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112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    112-241

======================================================================



 
                     VETERANS' BENEFITS ACT OF 2011

                                _______
                                

October 6, 2011.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Miller of Florida, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2349]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 2349) to amend title 38, United States Code, to 
direct the Secretary of Veterans Affairs to annually assess the 
skills of certain employees and managers of the Veterans 
Benefits Administration, and for other purposes, having 
considered the same, report favorably thereon with amendments 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendments.......................................................     2
Purpose and Summary..............................................     5
Background and Need for Legislation..............................     6
Hearings.........................................................    16
Subcommittee Consideration.......................................    17
Committee Consideration..........................................    18
Committee Votes..................................................    18
Committee Oversight Findings.....................................    18
Statement of General Performance Goals and Objectives............    18
New Budget Authority, Entitlement Authority, and Tax Expenditures    18
Earmarks and Tax and Tariff Benefits.............................    18
Committee Cost Estimate..........................................    19
Congressional Budget Office Estimate.............................    19
Federal Mandates Statement.......................................    23
Advisory Committee Statement.....................................    23
Letter of Jurisdiction Waiver from the House Judicary Committee..    24
Statement of Constitutional Authority............................    25
Applicability to Legislative Branch..............................    25
Section-by-Section Analysis of the Legislation...................    25
Changes in Existing Law Made by the Bill as Reported.............    28

                               Amendments

  The amendments are as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Veterans' Benefits Act of 2011''.

SEC. 2. ASSESSMENT OF CLAIMS-PROCESSING SKILLS PILOT PROGRAM.

  (a) Pilot Program.--Commencing not later than 180 days after the date 
of the enactment of the Act, in addition to providing employee 
certification under section 7732A of title 38, United States Code, the 
Secretary of Veterans Affairs shall carry out a pilot program to assess 
skills and provide training described under subsection (b).
  (b) Biennial Skills Assessment and Individualized Training.--
          (1) In general.--The Secretary shall--
                  (A) biennially assess the skills of appropriate 
                employees and managers of the Veterans Benefits 
                Administration who are responsible for processing 
                claims for compensation and pension benefits under the 
                laws administered by the Secretary, including by 
                requiring such employees and managers to take the 
                examination provided under section 7732A(a)(1) of title 
                38, United States Code; and
                  (B) on the basis of the results of such assessment 
                and examination, and on any relevant regional office 
                quality review, develop and implement an individualized 
                training plan related to such skills for each such 
                employee and manager.
          (2) Remediation.--
                  (A) Remediation provided.--In providing training 
                under paragraph (1)(B), if any employee or manager 
                receives a less than satisfactory result on any portion 
                of an assessment under paragraph (1)(A), the Secretary 
                shall provide such employee or manager with remediation 
                of any deficiency in the skills related to such portion 
                of the assessment and, within a reasonable period 
                following the remediation, shall require the employee 
                or manager to take the examination again.
                  (B) Personnel actions.--In accordance with titles 5 
                and 38, United States Code, the Secretary shall take 
                appropriate personnel actions with respect to any 
                employee or manager who, after being given two 
                opportunities for remediation under subparagraph (A), 
                does not receive a satisfactory result on an assessment 
                under paragraph (1)(A).
  (c) Locations and Duration.--The Secretary shall carry out the pilot 
program under this section at five regional offices of the Veterans 
Benefits Administration during the four-year period beginning on the 
date of the commencement of the pilot program.
  (d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section a total of $5,000,000 for fiscal 
years 2012 through 2016.
  (e) Reports.--Not later than November 1 of each year in which the 
pilot program under this section is carried out, the Secretary shall 
submit to the Committee on Veterans' Affairs of the House of 
Representatives and the Committee on Veterans' Affairs of the Senate a 
report on any assessments and training conducted under this section 
during the previous year. Each such report shall include--
          (1) a summary of--
                  (A) the results of the assessments under subsection 
                (b)(1)(A);
                  (B) remediation provided under subsection (b)(2)(A); 
                and
                  (C) personnel actions taken under subsection 
                (b)(2)(B); and
          (2) any changes made to the training program under subsection 
        (b)(1)(B) based on the results of such assessments and 
        remediation and the examinations provided under section 
        7732A(a)(1) of title 38, United States Code.

SEC. 3. EXCLUSION OF CERTAIN REIMBURSEMENTS OF EXPENSES FROM 
                    DETERMINATION OF ANNUAL INCOME WITH RESPECT TO 
                    PENSIONS FOR VETERANS AND SURVIVING SPOUSES AND 
                    CHILDREN OF VETERANS.

  (a) In General.--Paragraph (5) of section 1503(a) of title 38, United 
States Code, is amended to read as follows:
          ``(5) payments regarding--
                  ``(A) reimbursements of any kind (including insurance 
                settlement payments) for--
                          ``(i) expenses related to the repayment, 
                        replacement, or repair of equipment, vehicles, 
                        items, money, or property resulting from--
                                  ``(I) any accident (as defined in 
                                regulations which the Secretary shall 
                                prescribe), but the amount excluded 
                                under this subclause shall not exceed 
                                the greater of the fair market value or 
                                reasonable replacement value of the 
                                equipment or vehicle involved at the 
                                time immediately preceding the 
                                accident;
                                  ``(II) any theft or loss (as defined 
                                in regulations which the Secretary 
                                shall prescribe), but the amount 
                                excluded under this subclause shall not 
                                exceed the greater of the fair market 
                                value or reasonable replacement value 
                                of the item or the amount of the money 
                                (including legal tender of the United 
                                States or of a foreign country) 
                                involved at the time immediately 
                                preceding the theft or loss; or
                                  ``(III) any casualty loss (as defined 
                                in regulations which the Secretary 
                                shall prescribe), but the amount 
                                excluded under this subclause shall not 
                                exceed the greater of the fair market 
                                value or reasonable replacement value 
                                of the property involved at the time 
                                immediately preceding the casualty 
                                loss; and
                          ``(ii) medical expenses resulting from any 
                        accident, theft, loss, or casualty loss (as 
                        defined in regulations which the Secretary 
                        shall prescribe), but the amount excluded under 
                        this clause shall not exceed the costs of 
                        medical care provided to the victim of the 
                        accident, theft, loss, or casualty loss; and
                  ``(B) pain and suffering (including insurance 
                settlement payments and general damages awarded by a 
                court) related to an accident, theft, loss, or casualty 
                loss, but the amount excluded under this subparagraph 
                shall not exceed an amount determined by the Secretary 
                on a case-by-case basis;''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect on the date that is one year after the date of the enactment of 
this Act.
  (c) Extension of Authority to Obtain Certain Information From 
Department of Treasury.--Section 5317(g) of title 38, United States 
Code, is amended by striking ``2011'' and inserting ``2013''.

SEC. 4. AUTHORIZATION OF USE OF ELECTRONIC COMMUNICATION TO PROVIDE 
                    NOTICE TO CLAIMANTS FOR BENEFITS UNDER LAWS 
                    ADMINISTERED BY THE SECRETARY OF VETERANS AFFAIRS.

  (a) In General.--Section 5103 of title 38, United States Code, is 
amended--
          (1) in subsection (a)(1)--
                  (A) by striking ``Upon receipt of a complete or 
                substantially complete application, the'' and inserting 
                ``The'';
                  (B) by striking ``notify'' and inserting ``provide 
                to''; and
                  (C) by inserting ``by the most effective means 
                available, including electronic communication or 
                notification in writing'' before ``of any 
                information''; and
          (2) in subsection (b), by adding at the end the following new 
        paragraphs:
  ``(4) Nothing in this section shall require the Secretary to provide 
notice for a subsequent claim that is filed while a previous claim is 
pending if the notice previously provided for such pending claim--
          ``(A) provides sufficient notice of the information and 
        evidence necessary to substantiate such subsequent claim; and
          ``(B) was sent within one year of the date on which the 
        subsequent claim was filed.
  ``(5)(A) This section shall not apply to any claim or issue where the 
Secretary may award the maximum benefit in accordance with this title 
based on the evidence of record.
  ``(B) For purposes of this paragraph, the term `maximum benefit' 
means the highest evaluation assignable in accordance with the evidence 
of record, as long as such evaluation is supported by such evidence of 
record at the time the decision is rendered.''.
  (b) Construction.--Nothing in the amendments made by subsection (a) 
shall be construed as eliminating any requirement with respect to the 
contents of a notice under section 5103 of such title that are required 
under regulations prescribed pursuant to subsection (a)(2) of such 
section as of the date of the enactment of this Act.

SEC. 5. DUTY TO ASSIST CLAIMANTS IN OBTAINING PRIVATE RECORDS.

  (a) In General.--Section 5103A(b) of title 38, United States Code, is 
amended to read as follows:
  ``(b) Assistance in Obtaining Private Records.--(1) As part of the 
assistance provided under subsection (a), the Secretary shall make 
reasonable efforts to obtain relevant private records.
  ``(2)(A) Whenever the Secretary, after making such reasonable 
efforts, is unable to obtain all of the relevant records sought, the 
Secretary shall notify the claimant that the Secretary is unable to 
obtain records with respect to the claim. Such a notification shall--
          ``(i) identify the records the Secretary is unable to obtain;
          ``(ii) briefly explain the efforts that the Secretary made to 
        obtain such records; and
          ``(iii) explain that the Secretary will decide the claim 
        based on the evidence of record but that this section does not 
        prohibit the submission of records at a later date if such 
        submission is otherwise allowed.
  ``(B) The Secretary shall make not less than two requests to a 
custodian of a private record in order for an effort to obtain relevant 
private records to be treated as reasonable under this section, unless 
it is made evident by the first request that a second request would be 
futile in obtaining such records.
  ``(3)(A) This section shall not apply if the evidence of record 
allows for the Secretary to award the maximum benefit in accordance 
with this title based on the evidence of record.
  ``(B) For purposes of this paragraph, the term `maximum benefit' 
means the highest evaluation assignable in accordance with the evidence 
of record, as long as such evaluation is supported by such evidence of 
record at the time the decision is rendered.
  ``(4) Under regulations prescribed by the Secretary, the Secretary--
          ``(A) shall encourage claimants to submit relevant private 
        medical records of the claimant to the Secretary if such 
        submission does not burden the claimant; and
          ``(B) in obtaining relevant private records under paragraph 
        (1), may require the claimant to authorize the Secretary to 
        obtain such records if such authorization is required to comply 
        with Federal, State, or local law.''.
  (b) Public Records.--Section 5103A(c) of such title is amended to 
read as follows:
  ``(c) Obtaining Records for Compensation Claims.--(1) In the case of 
a claim for disability compensation, the assistance provided by the 
Secretary under this section shall include obtaining the following 
records if relevant to the claim:
          ``(A) The claimant's service medical records and, if the 
        claimant has furnished the Secretary information sufficient to 
        locate such records, other relevant records pertaining to the 
        claimant's active military, naval, or air service that are held 
        or maintained by a governmental entity.
          ``(B) Records of relevant medical treatment or examination of 
        the claimant at Department health-care facilities or at the 
        expense of the Department, if the claimant furnishes 
        information sufficient to locate those records.
          ``(C) Any other relevant records held by any Federal 
        department or agency that the claimant adequately identifies 
        and authorizes the Secretary to obtain.
  ``(2) Whenever the Secretary attempts to obtain records from a 
Federal department or agency under this subsection, the efforts to 
obtain those records shall continue until the records are obtained 
unless it is reasonably certain that such records do not exist or that 
further efforts to obtain those records would be futile.''.

SEC. 6. CONDITIONS FOR TREATMENT OF CERTAIN PERSONS AS ADJUDICATED 
                    MENTALLY INCOMPETENT FOR CERTAIN PURPOSES.

  (a) In General.--Chapter 55 of title 38, United States Code, is 
amended by adding at the end the following new section:

``Sec. 5511. Conditions for treatment of certain persons as adjudicated 
                    mentally incompetent for certain purposes

  ``In any case arising out of the administration by the Secretary of 
laws and benefits under this title, a person who is mentally 
incapacitated, deemed mentally incompetent, or experiencing an extended 
loss of consciousness shall not be considered adjudicated as a mental 
defective under subsection (d)(4) or (g)(4) of section 922 of title 18 
without the order or finding of a judge, magistrate, or other judicial 
authority of competent jurisdiction that such person is a danger to 
himself or herself or others.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
chapter 55 of such title is amended by adding at the end the following 
new item:

``5511. Conditions for treatment of certain persons as adjudicated 
mentally incompetent for certain purposes.''.

SEC. 7. REINSTATEMENT OF PENALTIES FOR CHARGING VETERANS UNAUTHORIZED 
                    FEES.

  (a) In General.--Section 5905 of title 38, United States Code, is 
amended to read as follows:

``Sec. 5905. Penalty for certain acts

  ``Except as provided in section 5904 or 1984 of this title, whoever--
          ``(1) in connection with a proceeding before the Department, 
        knowingly solicits, contracts for, charges, or receives any fee 
        or compensation in connection for--
                  ``(A) the provision of advice on how to file a claim 
                for benefits under the laws administered by the 
                Secretary; or
                  ``(B) the preparation, presentation, or prosecution 
                of such a claim before the date on which a notice of 
                disagreement is filed in a proceeding on the claim,
        or attempts to do so;
          ``(2) unlawfully withholds from any claimant or beneficiary 
        any part of a benefit or claim under the laws administered by 
        the Secretary that is allowed and due to the claimant or 
        beneficiary, or attempts to do so;
          ``(3) commits an offense punishable by this chapter, or aids, 
        abets, counsels, commands, or procures the commission of such 
        an act; or
          ``(4) causes an act to be done, which if directly performed 
        would be punishable by this chapter,
shall be fined as provided in title 18, or imprisoned for not more than 
one year, or both.''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
with respect to acts committed after the date of the enactment of this 
Act.

SEC. 8. PERFORMANCE AWARDS IN THE SENIOR EXECUTIVE SERVICE.

  For each of fiscal years 2012 through 2016, the Secretary of Veterans 
Affairs may not pay more than $2,000,000 in performance awards under 
section 5384 of title 5, United States Code.

SEC. 9. BUDGETARY EFFECTS OF THIS ACT.

  The budgetary effects of this Act, for the purpose of complying with 
the Statutory Pay-As-You-Go-Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the Congressional 
Record by the Chairman of the House Budget Committee, provided that 
such statement has been submitted prior to the vote on passage.

  Amend the title so as to read:

    A bill to amend title 38, United States Code, to improve 
the determination of annual income with respect to pensions for 
certain veterans, to direct the Secretary of Veterans Affairs 
to establish a pilot program to assess the skills of certain 
employees and managers of the Veterans Benefits Administration, 
and for other purposes.

                          Purpose and Summary

    H.R. 2349 was introduced on June 24, 2011, by 
Representative Jon Runyan of New Jersey. H.R. 2349, as amended, 
would amend title 38, United States Code, to make certain 
improvements in the laws administered by the Secretary of 
Veterans Affairs (VA).
    H.R. 2349, as amended, is comprised of a number of bills 
introduced in the 112th Congress. These bills include: H.R. 
2349; H.R. 923, a bill to amend title 38, United States Code, 
to exempt reimbursements of expenses related to accident, 
theft, loss, or casualty loss from determinations of annual 
income with respect to pensions for veterans and surviving 
spouses and children of veterans, and for other purposes, 
introduced by Represenative Alcee Hastings of Florida; H.R. 
2383, a bill to amend title 38, United States Code, to 
authorize the Secretary of Veterans Affairs to use electronic 
communication to provide required notice to claimants for 
benefits under laws administered by the Secretary, and for 
other purposes, introduced by Represenative Bill Johnson of 
Ohio; H.R. 1898, a bill to amend title 38, United States Code, 
to clarify the conditions under which certain persons may be 
treated as adjudicated mentally incompetent for certain 
purposes, introduced by Represenative Denny Rehberg of Montana; 
and a free-standing provision to establish an authorization cap 
of $2,000,000 for each of fiscal years 2012 through 2016 on 
performance awards payable to VA employees in the Senior 
Executive Service.

                  Background and Need for Legislation


Section 2--Assessment of Claims-Processing Skills Pilot Program

    Section 7732A of title 38, United States Code, currently 
requires employees and managers of the Veterans Benefits 
Administration (VBA) who are responsible for processing claims 
for compensation and pension benefits to undergo a 
certification examination. The mandate for employee 
certification had its genesis in the 110th Congress in 
legislation introduced by Representative John Hall of New York, 
the Chairman of the Disability Assistance and Memorial Affairs 
Subcommittee. In justifying the certification mandate, the 
Committee report accompanying the legislation (H.R. 5892), H. 
Rept. 110-789, pointed out that ``gaps in training and 
inconsistencies between the [VA Regional Offices] clearly 
persist'' in spite of the VA's plan to ``require at least 80 
hours of training for each employee and centralize the training 
program at its National Training Academy in Baltimore.'' In 
discussing the Systematic Technical Accuracy Review (STAR) 
program and the VA's response to these reviews, the Committee 
noted that ``[i]t is uncertain what additional training is 
conducted or whether or not there is any level of 
accountability for an individual [VA Regional Office] when 
mistakes are made.'' The Committee noted near the beginning of 
its account of the background underlying section 105 of H.R. 
5892 that ``certification testing is an appropriate means to 
measure an employee's qualifications and skills and should be a 
part of VA's human resources evaluation system.'' The Veterans' 
Benefits Improvement Act of 2008, Public Law 110-389, 122 Stat. 
4145, contained modified language from section 105 of H.R. 
5892.
    In implementing the mandate of Public Law 110-389, VA has 
used certification testing as a means to gauge whether certain 
employees should advance in pay grade, rather than using 
certification as a means to measure performance, ensure 
accountability, and reinforce required training at the 
individual level. Although testing to certify proficiency in a 
subject matter is certainly a worthwhile standard for 
promotion, the Committee believes that certification testing 
could be used to more broadly influence the type of training or 
remediation necessary at the individual employee level. Indeed, 
VA's own performance measures suggest that different approaches 
are needed. From January of 2009 to September of 2011, there 
has been a 99 percent increase in the reported backlog of 
claims for disability benefits. Over that same period, the 
average number of days to complete a claim rose from 160.7 days 
in fiscal year (FY) 2009 to 182.2 in FY 2011. Accuracy of 
claims decisions has been stagnant at 84 percent over the last 
3 years, well below VA's stated goal of 98 percent.
    The Committee is sensitive to concerns expressed by VA 
regarding the costs and management difficulties associated with 
annual testing of every employee, with follow-up remediation, 
at every Regional Office (RO). Therefore, section 2 of H.R. 
2349, as amended, allows for VA to take a more deliberate 
approach to skills assessments by requiring biennial 
assessments of appropriate employees and managers at only five 
Regional Offices from 2012 through 2016. The assessments would 
be required of appropriate employees and managers responsible 
for processing claims for compensation and pension benefits. If 
employees or managers receive a less-than-satisfactory score on 
the assessment exam, VA would be required to provide 
appropriate remediation training so that the assessment exam 
could be taken again. If after remediation an employee or 
manager again gets a less-than-satisfactory score, VA would 
then be required to take appropriate personnel actions. Section 
2 would authorize $5 million over five years to carry out the 
biennial assessments, the results of which VA would be required 
to report to Congress.

