[Federal Register Volume 68, Number 53 (Wednesday, March 19, 2003)]
[Rules and Regulations]
[Pages 13590-13605]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6329]



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Part V





Department of Veterans Affairs





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38 CFR Parts 17 and 61



VA Homeless Providers Grant and Per Diem Program; Interim Rule

  Federal Register / Vol. 68, No. 53 / Wednesday, March 19, 2003 / 
Rules and Regulations  

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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 17 and 61

RIN 2900-AL30


VA Homeless Providers Grant and Per Diem Program

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule.

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SUMMARY: We are revising the regulations concerning the VA Homeless 
Providers Grant and Per Diem Program in large part to implement the 
provisions of the Homeless Veterans Comprehensive Assistance Act of 
2001 (HVCAA).
    We also are establishing provisions in the form of funding 
priorities to meet a statutory mandate. In addition, to help ensure 
that program objectives are met by those receiving assistance we are 
adding provisions to state that to receive assistance under the interim 
final rule, an entity must not be in default by failing to meet 
requirements under any previously awarded grant.
    Further, we are making changes to provide that each resident of 
supportive housing may be required to pay rent in an amount determined 
by the recipient, except that such rent may not exceed 30 percent of 
the resident's monthly income not including amounts equal to medical 
expenses, child care expenses, or court ordered payments. This is 
intended to provide a system that is administratively feasible, that 
allows for significant help for covering operating expenses, and that 
would allow veterans to retain sufficient funds to help prepare for a 
successful transition to independent living.

DATES: Effective Date: This interim final rule is effective on March 
19, 2003; except for 38 CFR 61.11, 61.14, 61.17, 61.31, 61.41 and, 
61.51, which are effective April 3, 2003.
    Comment Dates: Comments on the rule, including comments on the 
information collection provisions, must be received on or before May 
19, 2003; except that comments on the request for emergency approval of 
the collection of information provisions must be received on or before 
April 3, 2003.

ADDRESSES: Mail or hand-deliver written comments to: Director, Office 
of Regulatory Law (02D), Department of Veterans Affairs, 810 Vermont 
Ave., NW., Room 1154, Washington, DC 20420; or fax comments to (202) 
273-9289; or e-mail comments to [email protected]. Comments 
should indicate that they are submitted in response to ``RIN 2900-
AL30.'' All comments received will be available for public inspection 
in the Office of Regulatory Law, Room 1158, between the hours of 8 a.m. 
and 4:30 p.m., Monday through Friday (except holidays).

FOR FURTHER INFORMATION CONTACT: Roger Casey, VA Homeless Providers 
Grant and Per Diem Program, Mental Health Strategic Health Care Group 
(116E), Department of Veterans Affairs, 810 Vermont Avenue, NW., 
Washington, DC 20420; (877) 332-0334. (This is a toll-free number.)

SUPPLEMENTARY INFORMATION: The regulations previously established for 
the VA Homeless Providers Grant and Per Diem Program (38 CFR 17.700 
through 17.731) contained a mechanism for providing grants and per diem 
to public or nonprofit private entities to assist homeless veterans by 
helping to ensure the availability of supportive housing and service 
centers to furnish outreach, rehabilitative services, vocational 
counseling and training, and transitional housing. As discussed below, 
we are revising the regulations in this interim final rule to implement 
the provisions of Public Law 107-95, the Homeless Veterans 
Comprehensive Assistance Act of 2001.

Organization and Clarity

    We are transferring the revised regulations to a new part 61 in 38 
CFR and are making other changes to provide better organization and 
clarity.

Use of the Term ``capital grants''

    In the previous regulations the term ``grant'' concerned 
construction, renovation, and acquisition of facilities; and also 
concerned acquisition of vans. In the interim final rule, we have 
referred to this type of grant as a ``capital grant'' to distinguish it 
from the new ``special needs grant'' and the new ``technical assistance 
grant,'' both discussed below.

Capital Grants to Expand Existing Structures

    Public Law 106-117 added authority to allow VA to award capital 
grants to expand existing programs which was codified by the HVCCA at 
38 U.S.C. 2011(a). We made changes to reflect this authority.

Recovery Provisions for Capital Grants

    The provisions of 38 U.S.C. 2011 authorize recovery of capital 
grant funds if not used for the intended purpose within 3 years after 
the grant was awarded. The interim final rule provides that if, after 3 
years from the date of award of a capital grant, the grant recipient 
does not establish the project for which the grant was made or has 
withdrawn from the VA Homeless Providers Grant and Per Diem Program, 
the United States would be entitled to recover from the grant recipient 
all of the grant amounts provided for the project. If thereafter, but 
prior to the period of time specified in the following chart, the 
capital grant recipient ceases to provide the services for which the 
grant was made or withdraws from the VA Homeless Providers Grant and 
Per Diem Program, the rule provides that the United States would be 
entitled to recover grant amounts from the grant recipient on a 
prorated basis. The amount to be recaptured equals the amount of the 
grant, multiplied by the fraction resulting from using the number of 
years the recipient was not operational as the numerator, and using the 
number of years of operation required under the following chart as the 
denominator.

------------------------------------------------------------------------
                                                               Years of
            Grant amount  (dollars in thousands)              operation
------------------------------------------------------------------------
0-250......................................................            7
251-500....................................................            8
501-750....................................................            9
751-1,000..................................................           10
1,001-1,250................................................           11
1,251-1,500................................................           12
1,501-1,750................................................           13
1,751-2,000................................................           14
2,001-2,250................................................           15
2,251-2,500................................................           16
2,501-2,750................................................           17
2,751-3,000................................................           18
Over-3,000.................................................           20
------------------------------------------------------------------------

    Example A: Grantee A is awarded a grant and does not bring the 
project to operational status within 3 years from the time of award. 
Grantee A may be subject to full recapture of the grant award.
    Example B: Grantee B is awarded a grant in the amount of 
$300,000 and brings the project to operational status within 3 years 
from the time of award. Grantee B then provides services to homeless 
veterans for a period of 6 years from the date the program was 
operationalized, but now decides to close the program. As the 
original award was $300,000 and as a condition of receiving the 
grant funds Grantee B agreed to provide services for 8 years. 
Therefore, Grantee B would be subject to the prorated recapture of 
the grant award for the 2-year period not served or in this case \1/
4\ of the original grant would be subject to recapture.
    Example C: Grantee C is awarded a grant in the amount of 
$400,000, becomes operational within 1 year of the date of the grant 
award and ceases operation 1 year later, 2 years after the date of 
the grant award. After the expiration of the 3-year period beginning 
on the date of the grant award, Grantee C would be subject to 
prorated recapture for the 7 years it did not provide service of the 
required 8 years of operation. The amount

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subject to recapture would thus be \7/8\ x $400,000 or $350,000.

This represents an equitable system for recovering capital grant 
amounts that are not used to the full extent of the intended purpose.
    The provisions of 38 U.S.C. 2011 also provide that VA may obligate 
any recovered funds without fiscal year limitation. We amended the 
regulations to reflect this authority.

Life Safety Code

    We are establishing a special mechanism for providing certain Life 
Safety Code capital grants. Public Law 107-95 established 38 U.S.C. 
2012(c)(3) to provide grants to renovate facilities that already 
received a capital grant under section 3 of the Homeless Veterans 
Comprehensive Service Programs Act of 1992 (Public Law 102-590; 38 
U.S.C. 7221 note). Such grants are solely for renovations to comply 
with the Life Safety Code of the National Fire Protection Association.
    Under the interim final rule, when funds are made available for the 
Life Safety Code capital grants, VA would publish a Notice of Fund 
Availability in the Federal Register stating the estimated amount of 
funding available and the particulars for applying for a Life Safety 
Code capital grant, including the submission of an application package. 
This corresponds with the process that the interim final rule continues 
to provide for other capital grants.
    Applicants would be rated based on criteria designed to identify 
cost-effectiveness and need. Life Safety Code capital grants would be 
allocated to the highest-ranked applicants in descending order until 
funds are expended.

