[Federal Register Volume 59, Number 104 (Wednesday, June 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-13051]


[[Page Unknown]]

[Federal Register: June 1, 1994]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AG91

 

VA Homeless Providers Grant and Per Diem Program

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Homeless Veterans Comprehensive Service Programs Act of 
1992 authorizes the Department of Veterans Affairs to assist public or 
nonprofit private entities in establishing new programs to furnish 
supportive services and supportive housing for homeless veterans 
through grants. The Act authorizes VA to provide per diem payments, or 
in-kind assistance in lieu of per diem payments, to eligible entities 
that established programs after November 10, 1992 that provide 
supportive services or supportive housing for homeless veterans, or 
service centers providing supportive services. This rule contains 
criteria and requirements relating to the awarding of grants and 
relating to per diem payments. Accordingly, this rule is necessary so 
that grants can be awarded and per diem payments can be made.

DATES: Effective date is June 1, 1994. Comments must be received on or 
before August 1, 1994.

ADDRESSES: All comments concerning this interim final rule should be 
addressed to the Secretary of Veterans Affairs, 810 Vermont Avenue NW., 
Washington, DC 20420. All written comments will be available for public 
inspection in room 170, Veterans Service Unit, at the above address 
between the hours of 8 a.m. and 4:30 p.m., Monday through Friday 
(except holidays) until August 10, 1994.

FOR FURTHER INFORMATION CONTACT: Lynn Bailey, Program Manager, VA 
Homeless Providers Grant and Per Diem Program; Mental Health and 
Behavioral Sciences Service (111C), U.S. Department of Veterans 
Affairs, 810 Vermont Avenue NW., Washington, DC 20420; (202) 535-7311 
(this is not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    This document sets forth a final interim rule to implement 
provisions of the ``Homeless Veterans Comprehensive Service Programs 
Act of 1992'' (Act).
    Statistics indicate that on any given night, as many as 250,000 
veterans are living on the streets or in shelters, and perhaps twice 
this number of veterans experience homelessness at some point during 
the course of a year. Many other veterans are considered ``near 
homeless'' or ``at risk'' because they are poor, suffer from various 
infirmities; or have no real home of their own, and live on a temporary 
basis with friends or relatives or in cheap hotels, often in 
substandard or overcrowded conditions. The vast majority of homeless 
veterans are single; about two percent of all homeless veterans are 
female. About 40 percent of homeless veterans suffer from severe mental 
illness and (with considerable overlap) about half have alcohol or 
other drug abuse problems.
    The Act authorizes the Department of Veterans Affairs (VA) to 
assist public or nonprofit private entities in establishing new 
programs to furnish supportive services or supportive housing for 
homeless veterans, or to establish service centers meeting the 
requirements described in Sec. 17.724(k) of this part through grants of 
up to 65 percent of the cost of acquiring, renovating, altering or 
constructing facilities, and of the cost of purchasing vans. It also 
authorizes VA to provide per diem payments, or in-kind assistance in 
lieu of per diem payments, to eligible entities that established 
programs after November 10, 1992 that provide supportive services or 
supportive housing for homeless veterans, or function as service 
centers.
    This interim rule contains criteria and requirements relating to 
the awarding of grants and contains criteria and requirements relating 
to per diem payments. Portions of these criteria and requirements 
restate statutory language. However, insofar as they establish 
regulatory material beyond the statutory language the regulatory 
material is designed to provide a mechanism for awarding grants and for 
allowing per diem payments to be made. The rule also sets forth the 
rates for services furnished to a homeless veteran. These rates are 
consistent with the amounts for similar services allowed under ``Aid to 
States for Care of Veterans in State Homes'' program (See 38 U.S.C. 
1741).
    In developing the criteria and requirements for inclusion in this 
rule, section 3(b) of the Act requires VA to consult with organizations 
with experience in the area of providing services to homeless veterans. 
On September 16, 1993 over 250 letters soliciting input into drafting 
rules for the program were mailed to known organizations that provide 
services to homeless veterans, national offices of veteran's service 
organizations, State and local departments of veterans affairs, and 
program coordinators of all centrally-funded VA homeless programs. The 
letter also sought additional names for the mailing list. As additional 
names were provided, copies of the September 16, 1993 letter were 
mailed to them.
    On December 17, 1993 a meeting was held in Washington, DC with 
individuals and organizations with experience in providing services to 
homeless persons, including veteran service organizations and private 
nonprofit organizations. The purpose of the meeting was to discuss the 
draft rule. Changes resulting from that meeting included improving nine 
definitions; minor wording modifications to 12 paragraphs that 
clarified the meaning of the paragraphs; deletion of paragraphs on 
technical assistance, funding minimums, recovery periods, a requirement 
for ``adequate'' supportive services, and a requirement for due process 
when recipients terminate assistance to veterans; and changes to 
paragraphs on use of grant funds for permanent housing or operating 
leases, construction standards, requirements for environmental review, 
deobligation of funds, site control, insurance on vans, fees and/or 
rents charged to veterans in funded programs, and matching fund 
requirements.

Executive Order 12866

    This rule has been reviewed as a ``significant regulatory action'' 
under E.O. 12866 by the Office of Management and Budget .

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553, VA has found good cause to dispense with 
prior notice and comment on this interim final rule and to dispense 
with a 30-day delay of its effective date in light of the critical need 
to provide housing and other essentials to homeless veterans. Comments 
have been solicited for 60 days after publication of this document. VA 
may modify the rule in response to comments if appropriate.

Regulatory Flexibility Act

    Because no notice of proposed rulemaking was required in connection 
with the adoption of this interim final rule, no regulatory flexibility 
analysis is required under the Regulatory Flexibility Act (5 U.S.C. 601 
et seq.).

    The Catalog of Federal Domestic Assistance program number is 
64.024.

List of Subjects in 38 CFR Part 17

    Community action programs, Community development, Homeless 
veterans, Government contracts, Grant programs--health, Grant 
programs--homeless veterans, Grant programs--housing and community 
development, Grant programs--social programs, Grant programs--
transportation, Health, Health care, Health facilities, Housing, 
Intergovernmental relations, Low and moderate income housing, Manpower 
training programs, Mental health centers, Mental health programs, Motor 
carriers, Motor vehicles, Public housing, Rent subsidies, Supportive 
housing, Supportive services, Veterans, Vocational education, 
Vocational rehabilitation, Work incentive programs.

    Approved: May 12, 1994.
Jesse Brown,
Secretary of Veterans Affairs.

    For the reasons set out in the preamble, 38 CFR Part 17 is amended 
as set forth below:

PART 17--MEDICAL

    1. The authority citation for part 17 is revised to read as 
follows:

    Authority: 38 U.S.C. 501, 38 U.S.C. 7721 note, unless otherwise 
noted.

    2. Part 17 is amended by adding Secs. 17.700 through 17.731 and an 
undesignated center heading preceding 17.700 to read as follows:

VA Homeless Providers Grant and Per Diem Program

Sec.
17.700  Purpose and scope.
17.701  Definitions.
17.702  Types and uses of assistance.
17.703  Grants for acquisition and rehabilitation.
17.704  Grants for new construction.
17.705  Grants for procurement of vans.
17.706  Matching requirements.
17.707  Limitations on use of assistance.
17.708  Notice of fund availability.
17.709  Grant award process.
17.710  Application requirements.
17.711  Ranking criteria for applications.
17.712  Selecting applications.
17.713  Obtaining additional information and awarding grants.
17.714  Environmental review requirements.
17.715  Aid for supportive services and supportive housing.
17.716  Eligibility to receive payments.
17.717  Requesting recognition.
17.718  Approval of annexes and new facilities.
17.719  Amount of aid payable.
17.720  Approval of eligibility.
17.721  Inspections.
17.722  Prerequisite for payment of aid.
17.723  Audit of recipients of aid.
17.724  General operation.
17.725  Outreach activities.
17.726  Resident rent.
17.727  Grant agreement.
17.728  Program changes.
17.729  Obligation and deobligation of funds.
17.730  Displacement, relocation, and acquisition.
17.731  Site control.

VA Homeless Providers Grant and Per Diem Program


Sec. 17.700   Purpose and scope.

    (a) General. The VA Homeless Providers Grant and Per Diem Program 
is authorized by sections 3 and 4 of Pub. L. 102-590, the Homeless 
Veterans Comprehensive Service Programs Act of 1992. The VA Homeless 
Providers Grant and Per Diem Program is designed to assist eligible 
entities in establishing new programs to furnish outreach, 
rehabilitative services, vocational counseling and training, and 
transitional housing assistance to homeless veterans. Section 3 of the 
Act provides for grants to eligible entities of up to 65 percent of the 
estimated cost to construct, expand, remodel or alter existing 
buildings; to acquire facilities for use as service centers, 
transitional housing or other facilities to serve homeless veterans; or 
to procure vans to provide transportation for and support outreach to 
homeless veterans. A grant may not be used to support operational 
costs. In addition, Sec. 4 of Pub. L. 102-590 authorizes VA to provide 
to a recipient of a grant under Sec. 3 (or entity eligible for such a 
grant as described in Sec. 17.715(a) of this part) per diem payments 
for homeless veterans whom VA has referred to that entity; or for whom 
VA has authorized the provision of services. In lieu of per diem 
payments, VA may provide in-kind assistance through services of VA 
employees and the use of other VA resources. This program does not 
provide for funding to construct, expand, remodel or acquire buildings 
located on VA-owned property, nor does it provide for funding to 
expand, remodel or acquire unutilized or underutilized VA structures 
made available to homeless providers under Title V of the Stewart B. 
McKinney Homeless Assistance Act.
    (b) Components. (1) Grants may be used for the three components 
described in Sec. 17.702:
    (2) Grant recipients or eligible entities may apply for per diem 
payments or receive in-kind assistance through VA as described in 
Sec. 17.715.
    (3) Applicants may apply for a grant for more than one component 
described in Sec. 17.702 and/or per diem payments.


Sec. 17.701   Definitions.

    As used in this part:
    Capital lease means a lease that satisfies one of the following 
criteria:
    (1) The lease transfers ownership to the lessee at the expiration 
of the lease term.
    (2) The lessor bears no risk.
    (3) The term of the lease exceeds 75 percent of the economic life 
of the asset.
    (4) The lease contains a bargain purchase option.
    (5) The present value of lease payments is equal to or greater than 
90 percent of the fair market value of the asset.
    Eligible entity means a public or nonprofit private entity with the 
capacity to effectively administer a grant under this section; which 
has demonstrated that adequate financial support will be available to 
carry out the project for which the grant is sought consistent with the 
plans, specifications and schedule submitted by the applicant; and 
which has agreed to, and has demonstrated the capacity to, meet the 
applicable criteria and requirements of the grant program.
    Expansion of an existing building means an addition to an existing 
structure that does not increase the floor area by more than 100 
percent.
    Federally recognized Indian tribal government includes the 
governing body or a governmental agency of any Indian tribe, band, 
nation, or other organized group or community (including any Native 
village as defined in section 3 of the Alaska Native Claims Settlement 
Act, 85 Stat 688) certified by the Secretary of the Interior as 
eligible for the special programs and services provided by him through 
the Bureau of Indian Affairs.
    Homeless or homeless individual (1) includes:
    (i) An individual who lacks a fixed, regular and adequate nighttime 
residence; and
    (ii) An individual who has a primary nighttime residence that is--
    (A) A supervised publicly or privately operated shelter designed to 
provide temporary living accommodations (including welfare hotels, 
congregate shelters, and transitional housing for the mentally ill);
    (B) An institution that provides a temporary residence for persons 
intended to be institutionalized; or
    (C) A public or private place not designed for, or ordinarily used 
as, a regular sleeping accommodation for human beings.
    (2) The term ``homeless'' or ``homeless individual'' does not 
include any individual imprisoned or otherwise detained pursuant to an 
Act of the Congress or a State law. An individual on probation, parole 
or under electronic custody is not considered ``imprisoned or otherwise 
detained''.
    New construction means the building of a structure where none 
existed or an addition to an existing structure that increases the 
floor area by more than 100 percent.
    New program/new component of an existing program means a proposed 
program of supportive services, or a proposed addition of supportive 
services to an existing program, which services are not currently being 
provided by the entity proposing it, and for which there is a 
demonstrated need in the community served by that entity.
    Nonprofit organization means a private organization, no part of the 
net earnings of which may inure to the benefit of any member, founder, 
contributor, or individual. The organization must:
    (1) Have a voluntary board;
    (2) Have a functioning accounting system that is operated in 
accordance with generally accepted accounting principles, or designate 
an entity that will maintain a functioning accounting system for the 
organization in accordance with generally accepted accounting 
principles; and
    (3) Practice nondiscrimination in the provision of supportive 
housing and supportive services assistance.
    Operating costs means expenses incurred in operating supportive 
housing, supportive services or service centers with respect to:
    (1) Administration (including staff salaries; costs associated with 
accounting for the use of grant funds, preparing reports for submission 
to VA and obtaining program audits; and similar costs related to 
administering the grant after the award), maintenance, repair and 
security for the supportive housing;
    (2) Van or building rent (except under capital leases), utilities, 
insurance, fuel, furnishings, and equipment;
    (3) Conducting on-going assessments of supportive services provided 
for and needed by participants and the availability of such services;
    (4) Relocation assistance under Sec. 17.730 of this part, including 
payments and services; and
    (5) Other costs associated with operating the supportive housing.
    Outpatient health services means outpatient health care, outpatient 
mental health services, outpatient alcohol and/or substance abuse 
services, and case management.
    Participant means a person who receives services provided at sites 
funded with assistance provided under this part.
    Project means a structure or structures (or portion of such 
structure or structures) acquired, rehabilitated, or constructed with 
assistance provided under this part. A project may be used to provide 
supportive housing or supportive services in single room occupancy 
dwelling units which may or may not contain bathrooms or kitchen 
facilities and are appropriate for use as supportive housing.
    Recipient means any governmental or nonprofit entity that receives 
assistance under this part.
    Rehabilitation means the improvement or repair of an existing 
structure. Rehabilitation does not include minor or routine repairs.
    Secretary means the Secretary of Veterans Affairs.
    Seriously mentally ill means having a severe and persistent mental 
or emotional impairment that seriously limits a person's ability to 
live independently. This may include an impairment related to substance 
(alcohol and/or drug) abuse.
    Service center means a project which provides the supportive 
services specified at Sec. 17.724(k) to homeless veterans for a minimum 
of 40 hours per week over a minimum of five days per week as well as on 
an as-needed, unscheduled basis.
    Single room occupancy (SRO) housing means a unit for occupancy by 
one person, which need not but may contain food preparation or sanitary 
facilities, or both.
    Sponsor means a public or nonprofit organization which owns or 
leases dwelling units in buildings acquired and/or renovated with funds 
from this grant program, and which makes such units available to 
eligible homeless veterans.
    State means any of the several States of the United States, the 
District of Columbia, the Commonwealth of Puerto Rico, any territory or 
possession of the United States, or any agency or instrumentality of a 
State exclusive of local governments. The term does not include any 
public and Indian housing agency under United States Housing Act of 
1937.
    Supportive housing means housing in conjunction with which 
supportive services are provided for homeless veterans where:
    (1) The housing is safe and sanitary and meets any applicable State 
and local housing codes and licensing requirements in the jurisdiction 
in which the housing is located, and the requirements of this part; and
    (2) The housing is:
    (i) Transitional housing; or
    (ii) Is, or is a part of, a particularly innovative project for, or 
alternative method of, meeting the immediate and long-term needs of 
homeless veterans.
    Supportive services (1) Means services, which may be designed by 
the recipient or program participants, that
    (i) address the special needs of homeless veterans to be served by 
the project, and
    (ii) provide appropriate services or assist such persons in 
obtaining appropriate services.
    (2) Supportive services include:
    (i) Outreach activities;
    (ii) Providing food, nutritional counseling, counseling, health 
care, mental health treatment, alcohol and other substance abuse 
services, case management services;
    (iii) Establishing and operating child care services for dependents 
of homeless veterans;
    (iv) Providing supervision and security arrangements necessary for 
the protection of residents of supportive housing and for homeless 
veterans using the housing or services;
    (v) Providing assistance in obtaining permanent housing;
    (vi) Providing education, employment counseling, job training, 
establishing and operating an employment assistance program;
    (vii) Providing assistance in obtaining other Federal, State and 
local assistance available for such residents including mental health 
benefits, employment counseling, veterans' benefits, medical 
assistance, and income support assistance such as Supplemental Security 
Income benefits, Aid to Families with Dependent Children, General 
Assistance, Food Stamps, etc.; and
    (viii) Providing housing assistance, legal assistance, advocacy, 
transportation, and other services essential for achieving and 
maintaining independent living.
    (ix) Inpatient acute hospital care does not qualify as a supportive 
service.
    Transitional housing means housing that will facilitate the 
movement of homeless veterans and their dependents to permanent housing 
within 24 months, or within a longer period as described in 
Sec. 17.724(i) of this part.
    Unit of general local government means a county, municipality, 
city, town, township, local public authority (including any public and 
Indian housing agency under the United States Housing Act of 1937), 
school district, special district, intrastate district, council of 
governments (whether or not incorporated as a nonprofit corporation 
under state law), any other regional or interstate government entity, 
or any agency or instrumentality of a local government.
    Veteran means a person who served in the active military, naval, or 
air service, and who was discharged or released therefrom under 
conditions other than dishonorable.
    Veteran with disabilities means a veteran with a physical, mental, 
or emotional impairment which is expected to be of long-continued and 
indefinite duration; substantially impedes his or her ability to live 
independently; and is of such a nature that such ability could be 
improved by more suitable housing conditions. This may include a 
disability related to substance (alcohol and/or drug) abuse. A veteran 
may be considered to have a disability regardless of whether VA has or 
has not awarded compensation or a pension for the disability.


Sec. 17.702  Types and uses of assistance.

    (a) Grant assistance. Grant assistance is available to:
    (1) Construct structures to establish new supportive housing 
facilities, new facilities to provide supportive services, or to 
establish service centers;
    (2) Acquire, expand and remodel/alter structures to establish new 
supportive housing facilities, new facilities to provide supportive 
services, or to establish service centers; and
    (3) Procure vans to provide transportation for the purpose of 
providing supportive services to homeless veterans.
    (4) Applicants may apply for more than one type of assistance.
    (b) Limitation on non-veteran participants. Up to 25 percent of 
services available in projects funded through this grant program may be 
provided to participants who are not receiving those services as 
veterans.
    (c) Structures used for multiple purposes. Structures funded 
through this grant program that are used to provide supportive housing, 
supportive services, or used as service centers may also be used for 
other purposes, except that assistance under this part will be 
available only in proportion to the use of the structure for supportive 
housing, supportive services, or as a service center.
    (d) Maximum amount of grant. The amount of a grant under this part 
may not exceed 65 percent of the cost of acquisition, rehabilitation, 
acquisition and rehabilitation, construction or procurement.


Sec. 17.703  Grants for acquisition and rehabilitation.

    (a) Use. VA will grant funds to recipients to:
    (1) Pay a portion of the cost of the acquisition of real property 
selected by the recipients for use in the provision of supportive 
housing or supportive services, or to establish service centers, 
including the repayment of any outstanding debt on a loan made to 
purchase property that has not been used previously for supportive 
housing, supportive services, or service centers; and
    (2) Pay a portion of the cost of rehabilitation of structures, 
including cost-effective energy measures, selected by the recipients to 
provide supportive housing or supportive services or to establish 
service centers.
    (b) If grant funds are proposed to be used for acquisition or 
rehabilitation, the applicant must demonstrate that the costs 
associated with acquisition or rehabilitation are less than the costs 
associated with new construction.


Sec. 17.704  Grants for new construction.

    (a) Use. VA will grant funds to recipients to pay a portion of the 
cost of new construction, including cost-effective energy measures and 
the cost of land associated with that construction, for use in the 
provision of supportive housing or supportive services, or for service 
centers. If grant funds are proposed to be used for new construction, 
the applicant must demonstrate that the costs associated with new 
construction are less than the costs associated with rehabilitation of 
an existing building, or that there is a lack of available appropriate 
units that could be rehabilitated at a cost less than new construction. 
The applicant must also demonstrate that new construction is less 
costly than acquisition of an existing building. For purposes of this 
cost comparison, costs associated with rehabilitation or new 
construction may include the cost of real property acquisition.
    (b) Demolition plan. The cost of demolition of a building cannot be 
included in the cost of construction unless the proposed construction 
is in the same location as the building to be demolished or unless the 
demolition is inextricably linked to the design of the construction 
project. If the applicant believes that this cost may be included in 
the cost of the construction project, a demolition plan should be 
submitted which includes the extent and cost of existing site features 
to be removed, stored, or relocated.


Sec. 17.705  Grants for procurement of vans.

    (a) Use. VA will grant funds to recipients to pay a portion of the 
cost of procuring vans to provide transportation for and support 
outreach to homeless veterans.
    (b) Insurance. Recipients of grants to procure vans who are 
nonprofit entities must insure vans to the same extent they would 
insure a van bought with their own funds.
    (c) Amount. The estimated total costs of purchasing the van may 
include the purchase price, sales taxes, and title and licensing fees.


Sec. 17.706  Matching requirements.

    (a) General. The recipient must, from sources other than grant 
funds received under this part, match the funds provided by VA to cover 
the percentage of the total cost of the acquisition, rehabilitation, 
construction or procurement not funded by the grant. This matching 
share shall constitute at least 35 percent of the total cost.
    (b) Maintenance of effort. State or local government funds used in 
the matching contribution are subject to the maintenance of effort 
requirements described at Sec. 17.707(a) of this part.


Sec. 17.707  Limitations on use of assistance.

    (a) Maintenance of effort. No assistance provided under this part 
may be used to replace Federal, State or local funds previously used, 
or designated for use, to assist homeless veterans.
    (b) Primarily religious organizations. VA will provide assistance 
to a recipient that is a primarily religious organization if the 
organization agrees to provide housing and supportive services in a 
manner that is free from religious influences and the organization 
complies with the following principles:
    (1) It will not discriminate against any employee or applicant for 
employment on the basis of religion and will not limit employment or 
give preference in employment to persons on the basis of religion;
    (2) It will not discriminate against any person applying for 
housing or supportive services on the basis of religion and will not 
limit such housing or services or give preference to persons on the 
basis of religion;
    (3) It will provide no religious instruction or counseling, conduct 
no religious worship or services, engage in no religious proselytizing, 
and exert no other religious influence in the provision of housing and 
supportive services.


Sec. 17.708  Notice of fund availability (NOFA).

    When funds are made available for assistance, VA will publish a 
notice of fund availability in the Federal Register. The notice will:
    (a) Give the location for obtaining application packages, which 
will provide specific application requirements and guidance;
    (b) Specify the date, time, and place for submitting completed 
applications; and
    (c) State the amount and status of funding available under the 
notice.


Sec. 17.709  Grant award process.

    General. The grant award process for assistance under this part 
consists of the following:
    (1) Reviewing applications for eligibility for assistance;
    (2) Rating applications (see Sec. 17.711 of this part);
    (3) Selecting applications conditionally (see Sec. 17.712 of this 
part);
    (4) Obtaining additional information and awarding grants (see 
Sec. 17.713 of this part).


Sec. 17.710  Application requirements.

    (a) General. Applications for grants must be submitted in the form 
prescribed by VA in the application package, must meet the requirements 
of this part, and must be submitted within the time period established 
by VA in the notice of fund availability under Sec. 17.708 of this 
part. The application packet includes exhibits to be prepared and 
submitted as part of the application process, including:
    (1) Justification for the project by addressing items listed in 
Sec. 17.711(c) of this part;
    (2) Site description, design, and cost estimates;
    (3) Documentation on eligibility to receive assistance under this 
part;
    (4) Documentation on matching funds committed to the project;
    (5) Documentation on operating budget and cost sharing;
    (6) Documentation on supportive services committed to the project;
    (7) Documentation on site control and appropriate zoning;
    (8) Applicants who are States must submit any comments or 
recommendations by appropriate State (and areawide) clearinghouses 
pursuant to E.O. 12372;
    (9) Reasonable assurances with respect to receipt of assistance 
under this part that:
    (i) The project will be used principally to furnish to veterans the 
level of care for which such application is made; that not more than 25 
percent of participants at any one time will be non-veterans; and that 
such services will meet standards prescribed by VA;
    (ii) Title to such site or van will vest solely in the applicant;
    (iii) Each recipient will keep those records and submit those 
reports as VA may reasonably require, within the timeframes required; 
and give VA, upon demand, access to the records upon which such 
information is based; and
    (iv) Adequate financial support will be available for the purchase 
of the van or completion of the project, and for its maintenance, 
repair and operation.
    (b) Pre-award expenditures. Costs incurred for a project after the 
date the Department of Veterans Affairs notifies an applicant that the 
project is feasible for VA participation are allowable costs if the 
application is approved and the grant is awarded. These pre-award 
expenditures include architectural and engineering fees. Such 
notification occurs when VA requests information for the second 
submission portion of the application.


Sec. 17.711  Rating criteria for applications.

    (a) General. Applications will be assigned a rating score and 
placed in ranked order, based upon the criteria listed in paragraphs 
(b) through (d) of this section.
    (b) Threshold review. Applicants will undergo a threshold review 
prior to rating and ranking, to ensure they meet the following:
    (1) Form, time and adequacy. Applications must be filed in the form 
prescribed by VA in the application process and within the time 
established in the NOFA.
    (2) Applicant eligibility. The applicant and project sponsor, if 
relevant, must be eligible to apply for the specific program.
    (3) Eligible population to be served. The population proposed to be 
served must be homeless veterans and meet other eligibility 
requirements of the specific program.
    (4) Eligible activities. The activities for which assistance is 
requested must be eligible for funding under this part.
    (5) Outstanding audit findings. No organization that receives 
assistance may have an outstanding obligation to VA that is in arrears 
or for which a payment schedule has not been agreed to, or whose 
response to an audit is overdue or unsatisfactory.
    (c) Rating and ranking of first submission. Applicants that pass 
the threshold review will then be rated using the eight selection 
criteria listed below. Applicants must receive at least 600 points (out 
of a possible 1,200) and must receive points under criteria 1, 2, 3, 4, 
and 8. Applicants that are applying as an innovative supportive housing 
project must achieve points under the ``innovative quality of the 
proposal'' criterion.

(1) Quality of the project--300 points
(2) Targeting to persons on streets and in shelters--150 points
(3) Ability of the applicant to develop and operate a project--200 
points
(4) Need for the type of project proposed in the area to be served--150 
points
(5) Innovative quality of the proposal--50 points
(6) Leveraging--50 points
(7) Cost effectiveness--100 points
(8) Coordination with other programs--200 points

    (d) Selection criteria--(1) Quality of the project. VA will award 
up to 300 points based on the extent to which the application presents 
a clear, well-conceived and thorough plan for assisting homeless 
veterans achieve residential stability, increased skills and/or income, 
and more influence over decisions that affect their lives. Higher 
ratings will be assigned to those applications that clearly describe:
    (i) How program participants will achieve residential stability, 
including how available supportive services will help participants 
reach this goal;
    (ii) How program participants will increase their skill level and/
or income, including how available supportive services will help 
participants reach this goal;
    (iii) How program participants will be involved in making project 
decisions that affect their lives, including how they will be involved 
in selecting supportive services, establishing individual goals and 
developing plans to achieve these goals so that they achieve greater 
self determination;
    (iv) How permanent affordable housing will be identified and made 
available to participants upon leaving the transitional housing, and 
how participants will be provided necessary follow-up services to help 
them achieve stability in the permanent housing;
    (v) How the service needs of participants will be assessed on an 
ongoing basis;
    (vi) How the proposed housing, if any, will be managed and 
operated;
    (vii) How participants will be assisted in assimilating into the 
community through access to neighborhood facilities, activities and 
services;
    (viii) How and when the progress of participants toward meeting 
their individual goals will be monitored and evaluated;
    (ix) How and when the effectiveness of the overall project in 
achieving its goals will be evaluated and how program modifications 
will be made based on those evaluations; and
    (x) How the proposed project will be implemented in a timely 
fashion.
    (2) Targeting to persons on streets and in shelters. VA will award 
up to 150 points based on:
    (i) The extent to which the project will serve homeless veterans 
living in places not ordinarily meant for human habitation (e.g., 
streets, parks, abandoned buildings, automobiles, under bridges, in 
transportation facilities) and those who reside in emergency shelters; 
and
    (ii) The likelihood that proposed plans for outreach and selection 
of participants will result in these populations being served.
    (3) Ability of applicant to develop and operate a project. VA will 
award up to 200 points based on the extent to which those who will be 
involved in carrying out the project have experience in activities 
similar to those proposed in the application. Rating will be assigned 
based on the extent to which the application demonstrates experience in 
the following areas:
    (i) Engaging the participation of homeless veterans living in 
places not ordinarily meant for human habitation and in emergency 
shelters;
    (ii) Assessing the housing and relevant supportive service needs of 
homeless veterans;
    (iii) Accessing housing and relevant supportive service resources;
    (iv) If applicable, contracting for and/or overseeing the 
rehabilitation or construction of housing;
    (v) If applicable, administering a rental assistance program;
    (vi) Providing supportive services for homeless veterans;
    (vii) Monitoring and evaluating the progress of persons toward 
meeting their individual goals; and
    (viii) Evaluating the overall effectiveness of a program and using 
evaluation results to make program improvements.
    (4) Need. VA will award up to 150 points based on the applicant's 
demonstrated understanding of the needs of the specific homeless 
veteran population proposed to be served. Ratings will be made based on 
the extent to which applicants demonstrate:
    (i) Substantial unmet needs, particularly among the target 
population who are living in places not ordinarily meant for human 
habitation (e.g., streets) and in emergency shelters, based on reliable 
data from surveys of homeless populations, a Comprehensive Housing 
Affordability Strategy (CHAS), or other reports or data gathering 
mechanisms that directly support claims made;
    (ii) An understanding of the homeless population to be served and 
its unmet housing and supportive service needs.
    (5) Innovative quality of the proposal. Applicants who have 
indicated in their application that they are applying under the 
innovative supportive housing component must receive points under this 
criterion to be eligible for award. VA will award up to 50 points based 
on the innovative quality of the proposal, when compared to other 
applications and projects, in terms of:
    (i) Helping homeless veterans or homeless veterans with 
disabilities to be served to reach residential stability, increase 
their skill level and/or income and increase the influence they have 
over decisions that affect their lives; and
    (ii) A clear link between the innovation(s) and its proposed 
effect(s); and
    (iii) Its ability to be used as a model for other projects.
    (6) Leveraging. VA will award up to 50 points based on the extent 
to which resources from other public and private sources, including 
cash and the value of third party contributions, have been committed to 
support the project at the time of application.

