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[Federal Register: March 31, 2006 (Volume 71, Number 62)]

[Proposed Rules]

[Page 16463-16475]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]


[[Page 16463]]


Part III

Department of Veterans Affairs


38 CFR Part 5

General Provisions; Proposed Rule

[[Page 16464]]



38 CFR Part 5

RIN 2900-AL87

General Provisions

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.


SUMMARY: The Department of Veterans Affairs (VA) proposes to reorganize

and rewrite in plain language general provisions applicable to its

compensation and pension regulations, including definitions. These

revisions are proposed as part of VA's rewrite and reorganization of

all of its compensation and pension rules in a logical, claimant-

focused, and user-friendly format. The intended effect of the proposed

revisions is to assist claimants, beneficiaries and VA personnel in

locating and understanding these general provisions.

DATES: Comments must be received by VA on or before May 30, 2006.

ADDRESSES: Written comments may be submitted by: mail or hand-delivery

to Director, Regulations Management (00REG1), Department of Veterans

Affairs, 810 Vermont Ave., NW., Room 1068, Washington, DC 20420; fax to

(202) 273-9026; or e-mail through http://www.Regulations.gov. Comments

should indicate that they are submitted in response to ``RIN 2900-

AL87.'' All comments received will be available for public inspection

in the Office of Regulation Policy and Management, Room 1063B, between

the hours of 8 a.m. and 4:30 p.m., Monday through Friday (except

holidays). Please call (202) 273-9515 for an appointment.

FOR FURTHER INFORMATION CONTACT: Bob White, Acting Chief, Regulations

Rewrite Project (00REG2), Department of Veterans Affairs, 810 Vermont

Avenue, NW., Washington, DC 20420, (202) 273-9515.

SUPPLEMENTARY INFORMATION: The Secretary of Veterans Affairs has

established an Office of Regulation Policy and Management to provide

centralized management and coordination of VA's rulemaking process. One

of the major functions of this office is to oversee a Regulation

Rewrite Project (the Project) to improve the clarity and consistency of

existing VA regulations. The Project responds to a recommendation made

in the October 2001 ``VA Claims Processing Task Force: Report to the

Secretary of Veterans Affairs.'' The Task Force recommended that the

compensation and pension regulations be rewritten and reorganized in

order to improve VA's claims adjudication process. Therefore, the

Project began its efforts by reviewing, reorganizing and redrafting the

content of the regulations in 38 CFR part 3 governing the compensation

and pension program of the Veterans Benefits Administration. These

regulations are among the most difficult VA regulations for readers to

understand and apply.

Once rewritten, the proposed regulations will be published in

several portions for public review and comment. This is one such

portion. It includes proposed rules regarding the scope of the

regulations in new part 5, general definitions, and general policy



Overview of New Part 5 Organization

Overview of Proposed Subpart A Organization

Table Comparing Current Part 3 Rules with Proposed Part 5 Rules

Content of Proposed Regulations

5.0 Scope of applicability.

5.1 General definitions.

5.2 [Reserved]

5.3 Standards of proof.

5.4 Claims adjudication policies.

Endnote Regarding Amendatory Language

Paperwork Reduction Act

Regulatory Flexibility Act

Executive Order 12866

Unfunded Mandates

Catalog of Federal Domestic Assistance Numbers

List of Subjects in 38 CFR Part 5

Overview of New Part 5 Organization

We plan to organize the new part 5 regulations so that most

provisions governing a specific benefit are located in the same

subpart, with general provisions pertaining to all compensation and

pension benefits also grouped together. This organization will allow

claimants, beneficiaries, and their representatives, as well as VA

adjudicators, to find information relating to a specific benefit more

quickly than the organization provided in current part 3.

The first major subdivision would be ``Subpart A--General

Provisions.'' It would include information regarding the scope of the

regulations in new part 5, general definitions and general policy

provisions for this part. This subpart is the subject of this document.

``Subpart B--Service Requirements for Veterans'' would include

information regarding a veteran's military service, including the

minimum service requirement, types of service, periods of war, and

service evidence requirements. This subpart was published as proposed

on January 30, 2004. See 69 FR 4820.

``Subpart C--Adjudicative Process, General'' would inform readers

about claims and benefit application filing procedures, VA's duties,

rights and responsibilities of claimants and beneficiaries, general

evidence requirements, and general effective dates for new awards, as

well as revision of decisions and protection of VA ratings. This

subpart will be published as three separate Notices of Proposed

Rulemaking (NPRM)s due to its size. The first, concerning the duties of

VA and the rights and responsibilities of claimants and beneficiaries,

was published on May 10, 2005. See 70 FR 24680.

``Subpart D--Dependents and Survivors'' would inform readers how VA

determines whether an individual is a dependent or a survivor for

purposes of determining eligibility for VA benefits. It would also

provide the evidence requirements for these determinations.

``Subpart E--Claims for Service Connection and Disability

Compensation'' would define service-connected disability compensation

and service connection, including direct and secondary service

connection. This subpart would inform readers how VA determines service

connection and entitlement to disability compensation. The subpart

would also contain those provisions governing presumptions related to

service connection, rating principles, and effective dates, as well as

several special ratings. This subpart will be published as three

separate NPRMs due to its size. The first, concerning presumptions

related to service connection, was published on July 27, 2004. See 69

FR 44614.

``Subpart F--Nonservice-Connected Disability Pensions and Death

Pensions'' would include information regarding the three types of

nonservice-connected pension: Improved Pension, Old-Law Pension, and

Section 306 Pension. This subpart would also include those provisions

that state how to establish entitlement to Improved Pension and the

effective dates governing each pension. This subpart will be published

as two separate NPRMs due to its size. The portion concerning Old-Law

Pension, Section 306 Pension, and elections of Improved Pension was

published as proposed on December 27, 2004. See 69 FR 77578.

``Subpart G--Dependency and Indemnity Compensation, Death

Compensation, Accrued Benefits, and Special Rules Applicable Upon Death

of a Beneficiary'' would contain regulations governing claims for

dependency and indemnity compensation (DIC); death

[[Page 16465]]

compensation; accrued benefits; benefits awarded, but unpaid at death;

and various special rules that apply to the disposition of VA benefits,

or proceeds of VA benefits, when a beneficiary dies. This subpart would

also include related definitions, effective-date rules, and rate-of-

payment rules. This subpart will be published as two separate NPRMs due

to its size. The portion concerning accrued benefits, death

compensation, special rules applicable upon the death of a beneficiary,

and several effective-date rules, was published as proposed on October

1, 2004. See 69 FR 59072. The portion concerning DIC benefits and

general provisions relating to proof of death and service-connected

cause of death was published on October 21, 2005. See 70 FR 61326.

``Subpart H--Special and Ancillary Benefits for Veterans,

Dependents, and Survivors'' would pertain to special and ancillary

benefits available, including benefits for children with various birth


``Subpart I--Benefits for Certain Filipino Veterans and Survivors''

would pertain to the various benefits available to Filipino veterans

and their survivors.

``Subpart J--Burial Benefits'' would pertain to burial allowances.

``Subpart K--Matters Affecting Receipt of Benefits'' would contain

provisions regarding bars to benefits, forfeiture of benefits, and

renouncement of benefits.

``Subpart L--Payments and Adjustments to Payments'' would include

general rate-setting rules, several adjustment and resumption

regulations, and election-of-benefit rules. Because of its size,

proposed regulations in subpart L will be published in two separate


The final subpart, ``Subpart M--Apportionments and Payments to

Fiduciaries or Incarcerated Beneficiaries,'' would include regulations

governing apportionments, benefits for incarcerated beneficiaries, and


Some of the regulations in this NPRM cross-reference other

compensation and pension regulations. If those regulations have been

published in this or earlier NPRMs for the Project, we cite the

proposed part 5 section. We also include, in the relevant portion of

the Supplementary Information, the Federal Register page where a

proposed part 5 section published in an earlier NPRM may be found.

However, where a regulation proposed in this NPRM would cross-reference

a proposed part 5 regulation that has not yet been published, we cite

to the current part 3 regulation that deals with the same subject

matter. The current part 3 section we cite may differ from its eventual

part 5 counterpart in some respects, but this method will assist

readers in understanding these proposed regulations where no part 5

counterpart has yet been published. If there is no part 3 counterpart

to a proposed part 5 regulation that has not yet been published, we

have inserted ``[regulation that will be published in a future Notice

of Proposed Rulemaking]'' where the part 5 regulation citation would be


Because of its large size, proposed part 5 will be published in a

number of NPRMs, such as this one. VA will not adopt any portion of

part 5 as final until all of the NPRMs have been published for public


In connection with this rulemaking, VA will accept comments

relating to a prior rulemaking issued as a part of the Project, if the

matter being commented on relates to both rulemakings.

Overview of Proposed Subpart A Organization

This NPRM pertains to general provisions applicable to compensation

and pension programs. These regulations would be contained in proposed

Subpart A of new 38 CFR part 5. Although these regulations have been

substantially restructured and rewritten for greater clarity and ease

of use, most of the basic concepts contained in these proposed

regulations are the same as their existing counterparts in 38 CFR part

3. However, a few substantive differences are proposed, as are some

regulations that do not have counterparts in 38 CFR part 3.

Table Comparing Current Part 3 Rules With Proposed Part 5 Rules

The following table shows the relationship between the current

regulations in part 3 and the proposed regulations contained in this



Based in whole or in part on 38

Proposed or redesignated part 5 section CFR part 3 section or paragraph

or paragraph (or ``New'')


5.0.................................... New.

5.1--Active military Service........... New.

5.1--Agency of original jurisdiction... New.

5.1--Alien............................. New.

5.1--Armed Forces...................... 3.1(a).

5.1--Beneficiary....................... New.

5.1--Benefit........................... New.

5.1--Certified statement............... New.

5.1--Child born of the marriage and 3.54(d).

child born before the marriage.

5.1--Claimant.......................... New.

5.1--Competent evidence................ New.

5.1--Direct service connection......... New.

5.1-- Discharged or released from 3.1(h).

active military service (1).

5.1-- Discharged or released from New.

active military service (2).

5.1--Final decision.................... New.

5.1--Former prisoner of war (or former Introduction to 3.1(y)(1),

POW). 3.1(y)(2)(i), and 3.1(y)(5).

5.1--Fraud (1)......................... 3.901(a).

5.1--Fraud (2)......................... 3.1(aa)(1).

5.1--Fraud (3)......................... 3.1(aa)(2).

5.1--In the waters adjacent to Mexico.. 3.1(t).

5.1--Insanity.......................... New.

5.1--Notice............................ 3.1(q).

5.1--Nursing home...................... 3.1(z).

5.1--On the borders of Mexico.......... 3.1(s).

5.1--Political subdivision of the 3.1(o).

United States.

5.1--Reserve component................. 3.1(b).

5.1--Reserve, or reservist............. 3.1©.

5.1--Secretary concerned............... 3.1(g).

[[Page 16466]]

5.1--Service medical records........... New.

5.1--State............................. 3.1(i).

5.1--Uniformed services................ New.

5.1--Veteran........................... 3.1(d).

5.2.................................... [Reserved].

5.3(a)................................. New.

5.3(b)(1).............................. Second and third sentences of


5.3(b)(2).............................. Fourth and sixth sentences of


5.3(b)(3).............................. Seventh sentence of 3.102.

5.3© and (d)......................... New.

5.4(a)................................. 3.103(a), second sentence.

5.4(b)................................. First sentence of 3.102;

3.103(a), second sentence.


Readers who use this table to compare existing regulatory

provisions with the proposed provisions, and who observe a substantive

difference between them, should consult the text that appears later in

this document for an explanation of significant changes in each

regulation. Not every paragraph of every current part 3 section

regarding the subject matter of this rulemaking is accounted for in the

table. In some instances, other portions of the part 3 sections that

are addressed in these proposed regulations will appear in subparts of

part 5 that are being published separately for public comment. For

example, a reader might find a reference to paragraph (a) of a part 3

section in the table, but no reference to paragraph (b) of that section

because paragraph (b) will be addressed in a separate NPRM. The table

also does not include provisions from part 3 regulations that will not

be repeated in part 5. Such provisions are discussed specifically under

the appropriate part 5 heading in this preamble. Readers are invited to

comment on the proposed part 5 provisions and also on our proposals to

omit those part 3 provisions from part 5.

Content of Proposed Regulations

5.0 Scope of Applicability

The first proposed regulation in this NPRM is a new general scope

provision. The regulation informs readers that, except as otherwise

provided, the provisions of the regulations in proposed part 5 apply

only to benefits governed by part 5.

We are aware that some parts of 38 CFR that do not relate to

benefits governed by part 5 may rely expressly or implicitly on certain

part 3 regulations and that part 3 will eventually be superceded by

part 5. As part of the Project, VA will determine whether adjustments

in other parts are necessary to specifically adopt part 5 regulations

by reference, or whether to add equivalent regulations to other parts

to ensure continued coverage after part 3 is removed from title 38,

CFR. We anticipate that we will make the determination regarding other

parts of title 38, CFR, on or about the time that the final version of

part 5 is adopted.

We propose not to carry forward the scope provision in current

Sec. 3.2100, which applies only to the provisions in subpart D of part

3, because the content of that provision would be subsumed by proposed

Sec. 5.0.

5.1 General Definitions

The next proposed regulation in this NPRM is based primarily on

current Sec. 3.1 and includes definitions of words and phrases

commonly used in proposed part 5. Some of the definitions in current

Sec. 3.1 would simply be rewritten in proposed Sec. 5.1 to provide

the same information in a more logically organized form. Some proposed

definitions are new. Some current Sec. 3.1 definitions are not

addressed in proposed Sec. 5.1 because we propose to incorporate them

into new part 5 subparts dealing with specific types of benefits.

(Those definitions will be, or have already been, addressed in other

NPRMs.) All terms defined in proposed Sec. 5.1 would be arranged in

alphabetical order.

Proposed Sec. 5.1 provides a general definition for ``active

military service.'' We propose to use this term in lieu of the longer

term ``active military, naval, and air service'' used in 38 U.S.C.

101(24) and current part 3 for simplicity with no change in meaning. We

have also included a cross-reference to proposed Sec. 5.21, the

section that describes service VA recognizes as active military

service. See 69 FR 4820, 4833 (Jan. 30, 2004).

Proposed Sec. 5.1 includes the following definition of the term

``agency of original jurisdiction'': ``Agency of original jurisdiction

means the VA activity that is responsible for making the initial

determination on an issue affecting a claimant's or beneficiary's right

to benefits.'' We note that this definition differs somewhat from a

definition of the same term in 38 CFR 20.3(a) which reads as

follows:``Agency of original jurisdiction means the Department of

Veterans Affairs activity or administration, that is, the Veterans

Benefits Administration, Veterans Health Administration, or National

Cemetery Administration, that made the initial determination on a

claim.'' The difference is because of the narrower scope of part 5 and

because the definitions in Sec. 20.3 are geared to an appellate

context while the definitions in proposed Sec. 5.1 are not.

Proposed Sec. 5.1 provides the definition of the term ``alien,''

which appears several times throughout current part 3, but it is not

defined in current part 3 or in title 38, United States Code. Such a

definition is contained in chapter 12, ``Immigration And Nationality,

General Provisions,'' of title 8, ``Aliens And Nationality,'' of the

United States Code. ``Alien'' is defined in 8 U.S.C. 1101(a)(3) as

``any person not a citizen or national of the United States.'' We

propose to adopt this definition for part 5. It is simple and clear and

is the definition used in the U.S.C. title primarily applicable to

determinations of immigration and nationality matters by the United


Proposed Sec. 5.1 defines ``beneficiary'' as ``an individual in

receipt of benefits under any of the laws administered by VA.''

We propose to define ``benefit'' as ``any payment, service,

commodity, function, or status, entitlement to which is determined

under laws administered by VA pertaining to veterans and their

dependents and survivors.'' The definition of ``benefit'' parallels the

definition of that term at 38 CFR 20.3(e).

Proposed Sec. 5.1 defines a ``certified statement,'' another

undefined term used in current part 3, as a ``statement made and signed

by an individual who affirms that the statement's content is true and

accurate to the best of that individual's knowledge and belief.'' This

is consistent with VA usage and

[[Page 16467]]

consistent with the common understanding of that term. For example, see

the definition of ``certify'', Black's Law Dictionary 220 (7th ed.

1999), ``1. To authenticate or verify in writing. 2. To attest as being

true or as meeting certain criteria.''

Proposed Sec. 5.1 next addresses the concepts of ``child born of

the marriage'' and ``child born before the marriage.'' The recognition

of an individual as the veteran's surviving spouse can turn on whether

a child was born of his or her marriage to the veteran, or was born to

the veteran and the surviving spouse before their marriage. See 38

U.S.C. 103(a) (concerning claims from spouses who entered into a

marriage with a veteran without knowledge of a legal impediment to the

marriage); 1102(a) (concerning marriage requirements for death

compensation); 1304 and 1318© (concerning marriage requirements for

dependency and indemnity compensation); 1532(d), 1534©, 1536©, and

1541(f) (concerning marriage requirements for various pension

benefits). The proposed definition is based on current Sec. 3.54(d)

with the clarification that adopted children and stepchildren are not

included in these terms, for the following reasons.

