SUPPLEMENTARY INFORMATION:

In a document published in the Federal Register on December 18, 2009, (74 FR 67145), VA proposed to amend its regulations pertaining to eligibility for specially adapted housing (SAH) grants and special home adaptation (SHA) grants. The public comment period ended on February 16, 2010, and VA received no comments. Therefore, VA is adopting the proposed rule as a final rule. However, we are making one change from the proposed rule. We are inserting “rated as permanent and total” ( printed page 57860) into the first sentence of 38 CFR 3.809(b) and 3.809a(b), so that the first sentence in each paragraph states: “A member of the Armed Forces serving on active duty must have a disability rated as permanent and total that was incurred or aggravated in line of duty in active military, naval, or air service.” Although we did not propose those provisions with the phrase “rated as permanent and total,” it is required by the statutory provisions on which they are based. Section 2101A(a) of title 38, United States Code, requires that housing assistance provided to certain members of the Armed Forces serving on active duty be provided “to the same extent as assistance is provided under [38 U.S.C. chapter 20] to veterans eligible under [chapter 20] and subject to the same requirements as veterans under [chapter 20].” To be entitled to a SAH or SHA grant, a veteran must be entitled to compensation “for a permanent and total service-connected disability.” 38 U.S.C. 2101(a)(2) and (b)(2). Therefore, for a member of the Armed Forces to be entitled to a SAH or SHA grant, the member's disability that was incurred or aggravated in line of duty in active service ( i.e., a service-connected disability) must be rated as permanent and total. Because the authorizing statutes require that SAH and SHA grants for Armed Forces members serving on active duty be conditioned on having a permanent and total service-connected disability, our implementing regulations must also impose that requirement.

Applicability Dates: The following applicability dates are provided for those amended regulations which do not contain an applicability date in the regulatory text. These dates are based upon the effective dates of the applicable provisions of the following Public Laws: Public Law 108-183, with applicable provisions effective December 16, 2003; Public Law 108-454, with applicable provisions effective December 10, 2004; Public Law 109-233, section 105 of which is effective December 10, 2004; and Public Law 110-289, with applicable provisions effective July 30, 2008. In accordance with the statutory provisions of these Public Laws, the following applicability dates pertain to this final rule:

(1) The revisions to § 3.809(b) introductory text and § 3.809a(b) introductory text, pertaining to eligibility for SAH and SHA grants of persons disabled by VA treatment or vocational rehabilitation, apply to applications for SAH or SHA grants received by VA on or after December 10, 2004.

(2) The addition of § 3.809(b)(5), pertaining to loss or loss of use of both upper extremities as a disability qualifying for SAH grant eligibility, applies to all applications for SAH grants received by VA on or after December 10, 2004.

(3) The addition of paragraph (b)(6) to § 3.809 and the addition of paragraphs (b)(2)(ii) through (b)(2)(iv) to 3.809a, pertaining to severe burns as disabilities qualifying for SAH and SHA grant eligibility, apply to all applications for SAH or SHA grants received by VA on or after July 30, 2008.

Paperwork Reduction Act

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

Regulatory Flexibility Act

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

Executive Order 12866

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Executive Order classifies a “significant regulatory action,” requiring review by the Office of Management and Budget, as any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

The economic, interagency, budgetary, legal, and policy implications of this final rule have been examined, and it has been determined to be a significant regulatory action under the Executive Order because it is likely to result in a rule that may raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Unfunded Mandates

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

Catalog of Federal Domestic Assistance Numbers and Titles

The Catalog of Federal Domestic Assistance program numbers and titles for the programs affected by this document are 64.106, Specially Adapted Housing for Disabled Veterans; and 64.109, Veterans Compensation for Service-Connected Disability.

Signing Authority

The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. John R. Gingrich, Chief of Staff, Department of Veterans Affairs, approved this document on September 9, 2010, for publication.

For the reasons set out in the preamble, VA amends 38 CFR part 3 as follows:

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. Revise § 3.362(e) to read as follows:

3. Revise § 3.800(a)(4) to read as follows:

(Authority: 38 U.S.C. 1151(b)(2))

4. Amend § 3.809 by:

a. In the introductory text, removing “ 38 U.S.C. 2101(a)” and adding in its place “38 U.S.C. 2101(a) or 2101A(a)” and by removing “veteran” and adding in its place “veteran or a member of the Armed Forces serving on active duty”;

b. Revising paragraph (a);

c. Revising paragraph (b) introductory text;

d. In paragraph (b)(3), removing “wheelchair.” and adding, in its place, “wheelchair, or”;

e. In paragraph (b)(4), removing “with the loss of loss of use” and adding in its place “with the loss or loss of use” and removing “wheelchair.” and adding, in its place, “wheelchair, or”;

f. Adding paragraphs (b)(5) and (b)(6);

g. Removing paragraph (c);

h. Redesignating paragraph (d) as new paragraph (c); and

i. Revising the authority citation at the end of the section.

The revisions and additions read as follows:

5. Amend § 3.809a by:

a. In the introductory text, removing “ 38 U.S.C. 2101(b)” and adding in its place “38 U.S.C. 2101(b) or 2101A(a)” and by removing “April 20, 1898,” and adding in its place “April 20, 1898, or to a member of the Armed Forces serving on active duty who is eligible for the benefit under this section on or after December 16, 2003,”.

b. Removing the authority citation after the introductory text.

c. In paragraph (a), removing “veteran” each place it appears and adding in each place “member of the Armed Forces serving on active duty or veteran”; and by removing the last sentence.

d. Revising paragraph (b).

e. Removing paragraph (c).

f. Revising the authority citation at the end of the section.

g. Adding a cross-reference immediately after the authority citation at the end of the section.

The revisions and addition read as follows: