[Federal Register Volume 69, Number 20 (Friday, January 30, 2004)]
[Proposed Rules]
[Pages 4820-4842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1895]



[[Page 4819]]

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Part VI





Department of Veterans Affairs





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38 CFR Part 5



Service Requirements for Veterans; Proposed Rule

  Federal Register / Vol. 69, No. 20 / Friday, January 30, 2004 / 
Proposed Rules  

[[Page 4820]]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 5

RIN 2900-AL67


Service Requirements for Veterans

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
Compensation and Pension regulations relating to service requirements 
for veterans, currently found in part 3 of title 38, Code of Federal 
Regulations (CFR), and to relocate them in new part 5. We propose to 
reorganize these regulations in a more logical order, add new section 
and paragraph headings, rewrite certain sections, and divide certain 
sections into one or more separate new sections. VA's principal goals 
in rewriting and reorganizing the current regulations are to provide 
readers with clearer language and more easily understood regulatory 
requirements.

DATES: Comments must be received by VA on or before March 30, 2004.

ADDRESSES: Written comments may be submitted by: mail or hand-delivery 
to Director, Regulations Management (00REG1), Department of Veterans 
Affairs, 810 Vermont Avenue, NW., Room 1068, Washington, DC 20420; fax 
to (202) 273-9026; e-mail to [email protected]; or, through 
www.Regulations.gov. Comments should indicate that they are submitted 
in response to ``RIN 2900-AL67.'' All comments received will be 
available for public inspection 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: Bill Russo, Chief, C&P Regulations 
Rewrite Project (00REG2), Department of Veterans Affairs, 810 Vermont 
Avenue, NW., Washington, DC 20420, (202) 273-9515.

SUPPLEMENTARY INFORMATION: The Secretary of Veterans Affairs has 
established an Office of Regulation Policy and Management (ORPM) to 
provide centralized management and coordination of VA's rulemaking 
process. One of the major functions of this office is to oversee a 
Regulation Rewrite Project (the Project) to improve the clarity and 
consistency of existing VA regulations. The Project responds to a 
recommendation made in the October 2001 Report to the Secretary of 
Veterans Affairs by the VA Claims Processing Task Force. The Task Force 
recommended that the Compensation and Pension regulations be rewritten 
and reorganized in order to improve VA's claims adjudication process. 
Therefore, the Project began its efforts by reviewing, reorganizing and 
redrafting the regulations in 38 CFR part 3 governing the Compensation 
and Pension (C&P) program of the Veterans Benefits Administration 
(VBA). These regulations are among the most difficult VA regulations 
for readers to understand and apply. Once rewritten, the proposed 
regulations will be published in several portions for public review and 
comment. This is the first such portion.

Overview of New Organization

    We plan to remove the compensation and pension benefit regulations 
from 38 CFR part 3 and relocate them in new part 5. We also plan to 
reorganize the regulations so that all provisions governing a specific 
benefit are located in the same part, with general provisions 
pertaining to all compensation and pension benefits also grouped 
together. We believe this reorganization will allow claimants and their 
representatives, as well as VA adjudicators, to find information 
relating to a specific benefit more quickly.
    The first major subdivision is ``Subpart A--General Provisions.'' 
It would include information regarding the scope of the regulations in 
new part 5, delegations of authority, general definitions, and general 
policy provisions for this part.
    ``Subpart B--Service Requirements for Veterans'' would include 
information regarding a veteran's military service, including the 
minimum service requirement, types of service, periods of war, and 
service evidence requirements. This subpart is the subject of this 
document.
    ``Subpart C--Adjudicative Process, General'' would inform readers 
about types of claims and filing procedures, VA's duties, rights and 
responsibilities of claimants, and general effective dates, as well as 
revision of decisions and protection of VA ratings.
    ``Subpart D--Dependents of Veterans'' would provide information 
about how VA determines whether an individual is a dependent and 
evidence requirements for such determinations.
    ``Subpart E--Claims for Service Connection and Disability 
Compensation'' would define service-connected compensation, including 
direct and secondary service connection. This subpart would inform 
readers how VA determines entitlement to service connection. The 
subpart would also contain those provisions governing presumptions 
related to service connection, rating principles, and effective dates, 
as well as several special ratings.
    ``Subpart F--Nonservice-Connected Disability Pensions and Death 
Pensions'' would include information regarding the three types of 
nonservice-connected pension: Improved pension, old law pension, and 
section 306 pension. This subpart would also include those provisions 
that state how to establish entitlement to each pension, and the 
effective dates governing each pension.
    ``Subpart G--Dependency and Indemnity Compensation, Death 
Compensation, and Accrued Benefits'' would contain those regulations 
governing claims for dependency and indemnity compensation (DIC), death 
compensation, accrued benefits, and benefits awarded, but unpaid, at 
death. This subpart would also include rules and definitions relating 
to these benefits and related effective dates and rates of payment.
    ``Subpart H--Special Benefits for Veterans, Dependents, and 
Survivors'' would pertain to ancillary and special benefits available, 
including benefits for children with various birth defects.
    ``Subpart I--Benefits For Filipino Veterans and Survivors'' would 
pertain to the various benefits available to Filipino veterans.
    ``Subpart J--Burial Benefits'' would pertain to burial allowances.
    ``Subpart K--Matters Affecting Receipt of Benefits'' would contain 
those provisions regarding determinations of willful misconduct, 
competency, and insanity, which may affect claimants' entitlement to 
benefits. This subpart would also contain information about forfeiture 
and renouncement of benefits.
    ``Subpart L--Payments and Adjustments to Payments'' would include 
general rate-setting rules, several adjustment and resumption 
regulations, and election of benefit.
    The final subpart, ``Subpart M--Apportionments and Payments to 
Fiduciaries or Incarcerated Beneficiaries'' would include regulations 
governing apportionments, benefits for incarcerated beneficiaries, and 
guardianship.
    Some of the regulations in this Notice of Proposed Rulemaking 
(NPRM) cross-reference other compensation and pension regulations. If 
those regulations have been published in this or earlier NPRMs, we cite 
the proposed part 5 section. We also cite the Federal

[[Page 4821]]

Register page where a proposed part 5 section published in an earlier 
NPRM may be found. However, where a regulation proposed in this NPRM 
would cross-reference a proposed part 5 regulation that has not yet 
been published, we cite to the current part 3 regulation that deals 
with the same subject matter. If there is no part 3 counterpart to a 
proposed part 5 regulation that has not yet been published, we have 
inserted ``[regulation that will be published in a future Notice of 
Proposed Rulemaking]'' in the place where the part 5 regulation 
citation would be placed.
    The current part 3 section we cite may differ from its eventual 
part 5 replacement in some respects, but we believe this method will 
assist readers in understanding these proposed regulations where no 
part 5 replacement has yet been published. VA will provide a separate 
opportunity for public comment on each segment of proposed part 5 
regulations before adopting a final version of part 5.

Organization of Proposed Subpart B

    This proposed rulemaking pertains to those regulations governing 
service requirements for compensation and pension benefits. These 
regulations would be contained in proposed subpart B of new 38 CFR part 
5. While these regulations have been substantially restructured and 
rewritten for greater clarity and ease of use, most of the basic 
concepts contained in these proposed regulations are the same as in 
their existing counterparts in 38 CFR part 3. However, a few 
substantive changes are proposed.
    The following table shows the correspondence between the current 
regulations in part 3 and those proposed regulations contained in this 
proposed rulemaking:

------------------------------------------------------------------------
                                            Based in whole or in part on
   Proposed part 5 section or paragraph       38 CFR part 3 section or
                                                      paragraph
------------------------------------------------------------------------
5.20......................................  3.2.
5.21(a)...................................  3.6(a), 3.7(a).
5.21(b)...................................  3.15.
5.22(a)...................................  3.6(b)(1).
5.22(b)...................................  3.6(b)(7).
5.22(c)...................................  new (cross reference).
5.23(a)(1)................................  3.6(b)(1).
5.23(a)(2)................................  3.6(c)(1).
5.23(a)(3)................................  3.6(d)(1) & (2).
5.23(b)(1)................................  3.6(b)(1).
5.23(b)(2)................................  3.6(c)(3).
5.23(b)(3)................................  3.6(d)(4).
5.23(c)...................................  new (cross reference).
5.24(a)...................................  3.6(b)(4) & (7).
5.24(b)(1)................................  3.6(b)(5).
5.24(b)(2)................................  3.6(c)(5).
5.24(c)(1)................................  3.6(c)(4).
5.24(c)(2)................................  3.6(d)(3).
5.24(c)(3)................................  3.700(a)(1)(ii).
5.24(d)...................................  new (cross reference).
5.25(a)(1)................................  3.6(b)(2).
5.25(a)(2)................................  3.6(c)(2).
5.25(a)(3)................................  3.6(d)(1) & (2).
5.25(b)...................................  3.6(b)(3).
5.25(c)...................................  3.6(c)(6) & (d)(4)(iii).
5.25(d)...................................  new (cross reference).
5.26......................................  3.7(o).
5.27(a) and (b)...........................  3.7(x).
5.27(c)...................................  3.7(x), 3.400(z).
5.28......................................  3.7(c)-(e), (h)-(l), (n),
                                             (p), & (s)-(w).
5.29(a)(1)................................  3.6(b)(6).
5.29(a)(2)................................  3.6(b)(7).
5.29(a)(3)................................  new (cross reference).
5.29(b)...................................  3.6(e).
5.30(a)...................................  3.12(a) first sentence.
5.30(b)...................................  new.
5.30(c)...................................  3.12(a) & (k)(1); 3.14(d).
5.30(d)...................................  new.
5.30(e)...................................  3.12(k)(2)-(3).
5.30(f)...................................  3.12(d).
5.31(a)...................................  new (purpose provision).
5.31(b)...................................  new.
5.31(c)...................................  3.7(b), 3.12(c).
5.31(d)...................................  new.
5.31(e)...................................  3.12(j).
5.32......................................  3.12(c)(6).
5.33......................................  3.12(b), (c)(6).
5.34(a)...................................  new (purpose provision).
5.34(b)...................................  new.
5.34(c)...................................  3.12(e).
5.34(d)...................................  3.400(g).
5.35(a)...................................  new (purpose provision).
5.35(b)...................................  3.12(f).
5.35(c) & (d).............................  3.12(g).
5.35(e)...................................  3.400(g).
5.36(a)...................................  3.12(h).
5.36(b) and (c)...........................  3.12(i).
5.37(a)...................................  new (purpose provision).
5.37(b)...................................  3.13(a).
5.37(c)...................................  3.13(b).
5.37(d)...................................  3.13(c).
5.38(a)...................................  new (purpose provision).
5.38(b)...................................  3.14(a) & (c).
5.38(c)...................................  3.14(b).
5.39(a)...................................  3.12a(b).
5.39(b)(1)................................  3.12a(c)(1).
5.39(b)(2)................................  3.12a(c)(2).
5.39(c)(1)................................  3.12a(a)(1).
5.39(c)(2)................................  3.203(c) last sentence.
5.39(d)...................................  3.12a(d).
5.39(e)...................................  3.15.
5.39(f)...................................  3.12a(e).
5.40(a)...................................  3.203(a).
5.40(b)...................................  3.203(a)(2).
5.40(c)...................................  3.203(a)(1) & (3).
5.40(d)...................................  3.203(c).
------------------------------------------------------------------------

    Readers who use this table to compare existing regulatory 
provisions with the proposed provisions, and who observe a substantive 
difference between them, should consult the text that appears later in 
this document for an explanation of significant changes in each 
regulation. Not every paragraph of every current part 3 section 
affected by these proposed regulations is accounted for in the table. 
In some instances other portions of the part 3 sections that are 
contained in these proposed regulations appear in subparts of part 5 
that will be published for public comment at a later time. For example, 
a reader might find a reference to paragraph (a) of a part 3 section in 
the table, but no reference to paragraph (b) of that section because 
paragraph (b) will be addressed in a future notice of proposed 
rulemaking. The table also does not include material from the current 
sections that will be removed from part 3 and not carried forward to 
part 5. A listing of material VA proposes to remove from part 3 appears 
later in this document.

Periods of War and Types of Military Service

    In new Sec. 5.20, we propose revisions to the rules concerning what 
periods of service VA recognizes as wartime service, beginning with the 
Mexican border period. Most of the information is presented in a table 
for easy reference.
    Because there are no veterans of the Civil War, the Indian Wars, or 
the Spanish-American War on VA's compensation and pension rolls and 
most, if not all, dependents with claims based on these earlier periods 
of war have already filed them, we propose to delete the provisions 
related to these periods of war and refer regulation users to the 
applicable statutory provisions concerning these earlier periods of 
war. This deletion would not affect benefit entitlement in any way. 
Should the occasion arise, VA will adjudicate any new claim using 
statutory definitions of earlier periods of war.
    A definition of the term ``period of war'' in 38 U.S.C. 1101(2)(A) 
extends the period recognized as World War I service for the purpose of 
benefits awarded under 38 U.S.C. chapter 11 (for example, disability 
compensation, death compensation, and benefits under 38 U.S.C. 1151, 
``Benefits for persons disabled by treatment or vocational 
rehabilitation''). World War I is similarly extended by 38 U.S.C. 
1501(2) for the purpose of non-service-connected pension benefits 
awarded under 38 U.S.C. chapter 15. We propose to clarify the nature of 
these extensions in Sec. 5.20(b)(2).
    Similarly, the definition of the term ``period of war'' in 38 
U.S.C. 1101(2)(B) extends the period recognized as World War II service 
for benefits awarded under 38 U.S.C. chapter 11. These proposed 
amendments would clarify the limited nature of this extension in Sec. 
5.20(c).
    Next, VA proposes to remove current 38 CFR 3.6, ``Duty periods;'' 
Sec. 3.7, ``Individuals and groups considered to have performed active 
military, naval,

[[Page 4822]]

or air service;'' and Sec. 3.15, ``Computation of service;'' and to 
rewrite them as nine separate, new sections that focus on the 
individual performing the duty instead of the type of duty performed. 
The new sections will be numbered Sec.Sec. 5.21 to 5.29.
    We propose in the first section, Sec. 5.21, to state the general 
conditions for active military service. Essentially, we propose to use 
the term ``active military service'' in lieu of the longer term 
``active military, naval, or air service'' in 38 U.S.C. 101(24) and 
current part 3 for simplicity and convenience. Note that, as an 
equivalent to the longer ``active military, naval, or air service,'' 
``active military service'' is a broader term than ``active duty.'' 
Compare 38 U.S.C. 101(21) with 38 U.S.C. 101(24).
    Proposed Sec. 5.21(a)(6) includes the provisions from current Sec. 
3.7(a) concerning the duty status of active duty and reserve persons 
assigned to the Postmaster General for the aerial transportation of 
mail from February 10, 1934, through March 26, 1935. This provision 
concerns the continuation of active duty for the persons involved and 
not persons ``considered to have performed'' active duty, as stated in 
Sec. 3.7, and is more appropriately included with the active military 
service provisions.
    In addition, we propose moving the types of duty not counted as 
active military service, such as time on agricultural furlough or time 
lost when absent without leave, from current Sec. 3.15, ``Computation 
of service,'' to Sec. 5.21(b). One of these provisions is ``time lost 
[while] under arrest (without acquittal).'' We propose to expand the 
exception for acquittal to include situations where the charges which 
led to arrest are dismissed. If charges are dismissed, there would 
never be a conviction for the offenses charged to taint the period of 
service in question. Further, we propose to clarify that the rule that 
time spent serving a court-martial sentence is not active military 
service for VA purposes is subject to 10 U.S.C. 875(a) that provides, 
under certain circumstances, for the restoration of ``all rights, 
privileges, and property affected by an executed part of a court-
martial sentence which has been set aside or disapproved.''
    Finally, we propose to remove the sentence in Sec. 3.15 concerning 
leave authorized by General Order No. 130, War Department, for claims 
based on Spanish-American War service as being included in active 
military service. We propose to remove this sentence because according 
to VA records, the last veteran of this war died in 1992. Although VA 
is paying death benefits to survivors based on this service, we do not 
believe we will receive any new claims from veterans who served in the 
Spanish-American War. In addition, we believe that the provision is 
unnecessary because periods of authorized leave are normally included 
as active military service.
    We propose to define the periods of duty that count as active duty 
in Sec. 5.22, stating that active duty is full-time duty and continues 
until midnight of the date of discharge from active duty.
    ``Special work'' is a category of service performed by Reservists, 
normally for limited periods of time. For example, 10 U.S.C. 115, 
``Personnel strengths: Requirements for annual authorization,'' refers 
at subsection (d)(6) to ``Members of reserve components on active duty 
for 180 days or less to perform special work'' and at subsection (d)(9) 
to ``members of reserve components * * * on active duty for more than 
180 days but less than 271 days to perform special work in support of 
the combatant commands.'' We have not addressed whether active duty for 
special work is active duty for VA purposes in the text of these 
proposed regulations. However, we believe that it may be the case for 
at least some special work assignments, particularly those that involve 
combat duties. We invite public comment on whether, and to what extent, 
VA should recognize military duty for special work as active duty for 
VA purposes.
    We propose in Sec. 5.23 to state how VA classifies various types of 
service performed by Reserve and National Guard personnel. One change 
to the current section, Sec. 3.6, will be removal of the provisions for 
determining active duty for training for full-time duty performed by 
the National Guard of any State while participating in the reenactment 
of the Battle of First Manassas in July 1961. We believe all National 
Guard members eligible for benefits under this provision have already 
applied for benefits and there will be no new applicants. If we receive 
a new application for entitlement to benefits under this provision, we 
will consider the application under the authorizing public law (Public 
Law 87-83, 75 Stat. 200 (1961)). Otherwise, we have simply restructured 
the current section and no substantive changes are proposed.
    In Sec. 5.24, we propose to include all the provisions applicable 
to types of duty for Armed Services Academy cadets, midshipmen, 
preparatory school attendees, and Senior Reserve Officers' Training 
Corps members. This proposed section includes a provision from current 
Sec. 3.700(a)(1)(ii), which states ``Time spent by members of the ROTC 
in drills as part of their activities as members of the corps is not 
active service.'' We have moved this sentence to this new section 
because it relates directly to the topic of this new section.
    Likewise, proposed Sec. 5.25 contains all the provisions pertaining 
to duty and related service in the Public Health Service, in the Coast 
and Geodetic Survey and its successor agencies, and of temporary 
members of the Coast Guard Reserves. Under current Sec. 3.6(b)(3)(ii), 
one of the ways in which the service of a commissioned officer of the 
Coast and Geodetic Survey or of its successor agencies is considered to 
be active duty is if the officer was ``(i)n the Philippine Islands on 
December 7, 1941, and continuously in such islands thereafter.'' Under 
the current regulation and in it's authorizing statute, 38 U.S.C. 
101(21)(C), this means continuously thereafter until July 29, 1945. We 
propose to make that clearer in Sec. 5.25(b)(1)(iv).
    We propose to extract from Sec. 3.7(o) and place in reorganized 
Sec. 5.26, ``Circumstances where persons ordered to service, but who 
did not serve, are considered to have performed active duty,'' 
provisions concerning entitlement to VA benefits for certain National 
Guard personnel and for persons who volunteer or are drafted for 
military service and incur injury or disease while engaged in required 
activities before entry into active Federal military duty. This 
proposed section explains that persons injured during an induction 
examination, or while traveling to an induction processing center, or 
National Guard members reporting to a rendezvous, or under other 
similar circumstances, are considered to have performed active duty for 
purposes of entitlement to VA benefits.
    The remainder of current Sec. 3.7 concerns individuals or groups 
who are not military personnel in the usual sense, but who have 
contributed significantly to the national defense. Because of the 
contributions of these individuals and groups, Congress (through 
specific statutory enactments), VA (through statutory interpretations 
in Administrator's Decisions), courts, and the Secretary of Defense 
(exercising authority granted in section 401 of Public Law 95-202) have 
determined that their work warrants recognition as active military 
service.
    VA proposes to include information about these individuals and 
groups in two separate proposed sections, Sec. 5.27, ``Individuals and 
groups designated by the Secretary of Defense as having performed 
active military service,'' and

[[Page 4823]]

Sec. 5.28, ``Other individuals and groups designated as having 
performed active military service.'' Both sections list these 
individuals and groups in alphabetical order.
    In Sec. 5.27, we propose to update the list, currently contained in 
38 CFR 3.7(x), of those individuals and groups the Secretary of Defense 
(frequently through the Secretary of the Air Force acting as Executive 
Agent of the Secretary of Defense) has determined have performed active 
military service. Notice of these determinations is given to the public 
in Federal Register notices issued by the Department of Defense. These 
notices include the date the Secretary of Defense, or the Secretary's 
agent, recognized the applicable group(s) as having performed active 
military service for the purpose of VA benefits. We propose to include 
recognition effective date information for each group listed in Sec. 
5.27.
    The following table includes a list of the relevant groups (in 
alphabetical order) and the recognition effective date for each group, 
as well as a citation to the applicable Federal Register notice 
describing the decision by the Secretary of Defense. There are two 
exceptions with respect to Federal Register citations. One group, the 
Women's Air Forces Service Pilots (WASP), was specifically recognized 
by Pub. L. 95-202, the statute that authorizes the Secretary of Defense 
to make these determinations. In that case, the effective date of 
recognition is the effective date specified in the statute. Information 
about another group, ``Quartermaster Corps Keswick Crew on Corregidor 
(WWII),'' does not appear to have been published in the Federal 
Register. In that case, we have cited the Department of Defense 
memorandum recognizing the group.

------------------------------------------------------------------------
    Individuals and groups                            Federal Register
designated by the Secretary of    Individual or    citation or authority
  Defense as having performed   group recognition     recognizing the
    active military service            date         individual or group
------------------------------------------------------------------------
American Merchant Marine in     Recognized         53 FR 2775.
 oceangoing service, during      effective
 the Period of Armed Conflict,   January 19, 1988.
 December 7, 1941, to August
 15, 1945.
The approximately 50 Chamorro   Recognized         64 FR 56773.
 and Carolinian former native    effective
 policemen who received          September 30,
 military training in the        1999.
 Donnal area of central Saipan
 and were placed under the
 command of Lt. Casino of the
 6th Provisional Military
 Police Battalion to accompany
 United States Marines on
 active, combat-patrol
 activity from August 19,
 1945, to September 2, 1945.
Civilian Crewmen of the United  Recognized         56 FR 23054, 57 FR
 States Coast and Geodetic       effective April    24600.
 Survey (USCGS) vessels, who     8, 1991.
 performed their service in
 areas of immediate military
 hazard while conducting
 cooperative operations with
 and for the U.S. Armed Forces
 within a time frame of
 December 7, 1941, to August
 15, 1945. Qualifying USCGS
 vessels specified by the
 Secretary of Defense, or his
 or her designee, are the
 Derickson, Explorer, Gilbert,
 Hilgard, E. Lester Jones,
 Lydonia, Patton, Surveyor,
 Wainwright, Westdahl,
 Oceanographer, Hydrographer,
 and the Pathfinder.
Civilian employees of Pacific   Recognized         46 FR 11857.
 Naval Air Bases who actively    effective
 participated in Defense of      January 22, 1981.
 Wake Island during World War
 II.
Civilian Navy Identification    Recognized         53 FR 32425.
 Friend or Foe (IFF)             effective August
 Technicians, who served in      2, 1988.
 the Combat Areas of the
 Pacific during World War II
 (December 7, 1941, to August
 15, 1945).
Civilian personnel assigned to  Recognized         48 FR 1532.
 the Secret Intelligence         effective
 Element of the Office of        December 27,
 Strategic Services (OSS).       1982.
Engineer Field Clerks (WWI)...  Recognized         44 FR 55622.
                                 effective August
                                 31, 1979.
Guam Combat Patrol............  Recognized         48 FR 23295.
                                 effective May
                                 10, 1983.
Honorably discharged members    Recognized         56 FR 26072.
 of the American Volunteer       effective May 3,
 Group (Flying Tigers), who      1991.
 served during the Period
 December 7, 1941, to July 18,
 1942.
Honorably discharged members    Recognized         57 FR 34766.
 of the American Volunteer       effective June
 Guard, Eritrea Service          29, 1992.
 Command, who served during
 the Period June 21, 1942, to
 March 31, 1943.
Male Civilian Ferry Pilots....  Recognized         46 FR 39197.
                                 effective July
                                 17, 1981.
The Operational Analysis Group  Recognized         64 FR 53364.
 of the Office of Scientific     effective August
 Research and Development,       27,1999.
 Office of Emergency
 Management, which served
 overseas with the U.S. Army
 Air Corps from December 7,
 1941, through August 15, 1945.
Quartermaster Corps Female      Recognized         46 FR 11857.
 Clerical Employees serving      effective
 with the AEF (American          January 22, 1981.
 Expeditionary Forces) in
 World War I.

[[Page 4824]]

 
Quartermaster Corps Keswick     Recognized         Memorandum from the
 Crew on Corregidor (WWII).      effective          Acting Assistant
                                 February 7, 1984.  Secretary of the Air
                                                    Force (Manpower,
                                                    Reserve Affairs and
                                                    Installations),
                                                    Determination of
                                                    Active Military
                                                    Service (Feb. 7,
                                                    1984) (on file with
                                                    DOD Civilian/
                                                    Military Service
                                                    Review Board)).
Reconstruction Aides and        Recognized         46 FR 37306.
 Dietitians in World War I.      effective July
                                 6, 1981.
Signal Corps Female Telephone   Recognized         44 FR 32019.
 Operators Unit of World War I.  effective May
                                 15, 1979.
Three scouts/guides, Miguel     Recognized         64 FR 56773.
 Tenorio, Penedicto Taisacan,    effective
 and Cristino Dela Cruz, who     September 30,
 assisted the U.S. Marines in    1999.
 the offensive operations
 against the Japanese on the
 Northern Mariana Islands from
 June 19, 1944, through
 September 2, 1945.
U.S. civilian employees of      Recognized         55 FR 46706.
 American Airlines, who served   effective
 overseas as a result of         October 5, 1990.
 American Airlines' contract
 with the Air Transport
 Command during the Period
 December 14, 1941, through
 August 14, 1945.
U.S. civilian female employees  Recognized         59 FR 298.
 of the U.S. Army Nurse Corps    effective
 while serving in the defense    December 13,
 of Bataan and Corregidor        1993.
 during the Period January 2,
 1942, to February 3, 1945.
U.S. Civilian Flight Crew and   Recognized         62 FR 36263.
 Aviation Ground Support         effective June
 Employees of Braniff Airways,   2, 1997.
 who served overseas in the
 North Atlantic or under the
 jurisdiction of the North
 Atlantic Wing, Air Transport
 Command (ATC), as a result of
 a contract with the ATC
 during the Period February
 26, 1942, through August 14,
 1945.
U.S. Civilian Flight Crew and   Recognized         57 FR 34765.
 Aviation Ground Support         effective June
 Employees of Consolidated       29, 1992.
 Vultree Aircraft Corporation
 (Consairway Division), who
 served overseas as a result
 of a contract with the Air
 Transport Command during the
 Period December 14, 1941,
 through August 14, 1945.
U.S. Civilian Flight Crew and   Recognized         62 FR 36263.
 Aviation Ground Support         effective June
 Employees of Northeast          2, 1997.
 Airlines Atlantic Division,
 who served overseas as a
 result of Northeast Airlines'
 Contract with the Air
 Transport Command during the
 Period December 7, 1941,
 through August 14, 1945.
U.S. Civilian Flight Crew and   Recognized         59 FR 297.
 Aviation Ground Support         effective
 Employees of Northwest          December 13,
 Airlines, who served overseas   1993.
 as a result of Northwest
 Airline's contract with the
 Air Transport Command during
 the Period December 14, 1941,
 through August 14, 1945.
U.S. Civilian Flight Crew and   Recognized         57 FR 34765.
 Aviation Ground Support         effective July
 Employees of Pan American       16, 1992.
 World Airways and Its
 Subsidiaries and Affiliates,
 who served overseas as a
 result of Pan American's
 Contract with the Air
 Transport Command and Naval
 Air Transport Service during
 the Period December 14, 1941,
 through August 14, 1945.
U.S. Civilian Flight Crew and   Recognized         57 FR 24479, 68 FR
 Aviation Ground Support         effective May      11068.
 Employees of Transcontinental   13, 1992.
 and Western Air (TWA), Inc.,
 who served overseas as a
 result of TWA's contract with
 the Air Transport Command
 during the Period December
 14, 1941, through August 14,
 1945. The ``Flight Crew''
 includes pursers.
U.S. Civilian Flight Crew and   Recognized         57 FR 24478.
 Aviation Ground Support         effective May
 Employees of United Air Lines   13, 1992.
 (UAL), who served overseas as
 a result of UAL's contract
 with the Air Transport
 Command during the Period
 December 14, 1941, through
 August 14, 1945.
U.S. civilian volunteers, who   Recognized         49 FR 7849.
 actively participated in the    effective
 Defense of Bataan.              February 7, 1984.
U.S. civilians of the American  Recognized         55 FR 46707.
 Field Service (AFS), who        effective August
 served overseas operationally   30, 1990.
 in World War I during the
 Period August 31, 1917, to
 January 1, 1918.
U.S. civilians of the American  Recognized         55 FR 46707.
 Field Service (AFS), who        effective August
 served overseas under U.S.      30, 1990.
 Armies and U.S. Army Groups
 in World War II during the
 Period December 7, 1941,
 through May 8, 1945.

[[Page 4825]]

 
U.S. Merchant Seamen who        Recognized         50 FR 46332.
 served on blockships in         effective
 support of Operation Mulberry.  October 18, 1985.
Wake Island Defenders from      Recognized         47 FR 17324.
 Guam.                           effective April
                                 7, 1982.
Women's Air Forces Service      Recognized         Sec. 401, Pub. L. 95-
 Pilots (WASP).                  effective          202, 91 Stat. 1433,
                                 November 23,       1449.
                                 1977.
Women's Army Auxiliary Corps    Recognized         45 FR 23716, 45 FR
 (WAAC).                         effective March    26115.
                                 18, 1980.
------------------------------------------------------------------------

    Proposed Sec. 5.27(a) provides basic information about the 
designation of individuals and groups by the Secretary of Defense. 
These individuals and groups are listed in Sec. 5.27(b).
    We propose to add three additional groups recognized by the 
Department of Defense to update the list in proposed Sec. 5.27.
    In the Federal Register of October 1, 1999 (64 FR 53364-65), the 
Secretary of the Air Force published a notice that he had determined 
that the service of the members of the group known as ``The Operational 
Analysis Group of the Office of Scientific Research and Development, 
Office of Emergency Management, which served overseas with the U.S. 
Army Air Corps from December 7, 1941, through August 15, 1945,'' shall 
be considered active duty for the purpose of all laws administered by 
VA.
    In the Federal Register of October 21, 1999 (64 FR 56773-74), the 
Secretary of the Air Force published a notice that he had determined 
that the service of the members of the groups known as:

[T]hree scouts/guides, Miguel Tenorio, Penedicto Taisacan, and 
Cristino Dela Cruz, who assisted the U.S. Marines in the offensive 
operations against the Japanese on the Northern Mariana Islands from 
June 19, 1944, through September 2, 1945, and * * * ``the 
approximately 50 Chamorro and Carolinian former, native policemen 
who received military training in the Donnal area of central Saipan 
and were placed under the command of Lt. Casino of the 6th 
Provisional Military Police Battalion to accompany United States 
Marines on active, combat-patrol activity from August 19, 1945, to 
September 2, 1945,

shall be considered to be active duty for the purpose of all laws 
administered by VA.
    We also propose to add additional information concerning three 
groups already recognized. The first group is ``[c]ivilian Crewmen of 
the United States (U.S.) Coast and Geodetic Survey vessels, who 
performed their service in areas of immediate military hazard while 
conducting cooperative operations with and for the U.S. Armed Forces 
within a time frame of December 7, 1941, to August 15, 1945.'' The 
Department of Defense has specifically designated qualifying vessels 
upon which members of the group must have served. 57 FR 24600, June 10, 
1992. We propose adding this information at Sec. 5.27(b)(3) to assist 
claimants and their representatives in identifying service potentially 
qualifying for VA benefits.
    In proposed Sec. 5.27(b)(7), we have amended the title of the group 
``Engineer Field Clerks'' to the more complete ``Engineer Field Clerks 
(WWI).'' See 44 FR 55622, September 27, 1979.
    The third group is ``U.S. Civilian Flight Crew and Aviation Ground 
Support Employees of Transcontinental and Western Air (TWA), Inc., who 
served overseas as a result of TWA's contract with the Air Transport 
Command during the Period December 14, 1941, through August 14, 1945.'' 
On February 21, 2003, the Secretary of the Air Force (acting as 
Executive Agent of the Secretary of Defense) determined that ``Flight 
Crew'' includes pursers. 68 FR 11068, March 7, 2003. This information 
has been added at proposed Sec. 5.28(b)(25).
    One of the Project's design goals is to associate effective date 
rules that concern specific regulations with those regulations so that 
related material will be in one place for the convenience of claimants 
and their representatives and VA personnel who adjudicate claims. 
Therefore, we propose to include rules for determining the effective 
date for awarding VA benefits to a member of a group that would be 
listed in proposed Sec. 5.27 as proposed Sec. 5.27(c). Proposed Sec. 
5.27(c) would replace effective date rules for awards to these groups 
currently included in the introduction to Sec. 3.7(x) and in Sec. 
3.400(z).
    38 U.S.C. 5110(g) provides that:

    (g) Subject to the provisions of section 5101 of this title 
[concerning the requirement for filing a claim for VA benefits], 
where compensation, dependency and indemnity compensation, or 
pension is awarded or increased pursuant to any Act or 
administrative issue, the effective date of such award or increase 
shall be fixed in accordance with the facts found but shall not be 
earlier than the effective date of the Act or administrative issue. 
In no event shall such award or increase be retroactive for more 
than one year from the date of application therefor or the date of 
administrative determination of entitlement, whichever is earlier.

