**Veterans Benefits Administration Program Guide 21-2**

**Department of Veterans Affairs**

**Washington, DC 20420**

The Veterans Benefits Administration Program Guide 21-2 has been
updated.

We added Regulatory Amendment Explanations 3-02-1 to 3-03-6 to bring
current the Part 3 guide since 2002. We also updated the corresponding
Index to Transmittal Sheets for Compensation and Pension Regulations for
Part 3.

> By Direction of the Under Secretary for Benefits
>
> Renée Szybala, Director
>
> Compensation and Pension Service

Distribution: RPC: 2068

FD: EX: ASO and AR (included in RPC 2068)

**Veterans Benefits Administration Program Guide 21-2**

**Department of Veterans Affairs**

**Washington, DC 20420**

PART I

INDEX TO TRANSMITTAL SHEETS FOR

COMPENSATION AND PENSION REGULATIONS

38 CFR PART 3

Includes All Compensation and Pension Transmittal Sheets

From Transmittal Sheet No. 189 to 757, 760 to 763,

and 3-89-1 to 3-03-6

**INDEX TO TRANSMITTAL SHEETS**

CFR \# Transmittal Sheet \# (and CFR subsection)

3.1 189; 235(i,o); 266(p,q,r), 280(m,n); 402(g); 463(g); 468(s,t);
565(d,m,q); 653(d,u,v,w,x); 709(y); 719(z); 757(aa); 761(y); 3-91-6(d);
3-95-9(m); 3-96-7(n,y)

3.2 189; 404(f,g); 468(h); 482(h); 571(f); 653(Intro,a); 3-91-11(i);
3-97-5(f)

3.3 189; 223(c); 235(b,c,d); 297(b,c,d); 404(c,d); 468(c,d); 482(c,d);
553(d); 565(a,d); 600(b,c,d); 624(c); 653; 3-91-6(b); 3-91-7(a);
3-91-11(a); 3-03-1(a)

3.4 189; 482(c); 517(d); 553(a,b,c,d); 647(b)

3.5 189; 323(a,d,e); 370(d); 442(e); 458(b); 463(d); 482(b,c,e);
553(a,b,d,e); 582(e); 616(e);\
647(a,b,d,e); 3-93-3(e); 3-95-7(c)

3.6 189; 220(c); 223(b); 235(b); 330(e); 370(b); 463(b); 607(b,c,d,e);
720(c); 730(c);\
3-89-2(c,d,e); 3-95-17(a,b,c); 3-96-2(b); 3-01-7(a,e); 3-02-9(a,e)

3.7 189; 235(b,u,v); 330(h); 402(h); 463(g); 524(w); 559(t); 645(x);
677(u,x); 683(x); 695(x); 708(x); 718(x); 724(x); 726(x); 741(x);
748(x); 751(x); 3-91-4(x); 3-91-17(x); 3-92-5(x); 3-92-9(x); 3-94-8(x);
3-98-2(x)

3.8 189; 391(b,c); 3-95-7(b,c,e)

3.9 189; 214(a,b)

3.10 \[Reserved\]

3.11 189; 647; 756

3.12 189; 235(b,c); 278(b,c,d); 592(e,f); 641(c,f,g,h,i,j); 666(d);
729(a,b,c,k); 3-97-3

3.12a 682; 702

3.13 189; 235; 381(b); 404(a); 565(b); 641(b,c); 682(b)

3.14 189; 235(a)

3.15 189; 235; 565

3.16 189; 600; 653

3.17 189; 223; 404; 482; 653; 3-91-11

3.18-19 \[Reserved\]

3.20 266; 565; 647; 710; 3-97-5; 3-99-3(b)

3.21 616; 653

3.22 647; 720(a); 750(b); 756(a); 3-00-1; 3-00-5(a)

3.23 653; 672(a,c); 684(a,c); 700(a,c); 716(a,c); 732; 740(a,c); 745;
750(d); 3-96-4(d)

3.24 653; 672(b,c); 684(b,c); 700(b,c); 716(b,c); 732; 740(b,c); 745;
3-96-4(c)

3.25 653; 672(a,c,d,e,f); 684(a,c,d,e); 700(a,c,d,e); 716(a,c,d,e); 732;
740(a,c,d,e); 745;\
3-96-4(c)

3.26 653; 672; 684; 700; 716; 732; 740(a,b); 745

3.27 653; 3-97-6(c,d); 3-02-5(c,d), 3-03-6(d,e)

3.28 653; 745

3.29 653; 710; 716(b); 3-00-4(c); 3-02-5(c)

3.30 653; 710(b,c); 730(b,c); 739(a,d,c,d); 746(Intro);
3-92-2(a,b,c,d,e,f)

3.31 710; 730(c); 3-00-4; 3-02-5 (Intro, c)

3.50 190; 288(b,c); 453(b); 601; 3-97-2

3.51 190; 505; 3-97-2

3.52 190; 229(d); 405(a); 601(c,d)

3.53 190; 601; 3-94-7(a)

3.54 190; 229(a,b); 246(e); 405(a,b,c,d); 469(a); 566(b,c,d,e); 579(a);
601(Intro,a); 648(b,c,d,e); 756(c); 3-91-3(c); 3-91-11(a); 3-00-1(c)

3.55 190; 288; 453; 566(a,b,c,d,e); 648(a,b,c,d); 3-91-7;
3-92-2(b,c,d,e); 3-93-10; 3-95-14(a);\
3-99-1; 3-00-5(a)

3.56 \[Reserved\]

57. 190; 229(c); 246(b,c); 363(a); 419(a,c); 447(c); 505(c); 654(a,c,d);
    665(a,b,c); 668(e); 730(a);

3-00-2(a)

3.58 190

3.59 190; 654(a)

3.60 654

3.100 191; 244(b); 311; 392(b); 400(d); 491(a,c); 495(c); 3-95-7(b,c);
3-96-4(a)

3.101 191; 754; 3-96-9

3.102 191; 734; 3-01-6

103. 191; 276(a,b,c,d,e,f,g); 306; 494; 763; 3-92-6(b,f); 3-93-2(c);
     3-93-17(f); 3-94-2(c); 3-94-3(b);

3-01-8(b)

3.104 191; 276(c); 301(a); 306(c); 311(b); 3-91-16(a); 3-01-3(a)

104. 191; 236(d,e); 267(Intro,a,d,e,f); 539(d,e,f); 763(d,e,f,g,h);
     3-91-16(a); 3-92-6(h); 3-97-6;

3-01-3(b); 3-02-5(g)

3.106 191; 481(a); 539(a); 3-95-7(c,d,e); 3-97-2

3.107 191; 319; 3-96-8

3.108 191

3.109 191; 211(c); 276(b,c); 306(b); 343(a); 763(b)

3.110 191; 276; 763

3.111 \[Reserved\]

3.112 191

3.113 191; 236; 3-01-10

3.114 267; 763(a); 3-97-4; 3-00-4(a); 3-02-5(a)

3.115 3-93-10

3.150 192; 342(d); 3-02-7

3.151 192; 733

3.152 192; 268(c); 342(c); 733

3.153 192

3.154 192; 217; 268

3.155 192; 744

3.156 192; 268(a,b,c,d,e,f,g); 3-90-5(a,b,c); 3-01-6(a)

3.157 192; 237(b); 268; 385(b); 587(b); 614(b); 744; 3-95-10(b)

3.158 192; 268; 303(c); 747(a); 3-97-6; 3-02-5(a, c)

3.159 3-90-6; 3-01-6

3.160 268; 385(d)

3.200 193; 307(a); 576; 743

3.201 193; 743; 3-93-4(a)

3.202 193; 576(a,b); 743; 3-94-16(c)

3.203 193; 212(a,b,c); 580(b); 678; 694(a); 743; 3-93-15(c); 3-01-5(a)

3.204 193; 678(Title); 743; 753; 3-94-16(b,c); 3-96-6; 3-01-8(a)

3.205 193; 247; 478(a); 580; 707(a,c); 743; 3-93-15(a); 3-94-16(a);
3-97-2

3.206 193; 247; 452(c); 580(Intro); 743

3.207 193; 234(Intro,c); 289; 743; 3-94-16(b)

3.208 193; 580; 743

3.209 193; 234(Intro,d,f); 478(Intro); 580(Intro); 707(Intro,e,g); 743;
3-94-16(a,b)

3.210 193; 221(c); 234(c); 286(b,d); 448(c); 506(c); 707(c); 743;
3-94-16(b,c)

3.211 193; 234(g); 743; 3-94-16(a,d)

3.212 193; 234(c); 743

3.213 193; 234(a,c); 269(a,b); 743; 3-96-6

3.214 369; 743; 3-97-2

3.215 454; 743; 3-91-7; 3-92-2; 3-93-10

3.216 3-92-1; 3-00-4; 3-02-5

3.217 3-01-8

3.250 194; 228(d); 281(Title,a); 567(a,c); 573(a); 731(a); 3-96-4(d)

3.251 194; 228(e); 281(a); 393(a); 395(a); 421(a); 470(a); 483(a);
567(a); 595(a); 3-95-7(a)

3.252 194; 228(d); 281; 406(Title); 421(a,b); 470(Title,a,b);
483(a,b,e); 567(a,b,d,e); 595(a,b); 625(f); 655(a); 3-96-4(a); 3-97-2

3.253-5 \[Reserved\]

3.256 194; 230; 281; 331; 470; 3-95-12; 3-98-6; 3-00-3; 3-01-8(a)

3.257 194; 281; 567; 3-97-2

3.258-9 \[Reserved\]

3.260 281(a,b,c,d,e,f); 309(c); 483(g); 567(e)

3.261 281(a,b,c); 331(a,b); 353(a); 359(a); 376(a); 395(a,b); 428(a);
470(a,b); 483(b); 490(a); 502(a); 511(a); 521(a); 525(a); 547(a);
562(a); 589(a); 599(a); 633(a); 3-92-8; 3-93-11(a); 3-94-12(a);
3-95-1(a); 3-95-7(a); 3-97-6; 3-02-5(a); 3-03-5(a)

3.262 281(a,b,c,d,e,f,g,h,i,j,k,l,m); 331(b,e,j,k,l,m,n); 340(k);
356(i); 388(i,j); 395(e,i,j,k,m,n,o,p); 406(m,n,p); 470(k);
483(b,i,k,l,m,n); 502(h); 521(f); 525(q); 547(o,p,q); 599(o,p,q);
655(b,e,g); 673(b); 685(b); 701(b); 717(b); 732(b); 740(b); 745; 3-92-8;
3-93-11(u); 3-94-9(m,o); 3-94-12(v); 3-95-1(w); 3-95-7(x); 3-97-2;
3-97-6; 3-02-5(y); 3-03-5(z)

3.263 281(a,b,c,d); 547(a); 655(d); 3-92-8; 3-93-11(f); 3-97-6;
3-02-5(g); 3-03-5(h)

3.270 655

3.271 655; 750(a,e,f) 3-92-8(a,f)

3.272 655; 679(k); 750(Intro,g,h,l,m); 3-91-14(k); 3-92-8(d,n,o,p);
3-93-5(l); 3-94-9(h);\
3-94-12(r); 3-94-14(q); 3-95-1(s); 3-95-7(t); 3-97-1(c); 3-97-6;
3-02-5(u); 3-02-6(h);

3-03-5(v)

3.273 655; 711(a,b); 3-92-8

3.274 655

3.275 655; 3-92-8(f,g); 3-95-1(h); 3-97-6; 3-02-5(i); 3-03-5(j)

3.276 655

3.277 655; 3-92-8; 3-95-12; 3-98-6; 3-00-3; 3-01-8(b)

3.300 3-01-2

3.301 209; 504(c); 3-95-9(a,c,d)

3.302 209; 279

3.303 209

3.304 209; 374(Title,a,b); 554(a,b); 3-93-9(f); 3-99-5(f); 3-02-4(f)

3.305 209; 290(b); 374(Title,a); 554(Title,a)

3.306 209; 3-92-7(b,c)

3.307 209; 262(a); 290(a); 374(Title,a); 455(a,b,d); 554(Title,a);
643(c); 698(a,b); 3-93-8(a);\
3-94-1(a); 3-94-6(a); 3-96-5(a); 3-97-5(a); 3-02-12(a,c,d); 3-03-1(a)

3.308 209; 290(b); 374; 554

3.309 209; 374(a); 455(c); 554(a,c); 617(a,b); 698(c); 714; 730(c);
750(c); 755; 3-92-2(d);\
3-93-6(d); 3-93-8(e); 3-94-1(e); 3-94-5(d); 3-94-6(e); 3-94-10(c);
3-95-11(d); 3-96-5(e);\
3-00-5(d); 3-01-4(e); 3-02-1(d); 3-02-12(a); 3-03-2(c), 3-03-3(e)

3.310 209; 663; 3-01-2(a)

3.311 723; 734; 3-94-1; 3-94-15(b); 3-95-3(b); 3-95-15(b); 3-98-5(b);
3-02-2(b)

3.311a 734; 3-91-9(c,d); 3-91-10(c,d); 3-94-1

3.311b 734; 3-89-1(a,b); 3-93-1(b,h); 3-94-1

3.312 209

3.313 3-90-2

3.314 209; 298(a,b); 332(a); 352; 374; 407(b); 471; 588; 626(b);
3-96-3(b)

3.315 374; 407(d,e); 471(d); 507; 588(b,c); 612(b); 631(c); 738(b);
3-96-8(c)

3.316 3-92-4; 3-94-13

3.317 3-95-2; 3-98-3; 3-01-9(a); 3-03-1(a,b,d)

3.318-20 \[Reserved\]

3.321 209; 215(b); 308(b,c); 312(b); 441(b); 492(b); 532(b); 550(b);
590(b); 3-96-4(b)

3.322 209

3.323 209; 518; 3-96-3(b)

3.324 209; 518; 588

3.325 \[Reserved\]

3.326 407(d,h); 471(h); 475; 588(a,d); 3-90-3(a); 3-94-11(b,d);
3-95-10(d); 3-95-13; 3-01-6(a)

3.327 209; 225(b,c); 357(b,c); 475(b,c); 3-90-3(a,b,c,d); 3-95-10(b)

3.328 762

3.329 209; 3-90-3

3.330 209; 310

3.331-9 \[Reserved\]

3.340 209; 689(a)

3.341 209; 310; 689; 737(c); 3-93-10(c); 3-03-1(b,c,)

3.342 209; 225(b); 310(b); 407(a); 537(b); 689(a); 737(b,c); 750(b);
3-91-7(a); 3-91-13(c);\
3-93-10(c)

3.343 209; 429; 537(c); 737(c); 750(c); 3-92-2(d); 3-93-10(c)

3.344 209

3.350 209; 238(i); 245(f); 282(a,b,c,d,e,f,h,i); 293(a); 295(h);
364(a,b,c,d,e,f,h,i); 407(a); 415(f); 429; 455(a,b,c,d,e,f,h,i);
496(a,b,c,d,e,f,h,i); 516(i); 518(Intro,a); 554(Intro,a,b,c,d,e,f,h,i);
583(a,b,c,d,e,f,h,i); 617(a,b,c,d,e,f,h,i); 637(a,f,h); 649(a,f,h);
669(a,f,h); 689(a); 703(a,c,d,e,f); 721(d,f); 730(e,f); 3-95-5(i);
3-02-3(a), 3-03-6(a)

3.351 209; 332(d); 407(a,b,c,d,e); 443(Title,a); 471(a,d); 484(a,c);
516(d); 564(a,c,d,e); 603(a,d); 617(Title,a,c); 649(a,c,f); 656;
3-94-11(a)

3.352 209; 213(Title,a); 560; 609; 649; 3-95-10(b); 3-96-9

353. 209; 477(a,b,c); 560(a,b,d); 609(b); 629(b,d,e); 3-93-14(d);
     3-95-16(b); 3-01-7(b); 3-02-8(b);

3-03-1(b)

3.354 209

3.355 209

3.356 209; 508

3.357 209; 346(b); 3-93-16(a)

3.358 209; 467(c); 554(c); 644(c); 3-95-6(c); 3-98-4(a)

3.359 635

3.360 642

3.361 3-98-4

3.362 3-98-4

3.363 3-98-4

3.370 209; 643(b)

3.371 209; 245(b); 374(Title,c); 554(Title); 643(a,c)

3.372 209; 429

3.373 \[Reserved\]

3.374 209; 245(d); 429(a,b); 643(d)

3.375 209; 245(b,c); 429; 643(a)

3.376-7 \[Reserved\]

3.378 209; 643

3.379 209

3.380 209

3.381 209; 3-99-2

3.382 209; 649; 3-99-2

3.383 264; 364(Intro,b,c); 649; 750

3.385 3-90-1; 3-94-17

3.400 195; 218(e,u); 248(e,h,j,o); 260(e);
270(Intro,c,d,f,g,i,o,p,q,r,v); 304(u); 305(e); 315(b); 333(j,q);
422(j); 437(h); 456(v,w,x); 459(c); 462(o); 464(b,c); 497(j); 540(w);
542; 551(b,c); 568(u); 584(j,o); 596(c); 604(e,f); 636(x,y); 646(z);
674(v); 733(b,c); 3-91-7(d,u,v,w); 3-92-2(u,v,w); 3-95-7(s); 3-95-14;
3-96-8(d); 3-97-2; 3-03-1(b,e)

3.401 195; 248(b); 270(b,f,h); 462(b); 540(b,c.d); 610(d,g,h); 618(a,c);
627(i); 674(a,f); 3-97-2

3.402 195; 270(c); 302(b); 408(a,c); 416(c); 542(Title,Intro,a,b); 674

3.403 195; 270(a); 420(f); 449(f); 462(c); 509(f); 542(Intro,f); 610(b);
674(Intro); 3-97-6; 3-02-5(b,c)

3.404 485; 674

3.450 196; 219(b,d,e); 249(a); 409(g); 486(e); 657(a,c,e,g,h)

3.451 196; 219; 657

3.452 196; 219(a,c,d,e); 249(c,d); 258(c); 334(c); 569(c,d); 657(a,c);
3-03-1(Title, c)

3.453 196; 219

3.454 196; 219; 249(a,b,c); 258(b); 334(b); 409(b); 472(Intro,b);
474(Intro); 569(b); 574(a); 657(Intro,a,b,c,d); 3-91-18(b,c,d);
3-03-1(c,d)

3.458 196; 219(a,b,c,g,h,i); 249(f); 261(c); 569(b,c,e,f,g);
657(b,c,e,f,g); 3-96-4(f)

3.459 196; 444(b); 569; 657

3.460 196; 219(Intro,c); 334(c); 409; 423(c); 472(c); 474(Intro,c);
569(Intro); 594; 606; 638(Intro); 657(Intro,b,c); 3-96-4(b)

3.461 196; 334(b); 444(b); 460(a,b); 515(b); 594; 606(a,b); 638;
3-96-4(b)

3.500 197; 231(h); 256(t); 271(Intro,b,d,e,g,h,i,k,l,n,r,v,w); 360(x);
396 (x); 424(f,h); 487(g,n); 519(r); 543); 555(r); 572(b,e,g,n,p);
687(b,e,n,s); 712(g,n); 747(v); 3-91-2(n); 3-91-15(q); 3-92-1(w);
3-93-7(x); 3-95-2(y)

3.501 197; 271(a,b,c,d,e,g,i,k,l,m); 328(b); 338(i); 487(d); 529(i);
619(b,d,i); 658(i); 712(d); 750(i); 3-91-7(i); 3-91-12(n); 3-91-18(i);
3-01-7(i); 3-03-1(i)

3.502 197; 271(a,b,d); 338(a); 410(e); 417(e); 445(a,b); 487(a);
619(Title,Intro,c); 712(a); 3-93-10(f)

3.503 197; 271(a,b,c,d,h); 365(a); 432(h); 450(j); 510(j);
619(Intro,b,i); 3-97-6; 3-02-5(b)

3.504 487

3.551 198; 250(a,b,c,d,e,f); 259(c,f); 327(a); 335(c); 339(b); 378(e);
411(c); 425(c); 498(a,b,c,g); 530(b); 552(a,b,c,d,e,f); 578(c,d,e);
602(c,g); 659(a,b,c,d,f); 675(a,b,c); 690(c); 704(g); 3-91-7(h);
3-91-18(a,b,c,d,e,f,g,h); 3-93-10(i); 3-94-18(i); 3-99-4(i); 3-01-7(i);
3-03-1(a,b,i)

3.552 198; 250(a,b,d,i); 283(a,b,d,e,g,h,i,j,k); 296(b); 327(b); 335(e);
366(a,d,g,h,i); 378(b); 411(b,e); 430(a,g,h); 498(a,b,g,h); 530(d,f,g);
556(g,h); 585(g,h); 620(g,h); 628(j); 639(g); 650(Title,a,b,g);
659(e,j); 670(g); 686(a,b,k); 690(g); 3-03-1(a)

3.553-5 \[Reserved\]

3.556 198; 250; 259(a,e); 283(a); 327(a); 339(a); 530(a); 556(a);
578(b,c,d,e,f); 650(a); 659(a); 736(e)

3.557 198; 250(b,d); 498(a); 530(d); 578(a,b,d); 676(a,b); 736;
750(c,d); 3-01-7(b); 3-03-1(removed)

558. 198; 250(b,c); 302(c); 480(c); 530(a); 578(b,c); 602(Title,c); 736;
     3-93-12(c); 3-01-7(a);

3-03-1(a,b,c)

3.559 198; 578(a,b); 3-96-4(c); 3-01-7; 3-03-1(removed)

3.650 199; 321; 705(Intro,a,c)

3.651 199; 272(b); 341(a)

3.652 199; 272(b); 747(a,b)

3.653 199; 272(b,c); 387(b,c); 705(b,c)

3.654 199; 272

3.655 199; 272; 476(b); 3-90-3

3.656 199; 239(Title,a,b); 272(a,b); 347(a); 384(d); 544(d); 563(c);
597(d); 660(a,d)

3.657 199; 321(Intro,a); 544; 660

3.658 199; 544; 597

3.659 199; 239; 321(Intro,b); 433(b); 597(b)

3.660 199; 232; 272; 335; 345; 397(a); 426(a); 488(a); 561(a,c); 621(a);
660; 713(a); 3-92-8(a,b)

3.661 199; 232; 272(b); 335; 345(a); 523(b); 660(a); 696(b); 3-92-8(a,b)

3.662-4 \[Reserved\]

3.665 691; 3-03-1(heading, a,c,m,n)

3.666 199; 384(Intro); 561(Intro,a); 570; 660; 691(Title,d); 3-97-2;
3-03-1(heading, intro, e)

3.667 199; 272(b,c,e); 367(e); 403(c,f); 440(b); 570(a,b); 705(a);
3-00-2

3.668 \[Reserved\]

3.669 253; 292(c,d); 548(a,c); 688(a,b)

3.700 200; 263(a); 324(a); 336(Intro); 351(a); 451(a); 457(b); 591; 661;
744; 3-91-1(a); 3-02-10(a)

3.701 200; 227(a); 473(a); 591(a); 661(a)

702. 200; 240(e,f); 383(f); 461(a,b,d); 473(a); 489(a); 545(c,d,e,f);
     598(a,b); 661(b); 3-95-7(d);

3-96-4(a,b); 3-97-2

3.703 200; 240; 322(a,c,d); 434(c); 545(a,c)

3.704 200; 240(a); 322(a,b) 434(a); 545

3.705 \[Reserved\]

3.706 200; 545

3.707 200; 240; 316(a); 375(a); 434; 608(b)

3.708 200; 265; 446(b); 541; 608; 661

3.709 200; 3-96-8

3.710 200; 336

3.711 227; 412; 499(b); 541; 608(b); 661; 680

3.712 661; 680; 3-96-8

3.713 661

3.714 680

3.715 3-93-7

3.750 201; 241(b); 326(b); 371(a,c); 465(a,c); 615(b,c); 692(a,b,c,d)

3.751 201

3.752 \[Reserved\]

3.753 201

3.754 277

3.800 202; 216(a); 273(a); 337(a); 520(b); 557; 750(a); 3-98-4

3.801 202; 557(c); 3-03-1(e)

3.802 202; 233(b); 294(a); 402(a); 651(b); 745, 3-03-6(c)

3.803 202; 287(b,c); 651(a)

3.804 202

3.805 202; 372(a); 503(e); 581(d,e,f); 613(Title,Intro,a);
651(Title,Intro); 3-97-2

3.806 202

3.807 202; 233; 317; 358(b,c); 362(b,c); 373(b,c); 390(b);
435(Title,Intro,b,d); 513(d); 581(Intro,a,b); 752; 3-94-19(c)

3.808 202; 413(a,c,e); 418(e); 466; 514(Intro); 577(Intro); 622(a);
634(a,b); 651(Intro); 706(Intro); 752(Intro,b,c,d); 3-01-11(d)

3.809 202; 233(b,d); 325(b,d); 438(b,d); 640(b,d); 693(Title,Intro)

3.809a 693; 750(Intro)

3.810 500; 531(c); 533(a); 577(a); 586(a); 622(a); 728(a); 3-91-3(a);
3-97-5

3.811 533; 3-96-1; 3-98-1; 3-98-7

3.812 727; 755; 3-93-13(f); 3-95-8(f)

3.813 734

3.814 3-97-6; 3-00-4(c,e,f); 3-01-1; 3-02-5(Title, a,b,c,d,e)

3.815 3-02-5

3.816 3-03-4

3.850 203; 210(c); 242(c); 526(c); 535(a); 558(a,b); 575(a); 593(a);
671(a); 3-02-8(d)

3.851 203; 535; 558; 671

3.852 203; 242; 526(a,b); 535(a,b); 575(a,b); 671(b); 3-96-4;
3-03-1(a,d,e)

3.853 3-91-12; 3-03-1(d)

3.854 203; 558

3.855 203; 526; 535(b); 630

3.856 203; 242; 558

3.857 203; 535; 3-97-2

3.900 204; 252(b,d); 749(d)

3.901 204; 252; 501(e); 749(c); 3-96-4(c,d)

3.902 204; 252; 749(c); 3-96-4(d)

3.903 204; 252; 512(a); 527(b)

3.904 252; 527(b,c); 536(c); 749(b)

3.905 284; 313(a,d); 493(a); 501(Title,a,e); 536(a,b); 749(b)

3.950 205

3.951 205; 274; 329; 439; 3-92-2

3.952 205; 226

3.953 205; 224(Title,c); 226(c)

3.954 205

3.955 \[Reserved\]

3.956 \[Reserved\]

3.957 226; 274; 329; 427

3.958 274; 605

3.959 431

3.960 662; 3-91-8(b,c)

3.961 662; 3-96-8

3.962 662; 3-96-8

1000. 206; 275(a,b,c,d); 368(d); 377(g); 436(d,f); 538(f,h); 3-91-5(g);
      3-96-8(g); 3-97-2; 3-97-5;

3-02-11(Title, c,d)

3.1001 206; 243(Title,Intro,a,b); 257; 275(a); 538(a,c)

3.1002 206; 243; 538

3.1003 206; 275(Intro); 3-94-4; 3-99-6(b)

3.1004-6 \[Reserved\]

3.1007 206; 243; 549; 3-01-7; 3-03-1

3.1008 199; 206

3.1009 243; 299(Intro); 549(Intro,a)

3.1600 207; 379(Intro,a,b); 394(a,b); 399(Intro,a,b,c); 528(a,b,f);
611(a,b,c); 623(a,g); 652(a,c,g); 697(Intro,a,b,c,f); 722(b,c); 745;
3-91-7(f); 3-95-7(a,b,f); 3-97-5(c)

3.1601 207; 291(a); 349(b); 414(a,c); 528(a,b,c); 611(a); 652(a); 664;
722(b); 745; 3-90-4(a)

3.1602 207; 528(a,b,d); 611(a)

3.1603 207; 528; 722

3.1604 207; 318(Title,Intro,a); 528(c); 611(a); 652(a,b); 664(c,d); 745;
3-01-7(d)

3.1605 207; 222(b); 380(b); 399(Intro,a); 479(d); 528(Intro,a,b);
652(Intro); 722(Intro)

3.1606 207; 479(a); 522(a); 623; 632(b)

3.1607 207

3.1608 207

3.1609 207; 254; 528; 623(a)

3.1610 207; 3-92-3

3.1611 207

3.1612 664; 667(e); 681(e); 699(e); 715(e); 725(e,g); 735(e); 742(e);
745; 3-90-4(g); 3-91-7(h);\
3-91-13(b,c,e); 3-96-4(e)

3.2100 3-01-10

3.2130 3-01-10

3.2600 3-01-3; 3-02-8(a)

APPENDIX A

38 CFR Part 3 \-- Adjudication

Regulatory Amendment Explanations

3-89-1 Through 3-03-6

REGULATORY AMENDMENT

3-89-1

Regulations Affected: 38 CFR 3.311b(a) and (b)

EFFECTIVE DATE OF REGULATION: November 17, 1989.

Date Secretary Approved Regulation: September 13, 1989

Federal Register Citation: 54 FR 42802-3 (October 18, 1989)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

The Veterans\' Dioxin and Radiation Exposure Compensation Standards Act,
Pub. L. 98-542, required VA to promulgate regulations for the
adjudication of compensation claims in which disabilities or deaths of
veterans are alleged to be the result of in-service exposure to ionizing
radiation. To assist VA in its effort, the law mandated the
establishment of the Veterans Advisory Committee on Environmental
Hazards (VACEH).

[Section 3.311b]{.underline}. The Radiation-Exposed Veterans
Compensation Act of 1989, Pub. L. 100-321, amended 38 U.S.C. 1112 to
establish presumptive service connection for certain radiation-exposed
veterans. 38 CFR 3.311b(a)(1) has been amended by adding a reference to
§ 3.309, which implemented this statutory provision.

VACEH recommended that posterior subcapsular cataracts and non-malignant
thyroid nodular disease be considered \"radiogenic\" and that the gender
restriction regarding breast cancer be deleted. VACEH also recommended
the manifestation periods for cataracts and thyroid disease and that the
time restriction for the manifestation of leukemia be deleted. The
Secretary has accepted these recommendations. 38 CFR 3.311b(b) has been
appropriately amended.

REGULATORY AMENDMENT

3-89-2

Regulations Affected: 38 CFR 3.6(c), (d) and (e)

EFFECTIVE DATE OF REGULATION: October 1, 1988

Date Secretary Approved Regulation: November 21, 1989

Federal Register Citation: 54 FR 51199-200 (December 13, 1989) as
corrected by 55 FR 23930-1 (June 12, 1990)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

[Section 3.6]{.underline}. Section 633(c) of Pub. L. 100-456, National
Defense Authorization Act, amended 38 U.S.C. 101 to require that
training duty performed by members of the Senior Reserve Officers\'
Training Corps for periods less than four weeks, or for any period which
is not a prerequisite to commissioning, is to be defined as \"inactive
duty training\" rather than \"active duty for training\". Training by
applicants for membership in the Senior Reserve Officers\' Training
Corps as defined in 5 U.S.C. 8140(g) is also included under the
definition of \"inactive duty training\". In 38 CFR 3.6, paragraph
(d)(3) is redesignated as paragraph (d)(4), paragraph (d)(2) is revised
and a new paragraph (d)(3) is added. 38 CFR 3.6(c)(4) and (5), and (e)
are revised.

REGULATORY AMENDMENT

3-90-1

Regulation Affected: 38 CFR 3.385

EFFECTIVE DATE OF REGULATION: May 3, 1990.

Date Secretary Approved Regulation: February 22, 1990

Federal Register Citation: 55 FR 12348-9 (April 3, 1990)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

[Section 3.385]{.underline}. The Chief Medical Director suggested that a
definition of hearing within normal limits be established consistent
with the revision of 38 CFR, Part 4, on the evaluation of hearing loss
which was effective December 18, 1987. New section 3.385 has been added
to 38 CFR, Part 3, to define hearing within normal limits for rating
purposes and to preclude service connection when hearing is within
normal limits.

REGULATORY AMENDMENT

3-90-2

Regulation Affected: 38 CFR 3.313

EFFECTIVE DATE OF REGULATION: August 5, 1964

Date Secretary Approved Regulation: October 2, 1990

Federal Register Citation: 55 FR 43123-5 (October 26, 1990)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

[Section 3.313]{.underline}. On March 29, 1990, the Centers for Disease
Control released a study entitled \"The Association of Selected Cancers
with Service in the U.S. Military in Vietnam.\" That study found that
Vietnam veterans have a roughly 50 percent increased risk of developing
non-Hodgkin\'s lymphoma (NHL) after service in Vietnam. The Secretary
has determined that there is a relationship between Vietnam service and
the subsequent development of NHL. 38 CFR, Part 3, has been amended to
add section 3.313 to provide the criteria to be used in considering
claims for service connection for NHL by Vietnam veterans.

The General Counsel held that in making a liberalizing amendment to VA
regulations, the Secretary may establish an effective date earlier than
the date of publication in the Federal Register. Consequently, this
amendment is effective on August 5, 1964, the beginning date of the
Vietnam era.

REGULATORY AMENDMENT

3-90-3

Regulations Affected: 38 CFR 3.326(a); 3.327(a), (b), (c) and (d);
3.329; and 3.655

EFFECTIVE DATE OF REGULATION: December 31, 1990

Date Secretary Approved Regulation: November 8, 1990

Federal Register Citation: 55 FR 49520-2 (November 29, 1990)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

The regulations concerning examinations, reexaminations and failure to
report for examination have been reorganized in order to clarify the
provision that individuals must report for VA examinations. A
requirement to issue advance notice before taking adverse action because
of failure to report has been added.

[Section 3.326]{.underline}. 38 CFR 3.326 has been amended by adding an
introduction to specify that the term examination includes periods of
hospital observation when requested by VA. The provision requiring
individuals to report for VA examinations, formerly contained in §
3.329, has been incorporated in § 3.326(a) and gender-neutral language
has been substituted where appropriate.

[Section 3.327]{.underline}. 38 CFR 3.327(a) has been amended to specify
that the term reexamination includes period of hospital observation when
requested by VA. Section 3.327(d) has been removed and the provision
regarding VA\'s right to request reexaminations has been incorporated in
§ 3.327(a) for greater emphasis. The provision requiring individuals to
report for VA examinations, formerly contained in § 3.329, has been
incorporated in § 3.327(a). The language in § 3.327(b) and (c) has been
modified for the sake of clarity.

[Section 3.329]{.underline}. 38 CFR 3.329 has been removed.

[Section 3.665]{.underline}. 38 CFR 3.655 has been rewritten and now
requires that an advance notice be issued before any adverse action is
taken because of an individual\'s failure to report for a VA
examination.

REGULATORY AMENDMENT

3-90-4

Regulations Affected: 38 CFR 3.1601(a) and 3.1612(g)

EFFECTIVE DATE OF REGULATION: January 7, 1991

Date Secretary Approved Regulation: November 15, 1990

Federal Register Citation: 55 FR 50322-3 (December 6, 1990)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

[Section 3.1601]{.underline}. The General Counsel held in an opinion
dated May 1, 1989 (O.G.C. Prec. 9-89), that the 2-year time limit for
filing claims which is established in 38 CFR 3.1601(a) should not apply
to claims for service-connected burial benefits under 38 U.S.C. 2307. 38
CFR 3.1601(a) has been amended to eliminate the time limit for filing
claims for the service-connected burial allowance and claims for
transportation expenses to the place of burial.

[Section 3.1612]{.underline}. A subsequent opinion dated July 31, 1991
(O.G.C. Prec. 17-90), held that the 2-year time limit as applied to
claims for reimbursement for the cost of transporting a veteran\'s body
to a national cemetery under 38 U.S.C. 2308 and the 2-year time limit
established in 38 CFR 3.1612(g) as applied to claims for monetary
allowance in lieu of a Government-furnished headstone or marker under 38
U.S.C. 2306 are invalid. 38 CFR 3.1612(g) has been amended to eliminate
the time limit for filing claims for the monetary allowance in lieu of a
Government-furnished headstone or marker.

REGULATORY AMENDMENT

3-90-5

Regulation Affected: 38 CFR 3.156

EFFECTIVE DATE OF REGULATION: January 22, 1991

Date Secretary Approved Regulation: November 27, 1990

Federal Register Citation: 55 FR 52274-5 (December 21, 1990)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

[Section 3.156]{.underline}. The Veterans\' Judicial Review Act, Pub. L.
100-687, established the United States Court of Veterans Appeals and
added new section 5108, dealing with claims reopened on the basis of
\"new and material evidence,\" to title 38, United States Code. That
term has been used in 38 CFR for many years without a formal definition.
Because of this new statutory use of the term, and because VA claims
will now be subject to judicial review, a formal definition of the term
\"new and material evidence\" has been developed. In 38 CFR 3.156,
paragraphs (a) and (b) have been redesignated as paragraphs (b) and (c)
respectively, and a new paragraph (a), containing the definition of new
and material evidence, has been added.

REGULATORY AMENDMENT

3-90-6

Regulation Affected: 38 CFR 3.159

EFFECTIVE DATE OF REGULATION: January 22, 1991

Date Secretary Approved Regulation: November 27, 1990

Federal Register Citation: 55 FR 52273-4 (December 21, 1990)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

[Section 3.159]{.underline}. It has been a long-standing VA policy to
assist claimants in developing the facts pertinent to their claims. The
Veterans\' Judicial Review Act, Pub. L. 100-687, made this VA policy a
statutory requirement and codified it at 38 U.S.C. 5107. 38 CFR 3.159
has been added to clarify VA\'s obligation to assist claimants in
developing the facts pertinent to their claims.

REGULATORY AMENDMENT

3-91-1

Regulation Affected: 38 CFR 3.700(a)

EFFECTIVE DATE OF REGULATION: April 30, 1990

Date Secretary Approved Regulation: December 11, 1990

Federal Register Citation: 56 FR 1110-1 (January 11, 1991)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

[Section 3.700]{.underline}. In a recent opinion (O.G.C. Prec. 10-90)
dated April 30, 1990, the General Counsel, noting that military
disability pay has been substantially altered over the last few years,
held that sick pay and incapacitation pay paid to a member of a reserve
component can no longer be equated to active duty pay. 38 CFR
3.700(a)(1)(i) has been amended to delete the references to sick pay and
incapacitation pay.

REGULATORY AMENDMENT

3-91-2

Regulation Affected: 38 CFR 3.500(n)

EFFECTIVE DATE OF REGULATION: September 10, 1990

Date Secretary Approved Regulation: January 16, 1991

Federal Register Citation: 56 FR 4729 (February 6, 1991)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

[Section 3.500]{.underline}. In a precedent opinion dated September 10,
1990 (O.G.C. Prec. 90-90), the General Counsel held that an individual
who is living with a person of the opposite sex and holding himself or
herself out to the public to be the spouse of such person remains a
\"child\" within the meaning of 38 U.S.C. 101(4), as long as the
individual does not contract a valid marriage. Consequently,
subparagraph (3) of 38 CFR 3.500(n) has been removed.

REGULATORY AMENDMENT

3-91-3

Regulations Affected: 38 CFR 3.54(c) and 3.810(a)

EFFECTIVE DATE OF REGULATION: December 18, 1989

Date Secretary Approved Regulation: January 8, 1991

Federal Register Citation: 56 FR 5756 (February 13, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

[Section 3.54]{.underline}. Pub. L. 101-237 amended 38 U.S.C. 1318(c)(1)
to reduce the time a surviving spouse must have been married to a
veteran in order to be eligible for certain survivor benefits.
Eligibility previously required two years of marriage. This has been
reduced to one year. 38 CFR 3.54(c) has been amended to implement this
new provision of law.

[Section 3.810]{.underline}. The Veterans\' Benefits Amendments of 1989,
Pub. L. 101-237, amended 38 U.S.C. 1162 to expand the category of
veterans entitled to receive a clothing allowance. Veterans who because
of a skin condition resulting from a service-connected disability use
medication which a physician has prescribed, and which the Secretary
determines causes irreparable damage to the veterans\' outergarments,
are now eligible for this benefit. 38 U.S.C. 1162 has also been amended
to eliminate the requirement that eligibility for the clothing allowance
be based upon a compensable disability. 38 CFR 3.810(a) has been amended
to implement these changes.

REGULATORY AMENDMENT

3-91-4

Regulation Affected: 38 CFR 3.7(x)

EFFECTIVE DATE OF REGULATION: The effective dates are August 30, 1990 (§
3.7(x)(17) and (18)), and October 5, 1990 (§ 3.7(x)(19)).

Date Secretary Approved Regulation: January 16, 1991

Federal Register Citation: 56 FR 5755-6 (February 13, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

[Section 3.7]{.underline}. The Secretary of the Air Force held under
Pub. L. 95-202 that the service of members of the following groups is
active duty for VA benefit purposes: U.S. Civilians of the American
Field Service (AFS) Who Served Overseas Operationally in World War I
During the Period August 31, 1917, to January 1, 1918; U.S. Civilians of
the American Field Service (AFS) Who Served Overseas Under U.S. Armies
and U.S. Army Groups in World War II During the Period December 7, 1941,
through May 8, 1945; and U.S. Civilian Employees of American Airlines
Who Served Overseas as a Result of American Airlines\' Contract with the
Air Transport Command During the Period December 14, 1941, through
August 14, 1945. 38 CFR 3.7(x) has been amended to include these groups.

The amendments are effective August 30, 1990, for the U.S. Civilians of
the American Field Service, and October 5, 1990, for the U.S. Civilian
Employees of American Airlines, the dates on which such service was
certified as active duty.

For historical purposes, the dates on which service was certified as
active military service under Pub. L. 95-202 for the following groups
are provided:

§ 3.7(x)(1) Women\'s Air Force Service Pilots March 8, 1979

§ 3.7(x)(2) Signal Corps Female Telephone Operators Unit of World War I
May 15, 1979

§ 3.7(x)(3) Engineer Field Clerks August 31, 1979

§ 3.7(x)(4) Women\'s Army Auxiliary Corps March 18, 1980

§ 3.7(x)(5) Quartermaster Corps Female Clerical Employees Serving With
the American Expeditionary Forces in World War I January 22, 1981

§ 3.7(x)(6) Civilian Employees of Pacific Naval Air Bases Who Actively
Participated in Defense of Wake Island During World War II January 22,
1981

§ 3.7(x)(7) Reconstruction Aides and Dietitians in World War I July 6,
1981

§ 3,7(x)(8) Male Civilian Ferry Pilots July 17, 1981

§ 3.7(x)(9) Wake Island Defenders from Guam April 7, 1982

§ 3.7(x)(10) Civilian Personnel Assigned to the Secret Intelligence
Element of the OSS December 27, 1982

§ 3.7(x)(11) Guam Combat Patrol May 10. 1983

§ 3.7(x)(12) Quartermaster Corps Keswick Crew on Corregidor World War II
February 7, 1984

§ 3.7(x)(13) U.S. Civilian Volunteers Who Actively Participated in the
Defense of Bataan February 7, 1984

§ 3.7(x)(14) United States Merchant Seamen Who Served on Blockships in
Support of Operation Mulberry October 18, 1985

§ 3.7(x)(15) American Merchant Seamen in Oceangoing Service during the
Period of Armed Conflict, December 7, 1941 to August 15, 1945 January
19, 1988

§ 3.7(x)(16) Civilian Navy Identification Friend or Foe Technicians Who
Served in the Combat Areas of the Pacific during World War II (December
7, 1941 to August 15, 1945) August 2, 1988

REGULATORY AMENDMENT

3-91-5

Regulation Affected: 38 CFR 3.1000(g)

EFFECTIVE DATE OF REGULATION: April 24, 1991

Date Secretary Approved Regulation: March 18, 1991

Federal Register Citation: 56 FR 18732-3 (April 24, 1991), as corrected
by 56 FR 24239 (May 29, 1991)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

[Section 3.1000]{.underline}. The current regulation governing the
payment of educational assistance as an accrued benefit does not
identify all educational assistance programs that result in periodic
monetary benefits which may be released as accrued benefits subject to
the provisions of 38 U.S.C. 5121, if they are due and unpaid on the date
of the veteran\'s death. 38 CFR 3.1000(g) has been amended to include
educational assistance under the provisions of 38 U.S.C. Chapters 30 or
32, and 10 U.S.C. Chapter 106 as potential accrued benefits.

REGULATORY AMENDMENT

3-91-6

Regulations Affected: 38 CFR 3.1(d) and 3.3(b)

EFFECTIVE DATE OF REGULATION: April 29, 1991

Date Secretary Approved Regulation: March 26, 1991

Federal Register Citation: 56 FR 19578-9 (April 29, 1991) as corrected
by 56 FR 22910 (May 17, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

[Section 3.1]{.underline}. As a result of the following amendment to 38
CFR 3.3, the cross-reference at § 3.1(d)(2) has been amended.

[Section 3.3]{.underline}. In a memorandum dated October 11, 1990, the
General Counsel held that 38 CFR 3.3(b)(3)(iii) and 3.3(b)(4)(iii) do
not clearly reflect the provisions of 38 U.S.C. 1541 and 1542;
specifically, that the veteran\'s service must have been during a period
of war. 38 CFR 3.3(b)(3) and 3.3(b)(4) have been amended to clarify this
eligibility requirement.

REGULATORY AMENDMENT

3-91-7

Regulations Affected: 38 CFR 1.575(b); 3.3(a); 3.55; 3.215; 3.400(d),
(u), (v) and (w); 3.501(i); 3.551(h); 3.1600(f); and 3.1612(h)

EFFECTIVE DATE OF REGULATION: November 1, 1990, except the provisions
concerning Medicaid payments (§§ 3.501(i)(3) and 3.551(h)) which are
effective November 5, 1990, the date that Pub. L. 101-508 was signed
into law.

Date Secretary Approved Regulation: April 10, 1991

Federal Register Citation: 56 FR 25043-5 (June 3, 1991) as corrected by
56 FR 28226 (June 10, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Section 8053 of the Omnibus Budget Reconciliation Act of 1990, Pub. L.
101-508, amended 38 U.S.C. 5101 to authorize the Secretary to require
the disclosure of the social security number of any individual, as well
as those of his or her dependents, who applies for or is in receipt of
compensation or pension benefits. The Secretary has decided to exercise
this authority.

Section 8002 of Pub. L. 101-508 amended 38 U.S.C. 1502(a) to eliminate
the presumption of total disability at age 65 for pension purposes.

Section 8004 of Pub. L. 101-508 amended 38 U.S.C. 103 to eliminate the
eligibility of remarried surviving spouses and married children for
reinstatement of benefits when that marital relationship terminates
unless the disqualifying marital relationship was void or was annulled.
Similarly, the fact that a surviving spouse of a veteran has terminated
a relationship with another person, in which the surviving spouse has
held himself or herself out openly to the public as the spouse of that
person, has also been eliminated as a basis for the reinstatement of
benefits.

Section 8003 of Pub. L. 101-508 amended 38 U.S.C. 5503 to require the
reduction of pension benefits to \$90 per month when a veteran, who has
neither spouse nor child, is receiving Medicaid-covered nursing home
care. This reduction will occur after the month of admission to the
nursing home. A veteran is not liable to the United States for any
payment of pension in excess of the permitted amount that is paid to or
for the veteran by reason of the inability or failure of VA to reduce
the pension unless such inability or failure is the result of a willful
concealment by the veteran of information necessary to make the
reduction. The provisions of this statutory amendment expire on
September 30, 1992.

Section 8042 of Pub. L. 101-508 amended 38 U.S.C. 2303(b)(2) to
eliminate eligibility for the \$150 plot allowance based solely on
wartime service. This change applies to deaths occurring on or after
November 1, 1990.

Section 8041 of Pub. L. 101-508 amended 38 U.S.C. 2306(d) to eliminate
the payment of the monetary allowance in lieu of VA-provided headstone
or marker for deaths occurring on or after November 1, 1990.

[Section 3.3]{.underline}. 38 CFR 3.3(a)(3)(v) has been amended to
eliminate the presumption of total disability at age 65 for pension
purposes. The reference to \"vicious habits\" that appears in §
3.3(a)(3)(v) has been removed, as that term no longer appears in the
statutory language (38 U.S.C. 1521 as amended by Pub. L. 95-588).

[Section 3.55]{.underline}. The authority citation at the end of 38 CFR
3.55 has been amended to cite 38 U.S.C. 103.

[Section 3.215]{.underline}. 38 CFR 3.215 has been amended by removing
the words \"On or after\" where they appear, and adding, in their place,
the words \"With respect to claims filed prior to November 1, 1990, on
or after\".

[Section 3.342]{.underline}. 38 CFR 3.342(a) has been amended by
removing the words \"On or after\" and adding, in their place, the words
\"With respect to claims filed prior to November 1, 1990, on or after\".

[Section 3.400]{.underline}. 38 CFR 3.400(d) has been amended to
eliminate the presumption of total disability at age 65 for pension
purposes. 38 CFR 3.400(u) and (v) have been amended to eliminate the
eligibility of remarried surviving spouses and married children for
reinstatement of benefits when that marital relationship terminates
unless the disqualifying marital relationship was void or was annulled.
38 CFR 3.400(w) has been amended to eliminate the termination of a
relationship of a surviving spouse of a veteran with another person, in
which the surviving spouse has held himself or herself out openly to the
public as the spouse of that person, as a basis for the reinstatement of
benefits.

[Section 3.501]{.underline}. 38 CFR 3.501(i)(3) has been redesignated as
§ 3.501(i)(4) and a new § 3.501(i)(3) has been added toestablish an
effective date for the reduction of pension benefits to \$90 per month
when a veteran, who has neither spouse nor child, is receiving
Medicaid-covered nursing home care, and to establish an effective date
for the reduction of pension benefits when a veteran, who has neither
spouse nor child, is receiving Medicaid-covered nursing home care, and
conceals information necessary to make the reduction to \$90 per month.

[Section 3.551]{.underline}. 38 CFR 3.551(h) has been added to require
the reduction of pension benefits to \$90 per month when a veteran, who
has neither spouse nor child, is receiving Medicaid-covered nursing home
care. This reduction will occur after the month of admission to the
nursing home. A veteran is not liable to the United States for any
payment of pension in excess of the permitted amount that is paid to or
for the veteran by reason of the inability or failure of VA to reduce
the pension unless such inability or failure is the result of a willful
concealment by the veteran of information necessary to make the
reduction. The provisions of this statutory amendment expire on
September 30, 1992.

[Section 3.1600]{.underline}. In 38 CFR 3.1600, paragraphs (f)(2),
(f)(3), and (f)(4) have been redesignated as paragraphs (f)(3), (f)(4),
and (f)(5), respectively. A new § 3.1600(f)(2) has been added. In the
newly redesignated § 3.1600(f)(3), the words \"either served during a
period of war or\" have been removed.

[Section 3.1612]{.underline}. 38 CFR 3.1612(h) has been added to
eliminate the payment of the monetary allowance in lieu of VA-provided
headstone or marker for deaths occurring on or after November 1, 1990.

REGULATORY AMENDMENT

3-91-8

Regulation Affected: 38 CFR 3.960(b) and (c)

EFFECTIVE DATE OF REGULATION: June 25, 1991

Date Secretary Approved Regulation: May 31, 1991

Federal Register Citation: 56 FR 28823-4 (June 25, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

In the Federal Register of September 16, 1987 (52 FR 34906-10), VA
published an amendment to 38 CFR 3.26, which dealt with section 306 and
old-law pension annual income computations. However, the cross-reference
to § 3.26 that appears at § 3.960 concerning section 306 and old-law
pension protection was not amended.

[Section 3.960]{.underline}. In 38 CFR 3.960(b)(5), the words \"§
3.26(b)\" are removed, and the words \"§ 3.26(c)\" are added in their
place. In § 3.960(c), the words \"§ 3.26(a)(1) or (2) or (b)(1)\" are
removed, and the words \"§ 3.26(a), (b), or (c)\" are added in their
place.

REGULATORY AMENDMENT

3-91-9

Regulation Affected: 38 CFR 3.311a(c) and (d)

EFFECTIVE DATE OF REGULATION: September 25, 1985

Date Secretary Approved Regulation: September 16, 1991

Federal Register Citation: 56 FR 51651-3 (October 15, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Under 38 CFR 1.17(c), when VA determines that a significant statistical
association exists between exposure to a herbicide containing dioxin and
any disease, 38 CFR 3.311a shall be amended to provide guidelines for
the establishment of service connection for the disease. These
determinations are to be made after receiving the advice of the Veterans
Advisory Committee on Environmental Hazards (VACEH) based on its
evaluation of scientific or medical studies.

In a public meeting on May 16-17, 1990, the VACEH met in Washington, DC.
At that meeting, the VACEH considered more than 80 scientific and
medical documents relating to the connection, if any, between exposure
to a herbicide containing dioxin and the subsequent development of
soft-tissue sarcoma (STS). The VACEH found that the relative weights of
valid positive and valid negative studies permitted the conclusion that
it is at least as likely as not that there is a significant statistical
association between exposure to a herbicide containing dioxin and STS.
The Secretary has accepted that recommendation.

There is disagreement even among pathologists as to what tumors the term
\"soft-tissue sarcoma\" encompasses. With the assistance of the Veterans
Health Administration and the VACEH, we compiled a list of those tumors
which we consider to be soft-tissue sarcomas and included it in the
regulation. For compensation purposes, such tumors must be malignant and
arise from tissue of mesenchymal origin, including muscle, fat, blood or
lymph vessels, or connective tissue (but not cartilage or bone). Tumors
of infancy or childhood, and those having a strong, known causal
association with a specific etiology have been excluded because it is
unlikely that there is a reasonable probability of a significant
statistical association between such tumors and exposure to a herbicide
containing dioxin.

In [Nehmer]{.underline}, the court invalidated VA\'s requirement of
proof of a causal relationship in determining service connection for
diseases associated with dioxin exposure. Accordingly, § 3.311a(d) is
currently of no force and effect.

Further, because the [Nehmer]{.underline} decision invalidated VA\'s
original service connection determinations in § 3.311a [ab]{.underline}
[initio]{.underline}, and because those determinations were the original
regulatory response to the mandate in section 5(a)(1) of Pub. L. 98-542,
the effective date of the amendment to § 3.311a(c) is September 25,
1985, the original effective date of the section.

In order to insure equitable treatment of veterans who may have been
exposed to herbicides containing dioxin during service other than in
Vietnam during the Vietnam era, e.g., in activities related to testing,
storage or shipping of herbicides, the restriction limiting the
provisions of § 3.311a to veterans who served in Vietnam during the
Vietnam era has been removed.

[Section 3.311a]{.underline}. 38 CFR 3.311a(c) has been amended to
remove the restriction limiting the provisions of § 3.311a to veterans
who served in Vietnam during the Vietnam era, and to provide for service
connection for STS. 38 CFR 3.311a(d) has been removed and reserved.

REGULATORY AMENDMENT

3-91-10

Regulations Affected: 38 CFR 3.311a(c) and (d)

EFFECTIVE DATE OF REGULATION: The change to § 3.311a(d) is effective
September 25, 1985. The change to § 3.311a(c) is effective October 21,
1991.

Date Secretary Approved Regulation: September 13, 1991

Federal Register Citation: 56 FR 52473-4 (October 21, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Under 38 CFR 1.17(c), when VA determines that a significant statistical
association exists between exposure to a herbicide containing dioxin and
any disease, 38 CFR 3.311a shall be amended to provide guidelines for
the establishment of service connection for the disease. These
determinations are to be made after receiving the advice of the Veterans
Advisory Committee on Environmental Hazards (VACEH) based on its
evaluation of scientific or medical studies.

The VACEH held a public meeting on August 22-23, 1990, in Washington,
DC. At that meeting, the VACEH considered 30 scientific and medical
documents relating to the association, if any, between exposure to a
herbicide containing dioxin and either chloracne or porphyria cutanea
tarda (PCT). The VACEH found that the relative weights of valid positive
and valid negative studies permit the conclusion that there is a
significant statistical association between exposure to a herbicide
containing dioxin and the manifestation, within nine months of such
exposure, of chloracne. The VACEH also found that the relative weights
of valid positive and valid negative studies do not permit the
conclusion that there is a significant statistical association between
exposure to a herbicide containing dioxin and the subsequent development
of PCT. The Secretary has accepted these recommendations.

In [Nehmer]{.underline}, the court invalidated VA\'s requirement of
proof of a causal relationship in determining service connection for
diseases associated with dioxin exposure. Accordingly, 38 CFR 3.311a(d)
was removed and reserved pending the Secretary\'s determinations for
other diseases, pursuant to the court\'s remand order, after receiving
the advise of the VACEH. A revised § 3.311a(d) has been reinserted.

Further, because the [Nehmer]{.underline} decision invalidated VA\'s
original service connection determinations in § 3.311a [ab]{.underline}
[initio]{.underline}, and because those determinations were the original
regulatory response to the mandate in section 5(a)(1) of Pub. L. 98-542,
the effective date of the revised § 3.311a(d) is September 25, 1985, the
original effective date of the section.

[Section 3.311a]{.underline}. 38 CFR 3.311a(c) has been amended to
change the manifestation period for chloracne from three to nine months.
38 CFR 3.311a(d) has been reinserted to implement the Secretary\'s
decision that there is no significant statistical association between
exposure to dioxin and the subsequent development of PCT.

REGULATORY AMENDMENT

3-91-11

Regulations Affected: 38 CFR 3.2(i), 3.3(a), 3.17 and 3.54(a)

EFFECTIVE DATE OF REGULATION: April 16, 1991

Date Secretary Approved Regulation: September 24, 1991

Federal Register Citation: 56 FR 57985-6 (November 15, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Section 332 of the Persian Gulf War Veterans\' Benefits Act of 1991,
Pub. L. 102-25, amended 38 U.S.C. 101 to add the Persian Gulf War,
beginning August 2, 1990, and terminating on a date to be determined by
Presidential proclamation or law, as an official \"period of war\" for
the purpose of veterans benefits.

Section 333 of Pub. L. 102-25 amended 38 U.S.C. 1501 and 1541 to provide
pension eligibility for Persian Gulf War veterans and their surviving
spouses.

[Section 3.2]{.underline}. 38 CFR 3.2(i) has been added to include the
Persian Gulf War as a period of war.

[Section 3.3]{.underline}. 38 CFR 3.3(a)(3) the introductory text has
been amended to include the Persian Gulf War.

[Section 3.17]{.underline}. 38 CFR 3.17 has been amended to include the
Persian Gulf War.

[Section 3.54]{.underline}. 38 CFR 3.54(a)(3)(viii) has been added to
reflect the statutory delimiting date for the surviving spouse of a
Persian Gulf War veteran.

REGULATORY AMENDMENT

3-91-12

Regulations Affected: 38 CFR 3.501(n) and 3.853

EFFECTIVE DATE OF REGULATION: November 1, 1990

Date Secretary Approved Regulation: November 13, 1991

Federal Register Citation: 56 FR 65852-3 (December 19, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Section 8001 of the Omnibus Budget Reconciliation Act of 1990, Pub. L.
101-508, added 38 U.S.C. 5505 to prohibit the payment of compensation to
or for an incompetent veteran, having neither spouse, child, nor
dependent parent, whose estate, excluding the value of the veteran\'s
home, exceeds \$25,000 until the estate has been reduced to less than
\$10,000. If the veteran is subsequently rated competent for more than
90 days, the withheld compensation will be paid in a lump-sum payment;
however, a lump-sum payment may not be made to or for a veteran who,
within that 90 day period, dies or is again rated incompetent. These
provisions expire on September 30, 1992.

[Section 3.501]{.underline}. 38 CFR 3.501(n) has been added to require
termination of compensation on the last day of the first month in which
the veteran\'s estate exceeds \$25,000.

[Section 3.853]{.underline}. 38 CFR 3.853 has been added to prohibit the
payment of compensation to or for an incompetent veteran, having neither
spouse, child, nor dependent parent, whose estate, excluding the value
of the veteran\'s home, exceeds \$25,000 until the estate has been
reduced to less than \$10,000.

REGULATORY AMENDMENT

3-91-13

Regulations Affected: 38 CFR 3.342(c) and 3.1612(b), (c), and (e)

EFFECTIVE DATE OF REGULATION: December 18, 1989

Date Secretary Approved Regulation: November 13, 1991

Federal Register Citation: 56 FR 65851-2 (December 19, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Section 114 of the Veterans\' Benefits Amendments of 1989, Pub. L.
101-237, amended 38 U.S.C. 1524 (formerly 524) to lower from 50 years to
45 years the maximum age at which veterans awarded pension must undergo
an evaluation to determine whether achievement of a vocational goal is
reasonably feasible through a program of vocational training. 38 U.S.C.
1524 was also amended to protect the permanent and total evaluation of a
veteran, who secures employment within the scope of the vocational goal
identified by his or her vocational rehabilitation plan, from
termination by reason of employability, until the veteran has maintained
this employment for not less than 12 consecutive months.

Section 501 of Pub. L. 101-237 amended 38 U.S.C. 2306(d) to authorize
payment of the monetary allowance in lieu of furnishing a headstone or
marker at Government expense when the headstone or marker is purchased
prior to the veteran\'s death. Since this benefit is available when the
headstone is purchased prior to the veteran\'s death, VA will
discontinue making reimbursement for the cost of adding the veteran\'s
identifying information to an existing headstone or marker if death
occurred on or after December 18, 1989. It should be noted that section
8041 of the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508,
eliminated the payment of the monetary allowance in lieu of VA-provided
headstone or marker for deaths occurring on or after November 1, 1990.

[Section 3.342]{.underline}. 38 CFR 3.342(c)(1) and (c)(2) have been
amended to lower from 50 years to 45 years the maximum age at which
veterans awarded pension must undergo an evaluation to determine whether
achievement of a vocational goal is reasonably feasible through a
program of vocational training. 38 CFR 3.342(c)(3) has been added to
protect the permanent and total evaluation of a veteran, who secures
employment within the scope of the vocational goal identified by his or
her vocational rehabilitation plan, from termination by reason of
employability, until the veteran has maintained this employment for not
less than 12 consecutive months.

[Section 3.1612]{.underline}. In 38 CFR 3.1612, paragraph (e)(3) is
redesignated as paragraph (e)(4), and paragraph (e)(2)(iii) is
redesignated as paragraph (e)(3). 38 CFR 3.1612(b)(3), (c), (e)(1), and
(e)(2)(i) have been amended to authorize payment of the monetary
allowance in lieu of furnishing a headstone or marker at Government
expense when the headstone or marker is purchased prior to the
veteran\'s death, and to discontinue the reimbursement for the cost of
adding the veteran\'s identifying information to an existing headstone
or marker if death occurred on or after December 18, 1989.

REGULATORY AMENDMENT

3-91-14

Regulation Affected: 38 CFR 3.272(k)

EFFECTIVE DATE OF REGULATION: January 21, 1992

Date Secretary Approved Regulation: November 13, 1991

Federal Register Citation: 56 FR 65846-7 (December 19, 1991)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

On December 13, 1979, 42 U.S.C. 5044(g) was amended by section 9 of the
Domestic Volunteer Service Act Amendments of 1979, Pub. L. 96-143, to
provide that payments under a Domestic Volunteer Service Act (DVSA)
program be excluded from consideration when determining entitlement to
other governmental programs unless the Director of the ACTION Agency
determines that a volunteer\'s payments equal or exceed the minimum
wage. As a result, VA published in the Federal Register of January 29,
1981 (46 FR 9579-80), an amendment to 38 CFR 3.272 which added paragraph
(k) for the purposes of excluding such payments from countable income
under the Improved Pension Program. That rulemaking, however,
erroneously listed the Older American Community Service Program as a
DVSA program.

[Section 3.272]{.underline}. 38 CFR 3.272(k) has been amended to remove
the Older American Community Service Program.

REGULATORY AMENDMENT

3-91-15

Regulation Affected: 38 CFR 3.500(q)

EFFECTIVE DATE OF REGULATION: January 21, 1992

Date Secretary Approved Regulation: November 13, 1991

Federal Register Citation: 56 FR 65847 (December 19, 1991)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

38 U.S.C. 5306 requires that, upon the filing of a written renouncement,
payment of monetary benefits will be terminated. Formerly, 38 CFR
3.500(q) provided that the effective date of discontinuance when
benefits are renounced was the date of last payment. Because of
differences in workload among regional offices, as well as fluctuations
within the same office, some renouncements were processed less
expeditiously than others, and claims received by VA on the same date
resulted in benefits being terminated on different dates. A later
effective date might not be advantageous to some beneficiaries who, for
whatever reason, wish to terminate VA benefits without delay.

[Section 3.500]{.underline}. 38 CFR 3.500(q) has been amended to provide
for the termination of benefits on the last day of the month in which
the renouncement is received.

REGULATORY AMENDMENT

3-91-16

Regulations Affected: 38 CFR 3.104(a) and 3.105(a)

EFFECTIVE DATE OF REGULATION: January 21, 1992

Date Secretary Approved Regulation: November 13, 1991

Federal Register Citation: 56 FR 65845-6 (December 19, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

The current rulemaking establishes by regulation the point at which a
decision becomes final and binding upon all VA field offices. That point
is reached when VA issues written notification on any issues for which
it is required that VA provide notice to the claimant in accordance with
38 U.S.C. 5104. Once VA issues such notice, the decision may be changed
only upon a showing of clear and unmistakable error or upon review by
duly constituted appellate authorities.

[Section 3.104]{.underline}. 38 CFR 3.104(a) has been amended to provide
that a decision becomes final and binding upon all VA field offices when
VA issues written notification on any issues for which it is required
that VA provide notice to the claimant in accordance with 38 U.S.C.
5104.

[Section 3.105]{.underline}. 38 CFR 3.105(a) has been amended by
removing the words \"determinations on which an action was predicated\",
and adding, in their place, the words \"determinations which are final
and binding.\"

REGULATORY AMENDMENT

3-91-17

Regulation Affected: 38 CFR 3.7(x)

EFFECTIVE DATE OF REGULATION: The effective dates are April 8, 1991 (§
3.7(x)(20)) and May 3, 1991 (§ 3.7(x)(21)).

Date Secretary Approved Regulation: November 18, 1991

Federal Register Citation: 56 FR 65847-8 (December 19, 1991)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The Secretary of the Air Force held under Pub. L. 95-202 that the
service of members of the following groups is active duty for VA benefit
purposes: Civilian Crewmen of the United States Coast and Geodetic
Survey Vessels Who Performed Their Service in Areas of Immediate
Military Hazard While Conducting Cooperative Operations with and for the
United States Armed Forces Within a Time Frame of December 7, 1941 to
August 15, 1945; and Honorably Discharged Members of the American
Volunteer Group (Flying Tigers) Who Served During the Period December 7,
1941 to July 18, 1942. The effective dates are April 8, 1991 for
Civilian Crewmen of the United States Coast and Geodetic Survey Vessels,
and May 3, 1991 for Honorably Discharged Members of the American
Volunteer Group (Flying Tigers).

[Section 3.7]{.underline}. 38 CFR 3.7(x)(20) and (21) have been added to
include service performed by Civilian Crewmen of the United States Coast
and Geodetic Survey Vessels and Honorably Discharged Members of the
American Volunteer Group (Flying Tigers) as active military service.

REGULATORY AMENDMENT

3-91-18

Regulations Affected: 38 CFR 3.454(b), (c), and (d); 3.501(i); and
3.551(a), (b), (c), (d), (e), (f), (g), and (h)

EFFECTIVE DATE OF REGULATION: The amendments that pertain to Improved
Pension rates for certain veterans receiving institutional care are
effective February 1, 1990. The amendments pertaining to veterans
receiving Section 306 pension who are institutionalized are effective
January 21, 1992.

Date Secretary Approved Regulation: November 13, 1991

Federal Register Citation: 56 FR 65848-51 (December 19, 1991)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Section 111 of the Veterans\' Benefits Amendments of 1989, Pub. L.
101-237 amended 38 U.S.C. 5503(a)(1) to require reduction of Improved
Pension for veterans without dependents only if they are admitted to a
domiciliary or nursing home by VA or at VA expense. Under these
conditions, a veteran\'s monthly pension may not exceed \$90 effective
the end of the third full calendar month following the month of
admission. Section 101 of the Veterans\' Benefits Programs Improvement
Act of 1991, Pub. L. 102-86, amended 38 U.S.C. 5503 to provide for
reduction of Improved Pension to \$90 rather than \$60 monthly for
veterans without dependents effective the first of the month following
readmission to a domiciliary or nursing home by VA or at VA expense when
the readmission is within six months of a period during which there was
a required reduction.

In passing Pub. L. 101-237, Congress clearly intended to eliminate
pension reductions due to hospitalization and to increase the maximum
monthly pension payable to veterans who are receiving long-term
domiciliary or nursing home care at VA expense without creating a large
estate. In order to achieve those goals, when a veteran with no
dependents who is receiving domiciliary or nursing home care is
transferred to a hospital and then returns to the domiciliary or nursing
home, the entire period will be treated as continuous domiciliary or
nursing home care if the period of hospitalization is for less than six
months. Likewise, if a veteran dies after transfer from a domiciliary or
nursing home to a hospital, the period of hospitalization will be
considered as continuous domiciliary or nursing home care. If
hospitalization of less than six months results in the discharge of the
veteran from care at VA expense, then his or her full rate of pension
will be restored effective the date of transfer to the hospital.

In an opinion dated June 15, 1990 (O.G.C. Prec. 19-90), the General
Counsel held that the previous amendments to 38 U.S.C. 5503(a)(1) have
been erroneously applied to veterans receiving pension under section 306
of Pub. L. 95-588. Consequently, the rate payable for veterans without
dependents receiving section 306 pension who are institutionalized at VA
expense for the requisite period may not exceed \$50 per month. In
addition, the effective date for reduction for such admissions will be
the end of the second full calendar month following the month of
admission and, for readmissions within six months following termination
of a period of treatment or care of not less than two full calendar
months, reduction will be from date of readmission.

[Section 3.454]{.underline}. In 38 CFR 3.454(b)(1) and (c), remove the
dollar amount \"\$60\", wherever it appears, and add, in its place, the
dollar amount \"\$50\". In § 3.454(b)(2) and (d), remove \"§ 3.551(c)\"
and add, in its place, \"§ 3.551(d) or (e)(2)\". In § 3.454(d), after
the word \"monthly\" add the words \"if reduction is under § 3.551(d) or
(e)(2), or \$90 monthly if reduction is under § 3.551(e)(1)\". 38 CFR
3.454(b)(3) is added to provide for an apportionment when a married
veteran\'s improved pension under 38 U.S.C. 1521(b) (formerly 521(b)) is
reduced to \$90 monthly under 38 CFR 3.551(e)(1).

[Section 3.501]{.underline}. 38 CFR 3.501(i) has been amended to provide
effective dates for reduction upon readmission, and to conform with the
newly adopted amendments to 38 CFR 3.551. 38 CFR 3.501(i)(3) and (4) are
redesignated as paragraphs (6) and (7) respectively, new paragraphs (3),
(4) and (5) are added, and paragraphs (1) and (2) are revised.

[Section 3.551]{.underline}. In 38 CFR 3.551(b), the existing text is
designated as (b)(1), and new paragraphs (b)(2) and (3) are added
concerning the reduction of old-law pension upon readmission. Paragraphs
(d), (f), and (g) are redesignated as (f), (g), and (h), respectively, a
new paragraph (d) concerning improved pension prior to February 1, 1990,
is added, paragraph (e) is revised to pertain to improved pension after
January 31, 1990, and redesignated paragraph (h)(1) is revised to
reflect the reduction of improved pension upon hospitalization. In §
3.551(a), in the first sentence, after the word \"reduction\" and before
the word \"when\" add the words \"as specified below\". In redesignated
§ 3.551(b)(1), remove the phrase \", and service pension based on
entitlement prior to July 1, 1960\" from the heading. In § 3.551(c),
remove the phrase \", improved pension, and service pension based on
entitlement after June 30, 1960\" from the heading. In § 3.551(c)(1),
after the word \"furnished\"and before the word \"domiciliary\" add the
words \"hospital, nursing home or\", remove the dollar amount \"\$60\"
and add, in its place, the dollar amount \"\$50\". Remove paragraphs
(c)(2) and (4), (6) and (7), and redesignate paragraphs (c)(3) and
(c)(5) as (c)(2) and (c)(3), respectively. In the newly redesignated
paragraph (c)(2), remove the words \"or (2)\". In the newly redesignated
paragraphs (c)(2) and (c)(3), remove the dollar amount \"\$60\" wherever
it appears, and add, in its place, the dollar amount \"\$50\". In the
newly redesignated paragraph (h)(2), remove the paragraph designations
\"(c)(2)\", \"(c)(3)\", and \"(g)(1)\" wherever they appear, and add, in
their place, the paragraph designations \"(d)\", \"(e)\", and
\"(h)(1)\", respectively. In the newly redesignated paragraph (h)(3),
after the word \"monthly\" and before the word \"payable\" add the
phrase \"or \$90, if reduction is under paragraph (e)(1)\".

REGULATORY AMENDMENT

3-92-1

Regulations Affected: 38 CFR 3.216 and 3.500(w)

EFFECTIVE DATE OF REGULATION: November 5, 1990.

Date Secretary Approved Regulation: November 13, 1991

Federal Register Citation: 57 FR 8267-8 (March 9, 1992)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Section 8053 of the Omnibus Budget Reconciliation Act of 1990, Pub. L.
101-508, amended 38 U.S.C. 5101 (formerly 3001) by authorizing the
Secretary to require any person who applies for or receives compensation
or pension benefits to disclose his or her social security number, and
the social security numbers of any dependents for whom benefits are
being paid, to VA upon request. An individual is not required to furnish
VA with a social security number for any person to whom a social
security number has not been assigned. VA will discontinue benefits when
a beneficiary fails to disclose his or her social security number, or
those of his or her dependents, within 60 days of the date of request.
This time period is consistent with § 3.103(b)(2).

[Section 3.216]{.underline}. New section 3.216 has been added to require
any person who applies for or receives compensation or pension benefits
to disclose his or her social security number, and the social security
numbers of any dependents for whom benefits are being paid, to VA upon
request.

[Section 3.500]{.underline}. New paragraph (w) has been added to provide
the effective date of termination or reduction of benefits when a
beneficiary fails to furnish a required social security number.

REGULATORY AMENDMENT

3-92-2

Regulations Affected: 38 CFR 3.30(a, b, c, d, e, and f); 3.55(b, c,
d,and e); 3.215; 3.309(d); 3.343(d); 3.400(u, v, and w); and 3.951

EFFECTIVE DATE OF REGULATION: August 14, 1991.

Date Secretary Approved Regulation: February 7, 1992

Federal Register Citation: 57 FR 10424-26 (March 26, 1992)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Section 102 of the Veterans\' Benefits Programs Improvement Act of 1991,
Pub. L. 102-86, amended 38 U.S.C. 1315 to authorize the Secretary to
make payment of parents\' DIC less frequently than monthly if the amount
of the annual benefit is less than 4 percent of the maximum annual rate
payable under 38 U.S.C. 1315. The Secretary has decided to exercise that
authority by authorizing semiannual payments.

Section 8004 of the Omnibus Budget Reconciliation Act of 1990, Pub. L.
101-508, eliminated the eligibility of remarried surviving spouses and
married children for reinstatement of benefits when that marital
relationship terminates unless the disqualifying marital relationship
was void or was annulled. Similarly, the fact that a surviving spouse of
a veteran terminated a relationship with another person, in which the
surviving spouse held himself or herself out openly to the public as the
spouse of that person, was also eliminated as a basis for the
reinstatement of benefits. These provisions apply to claims filed after
October 31, 1990. Section 502 of Pub. L. 102-86 provides that the
amendments made by section 8004 of Pub. L. 101-508 do not apply with
respect to any individual who on October 31, 1990, was a surviving
spouse or child within the meaning of title 38, United States Code,
unless after that date that individual marries or, in the case of a
surviving spouse, begins to live with another person while holding
himself or herself out openly to the public as that person\'s spouse.

Section 2 of the Radiation-Exposed Veterans Compensation Act of 1986,
Pub. L. 100-321, provided a 40-year presumptive period for all but one
of the conditions for which presumptive service connection may be
granted based upon participation in a radiation-risk activity during
active military service; a 30-year presumptive period was provided for
leukemia. Under Pub. L. 100-321, reservists who participated in a
radiation-risk activity while on active duty for training or inactive
duty training are not entitled to presumptive service connection.
Section 104 of Pub. L. 102-86 amended 38 U.S.C. 1112 (formerly 312) to
provide for a 40-year presumptive period for the occurrence of leukemia
in veterans exposed to radiation, and section 105 of Pub. L. 102-86
extended presumptive service connection to individuals who were engaged
in a radiation-risk activity during active duty for training or inactive
duty training.

The General Counsel, in O.G.C. Prec. 66-90, determined that VA had no
authority to \"grandfather\" or protect disability evaluations assigned
under superceded rating criteria. Section 103 of Pub. L. 102-86 amended
38 U.S.C. 1155 to provide that a modification to the rating schedule
occurring after August 14, 1991, will not result in a reduction of any
disability evaluation unless that disability has actually improved.

[Section 3.30]{.underline}. The section heading, introductory text and
paragraph headings for paragraphs (a), (b), (c) and (d) have been
revised. Paragraph (e) has been redesignated as paragraph (f), and a new
paragraph (e) has been added. These amendments implement the
Secretary\'s decision to authorize semiannual payments for parents\'
DIC.

[Section 3.55]{.underline}. 38 CFR 3.55(b), (c), (d), and (e) have been
amended to authorize the reinstatement of benefits to any individual who
on October 31, 1990, was a surviving spouse or child within the meaning
of title 38, United States Code, unless after that date that individual
marries or, in the case of a surviving spouse, begins to live with
another person while holding himself or herself out openly to the public
as that person\'s spouse.

[Section 3.215]{.underline}. 38 CFR 3.215 has been amended to provide
for the reinstatement of benefits to any individual who on October 31,
1990, was a surviving spouse within the meaning of title 38, United
States Code, unless after that date that individual marries or begins to
live with another person while holding himself or herself out openly to
the public as that person\'s spouse.

[Section 3.309]{.underline}. 38 CFR 3.309(d)(3) has been amended to
provide a 40-year presumptive period for leukemia. 38 CFR 3.309(d)(4)(i)
has been amended to extend presumptive service connection to individuals
who were engaged in a radiation-risk activity during active duty for
training or inactive duty training.

[Section 3.343]{.underline}. 38 CFR 3.343(d) has been removed since that
paragraph is no longer relevant.

[Section 3.400]{.underline}. 38 CFR 3.400(u)(3), (u)(4), (v)(3), (v)(4)
and (w) have been amended to reflect the statutory provision for the
reinstatement of benefits to any individual who on October 31, 1990, was
a surviving spouse or child within the meaning of title 38, United
States Code, unless after that date that individual marries or, in the
case of a surviving spouse, begins to live with another person while
holding himself or herself out openly to the public as that person\'s
spouse.

[Section 3.951]{.underline}. The current text is designated as paragraph
(b) and a new paragraph (a) is added to provide that a modification to
the rating schedule occurring after August 14, 1991, will not result in
a reduction of any disability evaluation unless that disability has
actually improved.

REGULATORY AMENDMENT

3-92-3

Regulations Affected: 38 CFR 3.1610

EFFECTIVE DATE OF REGULATION: June 30, 1992

Date Secretary Approved Regulation: May 27, 1992

Federal Register Citation: 57 FR 29025 (June 30, 1992)

The purpose of the following comments on the changes included in this
amendment to VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

VA regional office Directors currently are authorized to arrange for the
burial of unclaimed bodies of veterans in national cemeteries. Several
states do not have national cemeteries or have national cemeteries that
are inconvenient to some locations. Many states, however, do operate
cemeteries or cemetery sections used solely for the burial of those
eligible for burial in national cemeteries. Where these cemeteries meet
the high standards of operation currently required of national
cemeteries, they may prove to be acceptable alternatives to national
cemeteries.

Under this amendment, regional office Directors are authorized to pay
the cost of transporting unclaimed bodies to certain state-owned
cemeteries or cemetery sections as well as to national cemeteries,
provided that the total amount paid by VA does not exceed the total
amount payable if burial had been in a national cemetery. The
nonservice-connected plot allowance may be included as part of the total
amount payable if entitlement is otherwise established. A state is not
obligated to allow burial, and regional office Directors are not
required to arrange for burial in state-owned cemeteries. The amendment
offers an option that may be exercised if an acceptable alternative is
available.

[Section 3.1610]{.underline}. This section is revised to allow regional
office Directors to pay the cost of transporting unclaimed bodies to
certain state-owned cemeteries or cemetery sections as well as to
national cemeteries in certain circumstances.

