than honorable conditions, shall be entitled to benefits under laws administered by the Veterans' Administration except upon a determination, based on a case-by-case review, under standards (meeting the requirements of paragraph (1) of this subsection) applied by the board of review concerned under section 1553 of title 10, subject to review by the Secretary concerned, that such person would be awarded an upgraded discharged under such standards;

"(B) Such determination shall be made by such board, (i) on an expedited basis after notification by the Veterans' Administration to the Secretary concerned that such person has received, is in receipt of, or has applied for such benefits or after a written request is made by such person or such determination, (ii) on its own initiative within one year after the date of enactment of this paragraph in any case where a general or honorable discharge has been awarded on or prior to the date of enactment of this paragraph under revised standards referred to in clause (A) (i), (ii), or (iii) of this paragraph, or (iii) on its own initiative at the time a general or honorable discharge is so awarded in any case where a general or honorable discharge is awarded after such enactment date.

"If such board makes a preliminary determination that such person would not have been awarded an upgraded discharge under standards meeting the requirements of paragraph (1) of this subsection, such personal shall be entitled to an appearance before the board, as provided for in section 1553(c) of title 10, prior to a final determination on such question and shall be given written notice by the board of such preliminary determination and of his or her right to such appearance. The Administrator shall, as soon as administratively feasible, notify the appropriate board of review of the receipt of benefits under laws administered by the Veterans' Administration, or the application for such benefits, by any person awarded an upgraded discharge under revised standards referred to in clause (A) (i), (ii), or (iii) of this paragraph with respect to whom a favorable determina

21

tion has not been made under this paragraph.".

(b) (1) The Secretary of Defense shall fully inform each person awarded a general or honorable discharge under revised standards for the review of discharges referred to in section 3103(e)(2)(A) (i), (ii), or (iii) of title 38, United States Code, as added by subsection (a)(2) of this section of his or her right to obtain an expedited determination under section 3103(e)(2)(B)(i) of such title and of the implications of the provisions of this Act for each such person.

(2) Notwithstanding any other provision of law, the Secretary of Defense shall inform each person who applies to a board of review under section 1553 of title 10, United States Code, and who appears to have been discharged under circumstances which might constitute a bar to benefits under section 3103(a), of title 38, United States Code, (A) that such person might possibly be administratively found to be entitled to benefits under laws administered by the Veterans' Administration only through the action of a board for the correction of military records under section 1552 of such title 10 or the action of the Administrator of Veterans' Affairs under section 3103 of such title 38, and (B) of the procedures for making application to such section 1552 board for such purpose and to the Administrator of Veterans' Affairs for such purpose (including the right to proceed concurrently under such sections 3103, 1552 and 1553).

any

Section 2. Notwithstanding other provision of law, the Administrator of Veterans' Affairs shall provide the type of health care and related benefits authorized to be provided under chapter 17 of title 38, United States Code, for any disability incurred or aggravated during active military, naval, or air service in line of duty by a person other than a person barred from receiving benefits by section 3103(a) of such title, but shall not provide such health care and related benefits pursuant to this section for any disability incurred or aggravated during a period of service from which such person was discharged by reason of a bad conduct discharge.

Section 3. Paragraph (18) of section 101 of Title 38, United States Code, is amended to read as follows:

"(18) The term 'discharge or release' includes, (A) retirement from the active military, naval, or air service, and (B) the 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 dishonorable."

Section 4. In promulgating, or making any revisions of or amendments to, regulations governing the standards and procedures by which the Veterans' Administration determines whether a person was discharged or released from active military, naval, or air service under conditions other than dishonorable, the Administrator of Veterans' Affairs shall, in keeping with the spirit and intent of this Act, not promulgate any such regulations or revise or amend any such regulations for the purpose of, or having the effect of, (1) providing any unique or special advantage to veterans awarded general or honorable discharges under revised standards for the review of discharges described in section 3103(e)(2)(A) (i), (ii), or (iii) of title 38, United States Code, as added by section 1(a)(2) of this Act, or (2) otherwise making any special distinction between such veterans and other veterans.

