[Federal Register Volume 62, Number 227 (Tuesday, November 25, 1997)]
[Proposed Rules]
[Pages 62736-62739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30872]


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DEPARTMENT OF DEFENSE

DEPARTMENT OF TRANSPORTATION

Coast Guard

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AH88


Election of Education Benefits

AGENCIES: Department of Defense, Department of Transportation (Coast 
Guard), and Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the Department of Veterans 
Affairs (VA) educational assistance and educational benefits 
regulations relating to certain elections between benefits. VA has 
provided by regulation that after a veteran seeks to make an election 
to have service in the Selected Reserve credited toward payment under 
the Montgomery GI Bill--Selected Reserve (MGIB-SR) program or under the 
Montgomery GI Bill--Active Duty (MGIB-AD) program, the election will 
take effect when the individual has negotiated a check issued under the 
program she or he has elected. In order to adapt the current rules to 
the new system of electronic transfers, it is proposed to change these 
election provisions to make the election effective either upon 
negotiation of a check or electronic receipt of education benefits. VA 
has provided by regulation that an election to receive benefits under 
Survivors' and Dependents' Educational Assistance (DEA) for a program 
of education rather than pension, compensation, or Dependency and 
Indemnity Compensation (DIC) will take effect when the individual has 
commenced a program of education and negotiated a check issued under 
the program she or he has elected. In order to adapt the current rule 
to the new system of electronic transfers and to ensure that decisions 
are made with knowledge, it is proposed to change these election 
provisions to require a written election to be submitted and to make 
the election effective either upon negotiation of a check or electronic 
receipt of education benefits. Nonsubstantive changes would also be 
made for purposes of clarity and to reflect current statutory 
codification and authority. The proposed requirements for individuals 
to make elections before receiving certain benefit payments constitute 
collections of information.

[[Page 62737]]

Accordingly, this document also requests comments under the Paperwork 
Reduction Act on those proposed collections of information.

DATES: Comments must be received on or before January 26, 1998.

ADDRESSES: Mail or hand deliver written comments to: Director, Office 
of Regulations Management (02D), Department of Veterans Affairs, 810 
Vermont Ave., NW., Washington, DC 20420. Comments should indicate that 
they are submitted in response to ``RIN 2900-AH88.'' All written 
comments received will be available for public inspection in the Office 
of Regulations Management, Room 1158, between the hours of 8:00 a.m. 
and 4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: June C. Schaeffer, Assistant Director 
for Policy and Program Administration, Education Service (225), 
Veterans Benefits Administration, Department of Veterans Affairs, (202) 
273-7187.

SUPPLEMENTARY INFORMATION: VA administers a number of benefit programs. 
A veteran or other eligible person may be potentially eligible for 
benefits under more than one of them. Often the law governing 
eligibility requires that the individual elect the program under which 
she or he is to receive benefits. This document proposes to amend the 
VA educational assistance and educational benefits regulations relating 
to certain elections between benefits.
    VA is given broad statutory authority to prescribe the manner of 
elections when a veteran must elect whether time served in the Selected 
Reserve is to be applied toward establishing eligibility for the MGIB-
SR program or toward establishing entitlement to a greater monthly rate 
of educational assistance under the MGIB-AD program. VA has provided by 
regulation in 38 CFR 21.7042 and 21.7540 that after a veteran seeks to 
make an election to have service in the Selected Reserve credited 
toward payment under the MGIB-SR program or under the MGIB-AD program, 
the election will take effect when the individual has negotiated a 
check issued under the program she or he has elected. In order to adapt 
the current rules to the new system of electronic transfers, it is 
proposed to change these election provisions to make the election 
effective either upon negotiation of a check or electronic receipt of 
education benefits.
    This document also proposes to amend Sec. 21.3023, which concerns 
an election to receive DEA for a program of education rather than 
pension, compensation, or DIC. That section currently provides that the 
commencement of a program of education constitutes an election and, 
with limited exceptions, that the election is final when the payee has 
negotiated one check for the benefit. This section was issued pursuant 
to 38 U.S.C. 3562, which provides that if a child of a veteran is 
eligible for both DEA and DIC, commencement of a program of education 
under DEA would bar the child from receiving pension, compensation, or 
DIC in the future as a child. For the purposes of determining when 
there is commencement of a program of education under DEA, it is 
proposed that the ``commencement of a program'' will be deemed to have 
occurred at the time of negotiation of the first DEA benefit payment 
check or upon receipt of the first electronic transfer of a DEA benefit 
payment. It also is proposed that such an election occur only after a 
written election to receive DEA has been submitted to VA. These 
proposed provisions are designed to ensure that elections are made with 
knowledge and become effective at the time of commencement of a program 
of education under DEA.
    These changes are necessary because the Debt Collection Improvement 
Act of 1996 (sec. 31001, Pub. L. 104-134) requires that the Federal 
government make payments through electronic funds transfer. The 
proposed provisions are intended to adapt the current rules to include 
the new system of electronic transfer.
    This document also proposes to make nonsubstantive amendments for 
purposes of clarification and to reflect current statutory authority. 
In addition, this document also seeks approval, as explained below, for 
certain collections of information in Secs. 21.3023, 21.7042, and 
21.7540.
    The Department of Defense (DOD), the Department of Transportation 
(Coast Guard), and VA are jointly issuing this proposal insofar as it 
relates to the MGIB-SR program. This program is funded by DOD and the 
Coast Guard, and is administered by VA. The remainder of this proposal 
is issued solely by VA.

