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[From the U.S. Government Publishing Office]


114th Congress    }                               {   Rept. 114-32
                       HOUSE OF REPRESENTATIVES
 1st Session      }                               {   Part 1
======================================================================
 
AUTHORIZING THE SECRETARY OF VETERANS AFFAIRS TO RECOUP BONUSES AND 
AWARDS PAID TO EMPLOYEES OF THE DEPARTMENT OF VETERANS AFFAIRS

                                _______
                                

 March 2, 2015.--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. 280]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 280) to authorize the Secretary of Veterans 
Affairs to recoup bonuses and awards paid to employees of the 
Department of Veterans Affairs, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     4
Subcommittee Consideration.......................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     5
Committee Correspondence.........................................     5
Committee Oversight Findings.....................................     6
Statement of General Performance Goals and Objectives............     6
New Budget Authority, Entitlement Authority, and Tax Expenditures     6
Earmarks and Tax and Tariff Benefits.............................     6
Committee Cost Estimate..........................................     6
Congressional Budget Office Estimate.............................     6
Federal Mandates Statement.......................................     8
Advisory Committee Statement.....................................     8
Constitutional Authority Statement...............................     8
Applicability to Legislative Branch..............................     8
Statement on Duplication of Federal Programs.....................     8
Disclosure of Directed Rulemaking................................     9
Section-by-Section Analysis of the Legislation...................     9
Changes in Existing Law Made by the Bill as Reported.............     9

                               Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. AUTHORITY TO RECOUP BONUSES OR AWARDS PAID TO EMPLOYEES OF 
                    DEPARTMENT OF VETERANS AFFAIRS.

  (a) In General.--Chapter 7 of title 38, United States Code, is 
amended by adding at the end the following new section:

``Sec. 715. Recoupment of bonuses or awards paid to employees of 
                    Department

  ``(a) Recoupment.--Notwithstanding any other provision of law, the 
Secretary may issue an order directing an employee of the Department to 
repay the amount, or a portion of the amount, of any award or bonus 
paid to the employee under title 5, including under chapters 45 or 53 
of such title, or this title if--
          ``(1) the Secretary determines such repayment appropriate 
        pursuant to regulations prescribed under subsection (c); and
          ``(2) before such repayment, the employee is afforded notice 
        and an opportunity for a hearing conducted by another 
        department or agency of the Federal Government.
  ``(b) Review.--A decision regarding a repayment by an employee 
pursuant to subsection (a)(2) is final and may not be reviewed by any 
department or agency or any court.
  ``(c) Regulations.--The Secretary shall prescribe regulations to 
carry out this section.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is further amended by adding at the end the following new 
item:

``715. Recoupment of bonuses or awards paid to employees of 
Department.''.

  (c) Effective Date.--Section 715 of title 38, United States Code, as 
added by subsection (a), shall apply with respect to an award or bonus 
paid by the Secretary of Veterans Affairs to an employee of the 
Department of Veterans Affairs before, on, or after the date of the 
enactment of this Act.
  (d) Construction.--Nothing in this Act or the amendments made by this 
Act may be construed to modify the certification issued by the Office 
of Personnel Management and the Office of Management and Budget 
regarding the performance appraisal system of the Senior Executive 
Service of the Department of Veterans Affairs.

                          Purpose and Summary

    H.R. 280, as amended, to authorize the Secretary of 
Veterans Affairs to recoup bonuses and awards paid to employees 
of the Department of Veterans Affairs, was ordered to be 
favorably reported to the full House on February 12, 2015, by 
voice vote. H.R. 280 was introduced on January 12, 2015, by 
Chairman Jeff Miller of Florida. H.R. 280, as amended, would 
give the Secretary of the Department of Veterans Affairs (the 
Secretary) the authority to rescind all or part of the amount 
of any award or bonus paid to an employee of the Department of 
Veterans Affairs (VA) under chapters 45 or 53 of title 5, 
United States Code (U.S.C.), or title 38 U.S.C. This new 
authority would apply to any award or bonus paid by VA before, 
on, or after the date of enactment of this act. H.R. 280, as 
amended, would require that notice be given to the employee of 
the repayment, and that the employee be afforded the 
opportunity to a hearing by a third-party department or agency 
of the Federal Government prior to the recoupment. Lastly, H.R. 
280, as amended, would require the Secretary to prescribe the 
necessary regulations to carry out this new authority.

