[Federal Register Volume 61, Number 161 (Monday, August 19, 1996)]
[Rules and Regulations]
[Pages 42942-42949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-20563]

[[Page 42941]]


Part II

Department of Agriculture

Rural Housing Service

7 CFR Part 1944


Department of Housing and Urban Development

24 CFR Part 700


Congregate Housing Services Program: Streamlining; Final Common Rule

Federal Register / Vol. 61, No. 161 / Monday, August 19, 1996 / Rules 
and Regulations

[[Page 42942]]


Rural Housing Service

7 CFR Part 1944


24 CFR Part 700
[Docket No. FR-4033-F-01]
RIN 2501-AC21

Congregate Housing Services Program: Streamlining; Final Rule

AGENCY: Rural Housing Service, (USDA), and Office of the Secretary, 

ACTION: Final common rule.


SUMMARY: This document amends the joint USDA and HUD regulations for 
the Congregate Housing Services Program (CHSP or Program). In an effort 
to comply with the President's regulatory reform initiatives, this rule 
will streamline CHSP regulations by eliminating provisions that are 
redundant of statutes or are otherwise unnecessary. This final rule 
will make CHSP regulations clearer and more concise.

EFFECTIVE DATE: September 18, 1996.

FOR FURTHER INFORMATION CONTACT: With respect to HUD's Congregate 
Housing Services Program: Carissa Janis, Program Analyst, Room 6176, 
Department of Housing and Urban Development, 451 Seventh Street, SW, 
Washington, DC 20410, telephone number (202) 708-3291 (this is not a 
toll-free number). With respect to the Rural Housing Service's 
Congregate Housing Services Program: Sue M. Harris-Green, Senior Loan 
Officer, Rural Housing Service, Department of Agriculture, 14th and 
Independence Avenue, S.W., room 5343, Washington, D.C., 20250, 
telephone number (202) 720-1660. Hearing- and speech-impaired persons 
may access these telephone numbers via TTY by calling the Federal 
Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: On March 4, 1995, President Clinton issued a 
memorandum to all Federal departments and agencies regarding regulatory 
reinvention. In response to this memorandum, the Department of Housing 
and Urban Development conducted a page-by-page review of its 
regulations to determine which can be eliminated, consolidated, or 
otherwise improved. HUD and USDA have determined that the regulations 
for CHSP can be improved and streamlined by eliminating unnecessary 
    Several provisions in the regulations repeat statutory language 
from the National Affordable Housing Act (NAHA) of 1990 and the Housing 
and Community Development Act of 1992. It is unnecessary to maintain 
statutory requirements in the Code of Federal Regulations (CFR), since 
those requirements are otherwise fully accessible and binding. 
Furthermore, if regulations contain statutory language, HUD and USDA 
must amend the regulations whenever Congress amends the statute. 
Therefore, this final rule will remove repetitious statutory language 
and replace it with a citation to the specific statutory section for 
easy reference. Readers of 24 CFR part 700 must have copies of the 
appropriate sections of both Acts readily available in order to 
effectively read and understand this regulation.
    Several other provisions in the regulations apply to more than one 
program, and therefore HUD repeated these provisions in different 
subparts. This repetition is unnecessary, and updating these provisions 
is cumbersome and often creates confusion. Therefore, this final rule 
will consolidate these duplicative provisions, maintaining appropriate 
cross-references for the reader's convenience.

Justification for Final Rulemaking

    HUD generally publishes a rule for public comment before issuing a 
rule for effect, in accordance with its own regulations on rulemaking 
in 24 CFR part 10. However, part 10 provides for exceptions to the 
general rule if the agency finds good cause to omit advance notice and 
public participation. The good cause requirement is satisfied when 
prior public procedure is ``impracticable, unnecessary, or contrary to 
the public interest'' (24 CFR 10.1). HUD and USDA find that good cause 
exists to publish this rule for effect without first soliciting public 
comment. This rule merely removes unnecessary regulatory provisions and 
does not establish or affect substantive policy. Therefore, prior 
public comment is unnecessary.

Other Matters

Regulatory Flexibility Act

    The Secretary concerned, in accordance with the Regulatory 
Flexibility Act (5 U.S.C. 605(b)), has reviewed and approved this final 
rule, and in so doing certifies that this rule will not have a 
significant economic impact on a substantial number of small entities. 
This rule merely streamlines regulations by removing unnecessary 
provisions. The rule will have no adverse or disproportionate economic 
impact on small businesses.

Unfunded Mandate Reform Act of 1995

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub. L. 
104-4, established requirements for Federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, the 
agencies generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures to state, local, or tribal 
governments, in the aggregate, or to the private sector. When such a 
statement is needed for a rule, section 205 of the UMRA generally 
requires the agencies to identify and consider a reasonable number of 
regulatory alternatives and adopt the least costly, more cost-effective 
or least burdensome alternative that achieves the objectives of the 
    This rule contains no Federal mandates (under regulatory provisions 
of Title II of the UMRA) for state, local, and tribal governments or 
the private sector. Thus, this rule is not subject to the requirements 
of sections 202 and 205 of the UMRA.

