[Federal Register Volume 65, Number 38 (Friday, February 25, 2000)]
[Rules and Regulations]
[Pages 10027-10030]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4390]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 1000

RIN 0970-ACO2


Individual Development Accounts

AGENCY: Office of Community Services, ACF, HHS.

ACTION: Interim final rule with comment.

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SUMMARY: This regulation implements a statutory requirement of the 
Assets for Independence Act establishing the Assets for Independence 
Demonstration Program, under title IV of the Community Opportunities, 
Accountability, and Training and Educational Services Act of 1998. The 
Act provides competitive demonstration grants for projects to 
establish, support, and evaluate individual development accounts for 
low income individuals and families. The statute requires the Secretary 
of Health and Human Services to prescribe regulations that grantees 
must follow in accounting for amounts grantees deposit in the reserve 
fund. This rule implements that provision of the legislation. Other 
factors in the legislation have been, or will be, addressed 
administratively, through the grant announcement and award process.

DATES: These regulations are effective February 25, 2000. Consideration 
will be given to written comments received by April 25, 2000.

ADDRESSES: Comments should be submitted in writing to the Office of 
Community Services, Administration for Children and Families, 370 
L'Enfant Promenade, SW, 5th Floor, Washington, DC 20447, Attention: 
Director of Office of Community Services, Mail Stop: OCS/OD. Comments 
will be available for public inspection Monday through Friday, 8:30 
a.m. to 5 p.m. on the 5th floor of the Department's offices at the 
above address. Comments may also be submitted by sending electronic 
mail (e-mail) to [email protected], or by telefaxing to 202-401-4687 
or 202 (401)-5718. This is not a toll-free number. Comments sent 
electronically must be in ASCII format.

FOR FURTHER INFORMATION CONTACT: Sheldon Shalit, Office of Community 
Services, (202) 401-4807, or Richard Saul, Office of Community 
Services, (202) 401-9341. Hearing impaired individuals may call the 
Federal Dual Party Relay Service at 800-877-8339 between 8 a.m. and 7 
p.m. eastern time.

SUPPLEMENTARY INFORMATION

I. Statutory and Regulatory Authority

    These rules implement section 407(b)(2) of the Community 
Opportunities, Accountability, and Training and Educational Services 
Act of 1998 (Pub. L. 105-285). Under this provision, the Secretary of 
Health and Human Services is to prescribe by regulation the rules 
grantees must follow in accounting for monies in reserve funds, 
established under the Act, which are used for depositing grant funds, 
the non-Federal matching funds required for establishing individual 
development accounts, and the proceeds from any investment of such 
funds.

II. Background

    The Assets for Independence Act, or title IV of Pub. L. 105-285, 
provides for the establishment of Individual Development Account (IDA) 
demonstration projects to determine how effective IDAs and ``asset-
building'' strategies are in helping low-income people save, acquire 
productive assets, and achieve economic self-sufficiency. The Act 
authorizes the Department of Health and Human Services to conduct a 
five-year Individual Development Account demonstration, through which 
grants are made to non-profit organizations on a competitive basis.
    The statute provides specific and detailed requirements for 
establishing

[[Page 10028]]

such programs and authorizes grants for projects to be awarded within 
10 months of enactment of the Act (August 27, 1999). For these reasons, 
coupled with the Department's commitment to reduce regulatory burden, 
we have decided to limit regulating to the one area where the statute 
indicates regulations are required. Specifically, section 407(b)(2) of 
Pub. L. 105-285 requires grantees to maintain a reserve fund in 
accordance with accounting regulations prescribed by the Secretary. 
Responding to this legislative provision, these rules stipulate which 
Departmental uniform administrative requirements must be met in 
maintaining IDA reserve funds.
    The statute requires that amounts in the reserve funds be used as 
matching contributions to individual development accounts for project 
participants; for expenses related to collecting and reporting project 
data and information required for the evaluation; for administration of 
the project including skill training necessary to achieve economic 
self-sufficiency; and for other project related expenses. Federal funds 
can only be drawn down after the match funds have been deposited.
    With respect to provisions of the Act other than accounting for the 
amounts in the reserve fund, on January 27, 1999, the Department issued 
a Program Announcement in the Federal Register, ``Program Announcement 
No. OCS-99-04'' (64 FR 4258), announcing the availability of funds and 
requesting competitive applications. On March 29, 1999, the Department 
published guidance, ``Clarification of Program Announcement No. OCS 99-
04'' (64 FR 14923), in the Federal Register to assist interested 
applicants in understanding the law and the requirements for 
eligibility. Also, on July 2, 1999, a Second Round of Applications was 
published, ``Program Announcement No. OCS-99-04'' (64 FR 36184). 
Further information will be made available to the grantees as part of 
Terms and Conditions at the time of the grant award.

III. Description of Regulatory Provisions

    We are adding a new part 1000 in title 45 of the Code of Federal 
Regulations.

New Part 1000 of Chapter X, title 45 of the CFR--Individual 
Development Account--Reserve Funds Established Pursuant to Grants 
for Assets for Independence

    We are establishing requirements under new 45 CFR part 1000 
regarding reserve funds established pursuant to the Assets for 
Independence Program. We are confirming that Departmental 
administrative requirements found in part 74 are applicable to reserve 
funds established by grantees that are not-for-profit organizations as 
defined by section 501(c)(3) of the Internal Revenue Code of 1986. We 
are also confirming that the Departmental administrative requirements 
found in Part 92 are applicable to reserve funds established by State 
or local government agencies or tribal governments.
    New Sec. 1000.1 provides that this part applies to the Community 
Services Assets for Independence Program.
    We are adding a definition of Individual Development Account at 
Sec. 1000.2(a) to read:
    Individual Development Account means a trust or custodial account 
created or organized in the United States exclusively for the purpose 
of paying the qualified expenses of an eligible individual, as defined 
in section 404(2) of Pub. L. 105-285, or enabling the eligible 
individual to make an emergency withdrawal, as prescribed in section 
404(3) of Pub. L. 105-285. The written governing instrument creating 
the trust or custodial account must meet the requirements of section 
404(5) of Pub. L. 105-285, (section 404(5)(A)) and of the Project 
Eligibility Requirements set forth in the Program Announcement No. OCS-
99-04 and any future announcements that may be issued.
    We are adding a definition of qualified entity at Sec. 1000.2(b) to 
read:
    Qualified Entity means one or more not-for-profit organizations 
described in section 501(c)(3) of the Internal Revenue Code of 1986 and 
exempt from taxation under section 501(a) of such Code; or a State or 
local government agency, or a tribal government, submitting an 
application under section 405 of Pub. L. 105-285 jointly with a 
501(c)(3) organization that is exempt from taxation under 501(a) of the 
Internal Revenue Code of 1986.
    We are adding a definition of reserve fund at Sec. 1000.2(c) to 
read
    (c) Reserve Fund means a fund, established by a qualified entity, 
that shall include all funds provided to the qualified entity from any 
public or private source in connection with the demonstration project 
and the proceeds from any investment made with such funds. The fund 
shall be maintained in accordance with Section 407 of Pub. L. 105-285. 
At least 90.5% of the funds must be used as matching contributions for 
Individual Development Accounts.
    Under Sec. 1000.3(a), we are confirming that Reserve Funds under 
the Assets for Independence Program established by qualified entities, 
other than State or local government agencies or tribal governments, 
are subject to the Department of Health and Human Services' uniform 
administrative requirements under 45 CFR part 74.
    Under Sec. 1000.3(b), we are confirming which requirements are 
applicable to Reserve Funds by a qualified entity that is a State or 
local government agency or tribal government. While these entities are 
not required to establish reserve funds, reserve funds that are 
established by these entities are subject to the Department of Health 
and Human Services' uniform administrative requirements under 45 CFR 
part 92.

IV. Justification for Dispensing with Notice of Proposed Rulemaking

    These regulations are being published in final form with a comment 
period. The Administrative Procedure Act, 5 U.S.C. 553(b)(3)(B), 
provides that, if the Department for good cause finds that a notice of 
proposed rulemaking is unnecessary, impracticable or contrary to public 
interest, it may dispense with the notice if it incorporates a brief 
statement in the final regulations of the reasons for doing so.
    The Department finds that there is good cause to dispense with 
proposed rulemaking procedures for the following reasons. First, the 
new part 1000 of the CFR does not establish original accounting 
requirements, but provides that existing regulations found in 45 CFR 
parts 74 and 92 apply to Reserve Funds established under the Assets for 
Independence Act. Therefore, this Interim Final Rule is a matter in 
which public comment would not significantly aid. Second, the Assets 
for Independence Act, as part of the Human Services Reauthorization Act 
of 1998, established stringent timelines which mandate that grant 
awards are to be determined by August 27, 1999. To ensure that grantees 
will have guiding principles by which they may operate the program, it 
is necessary to provide adequate administrative regulations in a timely 
manner. Therefore, we are eliminating a proposed rule for the sake of 
expediency.
    For these reasons, OCS believes that there is sufficient cause to 
dispense with proposed rulemaking. Nonetheless, we wish to have the 
advantage of the information and opinions we may receive through public 
comments. We will consider any comments received and revise the 
regulations if necessary. We will issue a final document confirming 
that this interim final rule is final and will add any revisions, as 
needed, from the comments.

[[Page 10029]]

V. Justification for Dispensing with Publication 30 Days Prior to 
the Effective Date

    The Assets for Independence Act, as part of the Human Services 
Reauthorization Act of 1998, established stringent timelines which 
mandate that grant awards are to be determined by August 27, 1999. To 
ensure that grantees will have guiding principles by which they may 
operate the program, it is necessary to provide adequate administrative 
regulations in a timely manner. Therefore, we are eliminating the 30-
day delay period for the effective date of publication for this rule.

VI. Regulatory Flexibility Analysis

    The Secretary certifies, under 5 U.S.C. 605(b), the Regulatory 
Flexibility Act (Pub. L. 96-354), that these proposed regulations will 
not result in a significant impact on a substantial number of small 
entities. The primary impact is on a limited number of grantees and the 
impact is not significant.

VII. Executive Order 12866

    Executive Order 12866 requires that regulations be reviewed to 
ensure that they are consistent with the priorities and principles set 
forth in the Executive Order. The Department has determined that this 
proposal is consistent with these priorities and principles. The rule 
implements the statutory provisions by specifying applicable rules 
grantees are subject to in meeting accounting requirements for reserve 
funds established for purposes of carrying out demonstration projects 
under the Assets for Independence Act.

VIII. Unfunded Mandates Act

    Section 202 of the Unfunded Mandates Reform Act of 1995 (Unfunded 
Mandates Act) requires that a covered agency prepare a budgetary impact 
statement before promulgating a rule that includes any Federal mandate 
that may result in the expenditure by State, local and Tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year.
    If a covered agency must prepare a budgetary impact statement, 
section 205 further requires that it select the most cost-effective and 
least burdensome alternative that achieves the objectives of the rule 
and is consistent with the statutory requirements. In addition, section 
203 requires a plan for informing and advising any small government 
that may be significantly or uniquely impacted by the proposed rule.
    We have determined that this rule will not result in the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector, of more than $100 million in any one year. 
Accordingly, we have not prepared a budgetary impact statement, 
specifically addressed the regulatory alternatives considered, or 
prepared a plan for informing and advising any significantly or 
uniquely impacted small government.

IX. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995, Pub. L. 104-13, all 
Departments are required to submit to the Office of Management and 
Budget (OMB) for review and approval any reporting or record keeping 
requirements inherent in a rule. This rule contains information 
collection requirements in Sec. 1000.3 (requiring the establishment of 
a reserve fund) which have been submitted to OMB for review and 
approval.
    The respondents to the information collection requirements in the 
rule are IDA grantees, which may be not-for-profit organizations, State 
or local agencies or tribal governments.
    The Department is requiring the collection of information in 
conjunction with section 407 of Pub. L. 105-285 which requires a 
qualified entity, other than a State or local government agency or a 
tribal government, to establish a Reserve Fund for depositing all funds 
provided to the qualified entity from any public or private source in 
connection with the demonstration project and the proceeds from any 
investments.
    We estimate a burden of 40 hours for each new grantee. On average 
we anticipate 76 new grantees each year resulting in a total annual 
burden for this rule of 3,040 hours.
    The Administration for Children and Families will consider comments 
by the public on this proposed collection of information in: evaluating 
whether the proposed collection is necessary for the proper performance 
of the functions of ACF, including whether the information will have 
practical utility; evaluating the accuracy of ACF's estimate of the 
burden of the proposed collections of information, including the 
validity of the methodology and assumptions used; enhancing the 
quality, usefulness, and clarity of the information to be collected; 
and minimizing the burden of the collection of information on those who 
are to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technology.
    OMB is required to make a decision concerning the collection of 
information contained in this interim final rule between 30 and 60 days 
after publication of this document in the Federal Register. Therefore, 
a comment is best assured of having its full effect if OMB received it 
within 30 days of publication. Written comments to OMB for the proposed 
information collection should be sent directly to the following: Office 
of Management and Budget, Paperwork Reduction Project, 725 17th Street, 
NW, Washington, DC 20503, Attn: Wendy Taylor.