Section 5. This Act shall become effective on the date of its enactment, except that

(1) Section 2 shall become effective on October 1, 1977, or on such enactment date, whichever is later; and

(2) The amendments made by section 1(a) shall apply retroactively to deny benefits under laws administered by the Veterans' Administration, except that, notwithstanding any other provision of law.

(A) With respect to any person who, on such enactment date is receiving benefits under laws administered by

the Veterans' Administration, (i) such benefits shall not be terminated under paragraph (2) of section 3103(e) of title 38, United States Code, as added by section 1(a)(2) of this Act, until, (I) the day on which a final determination not favorable to the person concerned is made on an expedited basis under paragraph (2) of such section 3103(e), (II) the day following the expiration of ninety days after a preliminary determination not favorable to such person is made under such paragraph, or (III) the day following the expiration of one hundred and eighty days after such enactment date, whichever day is the earliest, and (ii) the United States shall not make any claim to recover the value of any benefits provided to such person prior to such earliest day;

(B) With respect to any person awarded a general or honorable discharge under revised standards for the review of discharges referred to in clause (A) (i), (ii), or (iii) of such paragraph who has been provided any such benefits prior to such enactment date, the United States shall not make any claim to recover the value of any benefits so provided; and

(C) The amendments made by clause (1) of section 1(a) shall apply, (i) retroactively only to persons awarded general or honorable discharges under such revised standards and to persons who, prior to the date of enactment of this Act, had not attained general eligibility to such benefits by virtue of (I) a change in or new issuance of a discharge under section 1553 of title 10, United States Code, or (II) any other provision of law, and (ii) prospectively (on and after such enactment date) to all other persons.

Sec.

726.8 Procedure for designation of a trust

ee.

726.9 Emergency funds.

726.10 Reports and supervision of trustees. 726.11 Authority of the Judge Advocate General to issue instructions.

AUTHORITY: 5 U.S.C. 301; 10 U.S.C. 5031 and 5148; 37 U.S.C. 601-604, and 1001; 32 CFR 700.206 and 700.1202.

SOURCE: 47 FR 41559, Sept. 21, 1982, unless otherwise noted.

§ 726.1 Purpose.

This part prescribes regulations for implementation of 37 U.S.C. Chapter 11, "Payments to Mentally Incompetent Persons."

§ 726.2 Scope.

(a) 37 U.S.C. Chapter 11 grants authority, in the absence of notice that a legal committee, guardian, or other legal representative has been appointed by a court of competent jurisdiction, for the designation by the Department of the Navy of a trustee to receive the active duty pay and allowances, amounts due for accrued or accumulated leave, or retired pay or retainer pay, that are otherwise payable to a member who is found by competent medical authority to be mentally incapable of managing his/her affairs.

(b) The term "member" as used in this part refers to:

(1) Members of a uniformed service who are on active duty (other than for training) or who are on the retired list of that service; and

(2) Members of the Fleet Reserve or Fleet Marine Corps Reserve.

§ 726.3 Authority to appoint trustees to receive Federal moneys.

(a) Pursuant to 37 U.S.C. 602 (1976), the Judge Advocate General and the Deputy Assistant Judge Advocate General (Civil Affairs) [hereafter referred to in this part as the DAJAG (CA)] are delegated authority to appoint trustees to receive and administer federal moneys for members of the naval service.

(b) The commanding officer of any naval medical facility may designate an officer of the command to receive and receipt for up to $30 per month from the accrued pay of a member of the naval service who has been found

incapable of handling his/her own affairs and is a patient at a naval medical facility under the following conditions:

(1) A trustee has not been designated by cognizant authority and a committee, guardian, or other legal representative has not been appointed by a court of competent jurisdiction;

(2) The member has no other funds available for use in his/her own behalf; and

(3) The funds are necessary for the purchase of items necessary for the comfort of the member.

