issued; (2) the premiums charged for the insurance issued under this subsection shall be increased at the time of issue by such an amount as the Administrator determines to be necessary for sound actuarial operations and thereafter such premiums may be adjusted from time to time as the Administrator determines to be necessary; for the purpose of any increase at time of issue or later adjustment the service-connected group and the non-service-connected group may be separately classified; (3) an additional premium to cover administrative costs to the Government as determined by the Administrator at the time of issue shall be charged for insurance issued under this subsection and for any total disability income provision attached thereto (for which the insured may subsequently become eligible) and thereafter such costs may be adjusted as the Administrator determines to be necessary but at intervals of not less than five years and for this purpose the service-connected and non-service-connected can be separately classified; (4) the insurance and any total disability income provision attached thereto shall be on a nonparticipating basis; (5) all settlements on policies involving annuities shall be calculated on the basis of The Annuity Table for 1949; (6) all calculations in connection with insurance issued under this subsection shall be based on interest at the rate of 31⁄2 per centum per annum; (7) the insurance shall include such other changes in terms and conditions as the Administrator determines to be reasonable and practicable; (8) all premiums and other collections on the insurance and any total disability income provision attached thereto shall be credited to the National Service Life Insurance appropriation, and the payments on such insurance and total disability income provision shall be made directly from such appropriation. Appropriations necessary to carry out the provisions of this subsection are hereby authorized.

"(d) (1) There is authorized to be appropriated such sums as may be required to provide capital for the revolving fund to carry out the purpose of subsection (b) of this section. Such appropriations shall be advanced to the revolving fund as needed and shall bear interest as determined by the Secretary of the Treasury, taking into consideration the average yield on all marketable interest-bearing obligations of the United States of comparable maturities then forming a part of the public debt and shall be repaid to the Treasury over a reasonable period of time.

"(2) The Administrator is authorized to set aside out of the revolving fund established under subsection (b) of this section such reserve amounts as may be required under accepted actuarial principles to meet all liabilities on insurance issued under subsection (b) of this section and any total disability income provision attached thereto. The Secretary of the Treasury is authorized to invest in and to sell and retire special interest-bearing obligations of the United States for the account of the revolving fund. Such obligations issued for this purpose shall have maturities fixed with due regard for the needs of the fund and shall bear interest at a rate equal to the average market yield (computed by the Secretary of the Treasury on the basis of market quotations as of the end of the calendar month next preceding the date of issue) on all marketable interest-bearing obligations of the United States then forming a part of the public debt which are not due or callable until after the expiration of four years from the end of such calendar month; except that where such average market yield is not a multiple of one-eighth of 1 per centum, the rate of interest of such obligation shall be the multiple of one-eighth of 1 per centum nearest such market yield.

"(3) Notwithstanding the provisions of section 782 of this title, the Adminisrator shall, from time to time, determine the administrative costs to the Government which in his judgment are properly allocable to insurance issued under this section and any total disability income provision attached thereto, and shall transfer from the revolving fund, or the National Service Life Insurance appropriation, as appropriate, the amount of such costs allocable to the Veterans' Administration to the appropriation 'General Operating Expenses, Veterans' Administartion', and the remainder of such cost to the general fund receipts in the Treasury. The initial administrative costs of issuing insurance under this section and any total disability income provision attached thereto shall be so transferred over such period of time as the Administrator determines to be reasonable and practicable.

"(e) Notwithstanding the provisions of section 782 of this title, a medical examination (including any supplemental examination or tests) when required of an applicant for issuance of insurance under this section or any total disability

income provisions attached thereto shall be at the applicant's own expense by a duly licensed physician.

"(f) No insurance shall be granted under this section to any person referred to in section 107 of this title or to any person while on active duty or active duty for training under a call or order to such duty for a period of thirty-one days or more."

(b) Section 704 of the title 38, United States Code, is amended (1) by inserting "(a)" immediately before "Insurance"; and (2) by adding at the end thereof the following:

(b) Under such regulations as the Administrator may promulgate a policy of participating insurance may be converted to or exchanged for insurance issued under this subsection on a modified life plan. Insurance issued under this subsection shall be on the same terms and conditions as the insurance which it replaces, except (1) the premium rates for such insurance shall be based on the 1958 Commissioners Standard Ordinary Basic Table of Mortality and interest at the rate of 3 per centum per annum; (2) all cash, loan, paid-up and extended values shall be based on the 1958 Commissioners Standard Ordinary Basic Table of Mortality and interest at the rate of 3 per centum per annum; and (3) at the end of the day preceding the sixty-fifth birthday of the insured the face value of the modified life insurance policy or the amount of extended term insurance thereunder shall be automatically reduced by one-half thereof, without any reduction in premium.

"(c) Under such regulations as the Administrator may promulgate, a policy of nonparticipating insurance may be converted to or exchanged for insurance issued under this subsection on a modified life plan. Insurance issued under this subsection shall be on the same terms and conditions as the insurance which it replaces, except that (1) term insurance issued under section 621 of the National Service Life Insurance Act of 1940 shall be deemed for the purposes of this subsection to have been issued under section 723 (b) of this title; and (2) at the end of the day preceding the sixty-fifth birthday of the insured the face value of the modified life insurance policy or the amount of extended term insurance thereunder shall be automatically reduced by one-half thereof, without any reduction in premium. Any person eligible for insurance under section 722(a), or section 725 of this title may be granted a modified life insurance policy under this subsection which, subject to exceptions (2) above, shall be issued on the same terms and conditions specified in section 722 (a) or section 725, whichever is applicable.

(d) Any insured whose modified life insurance policy is in force by payment or waiver of premiums on the day before his sixty-fifth birthday may upon written application and payment of premiums made before such birthday be granted National Service Life Insurance, on an ordinary life plan, without physical examination, in an amount of not less than $500, in multiples of $250, but not in excess of one-half of the face amount of the modified life insurance policy in force on the day before his sixty-fifth birthday. Insurance issued under this subsection shall be effective on the sixty-fifth birthday of the insured. The premium rate, cash, loan, paid-up, and extended values on the ordinary life insurance issued under this subsection shall be based on the same mortality tables and interest rates as the insurance issued under the modified life policy. Settlements on policies involving annuities on insurance issued under this subsection shall be based on the same mortality or annuity tables and interest rates as such settlements on the modified life policy. If the insured is totally disabled on the day before his sixty-fifth birthday and premiums on his modified life insurance policy are being waived under section 712 of this title or he is entitled on that date to waiver under such section he shall be automatically granted the maximum amount of insurance authorized under this subsection and premiums on such insurance shall be waived during the continuous total disability of the insured." (c) The analysis of subchapter I of chapter 19 of title 38, United States Code, is amended by adding at the end thereof the following:

725. Limited period for acquiring insurance."

(d) The amendments made by this section shall take effect as of the first day of the first calendar month which begins more than six calendar months after the date of enactment of this Act.

CHAPTER. IV. BILLS REPORTED FROM THE SENATE COMMITTEE ON BANKING AND CURRENCY

Enactments by the 88th Congress concerning veterans' affairs which were reported from the Senate Committee on Banking and Currency follow, in the chronological order of approval by the President:

A. Special Housing for Disabled Veterans

(Public Law 88-401, approved Aug. 4, 1964)

1. LEGISLATIVE HISTORY

On January 9, 1963, Representative Olin Teague, of Texas, introduced H.R. 248, to provide assistance in acquiring specially adapted housing for certain blind veterans who have suffered the loss or loss of use of a lower extremity. The bill was referred to the House Committee on Veterans' Affairs.

A similar bill, S. 484, was introduced in the Senate on January 15, 1964 by Senator John Sparkman of Alabama and Senator Ralph Yarborough of Texas.

