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104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-650
_______________________________________________________________________


 
    VETERANS' EDUCATION AND COMPENSATION BENEFITS AMENDMENTS OF 1996

_______________________________________________________________________


 June 27, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

   Mr. Stump, from the Committee on Veterans' Affairs, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3674]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Veterans' Affairs, to whom was referred the 
bill (H.R. 3674) to amend title 38, United States Code, to 
clarify the causal relationship required between a veteran's 
service-connected disability and employment handicap for 
purposes of determining eligibility for training and 
rehabilitation assistance, to transfer certain educational 
assistance entitlements from the Post-Vietnam Era Educational 
Assistance Program to the Montgomery GI Bill, and for other 
purposes, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                              Introduction

    The reported bill reflects the Committee's consideration of 
several bills introduced during the 104th Congress, including 
H.R. 109, H.R. 1482, H.R. 2868 and H.R. 3493. Additional 
provisions were included for consideration by the full 
Committee.
    On April 17, 1996, the Subcommittee on Compensation, 
Pension, Insurance and Memorial Affairs ordered reported H.R. 
3248 to the full Committee, which contained provisions from 
H.R. 109 and H.R. 1482.
    On April 18, 1996, the Subcommittee on Education, Training, 
Employment and Housing held a hearing and discussed H.R. 2868.
    On May 22, 1996, the Subcommittee on Compensation, Pension, 
Insurance and Memorial Affairs ordered reported favorably H.R. 
3493 to the full Committee. H.R. 3493 was reintroduced as H.R. 
3506 on May 22, 1996, with identical legislative language and 
with additional original cosponsors.
    On June 20, 1996, H.R. 3674 was ordered reported by the 
full Committee to the House.

                      Summary of the Reported Bill

    H.R. 3674 contains two titles.

    Title I would:

         1. Require a causal relationship between a veteran's 
        service-connected disability and employment handicap to 
        qualify for vocational rehabilitation assistance.
         2. Increase the basic monthly rate of the Montgomery 
        GI Bill-Active Duty.
         3. Enable certain active duty Post Vietnam-Era 
        Educational Assistance Program participants to transfer 
        to the Montgomery GI Bill-Active Duty.
         4. Provide eligibility for certain current and former 
        active duty members of the Army and Air National Guard 
        for the Montgomery GI Bill.
         5. Make permanent the authority for payment of 
        Montgomery GI Bill benefits for alternative teacher 
        certification programs.

    Title II would:

          1. Amend the effective date of discontinuance of 
        certain veterans' benefits by reason of death of 
        recipient.
          2. Increase the period for which accrued benefits are 
        payable.
          3. Increase the maximum allowance provided by the 
        Secretary for the purchase of an automobile from $5,500 
        to $6,500.
          4. Authorize the provision of funds in order to 
        provide financial assistance by grant or contract to 
        legal assistance entities for representation of 
        financially needy veterans in connection with 
        proceedings before the United States Court of Veterans 
        Appeals.

                       Background and Discussion

                  TITLE I-VETERANS' EDUCATION PROGRAMS

    Section 101. Employment handicap for which an individual 
may receive training and rehabilitation assistance. This 
section would restore the causal relationship between a 
service-connected disability and an employment handicap for the 
purpose of awarding vocational rehabilitation benefits. Since 
1917, when vocational rehabilitation for veterans was 
established by law, a causal relationship between a veteran's 
service-connected disability and an employment handicap was 
required for service-disabled veterans to be eligible for 
vocational rehabilitation benefits. This nexus formed the basis 
for the original program and defined the Nation's 
responsibility for vocational rehabilitation to those veterans 
who incur or aggravate a disability while serving in our Armed 
Forces.
    In 1980, Public Law 96-466 extensively revised vocational 
rehabilitation programs in chapter 31 and the express statutory 
language requiring the causal relationship was omitted. As a 
result, under current law, veterans seeking vocational 
rehabilitation benefits under chapter 31 satisfy the statutory 
requirements if they (1) have a compensable service-connected 
disability and (2) are found to be in need of rehabilitation 
because of an employment handicap. Nonetheless, when the VA 
promulgated regulations related to the changes in the 
vocational rehabilitation programs, the VA continued to require 
the causal relationship as it had done in the past.
    A 1995 Court of Veterans Appeals decision, Davenport v. 
Brown, 7 Vet. App. 476 (1995), found no statutory support for 
the VA's regulations requiring a causal relationship between 
the service-connected disability and the employment handicap. 
As a result, the VA estimated that the Davenport decision would 
produce 32,366 additional participants in vocational 
rehabilitation programs over five years. This represents a 14.4 
percent increase in participation and a 14.6 percent increase 
in entitlement spending. The VA estimates that enactment of 
legislation to restore the causal relationship between a 
service-connected disability and vocational rehabilitation 
would result in pay-as-you-go-savings of $285 million during 
fiscal years 1997-2002.
    The bill would in effect reverse the Davenport decision, 
and make other improvements enabling the VA to focus its 
resources on service-disabled veterans most in need of training 
and rehabilitation assistance. The bill would reinstate 
original Congressional intent by requiring a nexus between the 
veteran's service-connected disability and employment handicap 
in the same manner as required by the VA's regulations prior to 
the Davenport decision.
    Section 102. Increase in basic Montgomery GI Bill-Active 
Duty rates. This section would raise the basic monthly rate for 
full-time education training under the Montgomery GI Bill-
Active Duty $5 from $416.62 to $421.62. The monthly full-time 
rate for two-year enlistees would be increased from $338.51 to 
$343.51. The Committee directs that the annual cost of living 
allowance (COLA) increase for fiscal year 1997, as required by 
title 38, be based on the new rates.
    Section 103. Opportunity for certain VEAP-participants to 
enroll. This section would authorize service members 
participating in the chapter 32 Veterans' Education Assistance 
Program (VEAP) to transfer to the Montgomery GI Bill, chapter 
30, title 38, USC. Post-Vietnam service members were eligible 
to enroll in VEAP after December 31, 1976, and before April 1, 
1987. VEAP was the first contributory education benefit plan. 
Under VEAP, active duty service members made voluntary 
contributions to an individual account which the federal 
government matched at a 2:1 ratio. The maximum participant 
contribution was $2,700, and participants could elect to make a 
lump-sum contribution to the fund. In most cases, a veteran had 
10 years in which to use the education benefit, and/or make a 
claim for the unused contribution.
    According to VA statistics, 18,927 persons used their VEAP 
entitlement in fiscal year 1995, which amounted to four percent 
of the total of persons using VA training and education 
benefits. By comparison, the Montgomery GI Bill provided 
benefits to nearly 292,000 trainees, or 59 percent of the 
total.
    The Committee believes that by allowing VEAP participants 
the opportunity to transfer into the Montgomery GI Bill, 
veterans will be afforded a greater education benefit, and an 
unpopular and relatively unsuccessful program will be brought 
nearer to closure. The Committee is convinced that it is in the 
best interest of the Departments of Defense and Veterans' 
Affairs, and most importantly, for the veterans affected, to 
provide improved education and training opportunities whenever 
possible.
    Section 104. Montgomery GI Bill eligibility for certain 
current and former active duty members of Army and Air National 
Guard. This section would provide eligibility for Montgomery GI 
Bill for some current and former active duty members of the 
Army and Air National Guard serving between June 30, 1985 and 
November 29, 1989. These members were not afforded the 
opportunity to participate in any education program, and the 
Committee desires to recognize their service with the same 
benefit available to others who served during that period.
    Section 105. Permanent authority for Alternative Teacher 
Certification Programs. This section would make permanent a 
pilot program established under Public Law 103-446 which 
provides Montgomery GI Bill benefits to those pursuing State-
approved alternative teacher certification programs through 
non-traditional educational institutions. The program is 
currently set to expire on September 30, 1996. The bill also 
further defines the term ``non-traditional educational 
institution''. For example, a veteran participating in programs 
offered by school districts or a consortium of school districts 
and certified by State Approving Agencies would be eligible for 
GI Bill benefits. Typically, a school district would offer 
certification through a combination of course work and 
``student teaching'' under the guidance of a certified teacher, 
saving both time and tuition for the new teacher.
    The Committee views the proposal favorably because it is 
successfully offering greater flexibility to a number of 
veterans. By 1995, 40 states and the District of Columbia 
reported that more than 50,000 persons have been licensed to 
teach through state alternative routes.

