Title: Veteran Debt Fairness Act of 2018
Policy area: Armed Forces and National Security

Summary:
Veteran Debt Fairness Act of 2018
This bill limits the authority of the Department of Veterans Affairs to recover overpayments of benefits from veterans.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2341 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 2341

  To amend title 38, United States Code, to improve the processing of 
 veterans benefits by the Department 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 veterans to the United 
 States, to improve the due process accorded veterans with respect to 
                 such recovery, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 25, 2018

Mr. Tester (for himself, Mr. Brown, and Mr. Blumenthal) introduced the 
 following bill; which was read twice and 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 Department 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 veterans to the United 
 States, to improve the due process accorded veterans with respect to 
                 such recovery, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veteran Debt Fairness Act of 2018''.

SEC. 2. IMPROVING PROCESSING OF VETERANS BENEFITS BY DEPARTMENT OF 
              VETERANS AFFAIRS.

    (a) Notification of Debts Incurred.--The Secretary of Veterans 
Affairs shall make such changes to such information technology systems 
of the Department of Veterans Affairs, including the eBenefits system 
or successor system, as may be necessary so that a person who is 
entitled to a payment from the Department by virtue of the person's 
participation in a benefits program administered by the Secretary will 
receive, at the request of the person, a notice from the Department (by 
electronic mail or other mechanism) whenever such person incurs a debt 
to the United States by virtue of such participation.
    (b) Updating Dependent Information.--The Secretary shall make such 
changes to such information technology systems of the Department, 
including the eBenefits system or successor system, as may be necessary 
so that whenever the Secretary records in such systems information 
about a dependent of a person, the person is able to review and revise 
such information.
    (c) Tracking of Metrics.--The Secretary shall make such changes to 
such information technology systems of the Department as may be 
necessary to track the following:
            (1) The number and amount of payments made by the 
        Department to persons as part of a benefits program 
        administered by the Secretary which result in the persons 
        incurring a debt to the United States by virtue of such 
        payments.
            (2) The average debt to the United States incurred by a 
        person by virtue of a payment described in paragraph (1).
            (3) The frequency by which applications for relief under 
        section 5302(a) of title 38, United States Code, are approved 
        and denied.
            (4) Such other metrics as the Secretary considers 
        appropriate.

SEC. 3. REFORMS RELATING TO RECOVERY BY DEPARTMENT OF VETERANS AFFAIRS 
              OF AMOUNTS OWED BY VETERANS TO THE UNITED STATES.

