Veterans and Dependents Education: Topping-Up Tuition Assistance; Licensing and Certification Tests; Duty To Assist Education Claimants, 9196-9220 [06-1219]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 71, Number 35 (Wednesday, February 22, 2006)]
[Proposed Rules]
[Pages 9196-9220]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-1219]



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Part II





Department of Veterans Affairs





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38 CFR Part 21



Veterans and Dependents Education: Topping-Up Tuition Assistance; 
Licensing and Certification Tests; Duty To Assist Education Claimants; 
Proposed Rule

Federal Register / Vol. 71, No. 35 / Wednesday, February 22, 2006 / 
Proposed Rules

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AK80


Veterans and Dependents Education: Topping-Up Tuition Assistance; 
Licensing and Certification Tests; Duty To Assist Education Claimants

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the regulations governing 
various aspects of the education programs the Department of Veterans 
Affairs (VA) administers, in order to implement some provisions of the 
Veterans Benefits and Health Care Improvement Act of 2000, the Floyd D. 
Spence National Defense Authorization Act for Fiscal Year 2001, and the 
Veterans Claims Assistance Act of 2000 that affect those programs. 
Specifically, these statutory provisions include provisions for 
payment, under Survivors' and Dependents' Educational Assistance, the 
Post-Vietnam Era Veterans' Educational Assistance Program, and the 
Montgomery GI Bill--Active Duty, for the cost of taking tests for 
licensure or certification. They also include provisions for payment 
under the Montgomery GI Bill--Active Duty of the difference between the 
portion of tuition and expenses covered by tuition assistance programs 
administered by the various military departments and the actual charges 
made by educational institutions. In addition, this document proposes 
rules regarding the timing and the scope of assistance VA will provide 
to claimants under the education programs VA administers who file 
substantially complete applications for benefits, or who attempt to 
reopen previously denied claims. The proposed rule would make other 
changes in the education benefits regulations that are nonsubstantive 
changes for the purpose of clarity, technical changes, or restatements 
of statutory provisions.

DATES: Comments must be received on or before April 24, 2006.

ADDRESSES: Written comments may be submitted by: mail or hand-delivery 
to Director, Regulations Management (00REG1), Department of Veterans 
Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; fax to 
(202) 273-9026; or e-mail comments through https://www.Regulations.gov. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AK80.'' All comments received will be available for public 
inspection in the Office of Regulation Policy and Management, room 
1063B, between the hours of 8 a.m. and 4:30 p.m., Monday through Friday 
(except holidays). Please call (202) 273-9515 for an appointment. In 
addition, see the Paperwork Reduction Act of 1995 heading under the 
SUPPLEMENTARY INFORMATION section of this preamble regarding submission 
of comments on the information collection provisions.

FOR FURTHER INFORMATION CONTACT: Lynn M. Nelson, Education Advisor 
(225C), Education Service, Veterans Benefits Administration, Department 
of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, 
(202) 273-7187.

SUPPLEMENTARY INFORMATION: Section 3689 of title 38 U.S.C., as added by 
section 122 of the Veterans Benefits and Health Care Improvement Act of 
2000 (Pub. L. 106-419) and amended by section 308(d) of the Veterans 
Benefits Act of 2002 (Pub. L. 107-330), contains provisions that allow 
veterans and other eligible persons to receive educational assistance 
under Survivors' and Dependents' Educational Assistance (DEA), the 
Post-Vietnam Era Veterans' Educational Assistance Program (VEAP), and 
the Montgomery GI Bill--Active Duty (MGIB) to cover the costs of taking 
tests for licensing or certification. Section 3689 provides that both 
the tests and the organizations offering the tests must be approved for 
VA training before veterans or other eligible persons could be paid for 
the cost of these tests. Section 3689(a) further provides that the 
Secretary of Veterans Affairs may approve these tests and organizations 
or use the State approving agencies (SAAs) to carry out this 
responsibility. The proposed rule would reflect the Secretary's 
determination that the SAAs are fully capable of carrying out this 
responsibility for all tests and organizations except for those tests 
the Federal Government offers.
    This proposed rule would contain provisions that VA believes are 
necessary to properly administer the provisions of 38 U.S.C. 3689 for 
payment of the cost of taking tests for licensure or certification. For 
example, VA believes that a testing organization should have the right 
to seek a review of an SAA's adverse decision. Although this isn't 
stated in the law, it would be provided in proposed Sec.  21.4268(f). 
Under proposed Sec.  21.4268(f), if an organization or entity offering 
a test disagrees with a decision made by an SAA, the organization or 
entity may seek a review of the SAA's decision by VA's Director of 
Education Service. The organization or entity would request such review 
in writing to the SAA. Proposed Sec.  21.4268(f)(2) would require that 
the request must be received by the SAA within 90 days of the date of 
the notice that the test or organization was not approved. Proposed 
Sec.  21.4268(f)(3) would require that the review by the Director of 
Education Service would be based on the evidence of record and would 
not be de novo in character. Proposed Sec.  21.4268(f)(4) would provide 
that VA's Director of Education Service, or Under Secretary of 
Benefits, may seek the advice of the Professional Certification and 
Licensure Advisory Committee as to whether or not the SAA's decision 
should be reversed. The Professional Certification and Advisory 
Committee was established under 38 U.S.C. 3689(e) to advise the 
Secretary with respect to the requirements of organizations and 
entities offering licensing and certification tests to individuals 
eligible for VA educational assistance under chapters 30, 32, 34, or 35 
of title 38. Under proposed Sec.  21.4268(f)(5), the decision made by 
the Director of Education Service, or Under Secretary for Benefits, 
would be the final administrative decision. Such decision would not be 
subject to further administrative review.
    Similarly, section 3689 states that the veteran or eligible person 
should be paid, but doesn't state whether VA should make that payment 
before or after the individual takes the test. Under the proposed rule, 
this payment would be made as a reimbursement rather than an advance 
payment. VA believes this is necessary to simplify the process for 
applicants, to minimize the costs of administering these payments, and 
to reduce the possibility of overpayments. A veteran or eligible person 
may contact VA at 1-888-GIBill-1 (1-888-442-4551) to determine if the 
test he or she wants to take is approved for reimbursement.
    In addition, 38 U.S.C. 3689(d) provides that ``the organization or 
entity that offers such test is deemed to be an * * * ``educational 
institution'' * * * for [certain] purposes * * *.'' We propose to amend 
the definitions in various subparts of the education regulations in 38 
CFR part 21 where appropriate to carry out this provision.
    The payment of benefits under the MGIB is also affected by 
provisions in 38 U.S.C. 3014, as amended by section 1602 of the Floyd 
D. Spence National Defense Authorization Act for Fiscal Year 2001 (Pub. 
L. 106-398). Specifically, the proposed rule would reflect those 
provisions, under which VA can, at the election of the individual, pay 
educational assistance to meet the portion of the charges of an

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educational institution for education or training that are not paid by 
the Secretary of a military department under 10 U.S.C. 2007(a) or (c). 
Such payments by VA would be defined in the proposed rule as ``tuition 
assistance top-up.'' (The payments by the Secretary of a military 
department under 10 U.S.C. 2007(a) or (c) are commonly called ``tuition 
assistance''.) The proposed rule would make clear how VA makes these 
payments and makes charges for them against each individual's 
entitlement.
    The Veterans Claims Assistance Act of 2000 (Pub. L. 106-475) (VCAA) 
included provisions amending 38 U.S.C. 5102 and 5103 and adding new 
sections 38 U.S.C. 5100 and 5103A pertaining to VA's duty to assist 
claimants in obtaining evidence in support of claims for benefits. Upon 
receipt of a substantially complete application for benefits, VA's duty 
under the VCAA is to make reasonable efforts to help the claimant 
obtain the evidence necessary to substantiate the claim. This effort is 
commonly referred to as the duty to assist. VA will refrain from 
providing assistance in obtaining evidence for a claim if the 
substantially complete application for benefits indicates that there is 
no reasonable possibility that any assistance VA would provide to the 
claimant would substantiate the claim. VA will discontinue providing 
assistance in obtaining evidence for a claim if the evidence obtained 
indicates that there is no reasonable possibility that further 
assistance would substantiate the claim.
    Under 38 U.S.C. 5103A(e), VA is directed to prescribe regulations 
to carry out the provisions of section 5103A. In the Federal Register 
of August 29, 2001 (66 FR 45620), VA issued a final rule amending 38 
CFR part 3, subpart A, to carry out those and other provisions of the 
VCAA with respect to claims for benefits that are governed by 38 CFR 
part 3 (including compensation, pension, dependency and indemnity 
compensation, burial benefits, monetary benefits ancillary to those 
benefits, and special benefits) (66 FR at 45629). Section 701 of the 
Veterans Benefits Act of 2003 (Pub. L. 108-183) further amended 38 
U.S.C. 5102 and 5103.
    This proposed rule's provisions under the VCAA and the Veterans 
Benefits Act of 2003 would apply to the educational benefits programs 
administered by the Secretary (which currently are DEA, VEAP, MGIB, and 
the Montgomery GI Bill-Selected Reserve (MGIB-SR)) and would apply to 
claims filed on or after November 9, 2000.
    VA is proposing to define a substantially complete application in 
proposed Sec.  21.1029(g). In regard to an individual's first 
application for educational assistance administered by VA, we propose 
in (g)(1) to define a substantially complete application as an 
application that contains:
     The claimant's name;
     His or her relationship to the veteran, if applicable;
     Sufficient information for VA to verify the claimed 
service, if applicable;
     The benefit claimed;
     The program of education, if applicable; and
     The name of the educational institution the claimant 
intends to attend, if applicable.
    If an application is a subsequent application for educational 
assistance, and the claimant's relationship to the veteran (if 
applicable) and sufficient information for VA to identify the claimed 
service (if applicable) are already on record with VA, under proposed 
Sec.  21.1029(g)(2) a substantially complete application would be an 
application containing:
     The claimant's name;
     The benefit claimed;
     The program of education, if applicable; and
     The name of the educational institution the claimant 
intends to attend, if applicable.
    Although VA application forms for educational assistance request 
more information than is listed in the proposed definition, the 
information specified in proposed 38 CFR 21.1029(g) to make an 
application substantially complete is generally sufficient for VA to 
identify the benefit claimed, determine whether the claimant is 
potentially eligible for it, and identify, at least generally, the 
types of information or evidence that would be required to substantiate 
the claim. A substantially complete application will trigger VA's duty 
to assist. A complete application would necessarily be a substantially 
complete application for purposes of VA's assistance in developing the 
claim.
    In addition, this proposed rule contains restatements of statute 
and would make technical changes and nonsubstantive changes for the 
purpose of clarity in the regulations governing various aspects of the 
education programs VA administers.

Paperwork Reduction Act of 1995

    This proposed rule includes provisions constituting collections of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521) (``Act'') that would need approval by the Office of Management 
and Budget (OMB). Accordingly, under section 3507(d) of the Act, VA has 
submitted a copy of this rulemaking action to OMB for review.
    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.
    Comments on the collections of information contained in this 
proposed rule 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 sent by mail or hand delivery to the Director, Regulations 
Management (00REG1), Department of Veterans Affairs, 810 Vermont Ave., 
NW., Room 1068, Washington, DC 20420; fax to (202) 273-9026; or e-mail 
comments through www.Regulations.gov. Comments should indicate that 
they are submitted in response to ``RIN 2900-AK80.''
    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.
    Under this heading, Paperwork Reduction Act of 1995, the 
collections of information referred to in this paragraph are described, 
under their proposed titles. The proposed amendments in 38 CFR 
21.1030(b), 21.1030(c), 21.4209, 21.4250(b), 21.4252(h), 21.4258, 
21.4259, 21.4268, and 21.7140 contain collections of information under 
the Act for which we are requesting approval by OMB. For the 
collections of information in three of these sections as proposed to be 
amended, Sec. Sec.  21.4250, 21.4258, and 21.4259, SAAs are the 
respondents, as SAAs also are for a related collection of information 
in 38 CFR 21.4154, which

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is currently approved under OMB control number 2900-0051. For 
administrative convenience, we are requesting OMB to approve under that 
OMB control number the information collections relating to those four 
sections of the regulations (see ``State Approving Agency Reports and 
Notices, 38 CFR 21.4154, 21.4250(b), 21.4258, and 21.4259'' and the 
proposed information collection approval parentheticals at the end of 
each of those sections in the proposed rule).
    This proposed rule would also amend some provisions containing 
other collections of information that have existing approval by OMB. In 
particular, the collections of information in proposed 38 CFR 
21.1030(a)(1), (b)(1), and (c)(1) are approved under OMB control 
numbers 2900-0154 (Application for VA Education Benefits) and 2900-0098 
(Application for Survivors' and Dependents' Educational Assistance 
(Under Chapter 35, Title 38 U.S.C.)). The collections of information in 
proposed 38 CFR 21.1030(a)(2) are approved under OMB control numbers 
2900-0074 (Request for Change of Program or Place of Training (For 
Veterans, Servicepersons, & Members of the Selected Reserve)) and 2900-
0099 (Request for Change of Program or Place of Training Survivors' and 
Dependents' Educational Assistance (Under Provisions of Chapter 35, 
Title 38 U.S.C.)).
    The proposed rule would reflect, in the information collection 
approval parenthetical at the end of Sec.  21.4252, Courses precluded; 
erroneous, deceptive, or misleading practices, as proposed to be 
amended, an OMB control number for the information collection in Sec.  
21.4252(h) as proposed to be amended, for which we are requesting OMB 
approval, and the OMB control numbers for the currently approved 
collections of information in Sec.  21.4252(j) and (l), which 
paragraphs and collections of information this document does not 
propose to amend. The collections of information in current Sec.  
21.4252(j) and (l) are approved under OMB control number 2900-0156 
(Notice of Change in Student Status) and OMB control number 2900-0073 
(Enrollment Certification), respectively. No changes would be made by 
this proposed rule to the currently approved collections of information 
in Sec.  21.4252. The collections of information in Sec.  21.5133, 
Certifications and release of payments, and in Sec.  21.7152, 
Certification of enrollment, are approved under OMB control number 
2900-0465 (Student Verification of Enrollment) and OMB control number 
2900-0073, respectively. Although this document proposes to amend 
certain provisions of Sec. Sec.  21.5133 and 21.7152, including by 
adding descriptions of circumstances in which the respective section's 
collection of information would not apply, those amendments would not 
change the collections of information by VA under Sec. Sec.  21.5133 
and 21.7152.
    We are proposing in Sec.  21.7131 to make the technical correction 
of removing the information collection approval parenthetical. The 
approval under the OMB control number it contains, 2900-0607, was 
discontinued at VA's request, since VA no longer had a need to conduct 
that information collection.
    This proposed rule includes information collection approval 
parentheticals at the end of certain sections. They display currently-
approved OMB control numbers (OMB's approval of which is either current 
for information collections under those sections or requested in 
relation to this rulemaking to be modified to include those sections as 
proposed to be amended) and OMB control numbers shown as 2900-XXXX for 
information collections for which we are requesting newly-approved OMB 
control numbers in this rulemaking. We are also proposing in Sec.  
21.4154 to revise, with a technical change for the purpose of 
clarification, the information collection approval parenthetical in 
which we display OMB control number 2900-0051.
    Title: Request for Reimbursement of Licensing or Certification Test 
Fee; 38 CFR 21.1030(b), 21.7140(c)(4).
    Summary of collection of information: The collection of information 
in proposed Sec. Sec.  21.1030(b) and 21.7140(c)(4) is necessary to 
apply 38 U.S.C. 3689 and 5101(a) to claims for educational assistance 
for licensing or certification tests under the various educational 
assistance programs VA administers. It would require that an individual 
must file a claim for educational assistance under the laws VA 
administers in order for VA to determine basic eligibility and to pay 
educational assistance to that individual for reimbursement of the cost 
of any licensing or certification test.
    Description of need for information and proposed use of 
information: The information collection in proposed Sec. Sec.  
21.1030(b) and 21.7140(c)(4) is needed to enable VA to decide whether 
an individual is entitled to the educational assistance he or she is 
seeking for taking a licensing or certification test and, if VA 
determines that he or she should be paid, the amount to be paid to the 
claimant.
    Description of likely respondents: Respondents would be veterans, 
servicemembers, and veterans' dependents who wish to receive 
educational assistance under DEA, VEAP, or the MGIB for reimbursement 
for taking an approved licensing or certification test.
    Estimated number of respondents: 3,600.
    Estimated frequency of responses: On occasion. When an individual 
wishes to receive educational assistance as a reimbursement of the cost 
of a licensing or certification test, the individual would need to file 
a claim for the benefit. Some claimants would file just one claim while 
others would file several from time to time as the situation may 
warrant.
    Estimated total annual reporting and recordkeeping burden: 1,000 
hours of reporting burden. VA estimates that there would be no 
recordkeeping burden.
    Estimated average burden per response: 15 minutes.
    Title: Application for Educational Assistance to Supplement Tuition 
Assistance; 38 CFR 21.1030(c), 21.7140(c)(5).
    Summary of collection of information: The collection of information 
in proposed Sec. Sec.  21.1030(c) and 21.7140(c)(5) is necessary to 
apply 38 U.S.C. 3014(b) and 5101(a) to claims for educational 
assistance under the MGIB to supplement tuition assistance provided 
under a program administered by the Secretary of a military department. 
Section 5101(a) requires that an individual must file a claim for a 
benefit under the laws VA administers in order for VA to pay that 
benefit to the individual.
    Description of need for information and proposed use of 
information: The information collection in Sec. Sec.  21.1030(c) and 
21.7140(c)(5) is needed to enable VA to decide whether the claimant 
should be paid the educational assistance he or she is seeking to 
supplement the tuition assistance the claimant received and, if he or 
she should be paid, the amount to be paid.
    Description of likely respondents: Respondents would be veterans, 
reservists, and servicemembers who wish to receive educational 
assistance under the MGIB for reimbursement for that portion of the 
cost of a course not covered by tuition assistance provided under a 
program administered by the Secretary of a military department.
    Estimated number of respondents: 12,250.
    Estimated frequency of responses: When an individual wishes to 
receive educational assistance for

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reimbursement for that portion of the cost of a course not covered by 
tuition assistance, the individual would need to file a claim for the 
benefit. Some claimants would file just one claim while others would 
file several from time to time as the situation warrants.
    Estimated total annual reporting and recordkeeping burden: 3,000 
hours of reporting burden. VA estimates that there would be no 
recordkeeping burden.
    Estimated average burden per response: 12 minutes.
    Title: Availability of Educational, Licensing, and Certification 
Records; 38 CFR 21.4209.
    Summary of collection of information: The collection of information 
in Sec.  21.4209 as proposed to be amended is necessary so that VA can 
apply 38 U.S.C. 3690(c) and also verify that the payments of 
educational assistance under the various programs VA administers were 
correct. Section 21.4209 would require that educational institutions 
with courses and programs approved for VA training (including 
organizations or entities with licensing and certification tests 
approved) must make records available to Government representatives if 
they are needed to verify that the payments for these courses, 
programs, and tests are correct. The section would require that the 
educational institution retain these records for 3 years unless the 
Government Accountability Office (GAO) or VA asks that they be kept 
longer.
    Description of need for information and proposed use of 
information: The information collection in proposed Sec.  21.4209 is 
needed to enable VA to decide whether the payments in the educational 
assistance programs it administers have been correct.
    Description of likely respondents: Respondents are educational 
institutions with course(s) and program(s) approved for VA training, 
and organizations or entities with licensing and/or certification 
test(s) approved for payment under those programs VA administers that 
allow for such payments.
    Estimated number of respondents: 8,000 (this includes respondents 
who would retain records but make no reports or disclosures).
    Estimated frequency of responses: Each year VA or SAA 
representatives would conduct a total of about 3,000 compliance or 
supervisory visits of the 8,000 respondents. There may be some overlap 
of visits by VA and the SAA, so some respondents would be visited 
annually, some twice a year, and some less frequently.
    Estimated total annual reporting and recordkeeping burden: 6,000 
hours. VA estimates that there will be no recordkeeping burden hours 
because these are records the institutions maintain in the normal 
course of their operations.
    Estimated average burden per respondent: 2 hours per visit.
    Title: Advertising, Sales, and Enrollment Materials, and Candidate 
Handbooks; 38 CFR 21.4252(h).
    Summary of collection of information: The collection of information 
in proposed Sec.  21.4252(h) is needed to implement 38 U.S.C. 3696(b), 
which requires that an educational institution maintain a complete 
record of all advertising, sales, or enrollment materials used by or on 
behalf of the educational institution during the preceding 12 months, 
and to implement 38 U.S.C. 3689, under which the requirements are 
applicable to organizations and entities offering licensing or 
certification tests. For organizations and entities offering licensing 
or certification tests, candidate handbooks are the equivalent of 
enrollment materials.
    Description of need for information and proposed use of 
information: VA or the Federal Trade Commission (FTC) would use the 
materials in any investigation (as permitted under 38 U.S.C. 3696(c)) 
of whether the materials were erroneous, deceptive, or misleading.
    Description of likely respondents: Educational institutions that 
offer courses approved for VA training and that advertise those 
courses, and organizations and entities that offer licensing or 
certification tests.
    Estimated number of respondents: 8,000 (this includes respondents 
that would keep records but make no reports).
    Estimated frequency of responses: Each year VA or SAA 
representatives would conduct a total of about 3,000 compliance or 
supervisory visits of the 8,000 respondents, during which the 
respondents would have to show their advertising and sales materials, 
and enrollment materials or candidate handbooks, to an employee of VA 
or the SAA. There may be some overlap of visits by VA and the SAA, so 
some respondents would be visited annually, some twice a year, and some 
less frequently.
    Estimated total annual reporting and recordkeeping burden: 750 
hours of reporting burden. VA estimates that there will be no 
recordkeeping burden, because these materials would be kept in the 
normal course of business.
    Estimated average burden per respondent: 15 minutes per visit.
    Title: Application for Approval of a Licensing or Certification 
Test and Organization or Entity; 38 CFR 21.4268.
    Summary of collection of information: The collection of information 
in proposed Sec.  21.4268 is necessary to apply 38 U.S.C. 3689. That 
section provides that an organization or entity offering licensing or 
certification tests that wishes to have its tests approved for VA 
payment, and to be itself approved, must make various certifications to 
VA and furnish information that the Secretary requires to determine 
whether payment may be made. Since the SAAs are, with limited 
exceptions, acting for VA in approving these tests and testing 
organizations or entities, an organization or entity must in general 
provide the information and make the certifications to the SAA with 
jurisdiction. This can best be done on an application for approval.
    Description of need for information and proposed use of 
information: The SAAs (or occasionally VA) will use this information to 
decide if the licensing or certification tests and the organizations or 
entities offering them can be approved for payments under the 
appropriate education programs that VA administers.
    Description of likely respondents: Organizations and entities that 
offer licensing or certification tests.
    Estimated number of respondents: 950.
    Estimated frequency of responses: Most organizations and entities 
would apply just once. However, if an approved organization or entity 
began offering a licensing or certification test that had not been 
approved, it would have to apply again.
    Estimated total annual reporting and recordkeeping burden: 3,000 
hours of reporting burden. VA estimates that there will be no 
recordkeeping burden. Although the proposed rule would require a 
certification that records will be retained, this requirement would not 
cause a recordkeeping burden because the records would be retained in 
the ordinary course of business.
    Estimated average burden per response: 3 hours.
    Title: State Approving Agency Reports and Notices; 38 CFR 21.4154, 
21.4250(b), 21.4258, and 21.4259.
    Summary of collection of information: The collections of 
information in Sec. Sec.  21.4250(b), 21.4258, and 21.4259 as proposed 
to be amended are required to implement 38 U.S.C. 3673, 3678, 3679, and 
3689. Section 38 U.S.C. 3673 instructs VA and the SAAs to cooperate and 
establish an exchange of

[[Page 9200]]

information pertaining to educational institutions to assure programs 
administered by VA are effectively and efficiently administered. 
Sections 3678 and 3679 provide that the SAAs must notify the 
educational institutions and VA of all approval and disapproval 
actions. Section 3689 provides that an organization or entity offering 
a licensing or certification test is deemed to be an ``institution'' or 
``educational institution'' and that a licensing or certification test 
is deemed to be a ``course'' as those terms are applied under and for 
purposes of, among other sections, 38 U.S.C. 3673, 3678, and 3679. The 
information collections in Sec. Sec.  21.4250(b), 21.4258, and 21.4259 
as proposed to be amended are required notices regarding the approval 
or disapproval of courses. The information collection in Sec.  21.4259 
also includes suspension notices; the SAAs may suspend approval of the 
course for new enrollments while giving an educational institution 60 
days to correct any deficiencies. The collection in Sec.  21.4154 is 
required to implement 38 U.S.C. 3674. VA uses the reports described in 
Sec.  21.4154 to determine reimbursement of expenses and allocation of 
payments.
    Description of need for information and proposed use of 
information: The information in Sec.  21.4154 is needed to determine 
reimbursement of expense the SAAs incur. VA also needs the information 
to obtain workload information to support budget requests in 
determining the amount of appropriations needed to adequately reimburse 
the SAAs. The information in Sec. Sec.  21.4250(b), 21.4258, and 
21.4259 as proposed to be amended is needed to notify educational 
institutions, training establishments, and organizations and entities 
that offer licensing or certification tests of the approval or 
disapproval of the courses or tests they offer. VA needs the 
information to determine whether or not payment of educational 
assistance is permitted for enrollment in courses, training programs, 
or to reimburse the cost of a licensing or certification test. Under 38 
U.S.C. 3680, VA may not award educational assistance to any eligible 
veteran or eligible person if his or her education or training program 
is not approved. Similarly, under 38 U.S.C. 3689, VA may not award 
educational assistance for any licensing or certification test unless 
the requirements in section 3689 are met.
    Description of likely respondents: SAAs.
    Estimated number of respondents: 59.
    Estimated frequency of responses: For reports, quarterly. For 
notices, on occasion, whenever an SAA approves, disapproves, or 
suspends approvals under Sec.  21.4250(b), 21.4258, or 21.4259 as 
proposed to be amended.
    Estimated total annual reporting and recordkeeping burden: 37,647 
hours of reporting burden. There is no recordkeeping burden because the 
records the SAAs would keep are records they would keep in normal 
operations.
    Estimated average burden per respondent: 638 hours.

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity). The Order 
classifies a rule as a significant regulatory action requiring review 
by the Office of Management and Budget if it meets any one of a number 
of specified conditions, including: having an annual effect on the 
economy of $100 million or more, creating a serious inconsistency or 
interfering with an action of another agency, materially altering the 
budgetary impact of entitlements or the rights of entitlement 
recipients, or raising novel legal or policy issues. VA has examined 
the economic, legal, and policy implications of this proposed rule and 
has concluded that it is a significant regulatory action under 
Executive Order 12866 because it raises novel policy issues.

Regulatory Flexibility Act

    The Secretary of Veterans Affairs hereby certifies that this 
proposed rule would 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. Although this proposed 
rule would affect some small entities that are testing organizations or 
educational institutions, any economic impact on them would be minor. 
The portions of this proposed rule that could have an economic impact 
on these small entities are recordkeeping, reporting, and application 
for approval requirements, the burdens for which would be the minor 
ones discussed in this preamble under the heading Paperwork Reduction 
Act of 1995. Pursuant to 5 U.S.C. 605(b), this proposed rule, 
therefore, is exempt from the initial and final regulatory flexibility 
analyses requirements of sections 603 and 604.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any given year. This proposed rule would have no such 
effect on State, local, and tribal governments, or the private sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
programs that would be affected by this proposed rule are 64.117, 
Survivors and Dependents Educational Assistance; 64.120, Post-Vietnam 
Era Veterans' Educational Assistance; and 64.124, All-Volunteer Force 
Educational Assistance. This proposed rule would also affect the 
Montgomery GI Bill--Selected Reserve program, for which there is no 
Catalog of Federal Domestic Assistance number.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflict 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: November 3, 2005.
Gordon H. Mansfield,
Deputy Secretary of Veterans Affairs.

    For the reasons set out above, VA proposes to amend 38 CFR part 21 
(subparts B, D, G, and K) as follows:

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart B--Claims and Applications for Educational Assistance

    1. The authority citation for part 21, subpart B is revised to read 
as follows:

    Authority: 38 U.S.C. 501(a), ch. 51, and as noted in specific 
sections.

    2. Section 21.1029 is amended by:
    a. Revising the introductory text.
    b. In paragraph (b)(1), removing ``Sec.  21.1032'' and adding, in 
its place, ``Sec.  21.1033''.
    c. Redesignating paragraphs (c), (d), and (e) as paragraphs (d), 
(e), and (i), respectively.

[[Page 9201]]

    d. Adding new paragraph (c).
    e. In newly redesignated paragraph (e)(1)(ii), removing ``paragraph 
(c)(1)(i)'' and adding, in its place, ``paragraph (d)(1)(i)''.
    f. In newly redesignated paragraph (e)(4), removing ``school'' and 
adding, in its place, ``educational institution or training 
establishment''.
    g. Adding paragraphs (f), (g), and (h).
    The revision and additions read as follows:


Sec.  21.1029  Definitions.

    The following definitions of terms apply to this subpart and 
subparts C, D, F, G, H, K, and L, to the extent that the terms are not 
otherwise defined in those subparts:
* * * * *
    (c) Educational institution. The term educational institution 
means:
    (1) A vocational school or business school;
    (2) A junior college, teachers' college, college, normal school, 
professional school, university, or scientific or technical 
institution;
    (3) A public or private elementary school or secondary school;
    (4) Any entity, other than an institution of higher learning, that 
provides training for completion of a State-approved alternative 
teacher certification program;
    (5) An organization or entity offering a licensing or certification 
test; or
    (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))


* * * * *
    (f) Information. The term information means nonevidentiary facts, 
such as the claimant's Social Security number or address, or the name 
of the educational institution the claimant is attending.

(Authority: 38 U.S.C. 5101, 5102, 5103)


    (g) Substantially complete application. (1) The term substantially 
complete application means, for an individual's first application for 
educational assistance administered by VA, an application containing--
    (i) The claimant's name;
    (ii) His or her relationship to the veteran, if applicable;
    (iii) Sufficient information for VA to verify the claimed service, 
if applicable;
    (iv) The benefit claimed;
    (v) The program of education, if applicable; and
    (vi) The name of the educational institution or training 
establishment the claimant intends to attend, if applicable.
    (2) For subsequent applications for educational assistance 
administered by VA, a substantially complete application means an 
application containing the information specified in paragraphs 
(g)(1)(i) through (g)(1)(vi) of this section, except that the 
application may omit any information specified in paragraphs (g)(1)(ii) 
or (g)(1)(iii) of this section that is already of record with VA.

(Authority: 38 U.S.C. 5102, 5103, 5103A)


    (h) Training establishment.The term training establishment means 
any establishment providing apprentice or other training on-the-job, 
including those under the supervision of a college, university, any 
State department of education, any State apprenticeship agency, any 
State board of vocational education, any joint apprenticeship 
committee, the Bureau of Apprenticeship and Training established in 
accordance with 29 U.S.C. chapter 4C, or any agency of the Federal 
government authorized to supervise such training.

(Authority: 38 U.S.C. 3452(e), 3501(a)(9))


    3. Section 21.1030 is revised to read as follows:


Sec.  21.1030  Claims.

    (a) Claim for educational assistance. (1) The first time an 
individual claims educational assistance administered by VA for pursuit 
of a program of education, he or she must file an application for 
educational assistance using a form the Secretary prescribes for that 
purpose.
    (2) If an individual changes his or her program of education or 
place of training after filing his or her first application for 
educational assistance, he or she must file an application requesting 
the change of program or place of training using a form the Secretary 
prescribes for that purpose.
    (3) A servicemember must consult with his or her education service 
officer before filing an application for educational assistance, 
whether it is the first application or an application to request a 
change of program or place of training.