This section shall be cited on the pay voucher as authority for payment and receipt of such monthly comfort money.

§ 726.4 Procedures.

(a) The commanding officer of the cognizant naval medical facility shall convene a board of not less than three medical officers or physicians, one of whom is specially qualified in the treatment of mental disorders, when there is evidence that a member of the naval service or a member of another uniformed service who is a patient in the naval medical facility may be incapable of handling his/her affairs. Membership of the board may include members of the Reserve components on active or inactive duty.

(b) At least one officer on the board, preferably a psychiatrist, shall personally observe the member and ensure that the member's medical record, particularly that portion concerning his/ her mental health, is accurate and complete. Each board member shall sign the report of the board and shall certify whether the servicemember is or is not mentally capable of managing his/her affairs.

(c) The Judge Advocate General or DAJAG (CA) may direct competent authority to convene a board in accordance with this section to determine the mental capability of a member of the naval service to manage his/her affairs. In appropriate circumstances, a commanding officer or administrator of any Federal medical facility may be requested by the Judge Advocate General or other cog

(a) The convening authority shall forward one copy of the record of proceedings of each board convened pursuant to §726.4, above, as follows:

(1) Naval service. Judge Advocate General (Code 12), Department of the Navy, 200 Stovall Street, Alexandria, Virginia 22332;

(2) Army. Commanding General, Finance Center, U.S. Army, Indianapolis, Indiana 46249, Attention: (Central Pay Operations in the case of activeduty personnel, or Retired Pay Division in the case of retired personnel);

(3) Air Force. Director of Military Personnel, Headquarters USAF, AFMPC, Washington, D.C. 20030;

(4) Coast Guard. Commandant, U.S. Coast Guard (Code C-PS/43), Washington, D.C. 20593;

(5) National Oceanic and Atmospheric Administration (NOAA). Director, NOAA Corps, NOAA, Rockville, Maryland 20852; and

(6) Public Health Service. Director, Commissioned Personnel Operations Division (OPM-OM), Room 435, 5600 Fishers Lane, Rockville, Maryland 20857.

(b) In the case of a finding that a servicemember is not mentally capable of managing his/her affairs, the convening authority, in the forwarding endorsement, shall set forth the name, relationship, and address of the member's next of kin and such other pertinent data as may be available to assist in identification of a trustee. This additional information need not be furnished where a trustee or other legal representative has been previously designated and the designation is still in effect.

§ 726.6 Travel orders.

In appropriate cases, the Chief of Naval Personnel or Commandant of the Marine Corps shall issue travel orders to a member of the naval service to appear before an examining board convened for the purpose of determining whether the member is or is not mentally capable of managing his/ her affairs. In the case of permanently retired members of the naval service,

however, travel expenses in connection with an appearance before a board convened pursuant to § 726.4 shall be at no cost to the Government unless the Judge Advocate General or DAJAG (CA) determines that unusual hardship exists and directs that appropriate authority fund the travel expenses.

§ 726.7

Status of pay account.

The Judge Advocate General or DAJAG (CA) will direct appropriate disbursing officials to suspend the pay of servicemembers found to be mentally incapable of managing their affairs. Thereafter, the Judge Advocate General or DAJAG (CA) will direct payment of moneys to (a) the appointed trustee; (b) the committee, guardian, or other legal representative appointed by a court of competent jurisdiction; or (c) directly to the member following determination that the member is capable of managing his/ her affairs. Disbursing officers shall seek direction from the Judge Advocate General when information from other sources indicates a member is not competent to manage his/her affairs.

a

§ 726.8 Procedure for designation of a trustee.