    (a) Indebtedness Offsets.--
            (1) Limitation on scope of authority.--Subsection (a) of 
        section 5314 of title 38, United States Code, is amended--
                    (A) by striking ``to subsections (b) and (d) of 
                this section'' and inserting ``to paragraphs (2) 
                through (6) of this subsection, subsections (b) and (e) 
                of this section,''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2) The Secretary may only deduct under paragraph (1) an amount 
of the indebtedness of a veteran, the estate of a veteran, or a spouse 
or child of a veteran who is deceased if the indebtedness is a result 
of one or more of the following:
            ``(A) An error made by the veteran, estate, spouse, or 
        child, as the case may be.
            ``(B) Fraud perpetrated by the veteran, estate, spouse, or 
        child, as the case may be.
            ``(C) A misrepresentation made by the veteran, estate, 
        spouse, or child, as the case may be.
    ``(3)(A) The Secretary may not deduct under paragraph (1) from any 
payment made under chapter 11 or 15 of this title more than the lessor 
of--
            ``(i) 25 percent; or
            ``(ii) such other percent as the Secretary determines, 
        pursuant to a request made under subparagraph (B), is the 
        greatest percent that would not cause a hardship to the 
        recipient of the payment.
    ``(B) A person whose future payments are to be reduced under 
paragraph (1) may request, via the administrative process prescribed 
under subsection (c), the Secretary make a determination under 
subparagraph (A)(ii) of this paragraph.
    ``(4) The Secretary may not deduct under paragraph (1) any amount 
relating to an indebtedness that was incurred by a veteran more than 
five years previously.
    ``(5) The Secretary may not deduct under paragraph (1) any amount 
relating to an indebtedness while the existence or amount of such 
indebtedness is being disputed under subsection (c).
    ``(6) The Secretary may not deduct under paragraph (1) any amount 
if the Secretary determines that the cost that would be incurred by the 
Department to recover such amount would exceed the amount to be 
recovered.''.
            (2) Due process.--
                    (A) Minimum period for notice and secondary 
                review.--Subsection (b) of such section is amended--
                            (i) by amending paragraph (1) to read as 
                        follows:
            ``(1) has made reasonable efforts to notify such person of 
        such person's right--
                    ``(A) to dispute through prescribed administrative 
                processes the existence or amount of such indebtedness;
                    ``(B) to request a waiver of such indebtedness 
                under section 5302 of this title; and
                    ``(C) to request the Secretary make a determination 
                under subsection (a)(3)(A)(ii).'';
                            (ii) in paragraph (2), by striking ``; 
                        and'' and inserting a semicolon; and
                            (iii) by striking paragraph (3) and 
                        inserting the following new paragraphs:
            ``(3) has notified such person, not later than 90 days 
        before making any of such deductions--
                    ``(A) about the proposed deductions; and
                    ``(B) detailed information about the indebtedness, 
                including, in the case of an overpayment, an itemized 
                list of each overpayment and the specific reason for 
                the overpayment; and
            ``(4) in any case in which the Secretary determines the 
        amount of indebtedness of a person exceeds $2,500, the 
        Secretary completes a secondary review to ensure that the 
        determination is accurate and the indebtedness is subject to 
        offset under this section.''.
                    (B) Adjudication of disputes.--
                            (i) In general.--Such section is amended--
                                    (I) by redesignating subsections 
                                (c) and (d) as subsections (d) and (e); 
                                and
                                    (II) by inserting after subsection 
                                (b) the following new subsection (c):
    ``(c)(1) The Secretary shall prescribe an administrative process 
for--
            ``(A) the dispute of the existence or amount of an 
        indebtedness subject to subsection (a); and
            ``(B) making requests under paragraph (3)(B) of such 
        subsection.
    ``(2) The Secretary shall ensure that each dispute under paragraph 
(1)(A) is adjudicated not later than 120 days after the dispute is 
filed.
    ``(3) 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 debt pending adjudication under the process 
prescribed under paragraph (1).
    ``(4) Nothing in this subsection shall be construed to prohibit a 
person from seeking relief from a court of competent jurisdiction.''.
                            (ii) Limitations on interest and fees 
                        charged during period of dispute.--Section 5315 
                        of such title is amended--
                                    (I) in subsection (b)(1), in the 
                                first sentence by striking ``or (B)'' 
                                and inserting ``(B) for any period 
                                during which the existence or amount of 
                                the indebtedness is being disputed 
                                under section 5314(c) of this title, or 
                                (C)''; and
                                    (II) in subsection (c)--
                                            (aa) by inserting ``(1)'' 
                                        before ``The administrative''; 
                                        and
                                            (bb) by adding at the end 
                                        the following new paragraph:
    ``(2) No administrative costs may be charged under this section 
with respect to an indebtedness described in subsection (a) while the 
existence or amount of the indebtedness is being disputed under section 
5314(c) of this title.''.
            (3) Effective date.--This subsection and the amendments 
        made by this subsection shall take effect on the date of the 
        enactment of this Act and shall apply with respect to 
        deductions made under section 5314 of such title on or after 
        such date.
    (b) Limitation on Authority To Sue To Collect Certain Debts.--
            (1) In general.--Section 5316(a) of title 38, United 
        States, is amended--
                    (A) in paragraph (1), by striking ``(2) and (3)'' 
                and inserting ``(2), (3), and (4)'';
                    (B) by redesignating paragraph (3) as paragraph 
                (4); and
                    (C) by inserting after paragraph (2) the following 
                new paragraph (3):
    ``(3) No suit may be filed under this section to recover any 
indebtedness incurred more than five years previously.''.
            (2) Effective date.--This subsection and the amendments 
        made by this subsection shall take effect on the date of the 
        enactment of this Act and shall apply with respect to suits 
        filed under section 5316 of such title on or after such date.
    (c) Repair of Credit.--
            (1) In general.--Chapter 53 of such title is amended by 
        adding at the end the following new section:
``Sec. 5320. Correction of erroneous information submitted to consumer 
              reporting agencies
    ``(a) Correcting Errors by the Department.--In any case in which 
the Secretary finds that the Department has submitted erroneous 
information to a consumer reporting agency about the indebtedness of 
any person who has been determined by the Secretary to be indebted to 
the United States by virtue of such person's participation in a 
benefits program administered by the Secretary, the Secretary shall--
            ``(1) instruct the consumer reporting agency to remove such 
        erroneous information from the consumer report of such person 
        or take such other action as may be required to ensure that 
        such erroneous information is not included in the report of 
        such person; and
            ``(2) transmit to the consumer reporting agency such 
        information as the consumer reporting agency may require to 
        take such appropriate actions.
    ``(b) Correcting Errors by Debt Collectors.--In any case in which 
the Secretary finds that a debt collector acting on behalf of the 
Department has submitted erroneous information to a consumer reporting 
agency about the indebtedness of any person who has been determined by 
the Secretary to be indebted to the United States by virtue of such 
person's participation in a benefits program administered by the 
Secretary, the Secretary shall instruct the debt collector to request 
the consumer reporting agency remove such erroneous information from 
the consumer report of such person or take such other action as may be 
required to ensure such erroneous information is not included in the 
report of such person.''
    ``(c) Notice.--Not later than 60 days after the date on which the 
Secretary issues an instruction under subsection (a)(1) or (b) with 
respect to a person, the Secretary shall notify the person that the 
Secretary issued such instruction.
    ``(d) Definitions.--In this section:
            ``(1) The terms `consumer report' and `consumer reporting 
        agency' have the meanings given such terms in section 603 of 
        the Fair Credit Reporting Act (15 U.S.C. 1681a).
            ``(2) The term `debt collector' has the meaning given such 
        term in section 803 of the Fair Debt Collection Practices Act 
        (15 U.S.C. 1692a).''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of chapter 53 of such title is amended by adding at 
        the end the following new item:

``5320. Correction of erroneous information submitted to consumer 
                            reporting agencies.''.
    (d) Audit.--Not later than 180 days after the date of the enactment 
of this Act, the Secretary of Veterans Affairs shall complete an audit 
to determine the following:
            (1) The frequency by which the Department of Veterans 
        Affairs makes an error that results in a payment to a person by 
        virtue of such person's participation in a benefits program 
        administered by the Secretary that such person is not entitled 
        to or in an amount that exceeds the amount to which the person 
        is entitled.
            (2) Whether and to what degree vacant positions in the 
        Veterans Benefits Administration affect such errors.
    (e) Plan.--Not later than 180 days after the date of the enactment 
of this Act, the Secretary shall submit to the Committee on Veterans' 
Affairs of the Senate and the Committee on Veterans' Affairs of the 
House of Representatives a plan and description of resource 
requirements necessary to align information technology systems to 
ensure that errors described in subsection (d)(1) are not the result of 
communication or absence of communication between information 
technology systems.
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