    (Note: Any applicant who wishes to receive points under this 
criterion must submit documentation of leveraged resources which 
meets the requirements stated in the application. This is optional; 
applicants who cannot, or choose not to, provide firm documentation 
of resources as part of the application will forego any points for 
leveraging.)

    (7) Cost effectiveness. VA will award up to 100 points for cost 
effectiveness. Projects will be rated based on the cost and number of 
new supportive housing beds made available or the cost, amount and 
types of supportive services made available, when compared to other 
transitional housing and supportive services projects, and when 
adjusted for high cost areas. Cost effectiveness may include using 
excess government properties (local, State, Federal), as well as 
demonstrating site control at the time of application.
    (8) Coordination with other programs. VA will award up to 200 
points based on the extent to which applicants demonstrate that they 
have coordinated with Federal, State, local, private and other entities 
serving homeless persons in the planning and operation of the project. 
Such entities may include shelter, transitional housing, health care, 
or social service providers; providers funded through Federal 
initiatives; local planning coalitions or provider associations; or 
other programs relevant to the local community. Applicants are required 
to demonstrate that they have coordinated with the VA medical care 
facility of jurisdiction and VA Regional Offices of jurisdiction in 
their area.
    (i) Higher points will be given to those applicants that can 
demonstrate that:
    (A) They are part of an ongoing community-wide planning process 
which is designed to share information on available resources and 
reduce duplication among programs that serve homeless veterans;
    (B) They have consulted directly with other providers regarding 
coordination of services for project participants. VA will award up to 
50 points of the 200 points for this criterion based on the extent to 
which commitments to provide supportive services are available at the 
time of application. Applicants who wish to receive points under this 
optional criterion must submit documentation of supportive service 
resources.


Sec. 17.712  Selecting applications.

    (a) General. The highest-ranked applications will be conditionally 
selected in accordance with their ranked order, as determined under 
Sec. 17.711 of this part. Each will be requested, as necessary, to 
provide additional project information, as described in Sec. 17.713 of 
this part, as a prerequisite to a grant award from VA.
    (b) Ties between applicants. In the event of a tie between 
applicants, VA will use the selection criterion in Sec. 17.711(d)(4) of 
this part, need for the type of project proposed in the area to be 
served, to determine which application should be selected for potential 
funding.
    (c) Procedural error. If an application would have been selected 
but for a procedural error committed by VA, VA will select that 
application for potential funding when sufficient funds become 
available if there is no material change in the information that 
resulted in its selection. A new application will not be required for 
this purpose.


Sec. 17.713  Obtaining additional information and awarding grants.

    (a) Additional information. Applicants who have been conditionally 
selected will be requested by VA to submit additional project 
information, as described in the second submission of the application, 
which may include:
    (1) Documentation to show that the project is feasible;
    (2) Documentation showing the sources of funding for the project 
and firm financing commitments for the match described in Sec. 17.706 
of this part;
    (3) Documentation showing site control, as described in Sec. 17.731 
of this part;
    (4) Information necessary for VA to ensure compliance with the 
provisions of the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.), as described in Sec. 17.714 of this part;
    (5) A site survey performed by a licensed land surveyor. A 
description of the site shall be submitted noting the general 
characteristics of the site. This should include soil reports and 
specifications, easements, main roadway approaches, surrounding land 
uses, availability of electricity, water and sewer lines, and 
orientation. The description should also include a map locating the 
existing and/or new buildings, major roads, and public services in the 
geographic area. Additional site plans should show all site work 
including property lines, existing and new topography, building 
locations, utility data, and proposed grades, roads, parking areas, 
walks, landscaping, and site amenities.
    (6) Design development (35 percent) drawings. (i) The applicant 
shall provide to VA one set of sepias and two sets of prints, rolled 
individually per set, to expedite the review process. The drawing shall 
indicate the designation of all spaces, size of the areas and rooms and 
indicate in outline the fixed and moveable equipment and furniture. The 
drawings shall be drawn at \1/8\'' or \1/4\'' scale. Bedroom and toilet 
layouts, showing clearances and Uniform Federal Accessibility Standards 
requirements, should be shown at \1/4\'' scale. The total floor and 
room areas shall be shown in the drawings. The drawings shall include:
    (A) A plan of any proposed demolition work;
    (B) A plan of each floor. For renovations, the existing conditions 
and extent of new work should be clearly delineated;
    (C) Elevations;
    (D) Sections and typical details;
    (E) Roof plan;
    (F) Fire protection plans; and
    (G) Technical engineering plans, including structural, mechanical, 
plumbing, and electrical drawings.
    (ii) If the project involves acquisition, remodeling, or 
renovation, the applicant should include the current as-built site 
plan, floor plans and building sections which show the present status 
of the building and a description of the buildings current use and type 
of construction.
    (7) Design development outline specifications. The applicant shall 
provide eight copies of outline specifications which shall include a 
general description of the project, site, architectural, structural, 
electrical and mechanical systems such as elevators, air conditioning, 
heating, plumbing, lighting, power, and interior finishes (floor 
coverings, acoustical material, and wall and ceiling finishes).
    (8) Design development cost estimates. The applicant shall provide 
three copies of cost estimates showing the estimated cost of the 
buildings or structures to be acquired or constructed in the project. 
Cost estimates should list the cost of construction, contract 
contingency, fixed equipment not included in the contract, movable 
equipment, architect's fees and construction supervision and 
inspection.
    (9) A design development conference. After VA reviews design 
development documents, a design development conference may be 
recommended in order to provide applicants and their architects an 
opportunity to learn VA procedures and requirements for the project and 
to discuss VA review comments.
    (10) Such other documentation as specified by VA in writing to the 
applicant, that confirms or clarifies information provided in the 
application.
    (b) Receipt of additional information. The required additional 
information must be received in acceptable form within the timeframe 
established by VA in a notice of fund availability published in the 
Federal Register. VA reserves the right to remove any proposed project 
from further consideration for grant assistance if the required 
additional project information is not received in acceptable form by 
the established deadline.
    (c) Grant award. Following receipt of the additional information in 
acceptable form (and, where applicable, provided that the environmental 
review described in Sec. 17.714 indicates that the proposed project is 
environmentally acceptable to VA), to the extent funds are available VA 
will approve the application and send a grant agreement for execution 
to the applicant.


Sec. 17.714  Environmental review requirements.