These provisions are designed to help ensure that the Life Safety Code 
capital grant would be awarded for needed quality projects.
    The provisions of 38 U.S.C. 2011 and 2012 further require that 
neither a capital grant nor per diem (with delayed effective dates for 
grant recipients under the Homeless Veterans Comprehensive Service 
Program Act of 1992 seeking per diem) may be provided unless the 
facility for which the assistance is provided meets the fire and safety 
requirements applicable under the Life Safety Code of the National Fire 
Protection Association or other comparable requirements. Accordingly, 
in addition to setting forth procedures specifically to provide Life 
Safety Code capital grants under 38 U.S.C. 2012(c)(3), the interim 
final rule provides that entities receiving a capital grant under 38 
U.S.C. 2011 or per diem under 38 U.S.C. 2012 (with statutorily imposed 
delayed effective dates) must comply with the Life Safety Code of the 
National Fire Protection Association.

Per Diem Payments

    Under the interim final rule, the rate of per diem payments for 
each veteran in supportive housing would be the lesser of:
    (i) The daily cost of care estimated by the per diem recipient 
minus other sources of payments to the per diem recipient for 
furnishing services to homeless veterans that the per diem recipient 
certifies to be correct (other sources include payments and grants from 
other departments and agencies of the United States, from departments 
of State and local governments, from private entities or organizations, 
and from program participants), or
    (ii) The current VA State Home Program per diem rate for 
domiciliary care.
    Also, the rule provides that the per diem amount for service 
centers would be \1/8\ of the lesser of the amounts in paragraph (i) or 
(ii) above per hour, not to exceed 8 hours in any day.
    These provisions for calculating per diem reflect requirements 
imposed by Pub. L. 107-95 that are set forth at 38 U.S.C. 2012.
    In addition, to avoid making per diem payments when services are 
not being rendered while still allowing reasonable absences (such as 
for visiting family, job searches, or short term medical care), the 
rule states that VA will not pay per diem for any additional days of 
absence when a veteran has been already absent for consecutive full 
days exceeding 72 hours (scheduled or unscheduled).
    Moreover, to avoid making per diem payments for services that have 
limited chance of success, the rule states that VA will not pay per 
diem payments for supportive housing for any homeless veteran who has 
had three or more episodes (admission and discharge for each episode) 
of supportive housing services paid for by VA. However, the rule 
provides that VA may waive the episode requirement if the services 
offered are different from those previously provided and may lead to a 
successful outcome.

Special Needs Grants

    We are establishing a mechanism for providing special needs grants. 
Section 5 of Pub. L. 107-95, codified at 38 U.S.C. 2061 authorizes VA 
to provide special needs grants to capital grant and per diem 
recipients under this part to assist with additional operational costs 
that would not otherwise be incurred but for the fact that the 
recipient is providing beds or services at supportive housing and 
service centers for the following homeless veterans:
    (1) Women, including women who have care of minor dependents;
    (2) Frail elderly;
    (3) Terminally ill; or
    (4) Chronically mentally ill.
    We have defined ``terminally ill'' to mean a prognosis of 9 months 
or less to live based on a written medical diagnosis from a physician. 
We also have defined ``chronically mentally ill'' to mean a condition 
of schizophrenia or major affective disorder (including bipolar 
disorder) or post-traumatic stress disorder (PTSD), based on a 
diagnosis from a licensed mental health professional, with at least one 
documented hospitalization for this condition sometime in the last 2 
years or with documentation of a formal assessment on a standardized 
scale of any serious symptomology or serious impairment in the areas of 
work, family relations, thinking, or mood. In addition, we have defined 
``frail elderly'' to mean 65 years of age or older with one or more 
chronic health problems and limitations in performing one or more 
activities of daily living (such as bathing, toileting, transferring 
from bed to chair, etc.). We believe these definitions constitute a 
reasonable interpretation of the statutory intent. They are designed to 
help ensure that those most in need are benefited by the special needs 
grants.
    Under the interim final rule, when funds are made available for 
special needs grants, VA would publish a Notice of Fund Availability in 
the Federal Register stating the estimated amount of funding available 
and the particulars for applying for a special needs grant, including 
the submission of a special needs grant application package. This 
corresponds with the process that the interim final rule continues to 
provide for capital grants.
    The interim final rule sets forth minimum threshold criteria by 
limiting special needs grants to those entities that demonstrate that 
they are eligible for a special needs grant, and would use the funds 
productively. Those meeting the threshold criteria would then be rated 
based on criteria designed to identify those who would use the special 
needs grant to provide the strongest programs. Special needs grants 
would be allocated to the highest-ranked applicants in descending order 
until funds are expended. These provisions are designed to help ensure 
that the special needs grants would be awarded for quality projects and 
be of sufficient duration to be worthwhile.

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Technical Assistance Grants

    We also are establishing a mechanism for providing technical 
assistance grants. Section 5 of Pub. L. 107-95, codified at 38 U.S.C. 
2064 authorizes VA to provide grants to entities or organizations with 
expertise in preparing grant applications relating to the provision of 
assistance for homeless veterans. The recipients are to use the grants 
to provide technical assistance to those nonprofit community-based 
groups with experience in providing assistance to homeless veterans in 
order to help such groups apply for grants under 38 CFR part 61 or 
apply for other grants from any source for addressing the problems of 
homeless veterans. To meet this mandate VA would provide grants for:
    (a) Group or individual seminars providing general instructions 
concerning grant applications;
    (b) Group or individual seminars providing instructions for 
applying for a specific grant; or
    (c) Group or individual instruction for preparing analyses to be 
included in a grant application.
    Under the interim final rule, when funds are made available for 
technical assistance grants, VA would publish a Notice of Fund 
Availability in the Federal Register stating the estimated amount of 
funding available and the particulars for applying for a technical 
assistance grant, including the submission of a technical assistance 
grant application package. This corresponds with the process that the 
interim final rule continues to provide for capital grants.
    The interim final rule sets forth minimum threshold criteria by 
limiting technical assistance grants to those entities that are 
eligible for a technical assistance grant and that demonstrate that 
they would use the grant productively. Those meeting the threshold 
criteria would then be rated based on criteria designed to identify 
those who would use the grant to provide the strongest programs. 
Technical assistance grants would be allocated to the highest-ranked 
applicants in descending order until funds are expended. These 
provisions are designed to help ensure that the technical assistance 
grants would be awarded for quality projects.

Nonprofit Entities

    The provisions of 38 U.S.C. 2011 also state that only public and 
nonprofit entities are eligible for assistance under the VA Homeless 
Providers Grant and Per Diem Program. We are amending the definition of 
``nonprofit organization'' to include the requirement that the 
organization must be recognized as a nonprofit organization by the 
United States Internal Revenue Service. This will help ensure that only 
nonprofit organizations will be recognized as such and should eliminate 
disputes regarding such status.

Funding Priorities

    The provisions of 38 U.S.C. 2011 state that awards shall not result 
in the duplication of ongoing services and to the maximum extent 
practicable shall reflect appropriate geographic dispersion and an 
appropriate balance between urban and nonurban locations. We are 
establishing provisions in the form of funding priorities to meet the 
statutory mandate.

Service Centers

    The regulations retain provisions requiring service centers for 
which assistance is awarded under the VA Homeless Providers Grant and 
Per Diem Program to provide services to homeless veterans for a minimum 
of 40 hours per week over a minimum of 5 days per week, as well as 
provide services on an as-needed, unscheduled basis. However, we are 
changing the regulations to specifically provide that the calculation 
of minimum hours would include travel time for mobile service centers. 
This is necessary because a substantial portion of work time for mobile 
service centers consists of travel time.
    We also are requiring fixed site service centers to prominently 
post at or near the entrance to the service center their hours of 
operation and contacts in case of emergencies. Further, we are 
requiring mobile service centers to take some action reasonably 
calculated to provide in advance a tentative schedule of visits. This 
will help ensure that homeless veterans know when and where they can 
obtain assistance.

Default Under Previously Awarded Grant

    We are adding provisions to state that to receive assistance under 
the interim final rule, an entity must not be in default by failing to 
meet requirements under any previously awarded grant. This is intended 
to help ensure that program objectives are met by those receiving 
assistance.

Resident Rent

    The regulations previously provided that each resident of 
supportive housing may be required to pay as rent an amount determined 
by the recipient, which could 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.
    We have changed the regulations to provide instead that each 
resident of supportive housing may be required to pay as rent an amount 
determined by the recipient, except that such rent may not exceed 30 
percent of the resident's monthly income after deducting medical 
expenses, child care expenses, court ordered child support payments, or 
other court ordered payments. This is intended to provide a system that 
is administratively feasible, that allows for significant help for 
covering operating expenses, and that would allow veterans to retain 
sufficient funds to help prepare for a successful transition to 
independent living.

Summaries of Certain Requirements

    We are deleting summaries of certain non-VA federal requirements 
since the source material should be used to determine those 
requirements.

Paperwork Reduction Act

    OMB assigns a control number for each collection of information it 
approves. Except for emergency approvals under 44 U.S.C. 3507(j), VA 
may not conduct or sponsor, and a person is not required to respond to, 
a collection of information unless it displays a currently valid OMB 
control number. The interim final rule at Sec. Sec.  61.11, 61.15, 
61.17, 61.20, 61.31, 61.41, 61.51, 61.55 and 61.70 contains collections 
of information under the Paperwork Reduction Act (44 U.S.C. 3501-3521). 
Accordingly, under section 3507(d) of the Act, VA has submitted a copy 
of this rulemaking action to OMB for its review of the collections of 
information. We have requested OMB to approve the collection of 
information on an emergency basis by April 3, 2003. If OMB does not 
approve the collections of information as requested, we will 
immediately remove Sec. Sec.  61.11, 61.15, 61.17, 61.20, 61.31, 61.41, 
61.51, 61.55 and 61.70 or take such other action as is directed by OMB.
    We are also seeking an approval of the information collection on a 
non-emergency basis. Accordingly, we are also requesting comments on 
the

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collection of information provisions contained in Sec. Sec.  61.11, 
61.15, 61.17, 61.20, 61.31, 61.41, 61.51, 61.55 and 61.70 on a non-
emergency basis. Comments must be submitted by May 19, 2003.
    OMB assigns a control number for each collection of information it 
approves. VA may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number.
    Comments on the collections of information should be submitted to 
the Office of Management and Budget, Attention: Desk Officer for the 
Department of Veterans Affairs, Office of Information and Regulatory 
Affairs, Washington, DC 20503, with copies mailed or hand-delivered to: 
Director, Office of Regulatory Law (02D), Department of Veterans 
Affairs, 810 Vermont Ave., NW., Room 1154, Washington, DC 20420. 
Comments should indicate that they are submitted in response to ``RIN 
2900-AL30.''
    Title: VA Homeless Providers Grant and Per Diem Program.
    Summary of collection of information: The interim final rule at 
Sec. Sec.  61.11, 61.15, 61.17, 61.20, 61.31, 61.41, and 61.51, 
contains application provisions for capital grants, per diem, special 
needs grants, and technical assistance grants. The interim rule at 
Sec. Sec.  61.55 and 61.70 contain requirements for compliance reports.

Application Provisions for Capital Grants and Per Diem

    Description of the need for information and proposed use of 
information: This information is needed to determine eligibility for 
capital grants and per diem.
    Description of likely respondents: Public or nonprofit private 
entities requesting a capital grant.

    Estimated number of respondents per year: 100.
    Estimated frequency of responses per year: 1.
    Estimated total annual reporting and recordkeeping burden: 3,500 
hours.
    Estimated annual burden per collection: 35 hours.

Application Provisions for the Life Safety Code Capital Grants

    Description of the need for information and proposed use of 
information: This information is needed to determine eligibility for 
Life Safety Code capital grants.
    Description of likely respondents: Public or nonprofit private 
entities requesting a Life Safety Code capital grant.
    Estimated number of respondents per year: 200.
    Estimated frequency of responses per year: 1.
    Estimated total annual reporting and recordkeeping burden: 2,000 
hours.
    Estimated annual burden per collection: 10 hours.

Application Provisions for Per Diem for Non-Capital Grant Recipients.

    Description of the need for information and proposed use of 
information: This information is needed to determine eligibility for 
per diem.
    Description of likely respondents: Public or nonprofit private 
entities requesting per diem.
    Estimated number of respondents per year: 150.
    Estimated frequency of responses per year: 1.
    Estimated total annual reporting and recordkeeping burden: 3,000 
hours.
    Estimated annual burden per collection: 20 hours.
    Application provisions for special needs grants.
    Description of the need for information and proposed use of 
information: This information is needed to determine eligibility for 
special needs grants.

    Description of likely respondents: Public or nonprofit private 
entities requesting a special needs grant.

    Estimated number of respondents per year: 200.
    Estimated frequency of responses per year: 1.
    Estimated total annual reporting and recordkeeping burden: 4,000 
hours.
    Estimated annual burden per collection: 20 hours.
    Application provisions for technical assistance grants.
    Description of the need for information and proposed use of 
information: This information is needed to determine eligibility for 
technical assistance grants.
    Description of likely respondents: Entities or organizations with 
expertise in preparing grant applications requesting a technical 
assistance grant.

    Estimated number of respondents per year: 25.
    Estimated frequency of responses per year: 1.
    Estimated total annual reporting and recordkeeping burden: 250 
hours.
    Estimated annual burden per collection: 10 hours.
    Compliance reports for technical assistance grants.
    Description of the need for information and proposed use of 
information: This information is needed to determine compliance with 
the requirements for a technical assistance grant.
    Description of likely respondents: Entities receiving technical 
assistance grants.
    Estimated number of respondents per year: 10.
    Estimated frequency of responses per year: 4.
    Estimated total annual reporting and recordkeeping burden: 90 
hours.
    Estimated annual burden per collection: 2.25 hours.
    Compliance reports for per diem and special needs grants.
    Description of the need for information and proposed use of 
information: This information is needed to determine compliance with 
the requirements for per diem and a special needs grant.
    Description of likely respondents: Entities receiving per diem or 
special needs grants.

    Estimated number of respondents per year: 300.
    Estimated frequency of responses per year: 1.
    Estimated total annual reporting and recordkeeping burden: 1500 
hours.
    Estimated annual burden per collection: 5 hours.

    The Department considers comments by the public on collections of 
information in--
    [sbull] Evaluating whether the collections of information are 
necessary for the proper performance of the functions of the 
Department, including whether the information will have practical 
utility;
    [sbull] Evaluating the accuracy of the Department's estimate of the 
burden of the collections of information, including the validity of the 
methodology and assumptions used;
    [sbull] Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
    [sbull] Minimizing the burden of the collections of information on 
those who are to respond, including responses through the use of 
appropriate automated, electronic, mechanical, or other technological 
collection techniques or other forms of information technology, e.g., 
permitting electronic submission of responses.
    OMB is required to make a decision concerning the collections of 
information contained in this rule between 30 and 60 days after 
publication of this document in the Federal Register. Therefore, a 
comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment on the interim final rule.

[[Page 13594]]

Administrative Procedure Act

    Pursuant to 5 U.S.C. 553, we have found for this rule that notice 
and public procedure are impracticable, unnecessary, and contrary to 
the public interest and that we have good cause to dispense with notice 
and comment on this rule and to dispense with a 30-day delay of its 
effective date. The Homeless Veterans Comprehensive Assistance Act of 
2001 (Pub. L. 107-95) authorizes increases in both the services (3 new 
grant programs) and the per diem available to homeless veteran 
providers. These increased services and per diem are critical to 
properly provide services to the homeless veterans population and meet 
the Congressional mandates of ending chronic homelessness. Also, a 
delay in some cases may even lead to the closing of some of our 
collaborative partners' homeless veteran programs. Therefore, the need 
to take emergency action is particularly great for those homeless 
veterans who will benefit from the increased services (grants) and per 
diem.

Executive Order 12866

    This document has been reviewed by the office of Management and 
Budget under Executive Order 12866.

Regulatory Flexibility Act

    The Secretary hereby certifies that the interim final rule will not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act (RFA), 5 
U.S.C. 601-602. In all likelihood, only similar entities that are small 
entities will participate in the Homeless Providers Grant and Per Diem 
Program. Therefore, pursuant to 5 U.S.C. 605(b), this interim final 
rule is exempt from the initial and final regulatory flexibility 
analysis requirement of sections 603 and 604.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private sector of 
$100 million or more in any given year. This rule would have no 
consequential effect on State, local, or tribal governments.

Catalog of Federal Domestic Assistance Program

    The Catalog of Federal Domestic Assistance program number is 
64.024.

List of Subjects

38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Foreign relations, 
Government contracts, Grant programs--health, Grant programs--veterans, 
Health care, Health facilities, Health professions, Health records, 
Homeless, Medical and dental schools, Medical devices, Medical 
research, Mental health programs, Nursing homes, Philippines, Reporting 
and recordkeeping requirements, Scholarships and fellowships, Travel 
and transportation expenses, Veterans.

38 CFR Part 61

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Day care, Dental health, Drug abuse, Government contracts, Grant 
programs-health, Grant programs-veterans, Health care, Health 
facilities, Health professions, Health records, Homeless, Mental health 
programs, Per-diem program; Reporting and recordkeeping requirements, 
Travel and transportation expenses, Veterans.

    Approved: December 17, 2002.
Anthony J. Principi,
Secretary of Veterans Affairs.

    For the reasons set forth in the preamble, we are amending 38 CFR 
chapter I as follows:

PART 17--MEDICAL

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

    Authority: 38 U.S.C. 501, 1721, unless otherwise noted.


Sec. Sec.  17.700 through 17.731  [Removed]

    2. Remove Sec. Sec.  17.700 through 17.731 and the undesignated 
center heading, VA HOMELESS PROVIDERS GRANT AND PER DIEM PROGRAM, 
immediately preceding those sections.

    3. A new part 61 is added to read as follows:

PART 61--VA HOMELESS PROVIDERS GRANT AND PER DIEM PROGRAM

Sec.
61.0 Purpose.
61.1 Definitions.
61.10 Capital grants--general.
61.11 Applications for capital grants.
61.12 Threshold requirements for capital grant applications.
61.13 Rating criteria for capital grant applications.
61.14 Selecting applications for capital grants.
61.15 Obtaining additional information and awarding capital grants.
61.16 Matching funds for capital grants.
61.17 Site control for capital grants.
61.20 Life Safety Code capital grants.
61.30 Per diem--general.
61.31 Application for per diem.
61.32 Ranking non-capital grant recipients for per diem.
61.33 Payment of per diem.
61.40 Special needs grants--general.
61.41 Special needs grants application.
61.42 Threshold requirements for special needs grant applications.
61.43 Rating criteria for special needs grant applications.
61.44 Awarding special needs grants.
61.50 Technical assistance grants--general.
61.51 Applications for technical assistance grants.
61.52 Threshold requirements for technical assistance grant 
applications.
61.53 Rating criteria for technical assistance grant applications.
61.54 Awarding technical assistance grants.
61.55 Technical assistance reports.
61.60 Notice of Fund Availability.
61.61 Agreement and funding actions.
61.62 Program changes.
61.63 Procedural error.
61.64 Religious organizations.
61.65 Inspections.
61.66 Financial management.
61.67 Recovery provisions.
61.80 General operation requirements for supportive housing and 
service centers.
61.81 Outreach activities.
61.82 Resident rent for supportive housing.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.0  Purpose.

    This part implements the VA Homeless Providers Grant and Per Diem 
Program which consists of the following components: capital grants, per 
diem, special needs grants, and technical assistance grants.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.1  Definitions.

    For purposes of this part:
    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.
    Capital grant means a grant for construction, renovation, or 
acquisition of a facility; or for acquisition of a van.
    Capital lease means a lease that will be in effect for the full 
period in which VA may recover all or portions of the capital grant 
amount under this part.
    Chronically mentally ill means a condition of schizophrenia or 
major affective disorder (including bipolar disorder) or post-traumatic 
stress disorder (PTSD), based on a diagnosis from a licensed mental 
health professional, with at least one

[[Page 13595]]

documented hospitalization for this condition sometime in the last 2 
years or with documentation of a formal assessment on a standardized 
scale of any serious symptomology or serious impairment in the areas of 
work, family relations, thinking, or mood.
    Fee means a fixed charge for a service offered by a recipient under 
this part, that is in addition to the services that are outlined in the 
recipient's application; and are not paid for by VA per diem or 
provided by VA, (e.g., cable television, recreational outings, 
professional instruction or counseling).
    Fixed site means a physical structure that under normal conditions 
is not capable of readily being moved from one location to another 
location.
    Frail elderly means 65 years of age or older with one or more 
chronic health problems and limitations in performing one or more 
activities of daily living (such as bathing, toileting, transferring 
from bed to chair, etc.)
    Homeless means: (1)(i) Lacking a fixed, regular and adequate 
nighttime residence; or
    (ii) Having 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 does not include imprisonment or other 
detainment pursuant to Federal or State law. Imprisonment or other 
detainment does not include probation, parole or electronic custody.
    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.
    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 be recognized as a 
501(c)(3) or 501(c)(19) nonprofit organization by the United States 
Internal Revenue Service, and:
    (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, obtaining program audits, and securing accreditation; and 
similar costs related to administering the grant after the award), 
maintenance, repair and security for the supportive housing;
    (2) Van costs or building rent (except under capital leases), e.g., 
fuel, insurance, utilities, furnishings, and equipment;
    (3) Conducting on-going assessments of supportive services provided 
for and needed by participants and the availability of such services;
    (4) 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 receiving services based on a grant or 
per diem provided under this part.
    Public entity includes:
    (1) 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, and
    (2) 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 the 
Bureau of Indian Affairs.
    Rehabilitation means the improvement or repair of an existing 
structure. Rehabilitation does not include minor or routine repairs.
    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 with supportive services provided 
for homeless veterans and is:
    (1) Transitional housing, or
    (2) A part of, a particularly innovative project for, or 
alternative method of, meeting the immediate and long-term needs of 
homeless veterans.
    Supportive services means services, which may be designed by the 
recipient or program participants, that provide appropriate services or 
assist such persons in obtaining appropriate services to address the 
needs of homeless veterans to be served by the project. Supportive 
services does not include inpatient acute hospital care, but does 
include:
    (1) Outreach activities;
    (2) Providing food, nutritional advice, counseling, health care, 
mental health treatment, alcohol and other substance abuse services, 
case management services;
    (3) Establishing and operating child care services for dependents 
of homeless veterans;
    (4) Providing supervision and security arrangements necessary for 
the protection of residents of supportive housing and for homeless 
veterans using supportive housing or services;
    (5) Providing assistance in obtaining permanent housing;
    (6) Providing education, employment counseling and assistance, and 
job training;
    (7) Providing assistance in obtaining other Federal, State and 
local assistance available for such residents including mental health 
benefits, employment counseling and assistance, veterans' benefits, 
medical assistance, and income support assistance; and
    (8) Providing housing assistance, legal assistance, advocacy, 
transportation, and other services essential for achieving and 
maintaining independent living.
    Terminally ill means a prognosis of 9 months or less to live based 
on a written medical diagnosis from a physician.
    VA means the Department of Veterans Affairs.
    Veteran means a person who served in the active military, naval, or 
air service, and who was discharged or released there from under 
conditions other than dishonorable.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)


[[Page 13596]]




Sec.  61.10  Capital grants--general.

    (a) VA provides capital grants to public or nonprofit private 
entities so they can assist homeless veterans by helping to ensure the 
availability of supportive housing and service centers to furnish 
outreach, rehabilitative services, vocational counseling and training, 
and transitional housing. Specifically, VA provides capital grants for 
up to 65 percent of the cost to:
    (1) Construct structures and purchase the underlying land to 
establish new supportive housing facilities or service centers, or to 
expand existing supportive housing facilities or service centers;
    (2) Acquire structures to establish new supportive housing 
facilities or service centers, or to expand existing supportive housing 
facilities or service centers;
    (3) Renovate existing structures to establish new supportive 
housing facilities or service centers, or to expand existing supportive 
housing facilities or service centers; and
    (4) Procure vans (purchase price, sales taxes, and title and 
licensing fees) to provide transportation or outreach for the purpose 
of providing supportive services.
    (b) Capital grants may not be use for acquiring buildings located 
on VA-owned property. However, capital grants may be awarded for 
construction, expansion, or renovation of buildings located on VA-owned 
property.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.11  Applications for capital grants.

    (a) To apply for a capital grant, an applicant must obtain from VA 
a capital grant application package and submit to VA the information 
called for in the application package within the time period 
established in the Notice of Fund Availability under Sec.  61.60 of 
this part.
    (b) The capital grant application package includes exhibits to be 
prepared and submitted as part of the application process, including:
    (1) Justification for the capital grant;
    (2) Site description, site design, and site cost estimates;
    (3) Documentation on eligibility to receive a capital grant 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, and on 
the boundaries of the area or community proposed to be served;
    (8) If capital grant funds are proposed to be used for acquisition 
or rehabilitation, documentation demonstrating that the costs 
associated with acquisition or rehabilitation are less than the costs 
associated with new construction;
    (9) If grant funds are proposed to be used for new construction, 
documentation demonstrating that the costs associated with new 
construction are less than the costs associated with rehabilitation of 
an existing building, that there is a lack of available appropriate 
units that could be rehabilitated at a cost less than new construction, 
and 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);
    (10) If the proposed construction includes demolition, a demolition 
plan, including the extent and cost of existing site features to be 
removed, stored, or relocated and information establishing that the 
proposed construction is in the same location as the building to be 
demolished or that the demolition is inextricably linked to the design 
of the construction project (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);
    (11) Comments or recommendations by appropriate State (and area 
wide) clearinghouses pursuant to E.O. 12372 (3 CFR, 1982 Comp., p. 
197), if the applicant is a State; and
    (12) Reasonable assurances with respect to receipt of a capital 
grant 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 nonveterans; and that 
such services will meet the requirements of this part;
    (ii) The recipient will continue to operate the project until the 
expiration of the period during which VA could seek recovery under 
Sec.  61.67;
    (iii) Title to such site or van will vest solely in the applicant 
and the applicant will insure vans to the same extent they would insure 
a van bought with their own funds;
    (iv) Adequate financial support will be available for the 
completion of the project or for the purchase and maintenance, repair, 
and operation of the van; and
    (v) The recipient will keep records and submit reports as VA may 
reasonably require, within the time frames required; and give VA, upon 
demand, access to the records upon which such information is based.
    (c) Applicants may apply for more than one capital grant.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.12  Threshold requirements for capital grant applications.

    To be eligible for a capital grant, an applicant must meet the 
following threshold requirements:
    (a) The application was completed in all parts and included the 
information called for in the application package and was filed within 
the time period established in the Notice of Fund Availability;
    (b) The applicant is a public or nonprofit private entity;
    (c) The population proposed to be served is homeless veterans;
    (d) The activities for which assistance is requested are eligible 
for funding under this part;
    (e) The applicant has demonstrated that adequate financial support 
will be available to carry out the project for which the capital grant 
is sought consistent with the plans, specifications and schedule 
submitted by the applicant;
    (f) The application has demonstrated compliance with the Uniform 
Relocation Assistance and Real Property Acquisition Policies Act of 
1970 (URA) (42 U.S.C. 4601-4655);
    (g) The applicant has agreed to comply with the requirements of 
this part and has demonstrated the capacity to do so;
    (h) The applicant does not have an outstanding obligation to VA 
that is in arrears, and does not have an overdue or unsatisfactory 
response to an audit; and
    (i) The applicant is not in default, by failing to meet 
requirements for any previous assistance from VA under this part.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.13  Rating criteria for capital grant applications.

    (a) Applicants that meet the threshold requirements in Sec.  61.12 
of this part, will then be rated using the selection criteria listed in 
this section. To be eligible for a capital grant, an applicant must 
receive at least 600 points (out of a possible 1,200) and must receive 
points under criteria in paragraphs (b), (c), (d), (e), and (i) of this 
section.

[[Page 13597]]

    (b) Quality of the project. VA will award up to 300 points based on 
the following:
    (1) How program participants will achieve residential stability, 
including how available supportive services will help participants 
reach this goal;
    (2) How program participants will increase their skill level and/or 
income, including how available supportive services will help 
participants reach this goal;
    (3) How program participants will be involved in making project 
decisions that affect their lives so that they achieve greater self-
determination, including how they will be involved in selecting 
supportive services, establishing individual goals and developing plans 
to achieve these goals;
    (4) How permanent affordable housing will be identified and made 
known 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;
    (5) How the service needs of participants will be assessed on an 
ongoing basis;
    (6) How the proposed housing, if any, will be managed and operated;
    (7) How participants will be assisted in assimilating into the 
community through access to neighborhood facilities, activities, and 
services;
    (8) How and when the progress of participants toward meeting their 
individual goals will be monitored, evaluated, and documented;
    (9) How and when the effectiveness of the overall project in 
achieving its goals will be evaluated and documented; and how any 
needed program modifications will be made based on those evaluations; 
and how program modifications will be reported to VA; and
    (10) How the proposed project will be implemented in a timely 
fashion.
    (c) Targeting to persons on streets and in shelters. VA will award 
up to 150 points based on:
    (1) The extent to which the project is designed to 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
    (2) The likelihood that proposed plans for outreach and selection 
of participants will result in these populations being served.
    (d) Ability of applicant to develop and operate a project. VA will 
award up to 200 points based on the extent to which the application 
demonstrates experience in the following areas:
    (1) Engaging the participation of homeless veterans living in 
places not ordinarily meant for human habitation and in emergency 
shelters;
    (2) Assessing the housing and relevant supportive service needs of 
homeless veterans;
    (3) Accessing housing and relevant supportive service resources;
    (4) If applicable, contracting for and/or overseeing the 
rehabilitation or construction of housing;
    (5) If applicable, administering a rental assistance program;
    (6) Providing supportive services or supportive housing for 
homeless veterans;
    (7) Monitoring and evaluating the progress of persons toward 
meeting their individual goals;
    (8) Evaluating the overall effectiveness of a program and using 
evaluation results to make program improvements, as needed; and
    (9) Maintaining fiscal solvency as evidenced by providing their 
last complete yearly financial statements.
    (e) Need. VA will award up to 150 points based on the extent to 
which the applicant demonstrates:
    (1) Substantial unmet needs, particularly among the target 
population living in places not ordinarily meant for human habitation 
such as the streets, emergency shelters, based on reliable data from 
surveys of homeless populations or other reports or data gathering 
mechanisms that directly support claims made; and
    (2) An understanding of the homeless population to be served and 
its unmet housing and supportive service needs.
    (f) Innovative quality of the proposal. VA will award up to 50 
points based on the innovative quality of the proposal, in terms of:
    (1) Helping homeless veterans or homeless veterans with 
disabilities to reach residential stability, to increase their skill 
level and/or income, and to increase the influence they have over 
decisions that affect their lives;
    (2) Establishing a clear link between the innovation(s) and its 
proposed effect(s); and
    (3) Establishing usefulness as a model for other projects.
    (g) Leveraging. VA will award up to 50 points based on the extent 
to which the applicant documents 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.
    (h) 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.
    (i) 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 program 
providers relevant to the needs of homeless veterans in 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. VA will award up to 50 
points of the 200 points based on the extent to which commitments to 
provide supportive services are documented at the time of application. 
Up to 150 points of the 200 points will be given to the extent 
applicants demonstrate that:
    (1) They are part of an ongoing community-wide planning process 
within the framework described above which is designed to share 
information on available resources and reduce duplication among 
programs that serve homeless veterans;
    (2) They have consulted directly with the closest VA Medical Center 
and other providers within the framework described above regarding 
coordination of services for project participants; and
    (3) They have coordinated with the closest VA Medical Center their 
plan to assure access to health care, case management, and other care 
services.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.14  Selecting applications for capital grants.

