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Witness Testimony of Curtis L. Coy, Deputy Under Secretary for Economic Opportunity, Veterans Benefits Administration, U.S. Department of Veterans Affairs

Good morning, Chairman Stutzman, Ranking Member Braley, and Members of the Subcommittee.  I appreciate the opportunity to appear before you today to discuss the progress made by the Department Veterans Affairs (VA) toward implementing the provisions in title II of Public Law 112-56, the “VOW to Hire Heroes Act of 2011.”  I am accompanied today by Mr. Keith Wilson, Director of VA’s Education Service.  My testimony will discuss the relevant sections of the legislation and explain how we plan to address them, with particular emphasis on section 211.   

Many of the provisions outlined in the VOW to Hire Heroes Act of 2011 closely align with the improvement of economic opportunities for Veterans.  Secretary Shinseki has emphasized that this critical legislation will materially help our Servicemembers and Veterans with employment and transition.  VA is committed to executing, in collaboration with other agencies and stakeholders, all provisions of this law for which we have responsibility, and I have outlined our coordinated approach in my testimony.

Section 211 – The Veterans Retraining Assistance Program

This section requires the Secretary of Veterans Affairs to establish a program of retraining assistance for eligible Veterans in collaboration with the Secretary of Labor not later than July 1, 2012.  The number of Veterans who participate in the program may not exceed 45,000 in fiscal year (FY) 2012 and 54,000 during the period beginning on October 1, 2012, and ending on March 31, 2014, when the authority to make payments under the program will terminate.  Eligible Veterans will receive the Montgomery GI Bill-Active Duty (chapter 30) full-time benefit rate for up to 12 months.  Training must be completed at a VA-approved community college or technical school; it must lead to an associate degree, certificate, or other record or completion; and the training must pertain to an occupation deemed by the Department of Labor (DOL) to be in high demand.  The training programs must begin on or after July 1, 2012, and the authority for VA to make payments ends on March 31, 2014.

The law establishes a set of criteria that Veterans must meet in order to participate in the program.  VA and DOL must evaluate a Veteran’s age range, employment status, character of discharge, type of training, and other key elements when determining eligibility.  The law requires VA and DOL to form a close partnership to successfully implement this retraining assistance program, including establishing a formal memorandum of agreement with a process for resolving disputes and appeals.  VA and DOL must also track participants, payments, and degrees awarded, and submit a final report on the impact of the retraining program to the Senate Committees on Veterans’ Affairs and Health, Education, Labor, and Pensions, and the House Committees on Veterans’ Affairs and Education and the Workforce.

In mid-November , VA and DOL representatives met to discuss plans for implementing the provisions of section 211.  The participants identified high-level roles, responsibilities, and decision points, and discussed a preliminary VA-developed framework for an integrated master schedule for managing the implementation of this new program.  VA also provided a high-level summary of the claims and payment process from VA’s perspective to initiate collaborative discussions regarding information sharing and other logistical needs between the two Departments.  At follow-up meetings, representatives from both Departments discussed how to successfully administer this program without duplication of effort and within the required timeframe, including existing benefit processing and payment systems within VA, and One-Stop Career Centers and other Veteran intake centers within DOL.

Initial DOL responsibilities identified in these meetings center on conducting initial Veteran intake, making DOL-specific eligibility determinations (unemployment, high-value career fields, etc.) as directed by the legislation, and ensuring that required information is collected and appropriately disseminated to VA.  Initial VA responsibilities include conducting VA-specific eligibility determinations (eligibility to VA benefits, prior benefit usage), communicating eligibility decisions, processing enrollment information, and administering payments.  VA is also focused on ensuring mechanisms are in place to meet the law’s extensive reporting requirements. 

While VA and DOL are on an excellent track in implementation planning and tackling the more complex aspects of the law, we anticipate challenges associated with implementing this program..  The law requires rapid establishment of a broad partnership between agencies with vastly different operating structures and information technology (IT) systems.  Provisions of this law, including wide-ranging eligibility criteria, present IT and logistical challenges in addition to the increased workload the program generates.  The aggressive timeframe also magnifies the complexity of this effort.  VA and DOL are working hard to mitigate these risks using innovative solutions. 

To ensure this program’s success, VA and DOL staff and leadership currently participate in weekly meetings to track progress, share information, and develop implementation strategies.  Internally, VA staff and project leads meet daily to discuss implementation status and ensure we remain on track to meet the July 1, 2012 deadline.  Additionally, VA is currently developing program management documentation, including a draft memorandum of agreement to outline the relationship and operation of the program between VA, DOL, and key representatives at the executive- and working- group levels.

The implementation of the Veterans Retraining Assistance Program will include an outreach program for the appropriate target population.  VA will use a variety of means and resources available to raise awareness about this new retraining benefit program, including the GI Bill Web site and the Education Service Facebook page.

As VA and DOL work together to successfully implement the new training program many intricacies will need to be worked out within the timeframe provided by the law. 

Enhancements to Vocational Rehabilitation and Employment Services

The new law will also enhance services provided by VA’s Vocational Rehabilitation and Employment (VR&E) program.  The law extends VA’s authority to provide vocational rehabilitation services to injured, active-duty Servicemembers, and promotes collaboration between VR&E and other organizations to provide additional services to aid Veterans’ transition to civilian employment.  This law also allows VR&E to fund special employer incentives for Veterans who did not previously qualify for on-the-job training.  In addition, VR&E can now provide an additional 12 months of benefits to Veterans who have exhausted their unemployment benefits, and also is now able to provide additional services to assist Veterans returning to employment.  I would now like to provide specific information regarding implementation for each of the VR&E provisions.

Section 222 – Individualized assessment on equivalence between military occupational specialty (MOS) and qualifications for private sector employment

This section requires DOL, in consultation with the Department of Defense (DoD) and VA, to contract for a study to identify equivalencies between MOS-related skills and civilian employment.  VA will work with DOL and DoD to review existing job-skill translators and to support the analysis required for DoD to comply with the requirement to ensure that all Transition Assistance Program participants receive an individualized assessment of civilian positions in the private sector for which they may qualify based on their military experience.  DoD is expected to begin providing the individualized assessments to Servicemembers and sharing them with DOL and VR&E in November 2012.  VR&E will be able to immediately use the assessments provided by DoD to develop education and employment goals for transitioning Veterans that have applied for VA education or VR&E benefits.

Section 231 – Two-year extension to provide Vocational Rehabilitation to Servicemembers

Section 231 of the bill provides a two-year extension of section 1631(b)(2) of Public Law 110-181.  This provision expedites rehabilitation services by allowing automatic eligibility and entitlement to VR&E services to be granted to active-duty Servicemembers referred by DoD with severe injuries or illnesses through

December 31, 2014.  This provision will enable VR&E to provide rehabilitation services, including career counseling, retraining, and placement services, to active-duty Servicemembers early in the disability evaluation process.  In addition, it allows VA to help Servicemembers with maintaining or obtaining a new MOS, or to prepare them for civilian employment that does not aggravate their service-connected injuries.

A memorandum of understanding (MOU) with DoD is in place, and VR&E has drafted procedures for immediate implementation.  This MOU implements VR&E counseling for Servicemembers transitioning through the Integrated Disability Evaluation System (IDES) at designated locations.  Early access to VR&E services and assistance offers Servicemembers resources that aid their recovery, transition, and reintegration into civilian life.  Eligible Servicemembers will be referred to VR&E if they are: evaluated by a DoD or VA physician and are determined to have a severe injury or illness that could cause their referral into the IDES; assigned to a Service’s Wounded Warrior program and are participating in the Education and Employment Initiative (E2I) program; or being processed through the IDES and referred to a Physical Evaluation Board.  The IDES project plan, which provides for 110 VR&E counselors to be stationed at selected IDES sites in FY 2012, will enable aggressive implementation of this section.  VR&E expects to begin providing these services in February 2012.

Section 232 – Expand VA authority to pay employers for on-the-job training

Section 232 of the bill allows VA to expand the Special Employer Incentive (SEI) program to employers who hire Veterans participating in a VR&E program even if the Veteran has not completed a training program.  Prior to this law, a Veteran needed to have completed rehabilitation services, such as job retraining or education, in order to qualify for SEI.  As a result of this legislation, VR&E will implement use of the SEI program for Veterans who choose to pursue employment, even if they were unable to fully complete their training programs, as well as for those Veterans who pursue a program consisting of solely employment services.  VR&E is drafting procedures and developing staff training so that this provision may be implemented by January 20, 2012.

