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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    108-211

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



 
                     VETERANS BENEFITS ACT OF 2003

                                _______
                                

 July 15, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Smith of New Jersey, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2297]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 2297) to amend title 38, United States Code, to 
modify and improve certain benefits for veterans, and for other 
purposes, having considered the same, reports favorably thereon 
with amendments and recommends that the bill as amended do 
pass.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Veterans Benefits 
Act of 2003''.
  (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Expansion of Montgomery GI Bill education benefits for certain 
self-employment training.
Sec. 3. Extension in period of eligibility for survivors' and 
dependents' education benefits for individuals who are involuntarily 
ordered to full-time National Guard duty.
Sec. 4. Extension of Veterans' Advisory Committee on Education.
Sec. 5. Repeal of provisions relating to obsolete education loan 
program.
Sec. 6. Retention of Dependency and Indemnity Compensation for 
surviving spouses remarrying after age 55.
Sec. 7. Eligibility of surviving spouses who remarry for burial in 
national cemeteries.
Sec. 8. Permanent authority for State cemetery grants.
Sec. 9. Reinstatement of veterans vocational training program for 
certain pension recipients.
Sec. 10. Increase in amounts for certain adaptive benefits for disabled 
veterans.
Sec. 11. Presumptions of service-connection relating to diseases and 
disabilities of former prisoners of war.
Sec. 12. Extension of spina bifida benefits for children of Vietnam-era 
veterans.
Sec. 13. Permanent authority for housing loans for members of the 
Selected Reserve.
Sec. 14. Adjustment to home loan fees and uniformity of fees for 
qualifying Reserve members with fees for active duty veterans.
Sec. 15. Reinstatement of minimum requirements for sale of vendee 
loans.
Sec. 16. Rate of payment of benefits for certain Filipino veterans and 
their survivors residing in the United States.
Sec. 17. Burial benefits for new Philippine scouts residing in the 
United States.
Sec. 18. Extension of authority to maintain regional office in the 
Republic of the Philippines.
Sec. 19. Outstationing of transition assistance program personnel.
Sec. 20. Forfeiture of benefits for subversive activities.
Sec. 21. Technical amendments related to Jobs for Veterans Act.
Sec. 22. Technical and conforming relating to establishment of Social 
Security Administration as an independent agency.

SEC. 2. EXPANSION OF MONTGOMERY GI BILL EDUCATION BENEFITS FOR CERTAIN 
                    SELF-EMPLOYMENT TRAINING.

   (a) Definition of Training Establishment.--Section 3452(e) of title 
38, United States Code, is amended by striking ``means any'' and all 
that follows and inserting ``means any of the following:
          ``(1) An establishment providing apprentice or other training 
        on the job, including those under the supervision of a college 
        or university or any State department of education.
          ``(2) An establishment providing self-employment on-job 
        training consisting of full-time training for a period of less 
        than six months that is needed or accepted for purposes of 
        obtaining licensure to engage in a self-employment occupation 
        or required for ownership and operation of a franchise that is 
        the objective of the training.
          ``(3) A State board of vocational education.
          ``(4) A Federal or State apprenticeship registration agency.
          ``(5) A joint apprenticeship committee established pursuant 
        to the Act of August 16, 1937, popularly known as the `National 
        Apprenticeship Act' (29 U.S.C. 50 et seq.).
          ``(6) An agency of the Federal Government authorized to 
        supervise such training.''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect on the date that is six months after the date of the enactment 
of this Act and shall apply to self-employment on-job training approved 
and pursued on or after that date.

SEC. 3. EXTENSION IN PERIOD OF ELIGIBILITY FOR SURVIVORS' AND 
                    DEPENDENTS' EDUCATION BENEFITS FOR INDIVIDUALS WHO 
                    ARE INVOLUNTARILY ORDERED TO FULL-TIME NATIONAL 
                    GUARD DUTY.

  (a) In General.--Section 3512(h) of title 38, United States Code, is 
amended by inserting ``or is involuntarily ordered to full-time 
National Guard duty under section 502(f) of title 32,'' after ``title 
10,''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect as of September 11, 2001.

SEC. 4. EXTENSION OF VETERANS' ADVISORY COMMITTEE ON EDUCATION.

  (a) Extension.--Subsection (c) of section 3692 of title 38, United 
States Code, is amended by striking ``December 31, 2003'' and inserting 
``December 31, 2009''.
  (b) Modification of Membership Requirements.--The second sentence of 
subsection (a) of such section is amended by striking ``World War II, 
the Korean conflict era, the post-Korean conflict era,''.
  (c) Technical Amendment.--Such section is further amended by striking 
``chapter 106'' each place it appears and inserting ``chapter 1606''.

SEC. 5. REPEAL OF PROVISIONS RELATING TO OBSOLETE EDUCATION LOAN 
                    PROGRAM.

  (a) Termination of Program.--Subchapter III of chapter 36 of title 
38, United States Code, is repealed.
  (b) Transfer of Loan Fund Balance.--Any balance as of the date of the 
enactment of this Act in the Department of Veterans Affairs Education 
Loan Fund shall be transferred to the Department of Veterans Affairs 
Readjustment Benefits Account.
  (c) Discharge of Liability.--The Secretary of Veterans Affairs shall 
discharge any outstanding liability of a veteran under such subchapter. 
Any overpayment declared under section 3698(e)(1) of that subchapter 
shall be waived without further process on the date on which funds are 
transferred under subsection (b).
  (d) Clerical Amendment.--The table of sections at the beginning of 
chapter 36 of such title is amended by striking the items relating to 
subchapter III and sections 3698 and 3699.
  (e) Conforming Amendments.--(1) Section 3462(a) of such title is 
amended by striking paragraph (2).
  (2) Section 3485(e)(1) of such title by striking ``(other than an 
education loan under subchapter III)''.
  (3) Section 3512 of such title is amended by striking subsection (f).

SEC. 6. RETENTION OF DEPENDENCY AND INDEMNITY COMPENSATION FOR 
                    SURVIVING SPOUSES REMARRYING AFTER AGE 55.

  (a) Exception to Termination of Benefits Upon Remarriage.--Section 
103(d)(2)(B) of title 38, United States Code, is amended by inserting 
``1311 or'' after ``under section''.
  (b) Effective Date.--The amendment made by subsection (a) shall take 
effect on--
          (1) the first day of the first month that begins after the 
        date of the enactment of this Act; or
          (2) the first day of the fiscal year that begins in the 
        calendar year in which this Act is enacted, if later than the 
        date specified in paragraph (1).
  (c) Retroactive Benefits Prohibited.--No benefit may be paid to any 
person by reason of the amendment made by subsection (a) for any period 
before the effective date specified in subsection (b).
  (d) Application for Benefits.--In the case of an individual who but 
for having remarried would be eligible for dependency and indemnity 
compensation under section 1311 of title 38, United States Code, and 
whose remarriage was before the date of the enactment of this Act and 
after the individual had attained age 55, the individual shall be 
eligible for such compensation by reason of the amendment made by 
subsection (a) only if the individual submits an application for such 
compensation to the Secretary of Veterans Affairs not later than the 
end of the one-year period beginning on the date of the enactment of 
this Act.

SEC. 7. ELIGIBILITY OF SURVIVING SPOUSES WHO REMARRY FOR BURIAL IN 
                    NATIONAL CEMETERIES.

  (a) Eligibility.--Section 2402(5) of title 38, United States Code, is 
amended by striking ``(which for purposes of this chapter includes an 
unremarried surviving spouse who had a subsequent remarriage which was 
terminated by death or divorce)'' and inserting ``(which for purposes 
of this chapter includes a surviving spouse who had a subsequent 
remarriage)''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
with respect to deaths occurring on or after January 1, 2000.

SEC. 8. PERMANENT AUTHORITY FOR STATE CEMETERY GRANTS.

  Paragraph (2) of section 2408(a) of title 38, United States Code, is 
amended--
          (1) by striking ``for fiscal year 1999 and for each 
        succeeding fiscal year through fiscal year 2004''; and
          (2) by adding at the end the following new sentence: ``Funds 
        appropriated under the preceding sentence shall remain 
        available until expended.''.

SEC. 9. REINSTATEMENT OF VETERANS VOCATIONAL TRAINING PROGRAM FOR 
                    CERTAIN PENSION RECIPIENTS.

  (a) Establishment of New Program Period.--Subsection (a)(3) of 
section 1524 of title 38, United States Code, is amended by striking 
``the period beginning on February 1, 1985, and ending on December 31, 
1995'' and inserting ``the five-year period beginning on the date of 
the enactment of the Veterans Benefits Act of 2003''.
  (b) Conforming Amendment.--Subsection (b)(4) of such section is 
amended by striking ``December 31, 1995'' and inserting ``the end of 
the program period''.
  (c) Outreach.--Such section is further amended by adding at the end 
the following new subsection:
  ``(f) The Secretary shall ensure that the availability of vocational 
training under this section is made known through a variety of means, 
including the Internet and announcements in Department publications and 
other veterans' publications.''.
  (d) Reports.--Such section, as amended by subsection (c), is further 
amended by adding at the end the following new subsection:
  ``(g) Not later than two years after the date of the enactment of the 
Veterans Benefits Act of 2003, and each year thereafter, the Secretary 
shall submit to the Committees on Veterans' Affairs of the Senate and 
House of Representatives a report on the operation of this section. The 
report shall set forth an evaluation of the vocational training 
provided under this section for the period involved, and shall include 
an analysis of the cost-effectiveness of the vocational training 
provided under this section as well as data on the entered-employment 
rate of veterans pursuing such vocational training.''.
  (e) Stylistic Amendments.--Such section is further amended--
          (1) by striking ``of Veterans Affairs'' in subsection (a)(1); 
        and
          (2) by striking ``of this section'' in subsections (a)(2), 
        (b)(1), (b)(4) (both places it appears), (c), (d), and (e).

SEC. 10. INCREASE IN AMOUNTS FOR CERTAIN ADAPTIVE BENEFITS FOR DISABLED 
                    VETERANS.

  (a) Increase in Assistance Amount for Specially Adapted Housing.--
Section 2102 of title 38, United States Code, is amended--
          (1) in the matter preceding paragraph (1) of subsection (a), 
        by striking ``$48,000'' and inserting ``$50,000''; and
          (2) in subsection (b)(2), by striking ``$9,250'' and 
        inserting ``$10,000''.
  (b) Increase in Amount of Assistance for Automobile and Adaptive 
Equipment for Certain Disabled Veterans.--Section 3902(a) of such title 
is amended by striking ``$9,000'' and inserting ``$11,000''.
  (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply with respect to assistance furnished on or after the date 
of the enactment of this Act.

SEC. 11. PRESUMPTIONS OF SERVICE-CONNECTION RELATING TO DISEASES AND 
                    DISABILITIES OF FORMER PRISONERS OF WAR.

  Subsection (b) of section 1112 of title 38, United States Code, is 
amended to read as follows:
  ``(b)(1) For the purposes of section 1110 of this title and subject 
to the provisions of section 1113 of this title, in the case of a 
veteran who is a former prisoner of war--
          ``(A) a disease specified in paragraph (2) shall be 
        considered to have been incurred in or aggravated by such 
        service, notwithstanding that there is no record of such 
        disease during the period of service; and
          ``(B) if the veteran was detained or interned as a prisoner 
        of war for not less than thirty days, a disease specified in 
        paragraph (3) which became manifest to a degree of 10 percent 
        or more after active military, naval, or air service shall be 
        considered to have been incurred in or aggravated by such 
        service, notwithstanding that there is no record of such 
        disease during the period of service.
  ``(2) The diseases specified in this paragraph are the following:
          ``(A) Psychosis.
          ``(B) Any of the anxiety states.
          ``(C) Dysthymic disorder (or depressive neurosis).
          ``(D) Organic residuals of frostbite, if the Secretary 
        determines that the veteran was interned in climatic conditions 
        consistent with the occurrence of frostbite.
          ``(E) Post-traumatic osteoarthritis.
  ``(3) The diseases specified in this paragraph are the following:
          ``(A) Avitaminosis.
          ``(B) Beriberi (including beriberi heart disease).
          ``(C) Chronic dysentery.
          ``(D) Helminthiasis.
          ``(E) Malnutrition (including optic atrophy associated with 
        malnutrition).
          ``(F) Pellagra.
          ``(G) Any other nutritional deficiency.
          ``(H) Cirrhosis of the liver.
          ``(I) Peripheral neuropathy except where directly related to 
        infectious causes.
          ``(J) Irritable bowel syndrome.
          ``(K) Peptic ulcer disease.''.

SEC. 12. EXTENSION OF SPINA BIFIDA BENEFITS FOR CHILDREN OF VIETNAM-ERA 
                    VETERANS.

  (a) Eligible Children.--Subchapter I of chapter 18 of title 38, 
United States Code, is amended by inserting before section 1802 the 
following new section:

``Sec. 1801. Persons eligible for benefits

  ``An individual is an eligible child for purposes of this subchapter 
if the individual is suffering from spina bifida and is--
          ``(1) a child as defined in section 1821(1) of this title; or
          ``(2) the natural child, regardless of age or marital status, 
        of a parent who during the period beginning on October 1 1967, 
        and ending on May 7 1975, performed active military, naval, or 
        air service in the Republic of Korea in the area between the 
        south line of the Demilitarized Zone and a line five miles 
        south of the Civilian Control Line established with respect to 
        the Demilitarized Zone, but only if the individual was 
        conceived after the parent performed such service.''.
  (b) Health Care.--Section 1803(a) of such title is amended by 
striking ``a child of a Vietnam veteran who is suffering from spina 
bifida'' and inserting ``an eligible child''.
  (c) Vocational Training and Rehabilitation.--Section 1804(a) of such 
title is amended by striking ``a child of a Vietnam veteran who is 
suffering from spina bifida'' and inserting ``an eligible child''.
  (d) Monetary Allowance.--Section 1805(a) of such title is amended by 
striking ``any child of a Vietnam veteran'' and inserting ``any 
eligible child''.
  (e) Conforming Amendments.--Chapter 18 of such title is amended as 
follows:
          (1) The heading of the chapter is amended to read as follows:

``CHAPTER 18--DISABILITY BENEFITS FOR CHILDREN OF VIETNAM VETERANS AND 
             OTHER VETERANS EXPOSED TO HERBICIDE AGENTS''.

          (2) The heading of subchapter I is amended to read as 
        follows:

           ``SUBCHAPTER I--CHILDREN BORN WITH SPINA BIFIDA''.

          (3) The table of sections at the beginning of the chapter is 
        amended--
                  (A) by striking the item relating to subchapter I and 
                inserting the following:

            ``SUBCHAPTER I--CHILDREN BORN WITH SPINA BIFIDA'';

                and
                  (B) by inserting before the item relating to section 
                1802 the following new item:

``1801. Persons eligible for benefits.''.
  (f) Tables of Chapters.--The items relating to chapter 18 in the 
tables of chapters at the beginning of title 38, United States Code, 
and at the beginning of part II of such title, are amended to read as 
follows:

``18. Disability Benefits for Children of Vietnam Veterans      1801''.
                            and Other Veterans Exposed to 
                            Herbicide Agents.

SEC. 13. PERMANENT AUTHORITY FOR HOUSING LOANS FOR MEMBERS OF THE 
                    SELECTED RESERVE.

  Section 3702(a)(2)(E) of title 38, United States Code, is amended by 
striking ``For the period'' and all that follows through ``each'' and 
inserting ``Each''.

SEC. 14. ADJUSTMENT TO HOME LOAN FEES AND UNIFORMITY OF FEES FOR 
                    QUALIFYING RESERVE MEMBERS WITH FEES FOR ACTIVE 
                    DUTY VETERANS.

  (a) Revised Load Fee Table.--Paragraph (2) of section 3729(b) of 
title 38, United States Code, is amended to read as follows:
  ``(2) The loan fee table referred to in paragraph (1) is as follows:

                            ``LOAN FEE TABLE
------------------------------------------------------------------------
            Type of loan                   Veteran        Other obligor
------------------------------------------------------------------------
(A)(i) Initial loan described in                 2.00                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other initial loan described
 in section 3710(a) other than with
 5-down or 10-down (closed before
 October 1, 2003)...................
------------------------------------------------------------------------
(A)(ii) Initial loan described in                2.15                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other initial loan described
 in section 3710(a) other than with
 5-down or 10-down (closed on or
 after October 1, 2003, and before
 October 1, 2011)...................
------------------------------------------------------------------------
(A)(iii) Initial loan described in               1.40                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other initial loan described
 in section 3710(a) other than with
 5-down or 10-down (closed on or
 after October 1, 2011).............
------------------------------------------------------------------------
(B)(i) Subsequent loan described in              3.30                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other subsequent loan
 described in section 3710(a)
 (closed before October 1, 2011)....
------------------------------------------------------------------------
(B)(ii) Subsequent loan described in             2.15                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other subsequent loan
 described in section 3710(a)
 (closed on or after October 1, 2011
 and before October 1, 2013)........
------------------------------------------------------------------------
(B)(iii) Subsequent loan described               1.25                NA
 in section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other subsequent loan
 described in section 3710(a)
 (closed on or after October 1,
 2013)..............................
------------------------------------------------------------------------
(C)(i) Loan described in section                 1.50                NA
 3710(a) to purchase or construct a
 dwelling with 5-down (closed before
 October 1, 2011)...................
------------------------------------------------------------------------
(C)(ii) Loan described in section                0.75                NA
 3710(a) to purchase or construct a
 dwelling with 5-down (closed on or
 after October 1, 2011).............
------------------------------------------------------------------------
(D)(i) Initial loan described in                 1.25                NA
 section 3710(a) to purchase or
 construct a dwelling with 10-down
 (closed before October 1, 2011)....
------------------------------------------------------------------------
(D)(ii) Initial loan described in                0.50                NA
 section 3710(a) to purchase or
 construct a dwelling with 10-down
 (closed on or after October 1,
 2011)..............................
------------------------------------------------------------------------
(E) Interest rate reduction                      0.50                NA
 refinancing loan...................
------------------------------------------------------------------------
(F) Direct loan under section 3711..             1.00                NA
------------------------------------------------------------------------
(G) Manufactured home loan under                 1.00                NA
 section 3712 (other than an
 interest rate reduction refinancing
 loan)..............................
------------------------------------------------------------------------
(H) Loan to Native American veteran              1.25                NA
 under section 3762 (other than an
 interest rate reduction refinancing
 loan)..............................
------------------------------------------------------------------------
(I) Loan assumption under section                0.50              0.50
 3714...............................
------------------------------------------------------------------------
(J) Loan under section 3733(a)......             2.25              2.25
------------------------------------------------------------------------
(K) Hybrid loan under section 3707A.             1.25             NA''.
------------------------------------------------------------------------


  (b) Conforming Amendments.--(1) Subparagraph (A) of paragraph (4) of 
such section is amended to read as follows:
          ``(A) The term `veteran' means any veteran eligible for the 
        benefits of this chapter.''.
  (2) Such paragraph is further amended by striking subparagraph (B) 
and redesignating subparagraphs (C), (D), (E), (F), (G), (H), and (I) 
as subparagraphs (B), (C), (D), (E), (F), (G), and (H), respectively.

SEC. 15. REINSTATEMENT OF MINIMUM REQUIREMENTS FOR SALE OF VENDEE 
                    LOANS.

  (a) Reinstatement.--Subsection (a) of section 3733 of title 38, 
United States Code, is amended by striking paragraph (2).
  (b) Increase in Maximum Percentage.--Paragraph (1) of such subsection 
is amended--
          (1) by striking ``65 percent'' in the first sentence and 
        inserting ``85 percent'';
          (2) by striking ``may be financed'' and inserting ``shall be 
        financed''; and
          (3) by striking the second sentence.
  (c) Stylistic Amendments.--Such section is further amended--
          (1) by striking ``of this subsection'' after--
                  (A) ``paragraph (1)'' in subsections (a)(4)(A), 
                (a)(5), (a)(6), and (c)(2); and
                  (B) ``paragraph (5)'' in subsection (a)(4)(B)(i); and
          (2) by striking ``of this paragraph'' each place it appears 
        in subsection (a)(4).

SEC. 16. RATE OF PAYMENT OF BENEFITS FOR CERTAIN FILIPINO VETERANS AND 
                    THEIR SURVIVORS RESIDING IN THE UNITED STATES.

  (a) Rate of Payment.--Section 107 of title 38, United States Code, is 
amended--
          (1) in the second sentence of subsection (b), by striking 
        ``Payments'' and inserting ``Except as provided in subsection 
        (c), payments''; and
          (2) in subsection (c)--
                  (A) by inserting ``and subchapter II of chapter 13 
                (except section 1312(a)) of this title'' after 
                ``chapter 11 of this title'';
                  (B) by striking ``in subsection (a)'' and inserting 
                ``in subsection (a) or (b)''; and
                  (C) by striking ``of subsection (a)'' and inserting 
                ``of the applicable subsection''.
  (b) Effective Date.--The amendments made by subsection (a) shall 
apply to benefits paid for months beginning after the date of the 
enactment of this Act.

SEC. 17. BURIAL BENEFITS FOR NEW PHILIPPINE SCOUTS RESIDING IN THE 
                    UNITED STATES.

  (a) Benefit Eligibility.--Section 107 of title 38, United States 
Code, as amended by section 16, is further amended--
          (1) in subsection (b)(2)--
                  (A) by striking ``and'' and inserting a comma; and
                  (B) by inserting ``, 23, and 24 (to the extent 
                provided for in section 2402(8))'' after ``(except 
                section 1312(a))'';
          (2) in the second sentence of subsection (b), as amended by 
        section 16(a)(1), by inserting ``or (d)'' after ``subsection 
        (c)'';
          (3) in subsection (d)(1), by inserting ``or (b), as otherwise 
        applicable,'' after ``subsection (a)''; and
          (4) in subsection (d)(2), by inserting ``or whose service is 
        described in subsection (b) and who dies after the date of the 
        enactment of the Veterans Benefits Act of 2003,'' after 
        ``November 1, 2000,''.
  (b) National Cemetery Interment.--Section 2402(8) of such title is 
amended by striking ``section 107(a)'' and inserting ``subsection (a) 
or (b) of section 107''.
  (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply with respect to deaths occurring after the date of the 
enactment of this Act.

SEC. 18. EXTENSION OF AUTHORITY TO MAINTAIN REGIONAL OFFICE IN THE 
                    REPUBLIC OF THE PHILIPPINES.

  Section 315(b) of title 38, United States Code, is amended by 
striking ``December 31, 2003'' and inserting ``December 31, 2009''.

SEC. 19. OUTSTATIONING OF TRANSITION ASSISTANCE PROGRAM PERSONNEL.

  (a) In General.--(1) Chapter 41 of title 38, United States Code, is 
amended by adding at the end the following new section:

``Sec. 4113. Outstationing of Transition Assistance Program personnel

  ``(a) Stationing of TAP Personnel at Overseas Military 
Installations.--(1) The Secretary--
          ``(A) shall station employees of the Veterans' Employment and 
        Training Service, or contractors under subsection (c), at each 
        veterans assistance office described in paragraph (2); and
          ``(B) may station such employees or contractors at such other 
        military installations outside the United States as the 
        Secretary, after consultation with the Secretary of Defense, 
        determines to be appropriate or desirable to carry out the 
        purposes of this chapter.
  ``(2) Veterans assistance offices referred to in paragraph (1)(A) are 
those offices that are established by the Secretary of Veterans Affairs 
on military installations pursuant to the second sentence of section 
7723(a) of this title.
  ``(b) Functions.--Employees (or contractors) stationed at military 
installations pursuant to subsection (a) shall provide, in person, 
counseling, assistance in identifying employment and training 
opportunities, help in obtaining such employment and training, and 
other related information and services to members of the Armed Forces 
who are being separated from active duty, and the spouses of such 
members, under the Transition Assistance Program and Disabled 
Transition Assistance Program established in section 1144 of title 10.
  ``(c) Authority to Contract With Private Entities.--The Secretary, 
consistent with such section 1144, may enter into contracts with public 
or private entities to provide, in person, some or all of the 
counseling, assistance, information and services under the Transition 
Assistance Program required under subsection (a).''.
  (2) The table of sections at the beginning of such chapter is amended 
by adding at the end the following new item:

``4113. Outstationing of Transition Assistance Program personnel.''.
  (b) Deadline for Implementation.--Not later than the date that is 90 
days after the date of the enactment of this Act, the Secretary of 
Labor shall implement section 4113 of title 38, United States Code, as 
added by subsection (a), and shall have employees of the Veterans' 
Employment and Training Service, or contractors, to carry out that 
section at the military installations involved by such date.

SEC. 20. FORFEITURE OF BENEFITS FOR SUBVERSIVE ACTIVITIES.

  (a) Addition of Certain Offenses.--Paragraph (2) of section 6105(b) 
of title 38, United States Code, is amended--
          (1) by inserting ``175, 229,'' after ``sections''; and
          (2) by inserting ``831, 1091, 2332a, 2332b,'' after ``798,''.
  (b) Effective Date.--The amendments made by subsection (a) shall 
apply to claims filed after the date of the enactment of this Act.

SEC. 21. TECHNICAL AMENDMENTS RELATED TO JOBS FOR VETERANS ACT.

  (a) Job Training and Placement Functions of the Department of 
Labor.--(1) Subsection (c)(2)(B)(ii) of section 4102A of such title is 
amended by striking ``October 1, 2002'' and inserting ``October 1, 
2003''.
  (2) The amendment made by paragraph (1) shall take effect as if 
included in the enactment of section 4(a) of the Jobs for Veterans Act 
(Public Law 107-288; 116 Stat. 2038).
   (b) Other Technical Amendments.--(1) Such subsection is further 
amended by striking ``, as amended by the Jobs for Veterans Act''.
  (2) Subsection (f)(1) of such section is amended by striking ``6 
months after the date of the enactment of this section,'' and inserting 
``May 7, 2003,''.

SEC. 22. TECHNICAL AND CONFORMING RELATING TO ESTABLISHMENT OF SOCIAL 
                    SECURITY ADMINISTRATION AS AN INDEPENDENT AGENCY.

  Title 38, United States Code, is amended as follows:
          (1) Section 1322 is amended--
                  (A) in subsection (a), by striking ``Secretary of 
                Health and Human Services'' and all that follows 
                through the period and inserting ``Commissioner of 
                Social Security, and shall be certified by the 
                Commissioner to the Secretary upon request of the 
                Secretary.''; and
                  (B) in subsection (b)--
                          (i) by striking ``Secretary of Health and 
                        Human Services'' in the first sentence and 
                        inserting ``Commissioner of Social Security'';
                          (ii) by striking ``the two Secretaries'' and 
                        inserting ``the Secretary and the 
                        Commissioner''; and
                          (iii) by striking ``Secretary of Health and 
                        Human Services'' in the second sentence and 
                        inserting ``Commissioner''.
          (2) Section 5101(a) is amended by striking ``Secretary of 
        Health and Human Services'' and inserting ``Commissioner of 
        Social Security''.
          (3) Section 5317 is amended by striking ``Secretary of Health 
        and Human Services'' in subsections (a), (b), and (g) and 
        inserting ``Commissioner of Social Security''.
          (4)(A) Section 5318 is amended--
                  (i) in subsection (a), by striking ``Department of 
                Health and Human Services'' and inserting ``Social 
                Security Administration''; and
                  (ii) in subsection (b)--
                          (I) by striking ``Department of Health and 
                        Human Services'' and inserting ``Social 
                        Security Administration'';
                          (II) by striking ``Secretary of Health and 
                        Human Services'' the first place it appears and 
                        inserting ``Commissioner of Social Security'';
                          (III) by striking ``Secretary of Health and 
                        Human Services'' the second place it appears 
                        and inserting ``Commissioner''; and
                          (IV) by striking ``such Secretaries'' and 
                        inserting ``the Secretary and the 
                        Commissioner''.
          (B)(i) The heading of such section is amended to read as 
        follows:

``Sec. 5318. Review of Social Security Administration death 
                    information''.

          (ii) The item relating to that section in the table of 
        sections at the beginning at chapter 53 is amended to read as 
        follows:

``5318. Review of Social Security Administration death information.''.

  Amend the title so as to read:

      A bill to amend title 38, United States Code, to improve 
benefits under laws administered by the Secretary of Veterans 
Affairs, and for other purposes.

                              Introduction

    The reported bill reflects the Committee's consideration of 
bills introduced during the 108th Congress: H.R. 533, H.R. 966, 
H.R. 1048, H.R. 1167, H.R. 1716, H.R. 2164, H.R. 2285 and H.R. 
2297.
    On April 10, 2003, the Subcommittee on Benefits held a 
hearing on six bills, including H.R. 533, the Agent Orange 
Veterans' Disabled Children's Benefits Act of 2003, introduced 
by Honorable Lane Evans, Honorable Ciro D. Rodriguez, Honorable 
Bob Filner, Honorable Luis V. Gutierrez, Honorable Corrine 
Brown, Honorable Vic Snyder, Honorable Mike McIntyre, Honorable 
Bernard Sanders, Honorable Jose E. Serrano, and Honorable Henry 
A. Waxman on February 5, 2003; H.R. 966, the Disabled Veterans' 
Return-to-Work Act of 2003, introduced by Honorable Henry E. 
Brown, Jr. and Honorable Ciro D. Rodriguez, Chairman and then-
Ranking Member, respectively, of the Subcommittee on Benefits, 
Honorable Christopher H. Smith and Honorable Lane Evans, on 
February 27, 2003; and H.R. 1048, the Disabled Veterans 
Adaptive Benefits Improvement Act of 2003, introduced by 
Honorable Henry E. Brown, Jr., Honorable Ciro D. Rodriguez, 
Honorable Christopher H. Smith, and Honorable Lane Evans on 
March 4, 2003.
    On June 11, 2003, the Subcommittee on Benefits held a 
hearing on eight bills, including H.R. 1167, to permit 
remarried surviving spouses of veterans to be eligible for 
burial in a national cemetery, introduced on March 6, 2003, by 
Honorable Heather Wilson; H.R. 2164, to provide for an 
extension in the period of eligibility for survivors' and 
dependents' education benefits for members of the National 
Guard who are involuntarily ordered to full-time National Guard 
duty, introduced on May 20, 2003, by Honorable Jeb Bradley and 
Honorable Michael H. Michaud; H.R. 2285, the Servicemembers 
Overseas Outreach Act, introduced on June 2, 2003, by Honorable 
Michael K. Simpson, Honorable Bob Beauprez, Honorable 
Christopher H. Smith, Honorable Lane Evans, Honorable Henry E. 
Brown, Jr., Honorable Michael H. Michaud, and Honorable Steve 
Buyer; and H.R. 2297, to modify and improve certain benefits 
for veterans and for other purposes, introduced on June 2, 
2003, by Honorable Christopher H. Smith, Honorable Lane Evans, 
Honorable Henry E. Brown, Jr., and Honorable Michael H. 
Michaud.
    On June 25, 2003, the Subcommittee on Benefits met and 
unanimously ordered H.R. 2297, as amended, reported favorably 
to the full Committee.
    On June 26, 2003, the full Committee met and ordered H.R. 
2297 reported favorably, as amended, to the House by unanimous 
voice vote.

                      Summary of the Reported Bill

    H.R. 2297, as amended, would:

    1.  LExpand the Montgomery GI Bill program by authorizing 
educational assistance for on-job training in certain self-
employment training programs.

    2.  LExtend the delimiting date for survivors' and 
dependents' education benefits when the eligible individual is 
involuntarily ordered to full-time National Guard duty.

    3.  LExtend the Veterans' Advisory Committee on Education 
through December 31, 2009.

    4.  LRepeal an obsolete VA education loan program 
authorization.

    5.  LProvide that remarriage of the surviving spouse of a 
veteran after attaining age 55 would not result in termination 
of dependency and indemnity compensation (DIC).

    6.  LAllow a remarried surviving spouse to retain 
eligibility for burial in a national cemetery based on his or 
her marriage to a veteran.

    7.  LMake permanent the State Cemetery Grants Program.

    8.  LReinstate a VA pilot program to provide vocational 
training to newly eligible VA nonservice-connected pension 
recipients.

    9.  LIncrease the specially adapted automobile grant from 
$9,000 to $11,000, and increase the specially adapted housing 
grants from $48,000 to $50,000 for the most severely disabled 
veterans and from $9,350 to $10,000 for less severely disabled 
veterans.

    10. LAdd cirrhosis of the liver to the list of presumed 
service-connected disabilities for former prisoners of war, and 
eliminate the requirement that a POW be held for 30 days or 
more to qualify for presumptions of service-connection for 
certain disabilities: psychosis, any of the anxiety states, 
dysthymic disorder, organic residuals of frostbite, and post-
traumatic osteoarthritis.

    11. LExpand benefits eligibility to those children with 
spina bifida who were born to Vietnam-era veterans who served 
in an area of Korea near the demilitarized zone between October 
1, 1967 and May 7, 1975.

    12. LMake permanent the VA home loan program for members of 
the Selected Reserve.

    13. LAdjust the funding fee charged to Selected Reserve 
home loan applications to the same amount as the amount paid by 
active duty servicemembers, and make certain increases in home 
loan fees.

    14. LReinstate the Department of Veterans Affairs' vendee 
loan program.

    15. LProvide the full amount of compensation and dependency 
and indemnity compensation (DIC) to eligible members of the new 
Philippine Scouts and their survivors, as well as the full 
amount of DIC paid by reason of service in the organized 
military forces of the Commonwealth of the Philippines, 
including organized guerilla units, if the individual to whom 
the benefit is payable resides in the United States and is 
either a citizen of the U.S. or an alien lawfully admitted for 
permanent residence.

    16. LExtend eligibility for burial in a national cemetery 
to new Philippine Scouts, as well as eligibility for burial 
benefits, to those who lawfully reside in the United States.

    17. LExtend the authority of the Secretary of Veterans 
Affairs to maintain a regional office in Manila, Philippines, 
through December 31, 2009.

    18. LMandate that the Department of Labor place staff in 
veterans' assistance offices at overseas military installations 
90 days after date of enactment.

    19. LExpand the list of serious federal criminal offenses a 
conviction for which would result in a bar to all VA benefits.

                       Background and Discussion

    Expansion of Montgomery GI Bill education benefits for 
certain self-employment training.--Section 2 of the bill would 
expand the Montgomery GI Bill program by authorizing 
educational assistance benefits for on-job training of less 
than six months in certain self-employment training programs. 
Public Law 106-50, the Veterans Entrepreneurship and Small 
Business Development Act, requires that all Federal agencies 
aggressively support self-employment for veterans and service-
disabled veterans, directly and through public-private 
partnerships. This provision would provide those veterans 
considering self-employment with improved access to training 
benefits, including training related to franchises. This 
provision is derived from an Administration proposal.

    Extension in period of eligibility for survivors' and 
dependents' education benefits for individuals who are 
involuntarily ordered to full-time National Guard duty.--
Section 3 of the bill would amend current law to provide that 
individuals who qualify for survivors' and dependents' 
education benefits under chapter 35 of title 38, United States 
Code, and are involuntarily ordered to full-time National Guard 
duty under title 32, United States Code, after September 11, 
2001, would have their eligibility extended. This section would 
allow the survivor or dependent to have the ending date of 
their eligibility extended by an amount of time equal to that 
period of full-time duty plus 4 months. Current law allows such 
an extension only to Reservists called up to active duty after 
September 11, 2001.

    Extension of Veterans' Advisory Committee on Education.--
Section 4 of the bill would extend, through December 31, 2009, 
the Veterans' Advisory Committee on Education, as well as amend 
the language to eliminate the requirement that veterans from 
certain wartime and post-wartime periods be members of the 
Committee. Under current law, the Committee will expire on 
December 31, 2003. The Advisory Committee has made a number of 
recommendations that have become legislative proposals, and its 
discussions and recommendations are a valuable aid in VA's 
efforts to administer its education programs. This provision 
would also eliminate the requirement that veterans from certain 
periods--World War II, Korean conflict era, or post-Korean 
conflict era--be required to participate as members of the 
Advisory Committee. The change would provide for greater 
flexibility in filling positions on the Committee. This 
provision is derived from an Administration proposal.

    Repeal of provisions relating to obsolete education loan 
program.--Section 5 of the bill would repeal the VA education 
loan program, in effect since January 1, 1975, and waive any 
existing repayment obligations, including overpayments due to 
default on such loans. The education loan program is currently 
available to issue loans up to a maximum of $2,500 per academic 
year to spouses and surviving spouses who are past their 
delimiting dates with remaining entitlement to chapter 35 
benefits. The population eligible for this program is very 
limited, and with other options in the public and private 
sectors, there is no longer a demand for the loans. VA has not 
issued a loan under this program in several years, but the 
government has paid approximately $70,000 a year to administer 
it. VA's October 2002 monthly loan statistics show 20 current 
education loans in the amount of $14,987.08 and 116 defaulted 
education loans totaling $105,908.10; it costs VA more to 
administer the loan program on a continuous basis than to 
forgive the debts currently outstanding. This provision is 
derived from an Administration proposal.

    Retention of dependency and indemnity compensation for 
surviving spouses remarrying after age 55.--Section 6 of the 
bill would allow a surviving spouse who remarries after 
attaining age 55 to retain dependency and indemnity 
compensation (DIC). Those surviving spouses who remarried after 
attaining age 55 but before this provision is enacted would 
have one year to apply for reinstatement of their DIC benefit.
    DIC is a tax-free monthly benefit paid to the surviving 
spouse of a veteran who dies as a result of military service. 
While current law prevents payment of DIC during the course of 
a subsequent marriage, Public Law 105-178 allowed reinstatement 
of this benefit if the remarriage is terminated. As the 
Honorable Michael Bilirakis stated in testimony before the 
Subcommittee on Benefits on April 11, 2002, ``DIC is the only 
federal annuity program that does not allow a widow who is 
receiving compensation to remarry at an older age and retain 
her annuity.'' It is the Committee's intent that an older 
surviving spouse who chooses to remarry should not be 
discouraged from doing so by the loss of DIC benefits. Public 
Law 107-330 allowed a surviving spouse who remarries after age 
55 to retain VA health insurance coverage.
    The Committee has not been able to obtain accurate data 
with respect to the numbers of surviving spouses likely to be 
affected by this provision. The Committee expects the 
Department of Veterans Affairs to obtain and maintain accurate 
data concerning the number and age of those surviving spouses 
who apply for reinstatement of their DIC benefits under this 
provision.

    Eligibility of surviving spouses who remarry for burial in 
national cemeteries.--Section 7 of the bill would allow a 
surviving spouse of a veteran to be eligible for burial in a VA 
national cemetery based on his or her marriage to the veteran, 
regardless of the status of a subsequent marriage. Current law 
does not permit the surviving spouse to be buried in a national 
cemetery if a remarriage is in effect when the veteran's 
surviving spouse is married at the time of death. According to 
VA, in cases when this situation has arisen, the veteran's 
children and grandchildren, and often the most recent spouse, 
support burial of the decedent with a previously deceased 
veteran-spouse in a VA national cemetery.

    Permanent authority for State cemetery grants.--Section 8 
of the bill would make permanent the State Cemetery Grants 
Program. Current law authorizes appropriations for making these 
grants through fiscal year 2004. The State Cemetery Grants 
Program provides grants to assist the states in establishing, 
expanding, and improving state-owned veterans' cemeteries. 
Increasing the availability of state veterans' cemeteries is 
one way to serve veterans who do not reside near a national 
cemetery. State cemeteries augment--but do not supplant--VA's 
national cemetery program. Since the beginning of the State 
Cemetery Grants Program, 127 grants totaling more than $155 
million to establish, expand or improve 57 veterans cemeteries 
in 31 states have been awarded. This provision is derived from 
an Administration proposal.

    Reinstatement of veterans' vocational training program for 
certain pension recipients.--Section 9 of the bill would 
reinstate a VA pilot program, which expired on December 31, 
1995, to provide vocational training to newly eligible VA 
nonservice-connected pension recipients. The program, open to 
those veterans age 45 years or younger, would provide disabled 
pension recipients the opportunity to receive training in order 
to return to the job market. There are many ways veterans can 
and do contribute to the economy. Those veterans receiving 
nonservice-connected pension are in effect discouraged from 
seeking employment because of the needs-based structure of VA's 
Pension Program, whereby every dollar they earn is offset from 
the amount of monthly pension they receive. Amounts paid to a 
veteran pursuing a course of vocational rehabilitation or 
training--including tuition, fees, books, and materials--are 
excluded in determining eligibility for and the amount of 
pension benefits available. The Committee believes it would be 
beneficial to reinstate the pilot program in order to give 
veterans considered permanently and totally disabled an 
opportunity to obtain employment rather than requiring these 
veterans to rely solely on the VA pension program and health 
care system for the remainder of their lives.

    Increase in amounts for certain adaptive benefits for 
disabled veterans.--Section 10(a) of the bill would increase 
the grants for specially adapted housing for severely disabled 
veterans from $48,000 to $50,000, and would increase the amount 
for less severely disabled veterans from $9,250 to $10,000. 
Under current law, the Secretary is authorized to assist 
eligible veterans in acquiring suitable housing and adaptations 
with special fixtures made necessary by the nature of the 
veteran's service-connected disability, and with the necessary 
land. Section 10(b) of the bill would increase the one-time 
reimbursement VA may pay to an eligible disabled servicemember 
or veteran to purchase an automobile from $9,000 to $11,000.

    Presumptions of service-connection relating to diseases and 
disabilities of former prisoners of war.--Section 11 of the 
bill would add cirrhosis of the liver to the disabilities 
presumptively service-connected for former prisoners of war, as 
well as provide a presumption of service-connection without 
regard to length of confinement for certain psychiatric 
disabilities as well as cold weather injuries and traumatic 
arthritis. Current law requires former POWs to have been 
confined for at least 30 days before they qualify for a 
presumption of service-connection for certain disabilities. At 
the time that POWs originally were awarded presumptions of 
service-connection for certain disabilities, most of the 
disabilities were related to malnutrition. Short-term prisoners 
of war were rare. See Bills to Increase Compensation Payments 
for Service-connected Disabled Veterans and Increase Income 
Limits and Rates for Non-service-connected Pensioners: Hearings 
Before the Subcommittee on Compensation and Pension of the 
Committee on Veterans' Affairs, House of Representatives, 91st 
Congress, Second Session, (May 26-27, June 3, 1970).
    Prisoners of war in more recent conflicts have been 
interred for shorter periods of time. All the POWs from 
Operation Iraqi Freedom were confined for less than 30 days. 
The VA's Advisory Committee on Former Prisoners of War has 
recommended that the 30-day requirement be eliminated for all 
presumptive conditions. Biennial Report of the Advisory 
Committee on Former Prisoners of War (transmitted to the House 
Committee on Veterans' Affairs, December 4, 2001). This 
provision would eliminate the 30-day requirement for all 
psychiatric conditions, cold weather-related injuries, and 
post-traumatic arthritis. The Committee notes that no 
durational requirement is indicated in the criteria for 
diagnosis of post-traumatic stress disorder, a common POW 
disability. Likewise, service-connection for POWs based on cold 
weather-related injuries are more properly related to 
internment in climatic conditions consistent with the 
occurrence of frostbite. Frostbite can occur within hours if 
the temperature is low enough. Post-traumatic arthritis is a 
condition which results from trauma; trauma can occur in a 
matter of seconds. While some length of internment may be 
appropriate for disabilities related to nutritional 
deficiencies, there is no scientific evidence to support a 
length of confinement requirement for psychiatric conditions, 
cold injuries and post-traumatic arthritis. During the hearing 
on April 10, 2003, the Veterans of Foreign Wars strongly urged 
the Committee to eliminate the 30-day requirement for 
presumptive conditions in order to ``include those POWs who 
have been held for shorter intervals but have certainly 
suffered most of the same physical and psychological trauma as 
other POWs.''
    The Committee also notes that the Institute of Medicine 
(IOM) has conducted follow-up studies of American POWs. 
According to the IOM, there is an increased mortality from 
cirrhosis of the liver in former POWs as compared to the 
general population. In proposing regulations to provide a 
presumption of service-connection for former POWs with 
cirrhosis, the VA stated: ``Cirrhosis mortality was not found 
to be associated with any differences in alcohol consumption 
among World War II and Korean POWs and Korean controls, which 
were similar to U.S. males. Therefore, it appears that alcohol 
consumption does not provide an explanation for the higher 
mortality rates identified in POWs.'' 68 F.R. 6680 (February 
10, 2003.) The bill accordingly provides for a statutory 
presumption of service-connection for cirrhosis of the liver.

    Extension of spina bifida benefits for children of Vietnam-
era veterans.--Section 12 of the bill would provide benefits 
under chapter 18 of title 38, United States Code, to the 
children of veterans who currently are disabled by spina bifida 
and who were conceived after a natural parent served in an area 
of Korea near the demilitarized zone between October 1, 1967 
and May 7, 1975. Current law restricts VA disability payments 
to those children with spina bifida whose natural parent served 
in the Republic of Vietnam during the period beginning on 
January 9, 1962 through May 7, 1975. The payments are based 
upon a finding by the IOM ``that there was limited/suggestive 
evidence of an association between exposure to the herbicides 
considered in this report and spina bifida in children of 
veterans.'' Veterans and Agent Orange Update 2000 (VAO 2000) 
(National Academy Press: Washington D.C. 2001) at p. 431. This 
standard has been used to provide a presumption of service-
connection for a number of disabilities associated with 
exposure to Agent Orange and other Vietnam-era herbicides. 
According to the Institute of Medicine Report, dioxin is 
retained in the body for some time. ``TCDD [dioxin] has a mean 
half life of 7.6 years [in humans] and elimination is inversely 
proportional to body fat content . . .'' VAO 2000 at 24.
    The Department of Defense (DOD) had advised the Committee 
on Veterans' Affairs that the herbicides used in Vietnam were 
also used for several years beginning with testing in 1967 in 
the Republic of Korea, south of the demilitarized zone (DMZ). 
DOD has estimated that approximately 12,056 servicemembers were 
potentially exposed to herbicides associated with spina bifida 
when it was used during 1968 and 1969. The Committee expects 
that the children of these former servicemembers deployed in 
the units identified by DOD and any other veterans who can 
document service in the area between the DMZ and an area five 
miles south of the Civilian Control line would qualify for 
benefits under the bill.
    During its hearing on April 10, 2003, the Committee 
received testimony from Mr. Michael Ruzalski of Pennsylvania 
who was born with spina bifida. Mr. Ruzalski was conceived 
after his father served during 1968-1969 in the Korean DMZ. He 
testified that under current law, VA denied his application for 
benefits related to spina bifida because his father's herbicide 
exposure occurred in the Korean DMZ, rather than in the 
Republic of Vietnam.

    Permanent authority for housing loans for members of the 
Selected Reserve.--Section 13 of the bill would make permanent 
the home loan program for members of the Selected Reserve. In 
1992, Congress granted eligibility for VA home loans to persons 
who served in the Selected Reserve (which includes the National 
Guard). This benefit is a useful recruiting and retention tool 
for members of the Selected Reserve. Under current law, the 
program is scheduled to expire on September 30, 2009.
    In order to qualify for this benefit, a member of the 
Selected Reserve must have honorably served for at least six 
years and meet other requirements. In recent years, reservists 
have been increasingly called upon to participate on active 
duty for extended periods to support the national defense. As 
the recent actions in Afghanistan and Iraq demonstrate, 
reservists are an integral part of America's ``total force.'' 
They have earned the right to participate in VA's home loan 
program on a permanent and equal basis.

    Adjustment to home loan fees and uniformity of fees for 
qualifying Reserve members with fees for active duty 
veterans.--Section 14 of the bill would amend the Loan Fee 
Table to provide uniformity in the funding fees charged to 
members of the Selected Reserve and active duty veterans for VA 
home loans. Under current law, in most cases a reservist pays a 
funding fee that is 0.75 percent higher than the fee charged to 
veterans who have served on active duty. For example, the 
current fee for a veteran to obtain an initial VA home loan 
with no down payment is 2 percent; a reservist is charged a fee 
of 2.75 percent for the same loan. Reservists would now pay 2 
percent, as well. Reservists who have a service-connected 
disability are exempt from the fee.
    According to VA, members of the Selected Reserve have a 
lower foreclosure rate than other loan guaranty beneficiaries. 
Since its inception, the foreclosure rates for members of the 
Selected Reserve have been almost one-third lower than that of 
other veterans; therefore, a higher rate is not justified on 
the basis of foreclosure risk. Reservists deserve equality in 
fees with other veterans.
    In order to pay the cost of equalizing benefits between 
reservists and other veterans, section 14 of the bill would 
also increase the home loan guaranty fees for veterans 
qualifying for a second or subsequent home loan with no down 
payment. The bill would amend the Loan Fee Table to increase 
the fees for veterans who obtain a subsequent VA home loan with 
no down payment from 3 percent to 3.3 percent for loans closed 
before October 1, 2011. This fee would be reduced to 2.15 
percent for loans closed between October 1, 2011 and September 
30, 2013. This section would increase from 1.25 percent to 1.4 
percent the fee on initial loans closed on or after October 1, 
2011. It would create a fee of 2.15 percent on loans closed on 
or after October 1, 2003 and before October 1, 2011. It would 
also create a 1.25 percent fee for hybrid loans made under a 
pilot program.

    Reinstatement of minimum requirements for sale of vendee 
loans.--Section 15 of the bill would reinstate the vendee loan 
program, which VA administratively terminated on January 23, 
2003. When a purchaser agrees to buy a foreclosed VA home, VA 
often offers to finance the sale by establishing a vendee loan 
to encourage the prompt sale of the home. Vendee loans are made 
at market interest rates and often require a down payment. 
Borrowers are assessed a 2.25 percent funding fee.
    The vendee loan program is based on sound business 
principles, and there is an ample body of empirical data 
indicating that offering vendee financing is cost effective to 
the government. The Committee views vendee loans as an 
important tool to obtain a higher return on property sales, 
which reduces the overall cost of program operations. The bill 
would require the the Secretary of Veterans Affairs to operate 
a vendee home loan program for some loans.

    Rate of payment of benefits for certain Filipino veterans 
and their survivors residing in the United States.--Section 16 
of the bill would provide the full amount of compensation and 
dependency and indemnity compensation (DIC) to eligible members 
of the new Philippine Scouts and their survivors, as well as 
the full amount of DIC paid by reason of service in the 
organized military forces of the Commonwealth of the 
Philippines, including organized guerilla units, if the 
individual to whom the benefit is payable resides in the United 
States and is either a citizen of the U.S. or an alien lawfully 
admitted for permanent residence. Under current law, benefits 
to Filipino veterans are restricted to a $0.50 on-the-dollar 
limitation, based on the significant difference in the U.S. 
average per capita income and cost-of-living and the Philippine 
average per capita income and cost-of-living.
    In the case of those Filipino veterans and their dependents 
and survivors who reside in the United States and therefore 
face living expenses comparable to United States veterans and 
their dependents and survivors, limiting the payment of 
benefits may result in undue hardships to eligible Filipino 
beneficiaries.

    Burial benefits for new Philippine scouts residing in the 
United States.--Section 17 of the bill would extend eligibility 
for national cemetery burial to new Philippine Scouts who 
lawfully reside in the United States. This section would also 
extend eligibility for other in-kind burial benefits on the 
same basis as such benefits are provided under current law to 
persons who served in the organized military forces of the 
Commonwealth of the Philippines, including Commonwealth Army 
veterans. This provision is consistent with achieving parity in 
veterans' benefits among similarly situated Filipino 
beneficiaries lawfully residing in the United States.

    Extension of authority to maintain regional office in the 
Republic of the Philippines.--Section 18 of the bill would 
extend VA's authority to operate a regional office in the 
Republic of the Philippines through December 31, 2009. Under 
current law, this authority expires on December 31, 2003. 
Congress has periodically extended this authority at VA's 
request in recognition that a regional office in the 
Philippines is the most cost-effective means of administering 
VA programs for beneficiaries residing there, in addition to 
providing an on-site presence to deter potential fraud. The 
Committee acknowledges the important contributions of the staff 
of the Manila Regional Office in cooperating with a recent VA 
Inspector General effort to identify and correct erroneous 
payments to veterans residing in the Philippines. This 
provision is derived from an Administration proposal.

    Outstationing of transition assistance program personnel.--
Section 19 of the bill would require the Department of Labor to 
place staff in veterans' assistance offices where VA staff are 
located at overseas military installations 90 days after date 
of enactment. Such staff would help transitioning 
servicemembers obtain civilian jobs. DOD and DOL data show that 
servicemembers who attend pre-separation employment seminars 
have a better chance of finding long-term, sustained 
employment. Current law authorizes the Department of Labor to 
place staff in veterans' assistance offices on military 
installations, both foreign and domestic. However, the 
Department of Labor has placed staff in domestic locations 
only. This section would require the Department of Labor to 
follow VA's model in staffing overseas installations. It would 
also authorize the Department of Labor to exceed the number of 
VA locations and place staff in more locations abroad.

    Forfeiture of benefits for subversive activities.--Section 
20 of the bill would amend current law to supplement the list 
of serious federal criminal offenses for which a veteran's 
conviction results in a bar to VA benefits, including burial in 
a national cemetery. The six additional criminal offenses are: 
section 175 of title 18, United States Code, prohibitions with 
respect to biological weapons; section 229 of title 18, United 
States Code, prohibited activities with respect to chemical 
weapons; section 831 of title 18, United States Code, 
prohibited transactions involving nuclear materials; section 
1091 of title 18, United States Code, genocide; section 2332a 
of title 18, United States Code, use of certain weapons of mass 
destruction; and section 2332b of title 18, United States Code, 
acts of terrorism transcending national boundaries. This 
provision is derived from an Administration proposal.

                      Section-By-Section Analysis

    Section 1 of the bill would provide that this Act may be 
cited as the ``Veterans Benefits Act of 2003''.

    Section 2(a) of the bill would amend section 3452(e) of 
title 38, United States Code, to define a training 
establishment as (1) an establishment providing apprentice or 
other training on the job, including those under the 
supervision of a college or university or any State department 
of education, (2) an establishment providing self-employment 
on-job training consisting of full-time training for a period 
of less than six months that is needed or accepted for purposes 
of obtaining licensure to engage in a self-employment 
occupation or required for ownership and operation of a 
franchise that is the objective of training, (3) a State board 
of vocational training, (4) a Federal or State apprenticeship 
registration agency, (5) a joint apprenticeship committee 
established pursuant to the Act of August 16, 1937, popularly 
known as the ``National Apprenticeship Act'' (29 U.S.C. 50 et 
seq.), (6) an agency of the Federal Government authorized to 
supervise such training.

    Section 2(b) of the bill would provide that the changes 
made by this section shall take effect on the date that is six 
months after the date of enactment of this Act and shall apply 
to self-employment on-job training approved and pursued on or 
after that date.

    Section 3(a) of the bill would amend section 3512(h) of 
title 38, United States Code, to include those involuntarily 
ordered to full-time National Guard duty under section 502(f) 
of title 32, United States Code.

    Section 3(b) of the bill would provide that the change made 
by this section shall take effect as of September 11, 2001.

    Section 4(a) of the bill would amend section 3692(c) of 
title 38, United States Code, to extend the Veterans' Advisory 
Committee on Education to December 31, 2009.

    Section 4(b) of the bill would amend section 3692(a) of 
title 38, United States Code, by striking World War II, the 
Korean conflict era, and the post-Korean conflict era.

    Section 5(a) of the bill would repeal subchapter III of 
chapter 36 of title 38, United States Code, which authorizes 
loans to veterans enrolled in school.

    Section 5(b) of the bill would transfer the loan fund 
balance as of the date of enactment from the Department of 
Veterans Affairs Education Loan Fund to the Department of 
Veterans Affairs Readjustment Benefits Account.

    Section 5(c) of the bill would require the Secretary of 
Veterans Affairs to discharge any outstanding liability of a 
veteran under subchapter III.

    Section 6(a) of the bill would amend section 103(d)(2)(B) 
of title 38, United States Code, to provide that remarriage of 
a surviving spouse after attaining age 55 shall not bar the 
furnishing of benefits under section 1311 of title 38, United 
States Code.

    Section 6(b) of the bill would provide that changes made by 
this section shall take effect on (1) the first day of the 
first month that begins after the date of enactment of this 
Act, or (2) the first day of the fiscal year that begins in the 
calendar year in which this Act is enacted, if later than the 
date specified in paragraph (1).

    Section 6(c) of the bill would prohibit any benefit from 
being paid to any person by reason of subsection (a) for any 
period before the effective date specified in subsection (b).

    Section 6(d) of the bill would provide that in the case of 
an individual who but for having remarried would be eligible 
for dependency and indemnity compensation under section 1311 of 
title 38, United States Code, and whose remarriage was before 
the date of the enactment of this Act and after the individual 
attained age 55, the individual shall be eligible for such 
compensation by reason of the amendment made in subsection (a) 
only if the individual submits an application for such 
compensation to the Secretary of Veterans Affairs not later 
than the end of the one-year period beginning on the date of 
the enactment of this Act.

    Section 7(a) of the bill would amend section 2402(5) of 
title 38, United States Code, to provide that a surviving 
spouse who had a subsequent marriage which had not been 
terminated at the time of death may be eligible for interment 
in a national cemetery.

    Section 7(b) of the bill would provide that the change made 
by this section shall take effect with respect to deaths 
occurring on or after January 1, 2000.

    Section 8 of the bill would make permanent the authority 
for state cemetery grants.

    Section 9(a) of the bill would reinstate vocational 
training for certain pension recipients under section 1524 of 
title 38, United States Code, for a five-year period beginning 
on the date of enactment of this Act.

    Section 9(c) of the bill would amend section 1524 of title 
38, United States Code, to require the Secretary of Veterans 
Affairs to ensure that the availability of vocational training 
under this section is made known through a variety of means, 
including the Internet and announcements in Department 
publications and other veterans' publications.

    Section 9(d) of the bill would require the Secretary, not 
later than two years after the date of enactment of this Act 
and each year thereafter, to submit to the Committees on 
Veterans' Affairs of the Senate and the House of 
Representatives a report on the operation of this section. The 
report shall set forth an evaluation of the vocational training 
provided under this section for the period involved, and shall 
include an analysis of the cost-effectiveness of the vocational 
training provided under this section as well as data on the 
entered-employment rate of veterans pursuing such vocational 
training.

    Section 10(a) of the bill would amend section 2102 of title 
38, United States Code, by increasing the Specially Adapted 
Housing Grant for veterans with severe service-connected 
disabilities from $48,000 to $50,000 and the Special Home 
Adaptation Grant for veterans less severely disabled from 
$9,250 to $10,000.

    Section 10(b) of the bill would amend section 3902(a) of 
title 38, United States Code, by increasing the amount of 
assistance for automobile and adaptive equipment for certain 
disabled veterans from $9,000 to $11,000.

    Section 10(c) of the bill would provide that the changes 
made in this section shall apply to assistance furnished on or 
after the date of enactment of this Act.

    Section 11 of the bill would amend subsection (b) of 
section 1112 of title 38, United States Code, to provide a 
presumption of service-connection under paragraph (2) of 
section 1112 without regard to the length of captivity, and add 
cirrhosis of the liver to paragraph (3) of section 1112.

    Section 12 of the bill would amend subchapter I of chapter 
18 of title 38, United States Code, to include the natural 
child, regardless of age or marital status, of a parent who 
during the period beginning on October 1, 1967 and ending on 
May 7, 1975, performed active military, naval, or air service 
in the Republic of Korea in the area between the south line of 
the Demilitarized Zone and a line five miles south of the 
Civilian Control Line established with respect to the 
Demilitarized Zone, but only if the individual was conceived 
after the parent performed such service.

    Section 13 of the bill would amend section 3702(a)(2)(E) of 
title 38, United States Code, to provide permanent authority 
for housing loans for members of the Selected Reserve.

    Section 14 of the bill would amend paragraph (2) of section 
3729(b) of title 38, United States Code, to provide uniform 
home loan fees for qualifying members of the Selected Reserve 
and active duty veterans, and would increase the fees for 
initial and second or subsequent use of the VA home loan 
program with no down payment.

    Section 15(a) of the bill would reinstate the minimum 
requirements for sale of vendee loans. With respect to current 
law section 3733(a) of title 38, United States Code, section 
15(a) would strike paragraph 2.

    Section 15(b) of the bill would amend current section 
3733(a)(1) of title 38, United States Code, by requiring that 
not more than 85 percent, nor fewer than 50 percent, of the 
purchases made during any fiscal year of real property acquired 
by the Secretary as the result of a defaulted loan may be 
financed by a loan made by the Secretary. This section would 
also strike the current authority to increase to 80 percent the 
maximum percentage in any fiscal year of real property acquired 
by the Secretary as a result of loan defaults.

    Section 16(a) of the bill would permit new Philippine 
Scouts to receive benefits comparable to Commonwealth Army 
veterans. This subsection would also amend the rates of payment 
under section 107 of title 38, United States Code, and under 
subchapter II of chapter 13 of title 38, United States Code, 
for qualified Filipino veterans and their survivors lawfully 
residing in the United States.

    Section 16(b) of the bill would provide that the amendments 
made by subsection (a) shall apply to benefits paid for months 
beginning after the date of the enactment of this Act.

    Section 17(a) of the bill would amend section 107 of title 
38, United States Code, as amended by section 16 of this Act, 
to extend eligibility for burial benefits for new Philippine 
Scouts residing in the United States.

    Section 17(b) of the bill would amend section 2402(8) of 
title 38, United States Code, by striking ``section 107(a)'' 
and inserting ``subsection (a) or (b) of section 107'' to 
provide for national cemetery interment of new Philippine 
Scouts.

    Section 17(c) of the bill would provide that the amendments 
made by subsections (a) and (b) shall apply with respect to 
deaths occurring after the date of the enactment of this Act.

    Section 18 of the bill would extend the VA's authority to 
maintain a regional office in the Republic of the Philippines 
through December 31, 2009.

    Section 19(a) of the bill would amend chapter 41 of title 
38, United States Code, by adding a new section, ``4113. 
Outstationing of Transition Assistance Program personnel.''

    New section 4113(a) would require the Secretary of Labor 
station employees of the Veterans' Employment and Training 
Service, or contractors under subsection (c), at those veterans 
assistance offices established by the Secretary of Veterans 
Affairs on military installations pursuant to the second 
sentence of section 7723(a) of title 38, United States Code. 
The Secretary of Labor would be authorized to station such 
employees or contractors at such other military installations 
outside the United States as the Secretary, after consultation 
with the Secretary of Defense, determines to be necessary to 
carry out the purposes of this section.

    New section 4113(b) would require employees (or 
contractors) stationed at military installations pursuant to 
subsection (a) to provide, in person, counseling, assistance in 
identifying employment and training opportunities, help in 
obtaining such employment and training, and other related 
information and services to members of the Armed Forces who are 
being separated from active duty, and the spouses of such 
members, under the Transition Assistance Program and Disabled 
Transition Assistance Program established in section 1144 of 
title 10, United States Code.

    New section 4113(c) would provide the Secretary the 
authority to enter into contracts with public or private 
entities to provide, in person, some or all of the counseling, 
assistance, information and services under the Transition 
Assistance Program required under subsection (a).

    Section 19(b) of the bill would require that not later than 
the date that is 90 days after the date of enactment of this 
Act, the Secretary of Labor implement section 4113 of title 38, 
United States Code, as added by subsection (a), and have 
employees of the Veterans' Employment and Training Service, or 
contractors, carry out that section at the military 
installations involved by such date.

    Section 20(a) of the bill would amend paragraph (2) of 
section 6105(b) of title 38, United States Code, to expand the 
list of serious federal criminal offenses that bar an 
individual, convicted after September 1, 1959, from receiving 
gratuitous benefits (including the right to burial in a 
national cemetery). This subsection of the bill would add 
sections 175, 229, 831, 1091, 2332a, and 2332b, of title 18, 
United States Code, to the list.

    Section 20(b) of the bill would provide that the amendments 
made by subsection (a) shall apply to claims filed after the 
date of enactment of this Act.

                    Performance Goals and Objectives

    The reported bill would authorize veterans' benefits 
enhancements and program improvements under laws administered 
by the Department of Veterans Affairs and the Department of 
Labor. Performance goals and objectives established in their 
annual performance plans are subject to the Committee's regular 
oversight.

             Statements of the Views of the Administration

Statement of Daniel L. Cooper, Under Secretary for Benefits, Before the 
 Subcommittee on Benefits, House Committee on Veterans' Affairs, April 
                                10, 2003

