefit amount limi-
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1 tations under sections 5507(c)(2)(D) and 5508 of this title,’’ 

2 after ‘‘(d)(3) of such section,’’. 

3 SEC. 307. EFFECTIVE DATES. 

4 (a) IN GENERAL.—Except as otherwise provided, this 

5 title and the amendments made by this title shall take effect 

6 on the first day of the seventh month beginning after the 

7 date of the enactment of this Act. 

8 (b) SPECIAL RULES.—(1) Section 5510 of title 38, 

9 United States Code, as added by section 305(a), shall take 

10 effect on the date of the enactment of this Act. 

11 (2) Sections 6106 and 6107 of title 38, United States 

12 Code, as added by section 303(a), shall apply with respect 

13 to any determinations by the Secretary of Veterans Affairs 

14 made after the date of the enactment of this Act of misuse 

15 of funds by a fiduciary. 

16 TITLE IV—OTHER MATTERS 

17 SEC. 401. INVENTORY OF MEDICAL WASTE MANAGEMENT 

18 ACTIVITIES AT DEPARTMENT HEALTH-CARE 

19 FACILITIES. 

20 (a) INVENTORY.—The Secretary of Veterans Affairs 

21 shall establish and maintain a national inventory of med22 ical waste management activities in the health-care facili23 ties of the Department of Veterans Affairs. The inventory 

24 shall include the following: 
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1 (1) A statement of the current national policy of 

2 the Department on managing and disposing of med3 ical waste, including regulated medical waste in all 

4 its forms. 

5 (2) A description of the program of each geo6 graphic service area of the Department to manage 

7 and dispose of medical waste, including general med8 ical waste and regulated medical waste, with a de9 scription of the primary methods used in those pro10 grams and the associated costs of those programs, 

11 with cost information shown separately for in-house 

12 costs (including full-time equivalent employees) and 

13 contract costs. 

14 (b) REPORT.—Not later than April 15, 2005, the Sec15 retary of Veterans Affairs shall submit to the Committees 

16 on Veterans’ Affairs of the Senate and House of Representa17 tives a report on medical waste management activities in 

18 the facilities of the Department of Veterans Affairs. The re19 port shall include the following: 

20 (1) The inventory established under subsection 

21 (a), including all the matters specified in that sub22 section. 

23 (2) A listing of each violation of medical waste 

24 management and disposal regulations reported at any 

25 health-care facility of the Department over the pre-
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1 ceding five years by any State or Federal agency, 

2 along with an explanation of any remedial or other 

3 action taken by the Secretary in response to each such 

4 reported violation. 

5 (3) A description of any plans to modernize, con6 solidate, or otherwise improve the management of 

7 medical waste and disposal programs at health-care 

8 facilities of the Department, including the projected 

9 costs associated with such plans and any barriers to 

10 achieving goals associated with such plans. 

11 (4) An assessment or evaluation of the available 

12 methods of disposing of medical waste and identifica13 tion of which of those methods are more desirable 

14 from an environmental perspective in that they would 

15 be least likely to result in contamination of air or 

16 water or otherwise cause future cleanup problems. 

17 SEC. 402. CARE FOR NEWBORN CHILDREN OF VETERANS 

18 RECEIVING MATERNITY CARE. 

19 (a) AUTHORITY TO PROVIDE NEWBORN INFANT

20 CARE.—Subchapter VIII of chapter 17 of title 38, United 

21 States Code, is amended by adding at the end the following 

22 new section: 
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1 ‘‘§ 1786. Care for newborn children of veterans receiv2 ing maternity care 

3 ‘‘(a) AUTHORITY.—Subject to subsections (b) and (c), 

4 when a female veteran who is enrolled in the health-care 

5 system established under section 1705 of this title is receiv6 ing maternity care from the Department delivers of a child 

7 in a Department facility or in a non-Department facility 

8 under a Department contract the Secretary may furnish 

9 care to the neonate. 

10 ‘‘(b) CARE IN A DEPARTMENT FACILITY.—In a case 

11 in which a neonate covered by subsection (a) is born in 

12 a Department facility, care furnished for the neonate at 

13 that facility shall be furnished without charge to the veteran 

14 who delivered of that neonate. 

15 ‘‘(c) CARE IN A NON-DEPARTMENT FACILITY.—In a 

16 case in which a neonate covered by subsection (a) is born 

17 in a non-Department facility or is provided care in a non18 Department facility following birth in a Department facil19 ity and transfer from that facility, the Secretary may pro20 vide for the payment of the cost of care and services for 

21 the neonate in the same manner, and subject to the same 

22 limitations, as if such care and services were emergency 

23 treatment furnished the veteran subject to section 1725 of 

24 this title, except that— 

25 ‘‘(1) the services for which the Secretary may 

26 make payment shall be limited to those items and 
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1 services for which payment may be made under the 

2 medicare program under title XVIII of the Social Se3 curity Act for post-natal care furnished to a neonate; 

4 and 

5 ‘‘(2) the rate of payment for such services may 

6 not exceed the payment rates applicable to those items 

7 and services under the medicare program under such 

8 title.’’. 

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

10 the beginning of such chapter is amended by inserting after 

11 the item relating to section 1784 the following new item: 

‘‘1786. Care for newborn children of veterans receiving maternity care.’’. 

12 SEC. 403. TECHNICAL AMENDMENTS TO EDUCATION PRO13 GRAM PROVISIONS. 

14 (a) INAPPLICABILITY OF WAGE REQUIREMENTS FOR

15 ON-JOB TRAINING PROGRAMS LEADING TO SELF-EMPLOY16 MENT.—(1) Section 3677(b) is amended by adding at the 

17 end the following new paragraph: 

18 ‘‘(3) Notwithstanding paragraph (1)(A) and sub19 section (c)(8), no wages shall be required to be paid an eligi20 ble person or veteran by a training establishment described 

21 in section 3452(e)(2) of this title.’’. 

22 (2) Section 3452(e), as amended by section 301 of the 

23 Veterans Benefits Act of 2003 (Public Law 108–183; 117 

24 Stat. 2658), is amended by striking ‘‘An’’ in paragraph (2) 
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1 and inserting ‘‘For the period beginning on October 1, 

2 2005, and ending on September 30, 2010, an’’. 

3 (b) EFFECTIVE DATE.—The amendments made by sub4 section (a) shall take effect as if included in the enactment 

5 of section 301 of the Veterans Benefits Act of 2003 (Public 

6 Law 108–183; 117 Stat. 2658). 

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

Servicemembers Civil Relief Act to make certain improvements and technical corrections to that Act, otherwise to 

improve legal protections provided to reserve component 

members called to active duty, and for other purposes.’’ 
Union Calendar No. 422 

108TH CONGRESS 

2D SESSION H. R. 4658 

[Report No. 108–683] 

A BILL 

To amend the Servicemembers Civil Relief Act to 

tions to that Act. make certain improvements and technical correcSEPTEMBER 13, 2004 

Reported with amendments, committed to the Committee 

dered to be printed of the Whole House on the State of the Union, and or-