
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-419 Section 123]
[Document affected by Public Law 107-14 Section 8(a)(7)]
[CITE: 38USC3674]

 
                      TITLE 38--VETERANS' BENEFITS
 
               PART III--READJUSTMENT AND RELATED BENEFITS
 
           CHAPTER 36--ADMINISTRATION OF EDUCATIONAL BENEFITS
 
                 SUBCHAPTER I--STATE APPROVING AGENCIES
 
Sec. 3674. Reimbursement of expenses

    (a)(1) Subject to paragraphs (2) through (4) of this subsection, the 
Secretary is authorized to enter into contracts or agreements with State 
and local agencies to pay such State and local agencies for reasonable 
and necessary expenses of salary and travel incurred by employees of 
such agencies and an allowance for administrative expenses in accordance 
with the formula contained in subsection (b) of this section in (A) 
rendering necessary services in ascertaining the qualifications of 
educational institutions for furnishing courses of education to eligible 
persons or veterans under this chapter and chapters 30 through 35 of 
this title and chapter 106 of title 10, and in the supervision of such 
educational institutions, and (B) furnishing, at the request of the 
Secretary, any other services in connection with such chapters. Each 
such contract or agreement shall be conditioned upon compliance with the 
standards and provisions of such chapters. The Secretary may also 
reimburse such agencies for work performed by their subcontractors where 
such work has a direct relationship to the requirements of such 
chapters, and has had the prior approval of the Secretary.
    (2)(A) The Secretary shall, effective at the beginning of fiscal 
year 1988, make payments to State and local agencies, out of amounts 
available for the payment of readjustment benefits, for the reasonable 
and necessary expenses of salary and travel incurred by employees of 
such agencies in carrying out contracts or agreements entered into under 
this section, for expenses approved by the Secretary that are incurred 
in carrying out activities described in section 3674A(a)(4) \1\ of this 
title (except for administrative overhead expenses allocated to such 
activities), and for the allowance for administrative expenses described 
in subsection (b).
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    \1\ See References in Text note below.
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    (B) The Secretary shall make such a payment to an agency within a 
reasonable time after the agency has submitted a report pursuant to 
paragraph (3)(A) \2\ of this subsection.
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    \2\ So in original. Probably should be paragraph ``(3)''.
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    (C) Subject to paragraph (4) of this subsection, the amount of any 
such payment made to an agency for any period shall be equal to the 
amount of the reasonable and necessary expenses of salary and travel 
certified by such agency for such period in accordance with paragraph 
(3) of this subsection plus the allowance for administrative expenses 
described in subsection (b) and the amount of expenses approved by the 
Secretary that are incurred in carrying out activities described in 
section 3674A(a)(4) \1\ of this title for such period (except for 
administrative overhead expenses allocated to such activities).
    (3) Each State and local agency with which a contract or agreement 
is entered into under this section shall submit to the Secretary on a 
monthly or quarterly basis, as determined by the agency, a report 
containing a certification of the reasonable and necessary expenses 
incurred for salary and travel by such agency under such contract or 
agreement for the period covered by the report. The report shall be 
submitted in the form and manner required by the Secretary.
    (4) The total amount made available under this section for any 
fiscal year may not exceed $13,000,000. For any fiscal year in which the 
total amount that would be made available under this section would 
exceed $13,000,000 except for the provisions of this paragraph, the 
Secretary shall provide that each agency shall receive the same 
percentage of $13,000,000 as the agency would have received of the total 
amount that would have been made available without the limitation of 
this paragraph.
    (b) The allowance for administrative expenses incurred pursuant to 
subsection (a) of this section shall be paid in accordance with the 
following formula:



  Total salary cost reimbursable under this          Allowable for
                   section                      administrative expense

$5,000 or less..............................  $693.
Over $5,000 but not exceeding $10,000.......  $1,247.
Over $10,000 but not exceeding $35,000......  $1,247 for the first
                                               $10,000, plus $1,155 for
                                               each additional $5,000 or
                                               fraction thereof.
Over $35,000 but not exceeding $40,000......  $7,548.
Over $40,000 but not exceeding $75,000......  $7,548 for the first
                                               $40,000, plus $999 for
                                               each additional $5,000 or
                                               fraction thereof.
Over $75,000 but not exceeding $80,000......  $14,969.
Over $80,000................................  $14,969 for the first
                                               $80,000, plus $872 for
                                               each additional $5,000 or
                                               fraction thereof.



    (c) Each State and local agency with which the Secretary contracts 
or enters into an agreement under subsection (a) of this section shall 
report to the Secretary on September 30, 1978, and periodically, but not 
less often than annually, thereafter, as determined by the Secretary, on 
the activities in the preceding twelve months (or the period which has 
elapsed since the last report under this subsection was submitted) 
carried out under such contract or agreement. Each such report shall 
describe, in such detail as the Secretary shall prescribe, services 
performed and determinations made in connection with ascertaining the 
qualifications of educational institutions in connection with this 
chapter and chapters 32, 34, and 35 of this title and in supervising 
such institutions.

(Added Pub. L. 88-126, Sec. 1, Sept. 23, 1963, 77 Stat. 159, Sec. 1774; 
amended Pub. L. 89-358, Sec. 3(a)(7), (8), (11), Mar. 3, 1966, 80 Stat. 
20, 21; Pub. L. 90-631, Sec. 4, Oct. 23, 1968, 82 Stat. 1334; Pub. L. 
92-540, title IV, Sec. 403(7), 411, Oct. 24, 1972, 86 Stat. 1090, 1092; 
Pub. L. 93-508, title II, Sec. 210(1), Dec. 3, 1974, 88 Stat. 1584; Pub. 
L. 94-502, title V, Sec. 503, Oct. 15, 1976, 90 Stat. 2399; Pub. L. 95-
202, title III, Sec. 303, Nov. 23, 1977, 91 Stat. 1441; Pub. L. 96-466, 
title II, Secs. 203(1), 213(1), Oct. 17, 1980, 94 Stat. 2188, 2190; Pub. 
L. 97-295, Sec. 4(51), Oct. 12, 1982, 96 Stat. 1308; Pub. L. 100-323, 
Sec. 13(a)(1), (b)(5), May 20, 1988, 102 Stat. 571, 573; Pub. L. 101-
237, title IV, Secs. 414, 423(b)(1)(A), Dec. 18, 1989, 103 Stat. 2085, 
2092; Pub. L. 102-16, Sec. 10(a)(7), Mar. 22, 1991, 105 Stat. 56; 
renumbered Sec. 3674 and amended Pub. L. 102-83, Sec. 5(a), (c)(1), Aug. 
6, 1991, 105 Stat. 406; Pub. L. 103-446, title VI, Sec. 606(a)(1), (b), 
Nov. 2, 1994, 108 Stat. 4672.)

                       References in Text

    Section 3674A(a)(4) of this title, referred to in subsec. (a)(2)(A), 
(C), was redesignated section 3674A(a)(3), and section 3674A(a)(5) was 
redesignated section 3674A(a)(4), by Pub. L. 103-446, title VI, 
Sec. 606(c)(1)(B), Nov. 2, 1994, 108 Stat. 4672.


                               Amendments

    1994--Subsec. (a)(3). Pub. L. 103-446, Sec. 606(b), struck out 
``(A)'' before ``Each State'' and struck out subpar. (B) which read as 
follows: ``The Secretary shall transmit a report to the Congress on a 
quarterly basis which summarizes--
        ``(i) the amounts for which certifications were made by State 
    and local agencies in the reports submitted under subparagraph (A) 
    of this paragraph with respect to the quarter for which the report 
    is made; and
        ``(ii) the amounts of the payments made by the Secretary for 
    such quarter with respect to such certifications and with respect to 
    administrative expenses.''
    Subsec. (a)(4). Pub. L. 103-446, Sec. 606(a)(1), substituted 
``$13,000,000'' for ``$12,000,000'' wherever appearing.
    1991--Pub. L. 102-83, Sec. 5(a), renumbered section 1774 of this 
title as this section.
    Subsec. (a)(1)(A). Pub. L. 102-16 substituted ``chapter 106'' for 
``chapters 106 and 107''.
    Subsec. (a)(2)(A), (C). Pub. L. 102-83, Sec. 5(c)(1), substituted 
``3674A(a)(4)'' for ``1774A(a)(4)''.
    1989--Subsec. (a). Pub. L. 101-237, Sec. 423(b)(1)(A), substituted 
``Secretary'' for ``Administrator'' wherever appearing.
    Subsec. (a)(2)(A). Pub. L. 101-237, Sec. 414(1), substituted 
``section, for expenses approved by the Secretary that are incurred in 
carrying out activities described in section 1774A(a)(4) of this title 
(except for administrative overhead expenses allocated to such 
activities), and for'' for ``section and for''.
    Subsec. (a)(2)(C). Pub. L. 101-237, Sec. 414(2), inserted before 
period at end ``and the amount of expenses approved by the Secretary 
that are incurred in carrying out activities described in section 
1774A(a)(4) of this title for such period (except for administrative 
overhead expenses allocated to such activities)''.
    Subsec. (c). Pub. L. 101-237, Sec. 423(b)(1)(A), substituted 
``Secretary'' for ``Administrator'' wherever appearing.
    1988--Subsec. (a)(1). Pub. L. 100-323, Sec. 13(b)(5), in subpar. (A) 
substituted ``chapters 30 through 35 of this title and chapters 106 and 
107 of title 10'' for ``chapters 34 and 35 of this title'', in subpar. 
(B) substituted ``such chapters'' for ``chapters 34 and 35 of this 
title'', and in provisions following subpar. (B) substituted 
``provisions of such chapters'' for ``provisions of chapters 34 and 35 
of this title'' and ``requirements of such chapters'' for ``requirements 
of chapter 32, 34, 35, or 36 of this title''.
    Pub. L. 100-323, Sec. 13(a)(1)(A), (B), substituted ``(1) Subject to 
paragraphs (2) through (4) of this subsection, the Administrator is'' 
for ``The Administrator is'', and redesignated pars. (1) and (2) as 
subpars. (A) and (B), respectively.
    Subsec. (a)(2) to (4). Pub. L. 100-323, Sec. 13(a)(1)(C), added 
pars. (2) to (4).
    1982--Subsec. (a). Pub. L. 97-295 inserted ``of this title'' after 
``34 and 35'' wherever appearing.
    1980--Subsec. (b). Pub. L. 96-466, Sec. 213(1), increased allowance 
for administrative expenses by substituting ``$693'' for ``$662'', 
``$1,247'' for ``$1,191'' in two places, ``$1,155'' for ``$1,103'', 
``$7,548'' for ``$7,205'' in two places, ``$999'' for ``$953'', 
``$14,969'' for ``$14,288'' in two places, and ``$872'' for ``$833''.
    Pub. L. 96-466, Sec. 203(1), increased allowance for administrative 
expenses by substituting ``$662'' for ``$630'', ``$1,191'' for 
``$1,134'' in two places, ``$1,103'' for ``$1,050'', ``$7,205'' for 
``$6,862'' in two places, ``$953'' for ``$908'', ``$14,288'' for 
``$13,608'' in two places, and ``$833'' for ``$793''.
    1977--Subsec. (b). Pub. L. 95-202, Sec. 303(1), increased allowance 
for administrative expenses by substituting ``$630'' for ``$600'', 
``$1,134'' for ``$1,080'' in two places, ``$1,050'' for ``$1,000'', 
``$6,862'' for ``$6,535'' in two places, ``$908'' for ``$865'', 
``$13,608'' for ``$12,960'' in two places, and ``$793'' for ``$755''.
    Subsec. (c). Pub. L. 95-202, Sec. 303(2), added subsec. (c).
    1976--Subsec. (a). Pub. L. 94-502, Sec. 503(1), inserted provision 
authorizing Administrator to reimburse State and local agencies for work 
performed by their subcontractors, where the work performed has a direct 
relationship to the requirements of this chapter, chapters 32, 34, and 
35, and has prior approval of the Administrator.
    Subsec. (b). Pub. L. 94-502, Sec. 503(2), increased allowance for 
administrative expenses from ``$550'' to ``$600''; ``$1000'' to 
``$1080''; ``$1000 for the first $10,000 plus $925 for each additional 
$5,000 or fraction thereof'' to ``$1,080 for the first $10,000 plus 
$1,000 for each additional $5,000 or fraction thereof''; ``$6,050'' to 
``$6,535''; ``$6,050 for the first $40,000 plus $800 for each additional 
$5,000 or fraction thereof'' to ``$6,535 for the first $40,000 plus $865 
for each additional $5,000 or fraction thereof''; ``$12,000'' to 
``$12,960''; ``$12,000 for the first $80,000 plus $700 for each 
additional $5,000 or fraction thereof'' to ``$12,960 for the first 
$80,000 plus $755 for each additional $5,000 or fraction thereof''.
    1974--Subsec. (b). Pub. L. 93-508 increased allowance for 
administrative expenses from ``$500'' to ``$550''; ``$900'' to 
``$1,000''; ``$900 for the first $10,000 plus $800 for each additional 
$5,000 or fraction thereof'' to ``$1,000 for the first $10,000 plus $925 
for each additional $5,000 or fraction thereof''; ``$5,250'' to 
``$6,050''; ``$5,250 for the first $40,000 plus $700 for each additional 
$5,000 or fraction thereof'' to ``$6,050 for the first $40,000 plus $800 
for each additional $5,000 or fraction thereof''; ``$10,450'' to 
``$12,000''; and ``$10,450 for the first $80,000 plus $600 for each 
additional $5,000 or fraction thereof'' to ``$12,000 for the first 
$80,000 plus $700 for each additional $5,000 or fraction thereof''.
    1972--Subsec. (a). Pub. L. 92-540, Sec. 403(7), inserted ``this 
chapter and'' before ``chapters 34 and 35'' in cl. (1).
    Subsec. (b). Pub. L. 92-540, Sec. 411, provided for recomputation of 
formula for reimbursement of expenses by doubling amounts paid as 
allowance for administrative expenses.
    1968--Pub. L. 90-631 designated existing provisions as subsec. (a), 
inserted ``and an allowance for administrative expenses in accordance 
with the formula contained in subsection (b) of this section'' after 
``employees of such agencies'', and added subsec. (b).
    1966--Pub. L. 89-358, Sec. 3(a)(7), (11), substituted ``chapters 34 
and 35'' for ``this chapter'' in three places and inserted ``or 
veterans'' after ``eligible persons'' in cl. (1).


                    Effective Date of 1994 Amendment

    Section 606(a)(2) of Pub. L. 103-446 provided that: ``The amendments 
made by subsection (a) [amending this section] shall apply with respect 
to services provided under such section after September 30, 1994.''


                    Effective Date of 1988 Amendment

    Amendment by section 13(a)(1)(A), (B), (b)(5) of Pub. L. 100-223 
effective May 20, 1988, and amendment by section 13(a)(1)(C) of Pub. L. 
100-323 effective for all of fiscal year 1988 and subsequent fiscal 
years, see section 16(a), (b)(1)(D) of Pub. L. 100-323, set out as a 
note under section 3104 of this title.


                    Effective Date of 1980 Amendment

    Amendment by sections 203(1) and 213(1) of Pub. L. 96-466 effective 
Oct. 1, 1980, and Jan. 1, 1981, respectively, see section 802(b)(1), (2) 
of Pub. L. 96-466, set out as a note under section 3482 of this title.


                    Effective Date of 1977 Amendment

    Amendment by Pub. L. 95-202 effective first day of first month 
beginning 60 days after Nov. 23, 1977, see section 501 of Pub. L. 95-
202, set out as a note under section 101 of this title.


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-502 effective Oct. 1, 1976, see section 
703(a) of Pub. L. 94-502, set out as an Effective Date note under 
section 3693 of this title.


                    Effective Date of 1974 Amendment

    Amendment by Pub. L. 93-508 effective Dec. 3, 1974, see section 503 
of Pub. L. 93-508, set out as a note under section 3452 of this title.


                    Effective Date of 1968 Amendment

    Section 6(b) of Pub. L. 90-631 provided that: ``The amendments made 
by section 4 of this Act [amending this section] shall apply with 
respect to contracts and agreements entered into under section 1774 [now 
3674] of title 38, United States Code, effective for periods beginning 
after June 30, 1968.''


  Reimbursement From Account Used for Payment of Readjustment Benefits

    Section 13(a)(2) of Pub. L. 100-323 provided that: ``If any payment 
is made to State or local approving agencies with respect to activities 
carried out under subchapter I of chapter 36 of title 38, United States 
Code, for fiscal year 1988 before the date of the enactment of this Act 
[May 20, 1988] and from an account other than the account used for 
payment of readjustment benefits, the account from which such payment 
was made shall be reimbursed from the account used for payment of 
readjustment benefits.''

                  Section Referred to in Other Sections

    This section is referred to in sections 3671, 3674A, 3683 of this 
title.
