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104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-397
_______________________________________________________________________


 
 VETERANS HOUSING, EMPLOYMENT PROGRAMS, AND EMPLOYMENT RIGHTS BENEFITS 
                              ACT OF 1995

_______________________________________________________________________


 December 11, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______


          Mr. Stump, from the Committee on Veterans' Affairs,

                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2289]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 2289) to amend title 38, United States Code, to 
extend permanently certain housing programs, to improve the 
veterans employment and training system, and to make clarifying 
and technical amendments to further clarify the employment and 
reemployment rights and responsibilities of members of the 
uniformed services, as well as those of the employer community, 
and for other purposes, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                              Introduction

    The Subcommittee on Education, Training, Employment and 
Housing met on September 7, 1995 and recommended the discussion 
draft which became H.R. 2289 to the full Committee. The full 
Committee met on September 20, 1995, and ordered H.R. 2289 
reported favorably to the House by unanimous voice vote.

                      Summary of the Reported Bill

    H.R. 2289 contains three titles. Title I would:

    1. Permanently authorize certain veterans' housing 
programs, including:
    (a) Negotiated interest rates--permit a veteran to 
negotiate with lenders and sellers for the most favorable rate 
and terms available;
    (b) Adjustable rate mortgages--veterans may purchase a home 
using a VA-guaranteed adjustable rate mortgage.
    (c) Energy efficient mortgages--cover the costs of energy 
efficiency improvements to a veterans' primary residence or 
energy efficiency improvements to a dwelling owned by a 
veteran;
    (d) Authority of lenders of automatically guaranteed loans 
to review appraisals--allow lenders to directly review 
appraisal reports and determine the value of property purchased 
with a VA-guaranteed loan; and
    (e) Housing assistance for homeless veterans--help homeless 
veterans and families acquire shelter through agreements 
between the Secretary and community based organizations or 
states.
    2. Extend the VA's authority for the enhanced loan asset 
sale authority for an additional five years. Authorizes the 
Secretary to guarantee the timely payment of principal and 
interest of securities evidencing an interest in a pool of 
mortgages made by the Secretary.
    3. Require the VA to report every 2 years instead of every 
year on the above-named VA home loan programs.
    4. Rename the ``Homeless Veterans' Reintegration Project'' 
the ``Homeless Veterans Employment Program'' and extend the 
program through fiscal year 1998 with an annual $10 million 
authorization.
    5. Require the Secretary of the Department of Labor (DOL) 
to maintain no fewer than five Veterans Employment and Training 
Service (VETS) regional offices in order to permit DOL to 
consolidate and reduce the number of regional offices.
    6. Require that VETS Regional Administrators appointed 
after the date of enactment of this Act be veterans.
    7. Broaden the duties of certain state-based clerical 
positions to include other kinds of veterans employment program 
responsibilities.
    8. Maintain the two-year residency requirement for State 
Directors and Assistant Directors for Veterans Employment and 
Training, but allow individuals who have served as Directors or 
Assistant Directors for at least two years to be appointed as a 
Director and Assistant Director in any state.
    9. Authorize the Secretary of Labor to conduct a five-state 
pilot program under which the primary responsibilities of the 
Local Veterans Employment Representatives (LVERs) would be case 
management and the provision of direct employment and training 
services to veterans in employment centers operated under the 
authority of a State.
    10. Require DOL to report to Congress on the effect of the 
pilot program on the timeliness and quality of employment and 
training services to veterans.
    11. Clarify that under section 4311, title 38, USC, the 
standard and burden-of-proof provisions included in this 
section apply to both the anti-reprisal and anti-discrimination 
provisions.
    12. Clarify that the time during which an individual is 
entitled to reemployment rights and benefits includes the 
period prior to actually entering military service, to the 
extent that such time is necessary to prepare for entering 
military service or traveling to the military service site.
    13. Clarify that the types of military service which do not 
count toward an individual's five-year service limit include 
service performed by a member of a uniformed service who is 
ordered to or retained on active duty under any provision of 
law because of a war or national emergency declared by the 
President or the Congress.
    14. Clarify that DOL investigators have the right to 
interview individuals with information relevant to their 
investigation.
    15. Emphasize that an employer can not require an employee 
to use vacation or similar leave time in order to participate 
in military training.
    16. Clarify that protection under chapter 43 covers not 
only the period of uniformed service but also the period prior 
to actually entering service, to the extent that that time is 
necessary to prepare for entering uniformed service or for 
traveling to the military service site.
    17. Clarify the mission of the Department of Labor (DOL) in 
the case-resolution process; would also clarify that USERRA 
continues case processing procedures that existed under the 
previous veterans' reemployment rights law whereby any case, 
including those the Department found to be non-meritorious, was 
referred to the U.S. Attorney if the claimant requested 
referral.
    18. Emphasize the special role assigned to the Office of 
Personnel Management in providing assistance to federal 
employees under chapter 43.

                       Background and Discussion

                  Title I--Veterans' Housing Programs

    This year marks the 51st anniversary of the enactment of 
the ``Serviceman's Readjustment Act'', Public Law 78-346, which 
created the VA Home Loan Guaranty Program. Under this program, 
the VA has guaranteed nearly 15 million homes valued in excess 
of $459 billion. The expenses associated with VA home loan 
programs are funded by direct, mandatory accounts.
Permanent housing extenders
    Section 101(a) of the Committee bill would make permanent 
several housing-related pilot programs including the Negotiated 
Interest Rate (NIR) program. This program, established as a 
pilot under Public Law 102-547, allows a veteran to negotiate 
the interest rate percentage as well as the points with a 
lender. The Committee has reviewed loan rates and has found 
that veterans are receiving competitive rates that compare 
favorably with non VA-guaranteed mortgage loans. Historically, 
the Secretary set interest rates and veterans were prohibited 
from paying discount points. It is the Committee's view that 
the artificial limit on interest rates and the discount point 
policy sometimes made it difficult for veterans to obtain 
financing.
    Section 101(b) of the bill would make permanent the 
Secretary's authority to make energy efficient mortgages to 
cover the costs of energy-related improvements to the primary 
residence or energy efficiency improvements to a dwelling owned 
by a veteran. The pilot program establishing these loans was 
contained in P.L. 102-547. VA guaranteed 995 energy efficient 
mortgages in fiscal year 1994, with an average loan amount for 
energy-efficiency improvements of $2,995. The Committee 
considers energy efficiency cost savings to be of considerable 
importance in deciding to authorize this program permanently.
    Section 101(c) of H.R. 2289 would also make permanent the 
authority of the Secretary to guarantee the real estate 
mortgage investment conduits (REMICs) that are used to market 
vendee loans. This authorization would guarantee timely 
payments of principal and interest on the certificates issued 
by the REMICs. Extending the sale program would eliminate the 
need for VA servicing and would permit the conversion of long-
term receivables into cash assets when VA sells the loans. This 
program has no direct or indirect effect on veterans or their 
ability to secure home loans.
    The VA's lead underwriter, First Boston Corporation, has 
estimated that timely payments reduce the yield that must be 
offered to investors. Reducing the yield on certificates would 
lower the payments to certificate holders and thereby increase 
sales receipts to VA. Other sales-related costs such as 
Securities and Exchange registration and credit rating costs 
would be eliminated as well, boosting potential savings. Sales 
volume remains consistent at about $440 million, with the VA 
normally holding sales three times annually. However, the 
volume of loan sales is linked to the number of properties VA 
requires following foreclosure. This number has declined in the 
past several years.
    Section 101(d) of the bill would also make permanent the 
authority for lenders of automatically guaranteed loans to 
review appraisals, thus permitting lenders to directly review 
appraisal reports done by VA-selected appraisers without the 
appraisals being first reviewed by VA. This procedure shortens 
loan processing time. During the first three quarters of fiscal 
year 1995, 32 percent of the loans were guaranteed using this 
provision. The Committee and VA found that this program 
increases efficiency and should be continued.
    Section 101(e) would make permanent a provision of the 
Homeless Veterans Comprehensive Service Programs Act of 1992 
(Public Law 102-590), which established a program under which 
homeless veterans and their families could acquire shelter 
through agreements by the Secretary and community-based 
organizations or states. The program was subject to 
appropriations and first received funding in fiscal year 1994.
Codification of reporting requirements
    Section 102(a) codifies the VA reporting requirements for 
veterans home loan programs, and makes changes to the reporting 
frequency of the reports to every second year, regarding VA 
housing programs affecting the status of Selected Reserve 
borrowers; negotiated interest rates; determination of 
reasonable rates; loans for energy efficiency improvements and 
direct loans to Native Americans.
Adjustable Rate Mortgage Program
    Section 102(b) would make the adjustable rate mortgage 
(ARM) program permanent.
    Following the Committee's Mark-up, the Congressional Budget 
Office submitted a second budget estimate indicating that the 
program had a direct cost of $37 million for one year. The pay-
go implications of the estimate make a re-authorization of the 
program difficult.
    ARMs (Public Law 102-547) are guaranteed loans with an 
adjustable interest rate that changes relative to a specific 
national interest rate index approved by the Secretary (usually 
the 6-month Treasury Bill). Changes in the interest rate are 
limited in any single yearly adjustment to a maximum of one 
percent increase or decrease. The rate may increase a maximum 
of five percent over the life of the loan.
    ARMs have become an increasingly popular option for home 
financing for veterans, and for the public in general. In 
Fiscal Year 1994, about 11 percent of all VA loans were of this 
type, while during the first half of the current fiscal year, 
21 percent of all VA loans were ARMs.
    The Committee notes, and disagrees with CBO's use of 
Federal National Mortgage Association (Fannie Mae) data to 
develop its cost estimate because the VA ARM program nearly 
mirrors the 10-year-old Federal Housing Administration (FHA) 
ARM program, whose data clearly indicates very favorable 
foreclosure rates as compared with FHA fixed-rate loan 
programs.
    The Committee also notes that VA has experienced only seven 
(7) ARM foreclosures out of over 68,000 ARM loans guaranteed in 
1993 and 1994. Industry officials indicate that ARM 
foreclosures typically occur within the first year of the loan.
    The Committee disagrees with the CBO estimate for the ARM 
program. Lower interest rates, conservative underwriting, 
extensive pre-foreclosure outreach and assistance, and 
extremely favorable experience with its existing base of ARMs 
lead the Committee to believe the program merits continuation.
Homeless Veterans Reintegration Program
    Section 103(a) is a provision to rename the Homeless 
Veterans Reintegration Program (HVRP) to reflect the employment 
focus of the program, changing its name to the Homeless 
Veterans Employment Program (HVEP). As the focus of any 
homeless program should be employment of the veteran, the 
program should reflect that goal in its name and by its 
mandates. Clearly job placement is the best method to remove 
veterans from the streets.
    The Committee finds that the service provided veterans by 
each of the program warrant the continuation of the program on 
a permanent basis.
    The Committee feels that the Homeless Veterans 
Reintegration Project (HVRP) as administered by the Department 
of Labor, has been a remarkably effective program, in spite of 
its rather meager funding level. HVRP was designed to find and 
place homeless veterans in jobs and, in cooperation with 
community-based organizations, help indigent and homeless 
veterans return to society as productive citizens. Although in 
past years $5 million has been appropriated for the program, 
the program will receive no appropriated support for fiscal 
year 1996. The Committee nonetheless strongly believes that 
HVRP has been an exemplary program and should be maintained. 
The Appropriations Committee has urged the Secretary of Labor 
to fund the program within his discretionary resources, and the 
Committee concurs with this guidance. The Committee strongly 
supports reauthorizing the program so that the Department of 
Labor can fund from other resources or so Congress may direct 
future appropriations to the program.

                 Title II--Veterans Employment Program

    The Assistant Secretary of Labor for Veterans Employment 
and Training (ASVET) is endeavoring to down-size the VETS, 
while at the same time maintaining high levels of service to 
veterans in search of employment and training. To enable VETS 
to accomplish this, the Committee bill includes several 
provisions recommended by the ASVET which the Committee agrees 
would accomplish this mandate.
Regional Administrators for Veterans' Employment and Training
    Section 201 of the Committee bill would require the 
Secretary of Labor to maintain no fewer than five Regional 
Administrators (RAs) for Veterans' Employment and Training and 
that each RA appointed after the enactment of this bill be a 
veteran. Current law stipulates that the Secretary of Labor 
shall maintain a number of VETS regional offices equal to the 
regional offices maintained by the Department of Labor's 
Employment and Training Administration (ETA). Accordingly, 
there are currently 10 VETS RAs. VETS operated effectively in 
the 1980s with seven regional offices. The ability to 
reorganize and reduce the number of RAs would permit the ASVET 
to efficiently manage consolidation while assuring a 
performance-centered reinvention of VETS. The Committee is 
confident that this change will not adversely affect the 
quality of services to veterans. The administration supports 
this provision.
    Section 201 considers an additional recommendation to 
require that Regional Administrators be veterans. This 
requirement is consistent with similar requirements for State 
and Assistant State Directors, as well as for the Disabled 
Veterans Outreach Specialists (DVOPs).
    Section 202 is an effort to further enable the ASVET to 
improve the quality of employment and training services with 
current staffing levels, and would allow a redefinition of the 
duties of support personnel assigned to State Directors for 
Veterans' Employment and Training (DVET). This would broaden 
the position description to include other kinds of veterans 
employment program support, thus expanding the job position 
beyond just clerical duties. Because of automation, many 
offices are increasingly able to operate effectively without 
the utilization of a full-time clerical assistant thus freeing 
that employee to assist with more substantive job development-
related assignments. This would allow the ASVET to retain a 
knowledgeable and productive staff support system while 
improving services.
    Section 203 would change the residency requirement for the 
position of State or Assistant State Director for veterans 
employment. Under current law, an individual must have been a 
resident of a State for at least two years to qualify for the 
position of State or Assistant State Director of Veterans' 
Employment and Training. Originally, it was deemed appropriate 
that the Director (DVET) and the Assistant Director (ADVET) be 
a State resident because it was assumed State residents would 
be familiar with the State's economy, employment system, and 
the individuals in State and local governments who would 
contribute to the successful employment of veterans in that 
State. While those were pertinent considerations, modern 
management demands human resource management skills, 
familiarity with modern labor exchange technologies, and 
knowledge of the laws and regulations governing veterans 
employment, reemployment, and training programs. These are 
qualities that are not dependent on State residency for 
successful implementation, and have become dominant factors in 
the private sector.
    It is apparent that the residency requirement is no longer 
the over-riding job qualification, and in fact, may restrict 
the ASVET's ability to hire the most qualified individual in 
this essential position.
    The Committee bill would maintain the two-year requirement 
except that individuals who have served as Directors or 
Assistant Directors for at least two years may be eligible for 
appointment as Director or Assistant Director in any State.
    As vacancies occur throughout the country during VETS down-
sizing, Directors and Assistant Directors in one particular 
State may transfer or be transferred, at the direction of the 
ASVET, to another State in to fill a Director's position if a 
suitable candidate is not found in the state experiencing a 
vacancy. This provision would be in keeping with job 
qualifications of other federal positions, none of which 
require any sort of residency requirements. This provision 
affords the ASVET the flexibility necessary to maintain an 
orderly and sustainable system of qualified State and Assistant 
State Directors throughout the nation.
Pilot program to integrate and streamline functions of LVERS
    Section 204 of the bill would authorize the Secretary of 
Labor to conduct a pilot program to investigate methods of 
service delivery to veterans. Recent labor and employment 
consolidation legislation is forcing the Department of Labor to 
institute changes in the employment system.
    The legislation authorizes a pilot program in no more than 
five States. As part of the pilot program, VETS could modify 
the primary Title 38 responsibilities of Local Veterans 
Employment Representatives (LVERs) to focus on case management 
of direct employment and training services to veterans. The 
pilot will test the effectiveness of the case management 
system. This will also test the level of services provided to 
veterans by the State Employment Security Agencies, or new 
delivery models such as the ``one-stop shop'' models of 
employment services as determined by each of the States. The 
legislation further requires DOL to report to Congress on the 
effect this redirection of responsibility has on the timeliness 
and quality of employment and training services to veterans.
    The importance of the pilot program and the successful 
achievement of the goals necessary for VETS to conduct business 
within the evolving employment system are of great concern to 
the Committee. The Committee will watch closely the development 
of the pilot program and will expect regular, informal 
briefings beginning no later than six months into the 
implementation period of the pilot program.
    During Subcommittee mark-up on September 7, Rep. Maxine 
Waters, Ranking Member, proposed an amendment to the Committee 
bill suggesting clarifying language to the pilot program 
provision. The amendment was incorporated into the bill.