Section 3--Exclusion of certain reimbursements of expenses from 
        determiniation of annual income with respect to pensions for 
        veterans and surviving spouses and children of veterans

    The purpose of VA pension benefits is to ensure that 
wartime veterans with limited means, who are unable to work due 
to age or non service-connected disability, have a minimum 
level of income support. Certain spouses and dependent children 
are also eligible for VA pension. In assessing a claimant's 
eligibility for pension benefits, VA must determine annual 
countable income, then calculate and pay a pension benefit that 
is equal to the difference between countable income and the 
maximum allowable pension level established in law. In order to 
verify certain kinds of countable income to ensure accurate 
pension payments, VA uses existing legal authority to match 
income data it receives with data possessed by the Internal 
Revenue Service. However, that legal authority is set to expire 
on November 18, 2011.
    Current law exempts from income determinations 
reimbursements for any kind of ``casualty loss,'' which is 
defined in VA regulation as ``the complete or partial 
destruction of property resulting from an identifiable event of 
a sudden, unexpected or unusual nature.'' However, current law 
does not exempt from income determinations reimbursements 
received as a result of accident, theft, or ordinary loss, and 
it does not exempt from income determinations reimbursements 
received as a result of pain and suffering associated with a 
casualty loss. Thus, if a pension recipient receives 
reimbursement from an insurance company for these items, it may 
cause an immediate reduction or elimination of monthly VA 
pension, even though the recipient may have needed to use 
proceeds from the insurance reimbursement to cover immediate or 
near-term expenses related to the casualty loss, such as 
purchasing a replacement automobile. The Committee believes 
that it is appropriate to have some measure of flexibility in 
these instances so that those who depend on monthly VA pension 
to survive are not punished when they suffer from an accident 
or loss.
    Section 3 would prevent the offset of pension benefits for 
veterans, surviving spouses and children of veterans due to the 
receipt of payments by insurance, court award, settlement or 
other means to reimburse expenses incurred after an accident, 
theft, loss, or casualty. Section 3 would also exempt ``pain 
and suffering'' income from pension calculations, but only in 
amounts determined by VA on a case-by-case basis. It is the 
Committee's hope that the individual facts of a case will 
enable VA to exempt an amount for pain and suffering that is in 
keeping with the intended purpose of VA pension.
    Section 3 would also extend the authority of VA to verify 
income information with the Internal Revenue Service to 
November 18, 2013.

Section 4--Authorization of use of electronic communications to provide 
        notice to claimants for benefits under laws administered by the 
        Secretary of Veterans Affairs.

    Section 5103 of title 38, United States Code, requires VA, 
upon receipt of a complete or substantially complete 
application from a claimant seeking any benefit from VA, to 
issue a written notice to claimants requesting evidence needed 
to substantiate their claims. Section 5103 further requires VA 
to issue a separate written notice to claimants upon receipt of 
any subsequent claims, regardless of whether the information 
contained in a subsequent notice is different from any prior 
notices issued.
    This written notice, commonly referred to as a ``notice of 
responsibility'' or ``VCAA notice'' because of its origin 
within the Veterans Claims Assistance Act of 2000, Public Law 
106-475, 114 Stat. 2096, requires a statement as to the issue 
or issues being claimed, lists the evidence the claimant wishes 
to be considered, and informs the claimant if there is any 
additional information or evidence required, including private 
medical treatment records for service connection, secondary 
service connection, increased evaluations, individual 
unemployability, or other claims. The VCAA notice further 
requests that the claimant complete and return a VA Form 21-
4142 (``Authorization and Consent to Release Information'') 
authorizing VA to obtain private medical treatment records. The 
claimant is also asked to include detailed information 
regarding health provider, facilities, findings and diagnoses. 
The claimant is further instructed to identify any VA medical 
treatment, including dates and specific facilities, so VA can 
obtain those medical records. Additionally, the claimant is 
informed he or she may provide a statement regarding the 
claimed condition or conditions as well as lay records 
including statements from persons with knowledge of how the 
claimed condition or conditions may affect the claimant.
    Information contained in the VCAA notice includes specific 
time periods in which additional information or evidence must 
be received and what actions VA has already taken, such as 
requesting records or a medical examination from a VA medical 
center. The notice also informs the claimant that, should the 
VA medical examination be missed without good cause, VA may 
move forward and decide the claim based on the evidence of 
record.
    The VCAA notice also outlines VA's duty to assist the 
claimant in obtaining evidence, including what steps the VA 
will take, and explains the role the claimant can play to 
ensure all relevant evidence is submitted for consideration. 
The VCAA notice explains how a disability rating and effective 
date will be determined. Finally, each VCAA notice contains a 
VCAA Notice Response Form, which identifies the date of claim 
and provides a brief explanation regarding the submission of 
any additional information or evidence. If the claimant has 
nothing further to submit in support of the claim, he or she 
may elect to have the claim decided as soon as possible, which 
may alleviate unnecessary delays in processing, or the claimant 
may elect to submit additional information or evidence.
    VA, in testimony before the Subcommittee on Oversight and 
Investigations on July 20, 2011, noted the unintended 
consequences, including court interpretations, of VCAA that 
have resulted in delays in claims processing instead of 
creating ``more efficient and effective development of claims'' 
as originally intended. The Committee believes that sensible 
modifications to VCAA can be made without undoing the intent of 
VCAA, while also expediting the claims process.
    Accordingly, section 4 of H.R. 2349, as amended, would 
remove the requirement that the VCAA notice be sent only after 
receipt of a claim, thereby allowing VA to put notice on new 
claims forms, as is currently done with the Department's 526-EZ 
form for Fully Developed Claims (FDC). Together with the 
provisions in Section 5 of H.R. 2349, as amended, which would 
authorize VA to encourage veterans to gather and submit private 
medical records in support of their claims, some veterans could 
be encouraged to take additional time to find, procure, and 
submit private medical evidence before submitting their claim. 
VA must ensure that veterans are adequately informed that they 
have the right to submit an informal claim for the purpose of 
establishing an earlier effective date in rewriting new 
application forms. Such information is currently included on 
the 526-EZ form for those filing under the FDC program, and it 
should similarly be included for those submitting standard non-
FDC forms to ensure that veterans do not lose any benefit.
    Although not its central purpose, current VCAA notice 
provides a claimant with an acknowledgement that the claim was 
received and is being processed. Upon enactment of section 4, 
it is imperative that when VA moves the VCAA notice onto the 
application form itself, it continues to keep in place a system 
that acknowledges receipt of all submitted claims. Currently, 
the VBA has stated that most ROs send out such letters 
acknowledging receipt of claims, and that such a system could 
be implemented throughout the remaining ROs.
    For claimants who file electronically, the acknowledgement 
of receipt can easily be auto-generated and delivered via email 
or other means, as chosen by the veterans during the 
application process. However, as long as veterans may file 
claims on paper forms or other non-electronic means, it is 
imperative that VA also continue to send acknowledgement of 
receipt of claims. In addition, to the extent feasible, VA 
should include a listing of any other records or evidence that 
was submitted along with the claim.
    The requirement that VA issue a separate written VCAA 
notice upon receipt of any subsequent claim presents two issues 
that contribute to the claims backlog. The first is that, in 
many cases, VA is forced to take a redundant step of producing 
the exact same notice it has already provided to the veteran, 
which increases the processing time without affecting the 
outcome of the claim.
    The second issue is that the notices provided by VA must be 
in writing and mailed through the postal system. Because it is 
not authorized to do so, VA cannot utilize the speed and 
efficiency provided by electronic mail, even if that were the 
claimant's preferred method of communication regarding the 
claim. This restriction of VA's means of communication prevents 
it from utilizing a widely-used and accepted form of efficient 
and timely correspondence.
    Section 4 of H.R. 2349, as amended, would correct both of 
these inefficiencies in two ways. First, it would authorize VA 
to use the most effective means available for communication, 
including electronic or written communication. Second, section 
4 would remove the requirement that VA send a notice for a 
subsequent claim if the issue is already covered under a 
previous claim. However, under this section, VA would still be 
required to send a notice if over one year has passed since any 
notice of responsibility was last sent to the claimant, 
ensuring easier tracking of a claim by the veteran.
    Authorizing the use of the most effective means available 
for communication would allow VA the option of sending a notice 
of responsibility to the claimant using either electronic 
correspondence or written correspondence. This section contains 
no requirement limiting correspondence to electronic mail. With 
its enactment, VA would have the ability to communicate quickly 
and efficiently with claimants. VA would no longer be 
statutorily restricted in its means of communicating with 
claimants, nor would it still be subject to the inherent added 
time of only using written mail delivered through the postal 
system.
    As VA continues modernizing toward an electronic and 
paperless system of filing, adjudicating, and awarding claims 
for benefits, it must ensure that veterans retain the ability 
to choose the best means of communicating with VA. For those 
who file their online claims, they should be given an option to 
opt-out of electronic communications and those who file via 
non-electronic means should be given the opportunity to opt-in 
to electronic communication. Further, as VA integrates VCAA 
notice into the online claims application process, it must also 
take special care to do so in a manner that assures the 
greatest likelihood that veterans will read and understand such 
online notice. In order to maintain the value of the VCAA 
notice, VA must carefully consider how best to present such 
notice during an online application process, such as dividing 
the notice into sections and highlighting key parts of the 
notice on relevant screens during the application process. 
Section 4 contains added protections for veterans with the 
inclusion of a provision specifying that nothing in the 
legislation shall change the contents of the notice provided to 
claimants. While providing a notice of responsibility to a 
claimant electronically is a different medium from a notice 
written on paper, and therefore the visual appearance would 
likely be different, the purpose of the notice would remain the 
same.
    Removing the requirement that an additional notice for a 
subsequent claim be provided when the issue is covered under 
the original claim is a straightforward method of saving 
valuable time in processing a claim. As noted above, VA is 
required to send a notice of responsibility to a claimant for 
the initial claim as well as any subsequent claims. However, 
many of these notices are identical to what had already been 
sent to the claimant, and often the subsequent claim is covered 
under the initial claim. Therefore, VA can sometimes send 
multiple copies of the exact same notice of responsibility to a 
claimant, even though the final result is not affected. By 
reducing the unnecessary actions taken by claims processors, 
overall processing time is also reduced. However, Section 4 
does contain a requirement that VA send a notice of 
responsibility for a subsequent claim if the previous notice 
was sent more than one year prior. The Committee considers this 
provision helpful to claimants in monitoring progress of 
claims.
    Section 4 of H.R. 2349, as amended, would further amend 
section 5103 of title 38, United States Code, by authorizing VA 
to waive the requirements for issuing a VCAA notice when ``the 
Secretary may award the maximum benefit in accordance with this 
title based on the evidence of record.'' This provision will 
eliminate delays that occur when a VCAA notice would be sent in 
connection with claims for which VA will award a benefit, and 
when such notice has little likelihood of leading to a higher 
level of benefit. Under the definition of ``maximum'' in 
section 4, it is clear that before VA could make such an award, 
it must have evidence that is sufficient to meet all aspects of 
the rating schedule for each condition.
    This provision is intended to reduce the number of 
situations wherein VA spends unnecessary time and resources to 
pursue private medical records that may already have been 
submitted in the claimant's file, may not exist, may not be 
obtainable, are not relevant to the claim or, even if obtained, 
are highly unlikely to change the rating that would otherwise 
be assigned based on the evidence of record. The provision is 
not in any way intended to encourage VA to speed claims through 
the process by waiving VCAA notice requirements when fulfilling 
these duties could result in a higher rating for veterans, nor 
is the provision constructed that way. With enactment of this 
legislation, VA would continue to have an obligation to obtain 
or assist veterans in obtaining relevant medical records, both 
public and private, but it would be able to do so in a more 
efficient manner by removing the requirement to seek 
irrelevant, duplicative, or unnecessary records that do not 
substantiate a claim.
    In implementing this new authority, it is important that VA 
continue to provide VCAA notice when such notice and assistance 
could lead to a higher benefit for the veterans. It is the 
Committee's expectation that with this new authority, VA would 
continue to obtain all records that are in the constructive 
custody of governmental entities, agencies, or departments, 
such as military health records. Further, VA would continue to 
be obligated to seek to obtain private medical records that 
veterans ask VA to obtain by completing the requisite medical 
release forms, unless such records are not relevant to the 
claim. In determining the relevancy of evidence, the Committee 
would expect that VA would instruct its employees that the 
threshold question would be whether the veteran could be harmed 
in any way if the evidence is not obtained.
    In the judgment of the Committee, the following are 
examples of records that would normally be considered 
irrelevant, and for which VA would no longer be obligated to 
provide assistance in obtaining:
          (1)  The medical release form (currently VA Form 21-
        4142) indicates treatment for an issue that is not 
        being claimed by the veteran;
          (2)  The VA Form 21-4142 indicates treatment for a 
        claimed condition 20 years ago, when service-connection 
        can be granted with records present in the claims 
        folder, and there's no possibility that an earlier 
        effective date can be established with the requested 
        records; or
          (3)  The VA Form 21-4142 indicates that the same 
        treatment records are already present in the claims 
        folder.
    In implementing this section, the Committee would expect VA 
to include in the claims decision and award letter information 
regarding when it determined that records properly identified 
to VA on a medical release form are not relevant to the 
veteran's claim, including the reasons for such determination. 
Such information would allow the veteran or the veteran's 
representative, if any, to better understand how VA reached its 
decision in a timely manner.

Section 5--Duty to assist claimants in obtaining private records

    Section 5103A of title 38, United States Code, outlines 
VA's duty to assist claimants in obtaining evidence needed to 
substantiate a claim. Under current law, VA must make 
``reasonable efforts'' to obtain private medical records on 
behalf of a claimant who adequately identifies and authorizes 
VA to obtain them. What constitutes a ``reasonable effort'' by 
VA to obtain private medical records on behalf of a claimant is 
undefined. VA historically has made multiple attempts for each 
claimant to obtain private medical records out of concern that 
courts might construe VA's imposition of a defined limit as a 
violation of the statute. Such uncertainty, and resulting 
multiple requests of private medical evidence, unnecessarily 
delays final resolution to a claim.
    Section 5 would establish a standard of reasonableness for 
requests for private records as ``not less than two requests.'' 
Quantifying a reasonable number of requests removes the 
uncertainty and latitude for interpretation, and provides more 
certainty that an initial attempt was not possibly overlooked 
or misplaced by a custodian of private medical records, or sent 
to an incorrect address. In addition, if a first request is 
received by a custodian of private medical records who can 
definitively respond that they no longer have the records, the 
Department can refocus its efforts at developing a claim with 
the evidence that can be obtained. Section 5 would further 
clarify, for the veteran's protection, that the veteran retains 
the ability to submit additional evidence at a later date 
should it be obtained.
    Section 5 would also remove an additional administrative 
obstacle to claims development. As with Section 4 of H.R. 2349, 
as amended, this section would authorize VA to waive its duty 
to assist requirements when ``the Secretary may award the 
maximum benefit in accordance with this title based on the 
evidence of record.'' The effect of this provision would 
prevent both the claimant and VA from having to collect further 
evidence that would have no impact on the claim. Under the 
definition of ``maximum'' benefit, it is clear that before VA 
could make such an award, it must have evidence that is 
sufficient to meet all aspects of the rating schedule for each 
condition.
    As with the similar provision in Section 4, this provision 
is intended to reduce the number of situations wherein VA 
spends unnecessary time and resources to pursue private medical 
records that may already have been submitted in the claimant's 
file, may not exist, may not be obtainable, are not relevant to 
the claim or even if obtained are highly unlikely to change the 
rating that would otherwise be assigned based on the evidence 
of record. It must not be used to speed claims through the 
process by waiving notice or duty to assist requirements when 
fulfilling these duties could result in a higher rating for 
veterans. The Committee believes that with enactment of this 
legislation, VA would continue to have an obligation to obtain 
or assist veterans in obtaining relevant medical records, both 
public and private, but it would be able to do so in a smarter 
manner so that VA stops chasing irrelevant, duplicative or 
unnecessary records. This provision makes clear that the 
purpose of VA's duty to assist should be limited to situations 
where it will actually assist veterans in substantiating their 
claims.
    Section 5 would also add a provision to encourage claimants 
to take a proactive role in the claims process. By encouraging 
``claimants to submit relevant private medical records of the 
claimant to the Secretary if such submission does not burden 
the claimant,'' the collection of evidence necessary to render 
a decision can be greatly facilitated. A claimant's knowledge 
of where certain medical records may be located is invaluable 
to claim development, and in many cases a claimant can 
identify, obtain, and submit that evidence more quickly than if 
VA were to receive a claim and subsequently endeavored to 
locate and request those same records. It follows that 
facilitating the development portion of the claims process can 
facilitate the claims process overall, and awarding of 
decisions to claimants could be made in a more timely fashion.

Section 6--Conditions for treatment of certain persons as adjudicated 
        mentally incompetent for certain purposes

    The following background material is taken from S. Rpt. 
111-27 in its description of S. 669, a bill reported from the 
Senate Committee on Veterans' Affairs during the 111th Congress 
that is identical to the language within section 6 of H.R. 
2349, as amended:

    The Federal Gun Control Act of 1968 (hereinafter, ``GCA''), 
Public Law 90-618, 82 Stat. 1213, and subsequent amendments 
established categories of persons who are prohibited from 
receiving or possessing firearms. Included among the categories 
is any person who has been ``adjudicated as a mental defective 
or who has been committed to a mental institution.'' Part 
478.11 of title 27, Code of Federal Regulations, defines the 
meaning of ``adjudicated as a mental defective'' as follows:
    (a) a determination by a court, board, commission, or other 
lawful authority that a person, as a result of marked subnormal 
intelligence, or mental illness, incompetency, condition, or 
disease:
          (1) is a danger to himself or to others; or
          (2) lacks the mental capacity to contract or manage 
        his own affairs.
    The Brady Handgun Violence Prevention Act of 1993 
(hereinafter, the ``Brady Act''), Public Law 103-159, 107 Stat. 
1536, required the Attorney General to establish a system to 
assist federally licensed gun dealers in determining whether a 
gun buyer is prohibited under the GCA from purchasing a 
firearm. The system developed pursuant to the Brady Act, the 
[National Instant Criminal Background Check System] NICS, is a 
computerized database operated by the FBI NICS Section. The 
NICS can be queried by gun dealers to determine whether the 
name of a prospective buyer is on the list and, therefore, 
legally prohibited from purchasing a firearm.
    The Brady Act also requires Federal agencies, upon the 
request of the Attorney General, to submit to the FBI 
information on persons prohibited from purchasing a firearm. 
The Attorney General made such a request to VA in 1998. Under a 
Memorandum of Understanding entered into between the FBI and 
VA, VA agreed to make available for inclusion on the NICS 
database information about VA beneficiaries who are determined 
to be mentally incompetent on account of their inability to 
contract or manage their own affairs pursuant to part 3.353 of 
title 38, Code of Federal Regulations. Determinations of 
incompetency under part 3.353 result in an appointment of a 
fiduciary.
    The evidence gathered to support a finding of incompetency, 
under part 3.353 of VA's regulations, is used to inform a 
judgment about whether a beneficiary is capable of managing 
their VA benefit payments. No evidence is gathered as part of 
this process to inform a judgment about whether a beneficiary 
presents a danger to themselves or others, or whether they 
should be prohibited from purchasing, possessing, or operating 
a firearm. Furthermore, although beneficiaries are entitled to 
a hearing once notified that it is proposed they will be 
determined incompetent, the initial hearing is before VA 
personnel, not an independent authority. From the date of the 
initial request of the Attorney General through October, 2007, 
VA has shared information with NICS on over 116,000 individuals 
for whom it has appointed a fiduciary. VA was unable to provide 
the Committee with updated information about how many 
additional names have been added or removed from NICS since 
October 2007. Despite the fact that other agencies, such as the 
Social Security Administration, appoint fiduciaries to manage 
benefit payments for their beneficiaries in a manner similar to 
VA's process, VA beneficiaries constitute the overwhelming 
majority of individuals referred to the FBI by the Federal 
Government.

    Testimony submitted by the Reserve Officers Association 
(ROA) in connection with the Subcommittee on Disability 
Assistance and Memorial Affairs hearing on July 7, 2011, 
pointed out the risks of VA assigning labels through an 
administrative process to those who have served in the 
military, which only serve to inflame the public's distrust of 
the mental capacity of those same individuals. In this case, 
VA's designation of veterans appointed a fiduciary as 
``mentally incompetent'' automatically attaches to it a 
placement on the NICS list, a list filled with criminals and 
others who have demonstrated through their actions that they 
present a danger to society. The GCA process VA has been 
directed to follow unfairly labels veterans as potentially 
dangerous without appropriate due process.
    The Committee is in absolute agreement that individuals who 
are a danger to themselves or others should not be permitted to 
own or possess a firearm. However, the Committee is deeply 
troubled with what appears to be an arbitrary and 
discriminatory process that allows a non-judicial authority to 
presume individuals seeking help from VA as threats to society 
when they may only need help managing their financial affairs. 
The Committee believes a rational process, in an appropriate 
forum, is an absolute necessity before Constitutional rights 
are abridged for any American, but especially America's 
veterans.
    Accordingly, section 6 would clarify that in any case 
arising out of VA's administration of benefits under title 38, 
a VA beneficiary who is mentally incapacitated, deemed mentally 
incompetent, or experiencing an extended loss of consciousness, 
shall not be considered adjudicated as a mental defective under 
the GCA without the order or finding of a judge, magistrate, or 
other judicial authority of competent jurisdiction that such 
individual is a danger to him- or herself or others.

Section 7--Reinstatement of penalties for charging veterans 
        unauthorized fees

    Chapter 59 of title 38, United States Code, establishes 
policies and procedures with respect to individuals acting as 
agents and attorneys before VA. In general, an agent or 
attorney must be recognized by VA in order to act in the 
preparation, presentation, or prosecution of a claim before VA. 
Further, VA is authorized to recognize representatives of 
certain organizations to act in that capacity for claims before 
VA and to recognize an individual for purposes of a specific 
claim before VA. VA may suspend or exclude an individual from 
practicing before VA for any of the reasons set forth in 
section 5904(b) of title 38, United States Code. Section 
5904(c) of title 38 generally provides that an agent or 
attorney may not charge a fee for services ``provided before 
the date on which a notice of disagreement is filed with 
respect to the case.'' Finally, Section 5905 of title 38 
specifies that whoever wrongfully withholds from any claimant 
or beneficiary any part of a benefit or claim allowed and due 
to the claimant or beneficiary, shall be fined as provided in 
title 18, or imprisoned not more than one year, or both.
    The purpose of existing law is to protect veterans from 
being charged excessive fees for aid in prosecuting 
applications to VA for benefits under various statutes passed 
for their relief and assistance. Further, the law is designed 
to prevent unscrupulous persons from receiving compensation or 
fees for obtaining benefits for veterans from VA.
    Recent investigative news reports and testimony before the 
Committee has identified that since 2006, there has been an 
increase in non-accredited individuals, organizations and 
private companies that have been taking advantage of veterans 
by charging fees to assist them with filing claims for 
veterans' benefits with the VA that may or may not have 
actually been filed. Since these individuals, groups and 
companies are not accredited, suspension and disbarment are not 
a viable deterrent and the language of existing law provides 
little avenue for successful prosecution of these unscrupulous 
individuals.
    Accordingly, section 7 would provide the Secretary of VA 
and the Department of Justice with the appropriate tools to 
effectively and successfully prosecute these individuals, 
groups and companies that are preying on our veterans 
population, often at the time they are most vulnerable and in 
need of assistance.

Section 8--Performance awards in the Senior Executive Service

    In an acknowledgment of the damage that unrestrained 
government spending has wrought on the national economy, one of 
the first actions of the 112th Congress was to adopt a 5 
percent budget cut for Congressional offices. A further 6 
percent cut is anticipated for FY 2012. In addition, a freeze 
on raises in Federal employee pay is in effect through 2012. 
Despite this step toward fiscal restraint, VA reserved the 
right to offer pay increases, performance awards, and bonuses 
to certain health care and information technology employees. In 
response to pre-hearing questions for the record submitted by 
Chairman Jeff Miller in connection with the Committee's 
February 17, 2011, hearing on VA's Fiscal Year 2012 budget, VA 
cited a need for these bonuses to improve its ability to retain 
such employees.
    However, Committee investigations and news reports 
discovered that this type of employee was not always the 
recipient of these bonuses. Committee investigations uncovered 
bonuses being paid to facility directors with multiple 
citations of mismanagement, and news reports showed large 
retention bonuses being paid to medical facility directors who 
were at or near retirement.
    Section 5384 of title 5, United States Code, sets out the 
authority for Federal agencies to allocate performance 
incentives to employees of the Senior Executive Service (SES). 
According to information supplied by VA, 221 SES bonuses were 
awarded in FY 2008 at a total cost of $3,816,330; 219 bonuses 
were awarded in FY 2009 at a total cost of $3,728,536; and 227 
bonuses were awarded in FY 2010 at a total cost of $3,342,100. 
At a time when the entire Legislative Branch is reducing 
spending, and many Executive Branch employees will not see pay 
increases, it is appropriate that VA reevaluate its entire 
bonus program and exercise restraint in its awarding of 
bonuses.
    In order to facilitate that reevaluation, section 8 would 
establish for each of fiscal years 2012 through 2016, an annual 
authorized amount of bonuses and performance awards payable to 
VA employees within the Senior Executive Service. The cap 
established would be $2,000,000 per year, a reduction from the 
3-year average of over $3,500,000.

                                Hearings

    On July 7, 2011, the Subcommittee on Disability Assistance 
and Memorial Affairs conducted a legislative hearing on various 
bills introduced during the 112th Congress, including: H.R. 
923, H.R. 1025, H.R. 1826, H.R. 1898, and H.R. 2349. The 
following witnesses testified: Mr. Raymond Kelley, Director, 
National Legislative Service of the Veterans of Foreign Wars of 
the United States; Mr. Ian de Planque, Deputy Director, 
National Legislative Commission of The American Legion; Mr. 
Jeffrey C. Hall, Assistant National Legislative Director, 
Disabled American Veterans; Mr. Al Garver, Executive Director 
of the Enlisted Association of the National Guard of the United 
States; Mr. Jimmy F. Sims, Jr., Rating Veteran Service 
Represenative of the Veterans Benefits Administration Regional 
Office, Winston-Salem, NC, and Steward, Local 1738 of the 
American Federation of Government Employees; Mr. Richard Paul 
Cohen, Esq., Executive Director of the National Organization of 
Veterans' Advocates, Inc.; and Mr. Thomas Murphy, Director of 
the Compensation Service, Veterans Benefits Administration of 
the U.S. Department of Veterans Affairs, accompanied by Mr. 
Richard J. Hipolit Assistant General Counsel, Office of General 
Counsel of the U.S. Department of Veterans Affairs. The 
Paralyzed Veterans of America, and the Reserve Officers 
Association of the United States and Reserve Enlisted 
Association of the United States submitted statements for the 
record.
    On July 20, 2011, the Subcommittee on Oversight and 
Investigation conducted a legislative hearing on various bills 
introduced during the 112th Congress, including: H.R. 2383, 
H.R. 2243, and H.R. 2388. The following witnesses testified: 
Mr. Thomas Murphy, Director, Compensation Service, Veterans 
Benefits Administration, U.S. Department of Veterans Affairs; 
accompanying Mr. Murphy were The Honorable Roger Baker, 
Assistant Secretary for Information and Technology, and Chief 
Information Officer, U.S. Department of Veterans Affairs, and 
John H. ``Jack'' Thompson, Deputy Assistant General Counsel, 
Office of General Counsel, U.S. Department of Veterans; The 
Honorable Elizabeth A. McGrath, Deputy Chief Management 
Officer, U.S. Department of Defense; Debra Filippi, Former 
Director, U.S. Department of Defense/U.S. Department of 
Veterans Affairs Interagency Program Office; Jeffrey C. Hall, 
Assistant National Legislative Director, Disabled American 
Veterans; and Ryan M. Gallucci, Deputy Director, National 
Legislative Service, Veterans of Foreign Wars of the United 
States. The Veterans' Employment and Training Service, U.S. 
Department of Labor submitted a statement for the record.

                       Subcommittee Consideration

    On July 22, 2011, the Subcommittee on Disability Assistance 
and Memorial Affairs met in an open markup session and took the 
following actions:
    The Subcommittee ordered favorably reported H.R. 1826, as 
amended, to the full Committee, by voice vote. During 
consideration of the bill the following amendment was 
considered:
    An amendment in the nature of a substitute by Mr. Runyan of 
New Jersey was agreed to by voice vote.
    The Subcommittee ordered favorably forwarded H.R. 1898 to 
the full Committee, by voice vote.
    An amendment in the nature of a substitute was offered by 
Mr. Runyan of New Jersey to H.R. 2349. The bill was 
subsequently withdrawn by unaniomous consent.
    The Subcommittee ordered favorably forwarded H.R. 923, as 
amended, to the full Committee, by voice vote. During 
consideration of the bill the following amendments were 
considered:
    An amendment in the nature of a substitute by Mr. Runyan of 
New Jersey was agreed to by voice vote.
    An amendment to the amendment in the nature of a substitute 
to provide a reimbursement by VA for military funeral honor 
services performed by volunteers at veterans' funerals by Mr. 
McNerney of California was defeated by a roll call vote of 4 to 
4. The vote is as follows: Chairman Runyan, Mr. Lamborn, Ms. 
Buerkle, and Mr. Stutzman voted No; Ranking Member McNerney, 
Mr. Barrow, Mr. Michaud, and Mr. Walz voted Yes.
    On July 28, 2011, the Subcommittee on Oversight and 
Investigations met in an open markup session, a quorum being 
present, and ordered favorably forwarded H.R. 2383 to the full 
Committee, by voice vote.

                        Committee Consideration

    On September 8, 2011, the full Committee met in an open 
markup session, a quorum being present, and ordered reported 
favorably H.R. 2349, as amended, to the House of 
Representatives, by voice vote. During consideration of the 
bill, the following amendment was considered:
    An amendment in the nature of a substitute by Mr. Runyan of 
New Jersey was agreed to by voice vote, incorporating 
provisions from H.R. 2349, H.R. 923, H.R. 2383, H.R. 1898, and 
a freestanding provision. The amendment was agreed to by voice 
vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report the legislation and amendments thereto. 
There were no record votes taken on amendments or in connection 
with ordering H.R. 2349, as amended, reported to the House. A 
motion by Mr. Bilirakis of Florida to order reported favorably 
H.R. 2349, as amended, to the House of Representatives was 
agreed to by voice vote.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                  Earmarks and Tax and Tariff Benefits

    H.R. 2349, as amended, does not contain any Congressional 
earmarks, limited tax benefits, or limited tariff benefits as 
defined in clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
2349, as amended, prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

               Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 2349, as amended, provided by the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974.