                  Background and Need for Legislation

    Over the past year, VA has been criticized for a wide range 
of issues that have affected the care and earned benefits of 
veterans. Over several Congresses, investigations by the 
Committee on Veterans' Affairs (the Committee), and the VA's 
Office of the Inspector General (VAOIG), have uncovered 
evidence of manipulation of VA's medical appointment system. 
This manipulation hid the fact that veterans waited months to 
receive medical appointments at many VA medical centers, while 
VA records improperly reflected wait times of only several 
days. This delay in receiving needed health care at the VA may 
have had serious consequences to the health and well-being of 
veterans, and may have led to preventable deaths. 
Investigations also uncovered evidence that some VA employees 
and VA senior managers may have allegedly falsified data to 
improve their performance metrics to receive bonuses. 
Regardless of whether falsified data used to justify the 
receipt of bonus money was deliberately manipulated or not, 
bonus awards should be provided on the basis of actual, 
verified performance, and not on an inaccurate portrayal of 
one's work.
    According to VA, in fiscal year 2013, the Secretary issued 
a total of $2,827,377 in performance awards to 304 Senior 
Executive Service (SES) employees and title 38 equivalent 
employees. Many of these 304 individuals were the senior 
managers ignoring, or worse, fostering, mismanagement and 
negligence at VA medical facilities and in Regional Offices.
    Following investigations by the Committee, the VAOIG, and 
outside media outlets that brought these VA scandals to light 
during the 113th Congress, Committee Members questioned the 
large sums of bonuses that were issued to many VA employees, 
especially many senior VA leaders who oversaw facilities where 
``secret'' appointment wait-lists were used. Committee Members 
questioned VA at several Committee hearings from April 2014 to 
August 2014 on whether the Secretary would have the legal 
authority to recoup any performance awards or bonuses issued to 
VA employees if the Secretary deemed their performance, 
particularly performance based on manipulated or inaccurate 
data, merited the recoupment. On June 17, 2014, Committee staff 
was told at a briefing by Mr. Samuel Retherford, VA's Principal 
Deputy Assistant Secretary for Human Resources and 
Administration, that the Secretary had the authority to rescind 
any bonus or performance award from an SES employee within 12 
months of it being awarded to the employee. Later, at a June 
20, 2014, Full Committee oversight hearing entitled, ``A Review 
of Awarding Bonuses to Senior Executives at the Department of 
Veterans Affairs,'' the Honorable Gina Farrisee, VA's Assistant 
Secretary for Human Resources and Administration, informed 
Members of the Committee that the Secretary did not have the 
authority to rescind any bonus or performance award from any 
employee after the award had been issued.
    On July 15, 2014, following the conflicting statements made 
by VA employees as to whether the Secretary had the authority 
to rescind a performance award, Chairman Miller sent then-
Acting Secretary Sloan Gibson a letter explicitly inquiring 
whether VA has the authority to rescind a bonus already issued 
to an employee. Deputy Secretary Sloan Gibson replied via 
letter on August 19, 2014 that ``the Department does not have 
the authority to rescind performance awards issued in 
accordance with policies and paid to employees for performance 
ratings that are final.''
    On July 17, 2014, following Deputy Secretary Gibson's 
response, Chairman Jeff Miller introduced H.R. 5094 in the 
113th Congress to give the Secretary this authority. H.R. 5094, 
as amended, was ordered to be favorably reported to the full 
House on September 10, 2014, by voice vote but was not 
considered by the full House. Chairman Miller reintroduced the 
measure as H.R. 280 in the 114th Congress. The Committee 
believes that if a VA employee acts unbecoming of VA and its 
mission to veterans, as determined by the Secretary, then the 
Secretary should have the authority to rescind any bonus or 
performance award from any prior, current, or future employee, 
which is the intent of H.R. 280, as amended.

