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115th Congress     }                                   {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                   {       115-680

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

 
TO AMEND TITLE 38, UNITED STATES CODE, TO CLARIFY PRESUMPTIONS RELATING 
 TO THE EXPOSURE OF CERTAIN VETERANS WHO SERVED IN THE VICINITY OF THE 
              REPUBLIC OF VIETNAM, AND FOR OTHER PURPOSES

                                _______
                                

  May 18, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Roe of Tennessee, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 299]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 299) to amend title 38, United States Code, to 
clarify presumptions relating to the exposure of certain 
veterans who served in the vicinity of the Republic of Vietnam, 
and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................    13
Background and Need for Legislation..............................    14
Hearings.........................................................    20
Subcommittee Consideration.......................................    21
Committee Consideration..........................................    21
Committee Votes..................................................    21
Committee Oversight Findings.....................................    21
Statement of General Performance Goals and Objectives............    22
New Budget Authority, Entitlement Authority, and Tax Expenditures    22
Earmarks and Tax and Tariff Benefits.............................    22
Committee Cost Estimate..........................................    22
Congressional Budget Office Estimate.............................    22
Federal Mandates Statement.......................................    32
Advisory Committee Statement.....................................    32
Constitutional Authority Statement...............................    32
Applicability to Legislative Branch..............................    32
Statement on Duplication of Federal Programs.....................    32
Disclosure of Directed Rulemaking................................    32
Section-by-Section Analysis of the Legislation...................    33
Changes in Existing Law Made by the Bill as Reported.............    35

                               Amendment

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

SECTION 1. CLARIFICATION OF PRESUMPTIONS OF EXPOSURE FOR VETERANS WHO 
                    SERVED IN VICINITY OF REPUBLIC OF VIETNAM.

  (a) In General.--Chapter 11 of title 38, United States Code, is 
amended by inserting after section 1116 the following new section:

``Sec. 1116A. Presumptions of service connection for veterans who 
                    served in the territorial seas of the Republic of 
                    Vietnam

  ``(a) Service Connection.--For the purposes of section 1110 of this 
title, and subject to section 1113 of this title, a disease covered by 
section 1116 of this title becoming manifest as specified in that 
section in a veteran who, during active military, naval, or air 
service, served in the territorial seas of the Republic of Vietnam 
during the period beginning on January 9, 1962, and ending on May 7, 
1975, shall be considered to have been incurred in or aggravated by 
such service, notwithstanding that there is no record of evidence of 
such disease during the period of such service.
  ``(b) Exposure.--A veteran who, during active military, naval, or air 
service, served in the territorial seas of the Republic of Vietnam 
during the period beginning on January 9, 1962, and ending on May 7, 
1975, shall be presumed to have been exposed during such service to an 
herbicide agent containing dioxin or 2,4-dichlorophenoxyacetic acid, 
and may be presumed to have been exposed during such service to any 
other chemical compound in an herbicide agent, unless there is 
affirmative evidence to establish that the veteran was not exposed to 
any such agent during that service.
  ``(c) Effective Date of Award.--(1) Except as provided by paragraph 
(2), the effective date of an award under this section shall be 
determined in accordance with section 5110 of this title.
  ``(2)(A) Notwithstanding subsection (g) of section 5110 of this 
title, the Secretary shall determine the effective date of an award 
based on a claim under this section for a veteran described in 
subparagraph (B) by treating the date on which the veteran filed the 
prior claim specified in clause (i) of such subparagraph as the date on 
which the veteran filed the claim so awarded under this section.
  ``(B) A veteran described in this subparagraph is a veteran who meets 
the following criteria:
          ``(i) The veteran submitted a claim for disability 
        compensation on or after September 25, 1985, and before January 
        1, 2019, for a disease covered by this section, and the claim 
        was denied by reason of the claim not establishing that the 
        disease was incurred or aggravated by the service of the 
        veteran.
          ``(ii) The veteran submits a claim for disability 
        compensation on or after January 1, 2019, for the same 
        condition covered by the prior claim under clause (i), and the 
        claim is approved pursuant to this section.
  ``(d) Herbicide Agent.--In this section, the term `herbicide agent' 
has the meaning given that term in section 1116 (a)(3) of this 
title.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
1116 the following new item:

``1116A. Presumptions of service connection for veterans who served in 
the territorial seas of the Republic of Vietnam.''.

  (c) Health Care.--Section 1710(e)(4) of such title is amended by 
inserting ``(including the territorial seas of such Republic)'' after 
``served on active duty in the Republic of Vietnam''.
  (d) Outreach.--
          (1) Requirement.--The Secretary of Veterans Affairs shall 
        conduct outreach to inform veterans described in paragraph (2) 
        of the ability to submit a claim for disability compensation 
        under section 1116A of title 38, United States Code, as added 
        by subsection (a).
          (2) Veteran described.--A veteran described in this paragraph 
        is a veteran who, during active military, naval, or air 
        service, served in the territorial seas of the Republic of 
        Vietnam during the period beginning on January 9, 1962, and 
        ending on May 7, 1975.
  (e) Reports.--Not later than January 1, 2020, and not later than 
January 1, 2022, the Secretary of Veterans Affairs shall submit to the 
Committees on Veterans' Affairs of the House of Representatives and the 
Senate a report on claims for disability compensation under section 
1116A of title 38, United States Code, as added by subsection (a). Each 
report shall include the following with respect to the period covered 
by the report, disaggregated by the regional offices of the Department 
of Veterans Affairs:
          (1) The number of claims filed under such section.
          (2) The number of such claims granted.
          (3) The number of such claims denied.
  (f) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2019.

SEC. 2. PRESUMPTION OF HERBICIDE EXPOSURE FOR CERTAIN VETERANS WHO 
                    SERVED IN KOREA.

  (a) In General.--Chapter 11 of title 38, United States Code, is 
amended by inserting after section 1116A, as added by section 1, the 
following new section:

``Sec. 1116B. Presumption of herbicide exposure for certain veterans 
                    who served in Korea

  ``(a) Presumption of Service-Connection.--(1) For the purposes of 
section 1110 of this title, and subject to section 1113 of this title, 
a disease specified in subsection (b) that becomes manifest as 
specified in that subsection in a veteran described in paragraph (2) 
shall be considered to have been incurred or aggravated in the line of 
duty in the active military, naval, or air service, notwithstanding 
that there is no record of evidence of such disease during the period 
of such service.
  ``(2) A veteran described in this paragraph is a veteran who, during 
active military, naval, or air service, served in or near the Korean 
demilitarized zone (DMZ), during the period beginning on September 1, 
1967, and ending on August 31, 1971.
  ``(b) Diseases.--A disease specified in this subsection is--
          ``(1) a disease specified in paragraph (2) of subsection (a) 
        of section 1116 of this title that becomes manifest as 
        specified in that paragraph; or
          ``(2) any additional disease that--
                  ``(A) the Secretary determines in regulations 
                warrants a presumption of service-connection by reason 
                of having positive association with exposure to an 
                herbicide agent; and
                  ``(B) becomes manifest within any period prescribed 
                in such regulations.
  ``(c) Herbicide Agent.--For purposes of this section, the term 
`herbicide agent' has the meaning given such term in section 1821(d) of 
this title.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
1116A, as added by section 1, the following new item:

``1116B. Presumption of herbicide exposure for certain veterans who 
served in Korea.''.

  (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2019.

SEC. 3. BENEFITS FOR CHILDREN OF CERTAIN THAILAND SERVICE VETERANS BORN 
                    WITH SPINA BIFIDA.

  (a) In General.--Subchapter III of chapter 18 of title 38, United 
States Code, is amended by adding at the end the following new section:

``Sec. 1822. Benefits for children of certain Thailand service veterans 
                    born with spina bifida

  ``(a) Benefits Authorized.--The Secretary may provide to any child of 
a veteran of covered service in Thailand who is suffering from spina 
bifida the health care, vocational training and rehabilitation, and 
monetary allowance required to be paid to a child of a Vietnam veteran 
who is suffering from spina bifida under subchapter I of this chapter 
as if such child of a veteran of covered service in Thailand were a 
child of a Vietnam veteran who is suffering from spina bifida under 
such subchapter.
  ``(b) Spina Bifida Conditions Covered.--This section applies with 
respect to all forms and manifestations of spina bifida, except spina 
bifida occulta.
  ``(c) Veteran of Covered Service in Thailand.--For purposes of this 
section, a veteran of covered service in Thailand is any individual, 
without regard to the characterization of that individual's service, 
who--
          ``(1) served in the active military, naval, or air service in 
        Thailand, as determined by the Secretary in consultation with 
        the Secretary of Defense, during the period beginning on 
        January 9, 1962, and ending on May 7, 1975; and
          ``(2) is determined by the Secretary, in consultation with 
        the Secretary of Defense, to have been exposed to a herbicide 
        agent during such service in Thailand.
  ``(d) Herbicide Agent.--For purposes of this section, the term 
`herbicide agent' means a chemical in a herbicide used in support of 
United States and allied military operations in Thailand, as determined 
by the Secretary in consultation with the Secretary of Defense, during 
the period beginning on January 9, 1962, and ending on May 7, 1975.''.
  (b) Clerical Amendments.--
          (1) Subchapter heading.--The heading for subchapter III of 
        chapter 18 of such title is amended by inserting ``AND 
        THAILAND'' after ``KOREA''.
          (2) Table of sections.--The table of sections at the 
        beginning of chapter 18 of such title is amended--
                  (A) by striking the item relating to subchapter III 
                and inserting the following new item:

   ``subchapter iii--children of certain korea and thailand service 
                   veterans born with spina bifida'';

        and
                  (B) by inserting after the item relating to section 
                1821 the following new item:

``1822. Benefits for children of certain Thailand service veterans born 
with spina bifida.''.

  (c) Report.--Not later than 180 days after the date of the enactment 
of this Act, the Secretary of Veterans Affairs, in consultation with 
the Secretary of Defense, shall submit to the Committees on Veterans' 
Affairs of the House of Representatives and the Senate a report 
identifying--
          (1) the military installations of the United States located 
        in Thailand during the period beginning on January 9, 1962, and 
        ending on May 7, 1975, at which an herbicide agent (as defined 
        in section 1822 of title 38, United States Code, as added by 
        subsection (a)) was actively used; and
          (2) the period of such use.

SEC. 4. REPORT ON CERTAIN GULF WAR ILLNESS STUDY.

  Not later than 180 days after the date of the enactment of this Act, 
the Secretary of Veterans Affairs shall submit to the Committees on 
Veterans' Affairs of the House of Representatives and the Senate a 
report on the findings, as of the date of the report, of the Follow-up 
Study of a National Cohort of Gulf War and Gulf Era Veterans under the 
epidemiology program of the Department of Veterans Affairs.

SEC. 5. LOANS GUARANTEED UNDER HOME LOAN PROGRAM OF DEPARTMENT OF 
                    VETERANS AFFAIRS.

  (a) Adjustment of Loan Limit.--Section 3703(a)(1) of title 38, United 
States Code, is amended--
          (1) in subparagraph (A)(i)(IV)--
                  (A) by striking ``the lesser of''; and
                  (B) by striking ``or 25 percent of the loan''; and
          (2) in subparagraph (C), by striking ``Freddie Mac'' and all 
        that follows through the period at the end and inserting 
        ``amount of the loan.''.
  (b) Loan Fees.--Section 3729(b)(2) of such title is amended by 
striking the loan fee table and inserting the following:


----------------------------------------------------------------------------------------------------------------
                  ``Type of loan                   Active duty veteran       Reservist          Other obligor
----------------------------------------------------------------------------------------------------------------
(A)(i) Initial loan described in section 3710(a)   2.15                 2.40                 NA
 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, 2004, and before
 January 1, 2019)
(A)(ii) Initial loan described in section 3710(a)  2.40                 2.40                 NA
 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 January 1, 2019, and before
 October 1, 2026)
(A)(iii) Initial loan described in section         2.15                 2.15                 NA
 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, 2026, and
 before October 1, 2027)
(A)(iv) Initial loan described in section 3710(a)  1.40                 1.40                 NA
 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, 2027)
(B)(i) Subsequent loan described in section        3.30                 3.30                 NA
 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, 2004, and before January 1, 2019)
(B)(ii) Subsequent loan described in section       3.80                 3.80                 NA
 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 January
 1, 2019, and before October 1, 2026)
(B)(iii) Subsequent loan described in section      3.30                 3.30                 NA
 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, 2026, and before October 1, 2027)
(B)(iv) Subsequent loan described in section       1.25                 1.25                 NA
 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, 2027)
(C)(i) Loan described in section 3710(a) to        1.50                 1.75                 NA
 purchase or construct a dwelling with 5-down
 (closed before January 1, 2019)
(C)(ii) Loan described in section 3710(a) to       1.75                 1.75                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after January 1, 2019, and before
 October 1, 2026)
(C)(iii) Loan described in section 3710(a) to      1.50                 1.50                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after October 1, 2026, and before
 October 1, 2027)
(C)(iv) Loan described in section 3710(a) to       0.75                 0.75                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after October 1, 2027)
(D)(i) Loan described in section 3710(a) to        1.25                 1.50                 NA
 purchase or construct a dwelling with 10-down
 (closed before January 1, 2019)
(D)(ii) Loan described in section 3710(a) to       1.45                 1.45                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after January 1, 2019, and before
 October 1, 2026)
(D)(iii) Loan described in section 3710(a) to      1.25                 1.25                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after October 1, 2026, and before
 October 1, 2027)
(D)(iv) Loan described in section 3710(a) to       0.50                 0.50                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after October 1, 2027)
(E) Interest rate reduction refinancing loan       0.50                 0.50                 NA
(F) Direct loan under section 3711                 1.00                 1.00                 NA
(G) Manufactured home loan under section 3712      1.00                 1.00                 NA
 (other than an interest rate reduction
 refinancing loan)
(H) Loan to Native American veteran under section  1.25                 1.25                 NA
 3762 (other than an interest rate reduction
 refinancing loan)
(I) Loan assumption under section 3714             0.50                 0.50                 0.50
(J) Loan under section 3733(a)                     2.25                 2.25                 2.25''.
----------------------------------------------------------------------------------------------------------------


  (c) Collection of Loan Fees.--Section 3729(c) of such title is 
amended--
          (1) in paragraph (1), by striking ``A fee'' and inserting 
        ``Subject to paragraph (3), a fee''; and
          (2) by adding at the end the following new paragraph:
  ``(3) A fee shall be collected under this section from any veteran 
with a service-connected disability rated as less than total, or any 
surviving spouse of such a veteran, who, on or after January 1, 2019, 
receives a loan in an amount that exceeds the Freddie Mac conforming 
loan limit limitation determined under section 305(a)(2) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a single-
family residence, as adjusted for the year involved.''.
  (d) Effective Date.--The amendments made by this section shall apply 
with respect to a loan guaranteed under section 3710 of title 38, 
United States Code, on or after January 1, 2019.
  (e) Guidance.--Notwithstanding section 501 of such title, the 
Secretary of Veterans Affairs may issue guidance to implement this 
section before prescribing new regulations under sections 3703 and 3729 
of such title, as amended by subsections (a), (b), and (c).

SEC. 6. INFORMATION GATHERING FOR DEPARTMENT OF VETERANS AFFAIRS HOME 
                    LOAN APPRAISALS.

  (a) In General.--Section 3731(b) of title 38, United States Code, is 
amended by adding at the end the following new paragraph:
  ``(3) The Secretary shall permit an appraiser on a list developed and 
maintained under subsection (a)(3) to make an appraisal for the 
purposes of this chapter based solely on information gathered by a 
person with whom the appraiser has entered into an agreement for such 
services.''.
  (b) Effective Date.--The amendments made by this section shall apply 
with respect to an appraisal under section 3731 of such title, on or 
after January 1, 2019.
  (c) Guidance.--Notwithstanding section 501 of such title, the 
Secretary of Veterans Affairs may issue guidance to implement this 
section before prescribing new regulations under sections 3731 of such 
title, as amended by subsection (a).

Amendment in the Nature of a Substitute to H.R. 299 Offered by Mr. Roe 
                              of Tennessee


    Strike all after the enacting clause and insert the 
following:

SECTION 1. CLARIFICATION OF PRESUMPTIONS OF EXPOSURE FOR VETERANS WHO 
                    SERVED IN VICINITY OF REPUBLIC OF VIETNAM.

  (a) In General.--Chapter 11 of title 38, United States Code, 
is amended by inserting after section 1116 the following new 
section:

``Sec. 1116A. Presumptions of service connection for veterans who 
                    served in the territorial seas of the Republic of 
                    Vietnam

  ``(a) Service Connection.--For the purposes of section 1110 
of this title, and subject to section 1113 of this title, a 
disease covered by section 1116 of this title becoming manifest 
as specified in that section in a veteran who, during active 
military, naval, or air service, served in the territorial seas 
of the Republic of Vietnam during the period beginning on 
January 9, 1962, and ending on May 7, 1975, shall be considered 
to have been incurred in or aggravated by such service, 
notwithstanding that there is no record of evidence of such 
disease during the period of such service.
  ``(b) Exposure.--A veteran who, during active military, 
naval, or air service, served in the territorial seas of the 
Republic of Vietnam during the period beginning on January 9, 
1962, and ending on May 7, 1975, shall be presumed to have been 
exposed during such service to an herbicide agent containing 
dioxin or 2,4-dichlorophenoxyacetic acid, and may be presumed 
to have been exposed during such service to any other chemical 
compound in an herbicide agent, unless there is affirmative 
evidence to establish that the veteran was not exposed to any 
such agent during that service.
  ``(c) Effective Date of Award.--(1) Except as provided by 
paragraph (2), the effective date of an award under this 
section shall be determined in accordance with section 5110 of 
this title.
  ``(2)(A) Notwithstanding subsection (g) of section 5110 of 
this title, the Secretary shall determine the effective date of 
an award based on a claim under this section for a veteran 
described in subparagraph (B) by treating the date on which the 
veteran filed the prior claim specified in clause (i) of such 
subparagraph as the date on which the veteran filed the claim 
so awarded under this section.
  ``(B) A veteran described in this subparagraph is a veteran 
who meets the following criteria:
          ``(i) The veteran submitted a claim for disability 
        compensation on or after September 25, 1985, and before 
        January 1, 2019, for a disease covered by this section, 
        and the claim was denied by reason of the claim not 
        establishing that the disease was incurred or 
        aggravated by the service of the veteran.
          ``(ii) The veteran submits a claim for disability 
        compensation on or after January 1, 2019, for the same 
        condition covered by the prior claim under clause (i), 
        and the claim is approved pursuant to this section.
  ``(d) Herbicide Agent.--In this section, the term `herbicide 
agent' has the meaning given that term in section 1116 (a)(3) 
of this title.''.
  (b) Clerical Amendment.--The table of sections at the 
beginning of such chapter is amended by inserting after the 
item relating to section 1116 the following new item:

``1116A. Presumptions of service connection for veterans who served in 
          the territorial seas of the Republic of Vietnam.''.
  (c) Health Care.--Section 1710(e)(4) of such title is amended 
by inserting ``(including the territorial seas of such 
Republic)'' after ``served on active duty in the Republic of 
Vietnam''.
  (d) Outreach.--
          (1) Requirement.--The Secretary of Veterans Affairs 
        shall conduct outreach to inform veterans described in 
        paragraph (2) of the ability to submit a claim for 
        disability compensation under section 1116A of title 
        38, United States Code, as added by subsection (a).
          (2) Veteran described.--A veteran described in this 
        paragraph is a veteran who, during active military, 
        naval, or air service, served in the territorial seas 
        of the Republic of Vietnam during the period beginning 
        on January 9, 1962, and ending on May 7, 1975.
  (e) Reports.--Not later than January 1, 2020, and not later 
than January 1, 2022, the Secretary of Veterans Affairs shall 
submit to the Committees on Veterans' Affairs of the House of 
Representatives and the Senate a report on claims for 
disability compensation under section 1116A of title 38, United 
States Code, as added by subsection (a). Each report shall 
include the following with respect to the period covered by the 
report, disaggregated by the regional offices of the Department 
of Veterans Affairs:
          (1) The number of claims filed under such section.
          (2) The number of such claims granted.
          (3) The number of such claims denied.
  (f) Effective Date.--The amendments made by this section 
shall take effect on January 1, 2019.

SEC. 2. PRESUMPTION OF HERBICIDE EXPOSURE FOR CERTAIN VETERANS WHO 
                    SERVED IN KOREA.

  (a) In General.--Chapter 11 of title 38, United States Code, 
is amended by inserting after section 1116A, as added by 
section 1, the following new section:

``Sec. 1116B. Presumption of herbicide exposure for certain veterans 
                    who served in Korea

  ``(a) Presumption of Service-Connection.--(1) For the 
purposes of section 1110 of this title, and subject to section 
1113 of this title, a disease specified in subsection (b) that 
becomes manifest as specified in that subsection in a veteran 
described in paragraph (2) shall be considered to have been 
incurred or aggravated in the line of duty in the active 
military, naval, or air service, notwithstanding that there is 
no record of evidence of such disease during the period of such 
service.
  ``(2) A veteran described in this paragraph is a veteran who, 
during active military, naval, or air service, served in or 
near the Korean demilitarized zone (DMZ), during the period 
beginning on September 1, 1967, and ending on August 31, 1971.
  ``(b) Diseases.--A disease specified in this subsection is--
          ``(1) a disease specified in paragraph (2) of 
        subsection (a) of section 1116 of this title that 
        becomes manifest as specified in that paragraph; or
          ``(2) any additional disease that--
                  ``(A) the Secretary determines in regulations 
                warrants a presumption of service-connection by 
                reason of having positive association with 
                exposure to an herbicide agent; and
                  ``(B) becomes manifest within any period 
                prescribed in such regulations.
  ``(c) Herbicide Agent.--For purposes of this section, the 
term `herbicide agent' has the meaning given such term in 
section 1821(d) of this title.''.
  (b) Clerical Amendment.--The table of sections at the 
beginning of such chapter is amended by inserting after the 
item relating to section 1116A, as added by section 1, the 
following new item:

``1116B. Presumption of herbicide exposure for certain veterans who 
          served in Korea.''.
  (c) Effective Date.--The amendments made by this section 
shall take effect on January 1, 2019.

SEC. 3. BENEFITS FOR CHILDREN OF CERTAIN THAILAND SERVICE VETERANS BORN 
                    WITH SPINA BIFIDA.

  (a) In General.--Subchapter III of chapter 18 of title 38, 
United States Code, is amended by adding at the end the 
following new section:

``Sec. 1822. Benefits for children of certain Thailand service veterans 
                    born with spina bifida

  ``(a) Benefits Authorized.--The Secretary may provide to any 
child of a veteran of covered service in Thailand who is 
suffering from spina bifida the health care, vocational 
training and rehabilitation, and monetary allowance required to 
be paid to a child of a Vietnam veteran who is suffering from 
spina bifida under subchapter I of this chapter as if such 
child of a veteran of covered service in Thailand were a child 
of a Vietnam veteran who is suffering from spina bifida under 
such subchapter.
  ``(b) Spina Bifida Conditions Covered.--This section applies 
with respect to all forms and manifestations of spina bifida, 
except spina bifida occulta.
  ``(c) Veteran of Covered Service in Thailand.--For purposes 
of this section, a veteran of covered service in Thailand is 
any individual, without regard to the characterization of that 
individual's service, who--
          ``(1) served in the active military, naval, or air 
        service in Thailand, as determined by the Secretary in 
        consultation with the Secretary of Defense, during the 
        period beginning on January 9, 1962, and ending on May 
        7, 1975; and
          ``(2) is determined by the Secretary, in consultation 
        with the Secretary of Defense, to have been exposed to 
        a herbicide agent during such service in Thailand.
  ``(d) Herbicide Agent.--For purposes of this section, the 
term `herbicide agent' means a chemical in a herbicide used in 
support of United States and allied military operations in 
Thailand, as determined by the Secretary in consultation with 
the Secretary of Defense, during the period beginning on 
January 9, 1962, and ending on May 7, 1975.''.
  (b) Clerical Amendments.--
          (1) Subchapter heading.--The heading for subchapter 
        III of chapter 18 of such title is amended by inserting 
        ``AND THAILAND'' after ``KOREA''.
          (2) Table of sections.--The table of sections at the 
        beginning of chapter 18 of such title is amended--
                  (A) by striking the item relating to 
                subchapter III and inserting the following new 
                item:

    ``subchapter iii--children of certain korea and thailand service 
                   veterans born with spina bifida'';

        and
                  (B) by inserting after the item relating to 
                section 1821 the following new item:

``1822. Benefits for children of certain Thailand service veterans born 
          with spina bifida.''.
  (c) Report.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary of Veterans Affairs, in 
consultation with the Secretary of Defense, shall submit to the 
Committees on Veterans' Affairs of the House of Representatives 
and the Senate a report identifying--
          (1) the military installations of the United States 
        located in Thailand during the period beginning on 
        January 9, 1962, and ending on May 7, 1975, at which an 
        herbicide agent (as defined in section 1822 of title 
        38, United States Code, as added by subsection (a)) was 
        actively used; and
          (2) the period of such use.

SEC. 4. REPORT ON CERTAIN GULF WAR ILLNESS STUDY.

  Not later than 180 days after the date of the enactment of 
this Act, the Secretary of Veterans Affairs shall submit to the 
Committees on Veterans' Affairs of the House of Representatives 
and the Senate a report on the findings, as of the date of the 
report, of the Follow-up Study of a National Cohort of Gulf War 
and Gulf Era Veterans under the epidemiology program of the 
Department of Veterans Affairs.

SEC. 5. LOANS GUARANTEED UNDER HOME LOAN PROGRAM OF DEPARTMENT OF 
                    VETERANS AFFAIRS.

  (a) Adjustment of Loan Limit.--Section 3703(a)(1) of title 
38, United States Code, is amended--
          (1) in subparagraph (A)(i)(IV)--
                  (A) by striking ``the lesser of''; and
                  (B) by striking ``or 25 percent of the 
                loan''; and
          (2) in subparagraph (C), by striking ``Freddie Mac'' 
        and all that follows through the period and inserting 
        ``amount of the loan.''.
  (b) Loan Fees.--Section 3729(b)(2) of such title is amended 
by striking the loan fee table and inserting the following:


----------------------------------------------------------------------------------------------------------------
                  ``Type of loan                   Active duty veteran       Reservist          Other obligor
----------------------------------------------------------------------------------------------------------------
(A)(i) Initial loan described in section 3710(a)   2.15                 2.40                 NA
 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, 2004, and before
 January 1, 2019)
(A)(ii) Initial loan described in section 3710(a)  2.40                 2.40                 NA
 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 January 1, 2019, and before
 October 1, 2026)
(A)(iii) Initial loan described in section         2.15                 2.15                 NA
 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, 2026, and
 before October 1, 2027)
(A)(iv) Initial loan described in section 3710(a)  1.40                 1.40                 NA
 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, 2027)
(B)(i) Subsequent loan described in section        3.30                 3.30                 NA
 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, 2004, and before January 1, 2019)
(B)(ii) Subsequent loan described in section       3.80                 3.80                 NA
 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 January
 1, 2019, and before October 1, 2026)
(B)(iii) Subsequent loan described in section      3.30                 3.30                 NA
 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, 2026, and before October 1, 2027)
(B)(iv) Subsequent loan described in section       1.25                 1.25                 NA
 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, 2027)
(C)(i) Loan described in section 3710(a) to        1.50                 1.75                 NA
 purchase or construct a dwelling with 5-down
 (closed before January 1, 2019)
(C)(ii) Loan described in section 3710(a) to       1.75                 1.75                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after January 1, 2019, and before
 October 1, 2026)
(C)(iii) Loan described in section 3710(a) to      1.50                 1.50                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after October 1, 2026, and before
 October 1, 2027)
(C)(iv) Loan described in section 3710(a) to       0.75                 0.75                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after October 1, 2027)
(D)(i) Loan described in section 3710(a) to        1.25                 1.50                 NA
 purchase or construct a dwelling with 10-down
 (closed before January 1, 2019)
(D)(ii) Loan described in section 3710(a) to       1.45                 1.45                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after January 1, 2019, and before
 October 1, 2026)
(D)(iii) Loan described in section 3710(a) to      1.25                 1.25                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after October 1, 2026, and before
 October 1, 2027)
(D)(iv) Loan described in section 3710(a) to       0.50                 0.50                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after October 1, 2027)
(E) Interest rate reduction refinancing loan       0.50                 0.50                 NA
(F) Direct loan under section 3711                 1.00                 1.00                 NA
(G) Manufactured home loan under section 3712      1.00                 1.00                 NA
 (other than an interest rate reduction
 refinancing loan)
(H) Loan to Native American veteran under section  1.25                 1.25                 NA
 3762 (other than an interest rate reduction
 refinancing loan)
(I) Loan assumption under section 3714             0.50                 0.50                 0.50
(J) Loan under section 3733(a)                     2.25                 2.25                 2.25''.
----------------------------------------------------------------------------------------------------------------

  (c) Collection of Loan Fees.--Section 3729(c) of such title 
is amended--
          (1) in paragraph (1), by striking ``A fee'' and 
        inserting ``Subject to paragraph (3), a fee''; and
          (2) by adding at the end the following new paragraph:
  ``(3) A fee shall be collected under this section from any 
veteran with a service-connected disability rated as less than 
total, or any surviving spouse of such a veteran, who, on or 
after January 1, 2019, receives a loan in an amount that 
exceeds the Freddie Mac conforming loan limit limitation 
determined under section 305(a)(2) of the Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a single-
family residence, as adjusted for the year involved.''.
  (d) Effective Date.--The amendments made by this section 
shall apply with respect to a loan guaranteed under section 
3710 of title 38, United States Code, on or after January 1, 
2019.
  (e) Guidance.--Notwithstanding section 501 of such title, the 
Secretary of Veterans Affairs may issue guidance to implement 
this section before prescribing new regulations under sections 
3703 and 3729 of such title, as amended by subsections (a), 
(b), and (c).

SEC. 6. INFORMATION GATHERING FOR DEPARTMENT OF VETERANS AFFAIRS HOME 
                    LOAN APPRAISALS.

  (a) In General.--Section 3731(b) of title 38, United States 
Code, is amended by adding at the end the following new 
paragraph:
  ``(3) The Secretary shall permit an appraiser on a list 
developed and maintained under subsection (a)(3) to make an 
appraisal for the purposes of this chapter based solely on 
information gathered by a person with whom the appraiser has 
entered into an agreement for such services.''.
  (b) Effective Date.--The amendments made by this section 
shall apply with respect to an appraisal under section 3731 of 
such title, on or after January 1, 2019.
  (c) Guidance.--Notwithstanding section 501 of such title, the 
Secretary of Veterans Affairs may issue guidance to implement 
this section before prescribing new regulations under sections 
3731 of such title, as amended by subsection (a).

                          Purpose and Summary

    H.R. 299, as amended, would, effective January 1, 2019, 
extend the presumption of exposure for purposes of entitlement 
to service connection for diseases associated with exposure to 
herbicide agents, such Agent Orange, to Blue Water Navy (BWN) 
Vietnam veterans.\1\ Additionally, H.R. 299, as amended, would 
extend the presumption of exposure to certain herbicide agents 
to veterans who served in or near the Korean demilitarized zone 
(DMZ) during the period beginning on September 1, 1967, and 
ending on August 31, 1971.
---------------------------------------------------------------------------
    \1\BWN veterans are defined as veterans who served in the 
territorial seas of the Republic of Vietnam (defined below) between the 
dates of January 9, 1962, and May 7, 1975.
---------------------------------------------------------------------------
    Consequently, these veterans may be eligible for veteran's 
benefits, such as compensation and healthcare, if they develop 
a disease linked to exposure to herbicides. H.R. 299, as 
amended, would require the Secretary of the Department of 
Veterans Affairs (Secretary) to conduct outreach to inform such 
veterans of the ability to submit a claim for disability 
compensation if they develop certain diseases.
    H.R. 299, as amended, would expand eligibility for U.S. 
Department of Veterans Affairs (VA) benefits to certain 
children with spina bifida who were born to veterans who served 
in Thailand between January 9, 1962, and May 7, 1975, and were 
determined by the Secretary to have been exposed to an 
herbicide agent.
    H.R. 299, as amended, also requires the Secretary to submit 
a report to the Committees on Veterans' Affairs of the House of 
Representatives and the Senate regarding the use of herbicides 
in Thailand during the Vietnam era. This bill also requires VA 
to submit reports to the Committees on Veterans' Affairs of the 
House of Representatives and the Senate on claims filed by BWN 
veterans for disability compensation under this Act. 
Furthermore, the bill, as amended, would also require the 
Secretary to submit an update to the Committees regarding the 
Follow-up Study of a National Cohort of Gulf War and Gulf Era 
Veterans, which examines the health of veterans who served in 
the Gulf War in 1990-1991 and veterans who served elsewhere 
during the same period.
    H.R. 299, as amended, would also make improvements to VA's 
Home Loan Guaranty program to ensure that veterans can use 
their home loan benefit in high-cost areas and receive 
appraisals in a timely and cost-efficient manner.
    Representative David G. Valadao of California introduced 
H.R. 299 on January 5, 2017.

                  Background and Need for Legislation


Toxic exposures

    The Agent Orange Act of 1991 (P.L. 102-4) established the 
presumption of service-connection for certain diseases 
associated with exposure to herbicides for veterans who served 
in the Republic of Vietnam between January 9, 1962, and May 7, 
1975. This presumption simplifies the disability claim process 
for veterans who may have developed conditions linked with 
exposure to toxic chemicals because it may be difficult for 
such veterans to prove that they were actually exposed to 
herbicides. Additionally, this policy reduces the time and 
expense for VA to gather evidence of service connection on a 
case-by-case basis.
    However, VA's current guidelines do not acknowledge that 
BWN may have been injured as a result of the military's use of 
Agent Orange during the Vietnam era. Instead, VA limits the 
presumption to veterans who actually set foot on land in the 
Republic of Vietnam or served in the country's inland 
waterways. H.R. 299, as amended, would remedy this inequity by 
extending the presumption of service connection for certain 
conditions\2\ linked to contact with herbicides to BWN veterans 
who served off the shore of Vietnam between January 9, 1962, 
and May 7, 1975.
---------------------------------------------------------------------------
    \2\VA currently acknowledges that the following conditions are 
linked with exposure to herbicides used during the Vietnam era: AL 
Amyloidosis, Chronic B-cell Leukemias, Chloracne, Diabetes Mellitus, 
Hodgkin's Disease, Ischemic Heart Disease, Multiple Myeloma, Non-
Hodgkin's Lymphoma, Parkinson's Disease, Peripheral Neuropathy, 
Porphyria Cutanea Tarda, Prostate Cancer, Respiratory Cancers, and Soft 
Tissue Sarcomas. Accordingly, if a Vietnam veteran who served on 
Vietnam soil or inland waters and develops one of these conditions, VA 
automatically presumes that such condition is service-connected.
---------------------------------------------------------------------------
    The bill is necessary because many veterans advocates 
contend that BWN veterans likely experienced significant 
exposure to defoliants during the Vietnam era. For example, it 
is possible that toxic substances sprayed in Vietnam polluted 
rivers and streams that ran into Vietnam's territorial seas.\3\ 
U.S. Naval ships used water drawn from the territorial seas to 
make potable water, which BWN veterans used for drinking, 
bathing, and cooking. Because BWN veterans may have been 
exposed to toxic chemicals, some advocates argue that it is 
unfair that veterans who served on land are eligible for VA 
benefits, but those who served off the coast of Vietnam are not 
eligible, even if they develop the same diseases.
---------------------------------------------------------------------------
    \3\Wells, John B., Executive Director, Military-Veterans Advocacy, 
Inc., Statement to the House of Representatives Committee on Veterans' 
Affairs, Subcommittee on Disability Assistance and Memorial Affairs 
Hearing on April 5, 2017.
---------------------------------------------------------------------------
    In response to concerns raised by veterans advocates, in 
2011 the Institute of Medicine (IOM) attempted to determine 
whether BWN veterans experience a comparable range of exposure 
to herbicides as those on the ground in Vietnam. However, the 
IOM concluded that given the passage of time and lack of 
sampling data collected during the conflict, there is not 
enough information to conclusively determine whether Blue Water 
Navy personnel actually came into contact to defoliants during 
their service.\4\ IOM also determined that it is unlikely that 
such data will be available in the future. As a result, VA has 
decided that the lack of scientific evidence prevents the 
Department from extending the presumption to BWN veterans.\5\
---------------------------------------------------------------------------
    \4\Institute of Medicine (IOM), Blue Water Navy Vietnam Veterans 
And Agent Orange Exposure, May 20, 2011.
    \5\Shulkin, David, J., M.D., Secretary, Department of Veterans 
Affairs, Statement to the House of Representatives Committee on 
Veterans' Affairs Hearing on February 15, 2017.
---------------------------------------------------------------------------
    Tragically, many veterans who served off the coast of the 
Republic of Vietnam are now experiencing health problems that 
are associated with herbicide exposure.\6\ However, since BWN 
veterans do not receive the presumption, these veterans must 
provide evidence of actual exposure to herbicides to 
successfully file a claim for VA benefits for conditions linked 
to defoliants. It is very difficult, if not impossible, for BWN 
veterans to gather such evidence because their service records 
may be missing or incomplete--if a contemporaneous record 
documenting exposure was created in the first place. As a 
result, VA often denies claims for benefits filed by BWN 
veterans.
---------------------------------------------------------------------------
    \6\Ibid.
---------------------------------------------------------------------------
    Our nation has a solemn duty to take care of the men and 
women who may have been injured during military service. In the 
absence of conclusive evidence to the contrary, BWN veterans 
should receive the benefit of the doubt. Therefore, Section 1 
of H.R. 299, as amended, would ensure that these veterans are 
eligible for benefits, such as health care and compensation if 
they develop diseases that may have been caused by contact with 
the herbicides that were used during the Vietnam era.
    To ensure that VA construes this bill to extend the 
presumption to all applicable BWN veterans who may have been 
exposed to herbicides, the Committee intends that VA's 
definition of ``territorial seas'' for this purpose be as broad 
as possible and in accordance with international law.
    Additionally, because BWN veterans have generally been 
unable to successfully apply for benefits for conditions that 
may have been caused by service in Vietnam due to the lack of a 
presumption of exposure, Section 1 of H.R. 299, as amended, 
would provide retroactive benefits for veterans who were denied 
benefits between September 1, 1985, and January 1, 2019. This 
provision is consistent with special effective date rules given 
to Vietnam veterans who served on land or on inland waterways 
under Nehmer v. United States Department of Veterans Affairs 
and to ensure parity for BWN veterans.\7\ To be eligible for 
retroactive benefits, a BWN veteran would be required to submit 
a new claim for disability compensation on or after January 1, 
2019, for the same condition that was previously denied.
---------------------------------------------------------------------------
    \7\Under Nehmer, for any new conditions or diseases VA recognized 
as linked to exposure to herbicides between September 25, 1985, and 
September 30, 2015, VA was required to automatically readjudicate any 
previously denied claims of Vietnam veterans and their survivors for 
those conditions or diseases. Moreover, if the veteran was awarded 
benefits, VA was required to establish that the effective date of the 
claim was the date the first claim was received. See: 38 C.F.R. Sec.  
3.816(c)(2)-(3). See also: Nehmer v. United States Veterans 
Administration, 712 F. Supp. 1404 (N.D. Cal. 1989) (Nehmer I); Nehmer 
v. United States Veterans Administration, 32 F. Supp. 2d. 1175 (N.D. 
Cal. 1999) (Nehmer II); Nehmer v. Veterans Administration of the 
Government of the United States, 284 F.3d 1158 (9th Cir. 2002) (Nehmer 
III).
---------------------------------------------------------------------------
    To ensure that veterans whose claims were previously denied 
are aware of their rights under this Act, H.R. 299, as amended, 
requires the Secretary to conduct outreach to inform affected 
veterans, who filed a claim for benefits between September 25, 
1985, and January 1, 2019, of the ability to submit a new 
claim. Furthermore, the bill would mandate that VA submit a 
report to the Committees on Veterans' Affairs of the House of 
Representatives and the Senate on the new claims filed under 
the special effective date rules by BWN veterans, on January 1, 
2020, and January 1, 2022.
    In 2000, the Institute of Medicine (IOM) determined there 
may be a link between exposure to chemicals used in Vietnam and 
spina bifida in offspring.\8\ Thus, Congress provides benefits 
to children of some Vietnam era veterans who may have been 
harmed by the use of defoliants, such as those who served in 
Vietnam or along the Korean DMZ.\9\ However, even though VA 
recognizes that some veterans who were stationed along the 
perimeter of military installations in Thailand (between 
January 9, 1962, and May 7, 1975), may have come into contact 
with defoliants, the Department does not provide benefits to 
these veterans' biological children who were born with spina 
bifida. Section 3 of H.R. 299, as amended, would extend 
benefits to these children if VA determines that the veteran 
may have been subject to an herbicidal agent during service. To 
be eligible for benefits, the child suffering from spina bifida 
must have been conceived subsequent to the parent's potential 
exposure.
---------------------------------------------------------------------------
    \8\Institute of Medicine, Veterans and Agent Orange Update 2000 
(2001).
    \9\P.L. 108-183 38 U.S.C. 1802, et. seq.
---------------------------------------------------------------------------
    Additionally, although Congress authorized benefits for 
certain children of veterans who served in or near the Korean 
DMZ between September 1, 1967, and August 31, 1971, VA's 
regulations limit the presumption of exposure for veterans who 
served in or near the Korean DMZ beginning April 1, 1968.\10\ 
As a result of VA's regulation, a veteran who was stationed 
along the Korean DMZ between September 1, 1967, and March 31, 
1968, is not automatically eligible for benefits if the veteran 
develops a condition linked with being subjected to toxic 
chemicals. Counterintuitively however, that same veteran's 
child who was conceived after the veterans' service in Korea 
and was born with spina bifida, may be eligible for benefits 
based on possible exposure to herbicides. Section 2 of H.R. 
299, as amended, would resolve this inconsistency by expanding 
the presumption to include veterans who served in or near the 
Korean DMZ between September 1, 1967, and April 1, 1968.
---------------------------------------------------------------------------
    \10\38 C.F.R. Sec.  3.307.
---------------------------------------------------------------------------
    H.R. 299, as amended, would also address concerns of 
veterans who were stationed in U.S. bases in Thailand between 
January 9, 1962, and May 7, 1975, but are excluded from the 
current presumption. This bill would require the VA Secretary, 
in consultation with the Secretary of Defense, to submit a 
report to the Committees on Veterans' Affairs of the House of 
Representatives and the Senate identifying the U.S. military 
installations located in Thailand where an herbicide agent was 
actively used and identify the period of such use.
    Moreover, H.R. 299, as amended, would require the Secretary 
to submit to the Committees on Veterans' Affairs of the House 
of Representatives and the Senate an update on the findings of 
VA's Follow-up Study of a National Cohort of Gulf War and Gulf 
Era Veterans. This study examines the health status of veterans 
who served in the Gulf War in 1990 and 1991 and the health of 
veterans who served in other areas during the same period.

VA's home loan program

    First authorized by the Servicemember's Readjustment Act of 
1944, the VA Home Loan Guaranty program helps hundreds of 
thousands of servicemembers and veterans, each year, purchase 
their part of the American dream. In FY 2017, the VA Loan 
Guaranty Service guaranteed 740,389 loans at a cost of over 
$188 billion.\11\ Section 3703 of title 38, U.S.C., sets the 
limit for the purchase price of a home loan that VA can 
guarantee. VA's maximum loan guaranty amount is calculated as a 
percentage of the Freddie Mac conforming loan limitation 
determined by the Federal Home Loan Mortgage Corporation 
Act\12\ which varies by location and zip code. Since in most 
cases VA's guaranty must be at least 25 percent of the loan, 
this means that VA's maximum loan guaranty amount is 
effectively capped at the Freddie Mac limit. For many veterans 
who are seeking to purchase a home in high cost areas, the 
Freddie Mac limit is too low for VA's zero-down loan program. 
This either forces the veteran not to use the VA program, or 
pay the loan principal down.
---------------------------------------------------------------------------
    \11\Fiscal Year 2019 Budget Submission, U.S. Department of Veterans 
Affairs, Volume 3, ``Benefits and Burial Programs and Departmental 
Administration, page 234.
    \12\Section 1454(a)(2) of title 12, U.S.C.
---------------------------------------------------------------------------
    To address this issue and make the home loan benefit 
available to all veterans and servicemembers that qualify, 
section five of this bill would amend section 3703 of title 38, 
U.S.C., to eliminate the maximum loan guaranty amount under the 
VA home loan program by eliminating the Freddie Mac limit for 
VA home loans and would make the maximum guaranty amount 25 
percent of the loan amount. This section would also require 
veterans who do not have a service-connected disability of 100 
percent and choose to purchase a home above the current 
conforming loan limit to pay a funding fee on the cost of the 
loan. The Committee is confident VA's current strict 
underwriting standards and low foreclosure rates will ensure 
that veterans still have the required credit and income to 
qualify for the loan, and that this change will not result in a 
significant increased amount of foreclosures.
    Section 3729 of title 38, U.S.C., requires certain users of 
VA's loan guaranty benefit to pay a funding fee. The amount of 
the funding fee varies based on an individual's active duty or 
reserve status, the amount of down payment brought forward, and 
the date of loan origination. The rates of funding fees 
(expressed as a percentage of the loan) have remained the same 
since 2004. The costs of the funding fee can be rolled into the 
life of the loan and can be waived if the servicemember has a 
service-connected disability. These fees reduce the subsidy 
cost associated with VA's guaranty of mortgage loans, and have 
typically been viewed as a reasonable cost to the benefit 
gained by having VA guarantee a mortgage loan. This section 
would make adjustments to the home loan fee for mortgages 
closed on or after January 1, 2019 through September 30, 2026. 
After September 20, 2026, the rates will revert back to current 
rates. The proposed rates for mortgages closed on or after 
January 1, 2019 through September 30, 2026 are listed below:

------------------------------------------------------------------------
                                                 Proposed
                                                 rates for
                                    Current         all       Change in
      Down payment and use           rates     participants    percent
                                                  through
                                                  FY2026
------------------------------------------------------------------------
No Money Down, 1st Use..........        2.15%         2.40%        0.25%
5% or more, 1st Use.............        1.50%         1.75%        0.25%
10% or more, 1st Use............        1.25%         1.45%        0.20%
Subsequent Use..................         3.3%          3.8%         0.5%
------------------------------------------------------------------------

    The Committee believes that these modest increases would 
have minimal impact on the home loan market and would not 
seriously limit a veteran or a servicemember's ability to use 
their home loan benefit. For example, in the case of an 
individual who chooses to roll the funding fee into the total 
amount of their loan, assuming a home price of $232,000 and 
using an interest rate of 4.5 percent on a 30 year loan, the 
cost of this modest increase for initial-use loans with a zero 
down payment is $2.94 per month over the course of the loan; 5 
percent down is $2.82 per month; and 10 percent down is $2.14 
per month. Under the same scenario for subsequent-use loans 
with a zero down payment, the cost is $7.05 per month over the 
course of the loan. It should also be noted that according to 
VA data, out of the 589,533 VA loans expected to close this 
year, approximately 42 percent, or 247,603, will not require 
any loan fee due to the veteran borrower's disability rating.
    The section would also eliminate the current .25 percent 
premium that members of the National Guard and Reserve pay on 
top of current funding fees rates. The Committee believes this 
change would provide equity between the benefit provided to 
these servicemembers with veterans and active duty 
servicemembers.
    Section 3731 of title 38, U.S.C., authorizes requirements 
and processes for the use of appraisals for VA-guaranteed home 
loans. This section would also establish qualifications for 
appraisers who are eligible to complete appraisals for VA 
loans. At the April 4, 2017 Subcommittee on Economic 
Opportunity oversight hearing on VA appraisals, witnesses 
described the need to improve the VA mortgage appraisal process 
and ensure that veterans, especially those in highly rural 
areas, have access to VA qualified appraisals to provide timely 
appraisals. The Subcommittee received testimony from Mr. 
Stephen S. Wagner, Vice President of the Appraisal Institute, 
where he highlighted the upcoming shortage and the potential 
impact on borrowers:

          We anticipate a continued decline in the number of 
        practicing appraisers, between 20-25 percent, over the 
        next 5-10 years. AI data does not indicate a national 
        shortage of appraisers at this time, but there are 
        indications of temporary shortages in some markets. We 
        anticipate, however, that longer-term shortages will 
        appear going forward should the projected decline 
        materialize.\13\
---------------------------------------------------------------------------
    \13\Testimony of Mr. Stephen S. Wagner MAI, SRA, AI-GRS, Vice 
President, The Appraisal Institute at the oversight hearing of House 
Committee on Veterans' Affairs, Subcommittee on Economic Opportunity, 
entitled, ``Assessing VA Approved Appraisers and How to Improve the 
Program for the 21st Century.'' April 4, 2017. https://docs.house.gov/
meetings/VR/VR10/20170404/105819/HHRG-115-VR10-Wstate-WagnerS-
20170404.pdf

    During this same hearing, the Subcommittee received 
testimony that one option to protect against this appraiser 
shortage is to authorize VA appraisers to utilize new and 
emerging technologies, such as the use of desktop appraisals. 
At this same hearing, Mr. Russell Johnson, Chief Revenue 
Officer, with Clear Capital, provided a detailed description of 
---------------------------------------------------------------------------
how this new technology can help improve VA appraisals:

          With the advent of new products, services and 
        analytics, Clear Capital suggests that the VA consider 
        the use of a desktop appraisal, based on the physical 
        inspection of a subject property by an industry 
        professional, where appropriate as an option by the 
        Department of Veterans Affairs. The product is a hybrid 
        of traditional appraisal process and methods and 
        leverages a qualified, arms-length, real estate 
        professional, such as a real estate broker or agent, 
        performing a visual inspection of the subject property 
        and providing other market insight and analytics.
          The inspection and other market data are provided to 
        a geographically-competent, licensed appraiser for 
        analysis, along with supporting data such as real-time 
        MLS information, public records, and local market data 
        and analytics. The appraiser analyzes all the 
        information and data and concludes the final value of 
        the property.\14\
---------------------------------------------------------------------------
    \14\Testimony of Mr. Russell Johnson, Chief Revenue Officer, Clear 
Capital, at the oversight hearing of House Committee on Veterans 
Affairs, Subcommittee on Economic Opportunity, entitled, ``Assessing VA 
Approved Appraisers and How to Improve the Program for the 21st 
Century.'' April 4, 2017.https://docs.house.gov/meetings/VR/VR10/
20170404/105819/HHRG-115-VR10-Wstate-JohnsonR-20170404.pdf

    At a Subcommittee on Economic Opportunity legislative 
hearing on March 20, 2018, Mr. Robert Worley, Director, 
Education Service, U.S. Department of Veterans Affairs, 
---------------------------------------------------------------------------
supported the need for new technology:

          VA supports enactment of this bill, as it would 
        enable VA-designated appraisers to expand their 
        coverage areas and would increase the number of 
        appraisals they could perform in a timely manner. The 
        bill would not change the qualifications for VA-
        designated appraisers, nor would it make any 
        substantial change to VA oversight requirements. It 
        would, however, better align VA appraisal policy and 
        procedures with industry standards, address recent 
        industry concerns regarding timely delivery of the VA 
        appraisal product, and likely encourage more use of the 
        VA Home Loan program by making VA financing a more 
        attractive option within the mortgage industry.\15\
---------------------------------------------------------------------------
    \15\Testimony of Mr. Robert Worley, Director, Education Service, 
U.S. Department of Veterans Affairs, at legislative hearing of House 
Committee on Veterans' Affairs, Subcommittee on Economic Opportunity, 
entitled, ``Legislative Hearing on H.R. 1206, H.R. 3023, H.R. 3940, 
H.R. 4451, H.R. 4830, H.R. 4835, H.R. 5044, and a draft bill entitled, 
``VA Home Loan Improvement Act of 2018'' March 20, 2018. https://
docs.house.gov/meetings/VR/VR10/20180320/108011/HHRG-115-VR10-Wstate-
WorleyIIUSAFR-20180320.pdf

    The Committee believes the use of this new technology could 
assist VA in reducing appraisal wait times and provide betters 
services to veterans. Section six of this bill, therefore, 
would amend section 3731(b) of title 38, U.S.C., to clarify 
that a VA may permit a VA-approved appraiser to make an 
appraisal based on information collected from a third party.

                                Hearings

    On April 5, 2017, the Subcommittee on Disability Assistance 
and Memorial Affairs conducted a legislative hearing on various 
bills introduced during the 115th Congress, including H.R. 299.
    The following witnesses testified:
          The Honorable Mike Bost, U.S. House of 
        Representatives, 12th District, Illinois; The Honorable 
        Julia Brownley, U.S. House of Representatives, 26th 
        District, California; The Honorable Jim Banks, U.S. 
        House of Representatives, 3rd District, Indiana; The 
        Honorable Jack Bergman, U.S. House of Representatives, 
        1st District, Michigan; The Honorable David G. Valadao, 
        U.S. House of Representatives, 21st District, 
        California; Ms. Beth Murphy, Director, Compensation 
        Service, Veterans Benefits Administration, U. S. 
        Department of Veterans Affairs, accompanied by Dr. 
        Ralph L. Erickson, Chief Consultant for Post Deployment 
        Health Service, Veterans Health Administration, U. S. 
        Department of Veterans Affairs; Ms. Patricia Watts, 
        Director, Legislative and Regulatory Service, National 
        Cemetery Administration, U. S. Department of Veterans 
        Affairs; Mr. Zachary Hearn, Deputy Director, Veterans 
        Affairs and Rehabilitation Division, The American 
        Legion; Mr. Rick Weidman, Executive Director, Policy 
        and Government Affairs, Vietnam Veterans of America; 
        Mr. Patrick Murray, Associate Director, National 
        Legislative Service, Veterans of Foreign Wars; Mr. 
        LeRoy Acosta, Assistant National Legislative Director, 
        Disabled American Veterans; and, Mr. John B. Wells, 
        Executive Director, Military-Veterans Advocacy Inc.
    Statements for the record were submitted by:
          The Honorable Timothy J. Walz, U.S. House of 
        Representatives, 1st District, Minnesota; and, the 
        Paralyzed Veterans of America.
    On March 20, 2018, the Subcommittee on Economic Opportunity 
held a legislative hearing on several bills pending before the 
Subcommittee including a draft bill which incorporated portions 
of section five and six of H.R. 299, as amended.
    The following witnesses testified:
          The Honorable Gus Bilirakis, U.S. House of 
        Representatives, 12th District, Florida; The Honorable 
        Brad Wenstrup, U.S. House of Representatives, 2nd 
        District, Ohio; The Honorable Ted Poe, U.S. House of 
        Representatives, 2nd District, Texas; The Honorable 
        Luke Messer, U.S. House of Representatives 6th 
        District, Indiana; The Honorable Steve Russell, U.S. 
        House of Representatives, 5th District, Oklahoma; MG 
        Robert M. Worley II, USAF (Ret.), Director, Education 
        Service, Veterans Benefit Administration, U.S. 
        Department of Veterans Affairs who was accompanied by 
        Mr. Jeffrey London, Director, Loan Guaranty Service, 
        Veterans Benefits Administration, U.S. Department of 
        Veterans Affairs; Mr. John J. Kamin, Assistant 
        Director, Veterans Employment and Education Division, 
        The American Legion; Ms. Ashlynne Haycock, Manager, 
        Education Services, Tragedy Assistance Program for 
        Survivors; and Mr. William Hubbard, Vice President of 
        Government Affairs, Student Veterans of America.
    Statements for the record were submitted by:
          The Honorable Steve Chabot, U.S. House of 
        Representatives, 1st District, Ohio; the U.S. 
        Department of Labor; the National Association of State 
        Approving Agencies; and the National Association of 
        Veterans' Programs Administrators

                       Subcommittee Consideration

    H.R. 299 was not considered before the Subcommittee.

                        Committee Consideration

    On May 8, 2018, the Full Committee met in an open markup 
session, a quorum being present, and ordered H.R. 299, as 
amended, favorably reported to the House of Representatives by 
voice vote. During consideration of the bill, the following 
amendment was considered and agreed to by voice vote:
    An amendment in the nature of a substitute offered by 
Representative David P. Roe of Tennessee, the Chairman of the 
full committee, that would extend benefits to certain veterans 
who served in or near the Korean DMZ during the Vietnam era and 
to certain children of veterans who served in Thailand during 
the Vietnam era; require VA to conduct certain outreach to Blue 
Water Navy veterans; require VA to submit certain reports to 
the Congressional Committees of jurisdiction; and, make 
improvements to VA's Home Loan Guaranty program to ensure that 
veterans can use their home loan benefit in high-cost areas and 
receive appraisals in a timely and cost-efficient manner.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, there were no recorded votes 
taken on amendments or in connection with ordering H.R. 299, as 
amended, reported to the House. A motion by Ranking Member 
Timothy J. Walz of Minnesota to report H.R. 299, as amended, 
favorably to the House of Representatives was adopted by voice 
vote.

                      Committee Oversight Findings

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

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are to establish a presumption of service 
connection for diseases associated with exposure to certain 
herbicide agents to Blue Water Navy veterans who served in the 
territorial seas of the Republic of Vietnam and to some 
veterans who served on or near the Korean DMZ between September 
1, 1967, and August 31, 1971; to expand eligibility for 
benefits to certain children of Vietnam era veterans who served 
in Thailand; to submit reports to the Committees on Veterans' 
Affairs of the House of Representatives and the Senate 
regarding claims for compensation under this act, the use of 
herbicides in Thailand between January 9, 1962, and May 7, 
1975, and Gulf War Illness; and, to improve veterans' and 
servicemembers' access to their home loan benefits.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

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

                  Earmarks and Tax and Tariff Benefits

    H.R. 299, as amended, does not contain any Congressional 
earmarks, limited tax benefits, or limited tariff benefits as 
defined in clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

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

               Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 299, as amended, provided by the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 15, 2018.
Hon. Phil Roe, M.D.,
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. 299, a bill to 
amend title 38, United States Code, to clarify presumptions 
relating to the exposure of certain veterans who served in the 
vicinity of the Republic of Vietnam, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is David Newman.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 299--A bill to amend title 38, United States Code, to clarify 
        presumptions relating to the exposure of certain veterans who 
        served in the vicinity of the Republic of Vietnam, and for 
        other purposes

    Summary: H.R. 299 would modify the loan guarantee and 
disability compensation programs administered by the Department 
of Veterans Affairs (VA). On net, CBO estimates that enacting 
the bill would decrease direct spending for those programs by 
$271 million over the 2019-2028 period.
    In addition, H.R. 299 would expand access to VA medical 
care for certain veterans and their dependents. In total, CBO 
estimates that implementing the bill would cost $136 million 
over the 2019-2023 period, assuming appropriation of the 
necessary amounts.
    Enacting H.R. 299 would affect direct spending; therefore, 
pay-as-you-go procedures apply. The bill would not affect 
revenues.
    CBO estimates that enacting H.R. 299 would not increase net 
direct spending by more than $2.5 billion or on-budget deficits 
by more than $5 billion in any of the four consecutive 10-year 
periods beginning in 2029.
    H.R. 299 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary effect of H.R. 299 is shown in Table 1. The costs of 
the legislation fall within budget function 700 (veterans 
benefits and services).

                           TABLE 1--ESTIMATED BUDGETARY EFFECTS OF H.R. 299, THE BLUE WATER NAVY VIETNAM VETERANS ACT OF 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               By fiscal year, in millions of dollars--
                                            ------------------------------------------------------------------------------------------------------------
                                              2018   2019   2020     2021    2022    2023    2024    2025    2026    2027    2028   2019-2023  2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
Estimated Budget Authority.................      0     16      -3     -125     -97     -73     -49     -50     -54      69      91      -280       -271
Estimated Outlays..........................      0     16      -3     -125     -97     -73     -49     -50     -54      69     -91      -280       -271
 
                                                     INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level..............      0      4      21       34      39      45      46      47      49      50      52       143        387
Estimated Outlays..........................      0      4      19       32      38      43      45      46      48      49      51       136        375
--------------------------------------------------------------------------------------------------------------------------------------------------------
The provisions of H.R. 299 would take effect on January 1, 2019. Details do not add to totals because of rounding.

    Basis of estimate: For this estimate, CBO assumes that the 
estimated amounts will be appropriated each year, that outlays 
will follow historical spending patterns for affected programs, 
and that the bill will be enacted in 2018. The bill specifies 
that the provisions would take effect on January 1, 2019.

Direct spending

    H.R. 299 would make several changes to VA's loan-guarantee 
benefit. It also would increase the disability compensation 
paid to certain veterans who served in Southeast Asia and Korea 
and their dependents. On net, enacting the bill would decrease 
direct spending by $271 million (see Table 2).
    Guaranteed Loans. Section 5 would modify several provisions 
of current law related to VA's authority to guarantee certain 
mortgages provided to veterans. In total, those changes would 
decrease direct spending by almost $1.2 billion over the 2019-
2028 period.

                                             TABLE 2--ESTIMATE OF THE EFFECTS ON DIRECT SPENDING OF H.R. 299
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Outlays, by fiscal year, in millions of dollars--
                                   ---------------------------------------------------------------------------------------------------------------------
                                     2018     2019     2020     2021     2022     2023     2024     2025     2026    2027    2028   2019-2023  2019-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      INCREASES OR DECREASES (-) IN DIRECT SPENDING
 
                                                                    Guaranteed Loans
 
Loan Guarantee Fees...............       0     -140     -171     -156     -141     -124     -106     -109     -112       4       5       -732     -1,050
Jumbo Loans.......................       0      -13      -19      -19      -17      -16      -14      -13      -15      -9      11        -84       -124
Home Loan Appraisals..............       0        *        1        1        1        1        1        1        1       1       1          4          9
    Subtotal Guaranteed Loan......       0     -153     -189     -174     -157     -139     -119     -121     -126      -4      17       -812     -1,165
 
                                                                 Disability Compensation
 
Blue Water Navy Veterans..........       0      169      186       48       59       65       69       70       71      72      73        527        882
Korea DMZ Veterans................       0        *        *        1        1        1        1        1        1       1       1          3          8
Spina Bifida Benefits.............       0        *        *        *        *        *        *        *        *       *       *          2          3
    Subtotal Disability                  0      169      186       49       60       66       70       71       72      73      74        532        894
     Compensation.................
        Total Changes in Direct          0       16       -3     -125      -97      -73      -49      -50      -54      69      91       -280       -271
         Spending.................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = less than $500,000; DMZ = Demilitarized Zone.
The provisions of H.R. 299 would take effect on January 1, 2019; Details may not add to totals because of rounding. Budget authority equals outlays.

    Loan Guarantee Fees. Most significantly, section 5 would 
change the fees that VA charges veterans for providing loan 
guarantees under its home loan program. Under that program, VA 
provides lenders a payment of up to 25 percent of the 
outstanding mortgage balances (subject to some limitations on 
the original loan amounts) in the event that a veteran defaults 
on a guaranteed loan. The guarantees enable veterans to get 
better loan terms, such as lower interest rates or smaller down 
payments. Increasing the fees would lower the subsidy cost of 
the guarantees by partially offsetting the costs of subsequent 
defaults.\1\ Reducing the fees would have the opposite effect. 
The subsidy cost of VA loan guarantees are paid from mandatory 
appropriations. Hence, changing the subsidy cost would affect 
direct spending.
---------------------------------------------------------------------------
    \1\Under the Federal Credit Reform Act of 1990, the subsidy cost of 
a loan guarantee is the net present value of estimated payments by the 
government to cover defaults and delinquencies, interest subsidies, or 
other expenses, offset by any payments to the government, including 
origination fees, other fees, penalties, and recoveries on defaulted 
loans. Such subsidy costs are calculated by discounting those expected 
cash flows using the rate on Treasury securities of comparable 
maturity. The resulting estimated subsidy costs are recorded in the 
budget when the loans are disbursed.
---------------------------------------------------------------------------
    Under current law, the up-front fee varies on the basis of 
the size of the down payment and whether the veteran has 
previously used the loan-guarantee benefit. Borrowers who are 
members of the reserve component pay an additional fee of 0.25 
percent of the loan amount. Veterans who receive compensation 
for service-connected disabilities are exempt from paying the 
fee. The fees that would be affected by section 5 are currently 
set as follows:
           2.15 percent of the loan amount for loans 
        with no down payment on the first use of the guarantee 
        benefit,
           3.30 percent of the loan amount for loans 
        with no down payment on subsequent uses of the 
        guarantee benefit,
           1.50 percent of the loan amount for loans 
        with a 5 percent down payment, and
           1.25 percent of the loan amount for loans 
        with a 10 percent down payment.
    Section 5 would increase those fees to 2.40 percent, 3.80 
percent, 1.75 percent, and 1.45 percent, respectively. The fees 
would rise on January 1, 2019; they would decline to the 
current levels after September 30, 2026. The provision also 
would permanently eliminate the additional 0.25 percent fee 
charged to reservists. On the basis of our analysis of 
information from VA on the number and size of loans guaranteed 
in recent years, the default rate for those loans, and the 
amount of fees collected, CBO estimates that the net effect of 
enacting those fee changes would be to decrease direct spending 
by $1.1 billion over the 2019-2028 period.
    Jumbo Loans. Section 5 also would increase the maximum loan 
level for which VA can provide a full guarantee. The guaranteed 
payment from VA is generally capped at 25 percent of the 
initial loan balance, up to the limit on loan size established 
by the Federal Home Loan Mortgage Corporation Act. That limit 
is currently $453,100. (Loans at or below that level are known 
as conforming loans; loans in excess are called jumbo loans. 
Exceptions are made to the conforming limit for certain high-
cost areas.) Under this provision, the cap would be eliminated 
as of January 1, 2019, allowing VA to provide a 25 percent 
guarantee on the full amount of loans. In the event that a 
veteran defaulted on a jumbo loan, guarantee payments by VA 
would be greater than they would under current law. Also, CBO 
expects that more veterans would use the loan benefit if VA 
could guarantee the full amount of all loans. Thus, raising the 
amount guaranteed would increase direct spending.
    However, the provision also would eliminate the fee 
exemption for most disabled veterans if they take out a jumbo 
loan. (Totally disabled veterans would still be exempt from 
paying the fee.) Also, fees on jumbo loans would be higher as a 
result of the temporary increase in loan fees discussed above. 
The additional fee income from those two sources would reduce 
direct spending by an amount that would more than offset the 
higher guarantee payments for any loans made up to September 
30, 2027. At that time, under current law, the loan fees 
decline to 1.4 percent, 1.25 percent, 0.75 percent, and 0.50 
percent, respectively. As a result of those lower fees, the 
additional guarantees for jumbo loans would increase subsidy 
costs for such loans made after that date.
    Over the 2008-2011 period, VA was authorized to provide a 
full guarantee on loans of up to $729,750. On the basis of 
information regarding the number and value of jumbo mortgages 
VA guaranteed during that period, CBO estimates that VA would 
guarantee about $3 billion worth of additional loans a year 
under this provision. On net, however, that change and the 
changes to fees would decrease direct spending by $124 million 
over the 2019-2028 period.
    Home Loan Appraisals. Home appraisals for loans guaranteed 
by VA must be performed by a provider that has been approved by 
the department. The cost of those appraisals is paid by the 
borrowers. VA reports that a shortage of approved appraisers in 
some areas of the country has increased the cost of appraisals 
and the time it takes to complete them. Section 6 would permit 
VA-approved appraisers to base their estimates of home values 
solely on information provided by third parties. That change 
would allow appraisers to estimate home values without visiting 
the property through the use of information from property tax 
records, real estate listings, and similar sources.
    On the basis of the number and the average amount of loans 
that VA guarantees, CBO expects that streamlining the process 
and reducing closing costs for borrowers would increase the 
number of loans guaranteed by VA by a few hundred each year. 
The average subsidy cost of VA loan guarantees, which are paid 
from mandatory appropriations, is about $3,000. Thus, 
increasing the number of loans would increase direct spending 
by about $1 million each year and $9 million over the 2019-2028 
period, CBO estimates.
    Disability Compensation. Sections 1 and 2 would increase 
compensation benefits for certain veterans who served in 
Southeast Asia or Korea. In total, those changes would increase 
direct spending by $894 million over the 2019-2028 period. 
Those changes also would affect medical care provided to 
disabled veterans and certain dependents. Those effects are 
discussed below in the section on ``Spending Subject to 
Appropriation.''
    Blue Water Navy Veterans. Section 1 would provide 
disability compensation to certain veterans who served in the 
territorial seas of Vietnam during the Vietnam War. It also 
would provide certain benefits to dependents or survivors of 
those veterans. Prospective and retroactive payments arising 
from section 1 would increase direct spending by $169 million 
in 2019, and by $882 million over the 2019-2028 period, CBO 
estimates.
    Under current law, veterans of the Vietnam War who served 
on land or in the country's inland or coastal waterways are 
presumed to have been exposed to Agent Orange, a blend of 
herbicides used by the Department of Defense to remove dense 
tropical foliage. Generally, VA compensates veterans who have 
disabilities or diseases that have been determined to be 
service-connected based on military medical records and 
physical examinations. However, VA presumes certain diseases, 
such as type 2 diabetes, Parkinson's disease, and prostate 
cancer, are a result of exposure to Agent Orange. If veterans 
served during specified time periods in designated locations 
where Agent Orange was used, those illnesses are presumed to be 
connected to the veterans' service. The veterans only need to 
provide evidence that they were in the designated locations at 
the specified times.
    VA does not currently presume that veterans who served in 
the territorial seas of Vietnam, commonly referred to as the 
``Blue Water Navy,'' have been exposed to Agent Orange. Section 
1 would make those veterans eligible for a presumption of Agent 
Orange exposure for purposes of disability compensation. On the 
basis of information from the Department of the Navy, VA, and 
other sources, CBO estimates that about 174,500 service members 
served offshore during the Vietnam War. Of those personnel, CBO 
estimates about 122,500 are already be eligible for Agent 
Orange presumption based on information from VA regarding ships 
that the agency has determined were exposed to Agent Orange. 
The remainder, about 52,000 personnel, are not currently 
eligible for a presumption of exposure to Agent Orange. Under 
H.R. 299, those additional veterans would be presumed to have 
been exposed to Agent Orange and would be eligible for 
increased disability compensation if they have one of the 
conditions VA has determined to be related to that exposure.
    CBO estimates that about 60 percent, or 30,000, of the 
52,000 offshore personnel are still living. VA reports that 
about 15 percent of Vietnam veterans have service-connected 
disabilities (SCD) and roughly 45 percent of those veterans 
have a disease that VA considers to be caused by exposure to 
Agent Orange. On that basis, CBO expects that about 2,000 
veterans would have their current disability rates raised; as a 
result, their disability compensation would increase by about 
$8,000 per veteran in 2019. After accounting for cost-of-living 
adjustments, CBO estimates that disability compensation for 
veterans with existing SCDs would increase by $152 million over 
the 2019-2028 period.
    The remaining group of living veterans would be newly 
eligible to have disabilities considered service-connected as a 
result of exposure to Agent Orange. CBO expects that half--
roughly 5,700--of newly eligible veterans with related diseases 
would apply to VA for a disability rating on a continuous basis 
over the 2019-2023 period. New disability payments would 
average $8,200 in 2019. Those payments would total $400 million 
over the 2019-2028 period.
    Survivors of veterans who die as a result of a SCD are 
eligible to receive dependency and indemnity compensation 
(DIC). Because more veterans would be designated as having 
SCDs, additional survivors would receive DIC payments. On the 
basis of information about the number of DIC beneficiaries, CBO 
estimates the bill would result in roughly 120 additional DIC 
beneficiaries by 2028. New DIC payments would total $10 million 
over the 2020-2028 period, CBO estimates.
    Section 1 also would authorize retroactive payments to Blue 
Water Navy veterans who have previously been denied a claim for 
an eligible condition that is presumed to be caused by exposure 
to Agent Orange. On the basis of information from VA about the 
number of veterans and survivors denied a SCD rating for Agent 
Orange exposure, CBO estimates that about 3,400 veterans and 
about 1,330 survivors would receive retroactive payments under 
this provision. Those retroactive benefits would be paid in a 
lump sum for the amount of disability compensation due to the 
veteran or survivor for the period between when they first 
applied for compensation or DIC and the date on which the SCD 
rating is approved. CBO estimates that period would average 10 
years for veterans and 8 years for survivors. Retroactive 
payments would be made in 2019 and 2020 totaling nearly $320 
million, CBO estimates.
    Korea Demilitarized Zone Veterans. Section 2 would require 
VA to provide disability compensation to certain veterans who 
served at the Korea Demilitarized Zone (DMZ) at any time during 
the period between September 1, 1967, and August 31, 1971. 
Payments also would be made to certain survivors of those 
veterans.
    Under current VA regulations, veterans who served along the 
Korea DMZ at any time from April 1, 1968, to August 31, 1971, 
are presumed to have been exposed to Agent Orange. The bill 
would extend the period for which exposure is presumed to have 
occurred by seven months.
    According to VA, about 1,000 veterans who served outside of 
Vietnam are receiving compensation for service-connected 
exposure to Agent Orange. In addition to service in Vietnam and 
along the Korea DMZ, VA presumes exposure to Agent Orange if 
the veteran served near the perimeter of military bases in 
Thailand during the Vietnam era, at locations where Agent 
Orange was tested or stored outside of Vietnam, and in a few 
other locations. The agency cannot identify by specific 
location the number of disability claims for Agent Orange 
exposure that occurred outside of Vietnam. CBO estimates that 
70 percent of those 1,000 veterans are receiving compensation 
payments as a result of service along the Korea DMZ.
    Because the bill would extend the eligibility dates for 
service along the Korea DMZ by 13 percent, CBO estimates a 
corresponding increase in the number veterans who would receive 
disability compensation for exposure to Agent Orange. Those 90 
veterans would receive an annual payment of about $8,200 in 
2019. Additional DIC costs for survivors of those veterans 
would be insignificant. In total, after accounting for 
inflation, section 2 would increase direct spending by $8 
million over the 2019-2028 period, CBO estimates.
    Spina Bifida Benefits. VA provides monetary allowances, 
vocational training, rehabilitation services, and VA-financed 
health care benefits to the biological children of certain 
Korea and Vietnam veterans if those children have been 
diagnosed with spina bifida. Section 3 would expand eligibility 
for those benefits to the children of certain veterans who 
served in Thailand between January 9, 1962, and May 7, 1975. On 
the basis of information from VA about the current population 
of children receiving benefits for spina bifida and the number 
of military personnel who served in Vietnam or Thailand, CBO 
estimates that about 20 individuals per year would receive a 
monetary allowance under this provision. With an average 
allowance of $1,100 per month, CBO estimates that enacting 
section 3 would increase direct spending by $3 million over the 
2019-2028 period.
    Section 3 also would provide health care benefits for those 
eligible individuals. The cost of that care is discussed in the 
``Spending Subject to Appropriation'' section of the estimate.

Spending subject to appropriation

    CBO estimates that implementing H.R. 299 would increase 
spending on VA medical care by a total of $136 million over the 
2019-2023 period, assuming appropriation of the necessary 
amounts (see Table 3).

                TABLE 3--ESTIMATE OF THE EFFECTS ON SPENDING SUBJECT TO APPROPRIATION OF H.R. 299
----------------------------------------------------------------------------------------------------------------
                                                                   By fiscal year, in millions of dollars--
                                                            ----------------------------------------------------
                                                              2018   2019   2020   2021   2022   2023  2019-2023
----------------------------------------------------------------------------------------------------------------
                                 INCREASES IN SPENDING SUBJECT TO APPROPRIATION
 
Health Care for Veterans
    Estimated Authorization Level..........................      0      4     20     33     38     44       139
    Estimated Outlays......................................      0      4     18     31     37     42       132
Spina Bifida Benefits
    Estimated Authorization Level..........................      0      *      1      1      1      1         4
    Estimated Outlays......................................      0      *      1      1      1      1         4
    Total Changes in Spending Subject to Appropriation
        Estimated Authorization Level......................      0      4     21     34     39     45       143
        Estimated Outlays..................................      0      4     19     32     38     43       136
----------------------------------------------------------------------------------------------------------------
The provisions of H.R. 299 would take effect on January 1, 2019.
Enacting H.R. 299 would increase spending subject to appropriation by $375 million over the 2019-2028 period.

    Health Care for Veterans. As discussed above in the section 
on ``Direct Spending,'' sections 1 and 2 would increase the 
disability ratings of certain veterans who served in Southeast 
Asia or Korea. Additionally, Blue Water Navy veterans who are 
not determined to have a disability connected to exposure to 
Agent Orange would become eligible to receive a higher priority 
for care or become newly eligible for care in the VA health 
care system. As a result, some of those veterans and certain 
dependents would receive additional health care benefits from 
VA.
    Veterans whose service-connected disability rating is 50 
percent or greater are charged lower copayments for VA medical 
care than those with a lesser rated disability or no service-
connected disability. CBO expects that those lower costs would 
lead veterans to use more VA-funded medical care and to 
increase the portion of their medical care that is paid for by 
VA. Additionally, VA prioritizes the medical treatment of 
disabilities that are service-connected. Thus, CBO expects that 
veterans who receive a new or increased SCD rating as a result 
of presumed exposure to Agent Orange would receive more VA-
funded care than if the disability was not connected to their 
service.
    On the basis of data regarding participation rates in the 
VA health care system, CBO estimates that under the bill about 
7,400 veterans who are already enrolled in the VA health care 
system would be moved to a higher priority group over the next 
five years. Those veterans would receive an average of $2,600 
in additional care each year. In total, health care costs for 
existing enrollees would increase by $62 million over the 2019-
2023 period, CBO estimates.
    In addition, CBO expects that about 4,800 veterans would 
newly enroll in the VA health care system as a result of new 
eligibility or heightened priority for health care over the 
next five years. On the basis of health care costs for existing 
enrollees, CBO estimates that those veterans would receive an 
average of $4,600 in health care each year. Over the 2019-2023 
period, CBO estimates that increases in health care costs for 
new enrollees would total $70 million.
    DIC recipients are eligible for health care through the 
Civilian Health and Medical Program of the Department of 
Veterans Affairs (CHAMPVA) program. CHAMPVA is an insurance 
program run by the VA for dependents and survivors of certain 
disabled veterans. Because the number of new DIC beneficiaries 
would be small, the costs of their CHAMPVA benefits would be 
insignificant.
    In total, CBO estimates that, under sections 1 and 2, 
spending for VA health care would increase by $132 million over 
the 2019-2023 period, assuming appropriation of the necessary 
amounts.
    Spina Bifida Benefits. As discussed above in the section on 
``Direct Spending,'' section 3 would extend eligibility for 
benefits related to spina bifida to include the children of 
veterans who served in Thailand between January 9, 1962, and 
May 7, 1975. Those children would be eligible for health care 
and certain other benefits from VA similar to those provided to 
children with spina bifida of veterans who served in Vietnam.
    On the basis of information from VA about the current 
population of children receiving health benefits for spina 
bifida relative to the number of service members who served in 
Vietnam and information about the number of veterans who served 
in Thailand, CBO estimates that roughly 20 people per year 
would take advantage of the health care benefits, at an 
estimated cost of $41,000 per beneficiary in 2019. Adjusting 
for inflation, CBO estimates that providing health benefits to 
this population would cost $4 million over the 2019-2023 
period. The other benefits provided under this provision are 
discussed in the section of the estimate titled ``Direct 
Spending.''
    Pay-As-You-Go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays that are subject to those 
pay-as-you-go procedures are shown in the following table.

            CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 299 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON VETERANS' AFFAIRS ON MAY 8, 2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                               By fiscal year, in millions of dollars--
                                             -----------------------------------------------------------------------------------------------------------
                                               2018   2019   2020    2021    2022    2023    2024    2025    2026    2027    2028   2018-2023  2018-2028
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact..............      0     16     -3     -125     -97     -73     -49     -50     -54      69      91      -280       -271
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Increase in long-term direct spending and deficits: CBO 
estimates that enacting H.R. 299 would not increase net direct 
spending by more than $2.5 billion or on-budget deficits by 
more than $5 billion in any of the four consecutive 10-year 
periods beginning in 2029.
    Mandates: H.R. 299 contains no intergovernmental or 
private-sector mandates as defined in UMRA.
    Estimate prepared by: Federal costs: Ann E. Futrell, David 
Newman, and Logan Smith; Mandates: Andrew Laughlin.
    Estimate reviewed by: Sarah Jennings, Chief, Defense, 
International Affairs, and Veterans Affairs Unit; Leo Lex, 
Deputy Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 299, as amended, prepared by the 
Director of the Congressional Budget Office pursuant to section 
423 of the Unfunded Mandates Reform Act.

                      Advisory Committee Statement

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

                   Constitutional Authority Statement

    Pursuant to Article I, section 8 of the United States 
Constitution, H.R. 299, as amended, is authorized by Congress' 
power to ``provide for the common Defense and general Welfare 
of the United States.''

                  Applicability to Legislative Branch

    The Committee finds that H.R. 299, as amended, does not 
relate to the terms and conditions of employment or access to 
public services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

              Statement on Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that no provision 
of H.R. 299, as amended, establishes or reauthorizes a program 
of the Federal Government known to be duplicative of another 
Federal program, a program that was included in any report from 
the Government Accountability Office to Congress pursuant to 
section 21 of Public Law 111-139, or a program related to a 
program identified in the most recent Catalog of Federal 
Domestic Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 115th Cong. (2017), 
the Committee estimates that H.R. 299, as amended, contains no 
directed rule making that would require the Secretary to 
prescribe regulations.