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 30, 2011.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2349, the 
Veterans' Benefits Act of 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 2349--Veterans' Benefits Act of 2011

    Summary: H.R. 2349 would modify the eligibility 
requirements for veterans' pension awards. The bill also would 
require the Department of Veterans Affairs (VA) to undertake a 
pilot program to assess the skill level of claims processing 
personnel, and would make several other administrative changes 
to veterans' benefits programs.
    On net, CBO estimates that enacting H.R. 2349 would 
decrease direct spending by $11 million over the 2012-2016 
period and by $16 million over the 2012-2021 period. In 
addition, CBO estimates that implementing H.R. 2349 would 
reduce net discretionary costs by $1 million over the 2012-2016 
period, assuming appropriation actions consistent with the 
bill. Enacting the bill would have an insignificant effect on 
revenues. Pay-as-you-go procedures apply because enacting the 
legislation would affect direct spending and revenues.
    H.R. 2349 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2349 is shown in Table 1. The costs of 
this legislation fall within budget function 700 (veterans 
benefits and services).
    Basis of estimate: This estimate is based on information 
from the VA. For the purposes of this estimate, CBO assumes the 
bill will be enacted near the beginning of fiscal year 2012, 
that the necessary amounts will be appropriated each year, and 
that outlays will follow historical patterns for similar and 
existing programs.

             TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF H.R. 2349, THE VETERANS' BENEFITS ACT OF 2011
----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2012     2013     2014     2015     2016   2012-2016
----------------------------------------------------------------------------------------------------------------
                                          CHANGES IN DIRECT SPENDING\a\

Estimated Budget Authority..............................        *       -4       -3       -2       -2       -11
Estimated Outlays.......................................        *       -4       -3       -2       -2       -11

                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Budget Authority..............................        2        *        *       -1       -1        -1
Estimated Outlays.......................................        2        *        *       -1       -1       -1
----------------------------------------------------------------------------------------------------------------
\a\In addition to the direct spending effects shown here, enacting H.R. 2349 would have additional effects on
  direct spending beyond 2016 (see Table 2). CBO estimates that net direct spending would decrease by $16
  million over the 2012-2021 period.
Note: Components may not sum to totals because of rounding; * = less than $500,000.

Direct spending

    H.R. 2349 would extend the authority for VA to conduct an 
income verification match with the Internal Revenue Service 
(IRS); VA also would be required to exclude certain 
reimbursements from income when determining a disability 
pension award. On net, those provisions would decrease direct 
spending by $16 million over the 2012-2021 period, CBO 
estimates.
    Extension of Income Verification Match. Section 3 would 
extend authorities under current law that allow VA to access 
information on income reported to the IRS for the purpose of 
verifying the income reported by recipients of veterans pension 
benefits. Authority for the IRS to provide such information to 
VA was extended indefinitely in Public Law 110-245, and 
authority for VA to acquire that information is scheduled to 
expire on September 30, 2011. Section 3 would extend VA's 
authority through September 30, 2013.
    According to VA, the department saved approximately $4 
million in newly identified overpayments of pension awards by 
verifying veterans' incomes in 2010 and an average of $4 
million annually over the 2006-2010 period. Using that 
information and accounting for mortality, CBO estimates that 
enacting section 3 would result in direct spending savings of 
$31 million over the 2012-2016 period and $56 million over the 
2012-2021 period.

                                             TABLE 2.--ESTIMATED CHANGES IN DIRECT SPENDING UNDER H.R. 2349
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              Outlays, in millions of dollars, by fiscal year--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2012    2013    2014    2015    2016    2017    2018    2019    2020    2021   2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extension of Income Verification Match............      -4      -8      -7      -6      -6      -6      -5      -5      -5      -4       -31        -56
Exclusion of Certain Reimbursements for Pension          4       4       4       4       4       4       4       4       4       4        20         40
 Purposes.........................................
                                                   -----------------------------------------------------------------------------------------------------
    Total Changes.................................       *      -4      -3      -2      -2      -2      -1      -1      -1       *       -11       -16
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note: * = between -$500,000 and $500,000.

    Exclusion of Certain Reimbursements for Pension Purposes. 
Section 3 also would exclude certain reimbursements and 
insurance settlements made to a veteran, surviving spouse, or 
child from being counted as income in determining disability 
pension awards. Under current law, certain payments can be 
counted as income and reduce a veteran's or surviving spouse's 
pension award. Thus, the effect of section 3 would be to 
increase the size of pension awards.
    According to VA, under current practice, payments for 
casualty losses are already excluded from income 
determinations. Awards for pain and suffering are included as 
income and make up the majority of reductions in pension 
awards. VA does not keep track of the number of pensioners who 
have had their pensions reduced because they received an award 
for pain and suffering; therefore, CBO used general population 
statistics on accidents that result in settlements for pain and 
suffering.
    Based on national data about the frequency of car accidents 
in the United States, about 6.3 million people (or 2 percent of 
the population) are involved in car accidents every year. About 
30 percent of those accidents result in an injury that could 
lead to a pain and suffering settlement. Insurance companies do 
not generally publish information on how many injury claims 
result in pain and suffering awards. Absent such information, 
CBO assumes that about one-half of the individuals injured 
receive a payment for pain and suffering.
    Based on information from VA on the population of veterans 
and spouses who receive pensions and using general population 
figures on accidents that result in injuries, CBO estimates 
that in 2012, about 7,500 veterans and surviving spouses will 
be involved in car accidents and that about 2,240 of them will 
be injured. Of those, we expect about half (1,120) will receive 
pain and suffering settlements. After accounting for a 
declining population of pension recipients, CBO estimates that 
by 2021 the number of veterans and surviving spouses receiving 
pain and suffering payments will decline to about 1,060 in 
2021. After reviewing data on pain and suffering payments, CBO 
determined that the average award was about $4,000. Thus, CBO 
estimates that enacting section 2 would increase direct 
spending by $4 million a year, or $40 million over the 2012-
2021 period.
    Reinstatement of Penalties. Section 7 would reinstate 
penalties for any individual found to be soliciting a fee or 
compensation for the assistance to a veteran in filing an 
application for benefits. The provision would expand the number 
of individuals who could be federally prosecuted. Because those 
prosecuted and convicted under section 7 could be subject to 
criminal fines, the federal government might collect additional 
fines if the legislation is enacted. Criminal fines are 
recorded as revenues, deposited in the Crime Victims Fund, and 
later spent. CBO expects that any additional revenues and 
direct spending would not be significant because of the small 
number of cases likely affected.

Spending subject to appropriation

    H.R. 2349 would limit the amount VA could pay for 
performance awards, establish a pilot program to assess the 
skills of claims processors and provide necessary training 
where those skills are deficient, and make other administrative 
reforms. CBO estimates that, on net, implementing H.R. 2349 
would reduce discretionary costs by $1 million over the 2012-
2016 period, assuming appropriation actions consistent with the 
bill.
    Performance Awards for Senior Executive Staff. Section 8 
would limit the amount that VA could pay in performance awards 
to senior staff to $2 million per year over the 2012-2016 
period. In 2010, VA paid about $3.3 million in performance 
award payments. Assuming a similar amount over the applicable 
period, CBO estimates that implementing section 8 would reduce 
discretionary spending for pay and performance by about $7 
million over the 2012-2016 period.
    Assessment of Claims-Processing Skills Pilot Program. 
Section 2 would establish a four-year pilot program at five VA 
regional offices to test the skills and proficiency of claims 
processors (both managers and employees) and to provide 
remediation and training to those individuals who do not pass 
the tests. Employees who failed the skills assessment after two 
attempts would be subject to unspecified personnel action. The 
bill also would require an annual report on the pilot program. 
Section 2 would authorize the appropriation of $5 million over 
the 2012-2016 period for those purposes. CBO estimates that 
implementing section 2 would cost $5 million over that period, 
assuming appropriation of the specified amount.

                      TABLE 3.--ESTIMATED CHANGES IN DISCRETIONARY SPENDING UNDER H.R. 2349
----------------------------------------------------------------------------------------------------------------
                                                                 In millions of dollars, by fiscal year--
                                                         -------------------------------------------------------
                                                            2012     2013     2014     2015     2016   2012-2016
----------------------------------------------------------------------------------------------------------------
Performance Awards for Senior Executive Staff:
    Estimated Authorization Level.......................       -1       -1       -1       -1       -1        -7
    Estimated Outlays...................................       -1       -1       -1       -1       -1        -7
Assessment of Claims-Processing Skills Pilot Program:
    Authorization Level.................................        3        1        1        *        *         5
    Estimated Outlays...................................        3        1        1        *        *         5
Other Provisions:
    Estimated Authorization Level.......................        *        *        *        *        *         1
    Estimated Outlays...................................        *        *        *        *        *         1
    Total Changes:
        Estimated Authorization Level...................        2        *        *       -1       -1        -1
        Estimated Outlays...............................        2        *        *       -1       -1       -1
----------------------------------------------------------------------------------------------------------------
Note: Components may not sum to totals because of rounding; * = less than $500,000.

    Other Provisions. The following provisions would each have 
an insignificant impact on spending subject to appropriation, 
but together would cost $1 million over the 2012-2016 period, 
assuming availability of appropriated funds.
     Section 4 would allow VA to use electronic 
communications when possible to inform a veteran with a pending 
claim that more information is needed to substantiate a claim 
for benefits.
     Section 5 would require VA to make no less than 
two attempts to obtain private medical records for use in 
completing a pending claim for benefits.
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table. 
Changes in revenues under the bill would be insignificant.

        CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 2349, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON VETERANS' AFFAIRS ON SEPTEMBER 8, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  By fiscal year, in millions of dollars--
                                                   -----------------------------------------------------------------------------------------------------
                                                     2012    2013    2014    2015    2016    2017    2018    2019    2020    2021   2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact....................       0      -4      -3      -2      -2      -2      -1      -1      -1       0       -11        -16
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 2349 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal costs: Dwayne M. Wright; 
Impact on state, local, and tribal governments: Lisa Ramirez-
Branum; Impact on the private sector: Elizabeth Bass.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 2349, as amended, prepared by the 
Director of the Congressional Budget Office pursuant to section 
423 of the Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
2349, as amended.


                 Statement of Constitutional Authority

    Pursuant to Article I, section 8 of the United States 
Constitution, the reported bill is authorized by Congress' 
power to ``provide for the common Defense and general Welfare 
of the United States.''

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section would provide the short title of H.R. 2349, as 
amended, as the ``Veterans' Benefits Act of 2011.''

Section 2. Assessment of Claims-Processing Skills Pilot Program

    This section would directs the VA to carry out a pilot 
program to assess skills and provide training described under 
subsection (b) no later than 180 days after the enactment of 
the act.
          (1) Directs the Secretary to assess the skills of 
        appropriate employees and managers of the Veterans 
        Benefits Administration biennially who are responsible 
        for processing claims for compensation and pension 
        benefits under the laws administered by the Secretary. 
        This includes requiring such employees and managers to 
        take the examination provided under section 7732A(a)(1) 
        of title 38, United States Code. The Secretary must 
        then develop and implement an individualized training 
        plan related to such skills for each such employee and 
        manager on the basis of the results of the 
        aforementioned assessment and examination, as well as 
        with any relevant regional office quality review.
          (2) This subsection directs the Secretary to provide 
        such employee or manager with remediation of any 
        deficiency and to retake the exam if any employee or 
        manager receives a less than satisfactory result on any 
        portion of an assessment under paragraph (1)(A).
    (b) Directs the Secretary to take appropriate personnel 
actions with respect to any employee or manager under certain 
circumstances.
    (c) Directs the Secretary to carry out the pilot program 
under this section at five regional offices of the Veterans 
Benefits Administration during the five-year period beginning 
on the date of the commencement of the pilot program.
    (d) Authorizes appropriations of $5,000,000 to carry out 
this section for fiscal years 2012 through 2016.
    (e) Directs the Secretary to submit a report, which 
includes a summary of results, the remediation, and personnel 
actions to the Committee on Veterans' Affairs of the House of 
Representatives and the Committee on Veterans' Affairs of the 
Senate.
          (1) Defines the contents within the subsection (e) 
        report.
          (2) Requires any changes made to the training program 
        under subsection (b)(1)(B) based on the results of such 
        assessments and remediation and the examinations 
        provided under section 7732A(a)(1) of title 38, United 
        States Code, to be included in the report.

Section 3. Exclusion of certain reimbursements of expenses from 
        determination of annual income with respect to pensions for 
        veterans and surviving spouses and children of veterans

    This section would amend paragraph (5) of section 1503(a) 
of title 38, United States Code, to exempt reimbursements of 
any kind, including insurance settlement payments, expenses 
related to the repayment, replacement, or repair of equipment, 
vehicles, items, money, or property resulting from any 
accidents, any theft or loss, and any casualty loss, included 
medical expenses resulting from any accident, theft, loss, or 
casualty loss.
          (I) Defines limitations to accident exemption.
          (II) Defines limitations to theft or loss exemption.
          (III) Defines limitations to casualty loss exemption.
    (B) Defines definition and limitation to pain and suffering 
exception related to an accident, theft, loss, or casualty 
loss.
    (b) Defines the date this subsection takes effect.
    (c) Amends section 5317(g) of title 38, United States Code, 
by striking ``2011'' and inserting ``2013''.

Section 4. Authorization of use of electronic communication to provide 
        notice to claimants for benefits under laws administered by the 
        Secretary of Veterans Affairs

    (a) Amends section 5103 of title 38, United States Code, by 
authorizing the use of election communication to provide notice 
to claimants for benefits under laws administered by the 
Secretary.
          (4) Amends section 5103 of title 38, United States 
        Code, by adding a new paragraph, which clarifies that 
        nothing in this section would compel the Secretary to 
        provide notice for a subsequent claim that is filed 
        while a previous claim is pending if the notice 
        previously provided for such pending claim provided 
        that:
          (A) sufficient notice of the information and evidence 
        necessary to substantiate such subsequent claim; and
          (B) was sent within one year of the date on which the 
        subsequent claim was filed.
          (5)(A) Defines this section as having no 
        applicability to any claim or issue where the Secretary 
        may award the maximum benefit in accordance with this 
        title based on the evidence of record.
          (B) Defines the term ``maximum benefit' for purposes 
        of this paragraph.
    (b) Defines proper interpretation of subsection (a).

Section 5. Duty to assist claimants in obtaining private records

    (a) Amends Section 5103A(b) of title 38, United States 
Code, is amended to direct the Secretary to make reasonable 
efforts to obtain relevant private records as part of the 
assistance provided under subsection:
          (2)(A) Requires the Secretary to notify the claimant 
        that the Secretary is unable to obtain records with 
        respect to the claim when reasonable efforts have been 
        made without obtaining all of the relevant records 
        sought. This subsection also defines what must be 
        contained within the notice under this section.
          (B) Requires the Secretary to make no less than two 
        requests to a custodian of a private record in order 
        for an effort to obtain relevant private records to be 
        treated as reasonable under this section, unless it is 
        made evident by the first request that a second request 
        would be futile in obtaining such records.
          (3)(A) Defines this section as inapplicable if the 
        evidence of record allows for the Secretary to award 
        the maximum benefit in accordance with this title based 
        on the evidence of record.
          (B) Defines ``maximum benefit'' for purposes of this 
        paragraph.
          (4) Requires the Secretary to encourage claimants to 
        submit relevant private medical records of the claimant 
        to the Secretary if such submission does not burden the 
        claimant; and may require the claimant to authorize the 
        Secretary to obtain such records.
    (b) Amends section 5103A(c) giving instructions to obtain 
records for compensation claims.
          (1) Directs the Secretary, with respect to assistance 
        required of the Secretary under this section, to obtain 
        certain records if relevant to the claim. They include 
        records defined in (A), (B), and (C) of this 
        subsection.
          (2) Directs the Secretary to continue effects to 
        obtain records described under this subsection until 
        the records are obtained unless it is reasonably 
        certain that such records do not exist or that further 
        efforts to obtain those records would be futile.

Section 6. Conditions for treatment of certain persons as adjudicated 
        mentally incompetent for certain purposes

    (a) Amends chapter 55 of title 38, United States Code, by 
requiring that a person mentally incompetent, incapacitated, or 
experiencing an extended loss of consciousness to not be 
considered adjudicated as a mental defective under subsection 
(d)(4) or (g)(4) of section 922 of title 18 without the order 
or finding of a judge, magistrate, or other judicial authority 
of competent jurisdiction that such person is a danger to 
himself or herself or others.
    (b) Amends the table of sections in chapter 55.

Section 7. Reinstatement of penalties for charging veterans 
        unauthorized fees

    (a) Amends section 5905 of title 38, United States Code, to 
reinstate penalties for a knowing solicitation, contracting, 
charging, or receiving any fee or compensation in connection 
for various services defined in subsections (A) or (B). 
Subsections (2), (3), and (4) expound on the penalties 
described in this section.
    (b) Defines the date this subsection takes effect.

Section 8. Performance awards in the Senior Executive Service

    Prohibits the Secretary from paying more than $2,000,000 in 
performance awards under section 5384 of title 5, United States 
Code, for each of fiscal years 2012 through 2016.

Section 9. Budgetary effects of this act

    Defines the budgetary effects of this Act for the purpose 
of complying with the Statutory Pay-As-You-Go-Act of 2010, and 
Amends title 38, United States Code.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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 italic, existing law in which no change is 
proposed is shown in roman):

TITLE 38, UNITED STATES CODE

           *       *       *       *       *       *       *


PART II--GENERAL BENEFITS

           *       *       *       *       *       *       *


 CHAPTER 15--PENSION FOR NON-SERVICE-CONNECTED DISABILITY OR DEATH OR 
FOR SERVICE

           *       *       *       *       *       *       *


SUBCHAPTER I--GENERAL

           *       *       *       *       *       *       *


Sec. 1503.   Determinations with respect to annual income

  (a) In determining annual income under this chapter, all 
payments of any kind or from any source (including salary, 
retirement or annuity payments, or similar income, which has 
been waived, irrespective of whether the waiver was made 
pursuant to statute, contract, or otherwise) shall be included 
except--
          (1) * * *

           *       *       *       *       *       *       *

          [(5) reimbursements of any kind for any casualty loss 
        (as defined in regulations which the Secretary shall 
        prescribe), but the amount excluded under this clause 
        may not exceed the greater of the fair market value or 
        reasonable replacement value of the property involved 
        at the time immediately preceding the loss;]
          (5) payments regarding--
                  (A) reimbursements of any kind (including 
                insurance settlement payments) for--
                          (i) expenses related to the 
                        repayment, replacement, or repair of 
                        equipment, vehicles, items, money, or 
                        property resulting from--
                                  (I) any accident (as defined 
                                in regulations which the 
                                Secretary shall prescribe), but 
                                the amount excluded under this 
                                subclause shall not exceed the 
                                greater of the fair market 
                                value or reasonable replacement 
                                value of the equipment or 
                                vehicle involved at the time 
                                immediately preceding the 
                                accident;
                                  (II) any theft or loss (as 
                                defined in regulations which 
                                the Secretary shall prescribe), 
                                but the amount excluded under 
                                this subclause shall not exceed 
                                the greater of the fair market 
                                value or reasonable replacement 
                                value of the item or the amount 
                                of the money (including legal 
                                tender of the United States or 
                                of a foreign country) involved 
                                at the time immediately 
                                preceding the theft or loss; or
                                  (III) any casualty loss (as 
                                defined in regulations which 
                                the Secretary shall prescribe), 
                                but the amount excluded under 
                                this subclause shall not exceed 
                                the greater of the fair market 
                                value or reasonable replacement 
                                value of the property involved 
                                at the time immediately 
                                preceding the casualty loss; 
                                and
                          (ii) medical expenses resulting from 
                        any accident, theft, loss, or casualty 
                        loss (as defined in regulations which 
                        the Secretary shall prescribe), but the 
                        amount excluded under this clause shall 
                        not exceed the costs of medical care 
                        provided to the victim of the accident, 
                        theft, loss, or casualty loss; and
                  (B) pain and suffering (including insurance 
                settlement payments and general damages awarded 
                by a court) related to an accident, theft, 
                loss, or casualty loss, but the amount excluded 
                under this subparagraph shall not exceed an 
                amount determined by the Secretary on a case-
                by-case basis;

           *       *       *       *       *       *       *


PART IV--GENERAL ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *


CHAPTER 51--CLAIMS, EFFECTIVE DATES, AND PAYMENTS

           *       *       *       *       *       *       *


SUBCHAPTER I--CLAIMS

           *       *       *       *       *       *       *


Sec. 5103.   Notice to claimants of required information and evidence

  (a) Required Information and Evidence.--(1) [Upon receipt of 
a complete or substantially complete application, the] The 
Secretary shall [notify] provide to the claimant and the 
claimant's representative, if any, by the most effective means 
available, including electronic communication or notification 
in writing of any information, and any medical or lay evidence, 
not previously provided to the Secretary that is necessary to 
substantiate the claim. As part of that notice, the Secretary 
shall indicate which portion of that information and evidence, 
if any, is to be provided by the claimant and which portion, if 
any, the Secretary, in accordance with section 5103A of this 
title and any other applicable provisions of law, will attempt 
to obtain on behalf of the claimant.

           *       *       *       *       *       *       *

  (b) Time Limitation.--(1) * * *

           *       *       *       *       *       *       *

  (4) Nothing in this section shall require the Secretary to 
provide notice for a subsequent claim that is filed while a 
previous claim is pending if the notice previously provided for 
such pending claim--
          (A) provides sufficient notice of the information and 
        evidence necessary to substantiate such subsequent 
        claim; and
          (B) was sent within one year of the date on which the 
        subsequent claim was filed.
  (5)(A) This section shall not apply to any claim or issue 
where the Secretary may award the maximum benefit in accordance 
with this title based on the evidence of record.
  (B) For purposes of this paragraph, the term ``maximum 
benefit'' means the highest evaluation assignable in accordance 
with the evidence of record, as long as such evaluation is 
supported by such evidence of record at the time the decision 
is rendered.

Sec. 5103A.   Duty to assist claimants

  (a) * * *
  [(b) Assistance in Obtaining Records.--(1) As part of the 
assistance provided under subsection (a), the Secretary shall 
make reasonable efforts to obtain relevant records (including 
private records) that the claimant adequately identifies to the 
Secretary and authorizes the Secretary to obtain.
  [(2) Whenever the Secretary, after making such reasonable 
efforts, is unable to obtain all of the relevant records 
sought, the Secretary shall notify the claimant that the 
Secretary is unable to obtain records with respect to the 
claim. Such a notification shall--
          [(A) identify the records the Secretary is unable to 
        obtain;
          [(B) briefly explain the efforts that the Secretary 
        made to obtain those records; and
          [(C) describe any further action to be taken by the 
        Secretary with respect to the claim.
  [(3) Whenever the Secretary attempts to obtain records from a 
Federal department or agency under this subsection or 
subsection (c), the efforts to obtain those records shall 
continue until the records are obtained unless it is reasonably 
certain that such records do not exist or that further efforts 
to obtain those records would be futile.
  [(c) Obtaining Records for Compensation Claims.--In the case 
of a claim for disability compensation, the assistance provided 
by the Secretary under subsection (b) shall include obtaining 
the following records if relevant to the claim:
          [(1) The claimant's service medical records and, if 
        the claimant has furnished the Secretary information 
        sufficient to locate such records, other relevant 
        records pertaining to the claimant's active military, 
        naval, or air service that are held or maintained by a 
        governmental entity.
          [(2) Records of relevant medical treatment or 
        examination of the claimant at Department health-care 
        facilities or at the expense of the Department, if the 
        claimant furnishes information sufficient to locate 
        those records.
          [(3) Any other relevant records held by any Federal 
        department or agency that the claimant adequately 
        identifies and authorizes the Secretary to obtain.]
  (b) Assistance in Obtaining Private Records.--(1) As part of 
the assistance provided under subsection (a), the Secretary 
shall make reasonable efforts to obtain relevant private 
records.
  (2)(A) Whenever the Secretary, after making such reasonable 
efforts, is unable to obtain all of the relevant records 
sought, the Secretary shall notify the claimant that the 
Secretary is unable to obtain records with respect to the 
claim. Such a notification shall--
          (i) identify the records the Secretary is unable to 
        obtain;
          (ii) briefly explain the efforts that the Secretary 
        made to obtain such records; and
          (iii) explain that the Secretary will decide the 
        claim based on the evidence of record but that this 
        section does not prohibit the submission of records at 
        a later date if such submission is otherwise allowed.
  (B) The Secretary shall make not less than two requests to a 
custodian of a private record in order for an effort to obtain 
relevant private records to be treated as reasonable under this 
section, unless it is made evident by the first request that a 
second request would be futile in obtaining such records.
  (3)(A) This section shall not apply if the evidence of record 
allows for the Secretary to award the maximum benefit in 
accordance with this title based on the evidence of record.
  (B) For purposes of this paragraph, the term ``maximum 
benefit'' means the highest evaluation assignable in accordance 
with the evidence of record, as long as such evaluation is 
supported by such evidence of record at the time the decision 
is rendered.
  (4) Under regulations prescribed by the Secretary, the 
Secretary--
          (A) shall encourage claimants to submit relevant 
        private medical records of the claimant to the 
        Secretary if such submission does not burden the 
        claimant; and
          (B) in obtaining relevant private records under 
        paragraph (1), may require the claimant to authorize 
        the Secretary to obtain such records if such 
        authorization is required to comply with Federal, 
        State, or local law.
  (c) Obtaining Records for Compensation Claims.--(1) In the 
case of a claim for disability compensation, the assistance 
provided by the Secretary under this section shall include 
obtaining the following records if relevant to the claim:
          (A) The claimant's service medical records and, if 
        the claimant has furnished the Secretary information 
        sufficient to locate such records, other relevant 
        records pertaining to the claimant's active military, 
        naval, or air service that are held or maintained by a 
        governmental entity.
          (B) Records of relevant medical treatment or 
        examination of the claimant at Department health-care 
        facilities or at the expense of the Department, if the 
        claimant furnishes information sufficient to locate 
        those records.
          (C) Any other relevant records held by any Federal 
        department or agency that the claimant adequately 
        identifies and authorizes the Secretary to obtain.
  (2) Whenever the Secretary attempts to obtain records from a 
Federal department or agency under this subsection, the efforts 
to obtain those records shall continue until the records are 
obtained unless it is reasonably certain that such records do 
not exist or that further efforts to obtain those records would 
be futile.

           *       *       *       *       *       *       *


CHAPTER 53--SPECIAL PROVISIONS RELATING TO BENEFITS

           *       *       *       *       *       *       *


Sec. 5317.   Use of income information from other agencies: notice and 
                    verification

  (a) * * *

           *       *       *       *       *       *       *

  (g) The authority of the Secretary to obtain information from 
the Secretary of the Treasury or the Commissioner of Social 
Security under section 6103(l)(7)(D)(viii) of the Internal 
Revenue Code of 1986 expires on September 30, [2011] 2013.

           *       *       *       *       *       *       *


           CHAPTER 55--MINORS, INCOMPETENTS, AND OTHER WARDS

Sec.
5501. Commitment actions.
     * * * * * * *
5511. Conditions for treatment of certain persons as adjudicated 
          mentally incompetent for certain purposes.

           *       *       *       *       *       *       *


Sec. 5511.   Conditions for treatment of certain persons as adjudicated 
                    mentally incompetent for certain purposes

  In any case arising out of the administration by the 
Secretary of laws and benefits under this title, a person who 
is mentally incapacitated, deemed mentally incompetent, or 
experiencing an extended loss of consciousness shall not be 
considered adjudicated as a mental defective under subsection 
(d)(4) or (g)(4) of section 922 of title 18 without the order 
or finding of a judge, magistrate, or other judicial authority 
of competent jurisdiction that such person is a danger to 
himself or herself or others.

           *       *       *       *       *       *       *


CHAPTER 59--AGENTS AND ATTORNEYS

           *       *       *       *       *       *       *


[Sec. 5905.   Penalty for certain acts

  [Whoever wrongfully withholds from any claimant or 
beneficiary any part of a benefit or claim allowed and due to 
the claimant or beneficiary, shall be fined as provided in 
title 18, or imprisoned not more than one year, or both.]

Sec. 5905.   Penalty for certain acts

  Except as provided in section 5904 or 1984 of this title, 
whoever--
          (1) in connection with a proceeding before the 
        Department, knowingly solicits, contracts for, charges, 
        or receives any fee or compensation in connection for--
                  (A) the provision of advice on how to file a 
                claim for benefits under the laws administered 
                by the Secretary; or
                  (B) the preparation, presentation, or 
                prosecution of such a claim before the date on 
                which a notice of disagreement is filed in a 
                proceeding on the claim,
        or attempts to do so;
          (2) unlawfully withholds from any claimant or 
        beneficiary any part of a benefit or claim under the 
        laws administered by the Secretary that is allowed and 
        due to the claimant or beneficiary, or attempts to do 
        so;
          (3) commits an offense punishable by this chapter, or 
        aids, abets, counsels, commands, or procures the 
        commission of such an act; or
          (4) causes an act to be done, which if directly 
        performed would be punishable by this chapter,
shall be fined as provided in title 18, or imprisoned for not 
more than one year, or both.

           *       *       *       *       *       *       *