[Federal Register Volume 66, Number 248 (Thursday, December 27, 2001)]
[Rules and Regulations]
[Pages 66763-66769]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31828]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Chapter 1, Part 3

RIN 2900-AK65


Filipino Veterans' Benefits Improvements

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule.

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SUMMARY: This document amends Department of Veterans Affairs (VA) 
adjudication regulations to reflect changes made by the Departments of 
Veterans Affairs and Housing and Urban Development, and Independent 
Agencies Appropriations Act, 2001, which changed the rate of 
compensation payments to certain Filipino veterans residing in the 
United States and the Veterans Benefits and Health Care Improvement Act 
of 2000, which changed the amount of the burial benefit paid to the 
survivors of certain Filipino veterans who were residing in the United 
States at the times of their deaths.

DATES: Effective Date: December 27, 2001.
    Applicability Dates: The provisions of this interim final rule 
regarding compensation benefits, 38 CFR 3.42, 38 CFR 3.405, and 38 CFR 
3.505, apply beginning October 27, 2000. The provision of this interim 
final rule regarding burial benefits, 38 CFR 3.43, applies when the 
veteran has died after November 1, 2000.
    Comment Date: Comments must be received by VA on or before February 
25, 2002.

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; or fax comments to 
(202) 273-9289; or e-mail comments to [email protected]. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AK65.'' All 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: Bill Russo, Regulations Staff, 
Compensation and Pension Service (211A), Veterans Benefits 
Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW, 
Washington, DC 20420, telephone (202) 273-7211.

SUPPLEMENTARY INFORMATION: The Philippine Islands achieved independence 
from the United States in 1946. The Philippines was still a 
commonwealth of the United States when America entered World War II, 
and President Roosevelt ordered many Filipinos into service. In the 
years that followed, a variety of VA benefits were provided to 
Filipinos based on service in different military units. One long-
standing provision, 38 U.S.C. 107, gave certain Filipino veterans 
certain VA benefits at half the rate paid to United States veterans.

I. Compensation Benefits

    On October 27, 2000, the President signed into law the Departments 
of Veterans Affairs and Housing and Urban Development, and Independent 
Agencies Appropriations Act, 2001, Pub. L. 106-377, 114 Stat. 1441. 
Section 501 of Pub. L. 106-377 amended 38 U.S.C. 107 to provide full-
rate payments of benefits for Filipino veterans who had ``[s]ervice 
before July 1, 1946, in the organized military forces of the Government 
of the Commonwealth of the Philippines, while such forces were in the 
service of the Armed Forces of the United States under the military 
order of the President dated July 26, 1941, including among such 
military forces organized guerrilla forces under commanders appointed, 
designated, or subsequently recognized by the Commander in Chief, 
Southwest Pacific Area, or other competent authority in the Army of the 
United States. * * *'' In order to be entitled to full-dollar rate 
benefits, Pub. L. 106-377 requires that the veteran be ``residing in 
the United States'' and also be either a U.S. citizen or an alien 
lawfully admitted for permanent residence in the U.S. To implement this 
new law, this document adds new Secs. 3.42 and 3.43 to 38 CFR, 
redesignates Secs. 3.8 and 3.9 as Secs. 3.40 and 3.41, respectively, 
and amends Sec. 3.40.

Legislative Intent

    By increasing compensation to Filipino veterans residing in the 
U.S., Congress indicated its recognition that Filipino veterans 
residing in the U.S. have a higher cost of living than Filipino 
veterans living in the Philippines. However, Congress did not intend to 
create a windfall for Filipino veterans who do not actually face the 
higher cost of living in the U.S. In order to avoid that potential 
result, Congress required that Filipino veterans be residing in the 
U.S. and either be citizens of the U.S. or aliens lawfully admitted for 
permanent residence in the U.S.

Definitions

    Although Congress did not define the term ``residing in the United 
States'' in Pub. L. 106-377, we believe Congress intended that VA pay 
Filipino veterans the full-dollar rate for compensation only while they 
are actually residing in the U.S. We are therefore defining the term to 
require that the veteran's principal, actual dwelling place must be in 
the U.S. We have used simple, objective criteria for determining 
whether a veteran meets that definition: requiring that the veteran be 
present in the U.S. for at least the majority of each calendar year, 
beginning with the calendar year in which he or she applies for the 
full-dollar rate, and continuing in each year in which the veteran 
receives full-dollar rate benefits; and that the veteran not be absent 
from the U.S. for more than 60 consecutive days. If a veteran is absent 
from the U.S. for longer than these periods, it is reasonable to 
conclude that he or she is not residing in the U.S. In addition, this 
definition will be understandable to veterans and readily applied by VA 
employees. This rule will also allow veterans reasonable periods to 
travel outside of the U.S. for business or personal reasons without 
having their benefits reduced.
    Congress did not define ``United States'' in Pub. L. 106-377, but 
we believe that Congress intended to more adequately compensate 
Filipino veterans for the cost-of-living in the states, territories and 
possessions of the United States, the District of Columbia, and the 
Commonwealth of Puerto Rico. Therefore, this rule specifically 
references the states, territories and possessions of the United 
States, the District of Columbia, and the Commonwealth of Puerto Rico.
    Congress did not define the terms ``citizen'' of the U.S. and 
''lawfully admitted for permanent residence'' in Pub. L. 106-377. 
However, these terms are well defined by existing federal immigration 
and naturalization laws found in title 8, United States Code, and we 
believe that Congress intended for the terms to have the same meaning.

[[Page 66764]]

Therefore, we are defining ``citizen'' of the U.S. to mean any 
individual who acquires U.S. citizenship through birth in the 
territorial U.S., birth abroad as provided under title 8, United States 
Code, or through naturalization, and has not renounced his or her U.S. 
citizenship, or had such citizenship cancelled, revoked, or otherwise 
terminated. We are defining ``lawfully admitted for permanent 
residence'' to mean lawfully accorded the privilege of residing 
permanently in the United States as an immigrant in accordance with 
title 8, United States Code, such status not having changed.

Evidence of Eligibility

    VA has an obligation to ensure that veterans receiving full-dollar 
rate benefits meet the residency and citizenship/permanent-resident-
alien requirements in the law. As proof that the veteran is residing in 
the U.S., this rule requires satisfactory evidence (which may include, 
for example, a driver's license, lease agreement, or utility bills) 
that he or she is residing at a valid street address in the U.S. and 
receiving mail at that address. Furthermore, this rule provides that VA 
will not pay benefits at the full rate if the veteran's mailing address 
is a Post Office box, unless evidence from the U.S. Postal Service 
shows that it does not deliver mail to the veteran's street address. We 
believe these provisions will help ensure program integrity and reduce 
the possibility of fraud.
    This rule states that a valid original or copy of one of the 
following documents is required to prove that a veteran is a natural 
born citizen of the U.S.:
    A valid U.S. passport;
     A birth certificate showing that he or she was born in the 
U.S.; or
     A Report of Birth Abroad of a Citizen of the U.S. issued 
by a U.S. consulate abroad.
    We believe this is a reasonable requirement, since these documents 
are standardized, reliable means of proving an individual's U.S. 
citizenship. A U.S. passport is issued only to individuals who have 
provided acceptable proof of U.S. citizenship to the U.S. Department of 
State. One of the latter two documents listed above are generally 
issued at birth.
    The U.S. Immigration and Naturalization Service (INS) is the 
federal agency responsible for granting naturalized citizen status and 
keeping records on such status. Therefore, this rule states that only 
verification of that status by INS to VA will be sufficient proof for 
purposes of eligibility for full-dollar rate benefits.
    INS documents all aliens who receive permanent-resident-alien 
status in the U.S. Therefore, this rule requires that, in order to 
establish status as a permanent resident alien for purposes of 
receiving compensation at the full-dollar rate, only verification of 
that status by INS to VA will be sufficient proof for purposes of 
eligibility for full-dollar rate benefits.

Continued Eligibility

    We believe that Congress intended that Filipino veterans receive an 
increased rate of benefit payment due to the relatively high cost-of-
living in the U.S., if the U.S. is their principal, actual dwelling 
place. Therefore, we believe it is reasonable to establish limits on 
how long a veteran may be absent from the U.S. but yet continue to 
receive benefits at the full-dollar rate. Under this rule, in order to 
continue receiving benefits at the full-dollar rate under this section, 
a veteran must be physically present in the U.S. for at least 183 days 
of each calendar year in which he or she receives payments at the full-
dollar rate, and may not be absent from the U.S. for more than 60 
consecutive days at a time. If a veteran is absent from the U.S. for 
longer than these periods, it is reasonable to conclude that the U.S. 
is not his or her principal, actual dwelling place. However, if a 
veteran becomes eligible for full-dollar rate benefits on an initial 
basis, on or after July 1 of any calendar year, the 183-day rule will 
not apply during that calendar year. Further, VA will not consider a 
veteran to have been absent from the U.S. if he or she left and 
returned to the U.S. on the same date. To ensure program integrity, we 
have included in this rule a requirement that a veteran receiving full-
dollar rate benefits must notify VA within 30 days of leaving the U.S.
    Also to ensure program integrity, we are requiring that a Filipino 
veteran receiving benefits at the full-dollar rate must notify VA 
within 30 days if he or she loses his or her U.S. citizenship or 
lawful-permanent-resident-alien status. This rule also states that, 
when a veteran no longer meets the citizenship/ permanent-resident-
alien eligibility requirements, VA will reduce his or her payment to 
the rate of $0.50 for each dollar authorized under the law.
    These requirements will be understandable to veterans and readily 
applied by VA employees. This rule will also allow veterans reasonable 
periods to travel outside of the U.S. for business or personal reasons 
without having their benefits reduced.
    In addition, this rule states that a veteran receiving full-dollar 
rate benefits must provide VA with satisfactory evidence that he or she 
continues to meet the residency and citizenship/naturalization 
requirements, whenever VA requests such evidence. This rule 
incorporates 38 CFR 3.652, which contains VA's procedure for requesting 
proof of continued eligibility and reducing a benefits award if it is 
not submitted in a timely manner. Section 3.652 states that VA 
beneficiaries must provide VA with proof, when requested, that any or 
all of the eligibility factors which established entitlement continue 
to exist. This rule specifically restates that requirement and the 
requirement that VA advise the veteran at the time of the request that 
the proof must be furnished within 60 days and that failure to do so 
will result in the reduction of benefits under Sec. 3.652. We believe 
these concepts from Sec. 3.652 are fair, reasonable and efficient.
    To further ensure program integrity, a veteran receiving benefits 
at the full-dollar rate under this section must notify VA promptly if 
the veteran changes his or her address. For the same reason, if mail 
from VA to the veteran is returned as undeliverable, VA will attempt to 
verify a more current address. If this attempt at verification proves 
unsuccessful, VA will reduce his or her payment to the rate of $0.50 
for each dollar authorized under law. We believe this is necessary, 
since such returned mail may indicate that the veteran no longer 
resides at the address that was the basis for his or her entitlement to 
the full-dollar rate benefits.

Effective dates for initial eligibility

    We are adding a new Sec. 3.405 containing the effective date rules 
for the full-dollar rate benefit. Section 501(a) of Pub. L. 106-377 
states that the amendments allowing full-dollar rate benefits for 
certain Filipino veterans ``shall take effect on the date of the 
enactment of this Act and shall apply to benefits paid for months 
beginning on or after that date.'' In order to be consistent with 
congressional intent, for veterans who met the eligibility requirements 
in Sec. 3.42 on October 27, 2000, and maintained such eligibility 
continuously from that date to the date of an administrative 
determination of entitlement, the effective date of awards of 
compensation at the full-dollar rate will be October 27, 2000. For all 
other veterans, awards of compensation for Filipino veterans under 
Sec. 3.42 will be effective on the latest of the following dates, which 
are consistent with existing effective date rules:
     Date entitlement arose;
     Date on which the veteran first met the residency and 
citizenship/ permanent-resident-alien status requirements in Sec. 3.42, 
if VA receives

[[Page 66765]]

evidence of this within 1 year of that date;
     Effective date of the rating establishing service 
connection, provided VA receives evidence that the veteran meets the 
residency and citizenship/permanent-resident-alien status requirements 
in Sec. 3.42 within 1 year of notification of such rating action.
     Date the veteran returned to the U.S. after absence of 
more than 60 consecutive days.
     First day of the year following the year in which the 
veteran was absent from the U.S. for a total of 183 days or more, or 
the first day after that date that the veteran returns to the U.S.

