[Federal Register Volume 68, Number 238 (Thursday, December 11, 2003)]
[Proposed Rules]
[Pages 69062-69066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30668]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 19 and 20

RIN 2900-AL77


Board of Veterans' Appeals: Obtaining Evidence and Curing 
Procedural Defects

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs proposes to amend the 
Appeals Regulations and Rules of Practice of the Board of Veterans' 
Appeals (Board) by removing the Board's authority to develop evidence 
for initial consideration. Under its current Appeals Regulations and 
Rules of

[[Page 69063]]

Practice, the Board is permitted to obtain evidence, clarify the 
evidence, cure a procedural defect, or perform any other action 
essential for a proper appellate decision in any appeal properly before 
it without having to remand the appeal to the agency of original 
jurisdiction. Some of the regulatory provisions governing this practice 
were recently invalidated by the United States Court of Appeals for the 
Federal Circuit. By way of this rulemaking, we propose removing the 
invalidated portions of the Board's development regulations and 
changing those regulations to provide that, with certain exceptions, 
the Board will remand a case to the agency of original jurisdiction 
when there is a need to obtain evidence, clarify the evidence, correct 
a procedural defect, or take any other action deemed essential for a 
proper appellate decision. We also propose to amend the definition of 
``agency of original jurisdiction,'' add a new provision that allows 
the Board to consider additional evidence without having to refer it to 
the agency of original jurisdiction for consideration in the first 
instance when this procedural right is waived by the appellant or the 
appellant's representative, and make other related changes and 
technical corrections to certain Appeals Regulations and Rules of 
Practice. The intended effect of this amendment is to make these 
regulations comply with a recent court decision.

DATES: Comments must be received on or before January 12, 2004.

ADDRESSES: Mail or hand-deliver written comments to: Director, 
Regulations Management (00REG1), Department of Veterans Affairs, 810 
Vermont Avenue, NW., Room 1064, Washington, DC 20420; or fax comments 
to (202) 273-9026; or e-mail comments to [email protected]. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AL77.'' All written comments will be available for public 
inspection at the above address in the Office of Regulation Policy and 
Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m., 
Monday through Friday (except holidays). Please call (202) 273-9515 for 
an appointment.

FOR FURTHER INFORMATION CONTACT: Steven L. Keller, Senior Deputy Vice 
Chairman, Board of Veterans' Appeals (01C), Department of Veterans 
Affairs, 810 Vermont Avenue, NW., Washington, DC 20420, (202-565-5978).

