[Federal Register Volume 86, Number 193 (Friday, October 8, 2021)]
[Rules and Regulations]
[Pages 56213-56216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-21800]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 3 and 36

RIN 2900-AR26


Assistance to Eligible Individuals in Acquiring Specially Adapted 
Housing

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is amending its 
adjudication and loan guaranty regulations regarding eligibility and 
assistance for certain veterans and members of the Armed Forces in 
acquiring specially adapted housing assistance. The amendments are 
necessary to implement certain provisions of the Ryan Kules and Paul 
Benne Specially Adaptive Housing Improvement Act of 2019.

DATES: 
    Effective date: This rule is effective November 8, 2021.
    Applicability dates: The amendments to 38 CFR 3.809, 3.809a, and 
36.4404 shall apply to all applications for benefits that were or are 
received by VA on or after August 8, 2020, or that were pending before 
VA (including the Board of Veterans' Appeals), the United States Court 
of Appeals for Veterans Claims, or the United States Court of Appeals 
for the Federal Circuit on August 8, 2020.
    The amendments to 38 CFR 36.4402, 36.4403, and 36.4406 shall apply 
to all applications for benefits that were or are received by VA on or 
after October 1, 2020, or that were pending before VA (including the 
Board of Veterans' Appeals), the United States Court of Appeals for 
Veterans Claims, or the United States Court of Appeals for the Federal 
Circuit on October 1, 2020.

FOR FURTHER INFORMATION CONTACT: Terry Rouch, Assistant Director for 
Loan Policy and Valuation, Loan Guaranty (26), Veterans Benefits 
Administration, Department of Veterans Affairs, 810 Vermont Ave. NW, 
Washington DC 20420, (202) 632-8862. (This is not a toll-free telephone 
number.)

SUPPLEMENTARY INFORMATION: The President signed into law the Ryan Kules 
and Paul Benne Specially Adaptive Housing Improvement Act of 2019 (the 
Act), Public Law 116-154, 134 Stat. 690, on August 8, 2020. The Act 
amended certain provisions of 38 U.S.C. chapter 21, Specially Adapted 
Housing for Disabled Veterans.
    Chapter 21 authorizes VA to provide specially adapted housing (SAH) 
assistance to eligible individuals with certain service-connected 
disabilities. Eligible individuals can include veterans and members of 
the Armed Forces. 38 U.S.C. 2101A. SAH assistance can be used toward 
the purchase, construction, or adaptation of a home that suits the 
individual's living needs. 38 U.S.C. 2102. It can also be used to 
reduce the debt associated with the costs of acquiring a home that is 
already adapted. Id. The amount of SAH assistance available to an 
eligible individual varies depending on factors such as the nature of 
the individual's disability, the scope of the eligible individual's 
project, and the amounts of SAH assistance the eligible individual has 
already received.

I. Amendments Under Section 2 of the Act

    Section 2 of the Act, which became effective upon enactment, 
amended 38 U.S.C. 2101(a) and (b) to change SAH eligibility for 
individuals with blindness in both eyes. Previously, the Secretary 
could provide such an individual with assistance under section 2101(a) 
if the individual had a permanent and total service-connected 
disability due to blindness in both eyes having only light perception, 
plus loss or loss of use of one lower extremity. Alternatively, the

[[Page 56214]]

Secretary could provide a lesser amount of assistance under section 
2101(b) if the individual had a service-connected disability due to 
blindness in both eyes with a central visual acuity of 20/200 or less 
in the better eye with the use of a standard correcting lens. For the 
purposes of that clause, the Secretary was to have considered an eye 
with a limitation in the fields of vision such that the widest diameter 
of the visual field subtends an angle no greater than 20 degrees as 
having a central visual acuity of 20/200 or less.
    With the enactment of the Act, the loss or loss of use of one lower 
extremity is no longer an eligibility criterion under section 2101(a) 
for individuals with blindness in both eyes. Further, the criterion 
that the service-connected disability for blindness be ``permanent and 
total'' has been changed to ``permanent''. Eligibility for blindness in 
both eyes under section 2101(a) is no longer described as having only 
light perception, but is instead described as it had been under the 
eligibility criteria found in section 2101(b): Having central visual 
acuity of 20/200 or less in the better eye with the use of a standard 
correcting lens. For the purposes of this clause, an eye with a 
limitation in the fields of vision such that the widest diameter of the 
visual field subtends an angle no greater than 20 degrees shall be 
considered as having a central visual acuity of 20/200 or less. In 
effect, an individual who was eligible for SAH assistance under prior 
section 2101(b)(2)(A) is now eligible to receive SAH assistance under 
section 2101(a)(2)(B)(ii) instead and can receive up to $100,896 for 
fiscal year 2021. See 85 FR 71139. The Act removed eligibility for SAH 
assistance under section 2101(b) for service-connected disability due 
to blindness in both eyes.
    Accordingly, VA is amending its adjudication regulations found at 
38 CFR 3.809 and 3.809a and its loan guaranty regulations found at 38 
CFR 36.4404 to reflect the changes in section 2101(a) and (b). Such 
amendments align the regulations with current section 2101(a) and (b). 
VA has also added applicability date language to clarify that these 
changes, which mirror the statutory changes, shall apply to all 
applications for benefits that were or are received by VA on or after 
August 8, 2020, or that were pending before VA (including the Board of 
Veterans' Appeals), the United States Court of Appeals for Veterans 
Claims, or the United States Court of Appeals for the Federal Circuit 
on August 8, 2020. This date reflects the Act's enactment date.

II. Amendments Under Section 3 of the Act

    Prior to enactment of the Act, under 38 U.S.C. 2102, an eligible 
individual was allowed three separate grants of assistance under 38 
U.S.C. chapter 21. Section 3(a) of the Act amended section 2102(d)(3) 
to allow a maximum of six grants of assistance. The amendment was 
effective October 1, 2020. To comply with this change to section 
2102(d), VA is amending 38 CFR 36.4402(d)(2), 36.4403, and 
36.4406(a)(2). VA is also clarifying that these changes, which mirror 
the statutory changes, shall apply to all applications for benefits 
that were or are received by VA on or after October 1, 2020, or that 
were pending before VA (including the Board of Veterans' Appeals), the 
United States Court of Appeals for Veterans Claims, or the United 
States Court of Appeals for the Federal Circuit on October 1, 2020. 
This date reflects the effective date provided in section 3(f) of the 
Act.

III. SAH-Related Provisions of the Act Not Covered by This Rulemaking

    Section 3(b) of the Act amended section 2101(a) by increasing from 
30 to 120 the number of SAH applications VA can approve annually for 
post-9/11 veterans described in 38 U.S.C. 2101(a)(2)(A)(ii). These are 
veterans who served in the Armed Forces on or after September 11, 2001, 
and are entitled to VA disability compensation for a permanent service-
connected disability. For eligibility, the disability had to be 
incurred on or after September 11, 2001, and must be due to the loss or 
loss of use of one or more lower extremities which so affects the 
function of balance or propulsion as to preclude ambulating without the 
aid of braces, crutches, canes, or a wheelchair. See 38 U.S.C. 
2101(a)(2)(A)(ii) and 2101(a)(2)(C). The amendment was effective 
October 1, 2020. Public Law 116-154, sec. 3(f). VA will, in a future 
rulemaking, promulgate regulatory changes regarding veterans described 
in section 2101(a)(2)(A)(ii).
    Section 3(c) through (e) increased the statutory aggregate dollar 
limits authorized for section 2101(a) and 2101(b) grants to $98,492 and 
$19,733, respectively, effective October 1, 2020. Those amounts were 
increased for fiscal year 2021, based on an annual adjustment required 
under 38 U.S.C. 2102(e). See 85 FR 71139 (increasing section 2101(a) 
and 2101(b) grants to $100,896 and $20,215, respectively). The amounts 
were also increased for fiscal year 2022, effective October 1, 2021 
(section 2101(a) and 2101(b) grants increased to $101,754 and $20,387, 
respectively). 38 U.S.C. 2102(e). VA intends to publish a separate 
notice in the Federal Register announcing the adjustment for fiscal 
year 2022.
    Finally, section 4 of the Act added a new section 2102(f) that 
authorizes VA, beginning October 1, 2030, to provide an additional 
amount of SAH assistance under sections 2101(a) or (b) in an amount 
that does not exceed half of the aggregate dollar limit for the 
applicable section, as adjusted for the year in which VA provides the 
additional assistance. New section 2102(f)(1) limits the assistance to 
``covered veterans'' who meet three criteria prescribed in a new 38 
U.S.C. 2102(f)(2). To meet these criteria, the covered veteran must be 
eligible for SAH assistance under section 2101(a)(2) or 2101(b)(2). See 
38 U.S.C. 2102(f)(2)(A). At least ten years must have elapsed between 
the date of his or her application for additional assistance and his or 
her last use of chapter 21 assistance. See 38 U.S.C. 2102(f)(2)(B). He 
or she must live in a home that VA determines does not have adaptations 
that are reasonably necessary because of his or her disability. See 38 
U.S.C. 2102(f)(2)(C). VA notes that section 3 of the Act amended 
section 2102(d)(3) such that the newly enacted six-use limitation 
(described above) is subject to the new section 2102(f). In other 
words, a covered Veteran may receive the newly authorized assistance 
provided under section 2102(f) even if he or she has already obtained 
the six grants of SAH assistance otherwise authorized.
    As mentioned above, assistance under subsection (f) cannot be 
provided before October 1, 2030. VA intends to promulgate regulations 
implementing subsection (f), including any amendments that would 
implement the relevant cross-referencing clause of section 2102(d)(3), 
in a separate rulemaking.

Administrative Procedure Act

    VA finds good cause under the provisions of 5 U.S.C. 553(b)(B) to 
publish this rule without prior opportunity for public comment. This 
amendment merely revises VA's regulations to mirror the statutory 
changes to the criteria and assistance provided to certain veterans and 
members of the Armed Forces through the SAH program. These revisions 
reflect statutory changes VA is adopting directly, without change, into 
VA's regulations and do not the exercise of any discretion by VA. 
Therefore, prior notice and opportunity for public comment is 
unnecessary.

[[Page 56215]]

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. 
The Office of Information and Regulatory Affairs has determined that 
this rule is not a significant regulatory action under Executive Order 
12866. The Regulatory Impact Analysis associated with this rulemaking 
can be found as a supporting document at www.regulations.gov.

Regulatory Flexibility Act

    The Secretary herby certifies that his 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 final rule is adopting changes in law that will directly 
affect only individuals by assisting such individuals in acquiring 
specially adapted housing grants and will not directly affect small 
entities. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final 
regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do 
not apply.

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 one year. This final rule will have no such effect on 
State, local, and tribal governments, or on the private sector.

Paperwork Reduction Act

    This action contains provisions constituting collections of 
information at 38 CFR 36.4403, under the provisions of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3501-3521). The information collection 
requirements for Sec.  36.4403 are currently approved by the Office of 
Management and Budget (OMB) and have been assigned OMB control number 
2900-0132. Although no new collections of information are associated 
with this final rule, there will be an increase in the number of 
respondents associated with the already approved OMB control number. 
This rule will result in an increase of 111 estimated annual burden 
hours and an annual cost of $3,004.\1\ As required by the Paperwork 
Reduction Act of 1995 (at 44 U.S.C. 3507(d)), VA will submit this 
information collection amendment to OMB for its review.
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    \1\ VA estimates an additional 670 applications will be 
completed annually as a result of the provisions codified in this 
final rule. The incremental costs of this rule were calculated using 
an estimated time burden of 10 minutes to complete the information 
collection under 38 CFR 36.4403 (also known as VA Form 26-4555). 
Because VA cannot make further assumptions about the population of 
respondents (veterans with service-connected disabilities) because 
of the variability of factors such as the educational background and 
wage potential of respondents, VA used general wage data to estimate 
the respondents' costs associated with completing the information 
collection. The Bureau of Labor Statistics (BLS) gathers information 
on full-time wage and salary workers. According to the latest 
available BLS data (May 2020), the mean hourly wage is $27.07 based 
on the BLS wage code--``00-0000 All Occupations''. This information 
is taken from the following website: (https://www.bls.gov/oes/current/oes_nat.htm#00-0000).
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Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for 
the programs affected by this final rule are 64.106, Specially Adapted 
Housing For Disabled Veterans; 64.116, Vocational Rehabilitation for 
Disabled Veterans; 64.118, Veterans Housing Direct Loans for Certain 
Disabled Veterans.

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

List of Subjects

38 CFR Part 3

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

38 CFR Part 36

    Condominiums, Housing, Individuals with disabilities, Loan 
programs-housing and community development, Loan programs-Indians, Loan 
programs-veterans, Manufactured homes, Mortgage insurance, Veterans.

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved this 
document on September 14, 2021, 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.

Jeffrey M. Martin,
Assistant Director, Office of Regulation Policy & Management, Office of 
the Secretary, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs amends 38 CFR parts 3 and 36 as set forth below:

PART 3--ADJUDICATION

Subpart A--Pension, Compensation, and Dependency and Indemnity 
Compensation

0
1. The authority citation for part 3, subpart A, continues to read as 
follows:

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


0
2. Amend Sec.  3.809 by revising paragraphs (a) and (b) to read as 
follows:


Sec.  3.809  Specially adapted housing under 38 U.S.C. 
2101(a)(2)(A)(i).

* * * * *
    (a) General. A member of the Armed Forces serving on active duty 
must have a disability that was incurred or aggravated in line of duty 
in active military, naval, or air service and meets the requirements 
described in paragraph (b) of this section. A veteran must be entitled 
to compensation under chapter 11 of title 38, United States Code, for a 
service-connected disability that meets the requirements described in 
paragraph (b) of this section.
    (b) Disability. The disability must be rated as one of the 
following:
    (1) A permanent and total disability due to the loss or loss of use 
of both lower extremities, such as to preclude locomotion without the 
aid of braces, crutches, canes, or a wheelchair.
    (2) A permanent disability due to blindness in both eyes, having 
central visual acuity of 20/200 or less in the better eye with the use 
of a standard correcting lens. For the purposes of this paragraph 
(b)(2), an eye with a limitation in the fields of vision such that the 
widest diameter of the visual field subtends an angle no greater than 
20 degrees shall be considered as having a central visual acuity of 20/
200 or less.
    (3) A permanent and total disability due to the loss or loss of use 
of one lower extremity together with residuals of organic disease or 
injury which so affect the functions of balance or propulsion as to 
preclude locomotion without the aid of braces, crutches, canes, or a 
wheelchair.
    (4) A permanent and total disability due to the loss or loss of use 
of one

[[Page 56216]]

lower extremity together with the loss or loss of use of one upper 
extremity which so affect the functions of balance or propulsion as to 
preclude locomotion without the aid of braces, crutches, canes, or a 
wheelchair.
    (5) A permanent and total disability due to the loss or loss of use 
of both upper extremities such as to preclude use of the arms at or 
above the elbow.
    (6) A permanent and total disability due to full thickness or 
subdermal burns that have resulted in contractures with limitation of 
motion of two or more extremities or of at least one extremity and the 
trunk.
* * * * *

0
3. Amend Sec.  3.809a by:
0
a. Removing paragraph (b)(2);
0
b. Redesignating paragraphs (b)(1) introductory text and (b)(1)(i), 
(ii), (iii), and (iv) as paragraphs (c) introductory text and (c)(1), 
(2), (3), and (4), respectively; and
0
c. Revising newly redesignated paragraph (b).
    The revisions read as follows:


Sec.  3.809a  Special home adaptation grants under 38 U.S.C 2101(b).

* * * * *
    (b) A member of the Armed Forces serving on active duty must have a 
disability that was incurred or aggravated in line of duty in active 
military, naval, or air service and meets the requirements described in 
paragraph (c) of this section. A veteran must be entitled to 
compensation under chapter 11 of title 38, United States Code, for a 
disability that meets the requirements described in paragraph (c) of 
this section.
* * * * *

PART 36--LOAN GUARANTY

0
4. The authority citation for part 36 continues to read as follows:

    Authority: 38 U.S.C. 501 and 3720.


Sec.  36.4402  [Amended]

0
5. Amend Sec.  36.4402 by removing in the last sentence of paragraph 
(d)(2) the word ``three'' and adding in its place ``six''.


Sec.  36.4403  [Amended]

0
6. Amend Sec.  36.4403 by removing the word ``three'' everywhere it 
appears and adding in its place ``six''.

0
7. Amend Sec.  36.4404 by:
0
a. Revising paragraphs (a)(1) introductory text, (a)(1)(i) and (ii), 
(a)(1)(iii) introductory text, and (a)(1)(iv) and (v);
0
b. Removing paragraph (a)(2)(i);
0
c. Redesignating paragraphs (a)(2)(ii) and (iii) as paragraphs 
(a)(2)(i) and (ii), respectively; and
0
d. Revising newly redesignated paragraph (a)(2)(ii).
    The revisions read as follows:


Sec.  36.4404   Eligibility for assistance.

    (a) * * *
    (1) The 2101(a) grant is available to individuals with a service-
connected disability who have been rated as being entitled to 
compensation under 38 U.S.C. chapter 11 for any of the following 
conditions:
    (i) A permanent and total disability due to the loss, or loss of 
use, of both lower extremities so as to preclude locomotion without the 
aid of braces, crutches, canes, or a wheelchair;
    (ii) A permanent disability due to blindness in both eyes having 
central visual acuity of 20/200 or less in the better eye with the use 
of a standard correcting lens. For the purposes of this paragraph 
(a)(1)(ii), an eye with a limitation in the fields of vision such that 
the widest diameter of the visual field subtends an angle no greater 
than 20 degrees shall be considered as having a central visual acuity 
of 20/200 or less;
    (iii) A permanent and total disability due to the loss or loss of 
use of one lower extremity, together with--
* * * * *
    (iv) A permanent and total disability due to the loss, or loss of 
use, of both upper extremities so as to preclude use of the arms at or 
above the elbows; or
    (v) Any other permanent and total disability identified as eligible 
for assistance under 38 U.S.C. 2101(a).
    (2) * * *
    (ii) Any other injury identified as eligible for assistance under 
38 U.S.C. 2101(b).
* * * * *


Sec.  36.4406   [Amended]

0
8. Amend Sec.  36.4406 by removing the word ``three'' in the last 
sentence of paragraph (a)(2) and adding in its place ``six''.

[FR Doc. 2021-21800 Filed 10-7-21; 8:45 am]
BILLING CODE 8320-01-P