IIB 
114TH CONGRESS 
2D SESSION 
H. R. 677 
IN THE SENATE OF THE UNITED STATES 
FEBRUARY 10, 2016 
Received; read twice and referred to the Committee on Veterans’ Affairs 
AN ACT 
To amend title 38, United States Code, to provide for annual 
cost-of-living adjustments to be made automatically by 
law each year in the rates of disability compensation 
for veterans with service-connected disabilities and the 
rates of dependency and indemnity compensation for sur-
vivors of certain service-connected disabled veterans, and 
for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘American Heroes COLA Act of 2015’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Expansion of eligibility for medallions. 
Sec. 3. Definitions relating to claims for benefits under laws administered by 
the Secretary of Veterans Affairs. 
Sec. 4. Quarterly reports on formal and informal claims for benefits under laws 
administered by Secretary of Veterans Affairs. 
Sec. 5. Expedited payment of survivor’s benefits. 
Sec. 6. Priority for processing claims of the Department of Veterans Affairs. 
Sec. 7. Treatment of medical evidence provided by non-Department of Veterans 
Affairs medical professionals in support of claims for disability 
compensation. 
Sec. 8. Automatic annual increase in rates of disability compensation and de-
pendency and indemnity compensation. 
Sec. 9. Improvement of fiduciaries for veterans. 
Sec. 10. Board of Veterans’ Appeals video hearings. 
Sec. 11. Improvements to authority for performance of medical disabilities ex-
aminations by contract physicians. 
Sec. 12. Pilot program on fully developed appeals. 
Sec. 13. Deadline for certification of appeals forms by regional offices of the 
Department of Veterans Affairs. 
Sec. 14. Evaluation of backlog of disability claims and appeals of claims of De-
partment of Veterans Affairs. 
Sec. 15. Methods for validating certain World War II Merchant Mariner service 
considered to be active service by the Secretary of Veterans Af-
fairs. 
Sec. 16. Designation of American World War II Cities. 
Sec. 17. Sense of Congress regarding American veterans disabled for life. 
Sec. 18. Extension of pilot program on counseling in retreat settings for women 
veterans newly separated from service in the Armed Forces. 
SEC. 2. EXPANSION OF ELIGIBILITY FOR MEDALLIONS. 
Section 2306(d)(4) of title 38, United States Code, 
is amended to read as follows: 
‘‘(4)(A) In lieu of furnishing a headstone or marker 
under this subsection to a deceased individual described 
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in subparagraph (B), the Secretary may furnish, upon re-
quest, a medallion or other device of a design determined 
by the Secretary to signify the deceased individual’s status 
as a veteran, to be attached to a headstone or marker fur-
nished at private expense. 
‘‘(B) A deceased individual described in this sub-
section is an individual who— 
‘‘(i) served in the Armed Forces on or after 
April 6, 1917; and 
‘‘(ii) is eligible for a headstone or marker fur-
nished under paragraph (1) (or would be so eligible 
but for the date of the death of the individual).’’. 
SEC. 3. DEFINITIONS RELATING TO CLAIMS FOR BENEFITS 
UNDER LAWS ADMINISTERED BY THE SEC-
RETARY OF VETERANS AFFAIRS. 
(a) DEFINITIONS.— 
(1) IN
GENERAL.—Section 5100 of title 38, 
United States Code, is amended to read as follows: 
‘‘§ 5100. Definitions 
‘‘In this chapter: 
‘‘(1) The term ‘claimant’ means any individual 
applying for, or submitting a claim for, any benefit 
under the laws administered by the Secretary. 
‘‘(2) The term ‘claim’ means a communication 
in writing requesting a determination of entitlement 
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or evidencing a belief in entitlement to a benefit 
under the laws administered by the Secretary. 
‘‘(3) The term ‘formal claim’ means a claim 
submitted on an application form prescribed by the 
Secretary.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 51 of such title is 
further amended by striking the item relating to sec-
tion 5100 and inserting the following new item: 
‘‘5100. Definitions.’’. 
(b) EFFECTIVE DATE.—Section 5100 of title 38, 
United States Code, as amended by subsection (a), shall 
take effect on the date of the enactment of this Act and 
shall apply with respect to a claim submitted on or after 
such date. 
