H.R. 5948 (112th): Veterans Fiduciary Reform and Honoring Noble Service Act

112th Congress, 2011–2013. Text as of Sep 20, 2012 (Referred to Senate Committee).

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IIB

112th CONGRESS

2d Session

H. R. 5948

IN THE SENATE OF THE UNITED STATES

September 20, 2012

Received; read twice and referred to the Committee on Veterans' Affairs

AN ACT

To amend title 38, United States Code, to improve the supervision of fiduciaries of veterans under the laws administered by the Secretary of Veterans Affairs, to establish a Place of Remembrance at Arlington National Cemetery, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Veterans Fiduciary Reform and Honoring Noble Service Act.

(b)

Table of Contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Improvement of fiduciaries for veterans.

Sec. 3. Establishment of Place of Remembrance at Arlington National Cemetery.

Sec. 4. Furnishing caskets and urns for deceased veterans with no known next of kin.

Sec. 5. Improved communication between Department of Veterans Affairs and medical examiners and funeral directors.

Sec. 6. Report on compliance of Department of Veterans Affairs with industry standards for caskets and urns.

Sec. 7. Exclusion of persons convicted of committing certain sex offenses from interment or memorialization in national cemeteries, Arlington National Cemetery, and certain State veterans’ cemeteries and from receiving certain funeral honors.

Sec. 8. Veterans freedom of conscience protection.

Sec. 9. Provision of access to case-tracking information.

Sec. 10. Notification by the Secretary of Veterans Affairs of individuals whose sensitive personal information is involved in a data breach.

Sec. 11. Limitation on bonuses for Department of Veterans Affairs employees who violate Federal civil laws or regulations.

Sec. 12. Limitation on awards and bonuses to employees of the Department of Veterans Affairs.

2.

Improvement of fiduciaries for veterans

(a)

Appointment and supervision

(1)

Section 5502 of title 38, United States Code, is amended to read as follows:

5502.

Appointment of fiduciaries

(a)

Appointment

(1)

Where it appears to the Secretary that the interest of the beneficiary would be served thereby, payment of benefits under any law administered by the Secretary may be made directly to the beneficiary or to a relative or some other fiduciary for the use and benefit of the beneficiary, regardless of any legal disability on the part of the beneficiary.

(2)

When in the opinion of the Secretary, a temporary fiduciary is needed in order to protect the benefits provided to the beneficiary under any law administered by the Secretary while a determination of incompetency is being made or appealed or a fiduciary is appealing a determination of misuse, the Secretary may appoint one or more temporary fiduciaries for a period not to exceed 120 days. If a final decision has not been made within 120 days, the Secretary may not continue the appointment of the fiduciary without obtaining a court order for appointment of a guardian, conservator, or other fiduciary under the authority provided in section 5502(b) of this title.

(b)

Appeals

(1)

If the Secretary determines a beneficiary to be mentally incompetent for purposes of appointing a fiduciary under this chapter, the Secretary shall provide such beneficiary with a written statement detailing the reasons for such determination.

(2)

A beneficiary whom the Secretary has determined to be mentally incompetent for purposes of appointing a fiduciary under this chapter may appeal such determination.

(c)

Modification

(1)

A beneficiary for whom the Secretary appoints a fiduciary under this chapter may, at any time, request the Secretary to—

(A)

remove the fiduciary so appointed; and

(B)

have a new fiduciary appointed.

(2)

The Secretary shall comply with a request under paragraph (1) unless the Secretary determines that the request is not made in good faith.

(3)

The Secretary shall ensure that any removal or new appointment of a fiduciary under paragraph (1) does not delay or interrupt the beneficiary’s receipt of benefits administered by the Secretary.

(d)

Independence

A fiduciary appointed by the Secretary shall operate independently of the Department to determine the actions that are in the interest of the beneficiary.

(e)

Predesignation

A veteran may predesignate a fiduciary by—

(1)

submitting written notice to the Secretary of the predesignated fiduciary; or

(2)

submitting a form provided by the Secretary for such purpose.

(f)

Appointment of non-predesignated fiduciary

If a beneficiary designates an individual to serve as a fiduciary under subsection (e) and the Secretary appoints an individual not so designated as the fiduciary for such beneficiary, the Secretary shall notify such beneficiary of—

(1)

the reason why such designated individual was not appointed; and

(2)

the ability of the beneficiary to modify the appointed fiduciary under subsection (c).

