Accelerated Payments Under the Montgomery GI Bill-Active Duty Program

AGENCY:

Department of Veterans Affairs.

ACTION:

Proposed rule.

SUMMARY:

This document proposes to amend the regulations governing various aspects of the educational assistance programs the Department of Veterans Affairs (VA) administers in order to implement 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 document also proposes to amend the regulation defining educational institution to include certain private technology entities.

DATES:

Comments must be received on or before November 12, 2002.

ADDRESSES:

Mail or hand-deliver written comments to: Director, Office of Regulations Management (02D), Department of Veterans Affairs, 810 Vermont Avenue, NW., Room 1154, Washington, DC 20420; or fax comments to (202) 273-9289; or e-mail comments to OGCRegulations@mail.va.gov. Comments should indicate that they are submitted in response to “RIN 2900-AL22”. All written comments received will be available for public inspection at the above address in the Office of Regulations Management, room 1158 between the hours of 8:00 a.m. to 4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT:

Lynn M. Cossette, Education Advisor, Education Service, Veterans Benefits Administration, 202-273-7294.

SUPPLEMENTARY INFORMATION:

The Veterans Education and Benefits Expansion Act of 2001 (Pub. L. 107-103) (the “Act”) contains provisions that allow the Department of Veterans Affairs (VA) to make accelerated payments under the Montgomery GI Bill—Active Duty program. Individuals can elect to receive an accelerated payment only when they are enrolled in an approved program of education that leads to employment in a high technology industry (as determined by the Secretary) and are charged tuition and fees for enrollment that exceed 200 percent of the monthly rate of basic educational assistance allowance otherwise payable.

Public Law 107-103 directs VA to prescribe regulations to carry out the provisions allowing accelerated payments. Since the term “high technology industry” is not defined in the statute, VA must define by regulation what industries qualify as high technology industries. This definition is included in this proposed rule. To arrive at its proposed definition of “high technology industry,” VA considered how other federal agencies determine what industries are considered high technology industries. For instance, in a June 1999 Monthly Labor Review Report, “High-technology employment; a broader view,” Dr. Daniel Hecker, an economist in the Office of Employment Projections, Bureau of Labor Statistics (BLS), considered an industry to be “high tech” if employment in both research and development and in all technology-oriented occupations accounted for a proportion of employment that was at least twice the average for all industries in the Occupational Employment Statistics survey. This resulted in 29 industries being identified as high technology industries. Ten of the 29 are considered to be high technology intensive industries because the ratios of employment in both research and development and in all technology oriented occupations is at least 5 times the average for all industries. We spoke to Dr. Hecker. He indicated that a report by the National Science Foundation (NSF), “Science and Engineering Indicators 2000,” includes a good list of 10 advanced technology industries that are high tech. He stated the NSF list is similar to the 10 high technology intensive industries identified in his report.

The NSF list of advanced technologies is based on the U.S. Bureau of the Census classification system for exports and imports of products that embody new or leading-edge technologies.

VA also considered the pertinent legislative history of Pub. L. 107-103 regarding accelerated MGIB payments. For instance, Chairman Rockefeller (D-WV), Senate Veterans Affairs Committee, original sponsor of the bill (S. 1088) enacted as Pub. L. 107-103, explained that the accelerated payment provision “would allow veterans to use their Montgomery GI Bill educational benefits to pay for short-term, high technology courses that would allow veterans to earn the credentials they need to gain entry to today's civilian-sector careers.” 147 Cong. Rec. S12,395 (daily ed. Dec. 5, 2001) (statement of Chairman Rockefeller). He further stated, “many veterans are pursuing forms of nontraditional training, such as short-term courses that lead to certification in a technical field. These courses often last just a few weeks or months, and can cost many of thousands of dollars.” Id.

The Committee report (S. Rep. No. 107-86) (2001) accompanying S. 1088 does not define which technology fields would be covered by the bill, but indicates that the bill authorizes the Secretary of Veterans Affairs to determine which courses are applicable. The report makes reference to Microsoft, Cisco, and other technical training. Additionally, it reflects that the Congressional Budget Office estimated the bill's costs based on short-term, high-cost, information technology courses.

Nevertheless, the Act itself does not contain language limiting accelerated payment to short-term high-cost information technology courses. Nor does it limit accelerated payment to nontraditional training, or to programs or courses that lead to certification in a technical field.

After considering all the above information, including especially Dr. Hecker's recommendation, we propose to use the listing in the Science and Engineering Indicators 2000 report to define the industries that will be considered “high-tech” for accelerated payment purposes. We believe this listing is the most accurate on leading-edge technologies. The list includes the following industries:

• Biotechnology;
• Life Science Technologies;
• Opto-Electronics;
• Computers and Telecommunications;
• Electronics, Computer-Integrated Manufacturing;
• Material Design;
• Aerospace;
• Weapons; and
• Nuclear Technology.