Effective dates for reductions

    As stated above, Pub. L. 106-377 does not address the issue of 
effective dates for the new full-dollar rate payments, so we will apply 
existing effective date regulations. We believe this is consistent with 
congressional intent, and that application of existing rules will avoid 
unnecessarily complicating the adjudication process.
    This rule also gives VA authority to verify continued eligibility 
for full-dollar rate payments. If VA requests information for this 
purpose, and the veteran does not provide it within 60 days, the 
eligibility factor(s) for which certification was requested will, 
pursuant to Sec. 3.652(a), be considered to have ceased to exist as of 
the end of the month in which it was last shown by the evidence of 
record to have existed. Under Sec. 3.652(b), if the required 
certification is submitted to VA after benefits have been reduced, the 
benefits will be adjusted in accordance with the facts found. We 
believe the general rules provided in Sec. 3.652 are fair and easy to 
administer. Accordingly, we will rely on them in cases of increased 
rate payments under Pub. L. 106-377; this rule provides that reductions 
for failure to verify continued eligibility will be as provided in 
Sec. 3.652.
    Under this rule, when a veteran no longer meets the residence or 
citizenship/permanent-resident-alien eligibility requirements of Pub. 
L. 106-377, VA will reduce his or her payment to the rate of $0.50 for 
each dollar authorized under the law, effective on the date determined 
under new Sec. 3.505, discussed below. The rule also states that, if 
mail from VA to the veteran is returned as undeliverable, VA will 
reduce his or her payment to the rate of $0.50 for each dollar 
authorized under law, effective on the date determined under 
Sec. 3.505.
    We are adding a new Sec. 3.505 to state that if a veteran receiving 
benefits at the full-dollar rate under Sec. 3.42 is physically absent 
from the U.S. for a total of 183 days or more during any calendar year, 
VA will reduce the payment of any compensation to the rate of $0.50 for 
each dollar authorized under the law, effective on the 183rd day of 
absence from the U.S. In addition, it states that, if a veteran 
receiving benefits at the full-dollar rate under Sec. 3.42 is 
physically absent from the U.S. for more than 60 consecutive days, VA 
will reduce his or her compensation to the rate of $0.50 for each 
dollar authorized under the law, effective on the 61st day of the 
absence. It further states that a veteran receiving benefits at the 
full-dollar rate under Sec. 3.42 loses either U.S. citizenship or 
status as an alien lawfully admitted for permanent residence in the 
U.S., VA will reduce the compensation to the rate of $0.50 for each 
dollar authorized under the law, effective on the day he or she no 
longer satisfies one of these criteria. Finally, it also states that if 
mail to a veteran receiving benefits at the full-dollar rate under 
Sec. 3.42 is returned to VA as undeliverable, VA will reduce his or her 
payment to the rate of $0.50 for each dollar authorized under law, 
effective on the date of the last payment of compensation benefits.

Effective dates for restored eligibility

    Under this rule, if a veteran who stopped meeting the residency or 
citizenship/permanent-resident-alien requirements in Pub. L. 106-377 
again meets these requirements, and provides VA with proof of this, VA 
will restore the veteran's full-dollar rate benefits, effective the 
date the veteran meets the eligibility requirements in 3.42. However, 
such increased payments will be retroactive no more than one year prior 
to the date on which VA receives evidence that he or she meets the 
requirements again. These rules are consistent with VA's existing 
effective date regulations. If a veteran's payments are reduced based 
on an absence from the U.S. of 183 or more days during a calendar year, 
under no circumstances will VA resume payments at the full-dollar rate 
before the beginning of the following calendar year. This is consistent 
with what we believe is Congress' intent that these higher payments be 
paid only to veterans whose principal, actual dwelling place is in the 
U.S.

II. Burial Benefits

    On November 1, 2000, the President signed into law the Veterans 
Benefits and Health Care Improvement Act of 2000, Pub. L. 106-419, 114 
Stat. 1822. Section 332 of Pub. L. 106-419 authorizes VA to pay burial 
benefits to the survivors of certain Filipino veterans at the full-
dollar rate, instead of the half-dollar rate. It includes the same 
requirements as Pub. L. 106-377 regarding residency and citizenship and 
also requires that the deceased veteran must have been receiving 
compensation or have met the disability and income requirements for 
pension, on the date of his or her death. (Generally, Filipino veterans 
are not eligible for pension, see 38 U.S.C. 107.) Specifically, with 
regard to compensation and pension, the veteran must have been 
receiving compensation under chapter 11 of title 38 or, if the 
veteran's service had been deemed to be active military, naval, or air 
service, he or she would have been entitled to pension under 38 U.S.C. 
1521 without denial or discontinuance by reason of 38 U.S.C. 1522's net 
worth restriction. This rule adds a new 38 CFR 3.43 to implement this 
new law.

Definitions

    Although Congress did not define the term ``residing in the United 
States'' in Pub. L. 106-419, we believe that, when Congress enacted 
Section 332 of Pub. L. 106-419, it intended to more adequately 
compensate the survivors of Filipino veterans for the cost of burial in 
the U.S., which is higher than the cost of burial in the Philippines. 
We believe that, for the purposes of burial benefits, the relevant 
issues under this statute are whether the deceased veteran was residing 
in the U.S. on the date of death (regardless of how long he or she was 
residing in this country) and whether he or she met the citizenship or 
resident-alien requirements. We believe this standard is consistent 
with the governing statute, will not impose an undue evidentiary burden 
on claimants, and will be relatively simple for VA to administer. In 
addition, VA does not believe Congress intended to exclude from this 
added benefit the survivors of veterans who resided in the U.S. but 
happened to die while temporarily out of the U.S., and we have included 
a sentence to that effect in Sec. 3.43.
    Congress did not define ``United States,'' ``citizen of the United 
States,'' or ``lawfully admitted for permanent residence'' in Section 
332 of Pub. L. 106-419. For the reasons stated in the discussion of 
compensation benefits above, we are defining these terms in a similar 
manner, but with minor modifications applicable to burial benefits.