REGULATORY AMENDMENT

3-92-4

Regulations Affected: 38 CFR 3.316

EFFECTIVE DATE OF REGULATION: July 31, 1992

Date Secretary Approved Regulation: May 27, 1992

Federal Register Citation: 57 FR 29025 (July 31, 1992)

The purpose of the following comments on the changes included in this
amendment to VA regulations is to inform all concerned why these changes
are being made. This comment is not regulatory.

Some Naval personnel were experimentally exposed to mustard gas during
full-body, field or chamber tests of protective equipment and clothing
conducted at the Naval Research Laboratory between 1943 and 1945.
Similar testing was conducted at other locations during World War II.
These World War II tests were classified, participants were instructed
not to discuss their involvement, and medical records associated with
the tests are generally unavailable. No long-term follow-up examinations
were conducted. For these reasons, some participants may not have filed
claims with VA for disabilities resulting from mustard gas poisoning,
or, if they did file claims, may have experienced difficulty in
establishing entitlement to benefits.

The special circumstances surrounding these World War II testing
programs have placed veterans who participated in them at a disadvantage
when attempting to establish entitlement to compensation for disability
or death resulting experimental exposure. This regulation has been added
to specify that if exposure occurred under these circumstances,
disabilities or deaths resulting from certain diseases are to be
recognized as connected to a veteran\'s exposure in-service.

A review of the available medical literature by Veterans Health
Administration personnel indicates that the chronic, long-term effects
of acute mustard gas poisoning may include laryngitis, bronchitis,
emphysema, asthma, conjunctivitis, keratitis, and corneal opacities.
Chronic forms of these conditions which developed subsequent to
experimental exposure during World War II will be service-connected.

[Section 3.316]{.underline}. This section is added to 38 CFR Part 3 to
provide that exposure to mustard gas while participating in full-body,
field or chamber experiments to test protective clothing or equipment
during World War II, together with the development of a chronic form of
any of the followingconditions manifested subsequent thereto, is
sufficient to establish service connection for that condition:
laryngitis, bronchitis, emphysema, asthma, conjunctivitis, keratitis,
and corneal opacities.

REGULATORY AMENDMENT

3-92-5

Regulation Affected: 38 CFR 3.7(x)

EFFECTIVE DATE OF REGULATION: The effective date is May 13,1992.

Date Secretary Approved Regulation: July 31, 1992

Federal Register Citation: 57 FR 43904-05 (September 23, 1992)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The Secretary of the Air Force held under Pub. L. 95-202 that the
service of members of the following groups is active duty for VA benefit
purposes: U.S. Civilian Flight Crew and Aviation Ground Support
Employees of United Air Lines (UAL), Who Served Overseas as a Result of
UAL\'s Contract With the Air Transport Command During the Period
December 14, 1941, through August 14, 1945; and U.S. Civilian Flight
Crew and Aviation Ground Support Employees of Transcontinental and
Western Air (TWA), Inc., Who Served Overseas as a Result of TWA\'s
Contract With the Air Transport Command During the Period December 14,
1941, through August 14, 1945.

[Section 3.7]{.underline}. 38 CFR 3.7(x)(22) and (23) have been added to
include service performed by members of U.S. Civilian Flight Crew and
Aviation Ground Support Employees of United Air Lines (UAL), Who Served
Overseas as a Result of UAL\'s Contract With the Air Transport Command
and members of U.S. Civilian Flight Crew and Aviation Ground Support
Employees of Transcontinental and Western Air (TWA), Inc., Who Served
Overseas as a Result of TWA\'s Contract With the Air Transport Command.

REGULATORY AMENDMENT

3-92-6

Regulation Affected: 38 CFR 3.103(b)(1), 3.103(f), and 3.105(h)(2)

EFFECTIVE DATE OF REGULATION: The effective date is December 2,1992.

Date Secretary Approved Regulation: October 6, 1992

Federal Register Citation: 57 FR 56992-93 (December 2, 1992)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

38 U.S.C. 5104(a) provides that when the Secretary of Veterans Affairs
makes a decision affecting the provision of benefits to a claimant, a
notice of that decision must be sent to the claimant and the claimant\'s
representative. It has been a long-standing VA policy to provide a
claimant\'s representative with a copy of each notice to the claimant
affecting adjudication of a claim, which clearly includes notice of
decisions as well as requests for information, etc. (See 38 CFR
1.525(d)). We believe it is appropriate, however, to amend regulatory
language at 38 CFR 3.103(b)(1), 3.103(f), and 3.105(h)(2) to clearly
reflect the statutory requirement that notice of a decision affecting
the provision of benefits be sent not only to the claimant, but also to
the claimant\'s representative. This amendment is made for the sake of
clarity and the convenience of the user. Additionally, the reference to
part 19, subpart B in § 3.103(f) has been amended to conform with final
Board of Veterans Appeals regulations published on February 3, 1992 (57
FR 4088-4130).

[Section 3.103]{.underline}. In § 3.103(b)(1), in the first sentence,
after the word \"Claimants\" add the words \"and their
representatives\". In § 3.103(f), in the first sentence, after the word
\"beneficiary\" add the words \"and his or her representative\". In the
parenthetical remarks after the last sentence, remove the words \"part
19, subpart B\" and add, in their place, the words \"part 20\".

[Section 3.105]{.underline}. In § 3.105(h)(2), in the fifth sentence,
after the word \"beneficiary\" add the words \"and his or her
representative\".

REGULATORY AMENDMENT

3-92-7

Regulation Affected: 38 CFR 3.306

EFFECTIVE DATE OF REGULATION: The effective date is May 1, 1974.

Date Secretary Approved Regulation: October 6, 1992

Federal Register Citation: 57 FR 59296 (December 15, 1992)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

In a memorandum dated May 18, 1992, VA\'s Office of General Counsel
pointed out that parts of 38 CFR 3.306 are outdated since they fail to
reflect the changes in law which made the wartime aggravation criteria
applicable to peacetime service after December 31, 1946. In 1966,
Congress added section 1137 to title 38, United States Code, to apply
the wartime presumption of sound condition upon entry onto active duty
to all veterans having service after January 31, 1955 (See section 7 of
Pub. L. 89-358, 80 Stat. 12, 27). In 1974, section 205 of the Veterans
Disability Compensation and Survivor Benefits Act of 1974 (Pub. L.
93-295, 88 Stat. 180, 183), amended 38 U.S.C. 1137 to strike out the
date January 31, 1955, and substitute December 31, 1946. As a result of
this amendment, the provisions of 38 U.S.C. 1132, which provide a less
generous presumption of soundness for veterans with peacetime service,
do not apply to veterans with service after December 31, 1946. Rather,
the same presumption of soundness for wartime veterans applies to these
veterans. No conforming amendments were made to 38 CFR 3.306, however,
and we are now correcting that oversight.

[Section 3.306]{.underline}. In § 3.306, remove the heading for
paragraph (b) and insert, in its place, the heading \"[Wartime service;
peacetime service after December 31, 1946]{.underline}\"; remove the
heading for paragraph (c), and insert, in its place the heading
\"[Peacetime service prior to December 7, 1941]{.underline}\".

REGULATORY AMENDMENT

3-92-8

Regulations Affected: 38 CFR 3.261, 3.262, 3.263, 3.271, 3.272, 3.273,
3.275, 3.277, 3.660, and 3.661.

EFFECTIVE DATE OF REGULATION: January 14, 1993, except for provisions
regarding exclusion of Agent Orange settlement payments, which are
effective January 1, 1989; provisions regarding exclusion of the DOD
annuity under Public Law 100-456, which are effective September 29,
1988; provisions regarding exclusion of payments for casualty loss under
Public Law 100-687, which are effective November 18, 1988; and
provisions concerning exclusion of restitution to individuals of
Japanese ancestry, which are effective August 10, 1988.

Date Secretary Approved Regulation: October 30, 1992.

Federal Register Citation: 57 FR 59296-300 (December 15, 1992).

The purpose of the following comments on the changes included in these
amendments of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

VA regulations regarding exclusions from income for pension and
parents\' DIC purposes have been amended to exclude income from the
following four additional sources:

\(1\) An annuity, authorized by section 653, Public Law 100-456, paid by
the Department of Defense to qualified surviving spouses of veterans who
died before November 1, 1953, and who were entitled to retired or
retainer pay on the date of death.

\(2\) Any payment received pursuant to the settlement in the case of In
re Agent Orange Product Liability Litigation in the United States
District Court for the Eastern District of New York (MDL No. 381). These
payments are also excluded from consideration in estate computations.
This provision of Public Law 101-201 is effective retroactively to
January 1, 1989.

\(3\) All reimbursements for any casualty loss up to an amount equaling
the greater of either the fair market value or reasonable replacement
value of the property lost. This provision, which expands on the
previous exclusion of proceeds from fire insurance, applies only to the
improved pension and parents\' DIC programs. For section 306 and old law
pension, only the proceeds from fire insurance are excluded from income
computation.

\(4\) Any payment made as restitution under Public Law 100-383, the
Civil Liberties Act of 1988, to individuals of Japanese ancestry who
were interned, evacuated, or relocated during the period December 7,
1941, through June 30, 1946, pursuant to any law, Executive order,
Presidential proclamation, directive, or other official action
respecting these individuals. This provision is effective August 10,
1988, and applies only to recipients of improved pension, parents\' DIC,
and parents\' death compensation. (Public Law 102-371, the Civil
Liberties Act Amendment of 1992, has now extended the exclusion to all
VA programs. A later regulatory change, to be issued shortly, will
implement this change.)

We also have provided definitions of recurring, nonrecurring, and
irregular income, and have added consistency of procedure for computing
these types of income in determining pension entitlement (38 CFR 3.271
and 3.273).

We have amended 38 CFR 3.271 to establish procedures in improved pension
cases where dependents with income cannot be included on awards of
benefits due to a lack of necessary evidence to confirm the
relationship. This rule will preclude creation of overpayments when
dependency is established retroactively.

We also have made technical amendments throughout to update terminology
and make language gender neutral. The update in terminology will bring
the text of the regulations into conformity with procedures and concepts
introduced with the improved pension program and will serve to avoid
confusion over references to periods of time as they relate to improved
pension or previously existing pension programs.

[Section 3.261]{.underline}. The table has been subdivided into parts
(a), (b), and (c). Part (a) deals with income, and parts (b) and (c)
deal with deductible expenses and corpus of estate, respectively. The
language of the columnar headings has been modified to reflect
gender-neutral language and to incorporate language specific to section
306 and old law pension. Item (14) has been modified to reflect
exclusion for the DOD annuity under Public Law 100-456; item (28) has
been modified to reflect exclusion for casualty loss under Public Law
100-687; and items (35) and (36) have been added to reflect exclusions
of the Agent Orange settlement payments and restitution to individuals
of Japanese ancestry, respectively.

[Section 3.262]{.underline}. Paragraphs (g), (h), (j), and (k) through
(p) have been amended to incorporate terminology specific to section 306
and old law pension and gender-neutral language. Authority citations
have been revised or added as required. Paragraphs (r) through (u) have
been added to implement the four new income exclusions under the
appropriate programs.

[Section 3.263]{.underline}. Paragraph (a) has been amended to
incorporate gender-neutral language. Paragraphs (e) and (f) have been
added to exclude from corpus of estate determinations under the
appropriate programs Agent Orange settlement payments (par. (e)) and
restitution to individuals of Japanese ancestry (par. (f)).

[Section 3.271]{.underline}. Paragraphs (a)(1) through (a)(3) have been
added to define recurring, irregular, and nonrecurring income,
respectively, and to provide procedures for computing such income in
determining entitlement to benefits. In paragraph (f), the pre-existing
text has been redesignated as paragraph (f)(1), and paragraph (f)(2) has
been added to establish procedures in improved pension cases where
dependents with income cannot be included on awards of benefits due to a
lack of necessary evidence to confirm the relationship.

[Section 3.272]{.underline}. Paragraph (d) has been revised to provide
exclusion from income for improved pension purposes of reimbursement of
any kind due to any casualty loss. The excludable amount is not to
exceed the greater of either the fair market value or the reasonable
replacement value of the property lost. This provision expands the
previous exclusion of proceeds from fire insurance. The term \"casualty
loss\" is defined in this paragraph. Paragraphs (n) through (p) have
been added to exclude from countable income under improved pension the
survivor benefit annuity under Public Law 100-456, Agent Orange
settlement payments, and restitution to individuals of Japanese
ancestry.

[Section 3.273]{.underline}. An introductory text to the section and a
sentence at the end of paragraph (a) have been added to provide
instructions concerning recomputation of the rate of improved pension
due to income changes or changes in the maximum annual pension rate.
Paragraph (d) has been added to instruct that rate computations
involving recurring or irregular income are subject to the provisions of
38 CFR 3.660(a)(2). Minor language changes have been made in paragraphs
(a), (b), and (c) for clarification and conformity with income
computation practice in improved pension.

[Section 3.275]{.underline}. Paragraphs (f) and (g) have been added to
provide that for improved pension purposes, Agent Orange settlement
payments and restitution to individuals of Japanese ancestry,
respectively, are excluded from corpus of estate computations.

[Section 3.277]{.underline}. The authority citation at the end of this
section has been revised.

[Section 3.660]{.underline}. The paragraph heading to paragraph (a)(2)
has been changed to read \"Effective dates,\" since this heading more
accurately describes the paragraph contents. In paragraph (b) language
changes have been made to replace references to \"year\" or \"calendar
year\" with references to \"12-month annualization period,\" so that the
regulation conforms to all pension programs and parents\' DIC. It is
important to note that in paragraph (b)(1) an exception to these changes
exists. The final phrase of the paragraph, \"the same or the next
calendar year.\", is required by the statutory language in 38 U.S.C.
5110(h).

[Section 3.661]{.underline}. The section heading has been changed to
read \"Eligibility Verification Reports.\" In paragraph (a)(1) and the
heading of paragraph (b), the word \"report\" has replaced the word
\"questionnaire.\" In paragraph (b)(2) the term \"Eligibility
Verification Report\" has replaced the term \"income questionnaire.\"
These changes conform to the current terminology for the periodic income
and net worth reports required of pension and parents\' DIC recipients.
In paragraph (b)(1) the word \"calendar\" has been placed before the
word \"year\" each time it appears. In paragraph (b)(2) the word
\"year\" has been replaced by the words \"12-month annualization
period.\" These changes reflect the differences in the reporting
requirements of the respective programs concerned.

REGULATORY AMENDMENT

3-92-9

Regulation affected: 38 CFR 3.7(x)

EFFECTIVE DATE OF REGULATION: The effective date for § 3.7(x)(24) and
(26) is June 29, 1992, the effective date for § 3.7(x)(25) is July 16,
1992.

Date Secretary Approved Regulation: November 4, 1992

Federal Register Citation: 57 FR 60734-35 (December 22, 1992)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The Secretary of the Air Force held under Pub. L. 95-202 that the
service of members of the following groups is active duty for VA benefit
purposes: U.S. Civilian Flight Crew and Aviation Ground Support
Employees of Consolidated Vultree Aircraft Corporation (Consairway
Division) Who Served Overseas as a Result of a Contract With the Air
Transport Command During the Period December 14, 1941, through August
14, 1945; U.S. Civilian Flight Crew and Aviation Ground Support
Employees of Pan American World Airways and Its Subsidiaries and
Affiliates, Who Served Overseas as a Result of Pan American\'s Contract
With the Air Transport Command and Naval Air Transport Service During
the Period December 14, 1941 through August 14, 1945 and Honorably
Discharged Members of the American Volunteer Guard, Eritrea Service
Command During the Period June 21, 1942 to March 31, 1943.

[Section 3.7]{.underline} 38 CFR 3.7(x)(24), (25) and (26) have been
added to include service performed by members of U.S. Civilian Flight
Crew and Aviation Ground Support Employees of Consolidated Vultree
Aircraft Corporation (Consairway Division) Who Served Overseas as a
Result of a Contract With the Air Transport Command, U.S. Civilian
Flight Crew and Aviation Ground Support Employees of Pan American World
Airways and Its Subsidiaries and Affiliates, Who Served Overseas as a
Result of Pan American\'s Contract With the Air Transport Command and
Naval Air Transport Service and Honorably Discharged Members of the
American Volunteer Guard, Eritrea Service Command.

REGULATORY AMENDMENT

3-93-1

Regulation affected: 38 CFR 3.311b

EFFECTIVE DATE OF REGULATION: March 26, 1993

Date Secretary Approved Regulation: March 3, 1993

Federal Register Citation: 58 FR 16358-59 (March 26, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The Veterans\' Dioxin and Radiation Exposure Compensation Standards Act,
Pub. L. 98-542, required VA to publish regulations for the adjudication
of compensation claims in which disabilities or deaths of veterans are
alleged to be the result of in-service exposure to ionizing radiation.
It also required that the regulations be based on sound scientific and
medical evidence. To assist VA in this effort, the law mandated the
establishment of the Veterans Advisory Committee on Environmental
Hazards (VACEH). On December 1, 1988, VA published in the Federal
Register (53 FR 48551-2) a proposal to amend 38 CFR 3.311a(g) and
3.311b(h) to specify the other provisions under which service connection
may be established for injury or disease claimed to be the result of
exposure to ionizing radiation or to herbicides containing dioxin are
those governing direct service connection, service connection by
aggravation, or presumptive service connection. However, in [Nehmer v.
United States Veterans Administration]{.underline}, 712 F. Supp. 1404
(N.D. Cal., 1989), the court concluded that VA incorrectly required
that, in determining whether diseases would be service connected based
on dioxin exposure, scientific evidence demonstrate a cause-and-effect
relationship between the disease and exposure, rather than only a
significant statistical association. In view of that decision, VA
withdrew the proposed amendments of §§ 3.311a(g) and 3.311b(h) as they
made reference to the causal relationship standard (See 54 FR 42802-03).

We have now amended § 3.311b(h) to clarify when service connection can
be established based upon exposure to ionizing radiation. 38 CFR
3.311b(b)(2) is meant to be an exclusive list of radiogenic conditions
for which service connection maybe granted under the provisions of Pub.
L. 98-542. The previous wording of § 3.311b(h) might have been
misinterpreted to mean that a veteran, rather than VA, may establish
that a disease not included in § 3.311b(b)(2) resulted from exposureto
ionizing radiation and should therefore be service-connected based on
\"sound scientific or medical evidence.\" Such an interpretation of §
3.311b(h) would be contrary to section 5(b)(2) of Pub. L. 98-542 which
clearly stipulates that VA, after receiving the advice and
recommendation of the VACEH, will publish regulations which list each
disease for which it finds sound scientific or medical evidence of a
connection to ionizing radiation.

Service connection may be established for any condition, regardless of
cause, shown to have been incurred or aggravated during active service
by applying the provisions of 38 CFR 3.303, 3.304, or 3.306. For certain
conditions which manifest themselves within specified periods following
a veteran\'s discharge from active military service, service connection
may be established under the provisions of 38 CFR 3.307. Under each of
these regulations, service connection is established not by what caused
the condition, but by when it becomes manifest, i.e., service connection
is established by the appearance of a combination of signs and symptoms
sufficient to identify the condition during, or within a specified
period following, the veteran\'s active military service. Service
connection for disabilities or deaths alleged to be the result of
exposure to ionizing radiation which first manifest themselves after the
periods specified in § 3.307, however, must be established under the
provisions of 38 CFR 3.311b unless service connection may be established
either by applying the presumptions established by Congress in Pub. L.
100-321 (38 CFR 3.309(d)), or because the condition is proximately due
to or the result of a service-connected disease or injury (38 CFR
3.310(a)).

By enacting Pub. L. 98-542, Congress clearly intended to establish an
avenue for VA to compensate veterans for disabilities or deaths caused
by ionizing radiation exposure, since existing statutes and regulations
had proven inadequate for that purpose. Just as clearly, 38 CFR
3.311b(h), which implements the radiation provisions of Pub. L. 98-542,
does not preclude awards of service connection under §§ 3.303, 3.304,
3.306, or 3.307, since it is applied only after service connection under
those regulations has already been precluded because a condition
manifested itself beyond the time frames they impose.

In a public meeting on August 22-23, 1990, the VACEH met in Washington,
DC. At that meeting, the VACEH considered 11 papers relating to the
health effects of exposure to ionizing radiation focusing primarily on
the fifth report of the Committee on Biological Effects of Ionizing
Radiation (BEIR V). Based on its review of this literature, the VACEH
recommended that ovarian cancer be added to the list of diseases that VA
will recognize as being radiogenic. The Secretary has accepted that
recommendation and 38 CFR 3.311b(b)(2) has been amended to implement the
Secretary\'s decision.

In a public meeting on January 30-31, 1991, the VACEH met in Washington,
DC. At that meeting, the VACEH reviewed the relevant animal and human
data and expressed the opinion that the data clearly implicate high dose
irradiation as a causal factor in the pathogenesis of
hyperparathyroidism and parathyroid tumors. Based on this review, the
VACEH recommended that parathyroid adenoma be added to the list of
diseases that VA will recognize as being radiogenic. The Secretary has
accepted that recommendation and 38 CFR 3.311b(b)(2) has been amended to
implement the Secretary\'s decision.

[Section 3.311b]{.underline}. Paragraph (b)(2) has been amended to
include ovarian cancer and parathyroid adenoma. Paragraph (h) has been
amended to clarify when service connection can be established based upon
exposure to ionizing radiation, and to provide that nothing in 38 CFR
3.311b will be construed to prevent the establishment of service
connection for any disease or injury shown to have been incurred or
aggravated during active service in accordance with §§ 3.304, 3.306,
3.307, or 3.309. However, service connection will not be established
under § 3.311b, or any other section except for §§ 3.309(d) or 3.310(a),
on the basis of exposure to ionizing radiation and the subsequent
development of any disease not specified in § 3.311b(b)(2).

REGULATORY AMENDMENT

3-93-2

Regulation affected: 38 CFR 3.103(c)

EFFECTIVE DATE OF REGULATION: March 26, 1993

Date Secretary Approved Regulation: March 3, 1993

Federal Register Citation: 58 FR 16359-60 (March 26, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

If a claimant requests a hearing on an issue pending before VBA, the
previous wording of 38 CFR 3.103(c)(1) provided that the hearing be held
\"in the VA office having original jurisdiction over the claim or at the
VA office nearest the claimant\'s home having adjudicative functions.\"
That wording did not allow VA sufficient flexibility to provide hearings
at alternative sites, such as other VA facilities or federal buildings
at which suitable hearing facilities are available, even though such an
option would allow VBA to better serve its claimants.

This amendment will ease this restriction and allow VBA managers the
latitude to authorize hearings at remote sites, solely at VA option and
subject to available resources. Additionally, the reference to § 19.174
that appears in the first sentence of § 3.103(c)(1) has been amended to
conform with final Board of Veterans Appeals regulations published on
February 3, 1992 (See 57 FR 4088-4130).

[Section 3.103]{.underline}. In § 3.103(c)(1), the first sentence,
remove the numbers \"19.174\", and add, in their place, the numbers
\"20.1304\". In § 3.103(c)(1), the second sentence, after the words
\"claimant\'s home having adjudicative functions,\" add the words \"or,
subject to available resources and solely at the option of VA, at any
other VA facility or federal building at which suitable hearing
facilities are available.\" Remove the words \"and will provide VA
personnel\" and add, in their place, the words \"VA will provide
personnel\".

REGULATORY AMENDMENT

3-93-3

Regulation affected: 38 CFR 3.5(e)

EFFECTIVE DATE OF REGULATION: January 1, 1993

Date Secretary Approved Regulation: February 12, 1993

Federal Register Citation: 58 FR 25561-62 (April 27, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Under 38 U.S.C. 1310, VA pays DIC to surviving spouses of veterans who
died from disease or injury incurred or aggravated during active
military service. Prior to January 1, 1993, 38 U.S.C. 1311(a) provided
that the surviving spouse\'s basic DIC rate be determined by the
deceased veteran\'s military pay grade. The Dependency and Indemnity
Compensation Reform Act of 1992, Section 102 of the Veterans\' Benefits
Act of 1992, Pub. L. 102-568, amended 38 U.S.C. 1311(a) to provide
surviving spouses eligible for DIC with a basic monthly rate of \$750,
without regard to the deceased veteran\'s military pay grade. This basic
rate is increased by \$165 monthly in the case of a veteran who at the
time of death was receiving or entitled to receive compensation for a
service-connected disability evaluated as totally disabling for a
continuous period of at least eight years immediately preceding death.
In determining the eight year period, only periods during which the
veteran was married to the surviving spouse will be considered.

Under the statute, beneficiaries have no option to elect DIC benefits as
provided prior to the enactment of Pub. L. 102-568. Surviving spouses of
veterans who die before January 1, 1993, will receive DIC either based
upon the veteran\'s military pay grade or under the new formula,
whichever provides the greater benefit. Surviving spouses of veterans
who die on or after January 1, 1993, will receive DIC only under the
formula provided by Pub. L. 102-568.

Pub. L. 102-568 also amended 38 U.S.C. 1311(b) to increase the
additional amount of DIC payable to a surviving spouse with dependent
children of the deceased veteran to \$100 monthly for each dependent
child beginning January 1, 1993; to \$150 monthly during Fiscal Year
1994; and to \$200 monthly thereafter.

[Section 3.5]{.underline}. 38 CFR 3.5(e)(1) has been amended to reflect
the DIC rate for a surviving spouse when death occurred on or after
January 1, 1993. 38 CFR 3.5(e)(2) has been amended to reflect the DIC
rate for a surviving spouse when death occurred prior to January 1,
1993.

REGULATORY AMENDMENT

3-93-4

Regulation affected: 38 CFR 3.201(a)

EFFECTIVE DATE OF REGULATION: May 27, 1993

Date Secretary Approved Regulation: March 3, 1993

Federal Register Citation: 58 FR 25562 (April 27, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 601 of the Servicemen\'s and Veterans\' Survivor Benefits Act,
Pub. L. No. 881, 70 STAT. 857, 886 (1956) added 38 U.S.C. 5105 which
authorized the Administrator of Veterans Affairs (now the Secretary of
Veterans Affairs) and the Secretary of Health, Education, and Welfare
(now the Secretary of Health and Human Services (HHS)) to jointly
prescribe forms for use by survivors of members and former members of
the uniformed services in filing applications for dependency and
indemnity compensation (DIC) from VA and benefits under title II of the
Social Security Act. That statute also stipulated that an application on
such form filed with either VA or the Secretary of HHS would be deemed
an application for both benefits, and it provided for transmission of
applications and supporting documentation between VA and HHS. The
purposes of section 601 were to obviate the necessity for a claimant to
file more than one basic application for benefits under the Social
Security Act and the DIC program and to avoid, to the maximum feasible
extent, the necessity for a claimant to file any particular item of
documentary evidence substantiating a claim more than once. VA published
regulations at 38 CFR 3.201(a) to put this statutory directive into
effect.

The central purpose of § 3.201(a) is to spare claimants the
inconvenience of filing duplicate claims or furnishing duplicate
evidence. It also establishes the date that the application or evidence
is considered to have been received by VA (See 38 CFR 3.156(a),
3.158(a), and 3.400(q)(1)(i)). It is not, however, intended to require
that evidence before the SSA be treated as if it were part of the record
before VA, or to require that VA affirmatively seek such evidence from
SSA in the absence of a request from the claimant, or to apply to claims
for any VA benefit other than DIC.

[Section 3.201]{.underline}. 38 CFR 3.201(a) has been amended to provide
that a claimant for DIC may elect to furnish VA in support of that claim
copies of evidence which was previously furnished to the Social Security
Administration or to have the Department of Veterans Affairs obtain such
evidence from the Social Security Administration. For the purpose of
determining the earliest effective date for payment of dependency and
indemnity compensation, such evidence will be deemed to have been
received by the Department of Veterans Affairs on the date it was
received by the Social Security Administration.

REGULATORY AMENDMENT

3-93-5

Regulation affected: 38 CFR 3.272(l)

EFFECTIVE DATE OF REGULATION: November 4, 1992

Date Secretary Approved Regulation: February 12, 1993

Federal Register Citation: 58 FR 25563 (April 27, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

38 U.S.C. 1718 previously provided that payments as a result of
participation in a VA therapeutic or rehabilitation activity be
considered a donation from a public or private relief or welfare
organization and not countable as income for pension purposes. Section
401 of the Veterans\' Health Care Act of 1992, Pub. L. 102-585, amended
38 U.S.C. 1718 to consider payments to a veteran as a result of
participation in a program of rehabilitative services provided as part
of the care furnished by a State home and which is approved by VA as
conforming to standards for activities under 38 U.S.C. 1718 to be a
donation from a public or private relief or welfare organization, and,
therefore, excluded from countable income under the Improved Pension
program.

[Section 3.272]{.underline}. 38 CFR 3.272(l) has been amended to exclude
as income for pension purposes payments to a veteran as a result of
participation in a program of rehabilitative services provided as part
of the care furnished by a State home and which is approved by VA as
conforming to standards for activities under 38 U.S.C. 1718.

REGULATORY AMENDMENT

3-93-6

Regulation affected: 38 CFR 3.309

EFFECTIVE DATE OF REGULATION: October 1, 1992

Date Secretary Approved Regulation: February 11, 1993

Federal Register Citation: 58 FR 25563-64 (April 27, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 2 of the Veterans\' Radiation Exposure Amendments of 1992, Pub.
L. 102-578, amended 38 U.S.C. 1112(c) to repeal the requirement that, to
be presumed service connected, specified diseases of veterans who
participated in a radiation-risk activity become at least 10 percent
disabling within 40 years after the veterans\' last exposure to
radiation. Pub. L. 102-578 also added cancer of the salivary gland and
cancer of the urinary tract to the list of conditions for which
presumptive service connection is authorized for veterans who
participated in a radiation-risk activity.

[Section 3.309]{.underline}. In § 3.309(d)(1), remove the words \"to a
degree of 10 percent or more within the presumptive period specified in
paragraph (d)(3) of this section\". In § 3.309(d)(2), paragraphs (xiv)
and (xv) have been added to include cancer of the salivary gland and
cancer of the urinary tract. In § 3.309(d), remove paragraph (3) and
redesignate paragraph (4) as paragraph (3).

REGULATORY AMENDMENT

3-93-7

Regulation affected: 38 CFR 3.500(x) and 3.715

EFFECTIVE DATE OF REGULATION: October 15, 1990

Date Secretary Approved Regulation: February 4, 1993

Federal Register Citation: 58 FR 25564-65 (April 27, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The Radiation Exposure Compensation Act of 1990 (RECA), Pub. L. 101-426,
104 Stat. 920, as amended by Pub. L. 101-510, section 3139, 104 Stat.
1835 (42 U.S.C. 2210 note) authorized the Attorney General of the United
States to establish procedures for making payments as restitution to all
eligible individuals, who may have contracted one of a specified group
of radiation-related diseases as a result of the federal government\'s
atmospheric nuclear testing program and to certain of their survivors.
RECA authorized the Attorney General to make payments to a limited class
of individuals with radiation-related diseases who had been employed
during a specified period in uranium mines in Colorado, Utah, Arizona,
Wyoming or New Mexico, or who had been present during designated periods
at, or in, certain specified areas downwind of, the Nevada Test Site,
the Pacific Proving Grounds, and the Trinity Test Site at Alamogordo,
New Mexico. The Department of Justice published final regulations
implementing RECA in the Federal Register of April 10, 1992 (57 FR
12428-61).

RECA has clear implications for VA beneficiaries receiving compensation
or DIC based on disability or death resulting from a radiogenic disease.
Section 6(e) of RECA provides that when an individual accepts a RECA
payment, that payment represents full satisfaction of all claims of or
on behalf of that individual against the United States based upon a
condition that arises out of exposure to radiation as a result of onsite
participation in a test involving the atmospheric detonation of a
nuclear device. It is clear that under section 6(e) a veteran who
accepts a RECA payment based on a radiogenic condition which developed
after he or she participated onsite in an atmospheric test, is
thereafter barred from receiving disability compensation under chapter
11 of title 38, United States Code, for the same condition. Similarly, a
survivor who accepts a RECA payment based on the death of a veteran
resulting from a radiogenic condition would thereafter be disqualified
from receiving DIC based on death resulting from the same condition.

[Section 3.500]{.underline}. 38 CFR 3.500(x) has been added to provide
that the termination date for an award of compensation or DIC is the
last day of the month preceding the month in which payment under the
Radiation Exposure Compensation Act of 1990 is issued.

[Section 3.715]{.underline}. 38 CFR 3.715 has been added to provide that
payment to any individual under the provisions of the Radiation Exposure
Compensation Act of 1990 (Pub. L. 101-426 as amended by Pub. L. 101-510)
based upon disability or death resulting from a specific disease shall
bar payment, or further payment, of compensation or DIC to or on behalf
of that individual based upon disability or death resulting from the
same disease.

REGULATORY AMENDMENT

3-93-8

Regulation affected: 38 CFR 3.307(a) and 3.309(e)

EFFECTIVE DATE OF REGULATION: February 6, 1991

Date Secretary Approved Regulation: March 17, 1993

Federal Register Citation: 58 FR 29107-09 (May 19, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 2 of the Agent Orange Act of 1991, Pub. L. 102-4, added 38
U.S.C. 1116 to establish a presumption of service connection for
veterans with service in the Republic of Vietnam during the Vietnam era
who subsequently develop, to a degree of 10 percent or more,
non-Hodgkin\'s lymphoma, soft-tissue sarcoma (subject to specified
statutory exceptions), and chloracne or other acneform disease
consistent with chloracne, even though there is no record of that
disease during military service. Qualifying skin conditions must have
become manifest to a degree of 10 percent or more within one year of the
last date of service in the Republic of Vietnam during the Vietnam era.

The term \"soft-tissue sarcoma\" is an imprecise term and there is no
standard list of conditions which is universally accepted within the
medical community as a definitive listing of \"soft-tissue sarcomas\".
Although Congress has specifically excluded osteosarcoma,
chondrosarcoma, Kaposi\'s sarcoma, and mesothelioma by statute, they
have offered no specific guidance as to which other tumors they consider
to be soft-tissue sarcomas.

VA has previously addressed the issue of what the term soft-tissue
sarcoma encompasses for the purpose of amending 38 CFR 3.311a, to
implement a determination by the Secretary of Veterans Affairs in
accordance with the Veterans\' Dioxin and Radiation Exposure
Compensation Standards Act, Pub. L. 98-542. Pub. L. 98-542 provided that
the Secretary, after receiving the advice of the Veterans Advisory
Committee on Environmental Hazards (VACEH), will make a determination
based upon \"sound medical and scientific evidence\", with respect to
whether service connection will be granted for a particular disease.
Based upon advice from VACEH and the Veterans Health Administration
(VHA), the Secretary concluded that soft-tissue sarcomas should be
classified by tumor type rather than tumor location and further, that in
order to be recognized as \"soft-tissue\" sarcomas by VA, tumors must be
malignant and arise from tissue of mesenchymal origin, including muscle,
fat, blood or lymph vessels, or connective tissue (but not cartilage or
bone), but that tumors of infancy or childhood, and those having a
strong, known causal association with a specific etiology should not be
included. The list of tumors which meet those criteria was published as
part of the revision to 38 CFR 3.311a(c) (See the Federal Register of
October 15, 1991 (56 FR 51651-3)).

Those same criteria are consistent with the statutory language of Pub.
L. 102-4 to the extent that when they are applied, osteosarcoma,
chondrosarcoma, Kaposi\'s sarcoma, and mesothelioma are not considered
soft-tissue sarcomas for VA purposes. However, since it provides
presumptive service connection for \"each\" soft-tissue sarcoma becoming
manifest to a degree of 10 percent or more, the statutory language of
Pub. L. 102-4 clearly encompasses a broader category of tumors than that
listed in 38 CFR 3.311a by not excluding tumors of infancy and
childhood.

To implement these provisions of Pub. L. 102-4, we have cited the list
of tumors that appears at 38 CFR 3.311a(c)(2) and have augmented it with
the following tumors: Extraskeletal Ewing\'s sarcoma, congenital and
infantile fibrosarcoma, and malignant ganglioneuroma. These additional
soft-tissue sarcomas are generally considered tumors of infancy and
childhood which rarely, if ever, occur initially in an individual old
enough to have been accepted for military service. They will be included
in this regulation, however, in order to satisfy the requirements
established by the statutory language of Pub. L. 102-4.

[Section 3.307]{.underline}. The heading has been revised to include
diseases associated with service in the Republic of Vietnam. A new
paragraph (a)(6) has been added to provide presumptive service
connection the diseases listed in § 3.309(e) which become manifest to a
degree of 10 percent or more at any time after service in Vietnam during
the Vietnam era, except that chloracne or another acneform disease
consistent with chloracne must become manifest to a degree of 10 percent
or more within a year after the last date on which the veteran performed
active military, naval, or air service in the Republic of Vietnam during
the Vietnam era. \"Service in the Republic of Vietnam\" includes service
in the waters offshore and service in other locations if the conditions
of service involved duty or visitation in the Republic of Vietnam. In §
3.307(a), the first sentence, remove the words \"or prisoner of war
related disease\", and add, in their place, the words \", prisoner of
war related disease, or a disease associated with service in the
Republic of Vietnam\". In § 3.307(a)(1), after the words \"§ 3.309(c)\"
add the words \"and (e)\".

[Section 3.309]{.underline}. New paragraph (e) has been added to provide
that, if a veteran, during active military, naval, or air service,
served in the Republic of Vietnam during the Vietnam era, the following
diseases will be service-connected if the requirements of § 3.307(a)(6)
are satisfied even though there is no record of such disease during
service, provided further that the rebuttable presumption provisions of
§ 3.307(d) are also satisfied:

Chloracne

Non-Hodgkin\'s lymphoma

Soft-tissue sarcoma (other than osteosarcoma, chondrosarcoma, Kaposi\'s
sarcoma, or mesothelioma)

NOTE: The term \"soft-tissue sarcoma\" includes those tumors listed at §
3.311a(c)(2). For the purposes of this section only, the following
tumors of infancy and childhood, although rarely if ever occurring in an
individual old enough to have been accepted for military service, will
also be included:

Extraskeletal Ewing\'s sarcoma

Congenital and infantile fibrosarcoma

Malignant ganglioneuroma

REGULATORY AMENDMENT

3-93-9

Regulation affected: 38 CFR 3.304(f)

EFFECTIVE DATE OF REGULATION: May 19, 1993

Date Secretary Approved Regulation: March 18, 1993

Federal Register Citation: 58 FR 29109-10 (May 19, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

In a precedent opinion dated March 17, 1992 (O.G.C. Prec. 7-92), VA\'s
General Counsel held that certain provisions of the Adjudication
Procedure Manual, M21-1, Part I, regarding the development of evidence
in claims involving PTSD constitute substantive rules which were not
promulgated in accordance with the rulemaking procedures prescribed by 5
U.S.C. 552(a)(1), 553 and 38 CFR 1.12.

PTSD is an anxiety disorder resulting from a traumatic event outside the
range of usual human experience which is characterized by recurrent
episodes of reexperiencing the traumatic event, numbing of emotional
responsiveness, and increased restlessness. In order to establish
service connection for PTSD, VA must have medical evidence supporting a
clear diagnosis of the condition, credible evidence that the claimed
inservice stressor actually occurred, and medical evidence establishing
a link between the current symptomatology and the claimed inservice
stressor.

Under the provisions of 38 U.S.C. 501(a), the Secretary of Veterans
Affairs has authority to prescribe regulations with respect to the
nature and extent of proof and evidence required in order to establish
entitlement to benefits. The Secretary has determined that for cases of
PTSD certain types of evidence are sufficient to substantiate the
occurrence of the claimed inservice stressor under specific
circumstances where events can never be fully documented. Combat, for
example, is inherently life-threatening, and the brutal and horrific
events associated with active armed combat are indisputably the types of
stressful events that could produce PTSD. The chaotic circumstances of
combat, however, preclude the maintenance of detailed records.
Consequently, the Secretary has determined that when service department
records indicate that the veteran engaged in combat or was awarded a
combat citation and the claimed stressor is related to the combat
experience, further development to document the occurrence of the
claimed stressor is unnecessary.

Similarly, when a veteran is considered a former prisoner-of-war under
the provisions of 38 CFR 3.1(y), the Secretary has determined that no
additional evidence is necessary to verify the occurrence of an
inservice stressor. Typically, former prisoners-of-war were forcibly
detained or interned under circumstances that included physical or
psychological hardships or abuse, malnutrition, and unsanitary
conditions. The prolonged and chronic stress of exposure to such
conditions plus the uncertainty of not knowing how long one must endure
them are types of overwhelming stress that could certainly produce PTSD.

When VA has the types of evidence discussed above, additional
development would only serve to delay the authorization of benefits to
which the claimants are entitled.

[Section 3.304]{.underline}. A new paragraph (f) has been added to
provide that service connection for PTSD requires medical evidence
establishing a clear diagnosis of the condition, credible supporting
evidence that the claimed inservice stressor actually occurred, and a
link, established by medical evidence, between current symptomatology
and the claimed inservice stressor. If the claimed stressor is related
to combat, service department evidence that the veteran engaged in
combat or that the veteran was awarded the Purple Heart, Combat
Infantryman Badge, or similar combat citation will be accepted, in the
absence of evidence to the contrary, as conclusive evidence of the
claimed inservice stressor. Additionally, if the claimed stressor is
related to the claimant having been a prisoner-of-war, prisoner-of-war
experience which satisfies the requirements of § 3.1(y) will be
accepted, in the absence of evidence to the contrary, as conclusive
evidence of the claimed inservice stressor.

REGULATORY AMENDMENT

3-93-10

Regulation affected: 38 CFR 3.55, 3.115, 3.215, 3.341(c), 3.342(c),
3.343(c), 3.502(f) and 3.551(i)

EFFECTIVE DATE OF REGULATION: The amendments to §§ 3.502 and 3.551 are
effective October 1, 1992. The remaining amendments are effective
October 29, 1992.

Date Secretary Approved Regulation: April 19, 1993

Federal Register Citation: 58 FR 32443-45 (June 10, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 8004 of the Omnibus Budget Reconciliation Act of 1990, Pub. L.
101-508, rescinded VA\'s authority to reinstate the benefits eligibility
of remarried surviving spouses when the marital relationship terminates.
These provisions applied to claims filed after October 31, 1990. Section
502 of the Veterans\' Benefits Programs Improvement Act of 1991, Pub. L.
102-86, stipulated that the rescission of VA\'s authority to reinstate
benefits eligibility does not apply to any individual who on October 31,
1990, was a surviving spouse within the meaning of title 38, United
States Code, unless after that date that individual marries. Section 103
of the Veterans\' Benefits Act of 1992, Pub. L. 102-568, further
stipulated that the rescission of VA\'s authority to restore benefits
eligibility does not apply to any case in which a legal proceeding to
terminate the disqualifying marital relationship was begun before
November 1, 1990, if that proceeding directly resulted in the
termination of the disqualifying marital relationship. Since the recent
amendment applies to surviving spouses but not to children, we are
revising 38 CFR 3.55 to implement this revised statutory provision and
reorganizing it into separate paragraphs for surviving spouses and
children. We have also revised the heading to § 3.55 to read
\"[Reinstatement of benefits eligibility based upon terminated marital
relationships]{.underline}\" which more accurately reflects the content
of the regulation than the previous heading, \"[Terminated marital
relationships]{.underline}.\" Additionally, we have made a revision to §
3.215 so that this section resembles § 3.55 in terminology and
structure.

In 38 U.S.C. 1163, Congress established a temporary program for
trial-work periods and vocational rehabilitation services to certain
veterans who have service-connected disabilities not rated as totally
disabling but who have been awarded a rating of total disability by
reason of individual unemployability. Under this temporary program, such
a veteran who starts a substantially gainful occupation may not have his
or her disability rating reduced on the basis of having obtained and
continued that employment unless he or she maintains that employment for
12 consecutive months. Section 401 of Pub. L. 102-568 makes the program
permanent and we have amended 38 CFR 3.341(c) and 3.343(c)(2) to reflect
that change.

38 U.S.C. 1524 provides for a temporary vocational training program for
veterans under the age of 45 who are awarded pension during the program
period. Section 402 of Pub. L. 102-568 extends the program until
December 31, 1995 and eliminates the statutory requirement that VA
suspend benefits if a veteran fails to participate in the program. We
have amended 38 CFR 3.342(c)(1) and (2) to reflect the revised ending
date and the elimination of the requirement to suspend benefits for
failure to participate in the program.

Section 8003 of Pub. L. 101-508 required VA to reduce the pension
benefits of any veteran having neither spouse nor child who receives
Medicaid-covered nursing home care to \$90 per month. These statutory
provisions expired September 30, 1992. Section 601 of Pub. L. 102-568
extends this requirement until September 30, 1997, and requires an
identical reduction in death pension payments to surviving spouses
having no children who receive Medicaid-covered nursing home care. We
have amended 38 CFR 3.502 and 3.551(i) to reflect these statutory
changes. The dates for reduction of death pension benefits under these
circumstances have been added at 38 CFR 3.502. The language in this
paragraph, except for benefit specific references, is identical to the
language that appears at § 3.501(i)(6) regarding the dates that
disability pension will be reduced under the same circumstances.
Inclusion in § 3.502 of a reference to a reduction effective the last
day of the month following 60 days after issuance of a prereduction
notice required under § 3.103(b) reflects the fact that a surviving
spouse may not generally be held liable for any overpayment created by
operation of the statute. This action is not intended to imply that
provision of a 60-day prereduction notice period creates entitlement to
benefits for that period.

The Right to Financial Privacy Act of 1978, codified at 12 U.S.C. 3401
through 3422, generally prohibits federal agencies from gaining access
to or obtaining copies of information contained in a financial
institution\'s customer records. Section 603 of Pub. L. 102-568 amends
12 U.S.C. 3413 to specifically permit financial institutions to disclose
to VA the names and addresses of customers where the disclosure is
necessary for the proper administration of benefit programs under laws
administered by VA and the information will be used solely for that
purpose. The Secretary of Veterans Affairs may request such information
only upon making a determination that it is necessary for the
administration of laws administered by VA and that it cannot be obtained
by a reasonable search of VA records and information. We have added a
new section, § 3.115, to 38 CFR Part 3 in order to implement this new
statutory provision.

[Section 3.55]{.underline}. Since this amendment applies to surviving
spouses but not to children, we are revising 38 CFR 3.55 to implement
this revised statutory provision and reorganizing it into separate
paragraphs for surviving spouses and children.

[Section 3.115]{.underline}. This section has been added to specifically
permit financial institutions to disclose to VA the names and addresses
of customers where the disclosure is necessary for the proper
administration of benefit programs under laws administered by VA and the
information will be used solely for that purpose.

[Section 3.215]{.underline}. In § 3.215, the first sentence, remove the
words \"With respect to marriages terminated on\" and insert, in their
place, the word \"On\". In § 3.215, the first sentence, remove the words
\"but prior to November 1, 1990,\". In § 3.215, the first sentence,
remove the words \"unless the same or similar conduct or relationship
resumes after October 31, 1990\" and insert, in their place, the words
\"if the relationship terminated prior to November 1, 1990\".

[Section 3.341]{.underline}. In § 3.341(c), the heading, remove the
words \"[Temporary program]{.underline}\", and insert, in their place,
the word \"[Program]{.underline}\". In § 3.341(c), the text, remove the
words \"on February 1, 1985 and ending on January 31, 1992,\" and
insert, in their place, the words \"after January 31, 1985,\".

[Section 3.342]{.underline}. In § 3.342(c)(1), the first sentence,
remove the words \"January 31, 1992,\" and insert, in their place, the
words \"December 31, 1995,\". In § 3.342(c)(1), the first sentence,
remove the words \"as required by § 21.6050\" and insert, in their
place, the words \"as provided in § 21.6050\". In § 3.342(c)(1), remove
the second sentence. In § 3.342, remove paragraph (c)(2) and redesignate
paragraph (c)(3) as the new paragraph (c)(2).

[Section 3.343]{.underline}. In § 3.343(c)(2), remove the words \"on
February 1, 1985, and ending on January 31, 1992,\" and insert, in their
place, the words \"after January 1, 1985,\".

[Section 3.502]{.underline}. This new section has been added to provide
for reduction in death pension payments to surviving spouses having no
children who receive Medicaid-covered nursing home care.

[Section 3.551]{.underline}. In § 3.551(i), in the heading, after the
word \"[veterans]{.underline}\" add the words \"[and surviving
spouses]{.underline}\"; in the first sentence, remove the words
\"September 30, 1992,\" and insert, in their place, the words
\"September 30, 1997,\"; in the first sentence, after the words \"nor
child\" add the words \", or a surviving spouse having no child,\"; in
the first sentence, after the words \"no pension\" insert the words \"or
death pension\"; in the first sentence, after the words \"to or for the
veteran\" add the words \"or the surviving spouse\"; in the second
sentence, after the words \"A veteran\" and \"by the veteran\" add the
words \"or surviving spouse\".

REGULATORY AMENDMENT

3-93-11

Regulations Affected: 38 CFR 3.261(a), 3.262(u), and 3.263(f).

EFFECTIVE DATE OF REGULATIONS: These amendments are effective August 10,
1988, the date authorized by Public Law 102-371.

Date Secretary Approved Regulations: February 5, 1993

Federal Register Citation: 58 FR 33766-67 (June 21, 1993)

The purpose of the following comments on the changes included in these
amendments of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Title I of Public Law 100-383, the Civil Liberties Act of 1988, provided
redress in the amount of \$20,000.00 to certain individuals of Japanese
ancestry who were interned or relocated by the Federal government during
WWII. The bill expressly provided that these payments shall not be
included as income or resources for determining eligibility to benefits
described in 31 U.S.C. 3803(c)(2)(C). An opinion of VA\'s General
Counsel (O.G.C. [Prec. 3-92]{.underline}) held that these payments are
not countable as income or for net worth determinations for the purposes
of improved pension and parents\' DIC, which are found in those chapters
of title 38 U.S.C. referenced by the cited section of title 31. The
opinion further stated that these payments were countable as income and
net worth under 306 pension and old law pension, because these benefits
are no longer in force under title 38, but under the savings provision
(section 306) of Public Law 95-588. In a previous regulatory amendment
we amended 38 CFR §§ 3.261, 3.263, 3.262, 3.272, and 3.275 to implement
Public Law 100-383 and the opinion of the General Counsel.

On September 27, 1992, the President signed Public Law 102-371, the
Civil Liberties Act Amendments of 1992. This law amended Public Law
100-383 by extending the income exemption of the Japanese-American
restitution payments to include exclusion from countable income or in
determining net worth for any program administered by VA, effective
August 10, 1988, the date of the original law. Our current amendments
implement these provisions of Public Law 102-371.

[Sections 3.261 and 3.262]{.underline}. Paragraphs 3.261(a)(36) and
3.262(u) have been revised to show that the Japanese-American
restitution payments are not countable income for section 306 and old
law pension.

[Section 3.263]{.underline}. Paragraph(f) has been revised to show that
the Japanese-American restitution payments are excluded from net worth
computations under section 306 pension.

REGULATORY AMENDMENT

3-93-12

Regulation affected: 38 CFR 3.558(c)

EFFECTIVE DATE OF REGULATION: March 11, 1993

Date Secretary Approved Regulation: May 25, 1993

Federal Register Citation: 58 FR 34224-25 (June 24, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

38 U.S.C. 5503(b)(1)(A) precludes the payment of compensation when a
veteran is without spouse or child; is receiving hospital treatment,
institutional care, or domiciliary care without charge or otherwise from
the U.S. or any political subdivision of the U.S.; is rated incompetent
by the Secretary in accordance with regulations; and his or her estate
(excluding, generally, the value of his or her home) exceeds \$1,500.
While subparagraph (A) requires suspension of compensation when all four
prerequisites exist, if the veteran is held competent by VA for a period
of six months, subparagraph (B) imposes the additional requirement that
the suspended benefits be paid in a lump sum.

The Secretary has prescribed at 38 CFR 3.558(c)(2) an additional
requirement that a veteran rated competent for six months or longer and
thereafter re-rated as incompetent must have a spouse or child in order
to be eligible for the lump-sum payment. In [Felton v.
Brown]{.underline}, U.S. Vet. App. No. 90-965, COVA held that the
requirement found at 38 CFR 3.558(c)(2) is an unauthorized limitation on
the scope of 38 U.S.C. 5503, and is, therefore, neither \"appropriate to
carry out\" nor \"consistent with\" the law under 38 U.S.C. 501(a). We
have amended § 3.558 to delete paragraph (c)(2) effective March 11,
1993, the date of the COVA decision.

Additionally, we have amended the remaining text of § 3.558 to clarify
that the sole criterion for determining whether a veteran is entitled to
a lump-sum payment is that he or she must have been subsequently rated
competent by VA for a period of not less than six months. VA believes
that this interpretation of the statute is consistent with the COVA
decision in [Felton v. Brown]{.underline}, which held that 38 U.S.C.
5503(b)(1)(B) clearly mandates a lump-sum payment after the expiration
of a six-month period following competency.

[Section 3.558]{.underline}. Paragraph (c) has been revised to provide
that any amount not paid because of the provisions of § 3.557(b),and any
amount of compensation or retirement pay withheld pursuant to the
provisions of § 3.551(b) (and/or predecessor regulatory provisions) as
it was constituted prior to August 1, 1972, and not previously paid
because of the provisions of § 3.557(b), will be awarded to the veteran
if he or she is subsequently rated competent by VA for a period of not
less than six months.

REGULATORY AMENDMENT

3-93-13

Regulation affected: 38 CFR 3.812(f)

EFFECTIVE DATE OF REGULATION: June 28, 1993

Date Secretary Approved Regulation: March 17, 1993

Federal Register Citation: 58 FR 34524-25 (June 28, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The Omnibus Budget Reconciliation Act of 1981 amended title 42, United
States Code, to discontinue payment of the social security mother\'s and
child\'s insurance benefits at the point at which the child reached age
sixteen. Previously, such benefits had terminated when the child reached
age eighteen. Section 156 of Pub. L. 97-377 restored such benefits for
surviving spouses and children of individuals who died on active duty
prior to August 13, 1981, or died as a result of service-connected
disability incurred or aggravated prior to that date. This law, which
established the Restored Entitlement Program for Survivors (REPS),
provided that payment of the mother\'s and child\'s benefits would be in
the amount, if any, that beneficiaries would have received under section
202 of the Social Security Act (codified at 42 U.S.C. 402) if the child
were under sixteen years of age. Section 202(j) of the Social Security
Act provides that the mother\'s (or father\'s) and child\'s benefits may
be paid from the beginning of the first month in which eligibility
arose, where application for benefits is filed prior to the end of the
sixth month immediately succeeding that month.

VA issued an implementing regulation, codified at 38 CFR 3.812(f)(2),
providing that benefits could be paid from the first day of the month in
which the claimant first became eligible, if application was filed
within eleven months following that month. However, in view of the [sua
sponte]{.underline} ruling by the Court of Veterans Appeals in [Cole v.
Derwinski]{.underline}, U.S. Vet. App. No. 89-30 (judgment entered July
27, 1992), invalidating this regulation, VA reviewed the statutory
authority for payment of benefits under this program. As a result of
this review, we now believe that the six-month application period for
payment of benefits from the month in which eligibility arose, provided
by the social security statutes, must be applied under the REPS program.
This amendment corrects the regulation in this regard.

Since the provisions of the Social Security Act requires that
application be filed within six months after the month in which
eligibility arose in order for payment to be made from that month, there
was no authority under section 156 to make such payment to those persons
who applied after six months but before eleven months from the month in
which eligibility arose. However, persons who have been paid benefits
pursuant to 38 CFR 3.812(f)(2) from the month in which eligibility
arose, based on applications filed within eleven months, but not within
the six months, of that month, will be permitted to keep those benefits
since payment was based on administrative error and, under 38 U.S.C.
5112(b)(10) and 38 CFR 3.500(b)(2), the effective date for reduction of
benefits in such situations is the date of last payment. We realize that
there may be persons who first became eligible for REPS benefits within
eleven months prior to the month in which this amendment became
effective but who did not or will not apply for benefits within the
required six-month period because of reliance upon the eleven-month
filing period specified in the former regulation. This amendment
establishes a policy under which equitable relief will be provided to
such persons under 38 U.S.C. 503(a), if they can establish to the
satisfaction of the Secretary that they did not make application within
the required six-month period due to reliance on the former regulation.
Section 503(a) authorizes the Secretary to provide equitable relief to
persons denied benefits by reason of administrative error on the part of
the Federal Government.

[Section 3.812]{.underline}. In § 3.812, remove the words \"11 months\"
in paragraph (f)(2) and add, in their place, the words \"6 months\";
redesignate paragraph (f)(4) as paragraph (f)(5), and add a new
paragraph (f)(4) to provide equitable relief for certain persons who
relied upon the prior regulatory provision.

REGULATORY AMENDMENT

3-93-14

Regulations Affected: 38 CFR 3.353

EFFECTIVE DATE OF REGULATION: This amendment is effective August 13,
1993.

Date Secretary Approved Regulation: May 20, 1993

Federal Register Citation: 58 FR 37856 (July 14, 1993)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

The definition of a mentally incompetent person for VA purposes is one
who, because of injury or disease, lacks the mental capacity to contract
or to manage his or her own affairs, including disbursement of funds
without limitation (38 CFR 3.353(a)). This definition represents
long-standing VA policy. An inconsistency existed in the language of §
3.353(d), however, which required a presumption in favor of competency
in situations where doubt arises as to whether a beneficiary is capable
of [administering his or her funds]{.underline} (emphasis added).

Section 3.353(d) was designed to avoid appointing a fiduciary except in
a situation where it is clearly in a beneficiary\'s best interest to do
so because of mental incompetency. Since ratings of incompetency are
based on the definition in § 3.353(a) and can result in appointment of a
fiduciary, to limit consideration under § 3.353(d) only to the
administration of funds would constitute internal inconsistency within
the regulation and could lead to discrepancies in its application in
individual cases. The regulatory history, in fact, shows that the
language of § 3.353(d) predates the definition of § 3.353(a) and was
never amended to conform with it. We, therefore, have amended § 3.353(d)
to add a provision regarding a beneficiary\'s mental capacity to
contract or to manage his or her own affairs, to change
\"administering\" funds to \"disbursement\" of funds, and to add the
phrase \"without limitation\" to the provision concerning disbursement
of funds. We also have amended § 3.353(d) to clarify that by \"doubt\"
whether a beneficiary is competent we mean \"reasonable doubt.\" This
change accords with VA\'s doctrine of reasonable doubt as defined in §
3.102 and represents in any event the intent of § 3.353(d) in this
regard.

[Section 3.353]{.underline}. Paragraph (d) has been amended to add a
provision regarding a beneficiary\'s mental capacity to contract or
manage his or her own affairs, to change \"administering\" funds to
\"disbursement\" of funds, to add the phrase \"without limitation\" to
the provision concerning disbursement of funds, and to clarify that by
\"doubt\" whether a beneficiary is competent \"reasonable doubt\" is
meant.

REGULATORY AMENDMENT

3-93-15

Regulations Affected: 38 CFR 3.203(c) and 3.205(a)(1).

EFFECTIVE DATE OF REGULATIONS: July 14, 1993

Date Secretary Approved Regulations: February 25, 1993

Federal Register Citation: 58 FR 37856-57 (July 14, 1993)

The purpose of the following comments on the changes included in these
amendments of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Prior to October 28, 1980, VA accepted photo copies of discharge
documents as proof of military service unless there was some reason to
question the genuineness of the documents. However, 38 CFR 3.203 was
amended to provide that VA may accept a copy of an original discharge
document as proof of military service, but only if the copy was issued
by the appropriate service department or by a public custodian of
records who certifies that it is a true and exact copy of the document
in his or her custody. If this type of evidence is not submitted, VA
requests verification of military service from the appropriate service
department.

No general review of previously allowed claims was conducted when §
3.203 was amended, so veterans who had previously been awarded
compensation or pension based upon uncertified copies of discharge
documents continue to receive those benefits. When one of those veterans
dies, however, VA requests evidence of military service which satisfies
the more stringent current requirements before authorizing payment of
the one-time, nonservice-connected burial benefit. The maximum amount of
the one-time burial benefit is \$450 (\$300 burial allowance plus \$150
plot allowance), and it is payable only when the veteran was entitled to
receive compensation or pension as of the date of death, or died in a VA
hospital. It has been our experience that we are ultimately able to
verify the service of virtually all of these veterans. We have therefore
determined that the delay in authorizing payment which verification
entails and the resulting distress to survivors are not warranted, and
that evidence relied upon to authorize payment of compensation or
pension is sufficient to authorize payment of the one-time,
nonservice-connected burial benefit.

Prior to June 14, 1982, VA accepted the veteran\'s certified statement,
under most circumstances, as proof of marriage; however, many claimants
also submitted uncertified copies of the public record of marriage to
support their claims. In 1982 VA began to require more than a certified
statement as proof of marriage, with certified copies of the public or
church record of marriage being the preferred type of evidence. No
general review of claims in which the additional allowance for a spouse
had been authorized was conducted, however. When a veteran who receives
compensation or pension benefits dies, claims for death pension or
dependency and indemnity compensation may be delayed while VA requests
currently acceptable proof of marriage. This is true even though VA
recognized the surviving spouse as a dependent while the veteran was
alive and even though VA has on record an uncertified copy of the public
record of marriage supporting a certified statement from the deceased
veteran as well as the surviving spouse\'s certified statement on the
application for death benefits. To require a certified marriage document
under these circumstances results in unwarranted expense, inconvenience
and loss of time to surviving spouses at a very difficult time.

[Section 3.203]{.underline}. In § 3.203(c), a new second sentence has
been added to provide that payment of nonservice-connected burial
benefits may be authorized, if otherwise in order, based upon evidence
of service which VA relied upon to authorize payment of compensation or
pension during the veteran\'s lifetime, provided that there is no
evidence which would serve to create doubt as to the correctness of that
service evidence.

[Section 3.205]{.underline}. In § 3.205, paragraph (a)(1) has been
amended to provide that payment of death benefits to a surviving spouse
may be authorized, if otherwise in order, based upon an uncertified copy
of the public record of marriage which was part of the VA record on the
date of the veteran\'s death, and which substantiates the veteran\'s
certified statement that VA relied upon to establish the claimant as the
spouse for compensation or pension payments which the veteran was
entitled to receive at the time of his or her death, provided that there
is no evidence which would serve to create doubt as to the correctness
of that copy.

REGULATORY AMENDMENT

3-93-16

Regulation affected: 38 CFR 3.357(a)

EFFECTIVE DATE OF REGULATION: October 6, 1993

Date Secretary Approved Regulation: August 26, 1993

Federal Register Citation: 58 FR 52017-18 (October 6, 1993)

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

A majority of the disabilities addressed in the VA\'s Schedule for
Rating Disabilities (38 CFR part 4) do not specify criteria for a zero
percent level. Once it has been determined that a disability is
service-connected, it has been VA\'s consistent practice to assign a
zero percent evaluation whenever the condition does not meet the stated
minimum requirements for compensable evaluation. In recent decisions,
however, the U.S. Court of Veterans Appeals (COVA) pointed out that
unless an individual diagnostic code requires residual disability for a
compensable evaluation, a zero percent evaluation is not authorized
under §§ 3.357(a) and 4.31. See [Rabideu]{.underline} [v.]{.underline}
[Derwinski]{.underline}, U.S. Vet. App. No. 90-1296 and
[Conley]{.underline} [v]{.underline}. [Derwinski]{.underline}, U.S. Vet.
App. No. 91-527. From the Court\'s analysis it is apparent that VA
regulations are seen as being inconsistent with VA\'s longstanding
practice of assigning a zero percent evaluation for any disability which
does not meet the minimum requirements for a compensable evaluation.

We have amended § 4.31 to eliminate this perceived discrepancy between
VA practice and regulations. We have changed the heading of § 4.31 from
\"A no-percent rating\" to \"Zero percent evaluations\" to more
accurately represent the issue addressed in the regulation.

[Section 3.357]{.underline}. Paragraph (a) is deleted because it is
duplicative of § 4.31 and the issue is more appropriately addressed in
the rating schedule.

REGULATORY AMENDMENT

3-93-17

Regulations Affected: 38 CFR 3.103(f)

EFFECTIVE DATE OF REGULATIONS: July 14, 1993

Date Secretary Approved Regulations: September 22, 1993

Federal Register Citation: 58 FR 59365-66 (November 9, 1993)

The purpose of the following comments on the changes included in these
amendments of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

38 U.S.C. 5104(b) provides that when the Secretary of Veterans Affairs
denies a benefit sought, the notification to the claimant (and to the
claimant\'s representative) of that decision must include a statement of
the reasons for the denial of benefits and a summary of the evidence
considered in reaching that decision. This requirement is not clearly
reflected in the regulations at 38 CFR 3.103 concerning procedural due
process and appellate rights. 38 CFR 3.103(f) stipulates that a claimant
or beneficiary and his or her representative will be notified in writing
concerning decisions that affect the payment of benefits or granting of
relief and describes the content of such a notification, but does not
specify the content of the notification when benefits sought are denied.
We have amended § 3.103(f) accordingly.

[Section 3.103]{.underline}. 38 CFR 3.103(f) has been amended to provide
that any notice that VA has denied a benefit sought will include a
summary of the evidence considered.

REGULATORY AMENDMENT

3-94-1

Regulations Affected: 38 CFR 3.307(a), 3.309(e), 3.311a, and 3.311b

EFFECTIVE DATE OF REGULATIONS: February 3, 1994

Date Secretary Approved Regulations: January 4, 1994

Federal Register Citation: 59 FR 5106-07 (February 3, 1994)

The purpose of the following comments on the changes included in these
amendments of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 2(a)(1) of the Agent Orange Act of 1991, Pub. L. 102-4, 105
Stat. 11 (1991), added 38 U.S.C. 1116 to establish presumptive service
connection for veterans with service in the Republic of Vietnam during
the Vietnam era who subsequently develop, to a degree of 10 percent or
more, non-Hodgkin\'s lymphoma, soft-tissue sarcoma (subject to specified
statutory exceptions), and chloracne or other acneform disease
consistent with chloracne, even though there is no record of that
disease during military service. Final regulations implementing this
statutory provision were published in the Federal Register of May 19,
1993 (See 58 FR 29107-09).

Section 3 of Pub. L. 102-4 directed the Secretary to enter into an
agreement with the National Academy of Sciences (NAS) to review the
scientific evidence concerning the association between exposure to
herbicides used in support of military operations in the Republic of
Vietnam during the Vietnam era and each disease suspected to be
associated with such exposure. Congress mandated that NAS determine, to
the extent possible, (1) whether there is a statistical association
between the suspect diseases and herbicide exposure, taking into account
the strength of the scientific evidence and the appropriateness of the
methods used to detect the association; (2) the increased risk of
disease among individuals exposed to herbicides during service in the
Republic of Vietnam during the Vietnam era; and (3) whether there is a
plausible biological mechanism or other evidence of a causal
relationship between herbicide exposure and the suspect disease.

Section 1116(b) of 38 U.S.C. provides that whenever the Secretary
determines, based on sound medical and scientific evidence, that a
positive association exists between exposure to an herbicide agent
(i.e., a chemical in an herbicide used in support of the United States
and allied military operations in the Republic of Vietnam during the
Vietnam era) and a disease, the Secretary will publish regulations
establishing presumptive service connection for that disease. In making
that determination, the Secretary is to consider reports received from
NAS as well as other available sound medical and scientific evidence and
analyses.

After reviewing 6,420 scientific or medical articles, consulting with
outside experts, and conducting public hearings, NAS issued a report,
entitled \"Veterans and Agent Orange: Health Effects of Herbicides Used
in Vietnam\", on July 27, 1993. NAS concluded that there is an
association between exposure to herbicides used in the Republic of
Vietnam and the subsequent development of chloracne, non-Hodgkin\'s
lymphoma, and soft-tissue sarcoma, conditions for which VA is already
paying compensation based upon the statutory presumptions established by
Pub. L. 102-4.

The Secretary has determined that a positive association exists between
exposure to herbicides used in the Republic of Vietnam and the
subsequent development of chloracne, non-Hodgkin\'s lymphoma, and
soft-tissue sarcoma. Chloracne has been linked to herbicide exposure in
numerous epidemiologic studies of occupationally and environmentally
exposed individuals. The NAS report considered a number of
epidemiological studies, including studies involving occupational,
environmental, and Vietnam exposures, and concluded that there was
sufficient evidence for a positive association between exposure to
herbicides used in the Republic of Vietnam and the development of
non-Hodgkin\'s lymphoma. The NAS analysis gave great weight to the
Swedish studies which demonstrated a relationship between herbicide
exposure and the development of soft-tissue sarcoma.

NAS also concluded that there is an association between exposure to
herbicides used in the Republic of Vietnam and the subsequent
development of PCT (a disease in which porphyrins are abnormally
metabolized and which is characterized by thinning and blistering of the
skin in sun-exposed areas) in genetically susceptible individuals. The
last time VA had considered this issue, it had determined, after
receiving the advice of the Veterans\' Advisory Committee on
Environmental Hazards (VACEH), that PCT does not result from exposure to
[dioxin]{.underline} (See 56 FR 52473-74). A majority of the VACEH
members felt that while the literature, particularly that dealing with
an industrial accident in Seveso, Italy, left open the possibility of an
association, it was insufficient to meet the requirements for a
\"significant statistical association,\" the standard in effect at that
time.

The NAS report found that case studies and animal studies are sufficient
to conclude that there is a positive association between [herbicide
exposure]{.underline} and PCT in genetically predisposed individuals.
After reviewing the NAS report, which found an association based on case
and animal studies, and reconsidering the analysis of VACEH focusing on
the issue of whether there is an association between herbicide \--
rather than dioxin \-- exposure and PCT, the Secretary has found that
the credible evidence for an association outweighs the credible evidence
against an association and that there is, therefore, a positive
association between exposure to herbicides used in the Republic of
Vietnam and the subsequent development of PCT.

The clinical evidence provides that for both PCT and chloracne onset
occurs soon after exposure, and that the conditions subside after
exposure ceases. Pub. L. 102-4 established service connection for
chloracne which occurred within one year of the veteran\'s last exposure
to herbicide agents. A study of the onset of chloracne subsequent to an
industrial accident involving herbicide production found that chloracne
occurred within a few weeks of exposure, with one case occurring eleven
months after the accident. We also propose to establish a one-year
manifestation period for PCT. In our judgment, this is reasonable and
consistent with manifestation periods established for other conditions
for which presumptive service connection has been established (See 38
CFR 3.307(a)(3) and (4)). We have amended 38 CFR 3.307(a) and 3.309(e)
to implement the Secretary\'s decision.

NAS also concluded that there is an association between herbicide
exposure and the subsequent development of Hodgkin\'s disease, a
neoplastic disease characterized by progressive anemia and enlargement
of lymph nodes, spleen, and liver. Nearly all of the case-control and
agricultural worker studies show increased risk for Hodgkin\'s disease.
Although only a few of these results are statistically significant,
those that are show a positive association. Those that are not
statistically significant generally indicate increased risk of
Hodgkin\'s disease and the pattern of the results is notably consistent.

Hodgkin\'s disease is a form of lymphoma with characteristic
histopathologic findings, especially the presence of Reed-Sternberg
cells. It also has a number of clinical features that typically differ
from other lymphomas. While there were fewer studies for Hodgkin\'s
disease than for non-Hodgkin\'s lymphoma, the NAS report noted that the
pattern of results was consistent with the findings for non-Hodgkin\'s
lymphoma and concluded that there was sufficient evidence for a positive
association between exposure to the herbicides used in Vietnam and the
development of Hodgkin\'s disease.

After reviewing the NAS report and noting (1) the difficulty which may
occur in trying to distinguish between Hodgkin\'s disease and
non-Hodgkin\'s lymphoma pathologically, (2) the occasional development
of both diseases in the same patient, and (3) the biologic relationship
between the two diseases in terms of tissue of origin, the Secretary has
determined that there is an association between exposure to herbicides
used in the Republic of Vietnam and the subsequent development of
Hodgkin\'s disease which manifests itself to a degree of 10 percent at
any time after exposure. We have amended 38 CFR 3.309(e) to implement
the Secretary\'s decision.

Currently, VA regulations address the issue of diseases resulting from
exposure to herbicides used in Vietnam under two distinct sets of
criteria: §§ 3.307 and 3.309 implement the statutory presumptions
established by Congress in the Agent Orange Act of 1991, Pub. L. 102-4,
while § 3.311a establishes service connection on the basis of exposure
to herbicides containing dioxin, as previously authorized under the
provisions of the Veterans\' Dioxin and Radiation Exposure Compensation
Standards Act, Pub. L. 98-542. However, Section 10 of Pub. L. 102-4
amended Pub. L. 98-542 by removing the provisions concerning dioxin
exposure and there is therefore no need for VA to maintain separate
regulations on this issue. Since the regulations implementing the other
statutory presumptions for service connection created by Congress appear
at §§ 3.307 and 3.309, and because the Secretary of Veterans Affairs is
specifically authorized to add to the list of presumptive conditions
established by Pub. L. 102-4, we have deleted § 3.311a and will address
the issue of diseases resulting from exposure to herbicides used in
Vietnam exclusively at §§ 3.307(a)(6) and 3.309(e).

VA has also amended § 3.307(a)(6) so that it (1) bases the presumption
of service connection on exposure to certain herbicide agents rather
than on service in the Republic of Vietnam during the Vietnam era as it
currently does, (2) incorporates the definition of the term \"herbicide
agent\" from Pub. L. 102-4, (3) incorporates the definition of the term
\"service in the Republic of Vietnam\" from 38 CFR 3.311a, and (4)
provides that for those who served in the Republic of Vietnam the last
day of exposure to an herbicide agent will be presumed to be the last
date of service in the Republic of Vietnam during the Vietnam era. In
addition, we have amended § 3.307(a)(6) to specify the chemicals in the
herbicides used in the Republic of Vietnam. We also have amended §
3.309(e) by revising the title to reflect the fact that the basis of
entitlement is exposure to certain herbicide agents, and to incorporate
the complete list of soft-tissue sarcomas VA has established by prior
rulemakings (See 56 FR 51651-53 and 58 FR 29107-09). Since the complete
list of soft-tissue sarcomas will now appear at § 3.309(e), the note
that currently follows § 3.309(e) is no longer necessary and we have
removed it.

[Section 3.307.]{.underline} The heading and § 3.307(a)(6) have been
revised as described above. In § 3.307(a), the first sentence of the
introductory text, remove the words \"a disease associated with service
in the Republic of Vietnam\" and insert, in their place, the words \"a
disease associated with exposure to certain herbicide agents\".

[Section 3.309]{.underline}. 38 CFR 3.309(e) has been revised as
described above.

[Section 3.311a]{.underline}. 38 CFR 3.311a is removed.

[Section 3.311b]{.underline}. 38 CFR 3.311b is redesignated as § 3.311.

REGULATORY AMENDMENT

3-94-2

Regulations Affected: 38 CFR 3.103(c)

EFFECTIVE DATE OF REGULATIONS: February 10, 1994

Date Secretary Approved Regulations: January 12, 1994

Federal Register Citation: 59 FR 6218 (February 10, 1994)

The purpose of the following comments on the changes included in these
amendments of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

It has been the long-standing policy of VA to offer claimants personal
hearings as an integral part of the claims adjudication process.
Hearings are held so that claimants may introduce into the record, in
person, any available evidence which the claimant may consider material
and any arguments and contentions which he or she may consider
pertinent. They are held only at the request of the claimant, however,
since VA does not require that evidence be submitted in person. Any
evidence which the claimant presents, whether documentary, testimonial,
or any other form, becomes part of the permanent VA record.

In keeping with the purpose of claimant hearings, VA expects that the
claimant and witnesses, if any, will be present at the hearing. A
hearing will not normally be scheduled solely for the purpose of
receiving argument by a claimant\'s representative, since the
adjudication process affords adequate alternative opportunities for the
representative to present argument in support of a claim. Although
current regulations at 38 CFR 3.103(c)(2) do indicate that the purpose
of a hearing is for a claimant to present evidence \"in person,\" they
do not clearly state that a claimant hearing will not normally be
scheduled solely for the purpose of receiving argument by a claimant\'s
representative.

38 CFR 3.103(c)(1) currently states that VA will furnish personnel who
have original determinative authority for the conduct of claimant
hearings at Veterans Benefits Administration (VBA) regional offices
without specifying any requisite number. Because the regulation does not
specify the number, we believe the term \"personnel\" might reasonably
be construed as encompassing one, two, or several persons. Even though
it is well established that unless the context indicates otherwise terms
which are plural in form may include the singular as well, some might
argue that the term \"personnel\" signifies that VA must furnish more
than one person to conduct hearings.

We have eliminated any possible confusion the current wording may create
by amending 38 CFR 3.103(c)(1) to state that VA will provide one or more
VA employees who have original determinative authority to conduct
claimant hearings. Congress, through enactment of what is now 38 U.S.C.
7102(b), has indicated its consent to single members holding hearings
before the Board of Veterans Appeals. There is nothing in the statutes
to suggest that Congress intended a different procedure with respect to
VBA hearings. We have also made a conforming amendment to the language
of 38 CFR 3.103(c)(2), which refers to the responsibility of VA
personnel conducting hearings.

[Section 3.103]{.underline}. In § 3.103(c)(1), in the third sentence,
remove the word \"personnel\" and insert, in its place, the words \"one
or more employees\"; in the fourth sentence, remove the words \"VA
personnel\" and insert, in their place, the words \"one or more VA
employees\". In § 3.103(c)(2), remove the first two sentences and add,
in their place, the words \"The purpose of a hearing is to permit the
claimant to introduce into the record, [in person]{.underline}, any
available evidence which he or she considers material and any arguments
or contentions with respect to the facts and applicable law which he or
she may consider pertinent. All testimony will be under oath or
affirmation. The claimant is entitled to produce witnesses, but the
claimant and witnesses are expected to be present. The Veterans Benefits
Administration will not normally schedule a hearing for the sole purpose
of receiving argument from a representative.\" In § 3.103(c)(2), in what
is now the fifth sentence, remove the word \"personnel\" and insert, in
its place, the words \"employee or employees\".

REGULATORY AMENDMENT

3-94-3

Regulation Affected: 38 CFR 3.103(b)

EFFECTIVE DATE OF REGULATION: March 16, 1994

Date Secretary Approved Regulation: January 12, 1994

Federal Register Citation: 59 FR 6901 (February 14, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 3.103(b)(2) of title 38, Code of Federal Regulations, provides
that if a VA decision involves discontinuance or reduction of benefit
payments, VA generally is required to provide a pretermination/reduction
notice providing 60 days within which a beneficiary may offer evidence
to show why the action should not be taken. Final action must be
deferred until expiration of the 60-day period. Section 3.103(b)(3)
provides for exceptions to this requirement. The rationale behind the
exceptions is to prevent issuance of benefit payments where it is
reasonable to conclude that the beneficiary either would not receive
them or would not be entitled to them, and that an attempt to give
advance notice would be unsuccessful or of little or no value in
protecting the beneficiary\'s rights. To the original three exceptions
we have added the following:

\(1\) A written and signed statement from the beneficiary renouncing VA
benefits. Delaying for pretermination notice would only serve to ensure
continued payment of benefits which the beneficiary no longer wants and
is no longer entitled to receive and would thereby create an
overpayment.

\(2\) A written and signed statement from the beneficiary indicating
that he or she has returned to active service. Since veterans reentering
active service often are aware of the prohibition against concurrent
receipt, in instances where these veterans notify VA specifically of the
nature of their service and date of reentry, it is proper to terminate
benefits as quickly as possible.

\(3\) A garnishment order issued under 42 U.S.C. 659(a). In these
instances, VA would not need to provide a pretermination/reduction
notice because an opportunity for a hearing and presentation of evidence
has already been given by the court issuing the order.

[Section 3.103.]{.underline} 38 CFR 3.103(b)(3)(i) has been amended to
insert the words \"to VA\" after the word \"provided\" to remove any
potential ambiguity. New paragraphs (b)(3)(iv), (b)(3)(v), and
(b)(3)(vi) have been added to include the three new exceptions
(renouncement, reentry into active service, and garnishment under 42
U.S.C. 659(a)) to the general requirement for pretermination/reduction
notice.

REGULATORY AMENDMENT

3-94-4

Regulation Affected: 38 CFR 3.1003

EFFECTIVE DATE OF THE REGULATION: June 15, 1994

Date Secretary Approved Regulation: January 31, 1994

Federal Register Citation: 59 FR 25329-30 (May 16, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 5121(a) of title 38, United States Code, authorizes VA to pay an
accrued amount of periodic monetary benefits which are due and unpaid at
the time of a beneficiary\'s or claimant\'s death. Payment must be made
in a specific order of precedence as designated in the statute. The
amount of accrued payable is limited to a period not exceeding one year
prior to the date of last entitlement. A claim for accrued benefits must
be filed within one year after the date of death.

Section 5122 of title 38, United States Code, provides that the amount
represented by a benefit check received but unnegotiated prior to a
beneficiary\'s death shall be payable in the same order of precedence as
listed in § 5121(a). Any amount not paid as provided in § 5122 will be
paid upon settlement by the General Accounting Office to the estate of
the deceased provided that the estate will not escheat. There is no time
limit for filing a claim for the proceeds of such a check, but the
amount payable may not include payment for the month of the
beneficiary\'s death.

A precedent opinion of the General Counsel (O.G.C. Prec. 22-92) has held
that the statutes intend a distinction between payment of accrued
benefits under § 5121 and payment of the proceeds of an unnegotiated
check under § 5122. After reviewing O.G.C. 22-92, we have amended 38 CFR
3.1003 to ensure that the regulation clearly and correctly expresses the
requirements of 38 U.S.C. 5122.

[Section 3.1003.]{.underline} We have amended 38 CFR 3.1003 to
accomplish the following:

\(1\) restate for clarity much of the current text of the regulation;

\(2\) add introductory text concerning the return and cancellation of
unnegotiated checks.

\(3\) add a paragraph concerning settlement by GAO and payment to the
deceased beneficiary\'s estate; and

\(4\) remove unnecessary references to 38 CFR 3.1000 and 3.1008.

REGULATORY AMENDMENT

3-94-5

Regulation affected: 38 CFR 3.309.

EFFECTIVE DATE OF REGULATION: October 1, 1992

Date Secretary Approved Regulation: January 31, 1994

Federal Register Citation: 59 FR 25328-29, May 16, 1994

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 2 of the Veterans\' Radiation Exposure Amendments of 1992,
Public Law 102-578, amended 38 U.S.C. 1112(c) by adding cancer of the
urinary tract to the list of conditions for which presumptive service
connection is authorized for veterans who participated in a
radiation-risk activity. In the Federal Register of April 27, 1993 (58
FR 25563), VA published adjudication regulations to reflect this change.

Clarification of what structures are included in the urinary tract is
needed, since this has been subject to various interpretations, and
Congress did not indicate what they considered to be included.

We have defined urinary tract according to standard medical dictionaries
(Dorland\'s Medical Dictionary, 27th Edition, p. 1740; Gould\'s Medical
Dictionary, 4th Edition, p. 1432) and commonly used medical textbooks.

We have amended Section 3.309 by adding a note at the end of paragraph
(d)(2)(xv) stating that for purposes of this section, the term \"urinary
tract\" means the kidneys, renal pelves, ureters, urinary bladder, and
urethra.

REGULATORY AMENDMENT

3-94-6

Regulations Affected: 38 CFR 3.307(a) and 3.309(e)

EFFECTIVE DATE OF THE REGULATION: June 9, 1994

Date Secretary Approved Regulation: April 28, 1994

Federal Register Citation: 59 FR 29723-24 (June 9, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 2(a)(1) of the Agent Orange Act of 1991, Pub. L. 102-4, 105
Stat. 11 (1991), added 38 U.S.C. 1116 which established presumptive
service connection for veterans with service in the Republic of Vietnam
during the Vietnam era who subsequently develop, to a degree of 10
percent or more, non-Hodgkin\'s lymphoma, soft-tissue sarcoma (subject
to specified statutory exceptions), and chloracne or other acneform
disease consistent with chloracne (within one year of the last date of
active service in the Republic of Vietnam during the Vietnam era), even
though there is no record of that disease during military service. Final
regulations implementing this statutory provision were published in the
[Federal Register]{.underline} of May 19, 1993 (58 FR 29107-09).

Section 3 of Pub. L. 102-4 directed the Secretary to enter into an
agreement with the National Academy of Sciences (NAS) to review the
scientific evidence concerning the association between exposure to
herbicides used in support of military operations in the Republic of
Vietnam during the Vietnam era and each disease suspected to be
associated with such exposure. Congress mandated that NAS determine, to
the extent possible: (1) whether there is a statistical association
between the suspect diseases and herbicide exposure, taking into account
the strength of the scientific evidence and the appropriateness of the
methods used to detect the association; (2) the increased risk of
disease among individuals exposed to herbicides during service in the
Republic of Vietnam during the Vietnam era; and (3) whether there is a
plausible biological mechanism or other evidence of a causal
relationship between herbicide exposure and the suspect disease.

Section 1116(b) of 38 U.S.C. provides that whenever the Secretary
determines, based on sound medical and scientific evidence, that a
positive association exists between exposure of humans to an herbicide
agent (i.e., a chemical in an herbicide used in support of the United
States and allied military operations in the Republic of Vietnam during
the Vietnam era) and a disease, the Secretary will publish regulations
establishing presumptive service connection for that disease. An
association is considered \"positive\" if the credible evidence for the
association is equal to or outweighs the credible evidence against the
association. In making that determination, the Secretary is to consider
reports received from NAS as well as other available sound medical and
scientific evidence and analyses.

After reviewing approximately 6,420 abstracts of scientific or medical
articles and approximately 230 epidemiologic studies, consulting with
outside experts, and conducting public hearings, NAS issued a report,
entitled \"Veterans and Agent Orange: Health Effects of Herbicides Used
in Vietnam\", on July 27, 1993. NAS concluded that there is sufficient
evidence of an association between exposure to herbicides used in the
Republic of Vietnam and the subsequent development of chloracne,
non-Hodgkin\'s lymphoma, soft-tissue sarcoma, Hodgkin\'s disease and
porphyria cutanea tarda. VA was already paying compensation for the
first three conditions based upon the statutory presumptions established
by Pub. L. 102-4, and the Secretary announced that same day that he had
concluded that a positive association exists between exposure to
herbicides used in the Republic of Vietnam and the subsequent
development of Hodgkin\'s disease and porphyria cutanea tarda. Final
regulations for these two conditions were published in the [Federal
Register]{.underline} on February 3, 1994 (59 FR 5106-07).

The Secretary also announced that VA would review the remaining findings
in the NAS report to determine whether a positive association exists
between herbicide exposure and any other conditions. That review has
been completed and the Secretary has concluded that a positive
association exists for multiple myeloma and respiratory cancers.

The NAS report found \"limited/suggestive evidence\" \-- a category it
defined as meaning that evidence suggests an association between
herbicide exposure and a specific disease, but that chance, bias, and
confounding factors cannot be ruled out with confidence \-- of an
association between herbicide exposure and the subsequent development of
multiple myeloma. VA, however, found the evidence concerning multiple
myeloma, a malignant proliferation of plasma cells which are derived
from B lymphocytes, to be convincing. Most of the studies reviewed by
NAS showed an increased risk, although in most cases it was not a
statistically significant increase. One occupational study found a
relationship between herbicide exposure and multiple myeloma. Another
study showed a clear association between herbicide exposure and multiple
myeloma in both males and females. Moreover, multiple myeloma is closely
related biologically to B-cell non-Hodgkin\'s lymphoma; consequently,
the epidemiological evidence concerning non-Hodgkin\'s lymphoma gives
added weight to the association between herbicide exposure and multiple
myeloma. Based on this clinical consideration and the weight of the
epidemiological evidence, the Secretary has determined that there is a
positive association between herbicide exposure and multiple myeloma
that manifests itself to a degree of 10 percent at any time after
exposure. We are amending 38 CFR 3.309(e) to implement the Secretary\'s
decision. This amendment is effective June 9, 1994, the date of
publication of the final rule, as provided by Pub. L. 102-4.

The NAS report also found limited/suggestive evidence of an association
between herbicide exposure and the subsequent development of respiratory
cancers, specifically cancers of the lung, larynx, or trachea. For study
purposes, NAS included cancer of the bronchus when it considered cancer
of the lung; therefore, we are including cancer of the bronchus within
the scope of the presumption.

In reviewing the NAS report, which noted that not all studies had fully
controlled for or evaluated smoking as a confounding factor, VA gave
weight to the fact that the studies found high relative risks for
respiratory cancers in production workers. One study showed an increased
risk with the duration of exposure. VA also noted that despite the
failure of some studies to control for smoking, it is unlikely that
there were major differences in smoking patterns between the study and
control groups. Considering all of the evidence, the Secretary has
determined that the credible evidence for an association outweighs the
credible evidence against an association and that there is, therefore, a
positive association between exposure to herbicides used in the Republic
of Vietnam and the subsequent development of respiratory cancers.

VA also found that the weight of the available evidence indicates that
chemically-induced respiratory cancers manifest within a definite period
following exposure, after which there is little effect from the
exposure. In our judgment, it is reasonable to assume that respiratory
cancers due to herbicide exposure will show a risk pattern similar to
other chemically-induced respiratory cancers, and we are providing in
our rule that respiratory cancer will be presumed service connected only
if it is manifest within 30 years after exposure. The longest
manifestation period noted for a respiratory cancer following herbicide
exposure is about 30 years. If future studies indicate that this
manifestation period is inappropriate, VA will amend it accordingly. We
are amending 38 CFR 3.307(a)(6)(ii) and 3.309(e) to implement the
Secretary\'s decision. This amendment is effective June 9, 1994, the
date of publication of the final rule, as provided by Pub. L. 102-4.

38 U.S.C. 1113 provides that where there is affirmative evidence to the
contrary, or evidence to establish that an intercurrent injury or
disease which is a recognized cause of any of the diseases for which
presumptive service connection may be allowed under the provisions of 38
U.S.C. 1112 (i.e., chronic diseases, tropical diseases, prisoner-of-war
related diseases, or diseases specific to radiation-exposed veterans),
has been suffered between the date of separation from service and the
onset of any such diseases, or the disability is due to the veteran\'s
own willful misconduct, presumptive service connection will not be in
order. Section 2(b) of Pub. L. 102-4 amends 38 U.S.C. 1113 so that its
provisions also apply to the presumptive conditions associated with
herbicide exposure under 38 U.S.C. 1116. Consequently, service
connection for multiple myeloma or respiratory cancers based on
herbicide exposure is precluded if there is affirmative evidence that
establishes a non-service related supervening condition or event as the
cause of the multiple myeloma or respiratory cancers, or the disability
is due to the veteran\'s own willful misconduct ([See]{.underline} 38
U.S.C. 1113).

[Section 3.307]{.underline}. 38 CFR 3.307(a)(6)(ii) has been amended as
described above.

[Section 3.309]{.underline}. 38 CFR 3.309(e) has been amended as
described above.

REGULATORY AMENDMENT

3-94-7

Regulation Affected: 38 CFR 3.53

EFFECTIVE DATE OF THE REGULATION: May, 13, 1993

Date Secretary Approved Regulation: January 13, 1994

Federal Register Citation: 59 FR 32658-59 (June 24, 1994)

The purpose of the following comments on the change included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

38 U.S.C. 101(3) requires that in order to establish entitlement to
death benefits as a \"surviving spouse\" of a veteran, the spouse must
have lived with the veteran continuously from the date of marriage to
the date of the veteran\'s death, except where there was a separation
which was due to the misconduct of, or procured by, the veteran without
the fault of the spouse. VA implemented this statutory provision at 38
CFR 3.50(b)(1) utilizing language identical to that of the statute. In
addition, 38 CFR 3.53(a) provides that the requirement of 38 U.S.C.
101(3) concerning continuous cohabitation from the date of marriage to
the date of death of the veteran will be considered as having been met
when the evidence shows there was \"no separation due to the fault of
the surviving spouse.\" In [Gregory v. Brown]{.underline}, U.S. Vet.
App. No. 91-912, the Court noted the inconsistency between 38 U.S.C.
101(3) and § 3.53(a) and invalidated that portion of § 3.53(a) that it
found inconsistent with the governing statute. The Court found that 38
U.S.C. 101(3) establishes a two-part test to determine whether a spouse
will be deemed to have continuously cohabited with the veteran when
there has been a separation: (1) the spouse must be free of fault at the
time of the separation, and (2) the separation must be due to the
misconduct of, or procured by, the veteran. The Court held that given
the plain meaning of the statute, the language in the first sentence of
§ 3.53(a) which requires that the separation not be due to the fault of
the surviving spouse, in essence eliminates the second part of the test
and is therefore unlawful because it exceeds the authority of the
Secretary provided by 38 U.S.C. 501(a). We have amended § 3.53(a) to
remove that inconsistency effective May 13, 1993, the date of the
Court\'s decision.

[Section 3.53]{.underline}. We have amended paragraph (a) to state that
a separation must be due to the misconduct of, or procured by, the
veteran.

REGULATORY AMENDMENT

3-94-8

Regulation Affected: 38 CFR 3.7(x)

EFFECTIVE DATE OF THE REGULATION: December 13, 1993

Date Secretary Approved Regulation: June 10, 1994

Federal Register Citation: 59 FR 34382-83 (July 5, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

The Secretary of the Air Force held under Pub. L. 95-202 that the
service of members of the following groups is active duty for VA benefit
purposes: \"U.S. Civilian Flight Crew and Aviation Ground Support
Employees of Northwest Airlines, Who Served Overseas as a Result of
Northwest Airline\'s Contract with the Air Transport Command during the
Period December 14, 1941 through August 14, 1945,\" and the group known
as \"U.S. Civilian Female Employees of the U.S. Army Nurse Corps While
Serving in the Defense of Bataan and Corregidor During the Period
January 2, 1942 to February 3, 1945.\"

[Section 3.7.]{.underline} 38 CFR 3.7(x)(27) and (28) have been added to
include service performed by members of U.S. Civilian Flight Crew and
Aviation Ground Support Employees of Northwest Airlines, Who Served
Overseas as a Result of Northwest Airline\'s Contract with the Air
Transport Command during the Period December 14, 1941 through August 14,
1945, and U.S. Civilian Female Employees of the U.S. Army Nurse Corps
While Serving in the Defense of Bataan and Corregidor During the Period
January 2, 1942 to February 3, 1945.

REGULATORY AMENDMENT

3-94-9

Regulations Affected: 38 CFR 3.262(m), 3.262(o), and 3.272(h)

EFFECTIVE DATE OF THE REGULATION: August 5, 1993

Date Secretary Approved Regulation: February 25, 1994

Federal Register Citation: 59 FR 35265-66 (July 11, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Rates payable under VA\'s income-based benefit programs, pension and
parents\' dependency and indemnity compensation, are affected by the
claimant\'s income. As countable income goes up, the rate payable goes
down. The law does, however, provide certain exclusions from countable
income.

38 U.S.C. 1503(a)(3) excludes amounts paid by a surviving spouse or
child of a deceased veteran for the veteran\'s just debts from countable
income; 38 U.S.C. 1315(f)(1)(H) provides a similar exclusion for a
dependent parent of a deceased veteran who pays a deceased spouse\'s
just debts. The term \"just debts,\" however, is not currently defined
by statute or regulation.

In a precedent opinion dated August 5, 1993 (OGC Prec 5-93), VA\'s
General Counsel held that amounts paid by a surviving spouse on secured
obligations incurred for the purchase of real or personal property could
not be excluded as \"just debts\" under 38 U.S.C. 1503(a)(3)(A). Based
on the principles in OGC Prec 5-93, we have amended 38 CFR Sections
3.262(m), 3.262(o), and 3.272(h) to state that the term \"just debts\"
does not include secured debts.

[Section 262]{.underline}. Paragraphs (m)(2) and (o)(2) have been
amended to show that for purposes of Section 306 pension and Parents\'
Dependency and Indemnity Compensation secured debts cannot be considered
\"just debts.\"

[Section 272]{.underline}. Paragraph (h) has been amended to show that
secured debts cannot be considered \"just debts\" for Improved Pension
purposes.

REGULATORY AMENDMENT

3-94-10

Regulation Affected: 38 CFR 3.309

EFFECTIVE DATE OF THE REGULATION: August 24, 1993

Date Secretary Approved Regulation: June 27, 1994

Federal Register Citation: 59 FR 35464-65 (July 12, 1994)

The purpose of the following comments on the change included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Public Law 91-376 established a presumption of service connection for
seven categories of diseases and conditions, including \"beriberi
(including beriberi heart disease),\" developing to a ten-percent degree
of disability at any time after active service in the case of a veteran
held as a prisoner of war in World War II, the Korean Conflict, or the
Vietnam War who suffered from dietary deficiencies, forced labor or
inhumane treatment in violation of the Geneva Conventions.

The Medical Follow-up Agency of the Institute of Medicine, National
Academy of Sciences, issued a study in 1992 which reported the results
of a medical examination survey of former World War II and Korean
Conflict POWs and comparable control groups. That study found what it
termed a noteworthy association between ischemic heart disease and
earlier reporting of localized edema of feet, ankles and legs-presumably
due to beriberi heart disease (wet beriberi)-while in captivity. After
reviewing this study the Secretary has determined, in keeping with the
intent of Congress to provide a presumption of service connection for
former prisoners of war, that the term beriberi heart disease found in
38 U.S.C. 1112(b)(2) includes ischemic heart disease if the former
prisoner of war suffered localized edema during captivity. We have
amended 38 CFR 3.309(c) accordingly.

[Section 3.309(c)]{.underline}. We have added a note at the end of the
paragraph to state that the term beriberi heart disease includes
ischemic heart disease in a former prisoner of war who had experienced
localized edema during captivity.

REGULATORY AMENDMENT

3-94-11

Regulation Affected: 38 CFR 3.326

EFFECTIVE DATE OF THE REGULATION: August 15, 1994

Date Secretary Approved Regulation: July 1, 1994

Federal Register Citation: 59 FR 35851 (July 14, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 3.326 of title 38, Code of Federal Regulations, requires VA to
authorize a medical examination where a reasonable probability of a
valid claim for disability compensation or pension benefits is
indicated, including either an original or reopened claim or a claim for
increased benefits. In specified cases, alternative types of medical
evidence may be deemed a \"Department of Veterans Affairs examination\"
and accepted for rating purposes. A statement from a private physician
which includes clinical manifestations and substantiation of a diagnosis
through medically acceptable diagnostic techniques may be accepted to
rate pension and certain other claims. It may not, however, be accepted
as the sole basis for a rating decision in compensation claims.

This amendment will permit acceptance of a private physician\'s
statement for rating purposes in claims for increased compensation due
to the increased severity of service-connected disabilities. Since the
basic issue of service connection has already been resolved, a private
physician\'s statement meeting the requirements mentioned above contains
medical evidence acceptable for rating purposes with no need for
verification through a VA examination. Furthermore, acceptance of this
type of evidence will permit earlier decisions by removing the need for
VA to schedule, conduct, and review the results of an additional
examination.

[Section 3.326]{.underline}. We have amended paragraph (b) to remove a
statement that evidence of permanent and total disability will not be
required in pension claims for veterans who have attained age 65. The
Omnibus Budget Reconciliation Act of 1990, eliminated the presumption of
total disability for these veterans with respect to claims filed after
October 31, 1990.

We also have amended paragraph (d) to permit acceptance of certain
private physicians\' statements in rating claims for increased
compensation, as explained above, and to clarify the other types of
claims in which such statements may be accepted.

[Section 3.351.]{.underline} In this section we have revised the
authority citation following paragraph (a)(2).

REGULATORY AMENDMENT

3-94-12

Regulations Affected: 38 CFR 3.261(a)(37), 3.262(v), and 3.272(r)

EFFECTIVE DATE OF THE REGULATION: January 1, 1994

Date Secretary Approved Regulation: July 12, 1994

Federal Register Citation: 59 FR 37695-96 (July 25, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 13736 of Public Law 103-66 amended 25 U.S.C. 1408 to provide
that up to \$2,000 per year of income received from trust or restricted
lands shall be excluded from the income of individual Indians when
determining eligibility for assistance from any Federal program.

25 CFR 151.2(d) defines \"trust land\" as land the title to which is
held in trust by the United States for an individual Indian or a tribe.
25 CFR 151.2(e) defines \"restricted land\" as land the title to which
is held by an individual Indian or a tribe and which can only be
alienated or encumbered by the owner with the approval of the Secretary
of the Interior.

We have amended 38 CFR 3.261, 3.262, and 3.272 to show that up to
\$2,000 per year of income from trust or restricted lands is excludable
from the countable income of an individual Indian. The purpose is to
make the regulations consistent with the provisions of Section 13736 of
Public Law 103-66.

[Section 261]{.underline}. A new paragraph (a)(37) has been added to
show that for purposes of protected pension programs and Parents\'
Dependency and Indemnity Compensation up to \$2,000 per year of income
from trust or restricted lands is excludable from the countable income
of an individual Indian beneficiary.

[Section 3.262]{.underline}. A new paragraph (v) has been added to show
that for purposes of protected pension programs and Parents\' Dependency
and Indemnity Compensation up to \$2,000 per year of income from trust
or restricted lands is excludable from the countable income of an
individual Indian beneficiary.

[Section 3.272]{.underline}. A new paragraph (r) has been added to show
that for purposes of Improved Pension up to \$2,000 per year of income
from trust or restricted lands is excludable from the countable income
of an individual Indian beneficiary.

REGULATORY AMENDMENT

3-94-13

Regulation Affected: 38 CFR 3.316

EFFECTIVE DATE OF THE REGULATION: January 6, 1993

Date Secretary Approved Regulation: July 15, 1994

Federal Register Citation: 59 FR 42497-500 (August 18, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

On July 31, 1992, VA published 38 CFR 3.316 authorizing service
connection in claims from veterans who underwent full-body exposure to
mustard gas during field or chamber experiments to test protective
clothing or equipment during World War II, and who subsequently develop
chronic forms of laryngitis, bronchitis, emphysema, asthma,
conjunctivitis, keratitis, or corneal opacities. The regulation was
based on a Veterans Health Administration (VHA) review of the available
English language medical literature dealing with the effects of exposure
to mustard gas. VA also contracted with the National Academy of Sciences
(NAS) to conduct a review of the world medical and scientific
literature, including that published in languages other than English, to
determine the long-term health effects of exposure to mustard agents and
Lewisite. After reviewing almost 2,000 medical and scientific papers,
consulting with outside experts, and conducting public hearings, NAS
issued a report, entitled \"Veterans at Risk: The Health Effects of
Mustard Gas and Lewisite\", on January 6, 1993. We have amended 38 CFR
3.316 based upon our review of that report.

NAS findings confirmed VA\'s prior determination that there is a
relationship between exposure to mustard gas and the subsequent
development of the seven conditions mentioned above. NAS also found that
the evidence indicated a causal relationship between exposure to mustard
gas and the subsequent development of nasopharyngeal, laryngeal, lung,
and skin cancers, pigmentation abnormalities of the skin, and chronic
skin ulceration and scar formation. We have added nasopharyngeal,
laryngeal and lung cancer (except mesothelioma) to the list of
conditions for which presumptive service connection may be granted based
on exposure to mustard gas. We excluded mesothelioma because the only
known cause of that condition is asbestos exposure.

Although NAS used the term \"skin cancer\" in the summary of its
findings, in our judgment the body of the report, which refers to
squamous cell and basal cell carcinomas of the skin but not malignant
melanomas, does not support so broad a presumption of service
connection. Although basal cell skin cancers were noted in some animal
studies, these studies constitute evidence of carcinogenicity rather
than evidence of skin cancer because there is no good animal model for
human skin response to mustard agents. Likewise, the one occupational
study that described basal cell carcinomas, Bowen\'s disease, and other
hyperkeratotic skin lesions was too seriously flawed to establish a
causal relationship with exposure to mustard agents. As the report
notes, the workers in that study were exposed to all types of gases, not
just mustard gas and Lewisite. Also, those individuals who participated
in chamber and field testing suffered acute rather than chronic exposure
like the chemical plant workers in the occupational study, which
occurred for many hours each week over many years. The report states
that \"cutaneous cancers following acute sulfur mustard exposure usually
localize in scars,\" and scar cancers are squamous cell carcinomas, not
basal cell carcinomas. Finally, since the study cited in the NAS report
in reference to the occurrence of basal cell carcinoma is not an
epidemiologic study, it is difficult to draw conclusions as to whether
the findings represent an unusual rate for basal cell carcinoma. For
these reasons, we have included only squamous cell carcinomas of the
skin.

In our judgment, there is no reason to establish presumptive service
connection for \"pigmentation abnormalities of the skin\" because these
abnormalities would be obvious from the time of the exposure to vesicant
agents rather than occurring many years after exposure, and most
pigmentation abnormalities resulting from these burns would not be
considered disabling, unless they interfered with the veteran\'s ability
to function. There is no mention in the NAS report of vitiligo-type
lesions, which are usually considered to be disabling because they are
disfiguring. Since compensation is only payable for disability resulting
from an injury or disease incurred or aggravated in the line of duty,
and since exposure to vesicant agents does not cause a type of
pigmentation abnormality which is disabling, we have not included
pigmentation abnormalities of the skin in the regulation. However, we
have included scar formation.

In addition to the respiratory conditions VA had previously recognized,
NAS found that the evidence indicated a causal relationship between
exposure to mustard gas and chronic obstructive pulmonary disease. NAS
further found that all these respiratory conditions could also result
from exposure to Lewisite, another vesicant agent. We have provided
service connection for a chronic form of laryngitis, bronchitis,
emphysema, asthma or chronic obstructive pulmonary disease, as a result
of exposure to mustard gas or Lewisite.

NAS also determined that the evidence indicated a causal relationship
exists between exposure to nitrogen mustard and the subsequent
development of acute nonlymphocytic leukemia. Based on that information,
we have provided service connection for acute nonlymphocytic leukemia as
a result of exposure to nitrogen mustard only.

Since the revised regulation addresses the effects of Lewisite as well
as mustard agents, we have revised the heading of 38 CFR 3.316 to
indicate that the regulation addresses claims based on chronic effects
of exposure to vesicant agents rather than mustard gas only. The prior
regulation applied only to those veterans exposed while participating in
secret tests of protective equipment during World War II; we have
expanded it to cover any verified full-body exposure during military
service, which will allow veterans exposed to mustard gas under
battlefield conditions in World War I, those present at the German air
raid on the harbor of Bari, Italy, in World War II, and those engaged in
manufacturing and handling vesicant agents during their military service
to be eligible for consideration under this regulation.

We also have amended 38 CFR 3.316 by adding a requirement that service
connection will not be established if there is affirmative evidence that
establishes a nonservice-related supervening condition or event as the
cause of the claimed condition. The prior regulation was based upon a
literature search of the immediate and short-term effects of mustard gas
exposure by the Veterans Health Administration, which revealed that
nonfatal exposures to mustard gas result in an immediate acute injury.
It was also reported that any chronic disability related to mustard gas
exposure should appear shortly after the exposure and continue to the
present. The NAS report, however, found that delayed effects of mustard
gas exposure may appear even though no acute effects were noted. Because
of this delay in manifestation of effects of mustard gas exposure
reported by the NAS, during which time the veteran may have been exposed
to other nonservice-related causative conditions or events, we have
determined that it is reasonable to consider evidence of intervening
cause which may exist, just as we do for other presumptive conditions
([See]{.underline} 38 CFR 3.307(b)).

The proposed rule stated that the amendment would be effective on the
date of publication of the final rule. In a letter of May 12, 1994, the
Chairman of the Senate Committee on Veterans\' Affairs, expressed his
concern over the delay in publishing the final regulation as well as his
belief that VA could establish an earlier effective date for the
amendments. We share Senator Rockefeller\'s concern over the delay in
the rulemaking process, and have therefore determined that it would be
both appropriate and more equitable for this amendment to be effective
January 6, 1993, the date of the decision to modify 38 CFR 3.316.

[Section 3.316.]{.underline} We have amended 38 CFR 3.316 as discussed
above.

REGULATORY AMENDMENT

3-94-14

Regulation Affected: 38 CFR 3.272

EFFECTIVE DATE OF THE REGULATION: October 6, 1994

Date Secretary Approved Regulation: July 12, 1994

Federal Register Citation: 59 FR 45975-76 (September 6, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

In O.G.C. Prec. 1-93, VA\'s General Counsel found that maintenance of a
life insurance policy involved two transactions: (1) purchase of
coverage during the period for which premiums are paid and (2)
accumulation of savings or investment. Upon surrender of the policy, the
policy owner receives a refund of the accumulated investment (the
premiums paid) plus interest that has accrued on the investment. The
General Counsel determined that it would be consistent with VA\'s policy
regarding exclusions from income to exclude from income computation
under the improved pension program that portion of the proceeds which
represents a return of the owner\'s investment. We therefore have
amended § 3.272 to exclude that portion of life insurance proceeds which
represents a return of premiums. Interest that has accumulated on the
investment will be considered income when paid, since that is an amount
which is paid over and above the owner\'s investment.

[Section 3.272]{.underline}. We have amended 38 CFR 3.272 by adding new
paragraph (q) to exclude from countable income under improved pension
that portion of proceeds from the cash surrender of a life insurance
policy which represents a return of insurance premiums.

REGULATORY AMENDMENT

3-94-15

Regulation Affected: 38 CFR 3.311(b)(2)

EFFECTIVE DATE OF REGULATION: September 6, 1994

Date Secretary Approved Regulation: August 17, 1994

Federal Register Citation: 59 FR 45975 (September 6, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerncd why the changes
are being made. These comments are not regulatory.

Under 38 CFR 1.17(c), when VA determines that a significant statistical
association exists between exposure to ionizing radiation and any
disease, 38 CFR 3.311 is amended to provide guidelines for the
establishment of service connection for that disease. Such a
determination is made after receiving the advice of the Veterans
Advisory Committee on Environmental Hazards (VACEH) based on its
evaluation of scientific or medical studies.

In a public meeting on April 22-23, 1993, the VACEH met in Washington,
DC. At that meeting, the VACEH reviewed studies by Modan, et al.,
\"Radiation-induced Head and Neck Tumors,\" [Lancet]{.underline},
February 23, 1974, pp. 277-279, and Ron, et al., \"Tumors of the Brain
and Nervous System After Radiotherapy in Childhood,\" [New England
Journal of Medicine]{.underline} 319: 1033-1039 (1988). Based on this
review, the VACEH recommended that tumors of the brain and central
nervous system, including, but not limited to, gliomas, astrocytomas,
and meningiomas, be added to the list of diseases VA will recognize as
being radiogenic. The Secretary accepted that recommendation and 38 CFR
3.311 (b)(2) is amended to include these conditions on the list of
radiogenic diseases for purposes of service-connected disability
compensation.

REGULATORY AMENDMENT

3-94-16

Regulations Affected: 38 CFR 3.202(c), 3.204(b) and (c), 3.205(a),
3.207(b), 3.209(a) and (b), 3.210(b) and (c), and 3.211(a) and (d). Also
amended are 38 CFR 3.205 (a)(4) and 3.210(b)(3)(i).

EFFECTIVE DATE OF REGULATION: September 8, 1994

Date Secretary Approved Regulation: July 14, 1994

Federal Register Citation: 59 FR 46337 (September 8, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

A number of recent developments, including military downsizing, judicial
review of VA decisions concerning benefit claims, and changes in due
process procedures, have had a major impact on the volume of claims
filed with the VA. The growing backlog of pending claims has created
additional delays for claimants, and in June 1993 VA established a Blue
Ribbon Panel on Claims Processing (the Panel) to develop recommendations
on eliminating this backlog and improving the timeliness of claims
processing.

One recommendation by the Panel was to revise the regulations to allow
the acceptance of photocopies of documents necessary to establish birth,
death, marriage or relationship. Current VA regulations provide, in
general, that, in order to establish birth, death, marriage or
relationship for VA purposes, a claimant must submit a copy of the
required document certified over the signature and official seal of the
person having custody of the record.

It has been our experience that many claimants are not certain of the
definition of a \"certified copy\" and often submit photocopies or
notarized copies, or fail to respond to a request for evidence because
of difficulty in obtaining certified copies. Such actions by claimants
result either in additional requests from VA for certified copies \--
further delaying the authorization of benefits \-- or in benefits to
which a claimant may be entitled being denied.

Accepting photocopies would reduce not only delays but also the
frustrations experienced by claimants who have difficulty obtaining
certified copies. The Panel was of the opinion that 38 CFR 3.216, which
requires claimants to furnish VA with the social security numbers for
all dependents on whose behalf benefits are claimed or received, and 38
U.S.C. 5317, which authorizes data exchanges between VA and other
federal agencies, are adequate safeguards against the possibility that
VA would erroneously award benefits based upon acceptance of altered
photocopies. Additionally, VA would retain the option of requesting
certified documentation if not satisfied that the photocopies are
genuine or free from alteration.

The Secretary of Veterans Affairs has accepted this recommendation of
the Panel, and we have amended 38 CFR 3.202(c), 3.204(b) and (c),
3.205(a), 3.207(b), 3.209(a) and (b), 3.210(b) and (c), and 3.211(a) and
(d) to implement the Secretary\'s decision. We have also amended §
3.205(a)(4) to remove the restrictions to the submission of an original
certificate of marriage, which are unnecessary in view of the
determination to accept a photocopy. Additionally, we have amended §
3.210(b)(3)(i) to reflect gender-neutral terminology in accordance with
38 CFR 1.13. In light of the Secretary\'s commitment to reduce the
backlog of pending claims and provide timely claims adjudication to all
claimants, and since this action cannot work to the detriment of any
claimant and is an agency rule of practice or procedure, we have elected
to publish this rule as an interim rule with request for comments rather
than a proposed rule.

This amendment is effective the date of publication of the interim rule.
The Secretary finds good cause for doing so since this amendment will
work to the advantage of those who will be affected without working to
the detriment of any other claimant. This decision is fully consistent
with VA\'s longstanding policy to administer the law under a broad
interpretation for the benefit of veterans and their dependents (38 CFR
3.102). Although this amendment is effective immediately, any comments
received will be carefully considered and another rule document will be
published, if indicated.

REGULATORY AMENDMENT

3-94-17

Regulation Affected: 38 CFR 3.385

EFFECTIVE DATE OF THE REGULATION: December 27, 1994

Date Secretary Approved Regulation: November 18, 1994

Federal Register Citation: 59 FR 60560 (November 25, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

In a recent decision the U.S. Court of Veterans Appeals noted that 38
CFR 3.385 is negative in both tone and application in that it states
when service-connection will not be established (See [Hensley v.
Derwinski]{.underline}, U.S. Vet. App. No. 90-1179). The Court also
noted that the regulation \"mixes apples and oranges\" by using criteria
for hearing loss to determine service-connection rather than degree of
disability.

We have corrected these shortcomings by amending 38 CFR 3.385 to
establish a standard for determining whether, for VA purposes, a
disability due to impaired hearing exists. If such a disability does
exist, whether or not it is service-connected is a separate
determination governed by the provisions of 38 CFR 3.303-3.344. These
changes will clearly limit the regulation to a definition of disability
due to impaired hearing, and no longer suggest that the rule governs
service-connection once the disability has been established. There is no
substantive change in the actual criteria.

The effective date of this amendment is December 27, 1994.

[Section 3.385.]{.underline} We have amended this section to state that
impaired hearing will be considered to be a disability for VA purposes
when the auditory threshold in any of the frequencies 500, 1000, 2000,
3000, 4000 Hertz is 40 decibels or greater; or when the auditory
thresholds for at least three of the frequencies 500, 1000, 2000, 3000
or 4000 Hertz are 26 decibels or greater; or when speech recognition
scores using the Maryland CNC Test are less than 94 percent.

REGULATORY AMENDMENT

3-94-18

Regulation Affected: 38 CFR 3.551(i)

EFFECTIVE DATE OF THE REGULATION: August 10, 1993

Date Secretary Approved Regulation: November 23, 1994

Federal Register Citation: 59 FR 62584 (December 6, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 8003 of Pub. L. 101-508 required VA to reduce the pension
benefits of any veteran having neither spouse nor child who receives
Medicaid-covered nursing home care to \$90 per month. The statutory
provisions expired September 30, 1992. Section 601 of Pub. L. 102-568
reestablished this requirement effective until September 30, 1997, and
required an identical reduction in death pension payments to surviving
spouses having no children who receive Medicaid-covered nursing home
care. Section 12005 of the Omnibus Budget Reconciliation Act of 1993,
Pub. L.103-66, further extends these statutory provisions with respect
to both veterans and their surviving spouses until September 30, 1998.
VA accordingly amends 38 CFR 3.551(i) to reflect this statutory change.

The effective date of this amendment is August 10, 1993.

REGULATORY AMENDMENT

3-94-19

Regulation Affected: 38 CFR 3.807(c)

EFFECTIVE DATE OF THE REGULATION: December 6, 1994

Date Secretary Approved Regulation: November 25, 1994

Federal Register Citation: 59 FR 62584-85 (December 6, 1994)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

The Survivors\' and Dependents\' Educational Assistance (DEA) Program,
established under 38 U.S.C. Chapter 35, authorizes monetary educational
benefits to a qualifying spouse or child, or surviving spouse or child,
of a veteran whose death or permanent and total disability was due to
military service.

38 CFR 3.807 provides that a spouse or child of a veteran has basic
eligibility for Chapter 35 benefits if the veteran has a permanent total
service-connected disability. The surviving spouse or child of a
deceased veteran has basic eligibility for Chapter 35 benefits if a
permanent total service-connected disability was in existence at the
date of the veteran\'s death or the veteran died of a service-connected
disability.

38 U.S.C. 1160 provides that where a veteran has suffered
service-connected loss of use of an eye, kidney, ear, hand, foot, or
lung and nonservice-connected loss of use of the paired eye, kidney,
ear, hand, foot, or lung, the veteran shall be paid compensation as if
the combination of disabilities were the result of service-connected
disability. 38 CFR 3.383 is the corresponding regulation.

In Precedent Opinion 75-90 dated July 18, 1990, the VA General Counsel
held that Chapter 35 eligibility is not established where a disability
of paired organs treated as if service-connected under 38 U.S.C. 1160
for purposes of disability compensation is evaluated as permanently and
totally disabling. The General Counsel reasoned that the threshold
criterion for DEA eligibility is total service-connected disability and
stated that this criterion is not satisfied where permanent and total
disability is based on the \"as if service-connected\" status
established under 38 U.S.C. 1160.

In a recent decision (Kimberlin v. Brown, No. 91-1972), however, the
United States Court of Veterans Appeals held that Chapter 35 entitlement
was established where the veteran was entitled to compensation for a
total disability, permanent in nature, regardless of whether entitlement
was based on loss of use of paired organs treated as if
service-connected under 38 U.S.C. 1160. The Court\'s opinion overrules
General Counsel Precedent Opinion 75-90 insofar as it relates to Chapter
35 eligibility.

Currently the regulation does not specifically address whether Chapter
35 eligibility may be established based on a combination of disabilities
treated as if service-connected under 38 CFR 3.383(a). We are amending
38 CFR 3.807 to reflect the Court\'s determination that such an
evaluation may be the basis for Chapter 35 eligibility.

[Section 3.807]{.underline}. Paragraph (c) has been amended to include
combinations of disabilities of paired organs or extremities treated as
if service-connected under 38 U.S.C. 1160 in the definition of
\"service-connected disability\" in 38 CFR 3.807(a).

REGULATORY AMENDMENT

3-95-1

Regulations Affected: 38 CFR 3.261(a)(38), 3.262(w), 3.272(s), and
3.275(h)

EFFECTIVE DATE OF THE REGULATION: October 15, 1990

Date Secretary Approved Regulation: December 22, 1994

Federal Register Citation: 60 FR 2522-23 (January 10, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Public Law 101-426, the Radiation Exposure Compensation Act (RECA), was
enacted by Congress to compensate individuals who may have suffered
adverse health effects from working in uranium mines or living downwind
of above-ground nuclear tests. Section 6(h) of that law provides that
RECA payments shall not be included as income or resources for purposes
of determining eligibility for benefits described in section
3803(c)(2)(C) of Title 31, United States Code. Title 31 U.S.C.
3803(c)(2)(C)(viii) lists benefits under chapters 11, 13 and 15 of Title
38, United States Code, which governs payment of VA benefits.

VA administers several income-based benefit programs under which a
claimant\'s countable income determines the rate of VA benefits payable.
Net worth may also affect eligibility. Those affected by RECA are death
compensation (38 U.S.C. chapter 11), Parents\' Dependency and Indemnity
Compensation (38 U.S.C. chapter 13) and the Improved Pension program (38
U.S.C. chapter 15). Other VA benefits which are income-based, notably
the prior pension programs known as the Section 306 and Old Law pension
programs, are no longer authorized under those chapters of 38 U.S.C.
listed in Public Law 101-426.

VA regulations at 38 CFR 3.271 state that payments of any kind from any
source shall be counted as income for purposes of the Improved Pension
program unless specifically excluded under 38 CFR 3.272. 38 CFR 3.261(a)
indicates whether various categories of income are included or excluded
when determining eligibility for Parents Dependency and Indemnity
Compensation or pension programs which were in effect prior to January
1, 1979. It also indicates whether various categories of income are
included or excluded when determining whether a parent qualifies as a
dependent parent for purposes of 38 U.S.C. chapter 11. 38 CFR 3.274
states that Improved Pension shall be denied or discontinued when the
corpus of a claimant\'s estate is such that it is reasonable that some
of the estate be used for the claimant\'s maintenance.

We are amending 38 CFR 3.261, 3.262, and 3.272 to show that RECA
payments are excludable from countable income for Parents\' Dependency
and Indemnity Compensation, the Improved Pension program, and in
determining whether a parent is dependent for purposes of 38 U.S.C.
chapter 11. We are amending 38 CFR 3.275 to show that RECA payments are
not to be included in computing an Improved Pension claimant\'s net
worth. Net worth is not a factor for Parents\' Dependency and Indemnity
Compensation. The purpose of this rule is to amend the regulations to be
consistent with the provisions of section 6 of Public Law 101-426.

[Section 3.261]{.underline}. Paragraph (a)(38) has been added to show
that RECA payments are countable income for Section 306 and Old Law
pension but not countable for purposes of Parents\' Dependency and
Indemnity Compensation and parents\' dependency determinations.

[Section 3.262]{.underline}. A new paragraph (w) has been added to show
that RECA payments are excluded as income for purposes of Parents\'
Dependency and Indemnity Compensation

[Section 3.272]{.underline}. A new paragraph (s) has been added to show
that RECA payments are excluded as income for purposes of Improved
Pension.

[Section 3.275]{.underline}. A new paragraph (h) has been added to show
that RECA payments are excluded from Improved Pension net worth
determinations.

REGULATORY AMENDMENT

3-95-2

Regulations Affected: 38 CFR 3.317; 3.500

EFFECTIVE DATE OF THE REGULATION: November 2, 1994

Date Secretary Approved Regulation: January 25, 1995

Federal Register Citation: 60 FR 6660-66 (February 3, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

On November 2, 1994, the President signed the \"Veterans Benefits
Improvements Act of 1994,\" Public Law 103-446. Title I of the statute,
the \"Persian Gulf War Veterans\' Benefits Act,\" authorizes the
Secretary of Veterans Affairs to compensate any Persian Gulf veteran
suffering from a chronic disability resulting from an undiagnosed
illness or combination of undiagnosed illnesses that became manifest
either during active duty in the Southwest Asia theater of operations
during the Persian Gulf war or to a degree of 10 percent or more within
a presumptive period thereafter, as determined by the Secretary. We have
added 38 CFR 3.317 to implement the authority granted by the statute.

Section 3.317 provides that VA shall pay compensation to Persian Gulf
veterans who exhibit objective indications of chronic disabilities which
result from an undiagnosed illness or combination of undiagnosed
illnesses, and which first became manifest either during active service
in the Southwest Asia theater of operations during the Persian Gulf War
or to a degree of 10 percent or more within 2 years after the date on
which a veteran last performed such service. A disability for which
service connection is established under § 3.317 will be considered
service connected for the purposes of all laws of the United States.

\"Objective indications of chronic disabilities\" include both \"signs\"
in the medical sense of objective evidence perceptible to an examining
physician and other, non-medical indicators that are capable of
independent verification. Non-medical indicators include, but are not
limited to such circumstance or events as time lost from work, evidence
that a veteran has sought medical treatment for his or her symptoms,
evidence affirming changes in the veteran\'s appearance, physical
abilities, or mental or emotional attitude, etc. Lay statements from
individuals who establish that they are able from personal experience to
make their observations or statements will be considered as evidence if
they support the conclusion that a disability exists. Objective
indications will assist in determining both the actual presence of a
disability and the extent of impairment caused by the disability.

Possible manifestations of undiagnosed illness are represented by the
presence of one or more signs or symptoms, 13 categories of which are
specified at § 3.317(b). These categories represent the wide range of
signs and symptoms that have been encountered in over 17,000 completed
and analyzed examinations of participants in VA\'s Persian Gulf Health
Registry, including those for whom a known clinical diagnosis has not
been established. The 13 categories, however, are not exclusive; other
signs and symptoms could legitimately qualify for consideration under §
3.317.

Payment under § 3.317 is prohibited for disabilities that through
medical history, physical examination, and laboratory tests are
determined to have resulted from any known clinical diagnosis. Once a
diagnosis is established, the condition falls outside the scope of §
3.317 but would receive consideration under other provisions of statute
or regulation governing service connection through direct incurrence,
aggravation, or presumption.

A disability is considered chronic if it has existed for 6 months.
Disabilities that are subject to intermittent periods of improvement and
worsening during a 6-month period are also considered chronic for the
purposes of this regulation. The 6-month period of chronicity is
measured from the first date on which the pertinent evidence establishes
that the signs and symptoms of the disability first became manifest.
Rating Boards will evaluate disabilities resulting from undiagnosed
illnesses using criteria from the Rating Schedule for a disease or
injury in which the functions affected, the anatomical localization, or
the symptomatology are similar.

In claims alleging incurrence during active service in the Southwest
Asia theater of operations, compensation under § 3.317 may not be paid
where there is affirmative evidence that the undiagnosed illness was not
incurred during that service. In claims alleging either incurrence of
the illness during active service in the Southwest Asia theater of
operations or manifestation during the 2-year presumptive period,
compensation under § 3.317 may not be paid where there is affirmative
evidence that the undiagnosed illness was caused by a supervening
condition or event that occurred between the veteran\'s latest departure
from the Persian Gulf and the onset of the illness. Compensation also
may not be paid where there is affirmative evidence that the illness is
the result of the veteran\'s own willful misconduct or the abuse of
alcohol or drugs.

For the purposes of this regulation a Persian Gulf veteran means a
veteran who served in the active military, naval, or air service in the
Southwest Asia theater of operations during the Persian Gulf War, which
by law runs from August 2, 1990, through a date yet to be determined by
law or Presidential proclamation (38 U.S.C. 101(33)). The Southwest Asia
theater of operations is defined according to Executive Order 12744 of
January 21, 1991, in which President Bush designated the combat zone of
the Persian Gulf War, and includes Iraq, Kuwait, Saudi Arabia, the
neutral zone between Iraq and Saudi Arabia, Bahrain, Qatar, the United
Arab Emirates, Oman, the Gulf of Aden, the Gulf of Oman, the Persian
Gulf, the Arabian Sea, the Red Sea, and the airspace above these
locations.

Situations may arise that will require termination or reduction of
benefits previously awarded under § 3.317. We, therefore, have amended §
3.500 to add paragraph (y) providing that reduction or termination of
benefits would be effective the last day of the month in which the
60-day period following notice of the final rating action expires. Final
rating action will not be taken prior to expiration of a 60-day
predetermination period, during which a payee will have an opportunity
to present evidence showing why benefits should not be reduced or
terminated. These procedures are consistent with the requirements of 38
CFR 3.103(b) regarding predetermination notice of adverse
determinations, and 38 CFR 3.105(d) and (e) governing severance and
reduction of compensation. Termination or reduction under § 3.500(y)
would not preclude continuation of payments if entitlement is
established under other sections of the statute or regulations governing
service connection for diseases or injuries incurred or aggravated
during active duty or that first appeared following service but within a
statutory or regulatory presumptive period.

[Section 3.317:]{.underline}

Paragraph (a) authorizes payments of compensation to any Persian Gulf
veteran who exhibits indications of chronic disability resulting from an
undiagnosed illness or combination of undiagnosed illnesses that became
manifest either during active duty in the Southwest Asia theater of
operations or to a degree of 10 percent or more within a two-year
presumptive period thereafter, and that by history, physical
examination, or laboratory tests cannot be attributed to any known
clinical diagnosis. The paragraph also defines \"objective indications
of chronic disability\"; defines the term \"chronic disability\";
provides that a chronic disability will be rated using criteria from the
Rating Schedule for a disease or injury in which the functions affected,
the anatomical localization, or the symptomatology are similar; and
provides that a disability for which compensation is payable under §
3.317 is considered service connected for the purposes of all laws of
the United States.

Paragraph (b) lists 13 categories of signs and symptoms that may be
manifestations of undiagnosed illness but cautions that the list is not
exclusive.

Paragraph (c) provides that compensation under § 3.317 shall not be paid
where there is affirmative evidence that the undiagnosed illness was not
incurred during service in the Southwest Asia theater of operations
during the Persian Gulf War; or where there is affirmative evidence that
the undiagnosed illness was caused by a supervening condition or event
that occurred between the veteran\'s latest departure from the Persian
Gulf and the onset of the illness; or where there is affirmative
evidence that the illness is the result of the veteran\'s own willful
misconduct or the abuse of alcohol or drugs.

Paragraph (d) defines the terms \"Persian Gulf veteran\" and \"Southwest
Asia theater of operations.\"

[Section 3.500:]{.underline} We have added paragraph (y) to provide for
termination of benefits paid under § 3.317 as of the last day of the
month in which 60 days following notice of the final rating action
expires.

REGULATORY AMENDMENT

3-95-3

Regulation Affected: 38 CFR 3.311

EFFECTIVE DATE OF THE REGULATION: September 1, 1994

Date Secretary Approved Regulation: February 10, 1995

Federal Register Citation: 60 FR 9627-28 (February 21, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

The Veterans\' Dioxin and Radiation Exposure Compensation Standards Act
(Public Law 98-542) required VA to develop regulations establishing
standards and criteria for adjudicating veterans\' claims for
service-connected compensation for diseases arising from exposure to
ionizing radiation during service. The law also required that the
Secretary, after receiving the advice of the Veterans Advisory Committee
on Environmental Hazards, determine which conditions could be considered
service-connected on the basis of exposure to ionizing radiation and
include those conditions in VA\'s regulations.

In September 1985 VA published 38 CFR 3.311b, since redesignated as
3.311, to implement the radiation provisions of Pub. L. 98-542. As
threshold requirements for entitlement to compensation under this
regulation, a veteran must have been exposed to ionizing radiation
during atmospheric testing of nuclear weapons, the occupation of
Hiroshima and Nagasaki during World War II, or through other activities
as claimed, and must have subsequently developed a radiogenic disease
within a specified time period. Conditions not specifically listed in
the regulation at 3.311(b)(2) as radiogenic diseases were excluded from
consideration.

On September 1, 1994, the United States Court of Appeals for the Federal
Circuit reversed the decision of the United States Court of Veterans
Appeals in [Combee v. Brown]{.underline}, No. 93-7107. The Federal
Circuit held that Public Law 98-542 did not authorize VA to establish an
exclusive list of radiogenic conditions for which a claimant might
establish entitlement to direct service connection under § 3.311. On
November 2, 1994, Public Law 103-446, the \"Veterans\' Benefits
Improvements Act of 1994, was signed into law. Section 501(b) of that
law amended 38 U.S.C. § 1113(b) to clarify that nothing contained in
Public Law 98-542 precludes a claimant from attempting to establish
direct service connection for a disability or disease based upon
exposure to ionizing radiation in service.

This amendment provides that if a claimant cites or submits competent
scientific or medical evidence that the claimed condition is a
radiogenic disease, the claim will be considered under the provisions of
§ 3.311. This is consistent with a decision by the U.S. Court of
Veterans Appeals that, where a determinative issue involves medical
causation, competent medical evidence indicating that the claim is
plausible or possible is required to establish that the claim is well
grounded. ([See]{.underline} [Grottveit v. Brown]{.underline} 5 Vet.
App. 91 (1993)) The amendment also deletes 3.311(h), which set out VA\'s
previous policy that the list of radiogenic diseases is an exclusive
list. That policy has been superseded by the Court of Appeals\' decision
in [Combee]{.underline} and section 501(b) of Public Law 103-446.

We have made technical changes throughout § 3.311 to conform with the
Court of Appeals\' decision and Public Law 103-446, including a revision
in § 3.311(b)(2) to define the term \"radiogenic disease\" for the
purposes of this regulation as a disease which may be induced by
ionizing radiation. We have also replaced all references to \"Chief
Medical Director\" and \"Chief Benefits Director\" with \"Under
Secretary for Health\" and \"Under Secretary for Benefits\"
respectively, which are the correct statutory titles.

[Section 3.311]{.underline}. We have amended § 3.311(b) to define
\"radiogenic disease\" and to provide that

VA shall consider a claim involving a disease not on the regulatory list
of radiogenic diseases where the claimant has cited or submitted
competent medical or scientific evidence showing that the claimed
condition is a radiogenic disease. We have made necessary technical
changes and have deleted § 3.311(h). We also have changed the words
\"Chief Medical Director\" and \"Chief Benefits Director\" to \"Under
Secretary for Health\" and \"Under Secretary for Benefits,\"
respectively.

REGULATORY AMENDMENT

3-95-4

Regulation Affected: 38 CFR 3.500

EFFECTIVE DATE OF THE REGULATION: February 21, 1995

Date Secretary Approved Regulation: February 10, 1995

Federal Register Citation: 60 FR 9626-9627 (February 21, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

5 U.S.C. 8116(a) prohibits a federal employee who is receiving benefits
for a work-related injury or death under FECA from receiving benefits
from VA for the same injury or death.

Currently the adjudication regulations at 38 CFR 3.500(e) specify that
the effective date for reduction of VA benefits based on an election of
FECA benefits will be the end of the month following the month in which
notice is received from the Department of Labor\'s Office of Workers\'
Compensation Programs that a VA payee has elected FECA benefits. The
regulations do not prohibit concurrent payment of VA and FECA benefits.
Thus, in those cases where FECA payment is authorized prior to a proper
election and discontinuance of VA benefits, a potential for duplicate
payment exists.

[Section 3.500.]{.underline} VA has amended 38 CFR 3.500(e) to provide
that the effective date for reduction or discontinuance of VA benefits
in cases where FECA benefits are elected for an injury or death which is
the basis of VA payment will be the day preceding the date on which the
FECA award became effective.

REGULATORY AMENDMENT

3-95-5

Regulations Affected: 38 CFR 3.350(i)

EFFECTIVE DATE OF THE REGULATION: March 9, 1995

Date Secretary Approved Regulation: November 23, 1994

Federal Register Citation: 60 FR 12886 (March 9, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Special monthly compensation is a benefit established by Congress to be
paid for specified disabilities independent of any other compensation
authorized by Title 38 U.S.C. 1114(a) - (j). 38 U.S.C. 1114(s) provides
for payment of special monthly compensation for a veteran who has a
service-connected disability rated as total and (1) has additional
service-connected disability or disabilities independently ratable at 60
percent or more, or, (2) is permanently housebound by reason of a
service-connected disability or disabilities. 38 CFR 3.350(i), the
implementing regulation, provided that the special monthly compensation
rate under 38 U.S.C. 1114(s) is payable where the veteran has a single
service-connected disability rated as 100 percent \"without resort to
individual unemployability\" and meets the other criteria.

In a precedent opinion dated February 2, 1994 (OGC Prec 2-94), VA\'s
General Counsel held that the plain and unambiguous language of 38
U.S.C. 1114(s) does not restrict the nature of total ratings that may
serve as a basis for entitlement to the rate of special monthly
compensation which section 1114(s) authorizes. Based on that holding,
the General Counsel found that the portion of 38 CFR 3.350(i) which
precludes eligibility if the service-connected disability rated as total
is so rated due to individual unemployability is an unauthorized
restriction.

The General Counsel has recommended that the regulation be revised. We
are, therefore, revising the text of 38 CFR 3.350(i) to remove the
unauthorized restriction.

[Section 3.350]{.underline}. The introductory text of paragraph (i) is
amended by removing the phrase \"without resort to individual
unemployability.\"

REGULATORY AMENDMENT

3-95-6

Regulations Affected: 38 CFR 3.358

EFFECTIVE DATE OF THE REGULATION: November 25, 1991

Date Secretary Approved Regulation: February 23, 1995

Federal Register Citation: 60 FR 14222-3 (March 16, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

38 U.S.C. 1151 provides for the payment of disability or dependency and
indemnity compensation for additional disability or death resulting from
an injury or aggravation of an injury suffered as the result of VA
hospitalization, medical or surgical treatment, examination, or pursuit
of a course of vocational rehabilitation under 38 U.S.C. ch. 31. VA had
long interpreted the statute to require a showing of fault on the part
of VA or the occurrence of an accident to establish entitlement to §
1151 compensation for adverse consequences of VA medical treatment. See
38 CFR 3.358(c)(3) (1994). The Supreme Court, however, recently affirmed
a lower court ruling that invalidated VA\'s fault-or-accident
interpretation.

In deciding Brown v. Gardner, U.S. Sup. Ct. No. 93-1128 (Dec. 12, 1994),
the Court held that the fault-or-accident requirement in 38 CFR
3.358(c)(3) was inconsistent with the plain language of the statute and
that no fault requirement was implicit in the statute.

Although the Supreme Court found that the statutory language simply
requires a causal connection between an injury or aggravation of an
injury and VA hospitalization, medical or surgical treatment,
examination, or vocational rehabilitation, it also indicated that not
every additional disability resulting from an injury or aggravation so
connected was compensable under § 1151. The Court noted that it did not
intend to exclude application of the doctrine volenti non fit injuria
(which is sometimes loosely translated as \"assumption of the risk\" but
more precisely refers to the doctrine of consent). Moreover, the Court
provided an example of disabilities that, although causally connected to
VA treatment, are not compensable under § 1151. In this regard, the
Court stated, \"\[i\]t would be unreasonable, for example, to believe
that Congress intended to compensate veterans for the necessary
consequences of treatment to which they consented (i.e., compensating a
veteran who consents to the amputation of a gangrenous limb for the loss
of the limb).\"

Under the authority granted in 38 U.S.C. 505, the Secretary of Veterans
Affairs requested an opinion from the U.S. Attorney General on precisely
what the Supreme Court meant by its statement regarding application of
the doctrine volenti non fit injuria. The response, from the Department
of Justice\'s Office of Legal Counsel, was that the Court construed §
1151 to exclude from coverage only those injuries that are the certain,
or perhaps the very nearly certain, result of proper medical treatment.

In this document VA is revising 38 CFR 3.358(c)(3) to reflect the
Supreme Court\'s holding that 38 U.S.C. 1151 permits compensation for
all but the necessary consequences of properly administered VA medical
or surgical treatment or examination to which a veteran consented.
\"Necessary consequences\" is the term the Supreme Court used in its
example of what Congress could not reasonably have intended to cover
with § 1151. We define \"necessary consequences\" as those consequences
certain or intended to result from treatment or examination. We consider
this interpretation of the statute to be consistent with the Supreme
Court\'s opinion.

Consistent with our interpretation of the Supreme Court\'s opinion, this
rule also provides that whether results were either certain or intended
is to be determined in relation to the examination or treatment actually
administered. Consequences otherwise certain or intended to result from
a treatment will not be considered uncertain or unintended solely
because it had not been determined at the time consent was given whether
that treatment would in fact be administered. For example, consider a
case in which a veteran is about to undergo exploratory surgery and,
depending on the findings, would undergo one of two possible additional
procedures, each of which has distinct consequences that are certain or
intended to result. Under these circumstances it is not known before the
exploratory surgery which additional procedure will actually be
performed. However, if the veteran consents both to the exploratory
surgery and whichever procedure ultimately is determined to be required,
the certainty of consequences is to be determined in relation to the
consented-to procedure or procedures actually performed.

Also, as reflected in the text of the rule, we have concluded that when
the Supreme Court stated that compensation should not be payable for the
necessary consequences of treatment to which the veteran \"consented,\"
the Court meant both express and implied consent. This is consistent
with the common meaning of the term \"consent\" and the Court did not
indicate that any other meaning should be applied.

This interim final rule, unlike the regulatory provision it replaces,
expressly includes the consequences of VA examinations. The statute
covers injuries or aggravation of injuries resulting from examination,
as well as from medical or surgical treatment. Thus, the rule\'s
inclusion of examination consequences is necessary to reflect completely
the provisions of the statute.

We also are deleting other references in the section to the invalidated
fault requirement. We are eliminating paragraph (c)(4), which requires
that VA be at fault to establish entitlement for claims based on being
transported while in hospitalized status. Such claims will now be
adjudicated under the standard applicable to hospitalization, treatment,
or examination. We are also making corresponding changes to paragraph
(c)(7) to remove the fault requirement for claims based on nursing home
care.

[Section 3.358.]{.underline} Paragraph (c)(3) has been amended as
described above. Paragraph (c)(4) has been eliminated as described
above. Paragraphs (c)(5), (c)(6), and (c)(7) have been redesignated as
paragraphs (c)(4), (c)(5), and (c)(6). Redesignated paragraph (c)(6) has
been amended as described above.

> REGULATORY AMENDMENT

3-95-7

Regulations Affected: 38 CFR 2.67a, 38 CFR 3.5(c), 38 CFR 3.8, 38 CFR
3.100, 38 CFR 3.106, 38 CFR 3.251(a)(3), 38 CFR 3.261(a)(39), 38 CFR
3.262(x), 38 CFR 3.272(t), 38 CFR 3.400(s), 38 CFR 3.702(d), 38 CFR
3.1600

EFFECTIVE DATE OF THE REGULATION: November 2, 1994, except for the
provisions removing the requirement to pay certain benefits in
Philippine pesos (38 CFR §§ 2.67a, 3.8, 3.100(b), 3.251(a)(3), and
3.1600) which are effective January 1, 1995.

Date Secretary Approved Regulation: March 31, 1995

Federal Register Citation: 60 FR 18354-56 (April 11, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

On November 2, 1994, the Veterans\' Benefits Improvements Act of 1994
was signed into law. Formerly, no person in receipt of DIC could elect
to receive any other benefit based on the same death. Section 111 of the
Veterans\' Benefits Improvements Act of 1994, Public Law 103-446,
amended 38 U.S.C. 1317 to allow a surviving spouse in receipt of DIC to
elect death pension instead of such compensation. VA is amending 38 CFR
3.5(c) and 3.702(d) to conform with this new statutory provision. We
have also made a nonsubstantive change in § 3.702(d) to clarify when an
election of DIC is final.

Under the provisions of 38 U.S.C. 5306 any person can renounce a benefit
to which he or she is entitled. Until recently any new application filed
thereafter was treated as an original application. Section 503 of Public
Law 103-446 amended 38 U.S.C. 5306 by adding a new subsection which
provides that a new application for pension or parents\' DIC filed
within one year after renouncement of that benefit shall not be treated
as an original application but rather that any benefits due will be
payable as if the renouncement has not occurred. VA is amending 38 CFR
§§ 3.106 and 3.400(s) to conform to this new statutory requirement.

All income is countable when VA determines entitlement to income-based
benefits unless specifically excluded by law. Section 506 of Public Law
103-446 provides a new exception to countable income if cash, stock,
land, or other interests are received by an individual from a Native
Corporation under the Alaska Native Claims Settlement Act (43 U.S.C.
1601 et seq.). VA is amending 38 CFR §§ 3.261, 3.262 and 3.272 to
conform to this new statutory requirement.

Section 507 of Public Law 103-446 amended 38 U.S.C. 107 to eliminate the
requirement that compensation, DIC, or burial allowance based on certain
Philippine service deemed not to be active service for other purposes be
paid in Philippine pesos. VA is amending 38 CFR §§ 3.8, 3.251(a)(3), and
3.1600 to conform to this statutory revision and removing §§ 2.67a and
3.100(b).

[Section 2.67a]{.underline}. This section is removed. Calculation of the
annual income limitation in Philippine pesos is no longer required so a
delegation for that purpose is unnecessary.

[Section 3.5]{.underline}. Paragraph (c) has been amended to provide
that a surviving spouse who is receiving dependency and indemnity
compensation may elect to receive death pension.

[Section 3.8]{.underline}. This section has been amended to provide that
benefits based on certain Philippine service deemed not to be active
service for other purposes be payable at the rate of \$.50 for each
dollar authorized. Previously, these benefits were payable only in
Philippine pesos.

[Section 3.100]{.underline}. Paragraph (b) is removed. Calculation of
the annual income limitation in Philippine pesos is no longer required
so a delegation for that purpose is unnecessary. Paragraph 3.100(c) is
redesignated as 3.100(b).

[Section 3.106]{.underline}. Paragraphs (c) and (d) are redesignated as
paragraphs (d) and (e) respectively. A new paragraph (c) is added to
provide that an application for pension or parents\' dependency and
indemnity compensation filed within one year after VA receives a
renouncement of that benefit shall not be treated as an original
application and benefits will be payable as if the renouncement had not
occurred.

[Section 3.251]{.underline}. Paragraph (a)(3) is amended to provide that
the income limitation will be \$.50 on the dollar for claims based on
service in the Commonwealth Army of the Philippines, or as a guerrilla
or as a Philippine Scout under section 14, Public Law 190, 79th
Congress.

[Section 3.261]{.underline}. Paragraph (a)(39) is added to provide an
income exclusion for certain income from a Native Corporation under the
Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.).

[Section 3.262]{.underline}. Paragraph (x) is added to provide an income
exclusion for certain income from a Native Corporation under the Alaska
Native Claims Settlement Act (43 U.S.C. 1601 et seq.).

[Section 3.272]{.underline}. Paragraph (t) is added to provide an income
exclusion for certain income from a Native Corporation under the Alaska
Native Claims Settlement Act (43 U.S.C. 1601 et seq.).

[Section 3.400]{.underline}. Paragraph (s) is amended to show that an
application for pension or parents\' dependency and indemnity
compensation filed within one year after VA receives a renouncement of
that benefit shall not be treated as an original application

[Section 3.702]{.underline}. Paragraph (d) is revised to permit a
surviving spouse in receipt of dependency and indemnity compensation to
elect death pension.

[Section 3.1600]{.underline}. Paragraphs (a), (b), and (f), are amended
to delete references to payment in Philippine pesos. Effective January
1, 1995, benefits formerly payable in Philippine pesos are payable in
U.S. dollars at the rate of \$.50 on the dollar.

> REGULATORY AMENDMENT

3-95-8

Regulation Affected: 38 CFR 3.812(f)

EFFECTIVE DATE OF THE REGULATION: April 27, 1995

Date Secretary Approved Regulation: April 7, 1995

Federal Register Citation: 60 FR 20642-43 (April 27, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

The Omnibus Budget Reconciliation Act of 1981 amended title 42, United
States Code, to terminate or reduce payment of the Social Security
child\'s insurance benefit and to terminate the mother\'s benefit at the
point at which the youngest child reached age 16. Previously, the
mother\'s benefit had terminated when the youngest child reached age 18.
Section 156 of Pub. L. 97-377, which established a program known as the
Restored Entitlement Program for Survivors or REPS, in effect, restored
such terminated or reduced benefits for surviving spouses and children
of veterans who died on active duty prior to August 13, 1981, or who
died as a result of service-connected disability incurred or aggravated
prior to that date.

Under the authority granted in section 156, VA issued regulations,
codified at 38 CFR 3.812, which implemented the statute. Paragraph (f)
of section 3.812 provided that benefits could be paid from the first day
of the month during which the claimant first became eligible, if
application was filed within 11 months following that month. This
paragraph was amended on June 28, 1993, to require that the application
be filed within 6 months of the month during which the claimant first
became eligible in order for benefits to be payable from the first day
of the month in which eligibility arose.

The United States Court of Veterans Appeals struck down subsections (2)
and (3) of 38 CFR 3.812(f), which specified the time limits for filing
an application for REPS benefits, in the case of [Cole v.
Derwinski]{.underline}, 2 Vet. App. 400 (1992), [aff\'d]{.underline}, 35
F.3d 551 (Fed. Cir. 1994), involving a claim for the REPS mother\'s
benefit. The court relied on its [Cole]{.underline} decision in [Skinner
v. Brown]{.underline}, 4 Vet. App. 141 (1993), [aff\'d]{.underline}, 27
F.3d 1571 (Fed. Cir. 1994), a case involving a claim for the REPS
child\'s benefit.

In affirming the Court of Veterans Appeals decision, the United States
Court of Appeals for the Federal Circuit held that the VA regulation
denying retroactive payment to claimants who failed to file a REPS claim
within 6 months of the month entitlement arose was contrary to the plain
meaning of the REPS statute, which imposes no time restrictions on
filing, and was therefore invalid. Paragraph (f) of 38 CFR 3.812 is
therefore amended to show that there is no time limit for filing a claim
for REPS benefits. The only restriction on payment to an otherwise
eligible claimant is that no payment can be made for any period prior to
January 1, 1983, the effective date set by the REPS statute.

[Section 3.812]{.underline}. Paragraph (f) is amended to show that there
is no time limit for filing a REPS claim.

> REGULATORY AMENDMENT

3-95-9

Regulations Affected: 38 CFR 3.1 and 38 CFR 3.301

EFFECTIVE DATE OF THE REGULATION: November 1, 1990

Date Secretary Approved Regulation: May 12, 1995

Federal Register Citation: 60 FR 27407-27408.

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 8052 of the Omnibus Budget Reconciliation Act of 1990 (OBRA
1990), Pub. L. 101-508, amended 38 U.S.C. 105(a), section 110
(recodified as 1110) and section 331 (recodified as 1131) to provide
that injuries or diseases resulting from the abuse of alcohol or drugs
by the person on whose service benefits are claimed will not be
considered incurred in line of duty and thus are not compensable by VA
as service-connected disabilities.

VA has amended its adjudication regulations at 38 CFR 3.1(m) and 3.301
to provide that injuries or diseases incurred or aggravated during
service as a result of the abuse of alcohol or drugs will not be
considered incurred or aggravated in line of duty for purposes of
service connection. We have also defined drug and alcohol abuse for
purposes of this implementing rule and have specified that the
provisions concerning abuse of alcohol or drugs pertain only to those
claims filed after October 31, 1990, the effective date of OBRA 1990.

[Section 3.1(m)]{.underline}. We have amended 38 CFR, section 3.1(m) to
show that \"in line of duty\" excludes injury or disease that is a
result of a veteran\'s own willful misconduct or due to abuse of alcohol
or drugs.

[Section 3.301(a)]{.underline}. We have similarly amended this section
to state that direct service connection may be granted only when
disability or cause of death was incurred in line of duty and not a
result of a veteran\'s own willful misconduct or abuse of alcohol or
drugs.

[Section 3.301(c)]{.underline}. We have amended the title of this
section to read as follows: \"Specific applications; willful
misconduct.\" Paragraph (3) has been amended to add a specific reference
to claims for service connection where disability is a result of abuse
of alcohol or drugs, specifying that this reference is found in the new
paragraph 3.301(d).

[Section 3.301(d)]{.underline}. This paragraph has been added to specify
that an injury or disease incurred during active service shall not be
considered to have been incurred in line of duty if such disease or
injury was a result of abuse of alcohol or drugs by the person on whose
service such benefits are claimed. It also defines alcohol and drug
abuse.

> REGULATORY AMENDMENT

3-95-10

Regulations Affected: 38 CFR 3.157(b)(2), 3.326(d), 3.327(b)(1),
3.352(b)(1)

EFFECTIVE DATE OF THE REGULATION: November 2, 1994

Date Secretary Approved Regulation: May 17, 1995

Federal Register Citation: 60 FR 27409 (May 24, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

On November 2, 1994, the Veterans\' Benefits Improvements Act of 1994
was signed into law. Section 301 of that statute created 38 U.S.C. 5125,
which authorizes the Secretary of Veterans Affairs to accept the report
of a private physician\'s examination that is otherwise adequate for
rating purposes to establish entitlement to compensation or pension
benefits. This document amends 38 CFR 3.157, 3.326, 3.327, and 3.352 in
order to reflect that statutory authority.

[Section 3.157]{.underline}. Paragraph (b)(2) is amended to remove the
requirement that a private physician\'s statement be confirmed by a VA
examination prior to granting service connection for a disability.

[Section 3.326]{.underline}. Paragraph (d) is amended to show that a
private physician\'s statement may be accepted for rating any
compensation or pension claim as long as it is adequate for rating
purposes.

[Section 3.327]{.underline}. Paragraph (b)(1) is amended to remove the
requirement that at least one VA examination be made in every case in
which compensation benefits are awarded.

[Section 3.352]{.underline}. Paragraph (b)(1) is amended to remove the
requirement that a veteran\'s need for the special aid and attendance
benefit under 38 U.S.C. 1114(r) must be determined by a Department of
Veterans Affairs physician.

REGULATORY AMENDMENT

3-95-11

Regulation Affected: 38 CFR 3.309

EFFECTIVE DATE OF THE REGULATION: November 2, 1994

Date Secretary Approved Regulation: March 27, 1995

Federal Register Citation: 60 FR 31250-31252.

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

The Radiation-Exposed Veterans Compensation Act of 1988, Pub. L.
100-321, which was enacted May 20, 1988, established a presumption of
service connection for specific radiogenic diseases arising in veterans
who had been present at the occupation of Hiroshima or Nagasaki, who had
potentially been exposed to ionizing radiation as prisoners of war in
Japan during World War II, or who had participated onsite in a test
involving the atmospheric detonation of a nuclear device.

On June 21, 1989, VA published regulations at 38 CFR 3.309 to implement
the provisions of Pub. L. 100-321. The introductory language of the
statute had indicated that it was to apply to veterans \"who
participated in atmospheric or underwater nuclear tests as part of the
United States nuclear weapons testing program.\" In formulating the
regulations, therefore, VA defined radiation risk activity as including
onsite participation in a test involving the atmospheric detonation of a
nuclear device by the United States. The effect of that rulemaking was
to exclude those veterans exposed to ionizing radiation during
atmospheric nuclear testing by governments other than the United States
from the presumption of service connection.

The Secretary determined that this rule should be revised to allow
consideration of service connection on the same presumptive basis for
these veterans as for veterans exposed to ionizing radiation due to
atmospheric nuclear detonations conducted as a part of the U.S. testing
program. Accordingly, on September 8, 1994, VA published a proposal in
the [Federal Register]{.underline} (59 FR 46379-46380) to amend its
adjudication regulations at 38 CFR 3.309(d)(3) to extend the presumption
that specified diseases are the result of in-service exposure to
ionizing radiation to veterans who were present at atmospheric nuclear
tests conducted by any government allied with the United States during
World War II.

On November 2, 1994, the President signed Pub. L. 103-446, the
Veterans\' Benefits Improvements Act. Section 501(a) of that law
clarified Congressional intent on this issue by amending 38 U. S. C.
1112(c)(3)(B) to define the term \"radiation-risk activity\" to include
onsite participation in a test involving the atmospheric detonation of a
nuclear device \"without regard to whether the nation conducting the
test was the United States or another nation.\"

The current regulatory amendment incorporates the legislation enacted
after the proposed rule was published and deletes the reference to
allied governments.

[Section 3.309(d)(3)(ii)(A).]{.underline} Revised to define \"radiation
risk activity\" as including onsite participation in a test involving
the atmospheric detonation of a nuclear device without regard to the
nation conducting the test by removing the restriction that such tests
must have been detonated by the United States.

[Section 3.309(d)(3)(v).]{.underline} Revised to show that the specific
operational periods shown apply to U. S. tests only.

> REGULATORY AMENDMENT

3-95-12

Regulations Affected: 38 CFR 3.256 and 3.277

EFFECTIVE DATE OF THE REGULATION: October 4, 1995

Date Secretary Approved Regulation: September 7, 1995

Federal Register Citation: 60 FR 51921-22 (October 4, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Public Law 103-271, the Board of Veterans\' Appeals Administrative
Procedures Improvement Act of 1994, amended 38 U.S.C. 1315 and 1506 to
give the Secretary of Veterans Affairs discretionary authority to
require submission of income and resource reports by recipients of
income-based benefits. This amendment outlines the manner in which the
Secretary will exercise this discretionary authority to determine which
claimants and beneficiaries must complete an EVR.

The rule requires an EVR in three instances. First, VA will require
submission of an EVR by any beneficiary whose Social Security number, or
whose spouse\'s Social Security number, has not been verified by the
Social Security Administration (SSA). A Social Security number is
considered to be verified when the identifying information associated
with that number in VA records (e.g., name, date of birth, sex) matches
identifying information associated with the number in SSA records.

VA will also require beneficiaries who receive income other than Social
Security to submit an EVR. These beneficiaries must submit an EVR
because VA is unable to verify the receipt and amount of other types of
income with the same accuracy that it can verify Social Security income.

Even if all relevant Social Security numbers have been verified and
neither the beneficiary nor the beneficiary\'s spouse received income
other than Social Security, VA will still require completion of an EVR
if it determines that submission of an EVR is necessary to preserve
program integrity. The phrase \"necessary to preserve program
integrity\" applies when it is necessary for VA, or an agency with
oversight authority over VA, to verify that EVR-exempt beneficiaries are
accurately reporting changes in entitlement factors.

Although beneficiaries will be required to file an EVR only if requested
to do so by VA, they have an affirmative obligation to advise VA
promptly of changes in factors such as income, marital status, etc.
which affect entitlement. This affirmative obligation appears at §§
3.256(a) and 3.277(b) of the amendments.

These amendments do not change any substantive rules concerning
eligibility for VA benefits, alter the recipient\'s obligation to report
changes that may affect the rate of VA benefits payable, or limit VA\'s
authority to require evidence of entitlement factors in an individual
case. The amendments merely set out VA\'s policy on requiring completion
of an EVR.

[Section 3.256.]{.underline} Revised to set out eligibility reporting
requirements for parents\' DIC, section 306, and old law pension
recipients and claimants.

[Section 3.277.]{.underline} Revised to set out eligibility reporting
requirements for improved pension recipients and claimants.

> REGULATORY AMENDMENT

3-95-13

Regulations Affected: 38 CFR 3.326

EFFECTIVE DATE OF THE REGULATION: October 11, 1995

Date Secretary Approved Regulation: July 31, 1995

Federal Register Citation: 60 FR 52863-64 (October 11, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

For many years VA regulations provided that a compensation claim could
not be rated without a current VA examination, or a report deemed to be
the equivalent of a VA examination. In general, hospital reports
(government or private) were deemed to be VA examinations if otherwise
adequate for rating purposes, but private physicians\' reports were not.

On July 14, 1994, VA published a final rule in the Federal Register (59
FR 35851) amending 38 CFR 3.326 to permit acceptance of a private
physician\'s statement for the purpose of rating claims for increased
compensation due to the increased severity of service-connected
disabilities. A private physician\'s statement, however, was still not
acceptable for rating an original compensation claim.

On November 2, 1994, the Veterans\' Benefits Improvements Act of 1994,
Public Law 103-446, was signed into law. Section 301 of Public Law
103-446 granted the Secretary of Veterans Affairs discretionary
authority to accept the report of a private physician\'s examination
that is otherwise adequate for rating purposes to establish entitlement
to any compensation or pension benefit. A final rule enabling the
Secretary to exercise that discretionary authority was published on May
24, 1995 in the Federal Register (60 FR 27409). That final rule amended
38 CFR 3.326(d) as well as 3.157, 3.327, and 3.352.

Previously, paragraph (a) of § 3.326 indicated that a VA examination
would be authorized where the reasonable probability of a valid claim
was indicated in any compensation or pension claim filed by a veteran,
surviving spouse, or parent, whether an original or reopened claim or a
claim for increase. This document revises paragraph (a) to state that a
VA examination will be authorized where there is a \"well-grounded
claim\" for disability compensation or pension but where the medical
evidence accompanying the claim is not adequate for rating purposes. We
believe this will not cause a substantial change in the criteria for
authorizing VA examinations; however, this change is made to more
accurately reflect statutory language and caselaw requirements
concerning such VA examinations.