    Mr. Chairman and Members of the Committee, thank you for the 
opportunity to testify today on several bills of great interest to 
veterans.
          * * * * * * *
                                h.r. 533
    H.R. 533, the ``Agent Orange Veterans' Disabled Children's Benefits 
Act of 2003,'' would amend chapter 18 of title 38, United States Code, 
to authorize VA to provide a monetary allowance and other benefits to a 
person suffering from spina bifida who is natural child, regardless of 
age or marital status, of a parent who performed ``qualifying 
herbicide-risk service,'' if the person was conceived after such 
service. A parent would be considered to have performed ``qualifying 
herbicide-risk service'' if, while performing active military, naval, 
or air service, he or she ``served in an area in which a Vietnam-era 
herbicide agent was used during a period during which such agent was 
used in that area; or . . . otherwise was exposed to a Vietnam-era 
herbicide agent.'' The term ``Vietnam-era herbicide agent'' would be 
defined by reference to current 38 U.S.C. Sec. 1116(a)(3). VA does not 
support this bill.
    Congress has repeatedly acted since 1979 to ensure that the Federal 
Government investigates the health effects of exposure to herbicides 
containing dioxin and compensates veterans who served in the Republic 
of Vietnam during the Vietnam era and suffered disability as a result 
of that exposure. Because of the ``concern and apprehension among 
veterans regarding the health effects of herbicides,'' Congress 
mandated an epidemiologic study by VA of the effects of exposure to 
dioxin in the Veterans Health Programs Extension and Improvement Act of 
1979. Congress also required VA to review and scientifically analyze 
literature relating to possible long-term health effects of human 
exposure to dioxin. In 1981, Congress authorized VA to provide hospital 
and nursing home care to certain veterans exposed during service to 
dioxin or ionizing radiation for conditions which, although not shown 
to have resulted from such exposure, are not found to have resulted 
from a cause other than such exposure. The Veterans' Dioxin and 
Radiation Exposure Compensation Standards Act of 1984 directed VA to 
issue regulations to establish guidelines and, where appropriate, 
standards and criteria for the resolution of benefit claims based on 
exposure to herbicides containing dioxin in service in the Republic of 
Vietnam during the Vietnam era. The act also required VA to make 
specific findings, either positive or negative, regarding service 
connection as to three diseases, chloracne, porphyria cutanea tarda, 
and soft-tissue sarcoma.
    In 1991, Congress added section 1116 (formerly section 316) to 
title 38, United States Code, establishing a presumption of service 
connection, applicable to veterans who served in the Republic of 
Vietnam during the Vietnam era, for three diseases. The act also called 
for VA to contract with the National Academy of Sciences to perform a 
review and evaluation of the scientific evidence regarding the 
association between disease and exposure to herbicides used in 
connection with the Vietnam War and each disease suspected of 
association with such exposure. Congress amended section 1116 in 1994 
and 2001 by adding five conditions to the list of diseases presumed to 
be service connected in Vietnam veterans.
    More recently, Congress has enacted legislation to provide a 
monetary allowance and other benefits to the children of Vietnam 
veterans who were born with spina bifida, as well as to children with 
certain other birth defects who are the natural children of women 
veterans who served in the Republic of Vietnam during the Vietnam era.
    Congress' legislative enactments indicate its recognition of the 
unique circumstances of service in Vietnam-circumstances including the 
special sacrifices made by veterans of that war, and the great 
uncertainties regarding exposures of individual veterans to aerially 
applied herbicides. H.R. 533 would extend benefits Congress bestowed 
upon the affected children of those veterans to children of veterans 
who did not serve under those circumstances. In addition, H.R. 533's 
language is so vague as to be almost impossible to administer. Under 
that language, an individual would be considered to have performed 
``qualifying herbicide-risk service'' if he or she, while performing 
active service, ``served in an area in which a Vietnam-era herbicide 
agent was used during a period when such agent was used in that area.'' 
The vagueness of the terms ``area,'' ``was used,'' and ``during a 
period when'' is sure to generate substantial litigation over what 
Congress intended by this language.
    VA estimates that enactment of H.R. 533 would result in direct 
costs of $60.8 million in FY 2004 and $760.7 million over the ten-year 
period FY 2004-2013. In addition, VA estimates administrative costs of 
$357,000 for FY 2004 and $ 1.73 million for the ten-year period FY 
2004-2013.
          * * * * * * *
                               h.r. 1048
Specially Adapted Housing
    The other Specially Adapted Housing proposal is contained in 
section 2 of H.R. 1048, the ``Disabled Veterans Adaptive Benefits 
Improvement Act of 2003.'' This section would increase the maximum 
Specially Adapted Housing grants. VA favors such increases, provided 
offsetting savings may be found.
    Under H.R. 1048, the maximum Specially Adapted Housing grant 
authorized by section 2101(a) would be increased from $48,000 to 
$50,000. In addition, the maximum Special Housing Adaptations grant 
authorized by section 2101(b) would be increased from $9,250 to 
$10,000. These grants were last increased by Public Law 107-103, 
enacted December 27, 2001.
    VA estimates that approximately 600 veterans per year will receive 
specially adapted housing assistance, of which about 92.5 percent will 
qualify for the grant authorized by section 2101(a). VA estimates the 
cost of enacting section 2 of H.R. 1048 would be $1.14 million per 
year, with a total 10-year cost of $11.4 million.
Assistance for Automobile and Adaptive Equipment
    Section 3 of H.R. 1048 would increase from $9,000 to $11,000 the 
maximum amount that VA may pay under 38 U.S.C. Sec. 3902(a) to provide 
or assist in providing an automobile or other conveyance to eligible 
persons.
    The maximum automobile allowance was also last increased to the 
current $9,000 on December 27, 2001.
    VA estimates the total benefits cost of both provisions of H.R. 
1048 would be $3.3 million for FY 2004 and $33.3 million for the ten-
year period FY 2004-2013. Because these benefits were last increased 
just 16 months ago, and these costs are not included in the President's 
budget request, we are unable to support enactment of H.R. 1048. 
However, we will remain vigilant and recommend increases if there is a 
significant erosion in the value of these benefits due to inflation.
          * * * * * * *
                                h.r. 966
    Mr. Chairman, H.R. 966, the ``Disabled Veterans' Return-to-Work Act 
of 2003,'' would amend provisions of 38 U.S.C. Sec. 1524 to reinstate a 
program of vocational training for certain pension recipients that was 
in place between February 1, 1985, and December 31, 1995. That 
temporary program, established pursuant to the Veterans' Benefits 
Improvement Act of 1984, Pub. L. No. 98-543, required the Secretary of 
Veterans Affairs to determine whether the achievement of a vocational 
goal was reasonably feasible in the case of certain veterans awarded 
pension during the program period. If the achievement of such a goal 
was found to be feasible, these veterans were offered the opportunity 
to pursue programs of vocational training consisting of vocationally 
oriented and other services and assistance of the same kind provided 
under the vocational rehabilitation program authorized under chapter 31 
of title 38, United States Code. These services and assistance did not 
include subsistence allowances, loans, or automobile adaptive 
equipment. Once a program of training was completed, a veteran could 
also receive employment assistance. The law limited the number of 
evaluations to be performed to not more than 3,500 veterans during any 
12-month period. The initial program period ran from February 1, 1985, 
to January 31, 1992.
    Initially, the law required that a veteran under the age of 50 who 
was awarded pension during the program period be evaluated with respect 
to his or her potential for rehabilitation. It required that the 
evaluation include a personal interview by a VA employee trained in 
vocational counseling. If the veteran refused to participate in the 
evaluation, his or her pension was suspended until he or she 
participated in an evaluation. Subsequent participation in the 
vocational training itself was voluntary. For a veteran pension 
recipient 50 years of age or older, the program of vocational training 
was totally voluntary. If, upon application by such a veteran-
pensioner, VA made a preliminary finding on the basis of information in 
the application that, with the assistance of a vocational training 
program, the veteran had good potential for achieving employment, VA 
was authorized, upon the veteran's request, to evaluate the veteran to 
further determine whether the achievement of a vocational goal was 
reasonably feasible.In 1992, Public Law 102-562 eliminated the 
limitation on the number of program participants who may be evaluated 
annually and amended the program for veterans under age 45, rather than 
under age 50, who were awarded pension during the program period so as 
to (A) require the Secretary, based on information on file with VA, to 
make a preliminary finding whether the veteran, with the assistance of 
a VA vocational training program, had a good potential for achieving 
employment; (B) if that potential was found to exist, required the 
Secretary to solicit from the veteran an application for VA vocational 
training; and (C) if the veteran applied for training, required the 
Secretary to provide an evaluation to determine whether the achievement 
of a vocational goal was reasonably feasible. In addition, the program 
was opened to veterans age 45 and older who had been awarded pension 
before the program period. That Public Law also extended the program 
ending date until December 31, 1995. No further action was taken by 
Congress, and by operation of law, the program ended on December 31, 
1995.
    During the period February 1, 1985, through January 31, 1989, VA 
evaluated approximately 9,468 veterans under the program. Of these, 
2,838 were found to be feasible for training. Some 468 veterans 
participated in programs of vocational training. Sixty-five veterans 
completed that training. Fifty-eight obtained employment. Between 
fiscal year 1989 and fiscal year 1992, VA conducted 9,140 evaluations 
under the program, with 937 veterans participating in training.
    H.R. 966 would reinstate the program and provide that a new program 
period would run for five years beginning on the date of enactment of 
the Act. In addition, it would require the Secretary to ensure that the 
availability of vocational training under section 1524 be made known 
through a variety of means, including the Internet and announcements in 
VA publications and other veterans' publications. Finally, the bill 
would require the Secretary, within two years after the date of 
enactment of the Act, to report to the Committees on Veterans' Affairs 
of the Senate and House on the operation of the program to include an 
evaluation of the vocational training provided and an analysis of the 
cost-effectiveness of the training provided, as well as data on the 
entered-employment rate of veterans pursuing such training.
    If H.R. 966 were to be enacted, we estimate that VA would conduct 
approximately 1,300 record reviews each year, based on new accessions 
to the pension rolls, to determine whether each veteran so evaluated 
has good potential for achieving employment. We estimate that the 
achievement of a vocational goal will be determined to be feasible in 
about \1/3\ (433) of those cases. Of that number, it is estimated that 
approximately \1/3\ of these, 144 veterans, will actually end up 
participating in the program. In addition, because the program is also 
available to veterans over age 45 on a voluntary basis, we estimate 
that an additional 25 participants may participate, for a total of 169 
cases per year. Based on those numbers, VA estimates that the enactment 
of H.R. 966 would cost $3 million for fiscal years 2004 through 2008 
and an additional $3.6 million for fiscal years 2009 though 2013, 
totaling $6.6 million.
    Mr. Chairman, given our experience in administering the temporary 
program during its ten-year duration, and the fact that only a small 
number of veterans benefited from the program, VA believes that the 
finite resources available to us for program administration would be 
best used to support our current program of vocational rehabilitation 
for service-disabled veterans, as authorized under chapter 31 of title 
38, United States Code. Thus, the Department does not support the 
enactment of H.R. 966.
    Mr. Chairman, this concludes my statement. I will be pleased to 
respond to any questions you or the members of the Subcommittee may 
have.
                               __________

  Statement of Robert J. Epley, Associate Deputy Under Secretary for 
   Policy and Program Management, Veterans Benefits Administration, 
Department of Veterans Affairs, Before the House Committee on Veterans' 
            Affairs, Subcommittee on Benefits, June 11, 2003

    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to testify today on several legislative items of interest 
to veterans. Accompanying me today is John H. Thompson, Deputy General 
Counsel.
          * * * * * * *
                               h.r. 1167
    H.R. 1167 would allow a veteran's surviving spouse who marries a 
non-veteran after the veteran's death to be eligible for burial in a VA 
national cemetery based on his or her marriage to the veteran. This 
proposal is similar to a VA proposal sent to Congress on April 25, 
2003.Over the last several years, the National Cemetery Administration 
has seen an increase in the number of requests for burial of a 
veteran's widow or widower who married a non-veteran after the veteran 
died. These cases usually involve spouses of veterans who were married 
for many years and raised a family with the veteran. Typically, the 
veteran's children and grandchildren, and often the current spouse, 
support the burial of the decedent with the original veteran-spouse in 
a VA national cemetery. However, current law does not permit it if the 
remarriage remained in effect when the veteran's survivor predeceased 
the new spouse.
    Public Law 103-446 revised eligibility criteria for burial in a 
national cemetery to reinstate burial eligibility for a surviving 
spouse of an eligible veteran whose subsequent remarriage to a non-
veteran was terminated by death or dissolved by divorce. The current 
proposal would be consistent with that amendment in further 
acknowledging the importance of that marriage to the veteran's family. 
This proposal would allow the deceased veteran to be buried with a 
spouse with whom he or she always expected to be buried. It would also 
allow the veteran's children to visit a single gravesite to pay their 
respects to their parents.
    We estimate that the cost associated with this proposal would be 
minimal. The average number of requests for burials for individuals 
previously married to an eligible veteran who subsequently married a 
non-veteran is estimated to be 200 per year; the majority of these 
burials would be second interments. The cost of a second interment 
(including a headstone or marker) in a VA national cemetery averages 
approximately $550. For FY 2004, we anticipate the mandatory cost of 
the proposal to be $20,000 for the provision of headstones or markers 
and the discretionary costs to be $90,000 for operational activities. 
Our ten-year estimate (FY 2004-2013) is $200,000 in mandatory costs and 
$900,000 in discretionary costs.This bill makes the eligibility for 
burial of remarried surviving spouses of veterans retroactive to 
January 1, 2000. We estimate that the costs associated with the 
retroactivity of this bill would be negligible. While it is difficult 
to determine how many families of already deceased, and presumably 
interred, remarried surviving spouses of veterans would want to 
disinter their loved one and then re-inter them with the veteran in a 
national cemetery, we do not believe this number would be significant.
          * * * * * * *
                               h.r. 2164
    H.R. 2164 would amend 38 U.S.C. Sec. 3512, effective September 1, 
2001, to provide that individuals who qualify for benefits under 
chapter 35 (survivors' and dependents' educational assistance) and are 
involuntarily ordered to full-time National Guard duty under 32 U.S.C. 
Sec. 502(f) after September 11, 2001, would have their individual 
delimiting dates extended by an amount of time equal to that period of 
active duty plus 4 months. Public Law 107-103 restored entitlement to 
National Guard personnel who qualified for chapter 35 benefits who had 
to discontinue course pursuit as a result of being called to active 
duty under specific sections of title 10, United States Code. This bill 
would provide the same delimiting date extension to National Guard 
members who are activated under title 32. The proposal is nearly 
identical to a VA proposal transmitted to Congress on April 25, 2003. 
Thus, VA strongly supports the bill.
    We estimate the cost associated with the enactment of H.R. 2164 
would be $150,000 for FY 2004 and approximately $5 million in mandatory 
funding for the ten-year period from FY 2004 through FY 2013.
                               h.r. 2285
    H.R. 2285 would amend title 38, United States Code, to require the 
Secretary of Labor to provide staffing at military installations 
overseas to carry out Transition Assistance Program (TAP) counseling 
within 90 days after the date of enactment of the Act. While VA 
strongly supports initiatives that would further enhance TAP, we 
respectfully defer to the views of the Department of Labor regarding 
the merits of this bill.
                               h.r. 2297
    H.R. 2297 would amend title 38, United States Code, to expand MGIB 
benefits to certain self-employment training, to extend the Veterans' 
Advisory Committee on Education until 2009, to repeal the VA education 
loan program, to provide permanent authority for state cemetery grants, 
to provide for forfeiture of VA benefits for certain subversive 
activities, and to extend VA's authority to maintain a regional office 
in the Philippines through 2005. H.R. 2297 incorporates with some 
changes certain provisions of VA draft bills sent to Congress on April 
25, 2003, and May 12, 2003.
    Section 1 of the bill would expand the Montgomery GI Bill (chapter 
30) program by authorizing educational assistance benefits for veterans 
under that program for on-job training in certain self-employment 
training programs. Such training might, for example, include that 
necessary for operation of a franchise. The Veterans Entrepreneurship 
and Small Business Development Act of 1999 (Pub. L. No. 106-50) 
requires that all Federal agencies aggressively support self employment 
for veterans and service-disabled veterans, directly and through public 
or private partnerships. This amendment would provide veterans 
considering self employment with improved access to capital for 
training. Thus, more veterans would be encouraged to initiate steps 
toward self employment. The proposal is nearly identical to a VA 
proposal transmitted to Congress on April 25, 2003. Accordingly, we 
strongly support its enactment.
    We estimate the costs associated with the enactment of this section 
would be $357,000 for FY 2004 and approximately $3.9 million in 
mandatory funding for the 10-year period from FY 2004 through FY 2013.
    Section 2 of the bill would extend to the year 2009 the Veterans' 
Advisory Committee on Education and amend pertinent law requiring the 
inclusion of veterans from World War II, the Korean Conflict era and 
the post-Korean conflict era as members of the Committee. The Committee 
is useful in keeping the Secretary in touch with the education 
community as well as the veterans' service organizations. During the 
last several years, the Committee has made a number of recommendations 
that have, in turn, become legislative proposals. The Committee's 
discussions and recommendations are an invaluable aid to our efforts in 
administering VA's education programs. The proposal is nearly identical 
to a VA proposal transmitted to Congress on April 25, 2003; however, we 
favor extending the authority for the Committee until 2013.
    We estimate the costs associated with the extension of the 
Committee would be $25,400 for FY 2004 and $200,000 in discretionary 
funding for the 10-year period from FY 2004 through FY 2013.
    Section 3 of the bill would repeal the VA education loan program 
and waive any existing repayment obligations, to include overpayments 
due to default on such loans. The program, in effect since January 1, 
1975, currently is available to issue loans up to a maximum of $2,500 
per academic year to spouses and surviving spouses of veterans who are 
past their delimiting dates with remaining entitlement to chapter 35 
benefits. The population for this program is very limited, and, with 
other options in the public and private sectors, there is no longer a 
demand for these loans. In fact, VA has not issued a loan under this 
program in several years, but the Government has paid an estimated 
$70,000 a year to administer it. VA's October 2002 monthly loans 
statistics show 20 current education loans in the amount of $14,987.08 
and 116 defaulted education loans totaling $105,908.10. As is apparent, 
it costs VA more to administer the loan program than to forgive the 
debts currently outstanding. VA recommended the repeal of this program 
in a letter to Congress on April 25th of this year.
    We estimate the cost associated with the repeal of the education 
loan program to be approximately $121,000 in FY 2004 in mandatory 
funding.
    Section 4 of the bill would amend 38 U.S.C. Sec. 2408(a)(2) to 
permanently authorize appropriations for VA to make grants to states to 
assist them in establishing, expanding, or improving state veterans' 
cemeteries. Section 2408(a)(2) currently authorizes appropriations for 
making these grants through fiscal year 2004.
    VA's State Cemetery Grants Program is an important component in 
meeting the burial needs of our Nation's veterans. State veterans' 
cemeteries supplement VA's national cemetery system in providing burial 
options to veterans throughout the Nation. VA's State Cemetery Grants 
Program has already helped to fund 51 operational state veterans' 
cemeteries, and six more are under construction. VA has received over 
30 additional pre-applications from states requesting grants. There is 
a tremendous, on-going demand for grants to improve or expand existing 
state veterans' cemeteries, and permanently authorizing appropriations 
would assist long-term planning for this important program.
    Appropriations for VA's State Home Grants Program (authorized by 
subchapter III of chapter 81, title 38, United States Code) are 
permanently authorized under 38 U.S.C. Sec. 8133(a). The amendment made 
by section 4 of H.R. 2297 would improve the consistency in the 
operation of the two programs. We support this proposal.
    The costs associated with this proposal would be those included in 
VA's annual budget request for use in providing grants to states. The 
President's budget submission to Congress for FY 2004 includes a 
request for $32 million for the State Cemetery Grants Program.
    Section 5 of the bill would amend section 6105 of title 38, United 
States Code, to supplement the list of offenses conviction of which 
would result in a bar to all gratuitous VA benefits. Section 6105 
provides that an individual convicted after September 1, 1959, of any 
of several specified offenses involving subversive activities shall 
have no right to gratuitous benefits, including national cemetery 
burial, under laws administered by the Secretary of Veterans Affairs, 
and that no other person shall be entitled to such benefits on account 
of such individual. Congress' primary concern in enacting this 
provision was to prevent VA benefits from being provided based on 
military service of persons found guilty of offenses involving national 
security. This proposal would amend section 6105 to supplement the list 
of offenses conviction of which would result in a bar to all gratuitous 
VA benefits to include additional offenses that have come into being 
since enactment of section 6105.
    This proposal would extend the current prohibition on payments of 
gratuitous benefits to persons convicted of subversive activities to 
include six additional classes of activities. The following offenses 
from title 18, United States Code, would be added: sections 175 
(Prohibitions with respect to biological weapons); 229 (Prohibited 
activities with respect to chemical weapons); 831 (Prohibited 
transactions involving nuclear materials); 1091 (Genocide); 2332a (Use 
of certain weapons of mass destruction); and 2332b (Acts of terrorism 
transcending national boundaries). All of these offenses, which involve 
serious threats to national security, were added to title 18, United 
States Code, after the enactment of section 6105. We support this 
proposal.
    There is no cost associated with this proposal. Cost savings would 
be insignificant.
    Section 6 of the bill would extend until December 31, 2005, the 
authority of the Secretary of Veterans Affairs under 38 U.S.C. 
Sec. 315(b) to operate a regional office in the Republic of the 
Philippines. Under current law, that authority will expire on December 
31, 2003. Congress has periodically extended this authority, most 
recently in Public Law 106-117.
    Were VA to close the Manila regional office, veterans' assistance 
activities would still be needed in the Philippines. A Federal Benefits 
Unit would have to be attached to the Department of State. Under such 
an arrangement, VA's control of costs and quality of service would be 
limited. Because a Federal Benefits Unit would assume responsibility 
only for disseminating information and assistance, but not processing 
benefits, there could be no assurance that the extensive fraud-
prevention activities currently performed by the Manila regional office 
would continue.
    We support extension of the Secretary's authority to operate a 
regional office in the Philippines. However, we recommend that this 
authority be extended through December 31, 2008.
    An extension of the Secretary's authority to operate a regional 
office in the Philippines is included in the President's FY 2004 
Budget.
    We note that, while legislation under consideration at this hearing 
reflects several proposals recommended by VA in draft legislation 
submitted to Congress on April 25, 2003, and May 12, 2003, a number of 
other provisions of our draft bills of importance to VA and veterans 
were not included. In particular, our Allen-case legislation, forwarded 
to the Congress in April, if enacted, would put an end to a state of 
the law we consider unconscionable and an affront to most veterans. The 
same program that so fittingly compensates veterans for their service-
related disabilities should not be a source of payments to veterans 
because they are substance abusers. Congress established the 
appropriate policy when it provided in 1990 that ``no compensation 
shall be paid if [a] disability is a result of [a] veteran's own . . . 
abuse of alcohol or drugs.'' VA is a recognized leader in the treatment 
of substance disorders, and that is an altogether appropriate role for 
the Government to assume. But paying veterans for the disabling effects 
of their own alcohol or drug abuse obviously can be a disincentive to 
their treatment and recovery. As currently interpreted by the courts, 
the law in this regard reflects a public policy inconsistent with VA's 
mission. We urge your prompt enactment of our legislation.
    In addition, we urge the Committee to review our draft legislative 
proposals dealing with alternative beneficiaries for Government life 
insurance, time limitations for submission of claim information, 
expansion of the burial plot allowance, provision of Government markers 
for privately marked graves, and expansion of benefits for Filipino 
veterans residing in the United States and incorporate these worthy 
initiatives into pending legislation.

               Congressional Budget Office Cost Estimate

    The following letter was received from the Congressional 
Budget Office concerning the cost of the reported bill:
                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, July 14, 2003
Hon. Christopher H. Smith
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. 2297, the Veterans 
Benefits Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Sarah T. 
Jennings, who can be reached at 226-2840.

            Sincerely,
                                       Douglas Holtz-Eakin,
                                                           Director
    Enclosure.

               Congressional Budget Office Cost Estimate

                H.R. 2297, Veterans Benefits Act of 2003

As ordered reported by the House Committee on Veterans' Affairs on June 
                                26, 2003

Summary
    H.R. 2297 would affect several veterans programs, including 
housing, compensation, pensions, burial, and education. The 
bill also would affect retirement programs for the military and 
the other uniformed services. CBO estimates that enacting this 
legislation would reduce direct spending for veterans programs 
and for uniformed services' retirement benefits by $63 million 
in 2004, about $135 million over the 2004-2008 period, and 
about $300 million over the 2004-2013 period. In addition, CBO 
estimates that implementing H.R. 2297 would cost $4 million in 
2004 and $137 million over the 2004-2008 period, assuming 
appropriation of the necessary amounts.
    H.R. 2297 contains no intergovernmental or private-sector 
mandates as defined by the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
Estimated cost to the federal government
    The estimated budgetary impact of H.R. 2297 is shown in 
Table 1. This estimate assumes that the legislation will be 
enacted by October 1, 2003. The costs of this legislation fall 
within budget functions 700 (veterans benefits and services), 
600 (income security), 300 (natural resources and environment), 
400 (transportation), and 550 (health).





                                  TABLE 1. ESTIMATED BUDGETARY IMPACT OF H.R. 2297

                                                                        By Fiscal Year, in Millions of Dollars
                                                                    --------------------------------------------
                                                                       2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------

                                           CHANGES IN DIRECT SPENDING

Estimated Budget Authority.........................................     -\63     -\15     -\18     -\20     -\21
Estimated Outlays..................................................     -\63     -\15     -\18     -\20     -\21

                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level......................................       37       39       40       41       41
Estimated Outlays..................................................        4       21       31       39       40
----------------------------------------------------------------------------------------------------------------

a Five-year costs in the text differ slightly from a summation of the annual costs listed here because of
  rounding.





Basis of estimate
Direct Spending--Summary

    H.R. 2297 would affect direct spending in veterans' 
programs for housing, compensation, pension, burial, and 
veterans' readjustment benefits. The bill would also affect 
direct spending for annuities for the survivors of uniformed 
services' retirees. Table 2 summarizes those effects, and the 
individual provisions that would affect direct spending are 
described below. In total, CBO estimates that enacting this 
legislation would decrease direct spending for veterans' 
programs and uniformed services retirement benefits by $63 
million in 2004, about $135 million over the 2004-2008 period, 
and about $300 million over the 2004-2013 period.
Direct Spending--Housing
    Three sections of the bill would affect direct spending on 
veterans' housing programs. Together, CBO estimates that 
enacting these provisions would lower direct spending by $97 
million in 2004, $372 million over the 2004-2008 period, and 
$816 million over the 2004-2013 period (see Table 2). (Higher 
savings in 2004 result from lower interest rate assumptions for 
that year compared to those projected for the 2005-2013 
period.) In preparing this estimate, CBO accounted for the 
interactive effects between the individual provisions; savings 
could be lower if only one or two of these provisions were 
enacted. Costs or savings for each individual provision, 
estimated as if they were enacted alone, are described below.




                                             TABLE 2. ESTIMATED CHANGES IN DIRECT SPENDING UNDER H.R. 2297

                                                                                     By Fiscal Year, in Millions of Dollars
                                                      --------------------------------------------------------------------------------------------------
                                                         2003     2004     2005     2006     2007     2008     2009     2010     2011     2012     2013
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                        HOUSING a

Spending Under Current Law...........................      452      567      552      535      547      560      572      588      601      917      938
Proposed Changes.....................................        0     -\97     -\65     -\67     -\70     -\73     -\76     -\82     -\85     -\99    -\102
                                                      --------------------------------------------------------------------------------------------------
Spending Under H.R. 2297.............................      452      470      487      468      477      487      496      506      516      818      836

                                                      COMPENSATION, PENSION, AND BURIAL BENEFITS a

Spending Under Current Law...........................   27,224   29,796   34,353   32,288   29,992   33,121   33,621   34,170   37,661   33,048   36,743
Proposed Changes.....................................        0       27       45       47       48       49       50       51       52       52       53
                                                      --------------------------------------------------------------------------------------------------
Spending Under H.R. 2297.............................   27,224   29,823   34,398   32,335   30,040   33,170   33,671   34,221   37,713   33,100   36,796

                                                                   RETIREMENT BENEFITS

Spending Under Current Law...........................   35,740   36,660   37,649   38,770   39,929   41,072   42,130   43,237   44,323   45,428   46,553
Proposed Changes.....................................        0        1      -\2      -\5      -\5      -\5      -\5      -\5      -\5      -\6      -\6
                                                      --------------------------------------------------------------------------------------------------
Spending Under H.R. 2297.............................   35,740   36,661   37,647   38,765   39,924   41,067   42,125   43,232   44,318   45,422   46,547

                                                             VETERANS' READJUSTMENT BENEFITS

Spending Under Current Law...........................    2,305    2,575    2,749    2,923    3,100    3,259    3,406    3,543    3,696    3,820    3,947
Proposed Changes.....................................        0        6        7        7        7        8        9        9        9        9        9
                                                      --------------------------------------------------------------------------------------------------
Spending Under H.R. 2297.............................    2,305    2,581    2,756    2,930    3,107    3,267    3,415    3,552    3,705    3,829    3,956

  Total Proposed Changes.............................        0     -\63     -\15     -\18     -\20     -\21     -\22     -\27     -\29     -\44     -\46
--------------------------------------------------------------------------------------------------------------------------------------------------------

a Five- and 10-year costs in the text differ slightly from a summation of the annual costs shown here because of rounding.




    Reinstatement of Vendee Home Loan Program. Section 15 would 
reinstate the vendee home loan program which was discontinued 
by the Department of Veterans Affairs (VA) on January 31, 2003. 
Before that date, when a veteran defaulted on his mortgage and 
the home went into foreclosure, VA often acquired the property 
and issued a new direct loan when the property was sold. These 
loans are called vendee loans. CBO estimates that reinstating 
the program would save VA $357 million over the 2004-2013 
period, or roughly $35 million a year. The bill also would 
require VA to finance between 50 percent and 85 percent of such 
sales through the vendee loan program. Before the program was 
terminated, VA financed roughly 60 percent of such sales with 
vendee financing and CBO estimates that it would continue to do 
so under the bill. The estimated savings for this provision is 
the net effect of three individual program effects (two with 
savings and one with costs), as explained below.

    Based on historical data, CBO estimates that under the bill 
roughly 14,000 vendee loans would be made each year with an 
average loan amount of $98,000. Vendee loans lower the subsidy 
cost of the VA home loan program in two ways. First, VA 
receives more money for homes sold with vendee financing than 
those sold with other financing (16 percent more in 2002). 
Since the proceeds from these home sales are considered 
recoveries of losses from the guaranteed loans that were 
foreclosed, enacting this section would increase recoveries and 
therefore lower subsidy costs in the guaranteed loan portfolio. 
CBO estimates that VA would save an average of $68 million a 
year in guaranteed loan subsidies over the 2004-2013 period. 
Second, because vendee loans have lower prepayment and default 
rates than other direct loans made by VA, this provision also 
would lower subsidy costs for direct loans by an average of $28 
million a year over the 2004-2013 period. Finally, before the 
program was terminated in 2003, VA sold most vendee loans on 
the secondary mortgage market and guaranteed their timely 
repayment; CBO estimates that it would continue to do so under 
the bill. Based on historical data, CBO estimates that VA would 
sell an average of $1.2 billion in vendee loans annually, at a 
subsidy cost of roughly $60 million a year.

    Changes in Loan Fees. Section 14 would make several 
significant changes to the fees charged for the VA home loan 
guarantee. First, it would require VA to charge the same fees 
for loans to veterans of active-duty and selected-reserve 
service; under current law veterans who served in the selected 
reserves pay 75 basis points more than veterans with active-
duty service. Second, starting in 2004, the bill would increase 
the fee charged for loans made with no downpayment by 15 basis 
points. Third, the provision would increase the fee charged for 
repeated use of the home loan benefit (when a veteran uses the 
benefit more than once) by 30 basis points for the 2004-2011 
period and by 90 basis points in 2012 and 2013. Finally, it 
would replace the existing range of fees for hybrid adjustable 
rate mortgages with a flat fee of 1.25 percent. CBO estimates 
that revising fees in the manner specified above would reduce 
direct spending by $29 million in 2004 and $492 million over 
the 2004-2013 period.

    Home Loans for Reservists. Section 13 would permanently 
extend the home loan benefits guaranteed by VA to members of 
the selected reserve. Under current law, reservists are 
eligible for home loans guaranteed by VA through 2009. CBO 
estimates that under the bill, VA would guarantee 9,000 
additional loans a year over the 2010-2013 period, with an 
average loan amount of $153,000. CBO further estimates that the 
subsidy cost associated with these additional loans would total 
$10 million over the 2010-2013 period.
Direct Spending--Compensation, Pensions, and Burial Benefits
    Several sections of the bill would affect spending for 
veterans' disability compensation, pensions, and burial 
benefits (see Table 3). Together, those provisions would 
increase spending by $27 million in 2004, $218 million over the 
2004-2008 period and by $479 million over the 2004-2013 period, 
CBO estimates.




                TABLE 3. ESTIMATED CHANGES IN DIRECT SPENDING FOR VETERANS' COMPENSATION, PENSIONS, AND BURIAL BENEFITS UNDER H.R. 2297

                                                                                         By Fiscal Year, in Millions of Dollars
                   Description of Provisions                   -----------------------------------------------------------------------------------------
                                                                  2004     2005     2006     2007     2008     2009     2010     2011     2012     2013
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                               CHANGES IN DIRECT SPENDING

Retention of DIC for Remarried Spouses........................       23       40       41       42       43       44       46       47       48       49
Disability Benefits for Filipino Veterans.....................        4        4        4        4        4        4        5        5        5        5
Vocational Training for Pensioners............................       1         1        2        2        2        2        0        0      -\1      -\1
Spina Bifida Benefits.........................................       1        1        1        1        1        1        1        1        1        1
Disability Benefits for Former POWs...........................       1        1        1        1        1        1        1        1        1        1
Burial Benefits for New Philippine Scouts.....................       1        1        1        1        1        1        1        1        1        1
Forfeiture of Benefits for Subversive Activities..............       1        1        1        1        1        1        1        1        1        1
                                                               -----------------------------------------------------------------------------------------
  Total Changes in Compensation, Pensions, and Burial Benefits       27       45       47       48       49       50       51       52       52       53
--------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE: DIC = Death and Indemnity Compensation; POWs = Prisoners of War.

1 = Less than $500,000.





    Retention of Death and Indemnity Compensation (DIC) for 
Remarried Spouses. Under current law, VA provides DIC payments 
to the surviving spouse of certain deceased veterans. If a 
surviving spouse remarries, DIC payments cease. Should the 
subsequent marriage end, either due to divorce or death of the 
new spouse, DIC payments can resume. Section 6 would allow a 
surviving spouse who remarries after age 55 to continue 
receiving DIC payments. The provision would apply 
retroactively, allowing surviving spouses who have already 
remarried after age 55 to resume receiving DIC payments but 
only if they apply for the benefit within one year after this 
bill is enacted. CBO estimates that the total cost to provide 
DIC payments to surviving spouses who remarry after age 55 
would be $23 million in 2004, $189 million over the 2004-2008 
period, and $423 million over the 2004-2013 period. Some of 
these costs would be offset by direct spending savings in 
retirement programs for the uniformed services. Those savings 
are discussed in the section titled ``Military Retirement'' 
below.

    In fiscal year 2002, about 300,000 surviving spouses 
received DIC payments. CBO estimates that in that year, about 
330 surviving spouses over age 55 (or about 0.1 percent of all 
surviving spouses receiving DIC) remarried and stopped 
receiving DIC payments as a result. CBO projects that, under 
current law, the number of remarriages would gradually increase 
each year as the overall population of DIC recipients increases 
and exceed 400 a year by the end of the decade.
    CBO estimated the costs for three groups of surviving 
spouses-those over age 55 who would remarry under current law, 
those over age 55 who would choose not to remarry under current 
law but would remarry if section 6 were enacted, and those who 
remarried after age 55 before enactment of this bill.

    Surviving Spouses Over Age 55 Who Would Remarry Under 
Current Law.--CBO estimates that over the 2004-2013 period, 
about 380 surviving spouses over age 55 would remarry each year 
on average under current law. Under this bill, federal spending 
for DIC would increase because those surviving spouses would 
now receive DIC payments that would have stopped under current 
law. The average DIC payment in fiscal year 2002 was $12,244. 
Such payments are adjusted annually for increases in the cost 
of living. After accounting for expected mortality of the 
remarried surviving spouses as well as their new spouses, CBO 
estimates that the additional cost to provide DIC payments to 
surviving spouses over age 55 who would remarry under current 
law would be $7 million in 2004, $69 million over the 2004-2008 
period, and $227 million over the 2003-2012 period.

    Surviving Spouses Over Age 55 Who Would Choose Not to 
Remarry Under Current Law.--Under this bill, some surviving 
spouses over age 55 might choose to remarry who would not have 
done so under current law. CBO estimates there would be no 
additional cost to provide DIC payments to those individuals. 
Because those surviving spouses would choose to remain 
unmarried and receive DIC payments continuously under current 
law, providing DIC payments if they remarry would result in no 
additional costs to the program.

    Surviving Spouses Who Remarried After Age 55 Before 
Enactment of the Bill.--Section 6 also would apply 
retroactively, allowing surviving spouses who remarried after 
age 55 before enactment of this legislation to resume receiving 
DIC once this legislation was enacted. The bill would impose a 
deadline, however, that would require all those eligible to 
apply for resumption this benefit within one year after the 
bill's enactment date. After accounting for expected mortality 
of the remarried surviving spouses as well as their new 
spouses, CBO estimates that about 2,500 surviving spouses who 
remarried after age 55 would apply within the time limit and 
resume receiving DIC payments. That number represents about 30 
percent of the total number of retroactive cases that CBO 
estimates would be eligible to reapply for DIC payments. CBO 
estimates that the additional cost to provide DIC payments to 
this population would be $16 million in 2004, $120 million over 
the 2004-2008 period, and $196 million over the 2004-2013 
period. Such costs could obviously be much higher or lower, 
depending on the portion of eligible people that apply for this 
retroactive benefit. (CBO also estimates that implementing this 
section would increase spending subject to appropriation by 
about less than $100,000 a year over the 2004-2006 period, 
assuming appropriation of the estimates amounts. CBO's estimate 
of those costs is discussed below under the heading of 
``Spending Subject to Appropriation.'')

    Disability Benefits for Filipino Veterans. Section 16 would 
expand benefits for Filipino veterans who served in the 
Philippine Commonwealth Army and the New Philippine Scouts and 
their survivors. In sum, CBO estimates that enacting section 16 
would cost $4 million in 2004, $20 million over the 2004-2008 
period, and $44 million over the 2004-2013 period.

    Dependency and Indemnity Compensation.--Under current law, 
surviving spouses and dependents of Filipino veterans who 
served in the Philippine Commonwealth Army or the New 
Philippine Scouts during World War II and live in the United 
States are eligible to receive half the amount of the DIC 
payment that survivors of veterans of the U.S. armed forces 
receive. Section 16 of the bill would require that these 
survivors be paid at the full DIC rate.

    Based on information provided by VA, CBO estimates that 
about 420 survivors of Filipino veterans who served in the 
Philippine Commonwealth Army or the New Philippine Scouts 
currently receive DIC payments at the 50 percent rate and that 
about 120 additional survivors would become eligible for these 
payments over the 2004-2013 period. CBO assumes that the 
survivors of these Filipino veterans received about half of the 
average DIC payment in fiscal year 2002 ($12,244, as noted 
above). After adjusting for cost-of-living increases, CBO 
estimates that, under the bill, the average DIC payment to 
these survivors would be $15,157 for 2004, an increase of 
$7,578. After accounting for the expected mortality of these 
veterans and their eligible survivors, CBO estimates that 
enacting this provision would raise direct spending for DIC by 
about $3 million in 2004, $18 million over the 2004-2008 
period, and about $40 million over the 2004-2013 period.

    Disability Compensation Benefits.--Under current law, 
former New Philippine Scouts residing in the United States are 
eligible to receive half the amount of disability compensation 
currently available to veterans of the U.S. armed forces. 
Section 16 would increase disability compensation for these 
veterans to the full rate. Based on information provided by VA, 
CBO estimates that there are currently about 100 former New 
Philippine Scouts residing in the United States today. In 
fiscal year 2002, the average disability compensation payment 
was $7,334. CBO assumes that eligible former New Philippine 
Scouts received about half that amount. After adjusting for 
cost-of-living increases, CBO estimates that the average 
disability compensation payment to these veterans would total 
$8,531 for fiscal year 2004, an increase of $4,265. After 
accounting for expected mortality rates, CBO estimates that 
enacting this provision would increase direct spending for 
veterans' disability compensation by less than $500,000 in 
2004, about $2 million over the 2004-2008 period, and about $3 
million over the 2004-2013 period.

    Vocational Training for Pensioners. Low-income veterans who 
served in the armed forces during a period of war and who are 
age 65 or older or are determined by VA to be permanently and 
totally disabled are eligible for monetary support to bring 
their total income up to a level set by the Congress. Under 
current law, veterans whose income subsequently exceeds this 
level are no longer eligible for this pension or the related 
health care benefits. Section 9 would reinstate a pilot program 
that offered vocational training and job placement services to 
certain pension recipients. That program expired in 1995. Under 
that program, trainees who subsequently became employed were 
allowed to maintain eligibility for the pension program through 
their first year of employment and to receive health care 
benefits for three years after that. Payments for education, 
training, and other services were made from the pension 
account. Section 9 would reinstate this program for five years 
from the bill's date of enactment.

    The temporary program of Vocational Training For Certain 
Pension Recipients operated from February 1, 1985, to December 
31, 1995. VA reports that individuals trained under that 
program from 1985 through 2000. Based on our analysis of that 
program's history, CBO expects about 50 pensioners to begin 
training in 2004, increasing to about 250 trainees a year when 
the program is fully implemented. The number of trainees would 
decline after 2008, when the program would stop taking new 
entrants.
    The vocational training and job placement services would be 
offered under the VA program of Training and Rehabilitation for 
Veterans with Service-Connected Disabilities. The average 
benefit under this program was about $7,300 in 2002 and CBO 
estimates the average benefit will increase to almost $8,100 in 
2004. Trainees under the pilot program for pension recipients 
would generally be eligible for 24 months of vocational 
training, but would not receive the subsistence allowance and 
related loans usually available to those in the Training and 
Rehabilitation program, nor would they be eligible for 
automobile adaptive equipment.
    During the earlier pilot program, the average cost for 
evaluating and training pension recipients was about 60 percent 
of the average training and allowance benefit under the 
Training and Rehabilitation Program, and for this estimate, CBO 
assumes that will continue to be the case. Thus, CBO estimates 
that reinstating the pilot program would result in training 
costs for pension recipients of less than $500,000 in 2004, $7 
million over the 2004-2008 period and $12 million over the 
2004-2013 period.
    To the extent that the trainees are successful in obtaining 
employment, their pensions would be reduced or eliminated, 
thereby reducing pension outlays. Assuming similar rates of 
employment to those reported under the previous pilot, CBO 
estimates that about 130 pensioners would have their pensions 
reduced or eliminated for a savings of $5 million over the 
2006-2013 period. In total, the pilot program would increase 
pension costs by less than $500,000 in 2004, $7 million over 
the 2004-2008 period, and $7 million over the 2004-2013 period.

    Spina Bifida Benefits. Exposure to certain herbicides used 
by the Department of Defense (DoD) during the Vietnam War from 
1962 to 1971 has been associated with a range of diseases from 
cancer to birth defects. Under current law, children with spina 
bifida who were born to veterans of the Vietnam War are 
entitled to monetary allowances, vocational rehabilitation 
benefits, and medical benefits administered by VA. Section 12 
would expand eligibility for these benefits to children with 
spina bifida who were born to veterans who served in the 
demilitarized zone (DMZ) in the Republic of Korea between 
October 1967 and May 1975.

    According to DoD, herbicides were used in the DMZ in Korea 
in 1968 and 1969. DoD estimates that up to 78,000 veterans may 
have served in the demilitarized zone during that time period, 
but that the number of veterans exposed could be much lower.
    According to VA, under current law the department provides 
benefits to about 1,100 children born to Vietnam veterans out 
of a total of about 3.1 million veterans who served within the 
borders of Vietnam. In 2002, the costs of benefits provided by 
VA to children with spina bifida born to Vietnam veterans 
ranged, depending on the severity of the disease, from $2,736 
to $16,248 a year per child for disability compensation and, on 
average, about $11,300 a year per child for medical benefits.
    Based on VA's experience with benefits for children with 
spina bifida born to Vietnam veterans, CBO estimates that less 
than 30 children with spina bifida born to veterans who served 
in the DMZ between October 1967 and May 1975 would begin to 
receive benefits under section 12. CBO estimates that the 
increase in direct spending resulting from enacting section 12 
would be less than $500,000 in 2004, about $2 million over the 
2004-2008 period, and about $4 million over the 2004-2013 
period. (CBO estimates that implementing this section also 
would increase spending subject to appropriation by about $2 
million over the 2004-2008 period, assuming appropriation of 
the estimated amounts. CBO's estimate of those costs is 
discussed below under the heading of ``Spending Subject to 
Appropriation.'')

    Disability Benefits for Former Prisoners of War (POWs). 
Under current law, VA generally deems a disability or disease 
to be service-connected for the purposes of disability 
compensation based on military medical records and physical 
examinations. For former POWs who were held captive for 30 days 
or more, current law specifies a list of 15 diseases and 
disabilities that VA assumes are service-connected because, 
according to VA, military medical records do not cover periods 
of captivity and may not provide adequate documentation for 
eligibility for disability compensation benefits.

    Section 11 would add cirrhosis of the liver to the list of 
presumed service-connected disabilities for former POWs who 
were held captive for 30 days or more. Based on information 
provided by VA, CBO estimates that there are currently about 
39,000 living former POWs. Applying prevalence rates for this 
disease obtained from the National Institutes of Health and 
assuming that between 50 percent and 60 percent of eligible 
former POWs would apply, CBO estimates that less than 10 former 
POWs would receive compensation under this provision each year. 
In 2002, the average disability compensation payment to 
veterans with diseases of the liver was about $5,900 for the 
year. CBO estimates that adding cirrhosis of the liver to the 
list of presumed service-connected disabilities for former POWs 
would increase direct spending for veterans' compensation by 
less than $100,000 a year over the 2004-2013 period.
    VA is in the process of issuing a regulation that would 
have the same effect as this provision and expects the 
regulation to take effect by the end of fiscal year 2003. If 
this regulation were to take effect before H.R. 2297 became 
law, this provision would have no cost.
    Section 11 also would eliminate the requirement that a POW 
be held prisoner for 30 days or more to qualify for presumed 
service-connection for five of the 15 presumed service-
connected disabilities included under current law-specifically, 
psychosis, any of the anxiety states, dysthymic disorder (or 
depressive neurosis), organic residuals of frostbite, and post-
traumatic osteoarthritis. Based on information provided by VA, 
CBO estimates that of the 39,000 living former POWs, no more 
than 400 were held captive for less than 30 days. About 70 
percent, or around 280, of these former POWs are already 
receiving disability compensation based on their eligibility as 
a veteran. Due to the small number of former POWs who would 
become eligible for the new benefit and the fact that many are 
already receiving disability compensation, CBO estimates that 
the increase in direct spending from eliminating the 30-day 
requirement for these five disabilities would be less than 
$100,000 a year over the 2004-2013 period.
    In sum, CBO estimates that enacting section 11 would cost 
less than $100,000 in 2004, less than $500,000 over the 2004-
2008 period, and, at most, $1 million over the 2004-2013 
period.

    Burial Benefits for New Philippine Scouts. Under current 
law, veterans who die of service-connected disabilities are 
eligible for a $2,000 burial benefit. Veterans who receive 
compensation or pension benefits but die of a nonservice-
connected condition are eligible for a $300 burial and funeral 
expenses benefit and another $300 allowance if the veteran is 
not interred in a cemetery that is under U.S. government 
jurisdiction. Veterans of the New Philippine Scouts are 
currently eligible for half of the burial benefit amounts 
provided to veterans of the U. S. armed forces. Under section 
17, veterans of the New Philippine Scouts would receive burial 
and plot allowances at the full rate if they are naturalized 
U.S. citizens living in the United States. Based on information 
provided by VA, CBO estimates that only a handful of these 
veterans would become eligible for the increase in burial 
benefits each year. Thus, CBO estimates that enacting section 
17 would have no significant effect on direct spending over the 
2004-2013 period.