Evidence of Eligibility

    VA has an obligation to ensure that claimants receive full-dollar 
rate benefits only if the deceased veteran met the residency and 
citizenship/

[[Page 66766]]

permanent-resident-alien requirements in the law on the date of death. 
As proof that the deceased was residing in the U.S., we are requiring 
that a claimant provide VA with satisfactory evidence (which may 
include, for example, a driver's license, lease agreement, or utility 
bills) that the deceased was residing on the date of death at a valid 
street address in the U.S. We believe these provisions will help ensure 
program integrity and reduce the possibility of fraud.
    For the reasons stated in the discussion of compensation benefits 
above, this rule states that in claims for full-dollar-rate burial 
benefits in which the claimant asserts that the deceased veteran was a 
natural born citizen of the U.S., a valid original or copy of one of 
the following documents is required:
     A valid U.S. passport;
     A birth certificate showing that he or she was born in the 
U.S.; or
     A Report of Birth Abroad of a Citizen of the U.S. issued 
by a U.S. consulate abroad.
    For the reasons stated in the discussion of compensation benefits 
above, this rule states that only verification of naturalized citizen 
or permanent-resident-alien status by INS to VA will be sufficient 
proof of such status for purposes of eligibility for full-dollar rate 
benefits.
    We are making this document effective on an emergency basis because 
there is good cause under the provisions of 5 U.S.C. 553 to publish 
this interim final rule without regard to prior notice and comment and 
effective date provisions. Compliance with these provisions would be 
impracticable, unnecessary, and contrary to the public interest. This 
interim final rule is necessary to implement legislation that provides 
additional benefits to disabled Filipino veterans and their survivors, 
most of whom are elderly. Many of these Filipino veterans, and their 
survivors, have chronic health problems and financial hardships. 
Publication of this amendment as an interim final rule will enable VA 
to immediately provide to these beneficiaries the increased benefits 
they need in order to better cope with the cost of living in the United 
States.

Scope and Applicability

    On October 27, 2000, the President signed into law the Departments 
of Veterans Affairs and Housing and Urban Development, and Independent 
Agencies Appropriations Act, 2001, Pub. L. 106-377, 114 Stat. 1441. 
Section 501 of Pub. L. 106-377 amended 38 U.S.C. 107 to provide full-
rate payments of VA compensation benefits for certain Filipino veterans 
who had ``[s]ervice before July 1, 1946, in the organized military 
forces of the Government of the Commonwealth of the Philippines, while 
such forces were in the service of the Armed Forces of the United 
States under the military order of the President dated July 26, 1941, 
including among such military forces organized guerrilla forces under 
commanders appointed, designated, or subsequently recognized by the 
Commander in Chief, Southwest Pacific Area, or other competent 
authority in the Army of the United States. . . .'' Therefore, the 
provisions of this interim final rule regarding compensation benefits, 
38 CFR 3.42, 38 CFR 3.405, and 38 CFR 3.505, apply beginning October 
27, 2000.
    On November 1, 2000, the President signed into law the Veterans 
Benefits and Health Care Improvement Act of 2000, Pub. L. 106-419, 114 
Stat. 1822. Section 332 of Pub. L. 106-419 authorizes VA to pay burial 
benefits to the survivors of certain Filipino veterans at the full-
dollar rate (instead of the half-dollar rate), if the veteran died 
after the date of enactment. Therefore, the provision of this interim 
final rule regarding burial benefits, 38 CFR 3.43, applies when the 
veteran has died after November 1, 2000.

Paperwork Reduction Act

    Proposed 38 CFR 3.42 and 3.43 contain collections of information 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). 
Section 3.42 deals with the payment of compensation at the full dollar 
rate under the provisions of Pub. L. 106-377. Section 3.43 deals with 
the payment of burial benefits at the full dollar rate under the 
provisions of Pub. L. 106-419. Accordingly, under section 3507(d) of 
the Act, VA has submitted a copy of this rulemaking action to OMB for 
its review of the 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. The collection of information 
provisions in this document will not be effective until approved by the 
OMB and assigned an 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 mailed or 
hand-delivered 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-AK65.''
    Title: Rate of Compensation Payments for Filipino Veterans Residing 
in the United States.
    Summary of collection of information: In proposed 38 CFR 3.42, VA 
requests information from certain Filipinos ordered into service during 
World War II to determine their entitlement to VA compensation at the 
full-dollar rate.
    Description of the need for information and proposed use of 
information: The information is necessary to determine the entitlement 
of certain Filipinos ordered into service during World War II to VA 
compensation at the full-dollar rate.
    Description of likely respondents: Estimated number of respondents: 
800.
    Estimated frequency of responses: 1.
    Estimated total annual reporting and record keeping burden: 400 
hours.
    Estimated annual burden per collection: 30 minutes.
    Title: Payment Rate of Burial Benefits for certain Filipino 
veterans of WWII.
    Summary of collection of information: In proposed 38 CFR 3.43, VA 
requests information from survivors of certain Filipinos ordered into 
service during World War II to determine their entitlement to VA burial 
benefits at the full-dollar rate.
    Description of the need for information and proposed use of 
information: The information is necessary to determine the entitlement 
survivors of certain Filipinos ordered into service during World War II 
to VA burial benefits at the full-dollar rate.
    Description of likely respondents: Estimated number of respondents: 
250.
    Estimated frequency of responses: 1.
    Estimated total annual reporting and record keeping burden: 375 
hours.
    Estimated annual burden per collection: 90 minutes.
    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

