Home Improvements and Structural Alterations (HISA) Benefits Program, 71658-71663 [2014-28373]

Agencies

• DEPARTMENT OF VETERANS AFFAIRS

[Federal Register Volume 79, Number 232 (Wednesday, December 3, 2014)]
[Rules and Regulations]
[Pages 71658-71663]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-28373]



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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: Final rule.

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SUMMARY: This rulemaking adopts as final, without change, a proposed 
rule creating regulations for the Home Improvements and Structural 
Alterations (HISA) benefits program. Through the HISA benefits program, 
VA provides monetary benefits to disabled veterans for necessary home 
improvements and alterations. An increase in the HISA benefits limit 
was authorized by the Caregivers and Veterans Omnibus Health Services 
Act of 2010. This rulemaking codifies regulations governing the HISA 
benefits program and incorporates the increase in HISA benefits 
authorized by the 2010 Act.

DATES: Effective Date: This rule is effective January 2, 2015.

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: On November 20, 2013, VA published a 
proposed rule in the Federal Register (78 FR 69614) that would create 
regulations governing the HISA benefits program. VA invited the public 
to submit comments on the proposed rulemaking on or before January 21, 
2014. VA received comments from four members of the public. Based on 
the rationale in the proposed rule and in this document, VA is adopting 
the proposed rule, with no changes.
    Section 1717(a)(1) of title 38, United States Code, 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.
    VA proposed to establish regulations to govern the HISA benefits 
program and to codify an increase in HISA benefit limits enacted in the 
2010 Act, Public Law 111-163. Additionally, VA proposed 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.
    During the comment period, VA received four public comments. A 
consideration of these comments follows.
    One commenter recommended ``more restrictions on contractors and 
vendors with more bids coming from the community.'' VA believes the 
process we proposed is consistent with this recommendation because 
veterans will have complete control over the choice of contractors who 
complete the improvements or structural alterations to their homes. VA 
will no longer require bids from multiple contractors, nor will VA be 
involved in reviewing these bids as part of the application, under the 
new HISA application and approval procedures in Sec. Sec.  17.3120 and 
17.3125. The commenter may have been making reference to geographic 
restrictions on contractors by recommending more bids from the 
community. This regulation puts no geographic restrictions on the 
contractors that a veteran can choose for a HISA project. The same 
commenter recommended that contractors provide ``more line items with 
actual costs listed.'' VA will require an itemized estimate of costs 
for the improvement or structural alteration under Sec.  17.3120(a)(4). 
Because veterans have full control over the selection of their 
contractors, they may request additional details about the costs of a 
project as they wish. VA makes no changes to the regulation based on 
this comment.
    Another commenter recommended that HISA applications be evaluated 
by occupational therapists to determine whether lower-cost options to 
accommodate veterans' needs have been evaluated, and to determine 
exactly what modifications are required to meet veterans' needs. The 
commenter notes that occupational therapists are trained to determine 
whether certain structural adaptations are appropriate for a specific 
space and to assess adaptive equipment, home safety, and environmental 
modifications. VA believes that these regulations and HISA program 
policies are consistent with this recommendation. VA medical facilities 
employ occupational therapists, physical therapists, and 
kiniseiotherapists, as well as blind rehabilitation specialists, who 
evaluate veterans applying for HISA benefits. This evaluation typically 
occurs when a physician documents within the veteran's prescription 
that there is a clinical need for that type of an evaluation. These 
evaluations are usually performed at the local VA medical facility, 
though some are performed in veterans' homes, depending on individual 
veterans' needs and the availability of certain therapeutic evaluation 
facilities at VA medical facilities. The same commenter expressed some 
concern over prosthetics program representatives inspecting HISA 
applicants' homes, as in Sec. Sec.  17.3120(b) and 17.3130(c)(1), 
because they do not have the same training and expertise as 
occupational therapists. This comment does not reflect VA's procedures. 
Prosthetics representatives will only inspect veterans' homes to ensure 
that the improvements or structural alterations proposed in a 
beneficiary's application are feasible, or that they have been 
completed as described in the application so VA can approve the final 
grant payment. These inspections relate to administration of the grant 
and protecting grant funds. Prosthetics representatives will not be 
inspecting homes to make decisions about whether the improvements or 
structural adaptations will provide medical benefits to the veteran, 
because those determinations are made by VA's clinical staff, such as 
physicians, kinesiotherapists, and occupational and physical 
therapists. VA makes no changes based on this comment.
    Two commenters disagreed with VA's statement in the proposed rule 
that the HISA benefit is not a construction benefit and that VA does 
not have any responsibility for ensuring the structural integrity or 
code compliance of alterations. VA stated in the proposed rule that our 
inspections of HISA grant sites or construction under Sec. Sec.  
17.3120(b) and 17.3130(c)(1) should not be confused with, or 
interpreted as, code enforcement or structural integrity inspections. 
The commenters recommended that VA inform HISA beneficiaries about 
existing construction standards so beneficiaries can provide them to 
their contractors. Specifically, the commenters recommend referring 
beneficiaries to the accessibility guidelines in the Americans with 
Disabilities Act, to section 504 of the Rehabilitation Act, or 
recommends that VA give beneficiaries the Specially Adapted Housing 
grant construction manual. The Specially Adapted Housing (SAH) program 
is administered by the

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Veterans Benefits Administration under 38 U.S.C. 2101 through 2107 and 
is distinct from the HISA program. This recommendation reflects VA's 
regulations and HISA policy, in part. VA prescribes the specific 
structural adaptations or improvements that veterans need before 
veterans apply for a HISA grant. That process ensures that the HISA 
grant provides veterans with resources that are suited to their 
abilities. When appropriate, prosthetics representatives may refer HISA 
beneficiaries and contractors to the SAH program minimum property 
requirements for construction projects, if the type of improvement or 
structural alteration being done with HISA grant funds calls for such 
guidance. Issues of code compliance and the structural soundness of 
construction, however, are different. VA does not have expertise in the 
building codes of each jurisdiction in which HISA benefits are used. 
Contractors performing the work on HISA grants must take responsibility 
for the structural soundness of the construction work they perform and 
for complying with their local building codes, and HISA grant funds may 
be used to ensure that structural alterations or improvements are sound 
and comply with building codes. We stress that VA's inspections are for 
the administrative purposes of ensuring that an improvement or 
structural alteration detailed in an application may be completed at 
the property, or that a project has been completed and therefore VA 
should make a final payment. VA makes no changes to the regulation 
based on these comments.
    One commenter objected to the proposed payment process, stating 
that it would add more steps to the application process and increase 
the risk of fraud. The commenter stated that veterans would need to 
submit additional forms for advance payments, then submit additional 
forms for final payment, instead of VA paying a sum directly to the 
vendor. VA disagrees with the commenter's characterization of the 
proposed rule. Requests for advance payments of HISA grant funds will 
be included in the same application that all veterans must submit to 
apply for a HISA grant under proposed Sec.  17.3120(a)(2), so there 
would be no additional paperwork required to request advance payments. 
Veterans are currently required to submit documentation to receive 
final payments, and will continue to be required to do so under Sec.  
17.3130(b); there is, therefore, no additional paperwork associated 
with that requirement. VA believes that the process we have proposed 
for veterans to request advance payments of HISA grant funds creates 
minimal additional burden for veterans, and that the benefits of making 
these funds available earlier in the process will outweigh any burden. 
The same commenter stated that the proposed rule is unclear on whether 
prepayments would be made to the veteran or the contractor. The 
commenter said that these prepayments would increase the risk of funds 
being lost or abused, apparently if the veteran receives the advanced 
funds, or would increase the risk of jeopardizing grant funds if a 
contractor is unreliable, apparently if the advance funds are paid 
directly to the contractor. The commenter believes these risks could 
lead to increased legal fees for VA if funds are abused, apparently to 
recover grant funds from veterans or contractors who have misused 
prepayments. VA disagrees that the process we have proposed for making 
prepayments creates significant increased risks of fraud or abuse. We 
do not agree that veterans cannot be trusted to receive funds directly 
as the HISA grant beneficiaries, nor do we believe that directly paying 
veterans creates any greater (or less) likelihood of misuse than 
directly paying the contractor or vendor who performs the work. VA 
acknowledged in the proposed rule that making advance payments could 
lead to abuse. The application form, VA Form 10-0103, will require 
beneficiaries who request advance payments to commit to using advance 
funds specifically for the HISA project, and to submit a request for 
final payment upon completion the project. VA would have legal 
authority to take action against veterans in such cases. If a veteran 
who receives an advance payment of HISA funds pays a contractor to 
perform work, but the contractor fails to do so, VA will not take 
action against the veteran. With these safeguards, we think there is 
minimal risk of fraud, abuse, or increased fees related to legal 
actions over advance payments. The commenter recommended, apparently as 
an alternative to the advance payment process, that VA dedicate a 
prosthetics representative to each HISA grant to help veterans complete 
the application process instead. VA prosthetics representatives do 
review each HISA application and provide assistance to veterans as 
needed to complete the application process. VA makes no changes based 
on this comment.
    VA received several comments recommending that we increase the 
deadline for submitting a final payment request under Sec.  17.3130(b) 
from 60 days to at least 90 days, with one commenter recommending 120 
days. Based on our administration of the program, we believe that 60 
days is sufficient time to complete a HISA grant project. By the time 
VA approves the HISA grant application or issues an advance payment, 
most of the project plan is already in place: the needed improvement or 
structural alteration must be prescribed and the contractor must be 
identified so the veteran could submit an itemized estimate of costs 
with their complete application under Sec.  17.3120. Most projects that 
use HISA grants should be able to be completed within 60 days of 
securing the information in the HISA grant application. There is no 
penalty if the project extends beyond 60 days, either; the regulation 
at Sec.  17.3130(d) describes the process by which VA will remind 
veterans to submit a final payment request or request more time to 
complete the application. In this manner, VA has given veterans 
flexibility to complete a HISA project, while also providing a 
reasonable deadline for ensuring that the HISA program can be 
administered efficiently and that government funds distributed as 
advance payments are being used properly. VA makes no changes based on 
these comments, but makes on technical correction. The undesignated 
center heading and Sec. Sec.  17.3100 through 17.3130 are added 
following Sec.  17.2000, and not following Sec.  17.1008 as written in 
the proposed rule.