The Court of Veterans Appeals has held that scheduling a VA examination
may be required as part of VA\'s duty to assist the claimant under 38
U.S.C. 5107(a), and that the duty to assist attaches when a claim is
well-grounded, i.e., when the claim is plausible, meritorious on its
own, or capable of substantiation. See, e.g., [Betties v.
Brown]{.underline}, 6 Vet. App. 333, 336 (1993).

The amendments made by this document do not affect the provisions
already in place that require former prisoners of war to be offered a
complete examination at a VA hospital or outpatient clinic prior to any
rating action denying monetary benefits.

Also, nonsubstantive changes are made to delete provisions that no
longer apply and to simplify and clarify other provisions.

[Section 3.326.]{.underline} Revised to provide that a VA examination
will be authorized where there is a well-grounded claim for disability
compensation or pension but the medical evidence accompanying the claim
is not adequate for rating purposes.

> REGULATORY AMENDMENT

3-95-14

Regulations Affected: 38 CFR 3.55(a)(2) and 3.400

EFFECTIVE DATE OF THE REGULATION: October 11, 1995

Date Secretary Approved Regulation: September 11, 1995

Federal Register Citation: 60 FR 52862-63 (October 11, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

A surviving spouse of a veteran must be unmarried to receive VA
benefits. The law regarding the eligibility for benefits of a surviving
spouse of a veteran who remarries after the veteran\'s death and whose
remarriage later terminates has changed several times in recent years.

Before November 1, 1990, 38 U.S.C. 103(d)(2) provided that the
remarriage of a surviving spouse of a veteran would not bar benefits if
the remarriage was terminated by death or dissolved by a court with
basic authority to render divorce decrees, unless VA determined that the
divorce was secured through fraud by the surviving spouse or collusion.

The Omnibus Budget Reconciliation Act of 1990 (OBRA), Public Law
101-508, deleted 38 U.S.C. 103(d)(2). The effect of this change was to
deny benefits to those filing claims on or after November 1, 1990, who
had remarried at any time after the death of the veteran.

The Veterans\' Benefits Programs Improvement Act of 1991, Public Law
102-86, provided that the 1990 OBRA amendments would not apply to any
person who met the statutory definition of a surviving spouse on October
31, 1990, unless after that date the individual married or lived with
another person and held himself or herself out openly to the public as
that person\'s spouse.

The Veteran\'s Benefits Act of 1992, Public Law 102-568, provided in
section 103 that the 1990 OBRA amendment would not apply to any case in
which a legal proceeding that terminated an existing marital
relationship was commenced before November 1, 1990, by an individual
who, but for that marital relationship, would be considered the
surviving spouse of a veteran.

VA regulations pertaining to reinstatement of benefits eligibility of a
surviving spouse based upon terminated marital relationships appear at
38 U.S.C. 3.55(a). Previously, subsection (a) included the following
provisions:

> \(2\) On or after January 1, 1971, remarriage of a surviving spouse
> terminated prior to November 1, 1990, or terminated by legal
> proceedings commenced prior to November 1, 1990, shall not bar the
> furnishing of benefits to such surviving spouse provided that the
> marriage:
>
> \* \* \*
>
> \(ii\) Has been dissolved by a court with basic authority to render
> divorce decrees unless the Department of Veterans Affairs determines
> that the divorce was secured through fraud by the surviving spouse or
> through collusion.
>
> \* \* \*

Since 38 CFR 3.55(a)(2) previously did not provide that the legal
proceedings which result in termination of the remarriage must have been
commenced by the individual seeking benefits as a veteran\'s surviving
spouse, it is now amended to conform with section 103 of Public Law
102-568. We are also making nonsubstantive amendments to 38 CFR 3.400 in
order to update cross-references and authority citations.

[Section 3.55(a)(2).]{.underline} Amended to make it clear that where a
surviving spouse claimant seeks reinstatement of benefits on the basis
of legal proceedings terminating a remarriage, the legal proceedings
must have been initiated by the surviving spouse claimant

[Section 3.400.]{.underline} Amended to update various cross references
and authority citations.

REGULATORY AMENDMENT

3-95-15

REGULATION AFFECTED: 38 CFR 3.311(b)(2)

EFFECTIVE DATE OF REGULATION: October 13, 1995

Date Secretary Approved Regulation: May 17, 1995

Federal Register Citation: 59 FR 53276-77, (October 13, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Under 38 CFR 1.17(c), when VA determines that a significant statistical
association exists between exposure to ionizing radiation and any
disease, 38 CFR 3.311 is amended to provide guidelines for the
establishment of service connection for that disease. This determination
is made by the Secretary of Veterans Affairs after receiving the advice
of the Veterans\' Advisory Committee on Environmental Hazards (VACEH)
based on its evaluation of scientific and medical studies.

In a public meeting on October 28-29, 1993, the VACEH met in Washington,
DC and reviewed 53 medical and scientific studies having to do with
health effects of radiation exposure. Based on that review, VACEH
recommended that VA add lymphomas other than Hodgkin\'s disease and
rectal cancer to the list of diseases recognized by VA as being
radiogenic. The Secretary accepted that recommendation and the proposed
amendment was published in the [Federal Register]{.underline} on
November 25, 1994. The appropriate comment period was observed and 38
CFR 3.311(b)(2) is now amended to add lymphomas other than Hodgkin\'s
disease and rectal cancer to the list of radiogenic diseases This
amendment relieves claimants suffering from these conditions from having
to establish that they may be induced by ionizing radiation.

[Section 3.311(b)(2)]{.underline}. Amended to add cancer of the rectum
and lymphomas other than Hodgkin\'s disease to the list of diseases VA
will recognize as radiogenic for purposes of service connection based on
exposure to ionizing radiation.

REGULATORY AMENDMENT

3-95-16

Regulation Affected: 38 CFR 3.353

EFFECTIVE DATE OF THE REGULATION: November 3, 1995

Date Secretary Approved Regulation: October 26, 1995

Federal Register Citation: 60 FR 55791-55792 (November 3, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Regulations at 38 CFR 3.353 govern VA determinations of competency and
incompetency. 38 CFR 3.353(a) defines a mentally incompetent person as
one who lacks the mental capacity to manage his or her own affairs,
including disbursement of funds without limitation. 38 CFR 3.353(b) was
intended to authorize rating boards to make determinations of competency
and incompetency for VA purposes without involvement of a Veterans
Services Officer (VSO).

In a [Coleman v. Brown]{.underline}, No. 90-966, the United States Court
of Veterans Appeals interpreted § 3.353(b) as requiring VSO
participation prior to determination of the issue of incompetency.
Although the VSO was meant to play an integral role in developing
evidence relating to the veteran\'s ability to handle his or her
affairs, the intent of the regulation was to give rating boards sole
responsibility for incompetency determinations without the VSO
participating in the decision. See 38 CFR 3.104(a). Although it was
intended that evidence produced by the VSO could lead to later
reconsideration of the incompetency determination, it was not intended
that the VSO\'s concurrence be a condition precedent to rating a
beneficiary incompetent. The VSO\'s investigation was meant merely to
provide an additional safeguard which could lead to later review.

The amendment provides that the rating board has sole authority to
determine the competency of beneficiaries for VA benefit purposes, but
that if the VSO develops new information bearing on the issue of the
beneficiary\'s competency, the rating board will consider that evidence
together with all other evidence of record to determine whether the
prior determination of incompetency should remain in effect. Paragraph
(b)(2) provides that the Adjudication Officer will authorize
disbursement to an incompetent beneficiary as directed by the VSO (e.g.,
supervised direct payment, payment to a fiduciary, or payment to the
beneficiary\'s spouse). Additional nonsubstantive changes are made in
the wording and format of § 3.353(b) for the sake of clarity.

[Section 3.353(b)]{.underline}. Amended to make it clear that only
rating boards are authorized to make determinations of incompetency for
purposes of insurance and payment of VA benefits.

REGULATORY AMENDMENT

3-95-17

Regulation Affected: 38 CFR 3.6

EFFECTIVE DATE OF THE REGULATION: October 3, 1994

Date Secretary Approved Regulation: November 3, 1995

Federal Register Citation: 60 FR 57178-57179 (November 14, 1995)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Under 38 U.S.C. 101(21)(D), service as a cadet at the United States
Military, Air Force, or Coast Guard Academy, or as a midshipman at the
United States Naval Academy is considered \"active duty.\" A precedent
opinion of the VA General Counsel (VAOPGCPREC 18-94) dated October 3,
1994, addressed the question of whether attendance at the United States
Air Force Academy Preparatory School constituted \"active duty.\" The
General Counsel noted that attendance at a service academy preparatory
school does not constitute service as a cadet or midshipman at a service
academy.

In VAOPGCPREC 18-94 the General Counsel held that an enlisted
servicemember who is reassigned to the United States Air Force Academy
Preparatory School without a release from active duty continues on
\"active duty\" but that persons enlisted directly from civilian life, a
reserve component, or the Air National Guard for the sole purpose of
attending the Air Force Academy Preparatory School are on \"active duty
for training.\" The General Counsel found it significant that an
enlisted servicemember who is disenrolled from a preparatory school
prior to completion of the school program still has a military
obligation to complete while an individual attending a preparatory
school from the Reserves, National Guard, or civilian life is generally
discharged from the service in the event of premature disenrollment.

In VAOPGCPREC 6-95 dated February 10, 1995, the VA General Counsel held
that the analysis in VAOPGCPREC 18-94 for determining whether service at
the United States Air Force Academy Preparatory School constitutes
\"active duty\" is generally applicable to service consisting of
attendance at the United States Military Academy Preparatory School and
the United States Naval Academy Preparatory School. However, the opinion
stated that in individual cases it would be advisable to determine
whether a student had made a commitment to active duty service which
would be binding upon disenrollment because such a student, even though
not transferring directly from enlisted active duty status, would be
considered to be on active duty while attending a preparatory school.
Paragraphs (b) and (c) of 38 CFR 3.6 are amended to reflect the holdings
in VAOPGCPREC 18-94 and VAOPGCPREC 6-95.

In the second sentence of § 3.6(a) the phrase \"[any]{.underline} period
of active duty for training\" is substituted for \"[and]{.underline}
period of active duty for training.\" This corrects a typographical
error. No substantive rule change is involved.

[Section 3.6(a)]{.underline}. Amended to correct a typographical error.

[Sections 3.6(b)(5) and (c)(5]{.underline}). Amended to show the
criteria for determining whether a person attending a military academy
preparatory school is on active duty or active duty for training status.

REGULATORY AMENDMENT

3-96-1

Regulation Affected: 38 CFR 3.811

Effective Date of the Regulation: March 20, 1996

Date Secretary Approved Regulation: March 11, 1996

Federal Register Citation: 61 FR 11309-10 (March 20, 1996)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

The \"Brownsville Incident\" occurred on August 13, 1906, when an
estimated 5 to 20 persons shot up the town of Brownsville, Texas. One
civilian was killed and one wounded. It was charged that soldiers from
the 25th Infantry Regiment, which was stationed adjacent to the town at
Fort Brown, were responsible for the shootings, but it proved impossible
to establish the guilt of individual soldiers. On November 5, 1906,
President Theodore Roosevelt ordered that all 167 enlisted men in the
three companies stationed at Fort Brown be dishonorably discharged.

On April 6, 1910, 14 of the 167 soldiers were exonerated by a special
Army Tribunal and permitted to reenlist. On September 22, 1972, the
Secretary of the Army ordered the discharges of all the dishonorably
discharged soldiers changed to honorable.

On December 6, 1973, Congress enacted Public Law 93-177. Section 7 of
Public Law 93-177 provided for payment of \$25,000 to surviving veterans
who were dishonorably discharged as a result of the \"Brownsville
Incident\" and were not thereafter eligible for reenlistment. It also
provided for payment of \$10,000 to the unremarried surviving spouses of
such veterans. The law provided that applications for these payments
must be filed within 5 years after December 6, 1973.

Section 3.811 of 38 CFR was promulgated in 1974. Since more than 15
years have passed since anyone could file for payments under Public Law
93-177, we are removing 38 CFR 3.811 as obsolete.

[Section 3.811.]{.underline} Removed and reserved.

REGULATORY AMENDMENT

3-96-2

Regulation Affected: 38 CFR 3.6(b)(7)

Effective Date of the Regulation: March 22, 1996

Federal Register Citation: 61 FR 11731 (March 22, 1996)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

38 CFR 3.6(b) sets out what constitutes \"active duty\" for purposes of
VA benefit eligibility. Paragraph (b)(7) states that a discharged
servicemember shall be deemed to have continued on active duty during
the period required to travel from the point of separation to his or her
home of record. The authority for the travel time provision of 38 CFR
3.6(b)(7) is 38 U.S.C. 106(c).

A review of historical materials indicates that paragraphs (i), (ii),
and (iii) of 38 CFR 3.6(b)(7) reflect effective dates for the travel
time provision of 38 U.S.C. 106(c). On June 23, 1976 (41 FR 26681) VA
published a final rule that removed the effective dates from the
regulation because they were historical only and no longer served any
purpose for claims processing. The deletions were never reflected in the
Code of Federal Regulations. This document corrects that erroneous
action.

[Section 3.6(b)(7).]{.underline} Paragraphs (i), (ii), and (iii) are
removed.

REGULATORY AMENDMENT

3-96-3

Regulations Affected: 38 CFR 3.314(b)(2) and 3.323(b)

Effective Date of the Regulation: May 7, 1996

Date Secretary Approved Regulation: April 19, 1996

Federal Register Citation: 61 FR 20438 (May 7, 1996)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Before 1978, the statute governing entitlement to pension for
nonservice-connected disability (now 38 U.S.C. 1521(a)) provided that VA
pension was potentially payable to a veteran who was permanently and
totally disabled from non-service-connected disability not the result of
the veteran\'s willful misconduct or vicious habits. In 1978 the
Veterans\' and Survivors\' Pension Improvement Act of 1978, Public Law
95-588, deleted the words \"vicious habits\" from the pension statute.

In 1990 VA amended 38 CFR 3.301(b) to delete the reference to \"vicious
habits\" (55 FR 13529). 38 CFR 3.301(b) now states simply that
\"disability pension is not payable for any condition due to the
veteran\'s own willful misconduct.\"

There are additional references to \"vicious habits\" in 38 CFR sections
3.314(b)(2), and 3.323(b) which apparently were overlooked when 38 CFR
3.301(b) was amended in 1990. This rule deletes those references and
conforms the rules to the current language of 38 U.S.C. 1521(a).

[Section 3.314]{.underline}. Paragraph (b)(2) is amended by removing the
words \"or vicious habits\".

[Section 3.323]{.underline}. Paragraphs (b)(1) and (b)(2) are amended by
removing the words \"or vicious habits\".

REGULATORY AMENDMENT

3-96-4

Regulations Affected: 38 CFR 3.23(d)(5), 3.24(c)(1), 3.25(c), 3.100(a),
3.250(d), 3.252(a), 3.321(b)(1), 3.458(f)(2), 3.460(b), 3.461(b)(1),
3.559(c), 3.702, 3.852, 3.901, 3.902(d), 3.1612(e)(3)

Effective Date of the Regulation: May 8, 1996

Date Secretary Approved Regulation: April 30, 1996

Federal Register Citation: 61 FR 20726-27 (May 8, 1996)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

38 CFR 3.23(d)(5) concerns annual income for improved pension surviving
spouses. The authority citation for 38 CFR 3.23(d)(5) is shown
incorrectly as \"38 U.S.C. 1541(c),(h)\". The authority citation is
corrected to \"38 U.S.C. 1541(c),(g)\".

38 CFR 3.24(c)(1) states that in certain situations pension shall be
paid to a child in the custody of a person legally responsible for the
child\'s support at an annual rate equal to the difference between the
rate for a surviving spouse and one child, and \"the sum of the annual
income of such person.\" This paragraph is based on 38 U.S.C. 1542 which
states that the child\'s rate is reduced by the child\'s income or, if
the child is residing with a person legally responsible for the child\'s
support, by \"the sum of the annual income of [such child
and]{.underline} such person.\" 38 CFR 3.24(c)(1) is amended to restore
the words \"the annual income of such child and\" before \"the annual
income of such person\". These words appear in the *Federal Register* of
September 16, 1987, but were omitted from the July 1, 1988, *Federal
Register* codification of 38 CFR and all subsequent versions. This
change will conform the regulation to 38 U.S.C. 1542.

The most recent change to 38 CFR 3.25 appeared in the *Federal Register*
of September 16, 1987. The version of 38 CFR 3.25(c)(2) in the *Federal
Register* of September 16, 1987, contained the following statement: \"\*
\* \* no payment of DIC to a parent under this paragraph may be less
than \$5 monthly. Each time there is a rate increase under 38 U.S.C.
3112, the amount of the reduction under this paragraph shall be
recomputed to provide, as nearly as possible, for an equitable
distribution of the rate increase.\" However, the July 1, 1988, codified
version of 38 CFR 3.25(c)(2) omitted the following words: \"may be less
than \$5 monthly. Each time there is a rate increase under 38 U.S.C.
3112, the amount of the reduction under this paragraph.\" This change
restores the words that were inadvertently omitted from 38 CFR
3.25(c)(2).

38 CFR 3.250(d) on remarriage of a parent receiving Dependency and
Indemnity Compensation (DIC) contains an incorrect reference to \"38
U.S.C. 102(a)(2).\" The reference is corrected to read \"38 U.S.C.
102(b)(1)\".

38 CFR 3.252(a), which concerns annual income limitations in old-law
pension cases, contains an incorrect reference to \"§3.26(b)\". 38 CFR
3.252(a) is changed to show the correct reference for old-law pension,
which is 38 CFR 3.26(c).

In 1991 §14(d)(8)(b) of Public Law 102-54 eliminated subsection (e) from
38 U.S.C. 6103. The language that was previously in subsection (e) was
included under subsection (b). The authority citation for 38 CFR
3.458(f)(2) is changed from \"38 U.S.C. 6103(e)\" to \"38 U.S.C
6103(b)\".

38 CFR 3.100(a), 38 CFR 3.321(b)(1), 3.460(b), 38 CFR 3.461(b)(1), and
38 CFR 3.559(c) are amended to show the current title of the chief
officer of the Veterans Benefits Administration. Previously the Under
Secretary for Benefits was called the \"Chief Benefits Director.\"

A regulatory change published in the *Federal Register* of June 24,
1985, moved effective date rules for Dependency and Indemnity
Compensation (DIC) from 38 CFR 3.400(c)(3) to 38 CFR 3.400(c)(4). 38 CFR
3.702 on DIC is amended to reflect that change in two references to 38
CFR 3.400.

We are amending 38 CFR 3.852 on institutional awards to add authority
citations for subparagraphs (a), (c), (d), and (e).

In 1991 §14(d)(8)(b) of Public Law 102-54 eliminated subsection (e) from
38 U.S.C. 6103. The authority citation for 38 CFR 3.901(c) is changed
from \"38 U.S.C. 6103(e)\" to \"38 U.S.C 6103\". The authority citation
for 38 CFR 3.901(d)(3) is changed from \"38 U.S.C. 6103(a), (d), (e)\"
to \"38 U.S.C. 6103\". The authority citation for 38 CFR 3.902(d)(3) is
changed from \"38 U.S.C. 6103(d), (e), 6104\" to \"38 U.S.C. 6104\".

38 CFR 3.1612(e)(3) is amended to show the current name of the element
within VA which is responsible for furnishing Government headstones and
markers. Previously the Office of Memorial Programs was called the
\"Monument Service.\"

[Section 3.23]{.underline}. Paragraph (d)(5) is amended by revising the
authority citation.

[Section 3.24]{.underline}. Paragraph (c)(1) is amended by adding words
which were inadvertently omitted.

[Section 3.25]{.underline}. Paragraph (c) is amended by adding words
which were inadvertently omitted.

[Section 3.100]{.underline}. Paragraph (a) is amended by substituting
\"Under Secretary for Benefits\" for \"Chief Benefits Director.\"

[Section 3.250]{.underline}. Paragraph (d) is amended by correcting a
cross-reference.

[Section 3.252]{.underline}. Paragraph (a) is amended by correcting a
cross-reference.

[Section 3.321]{.underline}. Paragraph (b)(1) is amended by substituting
\"Under Secretary for Benefits\" for \"Chief Benefits Director.\"

[Section 3.458]{.underline}. Paragraph (f)(2) is amended by revising the
authority citation.

[Section 3.460.]{.underline} Paragraph (b) is amended by substituting
\"Under Secretary for Benefits\" for \"Chief Benefits Director.\"

[Section 3.461]{.underline}. Paragraph (b)(1) is amended by substituting
\"Under Secretary for Benefits\" for \"Chief Benefits Director.\"

[Section 3.559.]{.underline} Paragraph (c) is amended by substituting
\"Under Secretary for Benefits\" for \"Chief Benefits Director.\"

[Section 3.702]{.underline}. Paragraphs (a) and (b) are amended by
correcting cross-references.

[Section 3.852.]{.underline} Paragraphs (a), (c), (d), and (e) are
amended by revising the authority citations.

[Section 3.901]{.underline}. Paragraphs (c) and (d) are amended by
revising the authority citations.

[Section 3.902]{.underline}. Paragraph (d) is amended by revising the
authority citation.

[Section 3.1612]{.underline}. Paragraph (e)(3) is amended by
substituting \"Office of Memorial Programs\" for \"Monument Service\".

REGULATORY AMENDMENT

3-96-5

Regulations Affected: 38 CFR 3.307(a) and 3.309(e)

Effective Date of the Regulation: November 7, 1996

Date Secretary Approved Regulation: October 29, 1996

Federal Register Citation: 61 FR 57586-89 (November 7, 1996)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 3 of the Agent Orange Act of 1991, Pub. L. 102-4, 105 Stat. 11,
directed the Secretary to seek to enter into an agreement with the
National Academy of Sciences (NAS) to review and summarize the
scientific evidence concerning the association between exposure to
herbicides used in support of military operations in the Republic of
Vietnam during the Vietnam era and each disease suspected to be
associated with such exposure. Congress mandated that NAS determine, to
the extent possible: (1) whether there is a statistical association
between the suspect diseases and herbicide exposure, taking into account
the strength of the scientific evidence and the appropriateness of the
methods used to detect the association; (2) the increased risk of
disease among individuals exposed to herbicides during service in the
Republic of Vietnam during the Vietnam era; and (3) whether there is a
plausible biological mechanism or other evidence of a causal
relationship between herbicide exposure and the suspect disease. Section
3 of Pub. L. 102-4 also required that NAS submit reports on its
activities every two years (as measured from the date of the first
report) for a ten-year period.

Section 1116(b) of 38 U.S.C., which was added by Pub. L. 102-4, provides
that whenever the Secretary determines, based on sound medical and
scientific evidence, that a positive association exists between exposure
of humans to an herbicide agent (i.e., a chemical in an herbicide used
in support of the United States and allied military operations in the
Republic of Vietnam during the Vietnam era) and a disease, the Secretary
will publish regulations establishing presumptive service connection for
that disease. An association is considered \"positive\" if the credible
evidence for the association is equal to or outweighs the credible
evidence against the association. In making that determination, the
Secretary is to consider the reports received from NAS as well as all
other available sound medical and scientific information and analyses.

NAS issued its initial report, entitled \"Veterans and Agent Orange:
Health Effects of Herbicides Used in Vietnam\" (VAO), on July 27, 1993.
The Secretary subsequently determined that positive associations exist
between exposure to herbicides used in the Republic of Vietnam and the
subsequent development of Hodgkin\'s disease, porphyria cutanea tarda,
multiple myeloma and certain respiratory cancers. Final regulations were
published in the *Federal Register* on February 3, 1994 (See 59 FR
5106-07) and June 9, 1994 (See 59 FR 29723-24) creating presumptions of
service connection for these conditions based on herbicide exposure.
Presumptions already existed for chloracne, non-Hodgkin\'s lymphoma and
soft tissue sarcomas.

After reviewing the latest scientific studies and conducting a public
meeting, NAS issued a second report, entitled \"Veterans and Agent
Orange: Update 1996,\" on March 14, 1996. On the same day, the Secretary
announced that VA would review the findings in that second NAS report
and pertinent studies to determine whether a positive association exists
between herbicide exposure and any condition for which the Secretary has
not specifically determined a presumption of service connection is
warranted. After that review the Secretary concluded that positive
associations exist for prostate cancer and acute and subacute peripheral
neuropathy.

Prostate cancer is a very common male cancer which shows marked
increased prevalence with age. The 1993 NAS report assigned prostate
cancer to a category labeled limited/suggestive evidence of an
association. This is defined as meaning there is evidence suggestive of
an association between herbicide exposure and a particular health
outcome, but that evidence is limited because chance, bias, and
confounding could not be ruled out with confidence. There were
statistically significant occupational studies which showed no
association between prostate cancer and herbicide exposure. Some
occupational studies showed a slight, elevated risk for prostate cancer
among farm and forestry workers; a large cohort study of farmers found
the risk of prostate cancer among farmers increased with the magnitude
of potential herbicide exposure. Upon a review of the evidence then
available, the Secretary determined that the credible evidence against
an association between prostate cancer and herbicide exposure outweighed
the credible evidence for such an association, and he determined that a
positive association did not exist.

In its 1996 report NAS, after a thorough review of previously and newly
available scientific literature, also assigned prostate cancer to the
category labeled limited/suggestive evidence of an association with
herbicide exposure, which it defined in the same manner as in the 1993
NAS report (See above). The 1996 NAS report noted several new
occupational studies and veteran studies. One study found a
statistically significant, slightly increased proportionate cancer
mortality ratio (PCMR) for prostate cancer among farmers in 22 of 23
states. Another cancer mortality study evaluated employees of two Dutch
companies which produced chlorophenoxy herbicides. Mortality rates from
prostate cancer were increased among the exposed men in this study
(standardized mortality rate (SMR) = 2.6, confidence interval (CI)
0.5-7.7), although the results were not statistically significant. A
mortality study of chemical workers exposed to an accidental release of
TCDD in 1949 found an increased risk of prostate cancer death in the
exposed workers when compared to the rates in the local population,
although, again, the results were not statistically significant. One
recent study of Finnish herbicide workers with a median total duration
of exposure of six weeks showed no increased risk of death from prostate
cancer. Cancer incidence rates after TCDD exposure in the Seveso, Italy,
cohort were re-evaluated. The cancer risk in the more highly exposed
zones was previously reported to be slightly increased (relative risk
(RR) = 1.4, CI 0.5-3.9), although not to a statistically significant
degree, but an updated study of the less exposed areas failed to show an
increased risk. A proportionate mortality study of Michigan Vietnam
veterans showed a nonsignificant, slightly increased rate of death due
to genital cancers. Prostate cancer rates were not reported separately
in this study.

The large cohort study of Canadian farmers had been previously reviewed
by the 1993 NAS report. Although this study found a decreased risk of
prostate cancer for the entire cohort, when the cohort was divided into
subsets based on suspected herbicide exposure, the study found an
increased risk of prostate cancer among those considered most likely to
have been exposed (based on amount of herbicides used on the subjects\'
farms and the lack of hired help or customary expenses for assisting in
work). In addition, the study reported an increasing risk with
increasing numbers of acres sprayed. Subsequent to the 1993 report, the
authors published a letter to the editor containing a reanalysis of
their data which supported the findings of an increased risk of prostate
cancer and the previously reported dose-response relationship with
herbicide exposure. Most of the other occupational and environmental
studies indicate some elevation in risk of prostate cancer. Considering
all of the evidence, the Secretary has determined that the credible
evidence for an association is equal to or outweighs the credible
evidence against an association and, therefore, there is a positive
association between herbicide exposure and prostate cancer. Accordingly,
we are amending 38 CFR 3.309(e) to establish a presumption of service
connection based on herbicide exposure for prostate cancer that
manifests itself to a degree of 10 percent at any time after exposure.
This amendment is effective the date of publication of the final rule,
in accordance with 38 U.S.C. 1116(c)(2).

Peripheral neuropathy can be induced by many common medical and
environmental disorders unrelated to herbicide exposure, such as
alcoholism, diabetes, and exposure to other toxic chemicals. The 1993
NAS report assigned peripheral neuropathy to a category labeled
inadequate/insufficient evidence to determine whether an association
exists, which was defined as meaning that the available studies were of
insufficient quality, consistency, or statistical strength to permit a
conclusion regarding the presence or absence of an association with
herbicide exposure. NAS stated that many case reports suggested that
acute or subacute peripheral neuropathy can develop with exposure to
dioxin, but that the most rigorously conducted studies argued against a
relationship between dioxin or herbicides and chronic peripheral
neuropathy. VAO stated that, as a group, the studies on peripheral
neuropathy suffered from various methodologic defects, such as not
applying consistent methods to define a comparison group, determine
exposure, evaluate clinical deficits, use standard definitions of
peripheral neuropathy, or eliminate confounding variables. Occupational
studies that did not have those methodological problems showed no
difference in the incidence of peripheral neuropathy for workers exposed
to herbicides and workers not so exposed. Accordingly, the Secretary
determined that the credible evidence against an association between
peripheral neuropathy and herbicide exposure outweighed the credible
evidence for such an association, and he determined that a positive
association did not exist. The Secretary asked, however, that NAS
reconsider in detail the relationship between exposure to herbicides and
the development of acute and subacute effects of peripheral neuropathy
in the next report.

The 1996 NAS report assigned acute and subacute peripheral neuropathy to
the category labeled limited/suggestive evidence of an association with
herbicide exposure. However, the 1996 NAS report continued to assign
chronic peripheral neuropathy to the category labeled
inadequate/insufficient evidence to determine whether an association
exists. In response to VA\'s request to conduct a detailed
reconsideration of the relationship between herbicide exposure and the
subsequent development of acute and subacute peripheral neuropathy, the
1996 NAS report noted that the methodology used to establish
associations between suspected causal agents and persistent chronic
peripheral neuropathy relies on epidemiological studies with adequate
controls. Such studies can rarely be set in motion with sufficient speed
to assess relationships between unexpected chemical exposure and the
development of acute or subacute peripheral neuropathy. Because of the
transient nature of the conditions, documenting signs and symptoms in
association with documented exposures can be difficult to accomplish in
a systematic manner. Consequently, greater reliance must be placed on
case and less well controlled studies.

Two case studies reported development of peripheral neuropathies within
days of exposure to 2,4-D followed by gradual recovery over a period of
months. Studies of the Seveso, Italy accident suggested that peripheral
nerve problems were more prevalent in the exposed group. One study
demonstrated that those individuals with clinical signs of significant
exposure (chloracne or elevated liver enzymes) showed a risk ratio of
2.8. Two subsequent follow-up studies showed no increased frequency of
peripheral neuropathy several years after the accident among the highly
exposed group. Environmental studies and case reports suggest that the
development of peripheral neuropathy can follow high levels of exposure
to herbicides, and that peripheral neuropathy associated with herbicide
exposure will manifest very soon after exposure. The trend to recovery
in the individual cases reported and the negative findings of many
long-term follow up studies of peripheral neuropathy suggest that, if a
neuropathy develops, it resolves with time. Considering all of the
evidence, the Secretary has determined that the credible evidence for an
association is equal to or outweighs the credible evidence against an
association and, therefore, there is a positive association between
herbicide exposure and acute and subacute peripheral neuropathy that
manifests within one year of exposure.

Since the available evidence indicates that herbicide-related acute and
subacute peripheral neuropathy develops shortly after exposure, we have
established a manifestation period of one year following exposure to
identify all peripheral neuropathies that are associated with herbicide
exposure. We have also defined the term \"acute and subacute peripheral
neuropathy\" to mean transient peripheral neuropathy that appears within
weeks or months of exposure to an herbicide agent and [resolves within
two years of the date of onset.]{.underline} The definition
differentiates transient peripheral neuropathies, for which the
Secretary has found a positive association with herbicide exposure, from
chronic peripheral neuropathies, for which he has found no such
association.

REGULATORY AMENDMENT

3-96-6

Regulations Affected: 38 CFR 3.204 and 3.213

Effective Date of the Regulation: November 4, 1996

Date Secretary Approved Regulation: October 22, 1996

Federal Register Citation: 61 FR 56626 (November 4, 1996)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 301 of the Veterans\' Benefits Improvements Act of 1994, Pub. L.
103-446, authorizes the Secretary of Veterans Affairs to accept the
written statement of a claimant as proof of the existence of following
relationships between the claimant and another person: marriage,
dissolution of a marriage, birth of a child, and death of any family
member. The statute further authorizes the Secretary to require
documentation in support of the claimant\'s statement if: (1) The
claimant does not reside within a State; (2) the claimant\'s statement
on its face raises a question of its validity; (3) there is conflicting
information of record; or (4) there is reasonable indication, in the
claimant\'s statement or otherwise, of fraud or misrepresentation. The
Secretary has determined to exercise this discretionary authority.

Accordingly, we have amended 38 CFR 3.204 to require that a claimant\'s
written statement contain the date (month and year) and place of the
event, the full name and relationship of the other person to the
claimant, and, where the claimant\'s dependent child does not reside
with the claimant, the name and address of the person who has custody of
the child. We need this information, which currently must be supplied by
an individual claiming additional dependency allowance, not only to make
a proper determination of dependency, but also to determine whether or
not the claimant\'s statement is valid or in conflict with other
information of record. We are also requiring that a claimant seeking
benefits on behalf of a dependent provide the social security number of
the dependent in accordance with the provisions of 38 CFR 3.216. We have
revised the heading of § 3.204 to reflect its contents more accurately.
Finally, in §§ 3.204 and 3.213(a), we have made technical amendments to
conform to the substantive changes made, and we have made technical
changes in the \"Cross References\" following §§ 3.205 through 3.214 to
conform to the heading revision of § 3.204.

Previously, we promulgated an amendment to the adjudication regulations
to allow claimants to submit uncertified photocopies of documents to
establish birth, death, marriage, or relationship (59 FR 46337 and 60 FR
46531). That amendment implemented a recommendation of VA\'s Blue Ribbon
Panel on Claims Processing and was intended to reduce delays and improve
efficiency in claims processing. This regulation revision will, we
believe, further improve timeliness and efficiency.

REGULATORY AMENDMENT

3-96-7

Regulation affected: 38 CFR 3.1(n) and 3.1(y)(4)

EFFECTIVE DATE OF REGULATION: November 4, 1996

Date Secretary approved regulation: September 12, 1996

Federal Register Citation: 61 FR 214 (November 4, 1996)

The purpose of the following comment on the changes included in this
amendment of VA regulations is state why this change is being made. This
comment is not regulatory.

As part of its ongoing revision of the CFR, the Department of Veterans
Affairs amended sections 3.1(n) and 3.1(y)(4) 38 CFR, Part 3, dealing
with the definition of \"willful misconduct.\"

We have deleted the Latin terms \"[malum in se]{.underline}\" and
\"[malum prohibitum]{.underline}.\" Although they are standard legal
terms, they serve no purpose here because the definition in §3.1(n) is
clear without them.

Also, a note following §3.1(n)(3) previously directed users to
§3.1(y)(2)(iii) for a definition of the term \"willful misconduct\" to
determine whether certain veterans met the requirements to be considered
former prisoners of war. The correct citation was §3.1(y)(4); however,
the definition at §3.1(y)(4) merely duplicated the first sentence of
§3.1(n) (without the Latin terms) and all of §3.1(n)(1). It was
therefore redundant and we have deleted the last two sentences in
§3.1(y)(4) as well as the note following §3.1(n)(3).

REGULATORY AMENDMENT

3-96-8

Regulations Affected: 38 CFR 3.107, 3.315(c), 3.400(d), 3.709, 3.712,
3.961, 3.962 and 3.1000(g)

Effective Date of the Regulation: December 26, 1996

Date Secretary Approved Regulation: November 21, 1996

Federal Register Citation: 61 FR 67949-50 (December 26, 1996)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

38 CFR 3.107 contains requirements for processing benefit awards where
claims have not been filed by or on behalf of all dependents who may be
entitled to monetary benefits. The heading of § 3.107, \"Awards where
all dependents do not apply\", does not accurately reflect its content
and we are revising it to read \"Awards where not all dependents
apply\".

38 CFR 3.315(c)(1)(i) and (ii) require basic eligibility determinations
under certain circumstances when veterans apply for education benefits
under 38 U.S.C. Chapter 34 and Chapter 32, respectively. Since 38 U.S.C.
Chapter 34 expired on December 31, 1989, § 3.315(c)(1)(i) is obsolete
and we have removed it. The last date that a veteran seeking benefits
under 38 U.S.C. Chapter 32 could have entered active duty and not have
the two-year service requirement found in 38 U.S.C. 5303A apply was
October 16, 1981. If such a veteran also did not meet the 181-day
service requirement, that veteran would have been released from active
duty before April 16, 1982, and, if found eligible for benefits under 38
U.S.C. Chapter 32, would have had the period of eligibility expire ten
years from the date of release from active duty, or no later than April
16, 1992. If such a veteran made a current application for chapter 32
educational benefits, there would be no need for rating board referral
in order to adjudicate that claim. Section 3.315(c)(1)(ii) is therefore
obsolete and we have removed it.

The references in § 3.315(c)(4) to Post-Korean and Vietnam era service
were needed to administer § 3.315(c)(1)(i). Since § 3.315(c)(1)(i) has
been removed, there is no longer any need in § 3.315(c)(4) to refer to
service between January 31, 1955, and August 5, 1964, and during the
Vietnam era. We have revised § 3.315(c)(4) accordingly. As there is no
longer any need to refer to 38 U.S.C. 3452(a) in the authority citation
following § 3.315(c), we have removed that reference. Also, that
authority citation contains an incorrect reference to \"10 U.S.C.
2133(b)\". The correct reference is \"10 U.S.C. 16133(b)\", and we have
revised the reference accordingly. Sections 3.315(c)(3)(i) and 3.1000(g)
contain incorrect references to \"10 U.S.C. Chapter 106\". The correct
reference is \"10 U.S.C. Chapter 1606\", and we have revised the
references accordingly.

38 CFR 3.400(d) is being deleted because it merely restates a statute
and its provisions have become obsolete.

When the Social Security Administration (SSA) has notified the
Department of Veterans Affairs (VA) that payments to any individual have
been authorized pursuant to section 217(b)(2) of the Social Security Act
(42 U.S.C. 417(b)(2)), 38 CFR 3.709 requires VA to notify SSA of any
determination that death pension, compensation, or dependency and
indemnity compensation is payable to any dependent of the veteran.
Section 5117 of Pub. L. 101-508 revised 42 U.S.C. 417(b)(2) so that it
applied only to individuals applying for SSA benefits before the end of
the 18-month period after the month in which Pub. L. 101-508 was
enacted. Since that 18-month period expired on June 1, 1992, 38 CFR
3.709 is obsolete and we have removed it.

38 CFR 3.712(a) concerns the election of improved pension by
Spanish-American War veterans. However, there are no Spanish-American
War veterans currently receiving monetary benefits from VA.
Consequently, § 3.712(a) is no longer required and is removed. Since the
remainder of § 3.712 concerns surviving spouses only, we have revised
the heading to read \"Improved pension elections; surviving spouses of
Spanish-American War veterans\", and redesignated paragraphs (b)(1) and
(b)(2) as paragraphs (a) and (b), respectively.

Pub. L. 95-588 completely revised the statutory framework for VA pension
benefits effective January 1, 1979. 38 CFR 3.961 states that pension
claims pending on December 31, 1978, will be adjudicated under title 38
U.S.C. as in effect on December 31, 1978, and that pension claims filed
after December 31, 1978, will be adjudicated under title 38 U.S.C. as in
effect on January 1, 1979 or thereafter. 38 CFR 3.962 states that claims
filed after December 31, 1978, will generally be adjudicated under title
38 U.S.C. as in effect on December 31, 1978, if entitlement is based on
permanent and total disability that existed or death that occurred prior
to January 1, 1979. Since such claims have long since been adjudicated,
§§ 3.961 and 3.962 are obsolete and we have removed them.

REGULATORY AMENDMENT

3-96-9

Regulations affected: 38 CFR 3.101, 3.352 and 14.597

EFFECTIVE DATE OF REGULATION: December 30, 1996

Date Secretary approved regulation: December 9, 1996

Federal Register Citation: 61 FR 68665-6 (December 30, 1996)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to state why this change is being made.
These comments are not regulatory.

38 CFR 3.101 states that all decisions of the Department of Veterans
Affairs will conform to the statutes and regulations of the Department
of Veterans Affairs and to the precedent opinions of the General
Counsel. That an agency must comply with its governing statutes and its
own regulations, which have the force and effect of law, is such a
fundamental legal concept that a regulation specifically requiring such
compliance is unnecessary.

38 CFR 14.507 indicates that General Counsel opinions designated as
precedential will be considered binding on VA officials as legal
interpretations of general applicability. This document revises 38 CFR
14.507(b) to more clearly state that precedent opinions are binding on
VA officials and employees in subsequent matters involving a legal issue
decided by the precedent opinion. Accordingly, there is no need to state
separately in part 3 that VA decisions must conform to VA precedent
opinions. For the foregoing reasons, this document amends VA
adjudication regulations by removing section 3.101.

This document revises 38 CFR 14.507(b) by adding at the end thereof a
sentence stating that an opinion designated as a precedent is binding on
VA officials and employees in subsequent matters involving a legal issue
decided in the precedent opinion, unless there has been a material
change in a controlling statute or regulation or the opinion has been
overruled or modified by a subsequent precedent opinion or judicial
decision. Also, a minor conforming change is made to 38 CFR 14.507(a).
These changes merely clarify the provisions of the current regulation.

Currently, 38 CFR 14.507(b) authorizes the VA General Counsel to
designate as a \`\`precedent opinion\'\' any General Counsel opinion
having significance beyond the particular case or matter at issue in the
opinion. The term \`\`precedent\'\' has a well-established legal meaning
indicating an interpretation of law by a competent authority which is
considered binding or persuasive in subsequent cases involving the same
issue of law. Further, section 14.507(b) currently provides that General
Counsel precedent opinions are subject to the provisions of 5 U.S.C.
552(a)(1), which requires Federal agencies to publish in the Federal
Register, among other things, \`\`interpretations of general
applicability formulated and adopted by the agency.\'\' Although section
14.507(b) presently indicates that General Counsel precedent opinions
will be generally applicable and binding on VA employees and officials
with respect to matters involving the same question of law, we believe
it would be helpful to state the binding effect of precedent opinions in
clearer terms.

This document also revises the heading of section 3.352 of the
adjudication regulations. Currently the heading reads \`\`Criteria for
permanent need for aid and attendance and \`permanently bedridden.\'
\'\' The heading is revised to read \`\`Criteria for determining need
for aid and attendance and \`permanently bedridden.\' \'\' The revised
heading more accurately indicates that section 3.352 concerns
entitlement to increased pension, compensation, or dependency and
indemnity compensation based on an individual\'s need for the regular
aid and attendance of another person without regard to whether or not
such need is permanent.

REGULATORY AMENDMENT

3-97-1

Regulation Affected: 38 CFR 3.272(c)

Effective Date of the Regulation: November 29, 1994

Date Secretary Approved Regulation: January 23, 1997

Federal Register Citation: 62 FR 5528 (February 6, 1997)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Under Title 38 United States Code, Chapter 15, eligible veterans may be
entitled to nonservice-connected disability pension benefits and
eligible surviving spouses and/or children may be entitled to payment of
nonservice-connected death pension benefits subject to statutory annual
income limitations. In determining annual income under Chapter 15, all
payments of any kind or from any source are countable unless
specifically excluded by statute. 38 U.S.C. 1503(a)(2) specifically
excludes \"payments under this chapter,\" i.e., Chapter 15, from
countable income.

Under the provisions of 38 U.S.C. 5121, certain periodic monetary
benefits to which an individual was entitled at death under existing
ratings or decisions or based on evidence in file at date of death, that
are due and unpaid for a period not to exceed two years shall, upon the
death of such individual, be paid to certain individuals as set forth in
5121(a).

The United States Court of Veterans Appeals (the Court) has held that,
since accrued benefits paid to a veteran\'s surviving spouse and/or
child based on pension benefits owed to a veteran at the time of his or
her death are derivative in nature, they are no more than payments of
pension under 38 U.S.C. Chapter 15 that VA owed a veteran at the time of
death and are, therefore, excludable from countable annual income for VA
improved death pension purposes. See *Martin v. Brown*, 7 Vet. App. 196,
199-200 (1994). We have amended 38 CFR 3.272(c) to incorporate this
holding of the Court.

REGULATORY AMENDMENT

3-97-2

Regulations Affected: 38 CFR 3.50, 3.51, 3.106, 3.205, 3.214, 3.252,
3.257, 3.262, 3.400, 3.401, 3.666, 3.702, 3.805, 3.857, and 3.1000.

Effective Date of the Regulation: February 6, 1997

Date Secretary Approved Regulation: January 27, 1997

Federal Register Citation: 62 FR 5528 (February 6, 1997)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

This document amends Department of Veterans Affairs (VA) adjudication
regulations to replace gender specific language with gender neutral
language. The amendments are necessary to conform the adjudication
regulations with the VA policy that all of its publications will be
stated in a manner that does not seem to preclude benefits for female
veterans, dependents or beneficiaries.

This document deletes references throughout 38 CFR Part 3 to \"wife,\"
\"husband,\" \"widow,\" or \"widower,\" and replaces them with the terms
\"spouse\" and \"surviving spouse.\" In 38 CFR 3.205(a)(6) \"held
themselves out as married\" has been substituted for \"held themselves
out as husband and wife.\" 38 CFR 3.50 is revised to provide a new
definition of \"spouse\" and \"surviving spouse\" to reflect statutory
requirements. Because of this change, it is no longer necessary to
define \"wife\" and \"widow.\" These terms are therefore removed. 38 CFR
3.51 previously provided that the term \"wife\" includes the husband of
a female veteran and the term \"widow\" includes the widower of a female
veteran. Because we have substituted gender neutral terms such as
\"spouse\" and \"surviving spouse\" for terms such as \"wife,\"
\"husband,\" \"widow,\" or \"widower\" throughout the adjudication
regulations, 38 CFR 3.51 is no longer necessary and we have removed it.

REGULATORY AMENDMENT

3-97-3

Regulations affected: 38 CFR 3.12

EFFECTIVE DATE OF REGULATION: March 28, 1997

Date Secretary approved regulation: March 14, 1997

Federal Register Citation: 62 FR 14822-3 (March 28, 1997)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to state why this change is being made.
These comments are not regulatory.

38 U.S.C. 1110 authorizes the Secretary of Veterans Affairs to
compensate veterans for disability resulting from injury or disease
incurred or aggravated during active military service provided that the
veteran was discharged or released under conditions other than
dishonorable from the period of service in which the injury or disease
was incurred. 38 U.S.C. 1521(a) authorizes the Secretary to pay
non-service-connected disability pension to certain veterans who are
permanently and totally disabled from non-service-connected disability.

Regulations at 38 CFR 3.12 implement two distinct statutory provisions
governing entitlement to most benefits administered by VA. One
provision, 38 U.S.C. 101(2), defines the term \"veteran\" for purposes
of establishing entitlement to benefits as a person who served in the
active military, naval, or air service, and who was discharged or
released under conditions other than dishonorable. The other, 38 U.S.C.
5303, bars the payment of VA benefits to individuals discharged under
certain listed circumstances regardless of how they fare under the
statutory definition of veteran.

Paragraphs 3.12(g) and (h) implement provisions of Pub. L. 95-126,
enacted on October 8, 1977, concerning the effect of certain discharge
upgrades and discharge review programs on the definition of veteran and
the statutory bars to benefits. This document reorganizes the material
in paragraphs (g) and (h) into a format that is simpler to read and
understand. The changes are not substantive.

Since these amendments merely reorganize and simplify the current
regulation and are not substantive in nature, this change is being
promulgated without regard to notice and comment and effective date
provisions of 5 U.S.C. 553.

REGULATORY AMENDMENT

3-97-4

Regulations affected: 38 CFR 3.114

EFFECTIVE DATE OF REGULATION: June 12, 1996

Date Secretary approved regulation: February 12, 1997

Federal Register Citation: 62 FR 17706 (April 11, 1997)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to state why this change is being made.
These comments are not regulatory.

Under the provisions of 38 U.S.C. 5110(a) and 38 CFR 3.400, awards of
compensation, pension and dependency and indemnity compensation benefits
are generally effective on the date VA receives the claim or the date
entitlement arose, whichever is later. However, 38 U.S.C. 5110(g)
provides an exception: Where benefits are awarded or increased based on
a change in law or an administrative issue, benefits are awarded based
on facts found but not earlier than the effective date of the law or
issue and not more than one year prior to the earlier of the date of
application or administrative determination of entitlement. The purpose
of section 5110(g) was to provide a one-year grace period, such as that
allowed after service discharge or death, for potential beneficiaries
who would otherwise be penalized by not filing promptly.

The implementing regulation for section 5110(g) is 38 CFR 3.114. Section
3.114(a) states that the effective date of an award or increase made
pursuant to a liberalizing law or VA issue will be made in accordance
with facts found but not earlier than the effective date of the law or
administrative issue. It goes on to state that, in order for a claimant
to be eligible for a retroactive award, the evidence must show that he
or she met all eligibility criteria for the liberalized benefit on the
effective date of the liberalizing law or issue and that the eligibility
existed continuously from that date to the date of claim or
administrative determination of entitlement.

In [McCay v. Brown]{.underline}, 9 Vet. App. 183 (1996), the U.S. Court
of Veterans Appeals (the Court) noted that both section 5110(g) and Sec.
3.114(a) are silent as to a liberalizing law or issue with a retroactive
effective date. The Court stated that the requirement that the claimant
must have met all eligibility criteria on the effective date of the law
or issue fulfills the intent of section 5110(g) when the liberalizing
law is prospective. However, the Court held that, where the liberalizing
law has a retroactive effective date, it is not a permissible
construction of section 5110(g) and would result in unequal treatment of
claimants. This document amends Sec. 3.114(a) to make it clear that that
requirement applies only when liberalizing laws or issues take effect on
or after the date of enactment or issuance.

REGULATORY AMENDMENT

3-97-5

Regulations Affected: 38 CFR 3.2(f), 3.20, 3.307(a)(6)(i) and (iii),
3.810, 3.1000, and 3.1600(c)

Effective Date of the Regulation: October 9, 1996, except for the
amendments to §§ 3.2(f) and 3.307(a)(6), which are effective January 1,
1997. The amendment to 38 CFR 3.20 apply to the deaths of compensation
and pension recipients that occur after December 31, 1996. The amendment
to 38 CFR 3.1000 applies to claims for accrued benefits based on deaths
that occurred before October 9, 1996, and that were not finally decided
before then, as well as to claims based on deaths that occurred after
then.

Date Secretary Approved Regulation: April 28, 1997

Federal Register Citation: 62 FR 35421-23 (July 1, 1997)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Under the provisions of 38 U.S.C. 1162, VA pays a clothing allowance to
each veteran who, because of a service-connected disability, either
wears or uses a prosthetic or orthopedic appliance which tends to wear
out or tear the veteran\'s clothing or uses a medication prescribed for
a skin condition due to a service-connected disability and which causes
irreparable damage to the veteran\'s outer clothing. Although 38 U.S.C.
5313 limits the amount of compensation or dependency and indemnity
compensation that is payable to any person who is incarcerated in a
Federal, State, or local penal institution for a period in excess of 60
days for conviction of a felony, there was no such restriction on
payment of the clothing allowance.

Section 502 of the Veterans\' Benefits Improvements Act of 1996, Pub. L.
104-275, amended 38 U.S.C. Chap. 53 to reduce the amount of the clothing
allowance payable under 38 U.S.C. 1162 to veterans who are incarcerated
in a Federal, State, or local penal institution for a period in excess
of 60 days and who are furnished clothing without charge by the
institution. Under this amendment, VA is required to reduce the amount
of the clothing allowance by an amount equal to 1/365 of the amount of
the allowance otherwise payable for each day on which the veteran was
incarcerated during the 12-month period preceding the date on which
payment of the clothing allowance would be due. VA has amended 38 CFR
3.810 to reflect this statutory change.

The Vietnam era was defined as the period August 5, 1964, through May 7,
1975, inclusive (See 38 CFR 3.2(f)). Section 505 of Pub. L. 104-275
amended 38 U.S.C. 101(29) to expand the Vietnam era to the period
beginning on February 28, 1961, and ending on May 7, 1975, but only for
veterans who served in the Republic of Vietnam during that period. Pub.
L. 104-275 also amended 38 U.S.C. 1116(a) to expand the period during
which veterans must have served in Vietnam to be entitled to the
application of certain presumptions relating to exposure to certain
herbicide agents and the service connection of associated diseases to
the period beginning January 9, 1962, and ending on May 7, 1975. VA has
amended 38 CFR 3.2(f) and 3.307(a)(6) to reflect these statutory
changes, which are effective January 1, 1997.

Under the provisions of 38 U.S.C. 5310, a veteran\'s surviving spouse
who is entitled to death benefits for the month of the veteran\'s death
gets an amount not less than the amount which the veteran would have
received for that month but for his or her death. Section 506 of Pub. L.
104-275 revised 38 U.S.C. 5310 to allow a surviving spouse who is not
entitled to death benefits for the month of the veteran\'s death to
receive a benefit in an amount equal to the amount which the veteran
would have received for that month but for his or her death. It further
provided that a compensation or pension payment issued to a veteran for
the month of death shall be treated as being payable to a surviving
spouse who is entitled to this new benefit and that if the payment is
negotiated or deposited it will be considered as the benefit due the
surviving spouse. However, if the payment is less than the amount the
veteran would have received for the month of death, the statute requires
that the unpaid amount be treated as an accrued benefit (See 38 U.S.C.
5121 and 38 CFR 3.1000). The changes made by section 506 of Pub. L.
104-275 apply to deaths occurring after December 31, 1996. VA has
amended 38 CFR 3.20 to reflect these statutory changes.

Under the provisions of 38 U.S.C. 5121, when an individual eligible for
VA periodic monetary benefits dies, the amount of benefits due but
unpaid at death may be paid either to certain survivors or as a
reimbursement to the person who bore the expense of the individual\'s
last illness and burial. The amount of accrued benefits payable was
limited to the amount due for a period not to exceed one year prior to
the date of death. Section 507 of Pub. L. 104-275 revised this to the
amount due for a period not to exceed two years prior to the date of
death. VA has amended 38 CFR 3.1000(a) to reflect this statutory change.

Under the provisions of 38 U.S.C. 2303, VA pays burial benefits on
behalf of a veteran who dies in a VA facility to which he or she was
admitted for hospital, nursing home, or domiciliary care, or who dies in
an institution at which he or she was receiving hospital or nursing home
care at the expense of the United States at the time of death. Section
212 of Pub. L. 104-275 amended 38 U.S.C. 2303 to provide burial benefits
for certain veterans who die in State nursing homes. VA has amended 38
CFR 3.1600(c) to reflect this statutory change, to correct an obsolete
reference to 38 U.S.C. 1701(4), and to include within the scope of the
term \"hospitalized by VA\" contract hospital care under 38 U.S.C. 1703.
These amendments merely conform the regulations to the governing
statutory provisions.

REGULATORY AMENDMENT

3-97-6

Regulations Affected: 38 CFR 3.27(c) and (d), 3.105, 3.158, 3.261,
3.262, 3.263, 3.272, 3.275, 3.403, 3.503, and 3.814

Effective Date of the Regulation: October 1, 1997

Date Secretary Approved Regulation: September 11, 1997

Federal Register Citation: 62 FR 51274-281 (September 30, 1997)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 3 of the Agent Orange Act of 1991, Pub. L. 102-4, 105 Stat. 11,
directed the Secretary of Veterans Affairs to seek to enter into an
agreement with the National Academy of Sciences (NAS) for a series of
reports to review and summarize the scientific evidence concerning the
association between exposure to herbicides used in support of military
operations in the Republic of Vietnam during the Vietnam era, and each
disease suspected to be associated with such exposure. In its most
recent report, entitled \"Veterans and Agent Orange: Update 1996,\"
which was released on March 14, 1996, NAS noted what it considered
\"limited/suggestive evidence of an association\" between herbicide
exposure and spina bifida in the offspring of Vietnam veterans.

Since VA did not have the statutory authority to provide benefits to
children of veterans based on birth defects, the Secretary announced on
May 28, 1996, that he would seek legislation to provide an appropriate
remedy and submitted proposed legislation to Congress in July of that
year. Section 421 of Pub. L. 104-204 added a new chapter 18 to title 38,
United States Code, authorizing VA to provide certain benefits,
including a monthly monetary allowance, to children born with spina
bifida who are the natural children of veterans who served in the
Republic of Vietnam during the Vietnam era. This document amends
existing VA adjudication regulations and adds a new section to title 38,
Code of Federal Regulations, to implement this new authority.

Section 1805(c) of title 38, United States Code, specifies that receipt
of this allowance shall not affect the right of the child, or the right
of any individual, based on the child\'s relationship to that
individual, to receive any other benefit to which the child, or that
individual, may be entitled under any law administered by VA, nor will
the allowance be considered income or resources in determining
eligibility for, or the amount of, benefits under any Federal or
federally assisted program. We are amending 38 CFR 3.261, 3.262, 3.263,
3.272, and 3.275 to reflect this statutory provision as it applies to
VA\'s income-based benefit programs.

Section 1806 of title 38, United States Code, provides that the
effective date of the monetary allowance to a child under new chapter 18
will be fixed in accordance with the facts found, but will not be
earlier than the date of receipt of application. Additionally, 38 U.S.C.
5110(n), which applies to all benefits, provides that the award of
benefits by reason of the birth of a child will be effective on the date
of birth if VA receives sufficient proof of the event within one year.
The effective date of section 421 of Pub. L. 104-204 is October 1, 1997.
VA is amending 38 CFR 3.403 to reflect these statutory provisions.

VA is also amending 38 CFR 3.503 to specify that this monetary allowance
will terminate the last day of the month before the month in which the
death of a child occurs. This date is consistent with the termination
provisions of 38 U.S.C. 5112(b) applicable to compensation, pension, and
dependency and indemnity compensation benefits administered by VA, and
there is no indication in the statute that Congress intended that VA
administer this benefit in any different manner. Due to the amendments
to 38 CFR 3.403 and 3.503 we are making technical amendments to each
cross reference following 38 CFR 3.57, 3.659, 3.703, 3.707, and 3.807.

VA is also amending 38 CFR 3.105 to specify that, where there is a
change in disability status warranting a reduction of the monetary
allowance, such reduction in evaluation will be effective the last day
of the month following sixty days from the date of notice to the
recipient (at the recipient\'s last address of record) of the
contemplated reduction. This is the date stipulated by 38 U.S.C.
5112(b)(6) for reduction of disability compensation benefits under the
same circumstances. We are not, however, incorporating an additional
sixty-day notice such as that provided before reductions of compensation
awards under the provisions of 38 CFR 3.105(e). Since reduction of this
monetary allowance would generally be based on private medical evidence
that the claimant had authorized to be released to VA, and since the
rating criteria for this benefit are generally less complex than those
for rating compensation claims, in our judgment, 60 days is enough time
for claimants to submit evidence showing that the monthly allowance
should not be reduced. We are applying the provisions of 38 CFR 3.105(h)
concerning the opportunity for a predetermination hearing to reductions
of this monetary allowance.

Section 3.158 of title 38, Code of Federal Regulations, describes the
circumstances under which VA will consider a claim abandoned. Where
evidence requested in connection with a claim is not furnished within
one year after the date of request, the claim will be considered
abandoned and further action will not be taken unless a new claim is
received. Should entitlement be established on the basis of this new
claim, benefits are awarded effective not earlier than the date of the
filing of the new claim. Where benefit payments have been discontinued
because a payee\'s present whereabouts are unknown, payments will be
resumed effective the day following the date of last payment if
entitlement is otherwise established, upon receipt of a valid current
address. In view of the similarity between this benefit and other
monetary benefits which VA administers, and, in order to maintain
consistency with respect to the administration of these benefits, we
believe it is appropriate to apply these provisions to the monetary
monthly allowance for children with spina bifida, and we are amending 38
CFR 3.158 accordingly.

Pursuant to 38 U.S.C. 1805(b)(3), the amount of the monthly monetary
allowance payable to a child with spina bifida will be \$200, \$700, or
\$1,200, based on the individual\'s degree of disability. Section
1805(b)(3) also specifies that these amounts are subject to adjustment
under the provisions of 38 U.S.C. 5312, which provides for the
adjustment of certain VA benefit rates whenever there is an increase in
benefit amounts payable under title II of the Social Security Act (42
U.S.C. 401 et seq.). We amending 38 CFR 3.27 to reflect that statutory
provision.

We are adding a new section 3.814 to title 38, Code of Federal
Regulations, to implement additional provisions of 38 U.S.C. 1805. If a
child with spina bifida is the natural child of two Vietnam veterans,
new section 3.814 would make clear that that child may receive only one
monthly allowance. This limitation is consistent with the provision of
38 U.S.C. 5304(a)(1) that limits a person to not more than one award of
pension, compensation, emergency officers, regular or reserve retirement
pay based on his or her own service. Such a limit is appropriate in this
instance because a child establishes entitlement to this benefit in his
or her own right due to being afflicted with spina bifida, and awarding
more than one monthly allowance based on the existence of the same
disability would constitute a duplication of benefits similar to that
prohibited by 38 U.S.C. 5304(a)(1).

We are requiring an applicant for the monetary allowance to furnish
certain information contained on a VA form entitled \"Application for
Spina Bifida Benefits\" which is set forth in full in the text portion
of proposed § 3.814(b). The information requested is necessary for
making determinations regarding eligibility for monetary allowances.
Furnishing the Social Security numbers of the natural parent(s) and the
child on whose behalf benefits are sought is not mandatory, given the
absence, under current law, of statutory authority that would authorize
VA to require this information. Nevertheless, voluntary submission of
such Social Security numbers would be helpful to VA in establishing an
individual\'s eligibility for the monetary allowance authorized by law.
VA would use the Social Security numbers to: (1) verify that the
child\'s natural parent was a veteran who served in Vietnam during the
specified period; (2) identify medical records; and (3) ensure that
awards to deceased beneficiaries are terminated in a timely manner to
avoid creation of overpayments.

The term \"Vietnam veteran\" is defined by the statute as a veteran who
performed active military, naval, or air service in the Republic of
Vietnam during the Vietnam era. We are adopting the statutory language
for purposes of new section 3.814. We also are defining the term
[service in the Republic of Vietnam]{.underline} to include service in
the waters offshore and service in other locations if the conditions of
service involved duty or visitation in the Republic of Vietnam. This is
consistent with the definition of [service in the Republic of
Vietnam]{.underline} that appears at 38 CFR 3.307(a)(6)(iii), which sets
forth the conditions under which VA presumes that Vietnam veterans were
exposed to an herbicide agent during active military service. Since the
purpose of this rulemaking is to provide for payment to the children of
those same veterans if the children are born with spina bifida, it is
appropriate to recognize the same area in which veterans are presumed to
have been exposed to herbicides.

The statute defines the term \"child\" as meaning a natural child of a
Vietnam veteran, regardless of age or marital status, who was conceived
after the date on which the veteran first entered the Republic of
Vietnam during the Vietnam era. In general, the statutes authorizing VA
benefits recognize a legitimate child, a legally adopted child, a
stepchild who is a member of the veteran\'s household, or an
illegitimate child either acknowledged in writing by the veteran or
judicially decreed to be the child of the veteran, as the child of the
veteran (See 38 U.S.C. 101(4)(A)). 38 U.S.C. 1801, however, establishes
a stricter requirement; in order to be eligible for this benefit a child
must be the [natural]{.underline} child of a Vietnam veteran. We
therefore are requiring that, in order to establish entitlement to this
benefit, a claimant must provide the types of evidence specified in 38
CFR 3.209 and 3.210 sufficient to demonstrate in the judgment of the
Secretary, that the child on whose behalf benefits are sought is the
natural child of a Vietnam veteran.

38 U.S.C. 1805 (b) authorizes VA to make monthly payments at one of
three levels based on the degree of disability suffered by the child, as
determined in accordance with a schedule for rating such disabilities to
be prescribed by the Secretary. Spina bifida is a developmental anomaly
characterized by defective closure of the bony encasement of the spinal
cord, through which the cord (myelocele), meninges (meningocele), or
both (meningomyelocele) may (spina bifida cystica) or may not (spina
bifida occulta) protrude (Dorland\'s Illustrated Medical Dictionary,
27th ed. 1988, 1560 and The Merck Manual, 16th ed. 1992, 2077).
Neurological deficit is the main determinant of disability for an
individual with spina bifida (Long-term Outcome in Surgically Treated
Spina Bifida Cystica, Isao Date, M.D., Yasunori Yagyu, M.D., Shoji
Asari, M.D., and Takshi Ohmoto, M.D., [Surg. Neurol]{.underline}. 1993,
40:471-5). In our judgment, the neurological manifestations that best
define the severity of disability are impairment of: functioning of the
extremities; bowel or bladder function; and intellectual functioning.

We are designating levels of disability identified as Level I, II, or
III, based on an assessment of these neurologic manifestations in
eligible individuals. Each of these neurologic manifestations exhibits
three clearly identifiable levels of impairment that can be used in
determining levels of payment. Functioning of the lower extremities can
be assessed from least to most impaired based on (1) the ability to walk
without braces or other external support; (2) the ability to walk only
with braces or other external support; or (3) the inability to walk.
Functioning of the upper extremities can be assessed from least to most
impaired based on (1) absence of sensory or motor impairment; (2)
existence of sensory or motor impairment not precluding the ability to
grasp a pen, feed one\'s self, perform self care; and (3) existence of
sensory or motor impairment severe enough to preclude the ability to
grasp a pen, feed one\'s self, or perform self care. Bowel or bladder
function can be assessed from least to most impaired based upon whether
an individual is (1) continent of urine and feces; (2) requires drugs or
mechanical means to maintain proper bladder or bowel function; or (3) is
completely incontinent of urine or feces.

Intellectual function is ordinarily assessed through the use of any of
several standardized tests that determine the intelligence quotient
(I.Q.). The average or normal I.Q. range is generally considered to be
90 to 110 (\"Comprehensive Textbook of Psychiatry\" 497 (Harold I.
Kaplan, M.D., and Benjamin J. Sadock, M.D., eds., 5th ed. 1989)). The
American Association of Mental Deficiency considers an I.Q. of 69 or
less to indicate mental retardation. Between these ranges falls an
intermediate group with an I.Q. between 70 and 89, considered to be in
the range of dull-normal to borderline mental retardation.

Section 1805(a) authorizes VA to pay a monetary allowance for any
disability resulting from spina bifida. We have concluded that any
person who has spina bifida, other than spina bifida occulta, suffers
some degree of disability. Accordingly, we will rate individuals
suffering from spina bifida at Level I (the lowest level of disability)
if they are able to walk without braces or other external support
(although gait may be impaired), have no motor or sensory impairment of
the upper extremities, have an I.Q. of 90 or higher, and are continent
of urine and feces. Provided that none of their disabilities due to
spina bifida are severe enough to meet the requirements of Level III, we
will rate individuals at Level II (the intermediate level of disability)
if they are ambulatory, but only with braces or other external support;
or, if they have motor or sensory impairment of the upper extremities
but are able to grasp a pen, feed themselves, and perform self care; or,
if they have an I.Q. between 70 and 89; or, if they require drugs or
intermittent catheterization to maintain proper urinary bladder
function, or mechanisms for proper bowel function. We will rate
individuals at Level III (the highest level of disability) if they are
unable to ambulate; or, if they have motor or sensory impairment of the
upper extremities severe enough to preclude grasping a pen, self-care or
self-feeding; or, if they have an I.Q. of 69 or less; or, if they are
completely incontinent of urine or feces. For a child with spina bifida
to be evaluated at Level I, each of any existing neurological
disabilities would have to fall into the least impaired range described
above. If at least one of the claimant\'s neurological impairments falls
into the middle range, the individual will be rated at Level II.
Furthermore, if at least one of the disabilities falls into the highest
level of impairment, the individual will be rated at Level III.

Children who are less than one year of age, regardless of whether they
suffer from spina bifida, are essentially helpless, incontinent, unable
to walk, and too young for I.Q. to be measured. Therefore, the
above-noted criteria are not readily applicable as determinants of
disability at that age. Therefore, children under the age of one will be
rated at Level I, unless a pediatric neurologist or a pediatric
neurosurgeon certifies that, in his or her medical judgment, there is a
neurological deficit present that will prevent the child from
ambulating, grasping a pen, performing self-care, or feeding him or
herself because of sensory or motor impairment of the upper extremities,
or that will make it impossible for the child to achieve urinary or
fecal continence. In our judgment, pediatric neurologists or pediatric
neurosurgeons are the only physicians with the expertise in this highly
specialized area necessary to assess neurological deficits and their
likely prognosis in children under the age of one. If such a deficit is
present, the child will be rated at Level III. We also are requiring
that VA reassess the level of disability in each child at the age of one
year, at which time the effects of spina bifida can more readily be
determined.

In some cases, symptoms due to spina bifida do not become manifest for
several years. Even if the limbs initially appear totally paralyzed,
early training and the use of appliances may allow ambulation in
childhood (Brain\'s Diseases of the Nervous System, revised by John N.
Walton, M.D., D.Sc., F.R.C.P., 8th ed., 1977, 777). However, children
with lesions at the second lumbar level or higher, even if they become
ambulatory in childhood, usually will require wheelchairs in the teenage
period. Despite initial bowel or bladder incontinence, most older
children, with training and the use of medication or appliances, are
able to achieve continence (Diseases of the Nervous System, Arthur K.
Asbury, M.D., Guy M. McKhann, M.D., and W. Ian McDonald, Ph.D.,
F.R.C.P., eds., 1986, 712).

VA will reassess the level of disability due to spina bifida whenever it
receives medical evidence indicating that a change is warranted.
Nevertheless, we are requiring that VA reassess the level of disability
due to spina bifida at intervals of not more than five years until the
child has reached the age of 21. Required reassessments will assure that
the appropriate level of disability is assigned during the period of
time when changes in the disabling effects of spina bifida are most
likely to occur. Thereafter, we will reassess the level of disability
only if we receive medical evidence indicating a material change in the
level of disability or that the current rating may be incorrect. By the
time a child is age 21, the condition has generally stabilized and, in
our judgment, required reassessments beyond that age will no longer be
necessary.

Because VA medical facilities generally provide examination and care
only to veterans, VA lacks pediatric examiners, pediatric neurologists,
and other pediatric specialists who might participate in the evaluation
and care of children with spina bifida. We therefore will accept
statements from private physicians, as well as examination reports from
government or private institutions, for the purpose of rating spina
bifida claims without further examination, provided they are adequate to
permit the evaluation of the effects of spina bifida under the criteria
proposed above. Because of the critical need to obtain this information
in order to assure assignment of an appropriate rating level, we are
requiring that individuals seeking or receiving benefits under this
provision authorize the release of pertinent medical records to VA and
that children for whom VA schedules an examination, whether at a VA
facility or by a private health-care provider under contract, report for
that examination. Individuals who fail to authorize the release of
pertinent medical records or fail to report for examination would be
rated at Level I.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In § 3.27, paragraph (c) is redesignated as paragraph (d), a new
paragraph (c) is added, and newly redesignated paragraph (d) and its
authority citation are revised to read as follows:

[§ 3.27 Automatic adjustment of benefit rates.]{.underline}

\* \* \* \* \*

\(c\) [Monetary allowance under 38 U.S.C. 1805 for a child suffering
from spina bifida who is a child of a Vietnam veteran.]{.underline}
Whenever there is a cost-of-living increase in benefit amounts payable
under section 215(i) of Title II of the Social Security Act, VA shall,
effective on the dates such increases become effective, increase by the
same percentage the monthly allowance under 38 U.S.C. 1805 for a child
suffering from spina bifida who is a child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(b)(3))

\(d\) [Publishing requirements.]{.underline} Increases in pension rates,
parents\' dependency and indemnity compensation rates and income
limitation, and the monthly allowance under 38 U.S.C. 1805 for a child
suffering from spina bifida made under this section shall be published
in the [FEDERAL REGISTER.]{.underline}

(Authority: 38 U.S.C. 5312(c)(1), 1805 (b)(3))

3\. In § 3.105, paragraphs (g) and (h) are redesignated as paragraphs
(h) and (i), respectively; in paragraphs (d), (e), (f) and newly
redesignated paragraph (h) remove \"paragraph (h)\" each time it appears
and add, in its place, \"paragraph (i)\"; in newly redesignated
paragraph (i)(1) remove \"paragraphs (d) through (g)\" and add, in its
place, \"paragraphs (d) through (h)\"; in newly redesignated paragraph
(i)(2) introductory text remove \"paragraph (d), (e), (f) or (g)\" and
add, in its place, \"paragraph (d), (e), (f), (g) or (h)\"; in newly
redesignated paragraph (i)(2)(ii) remove \"paragraph (f)\" and add, in
its place, \"paragraphs (f) and (g)\"; in new redesignated paragraph
(i)(2)(iii) remove \"paragraph (g)\" and add, in its place, \"paragraph
(h)\"; and add a new paragraph (g) to read as follows:

[§ 3.105 Revision of decisions.]{.underline}

\* \* \* \* \*

\(g\) [Reduction in evaluation - monetary allowance to a child suffering
from spina bifida under 38 U.S.C. 1805.]{.underline} Where a change in
disability level warrants a reduction of the monthly allowance currently
being paid, VA will notify the beneficiary at his or her latest address
of record of the proposed reduction, furnish detailed reasons therefor,
and allow the beneficiary 60 days to present additional evidence to show
that the monthly allowance should be continued at the present level.
Unless otherwise provided in paragraph (i) of this section, if VA does
not receive additional evidence within that period, it will take final
rating action and reduce the award effective the last day of the month
following sixty days from the date of notice to the payee of the
proposed reduction.

(Authority: 38 U.S.C. 501)

\* \* \* \* \*

[\[§ 3.158 Amended\]]{.underline}

4\. In § 3.158, paragraphs (a) and (c) are amended by removing \"or
dependency and indemnity compensation\" and adding, in its place,
\"dependency and indemnity compensation, or monetary allowance under the
provisions of 38 U.S.C. 1805\".

5\. In § 3.261, paragraph (a)(40) is added to read as follows:

[§ 3.261 Character of income; exclusions and estates.]{.underline}

\* \* \* \* \*

\(a\) \* \* \*

+-----------------+---------+-----------+---------+---------+--------+
| Income          | Dep     | D         | P       | P       | See    |
|                 | endency | ependency | ension; | ension; |        |
|                 |         |           |         |         |        |
|                 | (p      | and       | old-law | section |        |
|                 | arents) | Indemnity | (ve     | 306     |        |
|                 |         | com       | terans, | (ve     |        |
|                 |         | pensation | su      | terans, |        |
|                 |         | (parents) | rviving | su      |        |
|                 |         |           | spouses | rviving |        |
|                 |         |           | and     | spouses |        |
|                 |         |           | c       | and     |        |
|                 |         |           | hildren | ch      |        |
|                 |         |           |         | ildren) |        |
+-----------------+---------+-----------+---------+---------+--------+
| \(40\) Monetary | E       | Excluded  | E       | E       | §3.    |
| allow-          | xcluded |           | xcluded | xcluded | 262(y) |
|                 |         |           |         |         |        |
| ance under 38   |         |           |         |         |        |
| U.S.C. 1805 for |         |           |         |         |        |
| children        |         |           |         |         |        |
|                 |         |           |         |         |        |
| suffering from  |         |           |         |         |        |
| spina           |         |           |         |         |        |
|                 |         |           |         |         |        |
| bifida who are  |         |           |         |         |        |
|                 |         |           |         |         |        |
| children of     |         |           |         |         |        |
| Vietnam         |         |           |         |         |        |
| Veterans.       |         |           |         |         |        |
|                 |         |           |         |         |        |
| (38 U.S.C.      |         |           |         |         |        |
| 1805(d))        |         |           |         |         |        |
+-----------------+---------+-----------+---------+---------+--------+

\* \* \* \* \*

6\. In § 3.262, paragraph (y) is added immediately preceding the final
authority citation at the end of the section to read as follows:

[§ 3.262 Exclusions of income.]{.underline}

\* \* \* \* \*

\(y\) [Monetary allowance under 38 U.S.C. 1805 for a child suffering
from spina bifida who is a child of a Vietnam veteran.]{.underline}
There shall be excluded from income computation any allowance paid under
the provisions of 38 U.S.C. 1805 to a child suffering from spina bifida
who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

7\. In § 3.263, paragraph (g) is added to read as follows:

[§ 3.263 Corpus of estate; net worth.]{.underline}

\* \* \* \* \*

\(g\) [Monetary allowance under 38 U.S.C. 1805 for a child suffering
from spina bifida who is a child of a Vietnam veteran.]{.underline}
There shall be excluded from the corpus of estate or net worth of a
claimant any allowance paid under the provisions of 38 U.S.C. 1805 to a
child suffering from spina bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

8\. In § 3.272, paragraph (u) is added to read as follows:

[§ 3.272 Exclusions from income.]{.underline}

\* \* \* \* \*

\(u\) [Monetary allowance under 38 U.S.C. 1805 for a child suffering
from spina bifida who is a child of a Vietnam veteran.]{.underline} Any
allowance paid under the provisions of 38 U.S.C. 1805 to a child
suffering from spina bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

9\. In § 3.275, paragraph (i) is added to read as follows:

[§ 3.275 Criteria for evaluating net worth.]{.underline}

\* \* \* \* \*

\(i\) [Monetary allowance under 38 U.S.C. 1805 for a child suffering
from spina bifida who is a child of a Vietnam veteran.]{.underline}
There shall be excluded from the corpus of estate or net worth of a
claimant any allowance paid under the provisions of 38 U.S.C. 1805 to a
child suffering from spina bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

10\. In § 3.403, the introductory text and paragraphs (a) through (e)
are redesignated as paragraph (a) introductory text and paragraphs
(a)(1) through (a)(5), respectively, and paragraph (b) is added to read
as follows:

[§ 3.403 Children.]{.underline}

\* \* \* \* \*

\(b\) [Monetary allowance under 38 U.S.C. 1805 for a child suffering
from spina bifida who is a child of a Vietnam veteran (§
3.814).]{.underline} An award of the monetary allowance under 38 U.S.C.
1805 to a child suffering from spina bifida who is the child of a
Vietnam veteran will be either date of birth if claim is received within
one year of that date, or, date of claim, but not earlier than October
1, 1997.

(Authority: 38 U.S.C. 1806, 5110(n); sec. 422(c), Pub. L. 104-204, 110
Stat. 2926)

11\. In § 3.503, the introductory text and paragraphs (a) through (j)
are redesignated as paragraph (a) introductory text and paragraphs
(a)(1) through (a)(10), respectively, and paragraph (b) is added to read
as follows:

[§ 3.503 Children.]{.underline}

\* \* \* \* \*

\(b\) [Monetary allowance under 38 U.S.C. 1805 for a child suffering
from spina bifida who is a child of a Vietnam veteran (§
3.814).]{.underline} The effective date of discontinuance of the monthly
allowance under 38 U.S.C. 1805 to a child suffering from spina bifida
who is the child of a Vietnam veteran will be the last day of the month
before the month in which the death of the child occurred.

(Authority: 38 U.S.C. 501)

12\. Section 3.814 is added under the undesignated centerheading
\"Special Benefits\" to read as follows:

[§ 3.814 Monetary allowance under 38 U.S.C. 1805 for a child suffering
from spina bifida who is a child of a Vietnam veteran.]{.underline}

\(a\) VA shall pay a monthly allowance based upon the level of
disability determined under the provisions of paragraph (d) of this
section to or for a child who it has determined is suffering from spina
bifida and who is a child of a Vietnam veteran. Receipt of this
allowance shall not affect the right of the child, or the right of any
individual based on the child\'s relationship to that individual, to
receive any other benefit to which the child, or that individual, may be
entitled under any law administered by VA. If a child suffering from
spina bifida is the natural child of two Vietnam veterans, he or she is
entitled to only one monthly allowance under this section.

\(b\) Applicants for the monetary allowance under this section must
submit an application to the VA regional office and include the
information mandated on the following VA form entitled \"Application for
Spina Bifida Benefits:\"

\(c\) [Definitions.]{.underline}

\(1\) [Vietnam veteran.]{.underline} For the purposes of this section,
the term \"Vietnam veteran\" means a veteran who performed active
military, naval, or air service in the Republic of Vietnam during the
Vietnam era. [Service in the Republic of Vietnam]{.underline} includes
service in the waters offshore and service in other locations if the
conditions of service involved duty or visitation in the Republic of
Vietnam.