[[Page 66767]]

     Minimizing the burden of the collections of information on 
those who are to respond, including responses 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 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 rule.

Executive Order 12866

    This document has been reviewed by the Office of Management and 
Budget Under Executive Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that this regulatory amendment will 
not have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601-612. The reason for this certification is that these 
amendments would not directly affect any small entities. Only VA 
beneficiaries could be directly affected. Therefore, under 5 U.S.C. 
605(b), these amendments are exempt from the initial and final 
regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604.

Catalog of Federal Domestic Assistance Program Numbers

    The Catalog of Federal Domestic Assistance program numbers are 
64.100, 64.101, 64.104, 64.105, 64.106, 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: October 5, 2001.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, 38 CFR part 3 is to be 
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.


Secs. 3.8 and 3.9  [Redesignated as Secs. 3.40 and 3.41]

    2. Sections 3.8 and 3.9 are redesignated as Secs. 3.40 and 3.41, 
respectively, under the undesignated center heading ``General''.


    3. In chapter 1, remove all cross-references to ``Sec. 3.8'' and 
``Sec. 3.9'' and add, in their place, ``Sec. 3.40'' and `` Sec. 3.41'' 
respectively.


    4. In newly redesignated Sec. 3.40, paragraph (c)(1) the last 
sentence of paragraph (c)(1) is revised to read as follows:


Sec. 3.40  Philippine and Insular Forces.

* * * * *
    (c) * * *
    (1) * * *Except as provided in Secs. 3.42 and 3.43, benefits based 
on service described in this paragraph are payable at a rate of $0.50 
for each dollar authorized under the law.
* * * * *


    5. A new Sec. 3.42 is added under ``General'' to read as follows:


Sec. 3.42  Compensation at the full-dollar rate for certain Filipino 
veterans residing in the United States.

    (a) Definitions. For purposes of this section:
    (1) United States (U.S.) means the states, territories and 
possessions of the United States; the District of Columbia, and the 
Commonwealth of Puerto Rico.
    (2) Residing in the U.S. means that an individual's principal, 
actual dwelling place is in the U.S. and that the individual meets the 
residency requirements of paragraph (c)(4) of this section.
    (3) Citizen of the U.S. means any individual who acquires U.S. 
citizenship through birth in the territorial U.S., birth abroad as 
provided under title 8, United States Code, or through naturalization, 
and has not renounced his or her U.S. citizenship, or had such 
citizenship cancelled, revoked, or otherwise terminated.
    (4) Lawfully admitted for permanent residence means that an 
individual has been lawfully accorded the privilege of residing 
permanently in the U.S. as an immigrant by the U.S. Immigration and 
Naturalization Service under title 8, United States Code, such status 
not having changed.
    (b) Eligibility requirements. Compensation is payable at the full-
dollar rate based on service described in Sec. 3.40(c) or (d) to a 
veteran who is residing in the United States (U.S.) and is either:
    (1) A citizen of the U.S., or
    (2) An alien lawfully admitted for permanent residence in the U.S.
    (c) Evidence of eligibility for full-dollar rate benefits. (1) A 
valid original or copy of one of the following documents is required to 
prove that that the veteran is a natural born citizen of the U.S.:
    (i) A valid U.S. passport;
    (ii) A birth certificate showing that he or she was born in the 
U.S.; or
    (iii) A Report of Birth Abroad of a Citizen of the U.S. issued by a 
U.S. consulate abroad.
    (2) Only verification by the U.S. Immigration and Naturalization 
Service to VA that a veteran is a naturalized citizen of the U.S. will 
be sufficient proof of such status.
    (3) Only verification by the U.S. Immigration and Naturalization 
Service to VA that a veteran is an alien lawfully admitted for 
permanent residence in the U.S. will be sufficient proof of such 
status.
    (4) VA will not pay benefits at the full-dollar rate under this 
section if the veteran's mailing address is a Post Office box, unless 
evidence from the U.S. Postal Service shows that it does not deliver 
mail to the veteran's street address. In order to pay benefits at the 
full-dollar rate, evidence (such as a driver's license, lease 
agreement, utility bills) must establish that the veteran is residing 
at a valid street address in the U.S. and receiving mail at that 
address.
    (d) Continued eligibility. (1) In order to continue receiving 
benefits at the full-dollar rate under this section, a veteran must be 
physically present in the U.S. for at least 183 days of each calendar 
year in which he or she receives payments at the full-dollar rate, and 
may not be absent from the U.S. for more than 60 consecutive days at a 
time. However, if a veteran becomes eligible for full-dollar rate 
benefits on an initial basis, on or after July 1 of any calendar year, 
the 183-day rule will not apply during that calendar year. VA will not 
consider a veteran to have been absent from the U.S. if he or she left 
and returned to the U.S. on the same date.
    (2) A veteran receiving benefits at the full-dollar rate under this 
section must notify VA within 30 days of leaving the U.S. or within 30 
days if he or she loses either his or her U.S. citizenship or lawful 
permanent resident alien status. When a veteran no longer meets the 
eligibility requirements of paragraph (a) of this section, VA will 
reduce his or her payment to the rate of $0.50 for each dollar 
authorized under the law, effective on the date determined under 
Sec. 3.505. If such veteran regains his or her U.S. citizenship or 
lawful