X. Congressional Review

    This rule is not a major rule as defined in 5 U.S.C., Chapter 8.

XI. Assessment of Federal Regulations and Policies on Families

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 requires Federal agencies to determine whether a policy or 
regulation may affect family well being. If the agency's conclusion is 
affirmative, then the agency must prepare an impact assessment 
addressing seven criteria specified in the law. These regulations will 
not have an impact on family well being as defined in the legislation.

XII. Executive Order 13132

    Executive Order 13132 on Federalism applies to policies that have 
federalism implications, defined as ``regulations, legislative comments 
or proposed legislation, and other policy statements or actions that 
have substantial direct effects on the States, on the relationship 
between the national government and the States, or the distribution of 
power and responsibilities among the various levels of government.'' 
This rule does not have federalism implications as defined in the 
Executive Order.

List of Subjects in 45 CFR part 1000

    Grant programs-Social programs.

(Catalog of Federal Domestic Assistance Programs No. 93.602, 
Individual Development Account/Assets for Independence)

    Dated: October 21, 1999.
Olivia A. Golden,
Assistant Secretary for Children and Families.

    Approved: November 1, 1999.
Donna E. Shalala,
Secretary, Department of Health and Human Services.

    For the reasons set forth in the preamble, we are adding to Chapter 
X a new part 1000 of title 45 of the Code of Federal Regulations as 
follows:
    1. A new Part 1000 is added to Chapter X of title 45 of the Code of 
Federal Regulations to read as follows:

[[Page 10030]]

Part 1000--Individual Development Account Reserve Funds Established 
Pursuant to Grants for Assets for Independence

Sec.
1000.1  Scope.
1000.2  Definitions.
1000.3  Requirements.

    Authority: Sec. 407(b)(2), Pub. L. 105-285, 112 Stat. 2766.


Sec. 1000.1  Scope.

    This part applies to the Office of Community Services' Assets for 
Independence Program.


Sec. 1000.2  Definitions.

    Individual Development Account means a trust or custodial account 
created or organized in the United States exclusively for the purpose 
of paying the qualified expenses of an eligible individual, as defined 
in section 404(2) of Pub. L. 105-285, or enabling the eligible 
individual to make an emergency withdrawal as defined in section 404(3) 
of Pub. L.105-385. The written governing instrument creating the trust 
or custodial account must meet the requirements of Section 404(5) of 
Pub. L. 105-285, and of the Project Eligibility Requirements set forth 
in Program Announcements.
    Qualified Entity means one or more not-for-profit organizations 
described in section 501(c)(3) of the Internal Revenue Code of 1986 and 
exempt from taxation under section 501(a) of such Code; or a State or 
local government agency, or a tribal government, submitting an 
application under section 405 of Pub. L. 105-285 jointly with a 
501(c)(3) organization that is also exempt from taxation under 501(a) 
of the Internal Revenue Code of 1986.
    Reserve Fund means a fund, established by a qualified entity, that 
shall include all funds provided to the qualified entity from any 
public or private source in connection with the demonstration project 
and the proceeds from any investment made with such funds. The fund 
shall be maintained in accordance with section 407 of Pub. L. 1052-285. 
At least 90.5% of the funds must be used as matching contributions for 
Individual Development Accounts.


Sec. 1000.3  Requirements.

    (a) A qualified entity, other than a State or local government 
agency or tribal government, shall establish a Reserve Fund for use in 
the Assets for Independence program. Each reserve fund established by a 
qualified entity, other than a State or local government agency or 
tribal government, is subject to the Department of Health and Human 
Services' uniform administrative requirements under 45 CFR part 74.
    (b) Any reserve fund established by a qualified entity that is a 
State or local government agency or tribal government, is subject to 
the Department of Health and Human Services' uniform administrative 
requirements under 45 CFR part 92.

[FR Doc. 00-4390 Filed 2-24-00; 8:45 am]
BILLING CODE 4184-01-P