[Federal Register Volume 67, Number 1 (Wednesday, January 2, 2002)]
[Proposed Rules]
[Pages 200-209]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-31673]



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Part IV





Department of Veterans Affairs





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38 CFR Parts 3, 17, and 21



Monetary Allowance Payments, Health Care, and Vocational Training for 
Certain Children of Vietnam Veterans; Proposed Rules

  Federal Register / Vol. 67, No. 1 / Wednesday, January 2, 2002 / 
Proposed Rules  

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AK67


Monetary Allowances for Certain Children of Vietnam Veterans; 
Identification of Covered Birth Defects

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend 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, the proposed rule would 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 documents concerning the provision of health care (RIN 2900-
AK88) and vocational training benefits (RIN 2900-AK90) for eligible 
children of Vietnam veterans are set forth in the Proposed Rules 
section of this issue of the Federal Register.

DATES: Comments must be received by VA on or before February 1, 2002.

ADDRESSES: Mail or hand-deliver written comments to: Director, Office 
of Regulations Management (02D), Department of Veterans Affairs, 810 
Vermont Ave., NW., Room 1154, Washington, DC 20420; or fax comments to 
(202) 273-9289; or e-mail comments to [email protected]. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AK67.'' All comments received will be available for public 
inspection in the Office of Regulations Management, Room 1158, between 
the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except 
holidays).

FOR FURTHER INFORMATION CONTACT: Caroll McBrine, M.D., Consultant, 
Regulations Staff (211A), Compensation and Pension Service, Veterans 
Benefits Administration, 810 Vermont Avenue, NW., Washington, DC 20420, 
telephone (202) 273-7210.

SUPPLEMENTARY INFORMATION: Section 401 of the Veterans Benefits and 
Health Care Improvement Act of 2000, Public Law 106-419, amends 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. This document proposes to amend existing VA 
adjudication regulations and to add Sec. 3.815 to title 38, Code of 
Federal Regulations, to implement this new authority.
    Effective December 1, 2001, 38 U.S.C. 1823 provides 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 propose to amend 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.
    We also propose to amend 38 CFR 3.27, 3.29, 3.31, 3.105, 3.114, 
3.158, 3.216, 3.403, 3.500, and 3.503 so that regulations applying to 
adjustment of benefit rates, rounding of dollar figures of the monthly 
payment, commencement of the period of payment, revision of decisions, 
mandatory disclosure of social security numbers, abandonment of claims, 
and effective date of the award and of reductions and discontinuances, 
apply to these benefits.
    Further, we propose to make non-substantive changes to 38 CFR 3.814 
concerning the monetary allowance for individuals with spina bifida to 
reflect section 401 of Public Law 106-419, to make conforming changes, 
and to remove unnecessary or obsolete provisions.
    In addition, we propose to make changes for purposes of clarity in 
Sec. 3.814 and in other provisions mentioned above.
    Until December 1, 2001, 38 U.S.C. chapter 18 is titled ``Benefits 
for Children of Vietnam Veterans Who Are Born with Spina Bifida.'' It 
provides benefits for the children of Vietnam veterans on the basis of 
a report by the Institute of Medicine (IOM) of the National Academy of 
Sciences called ``Veterans and Agent Orange: Update 1996,'' in which 
the IOM noted what it considered ``limited/suggestive evidence of an 
association'' between herbicide exposure and spina bifida in the 
offspring of Vietnam veterans. Effective December 1, 2001, 38 U.S.C. 
chapter 18 is retitled ``Benefits for Children of Vietnam Veterans.'' 
Statutory provisions that have been in 38 U.S.C. chapter 18 concerning 
benefits for individuals with spina bifida who are children of Vietnam 
veterans are amended effective December 1, 2001, to be in subchapter I 
of chapter 18, renamed ``Children of Vietnam Veterans Born with Spina 
Bifida.'' Subchapter II is added effective December 1, 2001, to chapter 
18 and is titled ``Children of Women Vietnam Veterans Born with Certain 
Birth Defects.'' Subchapter III is added effective December 1, 2001, to 
chapter 18 and is titled ``General Provisions.'' That new subchapter 
contains provisions applicable to both categories of individuals.
    The new statutory provisions, primarily 38 U.S.C. 1815, authorize 
VA to provide a monetary allowance for an individual with disability 
resulting from one or more covered birth defects who is a child of a 
woman Vietnam veteran. The statute is based on the results of a 
comprehensive health study by VA of 8,280 women Vietnam-era veterans 
(half of whom served in the Republic of Vietnam and half of whom served 
elsewhere) that was mandated by Public Law 99-272. The study, completed 
in October 1998, and titled ``Women Vietnam Veterans Reproductive 
Outcomes Health Study'' (VA study), was conducted by the Environmental 
Epidemiology Service of the Veterans Health Administration of the 
Department of Veterans Affairs. For purposes of satisfying the basic 
statistical requirement of independence of observations (i.e., in this 
study one pregnancy per woman), the VA study selected the first 
pregnancy after entrance date to Vietnam service, for women Vietnam 
veterans, as the ``index pregnancy.'' For the non-Vietnam group, the 
index pregnancy was defined as the first pregnancy after July 4, 1965. 
The VA study defined ``likely'' birth defects as congenital anomalies 
and included structural, functional, metabolic, and hereditary defects. 
It excluded developmental disorders, perinatal complications, 
miscellaneous pediatric illnesses, and conditions that were not 
classifiable. A report of part of the VA study, ``Pregnancy Outcomes 
Among U.S. Women Vietnam Veterans'' (Pregnancy Outcomes report), was 
published in the American Journal of Industrial Medicine (38:447-454 
(2000)).
    As provided in 38 U.S.C. 1815(c), the amount of the monthly 
monetary allowance payable to an individual with disability resulting 
from covered birth defects will be: For the lowest level of disability 
(Level I), $100; for the lower intermediate level of disability (Level

[[Page 201]]

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.
    We propose to amend 38 CFR 3.27, ``Automatic adjustment of benefit 
rates'' to reflect the amendments to 38 U.S.C. chapter 18. Under the 
provisions of 38 U.S.C. 1805(b)(3) and 1815(d), these amounts are 
subject to adjustment under the provisions of 38 U.S.C. 5312, which 
provide 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 propose to amend the provisions of 38 CFR 3.29, ``Rounding'' to 
apply to increases in the monthly monetary amounts payable under 38 
U.S.C. 1815. Whenever rates are increased under the provisions of 38 
U.S.C. 5312, the Secretary may, under section 5312(c)(2), round those 
rates in such manner as the Secretary considers equitable and 
appropriate. The Secretary has determined that it is equitable and 
that, for ease of administration, it is appropriate to round up rate 
increases concerning the covered birth defects monetary benefit, as 
they are for the spina bifida monetary benefits. The proposed rule will 
amend Sec. 3.29 accordingly.
    We also propose to revise 38 CFR 3.31, ``Commencement of the period 
of payment''; 38 CFR 3.114, ``Change of law or Department of Veterans 
Affairs issue''; and 38 CFR 3.216, ``Mandatory disclosure of social 
security numbers'' to reflect that these provisions also apply to an 
individual with covered birth defects who is the child of a woman 
Vietnam veteran. All these provisions reflect statutory requirements.
    Where a change in disability level warrants a reduction of the 
monetary allowance under 38 U.S.C. 1805 for individuals with spina 
bifida, the provisions of 38 CFR 3.105(g) direct VA to notify the 
beneficiary of the proposed reduction, allow the beneficiary 60 days to 
present evidence showing that the reduction should not occur, and 
provide that in the absence of such additional evidence the reduction 
will be effective the last day of the month following 60 days from the 
date of the notice. The proposed rule would expand the procedures to 
make them applicable to proposed reduction or discontinuance of any 
monetary allowance under 38 U.S.C. chapter 18. This reflects statutory 
requirements.
    The provisions of 38 CFR 3.158 concern the circumstances under 
which VA will consider a claim abandoned. 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 propose to apply these provisions to the monetary 
monthly allowance for individuals with covered birth defects, and we 
are proposing to amend 38 CFR 3.158 accordingly.
    We propose to amend 38 CFR 3.403 by adding a new paragraph (c) to 
state that an award of the monetary allowance under 38 U.S.C. 1815 to 
or for an individual with covered birth defects who is a child of a 
woman Vietnam veteran will be the later of date of claim (or date of 
birth if a claim is received within one year of that date), the date 
entitlement arose, or December 1, 2001. This reflects statutory 
requirements.
    VA is also proposing to amend 38 CFR 3.503 to specify that any 
monetary allowance under 38 U.S.C. chapter 18 will terminate the last 
day of the month before the month in which the death of a beneficiary 
occurs. This reflects statutory requirements.
    VA is proposing to remove Sec. 3.814(b), which sets forth an 
obsolete version of the ``Application for Spina Bifida Benefits'' form. 
The Office of Management and Budget has approved a revised version of 
the form.
    We propose to add a new 38 CFR 3.815 to implement the provisions of 
38 U.S.C. 1811, 1812, 1815, and 1821, as well as other provisions of 38 
U.S.C. chapter 18, subchapters II and III. While Sec. 3.815 primarily 
contains provisions concerning payment of monetary benefits, some of 
the proposed provisions of Sec. 3.815 (for example, concerning whether 
an individual has a ``covered birth defect'') also would be used to 
determine eligibility for health care under 38 U.S.C. 1813 and 
vocational training under 38 U.S.C. 1814. Companion documents 
concerning the provision of health care (RIN 2900-AK88) and vocational 
training (RIN 2900-AK90) for certain children of Vietnam veterans with 
covered birth defects or spina bifida are set forth in the Proposed 
Rules section of this issue of the Federal Register.
    In accordance with the statutory framework, paragraph (a)(1) of 
proposed Sec. 3.815 provides that VA will pay a monthly 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. Paragraph (a)(1) further provides that, except as provided in 
paragraph (a)(3) of that section, the amount of the monetary allowance 
will be based on the level of disability suffered by an individual as 
determined in accordance with the provisions of paragraph (e), which 
sets forth criteria for evaluating levels of disability suffered by 
individuals with covered birth defects. Paragraph (a)(2) provides that 
no monetary allowance will be provided under this section to an 
individual based on disability from a particular birth defect 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 that veteran during the Vietnam era and that, in determining 
the level of disability, VA will not consider the particular defect in 
question. This will not prevent VA from paying a monetary allowance 
under subchapter II of 38 U.S.C. chapter 18 for any other birth defect 
for which affirmative evidence of another cause does not exist. We 
believe these provisions accord with the statutory intent of 38 U.S.C. 
1812.
    Paragraph (a)(3) of proposed Sec. 3.815 provides that, in the case 
of an individual (as defined in Sec. 3.815(c)(2)) whose only covered 
birth defect is spina bifida, a monetary allowance will be paid under 
Sec. 3.814, and not under Sec. 3.815, nor will the individual be 
evaluated for disability under Sec. 3.815. Thus, the individual's 
disability would be evaluated under 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'') 
and the monetary allowance would be paid under the terms of that 
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 Sec. 3.815 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 application of 
this paragraph, 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 would be not less than 
Level II, III or, IV, respectively. These provisions

[[Page 202]]

reflect statutory requirements under 38 U.S.C. 1824(a) and our 
interpretation that Congress intended that the provisions of 38 U.S.C. 
1824(a) are solely to provide for nonduplication of benefits between 
subchapters I and II, and are not intended in any other way to reduce 
the amount of monetary allowance that would be payable under 38 U.S.C. 
chapter 18 for an individual with spina bifida.
    Paragraph (b) of proposed Sec. 3.815 states, in accord with the 
statute, that receipt of the monetary allowance under 38 U.S.C. chapter 
18 will not affect the right of the individual with covered birth 
defects, 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.
    Paragraph (c)(1) of proposed Sec. 3.815 contains a definition of 
``Vietnam veteran'' for purposes of that section. The term ``Vietnam 
veteran'' is defined to mean 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. This reflects 
the statutory provisions in 38 U.S.C. 1821(2) and 1821(3)(B). We also 
propose to provide for purposes of Sec. 3.815 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. This is consistent with the 
definition of service in the Republic of Vietnam that appears at 38 CFR 
3.307(a)(6)(iii).
    Paragraph (c)(2) of proposed Sec. 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. Although 38 U.S.C. chapter 18 uses the terms 
``child'' and ``children,'' many of those entitled to this benefit are 
now adolescents or adults. This definition will make it clear that 
these regulations apply to eligible persons regardless of age. 
Paragraph (c)(2) also provides that to establish whether a person is 
the biological son or daughter of a Vietnam veteran, VA will require 
the types of evidence specified in 38 CFR 3.209 and 3.210.
    A birth defect is defined by the March of Dimes organization as an 
abnormality of structure, function, or metabolism, whether genetically 
determined or a result of environmental influence during embryonic or 
fetal life (http://www.modimes.org). Similar definitions are used by 
other State, national, and international organizations. The VA study of 
women Vietnam veterans did not define the term ``birth defects'' but 
stated that it included structural, functional, metabolic, and 
hereditary defects. It also stated that the causes of most congenital 
anomalies are unknown and that a combination of genetic and 
environmental factors may contribute to 20-25% of anomalies.
    In the VA study, ``likely'' birth defects, reported by women 
Vietnam veterans in their children, were divided by pediatricians who 
reviewed the mothers' descriptions of the defects into the following 
seven categories: chromosomal abnormality; multiple anomalies (except 
chromosomal and heritable genetic); isolated anomaly; congenital 
neoplasms; heritable genetic disease; undescribed isolated heart 
abnormality; and other poorly described defect (non-cardiac). The VA 
study stated that there is a notable lack of difference between the 
children of women Vietnam veterans and the children of women non-
Vietnam veterans for classes of known genetic/heritable conditions 
(including congenital malignancies). In the children resulting from 
index pregnancies, there was one congenital malignancy in a child of a 
Vietnam veteran and one in a child of a non-Vietnam veteran; there were 
four cases of heritable genetic disease in each group of veterans; and 
there were three chromosomal abnormalities in children of Vietnam 
veterans and four in the children of non-Vietnam veterans. Thus, the VA 
study provides no evidence of an association between service in Vietnam 
and three of the seven categories (chromosomal abnormalities, 
congenital malignancies, and heritable genetic diseases). Since under 
38 U.S.C. 1812(a)(1) VA has authority to identify birth defects of 
children of women Vietnam veterans as covered birth defects only if the 
birth defects ``are associated with the service of those veterans in 
the Republic of Vietnam during the Vietnam era,'' we believe it would 
not be appropriate to identify these three categories of birth defects 
as covered birth defects. Other conditions reported by the mother as 
birth defects that were something else included developmental 
disorders, such as autism, and miscellaneous pediatric conditions, such 
as asthma.
    In addition, the statute specifically excludes familial disorders, 
birth-related injuries, and fetal or neonatal infirmities with well-
established causes from the category of covered birth defects.
    Therefore, we propose in paragraph (c)(3) of Sec. 3.815 to define 
the term ``covered birth defect'' for purposes of that section to mean:

[A]ny 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.

We believe that this definition reflects the intent of Congress with 
respect to provision of benefits for individuals under 38 U.S.C. 
chapter 18, subchapters II and III.
    In paragraph (d) of proposed Sec. 3.815, VA lists some, but not 
all, specific conditions that VA would identify or would not identify 
as covered birth defects. Paragraph (d)(1) contains a list, based on 
the VA study, of some, but not all, conditions that VA would consider 
to be covered birth defects, unless a condition is familial in a 
particular case. Each of paragraphs (d)(2) through (d)(8) contains a 
non-exclusive list of certain conditions that, for different reasons, 
VA would not consider to be covered birth defects. Because of the vast 
number of possible birth defects, and the fact that many are sometimes 
familial and sometimes not (when they arise de novo, or anew, in a 
particular individual), it is not practical to develop an exclusive or 
definitive list in proposed Sec. 3.815(d). For example, achondroplasia 
and Marfan syndrome are sometimes familial and sometimes not. We 
propose to include achondroplasia in the list of covered birth defects 
because 75% of cases are due to gene mutation (www.med.jhu.edu/Greenberg.Center/achon.htm) rather than being familial, but it will not 
be a covered birth defect in any case where it is determined to be 
familial. On the other hand, Marfan syndrome is familial in two-thirds 
to three-quarters of cases (www.marfan.org), so we propose to exclude 
it as a covered birth defect, unless there is no indication that it is 
familial in a particular family, in which case it would not be excluded 
as familial.
    Proposed Sec. 3.815(d)(1) states that covered birth defects 
include, but are not limited to, the following (but that if a birth 
defect is determined to be familial in a particular family, it would

[[Page 203]]

not be a covered birth defect): achondroplasia, cleft lip and cleft 
palate, congenital heart disease, congenital talipes equinovarus 
(clubfoot), esophageal and intestinal atresia, Hallerman-Streiff 
syndrome, hip dysplasia, Hirschprung's disease (congenital megacolon), 
hydrocephalus due to aqueductal stenosis, hypospadias, imperforate 
anus, neural tube defects (including spina bifida, encephalocele, and 
anencephaly), Poland syndrome, pyloric stenosis, syndactyly (fused 
digits), tracheoesophageal fistula, undescended testicle, and Williams 
syndrome.
    Familial, according to Dorland's Illustrated Medical Dictionary, 
27th edition (1988), means occurring or affecting more members of a 
family than would be expected by chance. The category of familial 
disorders includes all heritable (that is, hereditary) genetic 
conditions, but not all genetic conditions, because a genetic mutation 
may arise for the first time during early development and not be 
hereditary. In that case, the parents would not have the genetic 
disorder, and the condition would not be familial.
    Proposed Sec. 3.815(d)(2) states generally that conditions that are 
familial disorders, including hereditary genetic conditions (as they 
are called in the VA study) are not covered birth defects. However, as 
proposed Sec. 3.815(d)(2) also provides, if a birth defect is not 
familial in a particular family, VA would not consider it to be a 
familial disorder. (Thus, it would be a covered birth defect unless 
excluded under another provision of paragraph (d).) It states that 
familial disorders include, but are not limited to, the following, 
unless not familial in a particular family: albinism, alpha-antitrypsin 
deficiency, Crouzon syndrome, cystic fibrosis, Duchenne's muscular 
dystrophy, galactosemia, hemophilia, Huntington's disease, Hurler 
syndrome, Kartagener's syndrome (Primary Ciliary Dyskinesia), Marfan 
syndrome, neurofibromatosis, osteogenesis imperfecta, pectus excavatum, 
phenylketonuria, sickle cell disease, Tay-Sachs disease, thalassemia, 
and Wilson's disease (the VA study, The Merck Manual). These and other 
conditions, depending on the circumstances, may or may not be familial. 
For example, pectus excavatum is generally considered to be a familial 
birth defect but may also occur in the absence of a family history. 
Congenital blindness has some established causes, such as maternal 
rubella during pregnancy or metabolic disorders, but in other cases, it 
has no established cause and would be a covered birth defect. 
Similarly, congenital deafness may be familial or may be due to an 
unknown cause. Some types of hydrocephalus are due to maternal 
infection and some have no known cause. Whether the disease is familial 
or not will be reported in most cases in medical records containing a 
family history.
    Proposed Sec. 3.815(d)(3) states that congenital malignant 
neoplasms (referred to in the VA study as congenital malignancies) are 
not covered birth defects. It states that these include, but are not 
limited to, the following: medulloblastoma, neuroblastoma, 
retinoblastoma, teratoma, and Wilm's tumor (The Merck Manual (17th 
edition, 1999 http://www.neonatology.org/ syllabus/teratoma.html, 
http://cancer.med.upenn.edu/pdq_html/1/engl/ 100048.html, and http://cancernet.nci.nih.gov/clinpdq/pif.html).
    Proposed Sec. 3.815(d)(4) states that chromosomal abnormalities are 
not covered birth defects. It states that these include, but are not 
limited to, the following: Down syndrome and other Trisomies, Fragile X 
syndrome, Klinefelter's syndrome, Turner syndrome (the VA study, The 
Merck Manual).
    Proposed Sec. 3.815(d)(5) states that conditions that are due to 
birth-related injury are not covered birth defects. It states that 
these conditions include, but are not limited to, the following: brain 
damage due to anoxia during or around the time of birth; cases of 
cerebral palsy due to birth trauma; facial nerve palsy or other 
peripheral nerve injury; fractured clavicle; and Horner's syndrome due 
to forceful manipulation during birth.
    Proposed Sec. 3.815(d)(6) states that 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. VA 
considers that these include, but are not limited to, the effects of 
maternal infection during pregnancy, such as rubella, toxoplasmosis, or 
syphilis, and include fetal alcohol syndrome or fetal effects of 
maternal drug use (known to result from maternal use of alcohol or 
drugs during pregnancy). Miscellaneous pediatric conditions are 
conditions which the Pregnancy Outcomes report discusses as ``unlikely 
birth defects.'' They were reported by the mother in telephone 
interviews as birth defects, but pediatricians determined them to be 
pediatric conditions rather than birth defects. Accordingly, proposed 
Sec. 3.815(d)(6) states that the following are not covered birth 
defects: asthma and other allergies, hyaline membrane disease, 
maternal-infant blood incompatibility, neonatal infections, neonatal 
jaundice, post-infancy deafness/hearing impairment (occurring after the 
age of one year), prematurity, and refractive disorders of the eye (for 
example, farsightedness and astigmatism).
    Proposed Sec. 3.815(d)(7) states that developmental disorders are 
not covered birth defects. VA considers that the following, which are 
listed in proposed Sec. 3.815(d)(7), are developmental disorders rather 
than birth defects: attention deficit disorder; autism; epilepsy 
diagnosed after infancy (after the age of one year); learning 
disorders; and mental retardation (unless part of a syndrome that is a 
covered birth defect) (the VA study, http://www.autism-society.org/whatisautism/autism.html#causes, and http://www.cdc.gov/nceh/cddh/ddhome.htm).
    Proposed Sec. 3.815(d)(8) states that conditions that do not result 
in permanent physical or mental disability are not covered birth 
defects. VA believes that these include, but are not limited to, the 
following, which are listed in proposed Sec. 3.815(d)(8): conditions 
rendered non-disabling through treatment; congenital heart problems 
surgically corrected or resolved without disabling residuals; heart 
murmurs unassociated with a diagnosed cardiac abnormality; hemangiomas 
that have resolved with or without treatment; and scars (other than of 
the head, face, or neck) as the only residual of corrective surgery for 
birth defects.
    Paragraph (h) of proposed Sec. 3.815 provides 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 to make the determination as to whether a condition 
is a covered birth defect.
    Paragraph (e) of proposed Sec. 3.815 provides, in accordance with 
38 U.S.C. 1815(a) and (b), that VA will determine the level of 
disability currently resulting, in combination, from an individual's 
covered birth defects and associated disabilities. It further provides 
that no monetary allowance will be payable under subchapter II of 38 
U.S.C. chapter 18 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. Also, as required by 38 U.S.C. 
1815(b), paragraph (e) sets forth a schedule for rating disabilities 
resulting from covered birth defects at four levels of disability, 
identified as

