HR 1405 RFS 
provide such beneficiary with a written statement detailing 
the reasons for such determination. 
‘‘(2) A beneficiary whom the Secretary has deter-
mined to be mentally incompetent for purposes of appoint-
ing a fiduciary under this chapter may appeal such deter-
mination. 
‘‘(c) MODIFICATION.—(1) A beneficiary for whom the 
Secretary appoints a fiduciary under this chapter may, at 
any time, request the Secretary to— 
‘‘(A) remove the fiduciary so appointed; and 
‘‘(B) have a new fiduciary appointed. 
‘‘(2) The Secretary shall comply with a request under 
paragraph (1) if the Secretary determines that the request 
is made in good faith and— 
‘‘(A) the fiduciary requested to be removed re-
ceives a fee from the beneficiary and a suitable vol-
unteer fiduciary is available to assist the beneficiary; 
or 
‘‘(B) the beneficiary provides credible informa-
tion that the fiduciary requested to be removed is— 
‘‘(i) not acting in the interest of the bene-
ficiary; or 
‘‘(ii) unable to effectively serve the bene-
ficiary because of an irreconcilable personality 
conflict or disagreement. 
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‘‘(3) The Secretary shall ensure that any removal or 
new appointment of a fiduciary under paragraph (1) does 
not delay or interrupt the beneficiary’s receipt of benefits 
administered by the Secretary. 
‘‘(d) INDEPENDENCE.—A fiduciary appointed by the 
Secretary shall operate independently of the Department 
to determine the actions that are in the interest of the 
beneficiary. 
‘‘(e) PREDESIGNATION.—A veteran may predesignate 
a fiduciary by— 
‘‘(1) submitting written notice to the Secretary 
of the predesignated fiduciary; or 
‘‘(2) submitting a form provided by the Sec-
retary for such purpose. 
‘‘(f) APPOINTMENT OF NON-PREDESIGNATED FIDU-
CIARY.—If a beneficiary designates an individual to serve 
as a fiduciary under subsection (e) and the Secretary ap-
points an individual not so designated as the fiduciary for 
such beneficiary, the Secretary shall notify such bene-
ficiary of— 
‘‘(1) the reason why such designated individual 
was not appointed; and 
‘‘(2) the ability of the beneficiary to modify the 
appointed fiduciary under subsection (c). 
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‘‘(g) PRIORITY OF APPOINTMENT.—In appointing a 
fiduciary under this chapter, if a beneficiary does not des-
ignate a fiduciary pursuant to subsection (e), to the extent 
possible the Secretary shall appoint a person who is— 
‘‘(1) a relative of the beneficiary; 
‘‘(2) appointed as guardian of the beneficiary 
by a court of competent jurisdiction; or 
‘‘(3) authorized to act on behalf of the bene-
ficiary under a durable power of attorney.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 55 of title 38, 
United States Code, is amended by striking the item 
relating to section 5502 and inserting the following: 
‘‘5502. Appointment of fiduciaries.’’. 
(b) SUPERVISION.— 
(1) IN
GENERAL.—Chapter 55 of title 38, 
United States Code, is amended by inserting after 
section 5502, as amended by subsection (a)(1), the 
following new section: 
‘‘§ 5502A. Supervision of fiduciaries 
‘‘(a) COMMISSION.—(1)(A) In a case in which the 
Secretary determines that a commission is necessary in 
order to obtain the services of a fiduciary in the best inter-
ests of a beneficiary, the Secretary may authorize a fidu-
ciary appointed by the Secretary to obtain from the 
monthly benefits provided to the beneficiary a reasonable 
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commission for fiduciary services rendered, but the com-
mission for any month may not exceed the lesser of the 
following amounts: 
‘‘(i) The amount that equals three percent of 
the monthly monetary benefits under laws adminis-
tered by the Secretary paid on behalf of the bene-
ficiary to the fiduciary. 
‘‘(ii) $35. 
‘‘(B) A commission paid under this paragraph may 
not be derived from any award to a beneficiary regarding 
back pay or retroactive benefits payments. 