Effect of Rulemaking

    Title 38 of the Code of Federal Regulations, as revised by this 
final rulemaking, represents VA's implementation of its legal authority 
on this subject. Other than future amendments to this regulation or 
governing statutes, no contrary guidance or procedures are authorized. 
All existing or subsequent VA guidance must be read to conform with 
this rulemaking if possible or, if not possible, such guidance is 
superseded by this rulemaking.

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3507) requires that 
VA consider the impact of paperwork and other information collection 
burdens imposed on the public. Under 44 U.S.C. 3507(a), an agency may 
not collect or sponsor the collection of information, nor may it impose 
an information collection requirement unless it displays a currently 
valid Office of Management and Budget (OMB) control number. See also 5 
CFR 1320.8(b)(3)(vi).

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    This final rule will impose the following amended information 
collection requirements. HISA beneficiaries will be required to submit 
VA Form 10-0103 (which OMB previously approved and assigned OMB control 
number 2900-0188), 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. As required by the Paperwork 
Reduction Act of 1995, VA has submitted these information collections 
to OMB for its review. OMB approved the amended information collection 
requirements associated with the final rule under existing OMB control 
number 2900-0188.

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. This final rule will 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 5 U.S.C. 
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 final rule 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 https://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 
https://www.va.gov/orpm/, by following the link for ``VA Regulations 
Published From FY 2004 Through Fiscal Year to Date.''

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.

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 November 24, 2014, 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 26, 2014.
William F. Russo,
Acting Director, Office of Regulation Policy & Management, Office of 
the General Counsel, U.S. Department of Veterans Affairs.

    For the reasons set out in the preamble, VA amends 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 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]
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

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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 paragraph (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)

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

[[Page 71662]]

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 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

[[Page 71663]]

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 requirement in this section under control number 2900-
0188.)

[FR Doc. 2014-28373 Filed 12-2-14; 8:45 am]
BILLING CODE 8320-01-P