IIB
107TH CONGRESS
1ST SESSION
H. R. 2540
IN THE SENATE OF THE UNITED STATES
JULY 31, 2001
Received; read twice and referred to the Committee on Veterans’ Affairs
AN ACT
To amend title 38, United States Code, to make various
improvements to veterans benefits programs under laws
administered by the Secretary of Veterans Affairs, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Veterans Benefits Act of 2001’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. References to title 38, United States Code.
TITLE I—ANNUAL COST-OF-LIVING ADJUSTMENT IN
COMPENSATION AND DIC RATES
Sec. 101. Increase in rates of disability compensation and dependency and in-
demnity compensation.
Sec. 102. Publication of adjusted rates.
TITLE II—COMPENSATION PROVISIONS
Sec. 201. Presumption that diabetes mellitus (type 2) is service-connected.
Sec. 202. Inclusion of illnesses that cannot be clearly defined in presumption
of service connection for Gulf War veterans.
Sec. 203. Preservation of service connection for undiagnosed illnesses to provide
for participation in research projects by Gulf War veterans.
Sec. 204. Presumptive period for undiagnosed illnesses program providing com-
pensation for veterans of Persian Gulf War who have certain
illnesses.
TITLE III—ADMINISTRATION OF UNITED STATES COURT OF
APPEALS FOR VETERANS CLAIMS
Sec. 301. Registration fees.
Sec. 302. Administrative authorities.
TITLE IV—OTHER MATTERS
Sec. 401. Payment of insurance proceeds to an alternate beneficiary when first
beneficiary cannot be identified.
Sec. 402. Extension of copayment requirement for outpatient prescription medi-
cations.
Sec. 403. Department of Veterans Affairs Health Services Improvement Fund
made subject to appropriations.
Sec. 404. Native American veteran housing loan pilot program.
Sec. 405. Modification of loan assumption notice requirement.
Sec. 406. Elimination of requirement for providing a copy of notice of appeal
to the Secretary.
Sec. 407. Pilot program for expansion of toll-free telephone access to veterans
service representatives.
Sec. 408. Technical and clerical amendments.
Sec. 409. Codification of recurring provisions in annual Department of Vet-
erans Affairs appropriations Acts.
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SEC. 2. REFERENCES TO TITLE 38, UNITED STATES CODE.
Except as otherwise expressly provided, whenever in
this Act an amendment or repeal is expressed in terms
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a
section or other provision of title 38, United States Code.
TITLE I—ANNUAL COST-OF-LIV-
ING ADJUSTMENT IN COM-
PENSATION AND DIC RATES
SEC. 101. INCREASE IN RATES OF DISABILITY COMPENSA-
TION AND DEPENDENCY AND INDEMNITY
COMPENSATION.
(a) RATE ADJUSTMENT.—The Secretary of Veterans
Affairs shall, effective on December 1, 2001, increase the
dollar amounts in effect for the payment of disability com-
pensation and dependency and indemnity compensation by
the Secretary, as specified in subsection (b).
(b) AMOUNTS
TO
BE
INCREASED.—The dollar
amounts to be increased pursuant to subsection (a) are
the following:
(1) 
COMPENSATION.—Each 
of 
the 
dollar
amounts in effect under section 1114 of title 38,
United States Code.
(2) ADDITIONAL COMPENSATION FOR DEPEND-
ENTS.—Each of the dollar amounts in effect under
sections 1115(1) of such title.
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(3) 
CLOTHING
ALLOWANCE.—The 
dollar
amount in effect under section 1162 of such title.
(4) NEW DIC RATES.—The dollar amounts in
effect under paragraphs (1) and (2) of section
1311(a) of such title.
(5) OLD
DIC
RATES.—Each of the dollar
amounts in effect under section 1311(a)(3) of such
title.
(6) ADDITIONAL DIC FOR SURVIVING SPOUSES
WITH MINOR CHILDREN.—The dollar amount in ef-
fect under section 1311(b) of such title.
(7) ADDITIONAL
DIC
FOR
DISABILITY.—The
dollar amounts in effect under sections 1311(c) and
1311(d) of such title.
(8) DIC FOR
DEPENDENT
CHILDREN.—The
dollar amounts in effect under sections 1313(a) and
1314 of such title.
(c) DETERMINATION
OF INCREASE.—(1) The in-
crease under subsection (a) shall be made in the dollar
amounts specified in subsection (b) as in effect on Novem-
ber 30, 2001.
(2) Except as provided in paragraph (3), each such
amount shall be increased by the same percentage as the
percentage by which benefit amounts payable under title
II of the Social Security Act (42 U.S.C. 401 et seq.) are
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increased effective December 1, 2001, as a result of a de-
termination under section 215(i) of such Act (42 U.S.C.
415(i)).
(3) Each dollar amount increased pursuant to para-
graph (2) shall, if not a whole dollar amount, be rounded
down to the next lower whole dollar amount.
(d) SPECIAL RULE.—The Secretary may adjust ad-
ministratively, consistent with the increases made under
subsection (a), the rates of disability compensation pay-
able to persons within the purview of section 10 of Public
Law 85–857 (72 Stat. 1263) who are not in receipt of
compensation payable pursuant to chapter 11 of title 38,
United States Code.
SEC. 102. PUBLICATION OF ADJUSTED RATES.
At the same time as the matters specified in section
215(i)(2)(D) of the Social Security Act (42 U.S.C.
415(i)(2)(D)) are required to be published by reason of
a determination made under section 215(i) of such Act
during fiscal year 2002, the Secretary of Veterans Affairs
shall publish in the Federal Register the amounts specified
in subsection (b) of section 101, as increased pursuant to
that section.
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TITLE II—COMPENSATION
PROVISIONS
SEC. 201. PRESUMPTION THAT DIABETES MELLITUS (TYPE
2) IS SERVICE-CONNECTED.
Section 1116(a)(2) is amended by adding at the end
the following new subparagraph:
‘‘(H) Diabetes Mellitus (Type 2).’’.
SEC. 202. INCLUSION OF ILLNESSES THAT CANNOT BE
CLEARLY DEFINED IN PRESUMPTION OF
SERVICE CONNECTION.
(a) ILLNESSES THAT CANNOT BE CLEARLY DE-
FINED.—(1) Subsection (a) of section 1117 is amended
by inserting ‘‘or fibromyalgia, chronic fatigue syndrome,
a chronic multisymptom illness, or any other illness that
cannot be clearly defined (or combination of illnesses that
cannot be clearly defined)’’ after ‘‘illnesses)’’.
(2) Subsection (c)(1) of such section is amended by
inserting ‘‘or fibromyalgia, chronic fatigue syndrome, a
chronic multisymptom illness, or any other illness that
cannot be clearly defined (or combination of illnesses that
cannot be clearly defined)’’ in the matter preceding sub-
paragraph (A) after ‘‘illnesses)’’.
(b) SIGNS
OR SYMPTOMS THAT MAY INDICATE
UNDIAGNOSED ILLNESSES.—(1) Section 1117 is further
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amended by adding at the end the following new sub-
section:
‘‘(g) For purposes of this section, signs or symptoms
that may be a manifestation of an undiagnosed illness in-
clude the following:
‘‘(1) Fatigue.
‘‘(2) Unexplained rashes or other dermato-
logical signs or symptoms.
‘‘(3) Headache.
‘‘(4) Muscle pain.
‘‘(5) Joint pain.
‘‘(6) Neurologic signs or symptoms.
‘‘(7) Neuropsychological signs or symptoms.
‘‘(8) Signs or symptoms involving the res-
piratory system (upper or lower).
‘‘(9) Sleep disturbances.
‘‘(10) Gastrointestinal signs or symptoms.
‘‘(11) Cardiovascular signs or symptoms.
‘‘(12) Abnormal weight loss.
‘‘(13) Menstrual disorders.’’.
(2) Section 1118(a) is amended by adding at the end
the following new paragraph:
‘‘(4) For purposes of this section, signs or symptoms
that may be a manifestation of an undiagnosed illness in-
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clude the signs and symptoms listed in section 1117(g)
of this title.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on April 1, 2002.
SEC. 203. PRESERVATION OF SERVICE CONNECTION FOR
UNDIAGNOSED ILLNESSES TO PROVIDE FOR
PARTICIPATION IN RESEARCH PROJECTS BY
GULF WAR VETERANS.
(a) AUTHORITY FOR SECRETARY TO PROVIDE FOR
PARTICIPATION WITHOUT LOSS OF BENEFITS.—Section
1117 is amended by adding after subsection (g), as added
by section 202(b), the following new subsection:
‘‘(h)(1) If the Secretary determines with respect to
a medical research project sponsored by the Department
that it is necessary for the conduct of the project that Per-
sian Gulf veterans in receipt of compensation under this
section or section 1118 of this title participate in the
project without the possibility of loss of service connection
under either such section, the Secretary shall provide that
service connection granted under either such section for
disability of a veteran who participated in the research
project may not be terminated.