    Forfeiture of Benefits for Subversive Activities. Under 
current law, a veteran who commits certain criminal acts loses 
eligibility for veterans' benefits that he would otherwise be 
due. Section 20 would include additional criminal acts that 
would cause a veteran to lose eligibility for veterans' 
benefits-specifically, criminal acts involving chemical, 
biological or nuclear weapons, genocide, and the murder of U.S. 
citizens outside of the United States. CBO estimates that any 
savings in direct spending that would result from not paying 
veterans who commit these crimes would be insignificant.
Direct Spending--Retirement Benefits
    Many retirees of the uniformed services have a Survivor 
Benefit Plan (SBP) premium payment deducted from their 
retirement annuity. The SBP was established in Public Law 92-
425 to create an opportunity for military retirees to provide 
annuities for their survivors. Under current law, survivors of 
disabled veterans who are retired from the military, the Coast 
Guard, Public Health Service, or the National Oceanic and 
Atmospheric Administration cannot receive both full SBP and DIC 
from VA. Because of this prohibition on concurrent receipt of 
these benefits, such survivors forgo a portion of their SBP 
annuity equal to the nontaxable DIC benefit. These survivors 
also receive a refund in premiums for the portion of the SBP 
annuity they chose to forgo to receive the nontaxable DIC 
benefit. If a survivor loses eligibility for DIC payments, he 
or she has the option to repay the refunded premiums to once 
again receive their full SBP annuity.
    Section 6 would allow surviving spouses who remarry after 
age 55 to continue receiving DIC payments that they would 
otherwise be ineligible for (see ``Retention of DIC for 
Remarried Spouses'' above). Surviving spouses who would gain 
eligibility for DIC under section 6 and who would as a result 
be eligible for both SBP and DIC would forgo that portion of 
their SBP annuity equal to the nontaxable DIC benefit. Thus, 
the enactment of section 6 would result in a savings in SBP 
payments for surviving spouses who under current law receive 
the full amount of their SBP payments.
    In comparison to current law, the full amount of these 
savings would be reduced because of changes in the amount of 
premium refunds and repayments. For the survivors whose 
remarriage occurred prior to enactment of this bill, these 
savings would be partially offset by the refunding of the 
premium payments for the portion of SBP that these survivors 
would forgo to receive DIC. CBO expects that their refund 
payments would occur in either 2004 or 2005, depending on how 
soon VA restarts their DIC benefit.
    Survivors who remarry after enactment of this legislation 
would continue receiving the same DIC and SBP payments as 
before their remarriage. If they remarry under current law, 
these survivors would become ineligible for DIC and would have 
to buy back their full SBP eligibility by repaying that portion 
of their premiums that had previously been refunded. Under 
section 6, these survivors would not repay the premiums because 
they would continue receiving SBP at the reduced rate. Thus, if 
section 6 were enacted, total SBP costs would increase by the 
amount that these survivors would not repay, and decrease by 
the amount of the DIC offset.
    Based on information provided by DoD and VA, CBO estimates 
that about 500 survivors would receive both DIC and a SBP 
annuity each year over the 2004-2013 period and that the 
average annual SBP offset would be $9,218 in 2004 which would 
increase over the 2005-2013 period for cost-of-living 
adjustments. After accounting for changes in SBP premium 
refunds and repayments, CBO estimates that enacting section 6 
would increase spending for retirement from the uniformed 
services by $1 million in 2004, but reduce spending for these 
benefits by $16 million over the 2004-2008 period and $43 
million over the 2004-2013 period (see table 2).
Direct Spending--Veterans' Readjustment Benefits
    H.R. 2297 contains several provisions that would affect 
direct spending for education benefits for veterans and their 
survivors and dependents, and for other readjustment benefits 
(see Table 4). Together, these provisions would increase 
spending by $6 million in 2004, $35 million over the 2004-2008 
period, and by $80 million over the 2004-2013 period.



                           TABLE 4. ESTIMATED CHANGES IN DIRECT SPENDING FOR VETERANS' READJUSTMENT BENEFITS UNDER H.R. 2297
                                                                                         By Fiscal Year, in Millions of Dollars
                   Description of Provisions                   -----------------------------------------------------------------------------------------
                                                                  2004     2005     2006     2007     2008     2009     2010     2011     2012     2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Automobile and Adaptive Equipment Grants......................        4        4        4        4        5        5        5        5        5        5
Adaptive Housing Grants.......................................        1        1        1        1        1        1        1        1        1        1
MGIB for Self-Employment......................................        1        2        2        2        2        3        3        3        3        3
Extend Chapter 35 for National Guard..........................       1        1        1        1        1        1        1        1        1        1
Repeal of Education Loan Program..............................       1         0        0        0        0        0        0        0        0        0
                                                               -----------------------------------------------------------------------------------------
  Total Changes in Veterans' Readjustment Benefits............        6        7        7        7        8        9        9        9        9        9
--------------------------------------------------------------------------------------------------------------------------------------------------------
NOTE: MGIB = Montgomery GI Bill.
1 = Less than $500,000.



    Automobile and Adaptive Equipment Grants. Section 10 would 
increase a benefit that helps eligible disabled veterans obtain 
suitable transportation. CBO estimates enacting this provision 
would increase direct spending for automobile grants and 
adaptive equipment by about $4 million in 2004, $21 million 
over the 2004-2008 period, and $46 million over the 2004-2013 
period.

    Automobile Grants.--Section 10 would increase, from $9,000 
to $11,000, the maximum amount of a grant available to eligible 
veterans for the purchase of an automobile or other vehicle. 
Veterans are eligible to receive this grant if, as a result of 
a service-connected injury or disease, they have lost the use 
of one or both hands (or feet), or have a severe vision 
impairment.

    Based on data provided by VA, CBO estimates that about 
1,100 veterans purchased automobiles in 2002 with the help of 
VA grants that averaged almost $9,000. Based on our analysis of 
the results of previous increases in this grant amount, CBO 
estimates that increasing the maximum grant amount to $11,000 
would raise the number of grants awarded to about 1,220, an 
increase of about 120 grants a year. Thus, CBO estimates that 
enacting this provision would increase outlays for automobile 
grants by about $3 million in 2004, $16 million over the 2004-
2008 period, and $36 million over the 2004-2013 period.

    Adaptive Equipment.--Veterans who receive automobile grants 
under the VA program are also entitled to receive the necessary 
adaptive equipment to enable them to safely operate their 
vehicles, and to have that equipment repaired or replaced as 
necessary. Based on current levels of expenditure, we estimate 
that providing adaptive equipment for about 120 extra vehicles 
a year would increase annual outlays by about $700,000, and 
that outlays would increase by close to $1 million a year in 
later years as these additional vehicles begin to return for 
repair or replacement of equipment. Thus, CBO estimates that 
providing and maintaining adaptive equipment for the extra 
vehicles purchased as a result of the benefit increase under 
section 10 would increase outlays by about $1 million in 2004, 
$5 million over the 2004-2008 period, and $10 million over the 
2004-2013 period.

    Adaptive Housing Grants. VA currently administers two grant 
programs to assist severely disabled veterans in acquiring 
housing that is adapted to their disabilities, or in modifying 
their existing housing. Under current law, veterans who are 
classified by VA as totally disabled and who have certain 
mobility limitations are entitled to receive housing grants of 
up to $48,000. Totally disabled veterans who are blind or have 
lost the use of their hands are entitled to receive grants of 
up to $9,250. Section 10 also would increase those grants to 
maximums of $50,000 and $10,000, respectively.

    According to VA, 678 veterans received housing grants 
averaging $36,586 in fiscal year 2002. Because the benefit 
increase is relatively small, and the criteria to receive these 
grants are highly restrictive, CBO expects that enacting 
section 10 would not result in a significant increase in the 
number of grants that would be awarded each year. CBO estimates 
that, under this provision, the grants would average about 
$39,000, increasing outlays by about $1 million annually.

    Montgomery GI Bill (MGIB) for Self-Employment Training.
    Section 2 would allow veterans to use their education 
benefits to receive on-the-job training for periods of less 
than six months, when that training is needed to obtain a 
license to engage in a self-employment occupation or is 
required for ownership and operation of a franchise. This 
provision would take effect six months after the bill's 
enactment. Under current law, these benefits are usually 
approved only for those on-the-job training programs that last 
a minimum of six months. Based on information from VA, CBO 
believes this expansion of education benefits would be used 
primarily by those seeking to own and operate a franchise. 
Franchise companies typically require prospective owners to 
undergo a four-to-six week program of on-the-job training.

    Based on information from the Department of Labor (DOL), 
CBO estimates that about 6,500 eligible veterans took self-
employment classes through Small Business Development Centers 
in 2002, and we assume that about 1,600 of these also completed 
five weeks of on-the-job training that is associated with the 
purchase of a franchise. Because the population eligible for 
and using MGIB is growing, we estimate this number will 
increase to about 2,000 by 2013. In 2004, the MGIB benefit will 
be $985 a month, or about $1,200 for a five-week period. Under 
current law, such payments are annually adjusted for increases 
in the cost of living. Thus, CBO estimates that enacting 
section 2 would increase direct spending for veterans' 
education benefits by about $1 million in 2004, $9 million over 
the 2004-2008 period, and $24 million over the 2004-2013 
period.

    Other Provisions Affecting Spending for Readjustment 
Benefits. The following provisions would have an insignificant 
budgetary impact on direct spending for readjustment benefits:

     LSection 3 would extend the period of eligibility 
for survivors and dependents education benefits for those 
members of the National Guard who are involuntarily ordered to 
full-time National Guard duty under section 502(f) of Title 32 
of the United States Code. This expanded eligibility would be 
retroactive to September 11, 2001. Based on information from VA 
and DoD, CBO estimates that very few National Guard members 
would be affected by this change and that the cost would be 
less than $500,000 over the 2004-2013 period.

     LSection 5 would repeal the Education Loan Program 
and forgive any remaining debts owed to the fund. No loans have 
been made through this fund in 10 years and the currently 
outstanding debt is about $120,000. Forgiving the remaining 
debt would constitute a loan modification, which would increase 
direct spending by less than $100,000.
Spending Subject to Appropriation
    Table 5 shows the estimated effects of H.R. 2297 on 
discretionary spending for veterans' programs. CBO estimates 
that implementing H.R. 2297 would increase discretionary 
spending for veterans benefits by $4 million in 2004 and $137 
million over the 2004-2008 period, assuming that the necessary 
amounts are appropriated.

    State Cemetery Grants. Current law authorizes VA to make 
grants to build and improve state veterans' cemeteries through 
fiscal year 2004, assuming appropriation of the necessary 
amounts. Section 8 would extend this authority indefinitely. 
CBO estimates that implementing this section would cost $107 
million over the 2005-2008 period, assuming appropriation of 
the necessary amounts.

    Transition Assistance Program (TAP). Servicemembers who are 
preparing to separate from the military are eligible to attend 
transition assistance workshops offered by the Department of 
Labor at military facilities in the United States and Puerto 
Rico. Section 19 would require TAP personnel or contractors to 
provide transition assistance, in person, at overseas bases. 
DoD projects about 20,000 separations a year at overseas bases. 
Based on information from DoD and DOL, CBO expects that, under 
section 19, DOL would offer about 600 overseas workshops a year 
at an average cost per workshop of about $2,500. CBO estimates 
that implementing section 19 would cost $1 million in 2004 and 
about $2 million a year thereafter, assuming that the necessary 
amounts are appropriated.

    Regional Office in Manila, Philippines. Section 18 would 
authorize VA to maintain the regional office located in Manila, 
Philippines, through December 31, 2009. Under current law, the 
authorization for this regional office will expire on December 
31, 2003. Based on information provided by VA, CBO estimates 
that implementing section 18 would cost $3 million in 2004 and 
$19 million over the 2004-2008, assuming appropriation of the 
necessary amounts.

    Spina Bifida Benefits. Under current law, children with 
spina bifida who were born to veterans of the Vietnam War are 
entitled to medical benefits administered by the Department of 
Veterans Affairs. Section 12 would expand eligibility for these 
benefits to children with spina bifida who were born to 
veterans who served in the demilitarized zone in the Republic 
of Korea between October 1967 and May 1975. Based on VA's 
experience with benefits for children with spina bifida born to 
Vietnam veterans, CBO estimates that less than 30 children with 
spina bifida would begin to receive benefits under section 12. 
According to VA, the average annual cost for providing medical 
benefits to these children was about $11,300 per child in 2002. 
Assuming appropriation of the estimated amounts, CBO estimates 
that implementing section 12 would cost less than $500,000 in 
2004 and about $2 million over the 2004-2008 period.




               TABLE 5. ESTIMATED CHANGES IN SPENDING SUBJECT TO APPROPRIATION UNDER H.R. 2297 a
                                                                        By Fiscal Year, in Millions of Dollars
                     Description of Provisions                      --------------------------------------------
                                                                       2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
State Cemetery Grants
  Estimated Budget Authority.......................................       33       33       34       35       35
  Estimated Outlays................................................        0       15       25       33       34
Transition Assistance Program
  Estimated Budget Authority.......................................        1        2        2        2        2
  Estimated Outlays................................................        1        2        2        2        2
Regional Office in Manila, Philippines
  Estimated Budget Authority.......................................        3        4        4        4        4
  Estimated Outlays................................................        3        4        4        4        4
Spina Bifida Benefits
  Estimated Budget Authority.......................................       1        1        1        1        1
  Estimated Outlays................................................       1        1        1        1        1
Other Provisions
  Estimated Budget Authority.......................................       1        1        1        1        1
  Estimated Outlays................................................       1        1        1        1        1
                                                                    --------------------------------------------
  Total Changes
    Estimated Budget Authority.....................................       37       39       40       41       41
    Estimated Outlays..............................................        4       21       31       39       40
----------------------------------------------------------------------------------------------------------------
a. Five-year costs in the text differ slightly from a summation of the annual costs shown here because of
  rounding.
1 = Less than $500,000.



    Other Provisions. The following provisions would have an 
insignificant impact on discretionary spending:

     LSection 4 would modify the charter of the 
Veterans' Advisory Committee on Education so that the committee 
would continue to operate until December 31, 2009. Based on 
information from the General Services Administration's Federal 
Advisory Committee Database, CBO estimates that implementing 
this provision would cost less than $100,000 a year over the 
2004-2010 period, assuming appropriation of the necessary 
amounts.

     LUnder current law, the VA provides DIC payments 
to the surviving spouse of certain deceased veterans. If a 
surviving spouse remarries, DIC payments cease. Should the 
subsequent marriage end, either due to divorce or death of the 
new spouse, DIC payments can resume. Section 6 would allow a 
surviving spouse who remarries after age 55 to continue 
receiving DIC payments. CBO estimates that enacting section 6 
would result in about 3,000 cases where a surviving spouses 
would apply to reinstate their DIC payments retroactively. CBO 
estimates that the costs for VA to process those additional 
applications would be less than $100,000 a year over the 2004-
2006 period, assuming appropriation of the necessary amounts.

     LUnder current law, surviving spouses of veterans 
lose eligibility for burial in a national cemetery if they 
remarry. Surviving spouses can only regain eligibility if the 
subsequent remarriage ends in death of the subsequent spouse or 
divorce. Section 7 would change the eligibility requirements 
for surviving spouses so that remarriage would not affect their 
eligibility for burial in a national cemetery. This provision 
would apply to deaths occurring on or after January 1, 2000. 
CBO estimates that the potential increase in costs resulting 
from an increased number of burials in national cemeteries 
would be insignificant.

     LU.S. veterans are eligible for burial in a 
national cemetery if they were discharged or separated from 
active duty under conditions other than dishonorable. Members 
of the armed forces who die on active duty and spouses and 
minor children of veterans are also eligible. Section 17 would 
extend this eligibility to veterans of the New Philippine 
Scouts and their dependents. Based on information provided by 
VA, CBO estimates that only a handful of these veterans and 
their dependents would request burial in a national cemetery 
each year. Thus, CBO estimates that this new eligibility would 
not lead to a significant increase in the number of burials in 
national cemeteries.
Intergovernmental and private-sector impact
    H.R. 2297 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would impose no costs on state, 
local, or tribal governments.
Previous cbo estimates
    On March 28, 2003, CBO transmitted a cost estimate for H.R. 
36, a bill to provide that remarriage of the surviving spouse 
of a deceased veteran after age 55 shall not result in 
termination of DIC otherwise payable to that surviving spouse, 
as introduced on January 7, 2003. Section 6 of H.R. 2297 would 
provide a one-year limit for VA to accept applications for 
reinstated DIC benefits. In contrast, H.R. 36 had no time limit 
for application for benefits. CBO's cost estimate for H.R. 36 
did not account for savings in military retirement programs 
that would occur as a result of both bills. These differences 
are reflected in the cost estimates for H.R. 36 and H.R. 2297.
    On April 3, 2003, CBO transmitted a cost estimate for H.R. 
533, the Agent Orange Veterans' Children's Benefits Act of 
2003, as introduced on February 5, 2003. Section 12 of H.R. 
2297 is similar to H.R. 533; however, CBO could not provide a 
specific estimate of costs for H.R. 533 because we were 
uncertain how VA would implement the bill. Because section 12 
is more specific regarding the expanded eligibility for 
benefits for children with spina bifida, CBO has provided an 
estimate of those costs for H.R. 2297.
    On May 19, 2003, CBO transmitted a cost estimate for H.R. 
1460, the Veterans Entrepreneurship and Benefits Improvement 
Act of 2003, as ordered reported by the House Committee on 
Veterans' Affairs on May 15, 2003. Section 15 of H.R. 2297 is 
similar to section 5 of H.R. 1460, as are the estimated 
savings.
    On May 19, 2003, CBO transmitted a cost estimate for H.R. 
1257, the Selected Reserve Home Loan Equity Act, as ordered 
reported by the House Committee on Veterans' Affairs on May 15, 
2003. Sections 13 and 14 of H.R. 2297 are similar to H.R. 1257, 
and the estimates of savings are also similar. Section 14 of 
H.R. 2297 would make further changes to loan fees, which would 
yield greater savings than estimated for H.R. 1257.On May 23, 
2003, CBO transmitted a cost estimate for H.R. 1838, a bill to 
revise the presumptions of service-connection relating to 
diseases and disabilities of former prisoners of war, as 
introduced on April 29, 2003. Section 11 of the bill is 
identical to H.R. 1838, as are the two estimates.
Estimate prepared by:
    Federal Costs:
          Housing: Sunita D'Monte (226-2840)
          Compensation: Melissa E. Zimmerman and Dwayne M. 
        Wright (226-2840)
          Retirement Benefits: Sarah T. Jennings and Melissa E. 
        Zimmerman (226-2840)
          Readjustment Benefits: Sarah T. Jennings (226-2840)
          Impact on State, Local, and Tribal Governments: 
        Melissa Merrell (225-3220)
          Impact on the Private Sector: Frances Lussier (226-
        2900)
Estimate approved by:
    Peter H. Fontaine

                     Statement of Federal Mandates

    The preceding Congressional Budget Office cost estimate 
states the bill contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act.

                 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.''

         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 italics, existing law in which no change 
is proposed is shown in roman):

TITLE 38, UNITED STATES CODE

           *       *       *       *       *       *       *


                       PART I--GENERAL PROVISIONS

CHAPTER                                                             Sec.
      General........................................................101
     * * * * * * *

                        PART II--GENERAL BENEFITS

      Compensation for Service-Connected Disability or Death........1101
     * * * * * * *
      Benefits for Children of Vietnam Veterans....................1802]
      Disability Benefits for Children of Vietnam Veterans and Other 18.
1801  Veterans Exposed to Herbicide Agents............................

           *       *       *       *       *       *       *


PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


CHAPTER 1--GENERAL

           *       *       *       *       *       *       *


Sec. 103. Special provisions relating to marriages

  (a) * * *

           *       *       *       *       *       *       *

  (d)(1) * * *
  (2)(A) * * *
  (B) The remarriage after age 55 of the surviving spouse of a 
veteran shall not bar the furnishing of benefits under section 
1311 or 1781 of this title to such person as the surviving 
spouse of the veteran.

           *       *       *       *       *       *       *


Sec. 107. Certain service deemed not to be active service

  (a) * * *
  (b) Service in the Philippine Scouts under section 14 of the 
Armed Forces Voluntary Recruitment Act of 1945 shall not be 
deemed to have been active military, naval, or air service for 
the purposes of any of the laws administered by the Secretary 
except--
          (1) * * *
          (2) chapters 11 [and], 13 (except section 1312(a)), 
        23, and 24 (to the extent provided for in section 
        2402(8)) of this title.

[Payments] Except as provided in subsection (c) or (d), 
payments under such chapters shall be made at a rate of $0.50 
for each dollar authorized, and where annual income is a factor 
in entitlement to benefits, the dollar limitations in the law 
specifying such annual income shall apply at a rate of $0.50 
for each dollar.
  (c) In the case of benefits under subchapters II and IV of 
chapter 11 of this title and subchapter II of chapter 13 
(except section 1312(a)) of this title paid by reason of 
service described in subsection (a) or (b) to an individual 
residing in the United States who is a citizen of, or an alien 
lawfully admitted for permanent residence in, the United 
States, the second sentence [of subsection (a)] of the 
applicable subsection shall not apply.
  (d)(1) With respect to benefits under chapter 23 of this 
title, in the case of an individual described in paragraph (2), 
the second sentence of subsection (a) or (b), as otherwise 
applicable, shall not apply.
  (2) Paragraph (1) applies to any individual whose service is 
described in subsection (a) and who dies after November 1, 
2000, or whose service is described in subsection (b) and who 
dies after the date of the enactment of the Veterans Benefits 
Act of 2003, if the individual, on the individual's date of 
death--
          (A) * * *

           *       *       *       *       *       *       *


CHAPTER 3--DEPARTMENT OF VETERANS AFFAIRS

           *       *       *       *       *       *       *


Sec. 315. Regional offices

  (a) * * *
  (b) The Secretary may maintain a regional office in the 
Republic of the Philippines until December 31, [2003] 2009.

           *       *       *       *       *       *       *


                       PART II--GENERAL BENEFITS

CHAPTER                                                             Sec.
      Compensation for Service-Connected Disability or Death........1101
     * * * * * * *
      Benefits for Children of Vietnam Veterans....................1802]
      Disability Benefits for Children of Vietnam Veterans and Other 18.
        Veterans Exposed to Herbicide Agents........................1801
     * * * * * * *

CHAPTER 11--COMPENSATION FOR SERVICE-CONNECTED DISABILITY OR DEATH

           *       *       *       *       *       *       *


SUBCHAPTER II--WARTIME DISABILITY COMPENSATION

           *       *       *       *       *       *       *


Sec. 1112. Presumptions relating to certain diseases and disabilities

  (a) * * *
  [(b) For the purposes of section 1110 of this title and 
subject to the provisions of section 1113 of this title, in the 
case of a veteran who is a former prisoner of war and who was 
detained or interned for not less than thirty days, the disease 
of--
          [(1) avitaminosis,
          [(2) beriberi (including beriberi heart disease),
          [(3) chronic dysentery,
          [(4) helminthiasis,
          [(5) malnutrition (including optic atrophy associated 
        with malnutrition),
          [(6) pellagra,
          [(7) any other nutritional deficiency,
          [(8) psychosis,
          [(9) any of the anxiety states,
          [(10) dysthymic disorder (or depressive neurosis),
          [(11) organic residuals of frostbite, if the 
        Secretary determines that the veteran was interned in 
        climatic conditions consistent with the occurrence of 
        frostbite,
          [(12) post-traumatic osteoarthritis,
          [(13) peripheral neuropathy except where directly 
        related to infectious causes,
          [(14) irritable bowel syndrome, or
          [(15) peptic ulcer disease,

which became manifest to a degree of 10 percent or more after 
active military, naval, or air service shall be considered to 
have been incurred in or aggravated by such service, 
notwithstanding that there is no record of such disease during 
the period of service.]
  (b)(1) For the purposes of section 1110 of this title and 
subject to the provisions of section 1113 of this title, in the 
case of a veteran who is a former prisoner of war--
          (A) a disease specified in paragraph (2) shall be 
        considered to have been incurred in or aggravated by 
        such service, notwithstanding that there is no record 
        of such disease during the period of service; and
          (B) if the veteran was detained or interned as a 
        prisoner of war for not less than thirty days, a 
        disease specified in paragraph (3) which became 
        manifest to a degree of 10 percent or more after active 
        military, naval, or air service shall be considered to 
        have been incurred in or aggravated by such service, 
        notwithstanding that there is no record of such disease 
        during the period of service.
  (2) The diseases specified in this paragraph are the 
following:
          (A) Psychosis.
          (B) Any of the anxiety states.
          (C) Dysthymic disorder (or depressive neurosis).
          (D) Organic residuals of frostbite, if the Secretary 
        determines that the veteran was interned in climatic 
        conditions consistent with the occurrence of frostbite.
          (E) Post-traumatic osteoarthritis.
  (3) The diseases specified in this paragraph are the 
following:
          (A) Avitaminosis.
          (B) Beriberi (including beriberi heart disease).
          (C) Chronic dysentery.
          (D) Helminthiasis.
          (E) Malnutrition (including optic atrophy associated 
        with malnutrition).
          (F) Pellagra.
          (G) Any other nutritional deficiency.
          (H) Cirrhosis of the liver.
          (I) Peripheral neuropathy except where directly 
        related to infectious causes.
          (J) Irritable bowel syndrome.
          (K) Peptic ulcer disease.

