SUPPLEMENTARY INFORMATION:

VA has two income-based benefit programs: pension and parents' dependency and indemnity compensation (DIC). VA may require a beneficiary of these programs to submit an eligibility verification report (EVR) in order to determine or verify entitlement under these programs. See38 U.S.C. 1315, 1506; 38 CFR 3.256, 3.277, 3.661. The authorizing statute for allowing VA to require an EVR from a parents' DIC beneficiary, section 1315(e), provides an exception for parents who have attained 72 years of age and have been paid DIC during two consecutive calendar years.

In the past, VA has interpreted section 1315(e) as allowing VA the discretion to continue requiring EVRs from this category of parents' DIC beneficiaries. See60 FR 25877, 25877-78 (May 15, 1995). However, on current review, we have determined that the statute does not allow VA to require EVRs from this group, and we are, therefore, amending the implementing regulation, § 3.256(b)(3), to state that VA will not request an EVR from these beneficiaries. This regulatory amendment does not change the requirement that parents' DIC beneficiaries who have attained 72 years of age and have been paid DIC during two consecutive calendar years must report material changes in income to VA. See38 U.S.C. 1315(e) and 38 CFR 3.256(a).

Administrative Procedures Act

This final rule is an interpretative rule and the changes made by this rule merely reflect VA's interpretation of statutory requirements. The primary purpose of the amendment is to implement VA's statutory interpretation of 38 U.S.C. 1315 and to align § 3.256 to the statute. Section 553(b) of title 5, U.S. Code, does not apply to interpretive rules. Accordingly, there is a basis for dispensing with prior notice and opportunity to comment. Moreover, under section 553(d), interpretive rules do not require 30 days prior notice before they may become effective. Therefore, because the amendment to § 3.256 is an interpretive rule, the amendment may have an immediate effect. Accordingly, there is a basis for dispensing with the delayed effective date provisions of 5 U.S.C. 553(d).

Paperwork Reduction Act

This document contains no provisions constituting a new collection of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521). The Office of Management and Budget (OMB) assigns a control number for each collection of information it approves. VA may not sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Control number 2900-0101 has been assigned for the collection of information under § 3.256.

The amendments to § 3.256 in this final rule remain within the scope of the approved collections of information. This document will not increase the information burden, nor is it a complete discontinuance because VA will continue to request EVRs from individuals who do not meet the exception requirements under section 1315(e). The amendments are a slight modification that applies to the narrow group of people who meet the exception. Any reduction in the burdens imposed by this approved collection will be identified and addressed in the extension request that VA must submit to OMB before July 31, 2008.

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. This final rule would not affect any small entities. Only 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.

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

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

Unfunded Mandates

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

Catalog of Federal Domestic Assistance Numbers and Titles

The Catalog of Federal Domestic Assistance program numbers and titles for this proposal are 64.102, Compensation for Service-Connected Deaths for Veterans' Dependents and 64.110, Veterans Dependency and Indemnity Compensation for Service-Connected Death.

For the reasons set forth in the preamble, 38 CFR part 3 is amended as follows:

1. The authority citation for part 3, subpart A, continues to read as follows:

Authority: 38 U.S.C. 501(a), unless otherwise noted.

2. Revise § 3.256(b)(3) introductory text to read as follows: