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                                                       Calendar No. 553
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-282

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

 
       A BILL TO AMEND TITLE 38, UNITED STATES CODE, TO IMPROVE 
SERVICEMEMBERS' GROUP LIFE INSURANCE AND VETERANS' GROUP LIFE INSURANCE 
 AND TO MODIFY THE PROVISION OF COMPENSATION AND PENSION TO SURVIVING 
 SPOUSES OF VETERANS IN THE MONTHS OF THE DEATHS OF THE VETERANS, AND 
                           FOR OTHER PURPOSES

                                _______
                                

               September 2, 2010.--Ordered to be printed

  Filed, under authority of the order of the Senate of August 5, 2010

                                _______
                                

          Mr. Akaka, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                             together with

                           SUPPLEMENTAL VIEWS

                         [To accompany S. 3765]

    The Committee on Veterans' Affairs (hereinafter, ``the 
Committee''), unanimously reports favorably an original bill to 
amend title 38, United States Code (hereinafter, ``U.S.C.''), 
to improve Servicemembers' Group Life Insurance (hereinafter, 
``SGLI'') and Veterans' Group Life Insurance (hereinafter, 
``VGLI''), to modify the provision of compensation and pension 
to surviving spouses of veterans in the months of the deaths of 
the veterans, and for other purposes, and recommends that the 
bill do pass.

                              Introduction

    On August 5, 2010, the Committee met in open session to 
consider a number of measures pending before the Committee, 
including an original measure proposed by Chairman Daniel K. 
Akaka to improve SGLI and VGLI, modify the provision of 
compensation and pension to surviving spouses of veterans in 
the months of the deaths of the veterans, and for other 
purposes.

                           Committee Meeting

    The Committee met in open session on August 5, 2010, to 
consider, among other legislation, the original bill. The 
Committee voted, without dissent, to report favorably the 
original bill as amended during the markup.

                  Summary of Original Bill as Reported

    The original bill as reported (hereinafter, ``the Committee 
bill''), contains three titles and seven provisions that would 
improve SGLI and VGLI, modify the provision of compensation and 
pension to surviving spouses of veterans in the months of the 
deaths of the veterans, amend eligibility for a death benefit, 
expand housing opportunities, and revise the processing of 
applications for relief from adjudication of mental 
incompetence for certain purposes.

                       TITLE I--BENEFITS MATTERS

    Section 101 would repeal the sunset on the 2-year extension 
of SGLI coverage for members of the Armed Forces separating 
from service while totally disabled.
    Section 102 would authorize increases by individuals of 
VGLI coverage upon renewal.
    Section 103 would modify the month of death benefit for 
surviving spouses of veterans who die while entitled to 
compensation or pension.
    Section 104 would allow individuals who die while serving 
in the active military, naval, or air service to be eligible 
for presidential memorial certificates.

                    TITLE II--LOAN GUARANTY MATTERS

    Section 201 would adjust requirements for property 
occupancy to include situations where the dependent child of a 
veteran occupies the property.
    Section 202 would modify rules for covenants and liens 
created by public entities in response to disaster-relief 
assistance.

                        TITLE III--OTHER MATTERS

    Section 301 would revise the processing of applications for 
relief from adjudication of mental incompetence for certain 
purposes.

                       Background and Discussion


                       TITLE I--BENEFITS MATTERS

Sec. 101. Repeal of sunset on 2-year extension of Servicemembers' Group 
        Life Insurance coverage for members of Armed Forces separating 
        from service while totally disabled.

    Section 101 of the Committee bill would eliminate the 
expiration date for a potential two-year extension of SGLI 
coverage available to servicemembers who are totally disabled 
when they separate from service.
    Background. The Department of Veterans Affairs 
(hereinafter, ``VA'') offers a variety of life insurance 
options for servicemembers, veterans, and their families. Among 
these is the SGLI program, which offers low-cost group life 
insurance for servicemembers on active duty, Ready Reservists, 
members of the National Guard, members of the Commissioned 
Corps of the National Oceanic and Atmospheric Administration 
and the Public Health Service, cadets and midshipmen of the 
four service academies, and members of the Reserve Officer 
Training Corps. SGLI coverage is available in $50,000 
increments up to the maximum of $400,000.
    Public Law 93-289, the Veterans' Insurance Act of 1974, 
established a new program of post-separation insurance known as 
VGLI. VGLI provides for the post-service conversion of SGLI to 
a renewable term policy of insurance. Persons eligible for 
full-time coverage include former servicemembers who were 
insured full-time under SGLI and who were released from active 
duty or the Reserves, Ready Reservists who have part-time SGLI 
coverage and who incur certain disabilities during periods of 
active or inactive duty training, and members of the Individual 
Ready Reserve and Inactive National Guard. VGLI coverage is 
issued in multiples of $10,000 up to a maximum of $400,000. 
Under current law, VGLI, generally, must be applied for within 
one year and 120 days from discharge. However, servicemembers 
who are totally disabled at the time of discharge may have a 
longer period within which to convert their SGLI coverage to 
VGLI.
    Public Law 109-233, the Veterans' Housing Opportunity and 
Benefits Improvement Act of 2006, authorized VA to extend from 
one to two years, after separation from active duty service, 
the period within which totally disabled members may receive 
premium-free SGLI coverage and convert their coverage to a 
policy under the VGLI program. However, Public Law 109-233 
mandated that on or after October 1, 2011, this two-year time 
period would be shortened to 18 months.
    Committee Bill. Section 101 of the Committee bill would 
amend section 1968(a) of title 38 to eliminate the expiration 
date for a potential two-year extension of SGLI coverage 
available to servicemembers who are totally disabled when they 
separate from service.
    It is the Committee's view that retaining the potential 
two-year extension would allow VA additional time to contact 
veterans who have little or no chance of obtaining commercial 
insurance and give them information to help them make informed 
decisions about their life insurance needs and options.

Sec. 102. Authorization for increases by individuals of Veterans' Group 
        Life Insurance coverage upon renewal.

    Section 102 would provide to VGLI participants who are 
under the age of 60 and insured for less than the current 
maximum authorized for SGLI the opportunity to obtain, without 
underwriting, an additional $25,000 in coverage once every 5 
years at the time of renewal.
    Background. Current law, section 1977(a)(1) of title 38, 
limits the amount of VGLI coverage a veteran may carry to the 
amount of SGLI coverage that continued in force after that 
veteran was separated from service. Through inquiries and 
responses to surveys conducted by VA, VGLI participants have 
expressed interest in increasing their coverage. Statistics 
indicate that 96 percent of VGLI-insured veterans have less 
than the current SGLI maximum of $400,000 in coverage. 
Currently, veterans who separated from service when the maximum 
SGLI coverage was considerably less than the current $400,000 
maximum, have no opportunity to increase their VGLI insurance 
coverage.
    Committee Bill. Section 102 of the Committee bill would 
amend section 1977(a) of title 38 to allow VGLI participants 
who are under the age of 60 and insured for less than the 
current maximum authorized for SGLI the opportunity to obtain, 
without a health care examination, an additional $25,000 in 
coverage once every 5 years at the time of renewal.
    The Committee intends to allow VA to provide veterans an 
opportunity to purchase additional life insurance to protect 
and enhance the financial security of their families.

Sec. 103. Modification of month of death benefit for surviving spouses 
        of veterans who die while entitled to compensation or pension.

    Section 103 of the Committee bill would amend current law 
so as to clarify that a surviving spouse of a veteran who is 
receiving compensation or pension from VA is due the amount of 
benefits the veteran would have received for the month of the 
veteran's death if the veteran had lived, regardless of whether 
the surviving spouse is otherwise entitled to survivor 
benefits. Also, if at the time of death the veteran had a claim 
pending for compensation or pension that was subsequently 
granted, the surviving spouse would be eligible for any 
benefits or additional benefits due for the month of death as 
accrued benefits.
    This section of the Committee bill would also prohibit VA 
from requesting that a surviving spouse who was a dependent for 
purposes of the veteran's compensation or pension award at the 
time of death return or repay the amount of a check or other 
payment issued to a deceased veteran if the funds are 
negotiated, deposited, or accessed by the surviving spouse. 
Such a benefit would be treated as the benefit due the 
surviving spouse for the month of death to the extent that it 
equals the amount payable as a month of death payment.
    Background. VA has experienced considerable difficulty in 
administering month of death payments for surviving spouses 
because of the confusion in current law among various 
provisions and because certain automated procedures used by VA 
for termination and recovery of benefits paid to veterans for 
the months of their deaths are not consistent with current law. 
As a demonstration of the scope of this situation, Committee 
oversight led VA to pay over $65 million to survivors who had 
been wrongfully denied benefits to which they were entitled for 
the month of death.
    Under current law, veterans' benefits for a specific month 
are paid in the month following the month to which they are 
attributable. No benefits are owed to a veteran for the month 
in which a veteran dies. For example, if a veteran is receiving 
VA compensation or pension for the month of January, the check 
or payment for January would be provided in February. If a 
veteran receiving such benefits dies in February, no benefits 
for the month of death would be payable to the veteran, meaning 
that no benefits should be provided in March. However, if the 
veteran had a surviving spouse, the month of death provision in 
current law--section 5310 of title 38--provides that the amount 
of benefits that the veteran would have received for February 
had the veteran not died is payable to the surviving spouse.
    Section 5310 also provides that, if the benefit payable to 
a surviving spouse as dependency and indemnity compensation 
(hereinafter, ``DIC'') or death pension is less than the amount 
that the veteran would have received for that month but for the 
veteran's death, the greater benefit would be paid for the 
month of death.
    This latter provision has caused considerable confusion 
because it is not fully consistent with other provisions of 
current law concerning effective dates for survivor benefits. 
Under section 5110(d) of title 38, the effective date of an 
award of death compensation, DIC, or death pension for which 
application is received within one year from the date of a 
veteran's death is the first day of the month in which the 
death occurred. Thus, if the veteran dies in February, the 
effective date of DIC or death pension would be February 1 if 
the surviving spouse applied for benefits within one year of 
the veteran's death. If the application for survivor benefits 
is received after the one-year period, the effective date is 
the date the application is received.
    Under section 5111(a) of title 38, payment of VA benefits, 
including survivor benefits, is not made for the month of the 
effective date of the benefit, but is paid for the first 
calendar month following the month in which the award became 
effective. For example, the first month for which benefits 
would be paid to the surviving spouse of a veteran dying in 
February, which would mean a February 1 effective date, would 
be the calendar month of March and, as noted above, the check 
or payment for March would be issued at the beginning of April. 
Absent the month of death provision, the survivor would 
experience a gap in income with no benefit paid for either the 
deceased veteran or the surviving spouse in the month of March.
    Although section 5111(c)(1) of title 38 appears to provide 
an exception for month of death payments when the DIC or death 
pension for the month of death would be greater than the amount 
that would have been paid to the deceased veteran for that 
month had the veteran lived, the language of paragraph (1) of 
that section does not clearly authorize a payment with a 
different effective date or a different commencement date than 
provided by sections 5110 or 5111(a). Because a surviving 
spouse eligible for benefits as the survivor of a veteran who 
died in February would not have those benefits commence until 
March and would receive the first DIC payment in April, it 
appears that there are no circumstances under which a surviving 
spouse could qualify for payments of both a month-of-death 
benefit for the month of February and a survivor benefit for 
the same month.
    VA has information concerning the identity and status of 
any spouse receiving benefits as a dependent on the veteran's 
compensation or pension award, such as a veteran receiving 
additional compensation payable under section 1115 at the rate 
of 30 percent or higher or pension benefits for married 
veterans specified in section 1521. In cases involving such 
dependency relationships, VA has recently begun issuing month 
of death benefits to surviving spouses upon notification of the 
death of a veteran whose surviving spouse was a dependent on 
the veteran's compensation or pension award as of the date of 
death. In cases in which VA does not have information 
concerning the existence, identity, or status of a surviving 
spouse, VA is not able to comply with the requirement for a 
month of death payment without obtaining additional 
information. In such cases, VA is now sending the veteran's 
estate a notice that includes information concerning the month 
of death payment and advises the estate concerning the 
procedures necessary in order for a payment to be made.
    Committee Bill. Subsection (a) of section 103 of the 
Committee bill would amend subsection (a) of section 5310 of 
title 38 to clarify that a payment for the month of a veteran's 
death would be made to a surviving spouse of a veteran 
receiving compensation or pension under chapters 11 or 15 of 
title 38 or to a surviving spouse of a veteran who had a claim 
pending at the time of death that was subsequently granted.
    Subsection (a) of section 103 of the Committee bill would 
further amend subsection (a) of section 5310(a) to specify that 
the amount of a payment for the month of a veteran's death is 
the amount that the veteran would have received for that month 
if the veteran had lived.
    Subsection (a) of section 103 of the Committee bill would 
further amend subsection (a) of section 5310(a) to specify that 
any benefits payable for the month of death for a veteran who 
was not receiving those benefits as of the date of death would 
be paid as accrued benefits.
    Subsection (a) of section 103 of the Committee bill would 
further amend subsection (b) of section 5310 of title 38 to 
clarify that, if a claim for entitlement to compensation or 
additional compensation under chapter 11 of title 38 or pension 
or additional pension under chapter 15 of title 38 was pending 
at the time of the veteran's death and the pending claim was 
subsequently granted, any additional benefits for the month of 
death would be paid as accrued benefits under section 5121 of 
title 38.
    Subsection (b) of section 103 of the Committee bill would 
amend subsection (c) of section 5111 of title 38 to provide 
that month of death payments under section 5310 are exempt from 
the delayed commencement of benefits provision otherwise 
applicable under section 5111.
    Subsection (c) of section 103 of the Committee bill would 
prohibit VA from requesting that a surviving spouse who was a 
dependent on a veteran's compensation or pension award as of 
the date of the veteran's death return a check or other payment 
issued to the veteran for the month of death, if the funds were 
negotiated, deposited, or accessed by the surviving spouse. In 
such cases, the payment made available to the surviving spouse 
would constitute the month of death payment to the extent that 
the payment equals the amount payable under section 5310. The 
Committee intends that this prohibition relating to claims for 
checks or payments will reduce the burden on the surviving 
spouse to return the funds to VA, only to be issued another 
payment in the same amount for the month of death benefit.
    Subsection (d) of section 103 of the Committee bill would 
provide that the changes made by that section would apply in 
cases of deaths that occur on or after the date of enactment of 
this legislation.
    The Committee expects that section 103 of the Committee 
bill, if enacted, will remove any confusion in current law and 
improve VA's ability to pay a surviving spouse the benefits due 
for the month of a veteran's death.