Title III--Employment and Reemployment Rights of the Uniformed Services

    The provisions of Federal law included in chapter 43, title 
38, United States Code, safeguarded the employment and 
reemployment rights of members of the uniformed services for 
over fifty years. Although the law effectively served the 
interests of veterans, members of the Selected Reserve, the 
Armed Forces, and the employer community, the statute was 
complex and sometimes ambiguous. Accordingly, in 1994, the 
Committee revised chapter 43 in order to clarify, simplify, 
and, where necessary, strengthen the existing veterans' 
employment and reemployment rights provisions. The measure that 
accomplished these goals, Public Law 103-353, the Uniformed 
Services Employment and Reemployment Rights Act of 1994 
(USERRA), was signed into law on October 13, 1994.
    Because of the complex and technical nature of P.L. 103-
353, the Committee anticipated that, as the law was 
implemented, minor problems would arise and technical and 
clarifying amendments would be necessary. Title III of H.R. 
2289 responds to the issues and concerns that have thus far 
been brought to the attention of the Committee. This title is 
based on H.R. 1941, a bill introduced by the Honorable G. V. 
(Sonny) Montgomery on June 28, 1995, to make clarifying and 
technical amendments to further clarify the employment and 
reemployment rights and responsibilities of members of the 
uniformed services, as well as those of the employer community. 
H.R. 1941 was largely derived from recommendations transmitted 
to Mr. Montgomery from the Honorable Robert Reich, Secretary of 
Labor.
    A working group, which included representatives of the 
Departments of Labor and Defense and the Office of Personnel 
Management, jointly prepared the Administration's suggested 
amendments. The Committee wants to express its sincere 
appreciation to all those in the Executive branch who worked 
closely with Committee staff to develop this explanatory 
legislation.
    There are provisions in Title III that should be 
particularly noted. Section 303 of the Committee bill would 
clarify that under section 4311, title 38, USC, the standard 
and burden of proof provisions included in this section apply 
to both the anti-reprisal and anti-discrimination provisions.
    Section 304(a) of H.R. 2289 would amend section 4312(a) of 
title 38, USC, to clarify that protection under chapter 43 
covers not only the period of uniformed service but also the 
period prior to actually entering service, to the extent such 
time is necessary to prepare for entering uniformed service or 
for traveling to the military service site.
    Section 304(b) of the reported bill would clarify that the 
types of military service which do not count toward an 
individual's five-year service limit include service performed 
by a member of a uniformed service who is ordered to or 
retained on active duty under any provision of law because of a 
war or national emergency declared by the President or the 
Congress. As currently written, the law provides service 
exemption to those individuals whose service is during, but is 
in no way related to, a war or national emergency. This was not 
the intent of Congress.
    Section 304(d) would amend chapter 43 to change references 
to sections in title 10, USC. This is made necessary by the 
renumbering of title 10 sections in the Defense Authorization 
Act for Fiscal Year 1995.
    Section 305 of the reported bill would ensure that a 
returning servicemember, who is not qualified for his or her 
escalator or pre-service position because of reasons other than 
a disability incurred in or aggravated during military service, 
would be entitled to another position for which he or she is 
qualified that is the nearest approximation to the position for 
which the servicemember otherwise would have been entitled.
    Section 306 of the reported bill would clarify that an 
election to use accrued vacation of annual or similar leave 
during the period of service rests solely with the 
servicemember to use such leave.
    Section 309 of the Committee bill would amend section 4322, 
title 38, USC, to clarify the mission of the Department of 
Labor (DOL) in the case-resolution process. It would also 
clarify that USERRA continues case processing procedures that 
existed under the previous veterans' reemployment rights law 
whereby any case, including those the Department had found to 
be non-meritorious, was referred to the U.S. Attorney if the 
claimant requested referral. Additionally, this section would 
emphasize the special role assigned to the Office of Personnel 
Management in providing assistance to Federal employees under 
Chapter 43.
    Section 313 of the reported measure would clarify that DOL 
investigators have the right to interview individuals who may 
have information relevant to their investigation. Current law 
does specifically grant access to documents but does not 
specifically grant investigators the right to interview 
individuals. Similar language granting investigators the right 
to question individuals is included in the Fair Labor Standards 
Act and the Employee Retirement Income Security Act, both of 
which are also administered by the DOL. It is the Committee's 
view that this right is necessary in order to ensure a fair and 
thorough investigation of a case.
    Section 314 of the reported bill would clarify that under 
the transition rules of USERRA, section 8(a), service performed 
prior to December 12, 1994 under orders issued pursuant to 5 
USC Section 502(f), would be considered for service limitation 
purposes under prior law while any such service performed on 
and after December 12, 1994 shall be considered under section 
4312(c) of USERRA. This amendment would not affect military 
service performed pursuant to any other provisions of titles 10 
or 32 of the United States Code.
    Section 315 of the Committee bill would make all of the 
amendments of Title III effective as of October 13, 1994, the 
original effective date of USERRA, except for the amendments 
made by section 304(d) which shall be effective as of December 
1, 1994.

                      Section-By-Section Analysis

    Section 1 would designate this Act as the ``Veterans 
Housing, Employment Programs, and Employment Rights Benefits 
Act of 1995''.
    Section 2 would specify that the expression of any 
amendment or repeal in this Act would refer to title 38, United 
States Code, unless otherwise expressly provided.
    Section 101(a) would amend section 3703(c)(4) of title 38, 
United States Code, to permanently extend the Secretary's 
authority to permit a veteran to negotiate interest rates on 
loans obtained under the VA Home Loan Guaranty Program.
    Section 101(b) would amend section 3710(d) of title 38, 
United States Code, to permanently extend the Secretary's 
authority to guarantee energy efficient mortgages.
    Section 101(c) would amend section 3720(h)(2) of title 38, 
United States Code, to extend until December 31, 2000, the 
Secretary's authority to issue and guarantee securities backed 
by VA mortgages.
    Section 101(d) would amend section 3731(f) of title 38, 
United States Code, to permanently extend the Secretary's 
authority to authorize lenders of automatically guaranteed 
loans to review appraisals.
    Section 101(e) would amend section 3735(c) of title 38, 
United States Code, to permanently extend the Secretary's 
authority to provide housing assistance to homeless veterans.
    Section 102(a) would add section 3736 to title 38, United 
States Code, and codify the Secretary's requirement to include 
in the annual report required by section 529 of title 38, 
United States Code, every second year, a discussion regarding 
the programs identified in Section 101 of this Act.
    Section 102(b) would strike sections 2(c), 3(b), 8(d), 9(c) 
and 10(b) of The Veterans Home Loan Program Amendments of 1992 
(Public Law 102-547) to repeal superseded reporting 
requirements.
    Section 103(a) would amend section 738(e)(1) of the Stewart 
B. McKinney Homeless Assistance Act (42 U.S.C. 11448(e)(1)) to 
authorize an annual appropriation of $10,000,000 for fiscal 
years 1996-1998.
    Section 103(b) would amend section 739(a) of the Stewart B. 
McKinney Homeless Assistance Act (42 U.S.C. 11448(a)) to extend 
the Secretary's authority until 1998 to authorize general 
appropriations under such Act.
    Section 103(c) would amend section 741 of the Stewart B. 
McKinney Homeless Assistance Act (42 U.S.C. 11450) to extend 
until October 1, 1998, the Homeless Veterans Employment 
Program.
    Section 201 would amend section 4102A(e) of title 38, 
United States Code, to require the Secretary of Labor to 
maintain no fewer than five Veterans' Employment and Training 
Service (VETS) regional offices, and require that each VETS 
Regional Administrator appointed after the date of enactment of 
this Act be a veteran.
    Section 202 would amend section 4103(a) of title 38, United 
States Code, to require the Secretary to expand the duties of 
certain state-based clerical positions to include other kinds 
of veterans employment program responsibilities.
    Section 203 would amend section 4103(b)(1) of title 38, 
United States Code, to require the Secretary to maintain the 
two-year residency requirement for Directors and Assistant 
Directors for Veterans' Employment and Training, but allow 
individuals who have served in such capacity for at least two 
years, to be appointed to either position in any state.
    Section 204(a) would authorize the Secretary of Labor to 
conduct a pilot program under which the primary 
responsibilities of the Local Veterans' Employment 
Representatives would be case management and the provision of 
direct employment and training services to veterans.
    Section 204(b) would authorize the Secretary to suspend or 
limit application of those provisions of chapter 41 that would 
otherwise apply to participants in the pilot program.
    Section 204(c) would require the Secretary to prioritize 
eligible veterans for participation in the pilot program.
    Section 204(d) would require the Secretary to limit 
participation in the pilot program to not more than five 
states.
    Section 204(e) would require the Secretary to submit an 
interim and final report to Congress on the pilot program.
    Section 204(f) would provide definitions for the purpose of 
this section.
    Section 204(g) would provide authorization for the 
appropriation, in the States designated by the Secretary of 
Labor, of amounts allocated to such States under section 
4102A(b)(5) of title 38, United States Code, for fiscal years 
1996-1998.
    Section 204(h) would provide for the expiration of this 
pilot program on October 1, 1998.
    Section 301 would amend section 4301(a)(2) of title 38, 
United States Code, to clarify the purpose of chapter 43.
    Section 302 would amend section 4303(16) of title 38, 
United States Code, to clarify the definition of ``uniformed 
services''.
    Section 303 would amend section 4311 of title 38, United 
States Code, to clarify that the standard and burden of proof 
provisions included in this section would apply to both the 
anti-reprisal and anti-discrimination provisions.
    Section 304(a) would amend section 4312(a) of title 38, 
United States Code, to clarify that the time during which an 
individual is entitled to reemployment rights and benefits 
includes preparation and travel time prior to service.
    Section 304(b) would amend section 4312(c)(4)(B) of title 
38, United States Code, to clarify that a person ordered to or 
retained on active duty because of a war or a national 
emergency would be exempt from the five-year cumulative length 
of absence limitation under such section.
    Section 304(c) would amend section 4312(d)(2)(C) of title 
38, United States Code, to clarify an employer's duty to rehire 
during brief, non-recurrent periods of service.
    Section 304(d) would amend section 4312(c) of title 38, 
United States Code, to provide conforming amendments to 
redesignations in title 10, United States Code.
    Section 305 would amend section 4313(a)(4) of title 38, 
United States Code, to make clarifications regarding 
reemployment positions.
    Section 306 would amend section 4316(d) of title 38, United 
States Code, to clarify that an employer may not require a 
person whose employment is interrupted by a period of service 
in the uniformed service to use vacation, annual or similar 
leave during such a period.
    Section 307 would amend section 4317(a) of title 38, United 
States Code, to make technical corrections relating to health 
plans.
    Section 308 would amend section 4318(b)(2) of title 38, 
United States Code, to make technical corrections relating to 
employee pension benefit plans.
    Section 309(a) would amend section 4322(d) of title 38, 
United States Code, to make a technical correction relating to 
enforcement of employment or reemployment rights.
    Section 309(b) would amend section 4322(e) of title 38, 
United States Code, to make a technical correction relating to 
the Secretary's requirement to notify a claimant of an 
unresolved complaint.
    Section 310 would amend section 4323(a) of title 38, United 
States Code, to make a technical correction relating to 
enforcement of rights with respect to a state or private 
employer.
    Section 311(a) would amend section 4324(a)(1) of title 38, 
United States Code, to make a technical correction relating to 
the Secretary's requirement to refer complaints for litigation 
to the Office of Special Counsel.
    Section 311(b) would amend section 4324(b) of title 38, 
United States Code, to make technical corrections relating to 
alternative submission of complaints and enforcement of rights 
with respect to federal executive agencies.
    Section 311(c) would amend section 4324(c)(2) of title 38, 
United States Code, to make technical corrections relating to 
relief and enforcement of rights with respect to federal 
executive agencies.
    Section 312 would amend section 4325(d)(1) of title 38, 
United States Code, to make technical corrections relating to 
enforcement of rights with respect to certain federal agencies.
    Section 313 would amend section 4326(a) of title 38, United 
States Code, to make technical corrections relating to the 
conduct of an investigation under this chapter.
    Section 314(a) would amend section 8(a) of the Uniformed 
Services Employment and Reemployment Rights Act of 1994 (38 
U.S.C. 4301 note), to clarify transition rules of USERRA for 
service limitation purposes.
    Section 315 would make all amendments included in Title III 
of this Act effective October 13, 1994, except for the 
amendments made by section 304(d) of this title which would be 
effective December 1, 1994.