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 501, 3034(a), 3241(a), 
3471, 3513, 5101(a))


    (b) Filing a claim for educational assistance to pay for a 
licensing or certification test. To receive educational assistance to 
pay for a licensing or certification test, an individual must file a 
claim for educational assistance.
    (1) If the claim is the first claim for educational assistance 
administered by VA, the individual must file an application for 
educational assistance using a form the Secretary prescribes for that 
purpose and must include the information described in paragraphs 
(b)(2)(i) through (b)(2)(vi) of this section.
    (2) If the claim is the second or subsequent claim for educational 
assistance, the claim must include:
    (i) The name of the test;
    (ii) The name and address of the organization or entity issuing the 
license or certificate;
    (iii) The date the claimant took the test;
    (iv) The cost of the test;
    (v) A statement authorizing release of the claimant's test 
information to VA, such as: ``I authorize release of my test 
information to VA''; and
    (vi) Such other information as the Secretary may require.

(Authority: 38 U.S.C. 501, 3034(a), 3241(a), 3471, 3513, 5101(a))


    (c) Filing a claim for educational assistance to supplement tuition 
assistance provided under a program administered by the Secretary of a 
military department. To receive tuition assistance top-up as defined in 
Sec.  21.4200(hh), an individual must file a claim for educational 
assistance.
    (1) If the claim is the first claim for educational assistance 
administered by VA, the individual must file an application for 
educational assistance using a form the Secretary prescribes for that 
purpose.
    (2) If the claim is the second or subsequent claim for educational 
assistance, the claimant may submit a statement that he or she wishes 
to receive tuition assistance top-up.
    (3) The claimant must also submit a copy of the form(s) that the 
military service with jurisdiction requires for tuition assistance and 
that had been presented to the educational institution, covering the 
course or courses for which the claimant wants tuition assistance top-
up. Examples of these forms include:
    (i) DA Form 2171, Request for Tuition Assistance-Army Continuing 
Education System;
    (ii) AF Form 1227, Authority for Tuition Assistance-Education 
Services Program;
    (iii) NAVMC 10883, Application for Tuition Assistance, and either 
NAVEDTRA 1560/5, Tuition Assistance Authorization or NAVMC (page 2), 
Tuition Assistance Authorization;

[[Page 9202]]

    (iv) Department of Homeland Security, USCG CG-4147, Application for 
Off-Duty Assistance; and
    (v) Request for Top-Up: eArmyU Program.
    (4) The claimant must also provide to VA the following information, 
to the extent it is not contained on any form filed under paragraph 
(c)(1) or (c)(3) of this section:
    (i) His or her name;
    (ii) His or her Social Security number;
    (iii) The name of the educational institution;
    (iv) The name of the course or courses for which the claimant wants 
educational assistance;
    (v) The number of the course or courses;
    (vi) The number of credit hours for each course;
    (vii) The beginning and ending date of each course;
    (viii) The cost of the course or courses; and
    (ix) If the claimant doesn't want to receive the full amount of 
that cost not met by the Secretary of the military department 
concerned, the portion that the claimant wishes to receive.
    (5) If the claimant's military department uses an electronic 
tuition assistance application process with electronic signatures, VA 
will accept an electronic transmission of the approved tuition 
assistance application directly from the military department concerned 
on behalf of the claimant if--
    (i) The electronic tuition assistance application indicates the 
servicemember's intent to claim tuition-assistance top-up; and
    (ii) The information described in paragraph (c)(4) of this section 
is included in the electronic application.

(Authority: 38 U.S.C. 501, 3034(a), 3241(a), 3471, 3513, 5101(a))


(The Office of Management and Budget has approved the information 
collection provisions in this section under control numbers 2900-
0074, 2900-0098, 2900-0099, 2900-0154, 2900-XXXX, and 2900-XXXX.)

    4. Section 21.1031 is amended by:
    a. In paragraph (a), removing ``claim forms,'' and adding, in its 
place, ``VA claim forms and''.
    b. Revising paragraph (b) to read as follows.


Sec.  21.1031  VA responsibilities when a claim is filed.

    (b) VA has a duty to notify claimants of necessary information or 
evidence. (1) Except when a claim cannot be substantiated because there 
is no legal basis for the claim, or undisputed facts render the 
claimant ineligible for the claimed benefit, when VA receives a 
complete or substantially complete application for educational 
assistance provided under subpart C, D, G, H, K, or L of this part VA 
will--
    (i) Notify the claimant of any information and evidence that is 
necessary to substantiate the claim; and
    (ii) Inform the claimant which information and evidence, if any, 
the claimant is to provide to VA and which information and evidence, if 
any, VA will try to obtain for the claimant.
    (2) The information and evidence that VA, pursuant to paragraph 
(b)(1) of this section informs the claimant that the claimant must 
provide, must be provided within one year from the date of the notice. 
If VA does not receive such information and evidence from the claimant 
within that time period, VA may adjudicate the claim based on the 
information and evidence in the file.
    (3) If the claimant has not responded to the request within 30 
days, VA may decide the claim before the expiration of the one-year 
period prescribed in paragraph (b)(2) of this section, based on all the 
information and evidence in the file, including information and 
evidence it has obtained on behalf of the claimant. If VA does so, 
however, and the claimant subsequently provides the information and 
evidence within one year of the date of the request, VA must 
readjudicate the claim. If VA's decision on a readjudication is 
favorable to the claimant, the award shall take effect as if the prior 
decision by VA on the claim had not been made.
    (4) If VA receives an incomplete application for benefits, it will 
notify the claimant of the information necessary to complete the 
application and will defer assistance until the claimant submits this 
information. If the information necessary to complete the application 
is not received by VA within one year from the date of such notice, VA 
cannot pay or provide any benefits based on that application.
    (5) For the purpose of this paragraph, if VA must notify the 
claimant, VA will provide notice to:
    (i) The claimant;
    (ii) His or her fiduciary, if any; and
    (iii) His or her representative, if any.

(Authority: 38 U.S.C. 5102, 5103, 5103A(a)(3))


Sec.  21.1032  [Redesignated and amended]

    5. Section 21.1032 is redesignated as Sec.  21.1033, and in newly 
redesignated Sec.  21.1033, paragraph (b) is removed and reserved.
    6. New Sec.  21.1032 is added to read as follows:


Sec.  21.1032  VA has a duty to assist claimants in obtaining evidence.

    (a) VA's duty to assist begins when VA receives a complete or 
substantially complete application. (1) Except as provided in paragraph 
(d) of this section, upon receipt of a complete or substantially 
complete application for educational assistance under subpart C, D, G, 
H, K, or L of this part, VA will--
    (i) Make reasonable efforts to help a claimant obtain evidence 
necessary to substantiate the claim; and
    (ii) Give the assistance described in paragraphs (b) and (c) of 
this section to an individual attempting to reopen a finally decided 
claim.
    (2) VA will not pay any fees a custodian of records may charge to 
provide the records VA requests.