‘‘(C) A commission may not be authorized for a fidu-
ciary who receives any other form of remuneration or pay-
ment in connection with rendering fiduciary services for 
benefits under this title on behalf of the beneficiary. 
‘‘(D) In accordance with section 6106 of this title, 
a commission may not be paid to a fiduciary if the Sec-
retary determines that the fiduciary misused any benefit 
payments of a beneficiary. 
‘‘(E) If the Secretary determines that the fiduciary 
has misused any benefit or payments of a beneficiary, the 
Secretary may revoke the fiduciary status of the fiduciary. 
‘‘(2) Where, in the opinion of the Secretary, any fidu-
ciary receiving funds on behalf of a Department bene-
ficiary is acting in such a number of cases as to make 
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it impracticable to conserve properly the estates or to su-
pervise the persons of the beneficiaries, the Secretary may 
refuse to make future payments in such cases as the Sec-
retary may deem proper. 
‘‘(b) COURT.—Whenever it appears that any fidu-
ciary, in the opinion of the Secretary, is not properly exe-
cuting or has not properly executed the duties of the trust 
of such fiduciary or has collected or paid, or is attempting 
to collect or pay, fees, commissions, or allowances that are 
inequitable or in excess of those allowed by law for the 
duties performed or expenses incurred, or has failed to 
make such payments as may be necessary for the benefit 
of the ward or the dependents of the ward, then the Sec-
retary may appear, by the Secretary’s authorized attorney, 
in the court which has appointed such fiduciary, or in any 
court having original, concurrent, or appellate jurisdiction 
over said cause, and make proper presentation of such 
matters. The Secretary, in the Secretary’s discretion, may 
suspend payments to any such fiduciary who shall neglect 
or refuse, after reasonable notice, to render an account 
to the Secretary from time to time showing the application 
of such payments for the benefit of such incompetent or 
minor beneficiary, or who shall neglect or refuse to admin-
ister the estate according to law. The Secretary may re-
quire the fiduciary, as part of such account, to disclose 
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any additional financial information concerning the bene-
ficiary (except for information that is not available to the 
fiduciary). The Secretary may appear or intervene by the 
Secretary’s duly authorized attorney in any court as an 
interested party in any litigation instituted by the Sec-
retary or otherwise, directly affecting money paid to such 
fiduciary under this section. 
‘‘(c) PAYMENT OF CERTAIN EXPENSES.—Authority 
is hereby granted for the payment of any court or other 
expenses incident to any investigation or court proceeding 
for the appointment of any fiduciary or other person for 
the purpose of payment of benefits payable under laws ad-
ministered by the Secretary or the removal of such fidu-
ciary and appointment of another, and of expenses in con-
nection with the administration of such benefits by such 
fiduciaries, or in connection with any other court pro-
ceeding hereby authorized, when such payment is author-
ized by the Secretary. 
‘‘(d) TEMPORARY PAYMENT OF BENEFITS.—All or 
any part of any benefits the payment of which is sus-
pended or withheld under this section may, in the discre-
tion of the Secretary, be paid temporarily to the person 
having custody and control of the incompetent or minor 
beneficiary, to be used solely for the benefit of such bene-
ficiary, or, in the case of an incompetent veteran, may be 
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apportioned to the dependent or dependents, if any, of 
such veteran. Any part not so paid and any funds of a 
mentally incompetent or insane veteran not paid to the 
chief officer of the institution in which such veteran is a 
patient nor apportioned to the veteran’s dependent or de-
pendents may be ordered held in the Treasury to the credit 
of such beneficiary. All funds so held shall be disbursed 
under the order and in the discretion of the Secretary for 
the benefit of such beneficiary or the beneficiary’s depend-
ents. Any balance remaining in such fund to the credit 
of any beneficiary may be paid to the beneficiary if the 
beneficiary recovers and is found competent, or if a minor, 
attains majority, or otherwise to the beneficiary’s fidu-
ciary, or, in the event of the beneficiary’s death, to the 
beneficiary’s personal representative, except as otherwise 
provided by law; however, payment will not be made to 
the beneficiary’s personal representative if, under the law 
of the beneficiary’s last legal residence, the beneficiary’s 
estate would escheat to the State. In the event of the death 
of a mentally incompetent or insane veteran, all gratuitous 
benefits under laws administered by the Secretary depos-
ited before or after August 7, 1959, in the personal funds 
of patients trust fund on account of such veteran shall 
not be paid to the personal representative of such veteran, 
but shall be paid to the following persons living at the 
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time of settlement, and in the order named: The surviving 
spouse, the children (without regard to age or marital sta-
tus) in equal parts, and the dependent parents of such 
veteran, in equal parts. If any balance remains, such bal-
ance shall be deposited to the credit of the applicable cur-
rent appropriation; except that there may be paid only so 
much of such balance as may be necessary to reimburse 
a person (other than a political subdivision of the United 
States) who bore the expenses of last sickness or burial 
of the veteran for such expenses. No payment shall be 
made under the two preceding sentences of this subsection 
unless claim therefor is filed with the Secretary within five 
years after the death of the veteran, except that, if any 
person so entitled under said two sentences is under legal 
disability at the time of death of the veteran, such five- 
year period of limitation shall run from the termination 
or removal of the legal disability. 