    (a) Applicants will first be grouped in categories according to the 
funding priorities set forth in the NOFA, if any. Applicants will then 
be ranked, within their respective funding category if applicable. The 
highest-ranked applications for which funding is available, within 
highest priority funding category if applicable, will be

[[Page 13598]]

conditionally selected to receive a capital grant in accordance with 
their ranked order, as determined under Sec.  61.13 of this part. If 
funding priorities have been established and funds are still available 
after selection of those applicants in the highest priority group VA 
will continue to conditionally select applicants in lower priority 
categories in accordance with the selection method set forth in this 
paragraph subject to available funding.
    (b) In the event of a tie between applicants, VA will use the score 
from Sec.  61.13(e) of this part to determine the ranking.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.15  Obtaining additional information and awarding capital 
grants.

    (a) Each applicant who has been conditionally selected for a 
capital grant will be requested by VA to submit additional information, 
including:
    (1) Documentation to show that the project is feasible, including a 
plan from an architect, contractor, or other building professional that 
provides estimated costs for the proposed design;
    (2) Documentation showing the sources of funding for the project 
and firm financing commitments for the matching requirements described 
in Sec.  61.16 of this part;
    (3) Documentation establishing site control described in Sec.  
61.17 of this part;
    (4) Documentation establishing compliance with the National 
Historic Preservation Act (16 U.S.C. 470);
    (5) Information necessary for VA to ensure compliance both with 
Uniform Federal Accessibility Standards (UFAS) and the Americans with 
Disabilities Act Accessibility Guidelines;
    (6) Documentation establishing compliance with local and state 
zoning codes;
    (7) Documentation in the form of one set of design development (35 
percent completion) drawings demonstrating compliance with local codes, 
state codes, and the Life Safety Code of the National Fire Protection 
Association.
    (8) Information necessary for VA to ensure compliance with the 
provisions of the National Environmental Policy Act (42 U.S.C. 4321 et 
seq.);
    (9) A site survey performed by a licensed land surveyor; and
    (10) Such other documentation as specified by VA in writing to the 
applicant to confirm or clarify information provided in the 
application.
    (b) The required additional information must be received by VA in 
acceptable form within the time frame established by VA in a Notice of 
Fund Availability published in the Federal Register.
    (c) Following receipt of the additional information in acceptable 
form, VA will execute an agreement and make payments to the grant 
recipient in accordance with Sec.  61.61 of this part and other 
applicable provisions of this part.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.16  Matching funds for capital grants.

    The amount of a capital grant may not exceed 65 percent of the 
total cost of the project for which the capital grant was awarded. 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 project not funded by the capital grant. This 
matching share shall constitute at least 35 percent of the total cost. 
If the project is for supportive housing, or a service center that 
would be used for purposes under this part and for other purposes, a 
capital grant may be awarded only in proportion to the use under this 
part. Capital grants may include application costs, including site 
surveys, architectural, and engineering fees, but may not include 
relocation costs.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.17  Site control for capital grants.

    (a) As a condition for obtaining a capital grant for supportive 
housing or a fixed site service center, an applicant must demonstrate 
site control through a deed, a capital lease, or an executed contract 
of sale, unless the site is in a building or on land owned by VA. Such 
site control must be demonstrated within 1 year after execution of an 
agreement under Sec.  61.61 of this part.
    (b) A capital grant recipient may change the site to a new site 
meeting the requirements of this part subject to VA approval under 
Sec.  61.62 of this part. However, the recipient is responsible for and 
must demonstrate ability to provide for any additional costs resulting 
from the change in site.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.20  Life Safety Code capital grants.

    (a) This section sets forth provisions for obtaining a Life Safety 
Code capital grant under 38 U.S.C. 2012(c)(3). To be eligible to 
receive such a capital grant, an applicant already must have received a 
grant under section 3 of the Homeless Veterans Comprehensive Service 
Programs Act of 1992 (Public Law 102-590; 38 U.S.C. 7221 note) for 
construction, renovation, or acquisition of a facility and must obtain 
the Life Safety Code capital grant solely for renovations to such 
facility to comply with the Life Safety Code of the National Fire 
Protection Association. The following sections of this part apply to 
the Life Safety Code grants Sec. Sec.  61.60 through 61.66; and Sec.  
61.80 and Sec.  61.82.
    (b) To apply for a Life Safety Code capital grant under this 
section, an applicant must obtain from VA a Life Safety Code capital 
grant application package and submit to VA the information called for 
in the application package within the time period established in the 
Notice of Fund Availability. The Life Safety Code capital grant 
application package includes exhibits to be prepared and submitted as 
part of the application process, including:
    (1) Justification for the modifications needed to meet the Life 
Safety Code or such other comparable fire and safety requirements;
    (2) Site description, site design, and site cost estimates;
    (3) Reasonable assurances with respect to receipt of a Life Safety 
Code capital grant under this part that:
    (i) The project being renovated is being, and will continue to be, 
used principally to furnish veterans the level of care for which VA 
awarded the applicant a grant under the Homeless Veterans Comprehensive 
Service Program Act of 1992; that not more than 25 percent of 
participants at any one time will be nonveterans; and that such 
services will meet the requirements of this part;
    (ii) The recipient will keep records and submit reports as VA may 
reasonably require, within the time frames required; and give VA, upon 
demand, access to the records upon which such information is based;
    (iii) The applicant has agreed to comply with the applicable 
requirements of this part and has demonstrated the capacity to do so;
    (iv) The applicant does not have an outstanding obligation to VA 
that is in arrears, and does not have an overdue or unsatisfactory 
response to an audit; and
    (v) The applicant is not in default, by failing to meet 
requirements for any previous assistance from VA.
    (c)(1) Cost-effectiveness. VA will award up to 300 points for cost-
effectiveness with adjustments for high-cost areas. Applicants should 
address the following:
    (i) Estimated cost of the renovation and the type of work to be 
done;
    (ii) Estimated cost of any displacement of program participants or 
services due to the renovation; and

[[Page 13599]]

    (iii) Cost-benefit analysis addressing the benefit of renovation to 
the structure compared to moving program to another site.
    (2) Coordination. VA will award up to 200 points for a summary 
countersigned by the local VAMC Facilities Management of the 
discussions concerning renovation plans. The summaries should detail 
the following:
    (i) Urgency of the renovation;
    (ii) Adequacy of the renovation; and
    (iii) Opinion of feasibility and cost benefit.
    (d) The highest-ranked applications for the Life Safety Code 
capital grants for which funding is available will be selected to 
receive grants in accordance with their ranked order. The amount 
awarded will be 100 percent of the estimated total cost of the 
renovation as stated in the Life Safety Code application (this may 
include application costs, architectural fees, and engineering fees). 
VA will execute an agreement and make payments to the Life Safety Code 
capital grant recipient in accordance with Sec.  61.61 of this part and 
other applicable provisions of this part. In the event of a tie between 
applicants, VA will use the score from Sec.  61.20(c)(2) of this part 
to determine the ranking.
    (e) Applicants may apply for more than one Life Safety Code capital 
grant.
    (f) The authority to provide Life Safety Code grants expires on 
December 21, 2006.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.30  Per diem-general.

