[Federal Register Volume 64, Number 193 (Wednesday, October 6, 1999)]
[Rules and Regulations]
[Pages 54206-54207]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26066]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AJ61


Returned and Canceled Checks

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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[[Page 54207]]

SUMMARY: This document amends the Department of Veterans Affairs (VA) 
adjudication regulations governing payment of the proceeds of checks 
which are returned and canceled following the death of the payee. This 
amendment is necessary to implement a statutory amendment that deleted 
the requirement for settlement by the General Accounting Office prior 
to payment of these proceeds to an estate. This document also makes 
nonsubstantive changes for purposes of clarity.

DATES: Effective Date: October 19, 1996.

FOR FURTHER INFORMATION CONTACT: Warren Jones, Consultant, Regulations 
Staff, Compensation and Pension Service, Veterans Benefits 
Administration, 810 Vermont Avenue, NW, Washington, DC 20420, telephone 
(202) 273-7167.

SUPPLEMENTARY INFORMATION: Section 5122 of title 38, United States 
Code, governs payment of the proceeds of VA benefit check(s) received 
by a payee but not negotiated before his or her death. VA has 
implemented section 5122 at 38 CFR 3.1003.
    Under section 5122, VA shall upon return and cancellation of an 
original benefit check pay the amount represented by the check in the 
same manner as it pays accrued benefits under 38 U.S.C. 5121. Section 
5121 requires VA to pay accrued benefits to the first living person(s) 
in the following order: (A) veteran's spouse; (B) veteran's children 
(in equal shares); and (C) veteran's dependent parents (in equal 
shares). Section 5121(a)(5) also provides that, ``[i]n all other 
cases,'' accrued benefits may be paid only as necessary to reimburse 
the person who bore the expenses of the payee's last sickness and 
burial. Section 5122 further provides that any amount not paid in this 
manner shall be paid to the estate of the deceased payee, unless the 
estate will escheat, i.e., revert to the state because there is no one 
eligible to inherit it.
    Prior to October 19, 1996, section 5122 required settlement by the 
General Accounting Office (GAO) before payment could be made to an 
estate. However, section 202(t) of the General Accounting Office Act of 
1996, Public Law 104-316, effective October 19, 1996, amended section 
5122 to delete reference to settlement by GAO. VA's Office of the 
General Counsel has advised that under section 5122, VA is now 
authorized to pay amounts due to the estates of deceased payees without 
reference to any other agency. We are, therefore, amending 38 CFR 
3.1003(b) to bring VA's regulation into conformity with the amended 
statute by removing reference to settlement by GAO.
    We also are amending Sec. 3.1003(b) to replace the legal term 
``escheat'' with the words ``revert to the state because there is no 
one eligible to inherit it.'' We believe that many will not understand 
the term ``escheat'' and have, therefore, chosen to replace it with 
words that express the same legal meaning but are easier for the 
general public to understand.
    The effective date of this amendment is October 19, 1996, the 
effective date of section 202(t) of Public Law 104-316.
    This final rule reflects statutory amendments and makes 
nonsubstantive changes. Accordingly, there is a basis for dispensing 
with prior notice and comment and delayed effective date provisions of 
5 U.S.C. 552 and 553.
    Because no notice of proposed rule making was required in 
connection with the adoption of this final rule, no regulatory 
flexibility analysis is required under the Regulatory Flexibility Act 
(5 U.S.C. 601-612). Even so, the Secretary hereby certifies that this 
final rule will not have a significant economic impact on a substantial 
number of small entities as they are defined in the Regulatory 
Flexibility Act.

    The Catalog of Federal Domestic Assistance program numbers are 
64.102, 64.104, 64.105, 64.109, and 64.110.

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Disability benefits, 
Health care, Pensions, Veterans, Vietnam.

    Approved: September 14, 1999.
Togo D. West, Jr.,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, 38 CFR part 3 is 
amended as follows:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and Dependency and Indemnity 
Compensation

    1. The authority citation for part 3, subpart A continues to read 
as follows:

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


Sec. 3.1003  [Amended]

    2. In Sec. 3.1003, paragraph (b) is amended by removing ``upon 
settlement by the General Accounting Office''; and by removing 
``escheat'' and adding, in its place, ``revert to the state because 
there is no one eligible to inherit it''.

[FR Doc. 99-26066 Filed 10-5-99; 8:45 am]
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