Environmental Impact

    This rulemaking does not have an environmental impact. This 
rulemaking simply amends an existing regulation by consolidating and 
streamlining provisions and does not alter the environmental effect of 
the regulations being amended. A Finding of No Significant Impact with 
respect to the environment was made in accordance with HUD regulations 
in 24 CFR part 50 that implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332) at the time of 
development of regulations implementing CHSP. That finding remains 
applicable to this rule and is available for public inspection between 
7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket 
Clerk, Office of General Counsel, Room 10276, Department of Housing and 
Urban Development, 451 Seventh Street, SW, Washington, DC.
    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program''. It is the determination of the 
RHS that the proposed action does not constitute a major Federal order 
significantly affecting the quality of the human environment and in 
accordance with the National Environmental Policy Act of

[[Page 42943]]

1969, Pub. L. 91-190, an environmental impact statement is not 

Executive Order 12612, Federalism

    The General Counsel, as the Designated Official under section 6(a) 
of Executive Order 12612, Federalism, has determined that this rule 
will not have substantial direct effects on States or their political 
subdivisions, or the relationship between the Federal government and 
the States, or on the distribution of power and responsibilities among 
the various levels of government. No programmatic or policy changes 
will result from this rule that would affect the relationship between 
the Federal Government and State and local governments.

Executive Order 12606, The Family

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this rule will not have 
the potential for significant impact on family formation, maintenance, 
or general well-being, and thus is not subject to review under the 
Order. No significant change in existing HUD or USDA policies or 
programs will result from promulgation of this rule.

Text of Final Common Rule

    The text of the final common rule, as adopted by the agencies in 
this document, appears below:


______.100  Purpose.
______.105  Definitions.
______.110  Announcement of fund availability, application process 
and selection.
______.115  Program costs.
______.120  Eligible supportive services.
______.125  Eligibility for services.
______.130  Service coordinator.
______.135  Professional assessment committee.
______.140  Participatory agreement.
______.145  Cost distribution.
______.150  Program participant fees.
______.155  Grant agreement and administration.
______.160  Eligibility and priority for 1978 Act recipients.
______.165  Evaluation of Congregate Housing Services Programs.
______.170  Reserve for supplemental adjustment.
______.175  Other Federal requirements.

$______.100  Purpose.

    The requirements of this part augment the requirements of section 
802 of the National Affordable Housing Act of 1990 (approved November 
28, 1990, Public Law 101-625) (42 U.S.C. 8011), (hereinafter, section 
802), as amended by the Housing and Community Development Act of 1992 
(Public Law 102-550, approved October 28, 1992), which authorizes the 
Congregate Housing Services Program (hereinafter, CHSP or Program).

Sec.  ______ .105  Definitions.

    In addition to the definitions in section 802(k), the following 
definitions apply to CHSP:
    Activity of Daily Living (ADL) means an activity regularly 
necessary for personal care. (1) The minimum requirements of ADLs 
    (i) Eating (may need assistance with cooking, preparing or serving 
food, but must be able to feed self);
    (ii) Dressing (must be able to dress self, but may need occasional 
    (iii) Bathing (may need assistance in getting in and out of the 
shower or tub, but must be able to wash self);
    (iv) Grooming (may need assistance in washing hair, but must be 
able to take care of personal appearance);
    (v) Getting in and out of bed and chairs, walking, going outdoors, 
using the toilet; and
    (vi) Household management activities (may need assistance in doing 
housework, grocery shopping or laundry, or getting to and from one 
location to another for activities such as going to the doctor and 
shopping, but must be mobile. The mobility requirement does not exclude 
persons in wheelchairs or those requiring mobility devices.)
    (2) Each of the Activities of Daily Living noted in paragraph (1) 
of this definition includes a requirement that a person must be able to 
perform at a specified minimal level (e.g., to satisfy the eating ADL, 
the person must be able to feed himself or herself). The determination 
of whether a person meets this minimal level of performance must 
include consideration of those services that will be performed by a 
person's spouse, relatives or other attendants to be provided by the 
individual. For example, if a person requires assistance with cooking, 
preparing or serving food plus assistance in feeding himself or 
herself, the individual would meet the minimal performance level and 
thus satisfy the eating ADL, if a spouse, relative or attendant 
provides assistance with feeding the person. Should such assistance 
become unavailable at any time, the owner is not obligated at any time 
to provide individualized services beyond those offered to the resident 
population in general. The Activities of Daily Living analysis is 
relevant only with regard to determination of a person's eligibility to 
receive supportive services paid for by CHSP and is not a determination 
of eligibility for occupancy;
    Adjusted income means adjusted income as defined in 24 CFR parts 
813 or 913.
    Applicant means a State, Indian tribe, unit of general local 
government, public housing authority (PHA), Indian housing authority 
(IHA) or local nonprofit housing sponsor. A State, Indian tribe, or 
unit of general local government may apply on behalf of a local 
nonprofit housing sponsor or a for-profit owner of eligible housing for 
the elderly.
    Area agency on aging means the single agency designated by the 
State Agency on Aging to administer the program described in Title III 
of the Older Americans Act of 1965 (45 CFR chapter 13).
    Assistant Secretary means the HUD Assistant Secretary for Housing-
Federal Housing Commissioner or the HUD Assistant Secretary for Public 
and Indian Housing.
    Case management means implementing the processes of: establishing 
linkages with appropriate agencies and service providers in the general 
community in order to tailor the needed services to the program 
participant; linking program participants to providers of services that 
the participant needs; making decisions about the way resources are 
allocated to an individual on the basis of needs; developing and 
monitoring of case plans in coordination with a formal assessment of 
services needed; and educating participants on issues, including, but 
not limited to, supportive service availability, application procedures 
and client rights.
    Eligible housing for the elderly means any eligible project 
including any building within a mixed-use project that was designated 
for occupancy by elderly persons, or persons with disabilities at its 
inception or, although not so designated, for which the eligible owner 
or grantee gives preference in tenant selection (with HUD approval) for 
all units in the eligible project (or for a building within an eligible 
mixed-use project) to eligible elderly persons, persons with 
disabilities, or temporarily disabled individuals. For purposes of this 
part, this term does not include projects assisted under the Low-Rent 
Housing Homeownership Opportunity program (Turnkey III (24 CFR part 
905, subpart G)).
    Eligible owner means an owner of an eligible housing project.