                                Hearings

    On February 27, 2015, the full House Committee on Veterans' 
Affairs conducted a legislative hearing on various bills 
introduced during the first month of the 114th Congress, 
including H.R. 280. The Department of Veterans Affairs failed 
to take a position on H.R. 280 during this legislative hearing. 
The following witnesses testified:
    The Honorable Alan Grayson, U.S. House of Representatives, 
9th District, Florida; Mr. David R. McLenachen, Acting Deputy 
Under Secretary for Disability Assistance, Veterans Benefits 
Administration, U.S. Department of Veterans Affairs, 
accompanied by Dr. Rajiv Jain, Assistant Deputy Under Secretary 
for Health for Patient Services, Veterans Health 
Administration, U.S. Department of Veterans Affairs, Ms. Susan 
Sullivan, Deputy Assistant Secretary for Policy, Office of 
Policy and Planning, U.S. Department of Veterans Affairs, and 
Ms. Kim McLeod, Counsel, Office of General Counsel, U.S. 
Department of Veterans Affairs; Mr. Joseph A. Violante, 
National Legislative Director, Disabled American Veterans; Mr. 
Aleks Morosky, Deputy Director, National Legislative Service, 
Veterans of Foreign Wars of the United States; and Mr. Blake 
Ortner, Deputy Government Relations Director, Paralyzed 
Veterans of America.
    Statements for the record were submitted by the following:
    The House Policy Council, Financial Services Roundtable.

                       Subcommittee Consideration

    There was no subcommittee consideration of H.R. 280.

                        Committee Consideration

    On February 12, 2015, the full Committee met in an open 
markup session, and a quorum being present, ordered H.R. 280, 
as amended, to be reported favorably to the House of 
Representatives, by voice vote. During consideration of the 
bill, the following amendment was considered and agreed to by 
voice vote:
    An amendment in the nature of a substitute by Chairman Jeff 
Miller of Florida which added to the original language of H.R. 
280 as introduced, provisions which would require the Secretary 
to prescribe regulations for carrying out the recoupment of the 
award, and would require that any hearing or appeal of the 
Secretary's decision to recoup the bonus be held before a 
third-party department or agency of the Federal Government.

                            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 recorded votes taken on amendments or in 
connection with ordering H.R. 280, as amended, reported to the 
House. A motion by Ranking Member Corrine Brown of Florida to 
report H.R. 280, as amended, favorably to the House of 
Representatives was agreed to by voice vote.

                        Committee Correspondence

                          House of Representatives,
                            Committee on Veterans' Affairs,
                                 Washington, DC, February 27, 2015.
Hon. Jason Chaffetz, Chairman,
House Committee on Oversight and Government Reform,
Rayburn House Office Building, Washington, DC.
    Dear Chairman Chaffetz: In reference to your letter on 
February 26, 2015, I write to confirm our mutual understanding 
regarding H.R. 280, as amended, ``To authorize the Secretary of 
Veterans Affairs to recoup bonuses and awards paid to employees 
of the Department of Veterans Affairs.''
    I appreciate the House Committee on Oversight and 
Government Reform's waiver of consideration of provisions under 
its jurisdiction and its subject matter as specified in your 
letter. I acknowledge that the waiver was granted only to 
expedite floor consideration of H.R. 280, as amended, and does 
not in any way waive or diminish the House Committee on 
Oversight and Government Reform's jurisdictional interests over 
this legislation or similar legislation. I will support a 
request from the House Committee on Oversight and Government 
Reform for appointment to any House-Senate conference on H.R. 
280, as amended.
    Again, thank you for your assistance with these matters.
    With warm personal regards, I am
            Sincerely,
                                               Jeff Miller,
                                                          Chairman.
                              ----------                              

