[Federal Register Volume 78, Number 224 (Wednesday, November 20, 2013)]
[Proposed Rules]
[Pages 69614-69625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-27672]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AO17


Home Improvements and Structural Alterations (HISA) Benefits 
Program

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to establish 
regulations for the Home Improvements and Structural Alterations (HISA) 
benefits program. Through the HISA benefits program, VA has provided 
monetary benefits to disabled veterans for necessary home improvements 
and

[[Page 69615]]

alterations. An increase in the HISA benefits limit was authorized by 
the Caregivers and Veterans Omnibus Health Services Act of 2010. The 
proposed rule would codify regulations to govern the HISA benefits 
program and incorporate the increase in HISA benefits authorized by the 
2010 Act.

DATES: Comments on the proposed rule must be received by VA on or 
before January 21, 2014.

ADDRESSES: Written comments may be submitted through http://www.regulations.gov; by mail or hand-delivery to the Director, 
Regulation Policy and Management (02REG), Department of Veterans 
Affairs, 810 Vermont Avenue NW., Room 1068, Washington, DC 20420; or by 
fax to (202) 273-9026.
    Comments should indicate that they are submitted in response to 
``RIN 2900-AO17, Home Improvements and Structural Alterations (HISA) 
Benefits Program.'' Copies of comments received will be available for 
public inspection in the Office of Regulation Policy and Management, 
Room 1068, between the hours of 8:00 a.m. and 4:30 p.m., Monday through 
Friday (except holidays). Please call (202) 461-4902 (this is not a 
toll-free number) for an appointment. In addition, during the comment 
period, comments may be viewed online through the Federal Docket 
Management System (FDMS) at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Shayla Mitchell, Program Analyst, 
Rehabilitation and Prosthetic Services (10P4R), Veterans Health 
Administration, Department of Veterans Affairs, 810 Vermont Avenue NW., 
Washington, DC 20420, (202) 461-0366 (this is not a toll-free number).

SUPPLEMENTARY INFORMATION: Section 1717(a)(1) of title 38, United 
States Code (U.S.C.), authorizes the Secretary of Veterans Affairs 
(Secretary) to furnish home health services as part of medical services 
provided to veterans. As a part of home health services, 38 U.S.C. 
1717(a)(2) authorizes VA to furnish improvements and structural 
alterations to the homes of disabled veterans ``only as necessary to 
assure the continuation of treatment for the veteran's disability or to 
provide access to the home or to essential lavatory and sanitary 
facilities.'' Section 1717(d) extends these same benefits to certain 
servicemembers. The HISA benefits program is distinct from VA's 
authority under 38 U.S.C. 2101 through 2107 to provide specially 
adapted housing for disabled veterans, and HISA benefits may be 
received in addition to specially adapted housing benefits.
    The HISA benefit is a fixed-amount monetary benefit subject to 
lifetime limits based on the nature of the beneficiary's disability; 
however, the beneficiary need not use the entire HISA benefit amount on 
a single improvement or structural alteration. In May 2010, section 516 
of the Caregivers and Veterans Omnibus Health Services Act of 2010 (the 
2010 Act), Public Law 111-163, amended 38 U.S.C. 1717(a)(2) to increase 
the maximum amount of the lifetime benefit.
    This proposed rule would establish regulations to govern the HISA 
benefits program that articulate a clear national policy and encompass 
the increase in the HISA benefit limits authorized by the 2010 Act. We 
note that this rulemaking proposes new practices and policies related 
to the HISA benefits program and, therefore, this proposed rule would 
make changes in the administration of HISA benefits. These changes are 
intended to streamline the application process; simplify, reduce, or 
eliminate administrative burdens on both VA and HISA beneficiaries; and 
generally improve the administration of the program, all without 
increasing the costs of the program.
    For example, the current program requests that applicants for HISA 
benefits provide multiple bids for construction projects. In practice, 
it is not uncommon for bids to come in at or above the maximum amount 
of the HISA benefit because, even under the increased benefit amount 
authorized by the 2010 Act, HISA benefits cannot exceed $6,800. After 
receiving the bids and other information submitted in an application, 
VA currently is required to review and assess all the information and 
take further administrative actions before approving the application 
and awarding the benefit. A similar process is followed after the 
improvement or structural alteration is completed and the beneficiary 
requests final payment. The regulatory framework proposed in this 
rulemaking will greatly simplify the process of filing and approving 
HISA claims. We expect that veterans and servicemembers eligible for 
HISA benefits and VA staff will find the new process much easier to 
work with, so that claims will be processed more quickly. We do not 
believe that the simplified process will have a negative impact on the 
integrity of the program because we have incorporated inspection and 
review processes to ensure that HISA benefits are awarded and spent in 
accordance with statutory intent.
    Because we intend to establish a new regulatory framework, with new 
procedures and policies that in many ways represent a significant 
departure from the manner in which HISA is currently administered, we 
do not further address current practice in this rulemaking.

17.3100 Purpose and Scope

    Proposed Sec.  17.3100 would set forth the purpose of the HISA 
program and the scope of Sec. Sec.  17.3100 through 17.3130. Consistent 
with 38 U.S.C. 1717(a)(2), proposed Sec.  17.3100(a) would state that 
the purpose of the HISA benefits program is to provide monetary 
benefits for improvements and structural alterations to the homes of 
eligible veterans or servicemembers that are necessary for the 
continuation of the provision of home health treatment of the 
beneficiary's disability or that provide access to the beneficiary's 
home or to essential lavatory and sanitary facilities in the home.
    Although 38 U.S.C. 1717(a)(2) authorizes VA to ``furnish[ ]'' 
improvements and structural alterations, we believe that Congress 
intended that VA pay for the cost of improvements or structural 
alterations, rather than that VA actually make the improvements or 
structural alterations. Our interpretation of the word ``furnish'' 
would permit VA to provide reimbursement to veterans who obtain such 
improvements or structural alterations, rather than actually 
identifying contractors and negotiating for the completion of 
particular projects. Our interpretation of the statute would ensure the 
most efficient and administratively convenient distribution of the 
limited funds authorized by section 1717(a)(2), and would represent a 
user-friendly way to administer the program to veterans and 
servicemembers.
    We also note that improvements or structural alterations made with 
HISA benefits are distinct from other benefits available under the 
Veterans Health Administration's (VHA) Prosthetic and Sensory Aids 
Service under 38 U.S.C. 8123. The Prosthetic and Sensory Aids Service 
provides prosthetic equipment and devices that may require 
modifications to a beneficiary's home to ensure their proper function 
within the home, but these modifications would be paid for with 
Prosthetic and Sensory Aid Service funds, rather than HISA benefits.
    HISA benefits are also distinct from the Specially Adapted Housing 
for Disabled Veterans benefit, authorized under 38 U.S.C. Chapter 21, 
which is administered by the Veterans Benefits Administration, provides 
a significantly greater benefit amount, and is designed to assist 
certain eligible veterans who

[[Page 69616]]

are entitled to compensation for permanent and total service-connected 
disability ``in acquiring a suitable housing unit'' or adaptations to 
housing necessary to accommodate the veteran's disabilities. 38 U.S.C. 
2101(a). Under the Specially Adapted Housing program, VA also provides 
``model plans and specifications of suitable housing units'' and 
develops, maintains, and provides to veterans a ``handbook containing 
appropriate designs for specially adapted housing.'' 38 U.S.C. 2103. A 
veteran may obtain HISA benefits in addition to these other benefits.
    Proposed paragraph Sec.  17.3100(b) would clarify that these 
proposed regulations apply only to the HISA benefits program, unless at 
some future date another section in the CFR specifically provides 
otherwise.