The United States Court of Appeals for Veterans Claims (CAVC)

interpreted the language ``child born of the marriage'' and ``child

born before the marriage'' in the context of a claim for pension under

chapter 15, title 38, United States Code, as follows:

Applying the ``fundamental canon of statutory construction''

that ``unless otherwise defined, words will be interpreted as taking

their ordinary, contemporary, common meaning'' * * * , the statutory

phrase ``child * * * born of the marriage'' of Sec. 1541(f)(3)

cannot be expanded by the B[oard of Veterans Appeals] or this Court

to read ``child * * * born of or adopted during the marriage''. When

a statute is clear and unambiguous, and a term of that statute is

``plain on the face of the statute, our statutory inquiry is at an

end.'' * * * An adopted child is not a ``child * * * born of the

marriage'' for the purpose of determining whether a surviving spouse

is qualified for a pension under 38 U.S.C. 1541 and 38 CFR 3.54.

Tapuro v. Derwinski, 2 Vet. App. 154, 155 (1992) (citations omitted).

The Court has clearly construed the relevant statutory language to

exclude adopted children in the context of 38 U.S.C. 1541, and

identical language appears in the other statutes governing the benefits

to which the proposed regulation applies, i.e., to 38 U.S.C. 103(a),

1102(a), 1304, 1318©, 1532(d), 1534©, 1536© and 1541(f).

Therefore, we propose to adopt the CAVC's interpretation in proposed

Sec. 5.1. Following the Court's logic, which is sound, we also propose

to clarify that stepchildren are not included. Clearly, a stepchild

cannot be a ``child * * * born of the marriage'' between a veteran and

his or her spouse.

The definition of ``claimant'' in proposed Sec. 5.1, ``any

individual applying for, or submitting a claim for, any benefit under

the laws administered by VA,'' is based on the statutory definition of

that term found at 38 U.S.C. 5100, ``Definition of `claimant'.''

Proposed Sec. 5.1 provides a definition of the term ``competent

evidence.'' Since the process of adjudicating claims is not

adversarial, VA is not concerned with the technical ``admissibility''

of evidence and does not exclude any evidence from the record (as we

propose to remind readers in a note associated with the proposed

definition). However, VA must evaluate the probative value of evidence.

One of the qualities upon which VA evaluates whether evidence is

probative is whether or not it is ``competent.'' Basically, this means

that VA evaluates evidence on whether its source was someone who had a

sound basis for stating the opinion or reporting the facts contained in

the evidence.

The new proposed definition would specify that competent evidence

is evidence of one of two types, ``competent expert evidence'' or

``competent lay evidence.'' In that respect, this new definition is

similar to Sec. 3.159(a)(1) and (2), which distinguishes between

``competent medical evidence'' and ``competent lay evidence.'' However,

instead of defining ``competent medical evidence,'' paragraph (1) of

the proposed definition defines ``competent expert evidence,'' which

would be evidence that must be provided by someone with specialized

education, training, or experience. ``Expert evidence'' is sufficiently

broad to encompass requiring a valid foundation for any evidence, not

just medical evidence, which is based on special technical expertise.

Examples might include such things as opinions from a handwriting

analysis expert or an accident reconstruction expert.

Paragraph (2) of the proposed definition defines ``competent lay

evidence.'' It is substantively similar to the definition of the same

term in current Sec. 3.159(a)(2) in most respects. However, we propose

to add that to be competent the lay evidence must be provided by a

person who has personal knowledge of the facts or circumstances

addressed by the evidence. Mere hearsay would not be competent

evidence. ``It bears repeating that [lay] testimony is competent only

so long as it remains centered upon matters within the knowledge and

personal observations of the witness. Should the testimony stray from

this basic principle and begin to address, for example, medical

causation, that portion of the testimony addressing the issue of

medical causation is not competent.'' Layno v. Brown, 6 Vet.App. 465,

470 (1994). We also propose to state that a lay person is a person

without relevant specialized education, training, or experience. A

person could be an expert in a field unrelated to the subject matter of

the evidence at hand and still be considered to be a ``lay person'' in

the context of evaluating the competency of that evidence. For example,

with respect to evaluating a medical opinion provided by a witness

without medical training, that person would be considered to be a lay

person even though he or she might have the credentials to provide

expert evidence concerning structural engineering.

Proposed Sec. 5.1 defines direct service connection in language

consistent with VA's traditional usage. ``Direct service connection''

is a term commonly used in veterans law. For example, the term is used

in the titles of current Sec. Sec. 3.304 and 3.305. However, it is not

specifically defined anywhere in current part 3. The term ``direct

service connection'' is commonly used within VA to distinguish service

connection granted on the basis of evidence showing that a disease or

injury was incurred in or aggravated in line of duty during active

military service from service connection granted on the basis of a

presumption; service connection for a disease or injury that is

secondary to another service-connected disease or injury; or service

connection based on aggravation of a nonservice-connected disability by

a service-connected disability. For that reason, the proposed

definition clarifies that direct service connection is ``established

without consideration of presumptions of service connection in subpart

E of this part or secondary service connection under Sec. 3.310 of

this chapter.''

Currently, Sec. 3.310(a) provides that except as provided in Sec.

3.300©, disability which is proximately due to or the result of a

service-connected disease or injury shall be service connected. When

service connection is thus established for a secondary condition, the

secondary condition shall be considered a part of the original


The holding of Allen v. Brown, 7 Vet.App. 439, 448 (1995), states

that when aggravation of a nonservice-connected disability is

proximately due to or the result of a service-connected disability, the

veteran is entitled to

[[Page 16468]]

compensation for the degree of disability over and above the disability

in existence prior to the aggravation.

In order to conform Sec. 3.310 to this judicial precedent, VA

drafted a proposed regulation entitled ``Claims Based on Aggravation of

a Nonservice-Connected Disability,'' an amendment that reflects the

principles stated in Allen, supra. 62 FR 30547 (1997). In referencing

Sec. 3.310 in our definition for direct service connection we intend

to include the principles stated in that proposed amendment, which we

anticipate will be issued as a final rule in the near future.

Proposed Sec. 5.1 includes an expanded definition of ``discharged

or released from active military service.'' The current definition of

that term in Sec. 3.1(h) simply notes that discharge or release

includes retirement from the active military, naval, or air service.

This concept, which is based on 38 U.S.C. 101(18)(A), would be retained

in paragraph (1) of the proposed definition.

However, under 38 U.S.C. 101(18)(B), ``discharge or release'' also

includes the following:

[T]he satisfactory completion of the period of active military,

naval, or air service for which a person was obligated at the time

of entry into such service in the case of a person who, due to

enlistment or reenlistment, was not awarded a discharge or release

from such period of service at the time of such completion thereof

and who, at such time, would otherwise have been eligible for the

award of a discharge or release under conditions other than


Paragraph (2) of the proposed definition of ``discharge or

release'' restates this aspect of the definition in somewhat simpler

language. It also substitutes the phrase ``intervening change in

military status'' for the statutory phrase ``enlistment or

reenlistment.'' ``Change in military status'' is defined in Sec. 5.37,

``Effect of extension of service obligation due to change in military

status on eligibility for VA benefits.'' See 69 FR 4820 (Jan. 30, 2004)

for a full explanation of the meaning of the term, its relationship to

38 U.S.C. 101(18)(B) as interpreted by VA, and the text of proposed

Sec. 5.37.

Proposed Sec. 5.1 includes a definition of the term ``final

decision.'' The proposed definition, which is similar to the definition

of ``finally adjudicated claim'' in current Sec. 3.160(d), provides

that a decision on a claim for VA benefits is final if VA provides

notice of that decision and the claimant either does not initiate and

complete a timely appeal or the Board of Veterans' Appeals issues a

final decision on the claim. The definition includes references to the

relevant regulations outlining the notice requirement and the

applicable steps in the administrative appellate process.

Proposed Sec. 5.1 defines the term ``former prisoner of war

(former POW)'' and is based on portions of current Sec. 3.1(y).

Portions of Sec. 3.1(y) that contain substantive rules concerning

proof of POW status will be addressed in another regulation in a

separate NPRM.

Proposed Sec. 5.1 provides definitions for the term ``fraud,''

which vary depending upon context. It is derived from current

Sec. Sec. 3.1(aa) and 3.901(a).

Although the definition of ``fraud'' in current Sec. 3.901(a)

appears in a regulation dealing with forfeiture for fraud, it is an

accurate general definition that need not be confined to the forfeiture

context. Therefore, we propose it as a general definition of fraud in

paragraph (1) of the Sec. 5.1 definition of fraud.

Current Sec. 3.1(aa)(1) references fraud ``[a]s used in 38 U.S.C.

103 and implementing regulations.'' Current Sec. 3.1(aa)(2) references

fraud ``[a]s used in 38 U.S.C. 110 and 1159 and implementing

regulations.'' We believe it would be much more useful to regulation

users to directly reference the regulations that implement the cited

statutes, rather than to reference the statutes and their unidentified

``implementing regulations.'' Therefore we have made this change in

paragraphs (2) and (3) of the proposed definition of fraud.

Current Sec. 3.1(t) defines ``in the waters adjacent thereto.''

This definition applies only to the definition of a period of war known

as the ``Mexican Border Period'' defined in current Sec. 3.2(h) and in

proposed Sec. 5.20(a). (For the text of the latter, see 69 FR 4820,

4832 (Jan. 30, 2004).) We propose no substantive change to the

definition, but the definition in Sec. 5.1 is of ``in the waters

adjacent to Mexico,'' rather than of ``in the waters adjacent

thereto,'' to conform to revisions to Sec. 5.20(a). We intend no

substantive change.

In Sec. 5.1 we propose to define insanity in the context of

insanity as a defense to commission of an act. The standard for

determining insanity for purposes of administering VA benefits is

contained in current 38 CFR 3.354(a), which states ``An insane person

is one who, while not mentally defective or constitutionally

psychopathic, except when a psychosis has been engrafted upon such

basic condition, exhibits, due to disease, a more or less prolonged

deviation from his normal method of behavior; or who interferes with

the peace of society; or who has so departed (become antisocial) from

the accepted standards of the community to which by birth and education

he belongs as to lack the adaptability to make further adjustment to

the social customs of the community in which he resides.''

This standard is difficult to apply and has not met with judicial

favor. For example, in Zang v. Brown, 8 Vet. App. 246 (1995), the CAVC

stated that the regulation is ``less than clear given its obvious

drafting defects,'' id. at 252; that ``a literal interpretation of the

regulation would produce an illogical and absurd result that could not

have been intended by the Secretary,'' id. at 253; and that the

regulation ``illustrates still another `confusing tapestry''' of VA

regulations. Id. at 256 (Steinberg, J., separate views).

However, the CAVC commented favorably in Cropper v. Brown, 6 Vet.

App. 450 (1994), on VA's application of the insanity defense

articulated in a now-superseded section of VA Adjudication Procedure

Manual M21-1. In Cropper, the Court stated:

Thus, [38 U.S.C. 5303(b)] sets out the authority for allowing

veterans benefits where a party has received an [other than

honorable (OTH)] discharge but has been adjudged insane, and [38 CFR

3.354] simply define the term ``insanity.'' It is the VA


11.05 (Apr. 3, 1992) and Part VI, Sec. 4.10 (Sept. 21, 1992), which

sets out the application of the insanity defense and the application

of the definition of insanity. The M21-1 Manual defines insanity as

``whether, at the time of commission of the act(s), the veteran was

laboring under such a defect of reason, from disease or mental

deficiency, as not to know or understand the nature or consequence

of the act(s) or that what he or she was doing was wrong.'' M21-1

Part VI, Sec. 4.10©; see also M21-1 Part IV, Sec.

11.10(d)(2)(a)-(b) (Apr. 3, 1992) (for purposes of considering

factors in wrongful and intentional killing cases, it defines

insanity as a condition when, ``at the time of commission of the

act, the party accused was laboring under such a defect of reason,

from disease of mind or mental deficiency, that he or she did not

know the nature and consequence of the act or * * * f known, that

the claimant did not perceive the act as wrong''). We find this

provision to be consistent with both the statute and the regulation

because it serves to limit the use of the insanity defense to those

situations where the acts leading to the discharge were the result

of insanity. Thus, the M21-1 Manual provision allows the insanity

defense only where it should be most properly applied. That is, the

defense may not be used where a claimant has received an OTH

discharge due to acts of misconduct over which he ultimately had

control but failed, in fact, to control. Conversely, the defense may

be used properly where the claimant has received a dishonorable

discharge due to some ``defect of reason, from disease or mental

deficiency,'' which is beyond his control.

Cropper, 6 Vet. App. at 453.

[[Page 16469]]

We propose to adopt a definition of insanity based on the

definition approved by the CAVC in Cropper, and to make that definition

applicable to all cases where an insanity determination may provide ``a

defense to a commission of an act'' (as opposed to limiting the

definition to the issue in Cropper, i.e., cases where insanity led to

an act causing an OTH discharge). This definition has the advantage of

incorporating a concept long familiar to the law. The law has

recognized since at least the mid-19th century that a person should not

be held criminally responsible for his or her behavior if that person

was ``insane'' at the time of committing a crime. M'Naghten's Case, 8

Eng.Rep. 718 (1843). In addition, the definition we propose is similar

to the following insanity-defense test endorsed by the American

Psychiatric Association: ``A person charged with a criminal offense

should be found not guilty by reason of insanity if it is shown that as

a result of mental disease or mental retardation he was unable to

appreciate the wrongfulness of his conduct at the time of the

offense.'' The Insanity Defense, American Psychiatric Association, at


We propose to supplement the definition of ``insanity'' discussed

by the CAVC in Cropper by adding injury to the list of potential

sources of impairment of the ability to reason responsibly. For

example, brain trauma can produce severe mental impairment.

Current Sec. 3.303© states that a personality disorder is not a

disease or injury for VA disability purposes. We anticipate that part 5

will have a counterpart to Sec. 3.303©.) In addition, a personality

disorder is not mental deficiency. Our proposed definition of insanity

requires that a person be laboring under a defect of reason resulting

from injury, disease, or mental deficiency. Therefore, we propose to

add in proposed Sec. 5.1, an additional sentence explicitly stating

that behavior attributable to a personality disorder does not satisfy

the definition of insanity.

Accordingly, we propose to provide in Sec. 5.1 that insanity, as a

defense to commission of an act, means a person was laboring under such

a defect of reason resulting from injury, disease, or mental deficiency

as not to know or understand the nature or consequence of the act, or

that what he or she was doing was wrong. Behavior that is attributable

to a personality disorder does not satisfy the definition of insanity.

The definition of ``insanity'' in proposed Sec. 5.1 is quite

different from the definition in Sec. 3.354. We have previously

referenced the Sec. 3.354 regulatory definition of insanity in Sec.

5.33, ``Insanity as a defense to acts leading to a discharge or

dismissal from the service that might be disqualifying for VA

benefits.'' 69 FR 4820, 4839 (Jan. 30, 2004). We explained, however,

that the definition of ``insanity'' would be revised and published for

comment as a proposed part 5 regulation. Accordingly, we intend that

when proposed Sec. 5.33 is issued as a final rule, it will cross

reference Sec. 5.1 rather than Sec. 3.354. Readers are invited to

comment at this time on the effect of Sec. 5.1 on Sec. 5.33. We do

not anticipate or intend any effect on insanity determinations by VA.

The proposed definition of ``notice'' in Sec. 5.1 is based on

current Sec. 3.1(q). We propose to add that, if a claimant or

beneficiary is represented, the notice must also be sent to the

representative. See 38 U.S.C. 5104(a) (requiring that notice of a

decision affecting the provision of benefits to a claimant be provided

to the claimant's representative). We also propose to require that if a

claimant or beneficiary has a fiduciary, notice must also be sent to

the fiduciary.

Proposed Sec. 5.1 defines ``on the borders of Mexico,'' with

regard to service during the Mexican border period, by listing

applicable border States and countries. The definition is based on the

definition of ``on the borders thereof'' in current Sec. 3.1(s), which

includes British Honduras. British Honduras is now Belize. The proposed

definition includes the current name of that nation. We have defined

``on the borders of Mexico,'' rather than ``on the borders thereof,''

to conform to revisions to proposed Sec. 5.20(a).

Proposed Sec. 5.1 includes a definition of a ``political

subdivision of the United States'' that is based on the definition in

current Sec. 3.1(o). The definition in current Sec. 3.1(o) states

that a ``[p]olitical subdivision of the United States includes the

jurisdiction defined as a State in paragraph (i) of this section, and

the counties, cities or municipalities of each.'' The word ``includes''

suggests that this is a partial list. We propose to omit it in the new

definition, because, with one possible exception, that is not the case.

(Note that the definition includes ``a State'' and that the definition

of ``State'' brings in ``the several States, Territories, and

possessions of the United States; the District of Columbia; and the

Commonwealth of Puerto Rico.'') The possible exception is that the

current definition includes counties, but not parishes. Parishes in

Louisiana are the equivalent of counties in other states. Therefore, we

propose to define a political subdivision of the United States as ``the

jurisdictions defined as a State and the counties (or parishes), cities

or municipalities of each.''

Proposed Sec. 5.1 departs from the definition of ``reserve'' in

current Sec. 3.1© in three respects. First, it would change

``reserves'' to ``reserve,'' as is the case in 38 U.S.C. 101(26). This

is not a substantive change. Second, it would define ``reserve or

reservist.'' ``Reservist'' is a more commonly used word with the same

meaning. Finally, we propose to shorten the current ``Reserve component

of one of the Armed Forces'' to just ``reserve component.'' ``[O]f one

of the Armed Forces'' is redundant because of the way that reserve

component is defined in Sec. 5.1.

Proposed Sec. 5.1 carries forward the current definition of

``Secretary concerned'' in Sec. 3.1(g) with one revision. The Coast

Guard is now under the jurisdiction of the Secretary of Homeland

Security, not the Secretary of Transportation. See Public Law 107-296,

Sec. 888(b), 116 Stat. 2135.

Proposed Sec. 5.1 defines ``service medical records'' as ``records

of medical treatment or medical examination provided by the Armed

Forces to either an applicant for membership into, or a member of, the

Armed Forces.'' We are aware that, for a variety of reasons, the Armed

Forces may provide a service member with medical care through civilian

resources. Therefore, the proposed definition also provides that

service medical records ``include records of medical examination and

treatment by a civilian health care provider at Armed Forces'


Proposed Sec. 5.1 defines ``uniformed services.'' As with the

several other new terms we have defined, the term ``uniformed

services'' (or ``uniformed service'') is used in current part 3, but is

not defined. See 38 CFR 3.157, 3.211, and 3.804 (all using the term

``uniformed service'' or ``uniformed services''). The statute that

contains the definitions generally applicable to title 38 United States

Code (38 U.S.C. 101), does not include a definition of ``uniformed

services.'' However, there is a definition in 38 U.S.C. chapter 43,

``Employment and Reemployment Rights of Members of the Uniformed

Services.'' See 38 U.S.C. 4303(16). We propose to adopt this definition

for part 5.

Proposed Sec. 5.1 defines ``veteran.'' This definition is based on

the definition in current Sec. 3.1(d) and largely mirrors that

provision except that we propose to

[[Page 16470]]

slightly modify the language of current Sec. 3.1(d)(1) (pertaining to

the definition of a veteran for purposes of DIC or death compensation).

The current provision, Sec. 3.1(d)(1), reads: ``For compensation

and dependency and indemnity compensation the term veteran includes a

person who died in active service and whose death was not due to

willful misconduct.'' The language specifying that this alternative

definition of veteran applies to cases of death compensation and DIC is

unnecessary. Eligibility criteria for various benefits are contained in

separate provisions. The key issue is whether a veteran by definition

may only be a person who was alive when he or she was discharged from

active military service, or whether a veteran can also be a person who

died in active military service. Therefore proposed Sec. 5.1 will

simply provide ``The term veteran also includes a person who died in

active service and whose death was not due to willful misconduct.''

We also propose to add a cross-reference to the regulation that

defines ``willful misconduct,'' and to add a cross-reference (which

concerns the meaning of ``veteran'' in the context of death pension

claims) to the subpart of proposed part 5 that deals with pension


Current Sec. 3.1(e) defines ``veteran of any war.'' We have not

included a similar definition in Sec. 5.1 because we anticipate that

the term would be used, at most, in one part 5 regulation. If that

should be the case, the definition could be included in that


5.2 [Reserved]

Proposed Sec. 5.1 contains definitions applicable throughout part

5, but proposed part 5 will also contain a number of definitions that

are more limited in scope. In keeping with our goal of locating

information applicable to specific programs together in one subpart of

proposed part 5 to the extent possible, definitions that apply to

specific VA programs and procedures would be located in subparts of

proposed part 5 that deal with those programs and procedures. We do not

currently know with certainty what all of those definitions will be and

where they will be located because some proposed part 5 subparts are

still in development. We have reserved proposed Sec. 5.2 as the future

location for a convenient cross-reference table to assist claimants,

beneficiaries, and VA staff in locating these definitions in other

subparts of part 5. We plan to publish Sec. 5.2 for notice and comment

in a future NPRM issued for the Project.

5.3 Standards of proof.

The next regulation in this NPRM, proposed Sec. 5.3, addresses the

standards of proof used in the adjudication of claims for VA benefits.

New proposed Sec. 5.3(a), ``Applicability,'' explains that Sec. 5.3

states the general standards of proof for proving facts and rebutting

presumptions and that these standards apply unless a statute or another

regulation specifically provides otherwise. For example, 38 U.S.C. 1111

requires ``clear and unmistakable evidence'' that an injury or disease

existed before acceptance and enrollment for service and was not

aggravated by service to rebut the presumption that a veteran was in

sound condition when examined, accepted, and enrolled for service.

Accordingly the default standard in Sec. 5.3(b) for rebutting a

presumption would not apply because there is a statute that

specifically provides another standard.

Proposed Sec. 5.3(b) addresses the default standard for proving a

specific fact or facts material to the determination of a claim. The

relevant statute, 38 U.S.C. 5107(b), specifies that in cases where

``there is an approximate balance of positive and negative evidence

regarding any issue material to the determination of a matter, [VA]

shall give the benefit of the doubt to the claimant.'' This language

has been interpreted to mean, essentially, that when there is a balance

of evidence for and against the existence of a fact, and proof of that

fact would support a veteran's claim, VA must consider the fact proven.

An excellent illustration of this point may be found in Gilbert v.

Derwinski, 1 Vet. App. 49 (1991), an early opinion by the CAVC in which

it first considered the ``benefit of the doubt'' doctrine (then

contained in 38 U.S.C. 3007).

Perhaps the analogy most helpful to an understanding of the

application of the ``benefit of the doubt'' rule was provided by

Deputy Assistant General Counsel Mullen at oral argument when he

stated that the ``benefit of the doubt'' standard is similar to the

rule deeply embedded in sandlot baseball folklore that ``the tie

goes to the runner.'' If the ball clearly beats the runner, he is

out and the rule has no application; if the runner clearly beats the

ball, he is safe and, again, the rule has no application; if,

however, the play is close, then the runner is called safe by

operation of the rule that ``the tie goes to the runner.'' * * *

Similarly, if a fair preponderance of the evidence is against a

veteran's claim, it will be denied and the ``benefit of the doubt''

rule has no application; if the veteran establishes a claim by a

fair preponderance of the evidence, the claim will be granted and,

again, the rule has no application; if, however, the play is close,

i.e., ``there is an approximate balance of positive and negative

evidence,'' the veteran prevails by operation of 38 U.S.C. 3007(b).

Gilbert, 1 Vet. App. at 55-56.

Turning to the exact language of proposed Sec. 5.3(b), we propose

to define ``equipoise'' in paragraph (b)(1). Although the language is

considerably simpler than current Sec. 3.102, the definition of

``equipoise'' that we propose is consistent with the longstanding

explanation of the ``reasonable doubt'' doctrine in current Sec. 3.102

concerning ``an approximate balance of positive and negative evidence

which does not satisfactorily prove or disprove the claim.'' This

proposed definition is that equipoise means that there is ``an

approximate balance between the weight of the evidence for and the

weight of the evidence against the truth of the asserted fact, such

that it is as likely as not that the asserted fact is true.''

Paragraph (b)(2) would require VA to apply the benefit of the doubt

``[w]hen the evidence is in equipoise and the fact or issue to be

proven would support a claim.'' Paragraph (b)(2) would emphasize that

if the evidence is in equipoise and ``the fact or issue to be proven

would not support a claim, the matter will not be considered proven.''

Such facts or issues must be established by a preponderance of the

evidence. Finally, paragraph (b)(2) clarifies that the ``benefit of the

doubt applies even in the absence of official records,'' as described

in current Sec. 3.102. This rule is consistent with the statutory

statement of these same principles in 38 U.S.C. 5107(b): ``When there

is an approximate balance of positive and negative evidence regarding

any issue material to the determination of a matter, the Secretary

shall give the benefit of the doubt to the claimant.''

Proposed paragraph (b)(3) would define the ``preponderance of the

evidence'' by stating: ``A fact or issue is established by a

preponderance of evidence when the weight of the evidence in support of

that fact or issue is greater than the evidence in opposition to it.''

This definition accords with the generally accepted definition of the

term. See Black's Law Dictionary 1064 (5th Ed., 1981).

Proposed Sec. 5.3(b)(5) provides that the equipoise standard does

not govern determinations as to whether evidence is new and material

when offered to reopen a previously denied claim; instead ``VA will

reopen a claim when the new and material evidence merely raises a

reasonable possibility of substantiating the claim. While the explicit

statement of this exception is new, the law underlying it is not. This

[[Page 16471]]

rule is consistent with Annoni v. Brown, 5 Vet. App. 463 (1993). In

Annoni, the CAVC, citing Gilbert, noted that the benefit of the doubt

rule (the equipoise standard) does not apply during the process of

gathering evidence and that it does not shift the initial burden to

submit a valid claim from the claimant to VA. Annoni, 5 Vet. App. at

467. Additionally, new and material evidence determinations do not

involve the usual weighing of ``all information and lay and medical

evidence of record'' within the meaning of 38 U.S.C. 5107(b), but

instead require threshold determinations of the significance of

discrete items of evidence, which VA must presume credible and to which

VA must give full weight. See Justus v. Principi, 3 Vet. App. 510, 513

(1992). Such threshold determinations as to whether a claimant has

submitted new and material evidence are governed by the standards set

forth in 38 CFR 3.156(a).

The default standard of proof applicable to rebuttal of a

presumption is addressed in proposed Sec. 5.3©. In some cases,

Congress has specifically provided the standard of proof applicable to

rebutting a presumption. For example, Congress has imposed rather high

standards of proof in two circumstances. Section 1111 of title 38,

``Presumptions of sound condition,'' requires ``clear and unmistakable

evidence'' to rebut the presumption of sound condition upon entry into

military service. Section 1154(b) of title 38 requires ``clear and

convincing evidence'' to rebut a combat veteran's satisfactory evidence

of combat incurrence of a disease or injury. The question remains as to

what standard of proof applies to the rebuttal of a presumption where

Congress has not provided a specific standard.

The Court of Appeals for the Federal Circuit addressed this issue

recently in Thomas v. Nicholson, 423 F.3d 1279 (Fed. Cir. 2005). The

specific issue considered by the court was determining the correct

standard of proof for rebutting the presumption in 38 U.S.C. 105(a)

that an injury or disease incurred during service was incurred in line

of duty. Section 105(a) does not specify a standard. Because of the

significance of the court's opinion in this case, we quote from it at


The government acknowledges that Sec. 105(a) does not specify

the evidentiary standard necessary to rebut the presumption that a

peacetime disability was incurred in line of duty, but argues that

Congress established the general evidentiary standard for factual

determinations of veterans' cases in 38 U.S.C. 5107(b). The

government urges this court to apply Sec. 5107, and the evidentiary

standard applicable to Sec. 5107, to Sec. 105(a) in this case.

In support, the government points out that this court in Forshey

examined 38 U.S.C. 5107 for the purpose of determining the proper

evidentiary standard under Sec. 105(a), although Forshey declined

to decide whether Sec. 5107 set out a ``preponderance of evidence''

or ``clear and convincing'' standard. Forshey, 284 F.3d at 1351-52.

The government therefore contends that 38 U.S.C. 5107 establishes a

general evidentiary standard governing determinations by the Board

on issues material to the resolution of claims which is applicable

to Sec. 105(a) and the determination of willful misconduct for

peacetime disabilities.

The government further relies on language in other opinions by

this court as support that Sec. 5107 sets out the ``preponderance

of evidence'' standard. Although acknowledging that Sec. 5107 does

not explicitly state an evidentiary standard, the government points

out that this court has found that Sec. 5107(b), ``the benefit of

the doubt rule,'' does not apply ``in cases in which the Board finds

that a preponderance of the evidence is against the veteran's claim

for benefits.'' Ortiz v. Principi, 2

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