                          House of Representatives,
              Committee on Oversight and Government Reform,
                                 Washington, DC, February 26, 2015.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
Washington, DC.
    Dear Mr. Chairman: I write concerning H.R. 280, to 
authorize the Secretary of Veterans Affairs to recoup bonuses 
and awards paid to employees of the Department of Veterans 
Affairs. As you know, the Committee on Veterans' Affairs 
received an original referral and the Committee on Oversight 
and Government Reform a secondary referral when the bill was 
introduced on January 12, 2015. I recognize and appreciate your 
desire to bring this legislation before the House of 
Representatives in an expeditious manner, and accordingly, the 
Committee on Oversight and Government Reform will forego action 
on the bill.
    The Committee takes this action with our mutual 
understanding that by foregoing consideration of H.R. 280 at 
this time, we do not waive any jurisdiction over the subject 
matter contained in this or similar legislation. Further, I 
request your support for the appointment of conferees from the 
Committee on Oversight and Government Reform during any House-
Senate conference convened on this or related legislation.
    Finally, I would ask that a copy of our exchange of letters 
on this matter be included in the bill report filed by the 
Committee on Veterans' Affairs, as well as in the Congressional 
Record during floor consideration, to memorialize our 
understanding.
            Sincerely,
                                            Jason Chaffetz,
                                                          Chairman.

                      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. 280, 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. 
280, 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. 280, 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, March 2, 2015.
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. 280, a bill to 
authorize the Secretary of Veterans Affairs to recoup bonuses 
and awards paid to employees of the Department of Veterans 
Affairs.
    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. 280--A bill to authorize the Secretary of Veterans Affairs to 
        recoup bonuses and awards paid to employees of the Department 
        of Veterans Affairs

    H.R. 280 would give the Secretary of Veterans Affairs the 
authority to recoup all or part of awards and bonuses that were 
paid to employees of the agency. Affected employees would have 
to be provided with a notice of recoupment and an opportunity 
for a hearing conducted by another agency of the federal 
government. The new authority would apply to payments made by 
the Department of Veterans Affairs (VA) before the date of 
enactment of H.R. 280, as well as those made after that date. 
Based on discussions with the agency, CBO expects that this 
provision would be used infrequently, primarily to recoup 
payments made to senior VA employees who were determined to 
have committed a serious violation of the agency's standards of 
conduct. Of the roughly $400 million that VA pays out each year 
for awards and bonuses, about $4 million goes to senior staff.
    Most federal statutes of limitation are no more than six 
years. On that basis, CBO expects that VA would not attempt to 
recoup payments made more than six years prior to the date of 
enactment. In addition, the authority would only affect current 
employees of VA; employees who resigned or retired would be 
exempt from recoupment.
    In recovering overpayments made to employees, federal 
agencies have several options: they can require lump-sum or 
installment payments, or they can use salary offsets--regular 
deductions from bi-weekly payroll payments. Based on general 
practices at federal agencies, CBO assumes that in most cases 
VA would offset future salary payments. Such offsets would 
reduce discretionary costs. In those cases where VA would 
require a lump-sum or installment repayment, the funds would 
generally be deposited in the Treasury and would be considered 
a reduction in direct spending. Because CBO believes that this 
authority would be used infrequently, and because employees 
could avoid recoupment by leaving the agency, we estimate that 
implementing H.R. 280 would decrease personnel costs by less 
than $500,000 over the 2016-2020 period, assuming appropriation 
actions consistent with the bill. In addition, enacting the 
bill would reduce direct spending by an insignificant amount; 
therefore, pay-as-you-go procedures apply.
    Enacting H.R. 280 would not affect revenues.
    H.R. 280 would impose a private-sector mandate as defined 
in the Unfunded Mandates Reform Act (UMRA) by permitting the 
Secretary of Veterans Affairs to recoup awards and bonuses 
given to VA employees. The Secretary could direct any employee 
to repay all or a portion of the amounts paid. Requiring 
employees to repay their awards and bonuses retroactively would 
impose a private-sector mandate on those employees. CBO expects 
that, in total, the amount of bonuses and awards recouped would 
not be substantial. Therefore, CBO estimates that the cost of 
the mandate to VA employees would fall well below the annual 
threshold for private-sector mandates established in UMRA ($154 
million in 2015, adjusted annually for inflation).
    H.R. 280 contains no intergovernmental mandates as defined 
in UMRA.
    The CBO staff contacts for this estimate are Dwayne M. 
Wright (for federal costs) and Paige Piper/Bach (for private-
sector effects). The estimate was 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. 280, 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. 
280, 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.

