[Federal Register Volume 75, Number 168 (Tuesday, August 31, 2010)]
[Rules and Regulations]
[Pages 53199-53202]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-21668]
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DEPARTMENT OF VETERANS AFFAIRS
38 CFR Part 1
RIN 2900-AN14
Deceased Indebted Servicemembers and Veterans: Authority
Concerning Certain Indebtedness
AGENCY: Department of Veterans Affairs.
ACTION: Final rule.
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SUMMARY: This document amends Department of Veterans Affairs (VA)
regulations to implement certain statutory provisions that grant
limited authority to the Secretary of Veterans Affairs to terminate
collection action on certain debts arising from a VA benefit program
when the indebted individual is a member of the Armed Forces or a
veteran who dies as a result of injury incurred or aggravated in the
line of duty while serving in a theater of combat operations in a war
or in combat against a hostile force during a period of hostilities on
or after September 11, 2001, and to refund amounts collected after the
individual's death. This document also implements statutory provisions
that grant the Secretary discretionary authority to suspend or
terminate collection of debts owed to VA by individuals who died while
serving on active duty as a member of the Army, Navy, Air Force, Marine
Corps, or Coast Guard during a period when the Coast Guard is operating
as a service in the Navy, and to refund amounts collected after the
individual's death.
DATES: Effective Date: September 30, 2010.
FOR FURTHER INFORMATION CONTACT: Peter Mulhern, Office of Financial
Policy (047G), Department of Veterans Affairs, 810 Vermont Avenue, NW.,
Washington, DC 20420, (202) 461-6487. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: On June 30, 2008, Congress enacted the
Combat Veterans Debt Elimination Act of 2008, Public Law 110-252, of
which section 1303 amended chapter 53 of title 38, United States Code,
to add a new section (38 U.S.C. 5302A) to grant limited authority to
the Secretary of Veterans Affairs to terminate collection action on
certain debts arising from an individual's indebtedness from a VA
benefit program.
The indebted individual must be a member of the Armed Forces or a
veteran who dies as a result of injury incurred or aggravated in the
line of duty while serving in a theater of combat operations, as
determined by the Secretary in consultation with the Secretary of
Defense, in a war or in combat against a hostile force during a period
of hostilities on or after September 11, 2001. This authority may be
exercised in the Secretary's discretion when determined to be in the
best interest of the United States. This authority does not apply to
any amounts owed the United States under any program carried out under
the authority of 38 U.S.C. chapter 37 relating to housing and small
business loans. This legislation eliminates the need to contact family
members and avoids further hardship on them. Instead, it demonstrates
appreciation for sacrifice on behalf of a grateful Nation.
Section 1303 of Public Law 110-252 also states that in any case
where all or any part of a debt of a covered individual, as described
in 38 U.S.C. 5302A(a), was collected on or after September 11, 2001,
but before the date of Public Law 110-252, enacted on June 30, 2008,
the Secretary may refund the amount collected if, in the Secretary's
determination, collection of the indebtedness would have been
terminated had section 5302A been in effect at the time, and the
individual is equitably entitled to such a refund.
On October 10, 2008, Congress enacted the Veterans' Benefits
Improvement Act of 2008, Public Law 110-389, of which section 801
amended 31 U.S.C. 3711(f) to grant limited authority to the Secretary
to suspend or terminate action by the Secretary to collect a claim
against the estate of a person who died while serving on active duty as
a member of the Army, Navy, Air Force, Marine Corps, or Coast Guard
during a period when the Coast Guard is operating as a service in the
Navy. The Secretary must determine that, under circumstances applicable
with respect to the deceased person, it is appropriate to do so.
Section 801 of Public Law 110-389 also grants the Secretary the
authority to refund to the estate of the deceased member any amount
collected by the Secretary from a member who died while serving on
active duty as a member of the Armed Forces if the Secretary determines
that, under the circumstances applicable with respect to the deceased
person, it is appropriate to do so, whether collected before, on, or
after October 10, 2008.
In a document published in the Federal Register on August 7, 2009,
VA published the proposed rule associated with this document, see 74 FR
39589, which would implement the provisions of 38 U.S.C. 5302A and 31
U.S.C. 3711(f). In that document, we proposed to add 38 CFR 1.945 to
implement the Secretary's limited authority to suspend or terminate
collection action on certain debts arising from an individual's
indebtedness from a VA benefit program. Under proposed Sec. 1.945, the
individual must either be a person who died while serving on active
duty after September 11, 2001, as a member of the Army, Navy, Air
Force, Marine Corps, or Coast Guard during a period when the Coast
Guard is operating as a service in the Navy or the individual must be a
member of the Armed Forces or a veteran who dies as a result of injury
incurred or aggravated in the line of duty while serving in a theater
of combat operations, as determined by the Secretary in consultation
with the Secretary of Defense, in a war or in combat against a hostile
force during a period of hostilities after September 11, 2001.