                           Oversight Findings

    No oversight findings have been submitted to the Committee 
by the Committee on Government Reform and Oversight.

               Congressional Budget Office Cost Estimate

    The following letter was received from the Congressional 
Budget Office concerning the cost of the reported bill:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 5, 1995.
Hon. Bob Stump,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate on H.R. 2289, the Veterans 
Housing and Educational Benefits Act of 1995, as ordered 
reported by the House Committee on Veterans' Affairs on 
September 20, 1995.
    The bill would affect direct spending and thus would be 
subject to pay-as-you-go procedures under section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                           June E. O'Neill,
                                                          Director.
    Enclosure:


                            CBO COST ESTIMATE                           
                                                                        
                                                                        

    1. Bill number: H.R. 2289
    2. Bill title: Veterans Housing and Educational Benefits 
Act of 1995.
    3. Bill status: As ordered reported by the House Committee 
on Veterans' Affairs on September 20, 1995.
    4. Bill purpose: The bill would permanently extend certain 
housing programs, improve the veterans employment and training 
system, and further clarify the employment and reemployment 
rights and responsibilities of members of the uniformed 
services.
    5. Estimated cost to the federal government:

                                                                                                                
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                              1995     1996     1997     1998     1999     2000 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                                 DIRECT SPENDING                                                
Spending Under Current Law:                                                                                     
  Estimated budget authority..............................       32       -1        0        0        0        0
  Estimated outlays.......................................       32       -1        0        0        0        0
Proposed Changes:                                                                                               
  Estimated budget authority..............................        0       32       28       25       24       24
  Estimated outlays.......................................        0       32       28       25       24       24
Spending Under the Bill:                                                                                        
  Estimated budget authority..............................       32       31       28       25       24       24
  Estimated outlays.......................................       32       31       28       25       24       24
                                                                                                                
                                    SPENDING SUBJECT TO APPROPRIATIONS ACTION                                   
Spending Under Current Law:                                                                                     
  Budget authority 1......................................        5        0        0        0        0        0
  Estimated outlays.......................................       12        7        2        0        0        0
Proposed Changes:                                                                                               
  Estimated authorization level...........................        0       12       12       12        2        2
  Estimated outlays.......................................        0        3        7       12       11        5
Spending Under the Bill:                                                                                        
  Estimated authorization level 1.........................        5       12       12       12        2        2
  Estimated outlays.......................................       12       10        9       12       11        5
----------------------------------------------------------------------------------------------------------------
1 The 1995 figure is the amount already appropriated.                                                           


    6. Basis of estimate: The estimate assumes enactment of the 
bill and appropriation of the authorized amounts for each 
fiscal year. CBO used historical spending rates for estimating 
outlays. The following section-by-section cost analysis 
addresses only those sections of the bill that would have a 
significant budgetary impact.
Direct spending
    The bill contains three provisions that would affect direct 
spending.
    Adjustable-Rate Mortgages. Section 101(b) would give VA 
authority to guarantee adjustable-rate mortgages (ARMs); 
previous authority expired on September 30, 1995. CBO estimates 
that this permanent extension would cost $36 million in 1996 
and $29 million in 2000.
    Adjustable-rate mortgages involve a greater subsidy cost to 
the federal government than fixed-rate mortgages (FRMS) because 
they have a higher likelihood of default. ARMs are more risky 
than FRMS, not only because interest rates can rise, but 
because home buyers with a given amount of income can usually 
qualify to borrow more money with an ARM than with a FRM, 
thereby becoming more financially leveraged. Thus, the 
borrowers with the greatest risk can opt for an ARM over a FRM. 
This greater risk results in higher delinquency and foreclosure 
rates.
    CBO bases its estimate on recent loan delinquencies 
reported by the Federal National Mortgage Association (Fannie 
Mae), the federal agency that has the most experience tracking 
the performance of adjustable-rate mortgages. Although data 
regarding the rate at which Fannie Mae forecloses on mortgages 
are not available, the delinquency rate for the ARMs Fannie Mae 
had purchased has been almost 2.5 times that of fixed-rate 
mortgages over the past 12 months. Because of VA's supplemental 
servicing program, the easy conversion option to a fixed-rate 
program, and the lower cap on annual interest rate increases (1 
percent compared to 2 percent for Fannie Mae), the difference 
in foreclosure rates between VA ARMs and FRM is likely to be 
less than the difference in delinquency rates between Fannie 
Mae ARMs and FRMS. CBO estimates that VA ARMs have a 
foreclosure rate 1.75 times the rate for VA FRMS. We also 
assume that the percentage of ARMS guaranteed by VA would be 
the same as it was in 1994, about 12 percent of all VA 
originations. Based on a baseline foreclosure rate of 10.3 
percent for FRMs for 1996, the estimated foreclosure rate for 
VA ARMs would be 18 percent. Thus, the subsidy cost for VA ARM 
loans would average about $31 million annually on an average 
annual volume of 21,000 loans.
    VA has had the authority to guarantee ARMs only since 1993, 
and as a result, the available data are not very useful for 
projecting defaults. Recent data from the Federal Housing 
Administration (FHA), the model for the VA ARM program, shows 
that the ARMs it guarantees have foreclosure rates similar to 
those of FRMs it guarantees. Nevertheless, there is strong 
reason to believe that this is a short-term phenomenon and that 
FHA ARMS, like Fannie Mae ARMS, will prove to have higher 
foreclosure rates than FRMS. First, the data from FHA are too 
sparse to use for estimating relative foreclosure rates. FHA 
has been guaranteeing ARMs for ten years but only in the last 
few years have these loans made up a significant portion of 
FHA's originations. Second, during this period, mortgage rates 
have been relatively stable and quite low by historical 
standards.
    Enhanced Authority to Sell Loan Assets. Section 101(d) 
would extend through September 30, 2000, the authority of the 
Secretary of Veterans Affairs to guarantee the real estate 
mortgage investment conduits (REMICs) that are used to market 
vendee loans. Vendee loans are issued to the buyers of 
properties that VA acquired through foreclosures. VA then sells 
these loans on the secondary mortgage market using REMICS. By 
guaranteeing the certificates issued on a pool of loans VA 
obtains a better price but also assumes risk.
    CBO estimates that this provision would save about $5 
million a year based on sales of $1.3 billion. If this 
provision were not enacted VA could market vendee loans under 
other provisions of law. Nevertheless, this provision would 
permit VA to realize a better price for a package of vendee 
loans than if it used a REMIC program of the Government 
National Mortgage Association. Data indicate that this 
provision would raise receipts by about 0.4 percent of sales.
    Negotiated Interest Rate. Prior to 1993, VA set an interest 
rate ceiling on loans it guaranteed. The ceiling was 
administered to ensure an ample supply of low-cost funds at 
rates near or below market interest rates. When the ceiling was 
set too low relative to market interest rates, lenders would 
try to compensate by charging discount points that by law only 
the seller could pay. When sellers refused, veterans were 
unable to purchase the homes they wanted.
    Under section 101(a), veterans could negotiate a higher 
interest rate with lenders participating in the VA mortgage 
program to avoid paying discount points. Allowing veterans to 
negotiate interest rates may result in additional loan 
originations and a somewhat greater risk of foreclosure, but 
CBO cannot estimate the subsidy costs of this provision.
Spending subject to appropriations action
    The bill has two provisions that would affect 
authorizations of appropriations.
    Job Training for Homeless Veterans. Section 103 would 
authorize appropriations for the Homeless Veterans Job Training 
Program. The provision specifies an authorization level of $10 
million per year for 1996, 1997, and 1998.

                                                                                                                
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                                       1996     1997     1998     1999     2000 
----------------------------------------------------------------------------------------------------------------
Authorization level................................................       10       10       10        0        0
Estimated outlays..................................................        1        5       10        9        3
----------------------------------------------------------------------------------------------------------------


    Support Staff for Employment and Training. Section 202 
would allow the Department of Labor (DOL) to provide additional 
support personnel to its state offices concerned with veterans 
employment and training. Currently the directors of these 
offices are only provided full-time clerical support. Because 
DOL plans to require the directors to conduct analyses and 
studies, additional support personnel could be required at each 
of 52 locations. According to DOL, the average pay grade of its 
clerical personnel is GS-6. One additional person at a pay 
grade in the range of GS-6 to GS-9 for each of the directors 
would cost about $2 million a year.
    DOL has not determined how many personnel, if any, it will 
assign to these offices. Furthermore, the grade level of 
additional support personnel could be higher based on the 
technical nature of their tasks. Consequently, actual costs 
could be higher or lower.
    7. Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act of 1985 sets up pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts through 1998. The bill would have the following pay-
as-you-go impact:

                                                                        
                [By fiscal years, in millions of dollars]               
------------------------------------------------------------------------
                                                 1996     1997     1998 
------------------------------------------------------------------------
Change in outlays............................       32       28       25
Change in receipts ..........................        Not applicable     


    8. Estimated cost to state and local governments: None.
    9. Estimate comparison: None.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Victoria L. Fraider, Michael 
Groarke, Amy Plapp, and Christina Hawley.
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                     Inflationary Impact Statement

    The enactment of the reported bill (would, or) would have 
no inflationary impact.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

                      TITLE 38, UNITED STATES CODE

          * * * * * * *

              PART III--READJUSTMENT AND RELATED BENEFITS

          * * * * * * *

              CHAPTER 37--HOUSING AND SMALL BUSINESS LOANS

                          subchapter i--general

Sec.
3701.  Definitions.
3702.  Basic entitlement.
     * * * * * * *

                subchapter iii--administrative provisions

3720.  Powers of Secretary.
3721.  Incontestability.
     * * * * * * *
3736.  Reporting requirements.
          * * * * * * *

                         SUBCHAPTER I--GENERAL

          * * * * * * *

Sec. 3703. Basic provisions relating to loan guaranty and insurance

  (a) * * *
          * * * * * * *
  (c)(1) * * *
          * * * * * * *
  (4)(A) * * *
          * * * * * * *
  [(D) This paragraph shall expire on December 31, 1995.]
          * * * * * * *

Sec. 3707. Adjustable rate mortgages

  (a) The Secretary shall carry out a [demonstration project 
under this section during fiscal years 1993, 1994, and 1995] 
program under this section for the purpose of guaranteeing 
loans in a manner similar to the manner in which the Secretary 
of Housing and Urban Development insures adjustable rate 
mortgages under section 251 of the National Housing Act.
          * * * * * * *

                          SUBCHAPTER II--LOANS

Sec. 3710. Purchase or construction of homes

  (a) * * *
          * * * * * * *
  (d)(1) The Secretary shall carry out a program [to 
demonstrate the feasibility of guaranteeing] to guarantee loans 
for the acquisition of an existing dwelling and the cost of 
making energy efficiency improvements to the dwelling or for 
energy efficiency improvements to a dwelling owned and occupied 
by a veteran. A loan may be guaranteed under this subsection 
only if it meets the requirements of this chapter, except as 
those requirements are modified by this subsection.
          * * * * * * *
  [(7) A loan may not be guaranteed under this subsection after 
December 31, 1995.]
          * * * * * * *

               SUBCHAPTER III--ADMINISTRATIVE PROVISIONS

Sec. 3720. Powers of Secretary

  (a) * * *
          * * * * * * *
  (h)(1) * * *
  (2) The Secretary may not under this subsection guarantee the 
payment of principal and interest on certificates or other 
securities issued or approved after December 31, [1995] 2000.
          * * * * * * *

Sec. 3731. Appraisals

  (a) * * *
          * * * * * * *
  (f)(1) * * *
          * * * * * * *
  [(3) The authority provided in this subsection shall 
terminate on December 31, 1995.
  [(4) Not later than April 30 of each year following a year in 
which the Secretary authorizes lenders to determine reasonable 
value of property under this subsection, the Secretary shall 
submit to the Committees on Veterans' Affairs of the Senate and 
the House of Representatives a report relating to the exercise 
of that authority during the year in which the authority was 
exercised.
  [(5) A report submitted pursuant to paragraph (4) of this 
subsection shall include, for the period covered by each 
report--
          [(A) the number and value of loans made by lenders 
        exercising the authority of this subsection;
          [(B) the number and value of such loans reviewed by 
        the appraisal-review monitors referred to in paragraph 
        (2) of this subsection;
          [(C) the number and value of loans made under this 
        subsection of which the Secretary received notification 
        of default;
          [(D) the amount of guaranty paid by the Secretary to 
        such lenders by reason of defaults on loans as to which 
        reasonable value was determined under this subsection; 
        and
          [(E) such recommendations as the Secretary considers 
        appropriate to improve the exercise of the authority 
        provided for in this subsection and to protect the 
        interests of the United States.]
          * * * * * * *

Sec. 3735. Housing assistance for homeless veterans

  (a) * * *
          * * * * * * *
  [(c) The Secretary may not enter into agreements under 
subsection (a) after December 31, 1995.]

Sec. 3736. Reporting requirements

  (a) The annual report required by section 529 of this title 
shall include a discussion of the activities under this 
chapter. Beginning with the report submitted at the close of 
fiscal year 1996, and every second year thereafter, this 
discussion shall include information regarding the following:
          (1) Loans made to veterans whose only qualifying 
        service was in the Selected Reserve.
          (2) Interest rates and discount points which were 
        negotiated between the lender and the veteran pursuant 
        to section 3703(c)(4)(A)(i) of this title.
          (3) Loans made with adjustable rates guaranteed 
        pursuant to section 3707 of this title.
          (4) The determination of reasonable value by lenders 
        pursuant to section 3731(f) of this title.
          (5) Loans that include funds for energy efficiency 
        improvements pursuant to section 3710(a)(10) of this 
        title.
          (6) Direct loans to Native American veterans made 
        pursuant to subchapter V of this chapter.NO 
        subsection (b) deg.
          * * * * * * *

    CHAPTER 41--JOB COUNSELING, TRAINING, AND PLACEMENT SERVICE FOR 
                                VETERANS

          * * * * * * *

Sec. 4102A. Assistant Secretary of Labor for Veterans' Employment and 
                    Training; Regional Administrators

  (a) * * *
          * * * * * * *
  (e)[(1) The Secretary shall assign to each region for which 
the Secretary operates a regional office a representative of 
the Veterans' Employment and Training Service to serve as the 
Regional Administrator for Veterans' Employment and Training in 
such region.] (1) The Secretary of Labor shall assign regional 
administrators for Veterans' Employment and Training in such 
regions, which may not be less than five in number, as the 
Secretary may determine are necessary for the effective 
administration of the Veterans' Employment and Training 
Service. Each regional administrator appointed after the date 
of the enactment of the Veterans Housing and Employment Rights 
Benefits Act of 1994 shall be a veteran.
          * * * * * * *

Sec. 4103. Directors and Assistant Directors for Veterans' Employment 
                    and Training

  (a) The Secretary shall assign to each State a representative 
of the Veterans' Employment Service to serve as the Director 
for Veterans' Employment and Training, and shall assign [full-
time Federal clerical support] full-time Federal clerical or 
other support personnel to each such Director. The Secretary 
shall also assign to each State one Assistant Director for 
Veterans' Employment and Training per each 250,000 veterans and 
eligible persons of the State veterans population and such 
additional Assistant Directors for Veterans' Employment and 
Training as the Secretary shall determine, based on the data 
collected pursuant to section 4107 of this title, to be 
necessary to assist the Director for Veterans' Employment and 
Training to carry out effectively in that State the purposes of 
this chapter. [Full-time Federal clerical support personnel] 
Full-time Federal clerical or other support personnel assigned 
to Directors for Veterans' Employment and Training shall be 
appointed in accordance with the provisions of title 5 
governing appointments in the competitive service and shall be 
paid in accordance with the provisions of chapter 51 and 
subchapter III of chapter 53 of title 5.
  (b)(1)(A) Each Director for Veterans' Employment and Training 
and Assistant Director for Veterans' Employment and Training 
(i) shall, except as provided in subparagraph (B) of this 
paragraph, be a qualified veteran who at the time of 
appointment has been a bona fide resident of the State for at 
least two years, and (ii) shall be appointed in accordance with 
the provisions of title 5 governing appointments in the 
competitive service and shall be paid in accordance with the 
provisions of chapter 51 and subchapter III of chapter 53 of 
title 5.
  [(B) If, in appointing a Director or Assistant Director for 
any State under this section, the Secretary determines that 
there is no qualified veteran available who meets the residency 
requirement in subparagraph (A)(i), the Secretary may appoint 
as such Director or Assistant Director any qualified veteran.]
  (B) A person who serves in the position of Director for 
Veterans' Employment and Training or Assistant Director of 
Veterans' Employment Training for any State for not less than 
two years is eligible for appointment as such a Director or 
Assistant Director for any State, regardless of the period of 
the person's residence in that State.
          * * * * * * *

   CHAPTER 43--EMPLOYMENT AND REEMPLOYMENT RIGHTS OF MEMBERS OF THE 
                           UNIFORMED SERVICES

          * * * * * * *

                         SUBCHAPTER I--GENERAL

Sec. 4301. Purposes; sense of Congress

  (a) The purposes of this chapter are--
          (1) to encourage noncareer service in the uniformed 
        services by eliminating or minimizing the disadvantages 
        to civilian careers and employment which can result 
        from such service;
          (2) to minimize the disruption to the lives of 
        persons performing service in the uniformed services as 
        well as to their employers, their fellow employees, and 
        their communities, by providing for the prompt 
        reemployment of such persons upon their completion of 
        such service [under honorable conditions]; and
          * * * * * * *

Sec. 4303. Definitions

  For the purposes of this chapter--
          (1) * * *
          * * * * * * *
          (16) The term ``uniformed services'' means the Armed 
        Forces, the Army National Guard and the Air National 
        Guard when engaged in active duty for training, 
        inactive duty training, or full-time National Guard 
        duty, the commissioned corps of the Public Health 
        Service, and any other category of persons designated 
        by the President in time of war or national emergency.
          * * * * * * *

  SUBCHAPTER II--EMPLOYMENT AND REEMPLOYMENT RIGHTS AND LIMITATIONS; 
                              PROHIBITIONS

Sec. 4311. Discrimination against persons who serve in the uniformed 
                    services and acts of reprisal prohibited

  (a) * * *
  [(b) An employer shall be considered to have denied a person 
initial employment, reemployment, retention in employment, 
promotion, or a benefit of employment in violation of this 
section if the person's membership, application for membership, 
service, application for service, or obligation for service in 
the uniformed services is a motivating factor in the employer's 
action, unless the employer can prove that the action would 
have been taken in the absence of such membership, application 
for membership, performance of service, application for 
service, or obligation.
  [(c)(1) An employer may not discriminate in employment 
against or take any adverse employment action against any 
person because such person has taken an action to enforce a 
protection afforded any person under this chapter, has 
testified or otherwise made a statement in or in connection 
with any proceeding under this chapter, has assisted or 
otherwise participated in an investigation under this chapter, 
or has exercised a right provided for in this chapter.
  [(2) The prohibition in paragraph (1) shall apply with 
respect to a person regardless of whether that person has 
performed service in the uniformed services and shall apply to 
any position of employment, including a position that is 
described in section 4312(d)(1)(C).]
  (b) An employer may not discriminate in employment against or 
take any adverse employment action against any person because 
such person (1) has taken an action to enforce a protection 
afforded any person under this chapter, (2) has testified or 
otherwise made a statement in or in connection with any 
proceeding under this chapter, (3) has assisted or otherwise 
participated in an investigation under this chapter, or (4) has 
exercised a right provided for in this chapter. The prohibition 
in this subsection shall apply with respect to a person 
regardless of whether that person has performed service in the 
uniformed services.
  (c) An employer shall be considered to have engaged in 
actions prohibited--
          (1) under subsection (a), if the person's membership, 
        application for membership, service, application for 
        service, or obligation for service in the uniformed 
        services is a motivating factor in the employer's 
        action, unless the employer can prove that the action 
        would have been taken in the absence of such 
        membership, application for membership, service, 
        application for service, or obligation for service; or
          (2) under subsection (b), if the person's (A) action 
        to enforce a protection afforded any person under this 
        chapter, (B) testimony or making of a statement in or 
        in connection with any proceeding under this chapter, 
        (C) assistance or other participation in an 
        investigation under this chapter, or (D) exercise of a 
        right provided for in this chapter, is a motivating 
        factor in the employer's action, unless the employer 
        can prove that the action would have been taken in the 
        absence of such person's enforcement action, testimony, 
        statement, assistance, participation, or exercise of a 
        right.
  (d) The prohibitions in subsections (a) and (b) shall apply 
to any position of employment, including a position that is 
described in section 4312(d)(1)(C).

Sec. 4312. Reemployment rights of persons who serve in the uniformed 
                    services

  (a) Subject to subsections (b), (c), and (d) and to section 
4304, any person [who is absent from a position of employment] 
whose absence from a position of employment is necessitated by 
reason of service in the uniformed services shall be entitled 
to the reemployment rights and benefits and other employment 
benefits of this chapter if--
          (1) * * *
          * * * * * * *
  (c) Subsection (a) shall apply to a person who is absent from 
a position of employment by reason of service in the uniformed 
services if such person's cumulative period of service in the 
uniformed services, with respect to the employer relationship 
for which a person seeks reemployment, does not exceed five 
years, except that any such period of service shall not include 
any service--
          (1) * * *
          * * * * * * *
          (3) performed as required pursuant to section [270] 
        10147 of title 10, under section 502(a) or 503 of title 
        32, or to fulfill additional training requirements 
        determined and certified in writing by the Secretary 
        concerned, to be necessary for professional 
        development, or for completion of skill training or 
        retraining; or
          (4) performed by a member of a uniformed service who 
        is--
                  (A) ordered to or retained on active duty 
                under section [672(a), 672(g), 673, 673b, 673c, 
                or 688] 688, 12301(a), 12301(g), 12302, 12304, 
                or 12305 of title 10 or under section 331, 332, 
                359, 360, 367, or 712 of title 14;
                  [(B) ordered to or retained on active duty 
                (other than for training) under any provision 
                of law during a war or during a national 
                emergency declared by the President or the 
                Congress;]
                  (B) ordered to or retained on active duty 
                (other than for training) under any provision 
                of law because of a war or because of a 
                national emergency declared by the President or 
                the Congress as determined by the Secretary 
                concerned;
                  (C) ordered to active duty (other than for 
                training) in support, as determined by the 
                Secretary concerned, of an operational mission 
                for which personnel have been ordered to active 
                duty under section [673b] 12304 of title 10;
                  (D) ordered to active duty in support, as 
                determined by the Secretary concerned, of a 
                critical mission or requirement of the 
                uniformed services; or
                  (E) called into Federal service as a member 
                of the National Guard under chapter 15 of title 
                10 or under section [3500 or 8500] 12406 of 
                title 10.
  (d)(1) * * *
  (2) In any proceeding involving an issue of whether--
          (A) * * *
          * * * * * * *
          (C) the employment referred to in paragraph (1)(C) 
        [is brief or for a nonrecurrent period and without a 
        reasonable expectation] is for a brief, nonrecurrent 
        period and there is no reasonable expectation that such 
        employment will continue indefinitely or for a 
        significant period,
the employer shall have the burden of proving the impossibility 
or unreasonableness, undue hardship, or the brief or 
nonrecurrent nature of the employment without a reasonable 
expectation of continuing indefinitely or for a significant 
period.
          * * * * * * *

Sec. 4313. Reemployment positions

  (a) Subject to subsection (b) (in the case of any employee) 
and sections 4314 and 4315 (in the case of an employee of the 
Federal Government), a person entitled to reemployment under 
section 4312, upon completion of a period of service in the 
uniformed services, shall be promptly reemployed in a position 
of employment in accordance with the following order of 
priority:
          (1) * * *
          * * * * * * *
          (4) In the case of a person who (A) is not qualified 
        to be employed in (i) the position of employment in 
        which the person would have been employed if the 
        continuous employment of such person with the employer 
        had not been interrupted by such service, or (ii) in 
        the position of employment in which such person was 
        employed on the date of the commencement of the service 
        in the [uniform] uniformed services for any reason 
        (other than disability incurred in, or aggravated 
        during, service in the uniformed services), and (B) 
        cannot become qualified with reasonable efforts by the 
        employer, in any other position [of lesser status and 
        pay which] which is the nearest approximation to a 
        position referred to first in clause (A)(i) and then in 
        clause (A)(ii) which such person is qualified to 
        perform, with full seniority.
          * * * * * * *

Sec. 4316. Rights, benefits, and obligations of persons absent from 
                    employment for service in a uniformed service

  (a) * * *
          * * * * * * *
  (d) Any person whose employment with an employer is 
interrupted by a period of service in the uniformed services 
shall be permitted, upon request of that person, to use during 
such period of service any vacation, annual, or similar leave 
with pay accrued by the person before the commencement of such 
service. No employer may require any such person to use 
vacation, annual or similar leave during such period of 
service.