SUPPLEMENTARY INFORMATION: The Board of Veterans' Appeals (Board or 
BVA) is the component of Department of Veterans Affairs (VA) in 
Washington, DC, that decides appeals from denials of claims for 
veterans' benefits. An agency of original jurisdiction (AOJ), typically 
one of VA's 57 regional offices, makes the initial decision on a claim 
and subsequent decisions if VA receives additional evidence. A claimant 
who is dissatisfied with an AOJ's decision may appeal to the Board. 
After a claimant perfects an appeal to the Board, the AOJ certifies the 
appeal to the Board and transfers the record to the Board, so that the 
Board can decide the appeal.
    While considering an appeal, a BVA veterans law judge, or panel of 
veterans law judges, sometimes discovers that more evidence is needed, 
that the current evidence must be clarified, or that a procedural 
defect must be cured for the appeal to be properly decided. Prior to 
regulatory changes effective in February 2002, if the Board determined 
that additional evidence needed to be obtained, current evidence 
clarified, or a procedural defect cured for the appeal to be properly 
decided, the case, pursuant to 38 CFR 19.9 (2001), generally had to be 
remanded to the AOJ to perform the needed action. In addition, any 
pertinent evidence submitted by the appellant or representative that 
was accepted by the Board, as well as any such evidence referred to the 
Board by the AOJ under 38 CFR 19.37(b), was required to be referred to 
the AOJ for review and preparation of a Supplemental Statement of the 
Case, unless this procedural right was waived by the appellant or 
representative, or unless the Board determined that the benefit or 
benefits to which the evidence related could be allowed on appeal 
without such referral. 38 CFR 20.1304(c) (2001).
    In order to address a growing backlog of claims awaiting decision 
at VA's Regional Offices and to provide more expeditious processing of 
appeals, VA modified provisions of its Appeals Regulations and the 
Board's Rules of Practice to permit the Board to develop the record or 
cure procedural defects itself without remanding the appeal to the AOJ, 
and without having to obtain the appellant's waiver. These changes, 
which most significantly involved the amendment of 38 CFR 19.9 and 
20.1304, were published in the Federal Register as final amendments on 
January 23, 2002, 67 FR 3099 (2002), with an effective date of February 
22, 2002.
    Under the changes made to 38 CFR 19.9 at that time, the Board was 
still permitted to remand a case needing further development, but no 
longer was required to do so. Additionally, under the new 38 CFR 
19.9(a)(2)(ii), if the Board decided to provide the appellant with the 
notice required by 38 U.S.C. 5103(a) and/or 38 CFR 3.159(b)(1) 
(evidence required to substantiate a claim), the appellant would have 
30 days to respond to the notice and furnish the requested evidence. 
Evidence submitted after the Board's decision, but before the 
expiration of the one-year period following the notice, would be 
referred to the AOJ for due consideration. 38 CFR 19.31 and 20.1304 
also were revised to facilitate the development that could be 
undertaken at the Board.
    A number of petitions challenging the 2002 revisions made to 38 CFR 
19.9, 19.31, 20.903 and 20.1304 were filed with the United States Court 
of Appeals for the Federal Circuit (Federal Circuit). On May 1, 2003, 
the Federal Circuit issued a decision in Disabled American Veterans v. 
Secretary of Veterans Affairs, 327 F.3d 1339 (Fed. Cir. 2003), that 
invalidated 38 CFR 19.9(a)(2), and 19.9(a)(2)(ii). The Court concluded 
that the changes made to Sec.  19.9(a)(2) were contrary to 38 U.S.C. 
7104(a) because, if the Board obtained new evidence and rendered a 
decision on the basis of such evidence without obtaining a waiver from 
the claimant, such action would deprive the claimant of ``one review on 
appeal'' of the additional evidence.
    On May 21, 2003, the VA Office of the General Counsel (OGC) issued 
a precedential opinion addressing the impact and effect of the Federal 
Circuit's decision in Disabled American Veterans on the authority of 
the Board to develop evidence with respect to cases pending before the 
Board on appeal. In pertinent part, the OGC found that the Court's 
decision does not prohibit the Board from developing evidence in a case 
on appeal before the Board, provided that the Board first obtains the 
appellant's waiver of initial consideration of such evidence by the 
agency of original jurisdiction. VAOPGCPREC 1-2003 (May 21, 2003).
    Although the authority found in VAOPGCPREC 1-2003 still exists, it 
has been decided that, given its resources and experience, the Veterans 
Benefits Administration (VBA) is the most appropriate organization 
within the Department of Veterans Affairs to shoulder responsibility 
for developing most types of evidence and correcting procedural 
deficiencies in cases that have been appealed to the BVA. Therefore, in 
order to remove the two regulatory provisions invalidated by the 
Federal Circuit, and to effectuate the decision that the development of 
most types of evidence and correction of procedural deficiencies should 
be accomplished by VBA, VA proposes to amend 38 CFR 19.9 to require the 
Board to remand a case to the AOJ if it is found

[[Page 69064]]

