[Federal Register Volume 88, Number 225 (Friday, November 24, 2023)]
[Rules and Regulations]
[Pages 82261-82264]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25836]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AR76


Reevaluation of Claims for Dependency and Indemnity Compensation

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of Veterans Affairs (VA) amends its 
adjudication regulations concerning certain awards of Dependency and 
Indemnity Compensation (DIC). Under this amendment, relevant claimants 
will be eligible to elect to have certain previously denied DIC claims

[[Page 82262]]

reevaluated pursuant to changes that establish or modify a presumption 
of service connection. Any award as a result of the reevaluation may be 
made retroactive as if the establishment or modification of the 
presumption of service connection had been in effect on the date of the 
submission of the original claim. This amendment incorporates 
legislative changes enacted by the Sergeant First Class Heath Robinson 
Honoring our Promise to Address Comprehensive Toxics Act of 2022 and 
will bring Federal regulations into conformance with those changes.

DATES: This rule is effective January 23, 2024. Federal law requires VA 
to set the effective date of major rules such as this rule no sooner 
than 60 days after publication in the Federal Register. 5 U.S.C. 
801(a)(3).

FOR FURTHER INFORMATION CONTACT: Eric Baltimore, Management and Program 
Analyst, Pension and Fiduciary Service (21PF), Veterans Benefits 
Administration, Department of Veterans Affairs, 810 Vermont Avenue NW, 
Washington, DC 20420, (202) 632-8863. (This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: In a document published in the Federal 
Register on March 22, 2023, at 88 FR 17166, VA proposed to amend its 
adjudication regulations concerning certain awards of DIC. Under this 
amendment, relevant claimants will be eligible to elect to have certain 
previously denied DIC claims reevaluated pursuant to changes that 
establish or modify a presumption of service connection. Any award as a 
result of the reevaluation may be made retroactive as if the 
establishment or modification of the presumption of service connection 
had been in effect on the date of the submission of the original claim. 
This amendment incorporates legislative changes enacted by section 204 
of the Sergeant First Class Heath Robinson Honoring our Promise to 
Address Comprehensive Toxics Act of 2022, or the Honoring our PACT Act 
of 2022, Public Law 117-168 (herein referred to as ``the PACT Act''). 
The 60-day public comment period ended on May 22, 2023.
    VA received three comments. While VA appreciates the commenters' 
concerns, several of the comments are unrelated to the reevaluation of 
claims for DIC under section 204 of the PACT Act. VA will not make any 
changes to the rule as proposed based on these comments. Nevertheless, 
VA provides the following responses and highlights the limitations of 
this rule based on section 204 of the PACT Act.
    The first commenter urged the necessity of proposed bill H.R. 3518, 
the ``Victims of Agent Orange Relief Act of 2021.'' In particular, the 
commenter emphasized that ``[t]here is a growing group of daughters of 
[A]gent [O]range male Veterans that have been ignored for years!'' 
According to Congress.gov, H.R. 3518 was introduced in the House and 
referred to the Committees on Veterans' Affairs, Foreign Affairs, and 
Energy and Commerce on May 25, 2021. The Committee on Energy and 
Commerce then referred the resolution to the Subcommittee on Health on 
May 26, 2021, which was the most recent action. As noted in the 
resolution's summary, ``[u]nder the bill, certain benefits will be made 
available to the children of male Vietnam veterans who are affected by 
certain birth defects. Currently, these benefits are only available to 
the children of women Vietnam veterans.'' \1\ Precisely, according to 
its text, the bill sought, in relevant part, to amend subchapter II of 
chapter 18 of 38 U.S.C. by striking all references to ``women'' Vietnam 
Veterans, a change that would have the effect of expanding eligibility 
to the children of male Vietnam Veterans as noted in the summary. The 
bill has so far not been enacted, and therefore it can have no bearing 
on this or any other VA rulemaking.
---------------------------------------------------------------------------

    \1\ Text--H.R. 3518--117th Congress (2021-2022): Victims of 
Agent Orange Relief Act of 2021, H.R. 3518, 117th Cong. (2021), 
available at https://www.congress.gov/bill/117th-congress/house-bill/3518/text.
---------------------------------------------------------------------------