[[Page 204]]

Level I, Level II, Level III, and Level IV, with Level I having the 
lowest, and Level IV the highest, level of disability. The schedule 
also includes Level 0 when VA determines that an individual has one or 
more covered birth defects, but has no current disability resulting 
therefrom. Disability determinations would be based on an assessment of 
the effect on day-to-day functioning or the extent of disfigurement of 
the head, face, or neck due to one or more covered birth defects or 
associated disabilities. These proposed criteria are necessarily broad 
because of the array of potential disabilities affecting any body 
system or multiple systems and are designed to be applicable to the 
widest possible variety of disabilities. We propose that the functions 
to be considered in assessing limitation of daily activities be 
mobility (ability to stand and walk, including balance and 
coordination), manual dexterity, stamina, speech, hearing, vision 
(other than correctable refraction errors), memory, ability to 
concentrate, appropriateness of behavior, and urinary and fecal 
continence. While disfigurement does not necessarily limit any of these 
functions, although it may limit communication, it may, in our 
judgment, and based on our experience with disability assessment in 
veterans, be significantly disabling in and of itself, and we are 
therefore proposing to include it in the criteria. These are similar to 
the types of functional impairments described in literature pertaining 
to disabilities, for example, in Americans with Disabilities Act (ADA) 
documents, such as the Glossary of Common Characteristics and 
Limitations of Disabilities in ADA Handbook, Appendix IV and ADA Title 
III Regulations, and in a 1997 Institute of Medicine document, 
``Enabling America: Assessing the Role of Rehabilitation Science and 
Engineering.''
    We propose that Level I be assigned if the individual has residual 
physical or mental effects that only occasionally or intermittently 
limit or prevent some daily activities, or 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). 
We propose that Level II be assigned if 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, 
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). We propose that 
Level III be assigned on one of four bases: if 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; the individual is unable to work or 
attend school, travel, or carry out household chores, or does so 
intermittently and with difficulty; the individual's communication, 
behavior, social interaction, and intellectual functioning are not 
entirely appropriate for age; or 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). We propose that Level IV be assigned on 
one of three bases: if the individual has residual physical or mental 
effects that prevent age-appropriate self-care, such as eating, 
dressing, grooming, and carrying out personal hygiene; communication, 
behavior, social interaction, and intellectual functioning are grossly 
inappropriate for age; or 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). We believe these criteria will establish 
objective measures to identify discrete levels of disability, in 
accordance with the payment levels established by Congress that can be 
applied consistently.
    Because VA medical facilities generally provide examination and 
care only to veterans, VA lacks pediatric examiners and pediatric 
specialists and some of the other specialists who might participate in 
the evaluation and care of individuals with covered birth defects. 
Therefore, paragraph (f) of proposed Sec. 3.815 provides that VA may 
accept statements from private physicians, as well as examination 
reports from government or private institutions, for the purposes of 
determining whether an individual has a covered birth defect and rating 
claims from individuals with covered birth defects. It also provides 
that if they are adequate for such purposes, VA may make the 
determination and rating without further examination.
    Paragraph (g) of proposed Sec. 3.815 provides that VA will 
reconsider its determination that an individual has a covered birth 
defect and/or the level of disability due to covered birth defects 
whenever it receives medical evidence indicating that a change is 
warranted. In general, we believe that the severity of these conditions 
will be stable but that this provision provides a reasonable procedure 
for evaluating those that are not.
    Paragraph (i) of proposed Sec. 3.815 contains effective date 
provisions for awards, and increases, of the monetary allowance under 
38 U.S.C. chapter 18, subchapter II. Paragraph (j) of proposed 
Sec. 3.815 contains provisions concerning reductions and 
discontinuances of that monetary allowance. These reflect statutory 
requirements.

Comment Period

    We are providing a comment period of 30 days for this proposed rule 
due to the December 1, 2001, effective date of the new benefit programs 
enacted by section 401 of Public Law 106-419, the statutory requirement 
for a final rule prior to that date, and the need to have a final rule 
as soon as possible that would enable identification of, and evaluation 
of disability from, covered birth defects in order to avoid delay in 
the commencement of those benefits.

Paperwork Reduction Act of 1995

    This proposed rule would remove the approved information collection 
provisions contained in 38 CFR 3.814 as unnecessary or obsolete. The 
version of the ``Application for Spina Bifida Benefits'' form that is 
published in Sec. 3.814(b) is no longer being used. The Office of 
Management and Budget (OMB) has approved a revision of the form, under 
the same OMB control number, 2900-0572. VA intends to seek from OMB 
approval under the Paperwork Reduction Act for further modifications to 
that form. This proposed rule does not contain provisions constituting 
new collections of information under the Paperwork Reduction Act. Any 
provisions that might otherwise require approval as a modification to 
an information collection would not affect 10 or more persons in a 
twelve-month period.

Executive Order 12866

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

[[Page 205]]

Regulatory Flexibility Act

    The Secretary hereby certifies that these regulatory amendments 
would 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. The reason for this certification is that these 
amendments would not directly affect any small entities. Only 
individuals could be directly affected. Therefore, pursuant to 5 U.S.C. 
605(b), these amendments are exempt from the initial and final 
regulatory flexibility analysis requirements of sections 603 and 604.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private sector, of 
$100 million or more in any given year. This rule would have no 
consequential effect on State, local, or tribal governments.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance program numbers for 
benefits affected by this rule are 64.104, 64.109, 64.127, and 
64.128. There are no Catalog of Federal Domestic Assistance program 
numbers for other benefits affected by this rule.

List of Subjects in 38 CFR Part 3

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

    Approved: October 26, 2001.
Anthony J. Principi,
Secretary of Veterans Affairs.
    For the reasons set forth in the preamble, 38 CFR part 3 is 
proposed to be 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 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 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) * * *

[[Page 206]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Dependency and          Pension; old-law       Pension; Section 306
             Income                 Dependency (parents)    indemnity compensation    (veterans, surviving     (veterans, surviving          See--
                                                                  (parents)          spouses and children)     spouses and chldren)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
                   *                  *                  *                  *                  *                  *                  *
(40) Monetary allowance under 38  Excluded...............  Excluded...............  Excluded...............  Excluded...............  Sec.  3.262(y)
 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. 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 later.

(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. Removing designation ``(d)'' from paragraph (d)(1) and by adding 
a heading for paragraph (d).
    h. Removing the authority citation at the end of paragraph (d).
    i. In paragraph (e), removing ``children'' and adding, in its 
place, ``an individual''.
    j. Revising the authority citation 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. * * *
* * * * *
(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:

[[Page 207]]

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
(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;

[[Page 208]]

(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.

[[Page 209]]

    (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 later. 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)

[FR Doc. 01-31673 Filed 12-31-01; 8:45 am]
BILLING CODE 8320-01-P