[[Page 42944]]

    Excess residual receipts mean residual receipts of more than $500 
per unit in the project which are available and not committed to other 
uses at the time of application to HUD for CHSP. Such receipts may be 
used as matching funds and may be spent down to a minimum of $500/unit.
    For-profit owner of eligible housing for the elderly means an owner 
of an eligible housing project in which some part of the project's 
earnings lawfully inure to the benefit of any private shareholder or 
    Grantee or Grant recipient means the recipient of funding under 
CHSP. Grantees under this Program may be states, units of general local 
government, Indian tribes, PHAs, IHAs, and local nonprofit housing 
    Local nonprofit housing sponsor means an owner or borrower of 
eligible housing for the elderly; no part of the net earnings of the 
owning organization shall lawfully inure to the benefit of any 
shareholder or individual.
    Nonprofit includes a public housing agency as that term is defined 
in section 3(b)(6) of the United States Housing Act of 1937.
    Person with disabilities means a household composed of one or more 
persons, at least one of whom is an adult who has a disability. (1) A 
person shall be considered to have a disability if such person is 
determined under regulations issued by the Secretary to have a 
physical, mental, or emotional impairment which:
    (i) Is expected to be of long-continued and indefinite duration;
    (ii) Substantially impedes his or her ability to live 
independently; and
    (iii) Is of such a nature that the person's ability could be 
improved by more suitable housing conditions.
    (2) A person shall also be considered to have a disability if the 
person has a developmental disability as defined in section 102(5) of 
the Developmental Disabilities Assistance and Bill of Rights Act (42 
U.S.C. 6001-7). Notwithstanding the preceding provisions of this 
paragraph, the terms ``person with disabilities'' or ``temporarily 
disabled'' include two or more persons with disabilities living 
together, one or more such persons living with another person who is 
determined (under regulations prescribed by the Secretary of HUD) to be 
essential to their care or well-being, and the surviving member or 
members of any household where at least one or more persons was an 
adult with a disability who was living, in a unit assisted under this 
section, with the deceased member of the household at the time of his 
or her death.
    Program participant (participant) means any project resident as 
defined in section 802(e)(1) who is formally accepted into CHSP, 
receives CHSP services, and resides in the eligible housing project 
served by CHSP grant.
    Qualifying supportive services means those services described in 
section 802(k)(16). Under this Program, ``health-related services'' 
mean non-medical supervision, wellness programs, preventive health 
screening, monitoring of medication consistent with state law, and non-
medical components of adult day care. The Secretary concerned may also 
approve other requested supportive services essential for achieving and 
maintaining independent living.
    Rural Housing Service (RHS) means a credit agency for rural housing 
and rural development in the U.S. Department of Agriculture (USDA).
    Secretary concerned means (1) The Secretary of Housing and Urban 
Development, with respect to eligible federally assisted housing 
administered by HUD; and
    (2) The Secretary of Agriculture with reference to programs 
administered by the Administrator of the Rural Housing Service.
    Service coordinator means CHSP staff person responsible for 
coordinating Program services as described in section ______.130.
    Service provider means a person or organization licensed or 
otherwise approved in writing by a State or local agency (e.g., 
Department of Health, Department of Human Services or Welfare) to 
provide supportive services.
    State agency means the State or an agency or instrumentality of the 
    State agency on aging means the single agency designated by the 
Governor to administer the program described in Title III of the Older 
Americans Act of 1965 (See 45 CFR part 13).

Sec. ______.110  Notice of funding availability, application process 
and selection.

    (a) Notice of funding availability. A Notice of Funding 
Availability (NOFA) will be published periodically in the Federal 
Register by the Secretary concerned containing the amounts of funds 
available, allocation or distribution of funds available among eligible 
applicant groups, where to obtain and submit applications, the deadline 
for submissions, and further explanation of the selection criteria, 
review and selection process. The Secretary concerned will designate 
the maximum allowable size for grants.
    (b) Selection criteria are set forth in section 802(h)(1) and shall 
include additional criteria specified by the Secretary concerned.

Sec. ______.115  Program costs.

