Notice and Assistance Requirements and Technical Correction, 23353-23356 [E8-9454]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 73, Number 84 (Wednesday, April 30, 2008)]
[Rules and Regulations]
[Pages 23353-23356]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-9454]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AM17


Notice and Assistance Requirements and Technical Correction

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: The Department of Veterans Affairs (VA) is amending its 
regulation governing VA's duty to provide a claimant with notice of the 
information and evidence necessary to substantiate a claim and VA's 
duty to assist a claimant in obtaining the evidence necessary to 
substantiate the claim. The purpose of these changes is to clarify when 
VA has no duty to notify a claimant of how to substantiate a claim for 
benefits, to make the regulation comply with statutory changes, and to 
streamline the development of claims. Additionally, we are making a 
non-substantive, technical correction to the statutory references in a 
separate part 3 regulation.

DATES: Effective Date: This amendment is effective May 30, 2008.
    Applicability Date: The amendments to 38 CFR 3.159 apply to 
applications for benefits pending before VA on or filed after the 
effective date of this rule.

FOR FURTHER INFORMATION CONTACT: Maya Ferrandino, Consultant, 
Regulations Staff (211D), Compensation and Pension Service, Veterans 
Benefits Administration, Department of Veterans Affairs, 810 Vermont 
Avenue, NW., Washington, DC 20420, (727) 319-5847.

SUPPLEMENTARY INFORMATION: On October 31, 2006, VA published in the 
Federal Register (71 FR 63732) a proposal to revise VA's regulation 
regarding VA assistance in developing claims, 38 CFR 3.159. Interested 
persons were invited to submit written comments on or before January 2, 
2007. We received two comments from members of the public.

Proposed Rule

38 CFR 3.159(b)(3)

    Under 38 U.S.C. 5103(a), upon receipt of a substantially complete 
application for benefits, VA must ``notify the claimant and the 
claimant's representative, if any, of any information, and any medical 
or lay evidence, not previously provided to the Secretary that is 
necessary to substantiate the claim'' (section 5103(a) notice). VA 
implemented section 5103(a) in 38 CFR 3.159, which reflects section 
5103(a)'s requirement that VA give the notice upon receipt of a 
substantially complete application. See 38 CFR 3.159(b)(1). In 
addition, VA defined ``substantially complete application'' for 
purposes of section 5103(a) notice. See 38 CFR 3.159(a)(3).
    Experience implementing section 5103(a) disclosed a potential 
ambiguity in the regulations, which this rulemaking removes. That 
ambiguity is whether VA's receipt of a notice of disagreement (NOD) 
also triggers VA's duty to give section 5103(a) notice because the NOD 
can be viewed as satisfying the definition of ``application'' in 38 CFR 
3.1(p). We proposed to clarify that it does not.
    An NOD is the means by which a claimant initiates an appeal of a 
decision on a claim to the Board of Veterans' Appeals (Board). 38 
U.S.C. 7105(a); 38 CFR 20.200. ``A written communication from a 
claimant or his or her representative expressing dissatisfaction or 
disagreement with an adjudicative determination by the agency of 
original jurisdiction and a desire to contest the result will 
constitute [an NOD].'' 38 CFR 20.201.
    We stated that, because the definition of ``application'' in Sec.  
3.1(p) is a holdover from before the Veterans Claims Assistance Act of 
2000 (VCAA), Public Law 106-475, 114 Stat. 2096, and was not intended 
to govern when VA must give section 5103(a) notice, VA does not view it 
as dispositive of the question. Furthermore, section 5103(a) does not

[[Page 23354]]

specify whether VA must issue section 5103(a) notice upon receipt of an 
NOD. VA believes that Congress did not intend to require section 
5103(a) notice upon VA's receipt of an NOD, for the following reasons: 
Congress intended VA to give section 5103(a) notice at the beginning of 
the claim process, but an NOD is filed after VA has decided a claim; 
Congress requires VA to issue a statement of the case in response to an 
NOD, so additional section 5103(a) notice would be redundant; giving 
section 5103(a) notice at the appeal stage of the claim process results 
in logical inconsistencies in the claim process; and not requiring 
section 5103(a) notice upon VA's receipt of an NOD would be consistent 
with case law governing such notice. Therefore, we proposed to state in 
Sec.  3.159(b)(3)(i) that VA does not have a duty to provide section 
5103(a) notice upon receipt of an NOD.
    To avoid any confusion, however, we note that VA may continue to 
have an obligation to provide adequate section 5103(a) notice despite 
receipt of an NOD, if compliant notice was not previously provided and 
if the claim was denied. In such instances, VA's duty to provide 
adequate section 5103(a) notice is still triggered upon receipt of a 
substantially complete application for benefits, not upon receipt of an 
NOD. Courts have specifically held that, although VA is required to 
provide section 5103(a) notice prior to the initial adjudication of a 
claim, if VA does not provide timely notice and a claim remains 
unsubstantiated, this defect can be cured by the subsequent provision 
of section 5103(a) notice followed by readjudication of the claim. See 
Mayfield v. Nicholson, 444 F.3d 1328, 1333-34 (Fed. Cir. 2006); 
Paralyzed Veterans of Am. v. Sec'y of Veterans Affairs, 345 F.3d 1334, 
1345-46 (Fed. Cir. 2003); Overton v. Nicholson, 20 Vet. App. 427, 437 
(2006); Dingess v. Nicholson, 19 Vet. App. 473, 491 (2006). After 
further consideration, we have revised Sec.  3.159(b)(3)(i) to clarify 
that no duty to provide section 5103(a) notice arises upon VA's receipt 
of an NOD.
    Additionally, we proposed to state at Sec.  3.159(b)(3)(ii) that 
the section 5103(a) notice duty does not arise when the claimant is not 
entitled to the claimed benefit as a matter of law. In such 
circumstances, there is no additional information or evidence the 
claimant could provide or VA could obtain that could substantiate the 
claim. This regulation would be consistent with the intent of Congress 
expressed in 38 U.S.C. 5103A(a)(2), which provides that ``[t]he 
Secretary is not required to provide assistance to a claimant under 
this section if no reasonable possibility exists that such assistance 
would aid in substantiating the claim.'' The legislative history of 
sections 5103(a) and 5103A(a) supports the conclusion that, if the 
claim is barred as a matter of law, VA's duty to notify does not apply 
because there is no relevant information or evidence to obtain.
    Proposed Sec.  3.159(b)(3)(ii) provided some examples of when a 
claimant would not be entitled to the claimed benefit as a matter of 
law, such as when the claimant lacks qualifying service or veteran 
status. However, because a determination that a claimant is not 
entitled to a benefit as a matter of law often requires fact-specific 
analysis, VA may be required to furnish section 5103(a) notice in the 
specific examples provided in the proposed rule. See, e.g., Palor v. 
Nicholson, 21 Vet. App. 202, 209 (2007) (concluding that VA's section 
5103(a) notice should have informed the veteran in that case of the 
types of evidence he could have submitted to establish veteran status 
and qualifying service); Dingess v. Nicholson, 19 Vet. App. 473, 485 
(2006) (concluding that section 5103(a) notice should address evidence 
required to establish veteran status when appropriate). After further 
consideration, we have decided not to include specific examples in 
Sec.  3.159(b)(3)(ii) because they may not always determine whether 
section 5103(a) notice is required in a given case.

38 CFR 3.159(b)(1)

    We additionally proposed to amend 38 CFR 3.159(b)(1). First, we 
proposed to remove the third sentence of current Sec.  3.159(b)(1), 
which states that VA will request the claimant to provide any evidence 
in the claimant's possession that pertains to the claim. Section 
3.159(b)(1) generally implements the notice requirements of section 
5103(a). The three notice requirements in section 5103(a) are currently 
prescribed in Sec.  3.159(b)(1) as follows: VA will notify the claimant 
(1) of the information and medical or lay evidence required to 
substantiate the claim, (2) of which information and evidence, if any, 
that the claimant is to provide to VA, and (3) of which information and 
evidence, if any, VA will attempt to obtain on behalf of the claimant. 
However, the third sentence of current Sec.  3.159(b)(1) is not 
required by statute and is redundant of the three statutory 
requirements from the perspective of what the claimant needs to submit 
to support the claim. As such, it is unnecessary as part of the 
regulation. A claimant who receives a section 5103(a) notice containing 
the three statutory elements will have received the same information 
regarding what the claimant needs to submit to support the claim as the 
claimant would have received had the claimant received a letter 
containing the three statutory elements and an additional request that 
the claimant provide any evidence in the claimant's possession that 
pertains to the claim.
    To avoid the possibility of misunderstandings regarding the nature 
of this provision and to ensure consistency between the manual and 
regulatory provisions, we further proposed to rescind the provision of 
paragraph I.1.B.3.b of the Veterans Benefits Administration 
Adjudication Procedures Manual M21-1MR (VBA Manual M21-1MR) that 
currently requires regional offices (ROs) to send to the claimant in 
response to a substantially complete application a letter that ``asks 
the claimant to submit any evidence in his/her possession that pertains 
to the claim.''
    Second, for ease of use, we proposed to add at the end of the first 
sentence of current Sec.  3.159(b)(1) the term ``notice'' in 
parentheses, to use as a term of art within Sec.  3.159(b)(1).
    Third, we proposed to remove the fourth sentence of current Sec.  
3.159(b)(1). This sentence states: ``If VA does not receive the 
necessary information and evidence requested from the claimant within 
one year of the date of the notice, VA cannot pay or provide any 
benefits based on that application.'' This provision implemented 
language from section 5103 that was repealed by the Veterans Benefits 
Act of 2003, Public Law 108-183, section 701(b), 117 Stat. 2670. To 
ensure consistency with current law and the intent of Congress, we 
proposed to replace this sentence with the following: ``The information 
and evidence that the claimant is informed that the claimant is to 
provide must be provided within one year of the date of the notice.''

38 CFR 3.159(g)

    We proposed to add to Sec.  3.159 a new paragraph (g), which states 
that the authority recognized in subsection (g) of 38 U.S.C. 5103A is 
reserved to the sole discretion of the Secretary and will be 
implemented, when deemed appropriate by the Secretary, through the 
promulgation of regulations, in accordance with VA's intention to issue 
regulations when the Secretary deems it appropriate to provide any 
additional assistance in substantiating a claim, as contemplated in 
section 5103A(g). In accordance with section 5103A(g), VA promulgated 
the second sentence of

[[Page 23355]]

Sec.  3.159(c), obligating itself to give the assistance described in 
paragraphs (c)(1), (c)(2), and (c)(3) of Sec.  3.159, relating to 
assistance with obtaining records, to an individual attempting to 
reopen a finally decided claim. See Duty to Assist, 66 FR 45,620, 
45,628 (Aug. 29, 2001). The main purpose of this new provision is to 
avoid the potential disparate treatment of similarly situated claimants 
that could arise from inconsistent use in various parts of the agency 
of open-ended authority to provide ``extra'' development assistance. 
Also, this provision is consistent with the Secretary's determination, 
in the prior rulemaking for Sec.  3.159, of the appropriate level of 
assistance to be provided individuals based on VA's finite resources 
and the need to process claims in an efficient manner for the benefit 
of all veterans.

38 CFR 3.159(c)(4)(i)

    We proposed to add the following sentence after the first sentence 
in Sec.  3.159(c)(4)(i): ``A medical examination or medical opinion is 
not necessary to show a link between a veteran's current disability or 
death and some disease or symptoms during service when the evidence of 
record already satisfies the chronicity or continuity requirements in 
Sec.  3.303(b).'' After further consideration, we have decided not to 
effectuate this proposed revision for policy reasons. We will 
reconsider this proposed revision at a later date if necessary.

Response to Comments

    One commenter stated that VA information was withheld from him and 
that he had not been offered assistance by VA. He felt that VA was 
interested in denying veterans benefits. He additionally stated that he 
felt that any claim for benefits should be considered a claim for any 
benefits for any reason. This commenter's comments concern the 
development of the commenter's specific claim and are irrelevant to the 
amendments contained in the proposed rule. Therefore, we make no 
changes to this final rule based on these comments.
    The other commenter stated that he did not like the proposed 
amendment to Sec.  3.159(b)(1) to add the following sentence: ``The 
information and evidence that the claimant is informed that the 
claimant is to provide must be provided within one year of the date of 
the notice.'' The commenter stated that it could take more than one 
year to obtain some information and evidence.
    To ensure consistency with 38 U.S.C. 5103(b)(1) and the intent of 
Congress, we proposed to remove the fourth sentence of current Sec.  
3.159(b)(1) and replace it with the following sentence: ``The 
information and evidence that the claimant is informed that the 
claimant is to provide must be provided within one year of the date of 
the notice.'' The statute requires that, ``[i]n the case of information 
or evidence that the claimant is notified under subsection (a) is to be 
provided by the claimant, such information or evidence must be received 
by the Secretary within one year from the date such notice is sent.'' 
38 U.S.C. 5103(b)(1). Because we are implementing a statutory 
requirement with this amendment, we make no changes based on this 
comment.
    Further, VA will make reasonable efforts to assist claimants. It is 
VA's intent that adequate information regarding evidence to support the 
claim should be received from the claimant within the one-year time 
period, not that all evidence, including examination reports, must be 
obtained by VA within the one-year period. Therefore, we make no 
changes based on this comment.

Additional Change

    In the proposed rulemaking, we proposed to amend the fifth sentence 
of current Sec.  3.159(b)(1), which states that VA may decide the claim 
if the claimant has not responded to the section 5103(a) notice within 
30 days. We proposed to provide 45 days as a more reasonable period 
after which VA may decide a claim if no response to the section 5103(a) 
notice has been received. Based on administrative concerns and matters 
of consistency, we have reconsidered this proposal and decided to 
maintain the current 30-day period after which VA may decide a claim if 
a claimant has not responded to the section 5103(a) notice. By statute, 
VA may make a decision on a claim before the expiration of the one-year 
period, 38 U.S.C. 5103(b), and this 30-day period merely sets forth a 
time frame for VA to wait for a response from the claimant before 
deciding the claim. The claimant will continue to have one year from 
the date of the section 5103(a) notice to provide the information and 
evidence requested. Furthermore, if VA decides the claim after 30 days 
and subsequently receives the information or evidence requested from 
the claimant within one year of VA giving the notice, VA must 
readjudicate the claim.
    We additionally proposed to rescind the provision of paragraph 
I.1.B.3.c of the VBA Manual M21-1MR that currently advises ROs to 
``inform the claimant that if he/she does not respond to the request 
for information within 60 days, VA may decide the claim based on all 
the information and evidence in the file.'' We did not receive any 
comments on this manual rescission. To ensure consistency between the 
manual and current regulatory provisions, we will rescind that manual 
provision and replace it with a new provision that will provide for a 
30-day period, as set forth in the regulation.
    VA appreciates the comments submitted in response to the proposed 
rule. Based on the rationale stated in the proposed rule and in this 
document, the proposed rule is adopted with the changes noted.

Technical Correction

    Section 5(a) of Public Law 102-83, the Department of Veterans 
Affairs Codification Act, redesignated 38 U.S.C. 410, 416, and 417 as 
38 U.S.C. 1310, 1316, and 1317, respectively. We are updating the 
parenthetical following the last sentence in 38 CFR 3.5(b)(3) to 
reflect current statutory designations. We are making no substantive 
changes to the regulation.

Paperwork Reduction Act

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

Regulatory Flexibility Act

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

Executive Order 12866

    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety, 
and other advantages; distributive impacts; and equity). The Executive 
Order classifies a ``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

[[Page 23356]]

a serious inconsistency or otherwise interfere with an action taken or 
planned by another agency; (3) materially alter the budgetary impact of 
entitlements, grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raise novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    The economic, interagency, budgetary, legal, and policy 
implications of this final rule have been examined and it has been 
determined to be a significant regulatory action under the Executive 
Order because it is likely to result in a rule that may raise novel 
legal or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in the Executive Order.

Unfunded Mandates

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

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance program numbers and 
titles are 64.100, Automobiles and Adaptive Equipment for Certain 
Disabled Veterans and Members of the Armed Forces; 64.101, Burial 
Expenses Allowance for Veterans; 64.102, Compensation for Service-
Connected Deaths for Veterans' Dependents; 64.103, Life Insurance 
for Veterans; 64.104, Pension for Non-Service-Connected Disability 
for Veterans; 64.105, Pension to Veterans Surviving Spouses, and 
Children; 64.106, Specially Adapted Housing for Disabled Veterans; 
64.109, Veterans Compensation for Service-Connected Disability; 
64.110, Veterans Dependency and Indemnity Compensation for Service-
Connected Death; 64.114, Veterans Housing--Guaranteed and Insured 
Loans; 64.115, Veterans Information and Assistance; 64.116, 
Vocational Rehabilitation for Disabled Veterans; 64.117, Survivors 
and Dependents Educational Assistance; 64.118, Veterans Housing--
Direct Loans for Certain Disabled Veterans; 64.119, Veterans 
Housing-Manufactured Home Loans; 64.120, Post-Vietnam Era Veterans' 
Educational Assistance; 64.124, All-Volunteer Force Educational 
Assistance; 64.125, Vocational and Educational Counseling for 
Servicemembers and Veterans; 64.126, Native American Veteran Direct 
Loan Program; 64.127, Monthly Allowance for Children of Vietnam 
Veterans Born with Spina Bifida; and 64.128, Vocational Training and 
Rehabilitation for Vietnam Veterans' Children with Spina Bifida or 
Other Covered Birth Defects.

List of Subjects in 38 CFR Part 3

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

    Approved: January 17, 2008.
Gordon H. Mansfield,
Deputy Secretary of Veterans Affairs.

0
For the reasons set out in the preamble, 38 CFR part 3 is amended as 
follows:

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.


Sec.  3.5  [Amended]

0
2. Amend Sec.  3.5(b)(3) by removing ``(38 U.S.C. 410, 416, 417, Public 
Law 92-197, 85 Stat. 660)'' and adding, in its place, ``(38 U.S.C. 
1310, 1316, 1317, Public Law 92-197, 85 Stat. 660)''.

0
3. Amend Sec.  3.159 as follows:
0
a. In paragraph (b)(1), at the end of the first sentence after the word 
``claim'', add the following parenthetical ``(hereafter in this 
paragraph referred to as the ``notice'')''.
0
b. In paragraph (b)(1), at the beginning of the second sentence, add 
``In the notice,''.
0
c. In paragraph (b)(1), remove the third sentence.
0
d. In paragraph (b)(1), remove the fourth sentence and add a new 
sentence in its place as set forth below.
0
e. In paragraph (b)(1), remove ``request'' each place it appears and 
add, in its place, ``notice''.
0
f. Add paragraphs (b)(3), and (g).
    The revisions read as follows:


Sec.  3.159  Department of Veterans Affairs assistance in developing 
claims.

* * * * *
    (b) * * *
    (1) * * * The information and evidence that the claimant is 
informed that the claimant is to provide must be provided within one 
year of the date of the notice.* * *
* * * * *
    (3) No duty to provide the notice described in paragraph (b)(1) of 
this section arises:
    (i) Upon receipt of a Notice of Disagreement; or
    (ii) When, as a matter of law, entitlement to the benefit claimed 
cannot be established.

(Authority: 38 U.S.C. 5103(a), 5103A(a)(2))
* * * * *
    (g) The authority recognized in subsection (g) of 38 U.S.C. 5103A 
is reserved to the sole discretion of the Secretary and will be 
implemented, when deemed appropriate by the Secretary, through the 
promulgation of regulations.

(Authority: 38 U.S.C. 5103A(g))

[FR Doc. E8-9454 Filed 4-29-08; 8:45 am]
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