Sec. 104. Eligibility for presidential memorial certificates of 
        individuals who die while serving in the active military, 
        naval, or air service.

    Section 104 would extend eligibility for presidential 
memorial certificates to the survivors of any servicemember who 
died in active military, naval or air service.
    Background. Under current law, section 112 of title 38, 
eligibility for presidential memorial certificates is limited 
to survivors of veterans who were discharged from service under 
honorable conditions. Under the statutory definition of 
``veteran,'' for purposes of this section, an individual who 
died in active service, including an individual killed in 
action, technically is not a veteran because the individual was 
not ``discharged or released'' from service. Therefore, under 
current law, the survivors of such an individual are not 
eligible for a presidential memorial certificate for honoring 
the memory of the deceased individual.
    Committee Bill. Section 104 of the Committee bill would 
allow the VA to provide presidential memorial certificates to 
the next of kin, relatives or friends of a servicemember who 
died in active military, naval or air service and to express 
the country's grateful recognition of the individual's 
sacrifice.

                    TITLE II--LOAN GUARANTY MATTERS

Sec. 201. Occupancy of property by dependent child of a veteran.

    Section 201 would broaden the occupancy requirements 
necessary to qualify for VA home loans to include situations 
where a veteran's dependent child occupies or will occupy the 
property as a home.
    Background. Current law, section 3704(c)(2) of title 38, 
states that, ``[i]n any case in which a veteran is in active 
duty status as a member of the Armed Forces and is unable to 
occupy a property because of such status, the occupancy 
requirements [for purposes of obtaining a VA-backed home loan] 
shall be considered to be satisfied if the spouse of the 
veteran occupies the property as the spouse's home and the 
spouse makes the certification required by paragraph (1) of 
this subsection.'' The structure of the American family often 
involves single parents. Under current law, a single veteran 
with a dependent child would be disqualified from obtaining a 
VA-backed home loan if he or she is on active duty status 
because he or she does not have a spouse to satisfy occupancy 
requirements.
    Committee Bill. Section 201 of the Committee bill would add 
to section 3704(c)(2) a provision allowing a veteran's 
dependent child who occupies or will occupy the property as a 
home to satisfy the occupancy requirements for purposes of 
qualifying for a VA-backed home loan. This would allow a 
single-parent veteran who returns to active duty to obtain a 
VA-guaranteed home loan if the veteran's child occupies the 
home. This requirement would be met if the veteran's attorney-
in-fact or a legal guardian of the veteran's dependent child 
makes the certification required by section 3704(c)(1) of title 
38.

Sec. 202. Covenants and liens created by public entities in response to 
        disaster-relief assistance.

    Section 202 would authorize VA to allow superior liens 
created by public entities providing assistance in response to 
a major disaster to ensure that veterans may obtain such 
disaster relief.
    Background. Under section 3703(d)(3) of title 38, any real 
estate housing loan, other than for repairs, alterations, or 
improvements, must be secured by a first lien on the realty. 
Currently, in determining whether a loan for the purchase or 
construction of a home is so secured, VA has the discretion to 
``disregard a superior lien created by a duly recorded covenant 
running with the realty in favor of a private entity to secure 
an obligation to such entity for the homeowner's share of the 
costs of the management, operation, or maintenance of property, 
services or programs within and for the benefit of the 
development or community in which the veteran's realty is 
located.''
    In an August 16, 2010, letter to Chairman Akaka, which 
provided VA's views on the Committee bill, VA noted that, as 
part of State disaster relief programs, States may ``opt to 
create covenants'' so that grant recipients have to rebuild 
their homes in ways that meet program specifications. Under 
current law, VA does not have the authority to allow such 
superior liens created by public entities which in turn could 
keep a veteran home owner from taking disaster relief. Given 
the occurrence of natural disasters, such as Hurricane Katrina, 
providing VA with the authority to take a second-lien position 
to such covenants should allow veterans to accept disaster 
relief and reduce the likelihood of foreclosures and claims 
against a VA guaranty.
    Committee Bill. Section 202 of the Committee bill would 
amend section 3703(d) of title 38 so as to authorize VA to 
allow superior liens created by public entities that have 
provided or will provide assistance in response to a major 
disaster as declared by the President under section 401 of the 
Robert T. Stafford Disaster Relief and Emergency Assistance Act 
(42 U.S.C. 5170).

                        TITLE III--OTHER MATTERS

Sec. 301. Processing of applications for relief from adjudication of 
        mental incompetence for certain purposes.

    Background. Section 101(c)(2) of Public Law 110-180, the 
NICS Improvement Amendments Act of 2007, requires Federal 
agencies that make adjudications on persons related to their 
mental health to establish a program that permits such persons 
to apply for relief from the National Instant Criminal 
Background Check System (hereinafter, ``NICS'') requirements 
pursuant to Public Law 103-159, the Brady Handgun Violence 
Prevention Act.
    Federal agencies are required to process applications for 
relief within 365 days of their receipt. VA, as an agency that 
makes such mental health adjudications, provides notice to 
beneficiaries who are assigned fiduciaries that such a program 
of relief is available to them. According to information 
provided to the Committee by VA, 74 claims for relief had been 
filed as of March 2010; however, none had been processed. Under 
current law, if a claim for relief has been pending for 365 
days or more it is considered denied, even if it was never 
processed. Of the 74 claims for relief VA has received, more 
than 30 have been denied because VA took no action on them 
within the 365 day time-frame.
    Committee Bill. Section 301 of the Committee bill would 
amend title 38 by adding a new section 5511, entitled 
``Processing of applications for relief from adjudication of 
mental incompetence for certain purposes.'' This new section 
would require VA to adjudicate appeals for relief from the NICS 
requirements within 180 days of their receipt. Further, 
contrary to the de facto denial that exists under current law, 
the new section would provide that claims for relief not 
processed within the 180-day time frame will be deemed granted.

                      Committee Bill Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the Committee, based on 
information supplied by the Congressional Budget Office 
(hereinafter, ``CBO''), estimates that enacting the original 
bill would, relative to current law, increase direct spending 
by less than $500,000 over the 2011-2020 period and would not 
affect revenues. The bill contains no intergovernmental and 
private sector mandates as defined in the Unfunded Mandates 
Reform Act.
    The cost estimate provided by CBO, setting forth a detailed 
breakdown of costs, follows:

                               Congressional Budget Office,
                                   Washington, DC, August 27, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman:  The Congressional Budget Office has 
prepared the enclosed cost estimate for a bill to amend title 
38, United States Code, to improve Servicemembers' Group Life 
Insurance and Veterans' Group Life Insurance and to modify the 
provision of compensation and pension to surviving spouses of 
veterans in the months of the deaths of the veterans, and for 
other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Dwayne M. 
Wright.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.

  Enclosure.

A bill to amend title 38, United States Code, to improve 
        Servicemembers' Group Life Insurance and Veterans' Group Life 
        Insurance and to modify the provision of compensation and 
        pension to surviving spouses of veterans in the months of the 
        deaths of the veterans, and for other purposes

    This legislation would modify several veterans' programs. 
CBO estimates that enacting the bill would increase direct 
spending by less than $500,000 over the 2011-2020 period and 
would not affect revenues. Because enacting the bill would 
affect direct spending, pay-as-you-go procedures apply.
    Section 104 would expand the Veterans Administration's 
(VA's) Presidential Memorial Certificate program to include 
survivors of individuals who die while serving in the active 
military, naval, or air service. Through the Presidential 
Memorial Certificate program a relative or friend can request a 
certificate signed by the President that expresses the 
country's recognition of a veteran's service. Eligibility for a 
certificate is currently limited to survivors of veterans who 
were honorably discharged from military service. Based on 
information from VA, CBO expects fewer than 100 additional 
requests would be made each year under this provision; 
therefore, CBO estimates section 104 would increase direct 
spending by less than $500,000 over the 2011-2020 period. Costs 
for the Presidential Memorial Certificates are paid out of the 
veterans' burial account, which is a mandatory program.
    Sections 101 and 102 would enhance the benefits available 
to veterans under the Servicemembers' Group Life Insurance 
program. Based on information from VA, CBO anticipates that the 
premiums servicemembers pay would cover the cost of the 
enhanced benefits. Therefore, we estimate that those provisions 
would have no budgetary impact.
    Section 103 would clarify that the surviving spouse of a 
veteran who was receiving disability compensation or a pension 
at the time of death would be entitled to a similar benefit for 
the month of the veteran's death. Also, if a veteran's claim 
for compensation or pension was pending at the time of death 
and the surviving spouse receives a benefit payment that is 
less than the amount the veteran would have received upon 
adjudication, then the surviving spouse would be entitled to 
receive the additional amount upon final adjudication. 
Information from VA indicates that surviving spouses are 
currently receiving such payments under other provisions of 
law; therefore, CBO estimates that this section of the 
legislation would have no cost.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Dwayne M. 
Wright. The estimate was approved by Theresa A. Gullo.

                      Regulatory Impact Statement

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee on Veterans' 
Affairs has made an evaluation of the regulatory impact that 
would be incurred in carrying out the Committee bill. The 
Committee finds that the Committee bill would not entail any 
regulation of individuals or businesses or result in any impact 
on the personal privacy of any individuals and that the 
paperwork resulting from enactment would be minimal.

                 Tabulation of Votes Cast in Committee

    In compliance with paragraph 7 of rule XXVI of the Standing 
Rules of the Senate, the following is a tabulation of votes 
cast in person or by proxy by members of the Committee on 
Veterans' Affairs at its August 5, 2010, meeting. On that date, 
the Committee ordered the original bill, as amended, reported 
favorably to the Senate by voice vote with no dissent. One 
amendment was accepted by voice vote.

                             Agency Report

    On August 16, 2010, the Secretary of Veterans Affairs 
submitted the views of the Department on the original bill. 
Below are excerpts from the Secretary's letter:

                         The Secretary of Veterans Affairs,
                                   Washington, DC, August 16, 2010.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: I am pleased to provide the Committee 
with the views of the Department of Veterans Affairs (VA) on 
S.____, 111th Cong., a bill ``[t]o amend title 38, United 
States Code, to improve Servicemembers' Group Life Insurance 
and Veterans' Group Life Insurance and to modify the provision 
of compensation and pension to surviving spouses of veterans in 
the months of the deaths of the veterans, and for other 
purposes.'' For the reasons explained below, we support 
enactment of all sections of the bill.

                              Section 101

    Section 101 would eliminate the expiration date for a 
potential two-year extension of Servicemembers' Group Life 
Insurance (SGLI) coverage available to servicemembers who are 
totally disabled when they separate from service. Under current 
law, if a SGLI-insured Servicemember is totally disabled at the 
time of his or her separation from service, the member's SGLI 
coverage can extend, at no cost to the member, for up to two 
years following separation from service. However, that 
potential two-year extension 
will shorten to 18 months effective for separations from 
service on or after October 1, 2011. This provision would 
permit the potential two-year extension indefinitely. VA 
supports enactment of this section.
    Retaining the potential two-year extension would allow VA 
additional time to contact Veterans having little or no chance 
of obtaining commercial insurance and give them useful 
information to help them make informed decisions about their 
life insurance needs and options. It would also guarantee that 
those most in need will be covered by SGLI during their 
transition period, at no cost to them.
    The SGLI premium rates charged to Servicemembers would 
cover the cost of indefinitely retaining the potential two-year 
period. Because the SGLI program would assume all costs 
associated with this provision, there would be no cost to the 
Government.

                              Section 102

    Section 102 would provide to Veterans' Group Life Insurance 
(VGLI) participants who are under the age of 60 and insured for 
less than the current maximum authorized for SGLI the 
opportunity to obtain, without underwriting (i.e., health 
questions), up to an additional $25,000 in coverage once every 
5 years at the time of renewal. Current law limits the amount 
of VGLI coverage a Veteran may carry to the amount of SGLI 
coverage that continued in force after that Veteran was 
separated from service. VA supports enactment of this section.
    Through inquiries and responses to surveys, VGLI 
participants have expressed interest in increasing their 
coverage. Statistics indicate that 96 percent of VGLI-insured 
Veterans have less than the current SGLI maximum of $400,000 in 
coverage. Currently, Veterans who separated from service when 
the maximum SGLI coverage was considerably less than the 
current $400,000 maximum have no opportunity to increase their 
VGLI insurance coverage. This provision would provide Veterans, 
including service-disabled Veterans, an opportunity to purchase 
additional life insurance to protect and enhance the financial 
security of their families.
    Although there would be no cost to the Government 
associated with this provision, restricting eligibility to 
Veterans under the age of 60 and limiting the purchase amount 
to $25,000 once every 5 years would minimize the cost to the 
program by limiting the degree of adverse selection. The 
currently strong financial position of the SGLI program makes 
this proposal to offer additional VGLI coverage more 
financially feasible.

                              Section 103

    Section 103(a) would revise 38 U.S.C. Sec. 5310, which 
authorizes a month-of-death benefit for the surviving spouse of 
certain Veterans, to simplify its administration and clarify 
the scope of its provisions. As amended, section 5310(a) would 
provide to the surviving spouse of a Veteran who was receiving 
VA compensation or pension at the time the Veteran died a 
benefit for the month of death in the amount of compensation or 
pension the Veteran would have received for that month but for 
his or her death. Section 5310(a), as amended, would also 
provide the month-of-death benefit to the surviving spouse of a 
Veteran who was not receiving VA compensation or pension at the 
time the Veteran died but who had a claim for compensation or 
pension ``pending for the month of the veteran's death for 
which benefits would have been payable'' had the Veteran not 
died. For these surviving spouses, the benefit would be payable 
as an accrued benefit.
    As amended, section 5310(b) would provide that, if, when a 
Veteran died, a claim for compensation, additional 
compensation, pension, or additional pension was pending and 
the month-of-death benefit paid to the surviving spouse is less 
than the amount the Veteran would have been entitled to 
pursuant to the adjudication of the pending claim but for his 
or her death, the difference in amounts would be treated as an 
accrued benefit. Section 103(b) of the draft bill would exempt 
month-of-death payments from the delayed commencement of 
payment provisions of 38 U.S.C. Sec. 5111, and section 103(c) 
of the draft bill would make all these amendments applicable to 
deaths occurring on or after the date of enactment. VA supports 
enactment of section 103 of the bill.
    Pursuant to 38 U.S.C. Sec. 5110(d), a surviving spouse's 
award of death compensation, dependency and indemnity 
compensation (DIC), or death pension may be made effective from 
the first day of the month of the Veteran's death in certain 
circumstances. Section 5310(a) of title 38, United States Code, 
currently provides that, if the surviving spouse is entitled 
under section 5110(d) to death compensation, DIC, or death 
pension for the month of the Veteran's death, the amount of the 
benefit for that month shall be not less than the amount of 
disability compensation or pension the Veteran would have 
received for that month but for his or her death. Section 
5310(b)(1) currently provides a benefit for the month of a 
Veteran's death if the Veteran's surviving spouse is not 
entitled to death compensation, DIC, or death pension for the 
month of death, in the amount of compensation or pension the 
Veteran would have received but for the Veteran's death. The 
benefit provided by section 5310(b) is a one-time payment 
conditioned on the surviving spouse's nonentitlement to death 
benefits for the month of the Veteran's death.
    The statutory scheme is ambiguous, however, as applied to 
circumstances in which the surviving spouse is entitled under 
section 5110(d) to death compensation, DIC, or death pension 
for the month of death in an amount greater than the amount of 
compensation or pension that would have been payable to the 
Veteran for that month. In that situation, section 5111(a) and 
(c) would appear to preclude payment of death compensation, 
DIC, or death pension under section 5110(d) for the month of 
death. The language of section 5310(b)(1) could be construed to 
preclude payment to the surviving spouse of the month-of-death 
payment authorized by section 5310(b)(1), because he or she is, 
in principle, ``entitled to death benefits * * * for the month 
in which the veteran's death occurs,'' even though he or she is 
precluded from receiving those benefits.
    We support section 103 because it would clarify the 
statutes to permit payment of the month-of-death benefit under 
section 5310(b) in such circumstances and would provide a 
month-of-death benefit for all surviving spouses of Veterans 
regardless of whether the surviving spouses are entitled to 
death compensation, DIC, or death pension for the month of 
death. Providing for a single type of month-of-death payment 
would make this payment easier for VA to administer.
    The amendment to section 5310 would also remove the 
provision currently in subsection (b)(2) that provides that a 
check issued to a Veteran is negotiable by the surviving spouse 
and will be treated as payment to the spouse. Removing this 
provision would allow VA to request that all surviving spouses 
return the Veterans' checks, and then to issue new checks 
directly to the surviving spouses to pay the month-of-death 
benefit. This would improve VA's ability to track month-of-
death payments and would alleviate administrative issues, 
including, in some instances, the month-of-death benefit being 
paid twice. Further, this amendment would address any 
difficulties that the surviving spouses are encountering when 
attempting to negotiate checks made out to deceased Veterans.
    This amendment would help streamline VA's ability to 
automate payments through VA's electronic information system, 
VETSNET, without the manual processing necessary under the 
current statutory scheme. For all these reasons, we support 
section 103.
    There would be no additional mandatory costs associated 
with the clarification that section 103 would make.

                              Section 104

    Section 104 would extend eligibility for presidential 
memorial certificates to the next of kin, relatives, or friends 
of any Servicemember who dies while serving in active military, 
naval, or air service. Under current law, eligibility is 
limited to the next of kin, relatives, or friends of Veterans 
who were discharged under honorable conditions. VA supports 
enactment of this section.
    Under the statutory definition of ``veteran,'' an 
individual who died in active service, including an individual 
killed in action, technically is not a ``veteran'' because the 
individual was not ``discharged or released'' from service. 
Therefore, under current law, the next of kin, relatives, or 
friends of such an individual are not eligible for a 
presidential memorial certificate for honoring the memory of 
the individual. This provision would allow VA to provide a 
presidential memorial certificate to the next of kin, 
relatives, or friends of such individuals, who have made the 
supreme sacrifice for our Country, and express our Country's 
grateful recognition of the individual's service in the Armed 
Forces.
    We estimate that this eligibility expansion would result in 
benefit costs of $9,000 in the first year and $90,000 over 10 
years.

