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. 
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 
‘‘VA Beneficiary Debt Collection Improvement Act’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
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 administra-
tive cost charges for debts relating to certain benefits pro-
grams. 
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. 
SEC. 2. PROHIBITION OF DEBT ARISING FROM OVERPAY-
MENT DUE TO DELAY IN PROCESSING BY THE 
DEPARTMENT OF VETERANS AFFAIRS. 
(a) BAR TO RECOVERY.— 
(1) IN
GENERAL.—Chapter 53 of title 38, 
United States Code, is amended by inserting after 
section 5302A the following new section: 
‘‘§ 5302B. Prohibition of debt arising from overpay-
ment due to delay in processing 
‘‘(a) LIMITATION.—(1) Except as provided in para-
graph (2), no individual may incur a debt to the United 
States that— 
‘‘(A) arises from the participation of the indi-
vidual in a program or benefit administered by the 
Under Secretary for Benefits; and 
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‘‘(B) is attributable to the failure of an em-
ployee or official of the Department to process infor-
mation provided by or on behalf of that individual 
within applicable timeliness standards established by 
the Secretary. 
‘‘(2) Nothing in this section shall be construed to af-
fect the penal and forfeiture provisions for fiduciaries set 
forth in chapter 61 of this title. 
‘‘(b) NOTICE.—(1) If the Secretary determines that 
the Secretary has made an overpayment to an individual, 
the Secretary shall provide notice to the individual of the 
overpayment. 
‘‘(2) Notice under paragraph (1) shall include a de-
tailed explanation of the right of the individual— 
‘‘(A) to dispute the overpayment, including a 
detailed explanation of the process by which to dis-
pute the overpayment; or 
‘‘(B) to request a waiver of indebtedness. 
‘‘(c) DELAY ON COLLECTION.—(1) Subject to para-
graph (2), the Secretary may not take any action under 
section 3711 of title 31 regarding an overpayment de-
scribed in a notice under subsection (b) of this section 
until the date that is 90 days after the date the Secretary 
issues such notice. 
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‘‘(2) The Secretary may take action under section 
3711 of title 31 regarding an overpayment described in 
a notice under subsection (b) of this section before the 
date that is 90 days after the date the Secretary issues 
such notice if the Secretary determines that delaying such 
action is— 
‘‘(A) likely to make repayment of such overpay-
ment more difficult for an individual; 
‘‘(B) likely to cause an unpaid debt to be re-
ferred to the Treasury Offset Program; or 
‘‘(C) not in the best interest of the individual.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such chapter is amended 
by inserting after the item relating to section 5302A 
the following new item: 
‘‘5302B. Prohibition of debt arising from overpayment due to delay in proc-
essing.’’. 
(3) DEADLINE.—The Secretary of Veterans Af-
fairs shall prescribe regulations to establish stand-
ards under section 5302B(a)(2) of such title, as 
added by subsection (a), not later than 180 days 
after the date of the enactment of this Act. 
(b) PLAN FOR IMPROVED NOTIFICATION AND COM-
MUNICATION OF DEBTS.— 
(1) IN
GENERAL.—Not later than 180 days 
after the date of the enactment of this Act, and one 
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year thereafter, the Secretary of Veterans Affairs 
shall submit to Congress a report on the improve-
ment of the notification of and communication with 
individuals who receive overpayments made by the 
Secretary. 
(2) CONTENTS.—Each report under paragraph 
(1) shall include each of the following: 
(A) The plan of the Secretary to carry out 
each of the following: 
(i) The development and implementa-
tion of a mechanism by which individuals 
enrolled in the patient enrollment system 
under section 1705 of title 38, United 
States Code, may view their monthly pa-
tient medical statements electronically. 
(ii) The development and implementa-
tion of a mechanism by which individuals 
eligible for benefits under the laws admin-
istered by the Secretary may receive elec-
tronic correspondence relating to debt and 
overpayment information. 
(iii) The development and implemen-
tation, by not later than October 1, 2022, 
of a mechanism by which individuals eligi-
ble for benefits under the laws adminis-
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tered by the Secretary may access informa-
tion related to Department of Veterans Af-
fairs debt electronically. 
(iv) The improvement and clarification 
of Department communications relating to 
overpayments and debt collection, including 
letters and electronic correspondence and 
including information relating to the most 
common reasons individuals eligible for 
benefits under the laws administered by 
the Secretary incur debts to the United 
States and the process for requesting a 
waiver of such debt. The Secretary shall 
develop such improvements and clarifica-
tions in consultation with veterans service 
organizations, labor organizations that rep-
resent employees of the Department, and 
other relevant nongovernmental organiza-
tions. 
(B) A description of the current efforts 
and plans for improving the accuracy of pay-
ments to individuals entitled to benefits under 
the laws administered by the Secretary, includ-
ing specific data matching agreements. 
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(C) A description of steps to be taken to 
improve the identification of underpayments to 
such individuals and to improve Department 
procedures and policies to ensure that such in-
dividuals who are underpaid receive adequate 
compensation payments. 