                  TITLE II-VETERAN'S BENEFITS PROGRAMS

    As of May, 1996, 2.2 million veterans received service-
connected disability compensation and 420,789 veterans received 
non service-connected pension. The number of spouses receiving 
Dependency and Indemnity Compensation totaled 300,934 for the 
same period. The Department of Veterans Affairs expenditures 
for disability compensation for fiscal year 1996 are expected 
to be more than $15 billion.
    Approximately 50,000 compensation recipients and about 
45,000 pension recipients die annually. About two-thirds of 
compensation recipients have surviving spouses, resulting in 
about 1,000 new Dependency and Indemnity Compensation 
beneficiaries per month. Widows and widowers of newly deceased 
pension recipients average about 1,500 per month. Deaths of 
compensation and pension recipients occur evenly through a 
given month.
    Section 201. Effective date of discontinuance of certain 
veterans' benefits by reason of death of recipient. This 
provision would allow a surviving spouse to retain compensation 
or pension payments pro rated to the day of death, instead of 
the end of the previous month. This provision would recognize 
the veterans' dependence on the compensation or pension. The 
effective date of this provision would be October 1, 1997.
    Section 202. Increase in period for which accrued benefits 
are payable. This provision would authorize an increase in the 
payment of accrued benefits for survivors from one year to two 
years, in the case of a veteran dying prior to adjudication of 
the claim. Current law limits payment of back benefits to one 
year. This increase would recognize the length of time it 
currently takes VA to process and adjudicate a claim.
    Section 203. Increase in automobile allowance. This 
provision would increase from $5,500 to $6,500 the maximum 
allowance provided for purchase of an automobile. The auto 
allowance, a one time grant, is available to severely disabled 
veterans if their disability is the result of an injury 
incurred or disease contracted in or aggravated by active 
military service. The Secretary prescribes or assists in 
providing an automobile or other conveyance to each eligible 
person by paying the lesser of the total purchase price of the 
automobile or conveyance or the maximum allowance. The 
allotment has not been increased since April 1988. 
Approximately 900 people will be affected by this provision.
    Section 204. Legal assistance for financially needy 
veterans in connection with Court of Veterans Appeals 
proceedings. Section 204 would authorize the provision of funds 
in order to provide financial assistance by grant or contract 
to legal assistance entities for representation of financially 
needy veterans in connection with proceedings before the United 
States Court of Veterans Appeals.
    In 1991, the Court of Veterans Appeals found that the 
overwhelming majority of appellants appearing before it were 
unrepresented by attorneys. In order to alleviate the resulting 
burden, the Court proposed the creation of the Pro Bono 
Representation Program to provide free legal representation to 
veterans with claims before the Court. Prior to fiscal year 
1996, a discrete line-item appropriation was included in the 
Court's budget and designated for transfer to the Program's 
administrator, the Legal Services Corporation. In fiscal year 
1996, the Court's operating funds were appropriated through 
successive continuing resolutions which did not include such a 
discrete line-item appropriation. In addition, the Court's 
funding was reduced from the $9.8 million requested for fiscal 
year 1996 to $9 million, an 8 percent decrease. Despite the 
reduction from its requested level of funding, the Court was 
compelled to provide funding for the Pro Bono program. In the 
Court's view, the fiscal year 1996 funding situation created a 
dilemma requiring the Court to choose between its own 
operations and full funding of the representation program 
designed to benefit one side of the litigation before it. In 
fiscal year 1997, the Court did not request money to fund the 
Program because it saw a reduction in its annual appropriation 
as creating a conflict between the Court's funding and the 
Program's funding. In order to avoid what it perceived to be 
the appearance of an ethical dilemma, the Court requested an 
alternative funding method for fiscal year 1997 while still 
fully supporting the Program.
    The Committee believes that the Pro Bono Program provides a 
valuable service to both veterans and the Court. Veterans 
receive free legal representation in a process which becomes 
complex and adversarial upon reaching the Court of Veterans 
Appeals. The Court is not burdened with as many unrepresented 
claims as it was prior to the creation of the Program. It is 
therefore able to operate a more efficient appellate judicial 
system.
    Consequently, in this bill, the Committee would fund the 
Program for six years at $700,000 per year, with an increase of 
three percent per year beginning in fiscal year 1998. The bill 
would fund the Program through the VA's Compensation and 
Pension account. This amount would be reduced during each of 
the six years by any appropriation enacted for operation of the 
Program. The Court would receive the funding from the account 
and/or the enacted appropriation, select a program 
administrator, and pass the funds to the administrator.

                      Section-By-Section Analysis

    Section 1 would be cited as the ``Veterans' Education and 
Compensation Benefits Amendments of 1996''.
    Section 101(a) would amend section 3101 of title 38, United 
States Code, by establishing the causal relationship between a 
veteran's service-connected disability rated at 10 percent or 
more and an employment handicap and the need for vocational 
rehabilitation.
    Section 101(b) would amend section 3102 to simplify the 
language and clarify that the Secretary is to determine if a 
veteran is in need of rehabilitation because of a serious 
employment handicap. These amendments would not be substantive.
    Section 101(c) would amend section 3103 to make clarifying 
and technical amendments to section 3103.
    Section 101(d) would amend section 3104 correlate 
rehabilitation services to the severity of impairment derived 
from a veteran's service-connected disability or disabilities.
    Section 101(e) would amend section 3103 by correlating the 
duration of assistance with a veteran's current impairment to 
employment.
    Section 101(f) would amend section 3106 by allowing the 
Secretary to determine whether a veteran who has a serious 
employment handicap is capable of participating in a program of 
independent living services under section 3120 of title 38.
    Section 101(g) would amend section 3108 requiring a 
standard that the veteran satisfactorily follow a program of 
employment services.
    Section 101(h) would amend section 3117(a) (1) by inserting 
``rated 10 percent or more'' after ``disability''.
    Section 101(i) would amend section 3120 by striking 
``service-connected disability described in section 
3102(1)(A)'' and inserting ``serious employment handicap 
resulting in substantial part from a service-connected 
disability described in section 3102(1)(A)(i)'' to clarify the 
nexus requirement.
    Section 101(j) would make the effective date the date of 
enactment of this Act, except that amendments relating to the 
causal relationship would be given prospective effect.
    Section 102(a)(1) would amend section 3015(a)(1) by 
increasing by $5 the basic monthly education benefit for full-
time students rates to $421.62.
    Section 102(a)(2) would amend section 3015(b)(1) by 
increasing by $5 the basic monthly education benefit for two 
year enlistees to $343.51.
    Section 102(b) would make the increase made in this section 
effective on October 1, 1996.
    Section 103(a) would amend subchapter II of chapter 30 by 
allowing certain chapter 32 active duty participants to 
transfer enrollment to the Montgomery GI Bill and would add the 
following new sections:

          Section 3018C(a) would allow VEAP participants 
        (Chapter 32) to elect to transfer to the Montgomery GI 
        Bill (Chapter 30).
          Section 3018C(b) would require that the basic pay of 
        an individual who elects to transfer be reduced by 
        $1,200, or that the Secretary collect $1,200, from the 
        individual, in order to become eligible for this 
        entitlement.
          Section 3018C(c) would provide for the disenrollment 
        from the VEAP program upon a veteran's election to 
        transfer to chapter 30 education benefits and would 
        provide for the transfer of education funds from VEAP 
        accounts (chapter 32) to Montgomery GI Bill accounts 
        (chapter 30).

