[Federal Register Volume 63, Number 218 (Thursday, November 12, 1998)]
[Proposed Rules]
[Pages 63253-63258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30287]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

DEPARTMENT OF TRANSPORTATION

Coast Guard

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AI63


Eligibility Criteria for the Montgomery GI Bill--Active Duty and 
Other Miscellaneous Issues

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: This document proposes to amend the educational assistance and 
educational benefit regulations of the Department of Veterans Affairs 
(VA). The proposed amendments reflect statutory changes which set forth 
new eligibility criteria that will allow additional individuals to 
establish eligibility for educational assistance under the Montgomery 
GI Bill--Active Duty (MGIB); and also reflect statutory provisions 
concerning the approval of courses leading to alternative teacher 
certification. This document also would make changes for the purpose of 
clarification.

DATES: Comments must be received on or before January 11, 1999.

ADDRESSES: Mail or hand-deliver written comments to: Director, Office 
of Regulations Management (02D), Department of Veterans Affairs, 810 
Vermont Ave., NW, Room 1154, Washington, DC 20420. Comments should 
indicate that they are submitted in response to ``RIN 2900-AI63.'' All 
written comments will be available for public inspection at the above 
address in the Office of Regulations Management, Room 1158, between the 
hours of 8 a.m. and 4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: William G. Susling, Jr., Education 
Advisor, Education Service, Veterans Benefits Administration, 202-273-
7187.

SUPPLEMENTARY INFORMATION: This document proposes to amend subparts D, 
G, K, and L of 38 CFR part 21, which concern educational assistance 
under various educational programs administered by VA. The proposed 
amendments would implement provisions of the National Defense 
Authorization Act for Fiscal Year 1997 (Pub. L. 104-201) and various 
provisions of the Veterans' Benefits Improvements Act of 1996 (Pub. L. 
104-275).
    Formerly, officers could not participate in the Montgomery GI 
Bill--Active Duty (MGIB) if they were commissioned after December 31, 
1976, under a program of educational assistance under 10 U.S.C. 2107 
(Senior Reserve Officer Training Corps (SROTC) Scholarship Program). A 
provision of Pub. L. 104-201 states that this restriction no longer 
applies to an individual who enters active duty after September 30, 
1996, and received no more than $2,000 for each year of participation 
in the SROTC program of educational assistance. The regulations 
governing eligibility for the MGIB would be revised to reflect the new 
statutory provision.
    Individuals who entered active duty during the period from January 
1, 1977, through June 30, 1985, were given the opportunity to 
participate in the Post-Vietnam Era Veterans' Educational Assistance 
Program (VEAP). Provisions of Pub. L. 104-275 permitted certain VEAP 
participants on active duty to elect to participate in the MGIB 
instead. The military pay of an individual who made the election will 
be reduced by $1,200, or, if not so reduced, VA will collect the amount 
from the individual. The regulations governing eligibility for the MGIB 
would be revised to reflect the new statutory provisions, including our 
view that the applicable statutory provisions require that an 
individual who made an election to participate in

[[Page 63254]]

