104TH CONGRESS
2D SESSION
H. R. 3674
AN ACT
To amend title 38, United States Code, to clarify
the causal relationship required between a veter-
an’s service-connected disability and employment
handicap for purposes of determining eligibility
for training and rehabilitation assistance, to
transfer certain educational assistance entitle-
ments from the Post-Vietnam Era Educational
Assistance Program to the Montgomery GI Bill,
and for other purposes.
104TH CONGRESS
2D SESSION
H. R. 3674
AN ACT
To amend title 38, United States Code, to clarify the causal
relationship required between a veteran’s service-con-
nected disability and employment handicap for purposes
of determining eligibility for training and rehabilitation
assistance, to transfer certain educational assistance enti-
tlements from the Post-Vietnam Era Educational Assist-
ance Program to the Montgomery GI Bill, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES TO TITLE 38,
UNITED STATES CODE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Veterans’ Education and Compensation Benefits Amend-
ments of 1996’’.
(b) REFERENCES.—Except as otherwise expressly
provided, whenever in this Act an amendment is expressed
in terms of an amendment to a section or other provision,
the reference shall be considered to be made to a section
or other provision of title 38, United States Code.
TITLE I—VETERANS’ EDUCATION
PROGRAMS
SEC. 101. EMPLOYMENT HANDICAP FOR WHICH AN INDI-
VIDUAL MAY RECEIVE TRAINING AND REHA-
BILITATION ASSISTANCE.
(a) DEFINITIONS.—Section 3101 is amended—
(1) in paragraph (1), by inserting ‘‘, resulting
in substantial part from a disability described in sec-
tion 3102(1)(A) of this title,’’ after ‘‘impairment’’;
(2) in paragraph (6), by inserting ‘‘authorized
under section 3120 of this title’’ after ‘‘assistance’’;
and
(3) in paragraph (7), by inserting ‘‘, resulting
in substantial part from a service-connected disabil-
ity rated at 10 percent or more,’’ after ‘‘impair-
ment’’.
(b) BASIC ENTITLEMENT.—Section 3102 is amend-
ed—
(1) in paragraph (1)(A)(i), by striking out
‘‘which is’’ and all that follows through ‘‘chapter 11
of this title’’ and inserting in lieu thereof ‘‘rated at
20 percent or more’’;
(2) in paragraph (2)(A), by striking out ‘‘which
is’’ and all that follows through ‘‘chapter 11 of this
title’’ and inserting in lieu thereof ‘‘rated at 10 per-
cent’’; and
(3) by amending paragraph (2)(B) to read as
follows:
‘‘(B) is determined by the Secretary to be
in need of rehabilitation because of a serious
employment handicap.’’.
(c) PERIODS
OF ELIGIBILITY.—Section 3103 is
amended—
(1) in subsection (b)(3), by striking out ‘‘de-
scribed in section 3102(1)(A)(i) of this title’’ and in-
serting in lieu thereof ‘‘rated at 10 percent or
more’’;
(2) in subsection (c)—
(A) in the matter preceding paragraph (1),
by striking out ‘‘particular’’ and inserting in
lieu thereof ‘‘current’’; and
(B) in paragraph (2), by striking out ‘‘vet-
eran’s employment’’ and inserting in lieu there-
of ‘‘veteran’s current employment’’; and
(3) in subsection (d), by striking out ‘‘under
this chapter’’ and inserting in lieu thereof ‘‘in ac-
cordance with the provisions of section 3120 of this
title’’.
(d) SCOPE OF SERVICES AND ASSISTANCE.—Section
3104 is amended—
(1) in subsection (a)—
(A) in paragraph (1)—
(i) by striking out ‘‘such veteran’s dis-
ability or disabilities cause’’ and inserting
in lieu thereof ‘‘the veteran has an employ-
ment handicap or’’; and
(ii) by inserting ‘‘reasonably’’ after
‘‘goal is’’;
(B) in paragraph (7)(A)—
(i) by striking out ‘‘(i)’’; and
(ii) by striking out ‘‘, and (ii)’’ and all
that follows through ‘‘such Act’’; and
(C) in paragraph (12), by striking out
‘‘For the most severely disabled veterans requir-
ing’’ and inserting in lieu thereof ‘‘For veterans
with the most severe service-connected disabil-
ities who require’’; and
(2) by striking out subsection (b) and redesig-
nating subsection (c) as subsection (b).