    Section 104(a) would amend paragraph (7) of section 3002 
allowing active duty National Guard Reserve members who first 
served between November 29, 1989 and June 30, 1985 to 
participate in Montgomery GI Bill benefits.
    Section 104(b)(1) would allow a nine month window to apply 
for benefits under this Act.
    Section 104(b)(2) would authorize the Secretary of Defense 
to collect $1,200 from individuals as necessary to establish 
eligibility for authorized educational benefits under this Act.
    Section 104(b)(3) would provide for a ten-year time 
limitation for eligibility and entitlement for benefits 
authorized under this section.
    Section 105 would amend of section 3452(c) by making 
permanent the alternative teacher certification program.
    Section 201(a) would amend section 5112(b)(1) by 
establishing the effective date of reductions and 
discontinuance of compensation, dependency and indemnity 
compensation, or pension when the recipient marries, remarries, 
or dies.
    Section 201(b) would amend section 5112 by providing for 
payment of benefit during the final month.
    Section 201(c) would amend section 5110(d) by adding a new 
paragraph providing for the commencement date of Dependency and 
Indemnity Compensation on the day after the veteran's death.
    Section 201(d) would provide an effective date for deaths 
occurring on or after October 1, 1997.
    Section 202 would amend section 5121(a) by increasing the 
period for which accrued benefits are payable from one year to 
two years.
    Section 203(a) would amend section 3902(a) by increasing 
the automobile allowance from $5,500 to $6,500.
    Section 203(b) would make the increase made in this section 
effective for purchases of automobiles and other conveyances on 
or after the date of enactment of this Act.
    Section 204(a) would amend subchapter III of chapter 72 by 
adding a new section: ``Section 7287 Legal assistance for 
financially needy veterans in proceedings before the Court'', 
and would add the following new sections:

          Section 7287(a) would require the Court to provide 
        funds for financial assistance to legal assistance 
        entities in order to provide free legal representation 
        for indigent veterans.
          Section 7287(b) would clarify the type of activity 
        covered under this section, including financial 
        assistance to defray the expenses of legal 
        representation, case screening and referral services to 
        pro bono attorneys or education and training activities 
        for attorneys. This section would also provide that 
        veterans or other parties before the Court who cannot 
        afford the costs of legal representation would receive 
        such free legal assistance in proceedings before the 
        Court. It would further provide that entities receiving 
        financial assistance for free legal representation of 
        individuals may not require or request payment from any 
        individual in connection with the Pro Bono Program.
          Section 7287(c) would fund the Pro Bono Program for 
        fiscal years 1997 through 2003 at $700,000 per year 
        with an additional three percent per year beginning in 
        fiscal year 1998. This funding would be paid out of the 
        VA's Compensation and Pension account. It would further 
        provide that the funding from the account would be 
        reduced by any amount appropriated for operation of the 
        Program.
          Section 7287(d) would provide that a nonprofit 
        organization may accept funds from the Court and 
        provide financial assistance by grant or contract to 
        legal assistance entities to furnish free legal 
        services to veterans. It would further provide that a 
        nonprofit organization would administer any such grant 
        or contract and accept funds from the Court to cover 
        the administrative costs associated with the Program.
          Section 7287(e) would require the Court to submit to 
        Congress by February 1 of each year, a report on the 
        funds and financial assistance provided under the 
        Program. It would further allow the Court to require 
        any nonprofit organization and any legal assistance 
        entity which receives funds under this section to 
        provide the Court with pertinent information on the 
        Program.
          Section 7287(f) would establish definitions for 
        ``nonprofit organization'', ``legal assistance 
        entity'', and ``veterans service organization''.

    Section 204(b) would make a clerical amendment adding 
section 7287 to the table of sections at the beginning of 
chapter 72.

                           Oversight Findings

    No oversight findings have been submitted to the Committee 
by the Committee on Government Reform and Oversight.

               Congressional Budget Office Cost Estimate

    The following letter was received from the Congressional 
Budget Office concerning the cost of the reported bill:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 21, 1996.
Hon. Bob Stump,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3674, Veterans 
Education and Compensation Benefits Amendments of 1996, as 
ordered reported by the House Veterans' Affairs Committee on 
June 20, 1996.
    The bill would affect direct spending and thus would be 
subject to pay-as-you-go procedures under section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                           June E. O'Neill,
                                                          Director.

    Attachment

               Congressional Budget Office Cost Estimate

    1. Bill number: H.R. 3674
    2. Bill title: Veterans' Education and Compensation 
Benefits Amendments of 1996.
    3. Bill status: As ordered reported by the House Committee 
on Veterans' Affairs on June 20, 1996.
    4. Bill purpose: The bill would affect eligibility for 
training and rehabilitation assistance, payments under the 
Montgomery GI Bill (MGIB), eligibility of current participants 
in the Post-Vietnam Educational Assistance Program (VEAP) for 
MGIB, and several provisions of law governing compensation and 
pension benefits.
    5. Estimated cost to the Federal Government: The following 
table summarizes the budgetary effects of the bill over the 
1997-2002 period.

                                                                                                                
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                     1996     1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                                 DIRECT SPENDING                                                
Proposed changes:                                                                                               
  Estimated budget authority.....................        0       11       -2      -16      -15      -15      -17
  Estimated outlays..............................        0        9       -2      -16      -14      -16      -17
----------------------------------------------------------------------------------------------------------------


    Spending resulting from this bill would fall under budget 
function 700.

    6. Basis of estimate: The estimate assumes enactment of the 
bill and an effective date of October 1, 1996. CBO used 
historical spending rates for estimating outlays.

             Veterans' Education and Readjustment Benefits

    Six provisions would affect veterans education and 
readjustment benefits. Their costs are shown in Table 1.

                      TABLE 1: COSTS OF PROVISIONS AFFECTING READJUSTMENT BENEFIT PROGRAMS                      
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                     1996     1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                                 DIRECT SPENDING                                                
Spending under current law:                                                                                     
  Estimated budget authority.....................    1,360    1,369    1,486    1,556    1,546    1,487    1,488
  Estimated outlays..............................    1,290    1,399    1,486    1,556    1,566    1,467    1,488
Proposed changes:                                                                                               
  Estimated budget authority.....................        0       -4      -17      -32      -31      -31      -34
  Estimated outlays..............................        0       -4      -17      -32      -31      -31      -34
Spending under the bill:                                                                                        
  Estimated budget authority.....................    1,360    1,365    1,469    1,524    1,515    1,456    1,454
  Estimated outlays..............................    1,290    1,395    1,469    1,524    1,535    1,436    1,454
----------------------------------------------------------------------------------------------------------------

    Eligibility for training and rehabilitation assistance 
(section 101).--This provision would require veterans to show 
that their employment handicaps are a direct result of their 
service-connected disability, thus overturning a recent court 
decision. CBO estimates that savings would total $20 million 
for 1997 and about $58 million in 2002 based on about 3,100 
trainees and about 7,600 trainees in 1997 and 2002, 
respectively. The number of trainees affected by the bill would 
vary over the five-year period primarily because the average 
training period is about two and a half years, and the bill 
would apply to more than one cohort after 1997. The estimate 
assumes an average benefit of about $7,000 a year.
    Increase in basic Montgomery GI Bill rates (section 102).--
This section would raise the basic monthly education benefit by 
$5 a month. This increase is not large enough to affect 
participation rates, so this estimate assumes that 
participation remains at baseline levels--about 466,000 
trainees a year. Consequently, the provision would cost about 
$13 million in 1997, and costs would rise to $17 million in 
2001.
    Transfer of VEAP beneficiaries to the Montgomery GI Bill 
(section 103).--The bill would provide an opportunity for 
active duty personnel currently enrolled in Post-Vietnam Era 
Veterans Education Program to transfer to the Montgomery GI 
Bill program. Like all other participants, these people would 
be required to contribute $1,200. The current balance of their 
contributions to VEAP would automatically be transferred to the 
Treasury. The Secretary of Defense would collect contributions 
from participants and refund balances in excess of $1,200.
    CBO estimates that approximately 10 percent or about 7,500 
veterans would transfer to the Montgomery GI Bill program. For 
1997, refunds would exceed contributions by about $4 million. 
The average benefit for trainees is higher for the Montgomery 
GI Bill by $700, and training costs would be $ 1 million for 
the 1,875 trainees. Thus, the total cost for 1997 would be $5 
million. Because the refunds would all be paid in 1997, the 
only costs over the 1998-2002 period are the increased training 
benefits--$2 million for 1998 and 1999 and $3 million a year 
thereafter.
    Eligibility of certain Reserve personnel for Montgomery GI 
Bill (section 104).--This provision would allow certain members 
of the Reserve Components serving on active duty to become 
eligible for Montgomery GI Bill benefits if they enroll and 
contribute $1,200. Those members, who came on active duty 
between June 30, 1985, and November 29, 1989, have never been 
offered the opportunity to enroll.
    According to the Department of Defense (DOD), about 3,950 
of an eligible population totaling about 4,400 people are 
expected to enroll. CBO estimates that the contributions would 
exceed training costs by about $4 million in 1997. Beginning in 
1998, the provision would result in added costs of about $4 
million as the first cohort begins to train. Costs reach $5 
million in 1999, but would then decline by about $1 million a 
year through 2002 because the bill would apply to a fixed 
number of beneficiaries and the likelihood of their using the 
benefit falls over time.
    Alternative teaching certificates (section 105).--The bill 
would permanently extend VA's authority to pay MGIB benefits to 
veterans who train in State-approved certification programs. 
Under current law, VA's authority expires at the end of fiscal 
year 1996; thus, costs begin in 1997. Training usually occurs 
in one of three settings--universities, service centers, or 
school districts. This bill would provide benefits to students 
who train outside of a university setting.
    CBO assumes that the number of people training in these 
programs will remain steady (about 380 per year), and that 
enrollment will continue to be evenly divided between 
university and other settings. Also, CBO assumes that, on 
average, participants would train for a period of about 10 
months. Based on a benefit rate for full-time students of about 
$400 per month of training, the bill would increase costs by 
about $1 million per year.
    Increase in automobile allowance (section 203).--VA 
currently awards allowances to certain disabled veterans to 
purchase automobiles. This bill would increase the automobile 
allowance from $5,500 to $6,500. According to VA, this 
provision would benefit about 1,100 persons, and the yearly 
cost would be about $1 million.

