Monetary Allowance Under 38 U.S.C. 1805 for a Child Born with Spina Bifida Who Is a Child of a Vietnam Veteran

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 3

RIN 2900-AI70

Monetary Allowance Under 38 U.S.C. 1805 for a Child Born with

Spina Bifida Who Is a Child of a Vietnam Veteran

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the Department of Veterans

Affairs (VA) adjudication regulations to provide for payment of a

monetary allowance to a child born with spina bifida who is a child of

a Vietnam veteran. The intended effect of this amendment is to

implement legislation authorizing VA to provide such benefits. A

companion document (RIN: 2900-AI65) concerning a proposal for the

provision of health care for such children is set forth in the Proposed

Rules section of this issue of the Federal Register.

DATES: Comments must be received by VA on or before June 30, 1997.

ADDRESSES: Mail or hand deliver written comments to: Director, Office

of Regulations Management (02D), Department of Veterans Affairs, 810

Vermont Ave., NW, Room 1154, Washington, DC 20420. Comments should

indicate that they are submitted in response to ``RIN 2900-AI70.'' All

written comments received will be available for public inspection at

the above address in the Office of Regulations Management, Room 1158,

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

holidays).

FOR FURTHER INFORMATION CONTACT: John Bisset, Jr., Consultant,

Regulations Staff, Compensation and Pension Service, Veterans Benefits

Administration, 810 Vermont Avenue, NW., Washington, DC 20420,

telephone (202) 273-7230.

SUPPLEMENTARY INFORMATION: Section 3 of the Agent Orange Act of 1991,

Public Law 102-4, 105 Stat. 11, directed the Secretary of Veterans

Affairs to seek to enter into an agreement with the National Academy of

Sciences (NAS) for a series of reports to review and summarize the

scientific evidence concerning the association between exposure to

herbicides used in support of military operations in the Republic of

Vietnam during the Vietnam era, and each disease suspected to be

associated with such exposure. In its most recent report, entitled

``Veterans and Agent Orange: Update 1996,'' which was released on March

14, 1996, NAS noted what it considered ``limited/suggestive evidence of

an association'' between herbicide exposure and spina bifida in the

offspring of Vietnam veterans.

Since VA did not have the statutory authority to provide benefits

to children of veterans based on birth defects, the Secretary announced

on May 28, 1996, that he would seek legislation to provide an

appropriate remedy and submitted proposed legislation to Congress in

July of that year. Section 421 of Public Law 104-204 added a new

chapter 18 to title 38, United States Code, authorizing VA to provide

certain benefits, including a monthly monetary allowance, to children

born with spina bifida who are the natural children of veterans who

served in the Republic of Vietnam during the Vietnam era. This document

amends existing VA adjudication regulations and adds a new section to

title 38, Code of Federal Regulations, to implement this new authority.

Section 1805(c) of title 38, United States Code, specifies that

receipt of this allowance shall not affect the right of the child, or

the right of any individual, based on the child's relationship to that

individual, to receive any other benefit to which the child, or that

individual, may be entitled under any law administered by VA, nor will

the allowance be considered income or resources in determining

eligibility for, or the amount of, benefits under any Federal or

federally assisted program. We propose to amend 38 CFR 3.261, 3.262,

3.263, 3.272, and 3.275 to reflect this statutory provision as it

applies to VA's income-based benefit programs.

Section 1806 of title 38, United States Code, provides that the

effective date of the monetary allowance to a child under new chapter

18 will be fixed in accordance with the facts found, but will not be

earlier than the date of receipt of application. The effective date of

section 421 of Public Law 104-204 will be October 1, 1997, unless other

legislation is enacted to provide for an earlier effective date. VA is

proposing to amend 38 CFR 3.403 to reflect these statutory provisions.

VA is also proposing to amend 38 CFR 3.503 to specify that this

monetary allowance will terminate the last day of the month before the

month in which the death of a child occurs. This date is consistent

with the termination provisions of 38 U.S.C. 5112(b) applicable to

compensation, pension, and dependency and indemnity compensation

benefits administered by VA, and there is no indication in the statute

that Congress intended that VA administer this benefit in any different

manner. Due to the amendments to 38 CFR 3.403 and 3.503, we are

proposing technical amendments to each cross-reference following 38 CFR

3.57, 3.659, 3.703, 3.707, and 3.807.