    (a) Allowable costs. (1) Allowable costs for direct provision of 
supportive services includes the provision of supportive services and 
others approved by the Secretary concerned for:
    (i) Direct hiring of staff, including a service coordinator;
    (ii) Supportive service contracts with third parties;
    (iii) Equipment and supplies (including food) necessary to provide 
    (iv) Operational costs of a transportation service (e.g., mileage, 
insurance, gasoline and maintenance, driver wages, taxi or bus 
    (v) Purchase or leasing of vehicles;
    (vi) Direct and indirect administrative expenses for administrative 
costs such as annual fiscal review and audit, telephones, postage, 
travel, professional education, furniture and equipment, and costs 
associated with self evaluation or assessment (not to exceed one 
percent of the total budget for the activities approved); and
    (vii) States, Indian tribes and units of general local government 
with more than one project included in the grant may receive up to 1% 
of the total cost of the grant for monitoring the projects.
    (2) Allowable costs shall be reasonable, necessary and recognized 
as expenditures in compliance with OMB Cost Policies, i.e., OMB 
Circular A-87, 24 CFR 85.36, and OMB Circular A-128.
    (b) Nonallowable costs. (1) CHSP funds may not be used to cover 
expenses related to any grantee program, service, or activity existing 
at the time of application to CHSP.
    (2) Examples of nonallowable costs under the program are:
    (i) Capital funding (such as purchase of buildings, related 
facilities or land and certain major kitchen items such as stoves, 
refrigerators, freezers, dishwashers, trash compactors or sinks);
    (ii) Administrative costs that represent a non-proportional share 
of costs charged to the Congregate Housing Services Program for rent or 
lease, utilities, staff time;
    (iii) Cost of supportive services other than those approved by the 
Secretary concerned;
    (iv) Modernization, renovation or new construction of a building or 
facility, including kitchens;
    (v) Any costs related to the development of the application and 
plan of operations before the effective date of CHSP grant award;
    (vi) Emergency medical services and ongoing and regular care from 

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and nurses, including but not limited to administering medication, 
purchase of medical supplies, equipment and medications, overnight 
nursing services, and other institutional forms of service, care or 
    (vii) Occupational therapy and vocational rehabilitation services; 
    (viii) Other items defined as unallowable costs elsewhere in this 
part, in CHSP grant agreement, and OMB Circular A-87 or 122.
    (c) Administrative cost limitation. Grantees are subject to the 
limitation in section 802(j)(4).

Sec.  ______.120  Eligible supportive services.

    (a) Supportive services or funding for such services may be 
provided by state, local, public or private providers and CHSP funds. A 
CHSP under this section shall provide meal and other qualifying 
services for program participants (and other residents and 
nonresidents, as described in Sec. ______ .125(a)) that are coordinated 
on site.
    (b) Qualifying supportive services are those listed in section 
802(k)(16) and in section ______ .105.
    (c) Meal services shall meet the following guidelines:
    (1) Type of service. At least one meal a day must be served in a 
group setting for some or all of the participants; if more than one 
meal a day is provided, a combination of a group setting and carry-out 
meals may be utilized.
    (2) Hot meals. At least one meal a day must be hot. A hot meal for 
the purpose of this program is one in which the principal food item is 
hot at the time of serving.
    (3) Special menus. Grantees shall provide special menus as 
necessary for meeting the dietary needs arising from the health 
requirements of conditions such as diabetes and hypertension. Grantees 
should attempt to meet the dietary needs of varying religious and 
ethnic backgrounds.
    (4) Meal service standards. Grantees shall plan for and provide 
meals which are wholesome, nutritious, and each of which meets a 
minimum of one-third of the minimum daily dietary allowances as 
established by the Food and Nutrition Board of the National Academy of 
Sciences-National Research Council (or State or local standards, if 
these standards are higher). Grantees must have an annual 
certification, prepared and signed by a registered dietitian, which 
states that each meal provided under CHSP meets the minimum daily 
dietary allowances.
    (5) Food stamps and agricultural commodities. In providing meal 
services grantees must apply for and use food stamps and agricultural 
commodities as set forth in section 802(d)(2)(A).
    (6) Preference for nutrition providers: In contracting for or 
otherwise providing for meal services grantees must follow the 
requirements of section 802(d)(2)(B). These requirements do not 
preclude a grantee or owner from directly preparing and providing meals 
under its own auspices.

Sec. ______ .125  Eligibility for services.

    (a) Participants, other residents, and nonresidents. Such 
individuals are eligible either to participate in CHSP or to receive 
CHSP services, if they qualify under section 802(e)(1), (4) and (5). 
Under this paragraph, temporarily disabled persons are also eligible.
    (b) Economic need. In providing services under CHSP, grantees shall 
give priority to very low income individuals, and shall consider their 
service needs in selecting program participants.

Sec.  ______.130  Service coordinator.

    (a) Each grantee must have at least one service coordinator who 
shall perform the responsibilities listed in section 802(d)(4).
    (b) The service coordinator shall comply with the qualifications 
and standards required by the Secretary concerned. The service 
coordinator shall be trained in the subject areas set forth in section 
802(d)(4), and in any other areas required by the Secretary concerned.
    (c) The service coordinator may be employed directly by the 
grantee, or employed under a contract with a case management agency on 
a fee-for-service basis, and may serve less than full-time. The service 
coordinator or the case management agency providing service 
coordination shall not provide supportive services under a CHSP grant 
or have a financial interest in a service provider agency which intends 
to provide services to the grantee for CHSP.
    (d) The service coordinator shall:
    (1) Provide general case management and referral services to all 
potential participants in CHSP. This involves intake screening, upon 
referral from the grantee of potential program participants, and 
preliminary assessment of frailty or disability, using a commonly 
accepted assessment tool. The service coordinator then will refer to 
the professional assessment committee (PAC) those individuals who 
appear eligible for CHSP;
    (2) Establish professional relationships with all agencies and 
service providers in the community, and develop a directory of 
providers for use by program staff and program participants;
    (3) Refer proposed participants to service providers in the 
community, or those of the grantee;
    (4) Serve as staff to the PAC;
    (5) Complete, for the PAC, all paperwork necessary for the 
assessment, referral, case monitoring and reassessment processes;
    (6) Implement any case plan developed by the PAC and agreed to by 
the program participant;
    (7) Maintain necessary case files on each program participant, 
containing such information and kept in such form as HUD and RHS shall 
    (8) Provide the necessary case files to PAC members upon request, 
in connection with PAC duties;
    (9) Monitor the ongoing provision of services from community 
agencies and keep the PAC and the agency providing the supportive 
service informed of the progress of the participant;
    (10) Educate grant recipient's program participants on such issues 
as benefits application procedures (e.g. SSI, food stamps, Medicaid), 
service availability, and program participant options and 
    (11) Establish volunteer support programs with service 
organizations in the community;
    (12) Assist the grant recipient in building informal support 
networks with neighbors, friends and family; and
    (13) Educate other project management staff on issues related to 
``aging-in-place'' and services coordination, to help them to work with 
and assist other persons receiving housing assistance through the 
    (e) The service coordinator shall tailor each participant's case 
plan to the individual's particular needs. The service coordinator 
shall work with community agencies, the grantee and third party service 
providers to ensure that the services are provided on a regular, 
ongoing, and satisfactory basis, in accordance with the case plan 
approved by the PAC and the participant.
    (f) Service coordinators shall not serve as members of the PAC.

Sec. ______.135  Professional assessment committee.

    (a) General. (1) A professional assessment committee (PAC), as 
described in this section, shall recommend services appropriate to the 
functional abilities and needs of each eligible project resident. The 
PAC shall be either a voluntary committee appointed by the project 
management or an agency in the community which provides assessment 
services and

[[Page 42946]]

conforms to section 802(e)(3)(A) and (B). PAC members are subject to 
the conflict of interest provisions in section ______ .175(b).
    (2) The PAC shall utilize procedures that ensure that the process 
of determining eligibility of individuals for congregate services 
affords individuals fair treatment, due process, and a right of appeal 
of the determination of eligibility, and shall ensure the 
confidentiality of personal and medical records.
    (3) The dollar value of PAC members' time spent on regular 
assessments after initial approval of program participants may be 
counted as match. If a community agency discharges the duties of the 
PAC, staff time is counted as its imputed value, and if the members are 
volunteers, their time is counted as volunteer time, according to 
sections ______.145(c)(2) (ii) and (iv).
    (b) Duties of the PAC. The PAC is required to:
    (1) Perform a formal assessment of each potential elderly program 
participant to determine if the individual is frail. To qualify as 
frail, the PAC must determine if the elderly person is deficient in at 
least three ADLs, as defined in section ______.105. This assessment 
shall be based upon the screening done by the service coordinator, and 
shall include a review of the adequacy of the informal support network 
(i.e., family and friends available to the potential participant to 
assist in meeting the ADL needs of that individual), and may include a 
more in-depth medical evaluation, if necessary;
    (2) Determine if non-elderly disabled individuals qualify under the 
definition of person with disabilities under section ______.105. If 
they do qualify, this is the acceptance criterion for them for CHSP. 
Persons with disabilities do not require an assessment by the PAC;
    (3) Perform a regular assessment and updating of the case plan of 
all participants;
    (4) Obtain and retain information in participant files, containing 
such information and maintained in such form, as HUD or RHS shall 
    (5) Replace any members of the PAC within 30 days after a member 
resigns. A PAC shall not do formal assessments if its membership drops 
below three, or if the qualified medical professional leaves the PAC 
and has not been replaced.
    (6) Notify the grantee or eligible owner and the program 
participants of any proposed modifications to PAC procedures, and 
provide these parties with a process and reasonable time period in 
which to review and comment, before adoption of a modification;
    (7) Provide assurance of nondiscrimination in selection of CHSP 
participants, with respect to race, religion, color, sex, national 
origin, familial status or type of disability;
    (8) Provide complete confidentiality of information related to any 
individual examined, in accordance with the Privacy Act of 1974;
    (9) Provide all formal information and reports in writing.
    (c) Prohibitions relating to the PAC. (1) At least one PAC member 
shall not have any direct or indirect relationship to the grantee.
    (2) No PAC member may be affiliated with organizations providing 
services under the grant.
    (3) Individuals or staff of third party organizations that act as 
PAC members may not be paid with CHSP grant funds.
    (d) Eligibility and admissions. (1) Before selecting potential 
program participants, each grantee (with PAC assistance) shall develop 
a CHSP application form. The information in the individual's 
application is crucial to the PAC's ability to determine the need for 
further physical or psychological evaluation.
    (2) The PAC, upon completion of a potential program participant's 
initial assessment, must make a recommendation to the service 
coordinator for that individual's acceptance or denial into CHSP.
    (3) Once a program participant is accepted into CHSP, the PAC must 
provide a supportive services case plan for each participant. In 
developing this plan, the PAC must take into consideration the 
participant's needs and wants. The case plan must provide the minimum 
supportive services necessary to maintain independence.
    (e) Transition-out procedures. The grantee or PAC must develop 
procedures for providing for an individual's transition out of CHSP to 
another setting. Transition out is based upon the degree of supportive 
services needed by an individual to continue to live independently. If 
a program participant leaves the program, but wishes to retain 
supportive services, he or she may do so, as long as he or she 
continues to live in an eligible project, pays the full cost of 
services provided, and management agrees (section 802(e)(4) and (5)). A 
participant can be moved out of CHSP if he or she:
    (1) Gains physical and mental health and is able to function 
without supportive services, even if only for a short time (in which 
case readmission, based upon reassessment to determine the degree of 
frailty or the disability, is acceptable);
    (2) Requires a higher level of care than that which can be provided 
under CHSP; or
    (3) Fails to pay services fees.
    (f) Procedural rights of participants. (1) The PAC must provide an 
informal process that recognizes the right to due process of 
individuals receiving assistance. This process, at a minimum, must 
consist of:
    (i) Serving the participant with a written notice containing a 
clear statement of the reasons for termination;
    (ii) A review of the decision, in which the participant is given 
the opportunity to present written or oral objections before a person 
other than the person (or a subordinate of that person) who made or 
approved the termination decision; and
    (iii) Prompt written notification of the final decision to the 
    (2) Procedures must ensure that any potential or current program 
participant, at the time of initial or regular assessment, has the 
option of refusing offered services and requesting other supportive 
services as part of the case planning process.
    (3) In situations where an individual requests additional services, 
not initially recommended by the PAC, the PAC must make a determination 
of whether the request is legitimately a needs-based service that can 
be covered under CHSP subsidy. Individuals can pay for services other 
than those recommended by the PAC as long as the additional services do 
not interfere with the efficient operation of the program.

