[Federal Register Volume 75, Number 12 (Wednesday, January 20, 2010)]
[Rules and Regulations]
[Pages 3163-3165]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-886]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AN13


Vocational Rehabilitation and Employment Program--Basic 
Entitlement; Effective Date of Induction Into a Rehabilitation Program; 
Cooperation in Initial Evaluation

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends Vocational Rehabilitation and Employment 
Program regulations of the Department of Veterans Affairs (VA). 
Specifically, it amends provisions concerning: Individuals' basic 
entitlement to vocational rehabilitation benefits and services; 
effective dates of induction into a rehabilitation program, including 
retroactive induction; and individuals' cooperation and lack of 
cooperation in the initial evaluation process. The amendments are 
intended to update pertinent regulations to reflect changes in law, to 
provide VA's interpretation of applicable law, and to improve clarity.

DATES: Effective Date: This final rule is effective February 19, 2010.
    Applicability Dates: Except as noted in the Supplementary 
Information section, the provisions of this final rule apply to claims 
pending on February 19, 2010.

FOR FURTHER INFORMATION CONTACT: Alvin Bauman, Senior Policy Analyst, 
Vocational Rehabilitation and Employment Service (28), Veterans 
Benefits Administration, Department of Veterans Affairs, 810 Vermont 
Ave., NW., Washington, DC 20420, (202) 461-9613.

SUPPLEMENTARY INFORMATION: In a document published in the Federal 
Register on May 8, 2009 (74 FR 21565), we proposed to amend VA's 
vocational rehabilitation and employment regulations. We provided a 60-
day comment period for the proposed rule that ended on July 7, 2009. We 
received no comments.
    In 38 CFR part 21, Subpart A--Vocational Rehabilitation Under 38 
U.S.C. Chapter 31, we are revising Sec.  21.40 concerning basic 
entitlement to vocational rehabilitation benefits and services; Sec.  
21.282 concerning effective dates of induction into a rehabilitation 
program; and Sec.  21.50(d) concerning cooperation and lack of 
cooperation in the initial evaluation process. VA previously addressed 
and implemented changes to services provided under 38 U.S.C. chapter 
31, which resulted from a court decision and the enactment of Public 
Law 104-275, the Veterans Benefits Improvement Act of 1996. This 
included VA's issuance of Circular 28-97-1 in 1997 (last revised in 
October 2004) to provide guidance regarding the implementation of these 
changes. This final rule will update 38 CFR part 21 consistent with 
current practice. In addition, the final rule will make other non-
substantive changes.

Basic Entitlement to Vocational Rehabilitation Benefits and Services

    We are revising Sec.  21.40 to include criteria, effective October 
1, 1993, for vocational rehabilitation basic entitlement determinations 
resulting from the Veterans' Benefits Act of 1992 (Pub. L. 102-568), 
enacted October 29, 1992. Public Law 102-568 amended 38 U.S.C. 3102(2) 
to entitle veterans to vocational rehabilitation if they have a 10 
percent service-connected disability and are determined by the 
Secretary of Veterans Affairs to be in need of rehabilitation due to a 
serious employment handicap. Further, the changes to Sec.  21.40 are 
intended to reflect the provisions of section 602(c) of the Veterans 
Benefits Improvement Act of 1994 (Pub. L. 103-446), which amended 
section 404(b) of Public Law 102-568 with a technical correction, 
effective October 29, 1992. This rule prescribes basic entitlement to 
vocational rehabilitation if they have a 10 percent service-connected 
disability, they originally applied for assistance under 38 U.S.C. 
chapter 31 before November 1, 1990, and VA determines they need 
rehabilitation because of an employment handicap.

