II Calendar No. 539 116th CONGRESS 2d Session S. 805 IN THE SENATE OF THE UNITED STATES March 14, 2019 Mr. Tester (for himself, Mr. Boozman , Mr. Brown , Mr. Blumenthal , Ms. Stabenow , Ms. Harris , Ms. Warren , Mr. Wyden , Mrs. Shaheen , Ms. Baldwin , and Ms. Klobuchar ) introduced the following bill; which was read twice and referred to the Committee on Veterans' Affairs September 15, 2020 Reported by Mr. Moran , with an amendment Strike out all after the enacting clause and insert the part printed in italic 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.

1. Short title This Act may be cited as the Veteran Debt Fairness Act of 2019 . 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 through means selected by the individual (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. 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 inserting (1) before Subject to ; (B) in paragraph (1), as designated by subparagraph (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 (C) by adding at the end the following new paragraph: (2) Notwithstanding any other provision of law, the Secretary may only deduct under paragraph (1) an amount of the indebtedness of a veteran, the estate of a veteran, a spouse or child of a veteran who is deceased, or a recipient of educational assistance under chapter 30, 31, 32, 33, 34, or 35 of this title if the indebtedness is a result of one or more of the following: (A) An error made by or failure to report required information to the Department by the veteran, estate, spouse, child, or recipient of educational assistance, as the case may be. (B) Fraud perpetrated by the veteran, estate, spouse, child, or recipient of educational assistance, as the case may be. (C) A misrepresentation made by the veteran, estate, spouse, child, or recipient of educational assistance, as the case may be. (D) In the case of a recipient of educational assistance under such chapters, a reduction in or termination of pursuit of a program of education by the recipient. (E) A failure described in section 3319(i)(2)(A) of this title. (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 of such payment; or (ii) such other percent of such payment as the Secretary and the person whose future payments are to be reduced under paragraph (1) agree would not cause a hardship to the person 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) In the case of an indebtedness that was incurred as a result of an error or failure described in paragraph (2)(A), the Secretary may not deduct under paragraph (1) any amount relating to such indebtedness after the date that is five years after the date on which the debt was incurred. (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— (A) disputed under subsection (c); or (B) appealed. (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. (7) Paragraphs (2) through (6) shall not apply to payments under chapter 19 of this title. . (2) Due process (A) Minimum period for notice 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); ; and (ii) by striking paragraph (3) and inserting the following new paragraphs: (3) has notified such person about the proposed deductions by mailing a notice of intent letter, which— (A) is mailed to the person— (i) in the case of a debt incurred by a person by virtue of the person's participation in a program of educational assistance administered by the Secretary, not later than 45 days before making any of such deductions; and (ii) in the case of a debt incurred by a person by virtue of the person's participation in any other benefit program administered by the Secretary, not later than 90 days before making any of such deductions; and (B) includes 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. . (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. (4) Rule of construction This subsection and the amendments made by this subsection shall be construed to apply to an error in a payment to a person from the Department of Veterans Affairs the person is entitled to by virtue of the person's participation in a benefits program administered by the Secretary of Veterans Affairs following the person's notice to the Department of a change in the person's eligibility regarding such benefit or participation. (b) Limitation on authority To sue To collect certain debts (1) In general Section 5316(a) of such title 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) In the case of an indebtedness that was incurred as a result or an error or failure described in section 5314(a)(2)(A) of this title, no suit may be filed under this section to recover the indebtedness after the date that is five years after the date on which the debt was incurred. . (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) Limitation on cooperation with other Federal agencies To collect Section 5316 of such title is amended by adding at the end the following new subsection: (d) The Secretary may not provide any information or assistance to any other element of the Federal Government to recover, whether by bringing suit in a court of competent jurisdiction, by deducting amounts from future payments, or by other method, any indebtedness of any person who has been determined to be indebted to the United States by virtue of such person's participation in a benefits program administered by the Secretary if the Secretary does not have the authority to recover such indebtedness under this title. . (d) Repair of credit (1) In general Chapter 53 of such title is amended by adding at the end the following new section: 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. . (e) Audits (1) One-time 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: (A) 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. (B) Whether and to what degree vacant positions in the Veterans Benefits Administration affect such errors. (2) Annual audits Section 5314 of such title, as amended by subsection (a), is further amended by adding at the end the following new subsection: (f) Not less frequently than once each year, the Secretary shall complete an audit of not less than 10 percent of all debts to the United States incurred by virtue of a person's participation in a benefits program administered by the Secretary to identify errors. . (f) 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. (g) Coordination with other Federal agencies (1) Interagency working group The Secretary of Veterans Affairs may establish an interagency working to assess how executive agencies should submit timely information to the Secretary of Veterans Affairs in order to reduce overpayments to veterans in the event of a life event, such as a change in work status, incarceration, or change in marital status. (2) Quarterly reporting by Secretary of Defense to Secretary of Veterans Affairs Each quarter, the Secretary of Defense shall transmit to the Secretary of Veterans Affairs information on compensation received by members of the reserve components of the Armed Forces who received during such quarter for instruction, training, or other duties under section 206 of title 37, United States Code.