‘‘(e) ESCHEATMENT.—Any funds in the hands of a 
fiduciary appointed by a State court or the Secretary de-
rived from benefits payable under laws administered by 
the Secretary, which under the law of the State wherein 
the beneficiary had last legal residence would escheat to 
the State, shall escheat to the United States and shall be 
returned by such fiduciary, or by the personal representa-
tive of the deceased beneficiary, less legal expenses of any 
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administration necessary to determine that an escheat is 
in order, to the Department, and shall be deposited to the 
credit of the applicable revolving fund, trust fund, or ap-
propriation. 
‘‘(f) ASSISTANCE.—The Secretary shall provide to a 
fiduciary appointed under section 5502 of this title mate-
rials and tools to assist the fiduciary in carrying out the 
responsibilities of the fiduciary under this chapter, includ-
ing— 
‘‘(1) handbooks, brochures, or other written 
material that explain the responsibilities of a fidu-
ciary under this chapter; 
‘‘(2) tools located on an Internet website, in-
cluding forms to submit to the Secretary required 
information; and 
‘‘(3) assistance provided by telephone.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 55 of title 38, 
United States Code, is amended by inserting after 
the item relating to section 5502 the following new 
item: 
‘‘5502A. Supervision of fiduciaries.’’. 
(c) DEFINITION OF FIDUCIARY.—Section 5506 of 
title 38, United States Code is amended— 
(1) by striking ‘‘For purposes’’ and inserting 
‘‘(a) For purposes’’; and 
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(2) by adding at the end the following new sub-
section: 
‘‘(b)(1) For purposes of subsection (a), the term ‘per-
son’ includes any— 
‘‘(A) State or local government agency whose 
mission is to carry out income maintenance, social 
service, or health care-related activities; 
‘‘(B) any State or local government agency with 
fiduciary responsibilities; or 
‘‘(C) any nonprofit social service agency that 
the Secretary determines— 
‘‘(i) regularly provides services as a fidu-
ciary concurrently to five or more individuals; 
and 
‘‘(ii) is not a creditor of any such indi-
vidual. 
‘‘(2) The Secretary shall maintain a list of State or 
local agencies and nonprofit social service agencies under 
paragraph (1) that are qualified to act as a fiduciary 
under this chapter. In maintaining such list, the Secretary 
may consult the lists maintained under section 807(h) of 
the Social Security Act (42 U.S.C. 1007(h)).’’. 
(d) QUALIFICATIONS.—Section 5507 of title 38, 
United States Code, is amended to read as follows: 
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‘‘§ 5507. Inquiry, investigations, and qualification of 
fiduciaries 
‘‘(a) INVESTIGATION.—Any certification of a person 
for payment of benefits of a beneficiary to that person as 
such beneficiary’s fiduciary under section 5502 of this title 
shall be made on the basis of— 
‘‘(1) an inquiry or investigation by the Sec-
retary of the fitness of that person to serve as fidu-
ciary for that beneficiary to be conducted in advance 
of such certification and in accordance with sub-
section (b); 
‘‘(2) adequate evidence that certification of that 
person as fiduciary for that beneficiary is in the in-
terest of such beneficiary (as determined by the Sec-
retary under regulations); 
‘‘(3) adequate evidence that the person to serve 
as fiduciary protects the private information of a 
beneficiary in accordance with subsection (d)(1); and 
‘‘(4) the furnishing of any bond that may be re-
quired by the Secretary in accordance with sub-
section (f). 