                         Other Benefit Programs

    Table 2 shows the costs of three provisions that would 
affect other benefit programs.
    Discontinuance of veterans' benefits (section 201).--
Currently, a veteran's compensation benefit is discontinued on 
the last day of the month prior to the veteran's death. This 
bill would allow surviving spouses of totally disabled veterans 
to keep a share of the monthly benefit that would vary 
according to the date of the veteran's death. Data from the 
Department of Veterans Affairs (VA) indicate that close to 
33,000 survivors of compensation beneficiaries and about 18,000 
survivors of veterans who are pensioners would benefit from 
this provision each year. On average, survivors would be paid 
half a month's benefit, resulting in a cost of $11 million in 
1997 rising to $12 million in 2002.

                          TABLE 2: COST OF PROVISIONS AFFECTING OTHER BENEFIT PROGRAMS                          
                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                     1996     1997     1998     1999     2000     2001     2002 
----------------------------------------------------------------------------------------------------------------
                                                                                                                
                                                 DIRECT SPENDING                                                
Spending under current law:                                                                                     
  Estimated budget authority.....................   17,991   18,168   18,447   19,209   19,512   19,847   20,215
  Estimated outlays..............................   16,565   18,183   18,389   19,146   20,912   18,395   20,184
Proposed changes:                                                                                               
  Estimated budget authority.....................        0       15       15       16       16       16       17
  Estimated outlays..............................        0       13       15       16       17       15       17
Spending under the bill:                                                                                        
  Estimated budget authority.....................   17,991   18,183   18,462   19,225   19,528   19,863   20,232
  Estimated outlays..............................   16,565   18,196   18,404   19,162   20,929   18,410   20,201
----------------------------------------------------------------------------------------------------------------

    Accrued benefits (section 202).--Currently, veterans' 
compensation or pension benefits are payable retroactive to the 
date of application, and can be accrued for up to one year. 
Depending on the nature of the case, the adjudication process 
for veterans' benefits can last several years. If a veteran 
dies during the adjudication process, VA pays the surviving 
spouse the accrued benefits that would have been paid to the 
veteran. This bill would require VA to pay surviving spouses 
benefits accrued for up to two years rather than one.
    VA does not have adequate data for a cost estimate. About 
3,000 accrued cases were paid last year, most involving 
compensation payments. If half of these accrued cases involved 
claims that would entitle survivors to more than a year's worth 
of benefits--16 months, for example--the cost of this bill 
would be about $3 million a year for the extra four months of 
benefits.
    Legal assistance for financially needy veterans (section 
204).--This provision would permit the Court of Veterans 
Appeals (COVA) to provide financial assistance on behalf of 
needy veterans to third parties for screening, legal 
representation and advice, and other such purposes. The 
legislation would require that certain amounts appropriated for 
compensation and pensions in 1997 through 2003 be transferred 
to a fund for the payment of this legal assistance. The bill 
would provide $700,000 in 1997 and the same amount increased by 
3 percent a year thereafter.
    In addition, the bill would create a gift fund for the same 
purposes. Citizens or corporations could contribute to the 
legal assistance fund. CBO estimates that these funds would be 
expended in the year they are received. Thus, the creation of 
the gift fund would have no net budgetary impact.
    7. Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act of 1985 sets up pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts through 1998. The bill would have the following pay-
as-you-go impact:

                                                                        
                [By fiscal years, in millions of dollars]               
------------------------------------------------------------------------
                                                 1996     1997     1998 
------------------------------------------------------------------------
Change in outlays............................        0        9       -2
Change in receipts ..........................        Not applicable     


    8. Estimated impact on State, local, and tribal 
governments: H.R. 3674 contains no intergovernmental mandates 
as defined by Public Law 104-4 and would not affect the budgets 
of State, local or tribal governments.
    9. Estimated impact on the private sector: This bill would 
impose no new federal private-sector mandates, as defined in 
Public Law 104-4.
    10. Previous CBO estimate: None.
    11. Estimate prepared by:

          Federal cost estimate: Victoria Fraider and Mary 
        Helen Petrus.
          Impact on State, local, and tribal governments: Marc 
        Nicole.
          Impact on private sector: Ellen Breslin Davidson.

    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                     Inflationary Impact Statement

    The enactment of the reported bill would have no 
inflationary impact.

                  Applicability to Legislative Branch

    The reported bill would not be applicable to the 
legislative branch under the Congressional Accountability Act, 
Public Law 104-1, because the bill would only affect certain 
Department of Veterans Affairs programs and benefits 
recipients.

                     Statement of Federal Mandates

    The reported bill would not establish a federal mandate 
under the Unfunded Mandates Reform Act, Public Law 104-4.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

                      TITLE 38, UNITED STATES CODE

          * * * * * * *

              PART III--READJUSTMENT AND RELATED BENEFITS

          * * * * * * *

     CHAPTER 30--ALL-VOLUNTEER FORCE EDUCATIONAL ASSISTANCE PROGRAM

                   subchapter i--purposes; definitions

Sec.
3001.  Purposes.
     * * * * * * *

               subchapter ii--basic educational assistance

3011.  Basic educational assistance entitlement for service on active 
          duty.
     * * * * * * *
3018C.  Enrollment of certain VEAP-enrolled individuals.
     * * * * * * *

                  SUBCHAPTER I--PURPOSES; DEFINITIONS

          * * * * * * *

Sec. 3002. Definitions

  For the purposes of this chapter--
  (1) * * *
          * * * * * * *
  (7) The term ``active duty'' includes full-time National 
Guard duty first performed after [November 29, 1989] June 30, 
1985, by a member of the Army National Guard of the United 
States or the Air National Guard of the United States in the 
member's status as a member of the National Guard of a State 
for the purpose of organizing, administering, recruiting, 
instructing, or training the National Guard.
          * * * * * * *

              SUBCHAPTER II--BASIC EDUCATIONAL ASSISTANCE

          * * * * * * *

Sec. 3013. Duration of basic educational assistance

  (a) * * *
          * * * * * * *
  (d) Subject to section 3695 of this title, each individual 
entitled to educational benefits under section 3018A [or 
3018B], 3018B, or 3018C of this title is entitled to the lesser 
of--
          (1) 36 months of educational assistance under this 
        chapter (or the equivalent thereof in part-time 
        educational assistance; or
          (2) the number of months of such educational 
        assistance (or such equivalent thereof) that is equal 
        to the number of months served by such individual on 
        active duty.
          * * * * * * *