\(2\) [Child.]{.underline} For the purposes of this section, the term
\"child\" means a natural child of a Vietnam veteran, regardless of age
or marital status, conceived after the date on which the veteran first
served in the Republic of Vietnam during the Vietnam era.
Notwithstanding the provisions of § 3.204(a)(1), VA shall require the
types of evidence specified in §§ 3.209 and 3.210 sufficient to
establish in the judgment of the Secretary that a child is the natural
child of a Vietnam veteran.

\(3\) [Spina bifida.]{.underline} For the purposes of this section, the
term \"spina bifida\" means any form and manifestation of spina bifida
except spina bifida occulta.

(d)(1) VA shall determine the level of disability suffered by the child
in accordance with the following criteria:

\(i\) [Level I]{.underline}. The child is able to walk without braces or
other external support (although gait may be impaired), has no sensory
or motor impairment of upper extremities, has an IQ of 90 or higher, and
is continent of urine and feces.

\(ii\) [Level II]{.underline}. Provided that none of the child\'s
disabilities are severe enough to be evaluated at Level III, and the
child: is ambulatory, but only with braces or other external support;
or, has sensory or motor impairment of upper extremities, but is able to
grasp pen, feed self, and perform self care; or, has an IQ of at least
70 but less than 90; or, requires drugs or intermittent catheterization
or other mechanical means to maintain proper urinary bladder function,
or mechanisms for proper bowel function.

\(iii\) [Level III]{.underline}. The child is unable to ambulate; or,
has sensory or motor impairment of upper extremities severe enough to
prevent grasping a pen, feeding self, and performing self care; or, has
an IQ of 69 or less; or, has complete urinary or fecal incontinence.

\(2\) Provided that they are adequate for assessing the level of
disability due to spina bifida under the provisions of paragraph (d)(1),
VA may accept statements from private physicians, or examination reports
from government or private institutions, for the purpose of rating spina
bifida claims without further examination. In the absence of such
information, VA will schedule an examination for the purpose of
assessing the level of disability.

\(3\) Unless or until VA is able to obtain medical evidence adequate to
assess the level of disability due to spina bifida, or to reassess the
level of disability when required to do so under the provisions of
paragraph (d)(4) or (5) of this section, VA will rate the disability of
a person eligible for this monetary allowance at no higher than Level I.

\(4\) Children under the age of one year will be rated at Level I unless
a pediatric neurologist or a pediatric neurosurgeon certifies that, in
his or her medical judgment, there is a neurological deficit that will
prevent the child from ambulating; from grasping a pen, feeding him or
herself, or performing self care; or from achieving urinary or fecal
continence. If such a deficit is present, the child will be rated at
Level III. In either case, VA will reassess the level of disability when
the child reaches the age of one year.

\(5\) VA will reassess the level of disability due to spina bifida
whenever it receives medical evidence indicating that a change is
warranted. For individuals between the ages of one and twenty-one,
however, it will reassess the level of disability at intervals of not
more than five years. Thereafter, it will reassess the level of
disability only if evidence indicates there has been a material change
in the level of disability or that the current rating may be incorrect.

(Authority: 38 U.S.C. 501, 1805)

13\. The Cross Reference following § 3.57 is amended by removing \"§
3.403(a)\" and \"§ 3.503(c)\" and adding, in their places, \"§
3.403(a)(1)\" and \"§ 3.503(a)(3)\", respectively.

14\. Each Cross Reference following §§ 3.659 and 3.703 is amended by
removing \"§ 3.503(g)\" and adding, in its place, \"§ 3.503(a)(7)\".

15\. The Cross Reference following § 3.707 is amended by removing \"§
3.503(h)\" and adding, in its place, \"§ 3.503(a)(8)\".

16\. The Cross Reference following § 3.807 is amended by removing \"§
3.503(h)\" and adding, in its place, \"§ 3.503(a)(8).\".

REGULATORY AMENDMENT

3-98-1

Regulations Affected: 38 CFR 3.811

Effective Date of the Regulation: January 6, 1998

Date Secretary Approved Regulation: December 23, 1997

Federal Register Citation: 63 FR 412-13 (January 6, 1998)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Pub. L. 92-425 provides for payment of a guaranteed minimum annual
income (the so-called minimum-income-widow annuity, hereinafter referred
to as the minimum income annuity) to certain surviving spouses of
persons entitled to military retired or retainer pay at the time of
their death. To be eligible, a person must: (1) be the surviving spouse
of a military retiree who died on or before March 20, 1974; (2) be
eligible for VA nonservice-connected death pension; (3) have annual
income that is less than the maximum annual rate of pension under 38
U.S.C. 1541(b); and (4) be ineligible to receive an annuity under the
Survivor Benefit Plan (10 U.S.C. 1447-1455).

Section 638 of the National Defense Authorization Act for Fiscal Year
1997, Pub. L. 104-201, transfers responsibility for the payment of the
minimum income annuity to the Secretary of Veterans Affairs from the
Department of Defense (DoD). However, DoD remains responsible for
funding this benefit and determining basic eligibility. In certain
instances, the Department of Transportation will determine basic
eligibility. This transfer is effective on July 1, 1997, and applies
with respect to payments of benefits for any month after June 1997.

Pub. L. 104-201 also provides that the minimum income annuity shall not
affect the pension eligibility of the surviving spouse even though, as a
result of including the amount of the annuity as pension income, no
amount of pension is due. We interpret this provision to mean that an
individual is still to be considered \"eligible for pension\" from VA
for purposes of determining basic eligibility for the minimum income
annuity even if that individual\'s income is excessive for VA pension
purposes when the minimum income annuity is added to any other countable
income.

We have added a new section, 3.811, to title 38, Code of Federal
Regulations, to reflect these statutory provisions.

Under DoD procedures (DoD Financial Management Regulation, Chapter 10,
91001), the minimum income annuity is payable to surviving spouses
receiving Spanish-American War pension without regard to income. Since
the pension paid to survivors of Spanish-American War veterans under 38
U.S.C. 1536 is not an income-based program, we will continue to pay the
minimum income annuity to those beneficiaries in the same manner as DoD.

Pub. L. 92-425 as amended specifies that annual income for minimum
income annuity purposes is to be determined in the same manner as VA
determines income for pension purposes. Consistent with that
requirement, we will determine a beneficiary\'s annual income for the
purpose of the minimum income annuity under the provisions of §§ 3.271
and 3.272 for beneficiaries receiving improved pension, or under §§
3.260 through 3.262 for beneficiaries receiving old law or section 306
pensions, except that the amount of the minimum income annuity will be
excluded from the calculation.

38 U.S.C. 5123 requires VA to round down the amounts of section 306
pension and pension payable under 38 U.S.C. 1521, 1541 and 1542 to the
nearest dollar. There is no similar requirement in title 10, United
States Code, for computing the minimum income annuity. Therefore, we
will not round the monthly minimum income benefit to the nearest whole
dollar.

Pub. L. 92-425 as amended provides that the amount of the minimum income
annuity is calculated by subtracting the income of the surviving spouse,
exclusive of VA pension, but including benefits payable under 10 U.S.C.
1431-1436 (Retired Servicemen\'s Family Protection Plan (RSFPP)) from
the maximum annual pension rate under 38 U.S.C. 1541(b). Since RSFPP
benefits are countable as income for improved pension purposes, for
beneficiaries receiving improved pension, VA will determine the minimum
income annuity payment by subtracting the annual income for pension
purposes from the maximum annual pension rate under 38 U.S.C. 1541(b).

Since RSFPP benefits are not countable income for old law and section
306 pensions (See 38 CFR 3.261(a)(14)), for beneficiaries receiving old
law and section 306 pensions, VA will determine the minimum income
annuity payment by reducing the maximum annual pension rate under 38
U.S.C. 1541(b) by the amount of benefits payable under the RSFPP, if
any, that the beneficiary receives from DoD, and the annual income for
pension purposes.

VA will recompute the monthly minimum income annuity payment whenever
there is a change to the maximum annual rate of pension in effect under
38 U.S.C. 1541(b), and whenever there is a change in the beneficiary\'s
income.

Since a beneficiary must be eligible for VA pension in order to be
entitled to the minimum income annuity, if the beneficiary\'s
eligibility to nonservice-connected death pension terminates for any
reason, VA will terminate the minimum income annuity effective the same
date.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.811 is added to read as follows:

[§ 3.811 Minimum income annuity.]{.underline}

\(a\) [Eligibility.]{.underline} The minimum income annuity authorized
by Pub. L. 92-425 as amended is payable to a person:

\(1\) Who the Department of Defense or the Department of Transportation
has determined meets the eligibility criteria of section 4(a) of Pub. L.
92-425 as amended other than section 4(a)(1) and (2); and

\(2\) Who is eligible for pension under subchapter III of chapter 15 of
title 38, United States Code, or section 306 of the Veterans\' and
Survivors\' Pension Improvement Act of 1978; and

\(3\) Whose annual income, as determined in establishing pension
eligibility, is less than the maximum annual rate of pension in effect
under 38 U.S.C. 1541(b).

\(b\) [Computation of the minimum income annuity payment.]{.underline}

\(1\) [Annual income.]{.underline} VA will determine a beneficiary\'s
annual income for minimum income annuity purposes under the provisions
of §§ 3.271 and 3.272 of this part for beneficiaries receiving improved
pension, or under §§ 3.260 through 3.262 of this part for beneficiaries
receiving old law or section 306 pensions, except that the amount of the
minimum income annuity will be excluded from the calculation.

\(2\) VA will determine the minimum income annuity payment for
beneficiaries entitled to improved pension by subtracting the annual
income for minimum income annuity purposes from the maximum annual
pension rate under 38 U.S.C. 1541(b).

\(3\) VA will determine the minimum income annuity payment for
beneficiaries receiving old law and section 306 pensions by reducing the
maximum annual pension rate under 38 U.S.C. 1541(b) by the amount of the
Retired Servicemen\'s Family Protection Plan benefit, if any, that the
beneficiary receives and subtracting from that amount the annual income
for minimum income annuity purposes.

\(4\) VA will recompute the monthly minimum income annuity payment
whenever there is a change to the maximum annual rate of pension in
effect under 38 U.S.C. 1541(b), and whenever there is a change in the
beneficiary\'s income.

\(c\) An individual otherwise eligible for pension under subchapter III
of chapter 15 of title 38, United States Code, or section 306 of the
Veterans' and Survivors' Pension Improvement Act of 1978 shall be
considered eligible for pension for purposes of determining eligibility
for the minimum income annuity even though as a result of adding the
amount of the minimum income annuity authorized under Pub. L. 92-425 as
amended to any other countable income, no amount of pension is due.

\(d\) [Termination.]{.underline} Other than as provided in paragraph (c)
of this section, if a beneficiary receiving the minimum income annuity
becomes ineligible for pension, VA will terminate the minimum income
annuity effective the same date.

(Authority: Pub. L. 92-425 as amended (10 U.S.C. 1448 note); Sec. 638,
Pub. L. 104-201, 110 Stat. 2581)

REGULATORY AMENDMENT

3-98-2

Regulations Affected: 38 CFR 3.7(x)

Effective Date of the Regulation: June 2, 1997

Date Secretary Approved Regulation: December 23, 1997

Federal Register Citation: 63 FR 413 (January 6, 1998)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 401 of Pub. L. 95-202 stated that the service of certain groups
that had rendered service to the Armed Forces of the United States in
the capacity of civilian employment or contractual service shall be
considered active duty for the purposes of all laws administered by VA.
In order for members of such a group to be eligible for VA benefits, the
Secretary of Defense, or his or her designee, must determine that the
service of the group constituted active military service and issue
discharges to members of the group.

In the Federal Register of July 7, 1997 (62 FR 36263-64), the Secretary
of the Air Force published a notice that she had determined that the
service of both U.S. Flight Crew and Aviation Ground Support Employees
of Northeast Airlines Atlantic Division, Who Served Overseas as a Result
of Northeast Airlines' Contract With the Air Transport Command During
the Period December 7, 1941, Through August 14, 1945, and U.S. Civilian
Flight Crew and Aviation Ground Support Employees of Braniff Airways,
Who Served Overseas in the North Atlantic or Under the Jurisdiction of
the North Atlantic Wing, Air Transport Command (ATC), as a Result of a
Contract With the ATC During the Period February 26, 1942, Through
August 14, 1945, constituted active military service and that members of
these groups are entitled to VA benefits. The effective date of the
determination by the Secretary of the Air Force was June 2, 1997. VA has
amended 38 CFR 3.7(x) to recognize that the service of these groups
constitutes active military service for the purposes of laws
administered by VA.

Additionally, we have amended the heading and introductory text of 38
CFR 3.7 to make it easier for interested individuals to clearly identify
the topic of the regulation from the table of contents.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In § 3.7, the section heading and introductory text are revised and
new paragraphs (x)(29) and (x)(30) are added to read as follows:

[§ 3.7 Individuals and groups considered to have performed active
military, naval, or air service.]{.underline}

The following individuals and groups are considered to have performed
active military, naval, or air service:

\* \* \* \* \*

\(x\) \* \* \*

\(29\) U.S. Flight Crew and Aviation Ground Support Employees of
Northeast Airlines Atlantic Division, Who Served Overseas as a Result of
Northeast Airlines' Contract With the Air Transport Command During the
Period December 7, 1941, Through August 14, 1945.

\(30\) U.S. Civilian Flight Crew and Aviation Ground Support Employees
of Braniff Airways, Who Served Overseas in the North Atlantic or Under
the Jurisdiction of the North Atlantic Wing, Air Transport Command
(ATC), as a Result of a Contract With the ATC During the Period February
26, 1942, Through August 14, 1945.

(Authority: Sec. 401, Pub. L. 95-202, 91 Stat. 1449)

REGULATORY AMENDMENT

3-98-3

Regulations Affected: 38 CFR 3.317

Effective Date of the Regulation: March 6, 1998

Applicability date: November 2, 1994

Date Secretary Approved Regulation: February 27, 1998

Federal Register Citation: 63 FR 11122 (March 6, 1998)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

In response to the needs and concerns of Persian Gulf veterans, Congress
enacted the "Persian Gulf War Veterans' Benefits Act," Title I of the
"Veterans' Benefits Improvements Act of 1994," Pub. L. 103-446. That
statute added a new section 1117 to Title 38, United States Code
authorizing the Secretary of Veterans Affairs to compensate any Persian
Gulf veteran suffering from chronic disability resulting from an
undiagnosed illness or combination of undiagnosed illnesses that became
manifest either during active duty in the Southwest Asia theater of
operations during the Persian Gulf War or to a degree of ten percent or
more within a presumptive period, as determined by the Secretary,
following service in the Southwest Asia theater of operations during the
Persian Gulf War. The statute specified that in establishing a
presumptive period the Secretary should review any credible scientific
or medical evidence, the historical treatment afforded other diseases
for which service connection is presumed, and other pertinent
circumstances regarding the experience of Persian Gulf veterans.

In the Federal Register of February 3, 1995, VA published a final rule
adding a new section 3.317 to title 39, Code of Federal Regulations to
establish the regulatory framework necessary for the Secretary to pay
compensation under the authority granted by the Persian Gulf War
Veterans' Benefits Act. As part of that rulemaking VA, having determined
that there was little or no scientific or medical evidence at that time
that would be useful in determining an appropriate presumptive period,
established a two-year post-Gulf-service presumptive period based on the
historical treatment of disabilities for which manifestation periods had
been established and pertinent circumstances regarding the experiences
of Persian Gulf veterans as they were then known.

In the Federal Register of April 29, 1997, VA published an interim rule
with a request for comments that revised the presumptive period for
disabilities due to undiagnosed illnesses suffered by Persian Gulf
veterans. As revised, the presumptive period encompasses any such
disability that becomes manifest through the year 2001.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

§ 3.317 \[Amended\]

2\. In § 3.317, paragraph (a)(1)(i) is amended by removing "two years
after the date on which the veteran last performed military, naval, or
air service in the Southwest Asia theater of operations during the
Persian Gulf War" and adding in its place, "December 31, 2001".

3.  In § 3.317, the authority citation immediately following paragraph
    (d)(2) is revised to read as follows:

[§ 3.317 Compensation for certain disabilities due to undiagnosed
illnesses.]{.underline}

\* \* \* \* \*

Authority: 38 U.S.C. 1117.

REGULATORY AMENDMENT

3-98-4

Regulations Affected: 38 CFR 3.358(a), 3.361, 3.362, 3.363, and 3.800

Effective Date of the Regulation: October 1, 1997

Date Secretary Approved Regulation: May 11, 1998

Federal Register Citation: 63 FR 45004-007 (August 24, 1998)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 1151 of title 38, United States Code, previously authorized the
award of compensation or dependency and indemnity compensation for any
additional disability or death of a veteran which did not result from
the veteran's own willful misconduct but which did result from an injury
or aggravation of an injury suffered as the result of hospitalization,
medical or surgical treatment, or the pursuit of a course of vocational
rehabilitation awarded under any of the laws administered by VA or as a
result of having submitted to an examination under any such law. 38 CFR
3.358 and 3.800 contain the regulatory provisions implementing those
statutory provisions.

Effective for claims filed on or after October 1, 1997, section 422(a)
of Pub. L. 104-204, 110 Stat. 2874, 2926, (1996) amended 38 U.S.C. 1151
to authorize an award of compensation or dependency and indemnity
compensation for a veteran's \"qualifying additional disability\" or
\"qualifying death.\" Under 38 U.S.C. 1151 as amended, an additional
disability or death qualifies for compensation or dependency and
indemnity compensation if it (1) was not the result of the veteran's
willful misconduct; (2) was caused by hospital care, medical or surgical
treatment, or examination furnished the veteran under any law
administered by VA, either by a VA employee or in a VA facility; and (3)
was proximately caused by carelessness, negligence, lack of proper
skill, error in judgment, or similar instance of fault on VA's part in
furnishing the care, treatment, or examination or by an event not
reasonably foreseeable. An additional disability or death also qualifies
for benefits if it was not the result of the veteran's willful
misconduct and was proximately caused by VA's provision of training and
rehabilitation services as part of an approved rehabilitation program
under 38 U.S.C. chapter 31. This document adds new 38 CFR 3.361 to
implement 38 U.S.C 1151 as amended, new 38 CFR 3.362 to codify rules
concerning the offset of benefits awarded under 38 U.S.C. 1151 if the
beneficiary has also recovered damages under the Federal Tort Claims
Act, and new 38 CFR 3.363 to consolidate regulatory provisions
previously contained in §§ 3.358 and 3.800.

Section 422(b)(2) of Pub. L. 104-204, 110 Stat. 2874, 2927, provides
that 38 U.S.C. 1151 as amended shall govern all administrative
determinations of eligibility for benefits under 38 U.S.C. 1151 made for
claims filed on or after the effective date set forth in section
422(b)(1), which is October 1, 1996. However, section 422(c) of Pub. L.
104-204, 110 Stat. 2874, 2927, provides that, notwithstanding section
422(b)(1) or any other provision of the act, the amendments shall not
take effect until October 1, 1997, unless Congress enacts legislation
other than Pub. L. 104-204 to provide an earlier effective date.
Congress has not enacted such legislation. Therefore, we apply new §§
3.361 through 3.363 only to claims received by VA on or after October 1,
1997, and continue to apply §§ 3.358 and 3.800 to claims received by VA
before October 1, 1997. These applicability rules are reflected in new
§§ 3.358(a), 3.361(a), 3.362(a), 3.363(a), and 3.800(a).

New § 3.361(b), concerning additional disability, is derived from §
3.358(b)(1) with appropriate changes made to reflect the amendments made
by section 422 of Pub. L. 104-204 and editorial changes made to improve
clarity. Similarly, proposed § 3.361(c), concerning cause, is derived
from § 3.358(b)(2) and (c)(1).

As amended by section 422 of Pub. L. 104-204, 38 U.S.C. 1151(a)(1)
requires for entitlement that a veteran's additional disability or death
be proximately caused either by \"an event not reasonably foreseeable\"
or by \"carelessness, negligence, lack of proper skill, error in
judgment, or similar instance of fault\" on VA's part in furnishing the
hospital care, medical or surgical treatment, or examination that caused
the additional disability or death. We believe that Congress, by listing
several synonymous terms relating to negligence, intended not to provide
alternative standards of liability, but rather to establish a single
standard which would trigger entitlement to 38 U.S.C. 1151 benefits if
not met in VA's furnishing of hospital care, medical or surgical
treatment, or examination. We further believe that the single standard
Congress intended to establish is tort-variety negligence. We recognize
that there is not a single standard of liability governing tort claims
under the Federal Tort Claims Act, but rather that the standard applied
may vary from state to state. However, we also believe that Congress did
not intend entitlement to a veterans' benefit to depend on a claimant's
state of residence. Accordingly, we apply a uniform standard in the
adjudication of claims under 38 U.S.C. 1151. Therefore, in new §
3.361(d)(1)(i), we interpret 38 U.S.C. 1151 as providing entitlement to
benefits if VA, in furnishing hospital care, medical or surgical
treatment, or examination, fails to exercise the degree of care that
would be expected of a reasonable health care provider in furnishing
hospital care, medical or surgical treatment, or examination.

New § 3.361(d)(1)(ii), concerning consent to care, treatment, or
examination, is derived from § 3.358(c)(3). However, we include a
requirement that consent be informed, in accordance with 38 CFR 17.32.
As reflected in new § 3.361(d)(2), we leave to the factfinder in each
claim the determination as to whether the proximate cause of a veteran's
additional disability or death was an event not reasonably foreseeable,
and for the factfinder, in making that determination, to apply the
standard of what a reasonable health care provider would have foreseen.
New § 3.361(d)(3), concerning proximate cause by the provision of
rehabilitation and training services, is derived from § 3.358(c)(5) with
appropriate changes made to reflect the amendments made by section 422
of Pub. L. 104-204 and editorial changes made to improve clarity.

The definition of \"Department employee\" in new § 3.361(e)(1) is
derived from 5 U.S.C. 2105(a), which defines \"employee\" for title 5
(Government Organization and Employees) purposes, modified to refer only
to VA employees who are engaged in the furnishing of health care
services. The definition of \"Department facility\" in new § 3.361(e)(2)
reflects a provision of 38 U.S.C. 1151(a) as amended by section 422 of
Pub. L. 104-204. 38 U.S.C. 1151(a)(1) refers to \"a Department facility
as defined in section 1701(3)(A)\" of title 38, United States Code.
Section 1701(3)(A) defines \"facilities of the Department\" as
facilities over which the Secretary has direct jurisdiction. We
therefore define \"Department facility\" in the same way.

New § 3.361(f)(1) excludes hospital care or medical services furnished
pursuant to a contract made under 38 U.S.C. 1703 because, under section
1703's terms, such care or services are furnished in a non-Department
facility, and the day-to-day operations of such a facility's employees
are not subject to the Secretary's supervision. The exclusion in new §
3.361(f)(2) of nursing home care furnished under 38 U.S.C. 1720 is
derived from § 3.358(c)(6). New § 3.361(f)(3) excludes hospital care or
medical services provided under 38 U.S.C. 8153 in a facility over which
the Secretary does not have direct jurisdiction because care or services
under section 8153 are not provided by VA employees, but may or may not
be furnished in a VA facility. New § 3.361(f)(3) excludes only such care
and services in fact not provided in a VA facility. New § 3.361(g) is
derived from § 3.800(b).

New § 3.362(b), concerning the amount of a tort recovery to be offset
from a veteran's compensation awarded under 38 U.S.C. 1151(a), is
derived from § 3.800(a)(2). New § 3.362(c), concerning the amount of a
tort recovery to be offset from a survivor's dependency and indemnity
compensation (DIC) awarded under 38 U.S.C. 1151(a), is derived from §
3.800(a)(2) and the Office of the General Counsel precedent opinion
(VAOPGCPREC) 79-90. That opinion held that the amount to be offset from
a DIC award under 38 U.S.C. 1151 depends on the nature of the damages
recovered by the claimant under the Federal Tort Claims Act. Amounts
recovered by a claimant as damages under a typical \"wrongful-death
statute\" may be offset from a DIC award under 38 U.S.C. 1151, even if
the damages are paid to a nominal party as trustee for the veteran's
survivors. Each survivor receiving such damages is subject to offset of
DIC under 38 U.S.C. 1151 to the extent of sums included in the tort
claim's judgment, settlement, or compromise to compensate for harm
suffered by that survivor. On the other hand, amounts recovered by a
claimant, acting as personal representative of a decedent veteran's
estate, as damages under a \"survival statute\" may not be offset from a
DIC award under 38 U.S.C. 1151.

New § 3.362(d), concerning offset of structured settlements, is derived
from the principles espoused in VAOPGCPREC 79-90. Structured settlements
are settlements or compromises in which the Government, rather than
simply paying to a plaintiff a sum, in settlement or compromise of a
claim under the Federal Tort Claims Act, buys an annuity or otherwise
funds payments, which may differ in total amount from the amount
expended by the Government, to be made to the plaintiff at some future
time. We will offset from a compensation or DIC award only the veteran's
or survivor's proportional share of the Government's cost of such a
settlement, including the veteran's or survivor's proportional share of
attorney fees. Furthermore, the offset begins as soon as compensation or
DIC payments are made after the settlement becomes final, not when the
settlement payments are actually made to the beneficiary.

New § 3.362, concerning a bar to benefits due to alternative recoveries
before December 1, 1962, is derived from § 3.800(a)(3).

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In § 3.358, the section heading and paragraph (a) are revised to
read as follows:

[§ 3.358 Compensation for disability or death from hospitalization,
medical or surgical treatment, examinations or vocational rehabilitation
training (§ 3.800).]{.underline}

\(a\) [General]{.underline}. This section applies to claims received by
VA before October 1, 1997. If VA determines that a veteran has an
additional disability resulting from a disease or injury or aggravation
of an existing disease or injury suffered as a result of training,
hospitalization, medical or surgical treatment, or examination, it will
pay compensation for such additional disability. For claims received by
VA on or after October 1, 1997, see § 3.361.

\* \* \* \* \*

3\. Section 3.361 is added to Subpart A to read as follows:

[§ 3.361 Benefits under 38 U.S.C. 1151(a) for additional disability or
death due to hospital care, medical or surgical treatment, examination,
or training and rehabilitation services]{.underline}.

\(a\) [Claims subject to this section]{.underline}. This section applies
to claims received by VA on or after October 1, 1997. This includes
original claims and claims to reopen, revise, reconsider, or otherwise
readjudicate a previous claim for benefits under 38 U.S.C. 1151 or its
predecessors. For claims received by VA before October 1, 1997, see §
3.358.

\(b\) [Determining whether a veteran has an additional
disability]{.underline}. To determine whether a veteran has an
additional disability, VA compares the veteran's condition immediately
before the beginning of the hospital care, medical or surgical
treatment, examination, or training and rehabilitation services upon
which the claim is based to the veteran's condition after such care,
treatment, examination, or services have stopped. VA considers each
involved body part or system separately.

\(c\) [Establishing the cause of additional disability or
death]{.underline}. (1) [Actual causation required]{.underline}. To
establish causation, the evidence must show that the hospital care,
medical or surgical treatment, or examination resulted in the veteran's
additional disability or death. Merely showing that a veteran received
care, treatment, or examination and that the veteran has an additional
disability or died is not sufficient to establish cause.

\(2\) [Continuance or natural progress of a disease or
injury]{.underline}. Hospital care, medical or surgical treatment, or
examination cannot cause the continuance or natural progress of a
disease or injury for which the care, treatment, or examination was
furnished unless VA's failure to timely diagnose and properly treat the
disease or injury proximately caused the continuance or natural
progress. The provision of training and rehabilitation services cannot
cause the continuance or natural progress of a disease or injury for
which the services were provided.

\(3\) [Veteran's failure to follow medical instructions]{.underline}.
Additional disability or death caused by a veteran's failure to follow
properly given medical instructions is not caused by hospital care,
medical or surgical treatment, or examination.

\(d\) [Establishing the proximate cause of additional disability or
death]{.underline}. (1) [Care, treatment, or examination]{.underline}.
To establish that carelessness, negligence, lack of proper skill, error
in judgment, or similar instance of fault on VA's part in furnishing
hospital care, medical or surgical treatment, or examination proximately
caused a veteran's additional disability or death, the evidence must
show that the hospital care, medical or surgical treatment, or
examination caused the veteran's additional disability or death (as
explained in paragraph (c) of this section) and

\(i\) VA failed to exercise the degree of care that would be expected of
a reasonable health care provider; or

\(ii\) VA furnished the hospital care, medical or surgical treatment, or
examination without the veteran's or, in appropriate cases, the
veteran's representative's informed consent. To determine whether there
was informed consent, VA will consider whether the health care providers
complied with the requirements of § 17.32 of this chapter. Consent may
be express (i.e., given orally or in writing) or implied (i.e.,
suggested by all the pertinent facts).

\(2\) [Events not reasonably foreseeable]{.underline}. Whether the
proximate cause of a veteran's additional disability or death was an
event not reasonably foreseeable is to be determined in each claim based
on what a reasonable health care provider would have foreseen.

\(3\) [Training and rehabilitation services]{.underline}. To establish
that the provision of training and rehabilitation services proximately
caused a veteran's additional disability or death, the evidence must
show that the veteran's participation in an essential activity or
function of the training or services provided or authorized by VA, as
part of an approved rehabilitation program under 38 U.S.C. chapter 31,
proximately caused the disability or death. It need not show that VA
approved that specific activity or function, as long as the activity or
function is generally accepted as being a necessary component of the
training or services VA provided or authorized.

\(e\) [Department employees and facilities]{.underline}. (1) A
[Department employee]{.underline} is an individual

\(i\) who is appointed by the Department in the civil service under
title 38, United States Code, or title 5, United States Code, as an
employee as defined in 5 U.S.C. 2105;

\(ii\) who is engaged in furnishing hospital care, medical or surgical
treatment, or examinations under authority of law; and

\(iii\) whose day-to-day activities are subject to supervision by the
Secretary of Veterans Affairs.

\(2\) A [Department facility]{.underline} is a facility over which the
Secretary of Veterans Affairs has direct jurisdiction.

\(f\) [Activities which are not hospital care, medical or surgical
treatment, or examination furnished by a Department employee or in a
Department facility]{.underline}. The following are not hospital care,
medical or surgical treatment, or examination furnished by a Department
employee or in a Department facility within the meaning of 38 U.S.C.
1151(a):

\(1\) Hospital care or medical services furnished under a contract made
under 38 U.S.C. 1703.

\(2\) Nursing home care furnished under 38 U.S.C. 1720.

\(3\) Hospital care or medical services, including examination, provided
under 38 U.S.C. 8153 in a facility over which the Secretary does not
have direct jurisdiction.

\(g\) [Benefits payable under 38 U.S.C. 1151 for a veteran's
death]{.underline}. (1) [Death before January 1, 1957]{.underline}. The
benefit payable under 38 U.S.C. 1151(a) to an eligible survivor for a
veteran's death occurring before January 1, 1957, is death compensation.
See §§ 3.5(b)(2) and 3.702 for the right to elect dependency and
indemnity compensation.

\(2\) [Death after December 31, 1956]{.underline}. The benefit payable
under 38 U.S.C. 1151(a) to an eligible survivor for a veteran's death
occurring after December 31, 1956, is dependency and indemnity
compensation.

(Authority: 38 U.S.C. 1151)

4\. Section 3.362 is added to read as follows:

[§ 3.362 Offsets under 38 U.S.C. 1151(b) of benefits awarded under 38
U.S.C. 1151(a)]{.underline}.

\(a\) [Claims subject to this section]{.underline}. This section applies
to claims received by VA on or after October 1, 1997. This includes
original claims and claims to reopen, revise, reconsider, or otherwise
readjudicate a previous claim for benefits under 38 U.S.C. 1151 or its
predecessors.

\(b\) [Offset of veterans' awards of compensation]{.underline}. If a
veteran's disability is the basis of a judgment under 28 U.S.C. 1346(b)
awarded, or a settlement or compromise under 28 U.S.C. 2672 or 2677
entered, on or after December 1, 1962, the amount to be offset under 38
U.S.C. 1151(b) from any compensation awarded under 38 U.S.C. 1151(a) is
the entire amount of the veteran's share of the judgment, settlement, or
compromise, including the veteran's proportional share of attorney fees.

\(c\) [Offset of survivors' awards of dependency and indemnity
compensation]{.underline}. If a veteran's death is the basis of a
judgment under 28 U.S.C. 1346(b) awarded, or a settlement or compromise
under 28 U.S.C. 2672 or 2677 entered, on or after December 1, 1962, the
amount to be offset under 38 U.S.C. 1151(b) from any dependency and
indemnity compensation awarded under 38 U.S.C. 1151(a) to a survivor is
only the amount of the judgment, settlement, or compromise representing
damages for the veteran's death the survivor receives in an individual
capacity or as distribution from the decedent veteran's estate of sums
included in the judgment, settlement, or compromise to compensate for
harm suffered by the survivor, plus the survivor's proportional share of
attorney fees.

\(d\) [Offset of structured settlements]{.underline}. This paragraph
applies if a veteran's disability or death is the basis of a structured
settlement or structured compromise under 28 U.S.C. 2672 or 2677 entered
on or after December 1, 1962.

\(1\) [The amount to be offset]{.underline}. The amount to be offset
under 38 U.S.C. 1151(b) from benefits awarded under 38 U.S.C. 1151(a) is
the veteran's or survivor's proportional share of the cost of the
settlement or compromise to the United States, including the veteran's
or survivor's proportional share of attorney fees.

\(2\) [When the offset begins]{.underline}. The offset of benefits
awarded under 38 U.S.C. 1151(a) begins the first month after the
structured settlement or structured compromise has become final that
such benefits would otherwise be paid.

(Authority: 38 U.S.C. 1151)

5\. Section 3.363 is added to read as follows:

[§ 3.363 Bar to benefits under 38 U.S.C. 1151]{.underline}.

(a) [Claims subject to this section]{.underline}. This section applies
    to claims received by VA on or after October 1, 1997. This

includes original claims and claims to reopen, revise, reconsider, or
otherwise readjudicate a previous claim for

benefits under 38 U.S.C. 1151 or its predecessors.

\(b\) [Administrative awards, compromises, or settlements, or judgments
that bar benefits under 38 U.S.C. 1151]{.underline}. If a veteran's
disability or death was the basis of an administrative award under 28
U.S.C. 1346(b) made, or a settlement or compromise under 28 U.S.C. 2672
or 2677 finalized, before December 1, 1962, VA may not award benefits
under 38 U.S.C. 1151 for any period after such award, settlement, or
compromise was made or became final. If a veteran's disability or death
was the basis of a judgment that became final before December 1, 1962,
VA may award benefits under 38 U.S.C. 1151 for the disability or death
unless the terms of the judgment provide otherwise.

(Authority: 38 U.S.C. 1151)

6\. Section 3.800 is amended by adding introductory text to read as
follows:

[§ 3.800 Disability or death due to hospitalization, etc.]{.underline}

This section applies to claims received by VA before October 1, 1997.
For claims received by VA on or after October 1, 1997, see §§ 3.362 and
3.363.

\* \* \* \* \*

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

Final Regulatory Amendment Rescinded

1\. A final rule to amend adjudication regulations concerning awards of
compensation or dependency and indemnity compensation for additional
disability or death due to VA hospital care, medical or surgical
treatment, examination, or training and rehabilitation services was
published in the Federal Register on August 24, 1998, pages 45004-007,
without prior notice and comment. Judicial review has been sought on the
basis that the rulemaking required an opportunity for prior notice and
comment. As provided in a settlement agreement, a document rescinding
the final rule of August 24, 1998, was published in the Federal Register
on January 8, 1999, pages 1131-32.

2\. We intend to publish provisions similar to those in the rescinded
rule as a proposed rule, subject to comment, in a future issue of the
Federal Register. The rescinded rule will be considered to have no
effect in any claim decided on or after August 24, 1998. Enclosed is a
copy of the text of the rescinded regulatory amendment. Please provide
copies for the appropriate personnel.

3\. Until a new final regulation can be published, claims should be
adjudicated under the provisions of 38 U.S.C. 1151 as amended by Pub. L.
104-204 (October 1, 1997). Also enclosed is the text of 38 U.S.C. 1151
as amended October 1, 1997.

4\. If you have any questions concerning the final regulatory amendment
or this letter, please contact Bill Russo via E-Mail or by telephone at
(202) 273-7210.

5\. This letter is rescinded effective June 1, 1999.

/s/

Renée Zsybala, Director

Compensation and Pension Service

Enclosures

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In § 3.358, the section heading and paragraph (a) are revised to
read as follows:

[§ 3.358 Compensation for disability or death from hospitalization,
medical or surgical treatment, examinations or vocational rehabilitation
training (§ 3.800).]{.underline}

\(a\) [General]{.underline}. Where it is determined that there is
additional disability resulting from a disease or injury or an
aggravation of an existing disease or injury suffered as a result of
training, hospitalization, medical or surgical treatment, or
examination, compensation will be payable for such additional
disability.

(Authority: 38 U.S.C. 1151)

\* \* \* \* \*

[§§ 3.361 through 3.363 \[Removed\]]{.underline}

3\. Sections 3.361 through 3.363 are removed.

[§ 3.800 \[Amended\]]{.underline}

4\. The introductory text to § 3.800 is removed.

Effective October 1, 1997, Section 1151 is amended pursuant to section
422(a) of Public Law 104-204; 110 Stat. 2926, to read as follows:

§1151. Benefits for persons disabled by treatment or vocational
rehabilitation

(a) Compensation under this chapter and dependency and indemnity
    compensation under chapter 13 of this title shall be awarded for a
    qualifying additional disability or a qualifying death of a veteran
    in the same manner as if such additional disability or death were
    service-connected. For purposes of this section, a disability or
    death is a qualifying additional disability or qualifying death if
    the disability or death was not the result of the veteran\'s willful
    misconduct and-

\(1\) the disability or death was caused by hospital care, medical or
surgical treatment, or examination furnished the veteran under any law
administered by the Secretary, either by a Department employee or in a
Department facility as defined in section 1701(3)(A) of this title, and
the proximate cause of the disability or death was-

\(A\) carelessness, negligence, lack of proper skill, error in judgment,
or similar instance of fault on the part of the Department in furnishing
the hospital care, medical or surgical treatment, or examination; or

\(B\) an event not reasonably foreseeable; or

\(2\) the disability or death was proximately caused by the provision of
training and rehabilitation services by the Secretary (including by a
service-provider used by the Secretary for such purpose under section
3115 of this title) as part of an approved rehabilitation program under
chapter 31 of this title

\(b\) Where an individual is, on or after December 1, 1962, awarded a
judgment against the United States in a civil action brought pursuant to
section 1346(b) of title 28 or, on or after December 1, 1962, enters
into a settlement or compromise under section 2672 or 2677 of title 28
by reason of a disability or death treated pursuant to this section as
if it were service-connected, then no benefits shall be paid to such
individual for any month beginning after the date such judgment,
settlement, or compromise on account of such disability or death becomes
final until the aggregate amount of benefits which would be paid but for
this subsection equals the total amount included in such judgment,
settlement, or compromise.

\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*\*

REGULATORY AMENDMENT

3-98-5

Regulations Affected: 38 CFR 3.311(b)

Effective Date of the Regulation: September 24, 1998

Date Secretary Approved Regulation: June 15, 1998

Federal Register Citation: 63 FR 50993-95 (September 24, 1998)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

The Veterans\' Dioxin and Radiation Exposure Compensation Standards Act,
Pub. L. 98-542, required VA to develop regulations establishing
standards and criteria for adjudicating veterans\' claims for
service-connected compensation for diseases claimed to be the result of
exposure to ionizing radiation. In response to that requirement, VA has
defined the term \"radiogenic disease\" to mean a disease that may be
induced by ionizing radiation and established a list of diseases that
satisfy that definition at 38 CFR 3.311(b)(2). That list is not an
exclusive list, however, and since 1985 VA has added a number of
conditions to it.

When the Secretary determines that a significant statistical association
exists between exposure to ionizing radiation and any disease under the
standards established at 38 CFR 1.17(c), VA adds that disease to the
list of radiogenic diseases found at 38 CFR 3.311(b)(2). Before making
such a determination, the Secretary receives the advice of the Veterans
Advisory Committee on Environmental Hazards (VACEH) based on its
evaluation of scientific and medical studies.

On April 25-26, 1995, the VACEH held a public meeting in Washington, DC,
and reviewed 53 medical and scientific studies having to do with
radiation exposure and subsequent development of disease. Based upon its
assessment of those studies and the scientific literature that it had
previously reviewed and deemed to be valid, the VACEH concluded that it
would be appropriate to consider prostate cancer as being associated
with radiation exposure for purposes of VA\'s compensation system. Based
on that recommendation, the Secretary has determined that an association
exists between radiation exposure and prostate cancer.

In response to a request from the Under Secretary for Benefits, the
VACEH addressed the question of the radiogenicity of cancer generally.
The VACEH concluded that, on the basis of current scientific knowledge,
exposure to ionizing radiation can be a contributing factor in the
development of any malignancy. The degree to which radiation exposure is
a factor varies depending on the type of malignancy, the amount, rate
and type of radiation exposure, and other relevant risk factors such as
age at the time of exposure. After reviewing this recommendation, the
Secretary has determined that an association exists between radiation
exposure and any other cancer not listed at 38 CFR 3.311(b)(2).

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In §3.311, paragraph (b)(2)(xxi) is amended by removing \"and\"; and
paragraph (b)(2)(xxii) is amended by removing \".\" and adding, in its
place, \";\"; and new paragraphs (b)(2)(xxiii) and (b)(2)(xxiv) are
added to read as follows:

[§ 3.311 Claims based on exposure to ionizing radiation.]{.underline}

\* \* \* \* \*

\(b\) \* \* \*

\(2\) \* \* \*

\(xxiii\) Prostate cancer; and

\(xxiv\) Any other cancer.

\* \* \* \* \*

REGULATORY AMENDMENT

3-98-6

Regulations Affected: 38 CFR 3.256 and 3.277

Effective Date of the Regulation: October 6, 1998

Date Secretary Approved Regulation: May 18, 1998

Federal Register Citation: 63 FR 53593-96 (October 6, 1998)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

The term \"eligibility verification report\" means a VA form requesting
information, such as income and marital status, that VA needs to
determine or verify eligibility for its need-based benefit programs,
such as old law pension and section 306 pension. The term \"old law
pension\" means the disability and death pension programs that were in
effect on June 30, 1960. The term \"section 306 pension\" means those
disability and death pension programs in effect on December 31, 1978.

Old law and section 306 pension are need-based benefits in that an
individual's eligibility for either depends on his or her income being
below a certain limit. If an individual's income exceeds the limit, the
individual is no longer eligible. Also, the rate of pension paid is
affected by the number of dependents the eligible individual has. For
these reasons, EVRs request information concerning income and marital
status.

Current 38 CFR 3.256(b)(3) requires every old law and section 306
pension recipient, as a condition to continuing to receive pension, to
furnish VA an EVR upon request. Current 38 CFR 3.256(b)(2) requires VA
to require an EVR under the following circumstances: (i) if the Social
Security Administration has not verified the recipient's Social Security
number and, if the recipient is married, his or her spouse's Social
Security number; (ii) if there is any reason to believe that the
recipient or, if the recipient's spouse's income could affect
entitlement, his or her spouse may have received income other than
Social Security benefits during the current or previous calendar year;
or (iii) if the Secretary determines that an EVR is necessary to
preserve program integrity. This interim final rule requires VA to
require an EVR from an old-law or section-306 pension recipient only if
the Secretary determines that an EVR is necessary to preserve program
integrity.

VA has determined that it is no longer necessary to require EVRs from
old law or section 306 pension recipients solely on the bases described
in 38 CFR 3.256(b)(2)(i) and (ii). VA required EVRs in these
circumstances to help determine whether the recipient's income exceeded
applicable limits. However, the annual income of all old law and section
306 pension recipients has been below applicable limits every year since
1978, and we believe it unlikely that their income will exceed
applicable limits in the future. If a recipient's income does exceed the
applicable limit, 38 CFR 3.256(a) will still require that he or she
promptly notify VA.

Based on these facts, we have determined that it is no longer necessary
to require old law and section 306 pension recipients to submit EVRs
based on unverified Social Security numbers or suspected additional
income.

Requiring fewer EVRs from old law and section 306 pensioners will reduce
the reporting burden for these elderly beneficiaries (the average age is
75) without significantly increasing the risk of erroneous pension
payments. Because the rates of payment do not change, changes in income
have no effect on payments except in the rare instance of income
exceeding the income limit. Furthermore, VA has data exchange programs
with other agencies such as the Internal Revenue Service, the Social
Security Administration, the Railroad Retirement Board, and the Office
of Personnel Management. These computer matching programs increase the
likelihood that VA will learn of increases in income in those rare
instances where the beneficiary failed to report the change. This
amendment will also reduce workload at VA regional offices and enable VA
to redirect scarce resources to other types of claims processing.

VA will still require old law and section 306 pensioners to furnish EVRs
if it determines that it is necessary to preserve program integrity,
which means it is necessary for VA, or an agency with oversight
authority over VA, to verify that EVR-exempt beneficiaries are
accurately reporting changes in entitlement factors. 38 CFR 3.256 is
amended accordingly.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.256 is revised to read as follows:

[§ 3.256 Eligibility reporting requirements.]{.underline}

\(a\) [Obligation to report changes in factors affecting
entitlement.]{.underline} Any individual who has applied for or receives
pension or parents' dependency and indemnity compensation must promptly
notify the Secretary in writing of any change affecting entitlement in
any of the following:

\(1\) Income;

\(2\) Net worth or corpus of estate;

\(3\) Marital status;

\(4\) Nursing home patient status;

\(5\) School enrollment status of a child 18 years of age or older; or

\(6\) Any other factor that affects entitlement to benefits under the
provisions of this Part.

\(b\) [Eligibility verification reports.]{.underline} (1) For purposes
of this section the term eligibility verification report means a form
prescribed by the Secretary that is used to request income, net worth
(if applicable), dependency status, and any other information necessary
to determine or verify entitlement to pension or parents' dependency and
indemnity compensation.

\(2\) VA will not require old law or section 306 pensioners to submit
eligibility verification reports unless the Secretary determines that
doing so is necessary to preserve program integrity.

\(3\) The Secretary shall require an eligibility verification report
from individuals receiving parents' dependency and indemnity
compensation under the following circumstances:

\(i\) If the Social Security Administration has not verified the
beneficiary's Social Security number and, if the beneficiary is married,
his or her spouse's Social Security number.

\(ii\) If there is reason to believe that the beneficiary or, if the
spouse's income could affect entitlement, his or her spouse may have
received income other than Social Security during the current or
previous calendar year; or

\(iii\) If the Secretary determines that an eligibility verification
report is necessary to preserve program integrity.

\(4\) An individual who applies for or receives pension or parents'
dependency indemnity compensation as defined in §§ 3.3 or 3.5 of this
part shall, as a condition of receipt or continued receipt of benefits,
furnish the Department of Veterans Affairs an eligibility verification
report upon request.

\(c\) If VA requests that a claimant or beneficiary submit an
eligibility verification report but he or she fails to do so within 60
days of the date of the VA request, the Secretary shall suspend the
award or disallow the claim.

(Authority: Sec. 306(a)(2) and (b)(3). Pub. L. 95-588, 92 Stat.
2508-2509; 38 U.S.C. 1315(e))

3\. Section 3.277 is republished as follows:

[§3.277 Eligibility reporting requirements.]{.underline}

\(a\) [Evidence of entitlement.]{.underline} As a condition of granting
or continuing pension, the Department of Veterans Affairs may require
from any person who is an applicant for or a recipient of pension such
information, proofs, and evidence as is necessary to determine the
annual income and the value of the corpus of the estate of such person,
and of any spouse or child whom the person is receiving or is to receive
increased pension (such child is hereinafter in this section referred to
as a [dependent child]{.underline}), and, in the case of a child
applying for or in receipt of pension in his or her own behalf
(hereinafter in this section referred to as a [surviving
child]{.underline}), of any person with whom such child is residing who
is legally responsible for such child's support.

\(b\) [Obligation to report changes in factors affecting
entitlement.]{.underline} Any individual who has applied for or receives
pension must promptly notify the Secretary in writing of any change
affecting entitlement in any of the following:

\(1\) Income;

\(2\) Net worth or corpus of estate;

\(3\) Marital status;

\(4\) Nursing home patient status;

\(5\) School enrollment status of a child 18 years of age or older; or

\(6\) Any other factor that affects entitlement to benefits under the
provisions of this Part.

\(c\) [Eligibility verification reports.]{.underline} (1) For purposes
of this section the term eligibility verification report means a form
prescribed by the Secretary that is used to request income, net worth,
dependency status, and any other information necessary to determine or
verify entitlement to pension.

\(2\) The Secretary shall require an eligibility verification report
under the following circumstances:

\(i\) If the Social Security Administration has not verified the
beneficiary's Social Security number and, if the beneficiary is married,
his or her spouse's Social security number;

\(ii\) If there is reason to believe that the beneficiary or his or her
spouse may have received income other than Social Security during the
current or previous calendar year; or

\(iii\) If the Secretary determines that an eligibility verification
report is necessary to preserve program integrity.

\(3\) An individual who applies for or receives pension as defined in §
3.3 of this part, as a condition of receipt or continued receipt of
benefits, furnish the Department of Veterans Affairs an eligibility
verification report upon request.

\(d\) If VA requests that a claimant or beneficiary submit an
eligibility verification report but he or she fails to do so within 60
days of the date of the VA request, the Secretary shall suspend the
award or disallow the claim.

(Authority: 38 U.S.C. 1506)

REGULATORY AMENDMENT

3-98-7

Regulations Affected: 38 CFR 3.811

Effective Date of the Regulation: November 10, 1998

Date Secretary Approved Regulation: October 29, 1998

Federal Register Citation: 63 FR 62943(November 10, 1998)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 645 of the National Defense Authorization Act for Fiscal Year
1998, Pub. L. 105-85, § 645, 111 Stat. 1629, 1801-1802 (1997) (10 U.S.C.
1448 note), transferred responsibility for paying the gratuitous annuity
authorized by section 653 of the National Defense Authorization Act,
Fiscal Year 1989, Pub. L. 100-456, § 653, 102 Stat. 1918, 1991-1992
(1988), from the Department of Defense (DoD) to the Secretary of
Veterans Affairs. However, DoD or the Department of Transportation
remains responsible for funding this annuity and determining basic
eligibility. This gratuitous annuity, initially in the amount of \$165 a
month, but since adjusted for changes in the Consumer Price Index, is
paid to certain surviving spouses of persons who died before November 1,
1953, and were entitled to retired or retainer pay on the date of death.
The statute provides that VA will combine the payment of this gratuitous
annuity with the payment of the minimum income annuity authorized by
Pub. L. 92-425, § 4, 86 Stat. 706, 712 (1972) (10 U.S.C. 1448 note).
Section 638 of the National Defense Authorization Act for Fiscal Year
1997, Pub. L. 104-201, § 638, 110 Stat. 2422, 2581 (1996), transferred
responsibility for paying a guaranteed minimum annual income (the
so-called minimum-income-widow annuity, or minimum income annuity) to
the Secretary of Veterans Affairs from DoD. We have amended 38 CFR 3.811
accordingly.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In § 3.811, paragraph (d) is redesignated as paragraph (e); and the
section heading and the heading for paragraph

\(a\) are revised, a new paragraph (d) is added, and the authority
citation at the end of the section is revised, to read as follows:

[§ 3.811 Minimum income annuity and gratuitous annuity.]{.underline}

\(a\) [Eligibility for minimum income annuity.]{.underline} \* \* \*

\* \* \* \* \*

\(d\) If the Department of Defense or the Department of Transportation
determines that a minimum income annuitant also is entitled to the
gratuitous annuity authorized by Pub. L. 100-456 as amended, which is
payable to certain surviving spouses of servicemembers who died before
November 1, 1953, and were entitled to retired or retainer pay on the
date of death, VA will combine the payment of the gratuitous annuity
with the minimum income annuity payment.

\* \* \* \* \*

(Authority: Sec. 4, Pub. L. 92-425, 86 Stat. 706, 712, as amended (10
U.S.C. 1448 note))

REGULATORY AMENDMENT

3-99-1

Regulations Affected: 38 CFR 3.55

Effective Date of the Regulation: October 1, 1998

Date Secretary Approved Regulation: April 14, 1999

Federal Register Citation: 64 FR 30244-45 (June 7, 1999)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. The comments are not regulatory.

A surviving spouse of a veteran must be unmarried to receive VA
benefits. The law regarding the eligibility for benefits of a surviving
spouse of a veteran who remarries after the veteran\'s death and whose
later remarriage later terminates has changed several times in recent
years.

Prior to January 1, 1971, remarriage of a surviving spouse of a deceased
veteran was a bar to benefits unless that marriage was void or annulled.
Public Law 91-376 amended 38 U.S.C. 103(d) by adding subsections
103(d)(2) and (d)(3) to permit the payment or resumption of payment of
benefits to a surviving spouse whose remarriage was terminated by death
or divorce, or who had ceased living with another person and holding
himself or herself out openly to the public as that person\'s spouse.

The Omnibus Budget Reconciliation Act of 1990 (Public Law 101-598)
deleted 38 U.S.C. 103(d)(2) and (d)(3). The effect of this change was to
eliminate VA\'s authority to reinstate entitlement to death benefits for
a surviving spouse who had remarried after the veteran\'s death unless
the marriage was void or annulled, or to reinstate entitlement to death
benefits for a surviving spouse who ceased living with another person
and holding himself or herself out openly as that person\'s spouse.

Section 8207 of the Transportation Equity Act for the 21^st^ Century ,
Public Law 105-178, amended 38 U.S.C. 1311, effective October 1, 1998,
to reinstate eligibility for only dependency and indemnity compensation
to a surviving spouse of a veteran whose marriage is terminated by
death, divorce, or annulment unless VA determines that the divorce or
annulment was secured through fraud or collusion. Additionally, Public
Law 105-178 reinstates eligibility for dependency and indemnity
compensation to a surviving spouse of a veteran who ceases living with
another person and holding himself or herself out openly to the public
as that person\'s spouse. 38 CFR is amended accordingly.

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

PART 3 - ADJUDICATION

Subpart A - Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In § 3.55, paragraphs (a)(3) and (a)(4) are re-designated as
paragraphs (a)(4) and (a)(6), respectively, and new paragraphs (a)(3)
and (a)(5) are added to read as follows:

[§ 3.55 Reinstatement of benefits eligibility based upon terminated
marital relationships]{.underline}

> \(a\)
>
> \(3\) On or after October 1, 1998, remarriage of a surviving spouse
> terminated by death, divorce, or annulment, will not bar the
> furnishing of dependency and indemnity compensation, unless the
> Secretary determines that that divorce or annulment was secured
> through fraud or collusion.
>
> (Authority: 38 U.S.C. 1311(e))
>
> \(5\) On or after October 1, 1998, the fact that a surviving spouse
> has lived with another person and has held himself or herself out
> openly to the public as the spouse of such other person will not bar
> the furnishing of dependency and indemnity compensation to the
> surviving spouse if he or she ceases living with such other person and
> holding himself or herself out openly to the public as such other
> person\'s spouse.
>
> (Authority: 38 U.S.C. 1311(e))

REGULATORY AMENDMENT

3-99-2

Regulations Affected: 38 C.F.R. §3.381 and §3.382; 38 C.F.R. §4.149

Effective Date of the Regulation: June 8, 1999

Date Secretary Approved Regulation: April 21, 1999

Federal Register Citation: 64 FR 30392-93 (June 8, 1999)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

38 CFR Part 4, the Schedule for Rating Disabilities, provides
evaluations for dental conditions considered disabling in nature. There
are, however, other dental conditions which are not considered disabling
and consequently do not fall under the purview of the rating schedule.
The issue of service connection for these conditions arises only for the
purpose of determining eligibility to outpatient dental treatment. These
conditions include carious teeth, replaceable missing teeth, dental or
alveolar abscesses, periodontal disease, and Vincent\'s stomatitis (also
referred to as Vincent\'s disease, Vincent\'s infection, or acute
necrotizing gingivitis). These conditions were listed in the former 38
CFR §4.149, in the Schedule for Rating Disabilities. Because these
conditions are not evaluated for compensation, but only to determine
eligibility for treatment, it is more appropriate to list them in 38 CFR
Part 3, which contains general rules for determining service connection.
Therefore, §4.149 has been deleted.

Prior to the current revision, §3.381 provided that service connection
will be granted for certain dental conditions shown after a \"reasonable
period of service\"; however, this subjective term was not defined. The
new rule replaces this subjective term with the objective requirement of
180 days or more of active service in decisions pertaining to service
connection for dental conditions that develop over a period of time.
Such conditions include dental caries, periodontal disease, and disease
of pathology of third molars or teeth in which an existing filling
requires replacement. Because these conditions take time to develop,
(often a year or two in permanent teeth), it is more likely than not
that caries or pathology that become apparent within the first 180 days
of service pre-existed that service.

The new rule also eliminates overlapping provisions in 38 CFR §§ 3.381
and 3.382 which did not clearly state requirements for service
connection or which appeared to be possibly conflicting. Section
3.381(d) now includes specific rules for determining whether dental
conditions that are noted at entry into service and treated during
active duty are service connected for treatment purposes. These
provisions provide concrete guidelines for decisions related to tooth
extractions and restorations, as well as for missing teeth.

Former §3.381(c) which addressed the principle of secondary service
connection for dental diseases and injuries was deleted because it was
superfluous given the provisions governing secondary service connection
already contained in §3.310. Likewise, paragraphs (a) and (b) of §3.382
were deleted because its statements related to the types of evidence
needed to establish service connection were redundant of provisions
contained elsewhere in the regulations which adequately describe
evidence requirements for establishing service connection. (*See* 38 CFR
§3.303, §3.304)

Former §3.381(d) specifically stated that the presumption of soundness
does not apply to non-compensable dental conditions. While no longer
explicitly stated in the revised regulation, the presumption of
soundness is clearly inapplicable based on 38 U.S.C. §1110 and §1111.
Section 1111 requires VA to consider every veteran to have been in sound
condition at the time of entry except as to defects noted at that time.
It specifically references §1110 of Title 38 which applies only to
payment of compensation for disability. Section 1111 is therefore not
applicable to determining eligibility to outpatient dental treatment
under 38 U.S.C. §1712. In addition, §1153 of Title 38 U.S.C. applies
only to disabilities. Because non-compensable dental conditions are not
considered to be disabilities, §1153 is also not applicable to 38 U.S.C.
§1712 determinations.

The revised rule retains the general principle contained in former
§3.381(b) which stated that treatment during service is not considered
*per se* aggravation of a dental condition noted as present at the time
of entry because such treatment is considered ameliorative. However, the
phrase \"*per se\"* has been deleted and is replaced with a statement
that treatment in service is not evidence that a condition noted at
entry has been aggravated unless additional pathology developed after
180 days or more of service. This is consistent with the change
reflected in §3.381(d) requiring 180 days of active duty service as a
prerequisite to considering specified dental conditions as service
connected for purposes of treatment.

Paragraph 3.381(e) lists conditions that will not be service connected
for treatment purposes, replacing former §3.382(c). Current medical
terminology has been used to describe these conditions with \"calculus\"
replacing \"salivary deposits,\" and \"periodontal disease\" replacing
\"gingivitis,\" \"Vincent\'s disease,\" and \"pyorrhea.\" Impacted or
malposed teeth are considered developmental defects as is the presence
of third molars (wisdom teeth). These conditions are not service
connected unless separate pathology develops after 180 days of active
service. The use of the 180-day time period has been explained above.
Periodontal disease is related to dental hygiene and can be affected by
other factors such as diet, abnormal stress, other disease processes,
and reaction to certain drugs or chemicals. With proper treatment, most
periodontal disease resolves with no residuals. Therefore, service
connection for acute periodontal disease is not subject to service
condition in the former rule and remains not subject to service
connection in the present rule. However, chronic periodontal disease
(formerly described as \"Pyorrhea\"), which may result in tooth
extraction, will warrant service connection for the lost teeth.

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

1\. The Authority citation for part 3 continues to read as follows:

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

2\. Section 3.381 is amended by revising the heading and text to read as
follows:

§ 3.381 Service connection of dental conditions for treatment purposes.

(a) Treatable carious teeth, replaceable missing teeth, dental or
    alveolar abscesses, and

periodontal disease will be considered service-connected solely for the
purpose of establishing eligibility for

outpatient dental treatment as provided in section 17.161 of this
chapter.

\(b\) The rating activity will consider each defective or missing tooth
and each disease of the teeth and periodontal tissues separately to
determine whether the condition was incurred or aggravated in line of
duty during active service. When applicable, the rating activity will
determine whether the condition is due to combat or other in-service
trauma, or whether the veteran was interned as a prisoner of war.

\(c\) In determining service connection, the condition of teeth and
periodontal tissues at the time of entry into active duty will be
considered. Treatment during service, including filling or extraction of
a tooth, or placement of a prosthesis, will not be considered evidence
of aggravation of a condition that was noted at entry, unless additional
pathology developed after 180 days or more of active service.

\(d\) The following principles apply to dental conditions noted at entry
and treated during service:

\(1\) Teeth noted as normal at entry will be service-connected if they
were filled or extracted after 180 days or more of active service.

\(2\) Teeth noted as filled at entry will be service-connected if they
were extracted, or if the existing filling was replaced, after 180 days
or more of active service.

\(3\) Teeth noted as carious but restorable at entry will not be service
connected on the basis that they were filled during service. However,
new caries that developed 180 days or more after such a tooth was filled
will be service-connected.

\(4\) Teeth noted as carious but restorable at entry, whether or not
filled, will be service-connected if extraction was required after 1 80
days or more of active service.

\(5\) Teeth noted at entry as non-restorable will not be
service-connected, regardless of treatment during service.

\(6\) Teeth noted as missing at entry will not be service connected,
regardless of treatment during service.

\(e\) The following will not be considered service-connected for
treatment purposes:

\(1\) calculus;

\(2\) acute periodontal disease;

\(3\) third molars, unless disease or pathology of the tooth developed
after

180 days or more of active service, or was due to combat or in-service
trauma;

\(4\) impacted or malposed teeth, and other developmental defects,
unless disease or pathology of these teeth developed after 180 days or
more of active service.

\(f\) Chronic periodontal disease. Teeth extracted because of chronic
periodontal disease will be service-connected only if they were
extracted after 180 days or more of active service.

(Authority: 38 U.S.C. 1712)

§ 3.382 Evidence to establish service connection for dental
disabilities.

\[Removed\]

3\. Section 3.382 is removed and reserved.

PART 4 SCHEDULE FOR RATING DISABILITIES

Dental and Oral Conditions

4\. The Authority citation for part 4 continues to read as follows:

AUTHORITY: 38 U.S.C. 11 55.

§ 4.149 Rating diseases of the teeth and gums. \[Removed\]

5\. Section 4.149 is removed and reserved.

REGULATORY AMENDMENT

3-99-3

Regulations Affected: 38 CFR 3.20(b)

Effective Date of the Regulation: June 8, 1999

Date Secretary Approved Regulation: May 21, 1999

Federal Register Citation: 64 FR 30391-92 (June 8, 1999)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 5111(a) of title 38, United States Code, prohibits payment of
compensation, pension, or DIC benefits for any period before the first
day of the month following the month in which an award or increased
award of benefits was effective. In effect, VA generally may not pay
first-time or increased benefits for any part of the first calendar
month of entitlement. (See also 38 CFR 3.31).

Section 5111(c) provides certain exceptions to the general prohibition
in § 5111(a), including the following:

\"\[Section 5111\] shall apply to payments made pursuant to section 5310
of this title only if the monthly amount of \[DIC\] or pension payable
to the surviving spouse is greater than the amount of compensation or
pension the veteran would have received, but for such veteran\'s death,
for the month in which such veteran\'s death occurred.\" (§ 5111(c)(1))

Section 5310 of title 38, United States Code, provides authority under
which VA may pay to a surviving spouse the amount of benefits which the
veteran would otherwise have received for the month of his or her death.
(When a veteran receiving compensation or pension dies, VA terminates
his or her benefit payments effective the last day of the month prior to
the month of death. See 38 U.S.C. § 5112(b)(1).) Under § 5310(a), if a
surviving spouse is entitled to certain death benefits for the month of
the veteran\'s death, the amount of benefits payable for that month
\"shall be not less\" than the amount of compensation or pension the
veteran would have received if he or she had not died.

VA has implemented the provisions of § 5111(c)(1) at 38 C.F.R. §§
3.20(b) and 3.31(c)(1). In a recent opinion (VAOPGCPREC 10-98), VA\'s
General Counsel indicated that the reference in § 5111(c)(1) to
\"payments made pursuant to section 5310\" means payments made pursuant
to what is now § 5310(a). At the time § 5111(c)(1) was enacted, §
5310(b) did not exist, and its subsequent addition to the statute did
not affect the intent of § 5111(c)(1). In the same opinion, the General
Counsel pointed out that language in 38 C.F.R. 3.20(b) is inconsistent
with 38 U.S.C. § 5111(c)(1). Section 5111(c)(1) provides, with respect
to payments under § 5310, that payment for the first calendar month of
entitlement is prohibited only if the amount of DIC or death pension
payable exceeds the amount of compensation or pension that would have
been payable to the veteran. Section 3.20(b), however, provides that
payment for the first calendar month is permitted only if the amount of
compensation or pension that would have been payable to the veteran
exceeds the amount of DIC or death pension payable. These two provisions
give different results if the amount of DIC or death pension payable
equals the amount of compensation or pension that would have been
payable to the veteran. In this situation, the statute would allow
payment for the month of death, but the regulation would not. To that
extent, 38 CFR 3.20(b) is inconsistent with § 5111(c)(1) of the statute.

Accordingly, we are amending § 3.20(b) to make it consistent with the
statute. It now provides that a surviving spouse may receive payment for
the month of the veteran\'s death if the veteran\'s rate of benefits is
equal to or greater than the rate of death pension or DIC payable to the
surviving spouse.

This final rule simply corrects VA regulations to reflect statutory
requirements.

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

PART 3 - ADJUDICATION

Subpart A - Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

[§ 3.20 \[Amended\]]{.underline}

2\. In § 3.20, the first sentence of paragraph (b) is amended by adding
\"equal to or\" immediately after \"if such rate is\".

> REGULATORY AMENDMENT

3-99-4

Regulations Affected: 38 CFR 3.551(i)

Effective Date of the Regulation: August 5, 1997

Date Secretary Approved Regulation: May 11, 1999

Federal Register Citation: 64 FR 32807 (June 18, 1999)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

Section 8003 of Public Law 101-500 required VA to limit the pension
benefits of any veteran having neither spouse nor child and who receives
Medicaid-covered nursing home care to no more than \$90 per month. This
statutory provision expired September 30, 1992. Section 602 of Public
Law 102-568 extended the expiration date of that statutory provision
until September 30, 1997. In addition, it imposed a similar limitation
on payment of death pension to surviving spouses who receive
Medicaid-covered nursing home care and have no children. Section 12005
of Public Law 103-66 further extended the expiration date until
September 30, 1998 for these limitations on payment of pension benefits
to veterans and surviving spouses.

Section 8015 of the balanced Budget Act of 1997, Public Law 105-33,
extends the ending date until September 30, 2002.

This document amends 38 CFR 3.551(i) to reflect this statutory change
which is effective August 5, 1997, the date of enactment of Public Law
105-33.

This final rule reflects statutory requirements.

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

PART 3 - ADJUDICATION

Subpart A - Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

[§ 3.551 \[Amended\]]{.underline}

2\. In § 3.551(i) is amended by removing \"September 30, 1998\" and
adding, in its place, \"September 30, 2002.

> REGULATORY AMENDMENT

3-99-5

Regulation affected: 38 CFR 3.304(f).

EFFECTIVE DATE OF REGULATION: March 7, 1997.

Date Secretary approved regulation: May 11, 1999.

Federal Register Citation: 64FR 32807. (June 18, 1999)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. The comment is not regulatory.

Post traumatic stress disorder (PTSD) is classified by the American
Psychiatric Association\'s Diagnostic and Statistical Manual of Mental
Disorders, Fourth Edition (DSM-IV) as an anxiety disorder resulting from
exposure to an extreme traumatic stressor involving direct personal
experience of an event that involved actual or threatened death or
serious injury or other threat to one\'s physical integrity; witnessing
an event that involved death, injury, or a threat to the physical
integrity of another person; or learning about unexpected or violent
death, serious harm, or threat of death or injury experienced by a
family member or other close associate. The person\'s response to the
event must involve intense fear, helplessness, or horror. PTSD is
characterized by persistent reexperiencing of the traumatic event,
persistent avoidance of stimuli associated with the trauma and numbing
of general responsiveness, and persistent symptoms of increased arousal.

VA regulations at 38 CFR 3.304(f) provide that service connection for
PTSD requires medical evidence establishing a clear diagnosis of the
condition, credible supporting evidence that the claimed in-service
stressor actually occurred, and a link, established by medical evidence,
between current symptomatology and the claimed in-service stressor. If
the claimed stressor is related to combat, service department evidence
that the veteran engaged in combat or that the veteran was awarded the
Purple Heart, Combat Infantryman Badge, or similar combat citation will
be accepted, in the absence of evidence to the contrary, as conclusive
evidence of the claimed in-service stressor.

Section 1154(b) of title 38, United States Code, which is the statutory
authority for § 3.304(f), provides that, where a veteran engaged in
combat with the enemy, VA must accept as sufficient proof of
service-connection for a claimed disease or injury satisfactory lay or
other evidence of service incurrence or aggravation of such disease or
injury, if consistent with the circumstances, conditions, or hardships
of such service, notwithstanding the fact that there is no official
record of the incurrence or aggravation of the claimed disease or
injury. In [Cohen v. Brown]{.underline}, 10 Vet. App. 128 (1997), the
Court of Veterans Appeals found a deficiency in § 3.304(f) in that it
does not adequately reflect, for the purposes of establishing an
in-service stressor, the relaxed adjudicative evidentiary requirements
provided by 38 U.S.C. 1154(b) for establishing service incurrence of an
event. The Court noted that, although § 3.304(f) states that proof of an
in-service stressor that is claimed to be related to combat may be shown
by service department evidence that the veteran engaged in combat, or
that the veteran received a particular decoration or award, § 3.304(f)
does not expressly provide that a combat veteran\'s lay testimony alone
may establish an in-service stressor pursuant to 38 U.S.C. 1154(b). The
Court reiterated its conclusion in [Zarycki v. Brown]{.underline}, 6
Vet. App. 91, 98 (1993), that, under 38 U.S.C. 1154(b), where it is
determined that the veteran engaged in combat with the enemy and the
claimed stressor is related to such combat, the veteran\'s lay testimony
regarding the claimed stressor must be accepted as conclusive as to its
occurrence and that no further development for corroborative evidence is
required, provided that the testimony is \"satisfactory\" and consistent
with the circumstances, conditions, or hardships of the veteran\'s
service. VA has amended § 3.304(f) accordingly to provide that, if a
veteran engaged in combat and the claimed stressor is related to that
combat, in the absence of clear and convincing evidence to the contrary,
and provided that the claimed stressor is consistent with the
circumstances, conditions, or hardships of the veteran\'s service,
occurrence of the claimed stressor may be established by the veteran\'s
lay testimony alone.

Previously 38 CFR 3.304(f) provided that \"service department evidence
that the veteran engaged in combat or that the veteran was awarded the
Purple Heart, Combat Infantryman Badge, or similar combat citation\" was
conclusive evidence of the claimed inservice stressor. As the Court
stated in [Cohen]{.underline}, 38 U.S.C. 1154(b) does not require the
acceptance of a veteran\'s assertion that he was engaged in combat. The
determination of combat status is a question to be decided on the basis
of the evidence of record in each case. For this reason, we have removed
the above cited language. Citations can, of course, still serve as
evidence that the veteran engaged in combat.

Additionally, we have amended that portion of § 3.304(f) regarding
prisoner-of-war-related stressors in a similar manner. 38 U.S.C. 1154(a)
requires that the Secretary include, in regulations pertaining to
service-connection for disabilities, provisions requiring that due
consideration be given to the places, types, and circumstances of the
veteran\'s military service. POW experience is another type of situation
where events often can never be fully documented and therefore warrants
the same relaxed adjudication requirements for service connection of
PTSD as for those veterans who engaged in combat.

The Court in [Cohen v. Brown]{.underline} also pointed out that,
although on October 8, 1996, VA issued a final rule amending the
Schedule for Rating Disabilities (38 CFR Part 4) pertaining to mental
disorders which adopted the nomenclature of DSM-IV (See 61 FR
52695-702), no amendment to § 3.304(f) was made. The Court noted that §
3.304(f) does not specifically set forth any requirements regarding the
sufficiency of a stressor and the adequacy of symptomatology to support
a diagnosis of PTSD. We have therefore amended § 3.304(f) to require
that the medical evidence diagnosing PTSD comply with 38 CFR 4.125(a),
which requires that diagnoses of mental disorders conform to DSM-IV.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In § 3.304, paragraph (f) is revised to read as follows:

[§ 3.304 Direct service connection; wartime and peacetime.]{.underline}

\* \* \* \* \*

\(f\) [Post-traumatic stress disorder.]{.underline} Service connection
for post-traumatic stress disorder requires medical evidence diagnosing
the condition in accordance with § 4.125(a) of this chapter; a link,
established by medical evidence, between current symptoms and an
in-service stressor; and credible supporting evidence that the claimed
in-service stressor occurred. If the evidence establishes that the
veteran engaged in combat with the enemy and the claimed stressor is
related to that combat, in the absence of clear and convincing evidence
to the contrary, and provided that the claimed stressor is consistent
with the circumstances, conditions, or hardships of the veteran\'s
service, occurrence of the claimed in-service stressor may be
established by the veteran\'s lay testimony alone. If the evidence
establishes that the veteran was a prisoner-of-war under the provisions
of § 3.1(y) of this part and the claimed stressor is related to that
prisoner-of-war experience, in the absence of clear and convincing
evidence to the contrary, and provided that the claimed stressor is
consistent with the circumstances, conditions, or hardships of the
veteran\'s service, occurrence of the claimed in-service stressor may be
established by the veteran\'s lay testimony alone.

(Authority: 38 U.S.C. 1154(b))

REGULATORY AMENDMENT

3-99-6

Regulation Affected: 38 CFR 3.1003(b)

Effective Date of the Regulation: October 19, 1996

Date Secretary Approved Regulation: September 14, 1999

Federal Register Citation: 64 FR 54206-54207 (October 6, 1999)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. These comments are not regulatory.

Section 5122 of title 38, United States Code, governs payment of the
proceeds

of VA benefit check(s) received by a payee but not negotiated before his
or her death. VA has implemented § 5122 at 38 CFR 3.1003.

Under section 5122, VA shall upon return and cancellation of an original
benefit check pay the amount represented by the check in the same manner
as it pays accrued benefits under 38 U.S.C. § 5121. Section 5121
requires VA to pay accrued benefits to the first living person(s) in the
following order: (A) veteran's surviving spouse; (B) veteran's surviving
children (in equal shares); and (C) veteran's dependent parents (in
equal shares). Section 5121 (a) also provides that, "\[i\]n all other
cases," accrued benefits may be paid only as necessary to reimburse the
person who bore the expenses of the payee's last sickness and burial.
Section 5122 further provides that any amount not paid in this manner
shall be paid to the estate of the deceased payee, unless the estate
will escheat, i.e., revert to the state because there is no one eligible
to inherit it.

Prior to October 19, 1996, § 5122 required settlement by the General
Accounting Office (GAO) before payment could be made to an estate.
However, § 202(t) of the General Accounting Office Act of 1996, Public
Law 104-316, effective October 19, 1996, amended § 5122 to delete
reference to settlement by GAO. VA's Office of the General Counsel has
advised that under § 5122, VA is now authorized to pay amounts due to
the estates of deceased payees without reference to any other agency. We
are, therefore, amending 38 CFR 3.1003(b) to bring VA's regulation into
conformity with the amended statute by removing reference to settlement
by GAO.

We also are amending § 3.1003(b) to replace the legal term "escheat"
with the words "revert to the state because there is no one eligible to
inherit it." We believe that many will not understand the term "escheat"
and have, therefore, chosen to replace it with words that express the
same legal meaning but are easier for the general public to understand.
The effective date of this amendment is October 19, 1996, the effective
date of § 202(t) of Public Law 104-316.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

[§ 3.1003 \[Amended\]]{.underline}

2\. In § 3.1003, paragraph (b) is amended by removing "upon settlement
by the General Accounting Office"; and by removing "escheat" and adding,
in its place, "revert to the state because there is no one eligible to
inherit it".

REGULATORY AMENDMENT

3-00-1

Regulations Affected: 38 CFR 3.22 and 3.54(c)

Effective Date of the Regulation: January 21, 2000

Date Secretary Approved Regulation: September 7, 1999

Federal Register Citation: 65 FR 3388-3392 (January 21, 2000)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. These comments are not regulatory.

[History of 38 CFR 3.22]{.underline}

Under chapter 13 of title 38, United States Code, VA is authorized to
pay DIC to certain survivors of veterans who died as a result of
service-connected disability. In 1978, Congress enacted Pub. L. 95-479,
which authorized VA to pay DIC to the survivors of a veteran whose death
was not caused by service-connected disability, but who, at the time of
death, "was in receipt of (or but for the receipt of retired or
retirement pay was entitled to receive)" compensation for a
service-connected disability rated 100 percent disabling for 10 years
immediately preceding death, or for a period of at least five years
extending from date of discharge from service until date of death. That
provision was codified in 38 U.S.C. 410(b)(1). In 1979, VA issued 38 CFR
3.22 to implement the statute. (44 Fed. Reg. 22716, 22718 (1979).)

A 1981 opinion by the VA General Counsel (Op. G.C. 2-81) concluded that
§ 410(b)(1) did not permit a DIC award to the survivors of a veteran who
was not actually in receipt of compensation for a total disability for a
full ten years prior to death, but who would have been in receipt of
such benefits if not for a clear and unmistakable error by VA in a
decision rendered during the veteran's lifetime.

In 1982, Congress enacted Pub. L. 97-306, which amended § 410(b)(1) in
response to the General Counsel's 1981 decision. The amended statute,
now codified at 38 U.S.C. 1318(b), authorized payment of DIC in cases
where the veteran "was in receipt of or entitled to receive (or but for
the receipt of retired or retirement pay was entitled to receive)"
compensation for a service-connected disability rated totally disabling
for 10 years immediately preceding death or a period of five years from
the date of discharge. The legislative history stated that the purpose
of the amendment was "to provide that the requirement that the veteran
have been in receipt of compensation for a service-connected disability
rated as total for a period of 10 years prior to death (or for 5 years
continuously from the date of discharge) is met if the veteran would
have been in receipt of such compensation for such period but for a
clear and unmistakable error regarding the award of a total disability
rating." (Explanatory Statement of Compromise Agreement, 128 Cong. Rec.
H7777 (1982), reprinted in 1982 U.S.C.C.A.N. 3012, 3013.)

In 1983, VA revised § 3.22 to state that DIC would be payable under §
410(b)(1) (now § 1318(b)) when the veteran "was in receipt of or for any
reason (including receipt of military retired or retirement pay or
correction of a rating after the veteran's death based on clear and
unmistakable error) was not in receipt of but would have been entitled
to receive compensation at the time of death" for service-connected
disability rated totally disabling for 10 years prior to death or five
years continuously from date of discharge to date of death. (48 Fed.
Reg. 41160, 41161 (1983).)

In Wingo v. West, 11 Vet. App. 307 (1998), the United States Court of
Appeals for Veterans Claims (CAVC) interpreted § 3.22(a) as permitting a
DIC award in a case where the veteran had never established entitlement
to VA compensation for a service-connected total disability and had
never filed a claim for such benefits which could have resulted in
entitlement to compensation for the required period. The CAVC concluded
that the language of § 3.22(a) would permit a DIC award where it is
determined that the veteran "hypothetically" would have been entitled to
a total disability rating for the required period if he or she had
applied for compensation during his or her lifetime.

