07-3466. Increase in Rates Payable Under the Montgomery GI Bill-Selected Reserve and Other Miscellaneous Issues

AGENCIES:

Department of Defense, Department of Homeland Security (United States Coast Guard), and Department of Veterans Affairs.

ACTION:

Final rule.

SUMMARY:

This document amends Department of Veterans Affairs (VA) regulations to increase the monthly rates of basic educational assistance payable under the Montgomery GI Bill—Selected Reserve (MGIB-SR) program for fiscal years 2005 and 2006 in accordance with statutory requirements, increase the percentage of basic educational assistance payable to reservists pursuing apprenticeship or other on-the-job training in accordance with the Veterans Benefits Act of 2004, and remove obsolete education break-pay provisions.

DATES:

Effective Date: This final rule is effective July 19, 2007.

Applicability Dates: The changes in the MGIB-SR rates for fiscal years 2005 and 2006 are applied retroactively to October 1, 2004, and October 1, 2005, respectively to conform to statutory requirements. The change in the percentage of basic educational assistance payable to reservists pursuing apprenticeship or other on-the-job training is applied retroactively to October 1, 2005, to conform to statutory requirements. The changes in the break-pay regulations contained in 38 CFR 21.7640 are effective July 19, 2007.

FOR FURTHER INFORMATION CONTACT:

Brandye R. Kidd, Management and Program Analyst, Education Service (225C), Veterans Benefits Administration, Department of Veterans Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, telephone [phone]. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION:

I. Increase in MGIB-SR Monthly Rates

Under the formula mandated by 10 U.S.C. 16131(b), the rates of basic educational assistance under the MGIB-SR payable to students pursuing a program of education full-time, three-quarter-time, and half-time must be increased by the percentage by which the total monthly Consumer Price Index-W for the 12-month period ending on June 30 preceding the fiscal year during which the increase is applicable exceeds the Consumer Price Index-W for the 12-month period ending on June 30 the previous fiscal year. Using this formula, VA calculated a 2 percent increase for fiscal year 2005 and a 3 percent increase for fiscal year 2006.

Section 16131(b) also requires that VA pay reservists, who are pursuing a program of education at less than half-time, an appropriately reduced rate. Since payment for less than half-time educational programs became available under the MGIB-SR in fiscal year 1990, VA has paid less than half-time students at 25 percent of the full-time rate. In this rule, VA continues that practice and will pay eligible reservists 25 percent of the increased full-time rate described above.

Section 16131(d) requires that reservists pursuing a full-time program of apprenticeship or other on-the-job training be paid a percentage of the basic educational monthly rate. Benefits for the first 6 months of training, the second 6 months of training, and the remainder of the program, are payable at 75 percent, 55 percent, and 35 percent respectively. Based on the section 16131(b) formula described above, there is a 2 percent increase for the apprenticeship and other on-the-job training pursued during fiscal year 2005 and a 3 percent increase for training during fiscal year 2006.

The increase in the MGIB-SR rates are applied in accordance with the applicable statutory provisions discussed above. Thus, VA began paying the 2005 and 2006 fiscal year increases effective October 1, 2004 and October 1, 2005 respectively.

II. Increase in the Percentage of Basic Educational Assistance Payable to Reservists Pursuing Apprenticeship or Other On-the-Job Training

The Veterans Benefits Improvement Act of 2004, Public Law 108-454, temporarily increased the percentages payable for apprenticeship and other on-the-job training from 75 percent, 55 percent, and 35 percent, to 85 percent, 65 percent, and 45 percent of the full-time rate of basic educational assistance, respectively, after September 30, 2005, and before January 1, 2008.

VA began paying the increased rates for reservists pursuing apprenticeship or other on-the-job training effective October 1, 2005, in accordance with Public Law 108-454.

III. Changes to Education Break-Pay Regulations Including the Removal of Obsolete Provisions

We are amending 38 CFR 21.7640(b) to remove obsolete provisions and provide greater clarity of regulations regarding benefit payments for school break periods between terms. In 2003, 38 CFR 21.4138(f), governing payment for breaks between terms, quarters or semesters, was amended to conform to statutory requirements. The final rule was published June 9, 2003, in the Federal Register (68 FR 34327-34332). The preamble to that final rule states that changes made to § 21.4138(f) are applicable to the Montgomery GI Bill—Active Duty, Survivors' and Dependents' Educational Assistance Program, Veterans Educational Assistance Program, and MGIB-SR. Although we amended the language in § 21.4138(f) in that final rule, we neglected to make a conforming amendment to § 21.7640(b) regarding payment for breaks, including intervals between terms. This document amends the language in the aforementioned section in accordance with statutory requirements and the previously published rule.