VA is also proposing to amend 38 CFR 3.105 to specify that, where

there is a change in disability status warranting a reduction of the

monetary allowance, such reduction in evaluation will be effective the

last day of the month following sixty days from the date of notice to

the recipient (at the recipient's last address of record) of the

contemplated reduction. This is the date stipulated by 38 U.S.C.

5112(b)(6) for reduction of disability compensation benefits under the

same circumstances. We are not, however, proposing to incorporate an

additional 60-day notice such as that provided before reductions of

compensation awards under the provisions of 38 CFR 3.105(e). Since

reduction of this monetary allowance would generally be based on

private medical evidence that the claimant had authorized to be

released to VA, and since the rating criteria for this benefit are

generally less complex than those for rating compensation claims, in

our judgment, 60 days is enough time for claimants to submit evidence

showing that the monthly allowance should not be reduced. We are

proposing to apply the provisions of 38 CFR 3.105(h) concerning the

opportunity for a predetermination hearing to reductions of this

monetary allowance.

Section 3.158 of title 38, Code of Federal Regulations, describes

the circumstances under which VA will consider a claim abandoned. Where

evidence requested in connection with a claim is not furnished within

one year after the date of request, the claim will be considered

abandoned and further action will not be taken unless a new claim is

received. Should entitlement be established on the basis of this new

claim, benefits are awarded effective not earlier than the date of the

filing of the new claim. Where benefit payments have been discontinued

because a payee's present whereabouts are unknown, payments will be

resumed effective the day following the date of last payment if

entitlement is otherwise established, upon receipt of a valid current

address. In view of the similarity between this benefit and other

monetary benefits which VA

[[Page 23725]]

administers, and, in order to maintain consistency with respect to the

administration of these benefits, we believe it is appropriate to apply

these provisions to the monetary monthly allowance for children with

spina bifida, and we are proposing to amend 38 CFR 3.158 accordingly.

Pursuant to 38 U.S.C. 1805(b)(3), the amount of the monthly

monetary allowance payable to a child with spina bifida will be $200,

$700, or $1,200, based on the individual's degree of disability.

Section 1805(b)(3) also specifies that these amounts are subject to

adjustment under the provisions of 38 U.S.C. 5312, which provide for

the adjustment of certain VA benefit rates whenever there is an

increase in benefit amounts payable under title II of the Social

Security Act (42 U.S.C. 401 et seq.). We propose to amend 38 CFR 3.27

to reflect that statutory provision.

We propose to add a new Sec. 3.814 to title 38, Code of Federal

Regulations, to implement additional provisions of 38 U.S.C. 1805. If a

child with spina bifida is the natural child of two Vietnam veterans,

new Sec. 3.814 would make clear that that child may receive only one

monthly allowance. This limitation is consistent with the provision of

38 U.S.C. 5304(a)(1) that limits a person to not more than one award of

pension, compensation, emergency officers, regular or reserve

retirement pay based on his or her own service. Such a limit is

appropriate in this instance because a child establishes entitlement to

this benefit in his or her own right due to being afflicted with spina

bifida, and awarding more than one monthly allowance based on the

existence of the same disability would constitute a duplication of

benefits similar to that prohibited by 38 U.S.C. 5304(a)(1).

We propose to require an applicant for the monetary allowance to

furnish certain information contained on a VA form entitled

``Application for Spina Bifida Benefits'' which is set forth in full in

the text portion of proposed Sec. 3.814(b). The information requested

is necessary for making determinations regarding eligibility for

monetary allowances. Furnishing the Social Security numbers of the

natural parent(s) and the child on whose behalf benefits are sought is

not mandatory, given the absence, under current law, of statutory

authority that would authorize VA to require this information.

Nevertheless, voluntary submission of such Social Security numbers

would be helpful to VA in establishing an individual's eligibility for

the monetary allowance authorized by law. VA would use the Social

Security numbers to: (1) Verify that the child's natural parent was a

veteran who served in Vietnam during the specified period; (2) identify

medical records; and (3) ensure that awards to deceased beneficiaries

are terminated in a timely manner to avoid creation of overpayments.

The term ``Vietnam veteran'' is defined by the statute as a veteran

who performed active military, naval, or air service in the Republic of

Vietnam during the Vietnam era. We propose to adopt the statutory

language for purposes of new Sec. 3.814. We also propose to define the

term service in the Republic of Vietnam to include service in the

waters offshore and service in other locations if the conditions of

service involved duty or visitation in the Republic of Vietnam. This is

consistent with the definition of service in the Republic of Vietnam

that appears at 38 CFR 3.307(a)(6)(iii), which sets forth the

conditions under which VA presumes that Vietnam veterans were exposed

to a herbicide agent during active military service. Since the purpose

of this rulemaking is to provide for payment to the children of those

same veterans if the children are born with spina bifida, it is

appropriate to recognize the same area in which veterans are presumed

to have been exposed to herbicides.

The statute defines the term ``child'' as meaning a natural child

of a Vietnam veteran, regardless of age or marital status, who was

conceived after the date on which the veteran first entered the

Republic of Vietnam during the Vietnam era. In general, the statutes

authorizing VA benefits recognize a legitimate child, a legally adopted

child, a stepchild who is a member of the veteran's household, or an

illegitimate child either acknowledged in writing by the veteran or

judicially decreed to be the child of the veteran, as the child of the

veteran (See 38 U.S.C. 101(4)(A)). 38 U.S.C. 1801, however, establishes

a stricter requirement; in order to be eligible for this benefit a

child must be the natural child of a Vietnam veteran. We therefore

propose to require that, in order to establish entitlement to this

benefit, a claimant must provide the types of evidence specified in 38

CFR 3.209 and 3.210 sufficient to demonstrate, in the judgment of the

Secretary, that the child on whose behalf benefits are sought is the

natural child of a Vietnam veteran.

38 U.S.C. 1805 (b) authorizes VA to make monthly payments at one of

three levels based on the degree of disability suffered by the child,

as determined in accordance with a schedule for rating such

disabilities to be prescribed by the Secretary. Spina bifida is a

developmental anomaly characterized by defective closure of the bony

encasement of the spinal cord, through which the cord (myelocele),

meninges (meningocele), or both (meningomyelocele) may (spina bifida

cystica) or may not (spina bifida occulta) protrude (Dorland's

Illustrated Medical Dictionary, 27th ed. 1988, 1560, and The Merck

Manual, 16th ed. 1992, 2077). Neurological deficit is the main

determinant of disability for an individual with spina bifida (Long-

term Outcome in Surgically Treated Spina Bifida Cystica, Isao Date,

M.D., Yasunori Yagyu, M.D., Shoji Asari, M.D., and Takshi Ohmoto, M.D.,

Surg. Neurol. 1993, 40:471-5). In our judgment, the neurological

manifestations that best define the severity of disability are

impairment of: Functioning of the extremities; bowel or bladder

function; and intellectual functioning.

We propose to designate levels of disability identified as Level I,

II, or III, based on an assessment of these neurologic manifestations

in eligible individuals. Each of these neurologic manifestations

exhibits three clearly identifiable levels of impairment that can be

used in determining levels of payment. Functioning of the lower

extremities can be assessed from least to most impaired based on (1)

the ability to walk without braces or other external support; (2) the

ability to walk only with braces or other external support; or (3) the

inability to walk. Functioning of the upper extremities can be assessed

from least to most impaired based on (1) absence of sensory or motor

impairment; (2) existence of sensory or motor impairment not precluding

the ability to grasp a pen, feed one's self, perform self care; and (3)

existence of sensory or motor impairment severe enough to preclude the

ability to grasp a pen, feed one's self, or perform self care. Bowel or

bladder function can be assessed from least to most impaired based upon

whether an individual is (1) continent of urine and feces; (2) requires

drugs or mechanical means to maintain proper bladder or bowel function;

or (3) is completely incontinent of urine or feces.

Intellectual function is ordinarily assessed through the use of any

of several standardized tests that determine the intelligence quotient

(I.Q.). The average or normal I.Q. range is generally considered to be

90 to 110 (``Comprehensive Textbook of Psychiatry'' 497 (Harold I.

Kaplan, M.D., and Benjamin J. Sadock, M.D., eds., 5th ed. 1989)). The

American Association of Mental Deficiency considers an I.Q. of 69 or

less to indicate mental retardation. Between these ranges falls an

intermediate group with an I.Q. between 70 and 89, considered to be in

the range

[[Page 23726]]

of dull-normal to borderline mental retardation.

Section 1805(a) authorizes VA to pay a monetary allowance for any

disability resulting from spina bifida. We have concluded that any

person who has spina bifida, other than spina bifida occulta, suffers

some degree of disability. Accordingly, we propose to rate individuals

suffering from spina bifida at Level I (the lowest level of disability)

if they are able to walk without braces or other external support

(although gait may be impaired), have no motor or sensory impairment of

the upper extremities, have an I.Q. of 90 or higher, and are continent

of urine and feces. Provided that none of their disabilities due to

spina bifida are severe enough to meet the requirements of Level III,

we propose to rate individuals at Level II (the intermediate level of

disability) if they are ambulatory, but only with braces or other

external support; or, if they have motor or sensory impairment of the

upper extremities but are able to grasp a pen, feed themselves, and

perform self care; or, if they have an I.Q. between 70 and 89; or, if

they require drugs or intermittent catheterization to maintain proper

urinary bladder function, or mechanisms for proper bowel function. We

propose to rate individuals at Level III (the highest level of

disability) if they are unable to ambulate; or, if they have motor or

sensory impairment of the upper extremities severe enough to preclude

grasping a pen, self-care or self-feeding; or, if they have an I.Q. of

69 or less; or, if they are completely incontinent of urine or feces.

For a child with spina bifida to be evaluated at Level I, each of any

existing neurological disabilities would have to fall into the least

impaired range described above. If at least one of the claimant's

neurological impairments falls into the middle range, the individual

would be rated at Level II. Furthermore, if at least one of the

disabilities falls into the highest level of impairment, the individual

would be rated at Level III.

Children who are less than one year of age, regardless of whether

they suffer from spina bifida, are essentially helpless, incontinent,

unable to walk, and too young for I.Q. to be measured. Therefore, the

above-noted criteria we are proposing are not readily applicable as

determinants of disability at that age. We therefore propose that

children under the age of one be rated at Level I, unless a pediatric

neurologist certifies that, in his or her medical judgment, there is a

neurological deficit present that will prevent the child from

ambulating, grasping a pen, performing self-care, or feeding him or

herself because of sensory or motor impairment of the upper

extremities, or that will make it impossible for the child to achieve

urinary or fecal continence. In our judgment, pediatric neurologists

are the only physicians with the expertise in this highly specialized

area necessary to assess neurological deficits and their likely

prognosis in children under the age of one. If such a deficit is

present, we propose that the child be rated at Level III. We also

propose to require that VA reassess the level of disability in each

child at the age of one year, at which time the effects of spina bifida

can more readily be determined.

In some cases, symptoms due to spina bifida do not become manifest

for several years. Even if the limbs initially appear totally

paralyzed, early training and the use of appliances may allow

ambulation in childhood (Brain's Diseases of the Nervous System,

revised by John N. Walton, M.D., D.Sc., F.R.C.P., 8th ed., 1977, 777).

However, children with lesions at the second lumbar level or higher,

even if they become ambulatory in childhood, usually will require

wheelchairs in the teenage period. Despite initial bowel or bladder

incontinence, most older children, with training and the use of

medication or appliances, are able to achieve continence (Diseases of

the Nervous System, Arthur K. Asbury, M.D., Guy M. McKhann, M.D., and

W. Ian McDonald, Ph.D., F.R.C.P., eds., 1986, 712).

VA will reassess the level of disability due to spina bifida

whenever it receives medical evidence indicating that a change is

warranted. Nevertheless, we propose to require that VA reassess the

level of disability due to spina bifida at intervals of not more than

five years until the child has reached the age of 21. Required

reassessments will assure that the appropriate level of disability is

assigned during the period of time when changes in the disabling

effects of spina bifida are most likely to occur. Thereafter, we

propose to reassess the level of disability only if we receive medical

evidence indicating a material change in the level of disability or

that the current rating may be incorrect. By the time a child is age

21, the condition has generally stabilized and, in our judgment,

required reassessments beyond that age will no longer be necessary.

Because VA medical facilities generally provide examination and

care only to veterans, VA lacks pediatric examiners, pediatric

neurologists, and other pediatric specialists who might participate in

the evaluation and care of children with spina bifida. We therefore

propose to accept statements from private physicians, as well as

examination reports from government or private institutions, for the

purpose of rating spina bifida claims without further examination,

provided they are adequate to permit the evaluation of the effects of

spina bifida under the criteria proposed above. Because of the critical

need to obtain this information in order to assure assignment of an

appropriate rating level, we propose to require that individuals

seeking or receiving benefits under this provision authorize the

release of pertinent medical records to VA and that children for whom

VA schedules an examination, whether at a VA facility or by a private

health-care provider under contract, report for that examination.

