VA Beneficiary Debt Collection Improvement Act
This bill addresses the administration of debt related to Department of Veterans Affairs (VA) programs and benefits.
Specifically, the bill prohibits an individual from incurring a debt to the United States that arises from participation in a VA benefits program and is attributable to the failure of the VA to process information according to its timeliness standards.
The VA must notify an individual if it has made an overpayment to the individual and include in the notice information on the right to dispute the overpayment or request a waiver of indebtedness. The VA is prohibited from taking action regarding an overpayment until 90 days after the notice is issued, except in specified circumstances.
The VA is prohibited from charging interest or administrative costs for debts related to its disability compensation program, pension program, or educational assistance program.
The bill extends from 180 days to one year the deadline by which an individual may request a waiver for relief from paying a debt related to VA benefits.
Additionally, the VA is prohibited from seeking to recover a debt if it determines the cost to the VA to recover the debt would exceed the amount of the debt itself.
The VA must establish an administrative process for the dispute of a debt's existence or the amount of the debt. The VA is prohibited from deducting from an individual's VA benefits to offset a debt if the amount of the debt is being disputed.
To amend title 38, United States Code, to improve the processing of 
veterans benefits by the Departments of Veterans Affairs, to limit the 
authority of the Secretary of Veterans Affairs to recover overpayments 
  made by the Department and other amounts owed by individuals to the 
United States, to improve due process accorded individuals with respect 
               to such recovery, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``VA Beneficiary 
Debt Collection Improvement Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Prohibition of debt arising from overpayment due to delay in 
                            processing by the Department of Veterans 
                            Affairs.
Sec. 3. Prohibition on Department of Veterans Affairs interest and 
                            administrative cost charges for debts 
                            relating to certain benefits programs.
Sec. 4. Extension of window to request relief from recovery of debt 
                            arising under laws administered by the 
                            Secretary of Veterans Affairs.
Sec. 5. Reforms relating to recovery by Department of Veterans Affairs 
                            of amounts owed by individuals to the 
                            United States.

SEC. 2. PROHIBITION OF DEBT ARISING FROM OVERPAYMENT DUE TO DELAY IN 
              PROCESSING BY THE DEPARTMENT OF VETERANS AFFAIRS.

    (a) Bar to Recovery.--
            (1) In general.--Chapter 53 of title 38, United States 
        Code, is amended by inserting after section 5302A the following 
        new section:
``Sec. 5302B. Prohibition of debt arising from overpayment due to delay 
              in processing
    ``(a) Limitation.--(1) Except as provided in paragraph (2), no 
individual may incur a debt to the United States that--
            ``(A) arises from the participation of the individual in a 
        program or benefit administered by the Under Secretary for 
        Benefits; and
            ``(B) is attributable to the failure of an employee or 
        official of the Department to process information provided by 
        or on behalf of that individual within applicable timeliness 
        standards established by the Secretary.
    ``(2) Nothing in this section shall be construed to affect the 
penal and forfeiture provisions for fiduciaries set forth in chapter 61 
of this title.
    ``(b) Notice.--(1) If the Secretary determines that the Secretary 
has made an overpayment to an individual, the Secretary shall provide 
notice to the individual of the overpayment.
    ``(2) Notice under paragraph (1) shall include a detailed 
explanation of the right of the individual--
            ``(A) to dispute the overpayment, including a detailed 
        explanation of the process by which to dispute the overpayment; 
        or
            ``(B) to request a waiver of indebtedness.
    ``(c) Delay on Collection.--(1) Subject to paragraph (2), the 
Secretary may not take any action under section 3711 of title 31 
regarding an overpayment described in a notice under subsection (b) of 
this section until the date that is 90 days after the date the 
Secretary issues such notice.
    ``(2) The Secretary may take action under section 3711 of title 31 
regarding an overpayment described in a notice under subsection (b) of 
this section before the date that is 90 days after the date the 
Secretary issues such notice if the Secretary determines that delaying 
such action is--
            ``(A) likely to make repayment of such overpayment more 
        difficult for an individual;
            ``(B) likely to cause an unpaid debt to be referred to the 
        Treasury Offset Program; or
            ``(C) not in the best interest of the individual.''.
            (2) Clerical amendment.--The table of sections at the 
        beginning of such chapter is amended by inserting after the 
        item relating to section 5302A the following new item:

``5302B. Prohibition of debt arising from overpayment due to delay in 
                            processing.''.
            (3) Deadline.--The Secretary of Veterans Affairs shall 
        prescribe regulations to establish standards under section 
        5302B(a)(2) of such title, as added by subsection (a), not 
        later than 180 days after the date of the enactment of this 
        Act.
    (b) Plan for Improved Notification and Communication of Debts.--
            (1) In general.--Not later than 180 days after the date of 
        the enactment of this Act, and one year thereafter, the 
        Secretary of Veterans Affairs shall submit to Congress a report 
        on the improvement of the notification of and communication 
        with individuals who receive overpayments made by the 
        Secretary.
            (2) Contents.--Each report under paragraph (1) shall 
        include each of the following:
                    (A) The plan of the Secretary to carry out each of 
                the following:
                            (i) The development and implementation of a 
                        mechanism by which individuals enrolled in the 
                        patient enrollment system under section 1705 of 
                        title 38, United States Code, may view their 
                        monthly patient medical statements 
                        electronically.
                            (ii) The development and implementation of 
                        a mechanism by which individuals eligible for 
                        benefits under the laws administered by the 
                        Secretary may receive electronic correspondence 
                        relating to debt and overpayment information.
                            (iii) The development and implementation, 
                        by not later than October 1, 2022, of a 
                        mechanism by which individuals eligible for 
                        benefits under the laws administered by the 
                        Secretary may access information related to 
                        Department of Veterans Affairs debt 
                        electronically.
                            (iv) The improvement and clarification of 
                        Department communications relating to 
                        overpayments and debt collection, including 
                        letters and electronic correspondence and 
                        including information relating to the most 
                        common reasons individuals eligible for 
                        benefits under the laws administered by the 
                        Secretary incur debts to the United States and 
                        the process for requesting a waiver of such 
                        debt. The Secretary shall develop such 
                        improvements and clarifications in consultation 
                        with veterans service organizations, labor 
                        organizations that represent employees of the 
                        Department, and other relevant nongovernmental 
                        organizations.
                    (B) A description of the current efforts and plans 
                for improving the accuracy of payments to individuals 
                entitled to benefits under the laws administered by the 
                Secretary, including specific data matching agreements.
                    (C) A description of steps to be taken to improve 
                the identification of underpayments to such individuals 
                and to improve Department procedures and policies to 
                ensure that such individuals who are underpaid receive 
                adequate compensation payments.
                    (D) A list of actions completed, implementation 
                steps, and timetables for each requirement described in 
                subparagraphs (A) through (C).
                    (E) A description of any new legislative authority 
                required to complete any such requirement.

SEC. 3. PROHIBITION ON DEPARTMENT OF VETERANS AFFAIRS INTEREST AND 
              ADMINISTRATIVE COST CHARGES FOR DEBTS RELATING TO CERTAIN 
              BENEFITS PROGRAMS.

    (a) In General.--Section 5315(a)(1) of title 38, United States 
Code, is amended--
            (1) by striking ``other than a loan'' and all that follows 
        through the semicolon and inserting ``other than--''; and
            (2) by adding at the end the following new subparagraphs:
                    ``(A) a loan, loan-guaranty, or loan-insurance 
                program;
                    ``(B) a disability compensation program;
                    ``(C) a pension program; or
                    ``(D) an educational assistance program.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply with respect to an indebtedness that occurs on or after the date 
of the enactment of this Act.

SEC. 4. EXTENSION OF WINDOW TO REQUEST RELIEF FROM RECOVERY OF DEBT 
              ARISING UNDER LAWS ADMINISTERED BY THE SECRETARY OF 
              VETERANS AFFAIRS.