1. Short title This Act may be cited as the Stopping Harm and Implementing Enhanced Lead-time for Debts for Veterans Act of 2020 or the SHIELD for Veterans Act of 2020 . 2. Prohibition of debt arising from overpayment 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 overpayment due to delay in processing (a) Limitation No individual may incur a debt to the United States that— (1) arises from any program or benefit administered by the Secretary; and (2) is attributable to the failure of an employee or official of the Department to process information provided by or on behalf of that individual within applicable timeliness standards established by the Secretary. (b) Notice to beneficiary (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 detailed explanation of the right of the individual— (A) to dispute the overpayment, including a detailed explanation of the process by which to dispute the overpayment; or (B) to request a waiver of indebtedness. (c) Delay on collection The Secretary may not take any action under section 3711 of title 31 regarding an overpayment described in a notice under subsection (b) until the date that is 90 days after the date the Secretary issues such notice. . (2) Clerical amendment The table of sections 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 processing. . (3) Deadline The Secretary of Veterans Affairs shall prescribe regulations to establish standards 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 communication of debts (1) In general Not later than 180 days after the date of the enactment of this Act, and one year thereafter, the Secretary of Veterans Affairs shall submit to Congress a report on the improvement 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 implementation 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 patient medical statements electronically. (ii) The development and implementation of a mechanism by which individuals eligible for benefits under the laws administered by the Secretary may receive electronic correspondence relating to debt and overpayment information. (iii) The development and implementation, by not later than October 1, 2022, of a mechanism by which individuals eligible for benefits under the laws administered by the Secretary may access information related to Department of Veterans Affairs 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 veterans incur debts to the United States. The Secretary shall develop such improvements and clarifications in consultation with veterans service organizations and other relevant nongovernmental organizations. (v) The development and implementation, by not later than October 1, 2022, of a mechanism by which veterans may update their dependency information electronically. (B) A description of the current efforts and plans for improving the accuracy of payments to individuals entitled to benefits under the laws administered by the Secretary, including specific data matching agreements. (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 individuals who are underpaid receive adequate compensation payments. (D) A list of actions completed, implementation steps, and timetables for each requirement described in subparagraphs (A) through (C). (E) A description of any new legislative authority required to complete any such requirement. 3. Prohibition on Department of Veterans Affairs 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 subparagraphs: (A) a loan, loan-guaranty, or loan-insurance 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. 4. Threshold for reporting debts to consumer reporting agencies (a) In general Chapter 53 of title 38, United States Code, is amended by adding after section 5319 the following new section: 5320. Threshold for reporting debts to consumer reporting agencies The Secretary shall prescribe regulations that establish the minimum amount of a claim or debt, arising from a benefit administered by the Under Secretary for Benefits or Under Secretary for Health, that the Secretary will report to a consumer reporting agency under section 3711 of title 31. . (b) Clerical amendment The table of sections at the beginning of such chapter is amended by adding after the item relating to section 5319 the following new item: 5320.Threshold for reporting debts to consumer reporting agencies. . (c) Deadline The Secretary of Veterans Affairs shall prescribe regulations under section 5320 of such title, as added by subsection (a), not later than 180 days after the date of the enactment of this Act. 5. Extension of window to request relief from recovery of debt arising under laws administered by the Secretary of Veterans Affairs Section 5302(a) of title 38, United States Code, is amended by striking 180 days and inserting one year . 6. Reforms relating to recovery by Department of Veterans Affairs of amounts owed by veterans to the United States (a) Administrative process for dispute of existence or amount of indebtedness (1) In general Section 5314 of title 38, United States Code, is amended— (A) by redesignating subsections (c) and (d) as subsections (d) and (e); and (B) by inserting after subsection (b) the following new subsection (c): (c) (1) The Secretary shall prescribe an administrative process for the dispute of the existence or amount of an indebtedness subject to subsection (a). (2) The Secretary shall ensure that each dispute under paragraph (1) 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) Notwithstanding any other provision of law, the Secretary may not deduct under subsection (a) any amount relating to an indebtedness while the existence or amount of such indebtedness is being— (A) disputed under paragraph (1) of this subsection; or (B) appealed. (5) Nothing in this subsection shall be construed to prohibit a person from seeking relief from a court of competent jurisdiction. (6) Nothing in this subsection shall be construed to affect a dispute regarding a decision on a claim that is subject to section 5104C(a)(1) of this title. . (2) Existing administrative process The Secretary of Veterans Affairs shall carry out subsection (c) of such section, as added by paragraph (1)(B), by improving the administrative process of the Department of Veterans Affairs for the dispute of the existing or amount of an indebtedness that was in effect on the day before the date of the enactment of this Act. (3) Improvements regarding Department website and notices In carrying out paragraph (2), the Secretary shall— (A) improve the website of the Department; and (B) ensure that such website and written notices sent to veterans about indebtedness described in section 5314(a) of title 38, United States Code, contain all information veterans need to dispute such a indebtedness, including a description of— (i) the specific actions the veterans will need to take in order to dispute the indebtedness; (ii) the documentation that will be required for the dispute; and (iii) how the documentation is to be submitted. (b) Minimum thresholds for amounts to be recovered Subsection (a) of such section is amended— (1) by inserting (1) before Subject to ; and (2) by adding at the end the following new paragraph: (2) 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. . (c) Conforming amendment Subsection (a)(1), as designated by subsection (b)(1), is amended by striking to subsections (b) and (d) of this section and inserting to paragraph (2) of this subsection, subsections (b), (c), and (e) of this section, . 7. Removal of dependents from award of compensation or pension The Secretary of Veterans Affairs shall ensure that— (1) a veteran may remove any dependent from an award of compensation or pension to the veteran using the eBenefits system of the Department of Veterans Affairs, or a successor system; and (2) such removal takes effect not later than 60 days after the date on which the veteran makes such removal.

September 15, 2020 Reported with an amendment