Home > 105th Congressional Bills > H.R. 4033 (ih) To amend title II of the Social Security Act to require investment of the Social Security trust funds in marketable securities, and for other purposes. ...H.R. 4033 (ih) To amend title II of the Social Security Act to require investment of the Social Security trust funds in marketable securities, and for other purposes. ...
108th CONGRESS
2d Session
H. R. 4032
To amend title 38, United States Code, to provide additional safeguards
for Department of Veterans Affairs benefit recipients who have
fiduciaries for receipt and management of benefit payments, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 25, 2004
Mrs. Davis of California (for herself, Mr. Michaud, Mr. Evans, Mr.
Filner, Ms. Corrine Brown of Florida, Mr. Rodriguez, Ms. Hooley of
Oregon, Mr. Strickland, Mr. Grijalva, Mr. Frank of Massachusetts, Mr.
Bishop of Georgia, Mr. Holden, Mr. Brady of Pennsylvania, Mrs.
Napolitano, and Mr. Chandler) introduced the following bill; which was
referred to the Committee on Veterans' Affairs
_______________________________________________________________________
A BILL
To amend title 38, United States Code, to provide additional safeguards
for Department of Veterans Affairs benefit recipients who have
fiduciaries for receipt and management of benefit payments, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Veterans Fiduciary Act of 2004''.
SEC. 2. DEFINITION OF FIDUCIARY.
(a) In General.--(1) Chapter 55 of title 38, United States Code, is
amended by adding at the end the following new section:
``Sec. 5506. Definition of `fiduciary'
``For purposes of this chapter and chapter 61 of this title, the
term `fiduciary' means--
``(1) a person who is a guardian, curator, conservator,
committee, or person legally vested with the responsibility or
care of a claimant (or a claimant's estate) or of a beneficiary
(or a beneficiary's estate); or
``(2) any other person having been appointed in a
representative capacity to receive money paid under any of the
laws administered by the Secretary for the use and benefit of a
minor, incompetent, or other beneficiary.''.
(2) The table of sections at the beginning of such chapter is
amended by adding at the end the following new item:
``5506. Definition of `fiduciary'.''.
(b) Conforming Amendments to Section 5502.--Section 5502 of such
title is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``other person''
and inserting ``other fiduciary''; and
(B) in the second sentence of paragraph (2), by
inserting ``for benefits under this title'' after ``in
connection with rendering fiduciary services'';
(2) in subsection (b), by striking ``guardian, curator,
conservator, or other person'' each place it appears and
inserting ``fiduciary''; and
(3) in subsection (d), by striking ``guardian, curator, or
conservator'' and inserting ``fiduciary''.
(c) Conforming Amendment to Section 6101.--Section 6101(a) of such
title is amended by striking ``guardian, curator,'' and all that
follows through ``beneficiary,'' and inserting ``fiduciary (as defined
in section 5506 of this title) for the benefit of a minor, incompetent,
or other beneficiary under laws administered by the Secretary,''.
SEC. 3. INVESTIGATION AND QUALIFICATION OF FIDUCIARIES.
(a) In General.--Chapter 55 of title 38, United States Code, as
amended by section 2, is further amended by adding at the end the
following new section:
``Sec. 5507. Investigation and qualification of fiduciaries
``(a) Any certification of a person for payment of benefits of a
beneficiary to that person as such beneficiary's fiduciary under
section 5502 of this title shall be made on the basis of--
``(1) an investigation by the Secretary of the fitness of
that person to serve as fiduciary for that beneficiary, such
investigation--
``(A) to be conducted in advance of such
certification; and
``(B) to the extent practicable, to include a face-
to-face interview with such person;
``(2) adequate evidence that certification of that person
as fiduciary for that beneficiary is in the interest of such
beneficiary (as determined by the Secretary under regulations);
and
``(3) the furnishing of any bond that may be required by
the Secretary.
``(b) As part of any investigation of any person under subsection
(a), the Secretary shall request information concerning whether that
person has been convicted of any offense under Federal or State law
which resulted in imprisonment for more than one year. If that person
has been convicted of such an offense, the Secretary may certify the
person as a fiduciary only if the Secretary makes a specific finding
that the person has been rehabilitated and is the most appropriate
person to act as fiduciary for the beneficiary concerned under the
circumstances.
``(c)(1) In the case of a proposed fiduciary described in paragraph
(2), the Secretary, in conducting an investigation under subsection
(a)(1), may carry out such investigation on an expedited basis that may
include waiver of any specific requirement relating to such
investigation, including the otherwise applicable provisions of
subparagraphs (A) and (B) of such subsection. Any such investigation
carried out on such an expedited basis shall be carried out under
regulations prescribed for purposes of this section.
``(2) Paragraph (1) applies with respect to a proposed fiduciary
who is--
``(A) the parent (natural, adopted, or stepparent) of a
beneficiary who is a minor;
``(B) the spouse or parent of an incompetent beneficiary;
or
``(C) a person who has been appointed a fiduciary of the
beneficiary by a court of competent jurisdiction.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is amended by adding after the item added by the amendment
made by section 2(a)(2) the following new item:
``5507. Investigation and qualification of fiduciaries.''.
SEC. 4. MISUSE OF BENEFITS BY FIDUCIARIES.
(a) Protection of Veterans Benefits When Administered by
Fiduciaries.--(1) Chapter 61 of title 38, United States Code, is
amended by adding at the end the following new sections:
``Sec. 6106. Misuse of benefits by fiduciaries
``(a) Fee Forfeiture in Case of Benefit Misuse by Fiduciaries.--A
fiduciary may not collect a fee from a beneficiary for any month with
respect to which the Secretary or a court of competent jurisdiction has
determined that fiduciary misused all or part of the individual's
benefit, and any amount so collected by the fiduciary as a fee for such
month shall be treated as a misused part of the individual's benefit.
``(b) Liability of Fiduciaries for Misused Benefits.--(1) If the
Secretary or a court of competent jurisdiction determines that a
fiduciary that is not a Federal, State, or local government agency has
misused all or part of a beneficiary's benefit that was paid to such
fiduciary, the fiduciary shall be liable for the amount misused, and
such amount (to the extent not repaid by the fiduciary) shall be
treated as an erroneous payment of benefits under this title to the
fiduciary for purposes of laws pertaining to the recovery of
overpayments. The amount of such overpayment shall constitute a
liability of such fiduciary to the United States and may be recovered
in the same manner as any other debt due the United States. Subject to
paragraph (2), upon recovering all or any part of such amount, the
Secretary shall pay an amount equal to the recovered amount to such
beneficiary or such beneficiary's alternative fiduciary.
``(2) The total of the amounts paid to a beneficiary (or a
beneficiary's alternative fiduciary) under paragraph (1) and under
section 6107 of this title may not exceed the total benefit amount
misused by the fiduciary with respect to that beneficiary.
``(c) Misuse of Benefits Defined.--For purposes of this chapter,
misuse of benefits by a fiduciary occurs in any case in which the
fiduciary receives payment, under any of laws administered by the
Secretary, for the use and benefit of a beneficiary and converts such
payment, or any part thereof, to a use other than for the use and
benefit of such beneficiary or that beneficiary's dependents. Retention
by a fiduciary of an amount of a benefit payment as a fiduciary fee or
commission, or as attorney's fees (including expenses) and court costs,
if authorized by the Secretary or a court of competent jurisdiction,
shall be considered to be for the use or benefit of such beneficiary.
``(d) Regulations.--The Secretary may prescribe by regulation the
meaning of the term `use and benefit' for purposes of this section.
``(e) Finality of Determinations.--A determination by the Secretary
that a fiduciary has misused benefits shall be considered to be a
decision of the Secretary under section 511(a) of this title.
``Sec. 6107. Reissuance of benefits
``(a) Negligent Failure by Secretary.--(1) In any case in which the
negligent failure of the Secretary to investigate or monitor a
fiduciary results in misuse of benefits by the fiduciary, the Secretary
shall pay to the beneficiary or the beneficiary's alternate fiduciary
an amount equal to the amount of benefits that were so misused.
``(2) There shall be considered to have been a negligent failure by
the Secretary to investigate and monitor a fiduciary in the following
cases:
``(A) A case in which the Secretary failed to timely review
a fiduciary's accounting.
``(B) A case in which the Secretary was notified of
allegations of misuse, but failed to act in a timely manner to
terminate the fiduciary.
``(C) In any other case in which actual negligence is
shown.
``(b) Reissuance of Misused Benefits.--(1) In any case in which a
fiduciary described in paragraph (2) misuses all or part of an
individual's benefit paid to such fiduciary, the Secretary shall pay to
the beneficiary or the beneficiary's alternative fiduciary an amount
equal to the amount of such benefit so misused.