    Another statutory provision, 38 U.S.C. 1832(b)(2), as amended by 
the Veterans Benefits Act of 2003, Pub. L. No. 108-183, 117 Stat. 2651 
(2003), extends Sec. 5110(g) to cover claims for certain benefits for 
children of Vietnam veterans and of veterans of covered service in 
Korea under 38 U.S.C. chapter 18.
    Because each decision of the Department of Defense to include a new 
group is a liberalizing change with respect to eligibility for VA 
benefits, we propose to treat the decision as a liberalizing 
``administrative issue'' under 5110(g). The effective date of 
recognition established by the Department of Defense would be the 
effective date of the ``administrative issue.''
    While neither 38 U.S.C. 5110(g) nor its current implementing 
regulation, Sec. 3.114, is specifically cited in current Sec. 3.400(z), 
we note that this approach is consistent with the approach used in Sec. 
3.400(z). Note, for example, the potential for up to one year in 
retroactive benefits under certain circumstances in Sec. 
3.400(z)(2)(iii) and in 38 U.S.C. 5110(g). This approach would also 
produce a result that appears to be consistent with the view of the 
Department of Defense. For example, the Federal Register notice of the 
group described at proposed Sec. 5.27(b)(2) states that benefits are 
not retroactive. See 64 FR 56773.
    In drafting the 38 U.S.C. 5110(g)-based effective date provision in 
proposed Sec. 5.27(c), we have substituted ``date entitlement arose'' 
for ``facts found.'' VA interprets ``facts found'' and another phrase 
used in effective date rules, ``date entitlement arose,'' as having the 
same basic meaning. We are proposing to use only one of these terms, 
``date entitlement arose,'' in all of our proposed regulations to 
improve consistency. ``Date entitlement arose'' will be defined in a 
later notice of

[[Page 4826]]

proposed rulemaking as part of the project.
    The effective date rules in proposed Sec. 5.27(c) are consistent 
with relevant portions of another 38 U.S.C. 5110(g)-based regulation, 
current Sec. 3.114.
    With respect to the individuals and groups described in proposed 
Sec. 5.27, current Sec. 3.7(x) provides that ``[t]he effective dates 
for an award based upon such service shall be as provided by Sec. 
3.400(z) and 38 U.S.C. 5110, except that in no event shall such an 
award be made effective earlier than November 23, 1977.'' We have not 
included similar information in proposed Sec. 5.27(c). The November 23, 
1977, date is the effective date of Pub. L. 95-202, which recognized 
the service of the Women's Air Forces Service Pilots (WASP) and 
authorized the Secretary of Defense to recognize the service of 
similarly situated groups in the future. Thus the only group recognized 
effective November 23, 1977, is the WASP group, as noted in proposed 
Sec. 5.27(b)(32). The recognition effective date of all other groups is 
later, as shown in proposed Sec. 5.27(b).
    In Sec. 5.28, we propose to list those individuals and groups 
determined specifically by the Congress, or by court or VA decisions 
interpreting applicable legislative provisions, to have performed 
active military service. These groups are currently listed in various 
paragraphs of current Sec. 3.7, as shown on the table presented 
earlier.
    We propose to update the list of groups and descriptions of the 
groups where indicated. Proposed Sec. 5.28(a) would add service in the 
Alaska Territorial Guard during World War II to the list of groups and 
individuals. See Public Law 106-259, 114 Stat. 656 (2000). We have also 
added material to Sec. 5.28(e) to notify readers that the Coast Guard 
is now under the jurisdiction of the Department of Homeland Security. 
See Public Law 107-296, 116 Stat. 2135 (2002). In addition, we propose 
to correct an error in current Sec. 3.7(h), which lists ``[a]ctive 
service in Coast Guard on or after January 29, 1915.'' The relevant 
date is actually January 28, 1915. See Pub. L. No. 77-182, 55 Stat. 598 
(1941). See also 14 U.S.C. 1 (``The Coast Guard as established January 
28, 1915, shall be a military service and a branch of the Armed Forces 
of the United States at all times.'')
    Proposed Sec. 5.29, ``Circumstances under which certain travel 
periods may be classified as military service,'' contains the rules 
pertaining to when a service member performing authorized travel is 
considered to be on active duty, active duty for training, or inactive 
duty training. Consistent with the language of current Sec. 3.6(e)(2), 
Sec. 5.29(b)(3) restates that the burden of proof is on the claimant to 
show that disability or death was incurred while the service member was 
going to, or returning from, authorized active duty for training or 
inactive duty training. See 38 U.S.C. 106(d)(3). We propose to add a 
cross reference to provisions in Sec. 5.26 concerning travel by persons 
who were ordered to service but did not serve.

Service Creditable for VA Benefits

    Current Sec. 3.12, the rules pertaining to service requirements for 
VA benefits, is long and extremely complex. It contains rules 
pertaining to several subjects: How VA determines whether discharges 
were issued under other than dishonorable conditions; certain statutory 
bars to VA benefits; the effect of discharge upgrades by different 
armed forces boards on decisions VA makes concerning service members' 
discharges; the effect of certain special discharge-upgrade programs in 
the 1970s; and various other subjects. We propose to divide Sec. 3.12 
by topic into separate sections, which would be numbered Sec.Sec. 5.30 
through 5.36.
    A requirement for VA benefits is status as a ``veteran,'' which 
means that the service member was discharged or released from active 
military service under other than dishonorable conditions. See 38 
U.S.C. 101(2). Proposed Sec. 5.30 would state the rules pertaining to 
VA's determinations of whether a service member's discharge or release 
was under other than dishonorable conditions.
    Proposed revisions include updating terminology to reflect the 
change by the Department of Defense in the term ``undesirable 
discharge'' to ``other than honorable discharge.''
    VA proposes to clarify, through new Sec.Sec. 5.30(b)(1) and 
5.31(b)(1), that a service member's discharge or release from service 
under other than honorable conditions, if it bars benefits at all, or a 
discharge or dismissal for commission of an act that results in a 
statutory bar to VA benefits, bars VA benefits only based on the period 
of service for which the relevant discharge, release, or dismissal was 
issued. Neither bars the award of benefits based upon other qualifying 
periods of service. This would avoid potential confusion in cases where 
the veteran has one period of service that ended with a discharge under 
dishonorable conditions and one or more other periods of service which 
ended with a discharge under other than dishonorable conditions.
    This matter was considered by VA's General Counsel in 1991 in 
response to a request from the Department of the Air Force for an 
opinion as to the effect of a discharge under dishonorable conditions 
on a service member's eligibility to receive veterans' benefits based 
on another period of service which terminated under honorable 
conditions. The General Counsel held that:

    Unless the Secretary of Veterans Affairs determines that an 
individual is guilty of an offense listed in 38 U.S.C. 6104 
(formerly Sec. 3504) (mutiny, treason, sabotage, or rendering 
assistance to an enemy of the United States or of its allies) or the 
individual is convicted of an offense listed in 38 U.S.C. 6105 
(formerly Sec. 3505) (articles 94 (mutiny or sedition), 104 (aiding 
the enemy), and 106 (spying) of the Uniform Code of Military 
Justice; various provisions of title 18, United States Code, 
relating to espionage, treason, rebellion, sedition, subversive 
activities, and sabotage; violations of the Atomic Energy Act of 
1954 and the Internal Security Act of 1950), a discharge under 
dishonorable conditions does not bar that individual from receiving 
gratuitous benefits administered by the Department of Veterans 
Affairs, including burial in a national cemetery, based on a prior 
period of service which terminated under conditions other than 
dishonorable. However, if VA determines, subject to the severe 
limitations on application of 38 U.S.C. 6104 to U.S. residents and 
domiciliaries after September 1, 1959, under 38 U.S.C. 6103(d)(1) 
(formerly Sec. 3503(d)(1)), that an individual is guilty of an 
offense listed in 38 U.S.C. 6104, or if an individual is convicted 
of an offense listed in 38 U.S.C. 6105, such individual is barred 
from receiving all accrued or future benefits regardless of whether 
the individual may have had a prior period of honorable service.

VAOPGCPREC 61-91.
    Proposed Sec.Sec. 5.30(b) and 5.31(b) reflect the general rule that 
a discharge or release under dishonorable conditions applies only to 
the period of service to which the discharge or release pertains, but 
that this general rule does not preclude forfeiture of VA benefits 
under 38 U.S.C. 6103 through 6105 or similar statutes governing 
forfeiture of VA benefits.
    We also note that, while it would be highly unusual, the period of 
service terminating under other than dishonorable conditions could 
follow as well as precede the period of service terminating under 
dishonorable conditions. For example, none of the controlling 
authorities discussed in VAOPGCPREC 61-91 requires a sequence. The 
issue is whether the period of service on which the claim is based was 
terminated by discharge or release under conditions other than 
dishonorable.
    Proposed Sec. 5.30(c) describes the discharges VA will recognize as 
being under other than dishonorable conditions. Proposed Sec. 5.30(d) 
lists

[[Page 4827]]

those discharges VA will recognize as being under dishonorable 
conditions. Section 5.30(e) lists the discharges for which VA will make 
a character of discharge determination. These provisions are based on 
the explicit provisions of current Sec. 3.12, as noted in the 
derivation table included earlier in this document, or are implicit in 
the current regulatory scheme.
    Except where the law otherwise specifically provides (such as in 
the case of certain discharge upgrade programs treated in proposed Sec. 
5.36), VA has long considered itself bound by discharges under 
honorable conditions issued by a service department, such as honorable 
discharges and general discharges under honorable conditions. 
Discharges under honorable conditions are, of course, also discharges 
that are under other than dishonorable conditions. In addition, VA 
treats uncharacterized entry level separations as being under other 
than dishonorable conditions. See current Sec. 3.12(a) and (k)(1), Sec. 
3.14(d). These are the discharges described in proposed Sec. 5.30(c).
    A dishonorable discharge is, by definition, a discharge under 
dishonorable conditions and issuance of such discharges is a matter for 
the Department of Defense. This is the subject of proposed Sec. 
5.30(d).
    Section 5.30(e) describes the types of discharges that lie in a 
middle ground, neither clearly honorable nor dishonorable: An other 
than honorable discharge (formerly classified as an ``undesirable'' 
discharge); a bad conduct discharge; and certain uncharacterized 
administrative separations. It is in those cases that VA will make the 
character of discharge determination because VA must decide whether 
they are, or are not, discharges ``under conditions other than 
dishonorable'' in order to determine eligibility for VA benefits. See 
generally Camarena v. Brown, 6 Vet. App. 565 (1994).
    While it does not represent a substantive change, we also propose, 
in Sec. 5.30(e)(3), to add a parenthetical explaining what ``dropped 
from the rolls'' means. VA understands this expression to mean the 
administrative termination of military status and pay. The U.S. Supreme 
Court has noted in Clinton v. Goldsmith, 526 U.S. 529 (1999) that:

    When a service member is dropped from the rolls, he forfeits his 
military pay. See 37 U.S.C. 803. The drop-from-the-rolls remedy 
targets a narrow category of service members who are absent without 
leave (AWOL) or else have been convicted of serious crimes. Since 
1870, the President has had authority to drop from the rolls of the 
Army any officer who has been AWOL for at least three months. See 
Act of July 15, 1870, Sec. 17, 16 Stat. 319. The power was 
subsequently extended to officers confined in prison after final 
conviction by a civil court, see Act of Jan. 19, 1911, ch. 22, 36 
Stat. 894, and then to ``any armed force'' officer AWOL for at least 
three months or else finally sentenced to confinement in a Federal 
or State penitentiary or correctional institution, see Act of May 5, 
1950, Sec. 10, 64 Stat. 146.

Id. at 532 n.1.
    Proposed Sec. 5.30(f) lists the offenses or events leading to a 
discharge that VA will recognize as a discharge or separation under 
dishonorable conditions. Current Sec. 3.12(d)(3) lists ``An offense 
involving moral turpitude. This includes, generally, conviction of a 
felony.'' We propose to retain this rule, including the example of 
conviction of a felony, but to add a general definition of moral 
turpitude. VA believes that such a definition would be helpful to 
claimants and to VA employees who adjudicate VA benefit claims.
    Claimants ought to be able to know with at least some degree of 
certainty whether or not a provision applies to their case. This is 
particularly true of provisions that may serve to bar VA benefits.
    The phrase ``moral turpitude'' is one commonly used in the law and 
has been examined by legal writers in some depth.
    There seems to be a common thread running through the majority of 
cases concerning misdeeds considered to involve moral turpitude. A 
crime involving moral turpitude is a criminal act that is done with the 
willful intent to harm another person or entity through harm to their 
person or property. In an analysis of more than 100 years of case law 
involving courts' struggles to define ``moral turpitude,'' one author 
notes the following with respect to the major categories of crimes 
found to involve moral turpitude:

    Crimes against the person involve moral turpitude when the local 
statute defining the crime requires ``malicious intent.'' * * * 
Crimes against property involve moral turpitude if the criminal 
statute requires an intent to deprive, defraud, or destroy. * * * 
Aggravated sexual crimes always involve moral turpitude, but some 
sexual offenses do not. Examples of aggravated sexual crimes are: 
rape, sexual misconduct with a minor, prostitution, sodomy, 
lewdness, and gross indecency. Sexual offenses that do not involve 
moral turpitude include vagrancy, maintaining a nuisance, and 
fornication. * * * Crimes involving family relationships that courts 
have held to be ``crimes involving moral turpitude'' include: 
adultery, abortion, bigamy, spousal abuse, and child abuse. * * * 
Crimes of fraud against the government or its authority, like all 
crimes with an element of fraud, are ``crimes involving moral 
turpitude.''

Brian C. Harms, Redefining ``Crimes of Moral Turpitude'': A Proposal to 
Congress, 15 Geo. Immigr. L.J. 259, 267-69 (Winter 2001).

    An exhaustive analysis of the concept of moral turpitude in 
American Law Reports Federal includes the observation that:

    The presence or absence of criminal or `evil' intent as an 
essential element of the crime under consideration is frequently 
considered as a factor indicative of the moral turpitude of the 
offense; the `evil' intent may be evidenced by the use of 
unjustified violence or the endangerment of human life * * *, or by 
the presence of an intent to defraud as a necessary ingredient of 
the offense. * * *

Annotation, What Constitutes ``Crime Involving Moral Turpitude'' Within 
Meaning of Sec.Sec. 212(a)(9) and 241(a)(4) of Immigration and 
Nationality Act (8 USCA Sec.Sec. 1182(a)(9), 1251(a)(4)), and Similar 
Predecessor Statutes Providing for Exclusion or Deportation of Aliens 
Convicted of Such Crime, 23 A.L.R. Fed. 480, 488 (1975).

    VA's proposed definition is: ``an offense involves `moral 
turpitude' if it is unlawful, it is willful, it is committed without 
justification or legal excuse, and it is an offense which a reasonable 
person would expect to cause harm or loss to person or property.''
    The basic concept is that VA will look at the facts and 
circumstances surrounding the commission of acts leading to discharge 
to determine whether they do, or do not, involve moral turpitude under 
the proposed definition.
    When a discharge or release from service is because of one of 
various offenses listed in current Sec. 3.12(d), VA will consider that 
discharge or release to be under dishonorable conditions. This list 
includes the following at Sec. 3.12(d)(5):
    Homosexual acts involving aggravating circumstances or other 
factors affecting the performance of duty. Examples of homosexual 
acts involving aggravating circumstances or other factors affecting 
the performance of duty include child molestation, homosexual 
prostitution, homosexual acts or conduct accompanied by assault or 
coercion, and homosexual acts or conduct taking place between 
service members of disparate rank, grade, or status when a service 
member has taken advantage of his or her superior rank, grade, or 
status.

    Since the time when these words were written in the 1970s, 
integration of men and women into almost all military specialties and 
every aspect of military life has become common. We believe it is 
appropriate for VA to clearly state that all of the sexual offenses 
listed in this paragraph are egregious no matter

[[Page 4828]]

who commits them. Therefore, in Sec. 5.30(f)(5), we propose to replace 
the word ``homosexual'' with ``sexual,'' in order to make this rule 
applicable to all persons.
    Proposed Sec. 5.31 describes statutory bars to VA benefits and the 
exceptions to those bars. Proposed Sec. 5.31(c)(1) would provide 
information concerning 10 U.S.C. 874(b), which grants service 
department secretaries the authority to ``substitute an administrative 
form of discharge for a discharge or dismissal executed in accordance 
with the sentence of a court-martial.'' VA's General Counsel has held 
that such a discharge upgrade does not remove the statutory bar to VA 
benefits that results from discharge or dismissal by reason of the 
sentence of a general court-martial. In VAOPGCPREC 10-96, after 
reviewing legislative history and other relevant matters, including the 
interpretation of 10 U.S.C. 874(b) by the Department of the Navy, the 
VA General Counsel reasoned at paragraph 11 that:

    In view of the foregoing, we conclude that an upgraded discharge 
awarded pursuant to 10 U.S.C. 874(b) does not alter an individual's 
service records to change the fact that the individual was 
discharged or dismissed by reason of the sentence of a general 
court-martial. In the instant case, the revised DD 214 issued to the 
appellant, while reflecting a discharge under honorable conditions, 
continues to identify the sentence of the court-martial as the 
reason for his discharge. Congress has made clear that a statutory 
bar to benefits under 38 U.S.C. 5303(a) will be removed ``[o]nly in 
instances when the Board for Correction of Military Records changes 
the reasons for discharge.'' H.R. Rep. No. 580, 95th Cong., 1st 
Sess. at 11, reprinted at 1977 U.S.C.C.A.N. at 2854. Accordingly, 
because an upgraded discharge issued under 10 U.S.C. 874(b) changes 
the character of discharge, but not the reasons for discharge, an 
upgraded discharge issued pursuant to 10 U.S.C. 874(b) does not 
remove the statutory bar to benefits under section 5303(a) as to 
individuals discharged or dismissed by reason of the sentence of a 
general court-martial.