(g)

Priority of appointment

In appointing a fiduciary under this chapter, if a beneficiary does not designate a fiduciary pursuant to subsection (e), to the extent possible the Secretary shall appoint a person who is—

(1)

a relative of the beneficiary;

(2)

appointed as guardian of the beneficiary by a court of competent jurisdiction; or

(3)

authorized to act on behalf of the beneficiary under a durable power of attorney.

.

(2)

Clerical amendment

The table of sections at the beginning of chapter 55 of title 38, United States Code, is amended by striking the item relating to section 5502 and inserting the following:

5502. Appointment of fiduciaries.

.

(b)

Supervision

(1)

In general

Chapter 55 of title 38, United States Code, is amended by inserting after section 5502, as amended by subsection (a)(1), the following new section:

5502A.

Supervision of fiduciaries

(a)

Commission

(1)
(A)

In a case in which the Secretary determines that a commission is necessary in order to obtain the services of a fiduciary in the best interests of a beneficiary, the Secretary may authorize a fiduciary appointed by the Secretary to obtain from the monthly benefits provided to the beneficiary a reasonable commission for fiduciary services rendered, but the commission for any month may not exceed the lesser of the following amounts:

(i)

The amount that equals three percent of the monthly monetary benefits under laws administered by the Secretary paid on behalf of the beneficiary to the fiduciary.

(ii)

$35.

(B)

A commission paid under this paragraph may not be derived from any award to a beneficiary regarding back pay or retroactive benefits payments.

(C)

A commission may not be authorized for a fiduciary who receives any other form of remuneration or payment in connection with rendering fiduciary services for benefits under this title on behalf of the beneficiary.

(D)

In accordance with section 6106 of this title, a commission may not be paid to a fiduciary if the Secretary determines that the fiduciary misused any benefit payments of a beneficiary.

(E)

If the Secretary determines that the fiduciary has misused any benefit or payments of a beneficiary, the Secretary may revoke the fiduciary status of the fiduciary.

(2)

Where, in the opinion of the Secretary, any fiduciary receiving funds on behalf of a Department beneficiary is acting in such a number of cases as to make it impracticable to conserve properly the estates or to supervise the persons of the beneficiaries, the Secretary may refuse to make future payments in such cases as the Secretary may deem proper.

(b)

Court

Whenever it appears that any fiduciary, in the opinion of the Secretary, is not properly executing or has not properly executed the duties of the trust of such fiduciary or has collected or paid, or is attempting to collect or pay, fees, commissions, or allowances that are inequitable or in excess of those allowed by law for the duties performed or expenses incurred, or has failed to make such payments as may be necessary for the benefit of the ward or the dependents of the ward, then the Secretary may appear, by the Secretary's authorized attorney, in the court which has appointed such fiduciary, or in any court having original, concurrent, or appellate jurisdiction over said cause, and make proper presentation of such matters. The Secretary, in the Secretary's discretion, may suspend payments to any such fiduciary who shall neglect or refuse, after reasonable notice, to render an account to the Secretary from time to time showing the application of such payments for the benefit of such incompetent or minor beneficiary, or who shall neglect or refuse to administer the estate according to law. The Secretary may require the fiduciary, as part of such account, to disclose any additional financial information concerning the beneficiary (except for information that is not available to the fiduciary). The Secretary may appear or intervene by the Secretary's duly authorized attorney in any court as an interested party in any litigation instituted by the Secretary or otherwise, directly affecting money paid to such fiduciary under this section.

(c)

Payment of certain expenses

Authority is hereby granted for the payment of any court or other expenses incident to any investigation or court proceeding for the appointment of any fiduciary or other person for the purpose of payment of benefits payable under laws administered by the Secretary or the removal of such fiduciary and appointment of another, and of expenses in connection with the administration of such benefits by such fiduciaries, or in connection with any other court proceeding hereby authorized, when such payment is authorized by the Secretary.