that further evidence, clarification of the evidence, or correction of 
a procedural defect is needed. The currently existing exceptions to 
this requirement that are contained in 38 CFR 19.9(b) are being 
retained. These exceptions were in effect prior to the 2002 changes 
made to Sec.  19.9, and one--the Board's consideration of a change in 
law without the necessity of a remand to the AOJ--was specifically 
upheld as being a valid provision by the Federal Circuit in the 
Disabled American Veterans decision. A new remand exception also is 
being added to reflect, as further discussed below, the addition of 
Sec.  20.1304(c). That new provision will provide appellants with the 
option of waiving initial consideration by the AOJ of evidence referred 
to, or received by, the Board.
    VA also proposes to revise the definition of ``agency of original 
jurisdiction,'' as set forth in 38 CFR 20.3(a), to mean ``the 
Department of Veterans Affairs activity or administration, that is, the 
Veterans Benefits Administration, Veterans Health Administration, or 
National Cemetery Administration, that made the initial determination 
on a claim.'' This change is being made to broaden the definition of 
AOJ so that it is not limited to a particular office within one of the 
VA activities and administrations, including the office that made the 
initial determination on a claim. The term ``activity'' comes from the 
definition of agency of original jurisdiction included in 38 U.S.C. 
7105(b)(1). The purpose of this change is to provide the 
Administrations, particularly VBA, with the requisite flexibility to 
process remanded appeals in the most efficient and effective manner 
possible by reassigning work to different offices as deemed appropriate 
by management. See The Veterans' Benefits Improvements Act of 1994, 
Public Law 103-446, sections 302, 108 Stat. 4645, 4658 (1994), 38 
U.S.C.A. 5101 (West 2003) (Historical and Statutory Notes). This will 
enable VBA to use its available resources to complete any necessary 
development and readjudication of a remanded appeal at the most 
appropriate location.
    Additionally, VA proposes to re-promulgate former Sec.  20.1304(c) 
in substantially the same form as it existed prior to the 2002 
regulatory amendments and its removal at that time from the Board's 
Rules of Practice. Under certain circumstances pertinent evidence may 
be submitted directly to and accepted by the Board, or may be referred 
to the Board by the AOJ pursuant to 38 CFR 19.37(b). Unless the Board 
determines that the benefit or benefits to which the evidence relates 
may be fully allowed on appeal, and hence there is no possibility of 
prejudice to the appellant, such newly received evidence must be 
referred to the AOJ for initial review. Under the proposed revision, 
such referral will not be required when the appellant or the 
appellant's representative waives the procedural right to have the 
newly submitted evidence considered by the AOJ in the first instance. 
Allowing an appellant to affirmatively waive initial AOJ consideration 
of newly submitted evidence will reduce the need for Board remands 
whenever new pertinent evidence is received and considered by the Board 
in the first instance. In turn, this proposed change will allow for the 
faster processing of the claims of individual appellants, as well as 
the processing of appeals at both the AOJ and Board levels, due to the 
reduction in the number of cases that otherwise would require remand.
    Several technical corrections also are being made to 38 CFR 20.1304 
to reflect the redesignation of current paragraph (c) as paragraph (d), 
and the addition of the new paragraph (c) discussed above. In addition, 
the redesignated paragraph (d) is being amended to reflect that a 
waiver, in accordance with new paragraph (c) of this section, of 
initial AOJ consideration of pertinent evidence received by the Board 
must be obtained from each claimant when a simultaneously contested 
claim is involved. The purpose of this change is to fully protect the 
procedural rights of all of the parties involved in a simultaneously 
contested claim.
    This proposed rulemaking also would make several minor amendments 
and technical corrections to the rules affected by this rulemaking. In 
addition to the above amendments, we propose revising 38 CFR 19.9 to 
change the title of ``Board Member'' to ``Veterans Law Judge.'' On 
February 10, 2003, 38 CFR 19.2 was revised to allow the use of the 
title ``Veterans Law Judge'' as an alternative to ``Member of the 
Board.'' 68 FR 6621 (2003). The change in language in Sec.  19.9 is 
being proposed to conform to the new Sec.  19.2.
    An amendment is being proposed to 38 CFR 19.38, ``Action by agency 
of original jurisdiction when remand received,'' to remove the 
requirement that the AOJ must notify the Board as to the action it has 
taken on a remanded case. Prior to the Veterans Appeal Control and 
Locator System (VACOLS) becoming the Department's sole computer appeals 
tracking system, the AOJs were required to keep the Board informed of 
the status of Board remand cases. Such action is no longer needed, 
however, because VACOLS is now the sole appeals tracking system within 
the Department for both the Board and the AOJs, and any final action 
taken on a case by the AOJ will be reflected in VACOLS. It is the 
responsibility of the AOJs to return remanded cases to the Board that 
are not fully granted by the AOJ on remand. The Board does not have any 
jurisdiction to take further action on a remanded matter until it is 
returned by the AOJ. This amendment will make the regulation conform to 
current practice.
    Three changes are being proposed to 38 CFR 20.903, ``Notification 
of evidence secured and law to be considered by the Board and 
opportunity for response.'' Section 20.903(a) currently provides that, 
if the Board requests a legal or medical opinion, both the appellant 
and the appellant's representative will be notified of the request, but 
when the opinion is received a copy of the opinion is only provided to 
the representative or to the appellant, but not to both. Except in 
circumstances governed by 38 U.S.C. 5701(b)(1), where disclosure of an 
opinion could possibly be injurious to the physical or mental health of 
a claimant, it makes no sense to provide an appellant with a copy of an 
opinion request, but not with a copy of the opinion that is obtained in 
response to that request. Accordingly, we propose amending Sec.  
20.903(a) to state that the Board will furnish a copy of any legal or 
medical opinion obtained to both the appellant and the appellant's 
representative, if any. This change will ensure that the appellant is 
fully informed about and aware of any such opinions obtained by the 
Board.
    The second change being proposed to Sec.  20.903 relates to 
paragraph (b). If, pursuant to 38 CFR 19.9(a) or 19.37(b), the Board 
obtains pertinent evidence that was not submitted by the appellant or 
appellant's representative, Rule 903(b) currently provides that the 
Board must notify the appellant and the appellant's representative, if 
any, of the evidence obtained by furnishing a copy of such evidence, 
and providing a period of 60 days for response, which may include the 
submission of relevant evidence or argument. With certain exceptions 
covered elsewhere in the regulations, the AOJ, rather than the Board, 
will be developing evidence for initial consideration. Consequently, it 
is being proposed that Rule 903(b) be removed as a result of this 
change in practice.
    The third and final change being proposed to Sec.  20.903 relates 
to paragraph (c), which is being redesignated as paragraph (b) in light 
of