    Proposed Sec. 5.31(c)(2) provides the rules concerning discharge or 
dismissal ``[a]s a conscientious objector who refused to perform 
military duty, wear the uniform, or comply with lawful orders of 
competent military authorities'' as a bar to VA benefits.
    Another statutory bar to VA benefits is found in title 38 of the 
United States Code, subsections 5303(a) and (c). These subsections bar 
the payment of VA benefits to an alien who is discharged because of his 
or her status as an alien during a time of hostilities between the 
United States and another nation where the discharge is initiated by 
the alien's own application or solicitation. Proposed Sec. 5.31(c)(6) 
concerns this bar to benefits based on alienage. This proposed revision 
eliminates material in current Sec. 3.7(b) concerning discharges for 
alienage upgraded to honorable prior to January 7, 1957, by certain 
military boards. The material provides that VA accepts such upgrades as 
proof that a discharge was not at the alien's request. It was added at 
a time when the burden of proof was on the service member to prove that 
a discharge for alienage was not based on the service member's 
application or solicitation. This material is no longer necessary 
because the burden of proving that the discharge was at the service 
member's request is now on the government under 38 U.S.C. 5303(c).
    Proposed Sec. 5.31(d), explaining that this section concerning 
statutory bars to benefits does not apply to certain government 
insurance programs, is new. It follows a statutory provision found at 
38 U.S.C. 5303(d). Note that this exclusion applies only to statutory 
bars to benefits under 38 U.S.C. 5303. It does not affect, for example, 
the forfeiture of National Service Life Insurance under 38 U.S.C. 1911, 
``Forfeiture.''
    Current Sec. 3.12(j) provides that:

    (j) No overpayment shall be created as a result of payments made 
after October 8, 1977, in cases in which the bar contained in 
paragraph (c)(6) of this section [relating to a statutory bar to VA 
benefit awards to individuals discharged under other than honorable 
conditions for being AWOL for 180 days or more] is for application. 
Accounts in payment status on or after October 8, 1977, shall be 
terminated at the end of the month in which it is determined that 
compelling circumstances do not exist, or April 7, 1978, whichever 
is the earliest. Accounts in suspense (either before or after 
October 8, 1977) shall be terminated on the date of last payment, or 
April 7, 1978, whichever is the earliest.

    This material is grounded in provisions of section 5 of Public Law 
No. 95-126, 91 Stat. 1106 (1977); the same Public Law which, in section 
1, amended what is now 38 U.S.C. 5303(a) to add the referenced 
statutory bar to VA benefits because of lengthy AWOLs. The material in 
the last two sentences of current Sec. 3.12(j) was important 
transitional material at the time Public Law No. 95-126 became 
effective but is now obsolete. We propose to replace the Sec. 3.12(j) 
material, in Sec. 5.31(e), with simplified award termination provisions 
that take into account applicable procedural and notice provisions, 
described currently in Sec. 3.105, ``Revision of decisions.'' We 
propose to provide, in Sec. 5.31(f), for the bar against overpayment 
creation by specifying that awards contrary to the statutory bar for 
lengthy AWOLs will be terminated on the date of last payment.
    Proposed Sec. 5.32, ``Consideration of mitigating factors in 
absence without leave cases,'' deals with cases in which a service 
member was separated or discharged because of absence without authority 
(referred to here by the more common term ``absence without leave'' 
(AWOL)). One of the statutory bars to VA benefits under 38 U.S.C. 
5303(a) is AWOL for a continuous period of at least 180 days. However, 
this subsection of the statute also provides for an exception where a 
claimant ``demonstrates to the satisfaction of the Secretary [of 
Veterans Affairs] that there are compelling circumstances to warrant 
such prolonged unauthorized absence.''
    Current Sec. 3.12(c)(6) sets up standards for determining whether 
there are ``compelling circumstances'' warranting a prolonged AWOL. It 
requires consideration of certain mitigating factors, such as reasons 
for being absent, when the service member was AWOL for 180 days or 
more. It does not provide for consideration of the same mitigating 
circumstances for lesser absences. Because it is illogical to be more 
lenient for greater offenses than for lesser ones, VA proposes in new 
Sec. 5.32, under its general rulemaking authority in 38 U.S.C. 501(a), 
to make this policy applicable to all cases involving AWOL as the 
reason for discharge. The effect of this proposed change would be to 
explicitly permit consideration of factors mitigating AWOL in the 
context of character of discharge determinations as well as in 
conjunction with statutory bars to VA benefits. We believe that this is 
consistent with current VA practice.
    As current Sec. 3.12(c)(6) and proposed Sec. 5.32(b) show, VA will 
consider such factors as how the situation appeared to the service 
member in light of the service member's age, cultural background, 
educational level and judgmental maturity in determining whether there 
were compelling circumstances for an unauthorized absence. However, we 
wish to be clear that VA does not judge whether compelling 
circumstances exist on the basis of a claimant's purely subjective 
viewpoint. Rather, VA looks at the record as a whole in evaluating 
whether compelling circumstances existed. See Lane v. Principi, 339 
F.3d 1331 (Fed. Cir. 2003). Therefore, proposed Sec. 5.32(b) notes that 
``VA will evaluate all of the relevant evidence of record in 
determining whether there are compelling circumstances to warrant 
unauthorized absence(s), including consideration of the following 
factors.''
    Proposed Sec. 5.33 deals with insanity as a defense to the 
commission of acts leading to separation from service. This defense is 
available under 38 U.S.C.

[[Page 4829]]

5303(b) in cases involving statutory bars to VA benefits and in 
character of discharge determinations by regulation. The definition of 
insanity, now contained in Sec. 3.354(a), will be revised and published 
for public comment later as part of this Project.
    The next two proposed sections, Sec.Sec. 5.34 and 5.35, state the 
rules related to the effect of discharge upgrades by boards for the 
correction of military records and discharge review boards on VA 
benefit eligibility determinations. Specifically, these rules concern 
whether VA benefits are barred by the character of a service member's 
discharge or because of statutory bars to benefits.
    Current Sec.Sec. 3.12 (f) and (g) provide guidance about the effect 
of discharge upgrades by discharge review boards on existing VA 
determinations based on a previous discharge, but they are not clear 
about the effect of such upgrades where VA is making the determination 
for the first time after the upgrade. We propose to address that 
shortcoming in Sec. 5.35. The proposed section would also provide 
information about the effective dates of awards of VA benefits when 
benefit eligibility is established on the basis of a discharge upgrade 
by a board for the correction of military records or a discharge review 
board.
    As current Sec. 3.12 does, proposed Sec. 5.35(d) provides that VA 
will not consider certain upgraded discharges issued by a discharge 
review board on or after October 8, 1977, in making character of 
discharge determinations unless certain enumerated statutory conditions 
for the board's review were met. (See 38 U.S.C. 5303(e)(1).) Proposed 
Sec. 5.35(d)(2)(iii) clarifies that VA will accept a report of the 
service department concerned that the discharge review board met those 
conditions.
    Proposed Sec. 5.36 sets out material now contained in Sec. 3.12(h) 
concerning the effect of certain special discharge upgrade programs in 
the 1970s. We have rewritten this regulation in an attempt to achieve 
greater clarity and to simplify the information concerning award 
terminations and a prohibition against the creation of overpayments.
    Current Sec. 3.12(i) provides that:

    (i) No overpayments shall be created as a result of payments 
made after October 8, 1977, based on an upgraded honorable or 
general discharge issued under one of the programs listed in 
paragraph (h) of this section which would not be awarded under the 
standards set forth in paragraph (g) of this section. Accounts in 
payment status on or after October 8, 1977, shall be terminated the 
end of the month in which it is determined that the original other 
than honorable discharge was not issued under conditions other than 
dishonorable following notice from the appropriate discharge review 
board that the discharge would not have been upgraded under the 
standards set forth in paragraph (g) of this section, or April 7, 
1978, whichever is the earliest. Accounts in suspense (either before 
or after October 8, 1977) shall be terminated on the date of last 
payment or April 7, 1978, whichever is the earliest.

    This material is grounded in provisions of section 5 of Public Law 
No. 95-126, 91 Stat. 1106 (1977); the same Public Law which, in section 
1, added what is now 38 U.S.C. 5303(e) concerning the effect of certain 
special discharge upgrade programs in the 1970s. The material in the 
last two sentences of current Sec. 3.12(i) was important transitional 
material at the time Public Law No. 95-126 became effective, but is now 
obsolete. We propose to replace the Sec. 3.12(i) material, in Sec. 
5.36(b), with simplified award termination provisions that take into 
account applicable procedural and notice provisions, described 
currently in Sec. 3.105, ``Revision of decisions.'' We propose to 
retain, in Sec. 5.36(c), the bar against overpayment creation and 
specify that awards contrary to the section will be terminated on the 
date of last payment.
    Proposed Sec. 5.37, a proposed replacement for current Sec. 3.13, 
concerns whether a service member has veteran status. That, in turn, 
depends (except for service members who die in service) upon whether 
the service member was discharged or released from active military 
service under other than dishonorable conditions. See 38 U.S.C. 101(2) 
(defining ``veteran'').
    More specifically, proposed Sec. 5.37 concerns a subset of the 
veteran status question. It typically arises under these circumstances: 
(1) A person enters military service for a fixed period of time, for 
example, a 4-year enlistment; (2) before the expiration of that fixed 
period of time, the person's service obligation is extended due to some 
change in military status; for example, an early discharge conditioned 
on immediate reenlistment, conversion from enlisted to officer status, 
a voluntary extension of service to gain some benefit, or an 
involuntary extension due to war or national emergency; (3) the person 
continues to serve honorably through the date when the original period 
of obligated service would have expired, but is not discharged or 
released on that date due to the intervening extension of the service 
obligation because of the change in military status; (4) after the date 
the period of service would have originally expired, but before 
discharge or release from the period of service to which the person 
became obligated upon the change in military status, the service member 
is involved in some incident that results in separation from service 
under dishonorable conditions.
    Congress has determined that in such situations service members 
should be granted veteran status as though they had been discharged or 
released under other than dishonorable conditions at the time when the 
period of service they were first obligated to serve expired. The 
section implements 38 U.S.C. 101(18)(B), which was added by Sec. 3 of 
Public Law 95-126, 91 Stat. 1106 (1977). The legislative history of 
this provision shows that Congress was attempting to correct an 
inequity caused when a discharge was not issued at the end of a service 
member's initial period of service because he or she agreed to extend 
their service beyond the initial period of obligation and, in some 
cases, decided or was offered the opportunity to change their military 
status. See H.R. Rep. No. 95-580, at 18, reprinted in 1977 U.S.C.C.A.N. 
2844, 2861.
    In drafting proposed Sec. 5.37, we have extensively reorganized 
current Sec. 3.13 and revised its language to make it more clearly 
reflect 38 U.S.C. 101(18), the statute's legislative history, and 
existing VA practice. We propose to title this new section, ``Effect of 
extension of service obligation due to change in military status on 
eligibility for VA benefits,'' to clarify that the purpose of this 
section is to address situations when eligibility for VA benefits may 
be affected by a change in military status.
    We note that even under the current regulation, there need not have 
been a formal discharge or release at the time military status changed; 
for example, a change from a Reserve to a Regular commission. The issue 
is not whether there was a discharge or release at the time of the 
change in military status, but rather due to the change in status, 
there was no discharge or release at the time the service member 
completed the period of service he or she was obligated to serve when 
they entered service.
    We propose two definitions in Sec. 5.37(b). The first is ``change 
in military status.'' While the end result will be the same as under 
the current regulation, VA believes that the ``change in status'' 
terminology is much clearer and more accurately reflects 38 U.S.C. 
101(18) and its legislative history than the ``conditional discharge'' 
language found in current Sec. 3.13.
    We propose to include a non-exclusive list of five examples of 
change in military status within this definition. The first four 
involve extensions of

[[Page 4830]]

obligated service through reenlistment or acceptance of an appointment 
as a commissioned or warrant officer and changes between regular and 
reserve commissions. We propose to add voluntary or involuntary 
extensions of military service as a fifth example. Service may be 
extended on a voluntary or involuntary basis for a variety of reasons. 
These range from qualifying for financial incentives based on the 
length of certain tours to occurrences, such as suffering an injury at 
or near the separation of service date for which military medical care 
is required. Periods of service are sometimes involuntarily extended 
due to war or other national emergencies.
    Because VA will determine the character of a service member's 
discharge or release upon the discharge or release from combined 
periods of service under certain circumstances, we also propose to 
define what we mean by ``combined periods of service'' in the context 
of this section. This is the second definition in proposed paragraph 
(b).
    We propose to eliminate the various rules related to specific 
periods of war and peacetime service in current Sec. 3.13(a)(1) through 
(3). These rules are based on VA regulations that predate the enactment 
of 38 U.S.C. Sec. 101(18)(B) and are no longer necessary.
    Proposed paragraph (c) states that VA will determine veteran status 
by the character of the final termination of the service member's 
combined periods of service if the combined periods of service 
terminate under honorable conditions. This is because there is no need 
to resort to the liberalizing provisions of 38 U.S.C. 101(18)(B) under 
such circumstances. The previously described sequence of events causing 
the potential inequity that 38 U.S.C. 101(18)(B) is intended to remedy 
would not occur because the service member was not ``involved in some 
incident that results in separation from service under dishonorable 
conditions.'' If that extended service is terminated by a discharge 
under other than honorable conditions, the provisions of proposed 
paragraph (d), which implements 38 U.S.C. 101(18)(B), govern.
    Further, we propose to omit language in current Sec. 3.13(b) 
purporting to list an exception for death pension purposes; 
specifically ``except that, for death pension purposes, Sec. 3.3(b)(3) 
and (4) is controlling as to basic entitlement when the conditions 
prescribed therein are met.'' Proposed Sec. 5.37 concerns veteran 
status, not pension eligibility rules, and is not inconsistent with 
those rules.
    As part of our revision of these regulations we propose to 
reorganize current Sec. 3.13(c), which we believe is unnecessarily 
confusing. It provides criteria for determining when VA will consider a 
service member to have been ``unconditionally discharged or released 
from active military, naval or air service'' ``[d]espite the fact that 
no unconditional discharge may have been issued.''
    The term ``unconditional discharge'' is not one generally used by 
the various military departments and is not defined in the current 
regulations. Actually, the criteria listed are the criteria VA uses to 
determine whether a service member is eligible for VA benefits when he 
or she was not discharged or released at the expiration of the time he 
or she was obligated to serve at the beginning of a period of service 
because of an intervening change in military status that extends the 
service member's military obligation. We believe that use of 
``unconditional discharge'' in the current regulation adds unnecessary 
complexity and have eliminated it in favor of a more accurate 
description in Sec. 5.37(d), the proposed replacement for Sec. 3.13(c). 
We have also clarified the effective date of the rules described in 
Sec. 5.37(d). These rules are effective on and after October 8, 1977, 
the effective date of the provisions of Public Law 95-126 amending 38 
U.S.C. 101(18).
    Proposed new Sec. 5.38, ``Effect of a voided enlistment on 
eligibility for VA benefits,'' is based on current Sec. 3.14. The first 
sentence of current Sec. 3.14(b) states:

    Where an enlistment is voided by the service department because 
the person did not have legal capacity to contract for a reason 
other than minority (as in the case of an insane person) or because 
the enlistment was prohibited by statute (a deserter or person 
convicted of a felony), benefits may not be paid based on that 
service even though a disability was incurred during such service.

    We propose to replace the example of ``an insane person,'' in 
proposed Sec. 5.38(b), with ``a lack of mental capacity to contract.'' 
``A lack of mental capacity to contract'' is the more customary way to 
describe this concept in contract law.

    The test for lack of capacity is generally said to be whether an 
individual lacks sufficient mental capacity to understand in a 
reasonable manner the nature of the transaction in which he or she 
is engaging, and to understand its consequences and effect upon his 
or her rights and interests.

53 Am. Jur. 2d Mentally Impaired Persons Sec. 156 (1996).
    This proposal also includes removal of sentences two and three of 
current Sec. 3.14(a) and all of Sec. 3.14(d). The second sentence of 
current Sec. 3.14(a), ``Benefits may not be paid, however, unless the 
discharge is held to have been under conditions other than 
dishonorable,'' is redundant. That concept is addressed in current Sec. 
3.12(a) and its proposed replacement, Sec. 5.30.
    The third sentence of current Sec. 3.14(a) provides that: 
``Generally discharge for concealment of a physical or mental defect 
except incompetency or insanity which would have prevented enlistment 
will be held to be under dishonorable conditions.'' In our view, this 
provision is too rigid. Not every such concealment is with an intent to 
defraud the government. For example, an individual may conceal defects 
out of a strong desire to serve one's country in a time of war or other 
national crisis. Such an act may be misguided, but in VA's view it does 
not warrant the harsh results flowing from the current regulation. In 
other cases, a service member might serve with some distinction before 
a disqualifying preexisting physical or mental defect is discovered. 
The current regulation leaves VA with little flexibility to consider 
mitigating circumstances. VA believes that it can address this 
situation adequately under other provisions and has not included the 
quoted material in these proposed regulations.
    The concept in current Sec. 3.14(d) that VA is bound by a service 
department's determination that a discharge is honorable is included in 
the text of proposed Sec. 5.30(c). The remaining material in current 
Sec. 3.14(d) concerning aliens is, in substance, a cross reference to 
material in Sec. 3.7(b) concerning certain veterans discharged for 
alienage whose service may be recognized for VA purposes (as opposed to 
the service of certain others so discharged who are statutorily barred 
from receiving VA benefits--see current Sec. 3.12(c)(5) and proposed 
Sec. 5.31(c)(6)). We do not believe that it is necessary to retain this 
reference, inasmuch as the referenced material is neither an exception 
to nor an amplification of the rule that VA is bound by a service 
department's determination that a discharge is honorable.