[[Page 53200]]
We proposed that this authority would be exercised in the
Secretary's discretion when determined to be in the best interest of
the United States. The Secretary's authority under proposed Sec. 1.945
would not apply to any amounts owed the United States under any program
carried out under the authority of 38 U.S.C. chapter 37 relating to
housing and small business loans. The proposed rule also stated that in
any case where all or any part of a debt of a covered individual, as
described in 38 U.S.C. 5302A(a), was collected after September 11,
2001, the Secretary may refund the amount collected if, in the
Secretary's determination, collection of the indebtedness would have
been terminated had section 5302A been in effect at the time and the
individual is equitably entitled to such a refund and only if the
Secretary determines that the deceased individual is equitably entitled
to the refund. The Secretary would also be authorized to refund to the
estate of a deceased individual who died while serving on active duty
as a member of the Armed Forces any amount collected by the Secretary
from that member if the Secretary determines that, under the
circumstances applicable with respect to the deceased member, it is
appropriate to do so.
We provided a 60-day comment period, which ended on October 6,
2009. We received two comments during this period.
The first commenter expressed concern about ``placing emphasis on
the date of death'' of the service member and suggested that we broaden
the scope of the regulation to include those who died in the line of
duty prior to September 11, 2001. The commenter stated, ``any person
that has voluntarily put themselves in the position to protect our
country and its citizens should be extended this benefit regardless of
a date of death.''
In enacting Public Law 110-252, Congress limited the scope of 38
U.S.C. 5302A to those members of the Armed Forces and veterans who died
on or after September 11, 2001. Public Law 110-389, applies to a person
who died while serving on active duty and explains that the Secretary
may refund to the estate of such person any amount previously collected
on a VA claim regardless of whether such collection was before, on, or
after the date of enactment of that law. Further, in enacting Public
Law 110-389, Congress limited the scope of 31 U.S.C. 3711(f) to members
of the Armed Forces who die on active duty. This law provides the
Secretary with discretionary authority to suspend or terminate
collection action and to refund amounts previously collected. Based
upon this authority granted by Congress, we limited refunds to the
estate or next-of-kin of servicemembers or veterans who served on
active duty on or after September 11, 2001. We believe that this
ensures consistency and we will not make any changes to this rulemaking
based upon this comment.
The second commenter had several suggestions for expanding the
scope of the rule including the following: (1) Providing specific
language to include deaths related to post-traumatic stress disorder
(PTSD) where the death of the veteran occurred well after combat; (2)
distributing any refunds directly to the person responsible for the
payment of the debt, rather than automatically distributing it to the
deceased's estate or next-of-kin; (3) developing a system to minimize
or eliminate debt-related contact with the decedent's family; (4)
engaging the public and families directly to let them know a refund may
be possible and to provide information on how to maneuver the process
of obtaining a refund; and (5) expanding such debt relief to all debt,
not just debt owed to VA. We will not make any changes to this
rulemaking based upon these suggestions.
Regarding the request that we include specific language concerning
PTSD-related deaths, the language of 38 U.S.C. 5302A authorizes the
Secretary to terminate collection action on debts owed by a member of
the Armed Forces or a veteran who dies as a result of an injury
incurred or aggravated in the line of duty while serving in a theater
of combat operations after September 11, 2001. The type of relief
proposed by the commenter is beyond the authority of that statute
because PTSD is considered a disease and not an injury. We note,
however, that the language of 31 U.S.C. 3711(f)(3) does not contain the
same limitation; rather the Secretary may suspend or terminate
collection of a debt of any person who dies while serving on active
duty if under the circumstances it would be appropriate to do so.
Therefore, the type of relief proposed by the commenter for deaths
associated with diseases while serving on active duty may be
appropriate under 31 U.S.C. 3711(f)(3). The final rule in Sec.
1.945(a) provides the Secretary may suspend or terminate collection
under this statute for any person who dies on active duty when the
Secretary determines such action is appropriate and in the best
interest of the United States. We made no changes to the final rule
based on this comment.
The second commenter also suggested that the distribution of any
refunds go directly to the person responsible for payment of the debt,
rather than automatic distribution to the deceased's estate or next-of-
kin. VA's authority under title 38, United States Code, is generally
limited to providing benefits for veterans and their survivors. Refunds
are for the express purpose of providing relief to the families of
certain indebted servicemembers or veterans. We believe that Congress
intended that VA, in appropriate cases, would refund previously
collected funds first to the decedent's estate and, if there is no
estate, then to the decedent's surviving family members in the same
order that VA pays accrued benefits to survivors under 38 U.S.C.