On March 6, 1963, the bill was reported in the House (Rept. 69). On April 1, 1963, H.R. 248 was considered and passed by the House.1 The bill was referred to the Senate Committee on Banking and Cur

rency.

The bill was reported in the Senate on July 23, 1964 (Rept. 1235). On July 24, 1964, H.R. 248 was considered and passed by the Senate.2 The bill was approved on August 4, 1964, and became Public Law

88-401.

2. DIGEST OF THE ACT

This act expands the paraplegic housing program, which provides for a grant of up to $10,000 for severely disabled veterans in acquiring specially equipped homes, by providing eligibility for such housing to veterans with compensable service-connected disabilities of blindness in both eyes, plus the additional service-connected disability of loss or loss of the use of a lower extremity. This legislation deleted the requirement that veterans with the above disabilities must be unable to move about without the aid of a wheelchair.

3. TEXT OF THE ACT

The following is the text of Public Law 88-401:

[Public Law 88-401, 88th Cong. (78 Stat. 380), Aug. 4, 1964]

AN ACT To amend section 801 of title 38, United States Code, to provide assistance in acquiring specially adapted housing for certain blind veterans who have suffered the loss of use of a lower extremity

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That paragraph (2) of section 801 of title 38,

1 Congressional Record, Apr. 1, 1963, p. 5186.

2 Congressional Record (daily edition), July 23, 1964, p. 16348.

United States Code, is amended by striking out “, and such permanent and total disability is such as to preclude locomotion without the aid of a wheelchair," and inserting in lieu thereof a semicolon.

B. Sale of Direct VA Loans

(Public Law 88-402, approved Aug. 4, 1964)

1. LEGISLATIVE HISTORY

On May 28, 1963, Representative Olin Teague, of Texas, introduced H.R. 6652, to authorize the Administrator of Veterans' Affairs to sell at prices which he determines to be reasonable direct loans made to veterans under chapter 37, title 38, United States Code. The bill was referred to the House Committee on Veterans' Affairs.

On November 20 and 21, 1963, the Subcommittee on Housing of the House Veterans' Affairs Committee held hearings on H.R. 6652. The bill was reported in the House on January 29, 1964 (Rept. 1104). On February 17, 1964, the bill was considered and passed by the House. The bill was referred to the Senate Committee on Banking and Currency.

On July 23, 1964, the bill was reported in the Senate (Rept. 1236). H.R. 6652 was considered and passed by the Senate on July 24, 1964. The bill was approved on August 4, 1964, and became Public Law

88-402.

2. DIGEST OF THE ACT

This act authorizes the Administrator of Veterans' Affairs to sell direct loans to private investors at prices which he determines to be reasonable, but not less that 98 percent unpaid principal plus the full amount of accrued interest. Prior law permitted such sales, but only at not less than the unpaid balance plus unaccrued interest.

3. TEXT OF THE ACT

The following is the text of Public Law 88-402:

[Public Law 88-402, 88th Cong. (78 Stat. 380), Aug. 4, 1964]

AN ACT To authorize the Administrator of Veterans' Affairs to sell at prices which he determines to be reasonable direct loans made to veterans under chapter 37, title 38, United States Code

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 1811 (g) of title 38, United States Code, is amended to read as follows:

"(g) The Administrator may sell, and shall offer for sale, to any person or entity approved for such purpose by him, any loan made under this section at a price which he determines to be reasonable but not less than 98 per centum of the unpaid principal balance, plus the full amount of accrued interest, except that if loans are offered to an investor in a package or block of two or more loans no sale shall be made at less than 98 per centum of the aggregate unpaid principal balance of the loans included in such package or block, plus the full amount of accrued interest; and the Administrator shall guarantee any loan thus sold subject to the same conditions, terms, and limitations which would be applicable were the loan guaranteed under section 1810 of this title."