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

Good afternoon, Mr. Chairman, Ranking Member Takano, 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, including the following:  H.R. 331, H.R. 821, H.R. 1357, H.R. 1796 (sections 4(b) and 6), H.R. 1842, H.R. 2011, H.R. 2210, and H.R. 2327.  Other bills under discussion today would affect programs or laws administered by the Department of Labor (DOL) and the Department of Defense (DoD).  Respectfully, VA defers to DOL’s views on H.R. 2150, a bill to provide for a 5-year extension of the Homeless Veterans Reintegration Program.  Accompanying me this morning is Mr. John Brizzi, Deputy Assistant General Counsel.

H.R. 331
H.R. 331 would amend section 3684(a) of title 38, United States Code, to permit any public institution in a consortium (or district) to certify to VA the enrollment of any student enrolled in an institution in such consortium.  Specifically, this section would allow any institution in a consortium (or district) to report enrollment information to VA for any student enrolled in an educational institution that is part of the consortium if all institutions of that entity are located in the same state and the consortium is organized in a manner that facilitates the centralized reporting of enrollments in any of such institutions.  It would, further, require individuals and educational institutions participating in the Post-Vietnam Era and Post-9/11 Veterans' Educational Assistance Programs to report to VA enrollment and any interruption or termination of the education of such individuals (thereby making the enrollment reporting requirements for the Post-Vietnam Era and Post-9/11 Programs consistent with other Veterans' education programs).
VA supports enactment of H.R. 331.  This proposal would allow each institution in the consortium (or district) to certify the student’s enrollment regardless of where the student is matriculated.  Furthermore, since school certifying officials at each ‘District’ institution have access to all of that District’s student records, and all courses have universal numbering, VA compliance visits could occur at any institution.  
We estimate that enactment of this legislation would result in no additional mandatory or general operating expense costs to VA.

H.R. 821
    H.R. 821 would amend the Servicemembers Civil Relief Act (SCRA) to provide surviving spouses with certain protections relating to mortgages and mortgage foreclosures.  While we respectfully defer to DoD regarding the merits of this legislation, we, nonetheless, have one technical concern.
Section 1 of the bill would expand mortgage protections provided under section 303 of SCRA to include a surviving spouse of a Servicemember if such spouse is "the" successor in interest to a covered property.  In addition to DoD’s concerns, VA notes that the extension of SCRA protections to surviving spouses directly supports VA’s mission of serving Veterans and their families.  As the bill is currently drafted, however, it seems that the spouse would have to be the sole successor, rather than merely "a" successor in interest, which could have unintended consequences if a Servicemember dies intestate or chooses to leave some percentage of interest to another individual, such as a child, sibling, or parent.  In that instance, a surviving spouse with only a partial interest in a property might be excluded from protection.   
    Section 2 of the bill would require certain lending institutions to appoint SCRA compliance officers, and section 3 would extend certain SCRA protections provided by the Honoring America’s Veterans and Caring for Camp Lejeune Families Act of 2012.  
    Provisions of this bill may have an impact on VA loan subsidy costs.  We will provide an estimate of cost for the record.

H.R. 1357
H.R. 1357 would amend section 211(b) of the VOW to Hire Heroes Act of 2011 to permit retraining assistance under the Veterans Retraining Assistance Program (VRAP) to be used by a Veteran to pursue a program of education for training on a less-than-full-time basis if the program consists of at least 16 seat-time hours (or the equivalent).  VA supports this proposal.
This proposal would greatly enhance training opportunities for Veterans who are eligible under this program.  The VOW to Hire Heroes Act of 2011 created VRAP to help retrain individuals hardest hit by unemployment – Veterans aged 35 to 60.  Currently, only Veterans training on a full-time basis are eligible to receive payments under VRAP.  As of June 12, 2013, VA approved 105,934 applicants; however, only 52,228 participants are enrolled in school.  Legislation that authorizes Veterans to train on a less than full-time basis would allow for greater participation under VRAP.  However, VA is unclear as to the meaning of “16 seat-time hours.”  Programs are currently measured on either a credit-hour or clock-hour basis.  Courses measured on a credit-hour basis generally require 12 or 14 credit hours (or the equivalent) for full-time training, while those measured on a clock-hour basis require 18 or 22 hours for full-time training.  If the intent is to allow for the payment of VRAP benefits to Veterans enrolled at more than one-half time, at least three-quarter time, etc., then VA recommends the language be changed to be specific to the required level of enrollment.
 We will be pleased to provide an estimate of the cost of enactment of this bill for the record.
H.R. 1796
H.R. 1796, the “Troop Talent Act of 2013,” proposes to ensure that the education and training provided members of the Armed Forces and Veterans better assists them in obtaining civilian certifications and licenses.  VA respectfully defers to DoD’s views on the merits of the proposals set forth in sections 3, 4(a), and 5 of this bill.
Section 4(b) of the bill would allow Servicemembers or Veterans to use educational assistance provided through VA in pursuit of a civilian certification or license only if the successful completion of a curriculum fully qualifies such student to take the appropriate examination and be certified or licensed to meet any other academic conditions required for entry into that occupation or profession and, where specialized accreditation is required by a State, the curriculum meets the requirements for that accreditation by an agency recognized by the Department of Education or designated by the State.  The amendments made by this section would take effect on
August 1, 2014, and would apply to courses pursued on or after that date.  VA does not oppose legislation that would allow us to pay for courses offered by educational institutions that are required to obtain employment in an occupation or profession that requires approval or licensure of a board or Stage agency.  However, if the intent of the legislation is to allow GI Bill beneficiaries to take courses required for a license or certification that do not constitute a complete program of training, then it should be noted that VA can already approve benefits for those courses.  Current statutory guidance requires schools to assess prior education or training, grant appropriate credit, and reduce the length of the overall program proportionally.  Consequently, VA does not require new legislation to meet the intent of this provision.  
Section 6 of the bill would direct VA to reestablish the Professional Certification and Licensure Advisory Committee, which was terminated on December 31, 2006, with a new termination date of December 31, 2019.  This section also would provide additional Committee duties, including the development of:  (1) guidance for audits of licensure and certification programs in order to ensure high-quality education to Servicemembers and Veterans; and (2) a plan to improve outreach to Servicemembers and Veterans on the importance of licensing and certification and the availability of educational benefits.  Not later than 180 days after the date of establishment of the Committee, it would submit to Congress a report containing an assessment of the feasibility and advisability of permitting Servicemembers to use educational assistance under the Montgomery GI Bill and the Post-9/11 GI Bill to obtain or pursue civilian employment certifications or licenses without the use of such assistance for that purpose being charged against the entitlement of such Servicemembers to such educational assistance.
VA does not support section 6, as we are not clear on the need to reestablish the Professional Certification and Licensure Advisory Committee if the only required deliverable is a report assessing the feasibility and advisability of permitting members of the Armed Forces to use educational assistance under Chapters 30 and 33 of title 38 to obtain or pursue civilian employment without them being charged entitlement.  Other Committee tasks involve outreach and auditing for licensing and certification programs, which are tasks that VA already undertakes with respect to approved programs and training establishments.  
It would also be extremely challenging for VA tonominate members; plan, organize, and, subsequently, hold meetings; and provide a report within 180 days of enactment.
 We will be pleased to provide an estimate of the cost of enactment of this bill for the record.

H.R. 1842
H.R. 1842 would amend the Servicemembers Civil Relief Act to improve the protections for Servicemembers, surviving spouses, and disabled Veterans against mortgage foreclosures, and for other purposes.  While we defer to DoD regarding the merits of this legislation, we, nonetheless, have several concerns.
One change is the requirement that a creditor stop foreclosure proceedings upon receipt of notice, since it might be irreconcilable with the provisions related to a court’s authority to allow a foreclosure to proceed.  As such, even if a court were to determine that a stay would be inequitable, a creditor might still be prohibited from foreclosing.
Another concern is the ambiguity in proposed section 303A, which could lead to title problems that cannot be resolved, and to uncertainty about what effect “notice” has.  It is not clear under subsection (c) whether a foreclosure would be invalid because the foreclosure occurred during a covered period, or if it would only be invalid during the covered period, after which a borrower would not have any right to object.  Similarly, it is not clear what effect the invalidation of a sale would have on subsequent purchasers of a property if a wrongful foreclosure is alleged.  In addition, the notice provisions of subsection (d) might allow a Servicemember to provide notice after a foreclosure and subsequent sale to a bona fide purchaser, which could result in a cloud on the title to the property or even an invalidation of that sale, and any subsequent sale.
We also note that other ambiguities exist, such as how to measure aggregate duration of SCRA protections, and when criminal penalties might apply.  
Of additional concern is proposed section 303B, which would allow a Servicemember on active duty to refinance a mortgage when the Servicemember is unable to occupy the property because of active-duty status, raises a few technical and substantive issues for VA.  The provision would establish a limitation on the frequency with which a Servicemember might refinance under the new provision – no more than once in a 5-year period.  VA statutes do not include such a limitation.  Unlike proposed section 303B, a Veteran is not required to certify occupancy to obtain a VA Interest Rate Reduction Refinance Loan.  Deeming a property a residence might not always work to the Servicemember’s benefit, as certain refinance programs require that the borrower cannot be an occupant.  Under proposed section 303B, however, a Servicemember would not have a choice, as a creditor would be required to treat the property as the Servicemember’s residence.
H.R.1842 might have unintended effects on the interpretation of protections found in other SCRA provisions.  For example, the reference to trust deeds in proposed section 303A(a)(2) could affect the interpretation of mortgage protections in current section 303 as well as those in proposed section 303B, because the term “trust deed” is newly introduced.   
We would be pleased to work with the Subcommittee staff and DoD in drafting amendments to address VA’s concerns with this bill and with H.R. 821.
Provisions of this bill may have an impact on VA loan subsidy costs.  We will provide an estimate of cost for the record.

