This document summarizes amendments to VA regulations governing the accreditation of veterans service organization representatives. The key points are: 1) Service organizations must now recertify the qualifications of accredited representatives every 5 years. 2) Organizations must notify VA if requesting cancellation of a representative's accreditation due to misconduct or lack of competence. 3) VA can suspend accreditation for a defined period or until conditions for reinstatement are met. The purpose is to ensure qualified representation for veterans' claims.

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Federal Register / Vol. 72, No. 197 / Friday, October 12, 2007 / Rules and Regulations
The commenter asked for a 6-month
individuals for the preparation,
DEPARTMENT OF VETERANS
grace period following the effective date
presentation, and prosecution of claims
AFFAIRS
of the regulation to achieve initial
for benefits before VA. The amendments
38 CFR Part 14 compliance and asked for a 4-month
to chapter 59, among other things,
grace period for each subsequent
require VA to: (1) Regulate the
RIN 2900–AM29
recertification of an accredited
qualifications and standards of conduct
representative. VA acknowledges that
applicable to accredited agents and
Accreditation of Service Organization
many service organizations, by virtue of
attorneys; (2) annually collect
Representatives and Agents
the size of their operations, will face
information about accredited agents’
Department of Veterans Affairs.
AGENCY: administrative challenges in recertifying
and attorneys’ standing to practice or
representatives accredited by VA more
appear before any court, bar, or Federal
Final rule.
ACTION:
than 5 years before the effective date of
or State agency; (3) add to the list of
SUMMARY: The Department of Veterans this rule. To address this issue, the rule
grounds for suspension or exclusion of
Affairs (VA) is amending its regulations is being made effective 90 days after the
agents or attorneys from further practice
governing the accreditation of date of publication in the Federal
before VA; and (4) subject veterans
representatives of claimants for Register and VA is establishing a
service organization representatives and
veterans’ benefits. As amended, the phased series of initial compliance dates
individuals recognized for a particular
regulations require service organizations based on the first letter of
claim to suspension and exclusion from
to recertify the qualifications of their representatives’ last names. The initial
further practice before VA on the same
accredited representatives every 5 years, compliance date for service organization
grounds as apply to agents and
and to notify VA when requesting representatives accredited more than 5
attorneys.
cancellation of a representative’s Section 101 of Public Law 109–461 years before the effective date of this
accreditation based upon misconduct or also amends the fee provisions in rule is April 9, 2008 for representatives
lack of competence, or if a chapter 59. Prior to the amendments, with last names beginning with letters A
representative resigns to avoid section 5904(c)(1) proscribed the through F; July 8, 2008 for
cancellation of accreditation for charging of fees by agents and attorneys representatives with last names
misconduct or lack of competence. They for services provided before a first final beginning with letters G through M;
also clarify that VA’s authority to cancel Board of Veterans’ Appeals (Board) October 6, 2008 for representatives with
accreditation includes the authority to decision in a case. Under the last names beginning with letters N
amendments, accredited agents and
suspend accreditation. The purpose of through S; and January 5, 2009 for
attorneys may charge fees for
these amendments is to ensure that representatives with last names
representational services provided after
claimants for veterans’ benefits have beginning with letters T through Z.
The delayed effective date and phased
the claimant files a notice of
responsible, qualified representation in
initial compliance dates will permit
disagreement in a case, and may receive
the preparation, presentation, and
organizations to make conforming
fees for representation directly from VA
prosecution of claims.
changes to their procedures and phase-
out of past-due benefits paid to
DATES: Effective Date: This final rule is
in the recertification requirements over
claimants.
effective January 10, 2008. See
These various amendments, viewed a 15-month period. We believe that
SUPPLEMENTARY INFORMATION for initial
together, indicate to us that Congress these accommodations are sufficient to
compliance dates.
intends VA to treat agents and attorneys avoid undue burdens on recognized
FOR FURTHER INFORMATION CONTACT:
in the same manner for purposes of organizations. Thereafter, VA intends
Michael G. Daugherty, Staff Attorney,
accreditation, suspension or that organizations will recertify their
Office of the General Counsel (022G2),
cancellation of accreditation, and accredited representatives before the
Department of Veterans Affairs, 810
payment of fees. To properly implement expiration of each 5-year certification
Vermont Avenue, NW., Washington, DC
the provisions of Public Law 109–461, period. Accordingly, we will not make
20420, (202) 273–6315. This is not a
further changes based on these
VA will withdraw the provisions of the
toll-free number. comments.
notice of proposed rulemaking relating
SUPPLEMENTARY INFORMATION: In a One commenter, a national veterans
to the accreditation of claims agents and
document published in the Federal service organization, requested
will revisit the issue in a later
Register on December 23, 2005 (70 FR clarification about proposed § 14.629(a).
rulemaking.
76221), VA proposed to amend the Specifically, the organization asked
Based on the rationale described in
regulations governing the accreditation whether VA’s amendment would
this document and in the notice of
of recognized veterans service require accredited service organization
proposed rulemaking, VA adopts the
organization representatives and claims representatives ‘‘to take a written
proposed rule as revised in this
agents. The public comment period examination administered by VA every
document.
ended on February 21, 2006. VA 5 years as a prerequisite for
Section 14.629(a)—Periodic
received comments from an individual recertification’’ as proposed for agents
Recertification of Service Organization
veteran, two State veterans service in § 14.629(b)(2). The organization does
Representatives
organizations, and three national not support such a requirement for its
Five commenters expressed overall
veterans service organizations. These accredited representatives. Another
support for the concept of periodic
comments are discussed below. commenter, a State veterans service
recertification of service organization
After the notice of proposed organization, expressed similar concern
representatives. One of these
rulemaking was published, Public Law that the rule would impose a new
commenters, a national veterans service
109–461 was enacted. Section 101 of testing requirement for representatives.
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It is not VA’s intention to impose a
organization, while supporting the
Public Law 109–461, the Veterans
new testing requirement for
proposed rule, expressed concern with
Benefits, Health Care, and Information
recertification of accredited
its ability to recertify hundreds of
Technology Act of 2006, amends
representatives of service organizations
accredited representatives in a timely
chapter 59 of title 38, United States
under this rule. Section 14.629(a)
manner after VA publishes a final rule.
Code, governing the recognition of
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2. 58010 Federal Register / Vol. 72, No. 197 / Friday, October 12, 2007 / Rules and Regulations
conflict in situations where the
and convincing evidence of proscribed
outlines the initial accreditation and
representative is also represented by the
conduct). Moreover, in Public Law 109–
periodic recertification requirements for
organization to which he or she is
461, Congress amended section 5902 to
accredited representatives of service
accredited.’’ According to this
subject accredited representatives to
organizations, and § 14.629(b) provides
organization, ‘‘[p]roviding the VA with
suspension and exclusion from further
the requirements for claims agents. To
information that may potentially
practice before VA on the same grounds
recertify an accredited representative,
adversely impact the representative’s
as apply to agents and attorneys as
an organization files a VA Form 21
entitlement to VA benefits is in direct
provided for in section 5904(b). VA
(Application for Accreditation as
conflict with the organization’s
agrees that there is a need for greater
Service Organization Representative)
obligation as the individual’s
clarity in the procedures for
with the signature of the certifying
representative.’’ We disagree.
reinstatement. Accordingly, we have
official indicating the representative
Under the law governing recognition,
revised the proposed amendments to the
continues to meet the requirements of
service organizations have a legal duty
rule concerning suspension to provide
§ 14.629(a)(1) through (3) in that he or
to assist VA in ensuring the competent
that the General Counsel may suspend
she is of good character and reputation,
representation of claimants before The
accreditation for a definite period or
is qualified to represent veterans, meets
Department. Section 5902(a) of title 38,
until the individual satisfies the
organizational membership
United States Code, authorizes VA to
conditions established by the General
requirements or is a full-time employee
recognize organizations for the limited
Counsel for reinstatement. The General
of the organization, and is not an
purpose of ensuring competent
Counsel will reinstate suspended
employee of the United States
representation of veterans in the
accreditations at the end of the period
Government. The organization may
preparation, presentation, and
of suspension or upon verification that
determine for itself the best means to
prosecution of claims for VA benefits.
the individual has satisfied the
determine the continuing qualifications
See 38 CFR 14.626 (‘‘The purpose of the
conditions for reinstatement.
of its representatives. The service
regulation of representatives is to ensure
Concerning the circumstances under
organization’s filing of the VA Form 21
that claimants for [VA] benefits have
which a representative may be
is the only requirement for
responsible, qualified representation in
suspended, VA believes that further
recertification of accredited
the preparation, presentation, and
clarification is unnecessary. The plain
representatives under § 14.629(a).
prosecution of claims for veterans’
language of section 5904(b) authorizes
Section 14.629(b)—Agents benefits.’’). VA implemented this
VA to suspend or exclude from further
One commenter, a State veterans authority in 38 CFR 14.628, which,
practice before VA agents or attorneys
service organization, objected to the among other things, requires that an
found incompetent or to have engaged
testing requirements in VA’s organization applying for recognition
in misconduct. Congress’ recent
accreditation regulations. However, the demonstrate a substantial service
amendment of section 5902 in Public
successful completion of an commitment to veterans. An
Law 109–461 codifies VA’s
examination exists as a requirement for organization applying for VA
longstanding interpretation of section
the initial accreditation of claims agents recognition must demonstrate that it
5902 by providing VA with authority to
and the initial accreditation of county satisfies the legal requirements for
suspend the accreditation of
veterans’ service officers recommended recognition and then certify to VA that
representatives or exclude them from
by a recognized State organization, not each of the organization’s
further practice before VA on the same
for service organization representatives representatives who will assist veterans
grounds as apply to agents and
in general. For the reasons discussed in the preparation, presentation, and
attorneys. VA’s decision to suspend or
above relating to the enactment of prosecution of claims before VA meets
cancel an individual’s accreditation will
Public Law 109–461, VA will withdraw the legal requirements for accreditation
be based on the facts and circumstances
the proposed amendments requiring in 38 CFR 14.629(a). Furthermore,
of the particular case, with suspension
periodic recertification of claims agents recognized organizations are required to
being appropriate in cases involving
train and monitor their accredited
extenuating circumstances or less
and will revisit the issue in a later
representatives to ensure the proper
egregious conduct not warranting
rulemaking.
handling of claims. 38 CFR
permanent cancellation of accreditation.
Section 14.633—Suspension of
14.628(d)(1)(v). Thus, an organization’s
Section 14.633—Duty To Inform VA of
Accreditation
legal duty to establish systems to ensure
Misconduct or Incompetence
One commenter, a national veterans the competent representation of
Two commenters disagreed with the
service organization, suggested that VA claimants does not end with its
proposed requirement for an
‘‘better define the circumstances under recognition, but continues as long as the
organization to inform VA of the reasons
which accreditation can be suspended’’ organization is recognized by VA.
for requesting cancellation of a
and ‘‘describe the maximum length of a Under current § 14.633(c) and (d),
representative’s accreditation under 38
suspension and the mechanism for cancellation of accreditation is
CFR 14.633(a) when the request is due
obtaining reinstatement.’’ We agree. mandatory if the General Counsel finds
Section 5904(b) permits VA to to the representative’s misconduct or that a representative engaged in
suspend or exclude agents and attorneys misconduct or that a representative’s
lack of competence or because the
from practice before VA. VA has performance before the Department
representative resigned to avoid
interpreted section 5902 and its demonstrates a lack of the degree of
cancellation of accreditation based upon
predecessor, 38 U.S.C. 3402, as similarly competence necessary to adequately
misconduct or lack of competence.
One commenter, a national service
authorizing the suspension or exclusion prepare, present, and prosecute claims.
organization, expressed concern that the
of accredited representatives of However, under current § 14.633(a),
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proposed requirement would create an
recognized service organizations. See 38 service organizations may request
adversarial relationship between the
CFR 14.627(c) (1965) (suspension or cancellation of a representative’s
accreditation without informing VA of
employer service organization and
exclusion for cause); see also 38 CFR
the reason for the request. The
employee representative and that it
14.633(c) (1979) (suspension or
amendments to § 14.633(a), which
would create ‘‘a potential ethical
exclusion based upon a finding of clear
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3. 58011
Federal Register / Vol. 72, No. 197 / Friday, October 12, 2007 / Rules and Regulations
later disaccredited for misconduct or
Regarding the commenter’s concern
require organizations to report the
incompetence, by itself, would generally
about a potential adverse impact on a
reason for the request if it involves
not be sufficient to require
veteran’s benefit entitlements by virtue
misconduct or incompetence, will assist
readjudication of a claim based on
of the obligation to inform VA of
VA in monitoring the qualifications of
conduct by the representative.
misconduct or incompetence, the
individuals who apply for accreditation
The commenter suggested that ‘‘very
service organizations’ duty to inform
or are cross-accredited through more
few individuals would be brought to the
provides VA with the information
than one recognized organization.
attention of the VA’’ for misconduct or
necessary to investigate misconduct and
The practice of cross-accreditation is
incompetence because it is likely those
incompetence and ensure competent
defined in 38 CFR 14.627(i) as
individuals would resign before any
representation of claimants. It is not
‘‘accreditation based on the status of a
allegations of misconduct or
clear how information about a
representative as an accredited and
incompetence were ever substantiated.
representative’s misconduct or
functioning representative of another
The situation described by the
incompetence could adversely affect his
organization.’’ Although cross-
organization is foreseeable under
or her own entitlement to VA benefits,
accreditation enhances claimants’
current § 14.633(a) and under the
unless the information relates to a
opportunities for representation, it may
amendments made by this rule. While
scheme of fraud in obtaining benefits.
conceal a representative’s misconduct or
VA recognizes that individuals may
Although an organization’s primary
incompetence absent the amendments
resign before any incompetence or
purpose is to serve veterans, clearly this
to § 14.633(a) in this rule. Consider the
misconduct is substantiated as a means
obligation does not include concealing
situation where a representative,
to avoid a formal inquiry, this does not
fraud against the United States.
accredited by several organizations, is
mean that VA should forego any effort
Recent changes in the law governing
discharged for an offense at one
to improve the quality of representation
representation reinforce the obligation
organization that, if proven, would
in cases where an organization has
of service organizations to report a
clearly lead to cancellation of
determined that misconduct or
representative’s misconduct or
accreditation by VA. If the organization
incompetence is sufficient to request
incompetence to VA. As discussed
does not report the reason for the
cancellation of VA accreditation. With
earlier, Public Law 109–461 amended
discharge to VA when requesting
the rule in effect, the organization will
38 U.S.C. 5904(a) to require VA to
cancellation of the representative’s
be required to inform VA that a request
regulate the qualifications and standards
accreditation, the individual’s
to cancel accreditation under § 14.633(a)
of conduct applicable to accredited
accreditations through other
is based upon misconduct,
agents and attorneys. Amended section
organizations remain valid and the
incompetence, or resignation to avoid
5902(b)(2) subjects veterans service
representative may continue to provide
cancellation of accreditation for
organization representatives to
representation through those
misconduct or incompetence. Upon
suspension and exclusion from further
organizations. As a result, an individual
receipt of such information, when
practice before VA on the same grounds
who engages in unlawful, unethical or
appropriate, VA will initiate the
as apply to agents and attorneys. VA’s
unprofessional acts or is incompetent
procedures under 38 CFR 14.633(e) to
statutory obligation to regulate the
may continue to represent veterans.
determine whether the representative
standards of conduct of accredited
An additional rationale for the should be barred from further
representatives as reflected in
amendment requiring notification is the representation of VA claimants. As a
amendments to chapter 59 requires that
situation where a representative ends result, VA, in cooperation with service
organizations fulfill the reporting
his or her affiliation with the organizations, will seek to ensure the
obligations described in § 14.633(a). In
organization in order to avoid competent representation of claimants.
May 2007, we published in the Federal
cancellation of accreditation based on Another commenter, a State
Register a notice of proposed
misconduct and then applies for organization, expressed disagreement
rulemaking implementing Public Law
accreditation through another with the proposed requirement to notify
109–461, which, among other things,
organization that has no knowledge of VA in cases of cancellation of
established standards of conduct for
the misconduct. In this case, without accreditation for misconduct ‘‘unless
practice before VA applicable to all
knowledge of the previous misconduct, [VA] assumes all potential civil liability
service organization representatives. 72
VA would likely accredit the for the accrediting organizations.’’ The
FR 25930.
representative through the new organization expressed concern that it
The commenter also expressed
organization based upon the new might incur civil liability as a result of
concern about the disclosure of
organization’s unknowing certification. a lawsuit brought by a representative
disaccreditation information providing a
Certainly, if a representative engages in after it provides accreditation
basis for claimants to seek
misconduct or provides incompetent cancellation information to VA.
readjudication of numerous claims.
representation at one organization, VA VA cannot guarantee immunity from
However, VA decisions are final absent
should not accredit the individual civil suit, nor can it underwrite an
reopening based on new and material
through another organization. This rule, organization’s potential liability
evidence or a finding of clear and
which requires organizations to notify resulting from civil suit. While VA
unmistakable error (CUE) in a prior
VA of the reason for requesting acknowledges the potential for civil
regional office or Board of Veterans’
liability in a defamation action under
cancellation of a representative’s Appeals (Board) decision. See 38 U.S.C.
state law for disclosure of employment-
accreditation if that reason involves 5108, 5109A, 7111. To establish CUE in
related information, this is a risk
misconduct or incompetence, closes a final VA decision, it must be shown
incurred by all employers in providing
these gaps and better ensures the that VA committed a specific error in
information about former employees to
competent representation of claimants. adjudicating the claim and that the
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current or potential employers. The sole
VA believes that these benefits greatly outcome would have been manifestly
purpose of the requirement that service
outweigh any potential effect on the different but for the error. Cook v.
organizations disclose the reason for
employer/employee relationship Principi, 318 F.3d 1334, 1343 (Fed. Cir.
requesting cancellation of a
between organizations and their 2002). Therefore, an allegation that a
representative’s accreditation is to
representatives. claimant was represented by a person
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4. 58012 Federal Register / Vol. 72, No. 197 / Friday, October 12, 2007 / Rules and Regulations
List of Subjects in 38 CFR Part 14
Regulatory Flexibility Act
ensure competent representation of
claimants by cancelling accreditation Administrative practice and
The Secretary hereby certifies that
and preventing further accreditation in procedure, Claims, Courts, Foreign
this final rule will not have a significant
appropriate cases. In the commenter’s relations, Government employees,
economic impact on a substantial
jurisdiction, section 47(b) of the Lawyers, Legal services, Organizations
number of small entities as they are
California Civil Code provides an and functions (Government agencies),
defined in the Regulatory Flexibility Act
absolute privilege for a communication Reporting and recordkeeping
(5 U.S.C 601–602). This rule will affect
‘‘in any other official proceeding requirements, Surety bonds, Trusts and
the 87 veterans service organizations
authorized by law.’’ See CAL. CIV. trustees, Veterans.
recognized by VA to represent benefit
CODE § 47(b). A ‘‘communication to an
Approved: July 2, 2007.
claimants. However, the rule would not
official administrative agency, which
have a significant economic impact on Gordon H. Mansfield,
communication is designed to prompt
these organizations because it would Deputy Secretary of Veterans Affairs.
action by that agency’’ is considered
only impose certification requirements For the reasons set forth in the
I
part of an official proceeding. See King
the costs of which would not be preamble, the Department of Veterans
v. Borges, 104 Cal. Rptr. 414, 417 (Cal.
significant. Therefore, pursuant to 5 Affairs amends 38 CFR part 14 as
Ct. App. 1972). Thus, an organization’s
U.S.C. 605(b), this rule is exempt from follows:
communication to VA concerning the
the final regulatory flexibility analysis
reasons for requesting cancellation of a
requirements of section 604. PART 14—LEGAL SERVICES,
representative’s accreditation, a
GENERAL COUNSEL, AND
communication required by law and Executive Order 12866
MISCELLANEOUS CLAIMS
designed to prompt action by VA
Executive Order 12866 directs
concerning the representative’s 1. The authority citation for part 14
I
agencies to assess all costs and benefits
accreditation through other continues to read as follows:
of available regulatory alternatives and,
organizations, is absolutely privileged
Authority: 5 U.S.C. 301; 28 U.S.C. 2671–
when regulation is necessary, to select
under California law. 2680; 38 U.S.C. 501(a), 512, 515, 5502, 5902–
regulatory approaches that maximize
Most States have statutory or common 5905; 28 CFR part 14, appendix to part 14,
net benefits (including potential
law provisions that establish truth as a unless otherwise noted.
economic, environmental, public health
defense in defamation actions and
2. Revise § 14.629(a) introductory text
I
and safety, and other advantages;
protect certain communications as
to read as follows:
distributive impacts; and equity). The
privileged. Communication of
Order classifies a rule as a significant
accreditation cancellation information § 14.629 Requirements for accreditation of
regulatory action requiring review by
to VA by a service organization, without service organization representatives;
the Office of Management and Budget if agents; and attorneys.
malice, and within accepted limits,
it meets any one of a number of
would generally be privileged and thus * * * * *
specified conditions, including: having (a) Service Organization
not likely to result in liability for
an annual effect on the economy of $100 Representatives. A recognized
defamation damages. Even in the
million or more, creating a serious organization shall file with the Office of
absence of a privilege, the publication of
inconsistency or interfering with an the General Counsel VA Form 21
a true statement by a service
action of another agency, materially (Application for Accreditation as
organization to VA would not lead to
altering the budgetary impact of Service Organization Representative) for
liability for defamation. See Restatement
entitlements or the rights of entitlement each person it desires accredited as a
(Second) of Torts § 581A (1977) (‘‘One
recipients, or raising novel legal or representative of that organization. The
who publishes a defamatory statement
policy issues. VA has examined the form must be signed by the prospective
of fact is not subject to liability for
economic, legal, and policy implications representative and the organization’s
defamation if the statement is true.’’).
of this final rule and has concluded that certifying official. For each of its
Because the nature of defamation
it is a significant regulatory action under accredited representatives, a recognized
liability and privileged communication
Executive Order 12866 because it raises organization’s certifying official shall
varies from State to State, VA
novel policy issues. complete, sign and file with the Office
encourages organizations to seek
of the General Counsel, not later than
counsel regarding applicable laws. As Unfunded Mandates
five years after initial accreditation
an additional protection from liability,
The Unfunded Mandates Reform Act through that organization or the most
organizations should consider making
of 1995 requires, at 2 U.S.C. 1532, that recent recertification by that
disclosure of accreditation cancellation
agencies prepare an assessment of organization, VA Form 21 to certify that
information to VA a condition of
anticipated costs and benefits before the representative continues to meet the
employment by or affiliation with the
issuing any rule that may result in the criteria for accreditation specified in
organization and obtaining prior written
expenditure by State, local, and tribal paragraph (a)(1), (2) and (3) of this
authorization from the representative to
governments, in the aggregate, or by the section. In recommending a person, the
disclose such information.
private sector, of $100 million or more organization shall certify that the
Paperwork Reduction Act (adjusted annually for inflation) in any designee:
year. This final rule would have no such
This document contains provisions * * * * *
effect on State, local, and tribal
constituting collections of information I 3. Section 14.633(a) is amended by:
governments, or on the private sector.
at 38 CFR 14.629(a), 14.629(b), and I a. Revising paragraphs (a) and (e)(2)(i).
14.633(a) under the Paperwork I b. In paragraphs (b), (c) introductory
Catalog of Federal Domestic Assistance
rfrederick on PROD1PC67 with RULES
Reduction Act (44 U.S.C. 3501–3521). text, and (d) adding ‘‘ suspended or ‘‘
Numbers and Titles
The Office of Management and Budget before ‘‘canceled’’ each time it appears.
There are no Federal Domestic
(OMB) has approved these collections I c. In paragraph (e) introductory text
Assistance programs associated with
and has assigned OMB control number adding ‘‘suspension or’’ before
this final rule.
2900–0018. ‘‘cancellation’’.
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