Effective Dates of Induction Into a Rehabilitation Program, Including 
Retroactive Induction

    In Sec.  21.282, we address the decision of the United States Court 
of Appeals for Veterans Claims (then the United States Court of 
Veterans Appeals) in Bernier v. Brown, 7 Vet. App. 434 (1995), 
concerning effective dates for retroactive induction into a program of 
rehabilitation benefits and services. The Bernier decision set aside 
two provisions of current Sec.  21.282 that limited retroactive 
induction into programs of rehabilitation benefits and services under 
38 U.S.C. chapter 31. Under revised Sec.  21.282, VA will be able to 
retroactively approve a period of training that occurred within an 
individual's period of eligibility under 38 CFR 21.41 through 21.46, 
beginning on the effective date of entitlement to disability 
compensation, provided that the individual met the criteria for 
entitlement to chapter 31 benefits and services for that period. VA 
must determine that the training and other rehabilitative services that 
the individual received during the period of retroactive induction were 
reasonably needed to achieve the planned goals and objectives 
identified for that individual. If the individual received other VA-
administered education benefits during any portion of that period, VA 
must offset the previous education benefits received against the 
payment of chapter 31 vocational rehabilitation benefits for the same 
period.
    We are revising Sec.  21.282(b) and (c) to clarify when an 
individual on active duty can qualify for retroactive induction and 
when the conditions for retroactive induction may apply to both 
veterans and servicemembers. For servicemembers, the period of 
retroactive induction must be within a period under Sec.  21.40(c) 
during which a servicemember was awaiting discharge for disability. In 
Sec.  21.282(b), we are clarifying that if an individual is 
retroactively inducted into a rehabilitation program, VA may authorize 
payment of tuition, fees, and other verifiable expenses that an 
individual paid or incurred consistent with the approved rehabilitation 
program. Section 21.282(b) will also authorize VA payment of 
subsistence allowance for the period of retroactive induction, except 
for any period during which the individual was on active duty. We are 
amending Sec.  21.282(c) to comply with pertinent statutory authorities 
by stating the conditions that must be met before an individual may

[[Page 3164]]

be inducted into a rehabilitation program on a retroactive basis.
    In response to the invalidation of the language in current Sec.  
21.282(c) in Bernier, we will state in Sec.  21.282(d) that the 
effective date for retroactive induction is the date on which all the 
entitlement conditions set forth in Sec.  21.282(c) are met, and for a 
veteran (except as to a period prior to discharge from active duty) in 
no event before the effective date of a VA rating establishing a 
qualifying level of service-connected disability under Sec.  21.40.

Cooperation and Lack of Cooperation in the Initial Evaluation Process

    In the Federal Register of March 26, 2007 (72 FR 14041), VA 
published amendments to several sections in 38 CFR part 21, including 
Sec.  21.50. We are revising Sec.  21.50(d) to reflect VA's 
determination of appropriate procedures and to clarify the action VA 
will take if an individual fails to cooperate with the counseling 
psychologist or vocational rehabilitation counselor in the initial 
evaluation process. Section 21.50(d) provides that if an individual 
does not cooperate, even after reasonable attempts are made to secure 
cooperation, VA will suspend the initial evaluation process and that 
individual will not be considered inducted into a rehabilitation 
program. Section 21.50(d) will also include references to Sec. Sec.  
21.632 and 21.634 regarding satisfactory and unsatisfactory conduct and 
cooperation.
    For the reasons stated above and as stated in the notice of 
proposed rulemaking, VA adopts the proposed rule as a final rule 
without change.

Paperwork Reduction Act of 1995

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and Tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any year. This final rule will have no such effect on 
State, local, and Tribal governments, or on the private sector.

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity). The Executive 
Order classifies a regulatory action as a ``significant regulatory 
action,'' requiring review by the Office of Management and Budget (OMB) 
unless OMB waives such review, if it is a regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or Tribal 
governments or communities; (2) create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    The economic, interagency, budgetary, legal, and policy 
implications of this final rule have been examined and it has been 
determined to be a significant regulatory action under the Executive 
Order because it is likely to result in a rule that may raise novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. This rule will not directly affect any small entities. Only 
individuals will 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.

Catalog of Federal Domestic Assistance

    The program that this rule will affect has the following Catalog of 
Federal Domestic Assistance number and title: 64.116, Vocational 
Rehabilitation for Disabled Veterans.