The CAVC's interpretation of § 3.22(a) does not accurately reflect VA's
intent in issuing that regulation. Section 1318 of the statute
authorizes DIC where the veteran was "in receipt of or entitled to
receive" compensation for total service-connected disability for a
specified period preceding death. The statute does not authorize VA to
award DIC benefits in cases where the veteran merely had hypothetical,
as opposed to actual, entitlement to compensation. VA does not have
authority to provide by regulation for payment of DIC in a manner not
authorized by § 1318. Section 3.22(a) is an interpretive rule that was
intended to explain the requirements of § 1318, and not to establish any
substantive rights beyond those authorized by § 1318. However, VA
acknowledges that the language of § 3.22(a) has apparently caused
confusion regarding VA's interpretation of § 1318. Accordingly, VA is
revising § 3.22(a) to ensure that it clearly expresses VA's
interpretation of § 1318.

[Definition of "Entitled to Receive"]{.underline}

In order to clarify the requirements of section 1318, VA is revising
section 3.22 to expressly define the statutory term "entitled to
receive". VA is defining that term to refer to each specific
circumstance where a veteran had a service-connected disability rated
totally disabling by VA but was not receiving VA compensation for such
disability at the time of death. Those circumstances are as follows.

In certain circumstances, VA may pay a veteran's compensation directly
to his or her dependents. (See 38 U.S.C. 1158, 5307, 5308(c).) VA may
also withhold a veteran's compensation in order to offset the veteran's
indebtedness to the United States arising out of participation in a
program administered by VA. (See 38 U.S.C. 5314.) In such cases, where
the veteran's compensation is being applied to satisfy an obligation of
the veteran, VA believes that the veteran may be considered to have been
entitled to receive compensation within the meaning of § 1318.

There are other circumstances in which a veteran who has established
entitlement to compensation for disability rated totally disabling by VA
may not have been receiving payments of compensation at the time of
death. A veteran will be considered to have been entitled to receive
compensation for such disability at the time of death if he or she had
filed a claim and would have received compensation for the required
period but for clear and unmistakable error by VA. Additionally, a
veteran will be considered to have been entitled to receive compensation
if, at the time of death, the veteran had a service-connected disability
(or disabilities) that was rated 100 percent disabling by VA for the
required period, but the veteran was not receiving compensation because
he or she had not waived military retired or retirement pay, or because
VA was withholding payments under certain circumstances. Payments of
compensation may be withheld under 10 U.S.C. 1174(h)(2) to offset the
amount of certain payments to the veteran from the Department of
Defense. It may also be necessary for VA to withhold compensation if the
veteran's whereabouts is unknown. Additionally, under 38 U.S.C. 5308, VA
may withhold payments to aliens located in the territory of an enemy of
the United States or any of its allies. A veteran is entitled to receive
payments withheld under § 5308 if it is shown that the veteran was not
guilty of mutiny, treason, sabotage, or rendering assistance to an enemy
of the United States or its allies (38 U.S.C. 5309). Accordingly,
revised § 3.22(b) states that the phrase "entitled to receive" refers to
veterans who were not receiving payments at the time of death for one of
the reasons stated above.

This definition also reflects VA's conclusion that the language "rated
totally disabling" in § 1318 requires that the disability or
disabilities have been rated totally disabling [by VA]{.underline}.
Section 1155 of title 38, United States Code, requires the Secretary of
Veterans Affairs to "adopt and apply a schedule of ratings of reductions
in earning capacity from specific injuries or combinations of injuries."
Under this authority, VA has created its Schedule for Rating
Disabilities (38 CFR Part 4). Given the very specific requirements of §
1155 as well as 38 U.S.C. § 1114, which establishes the rates of
compensation for the ten levels of disability including disabilities
"rated as total" (§ 1114(j)), we believe that the term "rated" as it is
used in § 1318 can only mean "rated by VA".

[Other changes]{.underline}

New paragraph (c) of § 3.22 is a restatement of material previously
contained in paragraph (a). New paragraph (c) provides that a rating
based on individual unemployability under 38 CFR 4.16 qualifies as
disability rated by VA as totally disabling. New paragraph (d) of § 3.22
provides the criteria for being considered a surviving spouse for
purposes of § 1318 and § 3.22. These criteria are merely a restatement
of 38 U.S.C. 1318(c) and 38 CFR 3.54(c)(2). We are simultaneously
removing section 3.54(c)(2) as unnecessary. New paragraphs (e) through
(h) are redesignations of former paragraphs (b) through (e),
respectively.

Title 38 CFR Part 3 is amended as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

[\[§ 3.22 Amended\]]{.underline}

2\. In § 3.22, the section heading is revised, paragraph (a) is
redesignated as paragraphs (a) through (d) and revised, existing
paragraphs (b) through (e) are redesignated as paragraphs (e) through
(h), respectively, and redesignated paragraph (f) is revised, to read as
follows:

[§ 3.22 DIC benefits for survivors of certain veterans rated totally
disabled at time of death.]{.underline}

\(a\) Even though a veteran died of non-service-connected causes, VA
will pay death benefits to the surviving spouse or children in the same
manner as if the veteran's death were service-connected, if:

\(1\) the veteran's own willful misconduct did not cause his or her
death, and

\(2\) At the time of death, the veteran was receiving, or was entitled
to receive, compensation for service-connected disability that was:

\(i\) rated by VA as totally disabling for a continuous period of at
least 10 years immediately preceding death; or

\(ii\) rated by VA as totally disabling continuously since the veteran's
release from active duty and for at least 5 years immediately preceding
death.

\(b\) For purposes of this section, "entitled to receive" means that at
the time of death, the veteran had service-connected disability rated
totally disabling by VA but was not receiving compensation because:

\(1\) VA was paying the compensation to the veteran's dependents;

\(2\) VA was withholding the compensation under authority of 38 U.S.C. §
5314 to offset an indebtedness of the veteran;

\(3\) the veteran had applied for compensation but had not received
total disability compensation due solely to clear and unmistakable error
in a VA decision concerning the issue of service connection, disability
evaluation, or effective date;

\(4\) the veteran had not waived retired or retirement pay in order to
receive compensation;

\(5\) VA was withholding payments under the provisions of 10 U.S.C. §
1174(h)(2);

\(6\) VA was withholding payments because the veteran's whereabouts was
unknown, but the veteran was otherwise entitled to continued payments
based on a total service-connected disability rating; or

\(7\) VA was withholding payments under 38 U.S.C.5308 but determines
that benefits were payable under 38 U.S.C. 5309.

\(c\) For purposes of this section, "rated by VA as totally disabling"
includes total disability ratings based on unemployability (§ 4.16 of
this chapter).

\(d\) To be entitled to benefits under this section, a surviving spouse
must have been married to the veteran-

\(1\) for not less than 1 year immediately preceding the date of the
veteran's death; or

\(2\) for any period of time if a child was born of the marriage, or was
born to them before the marriage.

(Authority: 38 U.S.C. 1318)

\(e\) \* \* \*

\(f\) *Social security and worker's compensation.* Benefits received
under social security or worker's compensation are not subject to
recoupment under paragraph (e) of this section even though such benefits
may have been awarded pursuant to a judicial proceeding.

\(g\) \* \* \*

\(h\) \* \* \*

\* \* \* \* \*

[§ 3.54 \[Amended\]]{.underline}

3\. In § 3.54, paragraph (c)(2) is removed, and paragraphs (c)(1),
c(1)(i), (c)(1)(ii), and (c)(1)(iii) are redesignated as paragraphs (c),
(c)(1), (c)(2), and (c)(3), respectively.

REGULATORY AMENDMENT

3-00-2

Regulations Affected: 38 CFR 3.57(a) and 3.667

Effective Date of the Regulation: March 8, 2000

Date Secretary Approved Regulation: February 29, 2000

Federal Register Citation: 65 FR 12116-12117 (March 8, 2000)

The purpose of the following summary of this regulatory amendment is to
inform all concerned why this change is being made. This summary is not
regulatory.

A veteran who is entitled to compensation under the provisions of 38
U.S.C. 1114 or 1134 is also entitled, under certain circumstances, to
additional compensation for dependents, including a child. A veteran who
is entitled to pension under the provisions of 38 U.S.C. 1521 is
entitled to a higher annual rate of pension because of dependents,
including a child. Dependency and indemnity compensation and death
pension are also monetary benefits affected by the number of the
surviving spouse's dependent children. Under certain circumstances, they
may be entitled to these benefits in their own right.

A "child" is defined in 38 U.S.C. 101(4)(A)(iii) to include a person who
is unmarried, and after attaining the age of eighteen years and until
completion of education or training (but not after attaining the age of
twenty-three years) is pursuing a course of instruction at an approved
educational institution. The implementing regulation is at
38 CFR 3.57(a)(1)(iii).

Section 104(a) of title 38, United States Code, provides that for the
purpose of determining whether or not benefits are payable (except those
under chapter 35, title 38, United States Code) for a child over the age
of eighteen and under the age of twenty-three years who is attending a
school, college, academy, seminary, technical institute, university, or
other educational institution, the Secretary may approve or disapprove
such educational institutions.

In a precedent opinion dated March 19, 1998 (VAOPGCPREC 3-98), VA's
General Counsel held that the term "educational institution" should be
interpreted as including only institutions which are similar in type to
the institutions specifically enumerated in 38 U.S.C. 104(a). According
to the General Counsel, a home-school program differs from those
institutions because the program is not offered to other students, but
rather is created to serve the needs of a particular student. Also, a
home-school is not a permanent organization but rather disbands at
completion of the student's program or withdrawal of the student. The
General Counsel concluded, therefore, that a person who is receiving
instruction in a home-school program is not pursuing a course of
instruction at an educational institution and therefore does not qualify
as a child within the meaning of 38 U.S.C. 101(4)(A)(iii). This document
amends 38 CFR 3.57(a)(1)(iii) accordingly. We are also making
non-substantive amendments to 38 CFR 3.667.

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

PART 3---ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In Sec. 3.57, paragraph (a)(1)(iii) is revised to read as follows:

Sec. 3.57 Child.

\(a\) \* \* \*

\(1\) \* \* \*

\(iii\) Who, after reaching the age of 18 years and until completion of
education or training (but not after reaching the age of 23 years) is
pursuing a course of instruction at an approved educational institution.
For the purposes of this section and Sec. 3.667, the term
\`\`educational institution\'\' means a permanent organization that
offers courses of instruction to a group of students who meet its
enrollment criteria. The term includes schools, colleges, academies,
seminaries, technical institutes, and universities, but does not include
home-school programs.

(Authority: 38 U.S.C. 101(4)(A), 104(a))

\* \* \* \* \*

Sec. 3.667 \[Amended\]

3\. Section 3.667 is amended by removing \`\`approved school\'\' and
\`\`approved course of instruction\'\' wherever they appear and adding,
in their place, \`\`approved educational institution\'\'.

4\. Section 3.667 is further amended as follows:

a\. Paragraphs (a)(2) and (a)(4) are amended by removing \`\`based upon
a course which\'\' and adding, in its place, \`\`based upon a course of
instruction at an approved educational institution which\'\';

b\. The first sentence of paragraph (b) is amended by removing
\`\`attending school\'\' and adding, in its place, \`\`attending an
approved educational institution\'\'; and

c\. The last sentence of paragraph (a)(5) and paragraph (d) are revised
to read as follows:

Sec. 3.667 School attendance.

\(a\) \* \* \*

\(5\) \* \* \* Where the child was receiving dependency and indemnity
compensation in its own right prior to age 18 and was not attending an
approved educational institution on the 18th birthday but commences

attendance at an approved educational institution after the 18^th^
birthday, payments may be resumed from the commencing date of the course
if evidence of such school attendance is filed within 1 year from that
date.

\* \* \* \* \*

\(d\) Transfers to other schools. When benefits have been authorized
based upon school attendance and it is shown that during a part or all
of that period the child was pursuing a different course in the same

approved educational institution or a course in a different approved
educational institution, payments previously made will not be disturbed.

\* \* \* \* \*

REGULATORY AMENDMENT

3-00-3

Regulations Affected: 38 CFR 3.256 and 3.277

Effective Date of the Regulation: March 30, 2000

Date Secretary Approved Regulation:, February 29, 2000

Federal Register Citation: 65 FR 16827-16828 (March 30, 2000)

The purpose of the following comments on the changes included in this
amendment of VA regulations is to inform all concerned why the changes
are being made. These comments are not regulatory.

On October 6, 1998, VA published in the Federal Register an interim
final rule generally exempting old law and section 306 pension
beneficiaries from the requirements to submit annual eligibility
verification reports (EVRs). (63 FR 53593-96, October 6 1998.) The term
"old law pension" means the disability and death pension programs that
were in effect on June 30, 1960. The term "section 306 pension" means
those disability and death pension programs that were in effect on
December 31, 1978. VA uses EVRs to request information, such as income
and marital status, that VA needs to determine or verify eligibility for
its need-based benefit programs.

We asked interested persons to submit comments on or before December 7,
1998. We received no comments. Based on the rationale stated in the
interim final rule and in this document, we are adopting the interim
final rule without change, except that we are adding statements
explaining that the information collections are approved by the Office
of Management and Budget (OMB) under control number 2900-0101. We also
affirm the information in the interim final rule document concerning the
Regulatory Flexibility Act.

Title 38 CFR Part 3 is amended as follows:

PART 3---ADJUDICATION

Subpart A---Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

Secs. 3.256 and 3.277 \[Amended\]

2\. In Secs. 3.256 and 3.277, a parenthetical is added at the end of
each section to read as follows:

(The Office of Management and Budget has approved the information
collection requirements in this section under control number 2900-0101.)

REGULATORY AMENDMENT

3-00-4

Regulations Affected: 38 C.F.R. §3.29(c), §3.31, §3.114(a), §3.216,
§3.814 (c, e, f), §17.901, §17.902, §17.903, §21.8012 and §21.8014.

Effective Date of the Regulation: October 1, 1997

Date Secretary Approved Regulation: February 2, 2000

Federal Register Citation: 65 FR 35280-35283 (June 2, 2000)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. These comments are not regulatory.

Section 421 of Pub. L. 104-204 added a new chapter 18 to title 38,
United States Code, authorizing VA to provide certain benefits to
children suffering from spina bifida who are the natural children of
Vietnam veterans. VA published three sets of regulations to implement
the provisions of section 421 of Pub. L. 104-204, i.e. regulations
concerning monetary allowances, provision of healthcare, and provision
of vocational training and rehabilitation, in the [FEDERAL
REGISTER]{.underline} of September 30, 1997 (62 FR 51273-296).

Section 404 of Pub. L. 105-114, the Veterans' Benefits Act of 1997,
enacted on November 21, 1997, amended chapter 18 of title 38, United
States Code. This document revises VA's regulations to implement those
statutory amendments. The changes concerning the definition of "Vietnam
veteran," the definition of "child," and the submission of social
security numbers concern all three sets of regulations. The other
changes made by this document only concern the monetary allowance
regulations.

Public Law No. 104-204 defined the term "Vietnam veteran" as a "veteran"
who performed active military, naval, or air service in the Republic of
Vietnam "during the Vietnam era." Public Law No. 105-114 amended that
definition to refer to an "individual" who performed active military,
naval, or air service in the Republic of Vietnam "during the period
beginning on January 9, 1962, and ending on May 7, 1975, without regard
to the characterization of the individual's service." We are amending 38
CFR 3.814(c)(1) of the monetary allowance regulations accordingly. This
change also affects the spina bifida regulations concerning provision of
healthcare (see 38 CFR 17.901) and provision of vocational training and
rehabilitation (see 38 CFR 21.8012).

Public Law No. 104-204 defined the term "child" as meaning a natural
child of a Vietnam veteran, regardless of age or marital status, who was
conceived after the date on which the veteran first entered the Republic
of Vietnam "during the Vietnam era." Public Law No. 105-114 amended the
definition of "child" by changing "during the Vietnam era" to "during
the period beginning on January 9, 1962, and ending on May 7, 1975." We
are amending 38 CFR 3.814(c)(2) of the monetary allowance regulations
accordingly. This change also affects the spina bifida regulations
concerning provision of healthcare (see 38 CFR 17.901) and provision of
vocational training and rehabilitation (see 38 CFR 21.8012).

Public Law No. 105-114 revised 38 U.S.C. 1806 so that various
administrative provisions of title 38, United States Code, including the
following, are applicable to those applying for or receiving spina
bifida benefits: 38 U.S.C. 5101(c), 5110(a), 5110(b)(2), 5110(g),
5110(i), 5111, 5112(a), 5112(b)(9), and 5112(b)(10). Accordingly, we are
making the following changes.

-   We are amending 38 CFR 3.216 to provide that anyone applying for or
    receiving benefits for a child suffering from spina bifida, as a
    condition for receipt or continued receipt of benefits, must furnish
    VA, upon request, his or her social security number, and the social
    security number of anyone based upon whom benefits are sought or
    received (38 U.S.C. 5101(c)).

-   We are amending 38 CFR 3.814 of the monetary allowance regulations
    to provide that the effective date of a monthly award for a child
    suffering from spina bifida based on an original claim, a claim
    reopened after final adjudication, or a claim for increase will be
    fixed in accordance with the facts found, but will not be earlier
    than the date of receipt of the application for benefits (38 U.S.C.
    5110(a)).

-   We are amending 38 CFR 3.814 to provide that the effective date of
    an increased monthly award for a child suffering from spina bifida
    will be the earliest date as of which it is ascertainable that an
    increase in disability had occurred, if application is received by
    VA within one year of that date (38 U.S.C. 5110(b)(2)).

-   We are amending 38 CFR 3.114 to provide that any award or increase
    of a monthly award for a child suffering from spina bifida pursuant
    to any law or administrative issue will not be effective prior to
    the effective date of the law or administrative issue and will not
    be retroactive more than one year from the date of application or
    the date of administrative determination of entitlement, whichever
    is earlier (38 U.S.C. 5110(g)).

-   We are amending 38 CFR 3.814 to provide that a monthly award for a
    child suffering from spina bifida benefits based on a disallowed
    claim reopened on the basis of a correction of military records will
    be effective on the date application was made for the correction, or
    the date the disallowed claim was filed, whichever is later, but not
    retroactive for more than one year from the reopening of the
    disallowed claim (38 U.S.C. 5110(i)).

-   We are amending 38 CFR 3.31 to provide that the payment of a monthly
    award for a child suffering from spina bifida may not be made for
    any period before the first day of the month following the month in
    which the award or increase became effective (38 U.S.C. 5111).

-   We are amending 38 CFR 3.814 to provide that the effective date of a
    reduction or discontinuance of a monthly award for a child suffering
    from spina bifida will be fixed in accordance with the facts found,
    that reduction or discontinuance of such benefits by reason of
    beneficiary error will be the effective date of the award, and that
    reduction or discontinuance of such benefits by reason of
    administrative error will be effective as of the date of last
    payment (38 U.S.C. 5112(a), (b)(9), (b)(10)).

Public Law No. 104-204 provided that the amounts of the monthly monetary
allowance to a child with spina bifida are subject to adjustment under
the provisions of 38 U.S.C. 5312, which provides for the adjustment of
certain VA benefit rates whenever there is an increase in benefit
amounts payable under title II of the Social Security Act (42 U.S.C. 401
et seq.). 38 U.S.C. 5312(c)(2) provides that whenever rates are so
increased, the Secretary may round those rates in such manner as the
Secretary considers equitable and appropriate. The Secretary has
determined that since all other benefits administered under VA's
adjudication regulations (38 CFR part 3) are paid in even dollar
amounts, for ease of administration it is appropriate to round rate
increases concerning the spina bifida monetary benefit.

Under procedures established at 38 CFR 3.29, when adjusting the annual
basic benefit rates for the pension programs and parents' dependency and
indemnity compensation, if the resulting amounts are not even dollar
amounts, VA rounds them to the next higher dollar. In computing monthly
rates from the adjusted annual rates, if the resulting amounts are not
even dollar amounts, VA rounds to the next lower dollar. Since Pub. L.
104-204 authorized the monetary allowance for spina bifida at a monthly
rate rather than an annual rate, it is necessary to round only one time
when determining a revised rate. Under 38 CFR 3.29, if rounding is
necessary after the first calculation, the resulting rate is always
rounded up. We believe therefore that since only one rounding is
required to revise the monetary allowance for spina bifida, it is both
equitable and appropriate to round up. We are amending § 3.29
accordingly.

Public Law No. 105-114 provides that the amendments to chapter 18 of
title 38, United States Code, are effective as of October 1, 1997.

Title 38 CFR parts 3, 17, and 21 are amended as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In § 3.29, paragraph (c) is added, to read as follows:

[§ 3.29 Rounding.]{.underline}

\* \* \* \* \*

\(c\) [Monthly rates under 38 U.S.C. 1805.]{.underline} When increasing
the monthly monetary allowance rates under § 3.814 for children
suffering from spina bifida (see § 3.27(c)), VA will round any resulting
rate that is not an even dollar amount to the next higher dollar.

(Authority: 38 U.S.C. 1805(b)(3), 5312(c)(2))

3\. Section 3.31 is amended as follows:

a\. The introductory text is amended in the first sentence by removing
"compensation, pension or dependency and indemnity compensation" and
adding, in its place, "compensation, pension, dependency and indemnity
compensation, or the monetary allowance under 38 U.S.C. 1805 for a child
suffering from spina bifida who is a child of a Vietnam veteran"; and

b\. Paragraph (c)(4)(ii) and the authority citation at the end of the
section are revised to read as follows:

[§ 3.31 Commencement of the period of payment.]{.underline}

\* \* \* \* \*

\(c\) \* \* \*

\(4\) \* \* \*

\(ii\) Increases in Improved Pension, parents' dependency and indemnity
compensation, or the monetary allowance for children suffering from
spina bifida pursuant to § 3.27, or

\* \* \* \* \*

(Authority: 38 U.S.C. 1806, 5111)

4\. Section 3.114 is amended as follows:

a\. Paragraph (a) introductory text is amended by removing "Where
pension, compensation, or dependency and indemnity compensation" in each
place it appears and adding, in its place, "Where pension, compensation,
dependency and indemnity compensation, or the monetary allowance under
38 U.S.C. 1805 for a child suffering from spina bifida who is a child of
a Vietnam veteran"; and

b\. The authority citation at the end of paragraph (a) is revised to
read as follows:

[§ 3.114 Change of law or Department of Veterans Affairs
issue.]{.underline}

\* \* \* \* \*

(Authority: 38 U.S.C. 1806, 5110(g))

\* \* \* \* \*

5\. In § 3.216, the section heading is amended by removing "number" and
adding, in its place, "numbers"; the first sentence is amended
immediately following "of this part" by adding ", or the monetary
allowance for a child suffering from spina bifida who is a child of a
Vietnam veteran under § 3.814 of this part,"; and the authority citation
is revised to read as follows:

[§ 3.216 Mandatory disclosure of social security numbers.]{.underline}

\* \* \* \* \*

(Authority: 38 U.S.C. 1806, 5101(c))

6\. Section 3.814 is amended as follows:

a\. Paragraph (c)(1) is amended by removing "a veteran" and adding, in
its place, "an individual"; by removing "during the Vietnam era" and
adding, in its place, "during the period beginning on January 9, 1962,
and ending on May 7, 1975, without regard to the characterization of the
individual's service";

b\. Paragraph (c)(2) is amended by removing "during the Vietnam era" and
adding, in its place, "during the period beginning on January 9, 1962,
and ending on May 7, 1975"; and

c\. Paragraphs (e) and (f) are added immediately following paragraph
(d)(5) and the authority citation at the end of the section is revised
to read as follows:

[§ 3.814 Monetary allowance under 38 U.S.C. 1805 for a child suffering
from spina bifida who is a child of a Vietnam veteran.]{.underline}

\* \* \* \* \*

\(e\) [Effective dates.]{.underline} Except as otherwise provided, VA
will award the monetary allowance for children suffering from spina
bifida based on an original claim, a claim reopened after final
disallowance, or a claim for increase as of the date VA received the
claim or the date entitlement arose, whichever is later.

\(1\) VA will increase benefits as of the earliest date the evidence
establishes that the level of severity increased, but only if the
beneficiary applies for an increase within one year of that date.

\(2\) If a claimant reopens a previously disallowed claim based on
corrected military records, VA will award the benefit from the latest of
the following dates: the date the veteran or beneficiary applied for a
correction of the military records; the date the disallowed claim was
filed; or, the date one year before the date of receipt of the reopened
claim.

\(f\) [Reductions and discontinuances.]{.underline} VA will generally
reduce or discontinue awards according to the facts found except as
provided in §§ 3.105 and 3.114(b).

\(1\) If benefits were paid erroneously because of beneficiary error, VA
will reduce or discontinue benefits as of the effective date of the
erroneous award.

\(2\) If benefits were paid erroneously because of administrative error,
VA will reduce or discontinue benefits as of the date of last payment.

\* \* \* \* \*

(Authority: 38 U.S.C. 1805, 1806, 5110, 5112)

PART 17 - MEDICAL

1\. The authority citation for part 17 continues to read as follows:

> AUTHORITY: 38 U.S.C. 501, 1721 unless otherwise noted.

2\. The authority citation at the end of § 17.901 is revised to read as
follows:

[§ 17.901 Definitions]{.underline}.

\* \* \* \* \*

Authority: 38 U.S.C. 101(2), 1801-1806, Public Law 105-114)

3\. The authority citation at the end of § 17.902 is revised to read as
follows:

[§ 17.902 Preauthorization]{.underline}.

\* \* \* \* \*

(Authority: 38 U.S.C. 101(2), 1801-1806, Public Law 105-114)

4\. The authority citation at the end of § 17.903 is revised to read as
follows:

[§ 17.903 Payment]{.underline}.

\* \* \* \* \*

(Authority: 38 U.S.C. 101(2), 1801-1806, Public Law 105-114)

PART 21 -- VOCATIONAL REHABILITATION AND EDUCATION

Subpart M---Vocational Training and Rehabilitation for Vietnam Veterans'
Children With Spina Bifida

1\. The authority citation for part 21, subpart M continues to read as
follows:

> AUTHORITY: 38 U.S.C. 101, 501, 512, 1151 note, 1801-1806, 5112, unless
> otherwise noted.

2\. The authority citation at the end of § 21.8012 is revised to read as
follows:

[§ 21.8012 Definitions and abbreviations]{.underline}.

\* \* \* \* \*

(Authority: 38 U.S.C. 101(2), 1801, 1804, Public Law 105-114)

3\. The authority citation at the end of § 21.8014 is revised to read as
follows:

[§ 21.8014 Application]{.underline}.

\* \* \* \* \*

(Authority: 38 U.S.C. 101(2), 1801, 1804, Public Law 105-114)

REGULATORY AMENDMENT

3-00-5

Regulations Affected: 38 C.F.R. §3.22(a), §3.55(a), and §3.309(d).

Effective Dates of the Rulemaking: The amendments to 38 CFR §3.22 and
§3.309 are effective November 30, 1999. The amendment to 38 CFR §3.55 is
effective December 1, 1999.

Date Secretary Approved Rulemaking: June 28, 2000

Federal Register Citation: 65 FR 43699-43700 (July 14, 2000)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. These comments are not regulatory.

On November 30, 1999, the President signed into law the Veterans
Millennium Health Care and Benefits Act, Pub. L. 106-117 (the Act).
Three provisions of the Act directly affect the payment of VA benefits.
These provisions concern: 1) payment of dependency and indemnity
compensation (DIC) to the surviving spouses of certain former prisoners
of war (POWs); 2) provision of health care, education and home loan
benefits to surviving spouses upon termination of their remarriages; and
3) addition of bronchiolo-alveolar carcinoma to the list of diseases
that VA presumes are the result of exposure to radiation during active
military service.

DIC benefits are generally payable to the survivors of veterans who died
from their service-connected disabilities. In addition, 38 U.S.C. 1318
authorizes VA to pay DIC benefits to survivors of veterans whose deaths
were not service-connected but who were continuously rated totally
disabled due to service-connected disabilities for ten years or more
immediately preceding the veteran's death, or for five years from the
date of such veteran's discharge. Section 501 of Pub. L. 106-117
authorizes payment of DIC to the survivors of former POWs who died after
September 30, 1999, and who were continuously rated totally disabled due
to a service-connected disability for a period of not less than one year
immediately preceding death. This provision is effective November 30,
1999, the date of enactment. This document amends 38 CFR 3.22, to
reflect this change.

In 1998, Pub. L. 105-178 restored eligibility to DIC to a surviving
spouse of a veteran if that person's subsequent remarriage had been
terminated by death or divorce, or if a subsequent relationship had been
terminated. Eligibility to DIC was restored effective October 1, 1998.
This law restored eligibility *only* to DIC. Eligibility to ancillary
benefits---including VA Civilian Health Care and Medical Program
(CHAMPVA), chapter 35 education, and home loan guaranty benefits---was
not restored.

Section 502 of Pub. L. 106-117 restores eligibility to health care
benefits under 38 U.S.C. chapter 17 (CHAMPVA), education benefits under
chapter 35, and home loan guaranty benefits under chapter 37 to a
surviving spouse if his or her remarriage has been terminated by death
or divorce, or if a surviving spouse has ceased living with another
person and holding himself or herself out openly to the public as that
person's spouse. Section 502 states that its changes shall take effect
on the first day of the first month beginning after the month in which
the Act is enacted, i.e., December 1, 1999. This document amends 38 CFR
3.55 to reflect these changes.

Section 503 of the Act adds bronchiolo-alveolar carcinoma to the list of
diseases that VA presumes result from exposure to radiation during
active military service. This provision of the law is effective November
30, 1999. This document amends 38 CFR 3.309(d) to reflect these changes.

Title 38 CFR part 3 is amended as follows:

PART 3---ADJUDICATION

Subpart A---Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

[§ 3.22 \[Amended\]]{.underline}

2\. Section 3.22 is amended by:

a\. In paragraph (a)(2)(i), removing the word "or" after the semi-colon
at the end of the paragraph.

b\. In paragraph (a)(2)(ii), removing the period at the end of the
paragraph and adding, in its place, "; or".

c\. Adding paragraph (a)(2)(iii) to read as follows:

[§3.22 DIC benefits for survivors of certain veterans rated totally
disabled at the time of death.]{.underline}

\(a\) \* \* \*

\(2\) \* \* \*

\(iii\) Rated by VA as totally disabling for a continuous period of not
less than one year immediately preceding death, if the veteran was a
former prisoner of war who died after September 30, 1999.

(Authority: 38 U.S.C. 1318(b))

\* \* \* \* \*

3\. Section 3.55 is amended by redesigning paragraphs (a)(4), (a)(5),
and (a)(6) as paragraphs (a)(5), (a)(6) and (a)(8), respectively; and
new paragraphs (a)(4) and (a)(7) are added to read as follows:

[§ 3.55 Reinstatement of benefits eligibility based upon terminated
marital relationships.]{.underline}

\(a\) \* \* \*

\(4\) On or after December 1, 1999, remarriage of a surviving spouse
terminated by death, divorce, or annulment, will not bar the furnishing
of benefits relating to medical care for survivors and dependents under
38 U.S.C. 1713, educational assistance under 38 U.S.C. chapter 35, or
housing loans under 38 U.S.C. chapter 37, unless the Secretary
determines that the divorce or annulment was secured through fraud or
collusion.

(Authority: 38 U.S.C. 103(d))

\* \* \* \* \*

\(7\) On or after December 1, 1999, the fact that a surviving spouse has
lived with another person and has held himself or herself out openly to
the public as the spouse of such other person will not bar the
furnishing of benefits relating to medical care for survivors and
dependents under 38 U.S.C. 1713, educational assistance under 38 U.S.C.
chapter 35, or housing loans under 38 U.S.C. chapter 37 to the surviving
spouse if he or she ceases living with such other person and holding
himself or herself out openly to the public as such other person's
spouse.

(Authority: 38 U.S.C. 103(d)).

\* \* \* \* \*

4\. Section 3.309 is amended by adding paragraph (d)(2)(xvi) and an
authority citation after the Note at the end of paragraph (d)(2)(xv) to
read as follows:

[§3.309 Disease subject to presumptive service connection]{.underline}.

\* \* \* \* \*

\(d\) \* \* \*

\(2\) \* \* \*

\(xvi\) Bronchiolo-alveolar carcinoma.

(Authority: 38 U.S.C. 1112(c)(2))

REGULATORY AMENDMENT

3-01-1

Regulation affected: 38 CFR 3.814

EFFECTIVE DATE OF REGULATION: April 5, 2001

Date Secretary approved regulation: February 15, 2001

Federal Register Citation: 66 FR 13435 (March 6, 2001)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Based on a review of a sample of spina bifida claims adjudicated under
previous regulations at 38 CFR 3.814 concerning the monthly monetary
payment to an individual born with spina bifida who is a child of a
Vietnam veteran, and, based on actual medical evidence used to
adjudicate these claims, we assessed the effectiveness of the evaluation
criteria and the manner in which they were applied. Based on that
assessment, a further review of the medical literature, and suggestions
from several service organizations, we revised section 3.814 to clarify
the criteria to ensure that they are applied consistently and to add a
provision allowing the Director of the Compensation and Pension Service
to adjust the payment level for individuals with disabling impairments
due to spina bifida that are not addressed in the evaluation criteria.

We noted that raters applied the criteria based on the effects of lower
extremity impairment inconsistently to individuals who occasionally use
braces or a wheelchair, or who use them only outside the home. We
therefore clarified the criteria so that the assessment is based on
whichever mode of ambulation represents the individual's primary means
of mobility in the community.

Regarding the effects of bowel and bladder impairment, we noted that the
terms "proper urinary bladder function" and "proper bowel function" were
interpreted differently by different raters. We therefore revised the
criteria for bladder impairment to base them on the extent to which the
impairment affects the ability of the individual to engage in ordinary
day-to-day activities based on the length of time the individual is
usually able to remain dry during waking hours, and whether or not the
individual requires the use of medication or some other means to achieve
that level of control. This change takes into account the fact that
individuals who are ordinarily able to remain dry for three hours may
occasionally have an accidental involuntary release of urine due to an
acute illness, miscalculations in controlling fluid intake, etc. Basing
evaluations on the frequency of inability to remain dry for at least
three hours at a time during waking hours will assure that individuals
with bladder impairment are consistently evaluated.

Regarding the effects of bowel impairment, we revised the criteria to
take into account the extent to which fecal leakage limits the
individual's ability to engage in ordinary day-to-day activities, in
order to enable raters to consistently and objectively evaluate
individuals who, although neither totally continent nor incontinent,
have partial control of the effects of bowel or bladder impairment. We
did this by basing the evaluation on the extent and frequency of fecal
leakage and the degree to which the individual is able to control or
modify the effects of impairment through bowel management techniques or
other treatment (which would include suppositories, enemas, medication,
biofeedback, behavior modification, diet, manual evacuation, etc.). An
individual who requires bowel management techniques or other treatment
to control the effects of bowel impairment, but has only occasional or
minimal fecal leakage, and does not need to wear absorbent materials at
least four days a week, is evaluated at Level II. An individual who,
despite the use of bowel management techniques or other treatment to
control the effects of bowel impairment, has fecal leakage of such
severity or frequency that he or she must wear absorbent materials at
least four days a week, is evaluated at Level III. An individual who
regularly requires manual evacuation or digital stimulation to empty the
bowel is evaluated at Level III, since these procedures may
significantly interfere with ordinary day-to-day activities. These
replace the current criteria for current Level III that there be
"complete fecal incontinence." We also added a provision concerning
individuals with colostomy, which is a relatively common procedure with
different possible outcomes, to direct that "a colostomy that requires
wearing a bag" will be evaluated at Level III and "a colostomy that does
not require wearing a bag" will be evaluated at Level II.

Because of concerns that individuals with conditions such as blindness
or seizures resulting from spina bifida might be underpaid under the
current criteria, we added a new provision to § 3.814 to allow the
Director of the Compensation and Pension Service to increase the payment
level of an individual who would otherwise be paid at Level I or II and
has one or more disabilities, such as blindness, uncontrolled seizures,
or renal failure that result either from spina bifida or from treatment
procedures for spina bifida, to the level that, in his or her judgment,
best represents the extent to which the disabilities limit the
individual's ability to engage in ordinary day-to-day activities,
including activities outside the home.

Since many of those entitled to this benefit are now adolescents or
adults, we changed the words "child" or "children" to "individual" or
"individuals" throughout § 3.814. We also amended the regulations to
provide that, when VA is required to reassess an individual's level of
disability for purposes of the monetary allowance, VA will pay the
individual at Level I in the absence of evidence adequate to support a
higher level of disability or if the individual fails to report,
"without good cause" for a scheduled examination.

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

Part 3---Adjudication

Subpart A---Pension, Compensation, and Dependency and Indemnity
Compensation

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.  In § 3.814, the heading for the section and paragraphs (a), (c),
    and (d) are revised to read as follows:

> Monetary Allowance under 38 U.S.C. 1805 for an individual suffering
> from spina bifida who a child of a Vietnam veteran.

\(a\) VA will pay a monthly allowance based upon the level of disability
determined under the provisions of paragraph (d) of this section to or
for an individual who it has determined is suffering from spina bifida
and whose biological father or mother is or was a Vietnam veteran.
Receipt of this allowance will not affect the right of the individual or
any other related individual to receive any other benefit to which he or
she may be entitled under any law administered by VA. An individual
suffering from spina bifida is entitled to only one monthly allowance
under this section, even if the individual's biological father and
mother are or were both Vietnam veterans.

\* \* \* \* \*

\(c\) \* \* \*

\(2\) Individual. For the purposes of this section, the term
"individual" means a person, regardless of age or marital status, whose
biological father or mother is or was a Vietnam veteran and who was
conceived after the date on which the veteran first served in the
Republic of Vietnam during the Vietnam era. Notwithstanding the
provisions of Sec. 3.204(a)(1), VA shall require the types of evidence
specified in Secs. 3.209 and 3.210 sufficient to establish in the
judgment of the Secretary that an individual's biological father or
mother is or was a Vietnam veteran.

\(d\) (1) Except as otherwise specified in this paragraph, VA will
determine the level of payment as follows:

\(i\) [Level I]{.underline}. The individual walks without braces or
other external support as his or her primary means of mobility in the
community, has no sensory or motor impairment of the upper extremities,
has an IQ of 90 or higher, and is continent of urine and feces without
the use of medication or other means to control incontinence.

\(ii\) [Level II]{.underline}. Provided that none of the disabilities is
severe enough to warrant payment at Level III, and the individual: walks
with braces or other external support as his or her primary means of
mobility in the community; or, has sensory or motor impairment of the
upper extremities, but is able to grasp pen, feed self, and perform self
care; or, has an IQ of at least 70 but less than 90; or, requires
medication or other means to control the effects of urinary bladder
impairment and is unable no more than two times per week to remain dry
for at least three hours at a time during waking hours; or, requires
bowel management techniques or other treatment to control the effects of
bowel impairment but does not have fecal leakage severe or frequent
enough to require wearing of absorbent materials at least four days a
week; or, has a colostomy that does not require wearing a bag.

\(iii\) [Level III]{.underline}. The individual uses a wheelchair as his
or her primary means of mobility in the community; or, has sensory or
motor impairment of the upper extremities severe enough to prevent
grasping a pen, feeding self, and performing self care; or, has an IQ of
69 or less; or, despite the use of medication or other means to control
the effects of urinary bladder impairment, at least three times per week
is unable to remain dry for three hours at a time during waking hours;
or, despite bowel management techniques or other treatment to control
the effects of bowel impairment, has fecal leakage severe or frequent
enough to require wearing of absorbent materials at least four days a
week; or, regularly requires manual evacuation or digital stimulation to
empty the bowel; or, has a colostomy that requires wearing a bag.

\(2\) If an individual who would otherwise be paid at Level I or II has
one or more disabilities, such as blindness, uncontrolled seizures, or
renal failure that result either from spina bifida, or from treatment
procedures for spina bifida, the Director of the Compensation and
Pension Service may increase the monthly payment to the level that, in
his or her judgment, best represents the extent to which the
disabilities resulting from spina bifida limit the individual's ability
to engage in ordinary day-to-day activities, including activities
outside the home. A Level II or Level III payment will be awarded
depending on whether the effects of a disability are of equivalent
severity to the effects specified under Level II or Level III.

\(3\) VA may accept statements from private physicians, or examination
reports from government or private institutions, for the purpose of
rating spina bifida claims without further examination, provided the
statements or reports are adequate for assessing the level of disability
due to spina bifida under the provisions of paragraph (d)(1) of this
section. In the absence of adequate medical information, VA will
schedule an examination for the purpose of assessing the level of
disability.

\(4\) VA will pay an individual eligible for a monetary allowance due to
spina bifida at Level I unless or until it receives medical evidence
supporting a higher payment. When required to reassess the level of
disability under paragraph (d)(5) or (d)(6) of this section, VA will pay
an individual eligible for this monetary allowance at Level I in the
absence of evidence adequate to support a higher level of disability or
if the individual fails to report, without good cause, for a scheduled
examination. Examples of good cause include, but are not limited to, the
illness or hospitalization of the claimant, death of an immediate family
member, etc.

\(5\) VA will pay individuals under the age of one year at Level I
unless a pediatric neurologist or a pediatric neurosurgeon certifies
that, in his or her medical judgment, there is a neurological deficit
that will prevent the individual from ambulating, grasping a pen,
feeding himself or herself, performing self care, or from achieving
urinary or fecal continence. If any of those deficits are present, VA
will pay the individual at Level III. In either case, VA will reassess
the level of disability when the individual reaches the age of one year.

\(6\) VA will reassess the level of payment whenever it receives medical
evidence indicating that a change is warranted. For individuals between
the ages of one and twenty-one, however, it must reassess the level of
payment at least every five years.

(Authority: 38 U.S.C. 501, 1805)

REGULATORY AMENDMENT

3-01-2

Regulations affected: 38 CFR 3.300 and 3.310(a)

Effective Date of Regulation: June 10, 1998

Date Secretary Approved Regulation: February 5, 2001

Federal Register Citation: 66 FR 18195 (April 6, 2001)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

This document amends VA adjudication regulations governing
determinations of whether disability or death is service-connected.
These changes are necessary to implement a statutory amendment providing
that a disability or death will not be service-connected on the basis
that it resulted from injury or disease attributable to a veteran's use
of tobacco products during service.

Section 9014(a) of the \`\`Internal Revenue Service Restructuring and
Reform Act of 1998,\'\' Public Law 105-206, amended section 8202 of the
\`\`Transportation Equity Act for the 21st Century,\'\' Public Law
105-178, by adding section 1103 to title 38, United States Code.
Subsection (a) of section 1103 provides that \`\`a veteran\'s disability
or death shall not be considered to have resulted from personal injury
suffered or disease contracted in the line of duty in the active
military, naval, or air service for purposes of this title on the basis
that it resulted from injury or disease attributable to the use of
tobacco products by the veteran during the veteran\'s service.\'\'

Subsection (b) of section 1103 provides that subsection (a) does not
preclude service connection for disability or death that is otherwise
shown to have been incurred or aggravated during service or that becomes
manifest to the requisite degree of disability during any applicable
presumptive period specified in section 1112 or 1116 of title 38, United
States Code. This document amends VA regulations by adding new Sec.
3.300 to title 38, Code of Federal Regulations, to implement the
provisions of 38 U.S.C. 1103.

Section 3.300(a) provides that, for claims received by VA after June 9,
1998, a disability or death will not be considered service-connected on
the basis that it resulted from injury or disease attributable to the
veteran\'s use of tobacco products during service. Section 3.300(a) also
defines \`\`tobacco products\'\' to mean \`\`cigars, cigarettes,
smokeless tobacco, pipe tobacco, and roll-your-own tobacco.\'\'

Section 3.300(b) provides that Sec. 3.300(a) does not prohibit service
connection for a disability or death if it resulted from a disease or
injury otherwise shown to have been incurred or aggravated during
service, or that became manifest to the required degree of disability
within a period that establishes eligibility for a presumption of
service connection under 38 CFR 3.307, 3.309, 3.313, or 3.316, or that
may be secondarily service-connected under Sec. 3.310(b). It defines
\"otherwise shown\" as meaning \"that the disability or death can be
service-connected on some basis other than the veteran's use of tobacco
products during service, or that the disability became manifest or death
occurred during service.\"

Sections 3.307 and 3.309 implement the statutory presumptions of 38
U.S.C. 1112 and 1116, which are specifically mentioned at 38 U.S.C.
1103(b). These sections of the statute govern the presumptions that the
following diseases are service-connected: chronic and tropical diseases
(section 1112(a)); diseases appearing in former prisoners of war
(section 1112(b)); diseases appearing in radiation-exposed veterans
(section 1112(c)); and diseases associated with exposure to certain
herbicide agents (section 1116).

Sections 3.313 and 3.316 are regulatory, rather than statutory,
presumptions issued pursuant to the general rulemaking authority of the
Secretary of Veterans Affairs. 38 U.S.C. 501(a). They govern,
respectively, service connection for non-Hodgkins\' lymphoma developing
subsequent to service in Vietnam and service connection for diseases
developing subsequent to exposure to mustard gas and Lewisite. Also,
Sec. 3.310(b), a regulatory presumption, governs secondary service
connection of ischemic heart disease and other cardiovascular disease as
the proximate result of certain service-connected amputations of the
lower extremities. Title 38 U.S.C. 1103(b) explicitly provides that
nothing in section 1103(a) shall be construed as precluding
establishment of service connection if disability or death resulted from
a disease or injury otherwise shown to have been incurred or aggravated
during service or that appeared to the required degree within a
statutory presumptive period.

In our view, 38 U.S.C. 1103 was not intended to affect a veteran\'s
ability to establish service connection on the basis of any legal
presumption, including regulatory presumptions authorized by 38 U.S.C.
501(a) as well as statutory presumptions. Section 1103(a) only precludes
establishment of service connection for a disability or death \`\`on the
basis that\'\' it resulted from injury or disease attributable to the
veteran\'s use of tobacco products. We believe that section 1103(b) was
enacted as a safeguard to assure that VA did not misinterpret section
1103(a) as barring otherwise valid claims for service connection. Based
on our interpretation of section 1103, new Sec. 3.300(b) specifies that
if disability or death can be service-connected under the regulatory
presumptions of Sec. 3.310(b), 3.313, or 3.316, a claim will not be
denied on the basis of Sec. 3.300(a).

New Sec. 3.300(c) provides that, for claims received by VA after June 9,
1998, a disability that is proximately due to or the result of an injury
or disease previously service-connected on the basis of the veteran\'s
use of tobacco products during service will not be service-connected.
According to current Sec. 3.310(a), \`\`\[d\]isability which is
proximately due to or the result of a service-connected disease or
injury shall be service connected.\'\' Section 3.310(a) provides for
service connection of disability not itself incurred or aggravated in
service but nevertheless resulting from a disease or injury incurred or
aggravated in service. Just as with directly service-connected
disabilities, secondarily service-connected disabilities are the result
of service-incurred or service-aggravated injury or disease, only they
are somewhat more remotely related to such disease or injury. When a
disability is proximately due to or the result of an injury or disease
previously service-connected on the basis of the veteran\'s use of
tobacco products during service, the secondary condition results from a
disease or injury attributable to the use of tobacco products.
Consequently, service connection of such a condition is barred by 38
U.S.C. 1103(a). New Sec. 3.300(c) therefore provides that secondary
service connection may not be established under Sec. 3.310(a) in a claim
received by VA after June 9, 1998, for a disability proximately due to
or the result of an injury or disease previously service-connected on
the basis that it is attributable to a veteran\'s tobacco use during
service. Under Sec. 3.300(c), a condition cannot be service-connected
under Sec. 3.310(a) as secondary to a disease such as nicotine
dependence, for example, that was previously service-connected solely on
the basis that it resulted from the veteran\'s use of tobacco products
during service. We are also amending Sec. 3.310(a) to make explicit that
it is subject to the provisions of Sec. 3.300(c).

Section 8202 of Public Law 105-178, as amended (38 U.S.C. 1103 note),
provides that 38 U.S.C. 1103 shall apply to claims received by VA after
June 9, 1998.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.300 is added immediately under the undesignated center
heading "Ratings and Evaluations; Basic Entitlement Considerations" to
read as follows:

[§ 3.300 Claims based on the effects of tobacco products]{.underline}.

\(a\) For claims received by VA after June 9, 1998, a disability or
death will not be considered service-connected on the basis that it
resulted from injury or disease attributable to the veteran's use of
tobacco products during service. For the purpose of this section, the
term "tobacco products" means cigars, cigarettes, smokeless tobacco,
pipe tobacco, and roll-your-own tobacco.

\(b\) The provisions of paragraph (a) of this section do not prohibit
service connection if:

\(1\) The disability or death resulted from a disease or injury that is
otherwise shown to have been incurred or aggravated during service. For
purposes of this section, "otherwise shown" means that the disability or
death can be service-connected on some basis other than the veteran's
use of tobacco products during service, or that the disability became
manifest or death occurred during service; or

\(2\) The disability or death resulted from a disease or injury that
appeared to the required degree of disability within any applicable
presumptive period under §§ 3.307, 3.309, 3.313, or 3.316; or

\(3\) Secondary service connection is established for ischemic heart
disease or other cardiovascular disease under § 3.310(b).

\(c\) For claims for secondary service connection received by VA after
June 9, 1998, a disability that is proximately due to or the result of
an injury or disease previously service-connected on the basis that it
is attributable to the veteran's use of tobacco products during service
will not be service-connected under\
§ 3.310(a).

(Authority: 38 U.S.C. 501(a), 1103, 1103 note)

3\. In § 3.310, paragraph (a) is amended by removing "Disability" and
adding, in its place, "Except as provided in § 3.300(c), disability".

REGULATORY AMENDMENT

3-01-3

Regulation affected: 38 CFR §3.104(a), §3.105(b), and §3.2600

Effective Date of Regulation: June 1, 2001

Date Secretary Approved Regulation: February 15, 2001

Federal Register Citation: 66 FR 21871 (May 2, 2001)

The purpose of the following information on these new VA regulations is
to inform all concerned why they are being promulgated. This information
is not regulatory.

[Background]{.underline}

These new regulations add provisions to allow any claimant who files a
timely Notice of Disagreement to obtain a *de novo* review of their
claims at the Veterans Service Center level before deciding whether to
proceed with the traditional appeal process. This option will offer
claimants a more efficient means for resolving disagreements concerning
claims.

These new regulations are based on the requirement in 38 U.S.C.
7105(d)(1) that, when a claimant files a Notice of Disagreement with the
decision of an agency of original jurisdiction, the agency will \`\`take
such development or review action as it deems proper under the
provisions of regulations not inconsistent with\'\' title 38 of the
United States Code. These new regulations will apply only to decisions
that have not yet become final (by appellate decision or failure to
timely appeal) and with which the claimant has disagreed.

Section 3.2600, \"Review of Benefit Claims Decisions\", is being
published in the recently created subpart D containing \`\`universal
adjudication rules\'\' that apply to claims which are governed by part 3
of title 38. Section 3.2100, \"Scope of Applicability\", specifies the
scope of the provisions in subpart D. This includes claims for benefits
such as compensation, pension, dependency and indemnity compensation,
burial benefits, and special benefits listed at §§ 3.800 through 3.814.
The \`\`universal adjudication rules\'\' also apply to claims for
eligibility determinations (such as character of military discharge,
military duty status and dependency status), apportionment of benefits
to dependents, and waiver of recovery of overpayments. Subpart D and
§3.2100 were added to the CFR on April 6, 2001.

[Procedures for *De Novo* Review]{.underline}

These new regulations provide that, upon receipt of a Notice of
Disagreement, VA will notify the claimant in writing of his or her right
to a review. To obtain such a review, the claimant will have to request
it when they file their Notice of Disagreement or anytime not later than
60 days of the date VA mails the notice. These regulations also provide
that a claimant may not have more than one of these reviews of the same
decision. We believe that one review is sufficient to resolve those
claims that can be resolved before proceeding with appellate review.

Under the new 38 CFR §3.2600, an Adjudication Officer, Veterans Service
Center Manager, or Decision Review Officer, at VA\'s discretion will
conduct the review. An individual who did not participate in the
decision being reviewed will conduct the review. This requirement is
similar to that for VA personnel conducting hearings under 38 CFR
§3.103(c)(1). The reviewer may conduct whatever development he or she
considers necessary to resolve disagreements concerning decisions with
which the claimant has expressed disagreement in the Notice of
Disagreement, consistent with applicable law. This may include an
attempt to obtain additional evidence or the holding of an informal
conference with the claimant. Upon the request of the claimant, the
reviewer will conduct a hearing under §3.103(c).

The review will be based on all the evidence of record and applicable
law. Further, the review decision must include a summary of the
evidence, a citation to pertinent laws, a discussion of how those laws
affect the decision, and a summary of the reasons for the decision. This
will ensure that the reviewer provides a fresh look at the case and
provides an appropriate record of the decision making process. If the
claimant does not withdraw his or her Notice of Disagreement as a result
of this review process, VA will proceed with the traditional appellate
process by issuing a Statement of the Case.

[Clear and Unmistakable Error]{.underline}

Under §3.2600, the reviewer will be authorized to grant a benefit sought
in the claim, but will not be authorized to revise the decision in a
manner that is less advantageous to the claimant than the decision under
review. This will ensure that the claimant is not penalized for seeking
a review. However, the reviewer will have the authority to reverse or
revise any decision of the agency of original jurisdiction (including
the decision being reviewed or any prior decision that has become final
due to failure to timely appeal) on the grounds of clear and
unmistakable error, even if disadvantageous to the claimant. All Service
Center decision-makers already have this authority (see 38 CFR
§3.105(a)).

We have also amended 38 CFR §3.105(b) (which concerns revision of
decisions based on difference of opinion) to specify that a decision may
be revised under §3.2600 without being recommended to Central Office.
This clarifies that the proposed review process created by §3.2600 is
not subject to the requirements of §3.105(b). (We have also amended
§3.104 to make clear that not only §3.105 but also §3.2600 are valid
bases for revision of decisions on the same factual basis as the initial
decision by the agency of original jurisdiction.)

[Effective Date]{.underline}

We believe that including claims which are pending at various stages of
the appellate process in the new *de novo* review process would be
administratively difficult because this process is designed to occur
prior to the traditional appellate process. Therefore, we have decided
that these new regulations will apply to all claims in which a Notice of
Disagreement is filed on or after June 1, 2001.Also, This will provide
claimants with a date certain on which the *de novo* review will be
available.

[No Change to the Traditional Appeal Process]{.underline}

We have established a new *de novo* review procedure that will be
available to any claimant who files a Notice of Disagreement with a
decision on a claim governed by 38 CFR part 3. The new *de novo* review
procedure will not change the procedures or rights involved with appeals
of such claims decisions to the Board of Veterans\' Appeals. It is an
additional, optional procedure to be conducted, if at all, between a
claimant\'s filing a Notice of Disagreement and VA\'s issuance of a
Statement of the Case. If *de novo* review under Sec. 3.2600 is not
requested with the Notice of Disagreement or after the Notice of
Disagreement is filed but within 60 days after VA mails notice of the
right of such review to the claimant,

then the appeal will proceed in accordance with the traditional appeal
process: VA will issue a Statement of the Case. However, a claimant may
not pursue *de novo* review and the traditional appeal simultaneously. A
traditional appeal is suspended until *de novo* review is complete.
Otherwise, there will be a risk of duplicative development and
inconsistent decisions made in the same claim.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

Sec. 3.104 Amended

2\. In Sec. 3.104, paragraph (a), the second sentence is amended by
removing \`\`Sec. 3.105\'\' and adding, in its place, \`\`Sec. 3.105 and
Sec. 3.2600\'\'.

Sec. 3.105 Amended

3\. In Sec. 3.105, paragraph (b) is amended by adding, as the last
sentence, \`\`However, a decision may be revised under Sec. 3.2600
without being recommended to Central Office.\'\'

Subpart D\--Universal Adjudication Rules That Apply to Benefit Claims
Governed by Part 3 of this Title

4\. The authority citation for part 3, subpart D continues to read as
follows:

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

5\. A new undesignated center heading and Sec. 3.2600 are added to
subpart D to read as follows:

Revisions

Sec. 3.2600 Review of benefit claims decisions.

\(a\) A claimant who has filed a timely Notice of Disagreement with a
decision of an agency of original jurisdiction on a benefit claim has a
right to a review of that decision under this section. The review will
be conducted by an Adjudication Officer, Veterans Service Center
Manager, or Decision Review Officer, at VA\'s discretion. An individual
who did not participate in the decision being reviewed will conduct

this review. Only a decision that has not yet become final (by appellate
decision or failure to timely appeal) may be reviewed. Review under this
section will encompass only decisions with which the claimant has
expressed disagreement in the Notice of Disagreement. The reviewer will
consider all evidence of record and applicable law, and will give no
deference to the decision being reviewed.

\(b\) Unless the claimant has requested review under this section with
his or her Notice of Disagreement, VA will, upon receipt of the Notice
of Disagreement, notify the claimant in writing of his or her right to a
review under this section. To obtain such a review, the claimant must
request it not later than 60 days after the date VA mails the notice.
This 60-day time limit may not be extended. If the claimant

fails to request review under this section not later than 60 days after
the date VA mails the notice, VA will proceed with the traditional
appellate process by issuing a Statement of the Case. A claimant may

not have more than one review under this section of the same decision.

\(c\) The reviewer may conduct whatever development he or she considers
necessary to resolve any disagreements in the Notice of Disagreement,
consistent with applicable law. This may include an

attempt to obtain additional evidence or the holding of an informal
conference with the claimant. Upon the request of the claimant, the
reviewer will conduct a hearing under Sec. 3.103(c).

\(d\) The reviewer may grant a benefit sought in the claim
notwithstanding Sec. 3.105(b), but, except as provided in paragraph (e)
of this section, may not revise the decision in a manner that is less
advantageous to the claimant than the decision under review. A review
decision made under this section will include a summary of the evidence,
a citation to pertinent laws, a discussion of how those laws

affect the decision, and a summary of the reasons for the decision.

\(e\) Notwithstanding any other provisions of this section, the reviewer
may reverse or revise (even if disadvantageous to the claimant) prior
decisions of an agency of original jurisdiction (including the decision
being reviewed or any prior decision that has become final due to
failure to timely appeal) on the grounds of clear and unmistakable error
(see Sec. 3.105(a)).

\(f\) Review under this section does not limit the appeal rights of a
claimant. Unless a claimant withdraws his or her Notice of Disagreement
as a result of this review process, VA will proceed with the traditional
appellate process by issuing a Statement of the Case.

\(g\) This section applies to all claims in which a Notice of
Disagreement is filed on or after June 1, 2001.

(Authority: 38 U.S.C. 5109A and 7105(d))

REGULATORY AMENDMENT

3-01-4

Regulation affected: 38 CFR §3.309(e)

Effective Date of Regulation: July 9, 2001

Date Secretary Approved Regulation: April 19, 2001

Federal Register Citation: 66 FR 23166 (May 8, 2001)

The purpose of the following information on this new VA regulation is to
inform all concerned why it is being promulgated. This information is
not regulatory.

The Department of Veterans Affairs (VA) has amended its adjudication
regulations concerning presumptive service connection for certain
diseases for which there is no record during service. This amendment is
necessary to implement a decision of the Secretary of Veterans Affairs
under the authority granted by 38 U.S.C. 1116 that there is a positive
association between exposure to herbicides used in the Republic of
Vietnam during the Vietnam era and the subsequent development of Type 2
diabetes. The intended effect of this amendment is to establish
presumptive service connection for that condition based on herbicide
exposure.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In Sec. 3.309, paragraph (e), the listing of diseases is amended by
adding \`\`Type 2 diabetes (also known as Type II diabetes mellitus or
adult-onset diabetes)\'\' between \`\`Chloracne or other acneform
disease consistent with chloracne\'\' and \`\`Hodgkin\'s disease\'\' to
read as follows:

Sec. 3.309 Diseases subject to presumptive service connection.

\* \* \* \* \*

\(e\) \* \* \*

Type 2 diabetes (also known as Type II diabetes mellitus or adult-onset
diabetes)

\* \* \* \* \*

(Authority: 38 U.S.C. 501(a) and 1116).

REGULATORY AMENDMENT

3-01-5

Regulations affected: 38 CFR 3.203(a)

Effective Date of Regulation: April 27, 2001.

Date Secretary Approved Regulation: February 15, 2001

Federal Register Citation: 66 FR 19857. (April 18, 2001)

The purpose of the following information on this new VA regulation is to
inform all concerned why it is being promulgated. This information is
not regulatory.

The Department of Veterans Affairs (VA) has amended its adjudication
regulations concerning the nature of evidence that VA will accept as
proof of military service. In the past VA only accepted original service
documents or copies issued by the service department or public custodian
of records for verification purposes. This change authorizes VA to
accept photocopies of service documents as evidence of military service
if they are certified to be copies of documents acceptable to VA by an
accredited agent, attorney, or service organization representative who
has successfully completed VA-prescribed training on military records.
The intended effect of the amendment is to streamline the processing of
claims for benefits.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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.  In Sec. 3.203, at the end of paragraph (a)(1) remove \`\`custody;
    and\'\' and add the following:

Sec. 3.203 Service records as evidence of service and character of
discharge.

(a) \* \* \*

(1)\* \* \* custody or, if the copy was submitted by an accredited
agent, attorney or service organization representative who has
successfully completed VA-prescribed training on military records, and
who certifies that it is a true and exact copy of either an original
document or of a copy issued by the service department or a public
custodian of records; and\'\'.

\* \* \* \* \*

REGULATORY AMENDMENT

3-01-6

Regulations affected: 38 CFR 3.102, 3.156(a), 3.159 and 3.326(a).

Effective date of regulation: This rule is effective November 9, 2000,
except for the amendment to 38 CFR 3.156(a), which is effective August
29, 2001.

Applicability dates: Except for the amendment to 38 CFR 3.156(a), the
second sentence of 38 CFR 3.159(c), and 38 CFR 3.159(c)(4)(iii), the
provisions of this final rule apply to any claim for benefits received
by VA on or after November 9, 2000, as well as to any claim filed before
that date but not decided by VA as of that date.

Date Secretary approved regulation: July 17, 2001.

Federal Register Citation: 66 FR 45620-32. (August 29, 2001)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

This document amends the Department of Veterans Affairs (VA)
adjudication regulations 38 CFR 3.156 and 3.159, to implement the
provisions of the Veterans Claims Assistance Act of 2000 (the VCAA),
which was effective on November 9, 2000. The intended effect of this
regulation is to establish clear guidelines consistent with the intent
of Congress regarding the timing and the scope of assistance VA will
provide to a claimant who files a substantially complete application for
VA benefits or who attempts to reopen a previously denied claim.

The amendment to 38 CFR 3.156(a), the second sentence of 38 CFR
3.159(c), and 38 CFR 3.159(c)(4)(iii) apply to any claim to reopen a
finally decided claim received on or after August 29, 2001.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

Sec. 3.102 \[Amended\]

2\. In Sec. 3.102, the fifth sentence is amended by removing
\`\`evidence; the claimant is required to submit evidence sufficient to
justify a belief in a fair and impartial mind that the claim is well
grounded.\'\' and adding, in its place, \`\`evidence.\'\'.

3\. Section 3.156(a) and its authority citation are revised to read as
follows:

Sec. 3.156 New and material evidence.

\(a\) A claimant may reopen a finally adjudicated claim by submitting
new and material evidence. New evidence means existing evidence not
previously submitted to agency decisionmakers. Material evidence means
existing evidence that, by itself or when considered with previous
evidence of record, relates to an unestablished fact necessary to
substantiate the claim. New and material evidence can be neither
cumulative nor redundant of the evidence of record at the time of the
last prior final denial of the claim sought to be reopened, and must
raise a reasonable possibility of substantiating the claim.

(Authority: 38 U.S.C. 501, 5103A(f), 5108)

\* \* \* \* \*

4\. Section 3.159 is revised to read as follows:

Sec. 3.159 Department of Veterans Affairs assistance in developing
claims.

\(a\) *Definitions*. For purposes of this section, the following
definitions apply:

\(1\) *Competent medical evidence* means evidence provided by a person
who is qualified through education, training, or experience to offer
medical diagnoses, statements, or opinions. Competent medical evidence
may also mean statements conveying sound medical principles found in
medical treatises. It would also include statements contained in
authoritative writings such as medical and scientific articles and
research reports or analyses.

\(2\) *Competent lay evidence* means any evidence not requiring that the
proponent have specialized education, training, or experience. Lay
evidence is competent if it is provided by a person who has knowledge of
facts or circumstances and conveys matters that can be observed and
described by a lay person.

\(3\) *Substantially complete application* means an application
containing the claimant\'s name; his or her relationship to the veteran,
if applicable; sufficient service information for VA to verify the
claimed service, if applicable; the benefit claimed and any medical
condition(s) on which it is based; the claimant\'s signature; and in
claims for nonservice-connected disability or death pension and
parents\' dependency and indemnity compensation, a statement of income.

\(4\) For purposes of paragraph (c)(4)(i) of this section, event means
one or more incidents associated with places, types, and circumstances
of service giving rise to disability.

\(5\) *Information* means non-evidentiary facts, such as the claimant\'s
Social Security number or address; the name and military unit of a
person who served with the veteran; or the name and address of a medical
care provider who may have evidence pertinent to the claim.

\(b\) *VA\'s duty to notify claimants of necessary information or
evidence.* (1) When VA receives a complete or substantially complete
application for benefits, it will notify the claimant of any information
and medical or lay evidence that is necessary to substantiate the claim.
VA will inform the claimant which information and evidence, if any, that
the claimant is to provide to VA and which information and evidence, if
any, that VA will attempt to obtain on behalf of the claimant. VA will
also request that the claimant provide any evidence in the claimant\'s
possession that pertains to the claim. If VA does not receive the
necessary information and evidence requested from the claimant within
one year of the date of the notice, VA cannot pay or provide any
benefits based on that application. If the claimant has not responded to
the request within 30 days, VA may decide the claim prior to the
expiration of the one-year period based on all the information and
evidence contained in the file, including information and evidence it
has obtained on behalf of the claimant and any VA medical examinations
or medical opinions. If VA does so, however, and the claimant
subsequently provides the information and evidence within one year of
the date of the request, VA must readjudicate the claim.

(Authority: 38 U.S.C. 5103)

\(2\) If VA receives an incomplete application for benefits, it will
notify the claimant of the information necessary to complete the
application and will defer assistance until the claimant submits this
information.

(Authority: 38 U.S.C. 5102(b), 5103A(3))

\(c\) *VA\'s duty to assist claimants in obtaining evidence.* Upon
receipt of a substantially complete application for benefits, VA will
make reasonable efforts to help a claimant obtain evidence necessary to
substantiate the claim. In addition, VA will give the assistance
described in paragraphs (c)(1), (c)(2), and (c)(3) to an individual
attempting to reopen a finally decided claim. VA will not pay any fees
charged by a custodian to provide records requested.

\(1\) *Obtaining records not in the custody of a Federal department or
agency.* VA will make reasonable efforts to obtain relevant records not
in the custody of a Federal department or agency, to include records
from State or local governments, private medical care providers, current
or former employers, and other non-Federal governmental sources. Such
reasonable efforts will generally consist of an initial request for the
records and, if the records are not received, at least one follow-up
request. A follow-up request is not required if a response to the
initial request indicates that the records sought do not exist or that a
follow-up request for the records would be futile. If VA receives
information showing that subsequent requests to this or another
custodian could result in obtaining the records sought, then reasonable
efforts will include an initial request and, if the records are not
received, at least one follow-up request to the new source or an
additional request to the original source.

\(i\) The claimant must cooperate fully with VA\'s reasonable efforts to
obtain relevant records from non-Federal agency or department
custodians. The claimant must provide enough information to identify and
locate the existing records, including the person, company, agency, or
other custodian holding the records; the approximate time frame covered
by the records; and, in the case of medical treatment records, the
condition for which treatment was provided.

\(ii\) If necessary, the claimant must authorize the release of existing
records in a form acceptable to the person, company, agency, or other
custodian holding the records.

(Authority: 38 U.S.C. 5103A(b))

\(2\) *Obtaining records in the custody of a Federal department or
agency.* VA will make as many requests as are necessary to obtain
relevant records from a Federal department or agency. These records
include but are not limited to military records, including service
medical records; medical and other records from VA medical facilities;
records from non-VA facilities providing examination or treatment at VA
expense; and records from other Federal agencies, such as the Social
Security Administration. VA will end its efforts to obtain records from
a Federal department or agency only if VA concludes that the records
sought do not exist or that further efforts to obtain those records
would be futile. Cases in which VA may conclude that no further efforts
are required include those in which the Federal department or agency
advises VA that the requested records do not exist or the custodian does
not have them.

\(i\) The claimant must cooperate fully with VA\'s reasonable efforts to
obtain relevant records from Federal agency or department custodians. If
requested by VA, the claimant must provide enough information to
identify and locate the existing records, including the custodian or
agency holding the records; the approximate time frame covered by the
records; and, in the case of medical treatment records, the condition
for which treatment was provided. In the case of records requested to
corroborate a claimed stressful event in service, the claimant must
provide information sufficient for the records custodian to conduct a
search of the corroborative records.

\(ii\) If necessary, the claimant must authorize the release of existing
records in a form acceptable to the custodian or agency holding the
records.

(Authority: 38 U.S.C. 5103A(b))

\(3\) *Obtaining records in compensation claims.* In a claim for
disability compensation, VA will make efforts to obtain the claimant\'s
service medical records, if relevant to the claim; other relevant
records pertaining to the claimant\'s active military, naval or air
service that are held or maintained by a governmental entity; VA medical
records or records of examination or treatment at non-VA facilities
authorized by VA; and any other relevant records held by any Federal
department or agency. The claimant must provide enough information to
identify and locate the existing records including the custodian or
agency holding the records; the approximate time frame covered by the
records; and, in the case of medical treatment records, the condition
for which treatment was provided.

(Authority: 38 U.S.C. 5103A(c))

\(4\) Providing medical examinations or obtaining medical opinions. (i)
In a claim for disability compensation, VA will provide a medical
examination or obtain a medical opinion based upon a review of the
evidence of record if VA determines it is necessary to decide the claim.
A medical examination or medical opinion is necessary if the information
and evidence of record does not contain sufficient competent medical
evidence to decide the claim, but:

\(A\) Contains competent lay or medical evidence of a current diagnosed
disability or persistent or recurrent symptoms of disability;

\(B\) Establishes that the veteran suffered an event, injury or disease
in service, or has a disease or symptoms of a disease listed in Sec.
3.309, Sec. 3.313, Sec. 3.316, and Sec. 3.317 manifesting during an
applicable presumptive period provided the claimant has the required
service or triggering event to qualify for that presumption; and

\(C\) Indicates that the claimed disability or symptoms may be
associated with the established event, injury, or disease in service or
with another service-connected disability.

\(ii\) Paragraph (4)(i)(C) could be satisfied by competent evidence
showing post-service treatment for a condition, or other possible
association with military service.

\(iii\) Paragraph (c)(4) applies to a claim to reopen a finally
adjudicated claim only if new and material evidence is presented or
secured.

(Authority: 38 U.S.C. 5103A(d))

\(d\) *Circumstances where VA will refrain from or discontinue providing
assistance.* VA will refrain from providing assistance in obtaining
evidence for a claim if the substantially complete application for
benefits indicates that there is no reasonable possibility that any
assistance VA would provide to the claimant would substantiate the
claim. VA will discontinue providing assistance in obtaining evidence
for a claim if the evidence obtained indicates that there is no
reasonable possibility that further assistance would substantiate the
claim. Circumstances in which VA will refrain from or discontinue
providing assistance in obtaining evidence include, but are not limited
to:

\(1\) The claimant\'s ineligibility for the benefit sought because of
lack of qualifying service, lack of veteran status, or other lack of
legal eligibility;

\(2\) Claims that are inherently incredible or clearly lack merit; and

\(3\) An application requesting a benefit to which the claimant is not
entitled as a matter of law.

(Authority: 38 U.S.C. 5103A(a)(2))

\(e\) *Duty to notify claimant of inability to obtain records.* (1) If
VA makes reasonable efforts to obtain relevant non-Federal records but
is unable to obtain them, or after continued efforts to obtain Federal
records concludes that it is reasonably certain they do not exist or
further efforts to obtain them would be futile, VA will provide the
claimant with oral or written notice of that fact. VA will make a record
of any oral notice conveyed to the claimant. For non-Federal records
requests, VA may provide the notice at the same time it makes its final
attempt to obtain the relevant records. In either case, the notice must
contain the following information:

\(i\) The identity of the records VA was unable to obtain;

\(ii\) An explanation of the efforts VA made to obtain the records;

\(iii\) A description of any further action VA will take regarding the
claim, including, but not limited to, notice that VA will decide the
claim based on the evidence of record unless the claimant submits the
records VA was unable to obtain; and

\(iv\) A notice that the claimant is ultimately responsible for
providing the evidence.

\(2\) If VA becomes aware of the existence of relevant records before
deciding the claim, VA will notify the claimant of the records and
request that the claimant provide a release for the records. If the
claimant does not provide any necessary release of the relevant records
that VA is unable to obtain, VA \[\[Page 45632\]\] will request that the
claimant obtain the records and provide them to VA.

(Authority: 38 U.S.C. 5103A(b)(2))

\(f\) For the purpose of the notice requirements in paragraphs (b) and
(e) of this section, notice to the claimant means notice to the claimant
or his or her fiduciary, if any, as well as to his or her
representative, if any.

(Authority: 38 U.S.C. 5102(b), 5103(a))

Sec. 3.326 \[Amended\]

5\. In Sec. 3.326(a), the first sentence is amended by removing
\`\`well-grounded\'\'.

REGULATORY AMENDMENT

3-01-7

Regulations affected: 38 CFR § 3.6(a, e), § 3.353(b). § 3.452, §
3.501(i), § 3.551(i),

§ 3.557(b), § 3.558(a), § 3.559, § 3.1007, § 3.1604(d), § 13.70(a), §
13.71(b), and

§ 13.108.

Effective Date of Regulation: November 1, 2000.

Date Secretary Approved Regulation: May 21, 2000.

Federal Register Citation: 66 FR 48558. (September 21, 2001)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 301 of the Veterans Benefits and Health Care Improvement Act of
2000 (the Act), Pub. L. No. 106-419, amended 38 U.S.C. 101(24), which
defines the term \"active military, naval, or air service\" to also
include periods of inactive duty training during which individuals
become disabled or die from an acute myocardial infarction, a cardiac
arrest, or a cerebrovascular accident that occurred during such
training. Section 301 also amended 38 U.S.C. 106(d) to provide that if a
person was disabled or died as a result of any of these three diseases
having occurred while the person was proceeding directly to or returning
directly from a period of active duty for training or inactive duty
training, such person would be deemed to have been on active duty for
training or inactive duty training, as the case may be. We have amended
paragraphs (a) and (e) of 38 CFR 3.6 to reflect the new statutory
requirements.

Section 304 of the Act amended 38 U.S.C. 5503(b)(1), which sets forth a
limitation on the payment of benefits to certain incompetent veterans
who are hospitalized or institutionalized at government expense, who
have neither spouse nor child, and who have estates with values that
equal or exceed a specified amount. Under prior law, benefits were
discontinued when the value of such veterans\' estates equaled or
exceeded \$1,500; payments could not be resumed until the value of those
estates had been reduced to \$500. Under section 304 of the Act,
effective November 1, 2000, benefits may not be discontinued until the
estate of an affected incompetent veteran equals or exceeds an amount
equal to five times the rate of compensation payable under 38 U.S.C.
1114(j) (the rate payable to a totally disabled veteran with no
dependents). Under the new provision, benefit payments discontinued
because of the estate limitation may not be resumed until the veteran\'s
estate has been reduced to one-half the amount of the new estate
limitation.

Because the rate of compensation payable under 38 U.S.C. 1114(j) is
generally increased on an annual basis to keep pace with inflation, VA
would have to make annual regulatory amendments to ten different
regulations if we were to simply insert new dollar amounts where the
regulations currently specify \$1,500 and \$500. This would be extremely
burdensome on VA and would invariably result in regulations that specify
incorrect dollar amounts until amendments to reflect increases in those
amounts made their way through the regulatory process.

To prevent this result, VA has amended 38 CFR 3.557(b) to describe the
method required by section 304 of the Act for calculating the dollar
values for the estates of incompetent veterans which will trigger
discontinuance or resumption of benefit payments. Each time there is an
increase in the rate of compensation payable under 38 U.S.C. 1114(j), VA
will calculate the new dollar values for discontinuance and resumption
and will publish those dollar values in the Notices section of the
[Federal Register]{.underline}. The new values will be effective on the
same day that the increase in the section 1114(j) rate becomes
effective. In this way VA will be spared the burden of annually amending
numerous regulations, and the public will have access to both the
calculation method and the actual dollar value calculated using that
method.

In § 3.557(b) we are also deleting the introductory phrase \"Effective
December 1, 1959,\". That phrase has no relevance to current claims
processing.

In addition to § 3.557 there are several other regulations referring to
the estate values that trigger discontinuance or resumption of benefits
for certain incompetent veterans, either in their titles, text or
cross-references. We have amended these regulations to remove references
to specific dollar amounts. Where amounts appeared in the regulatory
text, we have replaced them with references to the amounts calculated
under § 3.557(b). Where specific amounts appeared in titles or
cross-references we have amended them to eliminate reference to a dollar
amount. The affected regulations are §§ 3.353, 3.452, 3.501, 3.558,
3.559, 3.1007, 13.70, 13.71 and 13.108.

Section 333 of the Act amended 38 U.S.C. 2303(b)(1), which governs
eligibility for the plot or interment allowance when a veteran is buried
in a cemetery, or a section of a cemetery, that is owned by a State or
by an agency or a political subdivision of a State. The allowance was
previously payable only if the cemetery, or section of the cemetery, was
used solely for the interment of persons who were eligible for burial in
a national cemetery. Section 333 expanded eligibility to include
cemeteries, or sections of cemeteries, that are also used for the
interment of persons who were members of a reserve component of the
Armed Forces not otherwise eligible for burial in a national cemetery or
who were former members of such a reserve component not otherwise
eligible for burial in a national cemetery who were discharged or
released from service under conditions other than dishonorable. We have
amended § 3.1604(d)(1)(ii) to reflect these expanded eligibility
criteria. These criteria apply only to the burial of persons dying on or
after November 1, 2000.

Section 402(e) of the Act extended, until September 30, 2008, the
expiration date for 38 U.S.C. 5503(f), which governs the amount of
pension payable to certain veterans and surviving spouses receiving
Medicaid-covered nursing home care. That provision was due to expire on
September 30, 2002. We have amended § 3.551(i) to reflect the statutory
change.

For the reasons set forth in the preamble, 38 CFR Parts 3 and 13 are
amended as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In § 3.6, paragraphs (a) and (e) are revised to read as follows:

[§ 3.6 Duty periods]{.underline}.

\(a\) [Active military, naval, and air service]{.underline}. This
includes active duty, any period of active duty for training during
which the individual concerned was disabled or died from a disease or
injury incurred or aggravated in line of duty, and any period of
inactive duty training during which the individual concerned was
disabled or died from an injury incurred or aggravated in line of duty
or from a covered disease which occurred during such training. For
purposes of this section, the term \"covered disease\" is limited to\--

\(1\) An acute myocardial infarction,

\(2\) A cardiac arrest, or

\(3\) A cerebrovascular accident.

(Authority: 38 U.S.C. 101(24))

\* \* \* \* \*

\(e\) [Travel status---training duty (disability or death from injury or
covered disease)]{.underline}. Any individual:

\(1\) Who, when authorized or required by competent authority, assumes
an obligation to perform active duty for training or inactive duty
training; and

\(2\) Who is disabled or dies from an injury or covered disease incurred
while proceeding directly to or returning directly from such active duty
for training or inactive duty training shall be deemed to have been on
active duty for training or inactive duty training, as the case may be.
The Department of Veterans Affairs will determine whether such
individual was so authorized or required to perform such duty, and
whether the individual was disabled or died from an injury or covered
disease so incurred. In making such determinations, there shall be taken
into consideration the hour on which the individual began to proceed or
return; the hour on which the individual was scheduled to arrive for, or
on which the individual ceased to perform, such duty; the method of
travel performed; the itinerary; the manner in which the travel was
performed; and the immediate cause of disability or death. Whenever any
claim is filed alleging that the claimant is entitled to benefits by
reason of this paragraph, the burden of proof shall be on the claimant.

(Authority: 38 U.S.C. 106(d))

[§ 3.353 \[Amended\]]{.underline}

3\. In § 3.353, paragraph (b)(1) is amended by removing \"in excess of
\$1,500 (§ 3.557(b))\" and adding, in its place, \"that equals or
exceeds the amount specified in § 3.557(b)(4)\".