‘‘(b) ELEMENTS OF INVESTIGATION.—(1) In con-
ducting an inquiry or investigation of a proposed fiduciary 
under subsection (a)(1), the Secretary shall conduct— 
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‘‘(A) a face-to-face interview with the proposed 
fiduciary by not later than 30 days after the date on 
which such inquiry or investigation begins; and 
‘‘(B) a background check of the proposed fidu-
ciary to— 
‘‘(i) in accordance with paragraph (2), de-
termine whether the proposed fiduciary has 
been convicted of a crime; and 
‘‘(ii) determine whether the proposed fidu-
ciary will serve the best interest of the bene-
ficiary, including by conducting a credit check 
of the proposed fiduciary and checking the 
records under paragraph (5). 
‘‘(2) The Secretary shall request information con-
cerning whether that person has been convicted of any of-
fense under Federal or State law. If that person has been 
convicted of such an offense, the Secretary may certify the 
person as a fiduciary only if the Secretary finds that the 
person is an appropriate person to act as fiduciary for the 
beneficiary concerned under the circumstances. 
‘‘(3) The Secretary shall conduct the background 
check described in paragraph (1)(B)— 
‘‘(A) each time a person is proposed to be a fi-
duciary, regardless of whether the person is serving 
or has served as a fiduciary; and 
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‘‘(B) at no expense to the beneficiary. 
‘‘(4) Each proposed fiduciary shall disclose to the 
Secretary the number of beneficiaries that the fiduciary 
acts on behalf of. 
‘‘(5) The Secretary shall maintain records of any per-
son who has— 
‘‘(A) previously served as a fiduciary; and 
‘‘(B) had such fiduciary status revoked by the 
Secretary. 
‘‘(6)(A) If a fiduciary appointed by the Secretary is 
convicted of a crime described in subparagraph (B), the 
Secretary shall notify the beneficiary of such conviction 
by not later than 14 days after the date on which the Sec-
retary learns of such conviction. 
‘‘(B) A crime described in this subparagraph is a 
crime— 
‘‘(i) for which the fiduciary is convicted while 
serving as a fiduciary for any person; 
‘‘(ii) that is not included in a report submitted 
by the fiduciary under section 5509(a) of this title; 
and 
‘‘(iii) that the Secretary determines could affect 
the ability of the fiduciary to act on behalf of the 
beneficiary. 
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‘‘(c) INVESTIGATION OF CERTAIN PERSONS.—(1) In 
the case of a proposed fiduciary described in paragraph 
(2), the Secretary, in conducting an inquiry or investiga-
tion under subsection (a)(1), may carry out such inquiry 
or investigation on an expedited basis that may include 
giving priority to conducting such inquiry or investigation. 
Any such inquiry or investigation carried out on such an 
expedited basis shall be carried out under regulations pre-
scribed for purposes of this section. 
‘‘(2) Paragraph (1) applies with respect to a proposed 
fiduciary who is— 
‘‘(A) the parent (natural, adopted, or step-
parent) of a beneficiary who is a minor; 
‘‘(B) the spouse or parent of an incompetent 
beneficiary; 
‘‘(C) a person who has been appointed a fidu-
ciary of the beneficiary by a court of competent ju-
risdiction; 
‘‘(D) being appointed to manage an estate 
where the annual amount of veterans benefits to be 
managed by the proposed fiduciary does not exceed 
$3,600, as adjusted pursuant to section 5312 of this 
title; or 
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‘‘(E) a person who is authorized to act on be-
half of the beneficiary under a durable power of at-
torney. 
‘‘(d) PROTECTION OF PRIVATE INFORMATION.—(1) 
A fiduciary shall take all reasonable precautions to— 
‘‘(A) protect the private information of a bene-
ficiary, including personally identifiable information; 
and 
‘‘(B) securely conducts financial transactions. 
