A bill to address fees erroneously collected by Department of Veterans Affairs for housing loans, and for other purposes.

II 116TH CONGRESS 1ST SESSION S. 2073 To address fees erroneously collected by Department of Veterans Affairs for housing loans, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 10, 2019 Mr. BOOZMAN (for himself and Mr. TESTER) introduced the following bill; which was read twice and referred to the Committee on Veterans’ Affairs A BILL To address fees erroneously collected by Department of Veterans Affairs for housing loans, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. FEES ERRONEOUSLY COLLECTED BY DEPART- 3 MENT OF VETERANS AFFAIRS FOR HOUSING 4 LOANS. 5 (a) FINDINGS.—Congress makes the following find- 6 ings: 7 (1) The Department of Veterans Affairs offers 8 a Department-backed home loan for which veterans 9 VerDate Sep 11 2014 02:01 Jul 12, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2073.IS S2073 SSpencer on DSKBBXCHB2PROD with BILLS 2 •S 2073 IS are generally required to pay fees to defray the cost 1 of administering the home loan. 2 (2) Veterans are exempt from paying the fees 3 if they are entitled to receive disability compensation 4 from the Department of Veterans Affairs. 5 (3) Between January 1, 2012, and December 6 31, 2017, veterans paid fees of more than 7 $286,000,000 in association with Department- 8 backed home loans despite being exempt from such 9 fees. Fees paid included $65,800,000 in fees that 10 could have been avoided. 11 (4) Of those erroneously paid fees, 12 $189,000,000 in fee refunds are still due to vet- 13 erans. 14 (5) More than 70,000 veterans may have been 15 affected by these erroneously paid fees. 16 (b) PLAN TO IDENTIFY INDIVIDUALS WHO WERE 17 ERRONEOUSLY CHARGED FEES.— 18 (1) ERRONEOUS CHARGES JANUARY 1, 2012, TO 19 DECEMBER 31, 2017.— 20 (A) IN GENERAL.—Not later than 90 days 21 after the date of the enactment of this Act, the 22 Secretary of Veterans Affairs shall submit to 23 Congress a plan to identify individuals de- 24 scribed in subsection (c)(1) of section 3729 of 25 VerDate Sep 11 2014 02:01 Jul 12, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2073.IS S2073 SSpencer on DSKBBXCHB2PROD with BILLS 3 •S 2073 IS title 38, United States Code, from whom a fee 1 was collected under such section during the pe- 2 riod beginning on January 1, 2012, and ending 3 on December 31, 2017. 4 (B) CONTENTS.—The plan submitted 5 under paragraph (1) shall include the following: 6 (i) The number of individuals who 7 may be due a refund of the fee. 8 (ii) A timeline for the refunding of 9 fees. 10 (2) ERRONEOUS CHARGES BEFORE JANUARY 1, 11 2012.— 12 (A) IN GENERAL.—Not later than 180 13 days after the date of the enactment of this 14 Act, the Secretary of Veterans Affairs shall 15 submit to Congress a plan to identify individ- 16 uals described in subsection (c)(1) of section 17 3729 of title 38, United States Code, from 18 whom a fee was collected under such section be- 19 fore January 1, 2012. 20 (B) CONTENTS.—The plan submitted 21 under paragraph (1) shall include the following: 22 (i) The number of individuals who 23 may be due a refund of the fee. 24 VerDate Sep 11 2014 00:30 Jul 12, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2073.IS S2073 SSpencer on DSKBBXCHB2PROD with BILLS 4 •S 2073 IS (ii) A timeline for the refunding of 1 fees. 2 (c) AUTOMATED REFUND PROCESS.— 3 (1) IN GENERAL.—The Secretary shall develop 4 an automated process for refunding fees collected 5 under section 3729 of title 38, United States Code, 6 from individuals described in subsection (c)(1) of 7 such section. 8 (2) PROHIBITION.—For any individual identi- 9 fied under the process developed under paragraph 10 (1), the Secretary shall process the refund without 11 requiring further request. 12 (d) PLAN TO PROCESS REFUNDS.—Not later than 13 90 days after the date of the enactment of this Act, the 14 Secretary shall develop a plan to process refunds of fees 15 that were collected under section 3729 of title 38, United 16 States Code, from individuals described in subsection 17 (c)(1) of such section. 18 (e) ANNUAL REPORT ON REFUNDS.— 19 (1) IN GENERAL.—Not less frequently than 20 once each year, the Secretary shall submit to Con- 21 gress an annual report on refunds of fees collected 22 under section 3729 of title 38, United States Code. 23 VerDate Sep 11 2014 00:30 Jul 12, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2073.IS S2073 SSpencer on DSKBBXCHB2PROD with BILLS 5 •S 2073 IS (2) CONTENTS.—Each report submitted under 1 paragraph (1) shall include, for the period covered 2 by the report: 3 (A) The number of fees collected under 4 such section that were refunded and applied to 5 a home loan balance. 6 (B) The number of such refunds for which 7 the Secretary received documentation of the ap- 8 plication of a refund to a home loan balance. 9 (f) ACCURACY OF CERTIFICATES OF ELIGIBILITY.— 10 (1) IN GENERAL.—The Secretary shall update 11 such policies as may be necessary to ensure that cer- 12 tificates of eligibility are accurate at the time they 13 are used for the purposes of determining eligibility 14 for housing loans guaranteed, insured, or made 15 under chapter 37 of title 38, United States Code, 16 and for pursues of determining eligibility for exemp- 17 tion from the collection of fees under section 3729 18 of such title. 19 (2) REPORT.—Not later than 180 days after 20 the date of the enactment of this Act, the Secretary 21 shall submit to Congress a report on the solution de- 22 veloped under paragraph (1). 23 (g) MANNER OF REFUNDS.—In the case of a fee that 24 was erroneously collected under section 3729 of title 38, 25 VerDate Sep 11 2014 00:30 Jul 12, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2073.IS S2073 SSpencer on DSKBBXCHB2PROD with BILLS 6 •S 2073 IS United States Code, from an individual described in sub- 1 section (c) of such section, the Secretary may refund the 2 fee directly to the individual, notwithstanding any current 3 loan balance of the individual or the manner in which the 4 fee was originally collected. 5 (h) REFUNDS GENERALLY.—Section 3729(c) of title 6 38, United States Code, is amended by adding at the end 7 the following new paragraph: 8 ‘‘(3)(A) The Secretary shall develop a process for de- 9 termining whether a fee has been collected under this sec- 10 tion from an individual described in paragraph (1). 11 ‘‘(B) If the Secretary determines that such a fee has 12 been collected under this section from an individual de- 13 scribed in paragraph (1), the Secretary shall pay to such 14 individual an amount equal to the amount of the fee col- 15 lected. 16 ‘‘(C) Notwithstanding any other provision of law, a 17 payment under this paragraph shall not be subject to Fed- 18 eral, State, or other tax liability or reporting require- 19 ment.’’. 20 (i) AUDIT PLAN.— 21 (1) PLAN REQUIRED.—The Secretary shall de- 22 velop a plan to audit the Department on an annual 23 basis to determine the rate at which fees are erro- 24 VerDate Sep 11 2014 00:30 Jul 12, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2073.IS S2073 SSpencer on DSKBBXCHB2PROD with BILLS 7 •S 2073 IS neously collected under section 3729 of title 38, 1 United States Code. 2 (2) REPORTS.—Not later than 60 days after 3 the completion of any audit conducted pursuant to 4 the plan developed under paragraph (1), the Sec- 5 retary shall submit to Congress a report on the find- 6 ings of the Secretary with respect to the audit. 7 Æ VerDate Sep 11 2014 00:30 Jul 12, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S2073.IS S2073 SSpencer on DSKBBXCHB2PROD with BILLS