4\. The "CROSS REFERENCES" section immediately following § 3.452 is
revised to read as follows:

[§ 3.452 Veterans benefits apportionable]{.underline}.

\* \* \* \* \*

CROSS REFERENCES: Institutional awards. See § 3.852. Disappearance of
veteran. See § 3.656. Reduction because of hospitalization. See § 3.551.
Penal institutions. See § 3.666. Incompetents; estate equals or exceeds
statutory limit and institutionalized. See § 3.557.

[§ 3.501 \[Amended\]]{.underline}

5\. In § 3.501, paragraph (i)(7) is amended by removing \"\$1,500\" each
time it appears and adding, in its place, \"the amount specified in §
3.557(b)(4)\".

[§ 3.551 \[Amended\]]{.underline}

6\. In § 3.551, paragraph (i) is amended by removing \"2002\" and
adding, in its place, \"2008\".

7\. Section 3.557 is amended by:

A. Revising the section heading and paragraph (b).

B. In paragraph (d) removing \"\$1,500\" and adding, in its place, \"the
amount specified in paragraph (b)(4) of this section\".

C. Revising The "CROSS REFERENCES" section immediately following
§ 3.557.

The revisions read as follows:

[§ 3.557 Incompetents; estate equals or exceeds statutory limit and
institutionalized.]{.underline}

\* \* \* \* \*

\(b\) Where a veteran:

\(1\) Is rated incompetent by VA,

\(2\) Has neither spouse nor child,

\(3\) Is hospitalized, institutionalized or domiciled by the United
States or any political subdivision, with or without charge, and

\(4\) Effective November 1, 2000, has an estate, derived from any
source, which equals or exceeds an amount which is five times the rate
of compensation specified in 38 U.S.C. 1114(j), further payments of
pension, compensation or emergency officer\'s retirement pay will not be
made, except as provided in paragraph (d) of this section, until the
estate is reduced to one-half that amount. Whenever there is an increase
in the rate of compensation payable under 38 U.S.C. 1114(j) for a
veteran with a service-connected disability rated as total, effective on
the date such increase becomes effective, the amount specified in
paragraph (b)(4) shall be an amount equal to five times such increased
rate of compensation. The dollar value of that increased amount, as well
as the dollar value of one-half that amount, will be published in the
Notices section of the [Federal Register]{.underline}. If the veteran is
hospitalized for observation and examination, the date treatment began
is considered the date of admission.

\* \* \* \* \*

CROSS REFERENCES: Veterans disability pension. See § 3.454(c).
Reductions and discontinuances; general. See § 3.500. Reductions and
discontinuances; veterans. See § 3.501. Amounts withheld or not paid
incompetent veteran. See § 3.1007. Estate equals or exceeds statutory
limit. See § 13.108 of this chapter. Determination of value of estate.
See § 13.109 of this chapter.

8\. In § 3.558, the section heading and paragraph (a) are revised to
read as follows:

[§ 3.558 Resumption and payment of withheld benefits; incompetents with
estates that equaled or exceeded statutory limit.]{.underline}

\(a\) Where payment has been discontinued by reason of § 3.557(b), it
will not be resumed during hospitalization except as provided in §
3.557(e) or paragraph (b) of this section until proper notice has been
received showing the estate is reduced to one-half the amount specified
in § 3.557(b)(4) or less. Payments will not be made for any period prior
to the date on which the estate was reduced to one-half the amount
specified in § 3.557(b)(4) or less.

(Authority: 38 U.S.C. 5503)

\* \* \* \* \*

9\. Section 3.559 is amended by:

A. Revising the section heading.

B. In paragraph (a), removing \"\$500\" and adding, in its place,
\"one-half the amount specified in § 3.557(b)(4)\".

C. In paragraph (b), removing \"is then \$1,500 or more\" and adding, in
its place, \"equals or exceeds the amount specified in § 3.557(b)(4)\".

The revision reads as follows:

[§ 3.559 Resumption - where the estate equals or exceeds the statutory
limit and includes chose in action.]{.underline}

\* \* \* \* \*

[§ 3.1007 \[Amended\]]{.underline}

10\. Section 3.1007 is amended by removing \"\$1,500\" and adding, in
its place, \"the amount specified in § 3.557(b)(4)\".

Subpart B\--Burial Benefits

11\. The authority citation for part 3, subpart B continues to read as
follows:

AUTHORITY: 105 Stat. 386, 38 U.S.C. 501(a), 2302-2308, unless otherwise
noted.

12\. In § 3.1604, paragraph (d)(1)(ii) is revised to read as follows:

[§ 3.1604 Payments from non-Department of Veterans Affairs
sources.]{.underline}

\* \* \* \* \*

\(d\) \* \* \*

\(1\) \* \* \*

\(ii\) The deceased veteran is buried in a cemetery or a section thereof
which is used solely for the interment of persons who are eligible for
burial in a national cemetery or who, with respect to persons dying on
or after November 1, 2000, were at the time of death members of a
reserve component of the Armed Forces not otherwise eligible for such
burial or were former members of such a reserve component not otherwise
eligible for such burial who were discharged or released from service
under conditions other than dishonorable.

\* \* \* \* \*

PART 13\--VETERANS BENEFITS ADMINISTRATION, FIDUCIARY ACTIVITIES

13\. The authority citation for part 13 continues to read as follows:

AUTHORITY: 72 Stat. 1114, 1232, as amended, 1237; 38 U.S.C. 501, 5502,
5503, 5711, unless otherwise noted.

[§ 13.70 \[Amended\]]{.underline}

14\. In § 13.70, paragraph (a)(2) is amended by removing \"\$1,500\" and
adding, in its place, \"the amount specified in § 3.557(b)(4) of this
chapter\".

[§ 13.71 \[Amended\]]{.underline}

15\. In § 13.71, paragraph (b) is amended by removing \"\$1,500\" and
adding, in its place, \"the amount specified in § 3.557(b)(4) of this
chapter\".

16\. Section 13.108 is amended by:

A. Revising the section heading.

B. In paragraph (a), removing \"\$1,500\" and adding, in its place,
\"the amount specified in § 3.557(b)(4) of this chapter\", and by
removing \"\$500\" and adding, in its place, \"one-half the amount
specified in § 3.557(b)(4) of this chapter".

C. In paragraph (c), removing \"exceeds \$1,500\" and adding, in its
place, \"equals or exceeds the amount specified in § 3.557(b)(4) of this
chapter\".

The revision reads as follows:

[§ 13.108 Estate equals or exceeds statutory limit; 38 U.S.C.
5503(b)(1)]{.underline}.

\* \* \* \* \*

REGULATORY AMENDMENT

3-01-8

Regulations affected: 38 CFR §§ 3.103(b), 3.204(a), 3.217, 3.256(a), and
3.277(b).

Effective Date of Regulation: December 10, 2001.

Date Secretary Approved Regulation: September 13, 2001.

Federal Register Citation: 66 FR 56613 (November 9, 2001)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

For compensation, pension and dependency and indemnity compensation
(DIC) benefits administered by VA, individual factors such as income,
marital status, the beneficiary\'s number of dependents, may affect the
amount of the benefit that he or she receives or they may affect his or
her right to receive the benefit. Beneficiaries must report changes in
these factors to VA in a timely manner; certain current VA regulations
require that they report such changes in writing. However, there are
other means by which beneficiaries could report such changes, including
telephone, facsimile, or e-mail, that would allow beneficiaries to
advise VA of the changes more quickly and thereby enable VA to adjust
benefit payments more quickly. Furthermore, the office of the VA
Inspector General has recommended that we eliminate the requirement that
such reports be in writing in order to reduce the amounts of the
overpayments created when beneficiaries report changes that require VA
to reduce or terminate their benefits. For these reasons, we are
amending VA\'s adjudication regulations at 38 CFR 3.204(a)(1), 3.256(a)
and 3.277(b) to delete the requirement that beneficiaries report such
changes in writing.

For VA to adopt these changes, clearly we must also have safeguards,
both for beneficiaries and for VA, to ensure that VA adjusts benefit
payments based only on information provided by the beneficiary (or his
or her fiduciary) and that the information provided is documented for VA
records. We address these issues by adding a new regulation at 38 CFR
3.217. We specify in paragraph (a) of that new section, that unless
specifically provided otherwise elsewhere in the regulations, the
submission of information that affects entitlement via e-mail,
facsimile, or other written electronic means will satisfy a requirement
that such information be submitted in writing. This paragraph also
includes a note to clarify that the new section applies only to how such
information is submitted; it does not relieve the claimant of any other
evidence requirements, such as a requirement to use a specific form, to
provide specific information or evidence, or to provide a certified
statement or a signature.

This amendment authorizes VA to take action affecting entitlement to
benefits based on oral or written information provided by a beneficiary
or his or her fiduciary in paragraph (b) of new section 3.217. When an
individual submits information in writing or by facsimile or e-mail,
clearly there is, or in the case of e-mail VA may clearly create, a
written document detailing the information provided and the date VA
received it. However, because there is no such automatic recording of
information that is provided orally, we amended the regulations so that
VA may not take action based on oral information or statements unless
the VA employee receiving the information takes specific actions during
the conversation in which the information or statement is provided. We
require the VA employee to take the following actions:

\(1\) Identify himself or herself as a VA employee who is authorized to
receive the information or statement;

\(2\) Verify the identity of the provider as either the beneficiary or
his or her fiduciary by obtaining specific information about the veteran
or beneficiary, such as Social Security number, date of birth, branch
and/or dates of military service, or other information, that can be
verified from the beneficiary\'s VA records; and

\(3\) Inform the provider that VA will use the information or statement
to calculate benefit amounts.

We also require the VA employee receiving the information to document
all of the information or the statement received, as well as the steps
taken to verify the identity of the provider, in the beneficiary\'s VA
records. Just as importantly, we require the VA employee to document in
the beneficiary\'s VA records that he or she informed the provider that
VA would use the information or statement to calculate benefit amounts.

VA regulations at 38 CFR 3.103(b) generally prohibit VA from reducing or
terminating an award of compensation, pension or DIC without first
notifying the beneficiary of the adverse action and allowing him or her
60 days in which to submit evidence showing that VA should not take the
adverse action. There are specific exceptions to that rule in which VA
may issue a notice of the adverse action at the same time it takes the
action rather than wait 60 days before taking the action. One of those
exceptions is when an adverse action is based solely on written,
factual, unambiguous information regarding income, net worth, dependency
or marital status provided to VA by the beneficiary or his or her
fiduciary with knowledge or notice that VA will use the information to
calculate benefits. We revised Sec. 3.103(b) to allow VA to issue notice
at the same time it takes adverse action, in lieu of the otherwise
required 60-day advance notice, based on written or oral information as
described above if the VA employee receiving the information met all of
the requirements set out in proposed Sec. 3.217. The rule also states
that VA will restore retroactively benefits that were reduced or
terminated based on oral information or statements if within 30 days of
the date of the notification of adverse action the beneficiary or his or
her fiduciary asserts that the adverse action was based upon information
or statements that were inaccurate or upon information that was not
provided by the beneficiary or his or her fiduciary. This will not
preclude VA from taking subsequent action that adversely affects
benefits.

Many beneficiaries report these changes to VA by telephone because it is
more convenient or in hopes of keeping VA from issuing payments to which
they know they are not entitled. They are frustrated when VA advises
them that it will issue at least two additional benefit payments unless
the beneficiary reports the same information in writing. The change to §
3.103(b) in conjunction with the changes to §§ 3.204, 3.256 and 3.277
and the addition of § 3.217, addresses the concerns of both
beneficiaries, by allowing VA to take action on reported changes in a
more timely and customer friendly fashion, and the Office of the
Inspector General by reducing the amounts of overpayments created
because of adverse actions. The provisions contain sufficient added
safeguards to ensure that the information and statements used for
decision making are accurate and that we accept oral information or
statements only under conditions that meet due process requirements.

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

PART 3\--Adjudication

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.103 is amended by:

A. Revising paragraphs (b)(3) heading and revising paragraphs (b)(3)
introductory text and (b)(3)(i).

B. Removing \`\`is\'\' from paragraphs (b)(3)(ii), (b)(3)(iv), (b)(3)(v)
and (b)(3)(vi).

C. Removing the comma at the end of paragraphs (b)(3)(ii), (b)(3)(iii)
and (b)(3)(iv), and adding, in its place, a period.

D. Removing ", or\'\' at the end of paragraph (b)(3)(v) and adding, in
its place, a period.

E. Adding paragraph (b)(4).

F. Revising the authority citation at the end of the section.

The addition and revisions read as follows:

Sec. 3.103 [Procedural due process and appellate rights.]{.underline}

\* \* \* \* \*

\(b\) \* \* \*

\(2\) [Advance notice and opportunity for hearing.]{.underline}\* \* \*

\(3\) [Exceptions.]{.underline} In lieu of advance notice and
opportunity for a hearing, VA will send a written notice to the
beneficiary or his or her fiduciary at the same time it takes an adverse
action under the following circumstances:

\(i\) An adverse action based solely on factual and unambiguous
information or statements as to income, net worth, or dependency or
marital status that the beneficiary or his or her fiduciary provided to
VA in writing or orally (under the procedures set forth in Sec.
3.217(b)), with knowledge or notice that such information would be used
to calculate benefit amounts.

\* \* \* \* \*

\(4\) [Restoration of benefits.]{.underline} VA will restore
retroactively benefits that were reduced, terminated, or otherwise
adversely affected based on oral information or statements if within 30
days of the date on which VA issues the notification of adverse action
the beneficiary or his or her fiduciary asserts that the adverse action
was based upon information or statements that were inaccurate or upon
information that was not provided by the beneficiary or his or her
fiduciary. This will not preclude VA from taking subsequent action that
adversely affects benefits.

(Authority: 38 U.S.C. 501, 1115, 1506, 5104)

3\. In § 3.204(a)(1), the word \`\`written\'\' is removed; and the
information collection requirements parenthetical is added immediately
preceding the authority citation at the end of the section to read as
follows:

[§ 3.204 Evidence of dependents and age]{.underline}.

\* \* \* \* \*

(The office of Management and Budget has approved the information
collection requirements in this section under control number 2900-0624.)

\* \* \* \* \*

4\. A new § 3.217 is added immediately preceding the undesignated center
heading "Dependency, Income and Estates":

§ 3.217 [Submission of statements or information affecting entitlement
to benefits]{.underline}.

\(a\) For purposes of this part, unless specifically provided otherwise,
the submission of information or a statement that affects entitlement to
benefits by e-mail, facsimile, or other written electronic means, will
satisfy a requirement or authorization that the statement or information
be submitted in writing.

[Note to paragraph (a)]{.underline}: Section 3.217(a) merely concerns
the submission of information or a statement in writing. Other
requirements specified in this part, such as a requirement to use a
specific form, to provide specific information, to provide a signature,
or to provide a certified statement, must still be met.

\(b\) For purposes of this part, unless specifically provided otherwise,
VA may take action affecting entitlement to benefits based on oral or
written information or statements provided to VA by a beneficiary or his
or her fiduciary. However, VA may not take action based on oral
information or statements unless the VA employee receiving the
information meets the following conditions:

\(1\) During the conversation in which the information or statement is
provided, the VA employee:

\(i\) Identifies himself or herself as a VA employee who is authorized
to receive the information or statement (these are VA employees
authorized to take actions under §§ 2.3 or 3.100 of this chapter);

\(ii\) Verifies the identity of the provider as either the beneficiary
or his or her fiduciary by obtaining specific information about the
beneficiary that can be verified from the beneficiary\'s VA records,
such as Social Security number, date of birth, branch of military
service, dates of military service, or other information; and

\(iii\) Informs the provider that the information or statement will be
used for the purpose of calculating benefit amounts; and

\(2\) During or following the conversation in which the information or
statement is provided, the VA employee documents in the beneficiary\'s
VA records the specific information or statement provided, the date such
information or statement was provided, the identity of the provider, the
steps taken to verify the identity of the provider as being either the
beneficiary or his or her fiduciary, and that he or she informed the
provider that the information would be used for the purpose of
calculating benefit amounts.

(Authority: 38 U.S.C. 501, 1115, 1506, 5104)

5\. Section § 3.256(a) is amended by removing \`\`in writing\'\'; and
the information collection requirements parenthetical at the end of the
section is revised to read as follows:

[§ 2.356(a) Eligibility reporting requirements]{.underline}.

(The Office of Management and Budget has approved the information
collection requirements in this section under control numbers 2900-0101
and 2900-0624.)

\* \* \* \* \*

6\. Section § 3.277(b) introductory text is amended by removing \`\`in
writing\'\'; and the information collection requirements parenthetical
at the end of the section is revised to read as follows:

[3.277(b) Eligibility reporting requirements]{.underline}.

(The Office of Management and Budget has approved the information
collection requirements in this section under control numbers 2900-0101
and 2900-0624.)

> REGULATORY AMENDMENT

3-01-9

Regulations affected: 38 CFR § 3.317(a).

Effective Date of Regulation: November 9, 2001.

Date Secretary Approved Regulation: October 12, 2001.

Federal Register Citation: 66 FR 56614 (November 23, 2001)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

In response to the needs and concerns of veterans of the Persian Gulf
War (Gulf War), Congress enacted the "Persian Gulf War Veterans\'
Benefits Act," Title I of the "Veterans\' Benefits Improvements Act of
1994," Pub. L. 103-446. That statute added a new section 1117 to title
38, United States Code, authorizing the Secretary of Veterans Affairs to
compensate a Gulf War veteran suffering from a chronic disability
resulting from an undiagnosed illness or combination of undiagnosed
illnesses that became manifest either during active duty in the
Southwest Asia theater of operations during the Gulf War or to a degree
of 10 percent or more within a presumptive period, as determined by the
Secretary, following service in the Southwest Asia theater of operations
during the Gulf War. The statute specified that, in establishing a
presumptive period, the Secretary should review any credible scientific
or medical evidence, the historical treatment afforded other diseases
for which service connection is presumed, and other pertinent
circumstances regarding the experience of Gulf War veterans.

In the [Federal Register]{.underline} of February 3, 1995, VA published
a final rule adding a new § 3.317 to title 38, Code of Federal
Regulations, to establish the regulatory framework necessary for the
Secretary to pay compensation under the authority granted by the Persian
Gulf War Veterans\' Benefits Act. (See 60 FR 6660) As part of that
rulemaking, having determined that there was little or no scientific or
medical evidence at that time that would be useful in determining an
appropriate presumptive period, VA established a
2-year-post-Gulf-service presumptive period based on the historical
treatment of disabilities for which manifestation periods had been
established and pertinent circumstances regarding the experiences of
Gulf War veterans as they were then known.

Because of concerns regarding the adequacy of the 2-year presumptive
period for undiagnosed illnesses, the Secretary determined that the
presumptive period should be extended with respect to disabilities due
to undiagnosed illnesses that become manifest through December 31, 2001.
In the [Federal Register]{.underline} of April 29, 1997, VA published a
final rule amending 38 CFR 3.317 to implement that determination. (See
62 FR 23138)

As required by statute, 38 U.S.C. 1118, the Institute of Medicine (IOM)
of the National Academy of Sciences conducted a review of the available
scientific literature concerning associations between diseases and
exposure in military service to selected risk factors encountered or
experienced during the Gulf War. In a report published on September 7,
2000, the IOM noted that research was still ongoing. They suggested
additional areas of possible research and recommended that additional
studies be conducted. The IOM will be conducting additional reviews of
the scientific literature.

No end date for the Gulf War has been established by Congress or the
President. (See 38 U.S.C. 101(33)) The servicemembers who conduct
military operations after December 31, 2001, will have served in
essentially the same physical conditions in which other servicemembers
served from the end of the actual conflict through December 31, 2001. It
is anticipated that servicemembers will be serving in the Gulf region
after December 31, 2001. Thus, unless the manifestation period is
extended, these individuals may be unfairly deprived of the benefits
mandated by Congress.

In light of the continuing scientific and medical inquiry into the
nature and cause of undiagnosed illnesses suffered by Gulf War veterans,
the continuing military operations in the Gulf region, and the new
claims still being received from Gulf War veterans, this document
extends the presumptive period for disabilities due to undiagnosed
illnesses that become manifest to a degree of 10 percent or more through
December 31, 2006, a period of 5 years. It is expected that, during this
period, at least two additional literature reviews will be conducted by
the IOM. By then, it is anticipated, results of ongoing research may
shed more light on disabilities resulting from Gulf War service and
serve as a guide to future policies.

The presumptive period is based primarily on the need for completion of
additional research, rather than evidence concerning the manifestation
period of undiagnosed illnesses. Although this change has the effect of
creating a longer presumptive period for Gulf War veterans who left the
Southwest Asia theater of operations in the past, as compared to those
who may be service there at present, it still provides an ample
presumptive period (up to five years) for the latter individuals.
Further, future extensions of the presumptive period are possible should
they prove to be necessary for any group of veterans. Thus, this change
does not disadvantage any Gulf War veteran.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity

Compensation

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

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

§ 3.317 [\[Amended\]]{.underline}

2\. In § 3.317, paragraph (a)(1)(i) is amended by removing "December 31,
2001" and adding, in its place, "December 31, 2006".

REGULATORY AMENDMENT

3-01-10

Regulations affected: 38 CFR § 3.113, 3.2100, 3.2130

Effective Date of Regulation: April 6, 2001.

Date Secretary Approved Regulation: February 15, 2001.

Federal Register Citation: 66 FR 18194 (April 6, 2001)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

This amendment creates new section 3.2130 to restate the current
regulation and to remove the obsolete requirement in the Adjudication
Procedure Manual that eligibility verification reports signed by mark or
thumbprint be accompanied by a separate sheet of paper certifying that
the information contained on the form is true and correct. Paragraph (c)
eliminates reference to the VA Form 4505 series as giving authority to
VA employees to certify signatures by mark or thumbprint and substitutes
a reference to 38 CFR 2.3. It is regulations, not forms, that give
certain VA employees the authority to take affidavits, administer oaths,
and certify documents. The regulations are also more readily available
to the general public than VA Forms are. We believe this change more
clearly identifies the VA employees authorized to certify signatures by
mark or thumbprint.

Interested persons were invited to submit written comments on or before
September 25, 2000. We received one comment from the National Service
Director of the Disabled American Veterans. The comment suggested
improving the proposed rule by permitting the acceptance of signatures
on documents by mark or thumbprint when witnessed by accredited agents,
attorneys, or service organization representatives. The commenter
referred to VA\'s recently proposed amendment to 38 CFR 3.203 to
authorize the acceptance of copies of military records certified as true
and exact copies by claimants\' representatives (65 FR 39580). This
proposal was consistent with the partnership being developed between
accredited representatives and VA for the purpose of improving claims
processing. VA concurred with the commenter and modified the proposed
rule to reflect the comment. Proposed Sec. 3.2130 has been amended by
redesignating proposed paragraphs (b) and (c) as paragraphs (c) and (d)
respectively, and by adding a new paragraph (b) to read \`\`They are
witnessed by an accredited agent, attorney, or service organization
representative, or\'\'. No comments were received with regard to the
addition of subpart D or Sec. 3.2100 on the scope of applicability of
subpart D.

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

PART 3---ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

§ 3.1137 [\[Removed\]]{.underline}

2\. Section 3.113 is removed.

[Subpart C --\[Reserved\]]{.underline}

3.  Subpart C is added and reserved.

4.  A new subpart D is added to read as follows:

    [Subpart D---Universal Adjudication Rules That Apply to Benefit
    Claims Governed by Part 3 of This Title]{.underline}

    [General]{.underline}

    Sec.

    2100. Scope of Applicability.

    ```{=html}
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    ```
    2130. Will VA accept a signature by mark or thumbprint?

          [Subpart D---Universal Adjudication Rules That Apply to
          Benefit Claims Governed by Part 3 of This Title]{.underline}

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

          [General]{.underline}

5.  Section 3.2100 is added to read as follows:

    [§ 3.2100 Scope of Applicability.]{.underline}

    Unless otherwise specified, the provisions of this subpart apply
    only to claims governed by part 3 of this title.

    (Authority: 38 U.S.C. 501(a)).

6.  Section 3.2130 is added to read as follows:

    [§ 3.2130 Will VA accept a signature by mark or
    thumbprint?]{.underline}

    VA will accept signatures by mark or thumbprint if:

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```
(a) They are witnessed by two people who sign their names and give their
    addresses, or

(b) They are witnessed by an accredited agent, attorney, or service
    organization representative, or

(c) They are certified by a notary public or any other person having the
    authority to administer oaths for general purposes, or

(d) They are certified by a VA employee who has been delegated authority
    by the Secretary under 38 CFR 2.3.

    (Authority: 38 U.S.C. 5101).

REGULATORY AMENDMENT

3-01-11

Regulations affected: 38 CFR § 3.808(d)

Effective Date of Regulation: August 24, 2001.

Date Secretary Approved Regulation: August 17, 2001.

Federal Register Citation: 66 FR 18194 (August 24, 2001)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

This amendment concerns the criteria for certification for eligibility
for financial assistance for adaptive equipment for automobiles or other
conveyances by updating cross-references to pertinent medical
regulations that have been recodified. This rule merely consists of
nonsubstantive changes.

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

PART 3---ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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

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

§ 3.808 [\[Amended\]]{.underline}

2\. In § 3.808, paragraph (d) is amended by removing "17.119a through
17.119c" and adding, in its place, "17.156, 17.157, and 17.158"

REGULATORY AMENDMENT

3-02-1

Regulation affected: 38 CFR 3.309(d)

Effective date of regulation: This rule is effective March 26, 2002.

Date Secretary approved regulation: December 10, 2001.

Federal Register Citation: 67 FR 3612-3616 (January 25, 2002)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The Department of Veterans Affairs (VA) is amending its adjudication
regulations concerning presumptive service connection for certain
diseases for veterans who participated in radiation-risk activities
during active service or while members of reserve components during
active duty for training or inactive duty training. This amendment adds
cancers of the bone, brain, colon, lung, and ovary to the list of
diseases which may be presumptively service connected and amends the
definition of the term \`\`radiation-risk activity.\'\' The intended
effect of this amendment is to ensure that veterans who may have been
exposed to radiation during military service do not have a higher burden
of proof than civilians exposed to ionizing radiation who may be
entitled to compensation for these cancers under comparable Federal
statutes.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.309 is amended by:

A. Adding new paragraphs (d)(2)(xvii) through (d)(2)(xxi).

B. Adding new paragraph (d)(3)(ii)(D).

The additions read as follows:

Sec. 3.309 Diseases subject to presumptive service connection.

\* \* \* \* \*

\(d\) Diseases specific to radiation-exposed veterans.

\* \* \*

\(2\) \* \* \*

\(xvii\) Cancer of the bone.

\(xviii\) Cancer of the brain.

\(xix\) Cancer of the colon.

\(xx\) Cancer of the lung.

\(xxi\) Cancer of the ovary.

\(3\) \* \* \*

\(ii\) \* \* \*

(D)(1) Service in which the service member was, as part of his or her
official military duties, present during a total of at least 250 days
before February 1, 1992, on the grounds of a gaseous diffusion plant
located in Paducah, Kentucky, Portsmouth, Ohio, or the area

identified as K25 at Oak Ridge, Tennessee, if, during such service the
veteran:

\(i\) Was monitored for each of the 250 days of such service through the
use of dosimetry badges for exposure at the plant of the external parts
of veteran\'s body to radiation; or

\(ii\) Served for each of the 250 days of such service in a position
that had exposures comparable to a job that is or was monitored through
the use of dosimetry badges; or

\(2\) Service before January 1, 1974, on Amchitka Island, Alaska, if,
during such service, the veteran was exposed to ionizing radiation in
the performance of duty related to the Long Shot, Milrow, or Cannikin
underground nuclear tests.

\(3\) For purposes of paragraph (d)(3)(ii)(D)(1) of this section, the
term \`\`day\'\' refers to all or any portion of a calendar day.

\* \* \* \* \*

REGULATORY AMENDMENT

3-02-2

Regulations affected: 38 CFR § 3.311(b)(3) and (b)(4).

Effective Date of Regulation: February 14, 2002.

Date Secretary Approved Regulation: October 30, 2001.

Federal Register Citation: 67 FR 6870 (February 14, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The \`\`Veterans\' Dioxin and Radiation Exposure Compensation Standards
Act,\'\' Public Law 98-542, established the \`\`Veterans Advisory
Committee on Environmental Hazards,\'\' and Congress required VA to
consult with this Committee in the development of the new regulations
regarding claims for entitlement to disability benefits based on
exposure to ionizing radiation.

Section 5 of the Act specifically required VA to determine whether
service connection could be granted based on exposure to ionizing
radiation for the following diseases: soft tissue sarcoma, porphyria
cutanea tarda, chloracne, leukemia, malignancies of the thyroid, female
breast, lung, bone, liver and skin, and polycythemia vera. Based on the
advice of the Committee, VA concluded that service connection can be
granted for all of these diseases except polycythemia vera.

VA subsequently amended § 3.311 to permit consideration of service
connection for any disease other than polycythemia vera if a claimant
cites or submits competent scientific or medical evidence that the
claimed disease may be induced by ionizing radiation.

The list of radiogenic diseases in §3.311(b)(2) is not an exclusive
list. The fact that VA has determined that polycythemia vera is not a
radiogenic disease does not deprive claimants of the opportunity to cite
or submit evidence showing that polycythemia vera may be induced by
exposure to ionizing radiation. We amended § 3.311(b) so that if a
claimant cites or submits evidence showing polycythemia vera may be
induced by exposure to ionizing radiation, VA will obtain a dose
estimate, forward the claim for review by the Under Secretary for
Benefits, and request an advisory medical opinion from the Under
Secretary for Health under the provisions of § 3.311.

The complete text of the final regulatory amendment is as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity

Compensation

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\. In Sec. 3.311, paragraphs (b)(3) and (b)(4) are revised to read as
follows:

Sec. 3.311 Claims based on exposure to ionizing radiation.

\* \* \* \* \*

\* \* \*

\(3\) Public Law 98-542 requires VA to determine whether sound medical
and scientific evidence supports establishing a rule identifying
polycythemia vera as a radiogenic disease. VA has determined that sound
medical and scientific evidence does not support including polycythemia
vera on the list of known radiogenic diseases in this regulation. Even
so, VA will consider a claim based on the assertion that polycythemia
vera is a radiogenic disease under the provisions of paragraph (b)(4) of
this section. (Authority: Pub. L. 98-542, section 5(b)(2)(A)(i), (iii)).

\(4\) If a claim is based on a disease other than one of those listed in
paragraph (b)(2) of this section, VA shall nevertheless consider the
claim under the provisions of this section provided that the claimant
has cited or submitted competent scientific or medical evidence that the
claimed condition is a radiogenic disease.

\* \* \* \* \*

REGULATORY AMENDMENT

3-02-3

4-02-1

Regulations affected: 38 CFR 3.350(a) and 38 CFR 4.116, note two and
diagnostic code 7626.

Effective Date of Regulation: March 18, 2002.

Date Secretary Approved Regulation: January 9, 2002.

Federal Register Citation: 67 FR 6872-6874 (February 14, 2002).

67 FR 37695 (May 30, 2002)(Correction)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The Veterans Benefits and Health Care Improvement Act of 2000, Public
Law 106-419, 114 Stat. 1822, amended section 1114(k) by making
anatomical loss of one or both breasts (including loss by mastectomy) as
a result of a service-connected disability by a woman veteran a
condition warranting this special monthly compensation. This regulation
implements this legislation by 1) revising 38 CFR 3.350(a) to add the
provision concerning anatomical loss of one or both breasts (including
loss by mastectomy) in a woman veteran and to define what anatomical
loss of one or both breasts means for this purpose, 2) revising note two
under 38 CFR 4.116 to include anatomical loss of one or both breasts as
a condition for which a rater should refer to 38 CFR 3.350(a) to
determine whether special monthly compensation is warranted, and 3)
annotating diagnostic code 7626 in 38 CFR 4.116 to refer to a footnote
directing the rater to review for entitlement to special monthly
compensation under 38 CFR 3.350.

NOTE: A correction to this final rule was published in 67 FR 37695 on
May 30, 2002, to correct typographical errors in the "Note" at the end
of diagnostic code 7626 in 38 CFR 4.116.

REGULATORY AMENDMENT

3-02-4

Regulation affected: 38 CFR § 3.304(f).

Effective Date of Regulation: March 7, 2002.

Date Secretary Approved Regulation: February 27, 2002.

Federal Register Citation: 67 FR 10330-10332 (March 7, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 3.304(f) of 38 CFR states that service connection for PTSD
requires medical evidence diagnosing the condition; a link, established
by medical evidence, between current symptoms and an in-service
stressor; and credible supporting evidence that the claimed in-service
stressor occurred.

A claim for PTSD may be based upon a personal assault, including sexual
assault. Many incidents of in-service personal assault are not
officially reported, and veterans may find it difficult to produce
evidence to prove the occurrence of this type of stressor. This
amendment addresses this difficulty by specifying that evidence from
sources other than the veteran's service records may constitute credible
supporting evidence of such an in-service stressor. This amendment
includes examples of such evidence.

This amendment requires that VA not deny such claims without: 1)
advising claimants that evidence from sources other than a veteran\'s
service records, including evidence of behavior changes, may constitute
credible supporting evidence of the stressor and 2) allowing him or her
the opportunity to furnish this type of evidence or advise VA of
potential sources of such evidence. This amendment also states that VA
may submit any evidence that it receives to an appropriate medical or
mental health professional for an opinion as to whether it indicates
that a personal assault occurred.

In addition, this amendment partially divides § 3.304(f), which concerns
PTSD claims, into three new sub-paragraphs: one for PTSD claims by
combat veterans, a second for PTSD claims by former prisoners-of-war and
a third for PTSD claims based on in-service personal assault. This is a
non-susbstantive change, made to improve the organization of § 3.304(f).

The complete text of the final regulatory amendment is as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity

Compensation

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\. In Sec. 3.304, paragraph (f) is revised to read as follows:

Sec. 3.304 Direct service connection; wartime and peacetime.

\* \* \* \* \*

\(f\) Post-traumatic stress disorder. Service connection for
post-traumatic stress disorder requires medical evidence diagnosing the
condition in accordance with Sec. 4.125(a) of this chapter; a link,
established by medical evidence, between current symptoms and an
in-service stressor; and credible supporting evidence that the claimed
in-service stressor occurred. Although service connection may be
established based on other in-service stressors, the following
provisions apply for specified in-service stressors as set forth below:

\(1\) If the evidence establishes that the veteran engaged in combat
with the enemy and the claimed stressor is related to that combat, in
the absence of clear and convincing evidence to the contrary, and
provided that the claimed stressor is consistent with the circumstances,
conditions, or hardships of the veteran\'s service, the veteran\'s lay
testimony alone may establish the occurrence of the claimed in-service
stressor.

\(2\) If the evidence establishes that the veteran was a prisoner-of-war
under the provisions of Sec. 3.1(y) of this part and the claimed
stressor is related to that prisoner-of-war experience, in the absence
of clear and convincing evidence to the contrary, and provided that the
claimed stressor is consistent with the circumstances, conditions, or
hardships of the veteran\'s service, the veteran\'s lay testimony alone
may establish the occurrence of the claimed in-service stressor.

\(3\) If a post-traumatic stress disorder claim is based on in-service
personal assault, evidence from sources other than the veteran\'s
service records may corroborate the veteran\'s account of the stressor
incident. Examples of such evidence include, but are not limited to:
records from law enforcement authorities, rape crisis centers, mental
health counseling centers, hospitals, or physicians; pregnancy tests or
tests for sexually transmitted diseases; and statements from family
members, roommates, fellow service members, or clergy. Evidence of
behavior changes following the claimed assault is one type of relevant
evidence that may be found in these sources. Examples of behavior
changes that may constitute credible evidence of the stressor include,
but are not limited to: a request for a transfer to another military
duty assignment; deterioration in work performance; substance abuse;
episodes of depression, panic attacks, or anxiety without an
identifiable cause; or unexplained economic or social behavior changes.
VA will not deny a post-traumatic stress disorder claim that is based on
in-service personal assault without first advising the claimant that
evidence from sources other than the veteran\'s service records or
evidence of behavior changes may constitute credible supporting evidence
of the stressor and allowing him or her the opportunity to furnish this
type of evidence or advise VA of potential sources of such evidence. VA
may submit any evidence that it receives to an appropriate medical or
mental health professional for an opinion as to whether it indicates
that a personal

assault occurred.

(Authority: 38 U.S.C. 501(a), 1154)

REGULATORY AMENDMENT

3-02-5

Regulations affected: 38 CFR 3.27, 3.29, 3.31, 3.105, 3.114, 3.158,
3.216, 3.261, 3.262, 3.263, 3.272, 3.275, 3.403, 3.500, and 3.503. New
section 3.815 is added.

EFFECTIVE DATE OF REGULATION: July 31, 2002.

Applicability Date OF REGULATION: Benefits are payable in accordance
with this rule retroactively to December 1, 2001, the effective date of
the applicable statutory provisions.

Date Secretary approved regulation: May 13, 2002.

Federal Register Citation: 67 FR 49585-90 (July 31, 2002)

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 401 of the Veterans Benefits and Health Care Improvement Act of
2000, Public Law 106-419, amended chapter 18 of title 38, United States
Code, effective December 1, 2001, to authorize VA to provide certain
benefits, including a monthly monetary allowance, for children with
covered birth defects who are the natural children of women veterans who
served in the Republic of Vietnam during the Vietnam era. More detailed
explanations for substantive changes are included in the "Supplementary
Information" section of both the final regulatory amendment document,
which is attached, and the notice of proposed rulemaking, which was
published in the [Federal Register]{.underline} on January 2, 2002 (67
FR 200). In addition to providing for payment of a monetary allowance
for an individual with disability from one or more covered birth defects
who is a child of a woman Vietnam veteran, this regulatory amendment
identifies the conditions that are covered birth defects for purposes
also of eligibility for health care and vocational training benefits
authorized by the legislation. This final regulatory amendment also
amends VA adjudication regulations to reflect other new statutory
provisions, to make changes for purposes of clarity, to reflect agency
administration, and, in provisions concerning benefits for Vietnam
veterans' children with spina bifida, to make other nonsubstantive or
conforming changes. These include changes to 38 CFR 3.27, 3.29, 3.31,
3.105, 3.114, 3.158, 3.216, 3.261, 3.262, 3.263, 3.272, 3.275, 3.403,
3.500, and 3.503.

Effective December 1, 2001, chapter 18 is retitled "Benefits for
Children of Vietnam Veterans." Provisions concerning benefits for
individuals with spina bifida who are children of Vietnam veterans are
now in subchapter I of chapter 18, renamed "Children of Vietnam Veterans
Born with Spina Bifida." Subchapter II has been added to chapter 18 and
is titled "Children of Women Vietnam Veterans Born with Certain Birth
Defects."

As provided in 38 U.S.C. 1815(c), the amount of the monthly monetary
allowance payable to an individual with covered birth defects is: for
the lowest level of disability (Level I), \$100; for the lower
intermediate level of disability (Level II), the greater of \$214 or the
monthly amount payable under 38 U.S.C. 1805(b)(3) for the lowest level
of disability prescribed for an individual with spina bifida who is the
child of a Vietnam veteran; for the higher intermediate level of
disability (Level III), the greater of \$743 or the monthly amount
payable under 38 U.S.C. 1805(b)(3) for the intermediate level; for the
highest level of disability (Level IV), the greater of \$1272 or the
monthly amount payable under 38 U.S.C. 1805(b)(3) for the highest level
of disability.

This regulation adds a new 38 CFR 3.815, which provides that VA will pay
a monthly allowance, based upon the level of disability determined by
VA, to or for an individual whose biological mother is or was a Vietnam
veteran and who VA has determined, upon application in accordance with
paragraph (i) of § 3.815, to have a covered birth defect. Paragraph
(a)(2) provides that no monetary allowance will be provided under this
section in any case where affirmative evidence establishes that the
covered birth defect results from a cause other than the active
military, naval, or air service of that veteran during the Vietnam era.
This will not prevent VA from paying a monetary allowance under this
section for any other covered birth defect for which affirmative
evidence of another cause does not exist.

Paragraph (a)(3) of § 3.815 states that, in the case of an individual
eligible for a monetary allowance under § 3.815 whose only covered birth
defect is spina bifida, a monetary allowance is paid under § 3.814
("Monetary allowance under 38 U.S.C. 1805 for an individual suffering
from spina bifida whose biological father or mother is a Vietnam
veteran") and not under § 3.815. Section 3.815(b) states that in the
case of an individual eligible under § 3.815 who has spina bifida and
one or more additional covered birth defects, a monthly allowance is
paid under § 3.815 and not under § 3.814.

Paragraph (c)(1) of § 3.815 defines "Vietnam veteran" to mean a woman
who performed active military, naval, or air service in the Republic of
Vietnam during the period beginning on February 28, 1961, and ending on
May 7, 1975, without regard to the characterization of her service. It
also states that "service in the Republic of Vietnam" includes service
in the waters offshore and service in other locations if the conditions
of service involved duty or visitation in the Republic of Vietnam.

Paragraph (c)(2) of § 3.815 defines "individual" for purposes of that
section to mean a person, regardless of age or marital status, whose
biological mother is or was a Vietnam veteran and who was conceived
after the date on which the veteran first entered the Republic of
Vietnam during the period beginning on February 28, 1961, and ending on
May 7, 1975.

Paragraph (c)(3) of § 3.815 defines the term "covered birth defect" for
purposes of that section to mean: any birth defect identified by VA as a
birth defect that is associated with the service of women Vietnam
veterans in the Republic of Vietnam during the period beginning on
February 28, 1961, and ending on May 7, 1975, and that has resulted, or
may result, in permanent physical or mental disability. However, the
term [covered birth defect]{.underline} does not include a condition due
to a:

\(i\) Familial disorder;

\(ii\) Birth-related injury; or

\(iii\) Fetal or neonatal infirmity with well-established causes.

Paragraph (d) indicates that all birth defects that are not excluded
under the provisions of this paragraph are covered birth defects and it
lists certain conditions that VA would identify or would not identify as
covered birth defects under § 3.815. Paragraph (d)(1) contains a list of
some, but not all, conditions that VA considers to be covered birth
defects, unless the condition is familial in a particular case.
Paragraphs (d)(2) through (d)(8) each contain a non-exclusive list of
certain conditions that VA does not consider to be covered birth
defects. Paragraph (d)(2) lists some, but not all, conditions that VA
does not consider to be covered birth defects because they are familial
disorders, unless not familial in a particular family. Paragraph (d)(3)
lists some, but not all, conditions that VA does not consider to be
covered birth defects because they are congenital malignancies.
Paragraph (d)(4) lists some, but not all, conditions that VA does not
consider to be covered birth defects because they are chromosomal
disorders. Paragraph (d)(5) lists some, but not all, conditions that VA
does not consider to be covered birth defects because they are due to a
birth-related injury. Paragraph (d)(6) lists some, but not all,
conditions that VA does not consider to be covered birth defects because
they are due to a fetal or neonatal infirmity with well-established
causes or they represent miscellaneous pediatric conditions. Paragraph
(d)(7) lists some, but not all, conditions that VA does not consider to
be covered birth defects because they are regarded as developmental
disorders, rather than birth defects. Paragraph (d)(8) states that
conditions that do not result in permanent physical or mental disability
are not covered birth defects.

Paragraph (e) of § 3.815 provides evaluation criteria for covered birth
defects at four levels of disability: Level I, Level II, Level III, and
Level IV, with Level I having the lowest, and Level IV the highest,
level of disability. The levels are based on an assessment of the
day-to-day functioning of affected individuals or the extent of
disfigurement of the head, face, or neck due to one or more covered
birth defects or associated disabilities.

Paragraph (f) of § 3.815 provides that VA will accept statements from
private physicians, as well as examination reports from government or
private institutions, if adequate, for the purposes of determining
whether an individual has a covered birth defect and/or rating claims
from individuals with covered birth defects.

Paragraph (g) of § 3.815 provides that VA will reassess a determination
under this section whenever it receives evidence indicating that a
change is warranted.

Paragraph (h) states that if a regional office is unclear in any case as
to whether a condition is a covered birth defect, it may refer the issue
to the Director of the Compensation and Pension Service for
determination.

Paragraph (i) explains effective dates. It states that except as
provided in § 3.114(a) or paragraph (i)(1) or (2), VA will award the
monetary allowance under subchapter II of 38 U.S.C. chapter 18, for an
individual with disability resulting from one or more covered birth
defects, based on an original claim, a claim reopened after final
disallowance, or a claim for increase, as of the date VA received the
claim (or the date of birth if the claim is received within one year of
that date), the date entitlement arose, or December 1, 2001, whichever
is later. Subject to the condition that no benefits may be paid for any
period prior to December 1, 2001.

Paragraph (j) states that VA will generally reduce or discontinue awards
under subchapter II of 38 U.S.C. chapter 18 according to the facts found
except as provided in §§ 3.105 and 3.114(b).

New section 3.815 is added. Sections revised are 38 CFR 3.27, 3.29,
3.31, 3.105, 3.114, 3.158, 3.216, 3.261, 3.262, 3.263, 3.272, 3.275,
3.403, 3.500, and 3.503.

The pertinent text from the final regulatory amendment is as follows:

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

SUMMARY: This document amends the Department of Veterans Affairs (VA)
adjudication regulations to provide for payment of a monetary allowance
for an individual with disability from one or more covered birth defects
who is a child of a woman Vietnam veteran and to provide for the
identification of covered birth defects, to implement recent
legislation. In addition, this document amends the VA adjudication
regulations affecting benefits for Vietnam veterans\' children with
spina bifida to reflect that legislation, to make conforming changes,
and to remove unnecessary or obsolete provisions.

SUPPLEMENTARY INFORMATION: In a document published in the Federal
Register on January 2, 2002 (67 FR 200), we proposed to amend the VA
adjudication regulations to provide for payment of a monetary allowance
for an individual with disability from one or more covered birth defects
who is a child of a woman Vietnam veteran and to provide for the
identification of covered birth defects, to implement provisions in
recent legislation. In addition, we proposed to amend the VA
adjudication regulations affecting benefits for Vietnam veterans\'
children with spina bifida to reflect that legislation, to make
conforming changes, and to remove unnecessary or obsolete provisions.
Companion proposed rule documents concerning the provision under that
legislation of health care (RIN: 2900-AK88) (67 FR 209) and vocational
training benefits (RIN: 2900-AK90) (67 FR 215) for eligible children of
Vietnam veterans were also set forth in the January 2, 2002, issue of
the Federal Register. That legislation, section 401 of the Veterans
Benefits and Health Care Improvement Act of 2000, Public Law 106-419,
amended chapter 18 of title 38, United States Code, effective December
1, 2001, to authorize VA to provide certain benefits, including a
monthly monetary allowance, for children with covered birth defects who
are the natural children of women veterans who served in the Republic of
Vietnam during the Vietnam era. We provided a thirty-day period for
public comments, which ended on February 1, 2002. We received one
comment, from an individual.

The commenter felt that the U.S. government is displaying a bias in
favor of women veterans in this regulation and that the hidden effect of
Agent Orange may also have remained dormant in men\'s systems and
produced chromosomal disorders in their children. No changes are made
based on this comment. Public Law 106-419, which was based on a
comprehensive health study conducted by VA of 8,280 women Vietnam-era
veterans (as discussed in the SUPPLEMENTARY INFORMATION section of the
proposed rule), provides benefits specifically for women Vietnam
veterans\' children with certain birth defects. We have no legal
authority to award the new benefits to children of male Vietnam
veterans.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In Sec. 3.27, paragraphs (c) and (d) are revised to read as follows:

Sec. 3.27 Automatic adjustment of benefit rates.

\* \* \* \* \*

\(c\) Monetary allowance under 38 U.S.C. chapter 18 for certain
individuals who are children of Vietnam veterans. Whenever there is a
cost-of-living increase in benefit amounts payable under section 215(i)
of Title II of the Social Security Act, VA shall, effective on the dates
such increases become effective, increase by the same percentage the
monthly allowance rates under 38 U.S.C. chapter 18.

(Authority: 38 U.S.C. 1805(b)(3), 1815(d), 5312) (d) Publishing
requirements. Increases in pension rates, parents\' dependency and
indemnity compensation rates and income limitation, and the monthly
allowance rates under 38 U.S.C. chapter 18 made under this section shall
be published in the Federal Register.

Authority: (38 U.S.C. 1805(b)(3), 1815(d), 5312(c)(1))

3\. In Sec. 3.29, paragraph (c) is revised to read as follows:

Sec. 3.29 Rounding

\* \* \* \* \*

\(c\) Monthly rates under 38 U.S.C. chapter 18. When increasing the
monthly monetary allowance rates under 38 U.S.C. chapter 18 for certain
individuals who are children of Vietnam veterans, VA will round any
resulting rate that is not an even dollar amount to the next higher
dollar.

Authority: (38 U.S.C. 1805(b)(3), 1815(d), 5312)

Sec. 3.31 \[Amended\]

4\. Section 3.31 is amended by:

a\. In the introductory text, removing \`\`the monetary allowance under
38 U.S.C. 1805 for a child suffering from spina bifida\'\' and adding,
in its place, \`\`a monetary allowance under 38 U.S.C. chapter 18 for an
individual\'\'.

b\. In paragraph (c)(4)(ii), removing \`\`the monetary allowance for
children suffering from spina bifida\'\' and adding, in its place, \`\`a
monetary allowance under 38 U.S.C. chapter 18\'\'. c. Revising the
authority citation.

The revision reads as follows:

Sec. 3.31 Commencement of the period of payment.

\* \* \* \* \*

Authority: (38 U.S.C. 1822, 5111)

5\. In Sec. 3.105, paragraph (g) is revised to read as follows:

Sec. 3.105 Revision of decisions.

\* \* \* \* \*

\(g\) Reduction in evaluation\--monetary allowance under 38 U.S.C.
chapter 18 for certain individuals who are children of Vietnam veterans.
Where a reduction or discontinuance of a monetary allowance currently
being paid under 38 U.S.C. chapter 18 is considered warranted, VA will
notify the beneficiary at his or her latest address of record of the
proposed reduction, furnish detailed reasons therefor, and allow the
beneficiary 60 days to present additional evidence to show that the
monetary allowance should be continued at the present level. Unless
otherwise provided in paragraph (i) of this section, if VA does not
receive additional evidence within that period, it will take final
rating action and reduce the award effective the last day of the month
following 60 days from the date of notice to the beneficiary of the
proposed reduction.

Authority: (38 U.S.C. 1822, 5112(b)(6))

\* \* \* \* \*

Sec. 3.114 \[Amended\]

6\. Section 3.114 is amended by:

a\. In the introductory text of paragraph (a), removing \`\`the monetary
allowance under 38 U.S.C. 1805 for a child suffering from spina
bifida\'\' each place it appears and adding, in its place, \`\`a
monetary allowance under 38 U.S.C. chapter 18 for an individual\'\'. b.
Revising the authority citation at the end of paragraph (a).

The revision reads as follows:

Sec. 3.114 Change of law or Department of Veterans Affairs issue.

\* \* \* \* \*

Authority: (38 U.S.C. 1822, 5110(g))

\* \* \* \* \*

Sec. 3.158 \[Amended\]

7\. In Sec. 3.158, paragraphs (a) and (c) are amended by removing
\`\`1805\'\' and adding, in its place, \`\`chapter 18\'\'.

Sec. 3.216 \[Amended\]

8\. Section 3.216 is amended by:

a\. Removing \`\`or the monetary allowance for a child suffering from
spina bifida who is a child of a Vietnam veteran under Sec. 3.814 of
this part\'\' and adding, in its place, \`\`a monetary allowance under
38 U.S.C. chapter 18\'\'.

b\. Revising the authority citation.

The revision reads as follows:

Sec. 3.216 Mandatory disclosure of social security numbers.

\* \* \* \* \*

Authority: (38 U.S.C. 1822, 5101(c))

\* \* \* \* \*

9\. In Sec. 3.261, paragraph (a)(40) is revised to read as follows:

Sec. 3.261 Character of income; exclusions and estates.

\* \* \* \* \*

\(a\) \* \* \*

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

Dependency

and indemnity Pension; old-law Pension; section 306

Income Dependency compensation (veterans, surviving (veterans, surviving
See\--

(parents) spouses and children) spouses and children)

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

\* \* \* \* \* \* \*

\(40\) Monetary allowance under Excluded\...\...\...\.....
Excluded\...\...\...\..... Excluded\...\...\...\...\...\....
Excluded\...\...\...\...\...\.... Sec. 3.262(y)

38 U.S.C. chapter 18 for

certain individuals who are

children of Vietnam veterans

(38 U.S.C. 1823(c)).

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

\* \* \* \* \*

10\. In Sec. 3.262, paragraph (y) is revised to read as follows:

Sec. 3.262 Evaluation of income.

\* \* \* \* \*

\(y\) Monetary allowance under 38 U.S.C. chapter 18 for certain
individuals who are children of Vietnam veterans. There shall be
excluded from income computation any allowance paid under the provisions
of 38 U.S.C. chapter 18 to or for an individual who is the child of a
Vietnam veteran.

Authority: (38 U.S.C. 1823(c))

11\. In Sec. 3.263, paragraph (g) is revised to read as follows:

Sec. 3.263 Corpus of estate; net worth.

\* \* \* \* \*

\(g\) Monetary allowance under 38 U.S.C. chapter 18 for certain
individuals who are children of Vietnam veterans. There shall be
excluded from the corpus of estate or net worth of a claimant any
allowance paid under the provisions of 38 U.S.C. chapter 18 to or for an
individual who is a child of a Vietnam veteran.

Authority: (38 U.S.C. 1823(c))

12\. In Sec. 3.272, paragraph (u) is revised to read as follows:

Sec. 3.272 Exclusions from income.

\* \* \* \* \*

\(u\) Monetary allowance under 38 U.S.C. chapter 18 for certain
individuals who are children of Vietnam veterans. Any allowance paid
under the provisions of 38 U.S.C. chapter 18 to or for an individual who
is a child of a Vietnam veteran.

Authority: (38 U.S.C. 1823(c))

13\. In Sec. 3.275, paragraph (i) is revised to read as follows:

Sec. 3.275 Criteria for evaluating net worth.

\* \* \* \* \*

\(i\) Monetary allowance under 38 U.S.C. chapter 18 for certain
individuals who are children of Vietnam veterans. There shall be
excluded from the corpus of estate or net worth of a claimant any
allowance paid under the provisions of 38 U.S.C. chapter 18 to or for an
individual who is a child of a Vietnam veteran.

Authority: (38 U.S.C. 1823(c))

14\. In Sec. 3.403, paragraph (b) is revised and paragraph (c) is added,
to read as follows:

Sec. 3.403 Children.

\* \* \* \* \*

\(b\) Monetary allowance under 38 U.S.C. 1805 for an individual
suffering from spina bifida who is a child of a Vietnam veteran. An
award of the monetary allowance under 38 U.S.C. 1805 to or for an
individual suffering from spina bifida who is a child of a Vietnam
veteran will be effective either date of birth if claim is received
within one year of that date, or date of claim, but not earlier than
October 1, 1997.

Authority: (38 U.S.C. 1822, 5110; sec. 422(c), Pub. L. 104-204,

110 Stat. 2926)

\(c\) Monetary allowance under 38 U.S.C. 1815 for an individual with
covered birth defects who is a child of a woman Vietnam veteran. Except
as provided in Sec. 3.114(a) or Sec. 3.815(i), an award of the monetary
allowance under 38 U.S.C. 1815 to or for an individual with one or more
covered birth defects who is a child of a woman Vietnam veteran will be
effective as of the date VA received the claim (or the date of birth if

the claim is received within one year of that date), the date
entitlement arose, or December 1, 2001, whichever is latest.

Authority: (38 U.S.C. 1815, 1822, 1824, 5110)

15\. In Sec. 3.503, paragraph (b) is revised to read as follows:

Sec. 3.503 Children.

\* \* \* \* \*

\(b\) Monetary allowance under 38 U.S.C. chapter 18 for certain
individuals who are children of Vietnam veterans. The effective date of
discontinuance of the monthly allowance under 38 U.S.C. chapter 18 will
be the last day of the month before the month in which the death of the
individual occurred.

Authority: (38 U.S.C. 1822, 5112(b))

16\. Section 3.814 is amended by:

a\. Revising the section heading.

b\. Adding a heading to paragraph (a).

c\. In paragraph (a), revising the first sentence and, in the second
sentence, removing \`\`other related individual\'\' and adding, in its
place, \`\`related person\'\'.

d\. Removing and reserving paragraph (b).

e\. In paragraph (c)(1), removing \`\`an individual\'\' and adding, in
its place, \`\`a person\'\' and removing \`\`individual\'s\'\' and
adding, in its place, \`\`person\'s\'\'.

f\. In paragraph (c)(2), removing \`\`Sec. .3.204(a)(1), VA shall\'\'
and adding, in its place, \`\`Sec. 3.204(a)(1), VA will\'\' and by
removing \`\`an individual\'s biological father or mother is or was\'\'
and adding, in its place, \`\`a person is the biological son or daughter
of\'\'.

g\. Add a heading for paragraph (d).

h\. Removing the authority citation at the end of paragraph (d).

i\. In paragraph (e) introductory text, removing \`\`children\'\' and
adding, in its place, \`\`an individual\'\'.

j\. Revising the authority citation at the end of the section.

k\. Removing the information collection parenthetical at the end of the
section.

The revisions and additions read as follows:

Sec. 3.814 Monetary allowance under 38 U.S.C. chapter 18 for an
individual suffering from spina bifida whose biological father or mother
is or was a Vietnam veteran.

\(a\) Monthly monetary allowance. VA will pay a monthly monetary
allowance under subchapter I of 38 U.S.C. chapter 18, based upon the
level of disability determined under the provisions of paragraph (d) of
this section, to or for a person who VA has determined is an individual
suffering from spina bifida whose biological mother or father is or was
a Vietnam veteran. \* \* \*

\* \* \* \* \*

\(d\) Disability evaluations. (1) \* \* \*

\* \* \* \* \*

Authority: (38 U.S.C. 501, 1805, 1811, 1812, 1821, 1822, 1823, 1824,
5101, 5110, 5111, 5112)

17\. Section 3.815 is added to read as follows:

Sec. 3.815 Monetary allowance under 38 U.S.C. chapter 18 for an
individual with disability from covered birth defects whose biological

mother is or was a Vietnam veteran; identification of covered birth
defects.

(a) Monthly monetary allowance.

> \(1\) General. VA will pay a monthly monetary allowance under
> subchapter II of 38 U.S.C. chapter 18 to or for an individual whose
> biological mother is or was a Vietnam veteran and who VA has
> determined to have disability resulting from one or more covered birth
> defects. Except as provided in paragraph (a)(3) of this section, the
> amount of the monetary allowance paid will be based upon the level of
> such disability suffered by the individual, as determined in
> accordance with the provisions of paragraph (e) of this section.
>
> \(2\) Affirmative evidence of cause other than mother\'s service
> during Vietnam era. No monetary allowance will be provided under this
> section based on a particular birth defect of an individual in any
> case where affirmative evidence establishes that the birth defect
> results from a cause other than the active military, naval, or air
> service of the individual\'s mother during the Vietnam era and, in
> determining the level of disability for an individual with more than
> one birth defect, the particular defect resulting from other causes
> will be excluded from consideration. This will not prevent VA from
> paying a monetary allowance under this section for other birth
> defects.

\(3\) Nonduplication; spina bifida. In the case of an individual whose
only covered birth defect is spina bifida, a monetary allowance will be
paid under Sec. 3.814, and not under this section, nor will the
individual be evaluated for disability under this section. In the case
of an individual who has spina bifida and one or more additional covered
birth defects, a monetary allowance will be paid under this section and
the amount of the monetary allowance will be not less than the amount
the individual would receive if his or her only covered birth defect
were spina bifida. If, but for the individual\'s one or more additional
covered birth defects, the monetary allowance payable to or for the
individual would be based on an evaluation at Level I, II, or III,
respectively, under Sec. 3.814(d), the evaluation of the individual\'s
level of disability under paragraph (e) of this section will be not less
than Level II, III, or IV, respectively.

(b) No effect on other VA benefits. Receipt of a monetary allowance
    under 38 U.S.C. chapter 18 will not affect the right of the
    individual, or the right of any person based on the individual\'s
    relationship to that person, to receive any other benefit to which
    the individual, or that person, may be entitled under any law
    administered by VA.

(c) Definitions.

> \(1\) Vietnam veteran. For the purposes of this section, the term
> Vietnam veteran means a person who performed active military, naval,
> or air service in the Republic of Vietnam during the period beginning
> on February 28, 1961, and ending on May 7, 1975, without regard to the
> characterization of the person\'s service. Service in the Republic of
> Vietnam includes service in the waters offshore and service in other
> locations if the conditions of service involved duty or visitation in
> the Republic of Vietnam.

\(2\) Individual. For the purposes of this section, the term individual
means a person, regardless of age or marital status, whose biological
mother is or was a Vietnam veteran and who was conceived after the date
on which the veteran first entered the Republic of Vietnam during the
period beginning on February 28, 1961, and ending on May 7, 1975.
Notwithstanding the provisions of Sec. 3.204(a)(1), VA will require the
types of evidence specified in Secs. 3.209 and 3.210 sufficient to
establish that a person is the biological son or daughter of a Vietnam
veteran.

\(3\) Covered birth defect. For the purposes of this section, the term
covered birth defect means any birth defect identified by VA as a birth
defect that is associated with the service of women Vietnam veterans in
the Republic of Vietnam during the period beginning on February 28,
1961, and ending on May 7, 1975, and that has resulted, or may result,
in permanent physical or mental disability. However, the term covered
birth defect does not include a condition due to a:

\(i\) Familial disorder;

\(ii\) Birth-related injury; or

\(iii\) Fetal or neonatal infirmity with well-established causes.

\(d\) Identification of covered birth defects. All birth defects that
are not excluded under the provisions of this paragraph are covered
birth defects.

\(1\) Covered birth defects include, but are not limited to, the
following (however, if a birth defect is determined to be familial in a
particular family, it will not be a covered birth defect):

\(i\) Achondroplasia;

\(ii\) Cleft lip and cleft palate;

\(iii\) Congenital heart disease;

\(iv\) Congenital talipes equinovarus (clubfoot);

\(v\) Esophageal and intestinal atresia;

\(vi\) Hallerman-Streiff syndrome;

\(vii\) Hip dysplasia;

\(viii\) Hirschprung\'s disease (congenital megacolon);

\(ix\) Hydrocephalus due to aqueductal stenosis;

\(x\) Hypospadias;

\(xi\) Imperforate anus;

\(xii\) Neural tube defects (including spina bifida, encephalocele, and
anencephaly);

\(xiii\) Poland syndrome;

\(xiv\) Pyloric stenosis;

\(xv\) Syndactyly (fused digits);

\(xvi\) Tracheoesophageal fistula;

\(xvii\) Undescended testicle; and

\(xviii\) Williams syndrome.

\(2\) Birth defects that are familial disorders, including hereditary
genetic conditions, are not covered birth defects. Familial disorders
include, but are not limited to, the following, unless the birth defect
is not familial in a particular family:

\(i\) Albinism;

\(ii\) Alpha-antitrypsin deficiency;

\(iii\) Crouzon syndrome;

\(iv\) Cystic fibrosis;

\(v\) Duchenne\'s muscular dystrophy;

\(vi\) Galactosemia;

\(vii\) Hemophilia;

\(viii\) Huntington\'s disease;

\(ix\) Hurler syndrome;

\(x\) Kartagener\'s syndrome (Primary Ciliary Dyskinesia);

\(xi\) Marfan syndrome;

\(xii\) Neurofibromatosis;

\(xiii\) Osteogenesis imperfecta;

\(xiv\) Pectus excavatum;

\(xv\) Phenylketonuria;

\(xvi\) Sickle cell disease;

\(xvii\) Tay-Sachs disease;

\(xviii\) Thalassemia; and

\(xix\) Wilson\'s disease.

\(3\) Conditions that are congenital malignant neoplasms are not covered
birth defects. These include, but are not limited to, the following:

\(i\) Medulloblastoma;

\(ii\) Neuroblastoma;

\(iii\) Retinoblastoma;

\(iv\) Teratoma; and

\(v\) Wilm\'s tumor.

\(4\) Conditions that are chromosomal disorders are not covered birth
defects. These include, but are not limited to, the following:

\(i\) Down syndrome and other Trisomies;

\(ii\) Fragile X syndrome;

\(iii\) Klinefelter\'s syndrome; and

\[\[Page 49589\]\]

\(iv\) Turner\'s syndrome.

\(5\) Conditions that are due to birth-related injury are not covered
birth defects. These include, but are not limited to, the following:

\(i\) Brain damage due to anoxia during or around time of birth;

\(ii\) Cerebral palsy due to birth trauma,

\(iii\) Facial nerve palsy or other peripheral nerve injury;

\(iv\) Fractured clavicle; and

\(v\) Horner\'s syndrome due to forceful manipulation during birth.

\(6\) Conditions that are due to a fetal or neonatal infirmity with
well-established causes or that are miscellaneous pediatric conditions
are not covered birth defects. These include, but are not limited to,
the following:

\(i\) Asthma and other allergies;

\(ii\) Effects of maternal infection during pregnancy, including but not
limited to, maternal rubella, toxoplasmosis, or syphilis;

\(iii\) Fetal alcohol syndrome or fetal effects of maternal drug use;

\(iv\) Hyaline membrane disease;

\(v\) Maternal-infant blood incompatibility;

\(vi\) Neonatal infections;

\(vii\) Neonatal jaundice;

\(viii\) Post-infancy deafness/hearing impairment (onset after the age
of one year);

\(ix\) Prematurity; and

\(x\) Refractive disorders of the eye.

\(7\) Conditions that are developmental disorders are not covered birth
defects. These include, but are not limited to, the following:

\(i\) Attention deficit disorder;

\(ii\) Autism;

\(iii\) Epilepsy diagnosed after infancy (after the age of one year);

\(iv\) Learning disorders; and

\(v\) Mental retardation (unless part of a syndrome that is a covered
birth defect).

\(8\) Conditions that do not result in permanent physical or mental
disability are not covered birth defects. These include, but are not
limited to:

\(i\) Conditions rendered non-disabling through treatment;

\(ii\) Congenital heart problems surgically corrected or resolved
without disabling residuals;

\(iii\) Heart murmurs unassociated with a diagnosed cardiac abnormality;

\(iv\) Hemangiomas that have resolved with or without treatment; and

\(v\) Scars (other than of the head, face, or neck) as the only residual
of corrective surgery for birth defects.

\(e\) Disability evaluations. Whenever VA determines, upon receipt of
competent medical evidence, that an individual has one or more covered
birth defects, VA will determine the level of disability currently
resulting, in combination, from the covered birth defects and associated
disabilities. No monetary allowance will be payable under this section
if VA determines under this paragraph that an individual has no current
disability resulting from the covered birth defects, unless VA
determines that the provisions of paragraph (a)(3) of this section are
for application. Except as otherwise provided in paragraph (a)(3) of
this section, VA will determine the level of disability as follows:

\(1\) Levels of disability.

\(i\) Level 0. The individual has no current disability resulting from
covered birth defects.

\(ii\) Level I. The individual meets one or more of the following
criteria:

\(A\) The individual has residual physical or mental effects that only
occasionally or intermittently limit or prevent some daily activities;
or

\(B\) The individual has disfigurement or scarring of the head, face, or
neck without gross distortion or gross asymmetry of any facial feature
(nose, chin, forehead, eyes (including eyelids), ears (auricles),
cheeks, or lips).

\(iii\) Level II. The individual meets one or more of the following
criteria:

\(A\) The individual has residual physical or mental effects that
frequently or constantly limit or prevent some daily activities, but the
individual is able to work or attend school, carry out most household
chores, travel, and provide age-appropriate self-care, such as eating,
dressing, grooming, and carrying out personal hygiene, and
communication, behavior, social interaction, and intellectual
functioning are appropriate for age; or

\(B\) The individual has disfigurement or scarring of the head, face, or
neck with either gross distortion or gross asymmetry of one facial
feature or one paired set of facial features (nose, chin, forehead, eyes
(including eyelids), ears (auricles), cheeks, or lips). (iv) Level III.
The individual meets one or more of the following criteria:

\(A\) The individual has residual physical or mental effects that
frequently or constantly limit or prevent most daily activities, but the
individual is able to provide age-appropriate self-care, such as eating,
dressing, grooming, and carrying out personal hygiene;

\(B\) The individual is unable to work or attend school, travel, or
carry out household chores, or does so intermittently and with
difficulty;

\(C\) The individual\'s communication, behavior, social interaction, and
intellectual functioning are not entirely appropriate for age; or

\(D\) The individual has disfigurement or scarring of the head, face, or
neck with either gross distortion or gross asymmetry of two facial
features or two paired sets of facial features (nose, chin, forehead,
eyes (including eyelids), ears (auricles), cheeks, or lips). (v) Level
IV. The individual meets one or more of the following criteria:

\(A\) The individual has residual physical or mental effects that
prevent age-appropriate self-care, such as eating, dressing, grooming,
and carrying out personal hygiene;

\(B\) The individual\'s communication, behavior, social interaction, and
intellectual functioning are grossly inappropriate for age; or

\(C\) The individual has disfigurement or scarring of the head, face, or
neck with either gross distortion or gross asymmetry of three facial
features or three paired sets of facial features (nose, chin, forehead,
eyes (including eyelids), ears (auricles), cheeks, or lips).

\(2\) Assessing limitation of daily activities. Physical or mental
effects on the following functions are to be considered in assessing
limitation of daily activities:

\(i\) Mobility (ability to stand and walk, including balance and
coordination);

\(ii\) Manual dexterity;

\(iii\) Stamina;

\(iv\) Speech;

\(v\) Hearing;

\(vi\) Vision (other than correctable refraction errors);

\(vii\) Memory;

\(viii\) Ability to concentrate;

\(ix\) Appropriateness of behavior; and

\(x\) Urinary and fecal continence.

(f)Information for determining whether individuals have covered birth
defects and rating disability levels.

> \(1\) VA may accept statements from private physicians, or examination
> reports from government or private institutions, for the purposes of
> determining whether an individual has a covered birth defect and for
> rating claims for covered birth defects. If they are adequate for such
> purposes, VA may make the determination and rating without further
> examination. In the absence of adequate information, VA may schedule
> examinations for the purpose of determining whether an individual has
> a covered birth defect and/or assessing the level of disability.

\(2\) Except in accordance with paragraph (a)(3) of this section, VA
will not pay a monthly monetary allowance unless or until VA is able to
obtain medical evidence adequate to determine that an individual has a
covered birth defect and adequate to assess the level of disability due
to covered birth defects.

\(g\) Redeterminations. VA will reassess a determination under this
section whenever it receives evidence indicating that a change is
warranted.

\(h\) Referrals. If a regional office is unclear in any case as to
whether a condition is a covered birth defect, it may refer the issue to
the Director of the Compensation and Pension Service for determination.

\(i\) Effective dates. Except as provided in Sec. 3.114(a) or paragraph
(i)(1) or (2) of this section, VA will award the monetary allowance
under subchapter II of 38 U.S.C. chapter 18, for an individual with
disability resulting from one or more covered birth defects, based on an
original claim, a claim reopened after final disallowance, or a claim
for increase, as of the date VA received the claim (or the date of birth
if the claim is received within one year of that date), the date
entitlement arose, or December 1, 2001, whichever is latest. Subject to
the condition that no benefits may be paid for any period prior to
December 1, 2001:

\(1\) VA will increase benefits as of the earliest date the evidence
establishes that the level of severity increased, but only if the
beneficiary applies for an increase within one year of that date.

\(2\) If a claimant reopens a previously disallowed claim based on
corrected military records, VA will award the benefit from the latest of
the following dates: the date the veteran or beneficiary applied for a
correction of the military records; the date the disallowed claim was
filed; or, the date one year before the date of receipt of the reopened
claim.

\(j\) Reductions and discontinuances. VA will generally reduce or
discontinue awards under subchapter II of 38 U.S.C. chapter 18 according
to the facts found except as provided in Secs. 3.105 and 3.114(b).

\(1\) If benefits were paid erroneously because of beneficiary error, VA
will reduce or discontinue benefits as of the effective date of the
erroneous award.

\(2\) If benefits were paid erroneously because of administrative error,
VA will reduce or discontinue benefits as of the date of last payment.

Authority: (38 U.S.C. 501, 1811, 1812, 1813, 1814, 1815, 1816,

1821, 1822, 1823, 1824, 5101, 5110, 5111, 5112)

REGULATORY AMENDMENT

3-02-6

Regulation affected: 38 CFR 3.272(h).

Effective Date of Regulation: February 28, 2002.

Date Secretary Approved Regulation: November 19, 2001.

Federal Register Citation: 67 FR 9209 (February 28, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 1503(a)(3) of 38 USC provides for certain exclusions from
countable income for death pension entitlement, including an amount
equal to the expenses of the veteran's last illness, burial and just
debts paid by the spouse or by the surviving spouse or child of a
deceased veteran. VA implemented the provisions of 38 USC 1503(a)(3) at
38 CFR 3.272(h), the last sentence of which provided that the amount of
expenses of the veteran's last illness, burial, and just debts "paid
subsequent to death but prior to date of entitlement are not
deductible."

In precedent opinion dated March 28, 2000 (VAOPGCPRES 1-2000), VA's
General Counsel held that the last sentence of section 3.272(h) is
inconsistent with 38 USC 1503(a)(3) because the statute does not limit
the period in which expenses of a veteran's last illness may be deducted
in calculating the surviving spouse's death pension entitlement. The
General Counsel determined that VA may not deny a death pension claim or
reduce the amount of benefits payable based on the last sentence of Sec.
3.272(h) and that VA must revise Sec. 3.272(h) to eliminate the
prohibition against reducing the surviving spouse\'s countable income by
the amount of expenses of the veteran\'s last illness, just debts and
burial when paid after the veteran\'s death but before the date of the
surviving spouse\'s entitlement to death pension. To bring the
regulation into conformance with the governing statute, we removed that
final sentence.

The complete text of the final regulatory amendment is as follows:

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

as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity

Compensation

1\. The authority citation for part 3, subpart A continues to read

as follows:

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

Sec. 3.272 \[Amended\]

2\. Section 3.272 is amended by removing the last sentence of

paragraph (h) introductory text.

REGULATORY AMENDMENT

3-02-7

Regulation affected: 38 CFR 3.150.

Effective Date of Regulation: June 14, 2002.

Date Secretary Approved Regulation: June 6, 2002.

Federal Register Citation: 67 FR 40867 (June 14, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

VA\'s regulation 38 CFR 3.150, \`\`Forms to be furnished,\'\' has at the
end of the regulation a cross-reference to \`\`Failure to furnish claim
form or notice of time limit. See Sec. 3.109(b).\'\' In a previous VA
amendment to Sec. 3.109, we changed the title of subparagraph Sec.
3.109(b) to \`\`Extension of time limit.\'\' This amendment changes the
cross-reference in Sec. 3.150 to \`\`Extension of time limit.\'\'

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

as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity

Compensation

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\. The Cross reference at the end of Sec. 3.150 is revised to read

as follows:

Sec. 3.150 Forms to be furnished.

\* \* \* \* \*

Cross Reference: Extension of time limit. See Sec. 3.109(b).

REGULATORY AMENDMENT

3-02-8

Regulation affected: 38 CFR 3.353(b), 3.850(d), 3.2600(a) and all
references to Adjudication Officer, Veterans Services Officer or
Veterans\' Services Officer changed to Veterans Service Center Manager.

Effective Date of Regulation: July 17, 2002.

Date Secretary Approved Regulation: July 3, 2002.

Federal Register Citation: 67 FR 46868 (July 17, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

VA is amending its adjudication and fiduciary regulations to reflect the
reorganization of the Adjudication and Veterans Services Divisions into
Veterans Service Centers and to reflect the elimination of the positions
of the Adjudication Officer and the Veterans Services Officer and the
creation of the position of the Veterans Service Center Manager. Other
nonsubstantive changes are made for clarity.

For the reasons set forth in the preamble, 38 CFR parts 3 and 13 are
amended as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity

Compensation

1\. The authority citation for part 3, subpart A continues to read

as follows:

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

PART 3\--\[AMENDED\]

2\. Part 3 is amended by:

A. Revising all references to \`\`Adjudication Officer\'\', except for
in Sec. 3.2600(a), or all references to \`\`Veterans Services
Officer\'\' or \`\`Veterans\' Services Officer\'\' to read \`\`Veterans
Service Center Manager\'\'.

B. Revising all references to \`\`Adjudication Division\'\' to read
\`\`Veterans Service Center\'\'.

3\. Section 3.353(b)(2) is revised to read as follows:

Sec. 3.353 Determinations of incompetency and competency.

\* \* \* \* \*

\(b\) \* \* \*

\(2\) Where the beneficiary is rated incompetent, the Veterans Service
Center Manager will develop information as to the beneficiary\'s social,
economic and industrial adjustment; appoint (or recommend appointment
of) a fiduciary as provided in Sec. 13.55 of this chapter; select a
method of disbursing payment as provided in Sec. 13.56 of this chapter,
or in the case of a married beneficiary, appoint the beneficiary\'s
spouse to receive payments as provided in Sec. 13.57 of this chapter;
and authorize disbursement of the benefit.

\* \* \* \* \*

Sec. 3.850 \[Amended\]

4\. Section 3.850(d), is amended by removing misspelled word

\`\`Goverment\'\', and adding, in its place, \`\`Government\'\'.

Sec. 3.2600 \[Amended\]

5\. Section 3.2600(a) is amended by removing \`\`an Adjudication
Officer, Veterans Service Center Manager,\'\', and adding, in its place,
\`\`a Veterans Service Center Manager\'\'.

PART 13\--VETERANS BENEFITS ADMINISTRATION, FIDUCIARY ACTIVITIES

6\. The authority citation for part 13 continues to read as follows:

Authority: 72 Stat. 1114, 1232, as amended, 1237; 38 U.S.C. 501, 5502,
5503, 5711, unless otherwise noted.

PART 13\--\[AMENDED\]

7\. Part 13 is amended by:

A. Revising all references to \`\`Adjudication Officer\'\', or all
references to \`\`Veterans Services Officer\'\' to read \`\`Veterans
Service Center Manager\'\'.

B. Revising all references to \`\`Veterans Services Officers\'\' to read
\`\`Veterans Service Center Managers\'\'.

C. Revising all references to \`\`Veterans Services Officer\'s\'\' to
read \`\`Veterans Service Center Manager\'s\'\'.

D. In Sec. 13.2(a), removing \`\`Office of the Veterans Services
Division\'\', and adding, in its place, \`\`Veterans Service Center\'\'.

E. In Sec. 13.56(b), removing misspelled word \`\`mange\'\', and adding,
in its place, \`\`manage\'\'.

F. In Sec. 13.71(a)(3) and (b), removing \`\`to the Adjudication
Division\'\' wherever it appears.

G. Revising Sec. 13.108.

The revision reads as follows:

Sec. 13.108 Estate equals or exceeds statutory limit; 38 U.S.C.
5503(b)(1).

\(a\) Discontinuance of payments. When a veteran, who is rated
incompetent by VA and has no spouse or child, is receiving hospital
treatment, or domiciliary care, or institutional care by the United
States or any political subdivision, with or without charge, and the
veteran\'s estate equals or exceeds the amount specified in Sec.
3.557(b)(4) of this chapter, the Veterans Service Center Manager will
discontinue VA payments, other than insurance, under the provision of
Sec. 3.557 of this chapter. In those cases in which the payments have
been discontinued, the Veterans Service Center Manager will resume
payments when the estate has been reduced to one half the amount
specified in Sec. 3.557(b)(4) of this chapter.

(b)Waiver of discontinuance of payments. The Veterans Service Center
Manager will determine when discontinuance should be waived. Waiver of
discontinuance of payments under this paragraph may be granted more than
once in any calendar year, but will not exceed a total of 60 days in any
calendar year.

(1) The Veterans Service Center Manager may authorize waiver of
    discontinuance of payments when necessary to avoid hardship.

> \(2\) Hardship will not be considered present when assets are readily
> available to meet current liabilities.