17.3101 Definitions

    Proposed Sec.  17.3101 contains definitions applicable to the HISA 
benefits program.
    ``Access to the home'' would mean the ability of the beneficiary to 
enter and exit the home and to maneuver within the home to at least one 
bedroom and essential lavatory and sanitary facilities. Although 38 
U.S.C. 1717(a)(2) authorizes HISA benefits for ``access to the home,'' 
we broadly interpret this phrase to include movement of the beneficiary 
within the spaces necessary for daily living. Additionally, we 
interpret it as allowing beneficiaries with one means of entering or 
exiting the home to use their benefits to construct a second one.
    In addition to access to the home itself, we would define 
``[a]ccess to essential lavatory and sanitary facilities'' as having 
normal use of these facilities and their structural components. Beyond 
merely having the ability to move about in such spaces, a beneficiary 
may require that the structures within these spaces be altered to allow 
or enhance their normal use by the beneficiary. For example, within a 
kitchen or bathroom, counter heights may need to be lowered or existing 
plumbing fixtures may need to be replaced with accessible models.
    We propose to define ``[b]eneficiary'' as ``a veteran or 
servicemember who is awarded or who is eligible to receive HISA 
benefits.'' Use of this term will make it easier to refer to these 
individuals in the regulations.
    ``Essential lavatory and sanitary facilities'' would be defined as 
one bathroom equipped with a toilet and a shower or bath, one kitchen, 
and one laundry facility. Although many homes today are equipped with 
multiple bathrooms and sometimes more than one kitchen, we interpret 
the statutory reference to ``essential lavatory and sanitary 
facilities'' to be a limiting phrase. 38 U.S.C. 1717(a)(2). We believe 
that access to a single bathroom and a single kitchen facility is a 
reasonable interpretation of ``essential'' lavatory and sanitary 
facilities. A laundry facility would be included in the definition 
because clean clothing can reasonably be considered as important to 
sanitary living.
    ``HISA benefits'' would be defined as a monetary benefit paid under 
the provisions of this program. As indicated above, under these 
regulations the HISA benefits program would not provide the actual 
construction of improvements or structural alterations, but rather 
would provide monetary benefits to assist a beneficiary in paying for 
such construction.
    ``Home'' would be defined as the primary place where the 
beneficiary resides. Our definition is based on the common 
understanding of the word ``home'' and our belief that Congress 
intended that HISA benefits be used to adapt the place where the 
beneficiary resides the majority of the time so that the beneficiary 
will derive the greatest benefit of the program. This definition would 
include medical foster homes. We note that 38 U.S.C. 1717(a)(3) 
precludes VA from furnishing improvements or structural alterations in 
``a setting other than the veteran's home.'' We interpret this as 
permitting alterations to an eligible servicemember's home, which we 
would define as the place where the servicemember intends to reside 
after discharge from service.
    We would define an ``[i]mprovement or structural alteration'' as a 
modification to a home or to an existing feature or fixture of a home, 
including repairs to, or replacement of, previously improved or altered 
features or fixtures. HISA benefits need not have been used to create 
or previously modify a feature or fixture that is in need of repair, 
but may be used to repair or replace previously improved or altered 
features or fixtures only if the beneficiary meets the requirements set 
forth in this rule. For instance, if a beneficiary moves into a home 
that already has an access ramp to the entrance that is in need of 
repair, HISA benefits may be used to repair or replace that ramp, 
provided that the beneficiary has a documented medical justification 
for the ramp.
    For purposes of determining a servicemember's eligibility for HISA 
benefits, as discussed in more detail below, we would give ``undergoing 
medical discharge'' the same meaning as the term is defined in VA's 
interim final rule governing VA's program providing caregiver benefits 
to veterans and servicemembers. See 76 FR 26148, 26173, May 5, 2011 (38 
CFR 71.15).

17.3102 Eligibility

    Proposed Sec.  17.3102 would concern eligibility for HISA benefits.
    Consistent with 38 U.S.C. 1717(a)(2), proposed Sec.  17.3102(a) 
would state that veterans who are eligible for medical services under 
38 U.S.C. 1710(a) are eligible for HISA benefits.
    In addition to HISA benefits for eligible veterans, 38 U.S.C. 
1717(d)(1) authorizes VA to furnish HISA benefits to a member of the 
Armed Forces ``who, as determined by the Secretary [of VA], has a 
disability permanent in nature incurred or aggravated in the line of 
duty in the active [military service] . . . if . . . such member is 
likely to be discharged or released from the Armed Forces for such 
disability.'' In most cases, title 38, U.S.C., does not authorize VA to 
provide medical benefits to servicemembers. However, we recently were 
authorized under 38 U.S.C. 1720G(a)(2)(A) to provide caregiver support 
to a ``member of the Armed Forces undergoing medical discharge from the 
Armed Forces'' who has a serious injury incurred or aggravated during 
his or her service. Although the statutory language differs, the intent 
of Congress in both the HISA and 38 U.S.C. 1720G is to authorize VA to 
provide benefits to servicemembers who will soon be, but who are not 
yet, veterans. Therefore, in Sec.  17.3102(b), we propose to provide 
HISA benefits only to a servicemember ``who is undergoing medical 
discharge from the Armed Forces for a permanent disability that was 
incurred or aggravated in the line of duty in the active military, 
naval, or air service.'' This language is similar to the eligibility 
language in 38 CFR 71.20(a)(2) of the interim final rule governing VA's 
program providing caregiver benefits to veterans and servicemembers. 
See 76 FR 26148, 26173, May 5, 2011. We see no reason that a 
servicemember eligible for a caregiver should be denied access to his 
or her lifetime HISA benefit prior to discharge from service.
    We also note that VA is limited in its ability to determine 
precisely whether a servicemember is ``likely to be discharged or 
released from the Armed Forces for'' a disability because this 
determination is made by the Department of Defense (DoD), not VA. 
Identifying servicemembers who are undergoing medical discharge will 
provide an objective, determinable point to determine eligibility for 
HISA

[[Page 69617]]

benefits. We note that VA can easily identify these individuals through 
the new joint VA-DoD Integrated Disability Evaluation System (IDES), 
which integrates disability determination processing under each 
Department's respective programs. The IDES program identifies all 
servicemembers who are in need of medical discharge, and facilitates 
the process. Using IDES to identify servicemembers eligible for HISA 
benefits will not only facilitate the administration of the HISA 
program for VA by providing a clear eligibility criterion, it will help 
us identify individuals who are in need of HISA benefits, so that we 
can ensure that they are aware of them.

17.3105 HISA Benefit Lifetime Limits

    In proposed Sec.  17.3105(a), we would establish that the HISA 
benefit limits, as set forth in 38 U.S.C. 1717(a)(2), are limits 
established for the beneficiary's lifetime. We would explain that a 
beneficiary is authorized to use HISA benefits for more than one 
improvement or structural alteration as long as the beneficiary has not 
exhausted his or her lifetime benefit limit. We also would explain 
that, if the beneficiary does not have to use the entire approved 
amount for construction of a particular improvement or structural 
alteration, the unused amount will be added back into the beneficiary's 
remaining lifetime balance, and will be available for future use. This 
is also reflected in the HISA benefit payment procedures set forth in 
proposed Sec.  17.3130(c)(4).
    The HISA benefit lifetime limits, established in 38 U.S.C. 
1717(a)(2), are based on the nature and severity of the beneficiary's 
disability and the date on which the beneficiary first applies for HISA 
benefits. Specifically, the law provides that a greater benefit amount 
may be awarded if a beneficiary has a service-connected disability 
rated at 50 percent or greater, or if the beneficiary seeks HISA 
benefits to address a service-connected disability or a compensable 
disability treated ``as if'' it were service connected under 38 U.S.C. 
1151, e.g., a disability caused by VA treatment or vocational 
rehabilitation (see 38 U.S.C. 1710(a)(2)(C)). A lesser benefit amount 
may be awarded when HISA benefits are intended for use in addressing 
nonservice-connected conditions for certain veterans or when the 
beneficiary has a service-connected disability rated less than 50 
percent.
    In addition to the nature or severity of the disability, the 
statute clearly predicates eligibility for the increased HISA benefit 
amount or prior HISA benefit amount on whether the beneficiary ``first 
applies for benefits . . . before May 5, 2010,'' 38 U.S.C. 
1717(a)(2)(A)(i), (B)(i), or ``on or after May 5, 2010,'' 38 U.S.C. 
1717(a)(2)(A)(ii), (B)(ii). We interpret ``first applies'' to mean 
submitting an application to VA, according to the VA process in place 
at the time, for HISA benefits. Thus, those beneficiaries who first 
applied for HISA benefits before the effective date of the change would 
be subject to the limits that were in effect when they first applied. 
In proposed paragraphs (b), (c) and (d), we would establish eligibility 
for the increased HISA benefit amount or prior HISA benefit amount 
using substantively identical language based on the date of the first 
application for HISA benefits.
    Consistent with 38 U.S.C. 1717(a)(2)(A), proposed Sec.  17.3105(b) 
would identify the greater lifetime HISA benefit amount limits to 
address a need due to a service-connected disability under 38 U.S.C. 
1710(a)(1)(A), to address a need due to a compensable disability 
treated ``as if'' it were service connected under section 
1710(a)(2)(C), or to address any need for a veteran with a service-
connected disability rated 50 percent or more under section 
1710(a)(1)(B).
    Consistent with 38 U.S.C. 1717(a)(2)(B), proposed Sec.  17.3105(c) 
would identify the lesser lifetime HISA benefit limits to address a 
need of a beneficiary who is eligible for HISA benefits under proposed 
Sec.  17.3102(a), but does not qualify for the greater lifetime HISA 
benefit amount under proposed Sec.  17.3105(b).
    In proposed Sec.  17.3105(d), we would set forth the lifetime HISA 
benefits for servicemembers eligible under proposed Sec.  17.3102(b). 
The provisions of 38 U.S.C. 1717(d)(1) require that VA provide HISA 
benefits to eligible servicemembers for a ``disability permanent in 
nature incurred or aggravated in the line of duty in the active 
military, naval, or air service'' for which the servicemember is 
``likely to be discharged or released from the Armed Forces for such 
disability.'' Further provisions in the law imply that the limits on 
HISA benefits based on the nature and severity of a disability, as 
described above, should also be applied, but the law is not entirely 
clear on what level of lifetime benefit should be made available to 
servicemembers. We believe that any ``disability permanent in nature 
incurred or aggravated in the line of duty'' may be reasonably expected 
to result in a disability award based on service connection, and 
therefore the beneficiary would be eligible for VA medical services 
under 38 U.S.C. 1710(a)(1)(A) for such disability once the beneficiary 
becomes a veteran. For this reason, we would make the greater lifetime 
HISA benefit amount available for all servicemembers who qualify under 
proposed Sec.  17.3102(b) and 38 U.S.C. 1717(d)(1). The benefits must 
be used for the specific permanent disability or disabilities for which 
the beneficiary is undergoing medical discharge from the Armed Forces. 
We recognize that it is possible to interpret the law differently. 
However, Congress clearly intended for VA to make these benefits 
available to servicemembers at the earliest opportunity. We believe it 
will better serve the interests of our seriously wounded servicemembers 
and is a better use of VA's limited HISA resources to avoid making 
resource-intensive hypothetical determinations about these 
servicemembers' future ratings of service-connected disabilities. We 
expect that very few, if any, such determinations would result in 
smaller awards of benefits. Moreover, because Congress was silent as to 
the applicable benefit amount for servicemembers, we believe that our 
interpretation is a reasonable exercise of the discretion granted to VA 
by Congress to implement the statute.
    In proposed Sec.  17.3105(e)(1), we address the impact of a new 
award or an increased rating for a service-connected disability on the 
HISA benefit lifetime limit. A veteran may receive a new award of 
compensation for a service-connected disability or for a disability 
treated ``as if'' it were service connected, or the veteran may receive 
an increased service-connected disability rating after an initial 
application for HISA benefits. Thus, the issue presented involves the 
appropriate benefit amount for a veteran who meets the service-
connected-disability requirements for the greater HISA benefit after 
the veteran has already first applied for the lesser HISA benefit.
    In section 516(b) of the 2010 Act that amended 38 U.S.C. 1717 to 
authorize increased lifetime limits, Congress required VA to construe 
the amendment as follows: ``A veteran who exhausts such veteran's 
eligibility for benefits under [38 U.S.C.] 1717(a)(2) . . . before the 
date of the enactment of th[e 2010] Act, is not entitled to additional 
benefits under such section by reason of the amendments made [to 
increase the lifetime amount limitations].'' We interpret this to be a 
statement of Congress' intent to raise the HISA benefits amount 
available to beneficiaries who initially seek to make improvements or 
structural alterations after May 5, 2010, and not to provide additional 
HISA benefits to those who received this assistance previously. This is 
a reasonable interpretation of the law

[[Page 69618]]

because it reflects the reality that those beneficiaries seeking to 
make improvements or structural alterations today are faced with costs 
that are significantly higher than they were in 1992, when the lifetime 
amount limitations were last increased.
    However, we do not believe that Congress, in section 516 of the 
2010 Act, intended to prohibit beneficiaries from obtaining HISA 
benefits for which they had not been previously eligible. We believe 
that when a beneficiary, who previously was eligible for and obtained 
lesser HISA benefits only under the statutory equivalent of proposed 
Sec.  17.3105(c), is later awarded compensation for a service-connected 
disability, compensation for a disability ``as if'' it were service 
connected under 38 U.S.C. 1151, or an increased rating of 50 percent or 
more for a service-connected disability that results in eligibility for 
the greater HISA benefit under proposed Sec.  17.3105(b), such 
beneficiary should be allowed to receive the new greater benefit based 
on that new or increased award. We do not believe this interpretation 
violates the restriction of section 516 of the 2010 Act because 
eligibility for the greater benefit based on the new or increased award 
did not exist when the beneficiary first applied. In other words, such 
a beneficiary would not have ``first applie[d]'' for the greater HISA 
benefit available at that time; rather, that beneficiary would have 
``first applie[d]'' for the lesser HISA benefit available at that time. 
In short, individuals who prior to May 5, 2010, sought the greater HISA 
benefit for a service-connected disability, for a disability treated 
``as if'' it were service connected, or based on having a disability 
rating of 50 percent or more for a service-connected disability who 
then seek the new greater HISA benefit after such date would not be 
eligible for the increased greater HISA benefit amount. However, our 
proposed interpretation of the law would authorize the increased 
greater HISA lifetime benefit amount for individuals who prior to May 
5, 2010, sought the lesser HISA benefit for a nonservice-connected 
disability and who then seek the greater HISA benefit on or after that 
date for a service-connected disability, for a disability treated ``as 
if'' it were service connected, or based on having a disability rating 
of 50 percent or more for a service-connected disability.
    VA has consistently interpreted section 1717 to allow veterans to 
apply for the greater HISA benefit if they were not previously 
eligible. Additionally, we have searched the legislative history and 
have not found an indication that our interpretation is contrary to 
Congress' intent. H.R. Conf. Rep. 102-871, which discusses the increase 
of HISA benefit amounts to $4,100 and $1,200, explains that ``a veteran 
who, prior to January 1, 1990, received the maximum amount of 
reimbursement authorized under the current limits of section 1717 is 
not entitled to additional monetary benefits by reason of amendments.'' 
Based on this explanation it is safe to assume that a veteran who did 
not receive the maximum amount--that is, veterans who had previously 
received benefits only under the lower statutory threshold--may be 
entitled to the greater benefit by reason of amendments. Therefore, our 
interpretation allowing beneficiaries who previously applied for the 
lesser benefit to apply for the greater benefit under proposed Sec.  
17.3105 is reasonable, particularly in the absence of any indication 
otherwise when Congress has expressly stated other limitations. This 
interpretation is also consistent with VA's efforts to provide the 
maximum assistance to beneficiaries, who would otherwise be unable to 
receive additional HISA funds that Congress has made available to 
address veterans' increased disability statuses and growing costs of 
construction.
    We would not authorize the full increased HISA lifetime benefit 
amount for beneficiaries who applied for HISA benefits under section 
1717(a)(2)(B), and then later apply and are eligible for the greater 
HISA benefits under section 1717(a)(2)(A); rather, proposed Sec.  
17.3105(e) would authorize an award up to the amount of HISA benefits 
that the beneficiary would be eligible for under proposed Sec.  
17.3105(c) minus the amount of HISA benefits previously used by the 
beneficiary. This will ensure that these beneficiaries do not receive 
more than the authorized lifetime HISA benefit amount. Additionally, in 
no instance will any beneficiary be approved for more than the highest 
amount specified in the statute and regulation.
    The following example provides an illustration of the effect of 
proposed Sec.  17.3105(e). A beneficiary has a service-connected 
disability that is originally determined to be less than 50 percent and 
for which the beneficiary does not require HISA benefits (e.g., visual 
impairment) and has a nonservice-connected disability for which HISA 
benefits would provide relief (e.g., beneficiary walks with a cane and 
cannot climb stairs). Such beneficiary may exhaust the HISA benefit 
available under Sec.  17.3105(c) for the nonservice-connected 
disability to provide a ramp to assist in entering and exiting the 
beneficiary's home. Later, if that beneficiary's disability rating for 
his visual impairment is increased to 50 percent, the beneficiary would 
become eligible for an award up to the greater HISA benefit amount, 
which could be used to address either a service-connected or 
nonservice-connected disability. The new amount of HISA benefits 
available, however, would be limited to the difference between the 
greater HISA benefit amount and the amount of HISA benefits previously 
awarded.
    In Sec.  17.3105(e)(2), we would explain that a beneficiary who 
received HISA benefits as a servicemember may not receive additional 
HISA benefits simply because of a change in status from 
``servicemember'' to ``veteran.'' We believe that Congress intended for 
VA to provide HISA benefits at the earliest point in time to 
servicemembers dealing with disabilities resulting from their service, 
not to provide them with a benefit that could later be duplicated as 
part of the array of benefits available to them based on their status 
as a veteran.

