I 

117TH CONGRESS 

1ST SESSION H. R. 2935 

To amend title 38, United States Code, to improve the processing of veterans 

benefits by the Departments of Veterans Affairs, to limit the authority 

of the Secretary of Veterans Affairs to recover overpayments made by 

the Department and other amounts owed by individuals to the United 

States, to improve due process accorded individuals with respect to such 

recovery, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 30, 2021 

Mr. PAPPAS (for himself and Mr. NEHLS) introduced the following bill; which 

was referred to the Committee on Veterans’ Affairs 

A BILL 

To amend title 38, United States Code, to improve the 

processing of veterans benefits by the Departments of 

Veterans Affairs, to limit the authority of the Secretary 

of Veterans Affairs to recover overpayments made by 

the Department and other amounts owed by individuals 

to the United States, to improve due process accorded 

individuals with respect to such recovery, 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, 


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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

3 ‘‘VA Beneficiary Debt Collection Improvement Act’’. 

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

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Prohibition of debt arising from overpayment due to delay in processing 

by the Department of Veterans Affairs. 

Sec. 3. Prohibition on Department of Veterans Affairs interest and administrative cost charges for debts relating to certain benefits programs. 

Sec. 4. Extension of window to request relief from recovery of debt arising 

under laws administered by the Secretary of Veterans Affairs. 

Sec. 5. Reforms relating to recovery by Department of Veterans Affairs of 

amounts owed by individuals to the United States. 

6 SEC. 2. PROHIBITION OF DEBT ARISING FROM OVERPAY7 MENT DUE TO DELAY IN PROCESSING BY THE 

8 DEPARTMENT OF VETERANS AFFAIRS. 

9 (a) BAR TO RECOVERY.— 

10 (1) IN GENERAL.—Chapter 53 of title 38, 

11 United States Code, is amended by inserting after 

12 section 5302A the following new section: 

13 ‘‘§ 5302B. Prohibition of debt arising from overpay14 ment due to delay in processing 

15 ‘‘(a) LIMITATION.—(1) Except as provided in para16 graph (2), no individual may incur a debt to the United 

17 States that— 

18 ‘‘(A) arises from the participation of the indi19 vidual in a program or benefit administered by the 

20 Under Secretary for Benefits; and 


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1 ‘‘(B) is attributable to the failure of an em2 ployee or official of the Department to process infor3 mation provided by or on behalf of that individual 

4 within applicable timeliness standards established by 

5 the Secretary. 

6 ‘‘(2) Nothing in this section shall be construed to af7 fect the penal and forfeiture provisions for fiduciaries set 

8 forth in chapter 61 of this title. 

9 ‘‘(b) NOTICE.—(1) If the Secretary determines that 

10 the Secretary has made an overpayment to an individual, 

11 the Secretary shall provide notice to the individual of the 

12 overpayment. 

13 ‘‘(2) Notice under paragraph (1) shall include a de14 tailed explanation of the right of the individual— 

15 ‘‘(A) to dispute the overpayment, including a 

16 detailed explanation of the process by which to dis17 pute the overpayment; or 

18 ‘‘(B) to request a waiver of indebtedness. 

19 ‘‘(c) DELAY ON COLLECTION.—(1) Subject to para20 graph (2), the Secretary may not take any action under 

21 section 3711 of title 31 regarding an overpayment de22 scribed in a notice under subsection (b) of this section 

23 until the date that is 90 days after the date the Secretary 

24 issues such notice. 


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1 ‘‘(2) The Secretary may take action under section 

2 3711 of title 31 regarding an overpayment described in 

3 a notice under subsection (b) of this section before the 

4 date that is 90 days after the date the Secretary issues 

5 such notice if the Secretary determines that delaying such 

6 action is— 

7 ‘‘(A) likely to make repayment of such overpay8 ment more difficult for an individual; 

9 ‘‘(B) likely to cause an unpaid debt to be re10 ferred to the Treasury Offset Program; or 

11 ‘‘(C) not in the best interest of the individual.’’. 

12 (2) CLERICAL AMENDMENT.—The table of sec13 tions at the beginning of such chapter is amended 

14 by inserting after the item relating to section 5302A 

15 the following new item: 

‘‘5302B. Prohibition of debt arising from overpayment due to delay in processing.’’. 