(d)

Temporary payment of benefits

All or any part of any benefits the payment of which is suspended or withheld under this section may, in the discretion of the Secretary, be paid temporarily to the person having custody and control of the incompetent or minor beneficiary, to be used solely for the benefit of such beneficiary, or, in the case of an incompetent veteran, may be apportioned to the dependent or dependents, if any, of such veteran. Any part not so paid and any funds of a mentally incompetent or insane veteran not paid to the chief officer of the institution in which such veteran is a patient nor apportioned to the veteran's dependent or dependents may be ordered held in the Treasury to the credit of such beneficiary. All funds so held shall be disbursed under the order and in the discretion of the Secretary for the benefit of such beneficiary or the beneficiary's dependents. Any balance remaining in such fund to the credit of any beneficiary may be paid to the beneficiary if the beneficiary recovers and is found competent, or if a minor, attains majority, or otherwise to the beneficiary's fiduciary, or, in the event of the beneficiary's death, to the beneficiary's personal representative, except as otherwise provided by law; however, payment will not be made to the beneficiary's personal representative if, under the law of the beneficiary's last legal residence, the beneficiary's estate would escheat to the State. In the event of the death of a mentally incompetent or insane veteran, all gratuitous benefits under laws administered by the Secretary deposited before or after August 7, 1959, in the personal funds of patients trust fund on account of such veteran shall not be paid to the personal representative of such veteran, but shall be paid to the following persons living at the time of settlement, and in the order named: The surviving spouse, the children (without regard to age or marital status) in equal parts, and the dependent parents of such veteran, in equal parts. If any balance remains, such balance shall be deposited to the credit of the applicable current appropriation; except that there may be paid only so much of such balance as may be necessary to reimburse a person (other than a political subdivision of the United States) who bore the expenses of last sickness or burial of the veteran for such expenses. No payment shall be made under the two preceding sentences of this subsection unless claim therefor is filed with the Secretary within five years after the death of the veteran, except that, if any person so entitled under said two sentences is under legal disability at the time of death of the veteran, such five-year period of limitation shall run from the termination or removal of the legal disability.

(e)

Escheatment

Any funds in the hands of a fiduciary appointed by a State court or the Secretary derived from benefits payable under laws administered by the Secretary, which under the law of the State wherein the beneficiary had last legal residence would escheat to the State, shall escheat to the United States and shall be returned by such fiduciary, or by the personal representative of the deceased beneficiary, less legal expenses of any administration necessary to determine that an escheat is in order, to the Department, and shall be deposited to the credit of the applicable revolving fund, trust fund, or appropriation.

.

(2)

Clerical amendment

The table of sections at the beginning of chapter 55 of title 38, United States Code, is amended by inserting after the item relating to section 5502 the following new item:

5502A. Supervision of fiduciaries.

.

(c)

Definition of fiduciary

Section 5506 of title 38, United States Code is amended—

(1)

by striking For purposes and inserting (a) For purposes; and

(2)

by adding at the end the following new subsection:

(b)
(1)

For purposes of subsection (a), the term person includes any—

(A)

State or local government agency whose mission is to carry out income maintenance, social service, or health care-related activities;

(B)

any State or local government agency with fiduciary responsibilities; or

(C)

any nonprofit social service agency that the Secretary determines—

(i)

regularly provides services as a fiduciary concurrently to five or more individuals; and

(ii)

is not a creditor of any such individual.

(2)

The Secretary shall maintain a list of State or local agencies and nonprofit social service agencies under paragraph (1) that are qualified to act as a fiduciary under this chapter. In maintaining such list, the Secretary may consult the lists maintained under section 807(h) of the Social Security Act (42 U.S.C. 1007(h)).

.

(d)

Qualifications

Section 5507 of title 38, United States Code, is amended to read as follows:

5507.

Inquiry, investigations, and qualification of fiduciaries

(a)

Investigation

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 inquiry or investigation by the Secretary of the fitness of that person to serve as fiduciary for that beneficiary to be conducted in advance of such certification and in accordance with subsection (b);

(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);

(3)

adequate evidence that the person to serve as fiduciary protects the private information of a beneficiary in accordance with subsection (d)(1); and

(4)

the furnishing of any bond that may be required by the Secretary, in accordance with subsection (f).

(b)

Elements of investigation

(1)

In conducting an inquiry or investigation of a proposed fiduciary under subsection (a)(1), the Secretary shall conduct—

(A)

a face-to-face interview with the proposed fiduciary by not later than 30 days after the date on which such inquiry or investigation begins; and

(B)

a background check of the proposed fiduciary to—

(i)

in accordance with paragraph (2), determine whether the proposed fiduciary has been convicted of a crime; and

(ii)

determine whether the proposed fiduciary will serve the best interest of the beneficiary, including by conducting a credit check of the proposed fiduciary and checking the records under paragraph (5).