[[Page 69065]]

the proposed removal of Rule 903(b). A cross-reference is being added 
to the first sentence to make reference to Sec.  19.9(b)(2) as the 
source of the Board's authority to consider, in the first instance, law 
not already considered by the AOJ.

Comment Period

    Section 6(a)(1) of Executive Order 12866 indicates that, in most 
cases, a comment period for proposed regulations should be ``not less 
than 60 days.'' However, for this rulemaking we have provided a comment 
period of 30 days for the following reasons. First, this rulemaking 
primarily concerns rules of agency procedure or practice, which are not 
subject to the Administrative Procedure Act's general requirement of 
publication for notice and comment. Second, prompt issuance of the 
proposed amendments is necessary to remove those provisions of our 
current rules regarding the development of claims on appeal that were 
invalidated by the United States Court of Appeal for the Federal 
Circuit in Disabled American Veterans v. Secretary of Veterans Affairs, 
9 327 F. 3d 1339 (Fed. Cir. 2003). Third, and finally, the proposed 
amendments facilitate the processing of claims remanded from the Board 
by providing flexibility to VBA in deciding where those remands can 
best be handled. In that regard, it is important for the final rule to 
be published expeditiously in order to ensure the efficient and 
effective processing of appeals under valid regulations.

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 proposed rule would have 
no consequential effect on State, local, or tribal governments, or the 
private sector.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Executive Order 12866

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

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule 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. This proposed rule would affect only VA beneficiaries 
and would not affect small businesses. Therefore, pursuant to 5 U.S.C. 
605(b), this proposed rule is exempt from the initial and final 
regulatory flexibility analysis requirements of sections 603 and 604.

List of Subjects in 38 CFR Parts 19 and 20

    Administrative practice and procedure, Claims, Veterans.

    Approved: October 30, 2003.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR parts 19 and 20 are 
proposed to be amended as set forth below:

PART 19--BOARD OF VETERANS' APPEALS: APPEALS REGULATIONS

    1. The authority citation for part 19 continues to read as follows:

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

Subpart A--Operation of the Board of Veterans' Appeals

    2. Section 19.9 is amended by revising paragraphs (a) and (b) to 
read as follows:


Sec.  19.9  Remand for further development.