    VA provides per diem funds to capital grant recipients or to 
entities eligible to receive a capital grant, which established a 
program of supportive housing or services after November 10, 1992 so 
they can assist homeless veterans by helping to offset operating costs 
to ensure the availability of supportive housing and service centers 
tasked with furnishing outreach, rehabilitative services, vocational 
counseling and training, and transitional housing assistance.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.31  Application for per diem.

    (a) To apply for per diem, a capital grant recipient need only 
indicate the intent to receive per diem on the capital grant 
application or may separately request per diem by submitting to VA a 
written statement requesting per diem.
    (b) To apply for per diem, a non-capital grant recipient must 
obtain from VA a non-capital grant application package and submit to VA 
the information called for in the application package within the time 
period established in the Notice of Fund Availability. The non-capital 
grant application package includes exhibits to be prepared and 
submitted as part of the application process, including:
    (1) Justification for per diem;
    (2) Documentation on eligibility to receive per diem under this 
part;
    (3) Documentation on operating budget and cost sharing;
    (4) Documentation on supportive services committed to the project;
    (5) Comments or recommendations by appropriate State (and area 
wide) clearinghouses pursuant to E.O. 12372 (3 CFR, 1982 Comp., p. 
197), if the applicant is a State; and
    (6) Reasonable assurances with respect to receipt of per diem 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 nonveterans; and that 
such services will meet the requirements of this part;
    (ii) Adequate financial support will be available for the per diem 
program; and
    (iii) The recipient will keep records and submit reports as VA may 
reasonably require, within the time frames required; and give VA, upon 
demand, access to the records upon which such information is based.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.32  Ranking non-capital grant recipients for per diem.

    (a) Applications from non-capital grant recipients in response to a 
Notice of Fund Availability will be reviewed and grouped in categories 
according to the funding priorities set forth in the NOFA, if any. Such 
applications will then be ranked within their respective funding 
category according to scores achieved only if the applicant scores at 
least 500 cumulative points from paragraphs (b), (c), (d), (e), and (i) 
of Sec.  61.13 of this part. The highest-ranked applications for which 
funding is available, within highest priority funding category if 
applicable, will be conditionally selected for eligibility to receive 
per diem payments in accordance with their ranked order. If funding 
priorities have been established and funds are still available after 
selection of those applicants in the highest priority group VA will 
continue to conditionally select applicants in lower priority 
categories in accordance with the selection method set forth in this 
paragraph subject to available funding.
    (b) In the event of a tie between applicants, VA will use the score 
from Sec.  61.13(e) of this part to determine the ranking.
    (c) All applicants responding to a NOFA for ``Per Diem Only'' will 
be subject to the ranking method in paragraph (a) of this section.

    Note to Sec.  61.32: Capital grant recipients are not required 
to be ranked, however, continuation of per diem payments to capital 
grant recipients will be subject to limitations set forth in Sec.  
61.33 of this part.


(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.33  Payment of per diem.

    (a) A capital grant recipient meeting the application requirements 
as outlined in Sec.  61.31(a) of this part is eligible for per diem 
subject to a site inspection establishing that the applicant continues 
to meet the requirements for a capital grant as outlined in the 
following sections, Sec. Sec.  61.62, 61.64, 61.65, 61.66, 61.80, 
61.81, and 61.82.
    (b) For non-capital grant recipients who apply for per diem under 
this part, funds will be allocated to the highest-ranked applicants in 
descending order until funds are expended. Payments will be contingent 
upon verification of application information based on an initial site 
inspection and other inspections pursuant to Sec.  61.66 of this part 
and will be made for 3 years or as otherwise specified in the Notice of 
Fund Availability. Non-capital grant recipients may apply again 
thereafter only in response to a Notice of Fund Availability.
    (c) For those applicants selected to receive per diem, VA will 
execute an agreement in accordance with Sec.  61.61of this part and 
make payments to the grant recipient or non-grant recipient for those 
homeless veterans--
    (1) Who VA referred to the grant recipient or non-grant recipient; 
or
    (2) For whom VA authorized the provision of supportive housing or 
supportive service.
    (d)(1) The rate of per diem payments for each veteran in supportive 
housing shall be the lesser of--
    (i) The daily cost of care estimated by the per diem recipient 
minus other sources of payments to the per diem recipient for 
furnishing services to homeless veterans that the per diem recipient 
certifies to be correct (other sources include payments and grants from 
other departments and agencies of the United States, from departments 
of State and local governments, from private entities or organizations, 
and from program participants), or

[[Page 13600]]

    (ii) The current VA State Home Program per diem rate for 
domiciliary care.
    (2) The per diem amount for service centers shall be 1/8 of the 
lesser of the amounts in paragraphs (f)(1)(i) and (f)(1)(ii) of this 
section per hour, not to exceed 8 hours in any day.
    (e) Per diem payments may be paid retroactively for services 
provided not more than 3 days before VA approval is given or, where 
through no fault of the recipient, per diem payments should have been 
made but were not made. VA will not pay per diem for any additional 
days of absence when a veteran has already been absent for more than 72 
hours consecutively (scheduled or unscheduled). In addition, VA will 
not pay per diem payments for supportive housing for any homeless 
veteran who has had three or more episodes (admission and discharge for 
each episode) of supportive housing services paid for under this part. 
VA may waive the episode requirement if the services offered are 
different from those previously provided and may lead to a successful 
outcome.
    (f) Payment of per diem is subject to availability of funds. When 
necessary due to funding limitations, VA will reduce the rate of per 
diem as necessary.
    (g) Capital grant recipients and non-capital grant recipients may 
continue to receive per diem assistance only so long as they continue 
to meet the minimum eligibility requirements for obtaining a grant. For 
grant recipients this is the minimum 600 points as provided for in 
Sec.  61.13(a) of this part. For non-grant recipients this is the 
minimum 500 points provided for in Sec.  61.32(a) of this part.
    (h) Per diem payments will not be paid for both supportive housing 
and supportive services provided to the same veteran by the same per 
diem recipient.
    (i) For non-capital grant recipients, only those portions of the 
service center or supportive housing described in the application will 
be considered for per diem assistance.
    (j) At the time of receipt, a per diem recipient must report to VA 
all other sources of income for the project for which per diem was 
awarded. The information in this paragraph provides a basis for 
adjustments to the per diem payment.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.40  Special needs grants--general.

    (a) VA provides special needs grants to capital grant and per diem 
recipients under this part to assist with additional operational costs 
that would not otherwise be incurred but for the fact that the 
recipient is providing beds or services in supportive housing and at 
service centers for the following homeless veterans:
    (1) Women, including women who have care of minor dependents;
    (2) Frail elderly;
    (3) Terminally ill; or
    (4) Chronically mentally ill.
    (b) No part of a special needs grant may be used for any purpose 
that would change significantly the scope of the project for which a 
capital grant or per diem was awarded.
    (c) The following sections of this part apply to special needs 
grants: Sec. Sec.  61.60 through 61.66; and Sec.  61.80; Sec.  61.82.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.41  Special needs grants application.

