[Federal Register Volume 68, Number 113 (Thursday, June 12, 2003)]
[Rules and Regulations]
[Pages 35177-35181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-14860]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AL22


Accelerated Payments Under the Montgomery GI Bill--Active Duty 
Program

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document adopts as a final rule, with a minor non-
substantive change, a proposed rule amending the regulations governing 
various aspects of the educational assistance programs the Department 
of Veterans Affairs (VA) administers. The final rule implements some of 
the provisions of the Veterans Education and Benefits Expansion Act of 
2001. These provisions include accelerated payments to individuals 
under the Montgomery GI Bill--Active Duty program who are enrolled in 
approved training programs that lead to employment in high tech 
industries and whose charged tuition and fees exceed an amount equal to 
200 percent of the monthly rate of basic educational assistance 
allowance otherwise payable. This rule also amends the regulation 
defining educational institution to include certain private technology 
entities.

DATES: This final rule is effective June 12, 2003.
    Applicability Dates: The revisions to the various sections of the 
Code of Federal Regulations amended in this final rule are applied 
retroactively to October 1, 2002, to conform to statutory requirements.

FOR FURTHER INFORMATION CONTACT: Lynn M. Cossette, Education Advisor, 
Education Service (225C), Veterans Benefits Administration, Department 
of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, 
202-273-7294.

SUPPLEMENTARY INFORMATION: In a document published in the Federal 
Register on September 11, 2002 (67 FR 57543), VA published a proposed 
rule amending subparts D and K of 38 CFR part 21, regarding criteria 
for accelerated

[[Page 35178]]

payment of Montgomery GI Bill benefits as stated in the SUMMARY portion 
of this document.
    Interested persons were given 60 days to submit comments on the 
proposed rule and the proposed information collections. VA received one 
comment concerning the proposed rule. The comment came from a director 
of a company that has a financial interest in a construction trade 
school. He requested that VA include ``Construction Trades'' or 
``Construction Crafts'' in the list of industries an individual must 
intend to seek employment in to qualify for the accelerated payment 
provisions. The Veterans Education and Benefits Expansion Act of 2001 
(Public Law 107-103) allows an accelerated payment only for courses 
leading to employment in a ``high technology'' industry. Although the 
construction trade does offer jobs in technical fields, the 
construction trade industry did not appear as a ``high technology'' 
industry in the data we reviewed. The SUPPLEMENTARY INFORMATION section 
of the proposed rule shows the data we used in arriving at the list of 
``high technology'' industries. Because the law specifically states the 
training must lead to employment in a ``high technology'' industry, VA 
cannot offer accelerated payment for courses leading to employment in 
other industries. Thus, we did not amend the proposed rule based on the 
comment received.
    Based on the rationale set forth in the proposed rule and in this 
document, we are adopting the provisions of the proposed rule as a 
final rule, except as stated below.
    We amended proposed Sec.  21.7151(c) to include information 
inadvertently omitted. The amendment, located at Sec.  
21.7151(c)(1)(vi), applies when an individual who received an 
accelerated payment applies for a subsequent accelerated payment. This 
amendment states that an individual must make all certifications 
required in Sec.  21.7154(d) for any previous accelerated payment 
before we make a subsequent accelerated payment. The purpose of this 
amendment is to ensure proper payment of benefits by avoiding 
overpayments. Generally, Montgomery GI Bill payments are paid at the 
end of each month after students certify their attendance for that 
month. However, under the accelerated payment provisions individuals 
can receive the payment at the start of a course but their 
certification is not required until the end of the course. An 
individual could receive a payment of $6,000 at the start of the 
course. After receiving payment he or she might drop out of the course 
and therefore may not be entitled to the full $6,000 payment. The 
certification shows whether the individual completed the course or not. 
If he or she dropped the course, the certification will show the date 
last attended. VA uses the certification information to recalculate the 
payment and determine if an overpayment of benefits occurred. Before we 
release another accelerated payment, we must be certain that an 
overpayment has not occurred. If an overpayment has occurred, we would 
notify the individual of the amount owed VA and, if necessary reduce 
the subsequent accelerated payment by that amount.
    Additionally, paragraph (b) of Sec.  21.7140 has been changed to 
correct typographical errors that were published in the proposed rule 
on September 11, 2002, at 67 FR 57543. The first error was an incorrect 
cite to Sec.  21.7151(d), which does not exist. The second error was an 
incorrect cite to Sec.  21.7154(c), which should have read Sec.  
21.7154(d). This document corrects those errors.