Sec. ______  .140  Participatory agreement.

    (a) Before actual acceptance into CHSP, potential participants must 
work with the PAC and the service coordinator in developing supportive 
services case plans. A participant has the option of accepting any of 
the services under the case plan.
    (b) Once the plan is approved by the PAC and the program 
participant, the participant must sign a participatory agreement 
governing the utilization of the plan's supportive services and the 
payment of supportive services fees. The grantee annually must 
renegotiate the agreement with the participant.

Sec. ______  .145  Cost distribution.

    (a) General. (1) Grantees, the Secretary concerned, and 
participants shall all contribute to the cost of providing supportive 
services according to section 802(i)(A)(i). Grantees must contribute at 
least 50 percent of program cost, participants must contribute fees 
that in total are at least 10 percent of program

[[Page 42947]]

cost, and the Secretary concerned will provide funds in an amount not 
to exceed 40 percent.
    (2) Section 802(i)(1)(B)(ii) creates a cost-sharing provision 
between grantee and the Secretary concerned if total participant fees 
collected over a year are less than 10 percent of total program cost. 
This provision is subject to availability of appropriated grant funds. 
If funds are not available, the grantee must assume the funding 
    (b) Prohibition on substitution of funds and maintenance of 
existing supportive services. Grantees shall maintain existing funding 
for and provision of supportive services prior to the application date, 
as set forth in section 802(i)(1)(D). The grantee shall ensure that the 
activities provided to the project under a CHSP grant will be in 
addition to, and not in substitution for, these previously existing 
services. The value of these services do not qualify as matching funds. 
Such services must be maintained either for the time the participant 
remains in CHSP, or for the duration of CHSP grant. The grantee shall 
certify compliance with this paragraph to the Secretary concerned.
    (c) Eligible matching funds. (1) All sources of matching funds must 
be directly related to the types of supportive services prescribed by 
the PAC or used for administration of CHSP.
    (2) Matching funds may include:
    (i) Cash (which may include funds from Federal, State and local 
governments, third party contributions, available payments authorized 
under Medicaid for specific individuals in CHSP, Community Development 
Block Grants or Community Services Block Grants, Older American Act 
programs or excess residual funds with the approval of the Secretary 
    (ii) The imputed dollar value of other agency or third party-
provided direct services or staff who will work with or provide 
services to program participants; these services must be justified in 
the application to assure that they are the new or expanded services of 
CHSP necessary to keep the program participants independent. If 
services are provided by the state, Indian tribe, unit of general local 
government, or local nonprofit housing sponsor, IHA, PHA, or for-profit 
or not-for-profit owner, any salary paid to staff from governmental 
sources to carry out the program of the grantee and any funds paid to 
residents employed by the Program (other than from amounts under a 
contract under section ______.155) is allowable match.
    (iii) In-kind items (these are limited to 10 percent of the 50 
percent matching amount), such as the current market value of donated 
common or office space, utility costs, furniture, material, supplies, 
equipment and food used in direct provision of services. The applicant 
must provide an explanation for the estimated donated value of any item 
    (iv) The value of services performed by volunteers to CHSP, at the 
rate of $5.00 an hour.
    (d) Limitation. (1) The following are not eligible for use as 
matching funds:
    (i) PHA operating funds;
    (ii) CHSP funds;
    (iii) Section 8 funds other than excess residual receipts;
    (iv) Funds under section 14 of the U.S. Housing Act of 1937, unless 
used for service coordination or case management; and
    (v) Comprehensive grant funds unless used for service coordination 
or case management;
    (2) Local government contributions are limited by section 
    (e) Annual review of match. The Secretary concerned will review the 
infusion of matching funds annually, as part of the program or budget 
review. If there are insufficient matching funds available to meet 
program requirements at any point after grant start-up, or at any time 
during the term of the grant (i.e., if matching funds from sources 
other than program participant fees drop below 50 percent of total 
supportive services cost), the Secretary concerned may decrease the 
federal grant share of supportive services funds accordingly.

Sec. ______.150  Program participant fees.

