[Federal Register Volume 60, Number 38 (Monday, February 27, 1995)]
[Rules and Regulations]
[Pages 10502-10504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4654]



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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: Final rule.

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SUMMARY: We are, with changes, adopting as a final rule the provisions 
of an interim final rule promulgated pursuant to The Homeless Veterans 
Comprehensive Service Programs Act of 1992. The Act 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 
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 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.

EFFECTIVE DATE: February 27, 1995.

FOR FURTHER INFORMATION CONTACT: Roger Casey, 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, N.W., Washington, D.C. 20420; (202) 535-
7311 (this is not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    In a document published in the Federal Register on June 1, 1994 (59 
FR 28264-28275), we established an interim final rule to implement 
provisions of the ``Homeless Veterans Comprehensive Service Programs 
Act of 1992.'' We solicited comments concerning the interim final rule 
for 60 days ending August 1, 1994. We received comments from three 
commenters: the Missouri Veterans Leadership Program, Vietnam Veterans 
Of America, Inc., and the State of New Jersey Department of Military 
and Veterans' Affairs. We have carefully considered all of the 
comments, and they are discussed below.
    Based on the rationale set forth in the interim final rule and in 
this document, we are adopting the provisions of the interim final rule 
as a final rule, with changes as discussed in this document. This final 
rule also affirms the information contained in the interim final rule 
concerning Executive Order 12866 and the Regulatory Flexibility Act.
    It was commented that VA ``restore some of the original funding 
earmarked for technical assistance'' in preparing grant applications. 
No changes are made based on this comment. The appropriation for the 
grant and per diem program did not earmark funding for technical 
assistance.
    In addition, with respect to the two-phase application process for 
obtaining grants, it was commented that ``any requirements for 
professional consultation or the need for expenditures be reserved for 
the second [[Page 10503]] phase when there is some hope that these 
costs will be reimbursed.'' No changes are made based on this comment. 
The rule does not require use of professional consultation or any large 
expenditures for the initial phase of the application process.
    It was also suggested that VA make specific allocation of funds to 
the per diem and grant components of the program. No changes are made 
based on this comment. Instead of predetermining amounts, it is our 
view that the amounts should be allocated on an ad hoc basis based on 
need and availability of funds. Even so, we agree that funding should 
provide for both per diem and grant awards, and we will ensure that 
both receive portions of allocations.
    The writer also commented that the rating criteria should award 
additional points to ``veteran-run programs.'' No changes are made 
based on this comment. The grant and per diem program as authorized 
under Pub. L. 102-590 does not address this issue, and there does not 
appear to be a basis for giving preference to veteran-run programs.
    Another comment stated that the point system used for rating grants 
should include points for targeting homeless veterans discharged from 
VA medical centers. No changes are made based on this comment, since 
the rule already includes this concept (see 38 CFR 17.711 (d)(2)).
    This commenter also disagreed with the statement in the Preamble to 
the interim final rule that the ``vast majority of homeless veterans 
are single''. No changes are made based on this comment. We believe 
that such statement is correct. The statement is consistent with the 
Executive Summary of the 1990 Annual Report of the Interagency Council 
on the Homeless, which states that ``Over three-quarters of homeless 
adults are unattached single men, (and) 8% are unattached single 
women'' (page 24); and that the ``characteristics of homeless veterans 
appear to roughly parallel those of other homeless persons of the same 
sex'' (page 33).
    It was also asserted that the grant program should not prohibit use 
of grant funding to construct, expand, remodel or acquire buildings 
located on VA owned property. Except as provided for in 38 U.S.C. 8122 
or 40 U.S.C. 484, such VA property may not be purchased. In essence, 
applicants could only ``acquire'' these VA owned properties by lease, 
and lease payments are operational costs. Pub. L. 102-590 section 3(c) 
prohibits use of grant funds to support operational costs. Furthermore, 
the interim final rule limited uses of grant funding to acquisition, 
expansion and rehabilitation of structures owned by the applicant, or 
held by the applicant under a capital lease, in order to ensure long-
term use of such structures to benefit homeless veterans. However, we 
are amending Sec. 17.700 by revising the last sentence of paragraph (a) 
to permit use of grant funding to construct, expand or remodel 
buildings located on VA medical center grounds. A corresponding change 
is made in Sec. 17.731(a)(1) to allow such leases to be used to 
demonstrate site control. We believe that these changes are consistent 
with the Congressional intent. In this regard, Congress stated:

The Committee views the bill as a catalyst to spark linkages both 
between programs within VA as well as between VA and community-based 
programs. * * * The bill not only seeks to encourage new 
partnerships between VA programs and those serving in the same 
communities, but to provide seed money to start up new programs 
which would work in concert with VA efforts. (138 Cong. Rec. House 
Report No. 102-721 (July 24, 1992) reprinted in 1992 U.S.C.C.A.N. 
4318).