    (a) Generally. Project selection is subject to completion of an 
environmental review of the proposed site, and the project may be 
modified or the site rejected as a result of that review. The 
environmental effects must be assessed in accordance with the 
requirements of the National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et. seq.) (NEPA) as implemented pursuant to the Council on 
Environmental Quality's applicable regulations (40 CFR parts 1500-1508) 
and VA's applicable implementing regulations (38 CFR part 26).
    (b) Responsibility for review. (1) VA will perform the 
environmental review, in accordance with part 26 of this title, for 
conditionally selected applications received directly from private 
nonprofit organizations and governmental entities with special or 
limited purpose powers. VA is not permitted to approve such 
applications prior to its completion of this review. Because of time 
constraints, any application subject to environmental review by VA that 
requires an Environmental Impact Statement (EIS) (generally, an 
application that VA determines would result in a major Federal action 
significantly affecting the quality of the human environment in 
accordance with the environmental assessment procedures at (38 CFR part 
26) will not be eligible for assistance under this part.
    (2) Applicants that are States, metropolitan cities, urban 
counties, Indian tribes, or other governmental entities with general 
purpose powers shall include environmental documentation for the 
project by submitting information establishing a Categorical Exclusion 
(CE), a proposed Environmental Assessment (EA), or a proposed 
Environmental Impact Statement (EIS). The environmental documentation 
will require approval by VA before final award of a construction or 
acquisition grant under this part. (See 38 CFR 26.6 for compliance 
requirements.) If the proposed actions involving construction or 
acquisition do not individually or cumulatively have a significant 
effect on the human environment, the applicant shall submit a letter 
noting a CE. If construction outside the walls of an existing structure 
will involve more than 75,000 gross square feet (GSF), the application 
shall include an EA to determine if an EIS is necessary for compliance 
with section 102(2)(c) of the National Environmental Policy Act of 
1969. When the application submission requires an EA, the State shall 
briefly describe the possible beneficial and/or harmful effect which 
the project may have on the following impact categories:

(i) Transportation;
(ii) Air quality;
(iii) Noise;
(iv) Solid waste;
(v) Utilities;
(vi) Geology (soils/hydrology/flood plains);
(vii) Water quality;
(viii) Land use;
(ix) Vegetation, wildlife, aquatic, and ecology/wetlands;
(x) Economic activities;
(xi) Cultural resources;
(xii) Aesthetics;
(xiii) Residential population;
(xiv) Community services and facilities;
(xv) Community plans and projects; and
(xvi) Other.

    (3) If an adverse environmental impact is anticipated, the action 
to be taken to minimize the impact should be explained in the EA. An 
entity covered by this section that believes that it does not have the 
legal capacity to carry out the responsibilities required by 38 CFR 
Part 26 should contact the VA Homeless Providers Grant and Per Diem 
Program, Mental Health and Behavioral Sciences Service (111C), U.S. 
Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 
20420, for further instructions. Determinations of legal capacity will 
be made on a case-by-case basis.


Sec. 17.715  Aid for supportive services and supportive housing.

    (a) Per diem payments. Aid in the form of per diem payments may be 
paid to a recipient of a grant under this part, or to an entity 
eligible for such a grant, that after November 10, 1992 establishes a 
program for providing supportive services or supportive housing to 
homeless veterans, or a service center, if:
    (1) VA referred the homeless veteran to a recipient of a grant 
under this part (or entity eligible for such a grant as described in 
Sec. 17.715(a) of this part); or
    (2) VA authorized the provision of supportive services or 
supportive housing for the homeless veteran.
    (b) In-kind assistance. In lieu of per diem payments under this 
section, VA may, with approval of the grant recipient (or entity 
eligible for such a grant as described in Sec. 17.715(a) of this part), 
provide in-kind assistance through the services of VA employees and the 
use of other VA resources, to a grant recipient (or entity eligible for 
such a grant as described in Sec. 17.715(a) of this part).


Sec. 17.716  Eligibility to receive payments.

    An entity must be formally recognized by VA as eligible to receive 
payments under this section before payments can be made for the care of 
homeless veterans, except that payments may be made on behalf of a 
veteran up to three days prior to this recognition. An entity may be 
recognized if:
    (a) It is an entity receiving a grant, or eligible to receive a 
grant under this part,
    (b) At least 75 percent of persons who are receiving supportive 
services or supportive housing from the entity are veterans who may be 
included in the computation of the amount of aid payable from the 
Department of Veterans Affairs, and
    (c) The supportive services or supportive housing program for which 
per diem payments is requested was established after November 10, 1992.


Sec. 17.717  Requesting recognition.

    Requests for recognition of eligibility may be addressed to the VA 
Homeless Providers Grant and Per Diem Program; Mental Health and 
Behavioral Sciences Service (111C), U.S. Department of Veterans 
Affairs, 810 Vermont Avenue NW., Washington, DC 20420.


Sec. 17.718  Approval of annexes and new facilities.

    Separate applications for recognition must be filed for any annex, 
branch, enlargement, expansion, or relocation of the site of service 
provision of an eligible entity's facility which is not on the same or 
contiguous grounds on which the parent facility is located. When an 
eligible entity establishes sites which have not been inspected and 
approved by VA, a request for separate approval of such sites must be 
made. The prohibitions in Sec. 17.720 are also applicable to 
applications for aid on behalf of any veteran cared for in a new annex, 
branch or enlarged, expanded or relocated facility.


Sec. 17.719  Amount of aid payable.

    (a) Maximum amount payable. The amount of per diem payments made 
under paragraphs (1) and (2) of this section for services rendered to a 
veteran shall not exceed one-half of the cost to the grant recipient 
(or entity eligible for such a grant as described in Sec. 17.715(a) of 
this part) of providing such services.
    (1) The maximum per diem amount payable for supportive housing is 
$30.00.
    (2) The per diem amount payable for supportive services not 
provided in conjunction with supportive housing is $1.10 for each half 
hour during which supportive services are provided. The maximum per 
diem amount payable for supportive services not in conjunction with 
supportive housing is $17.60 per day.
    (b) Limitation on per diem payments. Per diem payments may be paid 
for a veteran under paragraph (a)(1) or (a)(2) of this section, but not 
under both paragraphs (a)(1) and (a)(2).
    (c) Limitation on duration of per diem payments. VA must 
periodically review and approve, or terminate approval for, continued 
per diem payments for each veteran. Such review shall occur at least 
once every three months.


Sec. 17.720  Approval of eligibility.

    (a) Eligibility determinations. A grant recipient (or entity 
eligible for such a grant as described in Sec. 17.715(a) of this part) 
will receive per diem payments or in-kind assistance from VA only for 
the care of veterans whose separate eligibility has been determined by 
VA, and only where VA has referred the veteran under Sec. 17.715(a)(1) 
or has authorized the provision of supportive housing or supportive 
services under Sec. 17.715(a)(2) of this part. A veteran does not have 
to be eligible for VA medical care in order for the Department to make 
per diem payments for that veteran.
    (1) VA shall determine the eligibility of each veteran referred to 
a grant recipient (or entity eligible for such a grant as described in 
Sec. 17.715(a) of this part) prior to making such referral.
    (2) To obtain such determination for veterans not referred by VA, 
the grant recipient (or entity eligible for such a grant as described 
in Sec. 17.715(a) of this part) will complete a VA application for 
medical benefits for each veteran and submit it to the VA medical care 
facility office of jurisdiction for determination of eligibility.
    (b) Retroactive payments. Per diem payments may be paid 
retroactively for services provided not more than three days before VA 
approval is given where VA authorized the provision of services 
pursuant to Sec. 17.715(a)(2).


Sec. 17.721  Inspections.

    The Secretary may inspect any facility of an entity eligible for 
per diem payments under this section at such times as are deemed 
necessary. Such inspections shall be concerned with the physical plant; 
records relating to admissions, discharges and occupancy; fiscal 
records; and all other areas of interest necessary to a determination 
of compliance with applicable laws and regulations relating to the 
payment of Federal aid. The authority to inspect carries with it no 
authority over the management or control of any entity eligible for per 
diem payments under this section.


Sec. 17.722  Prerequisite for payment of aid.