H.R. 2011
H.R. 2011 would amend section 3692 of title 38, United States Code, to extend for 2 years (through fiscal year 2015) the Veterans’ Advisory Committee on Education, which is set to expire on December 31, 2013.  It would also add Veteran representatives, to the maximum extent practicable, from the post-9/11 operations in Iraq and Afghanistan to the Committee.  Finally, it would add individuals receiving training under the vocational rehabilitation and employment program under chapter 31 of title 38, United States Code, to the list of those enrolled in programs of educational institution’s representatives which form part of the Committee.
Currently, section 3692(a) of title 38, United States Code, specifies that the Veterans’ Advisory Committee on Education shall be composed of persons who are eminent in their respective fields of education, labor, and management and of representatives of institutions and establishments furnishing education to eligible Veterans or persons enrolled under Chapter 30, 32, 33, or 35 of this title and
Chapter 1606 of title 10.  The Committee shall also, to the maximum extent practicable, include Veterans representative of World War II, the Korean conflict era, the post-Korean conflict era, the Vietnam era, the post-Vietnam era, and the Persian Gulf War.
    The legislation would amend section 3692(a) and change the composition of the Committee to include not only Veteran representatives of post-9/11 operations in Iraq and Afghanistan, but also representatives of institutions and establishments furnishing education to eligible Veterans or persons enrolled under Chapter 31..
VA supports this legislation.  If enacted, the Secretary would be able to continue to receive recommendations and seek advice from VA Committee on Education members with regard to the administration and proposals to enhance VA education benefit programs.
    Costs associated with this legislation are insignificant.  

H.R. 2210
H.R. 2210, the “Marine Gunnery Sergeant John David Fry Scholarship Improvements Act of 2013,” would amend current provisions of title 38, United States Code, to expand the universe of individuals who are entitled to educational assistance under the Post-9/11 GI Bill by virtue of the in-line-of-duty death of a parent serving on active duty in the Armed Forces to also include the child of an individual who:  (1) is awarded the Purple Heart medal for an injury; and (2) dies as a result of such injury during the 60-day period beginning on the date of the individual’s discharge or release from active-duty service in the Armed Forces.  This amendment would apply with respect to the death of a specified Veteran occurring on or after September 11, 2001.
VA supports the proposed legislation, subject to Congress identifying appropriate offsets for the additional costs. Benefit costs to VA are estimated to be $219 thousand during the first year, $2.4 million for 5 years, and $5.8 million over 10 years.  There are no additional full-time equivalent or General Operating Expenses cost requirements associated with this proposal.

VA does note that Departmental data shows that most deaths resulting from serious injury occur during the first 18 months after the release from active duty.  There are currently no provisions under the Post-9/11 GI Bill that would allow a child to receive benefits if his or her parent died of a service-connected injury or illness shortly after release from active duty.    Estimated benefit costs to VA would increase to $942 thousand during the first year, $10.1 million for 5 years, and $24.2 million over 10 years, if the legislation were expanded to provide Fry Scholarship benefits to children of active duty Servicemembers who die in the line of duty within 18 months of separation as a result of injuries incurred on active duty after September 10, 2001.
H.R. 2327
H.R. 2327, “Veterans Economic Opportunity Administration Act of 2013,” would amend title 38, United States Code, to establish in VA a new “Veterans Economic Opportunity Administration.”
Section 2 of the bill would establish the “Veterans Economic Opportunity Administration” to administer programs that provide assistance related to economic opportunity to Veterans and their dependents and Survivors.  The new Administration would be under the aegis of the Under Secretary for Veterans Economic Opportunity, who would be directly responsible to the Secretary of Veterans Affairs.  The new Administration would be responsible for the following VA programs:
•    Vocational Rehabilitation and Employment;
•    Educational Assistance;
•    Veterans Housing Loan (and related programs); and
•    Veterans Small Business Programs (including the program under 38 United States Code § 8127).
Section 3 of the bill would amend title 38, United States Code, to make the new Under Secretary position subject to appointment by the President with the advice and consent of the Senate.  The new Under Secretary would be responsible for the operations of the Veterans Economic Opportunity Administration.
The Secretary would be required to establish a commission to recommend individuals to the President for appointment to fill a vacancy when a position arises.  The commission would be composed of the following members appointed by the Secretary:
•    Three individuals representing education and training, vocational rehabilitation, employment, real estate, mortgage finance and related industries, and Survivor benefits activities affected by the new Administration.
•    Two individuals representing Veterans served by the new administration.
•    Two individuals with experience in the management of private sector benefits programs.
•    The Deputy Secretary of Veterans Affairs.
•    The Chairman of the Veterans’ Advisory Committee on Education.
•    One individual who has held the position of Under Secretary for Economic Opportunity, if the Secretary determines it is desirable.
In addition, each individual recommended to the President by the commission must have held a senior-level position in the private sector with responsibilities in at least one of the following:
•    Education policy;
•    Vocational rehabilitation;
•    Employment;
•    Home loan finance; and
•    Small business development.
Finally, for fiscal year 2014, the aggregate number of full-time employees authorized for the Veterans Benefits Administration (VBA) and the Veterans Economic Opportunity Administration could not exceed 20,851.
While VA appreciates the Committee’s focus on improving Veterans’ economic opportunities, we are unable to support the proposed legislation, since we believe that an appropriate management structure is already in place to oversee Veteran programs related to economic opportunities.
In 2011, the Office of Economic Opportunity (OEO) was established in VBA under the authority of the Under Secretary for Benefits to oversee all education benefits, loan guaranty services, and vocational rehabilitation and employment benefits and services for Veterans.  Veteran employment initiatives, including Veterans’ entrepreneurship-training benefits provided through VBA’s education program are also overseen by OEO.  This Office provides focused attention and oversight to Veteran economic opportunity programs.
Having the Under Secretary for Benefits oversee Veteran programs related to both economic opportunities and disability assistance ensures that there is coordination among benefit services, including compensation, pension, education, and home loan guaranties.  This cross-coordination avoids duplication of management support services within VA.  In addition, maintaining a separate office within VBA (the Deputy Under Secretary for Economic Opportunity) to oversee the economic opportunity program offices allows for that office’s leadership to be hired in a timely fashion whenever a vacancy arises.
Additionally, VA is uncertain how the small business programs would be partitioned out from the existing Office of Small and Disadvantaged Business Utilization (OSDBU) to report to this new Administration.  The legislation is vague with regard to what portions of OSDBU would be in this new structure.
Lastly, the establishment of a new Administration within VA would require a substantial management structure to oversee administrative and support tasks.  VA is concerned that this new management structure would result in significant administrative costs.  VA also has concerns regarding imposing a ceiling on the number of employees authorized in VBA and the new Administration.  As of May 2013, VBA had 21,240
full-time employees.  This legislation would not only reduce that number, but would also require the employees to be split between the two administrations.
We will be pleased to provide an estimate of the cost of enactment of this bill for the record.
Draft Legislation Affecting the Post-9/11 GI Bill
This draft bill would repeal certain provisions of Public Law 110-252 and amend subchapter III of chapter 33 of title 38, United States Code, to codify and improve the election requirements for the receipt of educational assistance under the Post 9/11 Veterans Educational Assistance program.  Respectfully, we will be pleased to provide our full views and estimate of the cost of enactment of this draft bill for the record.
Mr. Chairman, this concludes my statement.  Thank you for the opportunity to appear before you today.  I would be pleased to respond to questions you or the other Members of the Subcommittee may have regarding our views as presented.