             Section-by-Section Analysis of the Legislation


Sec. 1. Clarification of presumptions of exposure for veterans who 
        served in vicinity of Republic of Vietnam

    Section 1 would:
          (a) Extend the presumption of exposure to herbicides 
        for purposes of entitlement to service connection for 
        certain diseases linked to exposure to herbicides to 
        BWN veterans who served in the territorial seas of 
        Vietnam between January 9, 1962, and May 7, 1975. 
        Veterans who filed a claim for VA benefits for diseases 
        and conditions VA recognizes as associated with 
        exposure to herbicides for benefits under this Act 
        between September 25, 1985, and January 1, 2019, but 
        were denied benefits, may file a new claim. The 
        effective date for the claim would be the date the 
        veteran filed the first claim. This section would also 
        define the term ``herbicide agent.''
          (b) Make a clerical amendment.
          (c) Amend section 1710(e)(4) to establish eligibility 
        for hospital care, medical services, and nursing home 
        care to certain veterans who served in the territorial 
        seas of the Republic of Vietnam.
          (d) Require the Secretary to conduct outreach to 
        veterans who served in the territorial seas of the 
        Republic of Vietnam during the period beginning on 
        January 9, 1962, and ending on May 7, 1975, and who 
        filed a claim for benefits between September 25, 1985, 
        and January 1, 2019, of the ability to submit a new 
        claim.
          (e) Require VA to submit reports to the Committees on 
        Veterans' Affairs of the House of Representatives and 
        the Senate on claims for disability compensation under 
        this section.
          (f) Establish the effective date of this section as 
        January 1, 2019.

Sec. 2. Presumption of herbicide exposure for certain veterans who 
        served Korea

    Section 2 would:
          (a) Extend the presumption of exposure for purposes 
        of entitlement to service connection for certain 
        diseases to veterans who served in or near the Korean 
        DMZ between September 1, 1967, and August 31, 1971. 
        This section would also define the terms ``diseases'' 
        and ``herbicide agent''
          (b) Make a clerical amendment.
          (c) Establish the effective date of this section as 
        January 1, 2019.

Sec. 3. Benefits for children of certain Thailand service veterans born 
        with spina bifida

    Section 3 would:
          (a) Extend eligibility for health care, vocational 
        training and rehabilitation, and monetary allowance to 
        any child who was born with spina bifida, if at least 
        one parent of such child was a veteran who served in 
        Thailand between January 9, 1962, and May 7, 1975, and 
        the Secretary determined that at least one of the 
        parents may have been exposed to a herbicide agent 
        during such service in Thailand.
          (b) Make clerical amendments.
          (c) Require, not later than 180 days after the date 
        of enactment of this Act, VA, in consultation with DOD, 
        to submit a report to the Committees on Veterans' 
        Affairs of the House of Representatives and the Senate 
        identifying the military installations located in 
        Thailand between January 9, 1962, and May 7, 1975, at 
        which an herbicide agent was actively used and the 
        period of such use.

Sec. 4. Report on certain Gulf War illness study

    Section 4 would require, not later than 180 days after the 
date of enactment of this Act, VA to submit to the Committees 
on Veterans' Affairs of the House of Representatives and the 
Senate a report on the Follow-up Study of a National Cohort of 
Gulf War and Gulf Era Veterans under VA's epidemiology program.

Sec. 5. Loans guaranteed under home loan program of Department of 
        Veterans Affairs

    Section 5 would:
          (a) Amend section 3703(a) of title 38, U.S.C., to 
        eliminate the limitation of use of the VA home loan 
        program to the Freddie Mac Conforming loan limit as set 
        forth by section 1454(a)(2) of title 12, U.S.C.
          (b) Amend section 3729(b)(2) of title 38, U.S.C., to 
        provide temporary increases to home loan funding rates 
        through FY2026. This section would also eliminate the 
        additional .25 percent funding fee in place for members 
        of the National Guard and Reserve.
          (c) Amend section 3729(c) of title 38, U.S.C., to add 
        a new paragraph (3) to authorize that a funding fee be 
        collected from any veteran borrower who has a service-
        connected disability rated at less than 100 percent and 
        choses to purchase a home above the conforming loan 
        limit set by section 305(a)(2) of the Federal Home Loan 
        Mortgage Corporation Act (section 1454(a)(2)).
          (d) States that the amendments made by this section 
        would go into effect on January 1, 2019.
          (e) Authorize, notwithstanding section 501 of title 
        38, U.S.C., VA to issue guidance for implementing this 
        section in advance of regulations.

Sec. 6. Information gathering for Department of Veterans Affairs home 
        loan appraisals

    Section 6 would:
          (a) Amend section 3731(b) of title 38, U.S.C., to 
        authorize VA to permit a VA approved appraiser to 
        complete an appraisal for a VA back loan based solely 
        on information gathered by a third party.
          (b) States that the amendments made by this section 
        would go into effect on January 1, 2019.
          (c) Authorize, notwithstanding section 501 of title 
        38, U.S.C., VA to issue guidance for implementing this 
        section in advance of regulations.

         Changes in Existing Law Made by the Bill, as Reported

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

         Changes in Existing Law Made by the Bill, as Reported

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

                      TITLE 38, UNITED STATES CODE




           *       *       *       *       *       *       *
PART II--GENERAL BENEFITS

           *       *       *       *       *       *       *


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


                          SUBCHAPTER I--GENERAL

Sec.
1101. Definitions.
     * * * * * * *

             SUBCHAPTER II--WARTIME DISABILITY COMPENSATION

     * * * * * * *
1116A. Presumptions of service connection for veterans who served in the 
          territorial seas of the Republic of Vietnam.
1116B. Presumption of herbicide exposure for certain veterans who served 
          in Korea.

           *       *       *       *       *       *       *


SUBCHAPTER II--WARTIME DISABILITY COMPENSATION

           *       *       *       *       *       *       *


Sec. 1116A. Presumptions of service connection for veterans who served 
                    in the territorial seas of the Republic of Vietnam

  (a) Service Connection.--For the purposes of section 1110 of 
this title, and subject to section 1113 of this title, a 
disease covered by section 1116 of this title becoming manifest 
as specified in that section in a veteran who, during active 
military, naval, or air service, served in the territorial seas 
of the Republic of Vietnam during the period beginning on 
January 9, 1962, and ending on May 7, 1975, shall be considered 
to have been incurred in or aggravated by such service, 
notwithstanding that there is no record of evidence of such 
disease during the period of such service.
  (b) Exposure.--A veteran who, during active military, naval, 
or air service, served in the territorial seas of the Republic 
of Vietnam during the period beginning on January 9, 1962, and 
ending on May 7, 1975, shall be presumed to have been exposed 
during such service to an herbicide agent containing dioxin or 
2,4-dichlorophenoxyacetic acid, and may be presumed to have 
been exposed during such service to any other chemical compound 
in an herbicide agent, unless there is affirmative evidence to 
establish that the veteran was not exposed to any such agent 
during that service.
  (c) Effective Date of Award.--(1) Except as provided by 
paragraph (2), the effective date of an award under this 
section shall be determined in accordance with section 5110 of 
this title.
  (2)(A) Notwithstanding subsection (g) of section 5110 of this 
title, the Secretary shall determine the effective date of an 
award based on a claim under this section for a veteran 
described in subparagraph (B) by treating the date on which the 
veteran filed the prior claim specified in clause (i) of such 
subparagraph as the date on which the veteran filed the claim 
so awarded under this section.
  (B) A veteran described in this subparagraph is a veteran who 
meets the following criteria:
          (i) The veteran submitted a claim for disability 
        compensation on or after September 25, 1985, and before 
        January 1, 2019, for a disease covered by this section, 
        and the claim was denied by reason of the claim not 
        establishing that the disease was incurred or 
        aggravated by the service of the veteran.
          (ii) The veteran submits a claim for disability 
        compensation on or after January 1, 2019, for the same 
        condition covered by the prior claim under clause (i), 
        and the claim is approved pursuant to this section.
  (d) Herbicide Agent.--In this section, the term ``herbicide 
agent'' has the meaning given that term in section 1116 (a)(3) 
of this title.

Sec. 1116B. Presumption of herbicide exposure for certain veterans who 
                    served in Korea

  (a) Presumption of Service-connection.--(1) For the purposes 
of section 1110 of this title, and subject to section 1113 of 
this title, a disease specified in subsection (b) that becomes 
manifest as specified in that subsection in a veteran described 
in paragraph (2) shall be considered to have been incurred or 
aggravated in the line of duty in the active military, naval, 
or air service, notwithstanding that there is no record of 
evidence of such disease during the period of such service.
  (2) A veteran described in this paragraph is a veteran who, 
during active military, naval, or air service, served in or 
near the Korean demilitarized zone (DMZ), during the period 
beginning on September 1, 1967, and ending on August 31, 1971.
  (b) Diseases.--A disease specified in this subsection is--
          (1) a disease specified in paragraph (2) of 
        subsection (a) of section 1116 of this title that 
        becomes manifest as specified in that paragraph; or
          (2) any additional disease that--
                  (A) the Secretary determines in regulations 
                warrants a presumption of service-connection by 
                reason of having positive association with 
                exposure to an herbicide agent; and
                  (B) becomes manifest within any period 
                prescribed in such regulations.
  (c) Herbicide Agent.--For purposes of this section, the term 
``herbicide agent'' has the meaning given such term in section 
1821(d) of this title.