    The second commenter praised the benefits of the PACT Act but 
highlighted three areas where the proposed rule was ``underinclusive:'' 
(1) only DIC claims, and not Veteran's disability claims, can be 
awarded retroactive to the original filing date following a 
reevaluation; (2) only previously denied DIC claims where a 
reevaluation was elected, and not pending claims for DIC, may be 
afforded a retroactive award; and (3) the reevaluation process may only 
be initiated by the original claimant. The third commenter also raised 
the issue of DIC claims, and not live Veterans' disability claims, 
being eligible for the special retroactive treatment. To address these 
concerns, VA provides the following responses and highlights the 
limitations of this proposed rule based on section 204 of the PACT Act.
    First, the new regulation codified by this final rule, 38 CFR 3.33, 
focuses solely on reevaluations of previously denied DIC claims as 
discussed in section 204 of the PACT Act. Therefore, understanding the 
limitations of section 204 of the PACT Act, this regulation cannot 
extend retroactivity to the original filing date following a 
reevaluation for a Veteran's disability claim. Of note, VA intends to 
implement the PACT Act's provisions on disability benefits in a 
separate rulemaking. See Introduction to the Unified Agenda of Federal 
Regulatory and Deregulatory Actions--Fall 2022, 88 FR 10966, 11120 
(Feb. 22, 2023) (``Updating VA Adjudication Regulations for Disability 
or Death Benefits Based on Toxic Exposure.''). The separate rulemaking 
on disability benefits would have its own notice-and-comment period.
    Second, the retroactive provisions within the new regulation are 
limited to the reevaluation of a previously denied claim for DIC and do 
not apply to retroactivity for a pending DIC claim received by VA but 
not yet decided. This conforms to the application of the requirements 
within 38 U.S.C. 1305(a)(3), as added by section 204(a) of the PACT 
Act. Retroactive application is not authorized for the additional 
presumptive diseases prescribed within the PACT Act outside of section 
204. We note that this commenter raised the concern of a DIC claimant 
whose claim is awaiting review by the Board of Veterans' Appeals at the 
time the new presumption goes into effect, potentially losing multiple 
years' worth of benefits. The commenter's concern proceeds from the 
premise that a claim cannot qualify for special retroactive treatment 
under section 204 of the PACT Act while the claim is pending on appeal. 
The statute requires only that the claim have been ``denied,'' not that 
the denial have become final due to either passage of the appellate 
review period or final denial on appeal. We do not believe there is any 
textual ambiguity on this point. However, to the extent some may 
disagree, VA notes that disqualifying a DIC claim from special 
retroactive treatment due to a pending appeal would have the perverse 
effect of disincentivizing claimants from pursuing their appellate 
rights. This is particularly concerning in light of the fact that a 
claimant would have to be making the decision of whether to appeal 
before he or she knew with certainty whether the new presumption would 
in fact go into effect. Accordingly, VA now clarifies that an initial 
denial at the regional office level is all that is needed. We 
acknowledge that even under this interpretation, the commenter's 
concern retains some force in the context of a claim that is awaiting a 
decision when the presumption goes into effect. This outcome is 
unavoidable, however, as in this

[[Page 82263]]