    (a) Eligible program participants. The grantee shall establish fees 
consistent with section ______.145(a). Each program participant shall 
pay CHSP fees as stated in paragraphs (d) and (e) of this section, up 
to a maximum of 20 percent of the program participant's adjusted 
income. Consistent with section 802(d)(7)(A), the Secretary concerned 
shall provide for the waiver of fees for individuals who are without 
sufficient income to provide for any payment.
    (b) Fees shall include: (1) Cash contributions of the program 
    (2) Food Stamps; and
    (3) Contributions or donations to other eligible programs 
acceptable as matching funds under section ______.145(c).
    (c) Older Americans Act programs. No fee may be charged for any 
meals or supportive services under CHSP if that service is funded under 
an Older Americans Act Program.
    (d) Meals fees: (1) For full meal services, the fees for residents 
receiving more than one meal per day, seven days per week, shall be 
reasonable and shall equal between 10 and 20 percent of the adjusted 
income of the project resident, or the cost of providing the services, 
whichever is less.
    (2) The fees for residents receiving meal services less frequently 
than as described in paragraph (d)(1) of this section shall be in an 
amount equal to 10 percent of the adjusted income of the project 
resident, or the cost of providing the services, whichever is less.
    (e) Other service fees. The grantee may also establish fees for 
other supportive services so that the total fees collected from all 
participants for meals and other services is at least 10 percent of the 
total cost of CHSP. However, no program participants may be required to 
pay more than 20 percent of their adjusted incomes for any combination 
of services.
    (f) Other residents and nonresidents. Fees shall be established for 
residents of eligible housing projects (other than eligible project 
residents) and for nonresidents who receive meals and other services 
from CHSP under section ______.125(a). These fees shall be in an amount 
equal to the cost of providing the services.

Sec. ________.155  Grant agreement and administration.

    (a) General. HUD will enter into grant agreements with grantees, to 
provide congregate services for program participants in eligible 
housing projects, in order to meet the purposes of CHSP.
    (b) Term of grant agreement and reservation of amount. A grant will 
be for a term of five years and the Secretary concerned shall reserve a 
sum equal to the total approved grant amount for each grantee. Grants 
will be renewable at the expiration of a term, subject to the 
availability of funds and conformance with the regulations in this 
part, except as otherwise provided in section ______.160.
    (c) Monitoring of project sites by governmental units. States, 
Indian tribes, and units of general local government with a grant 
covering multiple projects shall monitor, review, and evaluate Program 
performance at each project site for compliance with CHSP regulations 
and procedures, in such manner as prescribed by HUD or RHS.
    (d) Reports. Each grantee shall submit program and fiscal reports 
and program budgets to the Secretary concerned in such form and at such 
times, as the Secretary concerned requires.
    (e) Enforcement. The Secretary concerned will enforce the 
obligations of the grantee under the agreement through such action as 
may be

[[Page 42948]]

necessary, including terminating grants, recapturing grant funds, and 
imposing sanctions.
    (1) These actions may be taken for:
    (i) A grantee's non-compliance with the grant agreement or HUD or 
RHS regulations;
    (ii) Failure of the grantee to provide supportive services within 
12 months of execution of the grant agreement.
    (2) Sanctions include but are not limited to the following:
    (i) Temporary withholding of reimbursements or extensions or 
renewals under the grant agreement, pending correction of deficiencies 
by the grantee;
    (ii) Setting conditions in the contract;
    (iii) Termination of the grant;
    (iv) Substitution of grantee; and
    (v) Any other action deemed necessary by the Secretary concerned.
    (f) Renewal of grants. Subject to the availability of funding, 
satisfactory performance, and compliance with the regulations in this 
    (1) Grantees funded initially under this part shall be eligible to 
receive continued, non-competitive renewals after the initial five-year 
term of the grant.
    (2) Grantees will receive priority funding and grants will be 
renewed within time periods prescribed by the Secretary concerned.
    (g) Use of Grant Funds. If during any year, grantees use less than 
the annual amount of CHSP funds provided to them for that year, the 
excess amount can be carried forward for use in later years.

Sec. ______ .160  Eligibility and priority for 1978 Act recipients.

    Grantees funded initially under 42 U.S.C. 8001 shall be eligible to 
receive continued, non-competitive funding subject to its availability. 
These grantees will be eligible to receive priority funding under this 
part if they comply with the regulations in this part and with the 
requirements of any NOFA issued in a particular fiscal year.

Sec. ________.165  Evaluation of Congregate Housing Services Programs.

    (a) Grantees shall submit annually to the Secretary concerned, a 
report evaluating the impact and effectiveness of CHSPs at the grant 
sites, in such form as the Secretary concerned shall require.
    (b) The Secretaries concerned shall further review and evaluate the 
performance of CHSPs at these sites and shall evaluate the Program as a 
    (c) Each grantee shall submit a certification with its application, 
agreeing to cooperate with and to provide requested data to the entity 
responsible for the Program's evaluation, if requested to do so by the 
Secretary concerned.

Sec. ________.170 Reserve for supplemental adjustment.

    The Secretary concerned may reserve funds subject to section 
802(o). Requests to utilize supplemental funds by the grantee shall be 
transmitted to the Secretary concerned in such form as may be required.

Sec. ________.175 Other Federal requirements.