(e) DURATION OF REHABILITATION PROGRAMS.—
Paragraph (1) of section 3105(c) is amended by striking
out ‘‘veteran’s employment’’ and inserting in lieu thereof
‘‘veteran’s current employment’’.
(f) INITIAL AND EXTENDED EVALUATIONS; DETER-
MINATIONS REGARDING SERIOUS EMPLOYMENT HANDI-
CAP.—(1) Section 3106 is amended—
(A) in subsection (a), by striking out ‘‘described
in clause (i) or (ii) of section 3102(1)(A) of this
title’’ and inserting in lieu thereof ‘‘rated at 10 per-
cent or more’’;
(B) in subsection (b), by striking out ‘‘counsel-
ing in accordance with’’;
(C) in subsection (c), by striking out ‘‘with ex-
tended’’ and inserting in lieu thereof ‘‘with an ex-
tended’’; and
(D) by redesignating subsections (d) and (e) as
subsections (e) and (f), respectively, and inserting
after subsection (c) the following new subsection:
‘‘(d) In any case in which the Secretary has deter-
mined that a veteran has a serious employment handicap
and also determines, following such initial and any such
extended evaluation, that achievement of a vocational goal
currently is not reasonably feasible, the Secretary shall de-
termine whether the veteran is capable of participating in
a program of independent living services and assistance
under section 3120 of this title.’’.
(2) Chapter 31 is amended—
(A) in section 3107(c)(2), by striking out
‘‘3106(e)’’ and inserting in lieu thereof ‘‘3106(f)’’;
(B) in section 3109, by striking out ‘‘3106(d)’’
and inserting in lieu thereof ‘‘3106(e)’’;
(C) in section 3118(c), by striking out
‘‘3106(e)’’ and inserting in lieu thereof ‘‘3106(f)’’;
and
(D) in section 3120(b), by striking out
‘‘3106(d)’’ and inserting in lieu thereof ‘‘3106(d) or
(e)’’.
(g) ALLOWANCES.—Section 3108 is amended—
(1) in subsection (a)(2), by striking out ‘‘follow-
ing the conclusion of such pursuit’’ and inserting in
lieu thereof ‘‘while satisfactorily following a program
of employment services provided under section
3104(a)(5) of this title’’; and
(2) in subsection (f)(1)—
(A) in subparagraph (A)—
(i) by inserting ‘‘eligible for and’’
after ‘‘veteran is’’;
(ii) by striking out ‘‘chapter 30 or
34’’ and inserting in lieu thereof ‘‘chapter
30’’; and
(iii) by striking out ‘‘either chapter 30
or chapter 34’’ and inserting in lieu there-
of ‘‘chapter 30’’; and
(B) in subparagraph (B), by striking out
‘‘chapter 30 or 34’’ and inserting in lieu thereof
‘‘chapter 30’’.
(h) EMPLOYMENT ASSISTANCE.—Paragraph (1) of
section 3117(a) is amended by inserting ‘‘rated at 10 per-
cent or more’’ after ‘‘disability’’.
(i) PROGRAM OF INDEPENDENT LIVING SERVICES
AND ASSISTANCE.—Section 3120 is amended—
(1) in subsection (b), by striking out ‘‘service-
connected disability described in section 3102(1)(A)’’
and inserting in lieu thereof ‘‘serious employment
handicap resulting in substantial part from a serv-
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect on October 1, 1996.
SEC. 103. ENROLLMENT OF CERTAIN VEAP PARTICIPANTS
IN MONTGOMERY GI BILL.
(a) IN GENERAL.—Subchapter II of chapter 30 is
amended by inserting after section 3018B the following
new section:
‘‘§ 3018C. Opportunity for certain VEAP participants
to enroll
‘‘(a) Notwithstanding any other provision of law, an
individual who—
‘‘(1) is a participant on the date of the enact-
ment of the Veterans’ Education and Compensation
Benefits Amendments of 1996 in the educational
benefits program provided by chapter 32;
‘‘(2) is serving on active duty (excluding the pe-
riods referred to in section 3202(1)(C)) on such
date;
‘‘(3) before applying for benefits under this sec-
tion, has completed the requirements of a secondary
school diploma (or equivalency certificate) or has
successfully completed the equivalent of 12 semester
hours in a program of education leading to a stand-
ard college degree;
section 3222(c) of this title) made by such Secretary
to the Account on behalf of such individual.
‘‘(3) Any contribution made by the Secretary of De-
fense to the Post-Vietnam Era Veterans Education Ac-
count pursuant to subsection (c) of section 3222 of this
title on behalf of any individual referred to in paragraph
(1) of this subsection shall remain in such account to
make payments of benefits to such individual under sec-
tion 3015(f) of this title.
‘‘(d) The procedures provided in regulations referred
to in subsection (a) shall provide for notice of the require-
ments of subparagraphs (B), (C), and (D) of section
3011(a)(3) and of subparagraph (A) of section 3012(a)(3)
of this title. Receipt of such notice shall be acknowledged
in writing.’’.
(b) CONFORMING AMENDMENTS.—(1) The table of
sections at the beginning of chapter 30 is amended by in-
serting after the item relating to section 3018B the follow-
ing new item:
‘‘3018C. Opportunity for certain VEAP participants to enroll.’’.
(2) Subsection (d) of section 3013 is amended by
striking out ‘‘or 3018B’’ and inserting in lieu thereof ‘‘,
3018B, or 3018C’’.
(3) Subsection (f) of section 3015 is amended by in-
serting ‘‘, 3018B, or 3018C’’ after ‘‘section 3018A’’.
(4) Paragraph (3) of section 3035(b) is amended by
striking out ‘‘or 3018B’’ in the matter preceding subpara-
graph (A) and inserting in lieu thereof ‘‘, 3018B, or
3018C’’.
(c) 
TRANSFER
OF
EDUCATIONAL
ASSISTANCE
FUNDS.—(1) Subparagraph (B) of section 3232(b)(2) is
amended—
(A) by striking out ‘‘, for the purposes of sec-
tion 1322(a) of title 31,’’; and
(B) by striking out ‘‘as provided in such sec-
tion’’ and inserting in lieu thereof ‘‘to the Secretary
for payments for entitlement earned under sub-
chapter II of chapter 30’’.
(2) Paragraph (1) of section 3035(b) of such title is
amended by inserting before the period at the end the fol-
lowing: ‘‘and from transfers from the Post-Vietnam Era
Veterans 
Education 
Account 
pursuant 
to 
section
3232(b)(2)(B) of this title’’.
(3) Subsection (a) of section 1322 of title 31, United
States Code, is amended by striking out ‘‘(82)’’ and in-
serting in lieu thereof ‘‘(81)’’.
SEC. 104. MONTGOMERY GI BILL ELIGIBILITY FOR CERTAIN
ACTIVE DUTY MEMBERS OF ARMY AND AIR
NATIONAL GUARD.
(a) IN GENERAL.—Paragraph (7) of section 3002 is
amended by striking out ‘‘November 29, 1989’’ and insert-
ing in lieu thereof ‘‘June 30, 1985’’.
(b) APPLICATION.—(1) An individual may only be-
come eligible for benefits under chapter 30 of title 38,
United States Code, as a result of the amendment made
by subsection (a) by making an election to become entitled
to basic educational assistance under such chapter. The
election may only be made within the nine-month period
beginning on the date of the enactment of this Act in the
manner required by the Secretary of Defense.
(2) In the case of any individual making an election
under paragraph (1)—
(A) the basic pay of an individual who, while a
member of the Armed Forces, makes an election
under paragraph (1) shall be reduced (in a manner
determined by the Secretary of Defense) until the
total amount by which such basic pay is reduced is
$1,200; or
(B) to the extent that basic pay is not so re-
duced before the individual’s discharge or release
from active duty, the Secretary of Defense shall col-
lect from an individual who makes such an election
an amount equal to the difference between $1,200
and the total amount of reductions under subpara-
graph (A), which amount shall be paid into the
Treasury of the United States as miscellaneous re-
ceipts.