List of Subjects in 38 CFR Part 21

    Administrative practice and procedure, Armed forces, Civil rights, 
Claims, Colleges and universities, Conflict of interests, Education, 
Employment, Grant programs-education, Grant programs-veterans, Health 
care, Loan programs-education, Loan programs-veterans, Manpower 
training programs, Reporting and recordkeeping requirements, Schools, 
Travel and transportation expenses, Veterans, Vocational education, 
Vocational rehabilitation.

    Approved: December 30, 2009.
John R. Gingrich,
Chief of Staff, Department of Veterans Affairs.

0
For the reasons set forth in the preamble, VA amends 38 CFR part 21 
(subpart A) as follows:

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart A--Vocational Rehabilitation and Employment Under 38 U.S.C. 
Chapter 31

0
1. Revise the authority citation for part 21, subpart A to read as 
follows:

    Authority: 38 U.S.C. 501(a), chs. 18, 31, and as noted in 
specific sections.


0
2. The subpart A heading is revised as set forth above.

0
3. Revise the undesignated center heading immediately preceding Sec.  
21.40 and that section to read as follows:

Entitlement


Sec.  21.40  Basic entitlement to vocational rehabilitation benefits 
and services.

    An individual meets the basic entitlement criteria for vocational 
rehabilitation benefits and services under this subpart if VA 
determines that he or she meets the requirements of paragraph (a), (b), 
(c), or (d) of this section. For other requirements affecting the 
provision of vocational rehabilitation benefits and services, see 
Sec. Sec.  21.41 through 21.46 (period of eligibility), Sec.  21.53 
(reasonable feasibility of achieving a vocational goal), and Sec. Sec.  
21.70 through 21.79 (months of entitlement).
    (a) Veterans with at least 20 percent disability. The individual is 
a veteran who meets all of the following criteria:
    (1) Has a service-connected disability or combination of 
disabilities rated 20 percent or more under 38 U.S.C. chapter 11.
    (2) Incurred or aggravated the disability or disabilities in active 
military, naval, or air service on or after September 16, 1940.
    (3) Is determined by VA to be in need of rehabilitation because of 
an employment handicap.
    (b) Veterans with 10 percent disability. The individual is a 
veteran who meets all of the following criteria:
    (1) Has a service-connected disability or combination of 
disabilities rated less

[[Page 3165]]

than 20 percent under 38 U.S.C. chapter 11.
    (2) Incurred or aggravated the disability or disabilities in active 
military, naval, or air service on or after September 16, 1940.
    (3) Is determined by VA to be in need of rehabilitation because of 
a serious employment handicap.
    (c) Servicemembers awaiting discharge. The individual is a 
servicemember who, while waiting for discharge from the active 
military, naval, or air service, is hospitalized, or receiving 
outpatient medical care, services, or treatment, for a disability that 
VA will likely determine to be service-connected. In addition, VA must 
have determined that:
    (1) The hospital or other medical facility providing the 
hospitalization, care, service, or treatment is doing so under contract 
or agreement with the Secretary concerned, or is under the jurisdiction 
of the Secretary of Veterans Affairs or the Secretary concerned;
    (2) The individual is in need of rehabilitation because of an 
employment handicap; and
    (3) The individual has a disability or combination or disabilities 
that will likely be:
    (i) At least 10 percent compensable under 38 U.S.C. chapter 11 and 
he or she originally applied for assistance under 38 U.S.C. chapter 31 
after March 31, 1981, and before November 1, 1990; or
    (ii) At least 20 percent compensable under 38 U.S.C. chapter 11 and 
he or she originally applied for assistance under 38 U.S.C. chapter 31 
on or after November 1, 1990.
    (d) Exception for veterans who first applied after March 31, 1981, 
and before November 1, 1990. The individual is a veteran who:
    (1) Has a service-connected disability or combination of 
disabilities rated less than 20 percent under 38 U.S.C. chapter 11;
    (2) Originally applied for assistance under 38 U.S.C. chapter 31 
after March 31, 1981, and before November 1, 1990; and
    (3) Is determined by VA to be in need of rehabilitation because of 
an employment handicap.