‘‘(2) Paragraph (1) does not apply in a case in
which—
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‘‘(A) the original award of compensation or
service connection was based on fraud; or
‘‘(B) it is clearly shown from military records
that the person concerned did not have the requisite
service or character of discharge.
‘‘(3) The Secretary shall publish in the Federal Reg-
ister a notice of each determination made by the Secretary
under paragraph (1) with respect to a medical research
project.’’.
(b) EFFECTIVE DATE.—The authority provided by
subsection (h) of section 1117 of title 38, United States
Code, as added by subsection (a), may be used by the Sec-
retary of Veterans Affairs with respect to any medical re-
search project of the Department of Veterans Affairs,
whether commenced before, on, or after the date of the
enactment of this Act.
SEC. 204. PRESUMPTIVE PERIOD FOR UNDIAGNOSED ILL-
NESSES PROGRAM PROVIDING COMPENSA-
TION FOR VETERANS OF PERSIAN GULF WAR
WHO HAVE CERTAIN ILLNESSES.
Section 1117 is amended—
(1) in subsection (a)(2), by striking ‘‘within the
presumptive period prescribed under subsection (b)’’
and inserting ‘‘before December 31, 2003’’; and
(2) by striking subsection (b).
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TITLE III—ADMINISTRATION OF
UNITED STATES COURT OF
APPEALS 
FOR 
VETERANS
CLAIMS
SEC. 301. REGISTRATION FEES.
(a) FEES
FOR COURT-SPONSORED ACTIVITIES.—
Subsection (a) of section 7285 is amended by adding at
the end the following new sentence: ‘‘The Court may also
impose registration fees on persons participating in a judi-
cial conference convened pursuant to section 7286 of this
title or any other court-sponsored activity.’’.
(b) USE OF FEES.—Subsection (b) of such section
is amended by striking ‘‘for the purposes of (1)’’ and all
that follows through the period and inserting ‘‘for the fol-
lowing purposes:
‘‘(1) Conducting investigations and proceedings,
including employing independent counsel, to pursue
disciplinary matters.
‘‘(2) Defraying the expenses of—
‘‘(A) judicial conferences convened pursu-
ant to section 7286 of this title; and
‘‘(B) other activities and programs that
are designed to support and foster bench and
bar communication and relationships or the
study, understanding, public commemoration,
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or improvement of veterans law or of the work
of the Court.’’.
(c) CLERICAL AMENDMENTS.—(1) The heading for
such section is amended to read as follows:
‘‘§ 7285. Practice and registration fees’’.
(2) The item relating to such section in the table of
sections at the beginning of chapter 72 is amended to read
as follows:
‘‘7285. Practice and registration fees.’’.
SEC. 302. ADMINISTRATIVE AUTHORITIES.
(a) IN GENERAL.—Subchapter III of chapter 72 is
amended by adding at the end the following new section:
‘‘§ 7287. Administration
‘‘Notwithstanding any other provision of law, the
Court of Appeals for Veterans Claims may exercise, for
purposes of management, administration, and expenditure
of funds, the authorities provided for such purposes by
any provision of law (including any limitation with respect
to such provision) applicable to a court of the United
States as defined in section 451 of title 28, except to the
extent that such provision of law is inconsistent with a
provision of this chapter.’’.
(b) CLERICAL AMENDMENT.—The table of sections
at the beginning of such chapter is amended by inserting
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after the item related to section 7286 the following new
item:
‘‘7287. Administration.’’.
TITLE IV—OTHER MATTERS
SEC. 401. PAYMENT OF INSURANCE PROCEEDS TO AN AL-
TERNATE BENEFICIARY WHEN FIRST BENE-
FICIARY CANNOT BE IDENTIFIED.
(a) NSLI.—Section 1917 is amended by adding at
the end the following new subsection:
‘‘(f)(1) Following the death of the insured—
‘‘(A) if the first beneficiary otherwise entitled to
payment of the insurance proceeds does not make a
claim for such payment within three years after the
death of the insured, payment of the proceeds may
be made to another beneficiary designated by the in-
sured, in the order of precedence as designated by
the insured, as if the first beneficiary had pre-
deceased the insured; and
‘‘(B) if within five years after the death of the
insured, no claim has been filed by a person des-
ignated by the insured as a beneficiary and the Sec-
retary has not received any notice in writing that
any such claim will be made, payment of the insur-
ance proceeds may (notwithstanding any other provi-
sion of law) be made to such person as may in the
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judgment of the Secretary be equitably entitled to
the proceeds of the policy.