    Section 5302(a) of title 38, United States Code, is amended by 
striking ``180 days'' and inserting ``one year''.

SEC. 5. REFORMS RELATING TO RECOVERY BY DEPARTMENT OF VETERANS AFFAIRS 
              OF AMOUNTS OWED BY INDIVIDUALS TO THE UNITED STATES.

    (a) Limitation on Indebtedness Offsets.--Subsection (a) of section 
5314 of title 38, United States Code, is amended--
            (1) by inserting ``(1)'' before ``Subject to''; and
            (2) by adding at the end the following new paragraph:
    ``(2) The Secretary may not make a deduction under paragraph (1) 
while the existence or amount of such indebtedness is disputed under 
section 5314A of this title.''.
    (b) Administrative Process for Dispute of Existence or Amount of 
Indebtedness.--
            (1) Establishment.--Chapter 53 of title 38, United States 
        Code, is amended by inserting after section 5314 the following 
        new section:
``Sec. 5314A. Dispute of indebtedness
    ``(a) Establishment.--The Secretary shall prescribe regulations 
that establish an administrative process for the dispute of the 
existence or amount of an indebtedness described in section 5314(a)(1) 
of this title (without regard to whether the Secretary has made a 
deduction under such section regarding such indebtedness).
    ``(b) Standards.--The process under subsection (a) shall be 
efficient, effective, and equitable.
    ``(c) Timeliness.--The Secretary shall ensure that each dispute 
under subsection (a) proceeds in accordance with standards for 
timeliness prescribed by the Secretary under this section.
    ``(d) Limitation.--The Secretary may not submit to any debt 
collector (as defined in section 803 of the Fair Debt Collection 
Practices Act (15 U.S.C. 1692a)) any dispute pending under this 
section.
    ``(e) Rule of Construction.--Nothing in this section shall be 
construed to modify the procedures for seeking review of a decision of 
the agency of original jurisdiction described in section 5104C(a)(1) of 
this title.''.
            (2) Existing administrative process.--The Secretary of 
        Veterans Affairs shall carry out section 5314A of such title, 
        as added by paragraph (1), by improving the administrative 
        process of the Department of Veterans Affairs for the dispute 
        of the existing or amount of an indebtedness that was in effect 
        on the day before the date of the enactment of this Act.
            (3) Improvements to department website and notices.--In 
        carrying out paragraph (2), the Secretary shall--
                    (A) improve the website of the Department; and
                    (B) ensure that such website and written notices 
                sent to a person about indebtedness described in 
                section 5314(a) of title 38, United States Code, 
                contain all information a person needs to dispute such 
                an indebtedness, including a description of--
                            (i) the specific actions the person will 
                        need to take in order to dispute the 
                        indebtedness;
                            (ii) the documentation that will be 
                        required for the dispute; and
                            (iii) how the documentation is to be 
                        submitted.
            (4) Clerical amendment.--The table of sections at the 
        beginning of such chapter is amended by inserting after the 
        item relating to section 5314 the following new item:

``5314A. Dispute of indebtedness.''.
    (c) Limitation on Authority To Recover Debts.--Section 5302(a) of 
title 38, United States Code, is amended--
            (1) by inserting ``(1)'' before ``There''; and
            (2) by adding at the end the following new paragraph:
    ``(2) The Secretary may not seek to recover an indebtedness 
described in paragraph (1) if the Secretary determines that the cost to 
the Department to recover such indebtedness, as determined when the 
debt is established, would exceed the amount of the indebtedness.''.
                                 <all>
VA Beneficiary Debt Collection Improvement Act
To amend title 38, United States Code, to improve the processing of veterans benefits by the Departments of Veterans Affairs, to limit the authority of the Secretary of Veterans Affairs to recover overpayments made by the Department and other amounts owed by individuals to the United States, to improve due process accorded individuals with respect to such recovery, and for other purposes.
VA Beneficiary Debt Collection Improvement Act
Rep. Pappas, Chris