SEC. 4. QUARTERLY REPORTS ON FORMAL AND INFORMAL 
CLAIMS FOR BENEFITS UNDER LAWS ADMIN-
ISTERED BY SECRETARY OF VETERANS AF-
FAIRS. 
(a) QUARTERLY REPORTS.—During the five-year pe-
riod beginning on the date of the enactment of this Act, 
the Secretary shall submit to the Committees on Veterans’ 
Affairs of the Senate and House of Representatives quar-
terly reports on formal and informal claims submitted to 
the Secretary. Each such report shall include, for the 3- 
month period covered by the report— 
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(1) the total number of claims submitted to the 
Secretary; 
(2) the total number of informal claims sub-
mitted to the Secretary; 
(3) the total number of formal claims submitted 
to the Secretary; 
(4) the total number of forms indicating an in-
tent to file a claim for benefits submitted to the Sec-
retary; 
(5) the total number of claims notification let-
ters that included an invitation to the claimant to 
submit an additional formal claim that was reason-
ably raised during the adjudication of the claim for 
which the notification letter is sent; 
(6) of the claimants who received notification 
letters described in paragraph (5), the total number 
who submitted a formal claim in response to the in-
vitation included in the letter; 
(7) the total number of electronically filed 
claims submitted to the Secretary; and 
(8) the total number of fully-developed claims 
submitted to the Secretary. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that the Secretary of Veterans Affairs should de-
velop a designated form for an increase or reopening of 
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a claim that does not require the resubmittal of informa-
tion previously submitted on a formal claim form. 
(c) DEFINITIONS.—In this section: 
(1) The terms ‘‘claim’’, ‘‘claimant’’, and ‘‘for-
mal claim’’ have the meanings given such terms in 
section 5100 of title 38, United States Code, as 
amended by section 4. 
(2) The term ‘‘informal claim’’ means a com-
munication in writing requesting a determination of 
entitlement or evidencing a belief in entitlement, to 
a benefit under the laws administered by the Sec-
retary of Veterans Affairs that— 
(A) is submitted in a format other than on 
an application form prescribed by the Secretary; 
(B) indicates an intent to apply for one or 
more benefits under the laws administered by 
the Secretary; 
(C) identifies the benefit sought; 
(D) is made or submitted by a claimant, 
his or her duly authorized representative, a 
Member of Congress, or another person acting 
on behalf of a claimant who meets the require-
ments established by the Secretary for such 
purpose; and 
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(E) may include a report of examination or 
hospitalization, if the report relates to a dis-
ability which may establish such an entitlement. 
(3) The term ‘‘reasonably raised’’ with respect 
to a claim means that evidence of an entitlement to 
a benefit under the laws administered by the Sec-
retary is inferred or logically placed at issue upon a 
sympathetic reading of another claim and the record 
developed with respect to that claim. 
SEC. 5. EXPEDITED PAYMENT OF SURVIVOR’S BENEFITS. 
(a) IN GENERAL.—Section 5101(a)(1) of title 38, 
United States Code, is amended— 
(1) by striking ‘‘A specific’’ and inserting ‘‘(A) 
Except as provided in subparagraph (B), a specific’’; 
and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B)(i) The Secretary may pay benefits under chap-
ters 13 and 15 and sections 2302, 2307, and 5121 of this 
title to a survivor of a veteran who has not filed a formal 
claim if the Secretary determines that the record contains 
sufficient evidence to establish the entitlement of the sur-
vivor to such benefits. 
‘‘(ii) For purposes of this subparagraph and section 
5110 of this title, the earlier of the following dates shall 
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be treated as the date of the receipt of the survivor’s appli-
cation for benefits described in clause (i): 
‘‘(I) The date on which the survivor of a vet-
eran (or the representative of such a survivor) noti-
fies the Secretary of the death of the veteran 
through a death certificate or other relevant medical 
evidence indicating that the death was due to a serv-
ice-connected or compensable disability. 
‘‘(II) The head of any other department or 
agency of the Federal Government notifies the Sec-
retary of the death of the veteran. 
‘‘(iii) In notifying the Secretary of the death of a vet-
eran as described in clause (ii)(I), the survivor (or the rep-
resentative of such a survivor) may submit to the Sec-
retary additional documents relating to such death without 
being required to file a formal claim.’’. 
(b) REPORT.— 
(1) IN
GENERAL.—Not later than one year 
after the date of the enactment of this Act, the Sec-
retary of Veterans Affairs shall submit to the Com-
mittee on Veterans’ Affairs of the Senate and the 
Committee on Veterans’ Affairs of the House of 
Representatives a report on benefits paid pursuant 
to covered claims. 
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(2) CONTENTS.—The report under paragraph 
(1) shall include the following: 
(A) The number of covered claims adju-
dicated during the one-year period preceding 
the date of the report, disaggregated by the fol-
lowing: 
(i) Claims in which the claimant 
claimed entitlement to compensation on the 
basis of the claimant’s status as the spouse 
of a deceased veteran. 
(ii) Claims in which the claimant 
claimed entitlement to compensation on the 
basis of the claimant’s status as the child 
of a deceased veteran. 
(iii) Claims in which the claimant 
claimed entitlement to compensation on the 
basis of the claimant’s status as the parent 
of a deceased veteran. 
(B) The number of covered claims that 
were adjudicated during such period and for 
which 
compensation 
was 
not 
awarded, 
disaggregated by clauses (i) through (iii) of 
subparagraph (A). 
(C) A comparison of the accuracy and 
timeliness of covered claims adjudicated during 
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such period with non-covered claims filed by 
survivors of a veteran. 
(D) The findings of the Secretary with re-
spect to adjudicating covered claims. 
(E) Such recommendations as the Sec-
retary may have for legislative or administrative 
action to improve the adjudication of claims 
submitted to the Secretary for benefits under 
chapters 13 and 15 and sections 2302, 2307, 
and 5121 of title 38, United States Code. 
(3) COVERED CLAIM DEFINED.—In this sub-
section, the term ‘‘covered claim’’ means a claim 
covered by section 5101(a)(1)(B) of title 38, United 
States Code, as added by subsection (a). 
(c) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply with respect to claims for bene-
fits based on a death occurring on or after the date of 
the enactment of this Act. 
SEC. 6. PRIORITY FOR PROCESSING CLAIMS OF THE DE-
PARTMENT OF VETERANS AFFAIRS. 
(a) IN GENERAL.—Subchapter I of chapter 51 of title 
38, United States Code, is amended by adding at the end 
the following new section: 
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‘‘§ 5109C. Priority for processing claims 
‘‘(a) PRIORITY.—In processing claims for compensa-
tion under this chapter, the Secretary shall provide the 
following claimants with priority over other claimants: 
‘‘(1) Veterans who have attained the age of 70. 
‘‘(2) Veterans who are terminally ill. 
‘‘(3) Veterans with life-threatening illnesses. 
‘‘(4) Homeless veterans (as defined in section 
2002 of this title). 
‘‘(5) Veterans who were awarded the Medal of 
Honor. 
‘‘(6) Veterans who are former prisoners of war. 
‘‘(7) Veterans whose claims are being reviewed 
again in relation to a previously denied claim relat-
ing to military sexual trauma. 
‘‘(8) Veterans whom the Secretary determines, 
on a case-by-case basis, are seriously or very seri-
ously injured. 
‘‘(9) Veterans whom the Secretary determines, 
on a case-by-case basis, should be given priority 
under this section based on an application for good 
cause established by the Secretary. 
‘‘(b) REGULATIONS.—The Secretary shall prescribe 
regulations to carry out subsection (a).’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
at the beginning of such chapter is amended by inserting 
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after the item relating to section 5109B the following new 
item: 
‘‘5109C. Priority for processing claims.’’. 
SEC. 7. TREATMENT OF MEDICAL EVIDENCE PROVIDED BY 
NON-DEPARTMENT OF VETERANS AFFAIRS 
MEDICAL PROFESSIONALS IN SUPPORT OF 
CLAIMS FOR DISABILITY COMPENSATION. 
(a) ACCEPTANCE OF REPORTS OF PRIVATE PHYSI-
CIAN EXAMINATIONS.—Section 5125 of title 38, United 
States Code, is amended— 
(1) by striking ‘‘For purposes’’ and inserting 
‘‘(a) IN GENERAL.—For purposes’’; and 
(2) by adding at the end the following new sub-
sections: 
‘‘(b) SUFFICIENCY OF EVIDENCE.—If a veteran has 
submitted a medical opinion or report of a medical exam-
ination administered by a private physician in support of 
the veteran’s claim, the Secretary may not order a medical 
examination to be administered by a Department physi-
cian unless the Secretary provides the veteran with a thor-
ough explanation of why the medical opinion or report 
submitted by the veteran was not sufficiently complete and 
the reason why additional medical evidence is necessary. 
‘‘(c) SUFFICIENTLY COMPLETE DEFINED.—For pur-
poses of a medical opinion or report described in sub-
section (a), the term ‘sufficiently complete’ means com-
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petent, credible, probative, and containing such informa-
tion as may be required to make a decision on the claim 
for which the medical opinion or report is provided.’’. 
(b) APPLICATION.—The amendment made by sub-
section (a) shall apply with respect to medical evidence 
submitted after the date that is one year after the date 
of the enactment of this Act by veterans who have not 
submitted any claim for disability compensation to the 
Secretary of Veterans Affairs before such date. 
(c) ANNUAL REPORTS.— 
(1) IN GENERAL.—During the three-year period 
beginning three years after the date of the enact-
ment of this Act, the Secretary of Veterans Affairs 
shall submit to the Committees on Veterans’ Affairs 
of the House of Representatives and the Senate an 
annual report on the implementation of section 
5125(b) of title 38, United States Code, as added by 
subsection (a). 
(2) MATTERS INCLUDED.—Each report under 
paragraph (1) shall include, with respect to the year 
covered by the report, the following: 
(A) The number of veterans who submitted 
a medical opinion or report of a medical exam-
ination administered by a private physician in 
support of the veteran’s claim for disability 
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compensation as described in section 5125(b) of 
title 38, United States Code, as added by sub-
section (a). 
(B) Of the number of veterans described in 
subparagraph (A), the number of veterans 
whose medical opinion or report of a medical 
examination administered by a private physician 
was determined by the Secretary to not be suf-
ficiently complete pursuant to such section 
5125(b), including the five most frequent rea-
sons for such a determination. 
(C) A comparison of the approval rate of 
claims for disability compensation with respect 
to— 
(i) veterans who submitted medical 
opinions or reports of a medical examina-
tion administered by a private physician in 
support of the veteran’s claim; and 
(ii)(I) veterans who did submit such 
opinions or reports but such opinions or 
reports were determined by the Secretary 
to not be sufficiently complete pursuant to 
such section 5125(b); and 
(II) veterans who did not submit such 
opinions or reports. 
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SEC. 8. AUTOMATIC ANNUAL INCREASE IN RATES OF DIS-
ABILITY COMPENSATION AND DEPENDENCY 
AND INDEMNITY COMPENSATION. 
(a) INDEXING TO SOCIAL SECURITY INCREASES.— 
Section 5312 of title 38, United States Code, is amended 
by adding at the end the following new subsection: 
‘‘(d)(1) During the nine-year period beginning on De-
cember 1, 2016, whenever there is an increase in benefit 
amounts payable under title II of the Social Security Act 
(42 U.S.C. 401 et seq.) as a result of a determination 
made under section 215(i) of such Act (42 U.S.C. 415(i)), 
the Secretary shall, effective on the date of such increase 
in benefit amounts, increase the dollar amounts in effect 
for the payment of disability compensation and depend-
ency and indemnity compensation by the Secretary, as 
specified in paragraph (2), as such amounts were in effect 
immediately before the date of such increase in benefit 
amounts payable under title II of the Social Security Act, 
by the same percentage as the percentage by which such 
benefit amounts are increased. 
‘‘(2) The dollar amounts to be increased pursuant to 
paragraph (1) are the following: 
‘‘(A) WARTIME DISABILITY COMPENSATION.— 
Each of the dollar amounts in effect under section 
1114 of this title. 
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‘‘(B) ADDITIONAL
COMPENSATION
FOR
DE-
PENDENTS.—Each of the dollar amounts in effect 
under section 1115(1) of this title. 