(Authority: 38 U.S.C. 5103A)


    (b) Obtaining records not in the custody of a Federal department or 
agency. (1) VA will make reasonable efforts to obtain relevant records 
not in the custody of a Federal department or agency. These records 
include relevant records from:
    (i) State or local governments;
    (ii) Private medical care providers;
    (iii) Current or former employers; and
    (iv) Other non-Federal governmental sources.
    (2) The reasonable efforts described in paragraph (b)(1) of this 
section will generally consist of an initial request for the records 
and, if VA does not receive the records, at least one follow-up 
request. The following are exceptions to this provision concerning the 
number of requests that VA generally will make:
    (i) VA will not make a follow-up request if a response to the 
initial request indicates that the records sought do not exist or that 
a follow-up request for the records would be futile.
    (ii) If VA receives information showing that subsequent requests to 
the initial or another custodian could result in obtaining the records 
sought, reasonable efforts will include an initial request and, if VA 
does not receive the records, at least one follow-up request to the new 
source or an additional request to the original source.
    (3) The claimant must cooperate fully with VA's reasonable efforts 
to obtain relevant records from non-Federal agency or department 
custodians. The claimant must provide enough information to identify 
and locate the existing records, including--
    (i) The person, company, agency, or other custodian holding the 
records;
    (ii) The approximate time frame covered by the records; and
    (iii) In the case of medical treatment records, the condition for 
which treatment was provided.

[[Page 9203]]

    (4) If necessary, the claimant must authorize the release of 
existing records in a form acceptable to the person, company, agency, 
or other custodian holding the records.

(Authority: 38 U.S.C. 5103A)


    (c) Obtaining records in the custody of a Federal department or 
agency. (1) VA will make as many requests as are necessary to obtain 
relevant records from a Federal department or agency. These records 
include but are not limited to:
    (i) Military records;
    (ii) Medical and other records from VA medical facilities;
    (iii) Records from non-VA facilities providing examination or 
treatment at VA expense; and
    (iv) Records from other Federal agencies.
    (2) VA will end its efforts to obtain records from a Federal 
department or agency only if VA concludes that the records sought do 
not exist or that further efforts to obtain those records would be 
futile. Cases in which VA may conclude that no further efforts are 
required include cases in which the Federal department or agency 
advises VA that the requested records do not exist or that the 
custodian of such records does not have them.
    (3) The claimant must cooperate fully with VA's reasonable efforts 
to obtain relevant records from Federal department or agency 
custodians. At VA's request, the claimant must provide enough 
information to identify and locate the existing records, including--
    (i) The custodian or agency holding the records;
    (ii) The approximate time frame covered by the records; and
    (iii) In the case of medical treatment records, the condition for 
which treatment was provided.
    (4) If necessary, the claimant must authorize the release of 
existing records in a form acceptable to the custodian or agency 
holding the records.

(Authority: 38 U.S.C. 5103A)


    (d) Circumstances where VA will refrain from or discontinue 
providing assistance. VA will refrain from providing assistance in 
obtaining evidence for a claim if the substantially complete or 
complete application for benefits indicates that there is no reasonable 
possibility that any assistance VA would provide to the claimant would 
substantiate the claim. VA will discontinue providing assistance in 
obtaining evidence for a claim if the evidence obtained indicates that 
there is no reasonable possibility that further assistance would 
substantiate the claim. Circumstances in which VA will refrain from or 
discontinue providing assistance in obtaining evidence include, but are 
not limited to:
    (1) The claimant's ineligibility for the benefit sought because of 
lack of qualifying service, lack of veteran status, or other lack of 
legal eligibility;
    (2) Claims that are inherently not credible or clearly lack merit; 
and
    (3) An application requesting a benefit to which the claimant is 
not entitled as a matter of law.

(Authority: 38 U.S.C. 5103A)


    (e) Duty to notify claimant of inability to obtain records. (1) VA 
will notify the claimant either orally or in writing when VA:
    (i) Makes reasonable efforts to obtain relevant non-Federal 
records, but is unable to obtain them; or
    (ii) After continued efforts to obtain Federal records, concludes 
that it is reasonably certain they do not exist or that further efforts 
to obtain them would be futile.
    (2) For non-Federal records requests, VA may provide the notice to 
the claimant at the same time it makes its final attempt to obtain the 
relevant records.
    (3) VA will make a record of any oral notice conveyed under 
paragraph (e) of this section to the claimant.
    (4) The notice to the claimant must contain the following 
information:
    (i) The identity of the records VA was unable to obtain;
    (ii) An explanation of the efforts VA made to obtain the records;
    (iii) The fact described in paragraph (e)(1)(i) or (e)(1)(ii) of 
this section;
    (iv) A description of any further action VA will take regarding the 
claim, including, but not limited to, notice that VA will decide the 
claim based on the evidence of record unless the claimant submits the 
records VA was unable to obtain; and
    (v) A notice that the claimant is ultimately responsible for 
obtaining the evidence.
    (5) If VA becomes aware of the existence of relevant records before 
deciding the claim, VA will notify the claimant of the existence of 
such records and ask that the claimant provide a release for the 
records. If the claimant does not provide any necessary release of the 
relevant records that VA is unable to obtain, VA will ask that the 
claimant obtain the records and provide them to VA.
    (6) For the purpose of this section, if VA must notify the 
claimant, VA will provide notice to:
    (i) The claimant;
    (ii) His or her fiduciary, if any; and
    (iii) His or her representative, if any.

(Authority: 38 U.S.C. 5102(b), 5103(a), 5103A)


Subpart D--Administration of Educational Assistance Programs

    7. The authority citation for part 21, subpart D is revised 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, and as noted in specific sections.

    8. Section 21.4005 is amended by:
    a. Adding introductory text to the section.
    b. Revising the paragraph (a) heading and paragraphs (a)(1) and 
(a)(2), and the authority citation at the end of paragraph (a).
    c. Redesignating paragraphs (a)(3) and (a)(4) as paragraphs (a)(5) 
and (a)(7), respectively.
    d. Adding new paragraphs (a)(3), (a)(4), and (a)(6).
    e. In newly redesignated paragraph (a)(5), removing ``a school'' 
and adding, in its place, ``an educational institution'' and removing 
``such school.'' and adding, in its place, ``such educational 
institution.''.
    f. Redesignating paragraphs (b)(1)(ii)(a) through (b)(1)(ii)(f) as 
paragraphs (b)(1)(ii)(A) through (b)(1)(ii)(F), respectively.
    g. Revising newly redesignated paragraph (b)(1)(ii)(F).
    h. In paragraphs (b)(1)(i) and (b)(2)(i), removing ``school'' and 
adding, in its place, ``educational institution''.
    i. Redesignating paragraphs (b)(2)(ii)(a) and (b)(2)(ii)(b) as 
paragraphs (b)(2)(ii)(A) and (b)(2)(ii)(B), respectively.
    j. Removing the authority citation following newly redesignated 
paragraph (b)(2)(ii)(A) and adding an authority citation following 
newly redesignated paragraph (b)(2)(ii)(B).
    k. In newly redesignated paragraphs (b)(1)(ii)(D), (b)(2)(ii)(A), 
and (b)(2)(ii)(B), removing ``schools'' and adding, in its place, 
``educational institutions''.
    l. In newly redesignated paragraph (b)(2)(ii)(B), removing 
``persons.'' and adding, in its place, ``persons, or desiring to offer 
licensing or certification tests to veterans or eligible persons.''.
    m. In paragraph (c)(1), removing ``request for'' and adding, in its 
place, ``requests for''.
    n. Removing the authority citation following paragraph (c)(2) and 
adding an authority citation following paragraph (c)(3).
    o. Revising paragraph (d).

[[Page 9204]]

    p. In paragraph (e), redesignating paragraphs (e)(1) through (e)(3) 
as paragraphs (e)(1)(i) through (e)(1)(iii), respectively; designating 
the introductory text following the paragraph heading as paragraph 
(e)(1) introductory text; and designating the undesignated paragraph as 
paragraph (e)(2).
    q. In newly redesignated paragraph (e)(1) introductory text, 
removing ``when:'' and adding, in its place, ``when, in circumstances 
involving a finding of conflicting interests:''.
    r. In newly redesignated paragraph (e)(2), removing ``school'' and 
adding, in its place, ``educational institution''.
    s. Adding an authority citation for paragraph (e).
    t. Removing paragraph (f).
    The revisions and additions read as follows:


Sec.  21.4005  Conflicting interests.

    For the purposes of this section, a person will be considered to be 
an ``officer'' of the State approving agency or VA when he or she has 
authority to exercise supervisory authority, and ``educational 
institution'' includes an organization or entity offering licensing or 
certification tests.

(Authority: 38 U.S.C. 3683, 3689)


    (a) A conflict of interest can cause the dismissal of a VA or State 
approving agency officer or employee and other adverse consequences. 
(1) An officer or employee of VA will be immediately dismissed from his 
or her office or employment, if while such an officer or employee he or 
she has owned any interest in, or received any wages, salary, 
dividends, profits, gratuities, or services from any educational 
institution operated for profit--
    (i) In which a veteran or eligible person was pursuing a course of 
education under 10 U.S.C. chapter 1606 or 38 U.S.C. chapter 30, 32, 34, 
35, or 36; or
    (ii) Offering a licensing or certification test that is approved 
for payment of educational assistance under 38 U.S.C. chapter 30, 32, 
or 35 to veterans or eligible persons who take that test.
    (2) Except as provided in paragraph (a)(3) or (c) of this section, 
VA will discontinue payments under Sec.  21.4153 to a State approving 
agency when the Secretary finds that any individual who is an officer 
or employee of a State approving agency has, while he or she was such 
an officer or employee, owned any interest in, or received any wages, 
salary, dividends, profits, gratuities, or services from any 
educational institution operated for profit--
    (i) In which a veteran or eligible person was pursuing a course of 
education or training under 10 U.S.C. chapter 1606 or 38 U.S.C. chapter 
30, 32, 34, 35, or 36; or
    (ii) Offering a licensing or certification test that is approved 
for payment of educational assistance under 38 U.S.C. chapter 30, 32, 
or 35 to veterans or eligible persons who take that test.
    (3) VA will not discontinue payments to a State approving agency 
under paragraph (a)(2) of this section if the State approving agency, 
after learning that it has any officer or employee described in that 
paragraph, acts without delay to end the employment of that individual.
    (4) If VA discontinues payments to a State approving agency 
pursuant to paragraph (a)(2) of this section, VA will not resume these 
payments while such an individual is an officer or employee of the:
    (i) State approving agency;
    (ii) State Department of Veterans Affairs; or
    (iii) State Department of Education.
* * * * *
    (6) If a State approving agency finds that any officer or employee 
of VA or of the State approving agency owns an interest in, or receives 
wages, salary, dividends, profits, gratuities, or services from an 
organization or entity, operated for profit, that offers licensing or 
certification tests, the State approving agency:
    (i) Will not approve any licensing or certification test that 
organization or entity offers; and
    (ii) Will withdraw approval of any licensing or certification test 
that organization or entity offers.
* * * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241, 3683, 3689)


    (b) * * *
    (1) * * *
    (ii) * * *
    (F) His or her position is not connected in any way with the 
inspection, approval, or supervision of educational institutions 
desiring to train veterans or eligible persons or to offer a licensing 
or certification test; or with the processing of claims by or making 
payments to veterans and eligible persons for taking an approved 
licensing or certification test.
    (2) * * *
    (ii) * * *
    (B) * * *

(Authority: 10 U.S.C. 16136(b); 38 U.S.C. 3034(a), 3241, 3683, 3689)


    (c) * * *
    (3) * * *

(Authority: 38 U.S.C. 512(a), 3683)


    (d) Notice when VA does not grant a requested waiver. When VA has 
denied a request for waiver of application of paragraph (a)(1) or 
(a)(2) of this section, VA will immediately notify the State approving 
agency and the educational institution:
    (1) That the approval of courses or licensing and certification 
tests offered by the educational institution must be withdrawn;
    (2) The reasons for the withdrawal of approval; and
    (3) The conditions that will permit the courses or such tests to be 
approved again.

(Authority: 38 U.S.C. 3683, 3689(d))


    (e) * * *

(Authority: 38 U.S.C. 3683, 3690, 5104)


    9. Section 21.4008 is revised to read as follows:


Sec.  21.4008  Prevention of overpayments.

    (a) Prevention of overpayments to veterans and eligible persons 
enrolled in educational institutions. When approval of a course may be 
withdrawn, and overpayments may exist or may be created, VA may suspend 
further payments to veterans and eligible persons enrolled in the 
educational institution offering the course until the question of 
withdrawing approval is resolved. See Sec.  21.4210.

(Authority: 38 U.S.C. 3690(b))


    (b) Prevention of overpayments to veterans and eligible persons 
taking licensing and certification tests. When approval of a licensing 
or certification test may be withdrawn, and overpayments may exist or 
may be created, VA may suspend payments to veterans and eligible 
persons taking that test until the question of withdrawing approval is 
resolved. See Sec.  21.4210.

(Authority: 38 U.S.C. 3689(a), 3690(b))


    10. Section 21.4009 is amended by:
    a. Revising the section heading.
    b. Adding introductory text.
    c. Revis