The amendment would provide a means to enhance VA partnerships with 
community-based programs, and would allow for better and more immediate 
access to health and other benefits at VA medical centers. Moreover, if 
a grant recipient whose program was funded on VA medical center grounds 
ceased to operate the program, VA could seek another community-based 
organization to occupy the site and conduct a program for homeless 
veterans that carries out the purposes of the Act.
    It was also asserted that the per diem program should not be 
restricted to new programs established after November 10, 1992. No 
change to the rule is made based on this comment since this a 
requirement of Pub. L. No. 102-590 (see section 4(a)).
    Two of the commenters asserted that recipients of grants should be 
able to obtain a grant by providing less than 35 percent of the total 
project costs. No changes are made based on this comment. VA has no 
choice in this matter, since Pub. L. 102-590 section 3(c) provides that 
the amount of a grant ``may not exceed 65 percent of the estimated cost 
* * *.''
    Three commenters asserted that grants should provide for operating 
costs. No changes are made based on these comments. VA has no choice in 
this matter since Pub. L. 102-590 section 3(c) states that a grant may 
not be used to support operational costs. However, it is noted that 
even though operational costs are not allowed under the grant 
component, payments under the per diem component necessarily include 
operational costs.
    Several comments were based on incorrect assumptions. It was 
commented incorrectly that the rule limits funding for remodeling or 
renovating VA foreclosures acquired under the McKinney Act. The rule 
does not contain such limitation on the use of funds for remodeling or 
renovating VA foreclosed properties, and the McKinney Act does not 
pertain to VA foreclosed properties. It was also incorrectly stated 
that grant funds were not available to make necessary and reasonable 
improvements to accommodate access for disabled veterans. The rule 
contains no such prohibition. In addition, it was incorrectly stated 
that the rule excludes applicants if they are not United Way member 
organizations. The rule does not require United Way membership as a 
condition of eligibility to apply for grants or per diem payments.
    Changes are made in the final rule to more clearly set forth the 
Congressional intent with respect to the meaning of ``new program/new 
component of existing program''. In this regard Congress stated that:

The intent of the grant program is to assist in the establishment of 
new programs, or new components of existing programs, that will 
provide needed services to homeless veterans. In this regard both 
newly established organizations and existing organizations would be 
eligible for grant support for the furnishing of specified 
assistance that is needed in the area or community so long as, in 
the case of existing organizations, they are not already providing 
that kind of assistance in such area or community. (138 Cong. Rec. 
S. 17185 (Oct. 7, 1992) reprinted in 1992 U.S.C.C.A.N. 4335, 4336).

The final rule is amended to better reflect this Congressional intent. 
We are adding a definition of ``area or community'' because it is 
relevant for determining whether or not the proposed project 
constitutes a new program or new component of an existing program. In 
this regard, the ``new program/new component of an existing program'' 
must be both needed and not already provided by the applicant in the 
``area or community''. Since it was intended that organizations be 
prohibited from receiving grants for the same kind of assistance they 
already have been providing in an area or community, it is necessary to 
specify at what point they would be in a different area or community 
and therefore eligible to receive a grant, assuming all other 
applicable conditions are met. To better reflect Congressional intent, 
the [[Page 10504]] term ``area or community'' is defined to mean ``a 
political subdivision or contiguous political subdivisions (such as 
precinct, ward, borough, city, county, State, Congressional district, 
etc.) with a separately identifiable population of homeless veterans.'' 
Accordingly, changes are made to the rule to better reflect this 
Congressional intent.
    Changes are made to the ``rating criteria for applications'' 
section of the rule (Sec. 17.711) to clarify that grants may be awarded 
only for new programs or new components of existing programs.
    This final rule, which essentially affirms the provisions of the 
interim final rule, is made effective upon publication. The substantive 
changes made by this final rule relieve restrictions.
    Executive Order 12866: This rule has been reviewed as a 
``significant regulatory action'' under E.O. 12866 by the Office of 
Management and Budget.
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: February 15, 1995.
Jesse Brown,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, the interim rule 
amending 38 CFR part 17 which was published at 59 FR 28625, June 1, 
1994, is adopted as final with the following changes:

PART 17--MEDICAL

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

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

    2. Section 17.700 is amended by revising the last sentence of 
paragraph (a) to read as follows:


Sec. 17.700  Purpose and scope.

    (a) * * * This program does not provide for funding to acquire 
buildings located on VA-owned property. The program does provide for 
grant funds to be used to construct, expand or remodel buildings 
located on VA-owned property.
* * * * *
    3. Section 17.701 is amended by adding the definition of ``area or 
community'', and by revising the definition of ``new program/new 
component of an existing program'' to read as follows:


Sec. 17.701  Definitions.

* * * * *
    Area or community means a political subdivision or contiguous 
political subdivisions (such as precinct, ward, borough, city, county, 
State, Congressional district, etc.) with a separately identifiable 
population of homeless veterans.
* * * * *
    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 area or community served by that entity.
* * * * *
    4. Section 17.710 is amended by revising paragraph (a)(7) to read 
as follows:


Sec. 17.710  Application requirements.

    (a) * * *
    (7) Documentation on site control and appropriate zoning, and on 
the boundaries of the area or community proposed to be served;
* * * * *
    5. Section 17.711 is amended by revising paragraphs (b)(4) and the 
first sentence in (d)(4) to read as follows:


Sec. 17.711  Rating criteria for applications.

* * * * *
    (b) * * *
    (4) Eligible activities. The activities for which assistance is 
requested must be eligible for funding under this part (e.g., new 
programs or new components of existing programs).
* * * * *
    (d) * * *
    (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 in the specified area or 
community. * * *
* * * * *
    6. Section 17.731 is amended by adding a new sentence at the end of 
paragraph (a)(1) to read as follows:


Sec. 17.731  Site control.

    (a) * * *
    (1) * * * A lease other than a capital lease does not demonstrate 
site control except for a VA lease as described in Sec. 17.700(a) of 
this part.
* * * * *
[FR Doc. 95-4654 Filed 2-24-95; 8:45 am]
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