Individuals who fail to authorize the release of pertinent medical

records or fail to report for examination would be rated at Level I.

Paperwork Reduction Act of 1995

The Office of Management and Budget (OMB) has determined that

proposed 38 CFR 3.814 would contain collections of information under

the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). Accordingly,

under section 3507(d) of the Act, VA has submitted a copy of this

rulemaking action to OMB for its review of the collections of

information.

OMB assigns a control number for each collection of information it

approves. VA may not conduct or sponsor, and a person is not required

to respond to, a collection of information unless it displays a

currently valid OMB control number.

Comments on the proposed collections of information should be

submitted to the Office of Management and Budget, Attention: Desk

Officer for the Department of Veterans Affairs, Office of Information

and Regulatory Affairs, Washington, DC 20503, with copies mailed or

hand-delivered to: Director, Office of Regulations Management (02D),

Department of Veterans Affairs, 810 Vermont Ave., NW, Room 1154,

Washington, DC 20420. Comments should indicate that they are submitted

in response to ``RIN 2900-AI70.''

Title: Application for Benefits Eligibility.

Summary of collection of information: The provisions of proposed 38

CFR 3.814 would require applicants for the monetary allowance to submit

certain personal identifying information of the child and natural

parents, medical status of the child, veteran status of the natural

parents, and incompetency details (if applicable and the child is over

18 years old). The types of evidence specified in Secs. 3.209 and 3.210

[[Page 23727]]

would be sufficient to establish that a child is the natural child of a

Vietnam veteran.

Description of the need for information and proposed use of

information: VA needs the information to determine eligibility for

obtaining the monetary allowance and the appropriate level of payment.

Although submission of Social Security numbers is not mandatory,

pending the enactment of specific legislation, VA would use the Social

Security numbers to: (1) Verify that the child's natural parent was a

veteran who served in Vietnam during the specified period; (2) identify

medical records; and (3) ensure that awards to deceased beneficiaries

are terminated in a timely manner to avoid creation of overpayments.

Description of likely respondents: Individuals seeking the monetary

allowance for a child born with spina bifida who is a child of a

Vietnam veteran.

Estimated number of respondents: 600-2,000.

Estimated frequency of responses: 1.

Estimated total annual reporting and recordkeeping burden: 335

hours.

Estimated annual burden per collection: 10 minutes.

Title: Acceptance of Released Statements from Private Physicians or

Institutions for the Purpose of Evaluating Spina Bifida Claims.

Summary of collection of information: The provisions of the

proposed 38 CFR 3.814(d) would permit VA to accept statements from

private physicians, as well as examination reports from government or

private institutions, for the purpose of evaluating spina bifida claims

without VA examination provided that they are adequate to evaluate the

effects of spina bifida under the criteria proposed in the regulation,

and would require individuals seeking the monetary allowance to

authorize the release of pertinent medical records to VA.

Description of the need for information and proposed use of

information: Because VA medical facilities generally provide

examination and care only to veterans, VA lacks pediatric examiners,

pediatric neurologists, and other pediatric specialists who might

participate in the evaluation of children with spina bifida.

Description of likely respondents: Individuals seeking the monetary

allowance for a child born with spina bifida who is a child of a

Vietnam veteran.

Estimated number of respondents: 600-2,000.

Estimated frequency of responses: 1.

Estimated total annual reporting and recordkeeping burden: 335

hours.

Estimated annual burden per collection: 10 minutes.

The Department considers comments by the public on proposed

collections of information in--

Evaluating whether the proposed collections of information

are necessary for the proper performance of the functions of the

Department, including whether the information will have practical

utility;

Evaluating the accuracy of the Department's estimate of

the burden of the proposed collections of information, including the

validity of the methodology and assumptions used;

Enhancing the quality, usefulness, and clarity of the

information to be collected; and

Minimizing the burden of the collections of information on

those who are to respond, including responses through the use of

appropriate automated, electronic, mechanical, or other technological

collection techniques or other forms of information technology, e.g.,

permitting electronic submission of responses.