16 (3) DEADLINE.—The Secretary of Veterans Af17 fairs shall prescribe regulations to establish stand18 ards under section 5302B(a)(2) of such title, as 

19 added by subsection (a), not later than 180 days 

20 after the date of the enactment of this Act. 

21 (b) PLAN FOR IMPROVED NOTIFICATION AND COM22 MUNICATION OF DEBTS.— 

23 (1) IN GENERAL.—Not later than 180 days 

24 after the date of the enactment of this Act, and one 


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1 year thereafter, the Secretary of Veterans Affairs 

2 shall submit to Congress a report on the improve3 ment of the notification of and communication with 

4 individuals who receive overpayments made by the 

5 Secretary. 

6 (2) CONTENTS.—Each report under paragraph 

7 (1) shall include each of the following: 

8 (A) The plan of the Secretary to carry out 

9 each of the following: 

10 (i) The development and implementa11 tion of a mechanism by which individuals 

12 enrolled in the patient enrollment system 

13 under section 1705 of title 38, United 

14 States Code, may view their monthly pa15 tient medical statements electronically. 

16 (ii) The development and implementa17 tion of a mechanism by which individuals 

18 eligible for benefits under the laws admin19 istered by the Secretary may receive elec20 tronic correspondence relating to debt and 

21 overpayment information. 

22 (iii) The development and implemen23 tation, by not later than October 1, 2022, 

24 of a mechanism by which individuals eligi25 ble for benefits under the laws adminisVerDate Sep 11 2014 00:23 May 22, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2935.IH H2935

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1 tered by the Secretary may access informa2 tion related to Department of Veterans Af3 fairs debt electronically. 

4 (iv) The improvement and clarification 

5 of Department communications relating to 

6 overpayments and debt collection, including 

7 letters and electronic correspondence and 

8 including information relating to the most 

9 common reasons individuals eligible for 

10 benefits under the laws administered by 

11 the Secretary incur debts to the United 

12 States and the process for requesting a 

13 waiver of such debt. The Secretary shall 

14 develop such improvements and clarifica15 tions in consultation with veterans service 

16 organizations, labor organizations that rep17 resent employees of the Department, and 

18 other relevant nongovernmental organiza19 tions. 

20 (B) A description of the current efforts 

21 and plans for improving the accuracy of pay22 ments to individuals entitled to benefits under 

23 the laws administered by the Secretary, includ24 ing specific data matching agreements. 


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1 (C) A description of steps to be taken to 

2 improve the identification of underpayments to 

3 such individuals and to improve Department 

4 procedures and policies to ensure that such in5 dividuals who are underpaid receive adequate 

6 compensation payments. 

7 (D) A list of actions completed, implemen8 tation steps, and timetables for each require9 ment described in subparagraphs (A) through 

10 (C). 

11 (E) A description of any new legislative 

12 authority required to complete any such re13 quirement. 

14 SEC. 3. PROHIBITION ON DEPARTMENT OF VETERANS AF15 FAIRS INTEREST AND ADMINISTRATIVE COST 

16 CHARGES FOR DEBTS RELATING TO CERTAIN 

17 BENEFITS PROGRAMS. 

18 (a) IN GENERAL.—Section 5315(a)(1) of title 38, 

19 United States Code, is amended— 

20 (1) by striking ‘‘other than a loan’’ and all that 

21 follows through the semicolon and inserting ‘‘other 

22 than—’’; and 

23 (2) by adding at the end the following new sub24 paragraphs: 


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1 ‘‘(A) a loan, loan-guaranty, or loan-insur2 ance program; 

3 ‘‘(B) a disability compensation program; 

4 ‘‘(C) a pension program; or 

5 ‘‘(D) an educational assistance program.’’. 

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

7 subsection (a) shall apply with respect to an indebtedness 

8 that occurs on or after the date of the enactment of this 

9 Act. 

10 SEC. 4. EXTENSION OF WINDOW TO REQUEST RELIEF FROM 

11 RECOVERY OF DEBT ARISING UNDER LAWS 

12 ADMINISTERED BY THE SECRETARY OF VET13 ERANS AFFAIRS. 

14 Section 5302(a) of title 38, United States Code, is 

15 amended by striking ‘‘180 days’’ and inserting ‘‘one year’’. 

16 SEC. 5. REFORMS RELATING TO RECOVERY BY DEPART17 MENT OF VETERANS AFFAIRS OF AMOUNTS 

18 OWED BY INDIVIDUALS TO THE UNITED 

19 STATES. 

20 (a) LIMITATION ON INDEBTEDNESS OFFSETS.—Sub21 section (a) of section 5314 of title 38, United States Code, 

22 is amended— 

23 (1) by inserting ‘‘(1)’’ before ‘‘Subject to’’; and 

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

25 paragraph: 


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1 ‘‘(2) The Secretary may not make a deduction under 

2 paragraph (1) while the existence or amount of such in3 debtedness is disputed under section 5314A of this title.’’. 

4 (b) ADMINISTRATIVE PROCESS FOR DISPUTE OF EX5 ISTENCE OR AMOUNT OF INDEBTEDNESS.— 

6 (1) ESTABLISHMENT.—Chapter 53 of title 38, 

7 United States Code, is amended by inserting after 

8 section 5314 the following new section: 

9 ‘‘§ 5314A. Dispute of indebtedness 

10 ‘‘(a) ESTABLISHMENT.—The Secretary shall pre11 scribe regulations that establish an administrative process 

12 for the dispute of the existence or amount of an indebted13 ness described in section 5314(a)(1) of this title (without 

14 regard to whether the Secretary has made a deduction 

15 under such section regarding such indebtedness). 

16 ‘‘(b) STANDARDS.—The process under subsection (a) 

17 shall be efficient, effective, and equitable. 

18 ‘‘(c) TIMELINESS.—The Secretary shall ensure that 

19 each dispute under subsection (a) proceeds in accordance 

20 with standards for timeliness prescribed by the Secretary 

21 under this section. 

22 ‘‘(d) LIMITATION.—The Secretary may not submit to 

23 any debt collector (as defined in section 803 of the Fair 

24 Debt Collection Practices Act (15 U.S.C. 1692a)) any dis25 pute pending under this section. 


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1 ‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec2 tion shall be construed to modify the procedures for seek3 ing review of a decision of the agency of original jurisdic4 tion described in section 5104C(a)(1) of this title.’’. 

5 (2) EXISTING ADMINISTRATIVE PROCESS.—The 

6 Secretary of Veterans Affairs shall carry out section 

7 5314A of such title, as added by paragraph (1), by 

8 improving the administrative process of the Depart9 ment of Veterans Affairs for the dispute of the exist10 ing or amount of an indebtedness that was in effect 

11 on the day before the date of the enactment of this 

12 Act. 

13 (3) IMPROVEMENTS TO DEPARTMENT WEBSITE

14 AND NOTICES.—In carrying out paragraph (2), the 

15 Secretary shall— 

16 (A) improve the website of the Depart17 ment; and 

18 (B) ensure that such website and written 

19 notices sent to a person about indebtedness de20 scribed in section 5314(a) of title 38, United 

21 States Code, contain all information a person 

22 needs to dispute such an indebtedness, includ23 ing a description of— 


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1 (i) the specific actions the person will 

2 need to take in order to dispute the indebt3 edness; 

4 (ii) the documentation that will be re5 quired for the dispute; and 

6 (iii) how the documentation is to be 

7 submitted. 

8 (4) CLERICAL AMENDMENT.—The table of sec9 tions at the beginning of such chapter is amended 

10 by inserting after the item relating to section 5314 

11 the following new item: 

‘‘5314A. Dispute of indebtedness.’’. 

12 (c) LIMITATION ON AUTHORITY TO RECOVER

13 DEBTS.—Section 5302(a) of title 38, United States Code, 

14 is amended— 

15 (1) by inserting ‘‘(1)’’ before ‘‘There’’; and 

16 (2) by adding at the end the following new 

17 paragraph: 

18 ‘‘(2) The Secretary may not seek to recover an in19 debtedness described in paragraph (1) if the Secretary de20 termines that the cost to the Department to recover such 

21 indebtedness, as determined when the debt is established, 

22 would exceed the amount of the indebtedness.’’. 

Æ 


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