5121(a)(2). Therefore, this final rule implements our interpretation of
Congressional intent with respect to the distribution of refunds. VA
will refund previously collected funds to the decedent's estate or,
absent an estate, to the decedent's next-of-kin in the following order:
the decedent's spouse, the decedent's children (in equal shares), or
the decedent's parents (in equal shares).
Next, the commenter asked whether a system could be developed to
minimize or eliminate debt-related contact with the decedent's family.
In doing so, the commenter suggested that the decedent's family should
be notified of any termination or suspension of collection action, or
the refund of any collected debt at the same time as they are notified
by the Department of Defense (DoD) of the decedent's death. We do not
believe that this suggestion can be implemented, primarily because
DoD's goal is to provide the service member's family with the
notification of death as quickly as possible. The VA process to
determine whether the debt should be suspended or terminated or a
refund issued, while done quickly, might not be completed prior to DoD
providing notification of death to the next-of-kin. In addition, DoD
has no authority to make a determination concerning the collection,
termination, and suspension of debts owed to VA or the refund of any
collected debt. It is the sole authority of VA to make the
determination for collection action on all cases arising from a VA
benefit program.
The commenter also suggested that VA engage the public and families
directly to let them know a refund may be possible and to provide
information on how to maneuver the process of obtaining a refund. As
authorized by sections 5302A and 3711(f), VA will limit refunds to the
estates of deceased service members or veterans or their next-of-kin to
ensure consistency in the refund of money. The next-of-kin will not
need to initiate a request for a
[[Page 53201]]
refund. The refunds will be processed automatically within VA and
submitted to the Secretary for approval.
Finally, the commenter expressed his belief that all debt, not just
debt owed to VA, should be forgiven for those who qualify under this
final rule. Unfortunately, while we understand the commenter's
concerns, our rulemaking authority is limited by sections 5302A and
3711(f) to cancellation of collection actions pertaining to debts owed
to VA.
We note that section 1303 of Public Law 110-252 states that the law
shall apply to those who died ``on or after'' September 11, 2001.
However, 38 U.S.C. 5302A(b) authorizes the Secretary to take action
regarding certain debts of individuals who die ``after September 11,
2001.'' The plain language of Public Law 110-252 clearly indicates that
Congress intended to include the debts of those who died on September
11, 2001. Moreover, a public law provision generally prevails over a
United States Code provision when there is an inconsistency. See
Stephan v. United States, 319 U.S. 423, 426 (1943) (U.S. Code ``cannot
prevail over the Statutes at Large when the two are inconsistent'');
Patten v. United States, 116 F.3d 1029, 1034 n. 3 (4th Cir. 1997)
(legislation enacted as a section of a public law and signed by the
President had the force of law even though it was not codified). In
light of the plain language of section 1303 and Congress' intent to
liberalize the law regarding debts owed by individuals who die in
combat or as a result of injuries incurred in combat, this final rule
implements the public law provision and authorizes the Secretary to
take action regarding indebted individuals who die on or after
September 11, 2001.
Based on the rationale set forth in the preamble to the proposed
rule and in this preamble, VA is adopting the provisions of the
proposed rule as a final rule with one change as noted above.
Paperwork Reduction Act
This document contains no provisions constituting a collection of
information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).
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 this 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.
Regulatory Flexibility Act
The Secretary 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, 5 U.S.C. 601-
612. Only individual survivors and estates of certain VA beneficiaries
could be directly affected. Therefore, pursuant to 5 U.S.C. 605(b),
this final rule is exempt from the initial and final regulatory
flexibility analysis 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 an 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 will have no such effect
on State, local, and tribal governments, or on the private sector.
Catalog of Federal Domestic Assistance Program
There is no Catalog of Federal Domestic Assistance program number
applicable to this final rule.
Signing Authority
The Secretary of Veterans Affairs, or designee, approved this
document and authorized the undersigned to sign and submit the document
to the Office of the Federal Register for publication electronically as
an official document of the Department of Veterans Affairs. John R.
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this
document on August 25, 2010 for publication.
List of Subjects in 38 CFR Part 1
Claims, Administrative practice and procedure, Archives and
records, Cemeteries, Courts, Crime, Flags, Freedom of information,
Government contracts, Government employees, Government property,
Infants and children, Inventions and patents, Parking, Penalties,
Privacy, Reporting and recordkeeping requirements, Seals and insignia,
Security measures, Wages.
Dated: August 26, 2010.
Robert C. McFetridge,
Director, Regulations Policy and Management, Office of the General
Counsel, Department of Veterans Affairs.
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For the reasons stated in the preamble, VA amends 38 CFR part 1 as
follows:
PART 1--GENERAL PROVISIONS
0
1. The authority citation for part 1 continues to read as follows:
Authority: 38 U.S.C. 501(a), and as noted in specific sections.
0
2. The authority citation preceding Sec. 1.900 is revised to read as
follows:
Authority: Sections 1.900 through 1.953 are issued under the
authority of 31 U.S.C. 3711 through 3720E; 38 U.S.C. 501, 5302,
5302A, 5314, and as noted in specific sections.
0
3. Amend Sec. 1.940 by adding introductory text, to read as follows:
Sec. 1.940 Scope and application.
Except as otherwise provided in Sec. 1.945:
* * * * *
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4. Add Sec. 1.945 to read as follows:
Sec. 1.945 Authority to suspend or terminate collection action on
certain benefit indebtedness; authority for refunds.
(a) The Secretary of Veterans Affairs (Secretary) may suspend or
terminate collection action on all or any part of an indebtedness owed
to VA by a member of the Armed Forces who dies while on active duty, if
the Secretary determines that such suspension or termination of
collection is appropriate and in the best interest of the United
States.
(b) The Secretary may terminate collection action on all or any
part of an amount owed to the United States for an indebtedness
resulting from an individual's participation in a benefits program
administered by the Secretary,
[[Page 53202]]
other than a program as described in paragraph (h) of this section, if
the Secretary determines that such termination of collection is in the
best interest of the United States. For purposes of this paragraph, an
individual is any member of the Armed Forces or veteran who dies as a
result of an injury incurred or aggravated in the line of duty while
serving in a theater of combat operations in a war or in combat against
a hostile force during a period of hostilities on or after September
11, 2001.
(c) For purposes of this section:
(1) Theater of combat operations means the geographic area of
operations where the Secretary in consultation with the Secretary of
Defense determines that combat occurred.
(2) Period of hostilities means an armed conflict in which members
of the United States Armed Forces are subjected to danger comparable to
danger to which members of the Armed Forces have been subjected in
combat with enemy armed forces during a period of war, as determined by
the Secretary in consultation with the Secretary of Defense.
(d) The Secretary may refund amounts collected after the death of a
member of the Armed Forces or veteran in accordance with this paragraph
and paragraph (e) of this section.
(1) In any case where all or any part of a debt of a member of the
Armed Forces, as described under paragraph (a) of this section, was
collected, the Secretary may refund the amount collected if, in the
Secretary's determination, the indebtedness would have been suspended
or terminated under authority of 31 U.S.C. 3711(f). The member of the
Armed Services must have been serving on active duty on or after
September 11, 2001. In any case where all or any part of a debt of a
covered member of the Armed Forces was collected, the Secretary may
refund the amount collected, but only if the Secretary determines that,
under the circumstances applicable with respect to the deceased member
of the Armed Forces, it is appropriate to do so.
(2) In any case where all or any part of a debt of a covered member
of the Armed Forces or veteran, as described under paragraph (b) of
this section, was collected on or after September 11, 2001, the
Secretary may refund the amount collected if, in the Secretary's
determination, the indebtedness would have been terminated under
authority of 38 U.S.C. 5302A. In addition, the Secretary may refund the
amount only if he or she determines that the deceased individual is
equitably entitled to the refund.
(e) Refunds under paragraph (d) of this section will be made to the
estate of the decedent or, in its absence, to the decedent's next-of-
kin in the order listed below.
(1) The decedent's spouse.
(2) The decedent's children (in equal shares).
(3) The decedent's parents (in equal shares).
(f) The authority exercised by the Secretary to suspend or
terminate collection action and/or refund amounts collected on certain
indebtedness is reserved to the Secretary and will not be delegated.
(g) Requests for a determination to suspend or terminate collection
action and/or refund amounts previously collected as described in this
section will be submitted to the Office of the Secretary through the
Office of the General Counsel. Such requests for suspension or
termination and/or refund may be initiated by the head of the VA
administration having responsibility for the program that gave rise to
the indebtedness, or any concerned staff office, or by the Chairman of
the Board of Veterans' Appeals. When a recommendation for refund under
this section is initiated by the head of a staff office, or by the
Chairman, Board of Veterans' Appeals, the views of the head of the
administration that administers the program that gave rise to the
indebtedness will be obtained and transmitted with the recommendation
of the initiating office.
(h) The provisions of this section concerning suspension or
termination of collection actions and the refunding of moneys
previously collected do not apply to any amounts owed the United States
under any program carried out under 38 U.S.C. chapter 37.
(Authority: 38 U.S.C. 501, 5302A; 31 U.S.C. 3711(f)).
[FR Doc. 2010-21668 Filed 8-30-10; 8:45 am]
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