OMB is required to make a decision concerning the collection of

information contained in this proposed rule between 30 and 60 days

after publication of this document in the Federal Register. Therefore,

a comment to OMB is best assured of having its full effect if OMB

receives it within 30 days of publication. This does not affect the

deadline for the public to comment on the proposed regulations.

The Secretary hereby certifies that this regulatory amendment will

not have a significant economic impact on a substantial number of small

entities as they are defined in the Regulatory Flexibility Act (RFA), 5

U.S.C. 601-612. The reason for this certification is that these

amendments would not directly affect any small entities. Only VA

beneficiaries could be directly affected. Therefore, pursuant to 5

U.S.C. 605(b), these amendments are exempt from the initial and final

regulatory flexibility analysis requirements of sections 603 and 604.

There is no Catalog of Federal Domestic Assistance program number

for this benefit.

List of Subjects in 38 CFR Part 3

Administrative practice and procedure, Claims, Disability benefits,

Health care, Pensions, Veterans, Vietnam.

Approved: March 21, 1997.

Jesse Brown,

Secretary of Veterans Affairs.

For the reasons set forth in the preamble, 38 CFR part 3 is

proposed to be amended as follows:

PART 3--ADJUDICATION

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

Compensation

1. The authority citation for part 3, subpart A continues to read

as follows:

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

2. In Sec. 3.27, paragraph (c) is redesignated as paragraph (d), a

new paragraph (c) is added, and newly redesignated paragraph (d) and

its authority citation are revised to read as follows:

Sec. 3.27 Automatic adjustment of benefit rates.

* * * * *

(c) Monetary allowance under 38 U.S.C. 1805 for a child born with

spina bifida who is a child of a Vietnam veteran. Whenever there is a

cost-of-living increase in benefit amounts payable under section 215(i)

of Title II of the Social Security Act, VA shall, effective on the

dates such increases become effective, increase by the same percentage

the monthly allowance under 38 U.S.C. 1805 for a child born with spina

bifida who is a child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(b)(3))

(d) Publishing requirements. Increases in pension rates, parents'

dependency and indemnity compensation rates and income limitation, and

the monthly allowance under 38 U.S.C. 1805 for a child born with spina

bifida made under this section shall be published in the Federal

Register.

(Authority: 38 U.S.C. 5312(c)(1), 1805(b)(3))

3. In Sec. 3.105, paragraphs (g) and (h) are redesignated as

paragraphs (h) and (i), respectively; in paragraphs (d), (e), (f) and

newly redesignated paragraph (h) remove ``paragraph (h)'' each time it

appears and add, in its place, ``paragraph (i)''; in newly redesignated

paragraph (i)(1) remove ``paragraphs (d) through (g)'' and add, in its

place, ``paragraphs (d) through (h)''; in newly redesignated paragraph

(i)(2) introductory text, remove ``paragraph (d), (e), (f) or (g)'' and

add, in its place, ``paragraph (d), (e), (f), (g) or (h)''; in newly

redesignated paragraph (i)(2)(ii) remove ``paragraph (f)'' and add, in

its place, ``paragraphs (f) and (g)''; in newly

[[Page 23728]]

redesignated paragraph (i)(2)(iii) remove ``paragraph (g)'' and add, in

its place, ``paragraph (h)''; and add a new paragraph (g) to read as

follows:

Sec. 3.105 Revision of decisions.

* * * * *

(g) Reduction in evaluation--monetary allowance to a child with

spina bifida under 38 U.S.C. 1805. Where a change in disability level

warrants a reduction of the monthly allowance currently being made, a

rating proposing the reduction will be prepared setting forth all

material facts and reasons. The beneficiary will be notified at his or

her latest address of record of the contemplated action and furnished

detailed reasons therefor, and will be given 60 days for the

presentation of additional evidence to show that the monthly allowance

should be continued at the present level. Unless otherwise provided in

paragraph (i) of this section, if additional evidence is not received

within that period, final rating action will be taken and the award

will be reduced effective the last day of the month following sixty

days from the date of notice to the payee of the proposed reduction.

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

* * * * *

Sec. 3.158 [Amended]

4. In Sec. 3.158, paragraphs (a) and (c) are amended by removing

``or dependency and indemnity compensation'' and adding, in its place,

``dependency and indemnity compensation, or monetary allowance under

the provisions of 38 U.S.C. 1805''.

5. In Sec. 3.261, paragraph (a)(40) is added to read as follows:

Sec. 3.261 Character of income; exclusions and estates.

* * * * *

(a) * * *

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Pension; old-law (veterans, Pension; section 306

Income Dependency (parents) Dependency and indemnity surviving spouses and (veterans, surviving spouses See

compensation (parents) children) and children)

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(40) Monetary allowance under 38 Excluded...................... Excluded...................... Excluded..................... Excluded..................... Sec. 3.262(y)

U.S.C. 1805 for children born with

spina bifida who are children of

Vietnam Veterans.

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* * * * *

6. In Sec. 3.262, paragraph (y) is added to read as follows:

Sec. 3.262 Exclusions of income.

* * * * *

(y) Monetary allowance under 38 U.S.C. 1805 for a child born with

spina bifida who is a child of a Vietnam veteran. There shall be

excluded from income computation any allowance paid under the

provisions of 38 U.S.C. 1805 to a child born with spina bifida who is

the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

7. In Sec. 3.263, paragraph (g) is added to read as follows:

Sec. 3.263 Corpus of estate; net worth.

* * * * *

(g) Monetary allowance under 38 U.S.C. 1805 for a child born with

spina bifida who is a child of a Vietnam veteran. There shall be

excluded from the corpus of estate or net worth of a claimant any

allowance paid under the provisions of 38 U.S.C. 1805 to a child born

with spina bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

8. In Sec. 3.272, paragraph (u) is added to read as follows:

Sec. 3.272 Exclusions from income.

* * * * *

(u) Monetary allowance under 38 U.S.C. 1805 for a child born with

spina bifida who is a child of a Vietnam veteran. Any allowance paid

under the provisions of 38 U.S.C. 1805 to a child born with spina

bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

9. In Sec. 3.275, paragraph (i) is added to read as follows:

Sec. 3.275 Criteria for evaluating net worth.

* * * * *

(i) Monetary allowance under 38 U.S.C. 1805 for a child born with

spina bifida who is a child of a Vietnam veteran. There shall be

excluded from the corpus of estate or net worth of a claimant any

allowance paid under the provisions of 38 U.S.C. 1805 to a child born

with spina bifida who is the child of a Vietnam veteran.

(Authority: 38 U.S.C. 1805(d))

10. In Sec. 3.403, the introductory text and paragraphs (a)-(e) are

redesignated as paragraphs (a), and (a)(1)-(a)(5), respectively, and

paragraph (b) is added to read as follows:

Sec. 3.403 Children.

* * * * *

(b) Monetary allowance under 38 U.S.C. 1805 for a child born with

spina bifida who is a child of a Vietnam veteran (Sec. 3.814). An award

of the monetary allowance under 38 U.S.C. 1805 to a child with spina

bifida who is the child of a Vietnam veteran will be either date of

birth if claim is received within one year of that date, or date of

claim, but not earlier than October 1, 1997.

(Authority: 38 U.S.C. 1806, 5110(n); sec. 422(c), Pub. L. 104-204,

110 Stat. 2926)

11. In Sec. 3.503, the introductory text and paragraphs (a)-(j) are

redesignated as paragraphs (a), and (a)(1)-(a)(10), respectively, and

paragraph (b) is added to read as follows:

Sec. 3.503 Children.

* * * * *

(b) Monetary allowance under 38 U.S.C. 1805 for a child born with

spina bifida who is a child of a Vietnam veteran (Sec. 3.814). The

effective date of discontinuance of the monthly allowance under 38

U.S.C. 1805 to a child with spina bifida who is the child of a Vietnam

veteran will be the last day of the month before the month in which the

death of the child occurred.

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

12. Section 3.814 is added to read as follows:

Sec. 3.814 Monetary allowance under 38 U.S.C. 1805 for a child born

with spina bifida who is a child of a Vietnam veteran.

(a) VA shall pay a monthly allowance based upon the level of

disability determined under the provisions of paragraph (c) of this

section to or for a child born with spina bifida who is a child of a

Vietnam veteran. Receipt of this allowance shall not affect the right

of the child, or the right of any individual based on the child's

relationship to that individual, to receive any other benefit to which

the child, or that individual, may be entitled under any law

administered by VA. If a child with spina bifida is the natural child

of two Vietnam veterans,

[[Page 23729]]

he or she is entitled to only one monthly allowance under this section.

