[Federal Register Volume 66, Number 184 (Friday, September 21, 2001)]
[Rules and Regulations]
[Pages 48558-48561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-23552]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 3 and 13

RIN 2900-AK68


Veterans Benefits and Health Care Improvement Act of 2000

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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[[Page 48559]]

SUMMARY: This document amends various Department of Veterans Affairs 
(VA) regulations concerning the definition of the term ``active 
military, naval, or air service''; the payment limitation based on the 
value of certain incompetent veterans' estates; the plot allowance for 
certain individuals buried in State veterans' cemeteries; and the 
limitation on payment of pension for certain recipients of Medicaid-
covered nursing home care. The amendments are necessary to reflect 
statutory changes contained in the Veterans Benefits and Health Care 
Improvement Act of 2000.

DATES: Effective Date: November 1, 2000.

FOR FURTHER INFORMATION CONTACT: Bob White, Team Leader, Plain Language 
Regulations Project, Veterans Benefits Administration, 810 Vermont 
Avenue, NW., Washington, DC 20420, telephone (202) 273-7228. This is 
not a toll-free number.

SUPPLEMENTARY INFORMATION: 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. 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 Sec. 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 Sec. 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 Sec. 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 Secs. 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 Sec. 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 Sec. 3.551(i) to reflect the 
statutory change.
    This final rule reflects statutory requirements. Accordingly, there 
is a basis for dispensing with the prior notice and comment and delayed 
effective date provisions of 5 U.S.C. 552 and 553.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

Executive Order 12866

    This document has been reviewed by the Office of Management and 
Budget under Executive Order 12866.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking was required in connection 
with the adoption of this final rule, no regulatory flexibility 
analysis is required under the Regulatory Flexibility Act (5 U.S.C. 
601-612). Even so, 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

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Flexibility Act. This final rule will not directly affect any small 
entities. Only VA beneficiaries are directly affected. Therefore, 
pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial 
and final regulatory flexibility analyses requirement of sections 603 
and 604.

(The Catalog of Federal Domestic Assistance program numbers are 
64.101, 64.104, 64.105, 64.109, 64.110, and 64.127.)

List of Subjects

38 CFR Part 3

    Administrative practice and procedure, Claims, Disability benefits, 
Health care, Pensions, Veterans, Vietnam.

38 CFR Part 13

    Surety bonds, Trusts and trustees, and Veterans.

    Approved: May 21, 2001.
Anthony J. Principi,
Secretary of Veterans Affairs.


    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 Sec. 3.6, paragraphs (a) and (e) are revised to read as 
follows:


Sec. 3.6  Duty periods.

    (a) Active military, naval, and air service. 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). 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))


Sec. 3.353  [Amended]

    3. In Sec. 3.353, paragraph (b)(1) is amended by removing ``in 
excess of $1,500 (Sec. 3.557(b))'' and adding, in its place, ``that 
equals or exceeds the amount specified in Sec. 3.557(b)(4)''.

    4. The ``CROSS REFERENCES'' section immediately following 
Sec. 3.452 is revised to read as follows:


Sec. 3.452  Veterans benefits apportionable.

* * * * *
    Cross References: Institutional awards. See Sec. 3.852. 
Disappearance of veteran. See Sec. 3.656. Reduction because of 
hospitalization. See Sec. 3.551. Penal institutions. See Sec. 3.666. 
Incompetents; estate equals or exceeds statutory limit and 
institutionalized. See Sec. 3.557.


Sec. 3.501  [Amended]

    5. In Sec. 3.501, paragraph (i)(7) is amended by removing 
``$1,500'' each time it appears and adding, in its place, ``the amount 
specified in Sec. 3.557(b)(4)''.


Sec. 3.551  [Amended]

    6. In Sec. 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 
Sec. 3.557.
    The revisions read as follows:


Sec. 3.557  Incompetents; estate equals or exceeds statutory limit and 
institutionalized.

* * * * *
    (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. 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 
Sec. 3.454(c). Reductions and discontinuances; general. See 
Sec. 3.500. Reductions and discontinuances; veterans. See 
Sec. 3.501. Amounts withheld or not paid incompetent veteran. See 
Sec. 3.1007. Estate equals or exceeds statutory limit. See 
Sec. 13.108 of this chapter. Determination of value of estate. See 
Sec. 13.109 of this chapter.


    8. In Sec. 3.558, the section heading and paragraph (a) are revised 
to read as follows:


Sec. 3.558  Resumption and payment of withheld benefits; incompetents 
with estates that equaled or exceeded statutory limit.

    (a) Where payment has been discontinued by reason of Sec. 3.557(b), 
it will not be resumed during hospitalization except as provided in 
Sec. 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 Sec. 3.557(b)(4) or less. Payments will not

[[Page 48561]]

be made for any period prior to the date on which the estate was 
reduced to one-half the amount specified in Sec. 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 Sec. 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 
Sec. 3.557(b)(4)''.
    The revision reads as follows:


Sec. 3.559  Resumption--where the estate equals or exceeds the 
statutory limit and includes chose in action.

* * * * *


Sec. 3.1007  [Amended]

    10. Section 3.1007 is amended by removing ``$1,500'' and adding, in 
its place, ``the amount specified in Sec. 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 Sec. 3.1604, paragraph (d)(1)(ii) is revised to read as 
follows:


Sec. 3.1604  Payments from non-Department of Veterans Affairs sources.

* * * * *
    (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.


Sec. 13.70  [Amended]

    14. In Sec. 13.70, paragraph (a)(2) is amended by removing 
``$1,500'' and adding, in its place, ``the amount specified in 
Sec. 3.557(b)(4) of this chapter''.


Sec. 13.71  [Amended]

    15. In Sec. 13.71, paragraph (b) is amended by removing ``$1,500'' 
and adding, in its place, ``the amount specified in Sec. 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 Sec. 3.557(b)(4) of this chapter'', and by 
removing ``$500'' and adding, in its place, ``one-half the amount 
specified in Sec. 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 Sec. 3.557(b)(4) of 
this chapter''.
    The revision reads as follows:


Sec. 13.108  Estate equals or exceeds statutory limit; 38 U.S.C. 
5503(b)(1).

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[FR Doc. 01-23552 Filed 9-20-01; 8:45 am]
BILLING CODE 8320-01-P