``(2) Paragraph (1) applies to a fiduciary that--
``(A) is not an individual; or
``(B) is an individual who, for any month during a period
when misuse occurs, serves 15 or more individuals who are
beneficiaries under this title.
``(c) Recoupment of Amounts Reissued.--In any case in which the
Secretary reissues a benefit payment (in whole or in part) under
subsection (a) or (b), the Secretary shall make a good faith effort to
obtain recoupment from the fiduciary to whom the payment was originally
made.''.
(b) Clerical Amendment.--The table of sections at the beginning of
such chapter is amended by adding at the end the following new items:
``6106. Misuse of benefits by fiduciaries.
``6107. Reissuance of benefits.''.
SEC. 5. ADDITIONAL PROTECTIONS FOR BENEFICIARIES WITH FIDUCIARIES.
(a) Onsite Reviews and Required Accountings.--(1) Chapter 55 of
title 38, United States Code, as amended by section 3, is further
amended by adding at the end the following new sections:
``Sec. 5508. Periodic onsite reviews of institutional fiduciaries
``(a) Inspections Required.--In addition to such other reviews of
fiduciaries as the Secretary may otherwise conduct, the Secretary shall
provide for the periodic onsite review of any person or agency located
in the United States that receives the benefits payable under laws
administered by the Secretary to another individual pursuant to the
appointment of such person or agency as a fiduciary under section 5502
of this title in any case in which--
``(1) the fiduciary is a person who serves in that capacity
with respect to 15 or more such individuals;
``(2) the fiduciary is a certified community-based
nonprofit social service agency; or
``(3) the fiduciary is an agency (other than an agency
described in paragraph (2)) that serves in that capacity with
respect to 50 or more such individuals.
``(b) Certified Community-Based Nonprofit Social Service Agency
Defined.--For purposes of this section, the term `certified community-
based nonprofit social service agency' means a community-based
nonprofit social service agency that is in compliance with
requirements, under regulations which shall be prescribed by the
Secretary, for annual certification to the Secretary that it is bonded
in accordance with requirements specified by the Secretary and that it
is licensed in each State in which it serves as a fiduciary (if
licensing is available in such State) in accordance with requirements
specified by the Secretary. Any such annual certification shall include
a copy of any independent audit on such agency which may have been
performed since the previous certification.
``(c) Biennial Report.--(1) Within 120 days after the end of each
even-numbered fiscal year, the Secretary shall submit to the Committees
on Veterans' Affairs of the Senate and House of Representatives a
report on the results of periodic onsite reviews conducted during the
two preceding fiscal years pursuant to subsection (a) and of any other
reviews of fiduciaries conducted during those fiscal years in
connection with benefits under this title (such as summaries of
findings of reports of the Office of the Inspector General) that the
Secretary determines to be pertinent for purposes of this subsection.
``(2) Each report under paragraph (1) shall describe in detail all
problems identified in such reviews and any corrective action taken or
planned to be taken to correct such problems, and shall include the
following:
``(A) The number of such reviews.
``(B) The results of such reviews.
``(C) The number of cases in which the fiduciary was
changed and why.
``(D) The number of cases involving the exercise of
expedited, targeted oversight of the fiduciary by the Secretary
conducted upon receipt of an allegation of misuse of benefits,
failure to pay a vendor, or a similar irregularity.
``(E) The number of cases discovered in which there was a
misuse of benefits.
``(F) How any such case of misuse of benefits was addressed
by the Secretary.
``(G) The final disposition of such cases of misuse of
benefits, including any civil or criminal penalties imposed.
``(H) Such other information as the Secretary considers
appropriate.
``Sec. 5509. Authority to redirect delivery of benefit payments when a
fiduciary fails to provide required accounting
``(a) Required Reports and Accountings.--The Secretary may require
a fiduciary to file a report or accounting pursuant to regulations
prescribed by the Secretary.
``(b) Actions Upon Failure To File.--In any case in which a
fiduciary fails to submit a report or accounting required by the
Secretary under subsection (a), the Secretary may, after furnishing
notice to such fiduciary and the beneficiary entitled to such payment
of benefits, require that such fiduciary appear in person at a regional
office of the Department serving the area in which the beneficiary
resides in order to receive such payments.''.
(2) The table of sections at the beginning of such chapter is
amended by adding after the item added by the amendment made by section
3(b) the following new items:
``5508. Periodic onsite reviews of institutional fiduciaries.
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