           *       *       *       *       *       *       *


CHAPTER 13--DEPENDENCY AND INDEMNITY COMPENSATION FOR SERVICE-CONNECTED 
DEATHS

           *       *       *       *       *       *       *


SUBCHAPTER III--CERTIFICATIONS

           *       *       *       *       *       *       *


Sec. 1322. Certifications with respect to social security entitlement

  (a) Determinations required by section 1312(a) of this title 
(other than a determination required by section 1312(a)(2) of 
this title) as to whether any survivor described in section 
1312(a)(3) of this title of a deceased individual would be 
entitled to benefits under section 202 of the Social Security 
Act (42 U.S.C. 402) for any month and as to the amount of the 
benefits which would be paid for such month, if the deceased 
veteran had been a fully and currently insured individual at 
the time of such veteran's death, shall be made by the 
[Secretary of Health and Human Services, and shall be certified 
by such Secretary to the Secretary of Veterans Affairs upon 
request of the Secretary of Veterans Affairs.] Commissioner of 
Social Security, and shall be certified by the Commissioner to 
the Secretary upon request of the Secretary.
  (b) The Secretary shall pay to the [Secretary of Health and 
Human Services] Commissioner of Social Security an amount equal 
to the costs which will be incurred in making determinations 
and certifications under subsection (a). Such payments shall be 
made with respect to the costs incurred during such period (but 
not shorter than a calendar quarter) as [the two Secretaries] 
the Secretary and the Commissioner may prescribe, with the 
amount of such payments to be made on the basis of estimates 
made by the [Secretary of Health and Human Services] 
Commissioner after consultation with the Secretary. The amount 
payable for any period shall be increased or reduced to 
compensate for any underpayment or overpayment, as the case may 
be, of the costs incurred in any preceding period.

           *       *       *       *       *       *       *


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

           *       *       *       *       *       *       *


SUBCHAPTER II--VETERANS' PENSIONS

           *       *       *       *       *       *       *


non-service-connected disability pension

           *       *       *       *       *       *       *


Sec. 1524. Vocational training for certain pension recipients

  (a)(1) In the case of a veteran under age 45 who is awarded a 
pension during the program period, the Secretary shall, based 
on information on file with the Department [of Veterans 
Affairs], make a preliminary finding whether such veteran, with 
the assistance of a vocational training program under this 
section, has a good potential for achieving employment. If such 
potential is found to exist, the Secretary shall solicit from 
the veteran an application for vocational training under this 
section. If the veteran thereafter applies for such training, 
the Secretary shall provide the veteran with an evaluation, 
which may include a personal interview, to determine whether 
the achievement of a vocational goal is reasonably feasible.
  (2) If a veteran who is 45 years of age or older and is 
awarded pension during the program period, or a veteran who was 
awarded pension before the beginning of the program period, 
applies for vocational training under this section and the 
Secretary makes a preliminary finding on the basis of 
information in the application that, with the assistance of a 
vocational training program under subsection (b) [of this 
section], the veteran has a good potential for achieving 
employment, the Secretary shall provide the veteran with an 
evaluation in order to determine whether the achievement of a 
vocational goal by the veteran is reasonably feasible. Any such 
evaluation shall include a personal interview by a Department 
employee trained in vocational counseling.
  (3) For the purposes of this section, the term ``program 
period'' means [the period beginning on February 1, 1985, and 
ending on December 31, 1995] the five-year period beginning on 
the date of the enactment of the Veterans Benefits Act of 2003.
  (b)(1) If the Secretary, based upon an evaluation under 
subsection (a) [of this section], determines that the 
achievement of a vocational goal by a veteran is reasonably 
feasible, the veteran shall be offered and may elect to pursue 
a vocational training program under this subsection. If the 
veteran elects to pursue such a program, the program shall be 
designed in consultation with the veteran in order to meet the 
veteran's individual needs and shall be set forth in an 
individualized written plan of vocational rehabilitation of the 
kind described in section 3107 of this title.

           *       *       *       *       *       *       *

  (4) A veteran may not begin pursuit of a vocational training 
program under this subsection after the later of (A) [December 
31, 1995] the end of the program period, or (B) the end of a 
reasonable period of time, as determined by the Secretary, 
following either the evaluation of the veteran under subsection 
(a) [of this section] or the award of pension to the veteran as 
described in subsection (a)(2) [of this section]. Any 
determination by the Secretary of such a reasonable period of 
time shall be made pursuant to regulations which the Secretary 
shall prescribe.
  (c) In the case of a veteran who has been determined to have 
a permanent and total non-service-connected disability and who, 
not later than one year after the date the veteran's 
eligibility for counseling under subsection (b)(3) [of this 
section] expires, secures employment within the scope of a 
vocational goal identified in the veteran's individualized 
written plan of vocational rehabilitation (or in a related 
field which requires reasonably developed skills and the use of 
some or all of the training or services furnished the veteran 
under such plan), the evaluation of the veteran as having a 
permanent and total disability may not be terminated by reason 
of the veteran's capacity to engage in such employment until 
the veteran first maintains such employment for a period of not 
less than 12 consecutive months.
  (d) A veteran who pursues a vocational training program under 
subsection (b) [of this section] shall have the benefit of the 
provisions of subsection (a) of section 1525 of this title 
beginning at such time as the veteran's entitlement to pension 
is terminated by reason of income from work or training (as 
defined in subsection (b)(1) of that section) without regard to 
the date on which the veteran's entitlement to pension is 
terminated.
  (e) Payments by the Secretary for education, training, and 
other services and assistance under subsection (b) [of this 
section] (other than the services of Department employees) 
shall be made from the Department appropriations account from 
which payments for pension are made.
  (f) The Secretary shall ensure that the availability of 
vocational training under this section is made known through a 
variety of means, including the Internet and announcements in 
Department publications and other veterans' publications.
  (g) Not later than two years after the date of the enactment 
of the Veterans Benefits Act of 2003, and each year thereafter, 
the Secretary shall submit to the Committees on Veterans' 
Affairs of the Senate and House of Representatives a report on 
the operation of this section. The report shall set forth an 
evaluation of the vocational training provided under this 
section for the period involved, and shall include an analysis 
of the cost-effectiveness of the vocational training provided 
under this section as well as data on the entered-employment 
rate of veterans pursuing such vocational training.

           *       *       *       *       *       *       *


         [CHAPTER 18--BENEFITS FOR CHILDREN OF VIETNAM VETERANS

   [SUBCHAPTER I--CHILDREN OF VIETNAM VETERANS BORN WITH SPINA BIFIDA]

 CHAPTER 18--DISABILITY BENEFITS FOR CHILDREN OF VIETNAM VETERANS AND 
               OTHER VETERANS EXPOSED TO HERBICIDE AGENTS

              SUBCHAPTER I--CHILDREN BORN WITH SPINA BIFIDA

Sec.
1801.    Persons eligible for benefits.
1802.    Spina bifida conditions covered.
     * * * * * * *

  [SUBCHAPTER I--CHILDREN OF VIETNAM VETERANS BORN WITH SPINA BIFIDA]

             SUBCHAPTER I--CHILDREN BORN WITH SPINA BIFIDA

Sec. 1801. Persons eligible for benefits

  An individual is an eligible child for purposes of this 
subchapter if the individual is suffering from spina bifida and 
is--
          (1) a child as defined in section 1821(1) of this 
        title; or
          (2) the natural child, regardless of age or marital 
        status, of a parent who during the period beginning on 
        October 1 1967, and ending on May 7 1975, performed 
        active military, naval, or air service in the Republic 
        of Korea in the area between the south line of the 
        Demilitarized Zone and a line five miles south of the 
        Civilian Control Line established with respect to the 
        Demilitarized Zone, but only if the individual was 
        conceived after the parent performed such service.

           *       *       *       *       *       *       *


Sec. 1803. Health care

  (a) In accordance with regulations which the Secretary shall 
prescribe, the Secretary shall provide [a child of a Vietnam 
veteran who is suffering from spina bifida] an eligible child 
with such health care as the Secretary determines is needed by 
the child for the spina bifida or any disability that is 
associated with such condition.

           *       *       *       *       *       *       *


Sec. 1804. Vocational training and rehabilitation

  (a) Pursuant to such regulations as the Secretary may 
prescribe, the Secretary may provide vocational training under 
this section to [a child of a Vietnam veteran who is suffering 
from spina bifida] an eligible child if the Secretary 
determines that the achievement of a vocational goal by such 
child is reasonably feasible.

           *       *       *       *       *       *       *


Sec. 1805. Monetary allowance

  (a) The Secretary shall pay a monthly allowance under this 
chapter to [any child of a Vietnam veteran] any eligible child 
for any disability resulting from spina bifida suffered by such 
child.

           *       *       *       *       *       *       *


CHAPTER 21--SPECIALLY ADAPTED HOUSING FOR DISABLED VETERANS

           *       *       *       *       *       *       *


Sec. 2102. Limitations on assistance furnished

  (a) The assistance authorized by section 2101(a) of this 
title shall be limited in the case of any veteran to one 
housing unit, and necessary land therefor, and shall be 
afforded under one of the following plans, at the option of the 
veteran but shall not exceed [$48,000] $50,000 in any one 
case--
          (1) * * *

           *       *       *       *       *       *       *

  (b) Except as provided in section 2104(b) of this title, the 
assistance authorized by section 2101(b) of this title shall be 
limited to the lesser of--
          (1) * * *
          (2) [$9,250] $10,000.

           *       *       *       *       *       *       *


CHAPTER 24--NATIONAL CEMETERIES AND MEMORIALS

           *       *       *       *       *       *       *


Sec. 2402. Persons eligible for interment in national cemeteries

  Under such regulations as the Secretary may prescribe and 
subject to the provisions of section 6105 of this title, the 
remains of the following persons may be buried in any open 
national cemetery under the control of the National Cemetery 
Administration:
          (1) * * *

           *       *       *       *       *       *       *

          (5) The spouse, surviving spouse [(which for purposes 
        of this chapter includes an unremarried surviving 
        spouse who had a subsequent remarriage which was 
        terminated by death or divorce)] (which for purposes of 
        this chapter includes a surviving spouse who had a 
        subsequent remarriage), minor child (which for purposes 
        of this chapter includes a child under 21 years of age, 
        or under 23 years of age if pursuing a course of 
        instruction at an approved educational institution), 
        and, in the discretion of the Secretary, unmarried 
        adult child of any of the persons listed in paragraphs 
        (1) through (4) and paragraph (7).

           *       *       *       *       *       *       *

          (8) Any individual whose service is described in 
        [section 107(a)] subsection (a) or (b) of section 107 
        of this title if such individual at the time of death--
                  (A) * * *

           *       *       *       *       *       *       *


Sec. 2408. Aid to States for establishment, expansion, and improvement 
                    of veterans' cemeteries

  (a)(1) * * *
  (2) There is authorized to be appropriated such sums as may 
be necessary [for fiscal year 1999 and for each succeeding 
fiscal year through fiscal year 2004] for the purpose of making 
grants under paragraph (1). Funds appropriated under the 
preceding sentence shall remain available until expended.

           *       *       *       *       *       *       *


PART III--READJUSTMENT AND RELATED BENEFITS

           *       *       *       *       *       *       *


CHAPTER 34--VETERANS' EDUCATIONAL ASSISTANCE

           *       *       *       *       *       *       *


SUBCHAPTER I--PURPOSE; DEFINITIONS

           *       *       *       *       *       *       *


Sec. 3452. Definitions

  For the purposes of this chapter and chapter 36 of this 
title--
  (a) * * *

           *       *       *       *       *       *       *

  (e) The term ``training establishment'' [means any 
establishment providing apprentice or other training on the 
job, including those under the supervision of a college or 
university or any State department of education, or any State 
apprenticeship agency, or any State board of vocational 
education, or any joint apprenticeship committee, or the Bureau 
of Apprenticeship and Training established pursuant to the Act 
of August 16, 1937, popularly known as the ``National 
Apprenticeship Act'' (29 U.S.C. 50 et seq.), or any agency of 
the Federal Government authorized to supervise such training.] 
means any of the following:
          (1) An establishment providing apprentice or other 
        training on the job, including those under the 
        supervision of a college or university or any State 
        department of education.
          (2) An establishment providing self-employment on-job 
        training consisting of full-time training for a period 
        of less than six months that is needed or accepted for 
        purposes of obtaining licensure to engage in a self-
        employment occupation or required for ownership and 
        operation of a franchise that is the objective of the 
        training.
          (3) A State board of vocational education.
          (4) A Federal or State apprenticeship registration 
        agency.
          (5) A joint apprenticeship committee established 
        pursuant to the Act of August 16, 1937, popularly known 
        as the ``National Apprenticeship Act'' (29 U.S.C. 50 et 
        seq.).
          (6) An agency of the Federal Government authorized to 
        supervise such training.

           *       *       *       *       *       *       *


SUBCHAPTER II--ELIGIBILITY AND ENTITLEMENT

           *       *       *       *       *       *       *


Sec. 3462. Time limitations for completing a program of education

                    Delimiting Period for Completion

  (a)(1) * * *
  [(2)(A) Notwithstanding the provisions of paragraph (1) of 
this subsection, any veteran shall be permitted to use any of 
such veteran's unused entitlement under section 3461 of this 
title for the purposes of eligibility for an education loan, 
pursuant to the provisions of subchapter III of chapter 36 of 
this title, after the delimiting date otherwise applicable to 
such veteran under such paragraph (1), if such veteran was 
pursuing an approved program of education on a full-time basis 
at the time of the expiration of such veteran's eligibility.
  [(B) Notwithstanding any other provision of this chapter or 
chapter 36 of this title, any veteran whose delimiting period 
is extended under subparagraph (A) of this paragraph may 
continue to use any unused loan entitlement under this 
paragraph as long as the veteran continues to be enrolled on a 
full-time basis in pursuit of the approved program of education 
in which such veteran was enrolled at the time of expiration of 
such veteran's eligibility (i) until such entitlement is 
exhausted, (ii) until the expiration of two years after 
November 23, 1977, or the date of the expiration of the 
delimiting date otherwise applicable to such veteran under 
paragraph (1) of this subsection, whichever is later, or (iii) 
until such veteran has completed the approved program of 
education in which such veteran was enrolled at the end of the 
delimiting period referred to in paragraph (1) of this 
subsection, whichever occurs first.]

           *       *       *       *       *       *       *


SUBCHAPTER IV--PAYMENTS TO ELIGIBLE VETERANS; VETERAN-STUDENT SERVICES

           *       *       *       *       *       *       *


Sec. 3485. Work-study allowance

  (a) * * *

           *       *       *       *       *       *       *

  (e)(1) Subject to paragraph (2) of this subsection, the 
Secretary may, notwithstanding any other provision of law, 
enter into an agreement with an individual under this section, 
or a modification of such an agreement, whereby the individual 
agrees to perform services of the kind described in clauses (A) 
through (E) of subsection (a)(1) of this section and agrees 
that the Secretary shall, in lieu of paying the work-study 
allowance payable for such services, as provided in subsection 
(a) of this section, deduct the amount of the allowance from 
the amount which the individual has been determined to be 
indebted to the United States by virtue of such individual's 
participation in a benefits program under this chapter, chapter 
30, 31, 32, 35, or 36 [(other than an education loan under 
subchapter III)] of this title, or chapter 106 of title 10 
(other than an indebtedness arising from a refund penalty 
imposed under section 2135 of such title).

           *       *       *       *       *       *       *


CHAPTER 35--SURVIVORS' AND DEPENDENTS' EDUCATIONAL ASSISTANCE

           *       *       *       *       *       *       *


SUBCHAPTER II--ELIGIBILITY AND ENTITLEMENT

           *       *       *       *       *       *       *


Sec. 3512. Periods of eligibility

  (a) * * *

           *       *       *       *       *       *       *

  [(f) Any eligible person (as defined in section 
3501(a)(1)(B), (C), or (D) of this chapter) shall be entitled 
to an additional period of eligibility for an education loan 
under subchapter III of chapter 36 of this title beyond the 
maximum period provided for in this section pursuant to the 
same terms and conditions set forth with respect to an eligible 
veteran in section 3462(a)(2) of this title.]

           *       *       *       *       *       *       *

  (h) Notwithstanding any other provision of this section, if 
an eligible person, during the delimiting period otherwise 
applicable to such person under this section, serves on active 
duty pursuant to an order to active duty issued under section 
688, 12301(a), 12301(d), 12301(g), 12302, or 12304 of title 10, 
or is involuntarily ordered to full-time National Guard duty 
under section 502(f) of title 32, such person shall be granted 
an extension of such delimiting period for the length of time 
equal to the period of such active duty plus four months.

           *       *       *       *       *       *       *


           CHAPTER 36--ADMINISTRATION OF EDUCATIONAL BENEFITS

                 subchapter i--state approving agencies

Sec.
3670.    Scope of approval.
     * * * * * * *

                    [subchapter iii--education loans

[3698.    Eligibility for loans; amount and conditions of loans; 
          interest rate on loans.
[3699.    Revolving fund; insurance.]

           *       *       *       *       *       *       *


SUBCHAPTER II--MISCELLANEOUS PROVISIONS

           *       *       *       *       *       *       *


Sec. 3692. Advisory committee

  (a) There shall be a Veterans' Advisory Committee on 
Education formed by the Secretary which shall be composed of 
persons who are eminent in their respective fields of 
education, labor, and management and of representatives of 
institutions and establishments furnishing education to 
eligible veterans or persons enrolled under chapter 30, 32, or 
35 of this title and chapter [106] 1606 of title 10. The 
committee shall also include veterans representative of [World 
War II, the Korean conflict era, the post-Korean conflict era,] 
the Vietnam era, the post-Vietnam era, and the Persian Gulf 
War. The Assistant Secretary of Education for Postsecondary 
Education (or such other comparable official of the Department 
of Education as the Secretary of Education may designate) and 
the Assistant Secretary of Labor for Veterans' Employment and 
Training shall be ex officio members of the advisory committee.
  (b) The Secretary shall consult with and seek the advice of 
the committee from time to time with respect to the 
administration of this chapter, chapter 30, 32, and 35 of this 
title, and chapter [106] 1606 of title 10. The committee may 
make such reports and recommendations as it considers desirable 
to the Secretary and the Congress.
  (c) The committee shall remain in existence until December 
31, [2003] 2009.

           *       *       *       *       *       *       *


                    [SUBCHAPTER III--EDUCATION LOANS

[Sec. 3698. Eligibility for loans; amount and conditions of loans; 
                    interest rate on loans

  [(a)(1) Subject to paragraph (2) of this subsection, each 
eligible veteran shall be entitled to a loan under this 
subchapter (if the program of education is pursued in a State) 
in an amount determined under, and subject to the conditions 
specified in, subsection (b)(1) of this section if the veteran 
satisfies the requirements set forth in subsection (c) of this 
section and the criteria established under subsection (g) of 
this section.
  [(2) Except in the case of a veteran to whom section 
3462(a)(2) of this title is applicable, no loan may be made 
under this subchapter after September 30, 1981.
  [(b)(1) Subject to paragraph (3) of this subsection, the 
amount of the loan to which an eligible veteran shall be 
entitled under this subchapter for any academic year shall be 
equal to the amount needed by such veteran to pursue a program 
of education at the institution at which the veteran is 
enrolled, as determined under paragraph (2) of this subsection.
  [(2)(A) The amount needed by a veteran to pursue a program of 
education at an institution for any academic year shall be 
determined by subtracting (i) the total amount of financial 
resources (as defined in subparagraph (B) of this paragraph) 
available to the veteran which may be reasonably expected to be 
expended by such veteran for educational purposes in any year 
from (ii) the actual cost of attendance (as defined in 
subparagraph (C) of this paragraph) at the institution in which 
such veteran is enrolled.
  [(B) The term ``total amount of financial resources'' of any 
veteran for any year means the total of the following:
          [(i) The annual adjusted effective income of the 
        veteran less Federal income tax paid or payable by such 
        veteran with respect to such income.
          [(ii) The amount of cash assets of the veteran.
          [(iii) The amount of financial assistance received by 
        the veteran under the provisions of title IV of the 
        Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).
          [(iv) Educational assistance received by the veteran 
        under this title other than under this subchapter.
          [(v) Financial assistance received by the veteran 
        under any scholarship or grant program other than those 
        specified in clauses (iii) and (iv).
  [(C) The term ``actual cost of attendance'' means, subject to 
such regulations as the Secretary may provide, the actual per-
student charges for tuition, fees, room and board (or expenses 
related to reasonable commuting), books, and an allowance for 
such other expenses as the Secretary determines by regulation 
to be reasonably related to attendance at the institution at 
which the veteran is enrolled.
  [(3) The aggregate of the amounts any veteran may borrow 
under this subchapter may not exceed $376 multiplied by the 
number of months such veteran is entitled to receive 
educational assistance under section 3461 of this title, but 
not in excess of $2,500 in any one regular academic year.
  [(c) An eligible veteran shall be entitled to a loan under 
this subchapter if such veteran--
          [(1) is in attendance at an educational institution 
        on at least a half-time basis and (A) is enrolled in a 
        course leading to a standard college degree, or (B) is 
        enrolled in a course, the completion of which requires 
        six months or longer, leading to an identified and 
        predetermined professional or vocational objective, 
        except that the Secretary may waive the requirements of 
        subclause (B) of this clause, in whole or in part, if 
        the Secretary determines, pursuant to regulations which 
        the Secretary shall prescribe, it to be in the interest 
        of the eligible veteran and the Federal Government;
          [(2) enters into an agreement with the Secretary 
        meeting the requirements of subsection (d) of this 
        section; and
          [(3) satisfies any criteria established under 
        subsection (g) of this section.
No loan shall be made under this subchapter to an eligible 
veteran pursuing a program of correspondence, or apprenticeship 
or other on-job training.
  [(d) Any agreement between the Secretary and a veteran under 
this subchapter--
          [(1) shall include a note or other written obligation 
        which provides for repayment to the Secretary of the 
        principal amount of, and payment of interest on, the 
        loan in installments (A) over a period beginning nine 
        months after the date on which the borrower ceases to 
        be at least a half-time student and ending ten years 
        and nine months after such date, or (B) over such 
        shorter period as the Secretary may have prescribed 
        under subsection (g) of this section;
          [(2) shall include provision for acceleration of 
        repayment of all or any part of the loan, without 
        penalty, at the option of the borrower;
          [(3) shall provide that the loan shall bear interest, 
        on the unpaid balance of the loan, at a rate prescribed 
        by the Secretary, at the time the loan is contracted 
        for which rate shall be comparable to the rate of 
        interest charged students at such time on loans insured 
        by the Secretary of Education under part B of title IV 
        of the Higher Education Act of 1965, but in no event 
        shall the rate so prescribed by the Secretary exceed 
        the rate charged students on such insured loans, and 
        shall provide that no interest shall accrue prior to 
        the beginning date of repayment; and
          [(4) shall provide that the loan shall be made 
        without security and without endorsement.
  [(e)(1) Except as provided in paragraph (2) of this 
subsection, whenever the Secretary determines that a default 
has occurred on any loan made under this subchapter, the 
Secretary shall declare an overpayment, and such overpayment 
shall be recovered from the veteran concerned in the same 
manner as any other debt due the United States.
  [(2) If a veteran who has received a loan under this section 
dies or becomes permanently and totally disabled, then the 
Secretary shall discharge the veteran's liability on such loan 
by repaying the amount owed on such loan.
  [(f) Payment of a loan made under this section shall be drawn 
in favor of the eligible veteran and mailed promptly to the 
educational institution in which such veteran is enrolled. Such 
institution shall deliver such payment to the eligible veteran 
as soon as practicable after receipt thereof. Upon delivery of 
such payment to the eligible veteran, such educational 
institution shall promptly submit to the Secretary a 
certification, on such form as the Secretary shall prescribe, 
of such delivery, and such delivery shall be deemed to be an 
advance payment under section 3680(d)(4) of this title for 
purposes of section 3684(b) of this title.
  [(g)(1) The Secretary shall conduct, on a continuing basis, a 
review of the default experience with respect to loans made 
under this section.
  [(2)(A) To ensure that loans are made under this section on 
the basis of financial need directly related to the costs of 
education, the Secretary may, by regulation, establish (i) 
criteria for eligibility for such loans, in addition to the 
criteria and requirements prescribed by subsections (c) and (d) 
of this section, in order to limit eligibility for such loans 
to eligible veterans attending educational institutions with 
relatively high rates of tuition and fees, and (ii) criteria 
under which the Secretary may prescribe a repayment period for 
certain types of loans made under this section that is shorter 
than the repayment period otherwise applicable under subsection 
(d)(1)(A) of this section. Criteria established by the 
Secretary under clause (i) of the preceding sentence may 
include a minimum amount of tuition and fees that an eligible 
veteran may pay in order to be eligible for such a loan (except 
that any such criterion shall not apply with respect to a loan 
for which the veteran is eligible as a result of an extension 
of the period of eligibility of such veteran for loans under 
this section provided for by section 3462(a)(2) of this title).
  [(B) In prescribing regulations under subparagraph (A) of 
this paragraph, the Secretary shall take into consideration 
information developed in the course of the review required by 
paragraph (1) of this subsection.
  [(C) Regulations may be prescribed under subparagraph (A) of 
this paragraph only after opportunity has been afforded for 
public comment thereon.