           *       *       *       *       *       *       *


CHAPTER 17--HOSPITAL, NURSING HOME, DOMICILIARY, AND MEDICAL CARE

           *       *       *       *       *       *       *


SUBCHAPTER II--HOSPITAL, NURSING HOME, OR DOMICILIARY CARE AND MEDICAL 
                               TREATMENT

Sec. 1710. Eligibility for hospital, nursing home, and domiciliary care

  (a)(1) The Secretary (subject to paragraph (4)) shall furnish 
hospital care and medical services which the Secretary 
determines to be needed--
          (A) to any veteran for a service-connected 
        disability; and
          (B) to any veteran who has a service-connected 
        disability rated at 50 percent or more.
  (2) The Secretary (subject to paragraph (4)) shall furnish 
hospital care and medical services, and may furnish nursing 
home care, which the Secretary determines to be needed to any 
veteran--
          (A) who has a compensable service-connected 
        disability rated less than 50 percent or, with respect 
        to nursing home care during any period during which the 
        provisions of section 1710A(a) of this title are in 
        effect, a compensable service-connected disability 
        rated less than 70 percent;
          (B) whose discharge or release from active military, 
        naval, or air service was for a disability that was 
        incurred or aggravated in the line of duty;
          (C) who is in receipt of, or who, but for a 
        suspension pursuant to section 1151 of this title (or 
        both a suspension and the receipt of retired pay), 
        would be entitled to disability compensation, but only 
        to the extent that such veteran's continuing 
        eligibility for such care is provided for in the 
        judgment or settlement provided for in such section;
          (D) who is a former prisoner of war, who was awarded 
        the medal of honor under section 3741, 6241, or 8741 of 
        title 10 or section 491 of title 14, or who was awarded 
        the Purple Heart;
          (E) who is a veteran of the Mexican border period or 
        of World War I;
          (F) who was exposed to a toxic substance, radiation, 
        or other conditions, as provided in subsection (e); or
          (G) who is unable to defray the expenses of necessary 
        care as determined under section 1722(a) of this title.
  (3) In the case of a veteran who is not described in 
paragraphs (1) and (2), the Secretary may, to the extent 
resources and facilities are available and subject to the 
provisions of subsections (f) and (g), furnish hospital care, 
medical services, and nursing home care which the Secretary 
determines to be needed.
  (4) The requirement in paragraphs (1) and (2) that the 
Secretary furnish hospital care and medical services, the 
requirement in section 1710A(a) of this title that the 
Secretary provide nursing home care, the requirement in section 
1710B of this title that the Secretary provide a program of 
extended care services, and the requirement in section 1745 of 
this title to provide nursing home care and prescription 
medicines to veterans with service-connected disabilities in 
State homes shall be effective in any fiscal year only to the 
extent and in the amount provided in advance in appropriations 
Acts for such purposes.
  (5) During any period during which the provisions of section 
1710A(a) of this title are not in effect, the Secretary may 
furnish nursing home care which the Secretary determines is 
needed to any veteran described in paragraph (1), with the 
priority for such care on the same basis as if provided under 
that paragraph.
  (b)(1) The Secretary may furnish to a veteran described in 
paragraph (2) of this subsection such domiciliary care as the 
Secretary determines is needed for the purpose of the 
furnishing of medical services to the veteran.
  (2) This subsection applies in the case of the following 
veterans:
          (A) Any veteran whose annual income (as determined 
        under section 1503 of this title) does not exceed the 
        maximum annual rate of pension that would be applicable 
        to the veteran if the veteran were eligible for pension 
        under section 1521(d) of this title.
          (B) Any veteran who the Secretary determines has no 
        adequate means of support.
  (c) While any veteran is receiving hospital care or nursing 
home care in any Department facility, the Secretary may, within 
the limits of Department facilities, furnish medical services 
to correct or treat any non-service-connected disability of 
such veteran, in addition to treatment incident to the 
disability for which such veteran is hospitalized, if the 
veteran is willing, and the Secretary finds such services to be 
reasonably necessary to protect the health of such veteran. The 
Secretary may furnish dental services and treatment, and 
related dental appliances, under this subsection for a non-
service-connected dental condition or disability of a veteran 
only (1) to the extent that the Secretary determines that the 
dental facilities of the Department to be used to furnish such 
services, treatment, or appliances are not needed to furnish 
services, treatment, or appliances for dental conditions or 
disabilities described in section 1712(a) of this title, or (2) 
if (A) such non-service-connected dental condition or 
disability is associated with or aggravating a disability for 
which such veteran is receiving hospital care, or (B) a 
compelling medical reason or a dental emergency requires 
furnishing dental services, treatment, or appliances (excluding 
the furnishing of such services, treatment, or appliances of a 
routine nature) to such veteran during the period of 
hospitalization under this section.
  (d) In no case may nursing home care be furnished in a 
hospital not under the direct jurisdiction of the Secretary 
except as provided in section 1720 of this title.
  (e)(1)(A) A Vietnam-era herbicide-exposed veteran is eligible 
(subject to paragraph (2)) for hospital care, medical services, 
and nursing home care under subsection (a)(2)(F) for any 
disability, notwithstanding that there is insufficient medical 
evidence to conclude that such disability may be associated 
with such exposure.
  (B) A radiation-exposed veteran is eligible for hospital 
care, medical services, and nursing home care under subsection 
(a)(2)(F) for any disease suffered by the veteran that is--
          (i) a disease listed in section 1112(c)(2) of this 
        title; or
          (ii) any other disease for which the Secretary, based 
        on the advice of the Advisory Committee on 
        Environmental Hazards, determines that there is 
        credible evidence of a positive association between 
        occurrence of the disease in humans and exposure to 
        ionizing radiation.
  (C) Subject to paragraph (2) of this subsection, a veteran 
who served on active duty between August 2, 1990, and November 
11, 1998, in the Southwest Asia theater of operations during 
the Persian Gulf War is eligible for hospital care, medical 
services, and nursing home care under subsection (a)(2)(F) for 
any disability, notwithstanding that there is insufficient 
medical evidence to conclude that such disability may be 
associated with such service.
  (D) Subject to paragraphs (2) and (3), a veteran who served 
on active duty in a theater of combat operations (as determined 
by the Secretary in consultation with the Secretary of Defense) 
during a period of war after the Persian Gulf War, or in combat 
against a hostile force during a period of hostilities after 
November 11, 1998, is eligible for hospital care, medical 
services, and nursing home care under subsection (a)(2)(F) for 
any illness, notwithstanding that there is insufficient medical 
evidence to conclude that such condition is attributable to 
such service.
  (E) Subject to paragraph (2), a veteran who participated in a 
test conducted by the Department of Defense Deseret Test Center 
as part of a program for chemical and biological warfare 
testing from 1962 through 1973 (including the program 
designated as ``Project Shipboard Hazard and Defense (SHAD)'' 
and related land-based tests) is eligible for hospital care, 
medical services, and nursing home care under subsection 
(a)(2)(F) for any illness, notwithstanding that there is 
insufficient medical evidence to conclude that such illness is 
attributable to such testing.
  (F) Subject to paragraph (2), a veteran who served on active 
duty in the Armed Forces at Camp Lejeune, North Carolina, for 
not fewer than 30 days during the period beginning on August 1, 
1953, and ending on December 31, 1987, is eligible for hospital 
care and medical services under subsection (a)(2)(F) for any of 
the following illnesses or conditions, notwithstanding that 
there is insufficient medical evidence to conclude that such 
illnesses or conditions are attributable to such service:
          (i) Esophageal cancer.
          (ii) Lung cancer.
          (iii) Breast cancer.
          (iv) Bladder cancer.
          (v) Kidney cancer.
          (vi) Leukemia.
          (vii) Multiple myeloma.
          (viii) Myelodysplastic syndromes.
          (ix) Renal toxicity.
          (x) Hepatic steatosis.
          (xi) Female infertility.
          (xii) Miscarriage.
          (xiii) Scleroderma.
          (xiv) Neurobehavioral effects.
          (xv) Non-Hodgkin's lymphoma.
  (2)(A) In the case of a veteran described in paragraph 
(1)(A), hospital care, medical services, and nursing home care 
may not be provided under subsection (a)(2)(F) with respect 
to--
          (i) a disability that is found, in accordance with 
        guidelines issued by the Under Secretary for Health, to 
        have resulted from a cause other than an exposure 
        described in paragraph (4)(A)(ii); or
          (ii) a disease for which the National Academy of 
        Sciences, in a report issued in accordance with section 
        3 of the Agent Orange Act of 1991, has determined that 
        there is limited or suggestive evidence of the lack of 
        a positive association between occurrence of the 
        disease in humans and exposure to a herbicide agent.
  (B) In the case of a veteran described in subparagraph (C), 
(D), (E), or (F) of paragraph (1), hospital care, medical 
services, and nursing home care may not be provided under 
subsection (a)(2)(F) with respect to a disability that is 
found, in accordance with guidelines issued by the Under 
Secretary for Health, to have resulted from a cause other than 
the service or testing described in such subparagraph.
  (3) In the case of care for a veteran described in paragraph 
(1)(D), hospital care, medical services, and nursing home care 
may be provided under or by virtue of subsection (a)(2)(F) only 
during the following periods:
          (A) Except as provided by subparagraph (B), with 
        respect to a veteran described in paragraph (1)(D) who 
        is discharged or released from the active military, 
        naval, or air service after January 27, 2003, the five-
        year period beginning on the date of such discharge or 
        release.
          (B) With respect to a veteran described in paragraph 
        (1)(D) who is discharged or released from the active 
        military, naval, or air service after January 1, 2009, 
        and before January 1, 2011, but did not enroll to 
        receive such hospital care, medical services, or 
        nursing home care pursuant to such paragraph during the 
        five-year period described in subparagraph (A), the 
        one-year period beginning on the date of the enactment 
        of the Clay Hunt Suicide Prevention for American 
        Veterans Act.
          (C) With respect to a veteran described in paragraph 
        (1)(D) who is discharged or released from the active 
        military, naval, or air service on or before January 
        27, 2003, and did not enroll in the patient enrollment 
        system under section 1705 of this title on or before 
        such date, the three-year period beginning on January 
        27, 2008.
  (4) For purposes of this subsection--
          (A) The term ``Vietnam-era herbicide-exposed 
        veteran'' means a veteran (i) who served on active duty 
        in the Republic of Vietnam (including the territorial 
        seas of such Republic) during the during the period 
        beginning on January 9, 1962, and ending on May 7, 
        1975, and (ii) who the Secretary finds may have been 
        exposed during such service to dioxin or was exposed 
        during such service to a toxic substance found in a 
        herbicide or defoliant used for military purposes 
        during such period.
          (B) The term ``radiation-exposed veteran'' has the 
        meaning given that term in section 1112(c)(3) of this 
        title.
  (5) When the Secretary first provides care for veterans using 
the authority provided in paragraph (1)(D), the Secretary shall 
establish a system for collection and analysis of information 
on the general health status and health care utilization 
patterns of veterans receiving care under that paragraph. Not 
later than 18 months after first providing care under such 
authority, the Secretary shall submit to Congress a report on 
the experience under that authority. The Secretary shall 
include in the report any recommendations of the Secretary for 
extension of that authority.
  (f)(1) The Secretary may not furnish hospital care or nursing 
home care (except if such care constitutes hospice care) under 
this section to a veteran who is eligible for such care under 
subsection (a)(3) of this section unless the veteran agrees to 
pay to the United States the applicable amount determined under 
paragraph (2) or (4) of this subsection.
  (2) A veteran who is furnished hospital care or nursing home 
care under this section and who is required under paragraph (1) 
of this subsection to agree to pay an amount to the United 
States in order to be furnished such care shall be liable to 
the United States for an amount equal to--
          (A) the lesser of--
                  (i) the cost of furnishing such care, as 
                determined by the Secretary; or
                  (ii) the amount determined under paragraph 
                (3) of this subsection; and
          (B) before September 30, 2019, an amount equal to $10 
        for every day the veteran receives hospital care and $5 
        for every day the veteran receives nursing home care.
  (3)(A) In the case of hospital care furnished during any 365-
day period, the amount referred to in paragraph (2)(A)(ii) of 
this subsection is--
          (i) the amount of the inpatient Medicare deductible, 
        plus (ii) one-half of such amount for each 90 days of 
        care (or fraction thereof) after the first 90 days of 
        such care during such 365-day period.
  (B) In the case of nursing home care furnished during any 
365-day period, the amount referred to in paragraph (2)(A)(ii) 
of this subsection is the amount of the inpatient Medicare 
deductible for each 90 days of such care (or fraction thereof) 
during such 365-day period.
  (C)(i) Except as provided in clause (ii) of this 
subparagraph, in the case of a veteran who is admitted for 
nursing home care under this section after being furnished, 
during the preceding 365-day period, hospital care for which 
the veteran has paid the amount of the inpatient Medicare 
deductible under this subsection and who has not been furnished 
90 days of hospital care in connection with such payment, the 
veteran shall not incur any liability under paragraph (2) of 
this subsection with respect to such nursing home care until--
          (I) the veteran has been furnished, beginning with 
        the first day of such hospital care furnished in 
        connection with such payment, a total of 90 days of 
        hospital care and nursing home care; or
          (II) the end of the 365-day period applicable to the 
        hospital care for which payment was made,
        whichever occurs first.
  (ii) In the case of a veteran who is admitted for nursing 
home care under this section after being furnished, during any 
365-day period, hospital care for which the veteran has paid an 
amount under subparagraph (A)(ii) of this paragraph and who has 
not been furnished 90 days of hospital care in connection with 
such payment, the amount of the liability of the veteran under 
paragraph (2) of this subsection with respect to the number of 
days of such nursing home care which, when added to the number 
of days of such hospital care, is 90 or less, is the difference 
between the inpatient Medicare deductible and the amount paid 
under such subparagraph until--
          (I) the veteran has been furnished, beginning with 
        the first day of such hospital care furnished in 
        connection with such payment, a total of 90 days of 
        hospital care and nursing home care; or
          (II) the end of the 365-day period applicable to the 
        hospital care for which payment was made,
whichever occurs first.
  (D) In the case of a veteran who is admitted for hospital 
care under this section after having been furnished, during the 
preceding 365-day period, nursing home care for which the 
veteran has paid the amount of the inpatient Medicare 
deductible under this subsection and who has not been furnished 
90 days of nursing home care in connection with such payment, 
the veteran shall not incur any liability under paragraph (2) 
of this subsection with respect to such hospital care until--
          (i) the veteran has been furnished, beginning with 
        the first day of such nursing home care furnished in 
        connection with such payment, a total of 90 days of 
        nursing home care and hospital care; or
          (ii) the end of the 365-day period applicable to the 
        nursing home care for which payment was made,
whichever occurs first.
  (E) A veteran may not be required to make a payment under 
this subsection for hospital care or nursing home care 
furnished under this section during any 90-day period in which 
the veteran is furnished medical services under paragraph (3) 
of subsection (a) to the extent that such payment would cause 
the total amount paid by the veteran under this subsection for 
hospital care and nursing home care furnished during that 
period and under subsection (g) for medical services furnished 
during that period to exceed the amount of the inpatient 
Medicare deductible in effect on the first day of such period.
  (F) A veteran may not be required to make a payment under 
this subsection or subsection (g) for any days of care in 
excess of 360 days of care during any 365-calendar-day period.
  (4) In the case of a veteran covered by this subsection who 
is also described by section 1705(a)(7) of this title, the 
amount for which the veteran shall be liable to the United 
States for hospital care under this subsection shall be an 
amount equal to 20 percent of the total amount for which the 
veteran would otherwise be liable for such care under 
subparagraphs (2)(B) and (3)(A) but for this paragraph.
  (5) For the purposes of this subsection, the term ``inpatient 
Medicare deductible'' means the amount of the inpatient 
hospital deductible in effect under section 1813(b) of the 
Social Security Act (42 U.S.C. 1395e(b)) on the first day of 
the 365-day period applicable under paragraph (3) of this 
subsection.
  (g)(1) The Secretary may not furnish medical services (except 
if such care constitutes hospice care) under subsection (a) of 
this section (including home health services under section 1717 
of this title) to a veteran who is eligible for hospital care 
under this chapter by reason of subsection (a)(3) of this 
section unless the veteran agrees to pay to the United States 
in the case of each outpatient visit the applicable amount or 
amounts established by the Secretary by regulation.
  (2) A veteran who is furnished medical services under 
subsection (a) of this section and who is required under 
paragraph (1) of this subsection to agree to pay an amount to 
the United States in order to be furnished such services shall 
be liable to the United States, in the case of each visit in 
which such services are furnished to the veteran, for an amount 
which the Secretary shall establish by regulation.
  (3) This subsection does not apply with respect to the 
following:
          (A) Home health services under section 1717 of this 
        title to the extent that such services are for 
        improvements and structural alterations.
          (B) Education on the use of opioid antagonists to 
        reverse the effects of overdoses of specific 
        medications or substances.
  (h) Nothing in this section requires the Secretary to furnish 
care to a veteran to whom another agency of Federal, State, or 
local government has a duty under law to provide care in an 
institution of such government.

           *       *       *       *       *       *       *


CHAPTER 18--BENEFITS FOR CHILDREN OF VIETNAM VETERANS AND CERTAIN OTHER 
                                VETERANS

Sec.

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

1802. Spina bifida conditions covered.
     * * * * * * *

 [SUBCHAPTER III---CHILDREN OF CERTAIN KOREA SERVICE VETERANS BORN WITH 
                              SPINA BIFIDA]

SUBCHAPTER III--CHILDREN OF CERTAIN KOREA AND THAILAND SERVICE VETERANS 
                         BORN WITH SPINA BIFIDA

1821. Benefits for children of certain Korea service veterans born with 
          spina bifida.
1822. Benefits for children of certain Thailand service veterans born 
          with spina bifida.

           *       *       *       *       *       *       *


SUBCHAPTER III--CHILDREN OF CERTAIN KOREA AND THAILAND SERVICE VETERANS 
BORN WITH SPINA BIFIDA

           *       *       *       *       *       *       *


Sec. 1822. Benefits for children of certain Thailand service veterans 
                    born with spina bifida

  (a) Benefits Authorized.--The Secretary may provide to any 
child of a veteran of covered service in Thailand who is 
suffering from spina bifida the health care, vocational 
training and rehabilitation, and monetary allowance required to 
be paid to a child of a Vietnam veteran who is suffering from 
spina bifida under subchapter I of this chapter as if such 
child of a veteran of covered service in Thailand were a child 
of a Vietnam veteran who is suffering from spina bifida under 
such subchapter.
  (b) Spina Bifida Conditions Covered.--This section applies 
with respect to all forms and manifestations of spina bifida, 
except spina bifida occulta.
  (c) Veteran of Covered Service in Thailand.--For purposes of 
this section, a veteran of covered service in Thailand is any 
individual, without regard to the characterization of that 
individual's service, who--
          (1) served in the active military, naval, or air 
        service in Thailand, as determined by the Secretary in 
        consultation with the Secretary of Defense, during the 
        period beginning on January 9, 1962, and ending on May 
        7, 1975; and
          (2) is determined by the Secretary, in consultation 
        with the Secretary of Defense, to have been exposed to 
        a herbicide agent during such service in Thailand.
  (d) Herbicide Agent.--For purposes of this section, the term 
``herbicide agent'' means a chemical in a herbicide used in 
support of United States and allied military operations in 
Thailand, as determined by the Secretary in consultation with 
the Secretary of Defense, during the period beginning on 
January 9, 1962, and ending on May 7, 1975.

           *       *       *       *       *       *       *


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

  (a)(1)(A) Any loan to a veteran eligible for benefits under 
this chapter, if made for any of the purposes specified in 
section 3710 of this title and in compliance with the 
provisions of this chapter, is automatically guaranteed by the 
United States in an amount not to exceed the lesser of--
          (i)(I) in the case of any loan of not more than 
        $45,000, 50 percent of the loan;
          (II) in the case of any loan of more than $45,000, 
        but not more than $56,250, $22,500;
          (III) except as provided in subclause (IV) of this 
        clause, in the case of any loan of more than $56,250, 
        the lesser of $36,000 or 40 percent of the loan; or
          (IV) in the case of any loan of more than $144,000 
        for a purpose specified in clause (1), (2), (3), (5), 
        (6), or (8) of section 3710(a) of this title, [the 
        lesser of] the maximum guaranty amount (as defined in 
        subparagraph (C)) [or 25 percent of the loan]; or
          (ii) the maximum amount of guaranty entitlement 
        available to the veteran as specified in subparagraph 
        (B) of this paragraph.
  (B) The maximum amount of guaranty entitlement available to a 
veteran for purposes specified in section 3710 of this title 
shall be $36,000, or in the case of a loan described in 
subparagraph (A)(i)(IV) of this paragraph, the maximum guaranty 
amount (as defined in subparagraph (C)), reduced by the amount 
of entitlement previously used by the veteran under this 
chapter and not restored as a result of the exclusion in 
section 3702(b) of this title.
  (C) In this paragraph, the term ``maximum guaranty amount'' 
means the dollar amount that is equal to 25 percent of the 
[Freddie Mac conforming loan limit limitation determined under 
section 305(a)(2) of the Federal Home Loan Mortgage Corporation 
Act (12 U.S.C. 1454(a)(2)) for a single-family residence, as 
adjusted for the year involved.] amount of the loan.
  (2)(A) Any housing loan which might be guaranteed under the 
provisions of this chapter, when made or purchased by any 
financial institution subject to examination and supervision by 
any agency of the United States or of any State may, in lieu of 
such guaranty, be insured by the Secretary under an agreement 
whereby the Secretary will reimburse any such institution for 
losses incurred on such loan up to 15 per centum of the 
aggregate of loans so made or purchased by it.
  (B) Loans insured under this section shall be made on such 
other terms, conditions, and restrictions as the Secretary may 
prescribe within the limitations set forth in this chapter.
  (b) The liability of the United States under any guaranty, 
within the limitations of this chapter, shall decrease or 
increase pro rata with any decrease or increase of the amount 
of the unpaid portion of the obligation.
  (c)(1) Loans guaranteed or insured under this chapter shall 
be payable upon such terms and conditions as may be agreed upon 
by the parties thereto, subject to the provisions of this 
chapter and regulations of the Secretary issued pursuant to 
this chapter, and shall bear interest not in excess of such 
rate as the Secretary may from time to time find the loan 
market demands, except that in establishing the rate of 
interest that shall be applicable to such loans, the Secretary 
shall consult with the Secretary of Housing and Urban 
Development regarding the rate of interest applicable to home 
loans insured under section 203(b) of the National Housing Act 
(12 U.S.C. 1709(b)). In establishing rates of interest under 
this paragraph for one or more of the purposes described in 
clauses (4) and (7) of section 3710(a) of this title, the 
Secretary may establish a rate or rates higher than the rate 
specified for other purposes under such section, but any such 
rate may not exceed such rate as the Secretary may from time to 
time find the loan market demands for loans for such purposes.
  (2) The provisions of the Servicemen's Readjustment Act of 
1944 which were in effect before April 1, 1958, with respect to 
the interest chargeable on loans made or guaranteed under such 
Act shall, notwithstanding the provisions of paragraph (1) of 
this subsection, continue to be applicable--
          (A) to any loan made or guaranteed before April 1, 
        1958; and
          (B) to any loan with respect to which a commitment to 
        guarantee was entered into by the Secretary before 
        April 1, 1958.
  (3) This section shall not be construed to prohibit a veteran 
from paying to a lender any reasonable discount required by 
such lender, when the proceeds from the loan are to be used--
          (A) to refinance indebtedness pursuant to clause (5), 
        (8), or (9)(B)(i) of section 3710(a) of this title or 
        section 3712(a)(1)(F) of this title;
          (B) to repair, alter, or improve a farm residence or 
        other dwelling pursuant to clauses (4) and (7) of 
        section 3710(a) of this title;
          (C) to construct a dwelling or farm residence on land 
        already owned or to be acquired by the veteran except 
        where the land is directly or indirectly acquired from 
        a builder or developer who has contracted to construct 
        such dwelling for the veteran;
          (D) to purchase a dwelling from a class of sellers 
        which the Secretary determines are legally precluded 
        under all circumstances from paying such a discount if 
        the best interest of the veteran would be so served; or
          (E) to refinance indebtedness and purchase a 
        manufactured-home lot pursuant to section 
        3710(a)(9)(B)(ii) or 3712(a)(1)(G) of this title, but 
        only with respect to that portion of the loan used to 
        refinance such indebtedness.
  (4)(A) In guaranteeing or insuring loans under this chapter, 
the Secretary may elect whether to require that such loans bear 
interest at a rate that is--
          (i) agreed upon by the veteran and the mortgagee; or
          (ii) established under paragraph (1).
The Secretary may, from time to time, change the election under 
this subparagraph.
  (B) Any veteran, under a loan described in subparagraph 
(A)(i), may pay reasonable discount points in connection with 
the loan. Except in the case of a loan for the purpose 
specified in section 3710(a)(8), 3710(b)(7), or 3712(a)(1)(F) 
of this title, discount points may not be financed as part of 
the principal amount of a loan guaranteed or insured under this 
chapter.
  (C) Not later than 10 days after an election under 
subparagraph (A), the Secretary shall transmit to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives a notification of the election, together with 
an explanation of the reasons therefor.
  (d)(1) The maturity of any housing loan at the time of 
origination shall not be more than thirty years and thirty-two 
days.
  (2)(A) Any loan for a term of more than five years shall be 
amortized in accordance with established procedure.
  (B) The Secretary may guarantee loans with provisions for 
various rates of amortization corresponding to anticipated 
variations in family income. With respect to any loan 
guaranteed under this subparagraph--
          (i) the initial principal amount of the loan may not 
        exceed the reasonable value of the property as of the 
        time the loan is made; and
          (ii) the principal amount of the loan thereafter 
        (including the amount of all interest to be deferred 
        and added to principal) may not at any time be 
        scheduled to exceed the projected value of the 
        property.
  (C) For the purposes of subparagraph (B) of this paragraph, 
the projected value of the property shall be calculated by the 
Secretary by increasing the reasonable value of the property as 
of the time the loan is made at a rate not in excess of 2.5 
percent per year, but in no event may the projected value of 
the property for the purposes of such subparagraph exceed 115 
percent of such reasonable value. A loan made for a purpose 
other than the acquisition of a single-family dwelling unit may 
not be guaranteed under such subparagraph.
  (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 either of the following:
          (i) A public entity that has provided or will provide 
        assistance in response to a major disaster as 
        determined by the President under the Robert T. 
        Stafford Disaster Relief and Emergency Assistance Act 
        (42 U.S.C. 5121 et seq.).
          (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.
  (e)(1) Except as provided in paragraph (2) of this 
subsection, an individual who pays a fee under section 3729 of 
this title, or who is exempted under section 3729(c)(1) of this 
title from paying such fee, with respect to a housing loan 
guaranteed or insured under this chapter that is closed after 
December 31, 1989, shall have no liability to the Secretary 
with respect to the loan for any loss resulting from any 
default of such individual except in the case of fraud, 
misrepresentation, or bad faith by such individual in obtaining 
the loan or in connection with the loan default.
  (2) The exemption from liability provided by paragraph (1) of 
this subsection shall not apply to--
          (A) an individual from whom a fee is collected (or 
        who is exempted from such fee) under section 
        3729(b)(2)(I) of this title; or
          (B) a loan made for any purpose specified in section 
        3712 of this title.
  (f) The application for or obtaining of a loan made, insured, 
or guaranteed under this chapter shall not be subject to 
reporting requirements applicable to requests for, or receipts 
of, Federal contracts, grants, loans, loan guarantees, loan 
insurance, or cooperative agreements except to the extent that 
such requirements are provided for in, or by the Secretary 
pursuant to, this title.

