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Board shall review the findings and decisions of the Phys-
ical Evaluation Board with respect to such covered indi-
vidual.
‘‘(2) The review by the Board under paragraph (1)
shall be based on the records of the armed force concerned
and such other evidence as may be presented to the Board.
A witness may present evidence to the Board by affidavit
or by any other means considered acceptable by the Sec-
retary of Defense.
‘‘(d) AUTHORIZED RECOMMENDATIONS.—The Board
may, as a result of its findings under a review under sub-
section (c), recommend to the Secretary concerned the fol-
lowing (as applicable) with respect to a covered individual:
‘‘(1) No recharacterization of the separation of
such individual or modification of the disability rat-
ing previously assigned such individual.
‘‘(2) The recharacterization of the separation of
such individual to retirement for disability.
‘‘(3) The modification of the disability rating
previously assigned such individual by the Physical
Evaluation Board concerned, which modified dis-
ability rating may not be a reduction of the disability
rating previously assigned such individual by that
Physical Evaluation Board.
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‘‘(4) The issuance of a new disability rating for
such individual.
‘‘(e) CORRECTION OF MILITARY RECORDS.—(1) The
Secretary concerned may correct the military records of a
covered individual in accordance with a recommendation
made by the Board under subsection (d). Any such correc-
tion may be made effective as of the effective date of the
action taken on the report of the Physical Evaluation Board
to which such recommendation relates.
‘‘(2) In the case of a member previously separated pur-
suant to the findings and decision of a Physical Evaluation
Board together with a lump-sum or other payment of back
pay and allowances at separation, the amount of pay or
other monetary benefits to which such member would be en-
titled based on the member’s military record as corrected
shall be reduced to take into account receipt of such lump-
sum or other payment in such manner as the Secretary of
Defense considers appropriate.
‘‘(3) If the Board makes a recommendation not to cor-
rect the military records of a covered individual, the action
taken on the report of the Physical Evaluation Board to
which such recommendation relates shall be treated as final
as of the date of such action.
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‘‘(f) REGULATIONS.—(1) This section shall be carried
out in accordance with regulations prescribed by the Sec-
retary of Defense.
‘‘(2) The regulations under paragraph (1) shall specify
reasonable deadlines for the performance of reviews required
by this section.
‘‘(3) The regulations under paragraph (1) shall specify
the effect of a determination or pending determination of
a Physical Evaluation Board on considerations by boards
for correction of military records under section 1552 of this
title.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions at the beginning of chapter 79 of such title is
amended by inserting after the item relating to sec-
tion 1554 the following new item:
‘‘1554a. Review of separation with disability rating of 20 percent disabled or
less.’’.
(b) IMPLEMENTATION.—The Secretary of Defense shall
establish the board of review required by section 1554a of
title 10, United States Code (as added by subsection (a)),
and prescribe the regulations required by such section, not
later than 90 days after the date of the enactment of this
Act.