Sec. 4317. Health plans

  [(a)(1)(A) Subject to paragraphs (2) and (3), in] (a)(1) In 
any case in which a person (or the person's dependents) has 
coverage under a health plan in connection with the person's 
position of employment, including a group health plan (as 
defined in section 607(1) of the Employee Retirement Income 
Security Act of 1974), and such person is absent from such 
position of employment by reason of service in the uniformed 
services, the plan shall provide that the person may elect to 
continue such coverage as provided in this subsection. The 
maximum period of coverage of a person and the person's 
dependents under such an election shall be the lesser of--
          [(i)] (A) the 18-month period beginning on the date 
        on which the person's absence begins; or
          [(ii)] (B) the day after the date on which the person 
        fails to apply for or return to a position of 
        employment, as determined under section 4312(e).
  [(B)] (2) A person who elects to continue health-plan 
coverage under this paragraph may be required to pay not more 
than 102 percent of the full premium under the plan (determined 
in the same manner as the applicable premium under section 
4980B(f)(4) of the Internal Revenue Code of 1986) associated 
with such coverage for the employer's other employees, except 
that in the case of a person who performs service in the 
uniformed services for less than 31 days, such person may not 
be required to pay more than the employee share, if any, for 
such coverage.
  [(C)] (3) In the case of a health plan that is a 
multiemployer plan, as defined in section 3(37) of the Employee 
Retirement Income Security Act of 1974, any liability under the 
plan for employer contributions and benefits arising under this 
paragraph shall be allocated--
          [(i)] (A) by the plan in such manner as the plan 
        sponsor shall provide; or
          [(ii)] (B) if the sponsor does not provide--
                  [(I)] (i) to the last employer employing the 
                person before the period served by the person 
                in the uniformed services, or
                  [(II)] (ii) if such last employer is no 
                longer functional, to the plan.
          * * * * * * *

Sec. 4318. Employee pension benefit plans

  (a) * * *
  (b)(1) * * *
  (2) A person reemployed under this chapter shall be entitled 
to accrued benefits pursuant to subsection (a) that are 
contingent on the making of, or derived from, employee 
contributions or elective deferrals (as defined in section 
402(g)(3) of the Internal Revenue Code of 1986) only to the 
extent the person makes payment to the plan with respect to 
such contributions or deferrals. No such payment may exceed the 
amount the person would have been permitted or required to 
contribute had the person remained continuously employed by the 
employer throughout the period of service described in 
subsection (a)(2)(B). Any payment to the plan described in this 
paragraph shall be made during the period beginning with the 
date of reemployment and whose duration is three times the 
period of the person's service in the uniformed services, such 
payment period not to exceed five years.
          * * * * * * *

      SUBCHAPTER III--PROCEDURES FOR ASSISTANCE, ENFORCEMENT, AND 
                             INVESTIGATION

          * * * * * * *

Sec. 4322. Enforcement of employment or reemployment rights

  (a) * * *
          * * * * * * *
  (d) The Secretary shall investigate each complaint submitted 
pursuant to subsection (a). If the Secretary determines as a 
result of the investigation that the action alleged in such 
complaint occurred, the Secretary shall attempt to resolve the 
complaint by making reasonable efforts to ensure that the 
person or entity named in the complaint complies with the 
provisions of this chapter.
  (e) If the efforts of the Secretary [with respect to a 
complaint under subsection (d) are unsuccessful,] with respect 
to any complaint filed under subsection (a) do not resolve the 
complaint, the Secretary shall notify the person who submitted 
the complaint of--
          (1) the results of the Secretary's investigation; and
          (2) the complainant's entitlement to proceed under 
        the enforcement of rights provisions provided under 
        section 4323 (in the case of a person submitting a 
        complaint against a State or private employer) or 
        section 4324 (in the case of a person submitting a 
        complaint against a Federal executive agency or the 
        Office of Personnel Management).
          * * * * * * *

Sec. 4323. Enforcement of rights with respect to a State or private 
                    employer

  (a)(1) A person who receives from the Secretary a 
notification pursuant to section 4322(e) [of an unsuccessful 
effort to resolve a complaint] relating to a State (as an 
employer) or a private employer may request that the Secretary 
refer the complaint to the Attorney General. If the Attorney 
General is reasonably satisfied that the person on whose behalf 
the complaint is referred is entitled to the rights or benefits 
sought, the Attorney General may appear on behalf of, and act 
as attorney for, the person on whose behalf the complaint is 
submitted and commence an action for appropriate relief for 
such person in an appropriate United States district court.
  (2) A person may commence an action for relief with respect 
to a complaint if that person--
          (A) has chosen not to apply to the Secretary for 
        assistance [regarding the complaint under section 
        4322(c)] under section 4322(a);
          * * * * * * *

Sec. 4324. Enforcement of rights with respect to Federal executive 
                    agencies

  (a)(1) A person who receives from the Secretary a 
notification pursuant to section 4322(e) [of an unsuccessful 
effort to resolve a complaint relating to a Federal executive 
agency] may request that the Secretary refer the complaint for 
litigation before the Merit Systems Protection Board. The 
Secretary shall refer the complaint to the Office of Special 
Counsel established by section 1211 of title 5.
          * * * * * * *
  (b) A person may submit a complaint against a Federal 
executive agency or the Office of Personnel Management under 
this subchapter directly to the Merit Systems Protection Board 
if that person--
          (1) has chosen not to apply to the Secretary for 
        assistance [regarding a complaint under section 
        4322(c)] under section 4322(a);
          * * * * * * *
  (c)(1) * * *
  (2) If the Board determines that a Federal executive agency 
or the Office of Personnel Management has not complied with the 
provisions of this chapter relating to the employment or 
reemployment of a person by the agency, the Board shall enter 
an order requiring the agency or [employee] Office to comply 
with such provisions and to compensate such person for any loss 
of wages or benefits suffered by such person by reason of such 
lack of compliance.
          * * * * * * *

Sec. 4325. Enforcement of rights with respect to certain Federal 
                    agencies

  (a) * * *
          * * * * * * *
  (d) This section may not be construed--
          (1) as prohibiting an employee of an agency referred 
        to in subsection (a) from seeking information from the 
        Secretary regarding assistance in seeking reemployment 
        from the agency under this chapter[, alternative 
        employment in the Federal Government under this 
        chapter,] or information relating to the rights and 
        obligations of [employee] employees and Federal 
        agencies under this chapter; or
          * * * * * * *

Sec. 4326. Conduct of investigation; subpoenas

  (a) In carrying out any investigation under this chapter, the 
Secretary's duly authorized representatives shall, at all 
reasonable times, have reasonable access to and the right to 
interview persons with information relevant to the 
investigation and shall have reasonable access to, for purposes 
of examination, and the right to copy and receive, any 
documents of any person or employer that the Secretary 
considers relevant to the investigation.
          * * * * * * *
                              ----------                              


             VETERANS HOME LOAN PROGRAM AMENDMENTS OF 1992

          * * * * * * *

SEC. 2. ELIGIBILITY OF SELECTED RESERVE.

  (a) * * *
          * * * * * * *
  [(c) Report.--The Secretary of Veterans Affairs shall 
transmit a report to the Committees on Veterans' Affairs of the 
Senate and House of Representatives no later than December 31, 
1994, and annually thereafter. The report shall contain--
          [(1) a declaration of the number of veterans (as 
        defined by section 3701(b)(5) of title 38, United 
        States Code) who receive mortgage loans guaranteed by 
        the Secretary as a result of the amendments made by 
        subsection (a);
          [(2) a comparison of the default rate of veterans 
        described in paragraph (1) with the default rate for 
        all other veterans who have received loans guaranteed 
        or insured by the Secretary; and
          [(3) a comparison of the proportion of veterans who 
        receive mortgage loans guaranteed by the Secretary as a 
        result of the amendments made by subsection (a) who are 
        first time homebuyers with the proportion of all other 
        veterans who receive mortgage loans guaranteed or 
        insured by the Secretary and who are first time 
        homebuyers.]

SEC. 3. ADJUSTABLE RATE MORTGAGE DEMONSTRATION PROGRAM.