              Statement on Duplication of Federal Programs

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee finds that no provision of H.R. 280, as amended, 
establishes or reauthorizes a program of the Federal Government 
known to be duplicative of another Federal program, a program 
that was included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139, or a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee estimates that H.R. 280, as amended, contains one 
directed rule making at section 1 which would require the 
Secretary to prescribe regulations to carry out this section.

             Section-by-Section Analysis of the Legislation


Section 1--Authority to Recoup Bonuses or Awards Paid to Employees of 
        Department of Veterans Affairs

    Section 1(a) of the bill would amend Chapter 7 of title 38 
U.S.C, by adding at the end of the chapter, a new section, 
Section 715. This section would give the Secretary of the 
Department of Veterans Affairs the authority to direct any VA 
employee to repay, in part or in full, an award or bonus paid 
to the employee under chapters 45 or 53 of title 5 if the 
Secretary determines the repayment appropriate and would direct 
the Secretary to prescribe regulations to carry out this 
section. Section 1(a) would also require that the employee be 
given notice of the repayment requirement and be afforded the 
opportunity to a hearing before a third party department or 
agency of the Federal Government. The decision made by this 
third party entity would be final and may not be reviewed any 
further by any department, agency, or court.
    Section 1(b) adds a clerical amendment at the beginning of 
Chapter 7 of title 38 U.S.C. to reflect the new section, to 
read as--``715. Recoupment of bonuses or awards paid to 
employees of Department.
    Section 1(c) applies this provision to any award or bonus 
paid by the Secretary of Veterans Affairs to an employee of the 
Department of Veterans Affairs before, on, or after the date of 
the enactment of this Act.
    Section 1(d) ensures that nothing within section 1 of H.R. 
280, as amended, may be construed to modify the certification 
issued by the Office of Personnel Management and the Office of 
Management and Budget regarding the performance appraisal 
system of the Senior Executive Service of the Department of 
Veterans Affairs.

         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 (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

TITLE 38, UNITED STATES CODE

           *       *       *       *       *       *       *



PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


                          CHAPTER 7--EMPLOYEES


Sec.
701. Placement of employees in military installations.
     * * * * * * *
715. Recoupment of bonuses or awards paid to employees of Department.

           *       *       *       *       *       *       *


Sec. 715. Recoupment of bonuses or awards paid to employees of 
                    Department

  (a) Recoupment.--Notwithstanding any other provision of law, 
the Secretary may issue an order directing an employee of the 
Department to repay the amount, or a portion of the amount, of 
any award or bonus paid to the employee under title 5, 
including under chapters 45 or 53 of such title, or this title 
if--
          (1) the Secretary determines such repayment 
        appropriate pursuant to regulations prescribed under 
        subsection (c); and
          (2) before such repayment, the employee is afforded 
        notice and an opportunity for a hearing conducted by 
        another department or agency of the Federal Government.
  (b) Review.--A decision regarding a repayment by an employee 
pursuant to subsection (a)(2) is final and may not be reviewed 
by any department or agency or any court.
  (c) Regulations.--The Secretary shall prescribe regulations 
to carry out this section.

           *       *       *       *       *       *       *