To amend title 38, United States Code, to clarify the applicability of the prohibition on assignment of veterans benefits to agreements regarding future receipt of compensation, pension, or dependency and indemnity compensation, and for other purposes.

January 30, 2003

Mr. NELSON of Florida (for himself, Mr. MCCAIN, Mr. INOUYE, Mr. LEVIN, Mr. BINGAMAN, Mr. KERRY, Mr. BREAUX, Mr. CONRAD, Mr. JOHNSON, Ms. LANDRIEU, Mr. SESSIONS, and Mr. NELSON of Nebraska) introduced the following bill; which was read twice and referred to the Committee on Veterans' Affairs

To amend title 38, United States Code, to clarify the applicability of the prohibition on assignment of veterans benefits to agreements regarding future receipt of compensation, pension, or dependency and indemnity compensation, 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.

This Act may be cited as the `Veterans Benefits and Pensions Protection Act of 2003'.

SEC. 2. APPLICABILITY OF PROHIBITION ON ASSIGNMENT OF VETERANS BENEFITS TO AGREEMENTS ON FUTURE RECEIPT OF CERTAIN BENEFITS.

(a) IN GENERAL- Section 5301(a) of title 38, United States Code, is amended--

(1) by inserting `(1)' after `(a)';

(2) by designating the last sentence as paragraph (2) and indenting such paragraph, as so designated, two ems from the left margin; and

(3) by adding at the end the following new paragraph:

`(3)(A) For purposes of this subsection, in any case where a beneficiary entitled to compensation, pension, or dependency and indemnity compensation enters into an agreement with another person under which agreement such other person acquires for consideration the right to receive payment of such compensation, pension, or dependency and indemnity compensation, as the case may be, whether by payment from the beneficiary to such other person, deposit into an account from which such other person may make withdrawals, or otherwise, such agreement shall be deemed to be an assignment and is prohibited.

`(B) Any agreement or arrangement for collateral for security for an agreement that is prohibited under subparagraph (A) is also prohibited.

`(C)(i) Any person who enters into an agreement that is prohibited under subparagraph (A), or an agreement or arrangement that is prohibited under subparagraph (B), shall be fined under title 18, imprisoned for not more than one year, or both.

`(ii) This subparagraph does not apply to a beneficiary with respect to compensation, pension, or disability and indemnity compensation to which the beneficiary is entitled under a law administered by the Secretary.'.

(b) EFFECTIVE DATES- (1) Subparagraphs (A) and (B) of paragraph (3) of section 5301(a) of title 38, United States Code (as added by subsection (a) of this section), shall apply with respect to any agreement or arrangement described in such subparagraphs, whether entered into before, on, or after the date of the enactment of this Act, and any such agreement or arrangement entered into before the date of the enactment of this Act is void and unenforceable as of such date.

(2) Subparagraph (C) of such paragraph shall apply with respect to any agreement or arrangement covered by such subparagraph that is entered into on or after the date of the enactment of this Act.

(c) OUTREACH- The Secretary of Veterans Affairs shall, during the five-year period beginning on the date of the enactment of this Act, carry out a program of outreach to inform veterans and other recipients or potential recipients of compensation, pension, or disability and indemnity compensation benefits under the laws administered by the Secretary of the prohibition on the assignability of such benefits under law. The program shall include information on various schemes to evade the prohibition, and means of avoiding such schemes.

(d) AUTHORIZATION OF APPROPRIATIONS- There is hereby authorized to be appropriated for the Department of Veterans Affairs for each of fiscal years 2004 through 2008, $3,000,000 for purposes of carrying out the program of outreach required by subsection (c).

END