           *       *       *       *       *       *       *


SUBCHAPTER III--ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *


Sec. 3729. Loan fee

  (a) Requirement of Fee.--(1) Except as provided in subsection 
(c), a fee shall be collected from each person obtaining a 
housing loan guaranteed, insured, or made under this chapter, 
and each person assuming a loan to which section 3714 of this 
title applies. No such loan may be guaranteed, insured, made, 
or assumed until the fee payable under this section has been 
remitted to the Secretary.
  (2) The fee may be included in the loan and paid from the 
proceeds thereof.
  (b) Determination of Fee.--(1) The amount of the fee shall be 
determined from the loan fee table in paragraph (2). The fee is 
expressed as a percentage of the total amount of the loan 
guaranteed, insured, or made, or, in the case of a loan 
assumption, the unpaid principal balance of the loan on the 
date of the transfer of the property.
  (2) The loan fee table referred to in paragraph (1) is as 
follows:


                                                 [LOAN FEE TABLE
----------------------------------------------------------------------------------------------------------------
                  [Type of loan                    Active duty veteran       Reservist          Other obligor
----------------------------------------------------------------------------------------------------------------
(A)(i) Initial loan described in section 3710 (a)  2.00                 2.75                 NA
 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 January 1, 2004)
(A)(ii) Initial loan described in section 3710     2.20                 2.40                 NA
 (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 January 1, 2004, and
 before October 1, 2004)
(A)(iii) Initial loan described in section 3710    2.15                 2.40                 NA
 (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, 2004, and
 before September 30, 2027)
(A)(iv) Initial loan described in section 3710     1.40                 1.65                 NA
 (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 September 30, 2027)
(B)(i) Subsequent loan described in section 3710   3.30                 3.30                 NA
 (a) to purchase or construct a dwelling with 0-
 down, or any other subsequent loan described in
 section 3710 (a) (closed before September 30,
 2027)
(B)(ii) Subsequent loan described in section 3710  1.25                 1.25                 NA
 (a) to purchase or construct a dwelling with 0-
 down, or any other subsequent loan described in
 section 3710 (a) (closed on or after September
 30, 2027)
(C)(i) Loan described in section 3710 (a) to       1.50                 1.75                 NA
 purchase or construct a dwelling with 5-down
 (closed before September 30, 2027)
(C)(ii) Loan described in section 3710 (a) to      0.75                 1.00                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after September 30, 2027)
(D)(i) Initial loan described in section 3710 (a)  1.25                 1.50                 NA
 to purchase or construct a dwelling with 10-down
 (closed before September 30, 2027)
(D)(ii) Initial loan described in section 3710     0.50                 0.75                 NA
 (a) to purchase or construct a dwelling with 10-
 down (closed on or after September 30, 2027)
(E) Interest rate reduction refinancing loan       0.50                 0.50                 NA
(F) Direct loan under section 3711                 1.00                 1.00                 NA
(G) Manufactured home loan under section 3712      1.00                 1.00                 NA
 (other than an interest rate reduction
 refinancing loan)
(H) Loan to Native American veteran under section  1.25                 1.25                 NA
 3762 (other than an interest rate reduction
 refinancing loan)
(I) Loan assumption under section 3714             0.50                 0.50                 0.50
(J) Loan under section 3733 (a)                    2.25                 2.25                 2.25]
----------------------------------------------------------------------------------------------------------------



 
----------------------------------------------------------------------------------------------------------------
                   Type of loan                    Active duty veteran       Reservist          Other obligor
----------------------------------------------------------------------------------------------------------------
(A)(i) Initial loan described in section 3710(a)   2.15                 2.40                 NA
 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, 2004, and before
 January 1, 2019)
(A)(ii) Initial loan described in section 3710(a)  2.40                 2.40                 NA
 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 January 1, 2019, and before
 October 1, 2026)
(A)(iii) Initial loan described in section         2.15                 2.15                 NA
 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, 2026, and
 before October 1, 2027)
(A)(iv) Initial loan described in section 3710(a)  1.40                 1.40                 NA
 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, 2027)
(B)(i) Subsequent loan described in section        3.30                 3.30                 NA
 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, 2004, and before January 1, 2019)
(B)(ii) Subsequent loan described in section       3.80                 3.80                 NA
 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 January
 1, 2019, and before October 1, 2026)
(B)(iii) Subsequent loan described in section      3.30                 3.30                 NA
 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, 2026, and before October 1, 2027)
(B)(iv) Subsequent loan described in section       1.25                 1.25                 NA
 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, 2027)
(C)(i) Loan described in section 3710(a) to        1.50                 1.75                 NA
 purchase or construct a dwelling with 5-down
 (closed before January 1, 2019)
(C)(ii) Loan described in section 3710(a) to       1.75                 1.75                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after January 1, 2019, and before
 October 1, 2026)
(C)(iii) Loan described in section 3710(a) to      1.50                 1.50                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after October 1, 2026, and before
 October 1, 2027)
(C)(iv) Loan described in section 3710(a) to       0.75                 0.75                 NA
 purchase or construct a dwelling with 5-down
 (closed on or after October 1, 2027)
(D)(i) Loan described in section 3710(a) to        1.25                 1.50                 NA
 purchase or construct a dwelling with 10-down
 (closed before January 1, 2019)
(D)(ii) Loan described in section 3710(a) to       1.45                 1.45                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after January 1, 2019, and before
 October 1, 2026)
(D)(iii) Loan described in section 3710(a) to      1.25                 1.25                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after October 1, 2026, and before
 October 1, 2027)
(D)(iv) Loan described in section 3710(a) to       0.50                 0.50                 NA
 purchase or construct a dwelling with 10-down
 (closed on or after October 1, 2027)
(E) Interest rate reduction refinancing loan       0.50                 0.50                 NA
(F) Direct loan under section 3711                 1.00                 1.00                 NA
(G) Manufactured home loan under section 3712      1.00                 1.00                 NA
 (other than an interest rate reduction
 refinancing loan)
(H) Loan to Native American veteran under section  1.25                 1.25                 NA
 3762 (other than an interest rate reduction
 refinancing loan)
(I) Loan assumption under section 3714             0.50                 0.50                 0.50
(J) Loan under section 3733(a)                     2.25                 2.25                 2.25
----------------------------------------------------------------------------------------------------------------

  (3) Any reference to a section in the ``Type of loan'' column 
in the loan fee table in paragraph (2) refers to a section of 
this title.
  (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.
          (C) 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) 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) 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) 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) 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) 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) The term ``10-down'' means a downpayment of 10 
        percent or more of the total purchase price or 
        construction cost of the dwelling.
  (c) Waiver of Fee.--(1) [A fee] Subject to paragraph (3), a 
fee may not be collected under this section from a veteran who 
is receiving compensation (or who, but for the receipt of 
retirement pay or active service pay, would be entitled to 
receive compensation) or from a surviving spouse of any veteran 
(including a person who died in the active military, naval, or 
air service) who died from a service-connected disability.
  (2)(A) A veteran described in subparagraph (B) shall be 
treated as receiving compensation for purposes of this 
subsection as of the date of the rating described in such 
subparagraph without regard to whether an effective date of the 
award of compensation is established as of that date.
  (B) A veteran described in this subparagraph is a veteran who 
is rated eligible to receive compensation--
          (i) as the result of a pre-discharge disability 
        examination and rating; or
          (ii) based on a pre-discharge review of existing 
        medical evidence (including service medical and 
        treatment records) that results in the issuance of a 
        memorandum rating.
  (3) A fee shall be collected under this section from any 
veteran with a service-connected disability rated as less than 
total, or any surviving spouse of such a veteran, who, on or 
after January 1, 2019, receives a loan in an amount that 
exceeds the Freddie Mac conforming loan limit limitation 
determined under section 305(a)(2) of the Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a single-
family residence, as adjusted for the year involved.

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Sec. 3731. Appraisals

  (a) The Secretary shall--
          (1) subject to subsection (b)(2) and in consultation 
        with appropriate representatives of institutions which 
        are regularly engaged in making housing loans, 
        prescribe uniform qualifications for appraisers, 
        including the successful completion of a written test, 
        submission of a sample appraisal, certification of an 
        appropriate number of years of experience as an 
        appraiser, and submission of recommendations from other 
        appraisers;
          (2) use such qualifications in determining whether to 
        approve an appraiser to make appraisals of the 
        reasonable value of any property, construction, 
        repairs, or alterations for the purposes of this 
        chapter; and
          (3) in consultation with local representatives of 
        institutions described in clause (1) of this 
        subsection, develop and maintain lists of appraisers 
        who are approved under clause (2) of this subsection to 
        make appraisals for the purposes of this chapter.
  (b)(1) The Secretary shall select appraisers from a list 
required by subsection (a)(3) of this section on a rotating 
basis to make appraisals for the purposes of this chapter.
  (2) If uniform qualifications become applicable for 
appraisers who perform appraisals for or in connection with the 
Federal Government, the qualifications required by subsection 
(a)(1) of this section may be more stringent than such uniform 
qualifications, but the Secretary may use no written test in 
determining the qualifications of appraisers other than the 
test prescribed to implement such uniform qualifications.
  (3) The Secretary shall permit an appraiser on a list 
developed and maintained under subsection (a)(3) to make an 
appraisal for the purposes of this chapter based solely on 
information gathered by a person with whom the appraiser has 
entered into an agreement for such services.
  (c) Except as provided in subsection (f) of this section, the 
appraiser shall forward an appraisal report to the Secretary 
for review. Upon receipt of such report, the Secretary shall 
determine the reasonable value of the property, construction, 
repairs, or alterations for purposes of this chapter, and 
notify the veteran of such determination. Upon request, the 
Secretary shall furnish a copy of the appraisal made of 
property for the purposes of this chapter to the lender 
proposing to make the loan which is to be secured by such 
property and is to be guaranteed under this chapter.
  (d) If a lender (other than a lender authorized under 
subsection (f) of this section to determine reasonable value)--
          (1) has proposed to make a loan to be guaranteed 
        under this chapter,
          (2) has been furnished a certificate of reasonable 
        value of any property or of any construction, repairs, 
        or alterations of property which is to be the security 
        for such loan, and
          (3) within a reasonable period prescribed by the 
        Secretary, has furnished to the Secretary an additional 
        appraisal of the reasonable value of such property, 
        construction, repairs, or alterations which was made by 
        an appraiser selected by the lender from the list 
        required by subsection (a)(3) of this section,
the Secretary shall consider both the initial appraisal and the 
additional appraisal and shall, if appropriate, issue a revised 
certificate of reasonable value of such property, construction, 
repairs, or alterations.
  (e)(1) In no case may a veteran be required to pay all or any 
portion of the cost of the additional appraisal described in 
subsection (d)(3) of this section.
  (2) If a veteran, within a reasonable period prescribed by 
the Secretary, has furnished to the Secretary an additional 
appraisal of the reasonable value of such property, 
construction, repairs, or alterations which was made by an 
appraiser selected by the veteran from the list required by 
subsection (a)(3) of this section, the Secretary shall consider 
such appraisal, along with other appraisals furnished to the 
Secretary, and shall, if appropriate, issue a revised 
certificate of reasonable value of such property, construction, 
repairs, or alterations.
  (f)(1) Subject to the provisions of paragraphs (2) and (3) of 
this subsection, the Secretary may, in accordance with 
standards and procedures established in regulations prescribed 
by the Secretary, authorize a lender to determine the 
reasonable value of property for the purposes of this chapter 
if the lender is authorized to make loans which are 
automatically guaranteed under section 3702(d) of this title. 
In such a case, the appraiser selected by the Secretary 
pursuant to subsection (b) of this section shall submit the 
appraisal report directly to the lender for review, and the 
lender shall, as soon as possible thereafter, furnish a copy of 
the appraisal to the veteran who is applying for the loan 
concerned and to the Secretary.
  (2) In exercising the authority provided in paragraph (1) of 
this subsection, the Secretary shall assign a sufficient number 
of personnel to carry out an appraisal-review system to 
monitor, on at least a random-sampling basis, the making of 
appraisals by appraisers and the effectiveness and the 
efficiency of the determination of reasonable value of property 
by lenders.
  (4) Not later than April 30 of each year following a year in 
which the Secretary authorizes lenders to determine reasonable 
value of property under this subsection, the Secretary shall 
submit to the Committees on Veterans' Affairs of the Senate and 
the House of Representatives a report relating to the exercise 
of that authority during the year in which the authority was 
exercised.
  (5) A report submitted pursuant to paragraph (4) of this 
subsection shall include, for the period covered by each 
report--
          (A) the number and value of loans made by lenders 
        exercising the authority of this subsection;
          (B) the number and value of such loans reviewed by 
        the appraisal-review monitors referred to in paragraph 
        (2) of this subsection;
          (C) the number and value of loans made under this 
        subsection of which the Secretary received notification 
        of default;
          (D) the amount of guaranty paid by the Secretary to 
        such lenders by reason of defaults on loans as to which 
        reasonable value was determined under this subsection; 
        and
          (E) such recommendations as the Secretary considers 
        appropriate to improve the exercise of the authority 
        provided for in this subsection and to protect the 
        interests of the United States.

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