17.3120 Application for HISA Benefits

    In proposed Sec.  17.3120, we would state that, to apply for HISA 
benefits, the beneficiary must submit a complete application to VA, and 
we would identify all of the requirements for a complete HISA benefits 
application.
    In proposed Sec.  17.3120(a)(1), we would require submission of a 
prescription written or approved by a VA physician that identifies the 
specific improvement or structural alteration recommended and includes 
the diagnosis and medical justification for the improvement or 
structural alteration. VA relies on medical determinations to identify 
whether a beneficiary has a disability, and what treatments are 
appropriate for that disability. For approval of HISA benefits, we 
would require that the prescription be written or approved by a VA 
physician because VA physicians are highly qualified to determine what 
improvements or structural alterations would best serve those with 
disabilities common to veterans and servicemembers. Moreover, all 
veterans seeking HISA benefits must be eligible for care under section 
1710(a) and therefore they are eligible for a determination by a VA 
physician. Servicemembers will be examined by a VA physician as part of 
the IDES process and may obtain the required prescription or approval 
of a prescription at that time. The requirement for a prescription is 
an appropriate, cost effective way to determine the necessity of the 
improvement or alteration as required

[[Page 69619]]

by 38 U.S.C. 1717(a)(2). VA typically delivers this prescription 
directly to the HISA program office on the beneficiary's behalf.
    Proposed Sec.  17.3120(a)(2) would require that a completed VA Form 
10-0103, Veterans Application for Assistance in Acquiring Home 
Improvement and Structural Alterations, be included with the HISA 
benefits application. VA Form 10-0103 is the approved form for 
requesting HISA benefits and, when completed, provides VA with 
sufficient information to accurately identify the beneficiary and 
determine the beneficiary's eligibility for HISA benefits. That form is 
currently being modified to reflect the new requirements of this 
proposed rule, and we further address this information collection later 
in this rulemaking.
    Proposed Sec.  17.3120(a)(2) would indicate that a HISA application 
requires a completed and signed VA Form 10-0103, Veterans Application 
for Assistance in Acquiring Home Improvement and Structural 
Alterations. Additionally, this form is where the beneficiary may 
request payment in advance of construction of the improvement or 
structural alteration. This advance payment would provide the 
beneficiary with funds for up-front costs associated with the 
improvement or structural alteration. Specific details on advance 
payment are outlined in proposed Sec.  17.3130.
    In proposed Sec.  17.3120(a)(3), we would require all applicants to 
submit a homeowner's statement indicating that the homeowner agrees to 
allow construction of the improvement or structural alteration on the 
homeowner's property. We would require that the statement be notarized 
if the beneficiary is not the owner of the property.
    In general terms, the homeowner's statement provides verification 
that the improvement or structural alteration will be completed in a 
dwelling that the beneficiary is legally authorized to use as his or 
her home, as required by 38 U.S.C. 1717(a)(3). In cases where the 
beneficiary does not own the property, we believe that the notarized 
statement from the property owner may help protect the beneficiary 
against any future claims of unauthorized structural changes to the 
home. It will also help ensure that structural improvements or 
alterations are not provided for an unauthorized use under 38 U.S.C. 
1717.
    In proposed Sec.  17.3120(a)(4), we would require veterans and 
servicemembers applying for HISA benefits to provide a written and 
itemized estimate of costs for the improvement or structural 
alteration. The itemized estimate will be evaluated to ensure that the 
items listed on it match with the beneficiary's prescription. This will 
allow VA to protect the integrity of the program and HISA benefit funds 
from potential abuse. VA would also use the itemized estimate of costs 
to determine the appropriate amount of an advance payment to the 
beneficiary made upon request under proposed Sec.  17.3130, which is 
explained in greater detail below.
    In proposed Sec.  17.3120(a)(5), we would require that the 
beneficiary provide a color photograph of the unimproved site for the 
improvement or structural alteration. Together with the pre-award 
inspection conducted under proposed Sec.  17.3120(b), this photograph 
will help ensure that the proposed improvement or structural alteration 
is appropriate to the site and will assist VA in preventing fraud. We 
would compare the photograph submitted with the application to the one 
included with the final payment request, as required in Sec.  
17.3130(b), to verify that the improvement or structural alteration was 
completed as indicated in the application.
    Proposed Sec.  17.3120(b) would require the beneficiary to consent 
to VA's inspection of the site of the proposed improvement or 
structural alteration. An in-home evaluation before construction begins 
would allow VA to make an administrative determination that the 
proposed improvement or structural alteration is reasonably designed to 
meet the needs created by the beneficiary's disability. We also intend 
to use the pre-approval inspection to verify that the proposed 
improvement or structural alteration has not been previously 
constructed and does not duplicate resources that are already in the 
beneficiary's home. Because HISA benefits are provided to allow 
beneficiaries to make necessary improvements or structural alterations, 
we believe it would be inappropriate to provide the HISA benefits if 
such improvements or structural alterations already exist. The statute 
authorizes the Secretary to ``furnish'' improvements and alterations, 
which we interpret to include the authority to cause them to be 
constructed via authorization of HISA payments, but to the extent the 
modifications already exist before a claim is made for the benefit, the 
improvements and alterations have already been furnished, and VA lacks 
authority to reimburse a beneficiary for them. Finally, the pre-
approval inspection would allow VA to determine that the beneficiary's 
home can reasonably accommodate the improvement or structural 
alteration. VA may determine that the submitted documentation is 
sufficient to make all such determinations and that the in-home 
inspection would not be required.
    VA may also conduct an inspection after the construction is 
finished as part of the final payment process under Sec.  17.3130.
    VA's inspections should not be confused with or interpreted as code 
enforcement or structural integrity inspections. As indicated above, 
the HISA benefit is not a construction benefit and VA does not have 
expertise in such matters. Issues of structural integrity and code 
compliance are integral to the agreement that the veteran, like any 
other homeowner, enters into with a contractor. HISA benefits may be 
used to pay for the expenses of inspections designed to ensure 
compliance with those matters, but VA's inspection is for 
administrative, not safety or enforcement, purposes.
    Proposed Sec.  17.3120(c) would state that VA will review only 
complete HISA benefits applications for approval and will notify the 
beneficiary if any required documentation is missing from the 
application. If the beneficiary does not provide the missing 
documentation to VA within 30 days, VA will notify the beneficiary that 
the application has been closed. VA will inform the applicant that the 
closed application may be re-opened by providing the previously missing 
information, thus minimizing any adverse impact on the applicant. 
However, because several key elements of the application, such as costs 
associated with the improvement or structural alteration, may change 
over time, we would require the applicant to provide updated 
information after any lengthy period of time. We believe that this 
process will encourage applicants to keep moving forward with their 
applications and increase the efficiency of program operations by 
eliminating repeated follow-up correspondence requesting information.