    (a) General. If further evidence, clarification of the evidence, 
correction of a procedural defect, or any other action is essential for 
a proper appellate decision, a Veterans Law Judge or panel of Veterans 
Law Judges shall remand the case to the agency of original 
jurisdiction, specifying the action to be undertaken.
    (b) Exceptions. A remand to the agency of original jurisdiction is 
not necessary for the purposes of:
    (1) Clarifying a procedural matter before the Board, including the 
appellant's choice of representative before the Board, the issues on 
appeal, or requests for a hearing before the Board;
    (2) Consideration of an appeal, in accordance with Sec.  20.903(b) 
of this chapter, with respect to law not already considered by the 
agency of original jurisdiction. This includes, but is not limited to, 
statutes, regulations, and court decisions; or
    (3) Reviewing additional evidence received by the Board, if, 
pursuant to Sec.  20.1304(c) of this chapter, the appellant or the 
appellant's representative waives the right to initial consideration by 
the agency of original jurisdiction, or if the Board determines that 
the benefit or benefits to which the evidence relates may be fully 
allowed on appeal.
* * * * *

Subpart B--Appeals Processing by Agency of Original Jurisdiction


Sec.  19.38  [Amended]

    3. Section 19.38 is amended by removing ``the Board and'' from the 
third sentence.

PART 20--BOARD OF VETERANS' APPEALS: RULES OF PRACTICE

    4. The authority citation for part 20 continues to read as follows:

    Authority: 38 U.S.C. 501(a) and as noted in specific sections.

    5. Section 20.3 is amended by revising paragraph (a) to read as 
follows:


Sec.  20.3  Rule 3. Definitions.

* * * * *
    (a) Agency of original jurisdiction means the Department of 
Veterans Affairs activity or administration, that is, the Veterans 
Benefits Administration, Veterans Health Administration, or National 
Cemetery Administration, that made the initial determination on a 
claim.
* * * * *
    6. Section 20.903 is amended by:
    a. Revising the second sentence in paragraph (a);
    b. Removing paragraph (b);
    c. Redesignating paragraph (c) as paragraph (b); and
    d. Revising the first sentence in newly redesignated paragraph (b).
    The revisions read as follows:


Sec.  20.903  Rule 903. Notification of evidence secured and law to be 
considered by the Board and opportunity for response.

    (a) * * * When the Board receives the opinion, it will furnish a 
copy of the opinion to the appellant, subject to the limitations 
provided in 38 U.S.C. 5701(b)(1), and to the appellant's 
representative, if any. * * *
    (b) * * * If, pursuant to Sec.  19.9(b)(2) of this chapter, the 
Board intends to consider law not already considered by the agency of 
original jurisdiction and such consideration could result in denial of 
the appeal, the Board will notify the appellant and his or her 
representative, if any, of its intent to do so and that such 
consideration in the first instance by the Board could result in denial 
of the appeal. * * *

[[Page 69066]]

    7. Section 20.1304 is amended by:
    a. In paragraphs (a) and (b)(1)(ii), removing ``paragraph (c)'' 
from each, and adding, in each place, ``paragraph (d)''.
    b. In paragraph (b)(2), removing ``paragraph (b) or (c)'' each 
place it appears, and adding, in each place, ``paragraph (a) or (b)''.
    c. Redesignating paragraph (c) as paragraph (d).
    d. Adding new paragraph (c).
    e. In newly designated paragraph (d), adding a new sentence 
immediately after ``additional evidence in rebuttal.''
    The additions read as follows:


Sec.  20.1304  Rule 1304. Request for change in representation, request 
for personal hearing, or submission of additional evidence following 
certification of an appeal to the Board of Veterans' Appeals.

* * * * *
    (c) Consideration of additional evidence by the Board or by the 
agency of original jurisdiction. Any pertinent evidence submitted by 
the appellant or representative which is accepted by the Board under 
the provisions of this section, or is submitted by the appellant or 
representative in response to a Sec.  20.903 of this part, 
notification, as well as any such evidence referred to the Board by the 
agency of original jurisdiction under Sec.  19.37(b) of this chapter, 
must be referred to the agency of original jurisdiction for review, 
unless this procedural right is waived by the appellant or 
representative, or unless the Board determines that the benefit or 
benefits to which the evidence relates may be fully allowed on appeal 
without such referral. Such a waiver must be in writing or, if a 
hearing on appeal is conducted, the waiver must be formally and clearly 
entered on the record orally at the time of the hearing. Evidence is 
not pertinent if it does not relate to or have a bearing on the 
appellate issue or issues.
    (d) * * * For matters over which the Board does not have original 
jurisdiction, a waiver of initial agency of original jurisdiction 
consideration of pertinent additional evidence received by the Board 
must be obtained from each claimant in accordance with paragraph (c) of 
this section. * * *

[FR Doc. 03-30668 Filed 12-10-03; 8:45 am]
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