    No aid may be paid to eligible entities unless they meet the 
requirement and standards described in Secs. 17.724 through 17.726 of 
this part.


Sec. 17.723  Audit of recipients of aid.

    (a) State and local government entities. State, local and Indian 
tribal governments that receive $25,000 or more in assistance under 
this part shall have an audit made in accordance with the requirements 
of 38 CFR part 41.
    (b) Nonprofit entities. Nonprofit entities receiving assistance 
under this part shall be subject to the audit requirements contained in 
OMB Circular A-133.


Sec. 17.724  General operation.

    (a) State and local requirements. Each recipient of assistance 
under this part must provide housing or services that are in compliance 
with all applicable State and local housing codes, licensing 
requirements, fire and safety requirements, and any other requirements 
in the jurisdiction in which the project is located regarding the 
condition of the structure and the operation of the housing or 
services.
    (b) Habitability standards. Except for such variations as are 
proposed by the recipient that would not affect compliance with 
paragraph (a) of this section and are approved by VA, supportive 
housing must meet the following requirements:
    (1) Structure and materials. The structures must be structurally 
sound so as not to pose any threat to the health and safety of the 
occupants and so as to protect the residents from the elements.
    (2) Access. Entry and exit locations to the structure must be 
capable of being utilized without unauthorized use of other private 
properties, and must provide alternate means of egress in case of fire. 
Buildings constructed or altered with Federal assistance must also be 
accessible to the disabled, as required by Sec. 502 of the Americans 
with Disabilities Act, referred to as the Architectural Barriers Act. 
Waiver of the standards of the Architectural Barriers Act requires 
approval of the Administrator of the General Services Administration.
    (i) The Architectural Barriers Act requires that Federal and 
Federally-assisted buildings, the intended use for which either will 
require that such building be accessible to the public, or may result 
in the employment or residence therein of physically handicapped 
persons, be accessible to the disabled. This requirement applies to 
buildings to be constructed or altered by or on behalf of the United 
States, and to buildings to be leased in whole or in part by the United 
States (42 U.S.C. 4151).
    (ii) Accessibility guidelines for buildings and facilities are set 
forth in 36 CFR part 1191.
    (3) Space and security. Each resident must be afforded appropriate 
space and security for themselves and their belongings. Each resident 
must be provided an acceptable place to sleep that is in compliance 
with local codes and regulations.
    (4) Interior air quality. Every room or space must be provided with 
natural or mechanical ventilation. Structures must be free of 
pollutants in the air at levels that threaten the health of residents.
    (5) Water supply. The water supply must be free from contamination.
    (6) Sanitary facilities. Residents must have access to sufficient 
sanitary facilities that are in proper operating condition, may be used 
in privacy, and are adequate for personal cleanliness and the disposal 
of human waste.
    (7) Thermal environment. The housing must have adequate heating 
and/or cooling facilities in proper operating condition.
    (8) Illumination and electricity. The housing must have adequate 
natural or artificial illumination to permit normal indoor activities 
and to support the health and safety of residents. Sufficient 
electrical sources must be provided to permit use of essential 
electrical appliances while assuring safety from fire.
    (9) Food preparation and refuse disposal. All food preparation 
areas must contain suitable space and equipment to store, prepare, and 
serve food in a sanitary manner.
    (10) Sanitary condition. The housing and any equipment must be 
maintained in a sanitary manner.
    (c) Meals. Each recipient of assistance under this part who 
provides supportive housing for homeless veterans with disabilities 
must provide meals or meal preparation facilities for residents.
    (d) Ongoing assessment of supportive services. Each recipient of 
assistance under this part must conduct an ongoing assessment of the 
supportive services required by the residents of the project and the 
availability of such services, and make adjustments as appropriate.
    (e) Residential supervision. Each recipient of assistance under 
this part must provide residential supervision necessary to facilitate 
the adequate provision of supportive services to the residents of the 
housing throughout the term of the commitment to operate supportive 
housing. Residential supervision may include the employment or 
volunteer services of a full- or part-time residential supervisor with 
sufficient knowledge to provide or to supervise the provision of 
supportive services to the residents.
    (f) Participation of homeless veterans. (1) Each recipient of 
assistance under this part must provide for the consultation and 
participation of not less than one homeless veteran or formerly 
homeless veteran on the board of directors or an equivalent 
policymaking entity of the recipient, to the extent that such entity 
considers and makes policies and decisions regarding any project, 
supportive services, or assistance provided under this part. This 
requirement may be waived if an applicant, despite a good faith effort 
to comply, is unable to meet it and presents a plan, subject to VA 
approval, to otherwise consult with homeless or formerly homeless 
veterans in considering and making such policies and decisions.
    (2) Each recipient of assistance under this part must, to the 
maximum extent practicable, involve homeless veterans and families, 
through employment, volunteer services, or otherwise, in constructing, 
rehabilitating, maintaining, and operating the project and in providing 
supportive services for the project. Programs that do not involve 
homeless or formerly homeless veterans in such capacities may become 
ineligible to receive per diem payments. This requirement is waived if 
a recipient is unable to meet it and presents an explanation for VA 
approval
    (g) Accounting systems. Each recipient shall establish procedures 
for fiscal control and fund accounting to ensure proper disbursement 
and accounting of assistance received under this part.
    (h) Confidentiality. (1) Each recipient that provides family 
violence prevention or treatment services must develop and implement 
procedures to ensure:
    (i) The confidentiality of records pertaining to any individual 
provided services; and
    (ii) That the address or location of any project assisted will not 
be made public by the recipient and its staff, except with written 
authorization of the person or persons responsible for the operation of 
the project.
    (2) Each recipient of assistance under this part must maintain the 
confidentiality of records kept on homeless veterans receiving 
services.
    (i) Limitation of stay in transitional housing. A homeless veteran 
may remain in transitional housing for a period longer than 24 months, 
if permanent housing for the veteran has not been located or if the 
veteran requires additional time to prepare for independent living. 
However, VA may discontinue assistance for a transitional housing 
project if more than half of the homeless veterans remain in that 
project longer than 24 months.
    (j) Outpatient health services. VA may disapprove use of outpatient 
health services provided through the recipient if VA determines that 
such services are of unacceptable quality. VA will not pay per diems 
for veterans who receive services from providers who VA has found to be 
of unacceptable quality.
    (k) Service center requirements. A service center for homeless 
veterans shall provide services to homeless veterans for a minimum of 
40 hours per week over a minimum of five days per week, as well as on 
an as-needed, unscheduled basis. In addition:
    (1) Space in a service center shall be made available as mutually 
agreeable for use by VA staff and other appropriate agencies and 
organizations to assist homeless veterans;
    (2) A service center shall be equipped to provide, or assist in 
providing, health care, mental health services, hygiene facilities, 
benefits and employment counseling, meals, and transportation 
assistance;
    (3) A service center shall provide other services as VA determines 
necessary based on the need for services otherwise not available in the 
geographic area;
    (4) A service center may be equipped and staffed to provide, or to 
assist in providing, job training and job placement services (including 
job readiness, job counseling, and literacy and skills training), as 
well as any outreach and case management services that may be necessary 
to meet the requirements of this paragraph.


Sec. 17.725  Outreach activities.

    Recipients must use their best efforts to ensure that eligible 
hard-to-reach persons are served in the facility funded under this 
part. Recipients are expected to make sustained efforts to engage 
eligible persons so that they may be brought into the program. Outreach 
should be directed primarily toward eligible persons who have a 
nighttime residence that is an emergency shelter or a public or private 
place not designed for, or ordinarily used as, a regular sleeping 
accommodation for human beings (e.g., persons living in cars, streets 
and parks).


Sec. 17.726  Resident rent.

    (a) Calculation of resident rent. Each resident of supportive 
housing may be required to pay as rent an amount determined by the 
recipient which may not exceed the highest of:
    (1) 30 percent of the resident's monthly adjusted income 
(adjustment factors include the number of relatives in the family 
residing with the veteran, medical expenses, and child care expenses);
    (2) 10 percent of his or her family's monthly income; or
    (3) If the family is receiving payments for welfare assistance from 
a public agency and a part of the payments, adjusted in accordance with 
the family's actual housing costs, is specifically designated by the 
agency to meet the family's housing costs, the portion of the payments 
that is designated.
    (b) Use of rent. Resident rent may be used in the operation of the 
project or may be reserved, in whole or in part, to assist residents of 
transitional housing in moving to permanent housing.
    (c) Fees. In addition to resident rent, recipients may charge 
residents reasonable fees for services not paid with VA per diem funds 
or provided to the service provider by in-kind assistance through the 
services of VA employees and the use of other VA resources.


Sec. 17.727  Grant agreement.

    (a) General. The duty to provide supportive housing or supportive 
services, or to establish a service center in accordance with the 
requirements of this part will be incorporated in a grant agreement 
executed by VA and the recipient.
    (b) Enforcement. VA will enforce the obligations in the grant 
agreement through such action as may be appropriate, including 
repayment of funds that have already been disbursed to the recipient.


Sec. 17.728  Program changes.

    (a) VA approval. (1) A recipient may not make any significant 
changes to an approved program without prior VA approval. Significant 
changes include, but are not limited to, a change in the recipient, a 
change in the project site, additions or deletions in the types of 
activities listed in Sec. 17.702 of this part approved for the program, 
certain shifts of funds from one approved type of activity to another, 
and a change in the category of participants to be served.
    (i) Recipients of grants exceeding $100,000 for nonconstruction 
projects who are State or local governments must receive prior VA 
approval for cumulative transfers among direct cost categories which 
exceed or are expected to exceed ten percent of the current total 
approved budget.
    (ii) Recipients of grants for projects involving both construction 
and nonconstruction who are State or local governments must receive 
prior VA approval for any budget revision which would transfer funds 
between nonconstruction and construction categories.
    (iii) Recipients of grants exceeding $100,000 who are nonprofit 
entities must receive prior VA approval for cumulative transfers among 
direct cost categories or programs, functions and activities which 
exceed or are expected to exceed ten percent of the total budget as 
last approved by VA.
    (2) Approval for changes is contingent upon the application ranking 
remaining high enough after the approved change to have been 
competitively selected for funding in the year the application was 
selected.
    (b) Documentation of other changes. Any changes to an approved 
program that do not require prior VA approval must be fully documented 
in the recipient's records.


Sec. 17.729  Obligation and deobligation of funds.

    (a) Obligation of funds. When VA and the applicant execute a grant 
agreement, funds are obligated to cover the amount of the approved 
assistance under Secs. 17.702 through 17.707 of this part. The 
recipient will be expected to carry out the supportive housing or 
supportive services activities as proposed in the application.
    (b) Increases. After the initial obligation of funds, VA will not 
make revisions to increase the amount obligated.
    (c) Deobligation. (1) VA may deobligate all or parts of grants 
awarded under this part:
    (i) If the actual total cost of acquisition, rehabilitation, 
acquisition and rehabilitation, or new construction of facilities, or 
the cost of procurement of a van, is less than the total cost 
anticipated in the application, or
    (ii) Where a recipient materially fails to comply with the terms 
and conditions of an award under this part.
    (2) The grant agreement may set forth in detail other circumstances 
under which funds may be deobligated, and other sanctions may be 
imposed. Such sanctions may include, among other remedies: temporarily 
withholding cash payments pending correction of a deficiency, denying 
the use of grant or matching funds for all or part of the cost of an 
activity not in compliance, wholly or partly suspending an award, and 
withholding further awards to the recipient.
    (3) Where a recipient has no control over causes for delays in 
implementing a project, any delays due to causes beyond a recipient's 
control may, with VA approval, suspend the running of any period in 
which the recipient must implement a program or risk deobligation of 
funds or other VA remedies.
    (4) VA may:
    (i) Readvertise in a notice of fund availability under Sec. 17.708 
of this part, the availability of funds awarded that were deobligated 
in the same fiscal year as obligated; or
    (ii) Award funds deobligated in the same fiscal year as obligated 
to applications previously submitted in response to the most recently 
published notice of fund availability, and in accordance with 
Secs. 17.708 through 17.714 of this part; or
    (iii) If legally authorized, award amounts deobligated in a fiscal 
year later than the fiscal year in which they were obligated to 
applications previously submitted in response to the most recently 
published notice of fund availability, and in accordance with 
Secs. 17.708 through 17.714 of this part.


Sec. 17.730  Displacement, relocation, and acquisition.

    (a) Minimizing displacement. Consistent with other goals and 
objectives of this part, recipients must take all reasonable steps to 
minimize the displacement of persons (families, individuals, 
businesses, nonprofit organizations, and farms) as a result of 
supportive housing, supportive services, or service centers assisted 
under this part. These requirements apply to all interests in real 
property acquired for project purposes regardless of Federal 
participation in the purchases.
    (b) Relocation assistance for displaced persons. A displaced person 
must be provided relocation assistance at the levels described in, and 
in accordance with, the requirements of the Uniform Relocation 
Assistance and Real Property Acquisition Policies Act of 1970 (URA) (42 
U.S.C. 4601-4655).
    (c) Certification. The recipient must certify that it will comply 
with the URA, and must ensure such compliance notwithstanding any third 
party's contractual obligation to the recipient to comply with these 
provisions.
    (d) Cost of relocation assistance. The cost of required relocation 
assistance is not an eligible project cost, in that such costs are 
operational costs. Such costs must be paid for with local public funds 
or funds available from other sources.
    (e) Definition of initiation of negotiations. For purposes of 
determining the formula for computing the replacement housing 
assistance to be provided to a residential tenant displaced as a direct 
result of privately undertaken rehabilitation, demolition, or 
acquisition of the real property, the term ``initiation of 
negotiations'' means the execution of the agreement between the 
recipient and VA, or selection of the project site, if later.


Sec. 17.731  Site control.

    (a) Site control. (1) Where grant funds will be used for 
acquisition, rehabilitation, or new construction to provide supportive 
housing or supportive services, or to establish service centers, except 
where an applicant will provide services at sites not operated by the 
applicant, an applicant must demonstrate site control (e.g., through a 
deed, capital lease, executed contract of sale) before VA will execute 
a grant agreement.
    (2) If such site control is not demonstrated within one year after 
initial notification of the award of assistance under this part, the 
grant will be deobligated as provided in paragraph (c) of this section.
    (b) Site change. (1) A recipient may obtain ownership or control of 
a suitable site different from the one specified in its application. 
Retention of an assistance award is subject to the new site's meeting 
all requirements for suitable sites under this part.
    (2) If the acquisition, rehabilitation, acquisition and 
rehabilitation, or new construction costs of the substitute site are 
greater than the amount of the grant awarded for the site specified in 
the application, the recipient must provide for all additional costs. 
If the recipient is unable to demonstrate to VA that it is able to 
provide for the difference in costs, VA may deobligate the award of 
assistance.
    (c) Failure to obtain site control within one year. VA will 
deobligate any award for assistance under this part or pursue other 
remedies described in Sec. 17.729(c) of this part if the recipient is 
not in control of a suitable site before the expiration of one year 
after initial notification of an award.

[FR Doc. 94-13051 Filed 5-31-94; 8:45 am]
BILLING CODE 8320-01-P