[Sec. 3699. Revolving fund; insurance

  [(a) There is hereby established in the Treasury of the 
United States a revolving fund to be known as the ``Department 
of Veterans Affairs Education Loan Fund'' (hereinafter in this 
section referred to as the ``Fund'').
  [(b) The Fund shall be available to the Secretary, without 
fiscal year limitation, for the making of loans under this 
subchapter.
  [(c) There shall be deposited in the Fund (1) by transfer 
from current and future appropriations for readjustment 
benefits such amounts as may be necessary to establish and 
supplement the Fund in order to meet the requirements of the 
Fund, and (2) all collections of fees and principal and 
interest (including overpayments declared under section 3698(e) 
of this title) on loans made under this subchapter.
  [(d) The Secretary shall determine annually whether there has 
developed in the Fund a surplus which, in the Secretary's 
judgment, is more than necessary to meet the needs of the Fund, 
and such surplus, if any, shall be deemed to have been 
appropriated for readjustment benefits.
  [(e) A fee shall be collected from each veteran or person 
obtaining a loan made under this subchapter for the purpose of 
insuring against defaults on loans made under this subchapter; 
and no loan shall be made under this subchapter until the fee 
payable with respect to such loan has been collected and 
remitted to the Secretary. The amount of the fee shall be 
established from time to time by the Secretary, but shall in no 
event exceed 3 percent of the total loan amount. The amount of 
the fee may be included in the loan to the veteran or person 
and paid from the proceeds thereof.]

           *       *       *       *       *       *       *


CHAPTER 37--HOUSING AND SMALL BUSINESS LOANS

           *       *       *       *       *       *       *


SUBCHAPTER I--GENERAL

           *       *       *       *       *       *       *


Sec. 3702. Basic entitlement

  (a)(1) * * *
  (2) The veterans referred to in the first sentence of 
paragraph (1) of this subsection are the following:
          (A) * * *

           *       *       *       *       *       *       *

          (E) [For the period beginning on October 28, 1992, 
        and ending on September 30, 2009, each] Each veteran 
        described in section 3701(b)(5) of this title.

           *       *       *       *       *       *       *


SUBCHAPTER III--ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *


Sec. 3729. Loan fee

  (a) * * *
  (b) Determination of Fee.--(1) * * *
  [(2) The loan fee table referred to in paragraph (1) is as 
follows:

                             [LOAN FEE TABLE
------------------------------------------------------------------------
                                 Active duty                    Other
         Type of loan              veteran      Reservist      obligor
------------------------------------------------------------------------
(A)(i) Initial loan described          2.00          2.75            NA
 in section 3710(a) to
 purchase or construct a
 dwelling with 0-down, or any
 other initial loan described
 in section 3710(a) other than
 with 5-down or 10-down
 (closed before October 1,
 2011)........................
------------------------------------------------------------------------
(A)(ii) Initial loan described         1.25          2.00            NA
 in section 3710(a) to
 purchase or construct a
 dwelling with 0-down, or any
 other initial loan described
 in section 3710(a) other than
 with 5-down or 10-down
 (closed on or after October
 1, 2011).....................
------------------------------------------------------------------------
(B)(i) Subsequent loan                 3.00          3.00            NA
 described in section 3710(a)
 to purchase or construct a
 dwelling with 0-down, or any
 other subsequent loan
 described in section 3710(a)
 (closed before October 1,
 2011)........................
------------------------------------------------------------------------
(B)(ii) Subsequent loan                1.25          2.00            NA
 described in section 3710(a)
 to purchase or construct a
 dwelling with 0-down, or any
 other subsequent loan
 described in section 3710(a)
 (closed on or after October
 1, 2011).....................
------------------------------------------------------------------------
(C)(i) Loan described in               1.50          2.25            NA
 section 3710(a) to purchase
 or construct a dwelling with
 5-down (closed before October
 1, 2011).....................
------------------------------------------------------------------------
(C)(ii) Loan described in              0.75          1.50            NA
 section 3710(a) to purchase
 or construct a dwelling with
 5-down (closed on or after
 October 1, 2011).............
------------------------------------------------------------------------
(D)(i) Initial loan described          1.25          2.00            NA
 in section 3710(a) to
 purchase or construct a
 dwelling with 10-down (closed
 before October 1, 2011)......
------------------------------------------------------------------------
(D)(ii) Initial loan described         0.50          1.25            NA
 in section 3710(a) to
 purchase or construct a
 dwelling with 10-down (closed
 on or after October 1, 2011).
------------------------------------------------------------------------
(E) Interest rate reduction            0.50          0.50            NA
 refinancing loan.............
------------------------------------------------------------------------
(F) Direct loan under section          1.00          1.00            NA
 3711.........................
------------------------------------------------------------------------
(G) Manufactured home loan             1.00          1.00            NA
 under section 3712 (other
 than an interest rate
 reduction refinancing loan)..
------------------------------------------------------------------------
(H) Loan to Native American            1.25          1.25            NA
 veteran under section 3762
 (other than an interest rate
 reduction refinancing loan)..
------------------------------------------------------------------------
(I) Loan assumption under              0.50          0.50          0.50
 section 3714.................
------------------------------------------------------------------------
(J) Loan under section 3733(a)         2.25          2.25         2.25]
------------------------------------------------------------------------

  (2) The loan fee table referred to in paragraph (1) is as 
follows:

                             LOAN FEE TABLE
------------------------------------------------------------------------
            Type of loan                   Veteran        Other obligor
------------------------------------------------------------------------
(A)(i) Initial loan described in                 2.00                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other initial loan described
 in section 3710(a) other than with
 5-down or 10-down (closed before
 October 1, 2003)...................
------------------------------------------------------------------------
(A)(ii) Initial loan described in                2.15                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other initial loan described
 in section 3710(a) other than with
 5-down or 10-down (closed on or
 after October 1, 2003, and before
 October 1, 2011)...................
------------------------------------------------------------------------
(A)(iii) Initial loan described in               1.40                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other initial loan described
 in section 3710(a) other than with
 5-down or 10-down (closed on or
 after October 1, 2011).............
------------------------------------------------------------------------
(B)(i) Subsequent loan described in              3.30                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other subsequent loan
 described in section 3710(a)
 (closed before October 1, 2011)....
------------------------------------------------------------------------
(B)(ii) Subsequent loan described in             2.15                NA
 section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other subsequent loan
 described in section 3710(a)
 (closed on or after October 1, 2011
 and before October 1, 2013)........
------------------------------------------------------------------------
(B)(iii) Subsequent loan described               1.25                NA
 in section 3710(a) to purchase or
 construct a dwelling with 0-down,
 or any other subsequent loan
 described in section 3710(a)
 (closed on or after October 1,
 2013)..............................
------------------------------------------------------------------------
(C)(i) Loan described in section                 1.50                NA
 3710(a) to purchase or construct a
 dwelling with 5-down (closed before
 October 1, 2011)...................
------------------------------------------------------------------------
(C)(ii) Loan described in section                0.75                NA
 3710(a) to purchase or construct a
 dwelling with 5-down (closed on or
 after October 1, 2011).............
------------------------------------------------------------------------
(D)(i) Initial loan described in                 1.25                NA
 section 3710(a) to purchase or
 construct a dwelling with 10-down
 (closed before October 1, 2011)....
------------------------------------------------------------------------
(D)(ii) Initial loan described in                0.50                NA
 section 3710(a) to purchase or
 construct a dwelling with 10-down
 (closed on or after October 1,
 2011)..............................
------------------------------------------------------------------------
(E) Interest rate reduction                      0.50                NA
 refinancing loan...................
------------------------------------------------------------------------
(F) Direct loan under section 3711..             1.00                NA
------------------------------------------------------------------------
(G) Manufactured home loan under                 1.00                NA
 section 3712 (other than an
 interest rate reduction refinancing
 loan)..............................
------------------------------------------------------------------------
(H) Loan to Native American veteran              1.25                NA
 under section 3762 (other than an
 interest rate reduction refinancing
 loan)..............................
------------------------------------------------------------------------
(I) Loan assumption under section                0.50              0.50
 3714...............................
------------------------------------------------------------------------
(J) Loan under section 3733(a)......             2.25              2.25
------------------------------------------------------------------------
(K) Hybrid loan under section 3707A.             1.25                NA
------------------------------------------------------------------------

                                                        

           *       *       *       *       *       *       *
  (4) For the purposes of paragraph (2):
          [(A) The term ``active duty veteran'' means any 
        veteran eligible for the benefits of this chapter other 
        than a Reservist.
          [(B) The term ``Reservist'' means a veteran described 
        in section 3701(b)(5)(A) of this title who is eligible 
        under section 3702(a)(2)(E) of this title.]
          (A) The term ``veteran'' means any veteran eligible 
        for the benefits of this chapter.
          [(C)] (B) The term ``other obligor'' means a person 
        who is not a veteran, as defined in section 101 of this 
        title or other provision of this chapter.
          [(D)] (C) The term ``initial loan'' means a loan to a 
        veteran guaranteed under section 3710 or made under 
        section 3711 of this title if the veteran has never 
        obtained a loan guaranteed under section 3710 or made 
        under section 3711 of this title.
          [(E)] (D) The term ``subsequent loan'' means a loan 
        to a veteran, other than an interest rate reduction 
        refinancing loan, guaranteed under section 3710 or made 
        under section 3711 of this title if the veteran has 
        previously obtained a loan guaranteed under section 
        3710 or made under section 3711 of this title.
          [(F)] (E) The term ``interest rate reduction 
        refinancing loan'' means a loan described in section 
        3710(a)(8), 3710(a)(9)(B)(i), 3710(a)(11), 
        3712(a)(1)(F), or 3762(h) of this title.
          [(G)] (F) The term ``0-down'' means a downpayment, if 
        any, of less than 5 percent of the total purchase price 
        or construction cost of the dwelling.
          [(H)] (G) The term ``5-down'' means a downpayment of 
        at least 5 percent or more, but less than 10 percent, 
        of the total purchase price or construction cost of the 
        dwelling.
          [(I)] (H) The term ``10-down'' means a downpayment of 
        10 percent or more of the total purchase price or 
        construction cost of the dwelling.

           *       *       *       *       *       *       *


Sec. 3733. Property management

  (a)(1) Of the number of purchases made during any fiscal year 
of real property acquired by the Secretary as the result of a 
default on a loan guaranteed under this chapter for a purpose 
described in section 3710(a) of this title, not more than [65] 
85 percent, nor less than 50 percent, of such purchases [may] 
shall be financed by a loan made by the Secretary. [The maximum 
percentage stated in the preceding sentence may be increased to 
80 percent for any fiscal year if the Secretary determines that 
such an increase is necessary in order to maintain the 
effective functioning of the loan guaranty program.]
  [(2) After September 30, 1990, the percentage limitations 
described in paragraph (1) of this subsection shall have no 
effect.]

           *       *       *       *       *       *       *

  (4)(A) Except as provided in subparagraph (B) [of this 
paragraph], the amount of a loan made by the Secretary to 
finance the purchase of real property from the Secretary 
described in paragraph (1) [of this subsection] may not exceed 
an amount equal to 95 percent of the purchase price of such 
real property.
  (B)(i) The Secretary may waive the provisions of subparagraph 
(A) [of this paragraph] in the case of any loan described in 
paragraph (5) [of this subsection].
  (ii) A loan described in subparagraph (A) [of this paragraph] 
may, to the extent the Secretary determines to be necessary in 
order to market competitively the property involved, exceed 95 
percent of the purchase price.
  (5) The Secretary may include, as part of a loan to finance a 
purchase of real property from the Secretary described in 
paragraph (1) [of this subsection], an amount to be used only 
for the purpose of rehabilitating such property. Such amount 
may not exceed the amount necessary to rehabilitate the 
property to a habitable state, and payments shall be made 
available periodically as such rehabilitation is completed.
  (6) The Secretary shall make a loan to finance the sale of 
real property described in paragraph (1) [of this subsection] 
at an interest rate that is lower than the prevailing mortgage 
market interest rate in areas where, and to the extent, the 
Secretary determines, in light of prevailing conditions in the 
real estate market involved, that such lower interest rate is 
necessary in order to market the property competitively and is 
in the interest of the long-term stability and solvency of the 
Veterans Housing Benefit Program Fund established by section 
3722(a) of this title.

           *       *       *       *       *       *       *

  (c)(1) * * *
  (2) The Secretary shall include a summary of the information 
compiled, and the Secretary's findings, under paragraph (1) [of 
this subsection] in the annual report submitted to the Congress 
under section 529 of this title. As part of such summary and 
findings, the Secretary shall provide a separate analysis of 
the factors which contribute to foreclosures of loans which 
have been assumed.

           *       *       *       *       *       *       *


  CHAPTER 39--AUTOMOBILES AND ADAPTIVE EQUIPMENT FOR CERTAIN DISABLED 
VETERANS AND MEMBERS OF THE ARMED FORCES

           *       *       *       *       *       *       *


Sec. 3902. Assistance for providing automobile and adaptive equipment

  (a) The Secretary, under regulations which the Secretary 
shall prescribe, shall provide or assist in providing an 
automobile or other conveyance to each eligible person by 
paying the total purchase price of the automobile or other 
conveyance (including all State, local, and other taxes) or 
[$9,000] $11,000, whichever is the lesser, to the seller from 
whom the eligible person is purchasing under a sales agreement 
between the seller and the eligible person.

           *       *       *       *       *       *       *


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

Sec.
4100.    Findings.
     * * * * * * *
4113.    Outstationing of Transition Assistance Program personnel.

           *       *       *       *       *       *       *


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

  (a) * * *

           *       *       *       *       *       *       *

  (c) Conditions for Receipt of Funds.--(1) The distribution 
and use of funds under subsection (b)(5) in order to carry out 
sections 4103A(a) and 4104(a) of this title shall be subject to 
the continuing supervision and monitoring of the Secretary and 
shall not be governed by the provisions of any other law, or 
any regulations prescribed thereunder, that are inconsistent 
with this section or section 4103A or 4104 of this title.
  (2)(A) * * *
  (B)(i) * * *
  (ii) The Secretary shall phase in over the three fiscal-year 
period that begins on October 1, [2002] 2003, the manner in 
which amounts are made available to States under subsection 
(b)(5) and this subsection[, as amended by the Jobs for 
Veterans Act].

           *       *       *       *       *       *       *

  (f) Establishment of Performance Standards and Outcomes 
Measures.--(1) By not later than [6 months after the date of 
the enactment of this section,] May 7, 2003, the Assistant 
Secretary of Labor for Veterans' Employment and Training shall 
establish and implement a comprehensive performance 
accountability system to measure the performance of employment 
service delivery systems, including disabled veterans' outreach 
program specialists and local veterans' employment 
representatives providing employment, training, and placement 
services under this chapter in a State to provide 
accountability of that State to the Secretary for purposes of 
subsection (c).

           *       *       *       *       *       *       *


Sec. 4113. Outstationing of Transition Assistance Program personnel

  (a) Stationing of TAP Personnel at Overseas Military 
Installations.--(1) The Secretary--
          (A) shall station employees of the Veterans' 
        Employment and Training Service, or contractors under 
        subsection (c), at each veterans assistance office 
        described in paragraph (2); and
          (B) may station such employees or contractors at such 
        other military installations outside the United States 
        as the Secretary, after consultation with the Secretary 
        of Defense, determines to be appropriate or desirable 
        to carry out the purposes of this chapter.
  (2) Veterans assistance offices referred to in paragraph 
(1)(A) are those offices that are established by the Secretary 
of Veterans Affairs on military installations pursuant to the 
second sentence of section 7723(a) of this title.
  (b) Functions.--Employees (or contractors) stationed at 
military installations pursuant to subsection (a) shall 
provide, in person, counseling, assistance in identifying 
employment and training opportunities, help in obtaining such 
employment and training, and other related information and 
services to members of the Armed Forces who are being separated 
from active duty, and the spouses of such members, under the 
Transition Assistance Program and Disabled Transition 
Assistance Program established in section 1144 of title 10.
  (c) Authority to Contract With Private Entities.--The 
Secretary, consistent with such section 1144, may enter into 
contracts with public or private entities to provide, in 
person, some or all of the counseling, assistance, information 
and services under the Transition Assistance Program required 
under subsection (a).

           *       *       *       *       *       *       *


PART IV--GENERAL ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *


CHAPTER 51--CLAIMS, EFFECTIVE DATES, AND PAYMENTS

           *       *       *       *       *       *       *


Sec. 5101. Claims and forms

  (a) A specific claim in the form prescribed by the Secretary 
(or jointly with the [Secretary of Health and Human Services] 
Commissioner of Social Security, as prescribed by section 5105 
of this title) must be filed in order for benefits to be paid 
or furnished to any individual under the laws administered by 
the Secretary.

           *       *       *       *       *       *       *


          CHAPTER 53--SPECIAL PROVISIONS RELATING TO BENEFITS

Sec.
5301.    Nonassignability and exempt status of benefits.
     * * * * * * *
[5318.    Review of Department of Health and Human Services death 
          information.]
5318.    Review of Social Security Administration death information.

           *       *       *       *       *       *       *


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

  (a) The Secretary shall notify each applicant for a benefit 
or service described in subsection (c) of this section that 
income information furnished by the applicant to the Secretary 
may be compared with information obtained by the Secretary from 
the [Secretary of Health and Human Services] Commissioner of 
Social Security or the Secretary of the Treasury under section 
6103(l)(7)(D)(viii) of the Internal Revenue Code of 1986. The 
Secretary shall periodically transmit to recipients of such 
benefits and services additional notifications of such matters.
  (b) The Secretary may not, by reason of information obtained 
from the [Secretary of Health and Human Services] Commissioner 
of Social Security or the Secretary of the Treasury under 
section 6103(l)(7)(D)(viii) of the Internal Revenue Code of 
1986, terminate, deny, suspend, or reduce any benefit or 
service described in subsection (c) of this section until the 
Secretary takes appropriate steps to verify independently 
information relating to the following:
          (1) The amount of the asset or income involved.
          (2) Whether such individual actually has (or had) 
        access to such asset or income for the individual's own 
        use.
          (3) The period or periods when the individual 
        actually had such asset or income.

           *       *       *       *       *       *       *

  (g) The authority of the Secretary to obtain information from 
the Secretary of the Treasury or the [Secretary of Health and 
Human Services] Commissioner of Social Security under section 
6103(l)(7)(D)(viii) of the Internal Revenue Code of 1986 
expires on September 30, 2008.

[Sec. 5318. Review of Department of Health and Human Services death 
                    information]

Sec. 5318. Review of Social Security Administration death information

  (a) The Secretary shall periodically compare Department of 
Veterans Affairs information regarding persons to or for whom 
compensation or pension is being paid with information in the 
records of the [Department of Health and Human Services] Social 
Security Administration relating to persons who have died for 
the purposes of--
          (1) * * *

           *       *       *       *       *       *       *

  (b) The [Department of Health and Human Services] Social 
Security Administration death information referred to in 
subsection (a) of this section is death information available 
to the Secretary from or through the [Secretary of Health and 
Human Services] Commissioner of Social Security, including 
death information available to the [Secretary of Health and 
Human Services] Commissioner from a State, pursuant to a 
memorandum of understanding entered into by [such Secretaries] 
the Secretary and the Commissioner. Any such memorandum of 
understanding shall include safeguards to assure that 
information made available under it is not used for 
unauthorized purposes or improperly disclosed.

           *       *       *       *       *       *       *


CHAPTER 61--PENAL AND FORFEITURE PROVISIONS

           *       *       *       *       *       *       *


Sec. 6105. Forfeiture for subversive activities

  (a) * * *
  (b) The offenses referred to in subsection (a) of this 
section are those offenses for which punishment is prescribed 
in--
          (1) * * *
          (2) sections 175, 229, 792, 793, 794, 798, 831, 1091, 
        2332a, 2332b, 2381, 2382, 2383, 2384, 2385, 2387, 2388, 
        2389, 2390, and chapter 105 of title 18;

           *       *       *       *       *       *       *