Minimum Service and Evidence of Service

    The next portion of VA's service package includes removing current 
Sec. 3.12a, ``Minimum active-duty service requirement,'' and adding a 
proposed equivalent section, Sec. 5.39, ``Minimum active duty service 
requirement for VA benefits.''
    Paragraphs (d)(1) through (6) provide exclusions from the minimum 
active duty service requirement. One of these exclusions is based on 38 
U.S.C. 5303A(b)(3)(C), which excludes ``a

[[Page 4831]]

person who has a disability that the Secretary has determined to be 
compensable under chapter 11 of this title.'' In paragraph 5.39(d)(4), 
we propose to clarify that a ``compensable'' disability means a 
service-connected disability evaluated as 10 percent or more disabling 
under 38 CFR part 4, Schedule for Rating Disabilities; a disability for 
which special monthly compensation is payable; or a disability that, 
together with one or more other disabilities, is compensable under 
current Sec. 3.324, ``Multiple noncompensable service-connected 
disabilities.''
    We believe that clarifying ``compensable'' disability to include 
veterans receiving special monthly compensation and those receiving a 
10 percent evaluation for multiple noncompensable disabilities is fair 
to claimants and consistent with the Congressional intent of Sec. 
5303A. Although the legislative history regarding this issue is sparse, 
it speaks of including language similar to that in current Sec. 
3.12a(d)(3) in Sec. 5303A(b)(3)(C) in order to distinguish Sec. 5303A 
from a parallel statute of the Department of Defense. It appears that 
Congress intended to make sure that the minimum service requirement 
only applies to individuals with disabilities ``so slight as to be 
rated as zero-percent disabling, and for which no compensation is 
payable.'' S.R. Rep. No. 97-153, 97th Cong., 1st Sess., at 41-42, 
reprinted in 1981 U.S.S.C.A.N. 1595, 1626. Therefore, consistent with 
Congressional intent, we propose to make it clear in Sec. 5.39(d)(4) 
that veterans receiving compensation would be excluded from meeting the 
minimum service requirement.
    Current Sec. 3.12a(a)(1)(i), in discussing a requirement of 24-
months of continuous active duty for eligibility for VA benefits, 
provides that ``[n]on-duty periods that are excludable in determining 
the Department of Veterans Affairs benefit entitlement (e.g., see Sec. 
3.15) are not considered as a break in service for continuity purposes 
but are to be subtracted from total time served.'' We propose in 
paragraph (e) to state the provisions regarding temporary breaks in 
service, currently found in Sec. 3.15. However, because the minimum 
active duty service requirement in current Sec. 3.12a, and its proposed 
replacement, only apply to persons who entered service in the early 
1980's and thereafter, we are not including breaks that pertain to 
earlier time periods. We also propose to provide the same 
clarifications concerning time lost while under arrest and while 
serving a court martial sentence that appear in proposed Sec. 5.21(b). 
See the discussion concerning proposed changes to Sec. 5.21 for 
additional information.
    Under current Sec. 3.12a(e) and 38 U.S.C. 5303A(c), the dependents 
and survivors of a veteran who does not meet the minimum service 
requirement are also disqualified from VA benefits, except for benefits 
under chapter 19 (insurance) and chapter 37 (housing and small business 
loans) of 38 U.S.C. We propose to further clarify these exceptions in 
paragraph (f)(2) of proposed Sec. 5.39. As specified in proposed Sec. 
5.39(d)(5), and 38 U.S.C. 5303A(b)(3)(D), the minimum service 
requirement does not bar certain non-compensation VA benefits for a 
service-connected disability, condition or death. We note this 
exception through a cross-reference to Sec. 5.39(d)(5).
    We also propose to state that the minimum service requirement does 
not bar an award of DIC based on the veteran's death in service. This 
is because, under 38 U.S.C. 5303A(b), the minimum service requirement 
applies only if a person is ``discharged or released'' before 
completing the required period of active duty. A veteran who dies in 
service never has the opportunity to be ``discharged or released,'' so 
the requirements should not be applied in such a case. Of course the 
fact that an in-service death is not subject to the minimum service 
requirement of 38 U.S.C. 5303A does not mean that DIC may not be 
awarded for a service-connected death that occurs after service. 
However, 38 U.S.C. 5303A(c), and its proposed implementing regulation 
at Sec. 5.39(f), would be considered in determining eligibility for DIC 
based on post-service death whereas an in-service death does not fall 
under 38 U.S.C. 5303A's minimum service requirement.
    The final regulation in this proposed rulemaking is proposed Sec. 
5.40, ``Service records as evidence of service and character of 
discharge that qualify for VA benefits.'' This is a reorganization of 
current Sec. 3.203, written more concisely to make it more 
understandable and easier to apply.
    VA now has a statutory duty to assist claimants in obtaining 
evidence to substantiate their claims. Among other things, 38 U.S.C. 
5103A(c)(1) provides, with respect to a claim for disability 
compensation, that VA's assistance will include obtaining ``[t]he 
claimant's service medical records and, if the claimant has furnished 
the Secretary information sufficient to locate such records, other 
relevant records pertaining to the claimant's active military, naval, 
or air service that are held or maintained by a governmental entity.''
    The specifics of how VA implements its duty to assist are currently 
located in 38 CFR 3.159. However, we wish to make the regulations we 
are updating and revising compatible with that duty. As an example, 
current Sec. 3.203(a) is entitled ``Evidence submitted by a claimant.'' 
This, or similar wording, could be taken to imply that VA will not 
grant a claim if the claimant does not submit evidence of his or her 
service. We do not wish to imply that VA will not assist in obtaining 
service records, nor do we wish to imply that claimants may not submit 
those records with their claims. Therefore, we propose to use more 
neutral language in this section and to shift the focus from who must 
submit the evidence of service to what kind of evidence of service VA 
will accept, whether submitted by or for a claimant or obtained by VA.
    Because paragraph (b) and the second sentence of paragraph (c) of 
current Sec. 3.203 address additional requirements for eligibility for 
pension or burial benefits, we propose to move these provisions to the 
appropriate portions of new part 5 dealing with those benefits and to 
omit this information from this proposed new section.
    Proposed paragraphs (a) and (b) state the rules pertaining to what 
evidence of service is acceptable to VA and the kinds of information 
that evidence must contain. Paragraph (a) also clarifies that the list 
of acceptable documents is not all-inclusive. Currently, Sec. 3.203 
indicates that the evidence should contain ``needed information as to 
length, time and character of service.'' In this revision, we propose 
to change ``time'' of service to the more specific ``dates of 
service.''
    We propose to clarify this regulation by specifying in paragraph 
(c) when verification by the service department is not required. 
Proposed paragraph (d) would include circumstances when verification 
from the service department is required. Along with the circumstances 
listed in current Sec. 3.203(c), we propose to add paragraph (d)(3), 
which provides that VA will verify service if there is a material 
discrepancy in the evidence of record. This would, for example, cover 
situations in which documents concerning service are in conflict or 
there is credible testimony concerning service that conflicts with 
other evidence of record.

Endnote Regarding Removals (Deletions) From Part 3 of 38 CFR

    This is an advance notice of our intention to remove current 
Sec.Sec. 3.2, 3.6,

[[Page 4832]]

3.7, 3.12, 3.12a, and 3.13 through 3.15 and portions of Sec.Sec. 3.203 
and 3.400. We are not proposing these changes in part 3 at this time. 
Readers, however, are invited to comment on these removals at this 
time. We will propose these part 3 changes and the removal of all of 
part 3, in the last NPRM concerning the proposed part 5 compensation 
and pension regulations. VA plans to publish all of the subparts of 
part 5 for public comment over time. After public comments for all of 
the proposed subparts have been reviewed and considered, VA intends to 
remove all of part 3, concurrent with the implementation of part 5.

Paperwork Reduction Act

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

Regulatory Flexibility Act

    The Secretary hereby certifies that this regulatory amendment will 
not have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601-612. This amendment would not affect any small entities. 
Only VA beneficiaries could be directly affected. Therefore, pursuant 
to 5 U.S.C. 605(b), this amendment is exempt from the initial and final 
regulatory flexibility analysis requirements of sections 603 and 604.

Executive Order 12866

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

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 such 
effect on State, local, or tribal governments, or the private sector.

Catalog of Federal Domestic Assistance Numbers

    The catalog of Federal Domestic Assistance program numbers for this 
proposal are 64.100-102, 64.104-110, 64.115, and 64.127.

List of Subjects in 38 CFR Part 5

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

    Approved: November 6, 2003.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, VA proposes to amend 38 
CFR chapter I by adding part 5 to read as follows:

PART 5 COMPENSATION, PENSION, BURIAL AND RELATED BENEFITS

Subpart A--[Reserved]
Subpart B--Service Requirements for Veterans

Periods of War and Types of Military Service


5.20 Dates of periods of war.
5.21 Service VA recognizes as active military service.
5.22 Service VA recognizes as active duty.
5.23 How VA classifies Reserve and National Guard duty.
5.24 How VA classifies duty performed by Armed Services Academy 
cadets, midshipmen, attendees at the preparatory schools of the 
Armed Services Academies, and Senior Reserve Officers' Training 
Corps members.
5.25 How VA classifies service in the Public Health Service, in the 
Coast and Geodetic Survey and its successor agencies, and of 
temporary members of the Coast Guard Reserve.
5.26 Circumstances where persons ordered to service, but who did not 
serve, are considered to have performed active duty.
5.27 Individuals and groups designated by the Secretary of Defense 
as having performed active military service.
5.28 Other individuals and groups designated as having performed 
active military service.
5.29 Circumstances under which certain travel periods may be 
classified as military service.

Service Creditable for VA Benefits

5.30 How VA determines if service qualifies for VA benefits.
5.31 Statutory bars to VA benefits.
5.32 Consideration of mitigating factors in absence without leave 
cases.
5.33 Insanity as a defense to acts leading to a discharge or 
dismissal from the service that might be disqualifying for VA 
benefits.
5.34 Effect of discharge upgrades by Armed Forces boards for the 
correction of military records (10 U.S.C. 1552) on eligibility for 
VA benefits.
5.35 Effect of discharge upgrades by Armed Forces discharge review 
boards (10 U.S.C. 1553) on eligibility for VA benefits.
5.36 Effect of certain special discharge upgrade programs on 
eligibility for VA benefits.
5.37 Effect of extension of service obligation due to change in 
military status on eligibility for VA benefits.
5.38 Effect of a voided enlistment on eligibility for VA benefits.

Minimum Service and Evidence of Service

5.39 Minimum active duty service requirement for VA benefits.
5.40 Service records as evidence of service and character of 
discharge that qualify for VA benefits.
5.41-5.49 [Reserved]

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

Subpart A--[Reserved]

Subpart B--Service Requirements for Veterans

Periods of War and Types of Military Service


Sec. 5.20  Dates of periods of war.

    This section explains what periods of service VA recognizes as 
wartime service, beginning with the Mexican border period. See 38 
U.S.C. 101 for information concerning earlier periods of war.

----------------------------------------------------------------------------------------------------------------
              Period                           Dates             Exceptions/special rules         Authority
----------------------------------------------------------------------------------------------------------------
(a) Mexican Border Period.........  May 9, 1916, through April  Applies to a veteran who    38 U.S.C. 101(30).
                                     5, 1917.                    served in Mexico, or on
                                                                 the borders of Mexico, or
                                                                 in the waters adjacent to
                                                                 Mexico during the stated
                                                                 period.
(b) World War I...................  April 6, 1917, through      (1) April 6, 1917, through  38 U.S.C. 101(7),
                                     November 11, 1918.          April 1, 1920, for United   1101(2)(A),
                                                                 States armed forces         1501(2).
                                                                 serving in Russia.

[[Page 4833]]

 
                                                                (2) April 6, 1917, through
                                                                 July 1, 1921, for
                                                                 veterans who served in
                                                                 the active military,
                                                                 naval, or air service
                                                                 after April 5, 1917, and
                                                                 before November 12, 1918.
                                                                 This extension is limited
                                                                 to matters concerning
                                                                 benefits under 38 U.S.C.
                                                                 chapter 11 (service-
                                                                 connected disability
                                                                 compensation, death
                                                                 compensation, and
                                                                 benefits for persons
                                                                 disabled by VA medical
                                                                 treatment or during VA
                                                                 vocational rehabilitation
                                                                 or compensated work
                                                                 therapy) and benefits
                                                                 under 38 U.S.C. chapter
                                                                 15 (``Pension for Non-
                                                                 Service-Connected
                                                                 Disability or Death or
                                                                 for Service'').
(c) World War II..................  December 7, 1941, through   World War II service also   38 U.S.C. 101(8),
                                     December 31, 1946.          includes any period of      1101(2)(B).
                                                                 continuous service after
                                                                 December 31, 1946, and
                                                                 before July 26, 1947, if
                                                                 that period of service
                                                                 began before January 1,
                                                                 1947. This extension is
                                                                 limited to matters
                                                                 concerning benefits under
                                                                 38 U.S.C. chapter 11
                                                                 (service-connected
                                                                 disability compensation,
                                                                 death compensation, and
                                                                 benefits for persons
                                                                 disabled by VA medical
                                                                 treatment or during VA
                                                                 vocational
                                                                 rehabilitation, or
                                                                 compensated work therapy).
(d) Korean Conflict...............  June 27, 1950, through      None......................  38 U.S.C. 101(9).
                                     January 31, 1955.
(e) Vietnam Era...................  August 5, 1964, through     The Vietnam Era also        38 U.S.C. 101(29).
                                     May 7, 1975.                includes February 28,
                                                                 1961, through August 4,
                                                                 1964, in the case of a
                                                                 veteran who served in the
                                                                 Republic of Vietnam
                                                                 during that period.
(f) Persian Gulf War..............  August 2, 1990, through a   ..........................  38 U.S.C. 101(33).
                                     date to be prescribed by
                                     Presidential proclamation
                                     or by law.
(g) Future periods of war.........  Beginning on the date of    ..........................  38 U.S.C. 101(11).
                                     any future declaration of
                                     war by the Congress and
                                     ending on a date
                                     prescribed by
                                     Presidential proclamation
                                     or concurrent resolution
                                     of the Congress.
----------------------------------------------------------------------------------------------------------------

Sec. 5.21  Service VA recognizes as active military service.

    (a) Active military service includes:
    (1) Active duty. See Sec. 5.22, ``Service VA recognizes as active 
duty.''
    (2) The service of individuals certified by the Secretary of 
Defense as serving on active military service. See Sec. 5.27.
    (3) The service of individuals and groups listed in Sec. 5.28.
    (4) Active duty for training during which the individual was 
disabled or died from a disease or injury incurred or aggravated in 
line of duty.
    (5) Inactive duty training during which the individual was disabled 
or died from an injury incurred or aggravated in line of duty or from 
an acute myocardial infarction, a cardiac arrest, or a cerebrovascular 
accident.
    (6) Active or Reserve duty for persons who were injured or died 
while assigned to the Postmaster General for the aerial transportation 
of mail from February 10, 1934, through March 26, 1935.
    (b) In determining the period of active military service for 
service-connected or nonservice-connected benefits, VA will not count:
    (1) Time spent on industrial, agricultural, or indefinite furlough;
    (2) Time lost when absent without leave and without pay;
    (3) Time while under arrest without a subsequent acquittal or 
dismissal of charges;
    (4) Time during desertion; or
    (5) Subject to 10 U.S.C. 875 (concerning the restoration of rights, 
privileges, and property affected by certain court-marital sentences 
that are set aside or disapproved), time while serving a sentence of 
confinement imposed by a court-martial.

(Authority: 38 U.S.C. 101(24), 501(a). Section 5.21(a)(6) also 
issued under Pub. L. No. 73-140, 48 Stat. 508 (1934))


Sec. 5.22  Service VA recognizes as active duty.

    (a) Active duty means:
    (1) Full-time duty in the Armed Forces, other than active duty for 
training.
    (2) Certain duty performed by:
    (i) Reserve and National Guard members. See Sec. 5.23.
    (ii) Armed Services Academy cadets, midshipmen, attendees at the 
preparatory schools of the Armed Services Academies, and Senior Reserve 
Officers' Training Corps members. See Sec. 5.24.
    (iii) Commissioned officers of the Public Health Service, Coast and 
Geodetic Survey and its successor agencies, and temporary members of 
the Coast Guard Reserves. See Sec. 5.25.
    (3) Certain service of individuals ordered to service but who did 
not serve. See Sec. 5.26.
    (b) Active duty continues until midnight of the date of discharge 
or release from active duty.
    (c) Active duty includes certain travel as provided in Sec. 5.29, 
``Circumstances under which certain travel periods may be classified as 
military service.''

(Authority: 38 U.S.C. 101(21))


Sec. 5.23  How VA classifies Reserve and National Guard duty.

    (a) Reserves. (1) Active duty. Full-time duty in the Armed Forces 
performed by a Reservist, other than active duty for training, is 
active duty.
    (2) Active duty for training. Full-time duty in the Armed Forces 
performed by

[[Page 4834]]

a Reservist for training purposes is active duty for training.
    (3) Inactive duty training. Duty that is not full-time duty and 
that the Secretary concerned prescribes for a Reservist to participate 
in as a regular period of instruction or appropriate duty is inactive 
duty training. (See 37 U.S.C. 206, ``Reserves; members of National 
Guard: inactive-duty training.'') Special additional duties authorized 
for a Reservist by an authority designated by the Secretary concerned 
and performed on a voluntary basis in connection with prescribed 
training maintenance activities of the unit to which the Reservist is 
assigned is also inactive duty training.
    (b) National Guard. (1) Active duty. Full-time duty in the Armed 
Forces performed by a member of the National Guard serving under title 
10, United States Code, other than active duty for training, is active 
duty.
    (2) Active duty for training. Full-time duty performed by a member 
of the National Guard of any State under any of the following six 
circumstances is active duty for training:
    (i) When detailed as a rifle instructor for civilians (See 32 
U.S.C. 316);
    (ii) During required drills and field exercises (See 32 U.S.C. 
502);
    (iii) While participating in field exercises as directed by the 
Secretary of the Army or the Secretary of the Air Force (See 32 U.S.C. 
503);
    (iv) While attending schools or small arms competitions as 
prescribed by the Secretary of the Army or the Secretary of the Air 
Force (See 32 U.S.C. 504);
    (v) While attending any service school (except the United States 
Military Academy or the United States Air Force Academy), or attached 
to an organization of the Army or the Air Force for routine practical 
instruction during field training or other outdoor exercise. (See 32 
U.S.C. 505); or
    (vi) When performed under prior provisions of law that correspond 
to 32 U.S.C. 316, 502, 503, 504, or 505, for each of paragraphs 
(b)(2)(i) through (v) of this section.
    (3) Inactive duty training. Duty, other than full-time duty, 
performed by a member of the National Guard of any State under any of 
the following six circumstances is inactive duty training:
    (i) When detailed as a rifle instructor for civilians (See 32 
U.S.C. 316);
    (ii) During required drills and field exercises (See 32 U.S.C. 
502);
    (iii) While participating in field exercises as directed by the 
Secretary of the Army or the Secretary of the Air Force (See 32 U.S.C. 
503);
    (iv) While attending schools or small arms competitions as 
prescribed by the Secretary of the Army or the Secretary of the Air 
Force (See 32 U.S.C. 504);
    (v) While attending any service school (except the United States 
Military Academy or the United States Air Force Academy), or attached 
to an organization of the Army or the Air Force for routine practical 
instruction during field training or other outdoor exercise (See 32 
U.S.C. 505); or
    (vi) When performed under prior provisions of law that correspond 
to 32 U.S.C. 316, 502, 503, 504, or 505, for each of paragraphs 
(b)(3)(i) through (v) of this section.
    (4) Exception. Inactive duty training does not include work or 
study performed in connection with correspondence courses, or 
attendance at an educational institution in an inactive status.
    (c) Certain travel periods. For issues involving travel of a 
reservist or member of the National Guard, see Sec. 5.29, 
``Circumstances under which certain travel periods may be classified as 
military service.''

(Authority: 38 U.S.C. 101(21)-(23), 106, and 501(a))


Sec. 5.24  How VA classifies duty performed by Armed Services Academy 
cadets, midshipmen, attendees at the preparatory schools of the Armed 
Services Academies, and Senior Reserve Officers' Training Corps 
members.

    (a) Service as a cadet or midshipman. Service as a cadet at the 
United States Air Force Academy, United States Military Academy, or 
United States Coast Guard Academy, or as a midshipman at the United 
States Naval Academy qualifies as active duty. The period of such duty 
continues until midnight of the date of discharge or release from the 
respective service academy.
    (b) Preparatory school attendance. (1) Active duty. Attendance at 
the preparatory schools of the United States Air Force Academy, the 
United States Military Academy, or the United States Naval Academy is 
considered active duty if:
    (i) The individual was an enlisted active-duty member who was 
reassigned to a preparatory school without a release from active duty; 
or
    (ii) The individual has a commitment to perform active duty in the 
Armed Forces that would be binding upon disenrollment from the 
preparatory school.
    (2) Active duty for training. Except as provided in paragraph 
(b)(1)(ii) of this section, attendance at the preparatory schools of 
the United States Air Force Academy, the United States Military 
Academy, or the United States Naval Academy by an individual who enters 
the preparatory school directly from the Reserves, National Guard, or 
civilian life is active duty for training.
    (c) Senior Reserve Officers' Training Corps. (1) Active duty for 
training. Duty performed by a member of a Senior Reserve Officers' 
Training Corps program when ordered to duty for the purpose of training 
or a practice cruise under statutes and regulations governing the Armed 
Forces conduct of the Senior Reserve Officers' Training Corps is active 
duty for training.

(Authority: 10 U.S.C. chapter 103)

    (i) This paragraph (c)(1) is effective October 1, 1982, for death 
or disability resulting from disease or injury that occurred on or 
after October 1, 1982.
    (ii) This paragraph (c)(1) is effective October 1, 1983, for death 
or disability resulting from disease or injury that occurred on or 
before September 30, 1982.
    (iii) For duty on or after October 1, 1988, the duty must be a 
prerequisite to the member being commissioned and must be at least four 
continuous weeks long.
    (2) Inactive duty training. Training by a member of, or applicant 
for membership (a student enrolled, during a semester or other 
enrollment term, in a course that is part of Reserve Officers' Training 
Corps instruction at an educational institution) in the Senior Reserve 
Officers' Training Corps prescribed under 10 U.S.C. Chapter 103 
(``Senior Reserve Officers' Training Corps'') is inactive duty 
training.
    (3) Drills. Time spent by members of the Senior Reserve Officers' 
Training Corps in drills as part of their activities as members of the 
corps is not active military service.
    (d) Travel. For issues involving travel under this section, see 
Sec. 5.29, ``Circumstances under which certain travel periods may be 
classified as military service.''

(Authority: 38 U.S.C. 101, 106, and 501(a))


Sec. 5.25  How VA classifies service in the Public Health Service, in 
the Coast and Geodetic Survey and its successor agencies, and of 
temporary members of the Coast Guard Reserve.

    (a) Public Health Service. (1) Active duty. (i) Full-time duty, 
other than for training purposes, as a commissioned officer of the 
Regular or Reserve Corps of the Public Health Service is active duty if 
performed:
    (A) On or after July 29, 1945;
    (B) Before July 29, 1945, under circumstances affording entitlement 
to full military benefits; or

[[Page 4835]]

    (C) At any time, for the purposes of dependency and indemnity 
compensation.
    (ii) Such active duty continues until midnight of the date of 
discharge or release from active duty.
    (2) Active duty for training. Full-time duty for training purposes 
performed as a commissioned officer of the Reserve Corps of the Public 
Health Service is active duty for training if performed:
    (i) On or after July 29, 1945;
    (ii) Before July 29, 1945, under circumstances affording 
entitlement to full military benefits, as determined by the Secretary 
of the Department of Defense; or
    (iii) At any time, for the purposes of dependency and indemnity 
compensation.
    (3) Inactive duty training. Either of the following kinds of 
service is inactive duty training:
    (i) Duty, other than full-time duty, prescribed for commissioned 
officers of the Reserve Corps of the Public Health Service by the 
Secretary of Health and Human Services under 37 U.S.C. 206 (Reserves; 
members of National Guard: Inactive-duty training) or any other 
provision of law; or
    (ii) Special additional duties authorized for commissioned officers 
of the Reserve Corps of the Public Health Service by an authority 
designated by the Secretary of Health and Human Services and performed 
by them on a voluntary basis in connection with the prescribed training 
or maintenance activities of the units to which they are assigned.
    (b) Coast and Geodetic Survey and successor agencies. (1) Active 
duty. Full-time duty as a commissioned officer in the Coast and 
Geodetic Survey and its successor agencies, the Environmental Science 
Services Administration and the National Oceanic and Atmospheric 
Administration, is active duty if performed:
    (i) On or after July 29, 1945;
    (ii) Before July 29, 1945, while on transfer to one of the Armed 
Forces;
    (iii) Before July 29, 1945, in time of war or National emergency 
declared by the President, while assigned to duty on a project for one 
of the Armed Forces in an area that the Secretary of Defense has 
determined to be of immediate military hazard;
    (iv) In the Philippine Islands on December 7, 1941, and 
continuously in such islands thereafter until July 29, 1945; or
    (v) At any time for purposes of dependency and indemnity 
compensation.
    (2) Such active duty continues until midnight of the date of 
discharge or release from active duty.
    (c) Temporary member of the Coast Guard Reserve. Duty performed as 
a temporary member of the Coast Guard Reserve is not active duty for 
training or inactive duty training.
    (d) Travel. For issues involving travel by members of the Public 
Health Service, members of the Coast and Geodetic Survey and its 
successor agencies, or reservists under this section, see Sec. 5.29, 
``Circumstances under which certain travel periods may be classified as 
military service.''

(Authority: 38 U.S.C. 101, 106, and 501(a))


Sec. 5.26  Circumstances where persons ordered to service, but who did 
not serve, are considered to have performed active duty.

    (a) Persons included. The persons described in paragraph (a) of 
this section who meet the requirements of paragraphs (a) and (b) of 
this section will be considered to have performed active duty for 
entitlement to VA benefits.
    (1) Volunteers. Volunteers are included, provided they have applied 
for enlistment or enrollment in the active military service and have 
been provisionally accepted and directed or ordered to report to a 
place for final acceptance into the service.
    (2) Draftees. Persons selected or drafted for enrollment in the 
active military service are included if they report, before being 
rejected for service, according to a call from their local draft board.
    (3) National Guard. Members of the National Guard are included when 
they have been called into Federal active service, but have not yet 
been enrolled in such service, and when reporting to a designated 
rendezvous.
    (b) Injury or disease. This section applies only if a person 
described in paragraph (a) of this section suffers an injury, or 
contracts a disease, in line of duty while going to, coming from, or at 
a place designated for final acceptance or entry upon active duty. This 
applies to a draftee or selectee when reporting for preinduction 
examination or for final induction on active duty. This section does 
not apply to an injury or disease suffered during a period of inactive 
duty status or period of waiting after a final physical examination and 
prior to beginning the trip to report for induction. The injury or 
disease must be due to some factor relating to compliance with proper 
orders.

(Authority: 38 U.S.C. 106(b))


Sec. 5.27  Individuals and groups designated by the Secretary of 
Defense as having performed active military service.

    (a) Designation by the Secretary of Defense. Service performed by 
certain persons and groups that served the Armed Forces of the United 
States in a capacity that was considered civilian employment or 
contractual service under Public Law 95-202, is active military service 
for the purpose of VA benefits provided that the Secretary of Defense, 
or his or her designee, certifies this as active military service and 
issues a discharge under honorable conditions.
    (b) Individuals and groups included. The Secretary of Defense, or 
his or her designee, has certified as active military service the 
service of the following individuals and groups:
    (1) American Merchant Marine in oceangoing service, during the 
Period of Armed Conflict, December 7, 1941, to August 15, 1945. 
Recognized effective January 19, 1988.
    (2) The approximately 50 Chamorro and Carolinian former native 
policemen who received military training in the Donnal area of central 
Saipan and were placed under the command of Lt. Casino of the 6th 
Provisional Military Police Battalion to accompany United States 
Marines on active, combat-patrol activity from August 19, 1945, to 
September 2, 1945. Recognized effective September 30, 1999.
    (3) Civilian Crewmen of the United States Coast and Geodetic Survey 
(USCGS) vessels, who performed their service in areas of immediate 
military hazard while conducting cooperative operations with and for 
the U.S. Armed Forces within a time frame of December 7, 1941, to 
August 15, 1945. Qualifying USCGS vessels specified by the Secretary of 
Defense, or his or her designee, are the Derickson, Explorer, Gilbert, 
Hilgard, E. Lester Jones, Lydonia, Patton, Surveyor, Wainwright, 
Westdahl, Oceanographer, Hydrographer, and Pathfinder. Recognized 
effective April 8, 1991.
    (4) Civilian employees of Pacific Naval Air Bases who actively 
participated in Defense of Wake Island during World War II. Recognized 
effective January 22, 1981.
    (5) Civilian Navy Identification Friend or Foe (IFF) Technicians, 
who served in the Combat Areas of the Pacific during World War II 
(December 7, 1941, to August 15, 1945). Recognized effective August 2, 
1988.
    (6) Civilian personnel assigned to the Secret Intelligence Element 
of the Office of Strategic Services (OSS). Recognized effective 
December 27, 1982.
    (7) Engineer Field Clerks (WWI). Recognized effective August 31, 
1979.

[[Page 4836]]

    (8) Guam Combat Patrol. Recognized effective May 10, 1983.
    (9) Honorably discharged members of the American Volunteer Group 
(Flying Tigers), who served during the Period December 7, 1941, to July 
18, 1942. Recognized effective May 3, 1991.
    (10) Honorably discharged members of the American Volunteer Guard, 
Eritrea Service Command, who served during the Period June 21, 1942, to 
March 31, 1943. Recognized effective June 29, 1992.
    (11) Male Civilian Ferry Pilots. Recognized effective July 17, 
1981.
    (12) The Operational Analysis Group of the Office of Scientific 
Research and Development, Office of Emergency Management, which served 
overseas with the U.S. Army Air Corps from December 7, 1941, through 
August 15, 1945. Recognized effective August 27,1999.
    (13) Quartermaster Corps Female Clerical Employees serving with the 
AEF (American Expeditionary Forces) in World War I. Recognized 
effective January 22, 1981.
    (14) Quartermaster Corps Keswick Crew on Corregidor (WWII). 
Recognized effective February 7, 1984.
    (15) Reconstruction Aides and Dietitians in World War I. Recognized 
effective July 6, 1981.
    (16) Signal Corps Female Telephone Operators Unit of World War I. 
Recognized effective May 15, 1979.
    (17) Three scouts/guides, Miguel Tenorio, Penedicto Taisacan, and 
Cristino Dela Cruz, who assisted the U.S. Marines in the offensive 
operations against the Japanese on the Northern Mariana Islands from 
June 19, 1944, through September 2, 1945. Recognized effective 
September 30, 1999.
    (18) U.S. civilian employees of American Airlines, who served 
overseas as a result of American Airlines' contract with the Air 
Transport Command during the Period December 14, 1941, through August 
14, 1945. Recognized effective October 5, 1990.
    (19) U.S. civilian female employees of the U.S. Army Nurse Corps 
while serving in the defense of Bataan and Corregidor during the Period 
January 2, 1942, to February 3, 1945. Recognized effective December 13, 
1993.
    (20) U.S. Civilian Flight Crew and Aviation Ground Support 
Employees of Braniff Airways, who served overseas in the North Atlantic 
or under the jurisdiction of the North Atlantic Wing, Air Transport 
Command (ATC), as a result of a contract with the ATC during the Period 
February 26, 1942, through August 14, 1945. Recognized effective June 
2, 1997.
    (21) U.S. Civilian Flight Crew and Aviation Ground Support 
Employees of Consolidated Vultree Aircraft Corporation (Consairway 
Division), who served overseas as a result of a contract with the Air 
Transport Command during the Period December 14, 1941, through August 
14, 1945. Recognized effective June 29, 1992.
    (22) U.S. Civilian Flight Crew and Aviation Ground Support 
Employees of Northeast Airlines Atlantic Division, who served overseas 
as a result of Northeast Airlines' Contract with the Air Transport 
Command during the Period December 7, 1941, through August 14, 1945. 
Recognized effective June 2, 1997.
    (23) U.S. Civilian Flight Crew and Aviation Ground Support 
Employees of Northwest Airlines, who served overseas as a result of 
Northwest Airline's contract with the Air Transport Command during the 
Period December 14, 1941, through August 14, 1945. Recognized effective 
December 13, 1993.
    (24) U.S. Civilian Flight Crew and Aviation Ground Support 
Employees of Pan American World Airways and Its Subsidiaries and 
Affiliates, who served overseas as a result of Pan American's Contract 
with the Air Transport Command and Naval Air Transport Service during 
the Period December 14, 1941, through August 14, 1945. Recognized 
effective July 16, 1992.
    (25) U.S. Civilian Flight Crew and Aviation Ground Support 
Employees of Transcontinental and Western Air (TWA), Inc., who served 
overseas as a result of TWA's contract with the Air Transport Command 
during the Period December 14, 1941, through August 14, 1945. The 
``Flight Crew'' includes pursers. Recognized effective May 13, 1992.
    (26) U.S. Civilian Flight Crew and Aviation Ground Support 
Employees of United Air Lines (UAL), who served overseas as a result of 
UAL's contract with the Air Transport Command during the Period 
December 14, 1941, through August 14, 1945. Recognized effective May 
13, 1992.
    (27) U.S. civilian volunteers, who actively participated in the 
Defense of Bataan. Recognized effective February 7, 1984.
    (28) U.S. civilians of the American Field Service (AFS), who served 
overseas operationally in World War I during the Period August 31, 
1917, to January 1, 1918. Recognized effective August 30, 1990.
    (29) U.S. civilians of the American Field Service (AFS), who served 
overseas under U.S. Armies and U.S. Army Groups in World War II during 
the Period December 7, 1941, through May 8, 1945. Recognized effective 
August 30, 1990.
    (30) U.S. Merchant Seamen who served on blockships in support of 
Operation Mulberry. Recognized effective October 18, 1985.
    (31) Wake Island Defenders from Guam. Recognized effective April 7, 
1982.
    (32) Women's Air Forces Service Pilots (WASP). Recognized effective 
November 23, 1977.
    (33) Women's Army Auxiliary Corps (WAAC). Recognized effective 
March 18, 1980.
    (c) Effective dates of awards. (1) Scope. Paragraph (c) of this 
section establishes the effective date of an award of any of the 
following benefits based on service in a group listed in this section:
    (i) Pension;
    (ii) Compensation;
    (iii) Dependency and indemnity compensation; and
    (iv) Monetary allowances for a child of:
    (A) A Vietnam veteran under Sec. 3.814 of this chapter, ``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;''
    (B) A Vietnam veteran under Sec. 3.815 of this chapter, ``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;''
    (C) A veteran of covered service in Korea under 38 U.S.C. 1821, 
``Benefits for children of certain Korea service veterans born with 
spina bifida.''
    (2) Claim received one year or less after the effective date of 
recognition. If VA receives the claim within one year of the effective 
date of recognition, then the effective date of the award is the later 
of:
    (i) The date entitlement arose, as defined in [regulation that will 
be published in a future Notice of Proposed Rulemaking concerning 
proposed subpart C of this part] of this part, or
    (ii) The effective date of recognition.
    (3) Claim received more than one year after the effective date of 
recognition. If VA receives the claim more than one year after the 
effective date of recognition, the effective date of the award or 
increase is the later of:
    (i) The date entitlement arose, as defined in [regulation that will 
be published in a future Notice of Proposed Rulemaking concerning 
proposed subpart C of this part] of this part, or
    (ii) One year prior to the date of receipt of the claim.

[[Page 4837]]

    (4) Effective dates for awards based on a review on VA's initiative 
one year or less after the effective date of recognition. If VA awards 
benefits one year or less after the effective date of recognition, the 
effective date of the award is the later of:
    (i) The date entitlement arose, as defined in [regulation that will 
be published in a future Notice of Proposed Rulemaking concerning 
proposed subpart C of this part] of this part, or
    (ii) The effective date of recognition.
    (5) Effective dates for awards based on a review on VA's initiative 
more than one year after the effective date of the change. If VA awards 
benefits more than one year after the effective date of recognition, 
the effective date of the award is the later of:
    (i) The date entitlement arose, as defined in [regulation that will 
be published in a future Notice of Proposed Rulemaking concerning 
proposed subpart C of this part] of this part, or
    (ii) One year prior to the date of the VA rating decision awarding 
the benefit, or if no rating decision is required, one year prior to 
the date VA otherwise determines that the claimant is entitled to the 
benefit.

(Authority: 38 U.S.C. 501(a), 1832(b)(2), 5110(g); Sec. 401, Pub. L. 
95-202, 91 Stat. 1449, 1450)


Sec. 5.28  Other individuals and groups designated as having performed 
active military service.

    The following individuals and groups are considered to have 
performed active military service:
    (a) Alaska Territorial Guard during World War II. (1) Service in 
the Alaska Territorial Guard during World War II for any individual who 
was honorably discharged as determined by the Secretary of Defense is 
included.
    (2) Benefits cannot be paid for this service for any period prior 
to August 9, 2000.
    (b) Army field clerks. Army field clerks are included as enlisted 
men.
    (c) Army Nurse Corps, Navy Nurse Corps, and female dietetic and 
physical therapy personnel. Army Nurse Corps, Navy Nurse Corps, and 
female dietetic and physical therapy personnel are included, as 
follows:
    (1) Nurse Corps. Female Army and Navy nurses on active service 
under order of the service department; or
    (2) Female dietetic and physical therapy personnel. Female dietetic 
and physical therapy personnel, excluding students and apprentices, 
appointed with relative rank on or after December 22, 1942, or 
commissioned on or after June 22, 1944.
    (d) Aviation camps. Students who were enlisted men in Aviation 
camps during World War I are included.
    (e) Coast Guard. Active service in the Coast Guard on or after 
January 28, 1915, while under the jurisdiction of the Treasury 
Department, the Navy Department, the Department of Transportation, or 
the Department of Homeland Security is included. This does not include 
temporary members of the Coast Guard Reserves.
    (f) Contract surgeons. Contract surgeons are included for 
compensation and DIC, if the disability or death was the result of 
disease or injury contracted in line of duty during a period of war 
while actually performing the duties of assistant surgeon or acting 
assistant surgeon with any military force in the field, or in transit, 
or in a hospital.
    (g) Field clerks, Quartermaster Corps. Field clerks of the 
Quartermaster Corps are included as enlisted personnel.
    (h) Lighthouse service personnel. Lighthouse service personnel who 
were transferred to the service and jurisdiction of the War or Navy 
Departments by Executive order under the Act of August 29, 1916, are 
included. Effective July 1, 1939, service was consolidated with the 
Coast Guard.
    (i) Male nurses. Male nurses who were enlisted in a Medical Corps 
are included.
    (j) Persons previously having a pensionable or compensable status. 
Persons having a pensionable or compensable status prior to January 1, 
1959, are included.

(Authority: 38 U.S.C. 1152, 1504)

    (k) Philippine Scouts and others. See Sec. 3.40.
    (l) Revenue Cutter Service. The Revenue Cutter Service is included 
while serving under direction of the Secretary of the Navy in 
cooperation with the Navy. Effective January 28, 1915, the Revenue 
Cutter Service was merged into the Coast Guard.
    (m) Russian Railway Service Corps. Service during World War I in 
the Russian Railway Service Corps as certified by the Secretary of the 
Army is included.
    (n) Training camps. Members of training camps authorized by section 
54 of the National Defense Act (Pub. L. No. 64-85), are included, 
except for members of Student Army Training Corps Camps at the Presidio 
of San Francisco; Plattsburg, New York; Fort Sheridan, Illinois; Howard 
University, Washington, DC; Camp Perry, Ohio; and Camp Hancock, 
Georgia, from July 18, 1918, to September 16, 1918.
    (o) Women's Army Corps (WAC). Service in the WAC on or after July 
1, 1943, is included.
    (p) Women's Reserve of Navy, Marine Corps, and Coast Guard. Service 
in the Women's Reserve of the Navy, Marine Corps, and Coast Guard is 
included and provides the same benefits as members of the Officers 
Reserve Corps or enlisted men of the United States Navy, Marine Corps, 
or Coast Guard.

(Authority: 38 U.S.C. 101, 106, and 501(a))


Sec. 5.29  Circumstances under which certain travel periods may be 
classified as military service.

    (a) Active duty. (1) Travel time to and from active duty. Travel to 
or from any period of active duty is active duty if the travel is 
authorized by the Secretary concerned.
    (2) Travel on discharge or release. Travel time consisting of the 
period between the date of discharge or release and arrival home by the 
most direct route is active duty.
    (3) Persons ordered to service but who did not serve. For 
information about the travel of certain persons ordered to service who 
did not serve, see Sec. 5.26(b).
    (b) Active duty for training or inactive duty training--(1) Travel 
time for active duty for training or inactive duty training. Any 
individual proceeding directly to, or returning directly from, a period 
of active duty for training or inactive duty training will be 
considered to be on active duty for training or inactive duty training 
if the individual was:
    (i) Authorized or required by competent authority designated by the 
Secretary concerned to perform such duty, and
    (ii) Disabled or died from an injury, an acute myocardial 
infarction, a cardiac arrest, or a cerebrovascular accident incurred 
during that travel.
    (2) Determination of status. VA will determine whether such an 
individual was authorized or required to perform such duty and whether 
the individual was disabled or died from an injury, an acute myocardial 
infarction, a cardiac arrest, or a cerebrovascular accident incurred 
during that travel. In making these determinations, VA will take into 
consideration:
    (i) The hour at which the individual began to proceed to or return 
from the duty;
    (ii) The hour at which the individual was scheduled to arrive for, 
or at which the individual ceased to perform, such duty;
    (iii) The method of travel employed;
    (iv) The itinerary;
    (v) The manner in which the travel was performed; and

[[Page 4838]]

    (vi) The immediate cause of disability or death.
    (3) Burden of proof. Whenever any claim is filed alleging that the 
claimant is entitled to benefits by reason of travel for active duty 
for training or inactive duty training, the burden of proof shall be on 
the claimant.

(Authority: 38 U.S.C. 101(21) and (22), 106(c) and (d))

Service Creditable for VA Benefits


Sec. 5.30  How VA determines if service qualifies for VA benefits.

    (a) Purpose. Except for service members who died in service, a 
requirement for veteran status is discharge or release under other than 
dishonorable conditions. See Sec. 3.1(d) (defining ``veteran''). This 
section sets out how VA determines whether the service member's 
discharge or release was under other than dishonorable conditions.
    (b) Limitation to period of service concerned. (1) General rule. A 
determination under this section that a service member was discharged 
or released under dishonorable conditions applies only to the period of 
service to which the discharge or release applies. It does not preclude 
veteran status with respect to other periods of service from which the 
service member was discharged or released under other than dishonorable 
conditions. See also Sec. 5.37 (concerning certain cases where a 
service member was not discharged or released at the end of the period 
of time for which he or she was obligated to serve when entering a 
period of service because of a change in his or her military status 
during that period of service).
    (2) Forfeiture not precluded. The provisions of paragraph (b)(1) of 
this section do not preclude forfeiture of VA benefits under 38 U.S.C. 
6103, ``Forfeiture for fraud,'' under 38 U.S.C. 6104, ``Forfeiture for 
treason,'' under 38 U.S.C. 6105, ``Forfeiture for subversive 
activities,'' or under similar statutes governing forfeiture of VA 
benefits.
    (c) Discharges and releases VA recognizes as being under other than 
dishonorable conditions. For purposes of making determinations 
concerning character of discharge for VA purposes, a military discharge 
that is characterized by the service department as being either 
honorable or under honorable conditions is binding on VA. Subject to 
Sec. 5.36 (concerning certain special 1970s-era discharge upgrades), 
any of the following is a discharge or release under other than 
dishonorable conditions for VA purposes:
    (1) An honorable discharge.
    (2) A general discharge under honorable conditions.
    (3) An uncharacterized administrative entry level separation in the 
case of separation of enlisted personnel based on administrative 
proceedings begun on or after October 1, 1982.
    (d) Discharges VA recognizes as being under dishonorable 
conditions. A dishonorable discharge is a discharge under dishonorable 
conditions for VA purposes, except as provided in Sec. 5.33, ``Insanity 
as a defense to acts leading to a discharge or dismissal from the 
service which might be disqualifying for VA benefits.''
    (e) Discharges and releases for which VA will make the character of 
discharge determination. Subject to Sec. 5.36 (concerning certain 
special 1970s-era discharge upgrades), VA will determine whether the 
following types of discharges are discharges under other than 
dishonorable conditions for VA purposes, based on the facts and 
circumstances surrounding separation:
    (1) An other than honorable discharge (formerly an ``undesirable'' 
discharge).
    (2) A bad conduct discharge.
    (3) In the case of separation of enlisted personnel based on 
administrative proceedings begun on or after October 1, 1982, 
uncharacterized administrative separations for:
    (i) A void enlistment or induction, or
    (ii) Dropped from the rolls (that is, administrative termination of 
military status and pay).
    (f) Offenses or events leading to discharge or release being 
recognized as a discharge under dishonorable conditions. For purposes 
of VA's character of discharge determination under paragraph (e) of 
this section, a discharge or release because of one or more of the 
offenses or events specified in paragraph (f) of this section is a 
discharge or release under dishonorable conditions for VA purposes:
    (1) Acceptance of an other than honorable discharge (formerly an 
``undesirable'' discharge) to avoid trial by general court-martial.
    (2) Mutiny or spying.
    (3) Commission of one or more offenses involving moral turpitude. 
For purposes of this section, an offense involves ``moral turpitude'' 
if it is unlawful, it is willful, it is committed without justification 
or legal excuse, and it is an offense which a reasonable person would 
expect to cause harm or loss to person or property. This includes, 
generally, conviction of a felony.
    (4) Engaging in willful and persistent misconduct during military 
service. A discharge because of a minor offense will not be considered 
willful and persistent misconduct if service was otherwise honest, 
faithful, and meritorious. If the misconduct includes absences without 
leave, see also Sec. 5.32 (concerning mitigating factors in absence 
without leave cases).
    (5) Sexual acts involving aggravating circumstances or other 
factors affecting the performance of duty. Examples of sexual acts 
involving aggravating circumstances or other factors affecting the 
performance of duty include child molestation, prostitution, sexual 
acts or conduct accompanied by assault or coercion, and sexual acts or 
conduct taking place between service members of disparate rank, grade, 
or status when the service member has taken advantage of his or her 
superior rank, grade, or status.

(Authority: 38 U.S.C. 101(2), 501, 1301)


Sec. 5.31  Statutory bars to VA benefits.

    (a) Purpose. By Federal statute, commission of certain acts leading 
to discharge or dismissal from the Armed Forces bars the award of VA 
benefits (statutory bars). This section describes those acts and 
exceptions to the statutory bars.
    (b) Limitation to period of service concerned. (1) General rule. A 
determination under this section that veterans benefits are statutorily 
barred applies only to the period of service to which the relevant 
discharge or dismissal applies. It does not preclude the award of 
benefits based upon other periods of service. See also Sec. 5.37 
(concerning certain cases where a service member was not discharged or 
released at the end of the period of time for which he or she was 
obligated to serve when entering a period of service because of a 
change in his or her military status during that period of service).
    (2) Forfeiture not precluded. The provisions of paragraph (b)(1) of 
this section do not preclude forfeiture of VA benefits under 38 U.S.C. 
6103, ``Forfeiture for fraud,'' under 38 U.S.C. 6104, ``Forfeiture for 
treason,'' under 38 U.S.C. 6105, ``Forfeiture for subversive 
activities,'' or under similar statutes governing forfeiture of VA 
benefits.
    (c) Acts barring benefits. Benefits are not payable based upon a 
period of service from which the service member was discharged or 
dismissed from the Armed Forces under one or more of the following 
conditions:
    (1) By reason of the sentence of a general court-martial. 
Substitution of an administrative form of discharge for a discharge or 
dismissal executed in accordance with the sentence of a court-martial 
under 10 U.S.C. 874(b) (granting

[[Page 4839]]

the authority for such substitutions) does not remove this bar to VA 
benefits.
    (2) As a conscientious objector who refused to perform military 
duty, wear the uniform, or comply with lawful orders of competent 
military authorities.
    (3) As a deserter.
    (4) By reason of an absence without official leave (AWOL) for a 
continuous period of at least 180 days. This bar is subject to Sec. 
5.32 (concerning mitigating factors in AWOL cases) and to paragraph (f) 
of this section (concerning limitations on the creation of 
overpayments). It applies to any person so discharged who was awarded a 
discharge under other than honorable conditions and who:
    (i) Was awarded an honorable or general discharge under one of the 
programs listed in Sec. 5.36(a) (concerning certain special 1970s-era 
discharge upgrades) prior to October 8, 1977; or
    (ii) Had not otherwise established basic eligibility to receive VA 
benefits prior to October 8, 1977. For purposes of paragraph (c)(4)(ii) 
of this section, the term ``established basic eligibility to receive VA 
benefits'' means either a VA determination that an other than honorable 
discharge was issued under conditions other than dishonorable, or an 
upgraded honorable or general discharge issued prior to October 8, 
1977, under criteria other than those prescribed by one of the programs 
listed in Sec. 5.36. However, if a person was discharged or released by 
reason of the sentence of a general court-martial, only a finding of 
insanity (see Sec. 5.33) or a decision of a board of correction of 
records established under 10 U.S.C. 1552 (see Sec. 5.34) can establish 
basic eligibility to receive VA benefits.
    (5) By reason of resignation by an officer for the good of the 
service.
    (6) By reason of discharge due to alienage during a period of 
hostilities based on the request of a service member. However, benefits 
will not be barred in the absence of affirmative evidence establishing 
such a request.
    (d) Bars inapplicable to certain insurance. This section does not 
apply to war-risk insurance, Government (converted) or National Service 
Life Insurance policies.
    (e) Termination of awards. Subject to the provisions of Sec. 3.105 
of this chapter, ``Revision of decisions,'' any award contrary to the 
provisions of paragraph (c) of this section will be terminated.
    (f) Limitation on creation of overpayments in AWOL cases. Awards 
made after October 8, 1977, in cases in which the bar contained in 
paragraph (c)(4) of this section applies, will be terminated on the 
date of last payment.

(Authority: 38 U.S.C. 501, 5303; Pub. L. 95-126, 91 Stat. 1106, as 
amended by Pub. L. 102-40, 105 Stat. 239)


Sec. 5.32  Consideration of mitigating factors in absence without leave 
cases.