(D) A list of actions completed, implemen-
tation steps, and timetables for each require-
ment described in subparagraphs (A) through 
(C). 
(E) A description of any new legislative 
authority required to complete any such re-
quirement. 
SEC. 3. PROHIBITION ON DEPARTMENT OF VETERANS AF-
FAIRS INTEREST AND ADMINISTRATIVE COST 
CHARGES FOR DEBTS RELATING TO CERTAIN 
BENEFITS PROGRAMS. 
(a) IN GENERAL.—Section 5315(a)(1) of title 38, 
United States Code, is amended— 
(1) by striking ‘‘other than a loan’’ and all that 
follows through the semicolon and inserting ‘‘other 
than—’’; and 
(2) by adding at the end the following new sub-
paragraphs: 
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‘‘(A) a loan, loan-guaranty, or loan-insur-
ance program; 
‘‘(B) a disability compensation program; 
‘‘(C) a pension program; or 
‘‘(D) an educational assistance program.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply with respect to an indebtedness 
that occurs on or after the date of the enactment of this 
Act. 
SEC. 4. EXTENSION OF WINDOW TO REQUEST RELIEF FROM 
RECOVERY OF DEBT ARISING UNDER LAWS 
ADMINISTERED BY THE SECRETARY OF VET-
ERANS AFFAIRS. 
Section 5302(a) of title 38, United States Code, is 
amended by striking ‘‘180 days’’ and inserting ‘‘one year’’. 
SEC. 5. REFORMS RELATING TO RECOVERY BY DEPART-
MENT OF VETERANS AFFAIRS OF AMOUNTS 
OWED BY INDIVIDUALS TO THE UNITED 
STATES. 
(a) LIMITATION ON INDEBTEDNESS OFFSETS.—Sub-
section (a) of section 5314 of title 38, United States Code, 
is amended— 
(1) by inserting ‘‘(1)’’ before ‘‘Subject to’’; and 
(2) by adding at the end the following new 
paragraph: 
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‘‘(2) The Secretary may not make a deduction under 
paragraph (1) while the existence or amount of such in-
debtedness is disputed under section 5314A of this title.’’. 
(b) ADMINISTRATIVE PROCESS FOR DISPUTE OF EX-
ISTENCE OR AMOUNT OF INDEBTEDNESS.— 
(1) ESTABLISHMENT.—Chapter 53 of title 38, 
United States Code, is amended by inserting after 
section 5314 the following new section: 
‘‘§ 5314A. Dispute of indebtedness 
‘‘(a) ESTABLISHMENT.—The Secretary shall pre-
scribe regulations that establish an administrative process 
for the dispute of the existence or amount of an indebted-
ness described in section 5314(a)(1) of this title (without 
regard to whether the Secretary has made a deduction 
under such section regarding such indebtedness). 
‘‘(b) STANDARDS.—The process under subsection (a) 
shall be efficient, effective, and equitable. 
‘‘(c) TIMELINESS.—The Secretary shall ensure that 
each dispute under subsection (a) proceeds in accordance 
with standards for timeliness prescribed by the Secretary 
under this section. 
‘‘(d) LIMITATION.—The Secretary may not submit to 
any debt collector (as defined in section 803 of the Fair 
Debt Collection Practices Act (15 U.S.C. 1692a)) any dis-
pute pending under this section. 
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‘‘(e) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to modify the procedures for seek-
ing review of a decision of the agency of original jurisdic-
tion described in section 5104C(a)(1) of this title.’’. 
(2) EXISTING ADMINISTRATIVE PROCESS.—The 
Secretary of Veterans Affairs shall carry out section 
5314A of such title, as added by paragraph (1), by 
improving the administrative process of the Depart-
ment of Veterans Affairs for the dispute of the exist-
ing or amount of an indebtedness that was in effect 
on the day before the date of the enactment of this 
Act. 
(3) IMPROVEMENTS TO DEPARTMENT WEBSITE 
AND NOTICES.—In carrying out paragraph (2), the 
Secretary shall— 
(A) improve the website of the Depart-
ment; and 
(B) ensure that such website and written 
notices sent to a person about indebtedness de-
scribed in section 5314(a) of title 38, United 
States Code, contain all information a person 
needs to dispute such an indebtedness, includ-
ing a description of— 
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(i) the specific actions the person will 
need to take in order to dispute the indebt-
edness; 
(ii) the documentation that will be re-
quired for the dispute; and 
(iii) how the documentation is to be 
submitted. 
(4) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of such chapter is amended 
by inserting after the item relating to section 5314 
the following new item: 
‘‘5314A. Dispute of indebtedness.’’. 
(c) LIMITATION
ON
AUTHORITY
TO
RECOVER 
DEBTS.—Section 5302(a) of title 38, United States Code, 
is amended— 
(1) by inserting ‘‘(1)’’ before ‘‘There’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) The Secretary may not seek to recover an in-
debtedness described in paragraph (1) if the Secretary de-
termines that the cost to the Department to recover such 
indebtedness, as determined when the debt is established, 
would exceed the amount of the indebtedness.’’. 
Æ 
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