Veterans' Compensation Benefits Amendments of 1985

(Measure passed House, amended)

Veterans' Compensation Benefits Amendments of 1985 - Directs the Administrator of Veterans Affairs to establish a regional office of the Veterans Administration (VA) in each State, while maintaining its central office in the District of Columbia.

Adds the loss or loss of use of one hand or foot or one lung to those extremities given special consideration in the determination of veterans' disability compensation.

Expresses the sense of the Congress that payments by the VA to veterans as compensation for service-connected disabilities should remain exempt from Federal taxation, and that the President should reject any proposals to tax such payments.

Raises the coverage of life insurance benefits for veterans under the Servicemen's Group Life Insurance program. Allows veterans who are members of the Retired Reserve as of January 1, 1986, to receive such increased coverage. Makes conforming changes to the Veterans' Group Life Insurance program, similarly granting members of the Individual Ready Reserve and the Inactive National Guard eligibility under such program.

Makes eligible for certain veterans' benefits members of the National Guard or Air National Guard who perform full-time duty for training purposes after September 30, 1985. Makes former members of the National Guard or Air National Guard eligible if such member continuously served in such status for 181 days or more.

Extends through September 30, 1988, the authority of the VA to operate a regional office in the Republic of the Philippines.

Entitles surviving spouses of the Commandant of the Coast Guard to the same dependency and indemnity compensation rate as that accorded to surviving spouses of the chief of the other military services.

Makes technical amendments to the Veterans' Benefits Improvement Act of 1984 and other Federal law.