‘‘(2) Payment of insurance proceeds under paragraph
(1) shall be a bar to recovery by any other person.’’.
(c) TRANSITION PROVISION.—In the case of a person
insured under subchapter I or II of chapter 19 of title
38, United States Code, who dies before the date of the
enactment of this Act, the three-year and five-year periods
specified in subsection (f)(1) of section 1917 of title 38,
United States Code, as added by subsection (a), and sub-
section (b)(1) of section 1951 of such title, as added by
subsection (b), shall for purposes of the applicable sub-
section be treated as being the three-year and five-year
periods, respectively, beginning on the date of the enact-
ment of this Act.
SEC. 402. EXTENSION OF COPAYMENT REQUIREMENT FOR
OUTPATIENT PRESCRIPTION MEDICATIONS.
Section 1722A(d) is amended by striking ‘‘September
30, 2002’’ and inserting ‘‘September 30, 2006’’.
SEC. 403. DEPARTMENT OF VETERANS AFFAIRS HEALTH
SERVICES IMPROVEMENT FUND MADE SUB-
JECT TO APPROPRIATIONS.
(a) AMOUNTS TO BE SUBJECT
TO APPROPRIA-
TIONS.—Effective October 1, 2002, subsection (c) of sec-
tion 1729B is amended by striking ‘‘Amounts in the fund
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are hereby made available,’’ and inserting ‘‘Subject to the
provisions of appropriations Acts, amounts in the fund
shall be available,’’.
(b) TECHNICAL AMENDMENT.—Subsection (b) of
such section is amended by striking paragraph (1) and
redesignating paragraphs (2), (3), and (4) as paragraphs
(1), (2), and (3), respectively.
SEC. 404. NATIVE AMERICAN VETERAN HOUSING LOAN
PILOT PROGRAM.
(a) EXTENSION
OF NATIVE AMERICAN VETERAN
HOUSING LOAN PILOT PROGRAM.—Section 3761(c) is
amended by striking ‘‘December 31, 2001’’ and inserting
‘‘December 31, 2005’’.
(b) AUTHORIZATION OF THE USE OF CERTAIN FED-
ERAL
MEMORANDUMS
OF
UNDERSTANDING.—Section
3762(a)(1) is amended—
(1) by inserting ‘‘(A)’’ after ‘‘(1)’’;
(2) by striking ‘‘and’’ after the semicolon and
inserting ‘‘or’’; and
(3) by adding at the end the following:
‘‘(B) the tribal organization that has jurisdic-
tion over the veteran has entered into a memo-
randum of understanding with any department or
agency of the United States with respect to direct
housing loans to Native Americans that the Sec-
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retary determines substantially complies with the re-
quirements of subsection (b); and’’.
SEC. 405. MODIFICATION OF LOAN ASSUMPTION NOTICE
REQUIREMENT.
Section 3714(d) is amended to read as follows:
‘‘(d) With respect to a loan guaranteed, insured, or
made under this chapter, the Secretary shall provide, by
regulation, that at least one instrument evidencing either
the loan or the mortgage or deed of trust therefor, shall
conspicuously contain, in such form as the Secretary shall
specify, a notice in substantially the following form: ‘This
loan is not assumable without the approval of the Depart-
ment of Veterans Affairs or its authorized agent’.’’.
SEC. 406. ELIMINATION OF REQUIREMENT FOR PROVIDING
A COPY OF NOTICE OF APPEAL TO THE SEC-
RETARY.
(a) REPEAL.—Section 7266 is amended by striking
subsection (b).
(b) CONFORMING AMENDMENTS.—Such section is
further amended—
(1) by striking ‘‘(1)’’ after ‘‘(a)’’;
(2) by redesignating paragraph (2) as sub-
section (b);
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(3) by redesignating paragraph (3) as sub-
section (c) and redesignating subparagraphs (A) and
(B) thereof as paragraphs (1) and (2); and
(4) by redesignating paragraph (4) as sub-
section (d) and by striking ‘‘paragraph (3)(B)’’
therein and inserting ‘‘subsection (c)(2)’’.
SEC. 407. PILOT PROGRAM FOR EXPANSION OF TOLL-FREE
TELEPHONE ACCESS TO VETERANS SERVICE
REPRESENTATIVES.
(a) PILOT PROGRAM.—The Secretary of Veterans Af-
fairs shall conduct a pilot program to test the benefits and
cost-effectiveness of expanding access to veterans service
representatives of the Department of Veterans Affairs
through a toll-free (so-called ‘‘1–800’’) telephone number.
Under the pilot program, the Secretary shall expand the
available hours of such access to veterans service rep-
resentatives to not less than 12 hours on each regular
business day and not less than six hours on Saturday.
(b) INFORMATION TO BE PROVIDED.—The Secretary
shall ensure, as part of the pilot program, that veterans
service representatives of the Department of Veterans Af-
fairs have available to them (in addition to information
about benefits provided under laws administered by the
Secretary) information about veterans benefits provided
by—
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(1) all other departments and agencies of the
United States; and
(2) State governments.
(c) CONSULTATION.—The Secretary shall establish
the pilot program in consultation with the heads of other
departments and agencies of the United States that pro-
vide veterans benefits.
(d) VETERANS BENEFITS DEFINED.—For purposes
of this section, the term ‘‘veterans benefits’’ means bene-
fits provided to a person based upon the person’s own
service, or the service of someone else, in the Armed
Forces.
(e) PERIOD OF PILOT PROGRAM.—The pilot program
shall—
(1) begin not later than six months after the
date of the enactment of this Act; and
(2) end at the end of the two-year period begin-
ning on the date on which the program begins.
(f) REPORT.—Not later than 120 days after the end
of the pilot program, the Secretary shall submit to the
Committees on Veterans’ Affairs of the Senate and House
of Representatives a report on the pilot program. The re-
port shall provide the Secretary’s assessment of the bene-
fits and cost-effectiveness of continuing or making perma-
nent the pilot program, including an assessment of the ex-
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tent to which there is a demand for access to veterans
service representatives during the period of expanded ac-
cess to such representatives provided under the pilot pro-
gram.
SEC. 408. TECHNICAL AND CLERICAL AMENDMENTS.
(a) AMENDMENTS TO TITLE 38, UNITED STATES
CODE.—Title 38, United States Code, is amended as fol-
lows:
(1)(A) Section 712 is repealed.
(B) The table of sections at the beginning of
chapter 7 is amended by striking the item relating
to section 712.
(2) Section 1710B(c)(2)(B) is amended by in-
serting ‘‘on’’ before ‘‘November 30, 1999’’.
(3) Section 3695(a)(5) is amended by striking
‘‘1610’’ and inserting ‘‘1611’’.
(b) OTHER AMENDMENTS.—
(1) Section 1001(a)(2) of the Veterans’ Bene-
fits Improvements Act of 1994 (38 U.S.C. 7721
note) is amended by striking ‘‘and’’ at the end of
subparagraph (C).
(2) Section 12 of the Homeless Veterans Com-
prehensive Service Programs Act of 1992 (38 U.S.C.
7721 note) is amended in the first sentence by strik-
ing ‘‘to carry out this Act’’ and all that follows in
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that sentence and inserting ‘‘to carry out this Act
$50,000,000 for fiscal year 2001.’’.
SEC. 409. CODIFICATION OF RECURRING PROVISIONS IN
ANNUAL DEPARTMENT OF VETERANS AF-
FAIRS APPROPRIATIONS ACTS.
(a) CODIFICATION
OF RECURRING PROVISIONS.—
Section 313 is amended by adding at the end the following
new subsections:
‘‘(c) COMPENSATION AND PENSION.—Funds appro-
priated for Compensation and Pensions are available for
the following purposes:
‘‘(1) The payment of compensation benefits to
or on behalf of veterans as authorized by section 107
and chapters 11, 13, 51, 53, 55, and 61 of this title.
‘‘(2) Pension benefits to or on behalf of vet-
erans as authorized by chapters 15, 51, 53, 55, and
61 of this title and section 306 of the Veterans’ and
Survivors’ Pension Improvement Act of 1978.
‘‘(3) The payment of benefits as authorized
under chapter 18 of this title.
‘‘(4) Burial benefits, emergency and other offi-
cers’ retirement pay, adjusted-service credits and
certificates, payments of premiums due on commer-
cial life insurance policies guaranteed under the pro-
visions of article IV of the Soldiers’ and Sailors’