the MGIB would not become entitled until he or she has provided the 
Government the $1,200.
    Certain full-time, Active Guard Reserve (AGR) service and full-time 
National Guard service by a member of the Army National Guard or the 
Air National Guard in the member's status as a member of the National 
Guard of a State for the purpose of organizing, administering, 
recruiting, instructing, or training the National Guard qualifies as 
active duty for purposes of establishing eligibility to participate in 
the MGIB. Before the enactment of Pub. L. 104-275, the MGIB statute 
required that, in order to participate, the individual must have first 
performed qualifying active duty after November 29, 1989. A provision 
of Pub. L. 104-275 permitted certain members of the Army National Guard 
and the Air National Guard to elect to become entitled to the MGIB 
based on AGR or ADS service first performed after June 30, 1985. The 
regulations governing eligibility for the MGIB would be revised to 
reflect the new statutory provision.
    Since neither of the groups of individuals may receive benefits 
until the required $1,200 is collected, the regulations governing the 
effective dates of awards of educational assistance would be amended to 
establish effective dates for benefits based on elections to receive 
benefits and receipt of the $1,200 and of any other evidence necessary 
to establish a valid election.
    An individual is prohibited by statute (38 U.S.C. 3033(c)) from 
using the same period of service to establish eligibility for both the 
MGIB and the Montgomery GI Bill--Selected Reserve (MGIB-SR). Some of 
those individuals now eligible to elect to become entitled to the MGIB 
by having certain AGR and ADS service qualify as active duty, may have 
previously used that service to establish eligibility for the MGIB-SR. 
If such an individual received educational assistance under the MGIB-SR 
and now makes such an election, he or she would have no service to 
support the educational assistance previously received under the MGIB-
SR. Consequently, it is necessary for VA to terminate that assistance 
retroactively to the first date of training for which the individual 
received educational assistance. VA is proposing to revise 38 CFR 
21.7635 accordingly. The procedures for repayment of amounts paid under 
the MGIB-SR are set forth at 38 CFR 1.900 through 1.994.
    Beginning in November 1994, a pilot program was authorized by 
statute that required certain entities offering alternative teacher 
certification courses to be considered to be educational institutions. 
Since courses must be offered by educational institutions in order to 
be approved by State approving agencies for VA training, this provision 
allowed State approving agencies to approve these courses. This program 
was scheduled to expire on September 30, 1996. Pub. L. 104-275 made the 
pilot program permanent. Various regulations that indicated that the 
pilot program was scheduled to end on September 30, 1996, would be 
revised accordingly.
    This document would make other changes for the purpose of clarity.
    The restatements of statute and statutory interpretations contained 
in this proposed rule would be applied from the effective dates of the 
statutory provisions. The dates of application for the provisions 
covered by this document would be as follows:

October 1, 1996: 38 CFR 21.7020(b)(1), new Sec. 21.7042(f)(3) and newly 
redesignated Sec. 21.7042(f)(4)
October 9, 1996: Secs. 21.4135(b); 21.5021(d)(3); 21.5058(b); 
21.5130(d); 21.7020(b)(29); all changes to Sec. 21.7042 except new 
Sec. 21.7042(f)(3) and newly redesignated Sec. 21.7042(f)(4); 
Secs. 21.7045; 21.7050; 21.7131; 21.7520(b); and 21.7635

    The Department of Defense (DOD) is issuing this proposed rule 
jointly with VA insofar as it relates to VEAP. This program is funded 
by DOD and administered by VA. DOD, the Department of Transportation 
(Coast Guard), and VA are jointly issuing this proposed rule insofar as 
it relates to the Montgomery GI Bill--Selected Reserve. This program is 
funded by DOD and the Coast Guard, and is administered by VA. The 
remainder of this proposed rule is issued solely by VA.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), a 
collection of information is set forth in the proposed 38 CFR 
21.7131(l) and (m). Accordingly, under section 3507(d) of the Act, VA 
has submitted a copy of this rulemaking action to the Office of 
Management and Budget (OMB) for its review of the proposed collection 
of information.
    OMB assigns a control number to 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 collection 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 mailed or 
hand-delivered to the Director, Office of Regulations Management (02D), 
Department of Veterans Affairs, 810 Vermont Ave., NW, Room 1154, 
Washington, DC 20420. Comments should indicate that they are submitted 
in response to ``RIN 2900-AI63.''
    Title: Evidence Submitted to Validate an Election to Receive 
Educational Assistance under the Montgomery GI Bill--Active Duty.
    Summary of collection of information: The proposed Sec. 21.7131(l) 
and (m) would provide that a veteran may be required to submit evidence 
to validate an election to receive educational assistance under the 
MGIB and that the date of VA's receipt of the evidence may have an 
effect on the effective date of an award of educational assistance. The 
type of evidence submitted would be copies of records that most 
individuals would keep, such as a discharge certificate or a document 
that shows that $1,200 was withheld from military pay. There would be 
no recordkeeping requirement.
    Description of need for information and proposed use of 
information: VA and DOD conduct a computer match that allows VA access 
to data contained in the Defense Manpower Data Center (DMDC) about 
applicants for the MGIB. Those data are necessary to establish their 
eligibility for educational assistance. Normally, the information 
contained in DMDC records would be sufficient for VA to decide if an 
individual who claims to have become eligible for educational 
assistance under the proposed Sec. 21.7042(a)(7), 21.7042(b)(10), or 
21.7045(d) is, in fact, eligible. However, VA realizes that there may 
be an occasional error in entering the pertinent data into the computer 
records, so that it may appear that an individual is ineligible when he 
or she is actually eligible. The proposed Sec. 21.7131(l) and (m) 
recognize this by allowing for the possibility that an individual may 
have to submit additional evidence to show that he or she is eligible 
for educational assistance. VA will use the evidence submitted to 
validate an individual's eligibility for educational assistance under 
the MGIB.
    Description of likely respondents: Individuals seeking to establish 
eligibility for educational assistance under the MGIB.
    Estimated number of respondents: 56 per year.
    Estimated frequency of responses: Once per respondent.

[[Page 63255]]

    Estimated average burden per collection: 20 minutes. This is VA's 
estimate of the average time it would take for respondents to find or 
obtain, if necessary, this additional evidence, and to copy and mail 
this evidence to VA.
    Estimated total annual reporting and recordkeeping burden: 19 
hours.
    The Department considers comments by the public on proposed 
collections of information in--
     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;
     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;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     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 collection 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 submit comments to VA on the proposed rule.

Regulatory Flexibility Act

    The Secretary of Defense, Commandant of the Coast Guard, and the 
Secretary of Veterans Affairs hereby certify that the adoption of this 
proposed rule would not have a 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. Adoption of this proposed 
rule would not cause educational institutions to make changes in their 
activities and would have minuscule monetary effects, if any. Pursuant 
to 5 U.S.C. 605(b), this proposed rule, therefore, is exempt from the 
initial and final regulatory flexibility analyses requirements of 
Secs. 603 and 604.
    The Catalog of Federal Domestic Assistance numbers for programs 
affected by this proposed rule are 64.117, 64.120, and 64.124. This 
proposed rule would also affect the Montgomery GI Bill--Selected 
Reserve program, which has 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, Loan programs-education, Loan programs-veterans, 
Manpower training programs, Reporting and recordkeeping requirements, 
Schools, Travel and transportation expenses, Veterans, Vocational 
education, Vocational rehabilitation.

    Approved: June 12, 1998.
Togo D. West, Jr.,
Secretary of Veterans Affairs.
Normand G. Lezy,
Lieutenant General, USAF
Deputy Assistant Secretary (Military Personnel Policy), Department of 
Defense.

    Approved: July 28, 1998.
T. J. Barrett, RADM, USCG,
Assistant Commandant for Human Resources, Acting.

    For the reasons set forth above, 38 CFR part 21 (subparts D, G, K, 
and L) is proposed to be amended as set forth below.

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart D--Administration of Educational Assistance Programs

    1. The authority citation for part 21, subpart D continues to read 
as follows:

    Authority: 10 U.S.C. ch. 1606; 38 U.S.C. 501(a), chs. 30, 32, 
34, 35, 36, unless otherwise noted.

    2. In Sec. 21.4135, paragraph (b) is added to read as follows:


Sec. 21.4135  Discontinuance dates.

* * * * *
    (b) Election to receive educational assistance under the Montgomery 
GI Bill--Active Duty. If a veteran makes a valid election, as provided 
in Sec. 21.7045(d), to receive educational assistance under the 
Montgomery GI Bill--Active Duty in lieu of educational assistance under 
the Post-Vietnam Era Veterans' Educational Assistance Program, the 
discontinuance date of educational assistance under the Post-Vietnam 
Era Veterans' Educational Assistance Program shall be the date on which 
the election was made pursuant to procedures described in 
Sec. 21.7045(d)(2).

(Authority: 38 U.S.C. 3018C(c)(1))
* * * * *

Subpart G--Post-Vietnam Era Veterans' Educational Assistance Under 
38 U.S.C. Chapter 32

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

    Authority: 38 U.S.C. 501(a), ch. 32, unless otherwise noted.


Sec. 21.5021  [Amended]

    4. In Sec. 21.5021, paragraph (d)(3) is amended by removing 
``during the period beginning on November 2, 1994, and ending on 
September 30, 1996,''.
    5. In Sec. 21.5058, the authority citation for paragraph (b) is 
revised to read as follows:


Sec. 21.5058  Resumption of participation.

* * * * *
    (b) * * *

(Authority: 38 U.S.C. 3018A, 3018B, 3018C, 3202(l), 3222)

Sec. 21.5130  [Amended]

    6. In Sec. 21.5130, paragraph (b) is amended by removing ``(except 
paragraph (b))''.

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

    7. 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.

    8. In Sec. 21.7020, paragraph (b)(29)(iii) is amended by removing 
``during the period beginning on November 2, 1994, and ending on 
September 30, 1996,''; the authority citation for paragraph (b)(29) is 
revised; paragraph (b)(1)(iv) is added immediately after the authority 
citation for paragraph (b)(1)(iii); and paragraph (b)(44) is added 
immediately after the authority citation for paragraph (b)(43), to read 
as follows:


Sec. 21.7020  Definitions.

* * * * *
    (b) * * *
    (1) * * *
    (iv) When referring to individuals who, before June 30, 1985, had 
never served on active duty (as that term is defined by Sec. 3.6(b) of 
this chapter) and who made the election described in Sec. 21.7042(a)(7) 
or (b)(10), the term active duty when used in this subpart includes 
full-time National Guard duty under title 32, U.S. Code first performed 
after June 30, 1985, by a member of the Army National Guard of the 
United States or the Air National Guard of the United States for the 
purpose of organizing, administering, recruiting, instructing, or 
training the National Guard.


[[Page 63256]]


(Authority: 38 U.S.C. 3002(7); sec. 107, Pub. L. 104-275, 110 Stat. 
3329-3330)
* * * * *
    (29) * * *

(Authority: 38 U.S.C. 3002(8), 3452(c))
* * * * *
    (44) Date of election. The term date of election means:
    (i) For an election that must be made in the form and manner 
determined by the Secretary of Defense, the date determined by the 
Secretary of Defense; and
    (ii) For an election that must be submitted to VA, the date VA 
receives the written election.

(Authority: 38 U.S.C. 3018C(a)(5); sec. 107(b), Pub. L. 104-275, 110 
Stat. 3329-3330)

    9. In Sec. 21.7042, paragraph (f)(3) is redesignated as paragraph 
(f)(4); newly redesignated paragraph (f)(4) is amended by removing 
``Paragraph (f)(2) of this section does'' and adding, in its place, 
``Paragraphs (f)(2) and (f)(3) of this section do'', by removing 
``Coast'' and adding, in its place, ``United States Coast'', and by 
removing ``Reserve'' and adding, in its place, ``Senior Reserve''; 
paragraph (a)(7) is added immediately after the authority citation for 
paragraph (a)(6); paragraph (b)(10) is added immediately after the 
authority citation for paragraph (b)(9); new paragraph (f)(3) and 
paragraph (g)(5) are added; and paragraphs (f)(2), (g)(1), and (g)(4) 
are revised to read as follows:


Sec. 21.7042  Basic eligibility requirements.

* * * * *
    (a) * * *
    (7) An individual whose active duty meets the definition of that 
term found in Sec. 21.7020(b)(1)(iv), and who wishes to become entitled 
to basic educational assistance, must have elected to do so before July 
9, 1997. For an individual electing while on active duty, this election 
must have been made in the manner prescribed by the Secretary of 
Defense. For individuals not on active duty, this election must have 
been submitted in writing to VA.

(Authority: Sec. 107(b), Pub. L. 104-275, 110 Stat. 3329-3330)
* * * * *
    (b) * * *
    (10) An individual whose active duty meets the definition of that 
term found in Sec. 21.7020(b)(1)(iv), and who wishes to become entitled 
to basic educational assistance, must have elected to do so before July 
9, 1997. For an individual electing while on active duty, this election 
must have been made in the manner prescribed by the Secretary of 
Defense. For individuals not on active duty, this election must have 
been submitted in writing to VA.

(Authority: Sec. 107(b), Pub. L. 104-275, 110 Stat. 3329-3330)
* * * * *
    (f) * * *
    (2) Except as provided in paragraph (f)(4) of this section, an 
individual is not eligible for educational assistance under 38 U.S.C. 
chapter 30 if after December 31, 1976, he or she receives a commission 
as an officer in the Armed Forces upon graduation from:
    (i) The United States Military Academy;
    (ii) The United States Naval Academy;
    (iii) The United States Air Force Academy; or (iv) The United 
States Coast Guard Academy.
    (3) Except as provided in paragraph (f)(4) of this section, an 
individual who after December 31, 1976, receives a commission as an 
officer in the Armed Forces upon completion of a program of educational 
assistance under 10 U.S.C. 2107 is not eligible for educational 
assistance under 38 U.S.C. chapter 30, if the individual enters on 
active duty--
    (i) Before October 1, 1996; or
    (ii) After September 30, 1996, and while participating in that 
program received more than $2,000 for each year of participation.

(Authority: 38 U.S.C. 3011(c), 3012(d))
* * * * *
    (g) Reduction in basic pay. (1) Except as elsewhere provided in 
this paragraph, the basic pay of any individual described in paragraph 
(a), (b), or (c) of this section shall be reduced by $100 for each of 
the first 12 months that the individual is entitled to basic pay. If 
the individual does not serve 12 months, it shall be reduced by $100 
for each month that the individual is entitled to basic pay.
* * * * *
    (4) The individual who makes the election described in either 
paragraph (a)(7) or (b)(10) of this section shall have his or her basic 
pay reduced by $1,200 in a manner prescribed by the Secretary of 
Defense. To the extent that basic pay is not so reduced before the 
individual's discharge or release from active duty, VA will collect 
from the individual an amount equal to the difference between $1,200 
and the total amount of the reductions described in this paragraph. If 
the basic pay of an individual is not reduced and/or VA does not 
collect from the individual an amount equal to the difference between 
$1,200 and the total amount of the pay reductions, that individual is 
ineligible for educational assistance.

(Authority: Sec. 107(b)(3), Pub. L. 104-275, 110 Stat. 3329-3330)

    (5) If through administrative error, or other reason--
    (i) The basic pay of an individual described in paragraph (a)(1) 
through (a)(6), (b)(1) through (b)(9), (c), or (d) of this section is 
not reduced as provided in paragraph (g)(1) or (g)(2) of this section, 
the failure to make the reduction will have no effect on his or her 
eligibility, but will negate or reduce the individual's entitlement to 
educational assistance under 38 U.S.C. chapter 30 determined as 
provided in Sec. 21.7073 for an individual described in paragraph (c) 
of this section;
    (ii) The basic pay of an individual, described in paragraph (a)(7) 
or (b)(10) of this section, is not reduced as described in paragraph 
(g)(4) of this section and/or VA does not collect from the individual 
an amount equal to the difference between $1,200 and the total amount 
of the pay reductions described in paragraph (g)(4) of this section, 
that individual is ineligible for educational assistance. If the 
failure to reduce the individual's basic pay and/or the failure to 
collect from the individual was due to administrative error on the part 
of the Federal government or any of its employees, the individual may 
be considered for equitable relief depending on the facts and 
circumstances of the case. See Sec. 2.7 of this chapter.

(Authority: 38 U.S.C. 3002, 3011, 3012, 3018)

    10. In Sec. 21.7045, the heading and introductory text are revised; 
and paragraph (d) is added, to read as follows:


Sec. 21.7045  Eligibility based on involuntary separation, voluntary 
separation, or participation in the Post-Vietnam Era Veterans' 
Educational Assistance Program.