(3) In the case of any individual making an election
under paragraph (1), the 10-year period referred to in sec-
tion 3031 of such title shall begin on the later of—
(A) the date determined under such section
3031; or
(B) the date the election under paragraph (1)
of this subsection becomes effective.
SEC. 105. PERMANENT AUTHORITY FOR ALTERNATIVE
TEACHER CERTIFICATION PROGRAMS.
Subsection (c) of section 3452 is amended by striking
out ‘‘For the period ending on September 30, 1996, such’’
and inserting in lieu thereof ‘‘Such’’.
TITLE II—VETERANS’ BENEFITS
PROGRAMS
SEC. 201. EFFECTIVE DATE OF DISCONTINUANCE OF CER-
TAIN VETERANS’ BENEFITS BY REASON OF
DEATH OF RECIPIENT.
(a) DATE OF DISCONTINUANCE OF BENEFITS.—Sec-
tion 5112(b)(1) of title 38, United States Code, is amend-
ed to read as follows:
‘‘(1) by reason of—
‘‘(A) the marriage or remarriage of the
payee, shall be the last day of the month before
the month during which such marriage or re-
marriage occurs; and
‘‘(B) the death of the payee, shall be (i)
the last day of the month before the month dur-
ing which the death occurs, or (ii) in the case
of a payee who was in receipt of compensation
or pension and who has a surviving spouse who
is not entitled to have benefits computed under
section 5310 of this title for the month in which
the death occurs, the date on which the death
occurs;’’.
(b) PAYMENT OF BENEFIT FOR FINAL MONTH.—
Section 5112 of such title is further amended by adding
at the end the following new subsection:
‘‘(d) In the case of discontinuance of payment of com-
pensation or pension covered by subsection (b)(1)(B)(ii),
the payment for the final calendar month (or any portion
thereof) for which such benefit is payable shall (notwith-
standing any other provision of law) be payable to the sur-
viving spouse.’’.
(c) COMMENCEMENT
DATE
FOR
DIC.—Section
5110(d) of such title is amended by adding at the end
the following new paragraph:
‘‘(3) Notwithstanding paragraph (1), the effective
date of an award of dependency and indemnity compensa-
tion for which application is received within one year from
the date of death shall, in the case of a surviving spouse
who is not entitled to have benefits computed under sec-
tion 5310 of this title for the month in which the death
occurs, be the day following the date on which the death
occurred.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to the death of com-
pensation and pension recipients occurring after October
1, 1997.
SEC. 202. INCREASE IN PERIOD FOR WHICH ACCRUED BEN-
EFITS PAYABLE.
Subsection (a) of section 5121 is amended by striking
out ‘‘one year’’ in the matter preceding paragraph (1) and
inserting in lieu thereof ‘‘two years’’.
SEC. 203. INCREASE IN AUTOMOBILE ALLOWANCE.
(a) IN GENERAL.—Subsection (a) of section 3902 is
amended by striking out ‘‘$5,500’’ and inserting in lieu
thereof ‘‘$6,500’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to purchases of
automobiles and other conveyances on or after the date
of the enactment of this Act.
SECTION 
204. 
LEGAL 
ASSISTANCE 
FOR 
FINANCIALLY
NEEDY VETERANS IN CONNECTION WITH
COURT OF VETERANS APPEALS PROCEED-
INGS.
(a) IN GENERAL.—Subchapter III of chapter 72 is
amended by adding at the end the following new section:
‘‘§ 7287. Legal assistance for financially needy veter-
ans in proceedings before the Court
‘‘(a)(1) The Court of Veterans Appeals shall provide
funds in order to provide financial assistance by grant or
contract to legal assistance entities for purposes of pro-
grams described in subsection (b). Such funds shall be
provided from amounts transferred to the Court under
subsection (c)(1) or specifically appropriated to the Court
for the purposes of this section.
‘‘(2) The Court shall seek to provide funds for such
purpose through a nonprofit organization selected by it.
