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Witness Testimony of Keith M. Wilson, Veterans Benefits Administration, U.S. Department of Veterans Affairs, Director, Education Service

Good afternoon Mr. Chairman, Ranking Member Braley, and other Members of the Subcommittee. Thank you for the opportunity to be here today to provide the Department of Veterans Affairs? (VA) views on pending legislation affecting VA?s programs:  H.R. 802, H.R. 1383, H.R. 1657, and a draft bill to authorize VA to provide specially adapted housing assistance to individuals residing temporarily in housing owned by a family member. Accompanying me this afternoon are Mr. Jan R. Frye, Deputy Assistant Secretary for Acquisitions and Logistics, and Mr. F. John Brizzi, Deputy Assistant General Counsel.

H.R. 802

H.R. 802 would require VA to establish a “VetStar Award Program,” as well as a process for administering that program, which would recognize businesses for their contributions to Veterans? employment. The program would specify categories and sectors of businesses eligible for recognition each year and have objective measures for selecting recipients of the award.

VA supports this bill.  A program of recognition for contributions to Veterans? employment is a worthwhile means of encouraging businesses to continue to employ Veterans. Businesses that contribute to Veterans? employment provide a valuable and meaningful service, allowing VA to excel with regard to its mission to help Veterans become employable and obtain and maintain suitable employment. This service deserves appropriate recognition.  VA would recommend two categories, “small businesses” and “other than small businesses,” and three sectors, “non-profit,” “service,” and “manufacturing, farming and other,” of recipients eligible to receive awards. A review board would be created to review nominations and select recipients. Recipients would be recognized with appropriate non-cash award and mementos.

VA estimates that enactment of this bill as written would result in no significant costs. VA estimates nominal costs associated with staff-days to review and select nominations, advertising, verification of winners, and purchasing trophies and plaques.

H.R. 1383

Mr. Chairman, H.R. 1383, the “Restoring GI Bill Fairness Act of 2011,” would temporarily preserve higher rates for tuition and fees for programs of education at non-public institutions of higher learning pursued by individuals enrolled in VA?s Post-9/11 Educational Assistance Program as it existed before the enactment of Public Law 111­377, the Post-9/11 Veterans Educational Assistance Improvements Act of 2011. Prior to the passage of Public Law 111-377 on January 4, 2011, individuals using benefits under the Post-9/11 GI Bill at a private institution of higher learning were paid the lesser amount of the established charges (the actual charges for tuition and fees which similarly-circumstanced nonveterans enrolled in the program of education would be required to pay) or the established in-state maximum tuition-and-fee rate at a public institution within that state. With the enactment of Public Law 111-377, individuals pursuing a program of education at a private institution of higher learning for the academic year beginning on August 1, 2011, will be limited to the actual net cost for tuition and fees assessed by the institution, not to exceed $17,500.

Section 2 of this bill would modify the amount of educational assistance payable to specific individuals to make an exception for those who are enrolled in a private institution of higher learning in certain states.  This exception would apply to an individual entitled to educational assistance under the Post-9/11 GI Bill, who, on or before April 1, 2011, was enrolled in a private institution of higher learning in a state in which the maximum amount of tuition per credit hour in the 2010-2011 academic year exceeded $700, and the combined amount of tuition and fees for full-time attendance in the program of education in such academic year exceeded $17,500. There are 7 states which meet these criteria: Arizona, Michigan, New Hampshire, New York, Pennsylvania, South Carolina, and Texas. Beginning on August 1, 2011, and ending on July 31, 2014, the amount payable under this section would be the greater of $17,500, or the established charges payable based on the Department of Veterans Affairs Post-9/11 GI Bill 2010-2011 Tuition and Fee In-State Maximums published October 27, 2010.

H.R. 1383 does not preserve the higher rate for tuition and fees for students pursuing a program of education in a foreign country, pursuing at less than half-time rates or while on active duty.

Section 3 of this bill would freeze the cost-of-living adjustment for the monthly housing allowance provided under section 3313(c)(1)(B) of title 38, United States Code, at the amount payable on August 1, 2011, for a 24-month period beginning on that date. At the end of the 24-month period, the monthly allowance would become the amount then authorized by the aforementioned section.

VA has not yet had an opportunity to estimate the cost impacts of this legislation. We will submit our estimate and updated views on the bill for the record.  However, in addition to any concerns we may have if the legislation is found to impose PAYGO costs without an identified offset, VA also has concerns with the proposed legislation as written, to include the timeline for implementing this legislation, which are described in detail below. VA has had constructive discussions with Subcommittee staff regarding these issues, and will continue to be available to work with to the Committee to address these concerns.

VA is working aggressively on the Long-Term Solution (LTS) for processing Post­9/11 GI Bill claims. As of January 2011, VA and the Space and Naval Warfare Systems Center Atlanta (SPAWAR) have developed four releases for the LTS system. The enactment of Public Law 111-377, which modifies aspects of the Post-9/11 GI Bill, impacted VA?s ability to deploy previously-planned functionality enhancing the capability of the LTS. VA plans to implement changes to the Post-9/11 GI Bill mandated by Public Law 111-377 across three releases of the LTS. The first release was deployed on March 5, 2011; future releases are scheduled for deployment on June 6, 2011, and October 17, 2011.

The enactment of H.R. 1383 as introduced would severely hamper VA?s LTS deployment efforts. The changes made by this legislation would lead to very complicated processing scenarios in the LTS with changes in enrollment and Yellow Ribbon payments. Additionally, since the amount of educational assistance would be based on the greater of the maximum tuition per credit hour or $17,500, VA would have to apply a blended set of rules to each claim that falls under these provisions.

This proposed legislation would also have a negative impact on service delivery for those students using benefits this fall.  VA claims processors would have to thoroughly examine each claim to determine if it meets these provisions, which could result in labor-intensive manual processing. This would lead to a significant increase in the average number of days to process all education claims.

Regarding section 3, VA defers to the Congress on identification of an appropriate offset necessary to pay for the cost of the temporary adjustment for affected Veterans provided by this bill. We note, however, that such a freeze in cost-of-living adjustment increases for housing allowances could result in some hardship for a broad range of students.

VA has identified several other technical concerns with regard to the bill text. For example, it is unclear if an individual must be enrolled in the same school and program on or before April 1, 2011, to be covered under this legislation. It is also unclear how the legislation would apply to an individual who changes programs or schools.

Mr. Chairman, as we noted above, we have already had some discussions with Subcommittee staff regarding these concerns and look forward to the opportunity to continue those discussions.

While the amendments made by this legislation would take effect on August 1, 2011, VA strongly recommends language be added to allow VA to begin making payments in accordance with these provisions no later than August 1, 2012, to allow for necessary system changes and reduce the impact on existing beneficiaries.

As stated earlier, VA requests that we be able to provide cost estimates for H.R. 1383 for the record at a later date.

H.R. 1657

H.R. 1657 would revise section 8127(g) of title 38, United States Code, to mandate a minimum five-year debarment from VA contracting for any business, including the principals of the business, determined by the Secretary to have misrepresented its status as a Veteran-owned or service-disabled Veteran-owned small business (VOSB/SDVOSB).  Further, the bill would require VA to commence a debarment action within 30 days of determining the misrepresentation has occurred and to complete the action within 90 days.  VA shares the Subcommittee?s focus on aggressively protecting the Government from disreputable businesses in order that procurement dollars set aside for VOSB/SDVOSBs reach the intended recipients. VA has taken steps to protect the integrity of the VOSB/SDVOSB set-aside process. VA has added to its acquisition regulations the misrepresentation of VOSB/SDVOSB status as a specific cause of debarment for a period of up to five years.  Also, VA has instituted a separate and distinct 8127 Debarment Committee to review, examine, and refer those who misrepresent themselves to VA?s debarring official. While we support the general intent of the legislation, VA cannot support H.R. 1657 in its present form.

With regard to the proposed bill, VA questions whether a mandatory debarment as proposed would be consistent with the general requirement in debarment actions established by the courts to provide appropriate due process, notice and an opportunity to be heard, to businesses prior to a final determination of debarment. VA also submits that there are varying degrees of misrepresentation of VOSB/SDVOSB status. Some may be the result of an „innocent? mistake whereas others evince a clear desire to circumvent the VOSB/SDVOSB status requirements by “seducer” companies or individuals to steer set-aside dollars to non-status firms or persons. VA?s believes the debarring official should retain the discretion to make these determinations with respect to any debarment, including its duration, based on the specific circumstances, including remedial measures and corrective actions to prevent the misconduct from recurring. 

VA requests the opportunity to work with the Subcommittee to address its concern of protecting the VOSB/SDVOSB set-aside program while maintaining an equitable debarment process consistent with the requirement for an appropriate level of due process, including ways of improving VA?s debarment authority. 

VA estimates that enactment of this bill as written would result in no significant costs since VA already has a standing 8127 Debarment Committee.

Draft Legislation

The “Andrew Connolly Veterans? Housing Act” would amend section 2102A of title 38, United States Code, extending, through December 31, 2016, VA?s authority to provide Specially Adapted Housing assistance to eligible individuals residing temporarily with family members.  Under current law, the authority is set to expire on December 31, 2011.

Although VA supports enactment of this draft legislation, we recommend that Congress extend the benefit through the year 2021, in accordance with the Administration?s FY 2012 Budget.

VA estimates that the enactment of this proposal would not result in additional benefit costs or savings.

Mr. Chairman, this concludes my statement. Thank you for the opportunity to appear before you today.  I would be happy to respond to questions you or the other Members of the Subcommittee may have regarding our views as presented.