I 117th CONGRESS 1st Session H. R. 2935 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.

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 administrative cost charges for debts relating to certain benefits programs. 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. 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 (1) Except as provided in paragraph (2), no individual may incur a debt to the United States that— (A) arises from the participation of the individual in a program or benefit administered by the Under Secretary for Benefits; and (B) 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. (2) Nothing in this section shall be construed to affect 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 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 (1) Subject to paragraph (2), the Secretary may not take any action under section 3711 of title 31 regarding an overpayment described in a notice under subsection (b) of this section until the date that is 90 days after the date the Secretary issues such notice. (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 overpayment more difficult for an individual; (B) likely to cause an unpaid debt to be referred to the Treasury Offset Program; or (C) not in the best interest of the individual. . (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 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 clarifications in consultation with veterans service organizations, labor organizations that represent employees of the Department, and other relevant nongovernmental organizations. (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. 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 . 5. Reforms relating to recovery by Department of Veterans Affairs of amounts owed by individuals to the United States (a) Limitation on indebtedness offsets Subsection (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: (2) The Secretary may not make a deduction under paragraph (1) while the existence or amount of such indebtedness is disputed under section 5314A of this title. . (b) Administrative process for dispute of existence 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 prescribe regulations that establish an administrative process for the dispute of the existence or amount of an indebtedness 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 dispute pending under this section. (e) Rule of construction Nothing in this section shall be construed to modify the procedures for seeking review of a decision of the agency of original jurisdiction 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 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 to 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 a person about indebtedness described in section 5314(a) of title 38, United States Code, contain all information a person needs to dispute such an indebtedness, including a description of— (i) the specific actions the person 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. (4) Clerical amendment The table of sections 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 indebtedness described in paragraph (1) if the Secretary determines that the cost to the Department to recover such indebtedness, as determined when the debt is established, would exceed the amount of the indebtedness. .