The changes to the break-pay regulations, including the removal of obsolete provisions, are effective from July 19, 2007.

Administrative Procedure Act

Changes to 38 CFR part 21 are being published without regard to the notice-and-comment and delayed-effective-date provisions of 5 U.S.C. 553 since they merely conform VA's existing rules to the statutory requirements. Accordingly, these changes involve interpretive rules that are exempt from the notice-and-comment and delayed-effective-date requirement of 5 U.S.C. 553(b) and (d).

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 Executive Order classifies a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB) unless OMB waives such review, as any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

The economic, interagency, budgetary, legal, and policy implications of this final rule have been examined and it has been determined not to be a significant regulatory action under Executive Order 12866.

Paperwork Reduction Act

This document contains no provisions constituting a collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Regulatory Flexibility Act

The initial and final regulatory flexibility analyses requirements of sections 603 and 604 of the Regulatory Flexibility Act, 5 U.S.C. 601-612, are not applicable to this rule, because a notice of proposed rulemaking is not required for this rule. Even so, the Secretary of Veterans Affairs hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act. This final rule directly affects only individuals and does not directly affect small entities. Therefore, this final rule is also exempt pursuant to 5 U.S.C. 605(b) 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 final rule would have no such effect on State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance

There is no Catalog of Federal Domestic Assistance number for the program affected by this final rule.

List of Subjects in 38 CFR Part 21

• Administrative practice and procedure
• Armed forces
• Civil rights
• Claims
• Colleges and universities
• Conflict of interests
• 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: February 9, 2007.

Gordon H. Mansfield,

Deputy Secretary of Veterans Affairs.

Approved: March 12, 2007.

Clifford L. Pearson,

Rear Admiral, U.S. Coast Guard, Assistant Commandant for Human Resources.

Approved: May 7, 2007.

T.F. Hall,

Assistant Secretary of Defense for Reserve Affairs.

For the reasons stated above, VA amends 38 CFR part 21, subpart L, as set forth below.

PART 21—VOCATIONAL REHABILITATION AND EDUCATION

Subpart L—Educational Assistance for Members of the Selected Reserve

1. Revise the authority citation for part 21, subpart L, to read as follows:

Authority: 10 U.S.C. ch. 1606; 38 U.S.C. 501(a), 512, ch. 36, and as stated in specific sections.

2. Amend § 21.7635(c)(3) by removing “§ 21.7640” and adding, in its place, “§ 21.4138(f)”.

3. Amend § 21.7636 by revising paragraphs (a)(1), (a)(2)(i), and (a)(3) to read as follows:

§ 21.7636

Rates of payment.

(a) Monthly rate of educational assistance. (1) Except as otherwise provided in this section or in § 21.7639, basic educational assistance is payable at the following monthly rates.

(i) For training that occurs after September 30, 2004, and before October 1, 2005:

Training	Monthly rate
Full time	$288.00
3/4 time	216.00
1/2 time	143.00
1/4 time	72.00

(ii) For training that occurs after September 30, 2005:

Training	Monthly rate
Full time	$297.00
3/4 time	222.00
1/2 time	147.00
1/4 time	74.25

(2)(i) The monthly rate of basic educational assistance payable to a reservist for apprenticeship or other on-the-job training full time is payable at the following rates.

(A) For training which occurs after September 30, 2004, and before October 1, 2005:

Training	Monthly rate
First 6 months of pursuit of training	$216.00
Second 6 months of pursuit of training	158.40
Remaining pursuit of training	100.80

(B) For training which occurs after September 30, 2005:

Training	Monthly rate
First 6 months of pursuit of training	$252.45
Second 6 months of pursuit of training	193.05
Remaining pursuit of training	133.65

(ii) * * *

(3) The monthly rate of basic educational assistance payable to a reservist for pursuit of a cooperative course is as follows:

(i) For full-time training that occurs after September 30, 2004, and before October 1, 2005, the rate payable is the rate stated in paragraph (a)(1)(i) of this section.

(ii) For full-time training that occurs after September 30, 2005, the rate payable is the rate stated in paragraph (a)(1)(ii) of this section.

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4. Amend § 21.7640 by revising paragraph (b) to read as follows:

§ 21.7640

Release of payments.

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(b) Payment for breaks, including intervals between terms. In administering 10 U.S.C. chapter 1606, VA will apply the provisions of § 21.4138(f) when determining whether a reservist is entitled to payment for a break, including an interval between terms.

(Authority: 10 U.S.C. 16136(b), 38 U.S.C. 3680)

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