                              Section 105

    Section 105(a) would amend 38 U.S.C. Sec. 5317 by changing 
the expiration date from September 30, 2011, to September 30, 
2016, thereby extending for five years VA's income verification 
authority under that provision. Currently, section 5317 and a 
counterpart provision at section 6103(l)(7)(D)(viii) of the 
Internal Revenue Code authorize VA to verify the eligibility of 
recipients of, or applicants for, VA need-based benefits and 
services using income data from the Internal Revenue Service 
and the Social Security Administration. The existing authority 
has been instrumental in correcting amounts of benefits 
payments and determining health care eligibility, copayment 
status, and enrollment priority assignment; however, this 
authority expires on September 30, 2011. Notably, there is no 
expiration date in the counterpart Internal Revenue Service 
provision. Expiration of this authority would interrupt the 
income verification process. VA supports enactment of this 
subsection.
    VA estimates that enactment of section 105(a) would result 
in a cost to its mandatory compensation and pension programs of 
$20.2 million during the first year but produce net savings of 
$46.7 million over five years. Discretionary savings to the 
Veterans Health Administration are estimated to be $40.5 
million in the first year and $139.1 million over five years.
    Section 105(b) would amend 38 U.S.C. Sec. 5317A and a 
counterpart provision in section 453(j)(11) of the Social 
Security Act (42 U.S.C. Sec. 653(j)(11)), by extending the 
expiration date of those provisions until September 30, 2021. 
Currently, 38 U.S.C. Sec. 5317A and section 453(j)(11) of the 
Social Security Act authorize VA to verify the eligibility of 
recipients of, or applicants for, certain VA need-based 
benefits and services, using income data from the U.S. 
Department of Health and Human Services. This authority expires 
on September 30, 2011. The existing authority is a major 
vehicle for ensuring program integrity. Expiration of this 
authority would result in an increase of erroneous payments to 
applicants for need-based benefits and the under-charging of 
user fees.
    VA estimates that enactment of section 105(b) would 
initially result in increased benefit costs of $2 million 
during 2012 and $3.4 million through 2014, followed by a net 
savings of $869,000 in 2015 and an estimated total net benefit 
savings of $17 million through 2020.

                              Section 201

    Section 201 would amend 38 U.S.C. Sec. 3704(c) to allow a 
Veteran's dependent child to satisfy the occupancy requirements 
of VA home loans. Currently, only a Veteran or a Veteran's 
spouse may satisfy the requirement, which means that a single 
parent on active duty may be prevented from obtaining a VA-
guaranteed loan. The proposed change would make it easier for 
those serving in the Armed Forces to use their VA home loan 
benefit. VA supports enactment of this section.
    VA estimates that enactment of section 201 would result in 
$336,000 in savings during the first year, $2.6 million in 
costs over five years, and $8.9 million in costs over ten 
years.

                              Section 202

    Section 202 would amend 38 U.S.C. Sec. 3703(d) to allow the 
Secretary to guarantee a loan, regardless of whether such loan 
is subordinate to a superior lien created by a public entity 
that has provided or will provide assistance in response to a 
major disaster. VA determined this authority was necessary in 
the aftermath of Hurricanes Katrina and Rita, when States were 
developing grant assistance programs to help disaster victims. 
VA supports enactment of this section.
    As part of State disaster relief programs, States may opt 
to create covenants ensuring that grant recipients rebuild 
their homes in accordance with program specifications. VA does 
not have authority to take a second-lien position to such 
liens, however, and as a result, some Veterans may be in 
jeopardy of not being able to obtain disaster relief. Moreover, 
if a Veteran is unable to obtain disaster relief, the loan 
holder may be in a position of having to foreclose the loan and 
file a claim against VA's guaranty. By allowing the VA-
guaranteed loan to take a subordinate position to a superior 
lien resulting from disaster assistance, Veterans' homes are 
more likely to be repaired, thereby potentially reducing the 
likelihood of foreclosures and guaranty claims.
    This section also would eliminate an anachronism from the 
text of the statute. Currently, the statute requires that, with 
respect to any superior lien ``to be created after June 6, 
1969,'' the Secretary must have determined in advance that the 
interests of disregarding such a lien created by a covenant 
would not prejudice the interests of the Veteran borrower or 
the Government. Reference to June 6, 1969, in the future tense 
is no longer necessary.
    VA has determined that there are no expected costs 
associated with enactment of this section.

           *       *       *       *       *       *       *

    VA appreciates the opportunity to provide our formal views 
and cost estimates on this legislation. Please have your staff 
contact Assistant Secretary Joan Evans with any additional 
questions.
    Thank you for your tireless efforts in support of our 
Veterans, Servicemembers, and their families.
    The Office of Management and Budget has advised that there 
is no objection to the submission of this report from the 
standpoint of the Administration's program.
            Sincerely,
Eric K. Shinseki.

           *       *       *       *       *       *       *


        SUPPLEMENTAL VIEWS OF HON. RICHARD BURR, RANKING MEMBER

    Although I am pleased that my amendment was accepted to 
strengthen VA beneficiaries' due process rights in connection 
with the requirements of the Brady Handgun Violence Prevention 
Act of 1993 (that amendment is now section 301 of the original 
bill), I want to stress that the longer-term solution to the 
problem is enactment of S. 669, the Veterans 2nd Amendment 
Protection Act. During the first session of the 111th Congress, 
the Committee unanimously approved S. 669. That bill, which I 
authored, would require a finding by a judicial authority that 
VA beneficiaries who have been adjudicated as ``mental 
defective'' are, in fact, dangerous to themselves or others 
before their names could be sent to the National Instant 
Criminal Background Check System. As of the writing of this 
report, S. 669 remains pending before the Senate, but I believe 
it stands as the Committee's preferred solution to address 
needed improvements to VA beneficiaries' due process rights 
(for more on S. 669, see Senate Report 111-27). Absent movement 
on that legislation, however, I offered my amendment at the 
August 5, 2010, markup in an effort to advance improvements 
needed to the existing system of due process available to 
certain VA beneficiaries.

           *       *       *       *       *       *       *


                        Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, changes in existing law made by the 
Committee bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                      Title 38. Veterans' Benefits

                       Part I. General Provisions

Chapter 1. General

           *       *       *       *       *       *       *


SEC. 112. PRESIDENTIAL MEMORIAL CERTIFICATE PROGRAM

    [(a) At the request of the President the Secretary may 
conduct a program for honoring the memory of deceased veterans, 
discharged under honorable conditions, by preparing and sending 
to eligible recipients a certificate bearing the signature of 
the President and expressing the country's grateful recognition 
of the veteran's service in the Armed Forces. The award of a 
certificate to one eligible recipient will not preclude 
authorization of another certificate if a request is received 
from some other eligible recipient.]
    (a)(1) At the request of the President, the Secretary may 
conduct a program for honoring the memory of covered 
individuals by preparing and sending to eligible recipients a 
certificate bearing the signature of the President and 
expressing the country's recognition of the covered 
individual's service in the Armed Forces.
    (2) The award of a certificate to one eligible recipient 
shall not preclude authorization of another certificate if a 
request is received from some other eligible recipient.
    (b) For purposes of this section, a covered individual is 
any of the following:
          (1) A deceased veteran discharged under honorable 
        conditions.
          (2) An individual who dies while serving in the 
        active military, naval, or air service.
    (c) [(b)] For the purpose of this section an ``eligible 
recipient'' means the next of kin, a relative or friend upon 
request, or an authorized service representative acting on 
behalf of such relative or friend.
    (d) [(c)] A certificate may not be furnished under the 
program under subsection (a) on behalf of a deceased person 
described in section 2411(b) of this title.

           *       *       *       *       *       *       *


Part II. General Benefits

           *       *       *       *       *       *       *


Chapter 19. Insurance

           *       *       *       *       *       *       *


Subchapter III. Servicemembers' Group Life Insurance

           *       *       *       *       *       *       *


SEC. 1968. DURATION AND TERMINATION OF COVERAGE; CONVERSION

    (a) * * *
          (1) * * *
                  (A) * * *
                          (i) * * *
                          [(ii) The date that is--
                                  [(I) two years after the date 
                                of separation or release from 
                                such active duty or active duty 
                                for training, in the case of 
                                such a separation or release 
                                during the period beginning on 
                                the date that is one year 
                                before the date of the 
                                enactment of Veterans' Housing 
                                Opportunity and Benefits 
                                Improvement Act of 2006 and 
                                ending on September 30, 2011; 
                                and
                                  [(II) 18 months after the 
                                date of separation or release 
                                from such active duty or active 
                                duty for training, in the case 
                                of such a separation or release 
                                on or after October 1, 2011.]
                          (ii) The date that is 2 years after 
                        the date of separation or release from 
                        such active duty or active duty for 
                        training, in the case of such a 
                        separation or release occurring on or 
                        after June 15, 2005.

           *       *       *       *       *       *       *

          (4) * * *
                  (A) * * *
                  [(B) The date that is--
                          [(i) two years after the date of 
                        separation or release from such 
                        assignment, in the case of such a 
                        separation or release during the period 
                        beginning on the date that is one year 
                        before the date of the enactment of 
                        Veterans' Housing Opportunity and 
                        Benefits Improvement Act of 2006 and 
                        ending on September 30, 2011; and
                          [(ii) 18 months after the date of 
                        separation or release from such 
                        assignment, in the case of such a 
                        separation or release on or after 
                        October 1, 2011.]
                  (B) The date that is 2 years after the date 
                of separation or release from such assignment, 
                in the case of such a separation or release 
                occurring on or after June 15, 2005.

           *       *       *       *       *       *       *


SEC. 1977. VETERANS' GROUP LIFE INSURANCE

    (a)(1) Veterans' Group Life Insurance shall be issued in 
the amounts specified in section 1967(a) of this title. [In the 
case of any individual, the amount of Veterans' Group Life 
Insurance may not exceed the amount of Servicemembers' Group 
Life Insurance coverage continued in force after the expiration 
of the period of duty or travel under section 1967(b) or 
1968(a) of this title.] No person may carry a combined amount 
of Servicemembers' Group Life Insurance and Veterans' Group 
Life Insurance at any one time in excess of the maximum amount 
for Servicemembers' Group Life Insurance in effect under 
section 1967(a)(3)(A)(i) of this title.
    (2) * * *
    (3) Subject to the second sentence of paragraph (1), a 
veteran who has not attained the age of 60 years and is insured 
under Veterans' Group Life Insurance for an amount less than 
the maximum amount of Servicemembers' Group Life Insurance in 
effect under section 1967(a)(3)(A)(i) of this title at the time 
of renewal of Veterans' Group Life Insurance under this section 
may increase the amount of the veteran's coverage under 
Veterans' Group Life Insurance by not more than $25,000 at the 
time of renewal.

           *       *       *       *       *       *       *


Part III. Readjustment and Related Benefits

           *       *       *       *       *       *       *


              Chapter 37. Housing and Small Business Loans

Subchapter I. General

           *       *       *       *       *       *       *


SEC. 3703. BASIC PROVISIONS RELATING TO LOAN GUARANTY AND INSURANCE

           *       *       *       *       *       *       *


    (d)(1) * * *

           *       *       *       *       *       *       *

    [(3) Any real estate housing loan (other than for repairs, 
alterations, or improvements) shall be secured by a first lien 
on the realty. In determining whether a loan for the purchase 
or construction of a home is so secured, the Secretary may 
disregard a superior lien created by a duly recorded covenant 
running with the realty in favor of a private entity to secure 
an obligation to such entity for the homeowner's share of the 
costs of the management, operation, or maintenance of property, 
services or programs within and for the benefit of the 
development or community in which the veteran's realty is 
located, if the Secretary determines that the interests of the 
veteran borrower and of the Government will not be prejudiced 
by the operation of such covenant. In respect to any such 
superior lien to be created after June 6, 1969, the Secretary's 
determination must have been made prior to the recordation of 
the covenant.]
    (3)(A) Any real estate housing loan (other than for 
repairs, alterations, or improvements) shall be secured by a 
first lien on the realty. In determining whether a loan is so 
secured, the Secretary may either disregard or allow for 
subordination to a superior lien created by a duly recorded 
covenant running with the realty in favor of--
          (i) a public entity that has provided or will provide 
        assistance in response to a major disaster as declared 
        by the President under section 401 of the Robert T. 
        Stafford Disaster Relief and Emergency Assistance Act 
        (42 U.S.C. 5170); or
          (ii) a private entity to secure an obligation to such 
        entity for the homeowner's share of the costs of the 
        management, operation, or maintenance of property, 
        services, or programs within and for the benefit of the 
        development or community in which the veteran's realty 
        is located, if the Secretary determines that the 
        interests of the veteran borrower and of the Government 
        will not be prejudiced by the operation of such 
        covenant.
      (B) With respect to any superior lien described in 
subparagraph (A) created after June 6, 1969, the Secretary's 
determination under clause (ii) of such subparagraph shall have 
been made prior to the recordation of the covenant.