situation there is no denial available to trigger application of the 
statutory language. VA notes that in this scenario, the effective date 
difference between the original claim date and the effective date of 
the new presumption ordinarily should be minimal.
    Third, as noted in the proposed rulemaking, the PACT Act is silent 
on the accrued benefits or substitution processes as they relate to the 
reevaluation of previously denied DIC claims. As such, VA must utilize 
the existing processes regarding accrued benefits and substitution 
contained in 38 U.S.C. 5121 and 5121A. Thus, a claimant may request to 
be substituted for the original claimant for the purposes of processing 
a DIC reevaluation claim to completion, but only if the original 
claimant elected to have the previously denied DIC claim reevaluated.
    Of note, federal law allows substitution only for claims that are 
already pending at the time of the claimant's death. 38 U.S.C. 
5121A(a)(1). Consistent with that restriction, the PACT Act expressly 
allows reevaluation only ``at the election of the claimant.'' 38 U.S.C. 
1305(a)(2) (italics added). So, if a DIC claimant dies before 
requesting reevaluation under the PACT Act, there is no mechanism 
available allowing the claim to be reevaluated by a party secondary to 
the DIC claimant. VA makes no changes to the rule based on these 
comments.
    The third commenter offered general observations on the PACT Act's 
implications for ``retroactive disability payments'' and ``original 
effective dates,'' and requested retroactive benefits for himself based 
on the PACT Act effective to the original date of his claims for 
disability compensation that VA previously denied. These comments are 
unrelated to the reevaluation of claims for DIC under section 204 of 
the PACT Act, as such they will not result in any changes being made to 
the rule. As noted, VA intends to implement the PACT Act's provisions 
on disability benefits in a separate rulemaking.
    Of note, when VA grants an award based on a change in law (like the 
PACT Act), federal law generally limits the effective date of that 
award to no earlier than the effective date of the change in law. 38 
U.S.C. 5110(g). That same law also provides that ``[i]n no event'' may 
the effective date of an award granted because of a change in law be 
earlier than one year before the date of the associated claim or the 
date of the administrative determination of entitlement, whichever date 
is earlier. Therefore, if a Veteran files a PACT Act claim and VA 
grants the claim, the Veteran could still obtain these limited periods 
of retroactivity, but the law limits the effective date of that grant 
to no earlier than one year before the Veteran filed the claim, and no 
earlier than the effective date of the change in law.
    VA recognizes the concern that the second and third commenters have 
raised regarding the different retroactive effective date treatments 
between DIC claims and disability compensation claims for live 
Veterans. It is understandable that a Veteran who has been living with 
a disability for some time before that disability became subject to 
presumptive service connection would object to this difference, as 
these two commenters have. Congress has determined that claims for 
service-connected death should receive special retroactive effective 
dates, while compensation claims for living Veterans must continue to 
be subject to traditional effective date rules.
    VA does not have authority to contradict ordinarily applicable 
statutory effective date law. As the U.S. Supreme Court explained in 
January 2023, the effective date provisions in section 5110 of title 
38, United States Code, are not only time constraints, but they also 
express Congress's intent to limit, subject to enumerated exceptions, 
the amounts of payments Veterans may receive. Arellano v. McDonough, 
143 S. Ct. 543, 549 (2023). The constraints in 38 U.S.C. 5110(g) 
therefore apply unless displaced by a specific statutory effective date 
mechanism, as Congress did here for DIC. We note that if a DIC claim 
(or any claim) was pending when the PACT Act went into effect, VA will, 
and indeed must, complete the processing of that claim to determine if 
an earlier effective date on a direct basis (as distinguished from a 
presumptive basis) is possible.

Executive Orders 12866, 13563, and 14094

    Executive Order 12866 (Regulatory Planning and Review) directs 
agencies to assess the costs and benefits of available regulatory 
alternatives and, when regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects, and other advantages; 
distributive impacts; and equity). Executive Order 13563 (Improving 
Regulation and Regulatory Review) emphasizes the importance of 
quantifying both costs and benefits, reducing costs, harmonizing rules, 
and promoting flexibility. Executive Order 14094 (Executive Order on 
Modernizing Regulatory Review) supplements and reaffirms the 
principles, structures, and definitions governing contemporary 
regulatory review established in Executive Order 12866 of September 30, 
1993 (Regulatory Planning and Review), and Executive Order 13563 of 
January 18, 2011 (Improving Regulation and Regulatory Review). The 
Office of Information and Regulatory Affairs has determined that this 
rulemaking is a significant regulatory action under Executive Order 
12866, Section 3(f)(1), as amended by Executive Order 14094. The 
Regulatory Impact Analysis associated with this rulemaking can be found 
as a supporting document at www.regulations.gov.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-
612). Therefore, pursuant to 5 U.S.C. 605(b), the initial and final 
regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do 
not apply.

Unfunded Mandates

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

Paperwork Reduction Act

    This final rule includes provisions constituting a revised 
collection of information under the Paperwork Reduction Act of 1995 (44 
U.S.C. 3501-3521) that require approval by the Office of Management and 
Budget (OMB). Accordingly, under 44 U.S.C. 3507(d), VA has submitted a 
copy of this rulemaking action to OMB for review and approval. OMB has 
reviewed and approved this revised collection of information.

Congressional Review Act

    Under the Congressional Review Act, this regulatory action may 
result in an annual effect on the economy of $100 million or more, 5 
U.S.C. 804(2), and so is subject to the 60-day delay in effective date 
under 5 U.S.C. 801(a)(3). In accordance with 5 U.S.C. 801(a)(1), VA 
will submit to the Comptroller General and to Congress a copy of this

[[Page 82264]]

Regulation and the Regulatory Impact Analysis (RIA) associated with the 
Regulation.

List of Subjects in 38 CFR Part 3

    Administrative practice and procedure, Claims, Veterans.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, signed and approved 
this document on November 16, 2023, and authorized the undersigned to 
sign and submit the document to the Office of the Federal Register for 
publication electronically as an official document of the Department of 
Veterans Affairs.

Luvenia Potts,
Regulation Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.
    For the reasons stated in the preamble, the Department of Veterans 
Affairs amends 38 CFR part 3 as set forth below:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and Dependency and Indemnity 
Compensation

0
1. The authority citation for part 3, subpart A, continues to read as 
follows:

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

0
2. Remove the undesignated center heading ``General'' following Sec.  
3.32 and add Sec.  3.33 to read as follows:


Sec.  3.33  Reevaluation of Claims for Dependency and Indemnity 
Compensation Involving Presumptions of Service Connection Following 
Enactment of Public Law 117-168.

    (a) Purpose. This section states effective date and election rules 
based on amendments made under Public Law 117-168, which provides for 
the reevaluation of certain previously denied dependency and indemnity 
compensation (DIC) claims when a law establishes or modifies a 
presumption of service connection.
    (b) Definitions. For purpose of this section:
    (1) Law means any law, regulation, or Federal court decision or 
settlement establishing or modifying a presumption of service 
connection.
    (2) Relevant claimant means an individual who submitted a claim for 
DIC to VA that was evaluated and denied by VA before the date on which 
such a provision of law went into effect and might have been evaluated 
differently had the establishment or modification of the service 
connection presumption been applicable to the claim.
    (c) Election of review--(1) General. VA will not reevaluate under 
this section any previously denied claim for DIC prior to election by 
the relevant claimant.
    (2) Form of election. Reevaluation of a previously denied DIC claim 
must be at the election of the relevant claimant on a prescribed form 
pursuant to Sec.  3.152(a).
    (d) Effective date of award. If a relevant claimant is found 
entitled to DIC based on the establishment or modification of a 
presumption of service connection, the effective date of the award will 
be as follows:
    (1) If VA denied a claim for DIC prior to a law defined under 
(b)(1) of this section that establishes or modifies a presumption of 
service connection on or after August 10, 2022 (the date of enactment 
of Pub. L. 117-168), the effective date of the award will be determined 
as if the establishment or modification of the presumption of service 
connection had been in effect on the date of the submission of the 
original claim.
    (2) If the requirements of paragraph (d)(1) are not met, the 
effective date of the award shall be determined in accordance with 
Sec. Sec.  3.114 and 3.400.
    (e) Outreach and identification of relevant claimants. (1) VA will 
conduct the following efforts to inform relevant claimants that they 
may elect to have a claim reevaluated in light of the establishment or 
modification of a presumption of service connection:
    (i) Publish on the internet website of the Department a notice that 
such claimants may elect to have a claim so reevaluated;
    (ii) Notify, in writing or by electronic means, veterans service 
organizations of the ability of such claimants to elect to have a claim 
so reevaluated; and
    (iii) Notify each such claimant in the same manner that the 
Department last provided notice of a decision.

(Authority 38 U.S.C. 501, 1305)

[FR Doc. 2023-25836 Filed 11-22-23; 8:45 am]
BILLING CODE 8320-01-P