Paperwork Reduction Act of 1995

    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), 
the provisions of the proposed Secs. 21.3023, 21.7042, and 21.7540 
include collections of information. Accordingly, as required by the Act 
at Sec. 3507(d), VA has submitted a copy of this rulemaking action to 
the Office of Management and Budget (OMB) for its review of the 
proposed collections of information.
    OMB assigns a control number for each collection of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number.
    Comments on the proposed collections of information should be 
submitted to the Office of Management and Budget, Attention: Desk 
Officer for the Department of Veterans Affairs, Office of Information 
and Regulatory Affairs, Washington, DC 20503, with copies to the 
Director, Office of Regulations Management (02D), Department of 
Veterans Affairs, 810 Vermont Ave., NW., Washington, DC 20420. Comments 
should indicate that they are submitted in response to ``RIN 2900-
AH88.''
    Title: Election to Receive Dependents' Educational Assistance 
Instead of Dependency and Indemnity Compensation.
    Summary of collection of information: The collection of information 
in the proposed amendment to Sec. 21.3023 in this rulemaking proceeding 
would implement a statutory provision that prevents an individual with 
potential eligibility for DEA and compensation, pension, or DIC from 
receiving more than one benefit for pursuing a program of education. 
The proposed rule would require such an individual to make an election 
if she or he wished to receive DEA.
    Description of need for information and proposed use of 
information: An eligible child may not receive educational assistance 
under DEA and payments under DIC for the same school attendance. In 
order for VA to know when the child wishes to receive DEA, it is 
necessary for the child to state his or her desire for educational 
assistance under DEA.
    Description of likely respondents: Individuals with potential 
eligibility for DEA.
    Estimated number of respondents: 2,900 annually.
    Estimated frequency of responses: Once per eligible claimant.
    Estimated total annual reporting and recordkeeping burden: 580 
hours of reporting burden. VA does not believe that there would be an 
additional recordkeeping burden.
    Estimated average burden per collection: .2 hour.

    Title: Election to Apply Selected Reserve Service to Either the 
Montgomery GI Bill--Active Duty or to the Montgomery GI Bill--Selected 
Reserve.
    Summary of collection of information: The collection of information 
in the

[[Page 62738]]

proposed amendments to Secs. 21.7042 and 21.7540 in this rulemaking 
proceeding would implement a statutory provision that prevents an 
individual with potential eligibility for educational assistance under 
both the Montgomery GI Bill--Active Duty or the Montgomery Bill--
Selected Reserve from using the same Selected Reserve service to 
establish eligibility for assistance under the Montgomery GI Bill--
Selected Reserve, and to establish entitlement to educational 
assistance at an increased monthly rate under the Montgomery GI Bill--
Active Duty.
    Description of need for information and proposed use of 
information: An individual who participates in the Montgomery GI Bill--
Active Duty and who serves on active duty for two years followed by six 
years in the Selected Reserve must choose whether to apply the Selected 
Reserve service toward the Montgomery GI Bill--Active Duty or to the 
Montgomery GI Bill--Selected Reserve. If she or he decides to apply it 
towards the Montgomery GI Bill--Selected Reserve, she or he would be 
eligible for 36 months of educational assistance under the Montgomery 
GI Bill--Active Duty at the rate of $347.65 per month for full-time 
training and 12 months of educational assistance under the Montgomery 
GI Bill--Selected Reserve. If she or he chooses to apply that service 
towards the Montgomery GI Bill--Active Duty, she or he would be 
eligible for 36 months of educational assistance under the Montgomery 
GI Bill--Active Duty at the rate of $427.87 per month for full-time 
training while remaining ineligible for educational assistance under 
the Montgomery GI Bill--Selected Reserve. VA must know which benefit 
the individual wants the Selected Reserve service credited to in order 
to determine the proper payments to the individual.
    Description of likely respondents: Members of the Selected Reserve.
    Estimated number of respondents: 35 annually.
    Estimated frequency of responses: Once per eligible claimant.
    Estimated total annual reporting and recordkeeping burden: 11.67 
hours of reporting burden. VA does not believe that there would be an 
additional recordkeeping burden.
    Estimated average burden per collection: .33 hour.
    The Department considers comments by the public on proposed 
collections of information in--
    <bullet> Evaluating whether the proposed collections of information 
are necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
    <bullet> Evaluating the accuracy of the Department's estimate of 
the burden of the proposed collections of information, including the 
validity of the methodology and assumptions used;
    <bullet> Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
    <bullet> Minimizing the burden of the collections of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    OMB is required to make a decision concerning the proposed 
collections of information contained in this proposed rule between 30 
and 60 days after publication of this document in the Federal Register. 
Therefore, a comment to OMB is best assured of having its full effect 
if OMB receives it within 30 days of publication. This does not affect 
the deadline for the public to comment on the proposed regulations.

Regulatory Flexibility Act

    The signers of this document hereby certify that this proposed 
rule, if promulgated, would not have significant economic impact on a 
substantial number of small entities as they are defined in the 
Regulatory Flexibility Act, 5 U.S.C. 601-612. This proposed rule would 
directly affect only individuals and would not directly affect small 
entities. Pursuant to 5 U.S.C. 605(b), the proposed rule, therefore, is 
exempt from the initial and final regulatory flexibility analyses 
requirements of sections 603 and 604.

    The Catalog of Federal Domestic Assistance numbers for programs 
affected by the proposed rule are 64.117 and 64.124. The proposed rule 
also affects the Montgomery GI Bill--Selected Reserve for which there 
is no Catalog of Federal Domestic Assistance number.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflict of interests, Defense 
Department, Education, Employment, Grant programs-education, Grant 
Programs--veterans, Health care, Loan programs--education, Loan 
Programs--veterans, Manpower training programs, Reporting and 
recordkeeping requirements, Schools, Travel and transportation, 
Veterans, Vocational education, Vocational rehabilitation.

    Approved: September 5, 1997.
Hershel W. Gober,
Acting Secretary of Veterans Affairs.

    Approved: August 6, 1997.
G.R. Woolever,
Rear Admiral, U.S. Coast Guard, Assistant Commandant for Human 
Resources.

    Approved: August 5, 1997.
Normand G. Lezy,
Lieutenant General, USAF, Deputy Assistant Secretary (Military 
Personnel Policy).

    For the reasons set out in the preamble, 38 CFR part 21, subparts 
C, K, and L are proposed to be amended as follows.

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart C--Survivors' and Dependents' Educational Assistance Under 
38 U.S.C. Chapter 35

    1. The authority citation for part 21, subpart C, is revised to 
read as follows:

    Authority: 38 U.S.C. 501(a), 512, 3500-3566, unless otherwise 
noted.

    2. In Sec. 21.3023, paragraph (c)(3) is amended by removing 
``educational assistance'' and adding, in its place, ``education under 
DEA''; the section heading, paragraph (c) introductory text, and 
paragraph (c)(1) are revised, and an authority citation for the section 
is added, to read as follows:


Sec. 21.3023  Nonduplication; pension, compensation, and dependency and 
indemnity compensation.

* * * * *
    (c) Child; election. An election by a child under this section must 
be submitted to VA in writing.
    (1) Except as provided in paragraph (c)(2) of this section, an 
election to receive Survivors' and Dependents' Educational Assistance 
(DEA) is final when the eligible child commences a program of education 
under DEA (38 U.S.C. chapter 35). Commencement of a program of 
education under DEA will be deemed to have occurred for VA purposes on 
the date the first payment of DEA educational assistance is made, as 
evidenced by negotiation of the first check or receipt of the first 
payment by electronic funds transfer.
* * * * *
(Authority: 38 U.S.C. 3562)

Subpart K--All Volunteer Force Educational Assistance Program 
(Montgomery GI Bill--Active Duty)

    3. The authority citation for part 21, subpart K, continues to read 
as follows:

    Authority: 38 U.S.C. 501(a), chs. 30, 36, unless otherwise 
noted.


[[Page 62739]]


    4. In Sec. 21.7042, the section heading and paragraphs (d)(2), and 
(d)(3) are revised, and paragraph (d)(4) is added, to read as follows:


Sec. 21.7042  Eligibility for basic educational assistance.

* * * * *
    (d) * * *
    (2) An individual must elect, in writing, whether he or she wishes 
service in the Selected Reserve to be credited towards establishing 
eligibility under 38 U.S.C. chapter 30 or under 10 U.S.C. chapter 1606 
when:
    (i) The individual:
    (A) Is a veteran who has established eligibility for basic 
educational assistance through meeting the provisions of paragraph (b) 
of this section; and
    (B) Also is a reservist who has established eligibility for 
benefits under 10 U.S.C. chapter 1606 through meeting the requirements 
of Sec. 21.7540; or
    (ii) The individual is a member of the National Guard or Air 
National Guard who has established eligibility for basic educational 
assistance under 38 U.S.C. chapter 30 through activation under a 
provision of law other than 32 U.S.C. 316, 502, 503, 504, or 505.
    (3) An election under this paragraph (d) to have Selected Reserve 
service credited towards eligibility for payment of educational 
assistance under 38 U.S.C. chapter 30 or under 10 U.S.C. chapter 1606 
is irrevocable when the veteran either negotiates the first check or 
receives the first payment by electronic funds transfer of the 
educational assistance elected.
    (4) If a veteran is eligible to receive educational assistance 
under both 38 U.S.C. chapter 30 and 10 U.S.C. chapter 1606, he or she 
may receive educational assistance alternately or consecutively under 
each of these chapters to the extent that the educational assistance is 
based on service not irrevocably credited to one or the other chapter 
as provided in paragraphs (d)(1) through (d)(3) of this section.

(Authority: 10 U.S.C. 16132; 38 U.S.C. 3033(c))
* * * * *

Subpart L--Educational Assistance for Members of the Selected 
Reserve

    5. The authority citation for part 21, subpart L, is revised to 
read as follows:

    Authority: 10 U.S.C. 1606; 38 U.S.C. 501, unless otherwise 
noted.

    6. In Sec. 21.7540, paragraph (c) and the authority citation for 
paragraph (d) are revised, to read as follows:


Sec. 21.7540  Eligibility for educational assistance.

* * * * *
    (c) Limitations on establishing eligibility. (1) An individual must 
elect in writing whether he or she wishes service in the Selected 
Reserve to be credited towards establishing eligibility under 38 U.S.C. 
chapter 30 or under 10 U.S.C. chapter 1606 when:
    (i) The individual is a reservist who is eligible for basic 
educational assistance provided under 38 U.S.C. 3012 and has 
established eligibility to that assistance partially through service in 
the Selected Reserve; or
    (ii) The individual is a member of the National Guard or Air 
National Guard who has established eligibility for basic educational 
assistance provided under 38 U.S.C. 3012 through activation under a 
provision of law other than 32 U.S.C. 316, 502, 503, 504, or 505 
followed by service in the Selected Reserve.
    (2) An election under this paragraph (c) to have Selected Reserve 
service credited towards eligibility for payment of educational 
assistance under 38 U.S.C. chapter 30 or under 10 U.S.C. chapter 1606 
is irrevocable when the reservist either negotiates the first check or 
receives the first payment by electronic funds transfer of the 
educational assistance elected.
    (3) If a reservist is eligible to receive educational assistance 
under both 38 U.S.C. chapter 30 and 10 U.S.C. chapter 1606, he or she 
may receive educational assistance alternately or consecutively under 
each of these chapters to the extent that the educational assistance is 
based on service not irrevocably credited to one or the other chapter 
as provided in paragraphs (c)(1) and (c)(2) of this section.

(Authority: 10 U.S.C. 16132; 38 U.S.C. 3033(c))
* * * * *
    (d) * * *

(Authority: 10 U.S.C. 16132(d), 16134)

[FR Doc. 97-30872 Filed 11-24-97; 8:45 am]
BILLING CODE 8320-01-P