Upon receipt of a report from medical authorities that a member has been found mentally incapable of managing his/her affairs, the Judge Advocate General or DAJAG (CA) shall initiate action to appoint a trustee, provided a committee, guardian, or other legal representative has not been appointed by a court of competent jurisdiction. The Judge Advocate General or DAJAG (CA) may direct any appropriate Navy or Marine Corps activity to interview prospective trustees and make recommendations concerning their suitability. The interviewing officer will determine whether the prospective trustee can obtain an appropriate bond as directed by the Judge Advocate General or DAJAG (CA) and ascertain that the prospective trustee is willing to execute an affidavit acknowledging that all moneys shall be applied solely to the use and benefit of the member and his/her

legal dependents and that no fee, commission, or charge, for any service performed by the trustee except for payment of the required bond, can be made from Federal moneys. The interviewing officer will forward recommendations to the Office of the Judge Advocate General for appropriate action.

§ 726.9 Emergency funds.

Until such time as a trustee is appointed, the Judge Advocate General or DAJAG (CA) may appoint the member's commanding officer or other appropriate official to receive up to $1000 due from the account of the member without the necessity of a bond. The money shall be applied for the benefit of the member and his/her legal dependents.

§ 726.10 Reports and supervision of trust

ees.

(a) Annual accounting report. The trustee designated under this chapter shall submit accounting reports annually or at such times as the Judge Advocate General or DAJAG(CA) directs. The report shall account for all funds received from the Navy or Marine Corps on behalf of the servicemember. NAVJAG Forms 5800/13 (Rev. 8-76) and 5800/13A (Rev. 8-76) will be provided for these reports. When requested by the Judge Advocate General or DAJAG(CA), bank records, receipts, canceled checks, or vouchers shall be attached to the report. Report Control Symbols JAG 5800-5 and 5800-5A have been assigned to the reports.

ac

(b) Failure to submit a report. If an accounting is not received by the date designated by the Judge Advocate General or DAJAG(CA), or an counting is forwarded which is unsatisfactory, the Judge Advocate General or DAJAG(CA) shall notify the trustee in writing. The notice shall inform the trustee that he or she is in violation of the regulations concerning trustees promulgated pursuant to 37 U.S.C 601-604. The notice shall further state that if a satisfactory accounting is not received by the Judge Advocate General or DAJAG(CA) within an appropriate number of days from the date of receipt of the notification, the trustee will be declared in

default of the trustee agreement and shall become liable for any unaccounted for monies.

(c) Declaration in default. If the trustee fails to submit a satisfactory accounting within the time designated by the JAG or DAJAG(CA), the trustee shall be declared by the JAG or DAJAG(CA) to be in default of the trustee agreement.

(d) Termination of payments. If a trustee is declared to be in default of the trustee agreement, the Judge Advocate General or DAJAG(CA) shall request the appropriate Finance Center to terminate payments to the trustee and if necessary appoint a successor trustee.

(e) Demand for payment. At the time of the declaration of such default, the Judge Advocate General of DAJAG(CA) shall notify the defaulting trustee that he or she is in default of the trustee agreement. The surety for the trustee shall also be notified at this time concerning the account. The notifications to the trustee and surety shall state the reasons for default, the amount of indebtedness to the Government and shall demand payment. The notifications shall also state that if payment, in full, of the monies due the Government is not received by the Office of the Judge Advocate General, or satisfactory arrangements for repayment have not been made with an appropriate number of days from the date of receipt of the notifications, the account may be forwarded, as the Judge Advocate General or DAJAG(CA) may direct, to the Department of Justice for recovery of the monies through appropriate civil action.

(f) Final accounting. When payments under this chapter are terminated due to the death of the member, his or her restoration to capacity, the replacement of the trustee, or for any other reason, other than default of the trustee agreement, the trustee shall submit a final accounting to the Judge Advocate General DAJAG(CA), as appropriate. Upon approval of the report, the trustee and the surety will be discharged from liability. In the event of death or disability of a trustee, the final account

or