‘‘(C) 
CLOTHING
ALLOWANCE.—The 
dollar 
amount in effect under section 1162 of this title. 
‘‘(D) DEPENDENCY
AND
INDEMNITY
COM-
PENSATION
TO
SURVIVING
SPOUSE.—Each of the 
dollar amounts in effect under subsections (a) 
through (d) of section 1311 of such title. 
‘‘(E) DEPENDENCY
AND
INDEMNITY
COM-
PENSATION
TO
CHILDREN.—Each of the dollar 
amounts in effect under sections 1313(a) and 1314 
of such title. 
‘‘(3) Whenever there is an increase under paragraph 
(1) in amounts in effect for the payment of disability com-
pensation and dependency and indemnity compensation, 
the Secretary shall publish such amounts, as increased 
pursuant to such paragraph, in the Federal Register at 
the same time as the material required by section 
215(i)(2)(D) of the Social Security Act (42 U.S.C. 
415(i)(2)(D)) is published by reason of a determination 
under section 215(i) of such Act (42 U.S.C. 415(i)). 
‘‘(4) Each dollar amount increased under paragraph 
(1), if not a whole dollar amount, shall be rounded to the 
next lower whole dollar amount. 
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‘‘(5) The Secretary of Veterans Affairs may adjust 
administratively, consistent with the increases made under 
subsection (a), the rates of disability compensation pay-
able to persons under section 10 of Public Law 85–857 
(72 Stat. 1263) who have not received compensation 
under chapter 11 of this title.’’. 
(b) EFFECTIVE DATE.—Subsection (d) of section 
5312 of title 38, United States Code, as added by sub-
section (a) of this section, shall take effect on December 
1, 2016. 
SEC. 9. IMPROVEMENT OF FIDUCIARIES FOR VETERANS. 
(a) APPOINTMENT AND SUPERVISION.— 
(1) Section 5502 of title 38, United States 
Code, is amended to read as follows: 
‘‘§ 5502. Appointment of fiduciaries 
‘‘(a) APPOINTMENT.—Where it appears to the Sec-
retary that the interest of the beneficiary would be served 
thereby, payment of benefits under any law administered 
by the Secretary may be made directly to the beneficiary 
or to a relative or some other fiduciary for the use and 
benefit of the beneficiary, regardless of any legal disability 
on the part of the beneficiary. 
‘‘(b) APPEALS.—(1) If the Secretary determines a 
beneficiary to be mentally incompetent for purposes of ap-
pointing a fiduciary under this chapter, the Secretary shall 
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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 patient’s 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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to have the appeal determined under the pilot 
program. 
(B) All evidence that the claimant believes 
is needed for the appeal as of the date of the 
filing. 
(C) A statement of the argument in sup-
port of the claim, if any. 
(2) TIMING.—A claimant shall make an election 
under paragraph (1) as part of the notice of dis-
agreement filed by the claimant in accordance with 
paragraph (1)(A). 
(3) REVERSION.— 
(A) At any time, a claimant who makes an 
election under paragraph (1) may elect to revert 
to the standard appeals process. Such a rever-
sion shall be final. 
(B) A claimant described in subparagraph 
(A), or a claimant who makes an election under 
paragraph (1) but is later determined to be in-
eligible for the pilot program under subsection 
(a), shall revert to the standard appeals process 
without any penalty to the claimant other than 
the loss of the docket number associated with 
the fully developed appeal. 
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(4) OUTREACH.—In providing claimants with 
notices of the determination of a claim during the 
period in which the pilot program under subsection 
(a) is carried out, the Secretary shall conduct out-
reach as follows: 
(A) The Secretary shall provide to the 
claimant (and to the representative of record of 
the claimant, if any) information regarding— 
(i) the pilot program, including the 
advantages and disadvantages of the pro-
gram; 
(ii) how to make an election under 
paragraph (1); 
(iii) the limitation on the use of new 
evidence described in paragraph (3) of sub-
section (c) and the development of infor-
mation under paragraph (4) of such sub-
section; and 
(iv) the ability of the claimant to seek 
advice and education regarding such proc-
ess from veterans service organizations, at-
torneys, and claims agents recognized 
under chapter 59 of title 38, United States 
Code. 
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