    In addition to the Federal Requirements set forth in 24 CFR part 5, 
the following requirements apply to grant recipient organizations in 
this program:
    (a) Office of Management and Budget (OMB) Circulars and 
Administrative Requirements. The policies, guidelines, and requirements 
of OMB Circular No. A-87 and 24 CFR part 85 apply to the acceptance and 
use of assistance under this program by public body grantees. The 
policies, guidelines, and requirements of OMB Circular No. A-122 apply 
to the acceptance and use of assistance under this program by non-
profit grantees. Grantees are also subject to the audit requirements 
described in 24 CFR part 44 (OMB Circular A-128).
    (b) Conflict of interest. In addition to the conflict of interest 
requirements in OMB Circular A-87 and 24 CFR part 85, no person who is 
an employee, agent, consultant, officer, or elected or appointed 
official of the applicant, and who exercises or has exercised any 
function or responsibilities with respect to activities assisted with 
CHSP grant funds, or who is in a position to participate in a decision-
making process or gain inside information with regard to such 
activities, may obtain a personal or financial interest or benefit from 
the activity, or have an interest in any contract, subcontract, or 
agreement with respect thereto, or any proceeds thereunder, either for 
himself or herself or for those with whom he or she has family or 
business ties during his or her tenure, or for one year thereafter. 
CHSP employees may receive reasonable salary and benefits.
    (c) Disclosures required by Reform Act. Section 102(c) of the HUD 
Reform Act of 1989 (42 U.S.C. 3545(c)) requires disclosure concerning 
other government assistance to be made available with respect to the 
Program and parties with a pecuniary interest in CHSP and submission of 
a report on expected sources and uses of funds to be made available for 
CHSP. Each applicant shall include information required by 24 CFR part 
12 on form HUD-2880 ``Applicant/Recipient Disclosure/Update Report,'' 
as required by the Federal Register Notice published on January 16, 
1992, at 57 FR 1942.
    (d) Nondiscrimination and equal opportunity. (1) The fair housing 
poster regulations (24 CFR part 110) and advertising guidelines (24 CFR 
part 109);
    (2) The Affirmative Fair Housing Marketing Program requirements of 
24 CFR part 200, subpart M, and the implementing regulations at 24 CFR 
part 108; and
    (3) Racial and ethnic collection requirements--Recipients must 
maintain current data on the race, ethnicity and gender of program 
applicants and beneficiaries in accordance with section 562 of the 
Housing and Community Development Act of 1987 and section 808(e)(6) of 
the Fair Housing Act.
    (e) Environmental requirements. Support services, including the 
operating and administrative expenses described in 
section________.115(a), are categorically excluded from the 
requirements of the National Environmental Policy Act (NEPA) of 1969. 
These actions, however, are not excluded from individual compliance 
requirements of other environmental statutes, Executive Orders, and 
agency regulations where appropriate. When the responsible official 
determines that any action under this part may have an environmental 
effect because of extraordinary circumstances, the requirements of NEPA 
shall apply.

Adoption of the Final Common Rule

    The agency specific adoption of the final common rule, which 
appears at the end of the common preamble, appears below:


7 CFR Part 1944

List of Subjects in 7 CFR Part 1944

    Farm labor housing, Migrant labor, Nonprofit organizations, Public 
housing, Rent subsidies, and Rural rental housing.

    Dated: July 18, 1996.
Jill Long Thompson,
Under Secretary, Rural Development.

    Title 7 of the Code of Federal Regulations, part 1944 is amended as 
    1. The authority citation for subpart F continues to read as 

    Authority: 42 U.S.C. 1480, 8011 and 5 U.S.C. 301.

    2. Subpart F, consisting of Secs. 1944.251 [______.100] through

[[Page 42949]]

1944.266 [________.175], is revised to read as set forth at the end of 
the common preamble.


Subpart F--Congregate Housing Services Program

1944.251  Purpose.
1944.252  Definitions.
1944.253  Announcement of fund availability, application process and 
1944.254  Program costs.
1944.255  Eligible supportive services.
1944.256  Eligibility for services.
1944.257  Service coordinator.
1944.258  Professional assessment committee.
1944.259  Participatory agreement.
1944.260  Cost distribution.
1944.261  Program participant fees.
1944.262  Grant agreement and administration.
1944.263  Eligibility and priority for 1978 Act recipients.
1944.264  Evaluation of Congregate Housing Services Programs.
1944.265  Reserve for supplemental adjustment.
1944.266  Other Federal requirements.

    3. The words ``this part'' are revised to read ``this subpart'' in 
the following places: Secs. 1944.100, 1944.105 in the definition for 
``Eligible housing for the elderly'', 1944.115(b)(2)(viii), 1944.155 
(b) introductory text, (f) introductory text and (f)(1), 1944.160, and 



24 CFR Part 700

List of Subjects in 24 CFR Part 700

    Aged, Grant programs--housing and community development, 
Individuals with disabilities, Low and moderate income housing, 
Nutrition, Public housing, Rent subsidies, Reporting and recordkeeping 
requirements, Supportive services.

    Title 24 of the Code of Federal Regulations is amended by revising 
part 700 to read as set forth at the end of the common preamble.

    Dated: March 14, 1996.
Henry G. Cisneros,


700.100  Purpose.
700.105  Definitions.
700.110  Announcement of fund availability, application process and 
700.115  Program costs.
700.120  Eligible supportive services.
700.125  Eligibility for services.
700.130  Service coordinator.
700.135  Professional assessment committee.
700.140  Participatory agreement.
700.145  Cost distribution.
700.150  Program participant fees.
700.155  Grant agreement and administration.
700.160  Eligibility and priority for 1978 Act recipients.
700.165  Evaluation of Congregate Housing Services Programs.
700.170  Reserve for supplemental adjustment.
700.175  Other Federal requirements.

    Authority: 42 U.S.C. 3535(d) and 8011.

[FR Doc. 96-20563 Filed 8-16-96; 8:45 am]
BILLING CODE 3410-07-P; 4210-32-P