The letter from the Veterans' Administration requesting this legislation reads as follows:

Hon. JOSEPH W. MARTIN, Jr.,

VETERANS' ADMINISTRATION, Washington, D. C., December 2, 1948

Speaker of the House of Representatives, Washington, D. C.

DEAR MR. SPEAKER: Transmitted herewith is a draft of bill entitled "A bill to authorize the Administrator of Veterans' Affairs to reconvey to the Helena Chamber of Commerce certain described parcels of land situated in the city of Helena, Mont.," with a request that it be introduced and considered for enactment.

The purpose of the proposed bill is to provide authorization for the Administrator of Veterans' Affairs to reconvey to the Helena Chamber of Commerce, a corporation, two parcels of land situated in Helena, Mont.

In 1947 the Helena Chamber of Commerce acquired and donated to the United States the land described in the drafted bill. Such donation was tendered and accepted upon the assumption that the land would be used by the Veterans' Administration as the site of a regional office building to be erected in the city of Helena. Representations to that effect were made to the chamber of commerce by representatives of the Veterans' Administration. Thereafter it was determined that the need for establishing a regional office at Helena, Mont., could be eliminated by the consolidation of certain Veterans' Administration activities at Fort Harrison, Mont., and that the Veterans' Administration has no present or future need of the land donated by the Helena Chamber of Commerce. The chamber of commerce has been advised of such determination, and has requested the return of the land. Although the Veterans' Administration is desirous of complying with the request, such action is not permitted under existing law. No public funds have been expended for improvements since the land was acquired. The enactment of the proposed bill would not involve the expenditure of public funds.

The Veterans' Administration recommends favorable consideration of the proposed legislation.

The Bureau of the Budget advised that there would be no objection to the presentation of this proposal to the Congress for its consideration.

Sincerely yours,

CLARIFYING THE PROVISIONS OF SECTION 602 (u) OF THE NATIONAL SERVICE LIFE INSURANCE ACT OF 1940, AS AMENDED

May 5, 1949.—Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

Mr. RANKIN, from the Committee on Veterans' Affairs, submitted the

following

REPORT

To accompany S. 461]

The Committee on Veterans' Affairs, to whom was referred the bill (S. 461) to clarify the provisions of section 602 (u) of the National Service Life Insurance Act of 1940, as amended, having considered the same, report favorably thereon and recommend that the bill do

pass.

GENFRAL STATEMENT

This bill would make it clear that as to insurance maturing on or after August 1, 1946, which the beneficiary could not have elected to receive in a lump-sum settlement, any accrued installments not paid to such beneficiary during his or her lifetime shall be paid to the estate of the insured rather than to the estate of the beneficiary.

The legislation is recommended by the Veterans' Administration, was cleared by the Bureau of the Budget, and would not involve any additional cost. It would lessen the probability of future litigation in such insurance matters. The purpose of the bill has been endorsed by the American Legion, Veterans of Foreign Wars, Disabled American Veterans, American Veterans of World War II (AMVETS), and the Regular Veterans Association.

Existing law and regulations provide that payment be made to the estate of the insured in cases (1) where no beneficiary is designated by the insured; (2) where the beneficiary does not survive the insured; (3) where the designated beneficiary not entitled to lump-sum settlement (insured did not designate such payment) survives the insured and dies before receiving all benefits due and payable.

The letter from the Veterans' Administration requesting this legisla tion reads as follows:

Hon. JOSEPH W. MARTIN, Jr.,

VETERANS' ADMINISTRATION, Washington 25, D. C., September 13, 1948.

Speaker of the House of Representatives, Washington 25, D. C.

DEAR MR. SPEAKER: There is transmitted herewith draft of a proposed bill to clarify the provisions of section 602 (u) of the National Service Life Insurance Act of 1940, as amended, with the request that it be introduced and considered for enactment.

The purpose of the proposed legislation is to amend section 602 (u) of the National Service Life Insurance Act of 1940, as amended, to make it clear that as to insurance maturing on or after August 1, 1946, which the beneficiary could not have elected to receive in a lump-sum settlement, any accrued installment or installments of such insurance not paid to such beneficiary during his or her lifetime shall be paid to the estate of the insured rather than to the estate of the beneficiary.

Section 602 (u) of the act presently provides:

"(u) With respect to insurance maturing on or subsequent to the date of enactment of the Insurance Act of 1946, in any case in which the beneficiary is entitled to a lump-sum settlement but elects some other mode of settlement and dies before receiving all the benefits due and payable under such mode of settlement, the present value of the remaining unpaid amount shall be payable to the estate of the beneficiary; and in any case in which no beneficiary is designated by the insured, or the designated beneficiary does not survive the insured, or a designated beneficiary not entitled to choose a lump-sum settlement survives the insured, and dies before receiving all the benefits due and payable, the commuted value of the insurance remaining unpaid shall be paid in one sum to the estate of the insured: Provided, That in no event shall there be any payment to the estate of the insured or of the beneficiary of any sums unless it is shown that any sums paid will not escheat."

Veterans' Administration Regulations and Procedure R-3489 provides as follows: "3489. PAYMENT TO ESTATE OF INSURED.-If no person is designated beneficiary by the insured, or if the designated beneficiary (including a contingent beneficiary) does not survive the insured, or if the designated beneficiary (including a contingent beneficiary) not entitled to a lump-sum settlement survives the insured and dies before payment has commenced, the face amount of insurance less any indebtedness shall be paid to the insured's estate in one sum, provided that in no event shall there be any payment to such estate of any sums which, if paid, would escheat. If the designated beneficiary (including the contingent beneficiary) not entitled to a lump-sum settlement survives the insured and dies after payment has commenced but before receiving all the benefits due and payable, the present value of the remaining unpaid installments certain shall be paid in one sum to the insured's estate, provided that in no event shall there by any payment to such estate of any sums which, if paid, would escheat. This provision shall not apply to any insurance which matured prior to August 1, 1946.'

It will be noted that the regulation relates to the portion of subsection (u) following the semicolon therein, and that the words "insurance remaining unpaid shall be paid in one sum to the estate of the insured" as used in this part of subsection (u) are interpreted in the regulation as including all of the unpaid insurance (whether accrued or not) as a basis for determining the amount to be paid to the estate of the insured.

It is believed that the regulation correctly interprets the law and is in conformity with the intent of the Congress in enacting the provisions of section 602 (u). However, it might be argued that the provisions of section 602 (u) may be interpreted as requiring that benefits accrued and unpaid during the lifetime of a beneficiary be paid to the estate of such beneficiary. The proposed legislation would make it clear that under section 602 (u) all of the insurance remaining unpaid at the time of death of a beneficiary (whether accrued or not) is payable to the estate of the insured.

Since the bill would only clarify the provisions of section 602 (u) of the National Service Life Insurance Act of 1940, as amended, its enactment would not involve any cost and would lessen the probability of future litigation in the matter.

For the foregoing reasons, the Veterans' Administration recommends favorable consideration of the proposed measure.

Advice has been received from the Bureau of the Budget that they have no objection to the submission of the proposed draft of bill to the Congress for its consideration.

Sincerely yours,

O. W. CLARK,

Executive Assistant Administrator (For and in the absence of the Administrator).

RAMSEYER RULE

In accordance with clause 2a of rule XIII, House of Representatives, the changes made in existing law by the bill are shown as follows (existing law proposed to be omitted is in black brackets; new matter is in italics; existing law in which no changes are proposed is shown in roman):

SECTION 602 (u) of the National Service LIFE INSURANCE Act of 1940, as AMENDED

(u) With respect to insurance maturing on or subsequent to the date of enactment of the Insurance Act of 1946, in any case in which the beneficiary is entitled to a lump-sum settlement but elects some other mode of settlement and dies before receiving all the benefits due and payable under such mode of settlement, the present value of the remaining unpaid amount shall be payable to the estate of the beneficiary; and in any case in which no beneficiary is designated by the insured, or the designated beneficiary does not survive the insured, or a designated beneficiary not entitled to [choose] a lump-sum settlement survives the insured, and dies before receiving all the benefits due and payable, the commuted value of the [insurance] remaining unpaid insurance (whether accrued or not) shall be paid in one sum to the estate of the insured: Provided, That in no event shall there be any payment to the estate of the insured or of the beneficiary of any sums unless it is shown that any sums paid will not escheat.

O

H. Repts., 81–1, vol. 3- -19