We further propose the list of industries that we define as high technology industries include any advanced technologies listed in future Science and Engineering Indicators reports published by the NSF. The National Science Board (the governing board of the National Science Foundation) is responsible, by law, to publish the Science and Engineering Indicators Report on a biennial basis. By using the list in this biennial report, VA will stay current in our definition of high technology industries.

Moreover, our proposed regulations define “employment in a high technology industry”. We are doing so because the Act states that, in order to be eligible for accelerated payment, the individual's program of education must lead to employment in a high technology industry. Of the numerous employment positions that may be found in a high technology industry, many are common to all industries, not just high technology industries. We believe, however, that the Act, by its terms in their context, reasonably should be read as limiting accelerated payments to pursuit of programs that lead to high-technology-specific occupations. Thus, to give meaning to the term “employment in a high technology industry” as used in the Act, we propose to define that term to mean employment in a high technology occupation specific to a high technology industry.

The Act further provides that VA will prescribe regulations to include the requirements, conditions, and methods for the request, issuance, delivery, certification of receipt and use, and recovery of overpayment of an accelerated payment.

In our proposed rule, we propose to make accelerated payments similar to the way we currently make advance payments under section 3680(d)(4) of title 38, United States Code. Using this method, payment is drawn in the student's name and VA mails the payment directly to the educational institution for delivery to the student. We propose that upon delivery of payment, the educational institution shall submit certification of delivery to the Secretary. VA will provide a form for this certification. We further propose that the educational institution shall return the accelerated payment to VA within 30 days if the payment is not delivered to the student.

If the educational institution does not agree to accept accelerated payments, we propose that the educational institution must wait until the student begins classes before it submits enrollment information to VA. In this instance, VA proposes to make payment directly to the student via electronic funds transfer (EFT) to the eligible individual's bank account. By using EFT, recipients will receive the accelerated payment sooner than by regular mail, with minimal risk of it being lost or stolen. If the student does not have a bank account or objects to payment by EFT, VA will issue a check to the student's mailing address.

In our proposed rule, we propose requiring that the individual requesting the accelerated payment must verify that payment was received and used, and that the course was (or courses were) completed. We propose collecting this information by a certification form to be submitted by the individual at the end of the term, quarter, semester, or the end of the enrollment period for those courses not on a term, quarter, or semester basis. The proposed rule requires that VA must receive the information within 60 days of the end of the enrollment period or VA will establish and collect an overpayment equal to the accelerated payment amount. We propose that no further education benefits will be paid until VA receives the required certification.

If an individual fails to complete the course(s) for which an accelerated payment has been made and received, and the individual does not have mitigating circumstances for such failure, the proposed rule provides that VA will establish an overpayment equal to the accelerated payment. If mitigating circumstances are shown, VA will determine the amount of education benefits to which the individual is entitled for the enrollment period by prorating the accelerated payment amount in proportion to the number of days from the beginning of the enrollment period through the date of last attendance. VA will establish an overpayment against the individual for the difference between the amount so determined and the accelerated payment amount. Mitigating circumstances, for this purpose, are circumstances beyond the individual's control that prevent him or her from continuously pursuing a program of education.

The Act also contains a provision that includes certain private technology entities in the definition of educational institution. This provision allows a private entity that offers, either directly or 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. The proposed rule defines “high technology” occupation for VA purposes.

To identify those occupations that VA defines as high technology occupations, we used the following reports:

• Bureau of Labor Statistics, Monthly Labor Review, June 1999, “High-technology employment; a broader view” by Dr. Daniel Hecker; and
• The Digital Work Force, June 1999, by the Office of Technology, U.S. Department of Commerce.

The Digital Work Force report identifies only information technology occupations while the BLS Monthly Labor Review report identifies all high technology occupations including those in information technology. Consequently, we propose to use the occupations BLS identified as high technology occupations. BLS defines high technology occupations as scientific, technical, and engineering occupations that include the following occupational groups and detailed occupations:

• Life and physical scientists;
• Engineers;
• Mathematical specialists;
• Engineering and science technicians;
• Computer specialists; and
• Engineering, scientific, and computer managers.

We further propose to define the term “computer specialists”. To do this we looked at various information technology programs approved for veterans' training, and courses currently offered by computer training centers. We also considered the core information technology occupations as listed in the Digital Workforce 2000 report by Office of Technology Policy. After reviewing this material, we propose to include the following occupations as computer specialists in our proposed definition:

• Database, system, and network administrators;
• Database, system, and network developers;
• Computer and network engineers;
• Systems analysts;
• Programmers;
• Computer, database, and network support specialists;
• Computer scientists;
• Web site designers;
• Computer and network service technicians;
• Computer and network electronics specialists; and
• Certified professionals, certified associates, and certified technicians in the information technology field.

Paperwork Reduction Act of 1995

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: Director, Office of Regulations Management (02D), Department of Veterans Affairs, 810 Vermont Avenue, NW., Room 1154, Washington, DC 20420. Comments should indicate that they are submitted in response to “RIN 2900-AL22.” Comments must be received on or before November 12, 2002.

The Office of Management and Budget (OMB) has determined that the proposed new paragraphs 38 CFR 21.7151(c)(1)(i), (c)(2)(ii), and 21.7154(d)(1) would constitute collections of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Accordingly, under section 3507(d) of the Act, VA has submitted a copy of this rulemaking action to OMB for review.

Title: Request for Accelerated Payment.

Summary of Collection of Information: The collection of information in § 21.7151(c)(1)(i) of this rulemaking proceeding is necessary to apply provisions of section 104 of Pub. L. 107-103. The Act provides that certain individuals may elect to receive an accelerated payment of the basic educational assistance allowance otherwise payable.

Description of need for information and proposed use of information: The information collection required in § 21.7151(c)(1)(i) is needed because the law requires an individual to elect an accelerated payment.

Description of likely respondents: Respondents are veterans and service members who wish to receive an accelerated payment of educational assistance under the MGIB for courses leading to employment in a high technology industry.

Estimated number of respondents: 34,633.

Estimated frequency of responses: When a claimant wishes to receive an accelerated payment of educational assistance, the claimant must file a statement with VA or the educational institution requesting an accelerated payment. Some claimants will file just one request for an accelerated payment while others will file several a year if they are enrolled in more than one term. Thus, we estimate 11/2 responses per respondent.

Estimated total annual reporting and record keeping burden: 2,597 hours of reporting burden. VA estimates there will be no record keeping burden.

Estimated average burden per respondent: .05 hour.

Title: Agreement with Educational Institution.

Summary of Collection of Information: The collection of information in § 21.7151(c)(2)(ii) of this rulemaking proceeding is necessary to apply provisions of section 104 of Pub. L. 107-103. The Act requires VA to prescribe regulations to carry out provisions of section 104 regarding the requirements, conditions, and methods for the request, issuance, deliver, certification of receipt and use of an accelerated payment.

Description of need for information and proposed use of information: Section 21.7151(c)(2)(ii) requires an educational institution to enter into an agreement with VA to receive accelerated payments on behalf of veterans and servicemembers. Generally educational assistance allowance is paid directly to a claimant. VA will release an accelerated payment in advance of the start date of the course if the payment goes directly to the educational institution. By signing the agreement required in § 21.7151(c)(2)(ii), the educational institution is agreeing to accept an accelerated payment on behalf of a veteran or servicemember and to deliver the payment to him or her. VA requires the agreement before we release an accelerated payment to an educational institution to ensure proper handling of payments.

Description of likely respondents: Respondents are educational institutions that request to receive an accelerated payment on behalf of a veteran or servicemember.

Estimated number of respondents: 3,454.

Estimated frequency of responses: Educational institutions would apply just once.

Estimated total annual reporting and record keeping burden: 172 hours of reporting burden. VA estimates that there will be no record keeping burden for respondents.

Estimated average burden per respondent: .05 hour.

Title: Certifications Required from Individuals Electing Accelerated Payments.

Summary of Collection of Information: The collection of information required in § 21.7154(d)(1) of this rulemaking is necessary to apply provisions of section 104 of Pub. L. 107-103. The law requires VA to prescribe regulations to carry out provisions of section 104 regarding the delivery, certification of receipt and use of accelerated payments.

Description of need for information and proposed use of information: The information collection required in § 21.7154(d)(1) is needed to collect information required by law. The information collected verifies that the proper individual received the accelerated payment, that the course was completed, and shows how the recipient used the payment. We are responsible for determining proper payment. Generally individuals are not eligible for payment if they do not complete a course. In addition to the above information, we need to know if and when a person withdraws from a course. We also need to know the reason they withdrew. This information is necessary to determine if an individual has been overpaid benefits. Most accelerated payments are paid before the completion of the course and represent payment for the entire course.

Description of likely respondents: Respondents are veterans and servicemembers who receive an accelerated payment under the MGIB program.

Estimated number of respondents: 34,633.

Estimated frequency of responses: Some individuals will file just one request for an accelerated payment. Those who enrolled in more than one term may request an accelerated payment for each term. We estimate 11/2 responses per respondent.

Estimated total annual reporting and record keeping burden: 4,329 hours.

Estimated average burden per respondent: .083 hour.

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.

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 proposed rule would have 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 proposed 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 proposed rule will directly affect only individuals and will not directly affect small entities. Pursuant to 5 U.S.C. 605(b), this proposed 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

For the reasons set out in the preamble, 38 CFR part 21 (subparts D and K) 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. 2141 note, ch. 1606; 38 U.S.C. 501(a), chs. 30, 32, 34, 35, 36, unless otherwise noted.

2. Section 21.4138 is amended by:

a. In paragraph (f)(1)(v), removing “basis. or” and adding, in its place, “basis;”.

b. In paragraph (f)(1)(vi), removing “basis.” and adding, in it place, “basis; or”.

c. Adding paragraph (f)(1)(vii).

The addition reads as follows:

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

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.

5. Section 21.7020 is amended by adding paragraphs (b)(47) through (b)(51) at the end of the section.

The additions read as follows: