Veterans' Benefits Improvements Act of 1994: To Implement Provisions of Public Law 103-446

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 2 and 3

RIN 2900-AH36

Veterans' Benefits Improvements Act of 1994: To Implement

Provisions of Public Law 103-446

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends Department of Veterans Affairs (VA)

adjudication regulations to: Allow the election of death pension by

surviving spouses in receipt of dependency and indemnity compensation

(DIC); eliminate the requirement to pay certain benefits in Philippine

pesos; revise the treatment of certain claims after a renouncement of

benefits; and exclude from countable income in the pension and parents'

DIC programs certain income of Alaska natives. These changes are needed

to implement recently enacted legislation. The intended effect of these

changes is to bring the regulations into conformance with the new

statutory requirements.

EFFECTIVE DATE: These amendments are effective November 2, 1994, the

date that Public Law 103-446 was signed into law, except for the

provisions removing the requirement to pay certain benefits in

Philippine pesos (38 CFR 2.67a, 3.8, 3.100(b), 3.251(a)(3), and 3.1600)

which are effective January 1, 1995.

FOR FURTHER INFORMATION CONTACT: Paul Trowbridge, Consultant,

Regulations Staff (211B), Compensation and Pension Service, Veterans

Benefits Administration, 810 Vermont Avenue NW., Washington, DC 20420,

telephone (202) 273-7210.

SUPPLEMENTARY INFORMATION: On November 2, 1994, the Veterans' Benefits

Improvements Act of 1994 was signed into law. Formerly, no person in

receipt of DIC could elect to receive any other benefit based on the

same death. Section 111 of the Veterans' Benefits Improvements Act of

1994, Public Law 103-446, amended 38 U.S.C. 1317 to allow a surviving

spouse in receipt of DIC to elect death pension instead of such

compensation. VA is amending 38 CFR 3.5(c) and 3.702(d) to conform with

this new statutory provision. We have also made a nonsubstantive change

in Sec. 3.702(d) to clarify when an election of DIC is final.

Under the provisions of 38 U.S.C. 5306 any person can renounce a

benefit to which he or she is entitled. Until recently any new

application filed thereafter was treated as an original application.

Section 503 of Public Law 103-446 amended 38 U.S.C. 5306 by adding a

new subsection which provides that a new application for pension or

parents' DIC filed within one year after renouncement of that benefit

shall not be treated as an original application but rather that any

benefits due will be payable as if the renouncement has not occurred.

VA is amending 38 CFR 3.106 and 3.400(s) to conform to this new

statutory requirement.

All income is countable when VA determines entitlement to income-

based benefits unless specifically excluded by law. Section 506 of

Public Law 103-446 provides a new exception to countable income if

cash, stock, land, or other interests are received by an individual

from a Native Corporation under the Alaska Native Claims Settlement Act

(43 U.S.C. 1601 et seq.). VA is amending 38 CFR 3.261, 3.262 and 3.272

to conform to this new statutory requirement.

Section 507 of Public Law 103-446 amended 38 U.S.C. 107 to

eliminate the requirement that compensation, DIC, or burial allowance

based on certain Philippine service deemed not to be active service for

other purposes be paid in Philippine pesos. VA is amending 38 CFR 3.8,

3.251(a)(3), and 3.1600 to conform to this statutory revision. VA is

removing Secs. 2.67a and 3.100(b) because, in light of the statutory

amendment, calculation of the annual income limitation in Philippine

pesos is not required and a delegation of authority to the Chief

Benefits Director for that purpose is no longer necessary.

VA is issuing a final rule to make the above described amendments.

These [[Page 18355]] amendments are necessary to conform regulatory

provisions with Public Law 103-446. Because these amendments merely

restate statutory changes, publication as a proposal for public comment

is unnecessary.

Administrative Procedure Act: This final rule merely restates

statutory changes contained in Public Law 103-446. Accordingly,

pursuant to 5 U.S.C. 553, there is a basis for dispensing with prior

notice and comment on this final rule and dispensing with a 30-day

delay of its effective date.

Regulatory Flexibility Act: Because no notice of proposed

rulemaking 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 et seq.).

The Catalog of Federal Domestic Assistance program numbers are

64.101, 64.104, 64.105, 64.109, and 64.110.

List of Subjects

38 CFR Part 2

Authority delegations (Government agencies), Veterans Affairs

Department.

38 CFR Part 3

Administrative practice and procedure, Claims, Health care,

Individuals with disabilities, Pensions, Veterans.

Approved: March 31, 1995.

Jesse Brown,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR parts 2 and 3 are

amended as set forth below:

PART 2--DELEGATIONS OF AUTHORITY

1. The authority citation for part 2 continues to read as follows:

Authority: 38 U.S.C. 501, 512(a), unless otherwise noted.

Sec. 2.67a [Removed]

2. Section 2.67a is removed.

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. 3.5 [Amended]

2. In Sec. 3.5(c) change the period after ``Affairs'' to a comma

and add the following: ``except that, effective November 2, 1994, a

surviving spouse who is receiving dependency and indemnity compensation

may elect to receive death pension instead of such compensation.''

Sec. 3.8 [Amended]

3. In Sec. 3.8(b) and Sec. 3.8(c)(1) remove ``in Philippine pesos

equivalent to'' and add ``of'', in its place.

4. In Sec. 3.8(e) remove ``a peso basis'' and add, in its place,

``a $0.50 for each dollar authorized basis''. Remove ``payable in

pesos.'' and add, in its place, ``payable at the rate of $0.50 for each

dollar authorized.''

Sec. 3.100 [Amended]

5. Section 3.100(b) is removed. Redesignate Sec. 3.100(c) as

Sec. 3.100(b).

6. In Sec. 3.106, redesignate paragraphs (c) and (d) as paragraphs

(d) and (e), respectively. Add a new paragraph (c) to read as follows:

Sec. 3.106 Renouncement.

* * * * *

(c) Notwithstanding the provisions of paragraph (b) of this

section, if a new application for pension or parents' dependency and

indemnity compensation is filed within one year after the date that the

Department of Veterans Affairs receives a renouncement of that benefit,

such application shall not be treated as an original application and

benefits will be payable as if the renouncement had not occurred.

(Authority: 38 U.S.C. 5306(c))

Sec. 3.251 [Amended]

7. In Sec. 3.251(a)(3), remove ``computed'' and ``in Philippine

pesos equivalent''.

8. In Sec. 3.261, paragraph (a)(39) is added to read as follows:

Sec. 3.261 Character of income; exclusions and estates.

* * * * *

(a) Income

* * * * *

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Pension; old-law Pension; section 306

Dependency and (veterans, surviving (veterans, surviving

Income Dependency (parents) indemnitycompensation(parents) spouses and spouses and See--

children) children)

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(39) Cash, stock, land or other Excluded............ Excluded...................... Excluded............ Excluded............ Sec. 3.262(x).

interests received from a

Native Corporation under the

Alaska Native Claims Settlement

Act (43 U.S.C. 1601 et seq.).

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* * * * *

9. In Sec. 3.262, paragraph (x) and its authority citation are

added as follows:

Sec. 3.262 Evaluation of income.

* * * * *

(x) Alaska Native Claims Settlement Act. There shall be excluded

from income computation any cash (including cash dividends on stock

received from a Native Corporation) to the extent that it does not, in

the aggregate, exceed $2,000 per individual per annum; stock (including

stock issued or distributed by a Native Corporation as a dividend or

distribution on stock); a partnership interest; land or an interest in

land (including land or an interest in land received from a Native

Corporation as a dividend or distribution on stock); and an interest in

a settlement trust. (November 2, 1994)

(Authority: Sec. 506, Pub. L. 103-446)

10. In Sec. 3.272, paragraph (t) and its authority citation are

added as follows:

Sec. 3.272 Exclusions from income.

* * * * *

(t) Alaska Native Claims Settlement Act. Any receipt by an

individual of cash (including cash dividends on stock received from a

Native Corporation) to the extent that it does not, in the aggregate,

exceed $2,000 per individual per annum; stock (including stock issued

or distributed by a Native Corporation as a dividend or distribution on

stock); a partnership interest; land or an interest in land (including

land or an interest in land [[Page 18356]] received from a Native

Corporation as a dividend or distribution on stock); and an interest in

a settlement trust. (November 2, 1994)

(Authority: Sec. 506, Pub. L. 103-446)

Sec. 3.400 [Amended]

11. In Sec. 3.400(s), remove ``Date'' and add, in its place,

``Except as provided in Sec. 3.106(c), date''.

12. In Sec. 3.702, paragraph (d) is revised as follows:

Sec. 3.702 Dependency and indemnity compensation.

* * * * *

(d) Finality of election.

(1) Except as noted in paragraph (d)(2), an election to receive

dependency and indemnity compensation is final and the claimant may not

thereafter reelect death pension or compensation in that case. An

election is final when the payee (or the payee's fiduciary) has

negotiated one check for this benefit or when the payee dies after

filing an election but prior to negotiation of a check.

(2) Notwithstanding the provisions of paragraph (d)(1), effective

November 2, 1994, a surviving spouse who is receiving dependency and

indemnity compensation may elect to receive death pension instead of

such compensation.

(Authority: 38 U.S.C. 1317)

* * * * *

Sec. 3.1600 [Amended]

13. In Sec. 3.1600, paragraphs (a), (b), and (f), remove the words

``in Philippine pesos''.

[FR Doc. 95-8887 Filed 4-10-95; 8:45 am]

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