Sec. 3015. Amount of basic educational assistance

  (a) The amount of payment of educational assistance under 
this chapter is subject to section 3032 of this title. Except 
as otherwise provided in subsections (b), (c), (d), (e), (f), 
and (g) of this section, a basic educational assistance 
allowance under this subchapter shall be paid--
          (1) at the monthly rate of [$400] $421.62 for an 
        approved program of education pursued on a full-time 
        basis; or
          * * * * * * *
  (b) Except as provided in subsections (c), (d), (e), (f), and 
(g), in the case of an individual entitled to an educational 
assistance allowance under section 3011 or 3018 of this title 
and whose initial obligated period of active duty is two years, 
a basic educational assistance allowance under this chapter 
shall be paid--
          (1) at the monthly rate of [$325] $343.51 for an 
        approved program of education pursued on a full-time 
        basis; or
          * * * * * * *
  (f) In the case of an individual for whom the Secretary of 
Defense made contributions under section 3222(c) of this title 
and who is entitled to educational assistance under section 
3018A, 3018B, or 3018C of this chapter, the Secretary shall 
increase the rate of the basic educational assistance allowance 
applicable to such individual in excess of the rate provided 
under subsection (a) of this section in a manner consistent 
with, as determined by the Secretary of Defense, the agreement 
entered into with such individual pursuant to the rules and 
regulations issued by the Secretary of Defense under section 
3222(c) of this title.
          * * * * * * *

Sec. 3018C. Enrollment of certain VEAP-enrolled individuals

  (a) Notwithstanding any other provision of law, the Secretary 
of Defense shall allow an individual who--
          (1) is a participant on the date of the enactment of 
        the Veterans' Education and Compensation Benefits 
        Amendments of 1996 in the educational benefits program 
        provided by chapter 32;
          (2) is serving on active duty (excluding the periods 
        referred to in section 3202(1)(C)) on such date;
          (3) before applying for benefits under this section, 
        has completed the requirements of a secondary school 
        diploma (or equivalency certificate) or has 
        successfully completed the equivalent of 12 semester 
        hours in a program of education leading to a standard 
        college degree;
          (4) if discharged or released from active duty during 
        the 180-day period specified in paragraph (5), is 
        discharged or released therefrom with an honorable 
        discharge; and
          (5) before 180 days after the date of the enactment 
        of the Veterans' Education and Compensation Benefits 
        Amendments of 1996, makes an irrevocable election to 
        receive benefits under this section in lieu of benefits 
        under chapter 32 of this title, pursuant to procedures 
        which the Secretary of each military department shall 
        provide in accordance with regulations prescribed by 
        the Secretary of Defense for the purpose of carrying 
        out this section or which the Secretary of 
        Transportation shall provide for such purpose with 
        respect to the Coast Guard when it is not operating as 
        a service in the Navy;
to become entitled to basic educational assistance under this 
chapter.
  (b) With respect to an individual who makes an election under 
subsection (a) to become entitled to basic education assistance 
under this chapter--
          (1) the basic pay of the individual shall be reduced 
        (in a manner determined by the Secretary of Defense) 
        until the total amount by which such basic pay is 
        reduced is $1,200; or
          (2) the Secretary shall collect $1,200 from the 
        individual, which shall be paid into the Treasury of 
        the United States as miscellaneous receipts.
  (c)(1) Except as provided in paragraph (3) of this 
subsection, an individual who is enrolled in the educational 
benefits program provided by chapter 32 of this title and who 
makes the election described in subsection (a)(5) of this 
section shall be disenrolled from such chapter 32 program as of 
the date of such election.
  (2) For each individual who is disenrolled from such program, 
the Secretary shall refund--
          (A) as provided in section 3223(b) of this title, to 
        the individual the unused contributions made by the 
        individual to the Post-Vietnam Era Veterans Education 
        Account established pursuant to section 3222(a) of this 
        title; and
          (B) to the Secretary of Defense the unused 
        contributions (other than contributions made under 
        section 3222(c) of this title) made by such Secretary 
        to the Account on behalf of such individual.
  (3) Any contribution made by the Secretary of Defense to the 
Post-Vietnam Era Veterans Education Account pursuant to 
subsection (c) of section 3222 of this title on behalf of any 
individual referred to in paragraph (1) of this subsection 
shall remain in such account to make payments of benefits to 
such individual under section 3015(f) of this title.
  (d) The procedures provided in regulations referred to in 
subsection (a) shall provide for notice of the requirements of 
subparagraphs (B), (C), and (D) of section 3011(a)(3) and of 
subparagraph (A) of section 3012 of this title. Recepit of such 
notice shall be acknowledged in writing.

SUBCHAPTER IV--TIME LIMITATION FOR USE OF ELIGIBILITY AND ENTITLEMENT; 
                 GENERAL AND ADMINISTRATIVE PROVISIONS

          * * * * * * *

Sec. 3035. Allocation of administration and of program costs

  (a) * * *
  (b)(1) Except to the extent provided in paragraphs (2) and 
(3) of this subsection, payments for entitlement earned under 
subchapter II of this chapter shall be made from funds 
appropriated to, or otherwise available to, the Department of 
Veterans Affairs for the payment of readjustment benefits and 
from transfers from the Post-Vietnam Era Veterans Education 
Account pursuant to section 3232(b)(2)(B) of this title.
          * * * * * * *
  (3) Payment for entitlements established under section 3018A 
[or 3018B], 3018B, or 3018C of this title shall be made--
          (A) except as provided in subparagraphs (B) and (C) 
        of this paragraph, from the Department of Defense 
        Education Benefits Fund established under section 2006 
        of title 10;
          * * * * * * *

   CHAPTER 31--TRAINING AND REHABILITATION FOR VETERANS WITH SERVICE-
                         CONNECTED DISABILITIES

          * * * * * * *

Sec. 3101. Definitions

  For the purposes of this chapter--
  (1) The term ``employment handicap'' means an impairment, 
resulting in substantial part from a disability described in 
section 3102(1)(A) of this title, of a veteran's ability to 
prepare for, obtain, or retain employment consistent with such 
veteran's abilities, aptitudes, and interests.
          * * * * * * *
  (6) The term ``rehabilitation program'' means (A) a 
vocational rehabilitation program, or (B) a program of 
independent living services and assistance authorized under 
section 3120 of this title for a veteran for whom a vocational 
goal has been determined not to be currently reasonably 
feasible.
  (7) The term ``serious employment handicap'' means a 
significant impairment, resulting in substantial part from a 
service-connected disability rated at 10 percent or more, of a 
veteran's ability to prepare for, obtain, or retain employment 
consistent with such veteran's abilities, aptitudes, and 
interests.
          * * * * * * *

Sec. 3102. Basic entitlement

  A person shall be entitled to a rehabilitation program under 
the terms and conditions of this chapter if--
          (1) the person--
                  (A) is--
                          (i) a veteran who has a service-
                        connected disability [which is, or but 
                        for the receipt of retired pay would 
                        be, compensable at a rate of 20 percent 
                        or more under chapter 11 of this title] 
                        rated at 20 percent or more and which 
                        was incurred or aggravated in service 
                        on or after September 16, 1940; or
          (2) the person is a veteran who--
                  (A) has a service-connected disability [which 
                is, or but for the receipt of retired pay would 
                be, compensable at a rate of 10 percent under 
                chapter 11 of this title] rated at 10 percent 
                and which was incurred or aggravated in service 
                on or after September 16, 1940; and
                  [(B) has a serious employment handicap.]
                  (B) is determined by the Secretary to be in 
                need of rehabilitation because of a serious 
                employment handicap.
          * * * * * * *