‘‘(2) A fiduciary shall notify the Secretary of any ac-
tion of the fiduciary that compromises or potentially com-
promises the private information of a beneficiary. 
‘‘(e) POTENTIAL MISUSE OF FUNDS.—(1) If the Sec-
retary has reason to believe that a fiduciary may be mis-
using all or part of the benefit of a beneficiary, the Sec-
retary shall— 
‘‘(A) conduct a thorough investigation to deter-
mine the veracity of such belief; and 
‘‘(B) if such veracity is established, transmit to 
the officials described in paragraph (2) a report of 
such investigation. 
‘‘(2) The officials described in this paragraph are the 
following: 
‘‘(A) The Attorney General. 
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‘‘(B) Each head of a Federal department or 
agency that pays to a fiduciary or other person ben-
efits under any law administered by such depart-
ment of agency for the use and benefit of a minor, 
incompetent, or other beneficiary. 
‘‘(f) BOND.—In determining whether a proposed fi-
duciary is required to furnish a bond under subsection 
(a)(4), the Secretary shall consider— 
‘‘(1) the existence of any familial or other per-
sonal relationship between the proposed fiduciary 
and the beneficiary; and 
‘‘(2) the care the proposed fiduciary has taken 
to protect the interests of the beneficiary. 
‘‘(g) LIST OF FIDUCIARIES.—Each regional office of 
the Veterans Benefits Administration shall maintain a list 
of the following: 
‘‘(1) The name and contact information of each 
fiduciary, including address, telephone number, and 
email address. 
‘‘(2) With respect to each fiduciary described in 
paragraph (1)— 
‘‘(A) the date of the most recent back-
ground check and credit check performed by the 
Secretary under this section; 
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‘‘(B) the date that any bond was paid 
under this section; 
‘‘(C) the name, address, and telephone 
number of each beneficiary the fiduciary acts on 
behalf of; and 
‘‘(D) the amount that the fiduciary con-
trols with respect to each beneficiary described 
in subparagraph (C).’’. 
(e) ANNUAL RECEIPT OF PAYMENTS.— 
(1) IN
GENERAL.—Section 5509 of title 38, 
United States Code, is amended— 
(A) in subsection (a)— 
(i) by striking ‘‘may require a fidu-
ciary to file a’’ and inserting ‘‘shall require 
a fiduciary to file an annual’’; and 
(ii) by adding at the end the following 
new sentence: ‘‘The Secretary shall trans-
mit such annual report or accounting to 
the beneficiary and any legal guardian of 
such beneficiary.’’; 
(B) by adding at the end the following new 
subsections: 
‘‘(c) MATTERS INCLUDED.—Except as provided by 
subsection (f), an annual report or accounting under sub-
section (a) shall include the following: 
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‘‘(1) For each beneficiary that a fiduciary acts 
on behalf of— 
‘‘(A) the amount of the benefits of the ben-
eficiary provided under any law administered by 
the Secretary accrued during the year, the 
amount spent, and the amount remaining; and 
‘‘(B) if the fiduciary serves the beneficiary 
with respect to benefits not administered by the 
Secretary, an accounting of all sources of bene-
fits or other income the fiduciary oversees for 
the beneficiary. 
‘‘(2) A list of events that occurred during the 
year covered by the report that could affect the abil-
ity of the fiduciary to act on behalf of the bene-
ficiary, including— 
‘‘(A) the fiduciary being convicted of any 
crime; 
‘‘(B) the fiduciary declaring bankruptcy; 
and 
‘‘(C) any judgments entered against the fi-
duciary. 
‘‘(d) RANDOM AUDITS.—The Secretary shall annu-
ally conduct random audits of fiduciaries who receive a 
commission pursuant to subsection 5502A(a)(1) of this 
title. 
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‘‘(e) STATUS OF FIDUCIARY.—If a fiduciary includes 
in the annual report events described in subsection (c)(2), 
the Secretary may take appropriate action to adjust the 
status of the fiduciary as the Secretary determines appro-
priate, including by revoking the fiduciary status of the 
fiduciary. 
‘‘(f) CAREGIVERS
AND
CERTAIN
OTHER
FIDU-
CIARIES.—(1)(A) In carrying out this section, the Sec-
retary shall ensure that a caregiver fiduciary is required 
only to file an annual report or accounting under sub-
section (a) with respect to the amount of the benefits of 
the beneficiary provided under any law administered by 
the Secretary— 
‘‘(i) spent on— 
‘‘(I) food and housing for the beneficiary; 
and 
‘‘(II) clothing, health-related expenses, 
recreation, and other personal items for the 
beneficiary; and 
‘‘(ii) saved for the beneficiary. 
‘‘(B) The Secretary shall coordinate with the Under 
Secretary for Benefits and the Under Secretary for Health 
to— 
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‘‘(i) minimize the frequency with which employ-
ees of the Department visit the home of a caregiver 
fiduciary and beneficiary; and 
‘‘(ii) limit the extent of supervision by such 
Under Secretaries with respect to such a fiduciary 
and beneficiary. 
‘‘(C) In this paragraph, the term ‘caregiver fiduciary’ 
means a fiduciary who— 
‘‘(i) in addition to acting as a fiduciary for a 
beneficiary, is approved by the Secretary to be a 
provider of personal care services for the beneficiary 
under paragraph (3)(A)(i) of section 1720G(a) of 
this title; 
‘‘(ii) in carrying out such care services to such 
beneficiary, has undergone not less than four home 
visits under paragraph (9)(A) of such section; and 
‘‘(iii) has not been required by the Secretary to 
take corrective action pursuant to paragraph (9)(C) 
of such section. 
‘‘(2) In carrying out this section, the Secretary may 
adjust the matters required under an annual report or ac-
counting under subsection (a) with respect to a fiduciary 
whom the Secretary determines to have effectively pro-
tected the interests of the beneficiary over a sustained pe-
riod.’’; and 
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(C) by striking the section heading and in-
serting the following: ‘‘Annual reports and 
accountings of fiduciaries’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 55 of title 38, 
United States Code, is amended by striking the item 
relating to section 5509 and inserting the following 
new item: 
‘‘5509. Annual reports and accountings of fiduciaries.’’. 
(f) REPAYMENT OF MISUSED BENEFITS.—Section 
6107(a)(2)(C) of title 38, United States Code, is amended 
by inserting before the period the following: ‘‘, including 
by the Secretary not acting in accordance with section 
5507 of this title’’. 
(g) ANNUAL REPORTS.—Section 5510 of title 38, 
United States Code, is amended by striking ‘‘The Sec-
retary shall include in the Annual Benefits Report of the 
Veterans Benefits Administration or the Secretary’s An-
nual Performance and Accountability Report’’ and insert-
ing ‘‘Not later than July 1 of each year, the Secretary 
shall submit to the Committees on Veterans’ Affairs of 
the House of Representatives and the Senate a separate 
report containing’’. 
(h) REPORT.—Not later than one year after the date 
of the enactment of this Act, the Secretary of Veterans 
Affairs shall submit to the Committee on Veterans’ Affairs 
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of the Senate and the Committee on Veterans’ Affairs of 
the House of Representatives a comprehensive report on 
the implementation of the amendments made by this Act, 
including— 
(1) detailed information on the establishment of 
new policies and procedures pursuant to such 
amendments and training provided on such policies 
and procedures; and 
(2) a discussion of whether the Secretary 
should provide fiduciaries with standardized finan-
cial software to simplify reporting requirements. 
SEC. 5. LIMITATION ON AWARDS AND BONUSES TO EM-
PLOYEES OF DEPARTMENT OF VETERANS AF-
FAIRS. 
For each of fiscal years 2014 through 2018, the Sec-
retary of Veterans Affairs may not pay more than 
$345,000,000 in awards or bonuses under chapter 45 or 
53 of title 5, United States Code, or any other awards 
or bonuses authorized under such title. 
Passed the House of Representatives October 28, 
2013. 
Attest: 
KAREN L. HAAS, 
Clerk. 
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