If the Court determines that there exists no nonprofit or-
ganization that would be an appropriate recipient of funds
under this section for the purposes referred to in para-
graph (1) and that it is consistent with the mission of the
Court, the Court shall provide financial assistance, by
grant or contract, directly to legal assistance entities for
purposes of permitting such entities to carry out programs
described in subsection (b).
‘‘(b)(1) A program referred to in subsection (a) is any
program under which a legal assistance entity uses finan-
cial assistance under this section to provide assistance or
carry out activities (including assistance, services, or ac-
tivities referred to in paragraph (3)) in order to ensure
that individuals described in paragraph (2) receive, with-
out charge, legal assistance in connection with decisions
to which section 7252(a) of this title may apply or with
other proceedings before the Court.
‘‘(2) An individual referred to in paragraph (1) is any
veteran or other person who—
‘‘(A) is or seeks to be a party to an action be-
fore the Court; and
‘‘(B) cannot, as determined by the Court or the
entity concerned, afford the costs of legal advice and
representation in connection with that action.
‘‘(3) Assistance, services, and activities under a pro-
gram described in this subsection may include the follow-
ing for individuals described in paragraph (2) in connec-
tion with proceedings before the Court:
‘‘(A) Financial assistance to defray the ex-
penses of legal advice or representation (other than
payment of attorney fees) by attorneys, clinical law
programs of law schools, and veterans service orga-
nizations.
‘‘(B) Case screening and referral services for
purposes of referring cases to pro bono attorneys
and such programs and organizations.
‘‘(C) Education and training of attorneys and
other legal personnel who may appear before the
Court by attorneys and such programs and organiza-
tions.
‘‘(D) Encouragement and facilitation of the pro
bono representation by attorneys and such programs
and organizations.
‘‘(4) A legal assistance entity that receives financial
assistance described in subsection (a) to carry out a pro-
gram under this subsection shall make such contributions
(including in-kind contributions) to the program as the
nonprofit organization or the Court, as the case may be,
shall specify when providing the assistance.
‘‘(5) A legal assistance entity that receives financial
assistance under subsection (a) to carry out a program
described in this subsection may not require or request
the payment of a charge or fee in connection with the pro-
gram by or on behalf of any individual described in para-
graph (2).
‘‘(c)(1)(A) From amounts appropriated to the De-
partment for each of fiscal years 1997 through 2003 for
the payment of compensation and pension, the Secretary
shall transfer to the Court the amount specified under
subparagraph (B) for each such fiscal year, and such
funds shall be available for use by the Court only in ac-
cordance with this section.
‘‘(B) The amount to be transferred to the Court
under subparagraph (A) for any fiscal year is $700,000
for fiscal year 1997 and the same amount for each suc-
ceeding fiscal year through fiscal year 2003 increased by
3 percent per year, reduced for any such fiscal year by
such amount as may otherwise be specifically appropriated
for the purposes of the program under this section for that
fiscal year.
‘‘(2) The Court shall provide funds available to it for
the purposes of the program under this section to a non-
profit organization described in subsection (a)(1). Such
funds shall be provided to such organization in advance
or by way of reimbursement, to cover some or all of the
administrative costs of the organization in providing finan-
cial assistance to legal assistance entities carrying out pro-
grams described in subsection (b).
‘‘(3) Funds shall be provided under this subsection
pursuant to a written agreement entered into by the Court
and the organization receiving the funds.
‘‘(d) A nonprofit organization may—
‘‘(1) accept funds, in advance or by way of re-
imbursement, from the Court under subsection
(a)(1) in order to provide the financial assistance re-
ferred to in that subsection;
‘‘(2) provide financial assistance by grant or
contract to legal assistance entities under this sec-
tion for purposes of permitting such entities to carry
out programs described in subsection (b);
‘‘(3) administer any such grant or contract; and
‘‘(4) accept funds, in advance or by way of re-
imbursement, from the Court under subsection (c) in
order to cover the administrative costs referred to in
that subsection.
‘‘(e)(1) Not later than February 1 of each year, the
Court shall submit to Congress a report on the funds and
financial assistance provided under this section during the
preceding fiscal year. Based on the information provided
the Court by entities receiving such funds and assistance,
each report shall—
‘‘(A) set forth the amount, if any, of funds pro-
vided to nonprofit organizations under paragraph