  (a) * * *
  [(b) Report.--The Secretary shall transmit a report to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives no later than December 31, 1993, containing a 
description of the project carried out under section 3707 of 
title 38, United States Code (as added by subsection (a)), and 
shall continue to make annual reports to the Committees with 
respect to the default rate and other information concerning 
the loans guaranteed under such section. Such reports shall--
          [(1) compare the number of adjustable rate mortgages 
        guaranteed under such section with the number of fixed 
        rate loans guaranteed or insured under chapter 37 of 
        such title and contrast this ratio with a corresponding 
        ratio for loans for single family housing insured by 
        the Secretary of Housing and Urban Development pursuant 
        to the National Housing Act;
          [(2) compare the initial interest rate of the 
        adjustable rate mortgages guaranteed under such section 
        with the fixed interest rate on loans guaranteed or 
        insured under chapter 37 of such title;
          [(3) describe the monthly mortgage payment savings to 
        the veteran, if any, under an adjustable rate mortgage 
        guaranteed under such section compared with the 
        payments that would have been required if the loan bore 
        interest at a maximum fixed rate established by the 
        Secretary;
          [(4) discuss whether the market share for housing 
        loans guaranteed under chapter 37 of such title has 
        increased or decreased since the implementation of such 
        section;
          [(5) compare the default rate on mortgages guaranteed 
        under such section with the default rate of fixed-rate 
        mortgages guaranteed or insured under chapter 37 of 
        such title; and
          [(6) compare the number of first time homebuyers 
        using adjustable rate mortgage loans under such section 
        with the number of first time homebuyers using any 
        other loan guaranteed under chapter 37 of such title.]
          * * * * * * *

SEC. 8. NATIVE AMERICAN VETERANS DIRECT HOUSING LOAN PILOT PROGRAM.

  (a) * * *
          * * * * * * *
  [(d) Annual Reports.--Not later than February 1 of each of 
1994 through 1998, the Secretary of Veterans Affairs shall 
transmit to the Committees on Veterans' Affairs of the Senate 
and House of Representatives a report relating to--
          [(1) the implementation of the Native American 
        veterans direct housing loan pilot program established 
        under subchapter V of chapter 37 of title 38, United 
        States Code (as added by subsection (a)), during the 
        period ending on September 30 of the year preceding the 
        date of the report;
          [(2) the Secretary's exercise of the authority 
        provided under section 3762(c)(1)(B) of such title (as 
        so added) to make loans exceeding the maximum loan 
        amount;
          [(3) the appraisals performed for the Secretary 
        during that period under the authority of section 
        3732(d)(2) of such title (as so added), including a 
        description of--
                  [(A) the manner in which such appraisals were 
                performed;
                  [(B) the qualifications of the appraisers who 
                performed such appraisals; and
                  [(C) the actions taken by the Secretary with 
                respect to such appraisals to protect the 
                interests of veterans and the United States; 
                and
          [(4) the Secretary's recommendations, if any, for 
        legislation regarding the pilot program.]
          * * * * * * *

SEC. 9. ENERGY EFFICIENT MORTGAGES.

  (a) * * *
          * * * * * * *
  [(c) Reports.--Not later than 1 year after the date on which 
the Secretary of Veterans Affairs first exercises the authority 
to guarantee loans under section 3710(d) of title 38, United 
States Code (as added by subsection (a) of this section), and 
for each of the 3 years thereafter, the Secretary shall 
transmit to the Committees on Veterans' Affairs of the Senate 
and House of Representatives a report on the program under such 
section. Each such report shall contain information pertaining 
to--
          [(1) the number of mortgages guaranteed under such 
        section;
          [(2) the average amount of money added to the 
        mortgage to finance energy efficiency features;
          [(3) the types of energy efficiency features obtained 
        with mortgages under such section; and
          [(4) the default rates on the mortgages guaranteed 
        under such section compared with the default rates on 
        all other types of mortgages guaranteed by the 
        Secretary.]

SEC. 10. NEGOTIATED INTEREST RATES.

  (a) * * *
  [(b) Report.--Not later than December 31, 1993, and annually 
thereafter, the Secretary of Veterans Affairs shall transmit to 
the Committees on Veterans' Affairs of the Senate and House of 
Representatives a report on whether the Secretary has 
implemented the authority to guarantee and insure loans that 
bear negotiated interest rates and points under section 
3703(c)(4) of title 38, United States Code (as added by 
subsection (a)). If the Secretary has implemented that 
authority, the Secretary shall include in the report--
          [(1) a comparison of the interest rates paid by 
        veterans for loans that bear interest rates negotiated 
        under section 3703(c)(4) of such title with interest 
        rates allowable under mortgages for single family 
        housing insured by the Secretary of Housing and Urban 
        Development pursuant to the National Housing Act and 
        interest rates charged under conventional mortgage loan 
        programs for single family housing;
          [(2) a comparison of the negotiated interest rates 
        being charged under paragraph (4) of section 3703(c) of 
        such title with the interest rate that the Secretary 
        would have established under paragraph (1) of such 
        section during the same time period;
          [(3) a comparison of the number of discount points 
        charged by the lender for mortgage loans that bear 
        interest rates negotiated under section 3703(c)(4) of 
        such title with the number of discount points charged 
        for mortgages for single family housing insured by the 
        Secretary of Housing and Urban Development pursuant to 
        the National Housing Act and the number of discount 
        points charged under conventional mortgage loan 
        programs for single family housing;
          [(4) a discussion of the extent to which borrowers or 
        sellers are paying the discount points on negotiated 
        interest rate loans under section 3703(c)(4) of such 
        title;
          [(5) a discussion of whether the market share for 
        housing loans guaranteed under such title has increased 
        or decreased since the implementation of the authority 
        to guarantee and insure loans that bear negotiated 
        interest rates under section 3703(c)(4) of such title, 
        and a discussion of the extent to which any change in 
        market share was the result of that authority;
          [(6) in claims paid following foreclosure, a 
        discussion of the difference in the interest portion 
        paid on loans guaranteed under section 3703(c)(4) of 
        such title to what the interest portion would have been 
        under the interest rate established under section 
        3703(c)(1) of such title; and
          [(7) the number of first time homebuyers using loans 
        that bear negotiated interest rates under section 
        3703(c)(4) of such title.]
          * * * * * * *
                              ----------                              


              STEWART B. MCKINNEY HOMELESS ASSISTANCE ACT

          * * * * * * *

    TITLE VII--EDUCATION, TRAINING, AND COMMUNITY SERVICES PROGRAMS

          * * * * * * *

               Subtitle C--Job Training for the Homeless

          * * * * * * *

SEC. 738. HOMELESS VETERANS' REINTEGRATION PROJECTS.

  (a) * * *
          * * * * * * *
  (e) Authorization of Appropriations.--(1) There are 
authorized to be appropriated to carry out this section the 
following amounts:
          (A) $10,000,000 for fiscal year [1993] 1996.
          (B) [$12,000,000] $10,000,000 for fiscal year [1994] 
        1997.
          (C) [$14,000,000] $10,000,000 for fiscal year [1995] 
        1998.
  (2) Funds obligated for any fiscal year to carry out this 
section may be expended in that fiscal year and the succeeding 
fiscal year.

SEC. 739. AUTHORIZATION OF APPROPRIATIONS.

  (a) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this subtitle such sums as may be 
necessary for each of the [fiscal years 1994 and 1995] fiscal 
years 1996, 1997, and 1998.
          * * * * * * *

SEC. 741. TERMINATION.

  The provisions of this subtitle other than section 738 and 
740 shall terminate on October 1, [1995] 1998.
                              ----------                              


SECTION 8 OF THE UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS 
                              ACT OF 1994

SEC. 8. TRANSITION RULES AND EFFECTIVE DATES.

  (a) Reemployment.--(1) * * *
          * * * * * * *
  (3) In determining the number of years of service that may 
not be exceeded in an employee-employer relationship with 
respect to which a person seeks reemployment under chapter 43 
of title 38, United States Code, as in effect before or after 
the date of enactment of this Act, there shall be included all 
years of service without regard to whether the periods of 
service occurred before or after such date of enactment unless 
the period of service is exempted by the chapter 43 that is 
applicable, as provided in paragraphs (1) and (2), to the 
reemployment concerned. Any service begun up to 60 days after 
the date of enactment of this Act, which is served up to 60 
days after the date of enactment of this Act pursuant to orders 
issued under section 502(f) of chapter 5 of title 32, United 
States Code, shall be considered under chapter 43 of title 38, 
United States Code, as in effect on the day before such date of 
enactment. Any service pursuant to orders issued under section 
502(f) of chapter 5 of title 32, United States Code, served 
after 60 days after the date of enactment of this Act, 
regardless of when begun, shall be considered under the 
amendments made by this Act.
  (4) A person who initiates reemployment under chapter 43 of 
title 38, United States Code, during or after the 60-day period 
beginning on the date of enactment of this Act and whose 
reemployment is made in connection with a period of service in 
the uniformed services that was initiated before the end of 
[such period] such 60-day period shall be deemed to have 
satisfied the notification requirement of section 4312(a)(1) of 
title 38, United States Code, as provided in the amendments 
made by this Act, if the person complied with any applicable 
notice requirement under chapter 43, United States Code, as in 
effect on the day before the date of enactment of this Act.
          * * * * * * *
  (c) Insurance.--(1) * * *
  (2) With respect to the provisions of section 4317 of title 
38, United States Code, as provided in the amendments made by 
this Act, a [person on active duty] person serving a period of 
service in the uniformed services on the date of enactment of 
this Act, or a family member or personal representative of such 
person, may, after the date of enactment of this Act, elect to 
reinstate or continue a health plan as provided in such section 
4317. If such an election is made, the health plan shall remain 
in effect for the remaining portion of the 18-month period that 
began on the date of such person's separation from civilian 
employment or the period of the person's service in the 
uniformed service, whichever is the period of lesser duration.
          * * * * * * *

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