Sec. 3103. Periods of eligibility

  (a) * * *
  (b)(1) * * *
          * * * * * * *
  (3) In any case in which the Secretary determines that a 
veteran has been prevented from participating in a vocational 
rehabilitation program under this chapter within the period of 
eligibility prescribed in subsection (a) of this section 
because such veteran had not established the existence of a 
service-connected disability [described in section 
3102(1)(A)(i) of this title] rated at 10 percent or more, the 
twelve-year period of eligibility shall not run during the 
period such veteran was so prevented from participating in such 
a program.
  (c) In any case in which the Secretary determines that a 
veteran is in need of services to overcome a serious employment 
handicap, such veteran may be afforded a vocational 
rehabilitation program after the expiration of the period of 
eligibility otherwise applicable to such veteran if the 
Secretary also determines, on the basis of such veteran's 
[particular] current employment handicap and need for such 
services, that an extension of the applicable period of 
eligibility is necessary for such veteran and--
          (1) that such veteran had not previously been 
        rehabilitated to the point of employability;
          (2) that such veteran had previously been 
        rehabilitated to the point of employability but (A) the 
        need for such services had arisen out of a worsening of 
        such veteran's service-connected disability that 
        precludes such veteran from performing the duties of 
        the occupation for which such veteran was previously 
        trained in a vocational rehabilitation program under 
        this chapter, or (B) the occupation for which such 
        veteran had been so trained is not suitable in view of 
        such [veteran's employment] veteran's current 
        employment handicap and capabilities; or
  (d) In any case in which the Secretary has determined that a 
veteran's disability or disabilities are so severe that the 
achievement of a vocational goal currently is not reasonably 
feasible, such veteran may be afforded a program of independent 
living services and assistance [under this chapter] in 
accordance with the provisions of section 3120 of this title 
after the expiration of the period of eligibility otherwise 
applicable to such veteran if the Secretary also determines 
that an extension of the period of eligibility of such veteran 
is necessary for such veteran to achieve maximum independence 
in daily living.

Sec. 3104. Scope of services and assistance

  (a) Services and assistance which the Secretary may provide 
under this chapter, pursuant to regulations which the Secretary 
shall prescribe, include the following:
          (1) Evaluation, including periodic reevaluations as 
        appropriate with respect to a veteran participating in 
        a rehabilitation program, of the potential for 
        rehabilitation of a veteran, including diagnostic and 
        related services (A) to determine whether [such 
        veteran's disability or disabilities cause] the veteran 
        has an employment handicap or a serious employment 
        handicap and whether a vocational goal is reasonably 
        feasible for such veteran, and (B) to provide a basis 
        for planning a suitable vocational rehabilitation 
        program or a program of services and assistance to 
        improve the vocational rehabilitation potential or 
        independent living status of such veteran, as 
        appropriate.
          * * * * * * *
          (7)(A) Vocational and other training services and 
        assistance, including [(i)] individualized tutorial 
        assistance, tuition, fees, books, supplies, handling 
        charges, licensing fees, and equipment and other 
        training materials determined by the Secretary to be 
        necessary to accomplish the purposes of the 
        rehabilitation program in the individual case[, and 
        (ii) job-readiness skills development and counseling 
        under section 14(a)(2) of the Veterans' Job Training 
        Act (29 U.S.C. 1721 note) for a participant in a 
        program of training under such Act].
          * * * * * * *
          (12) [For the most severely disabled veterans 
        requiring] For veterans with the most severe service-
        connected disabilities who require homebound training 
        or self-employment, or both homebound training and 
        self-employment, such license fees and essential 
        equipment, supplies, and minimum stocks of materials as 
        the Secretary determines to be necessary for such a 
        veteran to begin employment and are within the criteria 
        and cost limitations that the Secretary shall prescribe 
        in regulations for the furnishing of such fees, 
        equipment, supplies, and stocks.
          * * * * * * *
  [(b) A program of independent living services and assistance 
may include the types of services and assistance described in 
section 702 of the Rehabilitation Act of 1973 (29 U.S.C. 
796a).]
  [(c)] (b) A rehabilitation program (including individual 
courses) to be pursued by a veteran shall be subject to the 
approval of the Secretary.
          * * * * * * *

Sec. 3105. Duration of rehabilitation programs

  (a) * * *
          * * * * * * *
  (c) The Secretary may extend the period of a vocational 
rehabilitation program for a veteran to the extent that the 
Secretary determines that an extension of such period is 
necessary to enable such veteran to achieve a vocational goal 
if the Secretary also determines--
          (1) that such veteran had previously been 
        rehabilitated to the point of employability but (A) 
        such veteran's need for further vocational 
        rehabilitation has arisen out of a worsening of such 
        veteran's service-connected disability that precludes 
        such veteran from performing the duties of the 
        occupation for which such veteran had been so 
        rehabilitated, or (B) the occupation for which such 
        veteran had been so rehabilitated is not suitable in 
        view of such [veteran's employment] veteran's current 
        employment handicap and capabilities; or
          * * * * * * *

Sec. 3106. Initial and extended evaluations; determinations regarding 
                    serious employment handicap

  (a) The Secretary shall provide any veteran who has a 
service-connected disability [described in clause (i) or (ii) 
of section 3102(1)(A) of this title] rated at 10 percent or 
more and who applies for benefits under this chapter with an 
initial evaluation consisting of such services described in 
section 3104(a)(1) of this title as are necessary (1) to 
determine whether such veteran is entitled to and eligible for 
benefits under this chapter, and (2) in the case of a veteran 
who is determined to be entitled to and eligible for such 
benefits, to determine--
          (A) whether such veteran has a serious employment 
        handicap, and
          (B) whether the achievement of a vocational goal 
        currently is reasonably feasible for such veteran if it 
        is reasonably feasible to make such determination 
        without extended evaluation.
  (b) In any case in which the Secretary has determined that a 
veteran has a serious employment handicap and that the 
achievement of a vocational goal currently is reasonably 
feasible for such veteran, such veteran shall be provided 
[counseling in accordance with] an individualized written plan 
of vocational rehabilitation developed under section 3107(a) of 
this title.
  (c) In any case in which the Secretary has determined that a 
veteran has a serious employment handicap but the Secretary is 
unable to determine, in an initial evaluation pursuant to 
subsection (a) of this section, whether or not the achievement 
of a vocational goal currently is reasonably feasible, such 
veteran shall be provided with an extended evaluation 
consisting of the services described in section 3104(a)(1) of 
this title, such services under this chapter as the Secretary 
determines necessary to improve such veteran's potential for 
participation in a program of services designed to achieve a 
vocational goal and enable such veteran to achieve maximum 
independence in daily living, and assistance as authorized by 
section 3108 of this title.
  (d) In any case in which the Secretary has determined that a 
veteran has a serious employment handicap and also determines, 
following such initial and any such extended evaluation, that 
achievement of a vocational goal currently is not reasonably 
feasible, the Secretary shall determine whether the veteran is 
capable of participating in a program of independent living 
services and assistance under section 3120 of this title.
  [(d)] (e) The Secretary shall in all cases determine as 
expeditiously as possible whether the achievement of a 
vocational goal by a veteran currently is reasonably feasible. 
In the case of a veteran provided extended evaluation under 
subsection (c) of this section (including any periods of 
extensions under section 3105(a) of this title), the Secretary 
shall make such determination not later than the end of such 
extended evaluation or period of extension, as the case may be. 
In determining whether the achievement of a vocational goal 
currently is reasonably feasible, the Secretary shall resolve 
any reasonable doubt in favor of determining that such 
achievement currently is reasonably feasible.
  [(e)] (f) In connection with each period of extended 
evaluation of a veteran and each rehabilitation program for a 
veteran who is determined to have a serious employment 
handicap, the Secretary shall assign a Department of Veterans 
Affairs employee to be responsible for the management and 
followup of the provision of all services (including 
appropriate coordination of employment assistance under section 
3117 of this title) and assistance under this chapter to such 
veteran.

Sec. 3107. Individualized vocational rehabilitation plan

  (a) * * *
          * * * * * * *
  (c)(1) * * *
  (2) In any case in which a veteran does not agree to such 
plan as proposed, to such plan as redeveloped, or to the 
disapproval of redevelopment of such plan, such veteran may 
submit to the person described in section [3106(e)] 3106(f) of 
this title a written statement containing such veteran's 
objections and request a review of such plan as proposed or 
redeveloped, or a review of the disapproval of redevelopment of 
such plan, as the case may be.
          * * * * * * *

Sec. 3108. Allowances

  (a)(1) * * *
  (2) In any case in which the Secretary determines, at the 
conclusion of such veteran's pursuit of a vocational 
rehabilitation program under this chapter, that such veteran 
has been rehabilitated to the point of employability, such 
veteran shall be paid a subsistence allowance, as prescribed in 
this section for full-time training for the type of program 
that the veteran was pursuing, for two months [following the 
conclusion of such pursuit] while satisfactorily following a 
program of employment services provided under section 
3104(a)(5) of this title.
          * * * * * * *
  (f)(1)(A) In any case in which the Secretary determines that 
a veteran is eligible for and entitled to rehabilitation under 
this chapter, to the extent that such veteran has remaining 
eligibility for and entitlement to educational assistance 
benefits under [chapter 30 or 34] chapter 30 of this title, 
such veteran may elect, as part of a vocational rehabilitation 
program under this chapter, to pursue an approved program of 
education and receive allowances and other forms of assistance 
equivalent to those authorized for veterans enrolled under 
[either chapter 30 or chapter 34] chapter 30 of this title, if 
the Secretary approves the educational, professional, or 
vocational objective chosen by such veteran for such program.
  (B) In the event that such veteran makes such an election, 
the terms and conditions applicable to the pursuit of a 
comparable program of education and the payment of allowances 
and provision of assistance under [chapter 30 or 34] chapter 30 
of this title for such a comparable program shall be applied to 
the pursuit of the approved program of education under this 
chapter.
          * * * * * * *

Sec. 3109. Entitlement to independent living services and assistance

  In any case in which the Secretary has determined under 
section [3106(d)] 3106(e) of this title that the achievement of 
a vocational goal by a veteran currently is not reasonably 
feasible, such veteran shall be entitled, in accordance with 
the provisions of section 3120 of this title, to a program of 
independent living services and assistance designed to enable 
such veteran to achieve maximum independence in daily living.
          * * * * * * *

Sec. 3117. Employment assistance

  (a)(1) A veteran with a service-connected disability rated at 
10 percent or more who has participated in a vocational 
rehabilitation program under this chapter or a similar program 
under the Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.) 
and who the Secretary has determined to be employable shall be 
furnished assistance in obtaining employment consistent with 
such veteran's abilities, aptitudes, interests, and employment 
handicap, including assistance necessary to insure that such 
veteran receives the benefit of any applicable provisions of 
law or regulation providing for special consideration or 
emphasis or preference for such veteran in employment or 
training.
          * * * * * * *

Sec. 3118. Personnel training, development, and qualifications

  (a) * * *
          * * * * * * *
  (c) Notwithstanding any other provision of law, the Secretary 
shall establish such qualifications for personnel providing 
evaluation and rehabilitation services to veterans under this 
chapter and for employees performing the functions described in 
section [3106(e)] 3106(f) of this title as the Secretary 
determines are necessary and appropriate to insure the quality 
of rehabilitation programs under this chapter. In establishing 
such qualifications, the Secretary shall take into account the 
qualifications established for comparable personnel under the 
Rehabilitation Act of 1973 (29 U.S.C. ch. 16).
          * * * * * * *

Sec. 3120. Program of independent living services and assistance

  (a) * * *
  (b) A program of independent living services and assistance 
may be made available under this section only to a veteran who 
has a [service-connected disability described in section 
3102(1)(A)] serious employment handicap resulting in 
substantial part from a service-connected disability described 
in section 3102(1)(A)(i) of this title and with respect to whom 
it is determined under section [3106(d)] 3106(d) or (e) of this 
title that the achievement of a vocational goal currently is 
not reasonably feasible.
          * * * * * * *
  (d) A program of independent living services and assistance 
for a veteran shall consist of such services described in 
section 3104(a) [and (b)] of this title as the Secretary 
determines necessary to enable such veteran to achieve maximum 
independence in daily living. Such veteran shall have the same 
rights with respect to an individualized written plan of 
services and assistance as are afforded veterans under section 
3107 of this title.
          * * * * * * *

          CHAPTER 32--POST-VIETNAM ERA EDUCATIONAL ASSISTANCE

          * * * * * * *

                 SUBCHAPTER III--ENTITLEMENT; DURATION

          * * * * * * *

Sec. 3232. Duration; limitations

  (a) * * *
  (b)(1) In the event that an eligible veteran has not utilized 
any or all of such veteran's entitlement by the end of the 
delimiting period applicable to the veteran under subsection 
(a) of this section and at the end of one year thereafter has 
not filed a claim for utilizing such entitlement, such eligible 
veteran is automatically disenrolled.
  (2)(A) Any contributions which were made by a veteran 
disenrolled under paragraph (1) of this subsection and remain 
in the fund shall be refunded to the veteran after notice of 
disenrollment is transmitted to the veteran and the veteran 
applies for such refund.
  (B) If no application for refund of contributions under 
subparagraph (A) of this paragraph is received from a 
disenrolled veteran within one year after the date the notice 
referred to in such subparagraph is transmitted to the veteran, 
it shall be presumed[, for the purposes of section 1322(a) of 
title 31,] that the veteran's whereabouts is unknown and the 
funds shall be transferred [as provided in such section] to the 
Secretary for payments for entitlement earned under subchapter 
II of chapter 30.
          * * * * * * *

              CHAPTER 34--VETERANS' EDUCATIONAL ASSISTANCE

          * * * * * * *

                   SUBCHAPTER I--PURPOSE; DEFINITIONS

          * * * * * * *

Sec. 3452. Definitions

  For the purposes of this chapter and chapter 36 of this 
title--
  (a) * * *
          * * * * * * *
  (c) The term ``educational institution'' means any public or 
private elementary school, secondary school, vocational school, 
correspondence school, business school, junior college, 
teachers' college, college, normal school, professional school, 
university, or scientific or technical institution, or other 
institution furnishing education for adults. [For the period 
ending on September 30, 1996, such] Such term includes any 
entity that provides training required for completion of any 
State-approved alternative teacher certification program (as 
determined by the Secretary).
          * * * * * * *

  CHAPTER 39--AUTOMOBILES AND ADAPTIVE EQUIPMENT FOR CERTAIN DISABLED 
                VETERANS AND MEMBERS OF THE ARMED FORCES

          * * * * * * *

Sec. 3902. Assistance for providing automobile and adaptive equipment

  (a) The Secretary, under regulations which the Secretary 
shall prescribe, shall provide or assist in providing an 
automobile or other conveyance to each eligible person by 
paying the total purchase price of the automobile or other 
conveyance (including all State, local, and other taxes) or 
[$5,500] $6,500, whichever is the lesser, to the seller from 
whom the eligible person is purchasing under a sales agreement 
between the seller and the eligible person.
          * * * * * * *

               PART IV--GENERAL ADMINISTRATIVE PROVISIONS

          * * * * * * *

           CHAPTER 51--CLAIMS, EFFECTIVE DATES, AND PAYMENTS

          * * * * * * *

                     SUBCHAPTER II--EFFECTIVE DATES

          * * * * * * *

Sec. 5110. Effective dates of awards

  (a) * * *
          * * * * * * *
  (d)(1) * * *
          * * * * * * *
  (3) Notwithstanding paragraph (1), the effective date of an 
award of dependency and indemnity compensation for which 
application is received within one year from the date of death 
shall, in the case of a surviving spouse who is not entitled to 
have benefits computed under section 5310 of this title for the 
month in which the death occurs, be the day following the date 
on which the death occurred.
          * * * * * * *

Sec. 5112. Effective dates of reductions and discontinuances

  (a) * * *
  (b) The effective date of a reduction or discontinuance of 
compensation, dependency and indemnity compensation, or 
pension--
          [(1) by reason of marriage or remarriage, or death of 
        a payee shall be the last day of the month before such 
        marriage, remarriage, or death occurs;]
          (1) by reason of--
                  (A) the marriage or remarriage of the payee, 
                shall be the last day of the month before the 
                month during which such marriage or remarriage 
                occurs; and
                  (B) the death of the payee, shall be (i) the 
                last day of the month before the month during 
                which the death occurs, or (ii) in the case of 
                a payee who was in receipt of compensation or 
                pension and who has a surviving spouse who is 
                not entitled to have benefits computed under 
                section 5310 of this title for the month in 
                which the death occurs, the date on which the 
                death occurs;
          * * * * * * *
  (d) In the case of discontinuance of payment of compensation 
or pension covered by subsection (b)(1)(B)(ii), the payment for 
the final calendar month (or any portion thereof) for which 
such benefit is payable shall (notwithstanding any other 
provision of law) be payable to the surviving spouse.
          * * * * * * *

                  SUBCHAPTER III--PAYMENT OF BENEFITS

Sec. 5121. Payment of certain accrued benefits upon death of a 
                    beneficiary

  (a) Except as provided in sections 3329 and 3330 of title 31, 
periodic monetary benefits (other than insurance and 
servicemen's indemnity) under laws administered by the 
Secretary to which an individual was entitled at death under 
existing ratings or decisions, or those based on evidence in 
the file at date of death (hereafter in this section and 
section 5122 of this title referred to as ``accrued benefits'') 
and due and unpaid for a period not to exceed [one year] two 
years, shall, upon the death of such individual be paid as 
follows:
          (1) * * *
          * * * * * * *

             PART V--BOARDS, ADMINISTRATIONS, AND SERVICES

          * * * * * * *

          CHAPTER 72--UNITED STATES COURT OF VETERANS APPEALS

               subchapter i--organization and jurisdiction

Sec.
7251.  Status.
7252.  Jurisdiction; finality of decisions.
     * * * * * * *

                subchapter iii--miscellaneous provisions

7281.  Employees.
     * * * * * * *
7287.  Legal assistance for financially needy veterans in proceedings 
          before the Court.
     * * * * * * *

                SUBCHAPTER III--MISCELLANEOUS PROVISIONS

          * * * * * * *

Sec. 7287. Legal assistance for financially needy veterans in 
                    proceedings before the Court

  (a)(1) The Court of Veterans Appeals shall provide funds in 
order to provide financial assistance by grant or contract to 
legal assistance entities for purposes of programs described in 
subsection (b).
  (2) The Court shall seek to provide funds for such purpose 
through a nonprofit organization selected by it. If the Court 
determines that there exists no nonprofit organization that 
would be an appropriate recipient of funds under this section 
for the purposes referred to in paragraph (1) and that it is 
consistent with the mission of the Court, the Court shall 
provide financial assistance, by grant or contract, directly to 
legal assistance entities for purposes of permitting such 
entities to carry out programs described in subsection (b).
  (b)(1) A program referred to in subsection (a) is any program 
under which a legal assistance entity uses financial assistance 
under this section to provide assistance or carry out 
activities (including assistance, services, or activities 
referred to in paragraph (3)) in order to ensure that 
individuals described in paragraph (2) receive, without charge, 
legal assistance in connection with decisions to which section 
7252(a) of this title may apply or with other proceedings 
before the Court.
  (2) An individual referred to in paragraph (1) is any veteran 
or other person who--
          (A) is or seeks to be a party to an action before the 
        Court; and
          (B) cannot, as determined by the Court or the entity 
        concerned, afford the costs of legal advice and 
        representation in connection with that action.
  (3) Assistance, services, and activities under a program 
described in this subsection may include the following for 
individuals described in paragraph (2) in connection with 
proceedings before the Court:
          (A) Financial assistance to defray the expenses of 
        legal advice or representation (other than payment of 
        attorney fees) by attorneys, clinical law programs of 
        law schools, and veterans service organizations.
          (B) Case screening and referral services for purposes 
        of referring cases to pro bono attorneys and such 
        programs and organizations.
          (C) Education and training of attorneys and other 
        legal personnel who may appear before the Court by 
        attorneys and such programs and organizations.
          (D) Encouragement and facilitation of the pro bono 
        representation by attorneys and such programs and 
        organizations.
  (4) A legal assistance entity that receives financial 
assistance described in subsection (a) to carry out a program 
under this subsection shall make such contributions (including 
in-kind contributions) to the program as the nonprofit 
organization or the Court, as the case may be, shall specify 
when providing the assistance.
  (5) A legal assistance entity that receives financial 
assistance under subsection (a) to carry out a program 
described in this subsection may not require or request the 
payment of a charge or fee in connection with the program by or 
on behalf of any individual described in paragraph (2).
  (c)(1)(A) From amounts appropriated to the Department for 
each of fiscal years 1997 through 2003 for the payment of 
compensation and pension, the Secretary shall transfer to the 
Court the amount specified under subparagraph (B) for each such 
fiscal year, and such funds shall be available for use by the 
Court only in accordance with this section.
  (B) The amount to be transferred to the Court under 
subparagraph (A) for any fiscal year is $700,000 for fiscal 
year 1997 and the same amount for each succeeding fiscal year 
through fiscal year 2003 increased by 3 percent per year, 
reduced for any such fiscal year by such amount as may 
otherwise be specifically appropriated for the purposes of the 
program under this section for that fiscal year.
  (2) The Court shall provide funds available to it for the 
purposes of the program under this section to a nonprofit 
organization described in subsection (a)(1). Such funds shall 
be provided to such organization in advance or by way of 
reimbursement, to cover some or all of the administrative costs 
of the organization in providing financial assistance to legal 
assistance entities carrying out programs described in 
subsection (b).
  (3) Funds shall be provided under this subsection pursuant to 
a written agreement entered into by the Court and the 
organization receiving the funds.
  (d) A nonprofit organization may--
          (1) accept funds, in advance or by way of 
        reimbursement, from the Court under subsection (a)(1) 
        in order to provide the financial assistance referred 
        to in that subsection;
          (2) provide financial assistance by grant or contract 
        to legal assistance entities under this section for 
        purposes of permitting such entities to carry out 
        programs described in subsection (b);
          (3) administer any such grant or contract; and
          (4) accept funds, in advance or by way of 
        reimbursement, from the Court under subsection (c) in 
        order to cover the administrative costs referred to in 
        that subsection.
  (e)(1) Not later than February 1 of each year, the Court 
shall submit to Congress a report on the funds and financial 
assistance provided under this section during the preceding 
fiscal year. Based on the information provided the Court by 
entities receiving such funds and assistance, each report 
shall--
          (A) set forth the amount, if any, of funds provided 
        to nonprofit organizations under paragraph (1) of 
        subsection (a) during the fiscal year covered by the 
        report;
          (B) set forth the amount, if any, of financial 
        assistance provided to legal assistance entities 
        pursuant to paragraph (1) of subsection (a) or under 
        paragraph (2) of that subsection during that fiscal 
        year;
          (C) set forth the amount, if any, of funds provided 
        to nonprofit organizations under subsection (c) during 
        that fiscal year; and
          (D) describe the programs carried out under this 
        section during that fiscal year.
  (2) The Court may require that any nonprofit organization and 
any legal assistance entity to which funds or financial 
assistance are provided under this section provide the Court 
with such information on the programs carried out under this 
section as the Court determines necessary to prepare a report 
under this subsection.
  (f) For the purposes of this section:
          (1) The term ``nonprofit organization'' means any 
        not-for-profit organization that is involved with the 
        provision of legal assistance to persons unable to 
        afford such assistance.
          (2) The term ``legal assistance entity'' means a not-
        for-profit organization or veterans service 
        organization capable of providing legal assistance to 
        persons with respect to matters before the Court.
          (3) The term ``veterans service organization'' means 
        an organization referred to in section 5902(a)(1) of 
        this title, including an organization approved by the 
        Secretary under that section.
                              ----------                              


              SECTION 1322 OF TITLE 31, UNITED STATES CODE

Sec. 1322. Payments of unclaimed trust fund amounts and refund of 
                    amounts erroneously deposited

  (a) On September 30 of each year, the Secretary of the 
Treasury shall transfer to the Treasury trust fund receipt 
account ``Unclaimed Moneys of Individuals Whose Whereabouts are 
Unknown'' that part of the balance of a trust fund account 
named in section 1321(a)(1)-[(82)] (81) of this title or an 
analogous trust fund established under section 1321(b) of this 
title that has been in the fund for more than one year and 
represents money belonging to individuals whose whereabouts are 
unknown. Subsequent claims to the transferred funds shall be 
paid from the account ``Unclaimed Moneys of Individuals Whose 
Whereabouts are Unknown''.
          * * * * * * *

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