Section 233 – Additional VR&E services to Veterans with exhausted rights to unemployment benefits

Section 233 of the bill entitles Veterans who have completed a VR&E program and exhausted state unemployment benefits to an additional 12 months of vocational rehabilitation services.  This legislative authority enables VR&E to provide services to Veterans who continue to struggle in obtaining employment.  These services include an additional short-term training program, extensive job-seeking skills training, and job-placement services.  It also allows for the provision of employment services to Veterans who are beyond the 12-year delimiting date and are not determined to have a serious employment handicap.  VR&E will work with DOL to identify and conduct outreach to Veterans who may qualify for these services.  VR&E will be ready to accept referrals and applications in February 2012 so that rehabilitation programs for these individuals may be in place on June 1, 2012, the effective date of this provision. 

Sec. 262. Extension of reduced pension for certain veterans covered by Medicaid plans for services

In section 262, Congress extended through September 30, 2016, the provisions of 38 U.S.C. § 5503(d), which limit to $90 the pension payable to certain recipients of Medicaid-covered nursing home care, and protect that pension payment from being applied to the cost of the recipient’s nursing home care.  This limitation was previously set to expire on May 31, 2015.  Because section 262 extends existing authority, which VA already implemented, we anticipate no delay in implementing the revised law. 

Sec. 264. Extension of authority for Secretary of Veterans Affairs to obtain information from Secretary of Treasury and Commissioner of Social Security for income verification purposes

In section 264, Congress extended through September 30, 2016, VA’s authority under 38 U.S.C. § 5317 to enter into data matching agreements with the Internal Revenue Service and the Social Security Administration.  This authority expired on September 30, 2011.  VA uses this authority to identify reporting discrepancies by beneficiaries in the Department’s income-based programs.  Because section 264 extends existing authority, which VA already implemented, we anticipate no delay in implementing the revised law. 

Section 265 – Extend VA Home Loan Funding Fees

As you know, on October 5, 2011, Public Law 112-37 extended VA’s home loan funding fees at a higher rate structure through November 17, 2011. 

On November 18, those fees reset to a lower rate structure, as prescribed in statute.  In response to the reset, our Home Loan Guaranty program took action to provide Veterans, our program lenders, and key industry trade groups with guidance regarding the closing of loans during this time period.  The Home Loan Guaranty program issued a program policy circular containing the necessary guidance, and posted that, along with a newsflash, to its Web site.  We also ensured that Treasury’s Funding Fee Payment System (FFPS), wherein lenders remit the funding fees to Treasury, was properly coded with the lower rate structure.  

With the approval of Public Law 112-56 on November 21, funding fees were once again set at the higher rate structure.  Specifically, section 265 of the law amended 38 U.S.C. § 3729(b)(2) by extending VA's authority to collect certain fees and by adjusting the amount of the fees, through September 30, 2016.  The Home Loan Guaranty program once again communicated these important program changes to Veterans and the mortgage industry.  VA personally contacted the Home Loan program’s largest lenders and several key industry trade groups to notify them of the bill signing and of the new funding fee rates.  VA also drafted and posted a new program policy circular, which announced the signing of the bill, and outlined the fees in effect.  This circular, along with another news update about the bill signing and the new fee rates, was posted to the Home Loan program’s website on the day after the bill was approved.  Additionally, VA worked with Treasury to update FFPS with the current rate structure.  We are not aware of any Veterans having difficulty closing their VA-guaranteed home loans during this time period.

As you know, Mr. Chairman, there is one provision in the bill not connected with VBA that relates to ambulance reimbursement.  That is a subject of Veteran Health Administration operations, so I will not address it in this testimony, other than to note my understanding that VA has brought one technical issue to the Committee staff’s attention, as well as their counterparts in the Senate. 

Mr. Chairman, this concludes my statement.  I would be pleased to answer any questions you or other Members of the Subcommittee may have.