(Authority:) 38 U.S.C. 5503(b)(1)(A))

\(c\) Apportionment award to dependent parent for care and maintenance.
In any case in which a veteran, without spouse or child, is
institutionalized by the United States or a political subdivision
thereof and his or her award of compensation, pension or emergency
officers\' retirement pay has been discontinued because his or her
estate equals or exceeds the amount specified in Sec. 3.557(b)(4) of
this chapter, an apportionment of the award otherwise payable may be
made to a dependent parent based on actual need as determined by the
Veterans Service Center Manager. So much of any monthly remainder of the
discontinued payments as equals the amount charged for his or her
current care and maintenance in the institution in which treatment or
care is furnished may be paid to the institution. This amount may not be
more than the amount determined by the Veterans Service Center Manager
to be the proper charge as fixed by statute or administrative
regulation. The Veterans Service Center Manager will determine the
amount of either award.

(Authority: 38 U.S.C. 5503(b)(2))

\(d\) Death of veteran; personal funds of patient. In the event of the
incompetent veteran\'s death in other than a VA institution, the
Veterans Services Officer should make certain that the provisions of the
pertinent laws are applied as to the gratuitous benefits in Personal
Funds of Patients.

(Authority: 38 U.S.C. 501)

REGULATORY AMENDMENT

3-02-9

Regulation affected: 38 CFR 3.6(a) and (e).

Effective Date of Regulation: July 31, 2002.

Date Secretary Approved Regulation: July 3, 2002.

Federal Register Citation: 67 FR 49584 (July 31, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

VA is amending its adjudication regulations regarding service connection
for disabilities incurred or aggravated during inactive duty for
training. The regulation amending 38 CFR 3.6 to implement Public Law
106-419, November 1, 2000, Veterans Benefits and Health Care Improvement
Act of 2000, used wording slightly different from the wording of the
Act. We are amending the regulation to accurately reflect the wording of
the Act.

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

as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity

Compensation

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\. Section 3.6 is amended by:

A. Removing paragraphs (a)(1) through (a)(3).

B. In paragraph (a), removing \`\`a covered disease which occurred
during such training. For purposes of this section, the term \`covered
disease\' is limited to-\'\', and adding, in its place, \`\`an acute
myocardial infarction, a cardiac arrest, or a cerebrovascular accident
which occurred during such training.\'\' C. Adding paragraph (e)(3)
preceding the authority citation at the end of the section.

The addition reads as follows:

Sec. 3.6 Duty periods.

\* \* \* \* \*

\(e\) \* \* \*

\(3\) For purposes of this section, the term covered disease means any
of the following:

\(i\) An acute myocardial infarction.

\(ii\) A cardiac arrest.

\(iii\) A cerebrovascular accident.

REGULATORY AMENDMENT

3-02-10

Regulation affected: 38 CFR 3.700(a).

Effective Date of Regulation: September 27, 2002.

Applicability dates: The changes will be applied retroactively to
conform to statutory requirements. For more information concerning the
dates of applicability, see the Supplementary Information section of the
regulatory amendment.

Date Secretary Approved Regulation: August 16, 2002.

Federal Register Citation: 67 FR 60867 (September 27, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

VA regulations at 38 CFR 3.700(a)(3) currently state that there is no
prohibition against payment of compensation if a veteran received
nondisability severance pay from the military.

In a precedent opinion (VAOPGCPREC 12-96), VA\'s General Counsel held
that the portion of 38 CFR 3.700(a)(3) which states that there is no
prohibition against payment of compensation to a veteran who received
nondisability severance pay is of no effect because it is inconsistent
with 10 U.S.C. 1174(h)(2), which as added in 1980 by Public Law 96-513,
section 109(c), 94 Stat. 2835, 2870 (1980), requires, effective
September 15, 1981, recoupment of nondisability severance pay from VA
compensation. Therefore, VA is amending 38 CFR 3.700(a)(3) to conform to
the governing statute.

Public Law 104-201 amended 10 U.S.C. 1174(h)(2) to exclude Federal
income tax withheld from payments of separation pay, severance pay and
readjustment pay made after September 30, 1996, from VA recoupment. VA
is amending 38 CFR 3.700(a)(2)(iii), (a)(3), and (a)(5)(i) to conform to
this governing statute. In addition, VA is making nonsubstantive changes
to 38 CFR 3.700 for purposes of clarity. Except with respect to the
amendment relating to income tax, this rule applies to disability
compensation paid after September 14, 1981; the amendment relating to
income tax applies only to payment of separation pay, special separation
benefits under 10 U.S.C. 1174a, severance pay, and readjustment pay made
after September 30, 1996.

While this document updates VA regulations concerning statutes enacted
in 1981 and 1996, VA procedures have adhered to these statutes since
their enactment. This document brings VA regulations into conformance
with VA practice and will not create overpayments in any existing
claims.

For the reasons set forth in the preamble, the Department of Veterans
Affairs amends 38 CFR part 3 as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.700 is amended by:

A. In paragraph (a)(2)(iii), removing \`\`of the total amount\'; adding
two sentences and revising the authority citation at the end of
paragraph (a)(2)(iii).

B. In paragraph (a)(3), in the first sentence, removing \`\`severance
pay is granted,\'\' and adding, in its place, \`\`severance pay is
granted, or where entitlement to disability compensation was established
on or after September 15, 1981,\'\'; removing the fifth sentence; in the
six sentence, removing \`\`Compensation\'\' and adding, in its place,
\`\`Where entitlement to disability compensation was established prior
to September 15, 1981, compensation\'\'; adding three sentences at the
end of paragraph (a)(3); and revising the authority citation at the end
of the paragraph.

C. In paragraph (a)(5), revising the paragraph heading.

D. In paragraph (a)(5)(i), removing \`\`A veteran\'\' and adding, in its
place, \`\`Where entitlement to disability compensation was established
on or after September 15, 1981, a veteran\'; removing \`\`total amount
received as\'\'; adding two sentences at the end of paragraph (a)(5)(i).

E. Revising the authority citation at the end of paragraph (a)(5).

The revisions and additions read as follows:

Sec. 3.700 General.

\* \* \* \* \*

\(a\) \* \* \*

\(2\) \* \* \*

(iii)\* \* \* Where payment of readjustment pay was made on or before
September 30, 1996, VA will recoup from disability compensation an
amount equal to the total amount of readjustment pay. Where payment of
readjustment pay was made after September 30, 1996, VA will recoup from
disability compensation an amount equal to the total amount of
readjustment pay less the amount of Federal income tax withheld from
such pay.

(Authority: 10 U.S.C 1174(h)(2) and 1212(c))

\* \* \* \* \*

\(3\) \* \* \* Where entitlement to disability compensation was
established on or after September 15, 1981, a veteran may receive
disability compensation for disability incurred or aggravated by service
prior to the date of receipt of the severance pay, but VA must recoup
from that disability compensation an amount equal to the severance pay.
Where payment of severance pay was made on or before September 30, 1996,
VA will recoup from disability compensation an amount equal to the total
amount of the severance pay. Where payment of severance pay was made
after September 30, 1996, VA will recoup from disability compensation an
amount equal to the total amount of the severance pay less the amount of
Federal income tax withheld from such pay.

(Authority: 10 U.S.C. 1174(h)(2) and 1212(c))

\* \* \* \* \*

\(5\) Separation pay and special separation benefits. (i) \* \* \* Where
payment of separation pay or special separation benefits under section
1174a was made on or before September 30, 1996, VA will recoup from
disability compensation an amount equal to the total amount of
separation pay or special separation benefits. Where payment of
separation pay or special separation benefits under section 1174a was
made after September 30, 1996, VA will recoup from disability
compensation an amount equal to the total amount of separation pay or
special separation benefits less the amount of Federal income tax
withheld from such pay.

\* \* \* \* \*

(Authority: 10 U.S.C. 1174 and 1174a)

\* \* \* \* \*

REGULATORY AMENDMENT

3-02-11

Regulation affected: 38 CFR 3.1000 (heading) (c) and (d).

Effective Date of Regulation: November 27, 2002.

Date Secretary Approved Regulation: August 21, 2002.

Federal Register Citation: 67 FR 65707 (October 28, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

This document amends the Department of Veterans Affairs (VA)
adjudication regulations dealing with accrued benefits, those benefits
to which an individual was entitled under existing ratings or decisions,
or those based on \`\`evidence in the file at date of death,\'\' which
were due and unpaid at the time the individual died. \`\`Evidence in the
file at date of death\'\' is now interpreted as evidence in VA\'s
possession on or before the date of the beneficiary\'s death, even if
such evidence was not physically located in the VA claims folder on or
before the date of death. Further, \`\`evidence necessary to complete
the application\'\' for accrued benefits is now interpreted as
information necessary to establish that the claimant is within the
category of eligible persons and that circumstances exist which make the
claimant the specific person entitled to the accrued benefits. These
amendments reflect our interpretation of the governing statute.

On March 4, 2002, we published in the Federal Register (67 FR 9638-9640)
a proposed rule to amend the adjudication regulations to define the
terms \`\`evidence in the file at date of death\'\' and \`\`evidence
necessary to complete the application\'\' for the purpose of accrued
benefits.

We are also correcting a technical error we made in the second
amendatory language instruction of the proposed rule. We proposed to
revise \`\`paragraph (d)(4) introductory text,\'\' (emphasis added) 67
FR 9640, whereas we meant to revise paragraph (d)(4) in its entirety
(emphasis added). Despite the error in the amendatory instruction, our
intent was clearly indicated in the SUPPLEMENTARY INFORMATION discussion
of the proposed rule. There, we explained that \`\`38 CFR 3.1000(d)(4)
purports to define \`evidence in the file at date of death,\'\'\' but
rather provides that VA may accept identifying, corroborating, or
verifying information from certain evidence. 67 FR 9639. Further, we
stated that we proposed \`\`to revise Sec. 3.1000(d)(4) to define
\`evidence in the file at the (sic) date of death.\'\'\' 67 FR 9639.
Accordingly, in this final rule, we revise paragraph (d)(4) in its
entirety to conform with the explanation given in the preamble to the
proposed rule.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.1000 is amended by revising the section heading, paragraph
(c)(1), and paragraph (d)(4) , to read as follows:

Sec. 3.1000 Entitlement under 38 U.S.C. 5121 to benefits due and unpaid
upon death of a beneficiary.

\* \* \* \* \*

\(c\) \* \* \*

(1) If an application for accrued benefits is incomplete because the
    claimant has not furnished information necessary to establish that
    he or she is within the category of eligible persons under the
    provisions of paragraphs (a)(1) through (a)(4) or paragraph (b) of
    this section and that circumstances exist which make the claimant
    the specific person entitled to payment of all or part of any
    benefits which may have accrued, VA shall notify the claimant:

\(i\) Of the type of information required to complete the application;

\(ii\) That VA will take no further action on the claim unless VA
receives the required information; and

\(iii\) That if VA does not receive the required information within 1
year of the date of the original VA notification of information
required, no benefits will be awarded on the basis of that application.

\* \* \* \* \*

\(d\) \* \* \*

\(4\) Evidence in the file at date of death means evidence in VA\'s
possession on or before the date of the beneficiary\'s death, even if
such evidence was not physically located in the VA claims folder on or
before the date of death.

\* \* \* \* \*

REGULATORY AMENDMENT

3-02-12

Regulation affected: 38 CFR 3.307 (a), (c), and (d) and 3.309(a).

Effective Date of Regulation: November 7, 2002.

Date Secretary Approved Regulation: September 9, 2002.

Federal Register Citation: 67 FR 67792 (November 7, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 1112(a), 38 U.S.C., states that, \`\`a chronic disease becoming
manifest to a degree of 10 percent or more within one year from the date
of separation from such service \* \* \* shall be considered to have
been incurred in or aggravated by such service, notwithstanding there is
no record of evidence of such disease during the period of service.\'\'

In the VA General Counsel Precedent Opinion 14-98 (VAOPGCPREC 14-98
(October 2, 1998)), the General Counsel held that Section 1112(a) of
title 38, United States Code, does not establish a presumption of
aggravation for a chronic disease that existed prior to service but
first became manifest to a compensable degree within the presumptive
period following service.

In [Splane v. West]{.underline}, 216 F. 3d 1058 (2000), the United
States Court of Appeals for the Federal Circuit concluded, among other
things, that the General Counsel\'s interpretation of 38 U.S.C. 1112(a)
was not in accordance with law and was therefore in excess of statutory
authority. The Court held that 38 U.S.C. 1112(a) establishes not only a
presumption of service incurrence for chronic diseases first manifest

after service, but also a presumption of aggravation for chronic
diseases that existed prior to service but first became manifest to a
degree of disability of 10 percent or more within the presumption period
after service. The Court vacated that portion of the General Counsel
Precedent Opinion which interpreted 38 U.S.C. 1112(a).

VA regulations currently prohibit establishing service connection for
aggravation of a preexisting chronic disease that first becomes manifest
to a degree of 10 percent or more following discharge from military
service. This prohibition is inconsistent with the statute as
interpreted by the United States Court of Appeals for the Federal
Circuit. Therefore, we are amending 38 CFR 3.307(a), (c), (d), and
3.309(a), to conform to the plain language of the statute and the
conclusions of the Court.

Presently, 38 CFR 3.307(a), (c), and (d) provide only for a presumption
of service incurrence. Accordingly, it is necessary to revise those
paragraphs to include a presumption of aggravation. 38 CFR 3.307(d)
currently states the factors to be considered in determining whether the
presumption of service incurrence has been rebutted. The current
regulation is based on the invalid conclusion that the presumption is
one of service incurrence only. This provision is inconsistent with
Splane because Splane establishes that 38 U.S.C. 1112(a) includes a
presumption of aggravation of pre-existing diseases that were not
incurred in service. Accordingly, it is necessary to revise 38 CFR
3.307(d) to state separately the criteria for rebutting the presumption
of service incurrence (in cases where the chronic disease did not exist
prior to service) and the criteria for rebutting the presumption of
aggravation (in cases where the chronic disease did exist prior to
service).

A current VA regulation, 38 CFR 3.306(a), provides that a presumption of
aggravation based on an increase in the severity of a preexisting
condition during service may be rebutted by evidence that the increase
was due to the natural progress of the disease. Additionally, section
1113(a) of title 38, United States Code, indicates that a presumption of
service connection based on manifestations of disability subsequent to
service may be rebutted by affirmative evidence to the contrary or
evidence to establish that such disability is due to an intercurrent
disease or injury suffered after separation from service. We are
revising Sec. 3.307(d) to reflect these principles. Although Splane did
not discuss the criteria for rebutting the presumption of aggravation,
we believe that inclusion of these rebuttal standards is necessary to
the implementation of that decision.

For the reasons set forth in the preamble, the Department of Veterans
Affairs amends 38 CFR part 3 as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity

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\. Section 3.307 is amended by:

A. In paragraph (a) introductory text, removing \`\`incurred in\'\' and
adding, in its place, \`\`incurred in or aggravated by\'\'.

B. In paragraph (c), removing the last sentence \`\`The consideration of
service incurrence provided for chronic diseases will not be interpreted
to permit any presumption as to aggravation of a preservice disease or
injury after discharge.\'\'.

C. Revising paragraph (d) and the authority citation at the end of the
section.

The revision reads as follows:

Sec. 3.307 Presumptive service connection for chronic, tropical or
prisoner-of-war related disease, or disease associated with exposure to
certain herbicide agents; wartime and service on or after January 1,
1947.

\* \* \* \* \*

(d) Rebuttal of service incurrence or aggravation.

\(1\) Evidence which may be considered in rebuttal of service incurrence
of a disease listed in Sec. 3.309 will be any evidence of a nature
usually accepted as competent to indicate the time of existence or
inception of disease, and medical judgment will be exercised in making
determinations relative to the effect of intercurrent injury or disease.
The expression \`\`affirmative evidence to the contrary\'\' will not be
taken to require a conclusive showing, but such showing as would, in
sound medical reasoning and in the consideration of all evidence of
record, support a conclusion that the disease was not incurred in
service. As to tropical diseases the fact that the veteran had no
service in a locality having a high incidence of the disease may be
considered as evidence to rebut the presumption, as may residence during
the period in question in a region where the particular disease is
endemic. The known incubation periods of tropical diseases should be
used as a factor in rebuttal of presumptive service connection as
showing inception before or after service.

\(2\) The presumption of aggravation provided in this section may be
rebutted by affirmative evidence that the preexisting condition was not
aggravated by service, which may include affirmative evidence that any
increase in disability was due to an intercurrent disease or injury
suffered after separation from service or evidence sufficient, under
Sec. 3.306 of this part, to show that the increase in disability was due
to the natural progress of the preexisting condition.

(Authority: 38 U.S.C 1113 and 1153)

Sec. 3.309 \[Amended\]

3\. Section 3.309(a) is amended by removing \`\`incurred in\'\' and
adding, in its place, \`\`incurred in or aggravated by\'\'.

REGULATORY AMENDMENT

3-03-1

Regulations affected: 38 CFR 3.3, 3.307, 3.317, 3.353, 3.400, 3.452,
3.454, 3.501, 3.551, 3.552, 3.557, 3.558, 3.559, 3.665, 3.666, 3.801,
3.852, 3.1007, 13.70, 13.71, 13.74, 13.75, 13.76, 13.77, 13.108 and
13.109.

Effective Date of Regulation: The amendments to 38 CFR 3.3 are effective
September 17, 2001. The amendment to 38 CFR 3.307(a)(6)(ii) is effective
January 1, 2002. The amendment to 38 CFR 3.307(a)(6)(iii) is effective
December 27, 2001. The amendments to 38 CFR 3.317 are effective March 1,
2002. The amendments to 38 CFR 3.353, 3.400, 3.452, 3.454, 3.501, 3.551,
3.552, 3.557-3.559, 3.801, 3.852, 3.1007, 13.70, 13.71, 13.74, 13.75,
13.76, 13.77, 13.108 and 13.109 are effective December 27, 2001. The
amendment to 38 CFR 3.665(c) is effective April 1, 2002. The addition of
38 CFR 3.665(n) is effective December 27, 2001. The addition of 38 CFR
3.666(e) is effective December 27, 2001.

Date Secretary Approved Regulation: March 10, 2003.

Federal Register Citation: 68 FR 34539-43(June 10, 2002).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

On December 27, 2001, the President signed into law the Veterans
Education and Benefits Expansion Act of 2001, Pub. L. 107-103 (the Act).
Several provisions of the Act directly affect the payment of VA
compensation or pension benefits. These provisions concern presumptions
based on herbicide exposure in Vietnam, Gulf War veterans' chronic
disabilities, the repeal of the limitation of benefits for incompetent
institutionalized veterans, non-service-connected pension eligibility,
the extension of the limitation on pension for certain recipients of
Medicaid-covered nursing home care, the prohibition on certain benefits
to fugitive felons, and a limitation on the payment of compensation for
certain veterans remaining incarcerated since October 7, 1980.

The pertinent text from the final regulatory amendment is as follows:

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

SUMMARY: This document amends the Department of Veterans Affairs (VA)
adjudication regulations and its Veterans Benefit Administration
fiduciary activities regulations to reflect statutory provisions of the
Veterans Education and Benefits Expansion Act of 2001. These changes
address the presumption of service connection for respiratory cancers
based on herbicide exposure in Vietnam; benefits for Gulf War veterans\'
chronic disabilities; repeal of the limitation of benefits for
incompetent institutionalized veterans; non-service-connected pension
eligibility; the limitation on pension for certain recipients of
Medicaid-covered nursing home care; the prohibition on certain benefits
to fugitive felons; and the limitation on the payment of compensation
for veterans remaining incarcerated since October 7, 1980. This document
also makes nonsubstantive changes for purposes of clarity and
miscellaneous technical amendments in those regulations.

SUPPLEMENTARY INFORMATION: On December 27, 2001, the Veterans Education
and Benefits Expansion Act of 2001, Public Law 107-103 (the Act), was
enacted. Several provisions of the Act directly affect the payment of VA
compensation or pension benefits. These provisions concern presumptions
based on herbicide exposure in Vietnam, Gulf War veterans\'

chronic disabilities, the repeal of the limitation of benefits for
incompetent institutionalized veterans, non-service-connected pension
eligibility, the extension of the limitation on pension for certain
recipients of Medicaid-covered nursing home care, the prohibition on
certain benefits to fugitive felons and their dependents, and a
limitation on the payment of compensation for certain veterans remaining
incarcerated since October 7, 1980.

Section 201 of the Act amended 38 U.S.C. 1116(a)(2)(F) to eliminate the
requirement that respiratory cancer (cancers of the lung, bronchus,
larynx, trachea) become manifest within 30 years of the veteran\'s
departure from Vietnam to qualify for the presumption of service
connection based on exposure to herbicides such as Agent Orange. Section
201 also expanded the presumption of exposure to herbicides to include
all Vietnam veterans, not just those who have a disease on the
presumptive list in 38 U.S.C. 1116(a)(2) and 38 CFR 3.309(e). In this
document we are amending 38 CFR 3.307 to reflect these changes. In
addition, section 201 added Type 2 diabetes to the presumptive list in
38 U.S.C. 1116(a)(2). This disease had previously been added to VA\'s
list in 38 CFR 3.309(e).

Section 202(a) of the Act amended 38 U.S.C. 1117 to expand the
definition of \`\`qualifying chronic disability\'\' (for service
connection) to include not only a disability resulting from an
undiagnosed illness as stated in prior law, but also any diagnosed
illness that the Secretary determines in regulations warrants a
presumption of service-connection under 38 U.S.C. 1117(d). Weare
amending Sec. 3.317 to reflect that change.

Section 202(a) also expanded the definition of \`\`qualifying chronic
disability\'\' to include a \`\`medically unexplained chronic
multisymptom illness (such as chronic fatigue syndrome, fibromyalgia,
and irritable bowel syndrome) that is defined by a cluster of signs or
symptoms.\'\' We believe this provision may be difficult for VA
adjudicators to understand and apply consistently due to the highly
technical medical aspects of the task of determining whether an illness
meets the criteria of \`\`medically unexplained chronic multisymptom
illness \* \* \* that is defined by a cluster of signs or symptoms.\'\'
Therefore this rulemaking clarifies this category of illnesses by
defining the term \`\`medically unexplained chronic multisymptom
illness\'\' in new Sec. 3.317(a)(2)(ii) to mean \`\`a diagnosed illness
without conclusive pathophysiology or etiology, that is characterized by
overlapping symptoms and signs and has features such as fatigue, pain,
disability out of proportion to physical findings, and inconsistent
demonstration of laboratory abnormalities.\'\' We also state:
\`\`Chronic multisymptom illnesses of partially understood etiology and
pathophysiology will not be considered medically unexplained.\'\'

This definition is based on the Joint Explanatory Statement for H.R.
1291, the Veterans Education and Benefits Expansion Act of 2001,
December 13, 2001, 147 CR 13235 at 13238, which said \`\`it is the
intent of the Committees to ensure eligibility for chronically disabled
Gulf War veterans not withstanding \[sic\] a diagnostic label by a
clinician in the absence of conclusive pathophysiology or etiology.\'\'
The Joint Explanatory Statement also stated, \`\`The compromise
agreement\'s definition \[of medically unexplained chronic multisymptom
illness \* \* \* that is defined by a cluster of signs or symptoms\]
encompasses a variety of unexplained clinical conditions, characterized
by overlapping symptoms and signs, that share features such as fatigue,
pain, disability out of proportion to physical findings, and
inconsistent demonstration of laboratory abnormalities.\'\' Id. The
Joint Explanatory Statement also said, \`\`The Committees do not intent
\[sic\] this definition to assert that the cited syndromes can be
clinically or scientifically linked to Gulf War service based on current
evidence, nor do they intend to include chronic multisymptom illnesses
of partially understood etiology and pathophysiology such as diabetes or
multiple sclerosis.\'\' Id. We are incorporating this guidance into our
regulatory criteria for what constitutes such an illness.

The Joint Explanatory Statement also said, \`\`By listing the first
three diagnoses as examples, it is the Committees\' intend \[sic\] to
give guidance to the Secretary rather than limit eligibility for
compensation based upon other similarly described conditions that may be
defined or redefined in the future.\'\' Id. We believe that Congress
intended that the Secretary have the authority to decide which illnesses
satisfy the criteria and to add to this list as he or she becomes aware
of them (through advances in medical or other scientific knowledge). As
yet, VA has not identified any illness other than the three identified
in section 202(a) as a \`\`medically unexplained chronic multisymptom
illness,\'\' and we therefore specify in new Sec. 3.317(a)(2)(i)(B)(1)
through (3) only chronic fatigue syndrome, fibromyalgia, and irritable
bowel syndrome as currently meeting this definition. We also provide in
new Sec. 3.317(a)(2)(i)(B)(4) that the list may be expanded in the
future when the Secretary determines that other illnesses meet the
criteria for a \`\`medically unexplained chronic multisymptom
illness.\'\'

In addition, section 202(b) changed the phrase \`\`Neurological signs or
symptoms\'\' to \`\`Neurological signs and symptoms,\'\' and we are
amending 38 CFR 3.317 accordingly.

Section 204 of the Act amended 38 U.S.C. 5503 to eliminate the
withholding of benefits for incompetent, institutionalized veterans
without dependents. This document therefore removes the VA regulations
on this type of withholding (38 CFR 3.557, 3.559, 13.74 through 13.77,
and 13.108), and amends Sec. 3.558, to reflect this change. This
document amends Sec. 3.852 to remove the references to institutional
awards made under 38 U.S.C. 5503(b). (This document also clarifies that
the authority for VA to pay benefits to an institution housing an
incompetent veteran is 38 U.S.C. 5502.)

In addition, this document generally removes the references to Sec. Sec.
3.557, 3.559, and 13.108 that are found in title 38. Specifically, this
document removes the references to 38 CFR 3.557 contained in 38 CFR
3.353, 3.400, 3.452, 3.454, 3.501, 3.551, 3.552, 3.801, and 3.853. (We
are also changing the heading of Sec. 3.452 to more clearly explain the
purpose of that regulation.)

We have retained, however, the references to Sec. 3.557 in Sec. Sec.
3.558, 3.1003, and 3.1007. Although Public Law 107-103 repealed former
38 U.S.C. 5503(b), the new statute does not require distribution of
funds that were properly withheld by VA while former 38 U.S.C. 5503(b)
remained in effect, until such time as the veteran regains competency.
Also, VA is not obligated under Public Law 107-103 to distribute funds
properly withheld under former section 5503(b) to a veteran\'s survivors
in the event that the veteran dies without regaining competency.

This document removes the reference to 38 CFR 3.559 contained in 38 CFR
3.551. This document removes the references to 38 CFR 13.108 contained
in 38 CFR 13.70 and 13.71.

We are removing 38 CFR 13.109 because the provisions of that section
only pertain to former section 5503(b) and/or former 38 U.S.C. 5505.
Section 5505 expired September 30, 1992 (38 U.S.C. 5505(c)), and was
later repealed by the Veterans\' Benefits Improvements Act of 1994,
Public Law 103-446, section 1201(g)(4)(A), 108 Stat. 4645, 4687.

Section 206 of the Act amended 38 U.S.C. 1502(a) to authorize VA to
consider a veteran to be permanently and totally disabled for the
purposes of non-service-connected disability pension if the veteran is:
a patient in a nursing home for long-term care due to disability, or
determined to be disabled for purposes of Social Security Administration
benefits. This document amends 38 CFR 3.3 to reflect these changes, as
well as to reflect expressly the other bases already contained in
section 1502(a) for considering persons to be totally and permanently
disabled.

Section 207 of the Act added a new 38 U.S.C. 1513, under which a veteran
who is age 65 or over and meets the military service and income/net
worth requirements for non-service-connected pension is eligible for
pension without regard to whether the veteran is permanently and totally
disabled. This document amends 38 CFR 3.3 to reflect that change.

Section 504 of the Act amended 38 U.S.C. 5503 to extend the \$90
limitation on pension for certain recipients of Medicaid-covered nursing
home care to September 30, 2011. This document amends 38 CFR 3.551 to
reflect this change.

Section 505 of the Act added a new 38 U.S.C. 5313B to prohibit the
payment of benefits to a veteran while he or she is a fugitive felon or
to a veteran\'s dependent while the veteran or the dependent is a
fugitive felon. This amendment includes definitions of the terms
\`\`fugitive felon\'\' and \`\`felony.\'\' The amendment\'s prohibition
applies to compensation, dependency and indemnity compensation, pension,
medical care, life insurance, vocational rehabilitation, and education
benefits. This document amends 38 CFR 3.665 and 38 CFR 3.666 to reflect
this change, including by changing the heading of each of those
sections. We are changing the heading of Sec. 3.665 from \`\`Penal
institutions\--compensation\'\' to \`\`Incarcerated beneficiaries and
fugitive felons\--compensation,\'\' which we believe more clearly
identifies the content of that section. For the same reason, we are
changing the heading of Sec. 3.666 from \`\`Penal
institutions\--pension\'\' to \`\`Incarcerated beneficiaries and
fugitive felons\--pension.\'\'

Section 506 of the Act amended 38 U.S.C. 5313 to extend its current
limitations on payment of compensation benefits to incarcerated veterans
to also apply to any veteran who is entitled to compensation and who on
October 7, 1980, was incarcerated in a Federal, State, or local penal
institution for a felony committed before that date; and remains so
incarcerated for conviction of that felony as of December 27, 2001, the
date of enactment of the Act. This document amends 38 CFR 3.665 to
reflect this change. We are also removing the phrase \`\`, or prior to
October 7, 1980,\'\' from 38 CFR 3.341(b) (referring to veterans rated
as unemployable prior to October 7, 1980) since it is now obsolete.

\* \* \*

For the reasons set forth in the preamble, 38 CFR parts 3 and 13 are
amended as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.3 is amended by:

A. Removing the authority citation following paragraph (a)(3)(v),
redesignating paragraphs (a)(3)(v) and (a)(3)(vi) as new paragraphs

(a)(3)(vi)(B) introductory text and (a)(3)(v), respectively.

B. Adding new paragraphs (a)(3)(vi)(A) and (a)(3)(vi)(B)(1) through (4).

C. In newly redesignated paragraph (a)(3)(v), removing \`\`Sec.
3.23.\'\' and adding, in its place, \`\`Sec. 3.23; and\'\'.

D. In newly redesignated paragraph (a)(3)(vi)(B) introductory text,
removing \`\`misconduct; and\'\' and adding, in its place,
\`\`misconduct. For purposes of this paragraph, a veteran is considered
permanently and totally disabled if the veteran is any of the
following:\'\'. The additions read as follows:

Sec. 3.3 Pension.

\* \* \* \* \*

\(a\) \* \* \*

\(3\) \* \* \*

(vi)(A) Is age 65 or older; or

\(B\) \* \* \*

\(1\) A patient in a nursing home for long-term care because of
disability; or

\(2\) Disabled, as determined by the Commissioner of Social Security for
purposes of any benefits administered by the Commissioner; or

\(3\) Unemployable as a result of disability reasonably certain to
continue throughout the life of the person; or

\(4\) Suffering from: (i) Any disability which is sufficient to render
it impossible for the average person to follow a substantially gainful
occupation, but only if it is reasonably certain that such disability
will continue throughout the life of the person; or

\(ii\) Any disease or disorder determined by VA to be of such a nature
or extent as to justify a determination that persons suffering from that
disease or disorder are permanently and totally disabled.

(Authority: 38 U.S.C. 1502(a), 1513, 1521, 1522)

\* \* \* \* \*

Sec. 3.307 \[Amended\]

3\. Section 3.307 is amended by:

A. In paragraph (a)(6)(ii), removing \`\`, and respiratory cancers
within 30 years,\'\'.

B. In paragraph (a)(6)(iii), removing \`\`and has a disease listed at
Sec. 3.309(e)\'\' and adding, in its place, a comma.

4\. Section 3.317 is amended by:

A. In paragraph (a)(1) introductory text, removing \`\`shall\'\' and
adding, in its place, \`\`will\'\', and removing \`\`chronic disability
resulting from an illness or combination of illnesses manifested by one
or more signs or symptoms such as those listed in paragraph (b) of this
section\'\' and adding, in its place, \`\`a qualifying chronic
disability\'\'.

B. Redesignating paragraphs (a)(2) through (a)(5) as paragraphs (a)(3)
through (a)(6), respectively.

C. Adding a new paragraph (a)(2).

D. In paragraph (b) introductory text, removing \`\`undiagnosed
illness\'\' and adding, in its place, \`\`undiagnosed illness or
medically unexplained chronic multisymptom illness\'\'.

E. In paragraph (b)(6), removing \`\`or\'\' and adding, in its place,
\`\`and\'\'

F. In paragraph (d)(1), removing \`\` \`\`Persian Gulf veteran\'\' \'\'
and adding, in its place, \`\`Persian Gulf veteran\'\'.

The addition reads as follows:

Sec. 3.317 Compensation for disabilities occurring in Persian Gulf War
veterans.

\(a\) \* \* \*

(2)(i) For purposes of this section, a qualifying chronic disability
means a chronic disability resulting from any of the following (or any
combination of the following):

\(A\) An undiagnosed illness;

\(B\) The following medically unexplained chronic multisymptom illnesses
that are defined by a cluster of signs or symptoms:

\(1\) Chronic fatigue syndrome;

\(2\) Fibromyalgia;

(3)Irritable bowel syndrome; or

\(4\) Any other illness that the Secretary determines meets the criteria
in paragraph (a)(2)(ii) of this section for a medically unexplained
chronic multisymptom illness; or (C) Any diagnosed illness that the
Secretary determines in regulations prescribed under 38 U.S.C. 1117(d)
warrants a presumption of service-connection.

\(ii\) For purposes of this section, the term medically unexplained
chronic multisymptom illness means a diagnosed illness without
conclusive pathophysiology or etiology, that is characterized by
overlapping symptoms and signs and has features such as fatigue, pain,
disability out of proportion to physical findings, and inconsistent
demonstration of laboratory abnormalities. Chronic multisymptom
illnesses of partially understood etiology and pathophysiology will not
be considered medically unexplained.

\* \* \* \* \*

Sec. 3.341 \[Amended\]

8\. Section 3.341 is amended by:

A. In paragraph (b), removing \`\`, or prior to October 7, 1980,\'\' and
removing \`\`required the\'\' and adding, in its place, \`\`required,
the\'\'.

B. In paragraph (c), removing \`\`Division\'\' and adding, in its place,
\`\`Service\'\'.

Sec. 3.353 \[Amended\]

9\. Section 3.353(b)(1) is amended by removing \`\`the discontinuance
and payment of amounts withheld because of an estate that equals or
exceeds the amount specified in Sec. 3.557(b)(4),\'\'.

10\. Section 3.400 is amended by revising the headings of paragraphs
(b)(1) and (e) to read as follows:

Sec. 3.400 General.

\* \* \* \* \*

\(b\) \* \* \*

\(1\) Disability pension (Sec. 3.3).

\* \* \* \* \*

\(e\) Apportionment (Sec. Sec. 3.450 through 3.461, 3.551).

\* \* \* \* \*

11\. Section 3.452 is amended by:

A. Revising the section heading.

B. In paragraph (c)(1), removing \`\`(c)(3)\'\' and adding, in its
place, "c)(2)".

C. Removing paragraph (c)(2).

D. Redesignating paragraph (c)(3) as new paragraph (c)(2).

E. Revising the authority citation at the end of new paragraph (c)(2).

F. In the Cross References, removing \`\`Incompetents; estate equals or
exceeds statutory limit and institutionalized. See Sec. 3.557.\'\'

The revisions read as follows:

Sec. 3.452 Situations when benefits may be apportioned.

\* \* \* \* \*

(Authority: 38 U.S.C. 501(a); 5307; 5503(a)).

\* \* \* \* \*

Sec. 3.454 \[Amended\]

12\. Section 3.454 is amended by removing paragraphs (c) and (d) and
their authority citations, respectively.

Sec. 3.501 \[Amended\]

13\. Section 3.501 is amended by removing paragraph (i)(7).

14\. Section 3.551 is amended by:

A. In paragraph (a) introductory text, removing \`\`and for
discontinuance of awards for incompetent veterans in Sec. 3.557\'\' and
removing \`\`3.559\'\' and adding, in its place, \`\`3.556\'\'.

B. In paragraph (i), removing \`\`September 30, 2008,\'\' and adding, in
its place, \`\`September 30, 2011,\'\'.

C. In the Cross References, removing \`\`Incompetents; hospitalized. See
Sec. 3.557.\'\'

D. Adding authority citations at the end of paragraphs (a) and (b).

The additions read as follows:

Sec. 3.551 Reduction because of hospitalization.

\(a\) \* \* \*

(Authority: 38 U.S.C. 5503(a))

\(b\) \* \* \*

(Authority: 38 U.S.C. 5503(a))

\* \* \* \* \*

Sec. 3.552 \[Amended\]

15\. Section 3.552(a)(2) is amended by removing \`\`and Sec. 3.557\'\'.

Sec. 3.557 \[Removed and Reserved\]

16\. Section 3.557 is removed and reserved.

Sec. 3.558 \[Amended\]

17\. Section 3.558 is amended by

A. Removing paragraph (a).

B. Redesignating paragraphs (b) and (c) as paragraphs (a) and (b),
respectively.

C. In newly redesignated paragraph (b), removing \`\`Sec. 3.557(b)\'\'
both times it appears and adding, in its place, \`\`former Sec. 3.557(b)
(as in effect prior to December 27, 2001)\'\'.

Sec. 3.559 \[Removed and Reserved\]

18\. Section 3.559 is removed and reserved.

19\. Section 3.665 is amended by:

A. Revising the section heading.

B. In paragraph (a), in the first sentence, removing \`\`shall not\'\'
and adding, in its place, \`\`will not\'\'; in the second sentence,
removing \`\`A\'\' and adding, in its place, \`\`VA will inform a\'\'
and removing \`\`shall be informed\'\'; in the third sentence, removing
\`\`addition,\'\' and adding, in its place, \`\`addition, VA will also
notify\'\', removing \`\`shall also be notified\'\', and removing
\`\`the Department of Veterans Affairs\'\' and adding, in its place,
\`\`VA\'\'; and at the end of the paragraph, adding a sentence.

C. Adding paragraph (c)(3).

D. Removing the authority citation following paragraph (m).

E. Adding paragraph (n).

The revision and additions read as follows:

Sec. 3.665 Incarcerated beneficiaries and fugitive
felons\--compensation.

\(a\) \* \* \* However, no apportionment will be made if the veteran or
the dependent is a fugitive felon as defined in paragraph (n) of this
section.

\* \* \* \* \*

\(c\) \* \* \*

\(3\) A veteran who, on October 7, 1980, was incarcerated in a Federal,
State, or local penal institution for a felony committed before that
date, and who remains so incarcerated for a conviction of that felony as
of December 27, 2001.

\* \* \* \* \*

\(n\) Fugitive felons.

\(1\) Compensation is not payable on behalf of a veteran for any period
during which he or she is a fugitive felon. Compensation or DIC is not
payable on behalf of a dependent of a veteran for any period during
which the veteran or the dependent is a fugitive felon.

\(2\) For purposes of this section, the term fugitive felon means a
person who is a fugitive by reason of:

\(i\) Fleeing to avoid prosecution, or custody or confinement after
conviction, for an offense, or an attempt to commit an offense, which is
a felony under the laws of the place from which the person flees; or

\(ii\) Violating a condition of probation or parole imposed for
commission of a felony under Federal or State law.

\(3\) For purposes of paragraph (n) of this section, the term felony
includes a high misdemeanor under the laws of a State which
characterizes as high misdemeanors offenses that would be felony
offenses under Federal law.

\(4\) For purposes of paragraph (n) of this section, the term dependent
means a spouse, surviving spouse, child, or dependent parent of a
veteran.

(Authority: 38 U.S.C. 501(a), 5313, 5313B; Sec. 506, Pub. L. 107-103,
115 Stat. 996-997)

20\. Section 3.666 is amended by:

A. Revising the section heading.

B. In the introductory text, removing \`\`Where\'\' and adding, in its
place, \`\`If\'\'; removing \`\`Payments\'\' and adding, in its place,
\`\`However, no apportionment will be made if the veteran or the
dependent is a fugitive felon as defined in paragraph (e) of this
section. Payments\'\', and removing \`\`received in\'\' and adding, in
its place, \`\`received by\'\'.

C. Adding paragraph (e).

The revision and additions read as follows:

Sec. 3.666 Incarcerated beneficiaries and fugitive felons\--pension.

\* \* \* \* \*

\(e\) Fugitive felons.

\(1\) Pension is not payable on behalf of a veteran for any period
during which he or she is a fugitive felon. Pension or death pension is
not payable on behalf of a dependent of a veteran for any period during
which the veteran or the dependent is a fugitive felon.

\(2\) For purposes of this section, the term fugitive felon means a
person who is a fugitive by reason of:

\(i\) Fleeing to avoid prosecution, or custody or confinement after
conviction for an offense, or an attempt to commit an offense, which is
a felony under the laws of the place from which the person flees; or

\(ii\) Violating a condition of probation or parole imposed for
commission of a felony under Federal or State law.

\(3\) For purposes of paragraph (e) of this section, the term felony
includes a high misdemeanor under the laws of a State which
characterizes as high misdemeanors offenses that would be felony
offenses under Federal law.

\(4\) For purposes of paragraph (e) of this section, the term dependent
means a spouse, surviving spouse, child, or dependent parent of a
veteran.

(Authority: 38 U.S.C. 501(a), 5313, 5313B)

21\. Section 3.801 is amended by:

A. In paragraph (e), removing \`\`Sec. Sec. 3.551 and 3.557\'\' and
adding, in its place, \`\`Sec. 3.551\'\'.

B. Adding an authority citation at the end of the section. The addition
reads as follows:

Sec. 3.801 Special acts.

\* \* \* \* \*

(Authority: 38 U.S.C. 501(a), 5503)

22\. Section 3.852 is amended by:

A. In paragraph (a)(2), removing the semicolon and adding, in its place,
a period.

B. Removing paragraph (a)(3).

C. Revising the authority citation at the end of paragraph (a).

D. Removing paragraph (d), and redesignating paragraph (e) as paragraph
(d).

The revision reads as follows:

Sec. 3.852 Institutional awards.

\(a\) \* \* \*

(Authority: 38 U.S.C. 501(a); 5307; 5502)

\* \* \* \* \*

Sec. 3.853 \[Amended\]

23\. Section 3.853 is amended by removing paragraph (d)..

24\. Section 3.1007 is amended by:

A. Removing \`\`under Sec. 3.557(b)\'\' and adding, in its place,
\`\`under former Sec. 3.557(b) (as applicable prior to December 27,
2001)\'\'.

B. Removing \`\`the amount specified in Sec. 3.557(b)(4)\'\' and adding,
in its place, \`\`the statutory maximum\'\'.

C. Revising the authority citation at the end of the section.

The revision reads as follows:

Sec. 3.1007 Hospitalized incompetent veterans.

\* \* \* \* \*

(Authority: 38 U.S.C. 5503)

PART 13\--VETERANS BENEFITS ADMINISTRATION, FIDUCIARY ACTIVITIES

25\. The authority citation for part 13 continues to read as follows:

Authority: 72 Stat. 1114, 1232, as amended, 1237; 38 U.S.C. 501, 5502,
5503, 5711, unless otherwise noted.

26\. Section 13.70 is amended by:

A. Redesignating paragraph (a)(1) as paragraph (a) and removing
paragraph (a)(2).

B. Adding an authority citation at the end of the section. The addition
reads as follows:

Sec. 13.70 Apportionment of benefits to dependents.

\* \* \* \* \*

REGULATORY AMENDMENT

3-03-2

Regulations affected: 38 CFR § 3.309(c).

Effective Date of Regulation: July 18, 2003.

Date Secretary Approved Regulation: July 2, 2003.

Federal Register Citation: 68 FR 42602 (July 18, 2003).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

VA presumes entitlement to service connection for certain diseases, even
if there was no record in service, in former prisoners of war (POWs) who
were interned or detained for at least 30 days. VA has added cirrhosis
of the liver to the current list of 15 diseases for which service
connection is presumed for former POWs because scientific and medical
research shows a higher risk of death from cirrhosis in former WWII POWs
than in the general population.

The pertinent text from the final regulatory amendment is as follows:

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.309 (c) is amended by adding \"Cirrhosis of the liver.\"
Following \"Peripheral neuropathy except where directly related to
infectious causes.\" And before the explanatory note.

Regulatory Amendment

3-03-3

Regulations affected: 38 CFR §3.309.

Effective Date of Regulation: October 16, 2003.

Date Secretary Approved Regulation: August 27, 2003.

Federal Register Citation: 68 FR 59540 (October 16, 2003).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

Section 3 of the Agent Orange Act of 1991, Pub. L. 102-4, 105 Stat. 11,
directed the Secretary to seek to enter into an agreement with the
National Academy of Sciences (NAS) to review and summarize the
scientific evidence concerning the association between exposure to
herbicides used in support of military operations in the Republic of
Vietnam during the Vietnam era and each disease suspected to be
associated with such exposure. Congress mandated that NAS determine, to
the extent possible: (1) Whether there is a statistical association
between the suspect diseases and herbicide exposure, taking into account
the strength of the scientific evidence and the appropriateness of the
methods used to detect the association; (2) the increased risk of
disease among individuals exposed to herbicides during service in the
Republic of Vietnam during the Vietnam era; and (3) whether there is a
plausible biological mechanism or other evidence of a causal
relationship between herbicide exposure and the suspect disease. Section
3 of Pub. L. 102-4 also required that NAS submit reports on its
activities every 2 years (as measured from the date of the first report)
for a 10-year period.

Section 1116(b) of title 38, United States Code, as enacted by the Agent
Orange Act of 1991, Pub. L. 102-4, provides that whenever the Secretary
determines, based on sound medical and scientific evidence, that a
positive association (i.e., the credible evidence for the association is
equal to or outweighs the credible evidence against the association)
exists between exposure of humans to an herbicide agent (i.e., a
chemical in an herbicide used in support of the United States and allied
military operations in the Republic of Vietnam during the Vietnam era)
and a disease, the Secretary will publish regulations establishing
presumptive service connection for that disease. If the Secretary
determines that a presumption of service connection is not warranted, he
is to publish a notice of that determination, including an explanation
of the scientific basis for that determination. The Secretary\'s
determination must be based on consideration of the NAS reports and all
other sound medical and scientific information and analysis available to
the Secretary.

Although 38 U.S.C. 1116(b) does not define "credible", it does instruct
the Secretary to "take into consideration whether the results \[of any
study\] are statistically significant, are capable of replication, and
withstand peer review." Simply comparing the number of studies which
report a positive relative risk to the number of studies which report a
negative relative risk for a particular condition is not a valid method
for determining whether the weight of evidence overall supports a
finding that there is or is not a positive association between herbicide
exposure and the subsequent development of the particular condition.
Because of differences in statistical significance, confidence levels,
control for confounding factors, bias, and other pertinent
characteristics, some studies are clearly more credible than others, and
the Secretary has given the more credible studies more weight in
evaluating the overall weight of the evidence concerning specific
diseases.

Section 2 of the Agent Orange Act of 1991, Public Law 102-4, provided
that the Secretary\'s authority to establish presumptions of service
connection under 38 U.S.C. 1116(b) would expire 10 years after the first
day of the fiscal year in which the NAS transmitted its first report to
VA. The first NAS report was transmitted to VA in July 1993, during the
fiscal year that began on October 1, 1992. Accordingly, under the Agent
Orange Act of 1991, Public Law 102-4, VA\'s authority to issue
regulatory presumptions as specified in section 1116(b) expired on
September 30, 2002. In December 2001, however, Congress enacted the
Veterans Education and Benefits Expansion Act of 2001 (Benefits
Expansion Act), Public Law 107-103. Section 201(d) of that Act extended
VA\'s authority under section 1116(b) through September 30, 2015.
Pursuant to the Benefits Expansion Act, Public Law 107-103, VA may issue
new regulations between October 1, 2002, and September 30, 2015,
establishing additional presumptions of service connection for diseases
that are found to be associated with exposure to an herbicide agent.

I. History of Agent Orange Presumptions

Pursuant to 38 U.S.C. 1116 and prior NAS reports received between July
1993 and April 2001, VA regulations contain presumptions of service
connection for ten categories of disease based on exposure to an
herbicide agent. Those diseases are listed in 38 CFR 3.309(e) as
follows: Chloracne or other acneform disease consistent with chloracne,
Type 2 diabetes (also known as Type II diabetes mellitus or adult-onset
diabetes), Hodgkin\'s disease, Multiple myeloma, Non-Hodgkin\'s
lymphoma, Acute and subacute peripheral neuropathy, Porphyria cutanea
tarda, Prostate cancer, Respiratory cancers (cancer of the lung,
bronchus, larynx, or trachea), and Soft-tissue sarcoma (other than
osteosarcoma, chondrosarcoma, Kaposi\'s sarcoma, or mesothelioma).

If a veteran who was exposed to an herbicide agent in service
subsequently develops one of the presumptive diseases, VA will presume
the disease was caused by the exposure to an herbicide agent in service
for purposes of establishing entitlement to service-connected benefits.
To qualify for this presumption, chloracne and porphyria cutanea tarda
must become manifest to a degree of disability of 10 percent or more
within one year after the date of last exposure. The other conditions
are presumed service connected if they are manifest to a degree of
disability of ten percent or more at any time after exposure. 38 U.S.C.
1116(a)(2). VA presumes that any veteran who served in the Republic of
Vietnam during the period beginning on January 9, 1962, and ending on
May 7, 1975, was exposed to an herbicide agent during such service. 38
U.S.C. 1116(f).

II\. Prior Actions Concerning Leukemia

In each of its four previous biennial reports under the Agent Orange Act
of 1991, the NAS concluded that there was "inadequate/insufficient"
evidence to determine whether an association exists between exposure to
an herbicide agent and the subsequent occurrence of leukemia in exposed
persons. After reviewing each of those reports, the Secretary determined
that the credible evidence against an association between exposure to an
herbicide agent and the occurrence of leukemia in exposed persons
outweighed the credible evidence for such an association, and that a
positive association therefore did not exist. 67 FR 42600, 42604 (June
24, 2002); 64 FR 59232, 59238 (Nov. 2, 1999); 61 FR 41442, 41445 (Aug.
8, 1996); 59 FR 341, 344 (Jan. 4, 1994).

III\. Latest NAS Review of Chronic Lymphocytic Leukemia

After receiving and reviewing the last prior NAS report in 2001, the
Secretary asked that NAS\' next report separately review the scientific
evidence concerning the association between herbicide exposure and one
particular form of leukemia, known as chronic lymphocytic leukemia
(CLL). NAS issued its report, "Veterans and Agent Orange: Update 2002,"
on January 23, 2003. In that report, NAS concluded that "there is
sufficient evidence of an association between exposure to at least one
of the chemicals of interest (2,4-D, 2,4,5-T or its contaminant TCDD,
picloram, or cacodylic acid) and CLL." The term "sufficient evidence of
an association," as explained in the NAS report, means that a positive
association has been observed between herbicides and the outcome in
studies in which chance, bias, and confounding could be ruled out with
reasonable confidence.

NAS discussed several studies that reported findings regarding the
incidence of CLL as distinguished from other types of leukemia. One
study of site-specific cancer incidence among 7,016 males and females in
a rural farming community found a standard incidence ratio of 1.8, with
a 95% confidence interval (CI) of 0.8-3.2 for CLL. (Waterhouse D et al.
1996. Cancer incidence in the rural community of Tecumseh, Michigan: a
pattern of increased lymphopoietic neoplasms. Cancer 77(4): 763-770). A
population-based case-control study in an agricultural area of Italy
noted an increased risk of CLL among farmers (Odds Ratio (OR) = 1.6, CI
= 0.5-5.2) and animal breeders (OR = 3.1 CI = 1.1-8.3), although no
information was provided on herbicide exposure in the study population.
(Amadori D et al. 1995. Chronic lymphocytic leukaemias and
non-Hodgkin\'s lymphomas by histological type in farming-animal breeding
workers: a population case-control study based on job titles.
Occupational and Environmental Medicine 52(6): 374-379). A study of
cancer risk in Danish male gardeners reportedly exposed to pesticides
and herbicides showed a significant increase in CLL (relative risk =
2.8, CI = 1.0-6.0), although no specific data on herbicide exposure were
given. (Hansen ES et al. 1992. A cohort study on cancer incidence among
Danish gardeners. American Journal of Industrial Medicine 21(5):
651-660). One study showed a significant increase in mortality due to
CLL among farmers in Nebraska from 1957-1974 (OR = 1.7), although no
data regarding herbicide exposure were given. (Blair A, White DW. 1985.
Leukemia cell types and agricultural practices in Nebraska. Archives of
Environmental Health 40(4): 211-214).

Two epidemiologic studies reported specifically on herbicide exposure
and CLL. In a study of 1,675 white Iowa males who died of leukemia, CLL
was significantly increased in farmers (OR = 1.9, CI=1.2-3.1).
(Burmeister LF et al. 1982. Leukemia and farm practices in Iowa.
American Journal of Epidemiology 115(5): 720-728). Further analysis
showed a strong relationship of CLL deaths in counties with acres
treated with herbicides. In a population-based case-control interview
study of 578 white men with leukemia and 1,245 controls, CLL mortality
was higher in farmers than nonfarmers. (Brown LM et al. Pesticide
exposures and other agricultural risk factors for leukemia among men in
Iowa and Minnesota. Cancer Research 50(20): 6585-6591). When risk was
calculated for CLL subtype, odds ratios were significantly increased for
use of any herbicide (OR = 1.4). The risk of CLL in farmers who ever
handled 2,4-D was 1.3. The risk of CLL in men who first handled 2,4,5-T
at least 20 years before interview was significantly increased (OR =
3.3, CI = 1.2-8.9).

NAS also noted that a recent follow-up study of residents of Seveso,
Italy found no increased risk of lymphocytic leukemia. (Bertazzi PA et
al. 2001. Health effects of dioxin exposure: a 20-year mortality study.
American Journal of Epidemiology 153(11): 1031-1044). NAS stated that
the epidemiologic studies indicate that farming occupation is associated
with significant risk of CLL, especially when there is exposure to the
herbicides 2,4-D and 2,4,5-T. NAS further noted that CLL shares more
traits with non-Hodgkin\'s lymphoma (NHL) than with other types of
leukemia and could have a common etiology, and that many studies support
the hypothesis that herbicide exposure can contribute to the risk of
NHL. NAS also concluded, as in its prior reports, that a connection
between exposure to TCDD, a contaminant of 2,4,5-T, and human health
effects is considered biologically plausible.

IV\. The Secretary\'s Determination on Chronic Lymphocytic Leukemia

After considering all of the evidence, the Secretary has determined that
there is a positive association between the exposure of humans to an
herbicide agent and the occurrence of CLL in humans. The studies cited
by NAS consistently show an increased risk of CLL among agricultural
workers and two of the studies show a significantly increased risk among
farmers who were exposed to herbicides. Some of the findings noted by
NAS are statistically significant, and the consistency of the findings
overall supports the view that an association exists. Under these
circumstances, the Secretary concludes that the credible evidence for an
association between exposure to an herbicide agent and the occurrence of
CLL in humans outweighs the credible evidence against such an
association. Accordingly, the Secretary has determined that a
presumption of service connection for CLL is warranted pursuant to 38
U.S.C. 1116(b).

This rule does not reflect determinations concerning any disease other
than CLL. The Secretary\'s determinations concerning other diseases
discussed in the current NAS report will be addressed in future
documents published in the Federal Register.

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. In Sec. 3.309, paragraph (e) the listing of diseases is amended by
adding "Chronic lymphocytic leukemia" between "Hodgkin\'s disease" and
"Multiple myeloma" to read as follows:

Sec. 3.309 Diseases subject to presumptive service connection.

\* \* \* \* \*

\(e\) \* \* \*

Chronic lymphocytic leukemia

\* \* \* \* \*

REGULATORY AMENDMENT

3-03-4

Regulation affected: 38 CFR 3.816 (added).

Effective date of regulation: The addition of 38 CFR 3.816 is effective
September 24, 2003.

Date Secretary approved regulation: July 2, 2003.

Federal Register Citation: 68 FR 50966-50972

The purpose of the following comment on the change included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

The Department of Veterans Affairs (VA) is adding a new provision to its
adjudication regulations concerning certain awards of disability
compensation and dependency and indemnity compensation (DIC). The new
rule explains that certain awards of disability compensation or DIC made
pursuant to liberalizing regulations concerning diseases presumptively
associated with herbicide exposure may be made effective retroactive to
the date of the claim or the date of a previously denied claim, even if
such date is earlier than the effective date of the regulation
establishing the presumption. The new rule also provides that VA may pay
to certain survivors of a deceased beneficiary, or to the beneficiary\'s
estate, any amounts the beneficiary was entitled to receive under the
effective-date provisions of this rule, but which were not paid prior to
the beneficiary\'s death. The purpose of this rule is to reflect the
requirements of court orders in a class-action case.

The pertinent text from the final regulatory amendment is as follows:

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

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

PART 3\--ADJUDICATION

Subpart A\--Pension, Compensation, and Dependency and Indemnity
Compensation

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\. Section 3.816 is added to read as follows:

Sec. 3.816 Awards under the Nehmer Court Orders for disability or death
caused by a condition presumptively associated with herbicide exposure.

\(a\) Purpose. This section states effective-date rules required by
orders of a United States district court in the class-action case of
Nehmer v. United States Department of Veterans Affairs, No. CV-86-6160
TEH (N.D. Cal.).

\(b\) Definitions. For purposes of this section\--

\(1\) Nehmer class member means:

\(i\) A Vietnam veteran who has a covered herbicide disease; or

\(ii\) A surviving spouse, child, or parent of a deceased Vietnam
veteran who died from a covered herbicide disease.

\(2\) Covered herbicide disease means a disease for which the Secretary
of Veterans Affairs has established a presumption of service connection
before October 1, 2002 pursuant to the Agent Orange Act of 1991, Public
Law 102-4, other than chloracne. Those diseases are:

\(i\) Type 2 Diabetes (Also known as type II diabetes mellitus or
adult-onset diabetes).

\(ii\) Hodgkin\'s disease.

\(iii\) Multiple myeloma.

\(iv\) Non-Hodgkin\'s lymphoma.

\(v\) Acute and Subacute peripheral neuropathy.

\(vi\) Porphyria cutanea tarda.

\(vii\) Prostate cancer.

\(viii\) Respiratory cancers (cancer of the lung, bronchus, larynx, or
trachea).

\(ix\) Soft-tissue sarcoma (as defined in Sec. 3.309(e)).

\(c\) Effective date of disability compensation. If a Nehmer class
member is entitled to disability compensation for a covered herbicide
disease, the effective date of the award will be as follows:

\(1\) If VA denied compensation for the same covered herbicide disease
in a decision issued between September 25, 1985 and May 3, 1989, the
effective date of the award will be the later of the date VA received
the claim on which the prior denial was based or the date the disability
arose, except as otherwise provided in paragraph (c)(3) of this section.
A prior decision will be construed as having denied compensation for the
same disease if the prior decision denied compensation for a disease
that reasonably may be construed as the same covered herbicide disease
for which compensation has been awarded. Minor differences in the
terminology used in the prior decision will not preclude a finding,
based on the record at the time of the prior decision, that the prior
decision denied compensation for the same covered herbicide disease.

\(2\) If the class member\'s claim for disability compensation for the
covered herbicide disease was either pending before VA on May 3, 1989,
or was received by VA between that date and the effective date of the
statute or regulation establishing a presumption of service connection
for the covered disease, the effective date of the award will be the
later of the date such claim was received by VA or the date the
disability arose, except as otherwise provided in paragraph (c)(3) of
this section. A claim will be considered a claim for compensation for a
particular covered herbicide disease if:

\(i\) The claimant\'s application and other supporting statements and
submissions may reasonably be viewed, under the standards ordinarily
governing compensation claims, as indicating an intent to apply for
compensation for the covered herbicide disability; or

\(ii\) VA issued a decision on the claim, between May 3, 1989 and the
effective date of the statute or regulation establishing a presumption
of service connection for the covered disease, in which VA denied
compensation for a disease that reasonably may be construed as the same
covered herbicide disease for which compensation has been awarded.

\(3\) If the class member\'s claim referred to in paragraph (c)(1) or
(c)(2) of this section was received within one year from the date of the
class member\'s separation from service, the effective date of the award
shall be the day following the date of the class member\'s separation
from active service.

\(4\) If the requirements of paragraph (c)(1) or (c)(2) of this section
are not met, the effective date of the award shall be determined in
accordance with Sec. Sec. 3.114 and 3.400.

\(d\) Effective date of dependency and indemnity compensation (DIC). If
a Nehmer class member is entitled to DIC for a death due to a covered
herbicide disease, the effective date of the award will be as follows:

\(1\) If VA denied DIC for the death in a decision issued between
September 25, 1985 and May 3, 1989, the effective date of the award will
be the later of the date VA received the claim on which such prior
denial was based or the date the death occurred, except as otherwise
provided in paragraph (d)(3) of this section.

\(2\) If the class member\'s claim for DIC for the death was either
pending before VA on May 3, 1989, or was received by VA between that
date and the effective date of the statute or regulation establishing a
presumption of service connection for the covered herbicide disease that
caused the death, the effective date of the award will be the later of
the date such claim was received by VA or the date the death occurred,
except as otherwise provided in paragraph (d)(3) of this section. In
accordance with Sec. 3.152(b)(1), a claim by a surviving spouse or child
for death pension will be considered a claim for DIC. In all other
cases, a claim will be considered a claim for DIC if the claimant\'s
application and other supporting statements and submissions may
reasonably be viewed, under the standards ordinarily governing DIC
claims, as indicating an intent to apply for DIC.

\(3\) If the class member\'s claim referred to in paragraph (d)(1) or
(d)(2) of this section was received within one year from the date of the
veteran\'s death, the effective date of the award shall be the first day
of the month in which the death occurred.

\(4\) If the requirements of paragraph (d)(1) or (d)(2) of this section
are not met, the effective date of the award shall be determined in
accordance with Sec. Sec. 3.114 and 3.400.

\(e\) Effect of other provisions affecting retroactive entitlement. (1)
General. If the requirements specified in paragraphs (c)(1) or (c)(2) or
(d)(1) or (d)(2) of this section are satisfied, the effective date shall
be assigned as specified in those paragraphs, without regard to the
provisions in 38 U.S.C. 5110(g) or Sec. 3.114 prohibiting payment for
periods prior to the effective date of the statute or regulation
establishing a presumption of service connection for a covered herbicide
disease. However, the provisions of this section will not apply if
payment to a Nehmer class member based on a claim described in paragraph
(c) or (d) of this section is otherwise prohibited by statute or
regulation, as, for example, where a class member did not qualify as a
surviving spouse at the time of the prior claim or denial.

\(2\) Claims Based on Service in the Republic of Vietnam Prior To August
5, 1964. If a claim referred to in paragraph (c) or (d) of this section
was denied by VA prior to January 1, 1997, and the veteran\'s service in
the Republic of Vietnam ended before August 5, 1964, the effective-date
rules of this regulation do not apply. The effective date of benefits in
such cases shall be determined in accordance with 38 U.S.C. 5110. If a
claim referred to in paragraph (c) or (d) of this section was pending
before VA on January 1, 1997, or was received by VA after that date, and
the veteran\'s service in the Republic of Vietnam ended before August 5,
1964, the effective date shall be the later of the date provided by
paragraph (c) or (d) of this section or January 1, 1997.

(Authority: Public Law 104-275, sec. 505)

\(f\) Payment of Benefits to Survivors or Estates of Deceased
Beneficiaries. (1) General. If a Nehmer class member entitled to
retroactive benefits pursuant to paragraphs (c)(1) through (c)(3) or
(d)(1) through (d)(3) of this section dies prior to receiving payment of
any such benefits, VA shall pay such unpaid retroactive benefits to the
first individual or entity listed below that is in existence at the time
of payment:

\(i\) The class member\'s spouse, regardless of current marital status.

Note to Paragraph (f)(1)(i): For purposes of this paragraph, a spouse is
the person who was legally married to the class member at the time of
the class member\'s death.

\(ii\) The class member\'s child(ren), regardless of age or marital
status (if more than one child exists, payment will be made in equal
shares, accompanied by an explanation of the division).

Note to Paragraph (f)(1)(ii): For purposes of this paragraph, the term
\`\`child\'\' includes natural and adopted children, and also includes
any stepchildren who were members of the class member\'s household at
the time of the class member\'s death.

\(iii\) The class member\'s parent(s), regardless of dependency (if both
parents are alive, payment will be made in equal shares, accompanied by
an explanation of the division).

Note to Paragraph (f)(1)(iii): For purposes of this paragraph, the term
\`\`parent\'\' includes natural and adoptive parents, but in the event
of successive parents, the persons who last stood as parents in relation
to the class member will be considered the parents.

\(iv\) The class member\'s estate.

\(2\) Inapplicability of certain accrued benefit requirements. The
provisions of 38 U.S.C. 5121(a) and Sec. 3.1000(a) limiting payment of
accrued benefits to amounts due and unpaid for a period not to exceed 2
years do not apply to payments under this section. The provisions of 38
U.S.C. 5121(c) and Sec. 3.1000(c) requiring survivors to file claims for
accrued benefits also do not apply to payments under this section. When
a Nehmer class member dies prior to receiving retroactive payments under
this section, VA will pay the amount to an identified payee in
accordance with paragraph (f)(1) of this section without requiring an
application from the payee. Prior to releasing such payment, however, VA
may ask the payee to provide further information as specified in
paragraph (f)(3)of this section.

\(3\) Identifying payees. VA shall make reasonable efforts to identify
the appropriate payee(s) under paragraph (f)(1) of this section based on
information in the veteran\'s claims file. If further information is
needed to determine whether any appropriate payee exists or whether
there are any persons having equal or higher precedence than a known
prospective payee, VA will request such information from a survivor or
authorized representative if the claims file provides sufficient contact
information. Before releasing payment to an identified payee, VA will
ask the payee to state whether there are any other survivors of the
class member who may have equal or greater entitlement to payment under
this section, unless the circumstances clearly indicate that such a
request is unnecessary. If, following such efforts, VA releases the full
amount of unpaid benefits to a payee, VA may not thereafter pay any
portion of such benefits to any other individual, unless VA is able to
recover the payment previously released.

\(4\) Bar to accrued benefit claims. Payment of benefits pursuant to
paragraph (f)(1) of this section shall bar a later claim by any
individual for payment of all or any part of such benefits as accrued
benefits under 38 U.S.C. 5121 and Sec. 3.1000.

\(g\) Awards covered by this section. This section applies only to
awards of disability compensation or DIC for disability or death caused
by a disease listed in paragraph (b)(2) of this section.

(Authority: 38 U.S.C. 501)

(Authority: 38 U.S.C. 501, 512, 5502, 5503)

27\. Section 13.71 is amended by:

A. Removing paragraph (a) heading and paragraph (b).

B. Redesignating paragraphs (a)(1) through (a)(1)(iii) as paragraphs (a)
through (a)(3), respectively.

C. Redesignating paragraphs (a)(2) through (a)(2)(iii) as paragraphs (b)
through (b)(3), respectively; and redesignating paragraph (a)(3) as
paragraph (c).

D. In newly redesignated paragraph (a) introductory text and paragraph
(c), removing \`\`(a)(2)\'\' and adding, in its place, \`\`(b)\'\'.

E. In newly redesignated paragraph (b)(3), removing \`\`shall
determine\'\' and adding, in its place, \`\`determines\'\'.

F. In newly redesignated paragraph (c), removing \`\`may\'\' and adding,
in its place, \`\`will\'\'.

G. Revising the authority citation.

The revision reads as follows:

Sec. 13.71 Payment of cost of veteran\'s maintenance in institution.

\* \* \* \* \*

(Authority: 38 U.S.C. 501, 512, 5502, 5503)

Sec. Sec. 13.74 through 13.77 \[Removed and Reserved\]

28\. Sections 13.74 through 13.77 are removed and reserved.

29\. Section 13.107 is amended by revising the authority citation to
read as follows:

Sec. 13.107 Accounts of chief officers of public or private
institutions.

\* \* \* \* \*

(Authority: 38 U.S.C. 5502)

Sec. Sec. 13.108 and 13.109 \[Removed and Reserved\]

30\. Sections 13.108 and 13.109 are removed and reserved.

Regulatory Amendment

3-03-5

Regulations affected: 38 CFR 3.261, 3.262, 3.263, 3.272 and 3.275.

Effective Date of Regulation: October 24, 2003.

Date Secretary Approved Regulation: August 4, 2003.

Federal Register Citation: 68 FR 60851 (October 24, 2003).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

This Final Rule amends the Department of Veterans Affairs (VA)
adjudication regulations to exclude from income and net worth
computations in the pension and parents' dependency and indemnity
compensation programs any money received under the Victims of Crime Act
of 1984. This amendment is necessary to conform the regulations to
statutory provisions.

All income is countable when VA determines entitlement to income-based
benefits unless specifically excluded by law. Section 234(b) of the
Antiterrorism and Effective Death Penalty Act of 1996, Pub. L. No.
104-132, amended section 1403 of the Victims of Crime Act of 1984, Pub.
L. No. 98-473, (42 U.S.C. 10602) to exclude amounts received as
compensation under the provisions of Pub. L. No. 98-473 from income for
purposes of determining eligibility for assistance under any federally
funded program that provides medical or financial assistance that
becomes necessary in full or in part because of the commission of a
crime against the claimant for such assistance (42 U.S.C. 10602(c)).

Sections 1522 and 1543 of title 38, United States Code, and 38 CFR
3.250(a)(2) provide that the corpus of the estate of a veteran, a
veteran's spouse, or other claimant, as the case may be, will be taken
into consideration to determine whether part of the corpus of the estate
can be used for the individual's maintenance for purposes of
establishing eligibility for certain veterans' benefits. Section 622(c)
of the "USA Patriot Act," Pub. L. No. 107-56, amended the Victims of
Crime Act of 1984 to also exclude amounts received as crime victim
compensation from consideration when determining an individual's
resources or assets (i.e., net worth) for purposes of assistance under
any federally funded program. This document amends 38 CFR 3.261, 3.262,
3.263, 3.272 and 3.275 to reflect these statutory changes.

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\. In § 3.261, paragraph (a) is amended by adding entry (41) at the end
of the table to read as follows:

§ 3.261 Character of income; exclusions and estates.

\* \* \* \* \*

\(a\) \* \* \*

+----------+----------+-------------+----------+-----------+---------+
| Income   | De       | Dependency  | Pension; | Pension;  | *See*   |
|          | pendency |             |          |           |         |
|          |          | and         | old-law  | section   |         |
|          | (        | indemnity   |          | 306       |         |
|          | parents) |             | (v       |           |         |
|          |          | c           | eterans, | (         |         |
|          |          | ompensation |          | veterans, |         |
|          |          |             | s        |           |         |
|          |          | (parents)   | urviving | surviving |         |
|          |          |             |          |           |         |
|          |          |             | spouses  | spouses   |         |
|          |          |             |          |           |         |
|          |          |             | and      | and       |         |
|          |          |             |          |           |         |
|          |          |             | children | children) |         |
+----------+----------+-------------+----------+-----------+---------+
| \* \*    | \*       | \*          | \*       | \*        | \*      |
|          |          |             |          |           |         |
| \(41\)   | Excl     | E           | Excl     | Exc       | §       |
| Income   | uded[^1] | xcluded[^2] | uded[^3] | luded[^4] | 3       |
| received |          |             |          |           | .262(z) |
| under    |          |             |          |           |         |
| the      |          |             |          |           |         |
| Victims  |          |             |          |           |         |
| of Crime |          |             |          |           |         |
| Act of   |          |             |          |           |         |
| 1984 (42 |          |             |          |           |         |
| U.S.C.   |          |             |          |           |         |
| 10601-   |          |             |          |           |         |
| 10605).  |          |             |          |           |         |
+----------+----------+-------------+----------+-----------+---------+

[^5]The compensation received through a crime victim compensation
program will be excluded from income computations unless the total
amount of assistance received from all federally funded programs is
sufficient to fully compensate the claimant for losses suffered as a
result of the crime.

\* \* \* \* \*

3\. Section 3.262 is amended by adding paragraph (z) immediately
following the first authority citation at the end of paragraph (y) to
read as follows:

§ 3.262 Evaluation of income.

\* \* \* \* \*

\(z\) [Victims of Crime Act]{.underline}. For purposes of old law
pension, section 306 pension, and parents' dependency and indemnity
compensation, amounts received as compensation under the Victims of
Crime Act of 1984 will not be considered income unless the total amount
of assistance received from all federally funded programs is sufficient
to fully compensate the claimant for losses suffered as a result of the
crime. (Authority: 42 U.S.C. 10602(c))

\* \* \* \* \*

4\. Section 3.263 is amended by adding paragraph (h) immediately
following the first authority citation at the end of paragraph (g) to
read as follows:

§ 3.263 Corpus of estate; net worth.

\* \* \* \* \*

\(h\) [Victims of Crime Act]{.underline}. There shall be excluded from
the corpus of estate or net worth of a claimant any amounts received as
compensation under the Victims of Crime Act of 1984 unless the total
amount of assistance received from all federally funded programs is
sufficient to fully compensate the claimant for losses suffered as a
result of the crime.

(Authority: 42 U.S.C. 10602(c))

\* \* \* \* \*

5\. Section 3.272 is amended by adding paragraph (v) immediately
following the authority citation at the end of paragraph (u) to read as
follows:

§ 3.272 Exclusions from income.

\* \* \* \* \*

\(v\) [Victims of Crime Act]{.underline}. Amounts received as
compensation under the Victims of Crime Act of 1984 unless the total
amount of assistance received from all federally funded programs is
sufficient to fully compensate the claimant for losses suffered as a
result of the crime.

(Authority: 42 U.S.C. 10602(c))

6\. Section 3.275 is amended by adding paragraph (j) immediately
following the authority citation at the end of paragraph (i) to read as
follows:

§ 3.275 Criteria for evaluating net worth.

\* \* \* \* \*

\(j\) [Victims of Crime Act]{.underline}. There shall be excluded from
the corpus of estate or net worth of a claimant any amounts received as
compensation under the Victims of Crime Act of 1984 unless the total
amount of assistance received from all federally funded programs is
sufficient to fully compensate the claimant for losses suffered as a
result of the crime. (Authority: 42 U.S.C. 10602(c))

Regulatory Amendment

3-03-6

Regulations affected: 38 CFR 3.350, 3.802 and 3.27.

Effective Date of Regulation: 3.350 and 3.802, December 6, 2002; 3.27,
September 1, 2003.

Date Secretary Approved Regulation: July 9, 2003.

Federal Register Citation: 68 FR 55466 (September 26, 2003).

The purpose of the following comment on the changes included in this
amendment of VA regulations is to inform all concerned why this change
is being made. This comment is not regulatory.

This document amends the Department of Veterans Affairs (VA)
adjudication regulations to reflect the statutory provisions of the
Veterans Benefits Act of 2002. These changes address entitlement to
special monthly compensation for loss of breast tissue in a woman and
increased pension payable to Medal of Honor recipients.

On December 6, 2002, the Veterans Benefits Act of 2002, Pub. L. 107-330
(the Act), was enacted. Certain provisions of the Act directly affect
the payment of VA compensation or pension benefits. These provisions
concern special monthly compensation for loss of breast tissue in a
woman and the amount of pension payable to Medal of Honor recipients.

Section 102 of the Act amended 38 U.S.C. 1114(k) to authorize special
monthly compensation to women veterans for loss of 25% or more of tissue
from a single breast or both breasts in combination, including loss by
mastectomy or partial mastectomy, or following receipt of radiation
treatment of breast tissue. In this document we are amending 38 CFR
3.350(a) to reflect that change. We are deleting 38 CFR 3.350(a)(7)
because the change to 38 CFR 3.350(a) makes it no longer necessary to
define the term \`\`anatomical loss of one or both breasts.\'\'

Section 304 of the Act amended 38 U.S.C. 1562 to provide for an annual
increase in the Medal of Honor pension effective December 1 of each
year, beginning December 1, 2004, by a percentage equal to the cost of
living adjustment of benefits paid under Title II of the Social Security
Act. This document amends 38 CFR 3.27 to reflect that change. Section
304 also provides for a retroactive lump sum payment of the Medal of
Honor pension from the first day of the month after the date of the
event for which the veteran earned the Medal of Honor for current as
well as future recipients of the special pension. This document amends
38 CFR 3.802 to reflect that change. In accordance with the Act, no
retroactive lump sum payment can be made prior to October 1, 2003.

When Congress does not specify an effective date for a statutory
provision, the effective date is the date of enactment. In section 102
of the Act, because Congress did not specify an effective date for the
amendment to 38 U.S.C. 1114(k), that amendment was effective December 6,
2002, the date of enactment of the Act. Similarly, in section 304 of the
Act, Congress did not specify an effective date for the amendment to 38
U.S.C. 1562 authorizing a retroactive lump sum payment for the Medal of
Honor pension, and the amendment was effective December 6, 2002. For
certain provisions of the Act, however, Congress specifically provided
effective dates that are different from the date of enactment of the
Act. In paragraph (d)(1) of section 304 of the Act, Congress specified
that the amendment to 38 U.S.C. 1562 authorizing an annual increase in
the Medal of Honor pension would be effective September 1, 2003.

For certain provisions in the Act, the effective date of the provision
governs the date on which benefit eligibility can arise. For instance,
section 102 of the Act authorizes, as of December 6, 2002, special
monthly compensation for women veterans who suffered the \`\`loss of 25
percent or more of tissue from a single breast or both breasts in
combination (including loss by mastectomy or partial mastectomy) or has
received radiation treatment of breast tissue.\'\' For certain other
provisions, Congress provided that, although the amendment was effective
immediately, benefit eligibility would not arise until a later date. In
paragraph (d)(2) of section 304 of the Act, Congress specified that VA
would not make any annual adjustment to the monthly Medal of Honor
pension in 2003. Therefore, the first annual adjustment would be made on
December 1, 2004. Also, in paragraph (d)(1) of section 304, Congress
specifically noted that no retroactive lump sum payment of the Medal of
Honor pension would be made prior to October 1, 2003. These effective
dates and rules governing eligibility are reflected in the
effective-date and substantive provisions of this notice.

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

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

Section 3.27 is amended by:

Redesignating paragraph (d) as paragraph (e), and adding a new paragraph
(d).

In newly designated paragraph (e), removing \`\`and the monthly\'\' and
adding in its place \`\`the monthly\'\'; and removing \`\`chapter 18\'\'
and adding in its place \`\`chapter 18 and the Medal of Honor
pension\'\' .

The added text reads as follows:

Sec. 3.27 Automatic adjustment of benefit rates.

\* \* \* \* \*

\(d\) Medal of Honor pension. Beginning in the year 2004, VA shall,
effective December 1 of each year, increase the monthly Medal of Honor
pension by the same percentage as the percentage by which benefit
amounts payable under section 215(i) of Title II of the Social Security
Act are increased effective December 1 of such year. (Authority: 38
U.S.C. 1562(e))

\* \* \* \* \*

Sec. 3.350 \[Amended\]

3\. Section 3.350 is amended by:

a\. In paragraph (a) introductory text, removing \`\`the anatomical loss
of one or both breasts (including loss by mastectomy).\'\' and adding,
in its place, \`\`loss of 25% or more of tissue from a single breast or
both breasts in combination (including loss by mastectomy or partial
mastectomy), or following receipt of radiation treatment of breast
tissue.\'\'

b\. Removing paragraph (a)(7) and the authority citation at the end of
the section.

4\. Section 3.802 is amended by adding paragraph (c) immediately
following the authority citation at the end of the section:

Sec. 3.802 Medal of Honor.

\* \* \* \* \*

\(c\) VA will pay to each person who is receiving or who in the future
receives Medal of Honor pension a retroactive lump sum payment equal to
the total amount of Medal of Honor pension that person would have
received during the period beginning the first day of the month after
the date of the event for which the veteran earned the Medal of Honor
and ending on the last day of the month preceding the month in which
pension was awarded under paragraph (b) of this section. VA will
calculate the lump sum payment using the monthly Medal of Honor pension
rates in effect from the first day of the month after the date of the
event for which the veteran earned the Medal of Honor, to the last day
of the month preceding the month in which the individual was initially
awarded the Medal of Honor pension. VA will not make a retroactive lump
sum payment under this section before October 1, 2003.

(Authority: 38 U.S.C. 1562(f))

[^1]: ^1^

[^2]: ^1^

[^3]: ^1^

[^4]: ^1^

[^5]: ^1^