    (a) Compelling circumstances considered. Separation for absence 
without leave (AWOL) will not preclude veteran status under Sec. 5.30 
(concerning character of discharge determinations) and will not bar 
benefit entitlement under Sec. 5.31(c)(4) (concerning AWOL as a 
statutory bar to VA benefits) if there are compelling circumstances to 
warrant unauthorized absence(s).
    (b) Factors considered. VA will evaluate all of the relevant 
evidence of record in determining whether there are compelling 
circumstances to warrant unauthorized absence(s), including 
consideration of the following factors:
    (1) Length of AWOL and character of service. VA will consider the 
length of the period(s) of AWOL in comparison to the length and 
character of service exclusive of the period(s) of AWOL. Service 
exclusive of the period(s) of AWOL should be of such quality and length 
that it can be characterized as honest, faithful, meritorious, and of 
benefit to the nation.
    (2) Examples of circumstances VA will consider. Reasons offered for 
being AWOL that VA will consider include family emergencies, compelling 
family obligations, or similar types of compelling obligations or 
duties owed to third parties. In evaluating the reasons for being AWOL, 
VA will consider how the situation appeared to the service member in 
light of the service member's age, cultural background, educational 
level and judgmental maturity. VA will also consider evidence showing 
that the service member's state of mind at the time AWOL began was 
adversely affected by hardship or suffering during overseas service, or 
by combat wounds or other service-incurred or aggravated disability.
    (3) Valid legal defense. VA may find that compelling circumstances 
exist if the absence could not validly be charged as, or lead to a 
conviction of, an offense under the Uniform Code of Military Justice.

(Authority: 38 U.S.C. 501, 5303(a))


Sec. 5.33  Insanity as a defense to acts leading to a discharge or 
dismissal from the service that might be disqualifying for VA benefits.

    If VA determines that a service member was insane at the time of 
the commission of an act, or acts, leading to separation from the 
service, the commission of such act(s) will not be a basis for denying 
status as a veteran under Sec. 5.30 (concerning character of discharge 
determinations) or for barring the payment of VA benefits under Sec. 
5.31 (concerning statutory bars to benefits). For the definition of 
``insanity,'' see Sec. 3.354.

(Authority: 38 U.S.C. 501(a), 5303(b))


Sec. 5.34  Effect of discharge upgrades by Armed Forces boards for the 
correction of military records (10 U.S.C. 1552) on eligibility for VA 
benefits.

    (a) Purpose. This section describes the effect of discharge 
upgrades by a board established under 10 U.S.C. 1552 (board for 
correction of military records) on VA determinations that a service 
member's discharge or dismissal was under dishonorable conditions or 
that the service member is statutorily barred from receiving VA 
benefits.
    (b) Definitions. For purposes of this section, ``any applicable new 
determination'' means a determination under Sec. 5.30 (concerning 
character of discharge determinations) or Sec. 5.31 (concerning 
statutory bars to VA benefits). ``Applicable previous VA discharge 
findings'' means findings by VA, based upon a previous discharge issued 
for the same period of service, that a service member's discharge or 
dismissal was under dishonorable conditions or that the service member 
is statutorily barred from receiving VA benefits.
    (c) Effect of discharge upgrades. An honorable discharge, or 
discharge under honorable conditions, issued through a board for 
correction of military records is final and conclusive and is binding 
on VA as to characterization based on the period covered by such 
service. Such a discharge supersedes a previous discharge issued for 
the same period of service. It will be the basis for making any 
applicable new determination and sets aside any applicable previous VA 
discharge findings.
    (d) Effective date. If entitlement to benefits is established 
because of the change, modification, or correction of a discharge or 
dismissal by a board for the correction of military records, the award 
of such benefits will be effective from the latest of these dates:
    (1) The date of filing with the service department of the 
application for change, modification, or correction of the discharge or 
dismissal in the case of either an original claim filed with VA or a 
previously disallowed claim filed with VA;
    (2) The date VA received a previously disallowed claim; or
    (3) One year prior to the date of reopening of the previously 
disallowed VA claim.


[[Page 4840]]


(Authority: 10 U.S.C. 1552(a)(4); 38 U.S.C. 501, 5110(i))


Sec. 5.35  Effect of discharge upgrades by Armed Forces discharge 
review boards (10 U.S.C. 1553) on eligibility for VA benefits.

    (a) Purpose. This section describes the effect of discharge 
upgrades by a board established under 10 U.S.C. 1553 (discharge review 
board) on VA determinations that a service member's discharge or 
dismissal was under dishonorable conditions or that the service member 
is statutorily barred from receiving VA benefits.
    (b) Upgrades issued before October 8, 1977. Paragraph (b) of this 
section concerns the effect of an honorable or general discharge 
(upgraded discharge) issued by a discharge review board before October 
8, 1977.
    (1) General rule. The upgraded discharge will be the basis for 
making any new determination under Sec. 5.30 (concerning character of 
discharge determinations) or Sec. 5.31 (concerning statutory bars to VA 
benefits). The upgraded discharge will also set aside any VA findings, 
based upon a previous discharge issued for the same period of service, 
that a service member's discharge or dismissal was under dishonorable 
conditions or that the service member is statutorily barred from 
receiving VA benefits.
    (2) Exception. The rule in paragraph (b)(1) of this section does 
not apply if:
    (i) The previous discharge was executed by reason of the sentence 
of a general court-martial, or
    (ii) The discharge review board was acting under the authority of 
one of the programs specified in Sec. 5.36 (concerning certain special 
1970s-era discharge upgrades).
    (c) Upgrades issued on or after October 8, 1977--effect on 
statutory bars. Any new determinations VA makes under Sec. 5.31 
(concerning statutory bars to VA benefits) will be made without regard 
to an honorable or general discharge (upgraded discharge) issued by a 
discharge review board on or after October 8, 1977. The upgraded 
discharge will not set aside any VA findings, based upon a previous 
discharge issued for the same period of service, that a service member 
is statutorily barred from receiving VA benefits.
    (d) Upgrades issued on or after October 8, 1977--effect on 
character of discharge determinations. (1) General rule. Any new 
determinations VA makes under Sec. 5.30 (concerning character of 
discharge determinations) will be made without regard to an honorable 
or general discharge (upgraded discharge) issued by a discharge review 
board on or after October 8, 1977. The upgraded discharge will not set 
aside any VA findings, based upon a previous discharge issued for the 
same period of service, that a service member's discharge or dismissal 
was under dishonorable conditions.
    (2) Exceptions. The rule in paragraph (d)(1) of this section does 
not apply if all of the following conditions are met:
    (i) The discharge was upgraded as a result of an individual case 
review;
    (ii) The discharge was upgraded under uniform published standards 
and procedures that generally apply to all persons administratively 
discharged or released from active service under conditions other than 
honorable; and
    (iii) Such published standards are consistent with standards for 
determining honorable service historically used by the service 
department concerned and do not contain any provision for automatically 
granting or denying an upgraded discharge. VA will accept a report of 
the service department concerned that the discharge review board 
proceeding met these conditions.
    (e) Effective date. If entitlement to benefits is established 
because of the change, modification, or correction of a discharge or 
dismissal by a discharge review board, the award of such benefits will 
be effective from the latest of these dates:
    (1) The date of filing with the service department of the 
application for change, modification, or correction of the discharge or 
dismissal in the case of either an original claim filed with VA or a 
previously disallowed claim filed with VA;
    (2) The date VA received a previously disallowed claim; or
    (3) One year prior to the date of reopening of the previously 
disallowed VA claim.

(Authority: 38 U.S.C. 501, 5110(i), 5303(e))


Sec. 5.36  Effect of certain special discharge upgrade programs on 
eligibility for VA benefits.

    (a) Programs involved. Except as provided in Sec. 5.35(d)(2) 
(pertaining to discharge upgrades based on individual case review under 
certain published standards), an honorable or general discharge awarded 
by a discharge review board under one of the following programs does 
not remove any bar to benefits imposed under Sec. 5.30 (concerning 
character of discharge determinations) or under Sec. 5.31 (concerning 
statutory bars to VA benefits):
    (1) The President's directive of January 19, 1977, implementing 
Presidential Proclamation 4313 of September 16, 1974;
    (2) The Department of Defense's special discharge review program 
effective April 5, 1977; or
    (3) Any discharge review program implemented after April 5, 1977, 
that does not apply to all persons administratively discharged or 
released from active service under other than honorable conditions.
    (b) Termination of awards. Subject to the provisions of Sec. 3.105 
of this chapter, ``Revision of decisions,'' any award of VA benefits 
made contrary to paragraph (a) of this section will be terminated.
    (c) No overpayments to be created. No overpayments will be created 
as a result of payments made after October 8, 1977, based on an 
upgraded honorable or general discharge issued under one of the 
programs listed in paragraph (a) of this section which would not be 
awarded under the standards set forth in Sec. 5.35(d)(2). Such payments 
will be terminated effective the date of last payment.

(Authority: Pub. L. 95-126, 91 Stat. 1106)

(Authority: 38 U.S.C. 5303(e))


Sec. 5.37  Effect of extension of service obligation due to change in 
military status on eligibility for VA benefits.

    (a) Purpose. Except for persons who die in military service, status 
as a veteran requires that an individual be discharged or released from 
active military service under conditions other than dishonorable. See 
Sec. 3.1(d) (defining ``veteran''). This section describes how VA will 
determine whether this requirement has been met when, because of a 
change in his or her military status, a service member was not 
discharged or released at the end of the period of time for which he or 
she was obligated to serve when entering a period of service.
    (b) Definitions: (1) Change in military status. For purposes of 
this section, a change in military status means a change in status that 
extends the period of time that a service member is obligated to serve. 
Examples of such a change in military status include, but are not 
limited to:
    (i) A discharge for acceptance of an appointment as a commissioned 
officer or warrant officer;
    (ii) Change from a Reserve commission to a Regular commission;
    (iii) Change from a Regular commission to a Reserve commission;
    (iv) Reenlistment; or
    (v) Voluntary or involuntary extensions of a period of obligated 
service.
    (2) Combined periods of service. For purposes of this section, 
combined

[[Page 4841]]

periods of service means the period of service immediately prior to the 
change in military status combined with the period of service 
immediately following the change in military status.
    (c) Combined periods of service terminating with discharge or 
release under honorable conditions. VA will determine veteran status by 
the character of the final termination of the service member's combined 
periods of service if the combined periods of service terminate under 
honorable conditions. Otherwise, the provisions of paragraph (d) of 
this section apply.
    (d) Combined periods of service terminating with discharge or 
release under other than honorable conditions. When a service member 
was not discharged or released at the end of the period of time he or 
she was obligated to serve when entering a period of service, he or she 
is eligible to receive VA benefits based upon that period of service if 
that service member:
    (1) Completed active military service for the period of time he or 
she was obligated to serve at the time of entry into that period of 
service; and
    (2) Due to an intervening change in military status was not 
discharged or released at the end of that period of time; but
    (3) Would have been eligible for a discharge or release under 
conditions other than dishonorable at the end of that period of time 
except for the intervening change in military status.

(Authority: 38 U.S.C. 101(18))


Sec. 5.38  Effect of a voided enlistment on eligibility for VA 
benefits.

    (a) Purpose. This section describes whether a claimant is eligible 
for VA benefits if the service department has voided the service 
member's enlistment.
    (b) Service considered valid for establishing eligibility for 
benefits. A service member's enlistment that is voided by the service 
department for reasons other than those stated in paragraph (c) of this 
section is valid from the date of entry upon active duty to the date of 
voidance by the service department. In the case of an enlistment voided 
for concealment of age or misrepresentation of age, service is valid 
from the date of entry upon active duty to the date of discharge.
    (c) Service considered not valid for establishing eligibility for 
benefits. A service member's enlistment that is voided by the service 
department for any of the reasons specified in paragraph (c) of this 
section is void from the date of entry. A service member is not 
eligible for VA benefits based on this period of service, if enlistment 
was voided for any of the following reasons:
    (1) Lack of legal capacity to contract, other than on the basis of 
minority, such as a lack of mental capacity to contract.
    (2) A statutory prohibition to enlistment, such as, but not limited 
to:
    (i) Desertion; or
    (ii) Conviction of a felony.

(Authority: 10 U.S.C. 501, 505; 38 U.S.C. 101(2), 501(a))

Minimum Service and Evidence of Service


Sec. 5.39  Minimum active duty service requirement for VA benefits.

    (a) Requirement. Any individual listed in paragraph (b) of this 
section will not be eligible for VA benefits unless he or she has 
completed a minimum period of active duty described in paragraph (c) of 
this section upon discharge or release from service, or qualifies for 
an exclusion under paragraph (d) of this section.
    (b) Applicability. The minimum active duty service requirement 
applies to:
    (1) Any person who originally enlisted in a regular component of 
the Armed Forces and entered on active duty after September 7, 1980 
(time spent during temporary assignment to a reserve component awaiting 
entrance on active duty because of a delayed entry enlistment contract 
does not count; this section applies if the actual date of entry on 
active duty is after September 7, 1980); and
    (2) Any other person (enlisted or officer) who entered on active 
duty after October 16, 1981, who had not previously completed a 
continuous period of active duty of at least 24 months.
    (c) Minimum active duty service requirement. (1) Except for 
veterans excluded in paragraph (d) of this section, a veteran must have 
served the shorter of:
    (i) 24 months of continuous active duty; or
    (ii) The full period of service for which the veteran was called or 
ordered to active duty.
    (2) If it appears that the length of service requirement may not be 
met, VA will request a complete statement of service to determine if 
there are any periods of active service that are required to be 
excluded under paragraph (e) of this section.
    (d) Exclusions. The minimum active duty service requirement of this 
section does not apply to:
    (1) Any person who was discharged under an early out program 
described in 10 U.S.C. 1171 (Armed Forces, ``Regular enlisted members: 
early discharge'').
    (2) Any person who was discharged because of a hardship as 
described in 10 U.S.C. 1173 (Armed Forces, ``Enlisted members: 
discharge for hardship'').
    (3) Any person who was discharged or released from active duty 
because of a disability incurred or aggravated in line of duty,
    (i) That, at the time of discharge or release, was determined to be 
service-connected without presumptive provisions of law, or
    (ii) That person had such a disability documented in official 
service records at the time of discharge that, in VA's medical 
judgment, would have justified a discharge for the disability.
    (4) Any person who has any disability that VA determines to be 
compensable under 38 U.S.C. chapter 11 because:
    (i) VA evaluates the disability as 10 percent or more disabling 
according to 38 CFR part 4, ``Schedule for Rating Disabilities;''
    (ii) Special monthly compensation is payable for the disability; or
    (iii) The disability, together with one or more other disabilities, 
is compensable under Sec. 3.324 of this chapter.
    (5) The provision of a benefit for or in connection with a service-
connected disability, condition, or death.
    (6) Insurance benefits under 38 U.S.C. chapter 19.
    (e) Temporary breaks in service. Temporary breaks in active duty 
service for any of the reasons listed below will not be considered to 
have interrupted the ``continuous service'' requirement of paragraph 
(c)(1)(i) of this section; however, time lost due to these breaks must 
be subtracted from the total service time because these times do not 
count towards the minimum active duty service requirement:
    (1) Time lost due to an industrial, agricultural, or indefinite 
furlough;
    (2) Time lost while absent without leave;
    (3) Time lost while under arrest (without acquittal or a dismissal 
of charges);
    (4) Time lost while a deserter; or
    (5) Subject to 10 U.S.C. 875(a), (concerning the restoration under 
certain circumstances of ``all rights, privileges, and property 
affected by an executed part of a court-martial sentence which has been 
set aside or disapproved''), time lost while serving a court martial 
sentence.
    (f) Effect on eligibility for benefits for survivors and 
dependents. (1) General rule. If a veteran is ineligible for VA 
benefits because he or she did not meet the minimum active duty service 
requirement, the veteran's dependents and survivors are ineligible for 
benefits based on that service.
    (2) Exceptions. Paragraph (f)(1) of this section does not bar 
entitlement to any

[[Page 4842]]

of the following VA benefits to which a dependent or survivor may 
otherwise be entitled:
    (i) Insurance benefits under 38 U.S.C. chapter 19,
    (ii) Housing or small business loans under 38 U.S.C. chapter 37,
    (iv) Benefits described in paragraph (d)(5) of this section,
    (v) DIC based on the veteran's death in service.

(Authority: 38 U.S.C. 5303A)


Sec. 5.40  Service records as evidence of service and character of 
discharge that qualify for VA benefits.

    (a) Acceptable evidence of service. To establish entitlement to 
pension, compensation, DIC or burial benefits, VA must have evidence of 
qualifying service and character of discharge from the service 
department concerned. Documents VA will accept as evidence of service 
and character of discharge include, but are not limited to, the 
following:
    (1) A DD Form 214; or
    (2) A Certificate of Release or Discharge from Active Duty.
    (b) Content of documents. The document establishing service must 
contain information which demonstrates:
    (1) The length of service;
    (2) The dates of service; and
    (3) The character of discharge or release.
    (c) When service department verification is not required. VA will 
accept one or more documents issued by a U.S. service department as 
evidence of service and character of discharge without verifying their 
authenticity, provided that VA determines that the document is genuine 
and accurate. The document can be a copy of an original document if the 
copy:
    (1) Was issued by a service department;
    (2) Is certified by a public custodian of records as a true and 
exact copy of a document in the custodian's possession; or
    (3) Is certified by an accredited agent, attorney, or service 
organization representative as a true and exact copy of either an 
original document or of a copy issued by the service department or a 
public custodian of records. This accredited agent, attorney, or 
service organization representative must have successfully completed 
VA-prescribed training on military records.
    (d) When service department verification is required. VA will 
request verification of service from the appropriate service department 
if:
    (1) The record does not include satisfactory evidence showing the 
information described in paragraph (b) of this section;
    (2) The evidence of record does not meet the requirements of 
paragraph (c) of this section; or
    (3) There is a material discrepancy in the evidence of record.

(Authority: 38 U.S.C. 501(a))


Sec.Sec. 5.41-5.49  [Reserved]

[FR Doc. 04-1895 Filed 1-29-04; 8:45 am]
BILLING CODE 8320-01-P