Paperwork Reduction Act

    The final rule contains new reporting requirements. We described 
the new reporting requirements in the preamble of the proposed rule and 
provided a comment period. We did not receive any comments concerning 
the new reporting requirements. The Office of Management and Budget 
assigned control number 2900-0636 to the new reporting requirements.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private section, of 
$100 million or more in any given year. This final rule has no 
consequential effect on State, local, or tribal governments.

Executive Order 12866

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

Regulatory Flexibility Act

    The Secretary of Veterans Affairs 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, 5 U.S.C. 601-612. This final rule affects only 
individuals and will not directly affect small entities. Pursuant to 5 
U.S.C. 605(b), this rule, therefore, is exempt from the initial and 
final regulatory flexibility analysis requirements of sections 603 and 
604.

Catalog of Federal Domestic Assistance Program Numbers

    The Catalog of Federal Domestic Assistance numbers for the programs 
affected by this proposed rule are 64.117, 64.120, and 64.124.

List of Subjects in 38 CFR Part 21

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

    Approved: March 12, 2003.
Anthony J. Principi,
Secretary of Veterans Affairs.

0
For the reasons set out in the preamble, 38 CFR part 21 (subparts D and 
K) is amended to read as follows:

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart D--Administration of Educational Assistance Programs

0
1. The authority citation for part 21, subpart D continues to read as 
follows:

    Authority: 10 U.S.C. 2141 note, ch.1606; 38 U.S.C. 501(a), chs. 
30, 32, 34, 35, 36, unless otherwise noted.

0
2. Section 21.4138 is amended by:
0
a. In paragraph (f)(1)(v), removing ``basis; or'' and adding, in its 
place, ``basis;''.
0
b. In paragraph (f)(1)(vi), removing ``basis.'' and adding, in its 
place, ``basis; or''.
0
c. Adding paragraph (f)(1)(vii).
    The addition reads as follows:


Sec.  21.4138  Certifications and release of payments.

* * * * *
    (f) * * *
    (1) * * *
    (vii) The veteran receives an accelerated payment for the term, 
quarter, semester, or summer session preceding the interval.
* * * * *

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3. Section 21.4200 is amended by:
0
a. In paragraph (a)(4), removing ``section; or'', and adding, in its 
place, ``section;'';

[[Page 35179]]

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b. In paragraph (a)(5), removing ``program.'', and adding, in its 
place, ``program; or''; and
0
c. Adding paragraph (a)(6); and paragraphs (aa) through (dd) 
immediately after the authority citation at the end of paragraph (z).
0
d. Revising the authority citation at the end of paragraph (a).
    The revisions and additions read as follows:


Sec.  21.4200  Definitions.

    (a) * * *
    (6) Any private entity that offers, either directly or indirectly 
under an agreement with another entity, a course or courses to fulfill 
requirements for the attainment of a license or certificate generally 
recognized as necessary to obtain, maintain, or advance in employment 
in a profession or vocation in a high technology occupation.

(Authority: 38 U.S.C. 3452, 3501(a)(6), 3689(d))

* * * * *
    (aa) High technology industry: The term high technology industry 
includes the following industries:
    (1) Biotechnology;
    (2) Life science technologies;
    (3) Opto-electronics;
    (4) Computers and telecommunications;
    (5) Electronics;
    (6) Computer-integrated manufacturing;
    (7) Material design;
    (8) Aerospace;
    (9) Weapons;
    (10) Nuclear technology; and
    (11) Any other identified advanced technologies in the biennial 
Science and Engineering Indicators report published by the National 
Science Foundation.

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))


    (bb) Employment in a high technology industry. Employment in a high 
technology industry means employment in a high technology occupation 
specific to a high technology industry.
    (Authority: 38 U.S.C. 3014A)
    (cc) High technology occupation. The term high technology 
occupation means an occupation that leads to employment in a high 
technology industry. These occupations consist of:
    (1) Life and physical scientists;
    (2) Engineers;
    (3) Mathematical specialists;
    (4) Engineering and science technicians;
    (5) Computer specialists; and
    (6) Engineering, scientific, and computer managers.