17.3125 Approving HISA Benefits Applications

    Proposed Sec.  17.3125(a) would establish the criteria that VA will 
use to approve a HISA benefits application.
    Proposed Sec.  17.3125(a)(1) would state that the beneficiary's 
application must meet the requirements of the regulations applicable to 
the HISA benefits program.
    Proposed Sec.  17.3125(a)(2) would require VA to determine that the 
proposed improvement or structural alteration is reasonably designed to 
address the needs of the beneficiary and is appropriate for the 
beneficiary's

[[Page 69620]]

home. This determination may be based on documentation provided by the 
beneficiary or through an in-home inspection, as authorized by Sec.  
17.3120(b).
    Proposed Sec.  17.3125(b) would describe the written notification 
that VA will provide to the beneficiary when a HISA benefits 
application is approved. The notification will include the total amount 
of the award of HISA benefits. VA will only authorize charges that VA 
considers to be reasonably designed to address the needs of the 
beneficiary and in keeping with the purpose of the HISA benefit. The 
notification will also indicate whether an advance payment is approved 
and will reiterate the beneficiary's obligation to use the advance 
payment only for the improvement or structural alteration defined in 
the application. Recipients will be reminded of their obligation to 
submit a request for final payment upon completion of the construction.
    Notification of approval of HISA benefits will also include a 
notice of the right to appeal and information about how to pursue an 
appeal. We believe it necessary to provide this information even when 
approving an application to allow the beneficiary to appeal any part of 
VA's determination.

17.3126 Disapproving HISA Benefits Applications

    In proposed Sec.  17.3126, we would state that VA will disapprove 
any HISA benefits application that does not meet all of the criteria 
outlined in Sec.  17.3125(a), which means that the application was 
either inconsistent with the regulations governing the HISA benefits 
program or that the proposed improvement or structural alteration is 
not found to be reasonably designed to address the needs of the 
beneficiary and/or is not appropriate for the beneficiary's home. VA 
will notify the beneficiary in writing of the decision, detailing the 
basis for the disapproval, and will provide notice to the beneficiary 
of his/her right to appeal the decision.

17.3130 HISA Benefits Payment Procedures

    Under the HISA benefits program, two types of payments are 
authorized: advance and final. As previously discussed, the purpose of 
the advance payment is to provide the beneficiary with funds for up-
front costs authorized under the HISA benefits program.
    Proposed Sec.  17.3130(a) would state that, upon request of the 
beneficiary, VA may make an advance payment equal to 50 percent of the 
total amount of HISA benefits VA has approved for the improvement or 
structural alteration. We believe that an advance payment of 50 percent 
is appropriate based on standard business practices and our experience 
with administering the HISA benefits program.
    A beneficiary may request the advance payment by completing the 
appropriate space on VA Form 10-0103, as indicated in proposed Sec.  
17.3120(a)(2). Absent a request, VA will not make an advance payment of 
HISA benefits. VA will make the advance payment within 30 days of the 
application approval. Only one advance payment will be authorized per 
approved application. Because providing funds before the beneficiary 
has made any improvements or structural alterations may put HISA 
benefits at risk of misuse, VA Form 10-0103 includes a statement that 
the beneficiary requesting the advance payment must commit to use the 
funds as described in the application and to submit the request for 
final payment. VA reserves the right to seek reimbursement of the 
advanced HISA benefit amount if the beneficiary does not comply.
    Proposed Sec.  17.3130(b) states that the beneficiary must submit a 
complete final payment request to VA within 60 days after the 
application for HISA benefits is approved or, if an advance payment was 
provided, within 60 days after the advance payment is made by VA. Final 
payment would not be authorized until all elements of the complete 
final payment request are received by VA. To be complete, the final 
payment request must include a statement that the construction 
indicated in the application has been completed, a color photograph of 
the completed work, and documentation of the itemized actual costs for 
construction of the improvement or structural alteration.
    VA would compare the color photograph of the completed improvement 
or structural alteration to the color photograph included with the HISA 
benefits application to substantiate that the improvement or structural 
alteration was completed. Documentation of the itemized actual costs of 
the construction will be used to determine the correct amount of the 
final payment.
    Proposed Sec.  17.3130(c) would describe the process that VA will 
follow after a complete final payment request is received. Proposed 
Sec.  17.3130(c)(1) would state that VA may conduct an on-site 
inspection to determine that the improvement or structural alteration 
was actually completed and would indicate that no payment will be made 
unless construction has been completed.
    In proposed Sec.  17.3130(c)(2), we would explain the method of 
calculating the final payment. The final payment will equal the full 
approved HISA benefit amount or the total actual cost of the 
improvement or structural alteration, whichever is less. In all cases, 
the amount of any advance payment will be subtracted from the amount to 
be paid.
    In proposed Sec.  17.3130(c)(3), we would indicate that the 
beneficiary would be obligated to reimburse VA if the total actual cost 
of construction is less than the amount of any advance payment.
    In proposed Sec.  17.3130(c)(4), we would state that final payment 
on a HISA benefits application would preclude VA from furnishing 
additional HISA benefits under that application. Any unused approved 
HISA benefit amount on an application would be credited back to the 
beneficiary's lifetime HISA benefit balance and would be available for 
use under future applications. A beneficiary who has not exhausted the 
lifetime HISA benefit may submit a new application for remaining HISA 
benefits by once again following the process set forth in this 
regulation.
    In proposed Sec.  17.3130(d), we would address the consequences of 
the failure of the beneficiary to submit a final payment request. As 
indicated previously, when a beneficiary requests an advance payment on 
VA Form 10-0103, the beneficiary commits to use the funds according to 
the plans articulated in the application and to submit a final payment 
request. We believe that this commitment is necessary to ensure 
appropriate use of the HISA benefit and to protect the HISA benefit 
program from abuse. If a beneficiary who received an advance payment 
does not submit a final payment request, VA will send a notice as a 
reminder of the commitment to complete the process. We acknowledge that 
home improvement projects are often lengthy. We will allow for the 
beneficiary to explain any delays in the construction that may have led 
to the delay in submitting the final payment request. VA has every 
intention of allowing the beneficiary a reasonable amount of time in 
which to finalize construction of the improvement or structural 
alteration. If a final payment request is not received or if suitable 
explanations for delay are not provided, VA reserves the right to 
attempt collection of any HISA benefits funds paid in advance.
    If a final payment request is not received from a beneficiary who 
did not request an advance payment, VA will close the application and 
will not pay HISA benefits on that application. Before closing the 
application, VA will send a notice to alert the beneficiary of

[[Page 69621]]

the impending action. If the beneficiary does not respond to the 
notice, providing adequate information to justify the delay, VA will 
proceed with closing the file and send a notice of closure to the 
beneficiary. The notice will provide the reason for closure and include 
information regarding the right to appeal the decision.
    Proposed Sec.  17.3130(e) would state that, if a VA-conducted 
inspection of the site of construction of the improvement or structural 
alteration reveals that the construction has not been completed as 
purported in a final payment request, VA may seek reimbursement of any 
advance payment amount made to the beneficiary. However, if the 
beneficiary shows that the failure to complete the project was the 
fault of the contractor, such as misconduct on the part of the 
contractor (including absconding with the funds) or bankruptcy of the 
contractor, VA will not seek to recover those funds from the 
beneficiary. Nor will VA credit the amount of the lost funds to the 
beneficiary's lifetime HISA benefits limit because they were paid out 
in accordance with the HISA program set forth in this regulation. The 
loss arose from the agreement for the construction of the improvement 
or structural alteration between the beneficiary and the contractor, 
and any attempt to recover the funds from the contractor must be made 
by the beneficiary.

Effect of Rulemaking

    The Code of Federal Regulations, as proposed to be revised by this 
proposed rulemaking, would represent the exclusive legal authority on 
this subject. No contrary rules or procedures would be authorized. All 
VA guidance, including VHA Handbook 1173.14, would be read to conform 
with this proposed rulemaking if possible or, if not possible, such 
guidance would be superseded by this rulemaking.

Paperwork Reduction Act

    This proposed rule includes collections of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) that require 
approval by the Office of Management and Budget (OMB). Accordingly, 
under 44 U.S.C. 3507(d), VA has submitted a copy of this rulemaking and 
the related form to OMB for review.
    OMB assigns a control number for each collection of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. VA Form 10-0103, Veterans 
Application for Assistance in Acquiring Home Improvement and Structural 
Alterations, was previously approved by OMB under OMB control number 
2900-0188. This approval allows a collection of information requested 
in proposed Sec.  17.3120. Proposed Sec. Sec.  17.3120 and 17.3130 
contain new collections of information under the Paperwork Reduction 
Act of 1995, which are reflected in an updated version of VA Form 10-
0103 that has been submitted to OMB for review. If OMB does not approve 
the collections of information as requested, VA will immediately remove 
the provisions containing a collection of information or take such 
other action as is directed by OMB.
    Comments on the collections of information contained in this 
proposed rule should be submitted to the Office of Management and 
Budget, Attention: Desk Officer for the Department of Veterans Affairs, 
Office of Information and Regulatory Affairs, Washington, DC 20503, 
with copies sent: by mail or hand delivery to the Director, Office of 
Regulation Policy and Management (02REG), Department of Veterans 
Affairs, 810 Vermont Ave. NW., Room 1068, Washington, DC 20420; by fax 
to (202) 273-9026; or through www.Regulations.gov. Comments should 
indicate that they are submitted in response to ``RIN 2900-AO17--Home 
Improvements and Structural Alterations (HISA) Benefits Program.''
    OMB is required to make a decision concerning the collections of 
information contained in this proposed rule between 30 and 60 days 
after publication of this document in the Federal Register. Therefore, 
a comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment on the proposed rule.
    VA considers comments by the public on proposed collections of 
information in--
     Evaluating whether the proposed collections of information 
are necessary for the proper performance of the functions of VA, 
including whether the information will have practical utility;
     Evaluating the accuracy of VA's estimate of the burden of 
the proposed collections of information, including the validity of the 
methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collections of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, e.g., permitting 
electronic submission of responses.
    The proposed amendments to 38 CFR 17.3120 and 17.3130 contain 
collections of information under the Paperwork Reduction Act of 1995 
for which we are requesting approval by OMB. These collections of 
information are described immediately following this paragraph, under 
their respective titles.
    Title: Application for HISA Benefits.
    Summary of collections of information: The proposed rule at Sec.  
17.3120 would require the beneficiary to submit VA Form 10-0103, a 
medical prescription, a statement from the homeowner (notarized, if the 
homeowner is not the beneficiary), an estimate of the costs for the 
improvement or structural alteration, and a color photograph of the 
unimproved site. VA Form 10-0103 is currently approved under OMB No. 
2900-0188.
    Description of the need for information and proposed use of 
information: This information is needed to ensure that the applicant 
meets the requirements provided in proposed Sec. Sec.  17.3100 through 
17.3130 and 38 U.S.C. 1717(a) and (d). Specifically, the medical 
prescription is needed to confirm the disability, and to help VA 
determine if the requested improvement or structural alteration is 
necessary for the treatment of the beneficiary's disability or 
necessary to provide access to and within the home. In those cases 
where the beneficiary is not the homeowner, the notarized statement 
will protect the beneficiary against any claims of unauthorized 
improvement or alteration made to the homeowner's property and provide 
verification that the improvement or structural alteration will be 
completed in a dwelling that the beneficiary is legally authorized to 
use as his/her home. When the beneficiary is the homeowner the 
statement validates that the improvement or structural alteration is 
being completed in the beneficiary's home. A cost estimate is needed 
for VA to determine if the proposed improvement or structural 
alteration is reasonably designed to address the needs of the 
beneficiary. A photograph of the unimproved site is needed to ensure 
that the proposed improvement or structural alteration is appropriate 
and help VA in preventing fraud.
    Description of likely respondents: Veterans and servicemembers 
applying for HISA benefits.
    Estimated number of respondents per year: 7,000.

[[Page 69622]]

    Estimated frequency of responses per year: 1.
    Estimated average burden per response: 5 minutes.
    Estimated total annual reporting and recordkeeping burden:583 
hours.
    Title: HISA Benefits Payment Procedures.
    Summary of collections of information: The proposed rule at Sec.  
17.3130 would require beneficiaries to submit a final payment packet to 
VA that consists of a statement by the beneficiary that the improvement 
or structural alteration was completed, a color photograph of the 
completed work, and documented evidence of total itemized actual costs.
    Description of the need for information and proposed use of 
information: The information required under this collection will be 
used as verification that the improvement or structural alteration has 
been completed and will serve as record of the associated costs. VA 
will make payment of HISA benefits awards based on the documents 
required under this collection.
    Description of likely respondents: Veterans and servicemembers.
    Estimated number of respondents per year: Applications: 7,000.
    Estimated frequency of responses per year: Applications: 1.
    Estimated average burden per response: 5 minutes.
    Estimated total annual reporting and recordkeeping burden: 583 
hours.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601-612. This proposed rule would not cause a significant 
economic impact on construction companies and their suppliers since 
only a small portion of the business of such entities concerns VA 
beneficiaries. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking 
is exempt from the initial and final regulatory flexibility analysis 
requirements of sections 603 and 604.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
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 effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' requiring review by the Office of 
Management and Budget (OMB) unless OMB waives such review, as ``any 
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 this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined, and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866. VA's impact analysis can be found as a 
supporting document at http://www.regulations.gov, usually within 48 
hours after the rulemaking document is published. Additionally, a copy 
of the rulemaking and its impact analysis are available on VA's Web 
site at http://www1.va.gov/orpm/, by following the link for ``VA 
Regulations Published.''

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 given year. This proposed rule would have no such 
effect on State, local, and tribal governments, or on the private 
sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance program numbers and 
titles for this rule are as follows: 64.005, Grants to States for 
Construction of State Home Facilities; 64.007, Blind Rehabilitation 
Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical 
Care Benefits; 64.010, Veterans Nursing Home Care; 64.014, Veterans 
State Domiciliary Care; 64.015, Veterans State Nursing Home Care; 
64.018, Sharing Specialized Medical Resources; 64.019, Veterans 
Rehabilitation Alcohol and Drug Dependence; 64.022, Veterans Home Based 
Primary Care; and 64.024, VA Homeless Providers Grant and per Diem 
Program.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. Jose D. 
Riojas, Chief of Staff, Department of Veterans Affairs, approved this 
document on October 18, 2013, for publication.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure; Alcohol abuse; Alcoholism; 
Claims; Day care; Dental health; Drug abuse; Foreign relations; 
Government contracts; Grant programs-health; Grant programs-veterans; 
Health care; Health facilities; Health professions; Health records; 
Homeless; Medical and dental schools; Medical devices; Medical 
research; Mental health programs; Nursing homes; Philippines; Reporting 
and recordkeeping requirements; Scholarships and fellowships; Travel 
and transportation expenses; Veterans.

    Dated: November 14, 2013.
William F. Russo,
Deputy Director, Regulation Policy and Management, Office of the 
General Counsel, Department of Veterans Affairs.

    For the reasons set forth in the preamble, we propose to amend 38 
CFR Part 17 as follows:

PART 17--MEDICAL

0
1. The authority citation for part 17 continues to read as follows:

    Authority: 38 U.S.C. 501, and as noted in specific sections.

0
2. Add an undesignated center heading and Sec. Sec.  17.3100 through 
17.3130 following the authority citation at the end of Sec.  17.1008 to 
read as follows:

Home Improvements and Structural Alterations (HISA) Program

Sec.
17.3100 Purpose and scope.
17.3101 Definitions.
17.3102 Eligibility.
17.3103-17.3104 [Reserved]

[[Page 69623]]

17.3105 HISA benefit lifetime limits.
17.3106-17.3119 [Reserved]
17.3120 Application for HISA benefits.
17.3121-17.3124 [Reserved]
17.3125 Approving HISA benefits applications.
17.3126 Disapproving HISA benefits applications.
17.3127-17.3129 [Reserved]
17.3130 HISA benefits payment procedures.

Home Improvements and Structural Alterations (HISA) Program


Sec.  17.3100  Purpose and scope.

    (a) Purpose. The purpose of Sec. Sec.  17.3100 through 17.3130 is 
to implement the Home Improvements and Structural Alterations (HISA) 
program. The purpose of the HISA benefits program is to provide 
eligible beneficiaries monetary benefits for improvements and 
structural alterations to their homes when such improvements and 
structural alterations:
    (1) Are necessary for the continuation of the provision of home 
health treatment of the beneficiary's disability; or
    (2) Provide the beneficiary with access to the home or to essential 
lavatory and sanitary facilities.
    (b) Scope. 38 CFR 17.3100 through 17.3130 apply only to the 
administration of the HISA benefits program, unless specifically 
provided otherwise.

(Authority: 38 U.S.C. 501, 1717(a)(2))

Sec.  17.3101  Definitions.

    For the purposes of the HISA benefits program (Sec. Sec.  17.3100 
through 17.3130):
    Access to essential lavatory and sanitary facilities means having 
normal use of the standard structural components of those facilities.
    Access to the home means the ability of the beneficiary to enter 
and exit the home and to maneuver within the home to at least one 
bedroom and essential lavatory and sanitary facilities.
    Beneficiary means a veteran or servicemember who is awarded or who 
is eligible to receive HISA benefits.
    Essential lavatory and sanitary facilities means one bathroom 
equipped with a toilet and a shower or bath, one kitchen, and one 
laundry facility.
    HISA benefits means a monetary payment by VA to be used for 
improvements and structural alterations to the home of a beneficiary in 
accordance with Sec. Sec.  17.3100 through 17.3130.
    Home means the primary place where the beneficiary resides or, in 
the case of a servicemember, where the beneficiary intends to reside 
after discharge from service.
    Improvement or structural alteration means a modification to a home 
or to an existing feature or fixture of a home, including repairs to or 
replacement of previously improved or altered features or fixtures.
    Undergoing medical discharge means that a servicemember has been 
found unfit for duty due to a medical condition by their Service's 
Physical Evaluation Board, and a date of medical discharge has been 
issued.

(Authority: 38 U.S.C. 501, 1717)

Sec.  17.3102  Eligibility.

    The following individuals are eligible for HISA benefits:
    (a) A veteran who is eligible for medical services under 38 U.S.C. 
1710(a).
    (b) A servicemember who is undergoing medical discharge from the 
Armed Forces for a permanent disability that was incurred or aggravated 
in the line of duty in the active military, naval, or air service. A 
servicemember would be eligible for HISA benefits while hospitalized or 
receiving outpatient medical care, services, or treatment for such 
permanent disability.

(Authority: 38 U.S.C. 501, 1717)

Sec. Sec.  17.3103-17.3104   [Reserved]


Sec.  17.3105  HISA benefit lifetime limits.

    (a) General. Except as provided in paragraph (e) of this section, a 
beneficiary's HISA benefit is limited to the lifetime amount 
established in paragraphs (b), (c), or (d) of this section, as 
applicable. A beneficiary may use HISA benefits to pay for more than 
one home alteration, until the beneficiary exhausts his or her lifetime 
benefit. HISA benefits approved by VA for use in a particular home 
alteration but unused by the beneficiary will remain available for 
future use.
    (b) HISA benefits for a service-connected disability, a disability 
treated ``as if'' it were service connected, or for veterans with a 
service-connected disability rated 50 percent or more.
    (1) If a veteran:
    (i) Applies for HISA benefits to address a service-connected 
disability;
    (ii) Applies for HISA benefits to address a compensable disability 
treated ``as if'' it is a service-connected disability and for which 
the veteran is entitled to medical services under 38 U.S.C. 
1710(a)(2)(C) (e.g., a disability acquired through treatment or 
vocational rehabilitation provided by VA); or
    (iii) Applies for HISA benefits to address a nonservice-connected 
disability, if the beneficiary has a service-connected disability rated 
at least 50 percent disabling; and
    (2) The veteran first applies for HISA benefits:
    (i) Before May 5, 2010, then the veteran's lifetime HISA benefit 
limit is $4,100.
    (ii) On or after May 5, 2010, then the veteran's lifetime HISA 
benefit limit is $6,800.
    (c) HISA benefits for any other disabilities. If a veteran who is 
eligible for medical services under 38 U.S.C. 1710(a) applies for HISA 
benefits to address a disability that is not covered under paragraph 
(b) of this section, and the veteran first applies for HISA benefits:
    (1) Before May 5, 2010, then the veteran's lifetime HISA benefit 
limit is $1,200; or
    (2) On or after May 5, 2010, then the veteran's lifetime HISA 
benefit limit is $2,000.
    (d) Servicemembers. If a servicemember is eligible for HISA 
benefits under Sec.  17.3102(b), and the servicemember first applies:
    (1) Before May 5, 2010, then the servicemember's HISA benefit 
lifetime limit is $4,100; or
    (2) On or after May 5, 2010, then the servicemember's HISA benefit 
lifetime limit is $6,800.
    (e) Increases to HISA benefit lifetime limit.
    (1) A veteran who received HISA benefits under paragraph (c) of 
this section, and who subsequently qualifies for HISA benefits under 
paragraph (b)(1) of this section on or after May 5, 2010, due to a new 
award of disability compensation based on service connection or an 
increased disability rating, may apply for the increased lifetime 
benefit amount under paragraph (b)(2)(ii) of this section. The 
increased amount that will be available is $6,800 minus the amount of 
HISA benefits previously used by the beneficiary.
    (2) A veteran who previously received HISA benefits as a 
servicemember is not eligible for a new lifetime HISA benefit amount 
based on his or her attaining veteran status, but the veteran may file 
a HISA claim for any HISA benefit amounts not used prior to discharge. 
The veteran's subsequent HISA award cannot exceed the applicable award 
amount under paragraphs (b), (c), or (e)(1) of this section, as 
applicable, minus the amount of HISA benefits awarded to the veteran 
while the veteran was a servicemember.

(Authority: 38 U.S.C. 501, 1717)


[[Page 69624]]




Sec. Sec.  17.3106-17.3119  [Reserved]


Sec.  17.3120  Application for HISA benefits.