    Authority: 38 U.S.C. ch. 11, 3102, 3103, 3106; sec. 8021(b), 
Pub. L. 101-508, 104 Stat. 1388-347; sec. 404(b), Pub. L. 102-568, 
106 Stat. 4338, as amended by sec. 602, Pub. L. 103-446, 108 Stat. 
4671.


0
4. In Sec. Sec.  21.42 and 21.47, remove ``Sec.  21.40(a)'' each place 
that it appears and add, in its place, ``Sec.  21.40''.

0
5. Revise Sec.  21.50(d) to read as follows:


Sec.  21.50  Initial evaluation.

* * * * *
    (d) Need for cooperation in the initial evaluation process. The 
individual's cooperation is essential in the initial evaluation 
process. If the individual does not cooperate, the CP or VRC will make 
reasonable efforts to secure the individual's cooperation. If, despite 
those efforts, the individual fails to cooperate, VA will suspend the 
initial evaluation process (see Sec.  21.362, regarding satisfactory 
conduct and cooperation, and Sec.  21.364, regarding unsatisfactory 
conduct and cooperation).

    Authority: 38 U.S.C. 3111.


0
6. Revise the undesignated center heading immediately preceding Sec.  
21.282 and that section to read as follows:

Induction into a Rehabilitation Program


Sec.  21.282  Effective date of induction into a rehabilitation 
program; retroactive induction.

    (a) Entering a rehabilitation program. The effective date of 
induction into a rehabilitation program is governed by the provisions 
of Sec. Sec.  21.320 through 21.334, except as provided in this 
section.

    Authority: 38 U.S.C. 3108, 5113.

    (b) Retroactive induction. Subject to paragraphs (c) and (d) of 
this section, an individual may be inducted into a rehabilitation 
program on a retroactive basis. If the individual is retroactively 
inducted, VA may authorize payment pursuant to Sec.  21.262 or Sec.  
21.264 for tuition, fees, and other verifiable expenses that an 
individual paid or incurred consistent with the approved rehabilitation 
program. In addition, VA may authorize payment of subsistence allowance 
pursuant to Sec. Sec.  21.260, 21.266, and 21.270 for the period of 
retroactive induction, except for any period during which the 
individual was on active duty.

    Authority: 38 U.S.C. 3108, 3113, 3681, 5113.

    (c) Conditions for retroactive induction. Retroactive induction 
into a rehabilitation program may be authorized for a past period under 
a claim for vocational rehabilitation benefits when all of the 
following conditions are met:
    (1) The past period is within--
    (i) A period under Sec.  21.40(c) during which a servicemember was 
awaiting discharge for disability; or
    (ii) A period of eligibility under Sec. Sec.  21.41 through 21.44 
or 38 U.S.C. 3103.
    (2) The individual was entitled to disability compensation under 38 
U.S.C. chapter 11 during the period or would likely have been entitled 
to that compensation but for active-duty service.
    (3) The individual met the criteria for entitlement to vocational 
rehabilitation benefits and services under 38 U.S.C. chapter 31 in 
effect during the period.
    (4) VA determines that the individual's training and other 
rehabilitation services received during the period were reasonably 
needed to achieve the goals and objectives identified for the 
individual and may be included in the plan developed for the individual 
(see Sec. Sec.  21.80 through 21.88, and Sec. Sec.  21.92 through 
21.98).
    (5) VA has recouped any benefits that it paid the individual for 
education or training pursued under any VA education program during any 
portion of the period.
    (6) An initial evaluation was completed under Sec.  21.50.
    (7) A period of extended evaluation is not needed to be able to 
determine the reasonable feasibility of the achievement of a vocational 
goal.

    Authority: 38 U.S.C. 3102, 3103, 3108, 5113.

    (d) Effective date for retroactive induction. The effective date 
for retroactive induction is the date when all the entitlement 
conditions set forth in paragraph (c) of this section are met, and for 
a veteran (except as to a period prior to discharge from active duty) 
in no event before the effective date of a VA rating under 38 U.S.C. 
chapter 11 establishing a qualifying level under Sec.  21.40 of 
service-connected disability.

    Authority: 38 U.S.C. 5113.

[FR Doc. 2010-886 Filed 1-19-10; 8:45 am]
BILLING CODE 8320-01-P