(b) Applicants for the monetary allowance under this section must

submit an application to the VA regional office and include the

information mandated on the following VA form entitled ``Application

for Spina Bifida Benefits'':

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(c) Definitions.

(1) Vietnam veteran. For the purposes of this section, the term

``Vietnam veteran'' means a veteran who performed active military,

naval, or air service in the Republic of Vietnam during the Vietnam

era. Service in the Republic of Vietnam includes service in the waters

offshore and service in other locations if the conditions of service

involved duty or visitation in the Republic of Vietnam.

(2) Child. For the purposes of this section, the term ``child''

means a natural child of a Vietnam veteran, regardless of age or

marital status, conceived after the date on which the veteran first

served in the Republic of Vietnam during the Vietnam era.

Notwithstanding the provisions of Sec. 3.204(a)(1), VA shall require

the types of evidence specified in Secs. 3.209 and 3.210 sufficient to

establish in the judgment of the Secretary that a child is the natural

child of a Vietnam veteran.

(3) Spina bifida. For the purposes of this section, the term

``spina bifida'' means any form and manifestation of spina bifida

except spina bifida occulta.

(d)(1) Upon receipt of competent medical evidence that a child has

spina bifida, VA shall determine the level of disability suffered by

the child in accordance with the following criteria:

(i) Level I. The child is able to walk without braces or other

external support (although gait may be impaired), has no sensory or

motor impairment of upper extremities, has an IQ of 90 or higher, and

is continent of urine and feces.

(ii) Level II. Provided that none of the child's disabilities are

severe enough to be evaluated at Level III, and the child: is

ambulatory, but only with braces or other external support; or has

sensory or motor impairment of upper extremities, but is able to grasp

pen, feed self, and perform self care; or has an IQ of at least 70 but

less than 90; or requires drugs or intermittent catheterization or

other mechanical means to maintain proper urinary bladder function, or

mechanisms for proper bowel function.

(iii) Level III. The child is unable to ambulate; or has sensory or

motor impairment of upper extremities severe enough to prevent grasping

a pen, feeding self, and performing self care; or has an IQ of 69 or

less; or has complete urinary or fecal incontinence.

(2) Provided that they are adequate for assessing the level of

disability due to spina bifida under the provisions of paragraph (d)(1)

of this section, VA may accept statements from private physicians, or

examination reports from government or private institutions, for the

purpose of rating spina bifida claims without further examination. In

the absence of such information, VA will schedule an examination for

the purpose of assessing the level of disability.

(3) Unless or until VA is able to obtain medical evidence adequate

to assess the level of disability due to spina bifida, it will rate the

disability of a person eligible for this monetary allowance at no

higher than Level I.

(4) Children under the age of one year will be rated at Level I

unless a pediatric neurologist certifies that, in his or her medical

judgment, there is a neurological deficit that will prevent the child

from ambulating; from grasping a pen, feeding him or herself, or

performing self care; or from achieving urinary or fecal continence. If

such a deficit is present, the child will be rated at Level III. VA

will reassess the level of disability of each child to which this

provision is applied at the age of one year.

(5) VA will reassess the level of disability due to spina bifida

whenever it receives medical evidence indicating that a change is

warranted. For individuals between the ages of one and twenty-one,

however, it will reassess the level of disability at intervals of not

more than five years. Thereafter, it will reassess the level of

disability only if evidence indicates there has been a material change

in the level of disability or that the current rating may be incorrect.

(Authority: 38 U.S.C. 501, 1805)

13. The Cross-Reference following Sec. 3.57 is amended by removing

``Sec. 3.403(a)'' and ``Sec. 3.503(c)'' and adding, in their places,

``Sec. 3.403(a)(1)'' and ``Sec. 3.503(a)(3)'', respectively. Each

Cross-Reference following Secs. 3.659 and 3.703 is amended by removing

``Sec. 3.503(g)'' and adding, in its place, ``Sec. 3.503(a)(7)''. Each

Cross Reference following Secs. 3.707 and 3.807 is amended by removing

``Sec. 3.503(h)'' and adding, in its place, ``Sec. 3.503(a)(8)''.

[FR Doc. 97-11256 Filed 4-30-97; 8:45 am]

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