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))


    (dd) Computer specialists. The term computer specialists includes 
the following occupations:
    (1) Database, system, and network administrators;
    (2) Database, system, and network developers;
    (3) Computer and network engineers;
    (4) Systems analysts;
    (5) Programmers;
    (6) Computer, database, and network support specialists;
    (7) All computer scientists;
    (8) Web site designers;
    (9) Computer and network service technicians;
    (10) Computer and network electronics specialists; and
    (11) All certified professionals, certified associates and 
certified technicians in the information technology field.

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))


* * * * *

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

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4. 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.


0
5. Section 21.7020 is amended by adding paragraphs (b)(47) through 
(b)(51) immediately following the authority citation at the end of the 
section.
    The additions read as follows:


Sec.  21.7020  Definitions.

* * * * *
    (b) * * *
    (47) High technology industry. The term high technology industry 
has the same meaning as provided in Sec.  21.4200(aa).

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))


    (48) Employment in a high technology industry. Employment in a high 
technology industry has the same meaning as provided in Sec.  
21.4200(bb).

(Authority: 38 U.S.C. 3014A)


    (49) High technology occupation. The term high technology 
occupation has the same meaning as provided in Sec.  21.4200(cc).

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))


    (50) Computer specialist. The term computer specialist has the same 
meaning as provided in Sec.  21.4200(dd).

(Authority: 38 U.S.C. 3014A, 3452(c), 3501(a)(6))


    (51) Accelerated payment. An accelerated payment is a lump sum 
payment of a maximum of 60 percent of the charged tuition and fees for 
an individual's enrollment for a term, quarter, or semester in an 
approved program of education leading to employment in a high 
technology industry. In the case of a program of education not offered 
on a term, quarter, or semester basis, the accelerated payment is a 
lump sum payment of a maximum of 60 percent of the charged tuition and 
fees for the entire such program.

(Authority: 38 U.S.C. 3014A)


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6. Section 21.7076 is amended by revising paragraphs (a), (b)(1) 
introductory text, and (b)(7) to read as follows:


Sec.  21.7076  Entitlement charges.

    (a) Overview. VA will make charges against entitlement as stated in 
this section.
    (1) Charges will be made against the entitlement the veteran or 
servicemember has to educational assistance under 38 U.S.C. chapter 30 
as the assistance is paid.
    (2) There will be a charge (for record purposes only) against the 
remaining entitlement, under 38 U.S.C. chapter 34, of an individual who 
is receiving the educational assistance under Sec.  21.7137 of this 
part. The record-purpose charges against entitlement under 38 U.S.C. 
chapter 34 will not count against the 48 months of total entitlement 
under both 38 U.S.C. chapters 30 and 34 to which the veteran or service 
member may be entitled. (See Sec.  21.4020(a) of this part).
    (3) Generally, VA will base those entitlement charges on the 
principle that a veteran or service member who trains full time for one 
day should be charged one day of entitlement. However, this general 
principle does not apply to a veteran or servicemember who:
    (i) Is pursuing correspondence training;
    (ii) Is pursuing flight training;
    (iii) Is pursuing an apprenticeship or other on-job training; or
    (iv) Is paid an accelerated payment.
    (4) The provisions of this section apply to:
    (i) Veterans and service members training under 38 U.S.C. chapter 
30; and
    (ii) Veterans training under 38 U.S.C. chapter 31 who make a valid 
election under Sec.  21.21 of this part to receive educational 
assistance equivalent to that paid to veterans under 38 U.S.C. chapter 
30.

(Authority: 38 U.S.C. 3013, 3014(A), 3014(b))


    (b) * * *

[[Page 35180]]

    (1) Except for those pursuing correspondence training, flight 
training, apprenticeship or other on-the-job training, those who are 
receiving tutorial assistance, and those who receive an accelerated 
payment, VA will make a charge against entitlement:
* * * * *
    (7) When a veteran or servicemember is paid an accelerated payment, 
VA will make a charge against entitlement for each accelerated payment 
made to him or her. The charge--
    (i) Will be made in months and decimal fractions of a month; and
    (ii) Will be determined by dividing the amount of the accelerated 
payment by an amount equal to the rate of basic educational assistance 
otherwise applicable to him or her for full-time institutional 
training. If the rate of basic educational assistance increases during 
the enrollment period, VA will charge entitlement for the periods 
covered by the initial rate and the increased rate, respectively.

(Authority: 38 U.S.C. 3014A)

* * * * *

0
7. Section 21.7140 is amended by:
0
a. Redesignating paragraphs (b) through (f) as paragraphs (c) through 
(g), respectively.
0
b. Adding a new paragraph (b).
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c. Revising newly redesignated paragraph (c)(1) introductory text.
0
The addition and revision read as follows:


Sec.  21.7140  Certifications and release of payments.

* * * * *
    (b) Accelerated payments. VA will apply the provisions of 
Sec. Sec.  21.7151(a), (c), and 21.7154(d) in making accelerated 
payments.
    (c) * * *
    (1) VA will pay educational assistance to a veteran or 
servicemember (other than one pursuing a program of apprenticeship or 
other on-job training, a correspondence course, one who qualifies for 
advance payment, one who qualifies for an accelerated payment, or one 
who qualifies for a lump sum payment) only after--
* * * * *


Sec.  21.7142  [Redesignated as Sec.  21.7143]

0
8. Section 21.7142 is redesignated as Sec.  21.7143.

0
9. A new Sec.  21.7142 is added to read as follows:


Sec.  21.7142  Accelerated payments.

    The accelerated payment will be the lesser of--
    (a) The amount equal to 60 percent of the charged tuition and fees 
for the term, quarter or semester (or the entire program of education 
for those programs not offered on a term, quarter, or semester basis), 
or
    (b) The aggregate amount of basic education assistance to which the 
individual remains entitled under this chapter at the time of the 
payment.

(Authority: 38 U.S.C. 3014A)


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10. Section 21.7151 is amended by:
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a. Revising the section heading.
0
b. Adding paragraph (c) and the information parenthetical immediately 
following the authority citation at the end of the section.
0
The revision and additions read as follows:


Sec.  21.7151  Advance payment and accelerated payment certifications.

* * * * *
    (c) Accelerated payments. (1) A veteran or servicemember is 
eligible for an accelerated payment only if--
    (i) The veteran or servicemember submits a signed statement to the 
school or to VA that states ``I request accelerated payment'';
    (ii) The veteran or servicemember is enrolled in a course or 
program of education or training beginning on or after October 1, 2002;
    (iii) The veteran is enrolled in an approved program as defined in 
Sec.  21.4200 (aa);
    (iv) The charged tuition and fees for the term, quarter, or 
semester (or entire program for those programs not offered on a term, 
quarter or semester basis) divided by the number of months (and 
fractions thereof) in the enrollment period, exceeds the amount equal 
to 200 percent of the monthly rate of basic educational assistance 
allowance otherwise payable under Sec. Sec.  21.7136 or 21.7137, as 
applicable;
    (v) The veteran or servicemember requesting the accelerated payment 
has not received an advance payment under Sec.  21.7140(a) for the same 
enrollment period; and
    (vi) The veteran or servicemember has submitted all certifications 
required under Sec.  21.7154(d) for any previous accelerated payment he 
or she received.
    (2) Except as provided in paragraph (c)(5) of this section, VA will 
make the accelerated payment directly to the educational institution, 
in the veteran's or servicemember's name, for delivery to the veteran 
or servicemember if:
    (i) The educational institution submits the enrollment 
certification required under Sec.  21.7152 before the actual start of 
the term, quarter or semester (or the start of the program for a 
program not offered on a term, quarter or semester basis); and
    (ii) The educational institution at which the veteran or 
servicemember is accepted or enrolled agrees to--
    (A) Provide for the safekeeping of the accelerated payment check 
before delivery to the veteran or servicemember;
    (B) Deliver the payment to the veteran or servicemember no earlier 
than the start of the term, quarter or semester (or the start of the 
program if the program is not offered on a term, quarter or semester 
basis);
    (C) Certify the enrollment of the veteran or servicemember and the 
amount of tuition and fees therefor; and
    (D) Certify the delivery of the accelerated payment to the veteran 
or servicemember.
    (3) VA will make accelerated payments directly to the veteran or 
servicemember if the enrollment certification required under Sec.  
21.7152 is submitted on or after the first day of the enrollment 
period. VA will electronically deposit the accelerated payment in the 
veteran's or servicemember's bank account unless--
    (i) The veteran or servicemember does not have a bank account; or
    (ii) The veteran or servicemember objects to payment by electronic 
funds transfer.
    (4) VA must make the accelerated payment no later than the last day 
of the month immediately following the month in which VA receives a 
certification from the educational institution regarding--
    (i) The veteran's or servicemember's enrollment in the program of 
education; and
    (ii) The amount of the charged tuition and fees for the term, 
quarter or semester (or for a program that is not offered on a term, 
quarter, or semester basis, the entire program).
    (5) The Director of the VA field station of jurisdiction may direct 
that accelerated payments not be made in advance of the first day of 
the enrollment period in the case of veterans or servicemembers 
attending an educational institution that demonstrates its inability to 
discharge its responsibilities for accelerated payments. In such a 
case, the accelerated payment will be made directly to the veteran or 
servicemember as provided in paragraph (a)(3).

(Authority: 38 U.S.C. 3014A)


(The Office of Management and Budget has approved the information 
collection requirements in this section under control number 2900-
0636.)

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11. Section 21.7154 is amended by:
0
a. Revising the authority citation at the end of paragraph (a) and the 
information parenthetical at the end of the section.

[[Page 35181]]

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b. Adding paragraph (a)(4) immediately following the authority citation 
at the end of paragraph (a)(3); and by adding paragraph (d) immediately 
following the authority citation at the end of the section.
0
The revision and additions read as follows:


Sec.  21.7154  Pursuit and absences.

* * * * *
    (a) * * *
    (4) Has received an accelerated payment for the enrollment period.

(Authority: 38 U.S.C. 3014A, 3034, 3684)

* * * * *
    (d) Additional requirements for individuals receiving an 
accelerated payment.
    (1) When an individual receives an accelerated payment as provided 
in Sec.  21.7151(c) and (d), he or she must certify the following 
information within 60 days of the end of the term, quarter or semester 
(or entire program when the program is not offered on a term, quarter, 
or semester basis) for which the accelerated payment was made:
    (i) The course or program was successfully completed, or if the 
course was not completed--
    (A) The date the veteran or servicemember last attended; and
    (B) An explanation why the course was not completed;
    (ii) If the veteran or servicemember increased or decreased his or 
her training time--
    (A) The date the veteran or servicemember increased or decreased 
training time; and
    (B) The number of credit/clock hours pursued before and after each 
such change in training time; and
    (iii) The accelerated payment was received and used.
    (2) VA will establish an overpayment equal to the amount of the 
accelerated payment if the required certifications in paragraph (c)(1) 
of this section are not timely received.
    (3) VA will determine the amount of the overpayment of benefits for 
courses not completed in the following manner--
    (i) For a veteran or servicemember who does not complete the full 
course, courses, or program for which the accelerated payment was made, 
and who does not substantiate mitigating circumstances for not 
completing, VA will establish an overpayment equal to the amount of the 
accelerated payment.
    (ii) For a veteran or servicemember who does not complete the full 
course, courses, or program for which the accelerated payment was made, 
but who substantiates mitigating circumstances for not completing, VA 
will prorate the amount of the accelerated payment to which he or she 
is entitled based on the number of days from the beginning date of the 
enrollment period through the date of last attendance. VA will 
determine the prorated amount by dividing the accelerated payment 
amount by the number of days in the enrollment period, and multiplying 
the result by the number of days from the beginning date of the 
enrollment period through the date of last attendance. The result of 
this calculation will equal the amount the individual is due. The 
difference between the accelerated payment and the amount the 
individual is due will be established as an overpayment.

(Authority: 38 U.S.C. 3014A(g))

* * * * *
(The Office of Management and Budget has approved the information 
collection requirements in this section under control numbers 2900-
0465 and 2900-0636.)
[FR Doc. 03-14860 Filed 6-11-03; 8:45 am]
BILLING CODE 8320-01-P