    (a) Application package. To apply for HISA benefits, the 
beneficiary must submit to VA a complete HISA benefits application 
package. A complete HISA benefits application package includes all of 
the following:
    (1) A prescription, which VA may obtain on the beneficiary's 
behalf, written or approved by a VA physician that includes all of the 
following:
    (i) The beneficiary's name, address, and telephone number.
    (ii) Identification of the prescribed improvement or structural 
alteration.
    (iii) The diagnosis and medical justification for the prescribed 
improvement or structural alteration.
    (2) A completed and signed VA Form 10-0103, Veterans Application 
for Assistance in Acquiring Home Improvement and Structural 
Alterations, including, if desired, a request for advance payment of 
HISA benefits.
    (3) A signed statement from the owner of the property authorizing 
the improvement or structural alteration to the property. The statement 
must be notarized if the beneficiary submitting the HISA benefits 
application is not the owner of the property.
    (4) A written itemized estimate of costs for labor, materials, 
permits, and inspections for the home improvement or structural 
alteration.
    (5) A color photograph of the unimproved area.
    (b) Pre-award inspection of site. The beneficiary must allow VA to 
inspect the site of the proposed improvement or structural alteration. 
VA will not approve a HISA application unless VA has either conducted a 
pre-award inspection or has determined that no such inspection is 
needed. No later than 30 days after receiving a complete HISA benefits 
application, VA will conduct the inspection or determine that no 
inspection is required.
    (c) Incomplete applications. If VA receives an incomplete HISA 
benefits application, VA will notify the applicant of the missing 
documentation. If the missing documentation is not received by VA 
within 30 days after such notification, VA will close the application 
and notify the applicant that the application has been closed. The 
closure notice will indicate that the application may be re-opened by 
submitting the requested documentation and updating any outdated 
information from the original application.

(Authority: 38 U.S.C. 501, 1717)


(The Office of Management and Budget has approved the information 
collection requirements in this section under control number 2900-
0188.)


Sec. Sec.  17.3121-17.3124  [Reserved]


Sec.  17.3125  Approving HISA benefits applications.

    (a) Approval of application. VA will approve the HISA benefits 
application if:
    (1) The application is consistent with Sec. Sec.  17.3100 through 
17.3130, and
    (2) VA determines that the proposed improvement or structural 
alteration is reasonably designed to address the needs of the 
beneficiary and is appropriate for the beneficiary's home, based on 
documentation provided and/or through a pre-award inspection of the 
home.
    (b) Notification of approval. No later than 30 days after a 
beneficiary submits a complete application, VA will notify the 
beneficiary whether an application is approved. The notification will:
    (1) State the total benefit amount authorized for the improvement 
or structural alteration.
    (2) State the amount of any advance payment, if requested by the 
beneficiary, and state that the advance payment must be used for the 
improvements or structural alterations detailed in the application. The 
notification will also remind beneficiaries receiving advance payment 
of the obligation to submit the request for final payment upon 
completion of the construction.
    (3) Provide the beneficiary with the notice of the right to appeal 
if they do not agree with VA's decision regarding the award.

(Authority: 38 U.S.C. 501, 1717, 7104)

Sec.  17.3126  Disapproving HISA benefits applications.

    VA will disapprove a HISA benefits application if the complete HISA 
benefits application does not meet all of the criteria outlined in 
Sec.  17.3125(a). Notification of the decision provided to the 
beneficiary will include the basis for the disapproval and notice to 
the beneficiary of his or her right to appeal.

(Authority: 38 U.S.C. 501, 7104)

Sec. Sec.  17.3127-17.3129  [Reserved]


Sec.  17.3130  HISA benefits payment procedures.

    (a) Advance payment. If the beneficiary has requested advance 
payment of HISA benefits in VA Form 10-0103, as provided in Sec.  
17.3120(a)(2), VA will make an advance payment to the beneficiary equal 
to 50 percent of the total benefit authorized for the improvement or 
structural alteration. VA will make the advance payment no later than 
30 days after the HISA benefits application is approved. The 
beneficiary may receive only one advance payment for each approved HISA 
benefits application. A beneficiary must use the advance payment only 
for the improvement or structural alteration described in the 
application and must submit a final payment request, as defined in 
paragraph (b) of this section, to document such use after the 
construction is finished.
    (b) Final payment request. No later than 60 days after the 
application is approved or, if VA approved an advance payment, no later 
than 60 days after the advance payment was made, the beneficiary must 
submit a complete final payment request to VA for payment. The complete 
final payment request must include:
    (1) A statement by the beneficiary that the improvement or 
structural alteration, as indicated in the application, was completed;
    (2) A color photograph of the completed work; and
    (3) Documentation of the itemized actual costs for material, labor, 
permits, and inspections.
    (c) VA action on final payment request.
    (1) Prior to approving and remitting the final payment, VA may 
inspect (within 30 days after receiving the final payment request) the 
beneficiary's home to determine that the improvement or structural 
alteration was completed as indicated in the application. No payment 
will be made if the improvement or structural alteration has not been 
completed.
    (2) No later than 30 days after receipt of a complete final payment 
request, or, if VA conducts an inspection of the home under paragraph 
(c)(1) of this section, no later than 30 days after the inspection, VA 
will make a determination on the final payment request. If approved, VA 
will remit a final payment to the beneficiary equal to the lesser of:
    (i) The approved HISA benefit amount, less the amount of any 
advance payment, or
    (ii) The total actual cost of the improvement or structural 
alteration, less the amount of any advance payment.
    (3) If the total actual cost of the improvement or structural 
alteration is less than the amount paid to the beneficiary as an 
advance payment, the beneficiary will reimburse VA for the difference 
between the advance payment and the total actual costs.
    (4) After final payment is made on a HISA benefits application, the 
application file will be closed and no

[[Page 69625]]

future HISA benefits will be furnished to the beneficiary for that 
application. If the total actual cost of the improvement or structural 
alteration is less than the approved HISA benefit, the balance of the 
approved amount will be credited to the beneficiary's remaining HISA 
benefits lifetime balance.
    (d) Failure to submit a final payment request.
    (1) If an advance payment was made to the beneficiary, but the 
beneficiary fails to submit a final payment request in accordance with 
paragraph (b) of this section within 60 days of the date of the advance 
payment, VA will send a notice to remind the beneficiary of the 
obligation to submit the final payment request. If the beneficiary 
fails to submit the final payment request or to provide a suitable 
update and explanation of delay within 30 days of this notice, VA may 
take appropriate action to collect the amount of the advance payment 
from the beneficiary.
    (2) If an advance payment was not made to the beneficiary and the 
beneficiary does not submit a final payment request in accordance with 
paragraph (b) of this section within 60 days of the date the 
application was approved, the application will be closed and no future 
HISA benefits will be furnished to the beneficiary for that 
application. Before closing the application, VA will send a notice to 
the beneficiary of the intent to close the file. If the beneficiary 
does not respond with a suitable update and explanation for the delay 
within 30 days, VA will close the file and provide a final notice of 
closure. The notice will include information about the right to appeal 
the decision.
    (e) Failure to make approved improvements or structural 
alterations. If an inspection conducted pursuant to paragraph (c)(1) of 
this section reveals that the improvement or structural alteration has 
not been completed as indicated in the final payment request, VA may 
take appropriate action to collect the amount of the advance payment 
from the beneficiary. VA will not seek to collect the amount of the 
advance payment from the beneficiary if the beneficiary provides 
documentation indicating that the project was not completed due to the 
fault of the contractor, including bankruptcy or misconduct of the 
contractor.

(Authority: 38 U.S.C. 501, 1717)


(The Office of Management and Budget has approved the information 
collection requirements in this section under control number 2900-
0188.)

[FR Doc. 2013-27672 Filed 11-19-13; 8:45 am]
BILLING CODE 8320-01-P