(2)

The Secretary shall request information concerning whether that person has been convicted of any offense under Federal or State law. If that person has been convicted of such an offense, the Secretary may certify the person as a fiduciary only if the Secretary finds that the person is an appropriate person to act as fiduciary for the beneficiary concerned under the circumstances.

(3)

The Secretary shall conduct the background check described in paragraph (1)(B)—

(A)

each time a person is proposed to be a fiduciary, regardless of whether the person is serving or has served as a fiduciary; and

(B)

at no expense to the beneficiary.

(4)

Each proposed fiduciary shall disclose to the Secretary the number of beneficiaries that the fiduciary acts on behalf of.

(5)

The Secretary shall maintain records of any person who has—

(A)

previously served as a fiduciary; and

(B)

had such fiduciary status revoked by the Secretary.

(6)
(A)

If a fiduciary appointed by the Secretary is convicted of a crime described in subparagraph (B), the Secretary shall notify the beneficiary of such conviction by not later than 14 days after the date on which the Secretary learns of such conviction.

(B)

A crime described in this subparagraph is a crime—

(i)

for which the fiduciary is convicted while serving as a fiduciary for any person;

(ii)

that is not included in a report submitted by the fiduciary under section 5509(a) of this title; and

(iii)

that the Secretary determines could affect the ability of the fiduciary to act on behalf of the beneficiary.

(c)

Investigation of certain persons

(1)

In the case of a proposed fiduciary described in paragraph (2), the Secretary, in conducting an inquiry or investigation under subsection (a)(1), may carry out such inquiry or investigation on an expedited basis that may include giving priority to conducting such inquiry or investigation. Any such inquiry or 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;

(C)

a person who has been appointed a fiduciary of the beneficiary by a court of competent jurisdiction;

(D)

being appointed to manage an estate where the annual amount of veterans benefits to be managed by the proposed fiduciary does not exceed $3,600, as adjusted pursuant to section 5312 of this title; or

(E)

a person who is authorized to act on behalf of the beneficiary under a durable power of attorney.

(d)

Protection of private information

(1)

A fiduciary shall take all reasonable precautions to—

(A)

protect the private information of a beneficiary, including personally identifiable information; and

(B)

securely conducts financial transactions.

(2)

A fiduciary shall notify the Secretary of any action of the fiduciary that compromises or potentially compromises the private information of a beneficiary.

(e)

Potential misuse of funds

(1)

If the Secretary has reason to believe that a fiduciary may be misusing all or part of the benefit of a beneficiary, the Secretary shall—

(A)

conduct a thorough investigation to determine the veracity of such belief; and

(B)

if such veracity is established, transmit to the officials described in paragraph (2) a report of such investigation.

(2)

The officials described in this paragraph are the following:

(A)

The Attorney General.

(B)

Each head of a Federal department or agency that pays to a fiduciary or other person benefits under any law administered by such department of agency for the use and benefit of a minor, incompetent, or other beneficiary.

(f)

Bond

In requiring the furnishing of a bond under subsection (a)(4), the Secretary shall—

(1)

ensure that any such bond is not paid using any funds of the beneficiary; and

(2)

consider—

(A)

the care a proposed fiduciary has taken to protect the interests of the beneficiary; and

(B)

the capacity of the proposed fiduciary to meet the financial requirements of the bond without sustaining hardship.

(g)

List of fiduciaries

Each regional office of the Veterans Benefits Administration shall maintain a list of the following:

(1)

The name and contact information of each fiduciary, including address, telephone number, and email address.

(2)

With respect to each fiduciary described in paragraph (1)—

(A)

the date of the most recent background check and credit check performed by the Secretary under this section;

(B)

the date that any bond was paid under this section;

(C)

the name, address, and telephone number of each beneficiary the fiduciary acts on behalf of; and

(D)

the amount that the fiduciary controls with respect to each beneficiary described in subparagraph (C).

.

(e)

Annual receipt of payments

(1)

In general

Section 5509 of title 38, United States Code, is amended—

(A)

in subsection (a)——

(i)

by striking may require a fiduciary to file a and inserting , subject to regulations prescribed pursuant to subsection (f), shall require a fiduciary to file an annual; and

(ii)

by adding at the end the following new sentence: The Secretary shall transmit such annual report or accounting to the beneficiary and any legal guardian of such beneficiary.;

(B)

by adding at the end the following new subsections:

(c)

Matters included

An annual report or accounting under subsection (a) shall include the following:

(1)

For each beneficiary that a fiduciary acts on behalf of—

(A)

the amount of the benefits of the beneficiary accrued during the year, the amount spent, and the amount remaining; and

(B)

if the fiduciary serves the beneficiary with respect to benefits not administered by the Secretary, an accounting of all sources of benefits or other income the fiduciary oversees for the beneficiary.

(2)

A list of events that occurred during the year covered by the report that could affect the ability of the fiduciary to act on behalf of the beneficiary, including—

(A)

the fiduciary being convicted of any crime;

(B)

the fiduciary declaring bankruptcy; and

(C)

any judgments entered against the fiduciary.

(d)

Random audits

The Secretary shall annually conduct random audits of fiduciaries who receive a commission pursuant to subsection 5502A(a)(1) of this title.

(e)

Status of fiduciary

If a fiduciary includes in the annual report events described in subsection (c)(2), the Secretary may take appropriate action to adjust the status of the fiduciary as the Secretary determines appropriate, including by revoking the fiduciary status of the fiduciary.

(f)

Regulations

(1)

In prescribing regulations to carry out this section, the Secretary, in consultation with the Under Secretary for Benefits and the Under Secretary for Health, shall ensure that the care provided by a fiduciary described in paragraph (2) to a beneficiary is not diminished or otherwise worsened by the fiduciary complying with this section.

(2)

A fiduciary described in this paragraph is a fiduciary who, in addition to acting as a fiduciary for a beneficiary, provides care to the beneficiary pursuant to this title (including such care provided under section 1720G of this title).

; and

(C)

by striking the section heading and inserting the following: Annual reports and accountings of fiduciaries.

(2)

Clerical amendment

The table of sections at the beginning of chapter 55 of title 38, United States Code, is amended by striking the item relating to section 5509 and inserting the following new item:

5509. Annual reports and accountings of fiduciaries.

.

(f)

Repayment of misused benefits

Section 6107(a)(2)(C) of title 38, United States Code, is amended by inserting before the period the following: , including by the Secretary not acting in accordance with section 5507 of this title.

(g)

Annual reports

Section 5510 of title 38, United States Code, is amended by striking The Secretary shall include in the Annual Benefits Report of the Veterans Benefits Administration or the Secretary's Annual Performance and Accountability Report and inserting Not later than July 1 of each year, the Secretary shall submit to the Committees on Veterans’ Affairs of the House of Representatives and the Senate a separate report containing.

(h)

Report

Not later than one year after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to the Committee on Veterans’ Affairs of the Senate and the Committee on Veterans’ of the House of Representatives a comprehensive report on the implementation of the amendments made by this Act, including—

(1)

detailed information on the establishment of new policies and procedures pursuant to such amendments and training provided on such policies and procedures; and

(2)

a discussion of whether the Secretary should provide fiduciaries with standardized financial software to simplify reporting requirements.

3.

Establishment of Place of Remembrance at Arlington National Cemetery

(a)

Establishment authorized

(1)

In general

Chapter 446 of title 10, United States Code, is amended by adding at the end the following new section:

4727.

Place of Remembrance at Arlington National Cemetery

(a)

Establishment authorized

Under regulations prescribed by the Secretary of Defense, the Secretary of the Army may establish at an appropriate location in Arlington National Cemetery a Place of Remembrance for the interment of cremated specimens or other portion of the remains of a deceased member of the armed forces described in subsection (b) when one of the conditions specified in subsection (c) applies with respect to the remains of the member.

(b)

Covered members

This section applies only with respect to members of the armed forces who die while on active duty—

(1)

in a war or contingency operation; or

(2)

in the line of duty, consistent with regulations prescribed by the Secretary of the Army with respect to burial at Arlington National Cemetery.

(c)

Conditions on interment of remains

The conditions under which cremated specimens or other portion of the remains of a deceased member of the armed forces described in subsection (b) (including cremated specimens or other portion of remains believed by the Secretary concerned to be from the remains of the deceased member) are authorized to be interred in the Place of Remembrance are any of the following:

(1)

The remains are unidentified.

(2)

The person designated under section 1482(c) of this title to direct disposition of the remains of the member agrees to interment of the remains in the Place of Remembrance.

(3)

The person designated under section 1482(c) of this title to direct disposition of the remains of the member has indicated to the Secretary concerned that no further notification is required if a specimen or portion of the remains of the member is discovered.

(4)

When, especially in historical cases, the Secretary concerned determines that there is no one authorized to direct the disposition of the remains of the member and the Secretary concerned recommends interment of the remains in the Place of Remembrance.

.

(2)

Clerical amendment

The table of sections at the beginning of such chapter is amended by adding at the end the following new item:

4727. Place of Remembrance at Arlington National Cemetery.

.

(b)

Retroactive application

Section 4727 of title 10, United States Code, as added by subsection (a), applies with respect to any war or contingency operation in which members of the Armed Forces participated and covers members of the Armed Forces who died in the line of duty before the date of the enactment of this Act, consistent with regulations prescribed by the Secretary of the Army with respect to burial at Arlington National Cemetery.

4.

Furnishing caskets and urns for deceased veterans with no known next of kin

(a)

In general

Section 2306 of title 38, United States Code, is amended—

(1)

by redesignating subsections (f) and (g) as subsections (g) and (h), respectively;

(2)

by inserting after subsection (e) the following new subsection (f):

(f)

The Secretary shall furnish a casket or urn, of such quality as the Secretary considers appropriate for a dignified burial, for burial in a national cemetery of a deceased veteran described in section 2414(b) of this title.

; and

(3)

in subsection (h), as redesignated by paragraph (1), by adding at the end the following new paragraph:

(4)

A casket or urn may not be furnished under subsection (f) for burial of a person described in section 2411(b) of this title.

.

(b)

Effective date

Subsections (f) and (h)(4) of section 2306 of title 38, United States Code, as added by subsection (a), shall take effect on the date of the enactment of this Act and shall apply with respect to deaths occurring on or after such date.

5.

Improved communication between Department of Veterans Affairs and medical examiners and funeral directors

(a)

In general

Chapter 24 of title 38, United States Code, is amended by adding at the end the following new section:

2414.

Communication between Department of Veterans Affairs and medical examiners and funeral directors

(a)

Required information

With respect to each deceased veteran described in subsection (b) who is transported to a national cemetery for burial, the Secretary shall ensure that the local medical examiner, funeral director, county service group, or other entity responsible for the body of the deceased veteran before such transportation submits to the Secretary the following information:

(1)

Whether the deceased veteran was cremated.

(2)

The steps taken to ensure that the deceased veteran has no next of kin.

(b)

Deceased veteran described

A deceased veteran described in this subsection is a deceased veteran whom the Secretary determines—

(1)

that there is no next of kin or other person claiming the body of the deceased veteran; and

(2)

does not have sufficient resources to cover burial and funeral expenses.

(c)

Determination of sufficient resources

If the Secretary is unable to make a reasonable determination of the amount of the resources of a deceased veteran under subsection (b)(2), the Secretary shall deem such resources to be an amount that is not sufficient to cover burial and funeral expenses.

.

(b)

Clerical amendment

The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 2413 the following new item:

2414. Communication between Department of Veterans Affairs and medical examiners and funeral directors.

.

(c)

Effective date

Section 2414 of title 38, United States Code, as added by subsection (a), shall take effect on the date of the enactment of this Act and shall apply with respect to deaths occurring on or after the date that is 180 days after the date of the enactment of this Act.

6.

Report on compliance of Department of Veterans Affairs with industry standards for caskets and urns

(a)

In general

Not later than 180 days after the date of the enactment of this Act, the Secretary of Veterans Affairs shall submit to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans' Affairs of the House of Representatives a report on the compliance of the Department of Veterans Affairs with industry standards for caskets and urns.

(b)

Elements

The report required by subsection (a) shall include the following:

(1)

A description of industry standards for caskets and urns.

(2)

An assessment of compliance with such standards at National Cemeteries administered by the Department with respect to caskets and urns used for the interment of those eligible for burial at such cemeteries.

7.

Exclusion of persons convicted of committing certain sex offenses from interment or memorialization in national cemeteries, Arlington National Cemetery, and certain State veterans’ cemeteries and from receiving certain funeral honors

(a)

Prohibition Against

Section 2411(b) of title 38, United States Code, is amended by adding at the end the following new paragraph:

(4)

A person—

(A)

who has been convicted of a Federal or State crime causing the person to be a tier III sex offender for purposes of the Sex Offender Registration and Notification Act (42 U.S.C. 16901 et seq.);

(B)

who, for such crime, is sentenced to a minimum of life imprisonment; and

(C)

whose conviction is final (other than a person whose sentence was commuted by the President or Governor of a State, as the case may be).

.

(b)

Conforming amendments

Section 2411(a)(2) of such title is amended—

(1)

by striking or (b)(2) each place it appears and inserting , (b)(2), or (b)(4); and

(2)

by striking capital each place it appears.

(c)

Effective Date

The amendments made by this section shall apply with respect to interments and memorializations that occur on or after the date of the enactment of this Act.

8.

Veterans freedom of conscience protection

Section 2404 of title 38, United States Code, is amended by adding at the end the following new subsection:

(h)
(1)

With respect to the interment or funeral, memorial service, or ceremony of a deceased individual at a national cemetery, the Secretary shall ensure that—

(A)

the expressed wishes of the next of kin or other agent of the deceased individual are respected and given appropriate deference when evaluating whether the proposed interment or funeral, memorial service, or ceremony affects the safety and security of the national cemetery and visitors to the cemetery;

(B)

to the extent possible, all appropriate public areas of the cemetery, including committal shelters, chapels, and benches, may be used by the family of the deceased individual for contemplation, prayer, mourning, or reflection; and

(C)

during such interment or funeral, memorial service, or ceremony, the family of the deceased individual may display any religious or other symbols chosen by the family.

(2)

Subject to regulations prescribed by the Secretary under paragraph (5), including such regulations ensuring the security of a national cemetery, the Secretary shall provide to any military or volunteer veterans honor guard, including such guards belonging to a veterans service organization or other non-governmental group that provides services to veterans, access to public areas of a national cemetery if such access is requested by the next of kin or other agent of a deceased individual whose interment or funeral, memorial service, or ceremony is being held in such cemetery.

(3)

With respect to the interment or funeral, memorial service, or ceremony of a deceased individual at a national cemetery, the Secretary shall notify the next of kin or other agent of the deceased individual of funeral honors available to the deceased veteran, including such honors provided by any military or volunteer veterans honor guard described in paragraph (2).

(4)

Any person aggrieved by a violation of this subsection or any regulation prescribed pursuant to this subsection may in a civil action in an appropriate Federal court obtain any appropriate relief against the Federal Government with respect to the violation. Standing to assert a claim or defense under this subsection shall be governed by the general rules of standing under Article III of the Constitution.

(5)

The Secretary shall prescribe regulations to carry out this subsection.

.

9.

Provision of access to case-tracking information

(a)

In general

Chapter 59 of title 38, United States Code, is amended by adding at the end the following:

5906.

Provision of access to case-tracking information

(a)

In general

(1)

In accordance with subsection (b), the Secretary shall provide a covered employee with access to the case-tracking system to provide a veteran with information regarding the status of a claim submitted by such veteran, regardless of whether such employee is acting under a power of attorney executed by such veteran.

(2)

In providing a covered employee with access to the case-tracking system under paragraph (1), the Secretary shall ensure—

(A)

that such access—

(i)

is provided in a manner that does not allow such employee to modify the data contained in such system; and

(ii)

does not include access to medical records; and

(B)

that each time a covered employee accesses such system, the employee must certify that such access is for official purposes only.

(b)

Privacy certification course

The Secretary may not provide a covered employee with access to the case-tracking system under subsection (a)(1) unless the covered employee has successfully completed a certification course on privacy issues provided by the Secretary.

(c)

Treatment of disclosure

The access to information by a covered employee pursuant to subsection (a)(1) shall be deemed to be—

(1)

a covered disclosure under section 552a(b) of title 5; and

(2)

a permitted disclosure under regulations promulgated under section 264(c) of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 1320d–2 note).

(d)

Definitions

In this section:

(1)

The term case-tracking system means the system of the Department of Veterans Affairs that provides information regarding the status of a claim submitted by a veteran.

(2)

The term covered employee means—

(A)

an employee of a Member of Congress who assists the constituents of the Member with issues regarding departments or agencies of the Federal Government; or

(B)

an employee of a State or local governmental agency (including a veterans service officer) who, in the course of carrying out the responsibilities of such employment, assists veterans with claims for any benefit under the laws administered by the Secretary.

.

(b)

Clerical amendment

The table of sections at the beginning of such chapter is amended by adding at the end the following new item:

5906. Provision of access to case-tracking information.

.

10.

Notification by the Secretary of Veterans Affairs of individuals whose sensitive personal information is involved in a data breach

(a)

In general

Subchapter III of chapter 57 of title 38, United States Code is amended by inserting after section 5724 the following new section:

5724A.

Data breach notification

(a)

Notification requirement

Except as provided in subsection (d), in the event of a data breach with respect to sensitive personal information that is processed or maintained by the Secretary, by not later than 10 business days after the date on which the Secretary learns of the data breach, the Secretary shall notify the appropriate committees of Congress and each individual whose sensitive personal information is involved in the data breach is notified of the data breach. If the Secretary determines that providing such notification within 10 business days is not feasible due to circumstances necessary to accurately identify the individuals whose sensitive personal information is involved in the data breach or to prevent further breach or unauthorized disclosure and reasonably restore the integrity of the data system the Secretary shall provide such notification not later than 15 business days after the date on which the Secretary learns of the data breach.

(b)

Contracts for data processing or maintenance

If the Secretary enters into a contract for the performance of any Department function that requires access to sensitive personal information, the Secretary shall require as a condition of the contract that the contractor agree to provide notification of data breaches in the same manner as required of the Secretary under subsection (a).

(c)

Method and content of notification

(1)

Notification provided to an individual under subsection (a) shall be provided clearly and conspicuously by one of the following methods:

(A)

Written notification.

(B)

Notification by email or other electronic means, if the Secretary’s primary method of communication with the individual is by email or such other electronic means.

(2)

Regardless of the method by which notification is provided to an individual under paragraph (1), such notification shall include—

(A)

a description of the sensitive personal information involved in the data breach;

(B)

a telephone number that the individual may use, at no cost to the individual, to contact an appropriate employee of the Department to inquire about the data breach or the individual’s sensitive personal information maintained by the Department;

(C)

notice that the individual is entitled to receive, at no cost to such individual, credit protection services under section 5724 of this title;

(D)

the toll-free contact telephone numbers and addresses for the major credit reporting agencies; and

(E)

a toll-free telephone number and website address whereby the individual may obtain information regarding identity theft.

(d)

Notification of general public

The Secretary, acting through the Office of Public Affairs of the Department, shall notify the general public concerning any data breach involving sensitive personal information by not later than 10 business days after the date on which the Secretary learns of the data breach, unless the Secretary determines that to do so is not feasible due to circumstances necessary to accurately identify the individuals whose sensitive personal information is involved in the data breach or to prevent further breach or unauthorized disclosure and reasonably restore the integrity of the data system, such notification shall be made as soon as possible.

(e)

Appropriate committees of Congress

In this section, the term appropriate committees of Congress means the Committee on Veterans Affairs’ of the House of Representatives and the Committee on Veterans’ Affairs of the Senate.

.

(b)

Clerical amendment

The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 5724 the following new item:

5724A. Data breach notification.

.

(c)

Effective date

The amendments made by this section shall apply with respect to a data breach occurring on or after the date that is 90 days after the date of the enactment of this Act.

11.

Limitation on bonuses for Department of Veterans Affairs employees who violate Federal civil laws or regulations

(a)

In general

Chapter 7 of title 38, United States Code, is amended by adding at the end the following new section:

713.

Limitation on bonuses

(a)

In general

(1)

The Secretary shall ensure that no employee of the Department who, during any year, knowingly violates any law, regulation, or policy described in paragraph (2) receives a bonus for or during that year.

(2)

A law, regulation, or policy described in this paragraph is any of the following:

(A)

A Federal civil law or Federal regulation, including such civil laws or regulations covered under the Federal Acquisition Regulation and the Veterans Affairs Acquisition Regulation.

(B)

An internal policy of the Department.

(b)

Certification

The Secretary shall annually certify to Congress that each bonus awarded by the Secretary during the previous year was awarded in accordance with subsection (a)(1).

(c)

Bonus defined

For purposes of this section, the term bonus includes—

(1)

a retention incentive;

(2)

a retention incentive payment;

(3)

a retention incentive award; and

(4)

any other incentive requiring approval from the Central Office Human Resource Service, the Chief Business Office Workforce Management, or the Corporate Senior Executive Management Office.

.

(b)

Clerical amendment

The table of sections at the beginning of such chapter is amended by adding at the end the following new item:

713. Limitation on bonuses.

.

12.

Limitation on awards and bonuses to employees of the Department of Veterans Affairs

For each of fiscal years 2013 through 2017, the Secretary of Veterans Affairs may not pay more than $357,613,229 in awards or bonuses under chapter 45 or 53 of title 5, United States Code, or any other awards or bonuses authorized under such title.

Passed the House of Representatives September 19, 2012.

Karen L. Haas,

Clerk.