    An individual who fails to meet the eligibility requirements found 
in Sec. 21.7042 or Sec. 21.7044 nevertheless will be eligible for 
educational assistance as provided in this subpart if he or she meets 
the requirements of paragraphs (a) and (b) of this section; paragraphs 
(a) and (c) of this section; or paragraph (d) of this section.
* * * * *
    (d) Alternate eligibility requirements for participants in the 
Post-Vietnam Era Veterans' Educational Assistance Program.--(1) Making 
an election. To receive educational assistance under the authority of 
paragraph (d) of this section, a veteran or servicemember must--
    (i) Have elected to do so before October 9, 1997;
    (ii) Have been a participant (as that term is defined in 
Sec. 21.5021(e)) in the Post-Vietnam Era Veterans' Educational 
Assistance Program on October 9, 1996;

[[Page 63257]]

    (iii) Have been on active duty on October 9, 1996; and
    (iv) Receive an honorable discharge.
    (2) Election. The election to receive educational assistance 
payable under this subpart in lieu of educational assistance payable 
under the Post-Vietnam Era Veterans' Educational Assistance Program is 
irrevocable. The election must have been made before October 9, 1997, 
pursuant to procedures provided by the Secretary of the military 
department concerned in accordance with regulations prescribed by the 
Secretary of Defense or provided by the Secretary of Transportation 
with respect to the Coast Guard when it is not operating as a service 
in the Navy.
    (3) $1,200 collection. An individual who has made the election 
described in paragraph (d)(2) of this section shall have his or her 
basic pay reduced by $1,200 in a manner prescribed by the Secretary of 
Defense. To the extent that basic pay is not so reduced before the 
individual's discharge or release from active duty, VA will collect 
from the individual an amount equal to the difference between $1,200 
and the total amount of the reductions. Reduction in basic pay by 
$1,200 or collection of $1,200 is a precondition to establishing 
eligibility.
    (4) Educational requirement. Before applying for benefits that may 
be payable as the result of making a valid election, an individual must 
have--
    (i) Completed the requirements of a secondary school diploma (or 
equivalency certificate); or
    (ii) Successfully completed the equivalent of 12 semester hours in 
a program of education leading to a standard college degree.

(Authority: 38 U.S.C. 3018C)

    11. In Sec. 21.7050, paragraph (a)(1) is amended by removing 
``paragraph (b)'' and adding, in its place, ``paragraphs (b) and (c)'', 
and by removing ``of this part''; paragraphs (c) and (d) are 
redesignated as paragraphs (d) and (e), respectively; the authority 
citation for paragraph (b) is revised; and a new paragraph (c) is added 
to read as follows:


Sec. 21.7050  Ending dates of eligibility.

* * * * *
    (b) * * *

(Authority: 38 U.S.C. 3031(e))

    (c) Time limit for some members of the Army and Air National Guard. 
(1) If a veteran or servicemember establishes eligibility for the 
educational assistance payable under this subpart by making the 
election described in Sec. 21.7042(a)(7) or (b)(10), VA will not 
provide basic educational assistance or supplemental educational 
assistance to that veteran or servicemember beyond 10 years from the 
later of:
    (i) The date determined by paragraph (a) or (b) of this section, as 
appropriate; or
    (ii) The effective date of the election described in 
Sec. 21.7042(a)(7) or (b)(10), as appropriate.
    (2) The effective date of election is the date on which the 
election is made pursuant to the procedures described in 
Sec. 21.7045(d)(2).

(Authority: Sec. 107(b)(3), Pub. L. 104-275, 110 Stat. 3329-3330)
* * * * *
    12. In Sec. 21.7131, paragraphs (l) and (m) are added to read as 
follows:


Sec. 21.7131  Commencing dates.

* * * * *
    (l) Eligibility established under Sec. 21.7042(a)(7) or (b)(10). 
This paragraph must be used to establish the effective date of an award 
of educational assistance when the veteran or servicemember has 
established eligibility under either Sec. 21.7042(a)(7) or (b)(10). The 
commencing date of an award of educational assistance for such a 
veteran or servicemember is the latest of the following:
    (1) The commencing date as determined by paragraphs (a) through (c) 
and (f) through (j) of this section;
    (2) The date of election provided that--
    (i) The servicemember initiated the $1,200 reduction in basic pay 
required by Sec. 21.7042(g)(4) and the full $1,200 was collected 
through that pay reduction;
    (ii) Within one year of the date of election VA both collected from 
the veteran $1,200 or the difference between $1,200 and the amount 
collected through a reduction in the veteran's military pay, as 
provided in Sec. 21.7042(g)(4), and received from the veteran any other 
evidence necessary to establish a valid election; or
    (iii) VA received from the veteran $1,200 or the difference between 
$1,200 and the amount collected through a reduction in the veteran's 
military pay and any other evidence necessary to establish a valid 
election within one year of the date VA requested the money and/or the 
evidence.
    (3) If applicable, the date VA collected the difference between 
$1,200 and the amount by which the servicemember's military pay was 
reduced, if the provisions of paragraph (l)(2)(ii) or (l)(2)(iii) of 
this section are not met; or
    (4) If applicable, the date VA collected $1,200, if the provisions 
of paragraph (l)(2)(ii) or (l)(2)(iii) of this section are not met.

(Authority: 38 U.S.C. 5113; sec. 107, Pub. L. 104-275, 110 Stat. 
3329-3330)

    (m) Eligibility established under Sec. 21.7045(d). This paragraph 
must be used to establish the effective date of an award of educational 
assistance when the veteran or servicemember has established 
eligibility under Sec. 21.7045(d). The commencing date of an award of 
educational assistance for such a veteran or servicemember is the 
latest of the following:
    (1) The commencing date as determined by paragraphs (a) through (c) 
and (f) through (j) of this section;
    (2) The date of election provided that--
    (i) The servicemember initiated the $1,200 reduction in basic pay 
required by Sec. 21.7045(d)(3) and the full $1,200 was collected 
through that pay reduction;
    (ii) Within one year of the date of election VA both collected from 
the veteran $1,200 or the difference between $1,200 and the amount 
collected through a reduction in the veteran's military pay, as 
provided in Sec. 21.7045(d)(3), and received from the veteran any other 
evidence necessary to establish a valid election; or
    (iii) VA received from the veteran $1,200 or the difference between 
$1,200 and the amount collected through a reduction in the veteran's 
military pay and any other evidence necessary to establish a valid 
election within one year of the date VA requested the money and/or the 
evidence.
    (3) If applicable, the date VA collected the difference between 
$1,200 and the amount by which the servicemember's military pay was 
reduced, if the provisions of paragraph (m)(2)(ii) or (m)(2)(iii) of 
this section are not met; or
    (4) If applicable, the date VA collected $1,200, if the provisions 
of paragraph (m)(2)(ii) or (m)(2)(iii) of this section are not met.

(Authority: 38 U.S.C. 3018C(a), (b), 5113)
* * * * *

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

    13. The authority citation for part 21, subpart L continues to read 
as follows:

    Authority: 10 U.S.C. ch. 1606; 38 U.S.C. 501(a), chs. 30, 32, 
34, 35 36, unless otherwise noted.

    14. In Sec. 21.7520, paragraph (b)(23)(iv) is amended by removing 
``during the period beginning on November 2, 1994, and ending on 
September 30, 1996,''; and the authority citation for paragraph (b)(23) 
is revised to read as follows:


Sec. 21.7520  Definitions.

* * * * *

[[Page 63258]]

    (b) * * *
    (23) * * *

(Authority: 10 U.S.C. 16131(a), (c); 38 U.S.C. 3002, 3452)
* * * * *
    15. In Sec. 21.7635, paragraph (y) is redesignated as paragraph 
(z); and a new paragraph (y) is added, to read as follows:


Sec. 21.7635  Discontinuance dates.

* * * * *
    (y) Election to receive educational assistance under 38 U.S.C. 
chapter 30. VA shall terminate educational assistance effective the 
first date for which the reservist received educational assistance 
when--
    (1) The service that formed a basis for establishing eligibility 
for educational assistance under 10 U.S.C. chapter 1606 included a 
period of active duty as described in Sec. 21.7020(b)(1)(iv); and
    (2) The reservist subsequently made an election, as described in 
Sec. 21.7042(a)(7) or (b)(10), to become entitled to basic educational 
assistance under 38 U.S.C. chapter 30.

(Authority: Sec. 107, Pub. L. 104-275, 110 Stat. 3329-3330)
* * * * *
[FR Doc. 98-30287 Filed 11-10-98; 8:45 am]
BILLING CODE 8320-01-P