[[Page 66768]]

permanent resident alien status, VA will restore full-dollar rate 
benefits, effective the date the veteran meets the eligibility 
requirements in Sec. 3.42.
    (3) When requested to do so by VA, a veteran receiving benefits at 
the full-dollar rate under this section must verify that he or she 
continues to meet the residency and citizenship/permanent-resident-
alien status requirements of paragraph (b). VA will advise the veteran 
at the time of the request that the verification must be furnished 
within 60 days and that failure to do so will result in the reduction 
of benefits. If the veteran fails to furnish the evidence within 60 
days, VA will reduce his or her payment to the rate of $0.50 for each 
dollar authorized, as provided in Sec. 3.652.
    (4) A veteran receiving benefits at the full-dollar rate under this 
section must promptly notify VA of any change of his or her address. If 
mail from VA to the veteran is returned to VA by the U.S. Postal 
Service, VA will reduce his or her payment to the rate of $0.50 for 
each dollar authorized under law, effective on the date determined 
under Sec. 3.505.
    (e) Effective date for restored eligibility. In the case of a 
veteran receiving benefits at the full-dollar rate, if his or her 
payments are reduced to the rate of $0.50 for each dollar authorized 
under the law, VA will resume payments at the full-dollar rate, if 
otherwise in order, effective the first day of the month following the 
date on which he or she again meets the requirements. However, such 
increased payments will be retroactive no more than one year prior to 
the date on which VA receives evidence that he or she again meets the 
requirements. If payments are reduced based on an absence from the U.S. 
of 183 or more days during a calendar year, VA will not resume payments 
at the full-dollar rate before the first day of the following calendar 
year.

(Authority: 38 U.S.C. 107, 501(a))



    6. A new Sec. 3.43 is added to under ``General'' read as follows:


Sec. 3.43  Burial benefits at the full-dollar rate for certain Filipino 
veterans residing in the United States on the date of death.

    (a) Definitions. For purposes of this section:
    (1) United States (U.S.) means the states, territories and 
possessions of the United States, the District of Columbia, and the 
Commonwealth of Puerto Rico.
    (2) Residing in the U.S. means an individual's principal, actual 
dwelling place was in the U.S. When death occurs outside the U.S., VA 
will consider the deceased individual to have been residing in the U.S. 
on the date of death if the individual maintained his or her principal 
actual dwelling place in the U.S. until his or her most recent 
departure from the U.S., and he or she had been physically absent from 
the U.S. less than 61 consecutive days when he or she died.
    (3) Citizen of the U.S. means any individual who acquires U.S. 
citizenship through birth in the territorial U.S., birth abroad as 
provided under title 8, United States Code, or through naturalization, 
and has not renounced his or her U.S. citizenship, or had such 
citizenship cancelled, revoked, or otherwise terminated.
    (4) Lawfully admitted for permanent residence means that the 
individual was lawfully accorded the privilege of residing permanently 
in the U.S. as an immigrant by the U.S. Immigration and Naturalization 
Service, and on the date of death, still had this status.
    (b) Payment of burial benefits at the full-dollar rate. VA will pay 
burial benefits under chapter 23 of title 38, United States Code, at 
the full-dollar rate, based on service described in Sec. 3.40(c) or 
(d), when an individual who performed such service dies after November 
1, 2000, and was on the date of death:
    (1) Residing in the U.S.; and
    (2) Either--
    (i) A citizen of the U.S., or
    (ii) An alien lawfully admitted for permanent residence in the 
U.S.; and
    (3) Either--
    (i) Receiving compensation under chapter 11 of title 38, United 
States Code; or
    (ii) Would have satisfied the disability, income and net worth 
requirements of Sec. 3.3(a)(3) of this part and would have been 
eligible for pension if the veteran's service had been deemed to be 
active military, naval, or air service.
    (c) Evidence of eligibility. (1) In a claim for full-dollar rate 
burial payments based on the deceased veteran having been a natural 
born citizen of the U.S., a valid original or copy of one of the 
following documents is required:
    (i) A valid U.S. passport;
    (ii) A birth certificate showing that he or she was born in the 
U.S.; or
    (iii) A Report of Birth Abroad of a Citizen of the U.S. issued by a 
U.S. consulate abroad.
    (2) In a claim based on the deceased veteran having been a 
naturalized citizen of the U.S., only verification of that status by 
the U.S. Immigration and Naturalization Service to VA will be 
sufficient proof for purposes of eligibility for full-dollar rate 
benefits.
    (3) In a claim based on the deceased veteran having been an alien 
lawfully admitted for permanent residence in the U.S., only 
verification of that status by the U.S. Immigration and Naturalization 
Service to VA will be sufficient proof for purposes of eligibility for 
full-dollar rate benefits.
    (4) In a claim for burial benefits at the full-dollar rate, 
evidence (which may include, for example, a driver's license, lease 
agreement or utility bills) must establish that the deceased veteran 
was, on the date of death, residing at a valid street address in the 
U.S.

(Authority: 38 U.S.C. 107, 501(a))



    7. A new Sec. 3.405 is added under ``Effective Dates''to read as 
follows:


Sec. 3.405  Filipino veterans; benefits at the full-dollar rate.

    For veterans who met the eligibility requirements in Sec. 3.42 on 
October 27, 2000, and maintained such eligibility continuously from 
that date to the date of an administrative determination of 
entitlement, the effective date of awards of compensation at the full-
dollar rate will be October 27, 2000. For all other veterans, awards of 
compensation for Filipino veterans under Sec. 3.42 will be effective on 
the latest of the dates stated in this section:
    (a) Date entitlement arose;
    (b) Date on which the veteran first met the residency and 
citizenship/ permanent-resident-alien status requirements in Sec. 3.42, 
if VA receives evidence of this within 1 year of that date;
    (c) Effective date of the rating establishing service connection, 
provided VA receives evidence that the veteran meets the residency and 
citizenship/ permanent-resident-alien status requirements in Sec. 3.42 
within 1 year of notification of such rating action;
    (d) Date the veteran returned to the United States after absence of 
more than 60 consecutive days; or
    (e) First day of the year following the year in which the veteran 
was absent from the United States for a total of 183 days or more, or 
the first day after that date that the veteran returns to the United 
States.

(Authority: 38 U.S.C. 107)



    8. A new Sec. 3.505 is added under ``Reductions and 
Discontinuances'' to read as follows:


Sec. 3.505  Filipino veterans; benefits at the full-dollar rate.

    The effective date of discontinuance of compensation for Filipino 
veterans under Sec. 3.42 will be the earliest of the dates stated in 
this section. Where an award is reduced, the reduced rate will be 
payable the day following the date of discontinuance of the greater 
benefit.

[[Page 66769]]

    (a) If a veteran receiving benefits at the full-dollar rate under 
Sec. 3.42 is physically absent from the U.S. for a total of 183 days or 
more during any calendar year, VA will reduce compensation to the rate 
of $0.50 for each dollar authorized under the law, effective on the 
183rd day of absence from the U.S.
    (b) If a veteran receiving benefits at the full-dollar rate under 
Sec. 3.42 is physically absent from the U.S. for more than 60 
consecutive days, VA will reduce his or her compensation to the rate of 
$0.50 for each dollar authorized under the law, effective on the 61st 
day of the absence.
    (c) If a veteran receiving benefits at the full-dollar rate under 
Sec. 3.42 loses either U.S. citizenship or status as an alien lawfully 
admitted for permanent residence in the U.S., VA will reduce the 
compensation to the rate of $0.50 for each dollar authorized under the 
law, effective on the day he or she no longer satisfies one of these 
criteria.
    (d) If mail to a veteran receiving benefits at the full-dollar rate 
under Sec. 3.42 is returned to VA by the U.S. Postal Service, VA will 
reduce his or her payment to the rate of $0.50 for each dollar 
authorized under law, effective on the date of the last payment of 
compensation benefits.

(Authority: 38 U.S.C. 107)


[FR Doc. 01-31828 Filed 12-26-01; 8:45 am]
BILLING CODE 8320-01-P