           *       *       *       *       *       *       *


SEC. 3704. RESTRICTIONS ON LOANS

           *       *       *       *       *       *       *


    (c)(1) * * *

           *       *       *       *       *       *       *

    [(2) In any case in which a veteran is in active duty 
status as a member of the Armed Forces and is unable to occupy 
a property because of such status, the occupancy requirements 
of--
          [(A) paragraph (1) of this subsection;
          [(B) paragraphs (1) through (5) and paragraph (7) of 
        section 3710(a) of this title;
          [(C) section 3712(a)(5)(A)(i) of this title; and
          [(D) section 3712(e)(5) of this title;
[shall be considered to be satisfied if the spouse of the 
veteran occupies the property as the spouse's home and the 
spouse makes the certification required by paragraph (1) of 
this subsection.]
    (2) In any case in which a veteran is in active duty status 
as a member of the Armed Forces and is unable to occupy a 
property because of such status, the occupancy requirements of 
this chapter shall be considered to be satisfied if--
          (A) the veteran's spouse occupies or intends to 
        occupy the property as a home and the spouse makes the 
        certification required by paragraph (1) of this 
        subsection; or
          (B) the veteran's dependent child occupies or will 
        occupy the property as a home and the veteran's 
        attorney-in-fact or a legal guardian of the veteran's 
        dependent child makes the certification required by 
        paragraph (1) of this subsection.

           *       *       *       *       *       *       *


               Part IV. General Administrative Provisions

Chapter 51. Claims, Effective Dates, And Payments

           *       *       *       *       *       *       *


Subchapter II. Effective Dates

           *       *       *       *       *       *       *


SEC. 5111. COMMENCEMENT OF PERIOD OF PAYMENT

           *       *       *       *       *       *       *


    (c)(1) This section shall [apply to payments made pursuant 
to section 5310 of this title only if the monthly amount of 
dependency and indemnity compensation or pension payable to the 
surviving spouse is greater than the amount of compensation or 
pension the veteran would have received, but for such veteran's 
death, for the month in which such veteran's death occurred] 
not apply to payments made pursuant to section 5310 of this 
title.

           *       *       *       *       *       *       *


Chapter 53. Special Provisions Relating to Benefits

           *       *       *       *       *       *       *


SEC. 5310. PAYMENT OF BENEFITS FOR MONTH OF DEATH

    [(a) If, in accordance with the provisions of section 
5110(d) of this title, a surviving spouse is entitled to death 
benefits under chapter 11, 13, or 15 of this title for the 
month in which a veteran's death occurs, the amount of such 
death benefits for that month shall be not less than the amount 
of benefits the veteran would have received under chapter 11 or 
15 of this title for that month but for the death of the 
veteran.
    [(b)(1) If the surviving spouse of a veteran who was in 
receipt of compensation or pension at the time of death is not 
entitled to death benefits under chapter 11, 13, or 15 of this 
title for the month in which the veteran's death occurs, that 
surviving spouse shall be entitled to a benefit for that month 
in the amount of benefits the veteran would have received under 
chapter 11 or 15 of this title for that month but for the death 
of the veteran.
    [(2) If (notwithstanding section 5112(b)(1) of this title) 
a check or other payment is issued to, and in the name of, the 
deceased veteran as a benefit payment under chapter 11 or 15 of 
this title for the month in which death occurs, that check or 
other payment (A) shall be treated for all purposes as being 
payable to the surviving spouse, and (B) if that check or other 
payment is negotiated or deposited, shall be considered to be 
the benefit to which the surviving spouse is entitled under 
paragraph (1). However, if such check or other payment is in an 
amount less than the amount of the benefit under paragraph (1), 
the unpaid amount shall be treated in the same manner as an 
accrued benefit under section 5121 of this title.]
    (a) In General.--(1) A surviving spouse of a veteran is 
entitled to a benefit for the month of the veteran's death if 
at the time of the veteran's death--
          (A) the veteran was receiving compensation or pension 
        under chapter 11 or 15 of this title; or
          (B) the veteran was not receiving compensation or 
        pension under chapter 11 or 15 of this title but the 
        veteran had a claim pending for the month of the 
        veteran's death for which benefits would have been 
        payable under chapter 11 or 15 of this title had the 
        veteran not died.
    (2) The amount of benefit under paragraph (1) is the amount 
that the veteran would have received under chapter 11 or 15 of 
this title for the month of the veteran's death had the veteran 
not died.
    (3) Any benefits payable under this section on behalf of a 
veteran who was not in receipt of such benefits as of the month 
of the veteran's death shall be paid to the surviving spouse as 
accrued benefits.
    (b) Claims Pending Adjudication.--If a claim for 
entitlement to compensation or additional compensation under 
chapter 11 of this title or pension or additional pension under 
chapter 15 of this title is pending at the time of a veteran's 
death and the check or other payment issued to the veteran's 
surviving spouse under subsection (a) is less than the amount 
of the benefit the veteran would have been entitled to for the 
month of death pursuant to the adjudication of the pending 
claim, an amount equal to the difference between the amount to 
which the veteran would have been entitled to receive under 
chapter 11 or 15 of this title for the month of the veteran's 
death had the veteran not died and the amount of the check or 
other payment issued to the surviving spouse shall be treated 
in the same manner as an accrued benefit under section 5121 of 
this title.

           *       *       *       *       *       *       *


           Chapter 55. Minors, Incompetents, and Other Wards

SEC.

5501. COMMITMENT ACTIONS.

           *       *       *       *       *       *       *


5510. ANNUAL REPORT.

5511. PROCESSING OF APPLICATIONS FOR RELIEF FROM ADJUDICATION OF MENTAL 
                    INCOMPETENCE FOR CERTAIN PURPOSES.

           *       *       *       *       *       *       *


SEC. 5511. PROCESSING OF APPLICATIONS FOR RELIEF FROM ADJUDICATION OF 
                    MENTAL INCOMPETENCE FOR CERTAIN PURPOSES

    Notwithstanding clause (ii) of section 101(c)(2)(A) of the 
NICS Improvement Amendments Act of 2007 (Public Law 110-180; 18 
U.S.C. 922 note), each application for relief submitted to the 
Secretary under the program required by clause (i) of such 
section shall be processed by the Secretary not later than 180 
days after the receipt of the application. If the Secretary 
fails to resolve such application for relief within 180 days 
for any reason, including a lack of appropriated funds, the 
Secretary shall be deemed to have granted such application for 
relief.