    (a) To apply for a special needs grant, an applicant must obtain 
from VA a special needs grant application package and submit to VA the 
information called for in the application package within the time 
period established in the Notice of Fund Availability.
    (b) The special needs grant application package includes exhibits 
to be prepared and submitted as part of the application process, 
including:
    (1) Justification for the special needs grant;
    (2) Documentation on eligibility to receive a special needs grant 
under this part;
    (3) Documentation concerning the estimated operating costs for the 
needs of the specific population for which the special needs grant is 
requested;
    (4) Documentation concerning supportive services committed to the 
project;
    (5) Comments or recommendations by appropriate State (and area 
wide) clearinghouses pursuant to E.O. 12372 (3 CFR, 1982 Comp., p. 
197), if the applicant is a State; and
    (6) Reasonable assurances with respect to receipt of a special 
needs grant under this part that:
    (i) The funds will be used to furnish to veterans the level of care 
for which such application is made; and that the special needs program 
will comply with applicable requirements of this part;
    (ii) The recipient will keep records and submit reports as VA may 
reasonably require, within the time frames required; and give VA, upon 
demand, access to the records upon which such information is based; and
    (iii) Adequate financial support will be available for the special 
needs program.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.42  Threshold requirements for special needs grant 
applications.

    To be eligible for a special needs grant, an applicant must meet 
the following threshold requirements:
    (a) The application included the information called for in the 
application package and was filed within the time period established in 
the Notice of Fund Availability;
    (b) The applicant still meets the requirements for receipt of per 
diem;
    (c) The activities for which assistance is requested are eligible 
for funding under this part;
    (d) The applicant 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;
    (e) The applicant does not have an outstanding obligation to VA 
that is in arrears, and does not have an overdue or unsatisfactory 
response to an audit;
    (f) The applicant is not in default, by failing to meet 
requirements for any previous assistance from VA under this part; and
    (g) The applicant has agreed to comply with applicable requirements 
of this part, to maintain eligibility for special need payments and has 
demonstrated the capacity to do so.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.43  Rating criteria for special needs grant applications.

    (a) Applicants that meet the threshold requirements in Sec.  61.42 
of this part, will then be rated using the selection criteria listed in 
paragraphs (b) and (c) of this section. To be eligible for a special 
needs grant, an applicant must receive at least 300 points (out of a 
possible 500) and must score points in all areas (paragraphs (b)(1) 
through (c)(3)).
    (b) VA will award up to 200 points based on the extent to which the 
applicant demonstrates why the service, operation, or personnel for 
which the special needs grant:
    (1) Is needed for the project;
    (2) Is integral to the project;
    (3) Is appropriate to the population and overall project design; 
and
    (4) Meets the special needs population provided per diem in the 
previous year.
    (c) VA will award up to 300 points based on the extent the 
applicant's goals, objectives, and measures for the population to be 
served are:
    (1) Appropriate;
    (2) Reasonable; and
    (3) Measurable.
    (d) The information provided under paragraphs (b) and (c) of this 
section for

[[Page 13601]]

women, including women who have care of minor dependents, should 
demonstrate how the program design will:
    (1) Ensure transportation for women and their children, especially 
for health care and educational needs;
    (2) Provide directly or offer referrals for adequate and safe child 
care;
    (3) Ensure children's health care needs are met especially age 
appropriate wellness visits and immunizations; and
    (4) Address safety and security issues including segregation 
procedures from other program participants if deemed appropriate.
    (e) The information provided under paragraphs (b) and (c) of this 
section for the frail elderly should demonstrate how the program design 
will:
    (1) Ensure the safety of the residents in the facility to include 
preventing harm and exploitation;
    (2) Ensure opportunities to keep residents mentally and physically 
agile to the fullest extent through the incorporation of structured 
activities, physical activity, and plans for social engagement within 
the program and in the community;
    (3) Provide opportunities for participants to address life 
transitional issues and separation and/or loss issues;
    (4) Provide access to assistance devices such as walkers, grippers, 
or other devices necessary for optimal functioning;
    (5) Ensure adequate supervision, including supervision of 
medication and monitoring of medication compliance; and
    (6) Provide opportunities for participants either directly or 
through referral for other services particularly relevant for the frail 
elderly, including services or programs addressing emotional, social, 
spiritual, and generative needs.
    (f) The information provided under paragraphs (b) and (c) of this 
section for the terminally ill should demonstrate how the program 
design will:
    (1) Help participants address life-transition and life-end issues;
    (2) Ensure that participants are afforded timely access to hospice 
services;
    (3) Provide opportunities for participants to engage in ``tasks of 
dying,'' or activities of ``getting things in order'' or other 
therapeutic actions that help resolve end of life issues and enable 
transition and closure;
    (4) Ensure adequate supervision including supervision of medication 
and monitoring of medication compliance; and
    (5) Provide opportunities for participants either directly or 
through referral for other services particularly relevant for 
terminally ill such as legal counsel and pain management.
    (g) The information provided under paragraphs (b) and (c) of this 
section for the chronically mentally ill should demonstrate how the 
program design will:
    (1) Help participants join in and engage with the community;
    (2) Facilitate reintegration with the community and provide 
services that may optimize reintegration such as life-skills education, 
recreational activities, and follow up case management;
    (3) Ensure that participants have opportunities and services for 
re-establishing relationships with family;
    (4) Ensure adequate supervision, including supervision of 
medication and monitoring of medication compliance; and
    (5) Provide opportunities for participants, either directly or 
through referral, to obtain other services particularly relevant for a 
chronically mentally ill population, such as vocational development, 
benefits management, fiduciary or money management services, medication 
compliance, and medication education.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.44  Awarding special needs grants.

    (a) Applicants will first be grouped in categories according to the 
funding priorities set forth in the NOFA, if any. Applicants will then 
be ranked, within their respective funding category if applicable. The 
highest-ranked applications for which funding is available, within 
highest priority funding category if applicable, will be conditionally 
selected to receive a special needs grant in accordance with their 
ranked order, as determined under Sec.  61.43 of this part. If funding 
priorities have been established and funds are still available after 
selection of those applicants in the highest priority group VA will 
continue to conditionally select applicants in lower priority 
categories in accordance with the selection method set forth in this 
paragraph subject to available funding.
    (b) In the event of a tie between applicants, VA will use the score 
from Sec.  61.43(b) of this part to determine the ranking.
    (c) For those applicants selected for a special needs grant, VA 
will execute an agreement and make payments to the grant recipient in 
accordance with Sec.  61.61of this part.
    (d) The amount of the special needs grant will be the estimated 
total operational cost of the special need over the life of the special 
needs grant award as specified in the special needs grant agreement. 
Payments may be made for no more than 3 years. Recipients may apply 
again thereafter only in response to a Notice of Fund Availability.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.50  Technical assistance grants-general.

    VA provides grants to entities or organizations with expertise in 
preparing grant applications relating to the provision of assistance 
for homeless veterans. The recipients are to use the grants to provide 
technical assistance to those nonprofit community-based groups with 
experience in providing assistance to homeless veterans in order to 
help such groups apply for grants under 38 CFR part 61 or apply for 
other grants from any source for addressing the problems of homeless 
veterans. This includes:
    (a) Group or individual seminars providing general instructions 
concerning grant applications;
    (b) Group or individual seminars providing instructions for 
applying for a specific grant; or
    (c) Group or individual instruction for preparing analyses to be 
included in a grant application.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.51  Applications for technical assistance grants.

    (a) To apply for a technical assistance grant under this part, an 
applicant must obtain from VA a technical assistance grant application 
package and submit to VA the information called for in the technical 
assistance grant application package within the time period established 
in the Notice of Fund Availability.
    (b) The technical assistance grant application package includes 
exhibits to be prepared and submitted as part of the application 
process, including
    (1) Justification for the technical assistance grant;
    (2) Documentation on eligibility to receive a technical assistance 
grant under this part;
    (3) Description of type of technical assistance that would be 
provided (see Sec.  61.50);
    (4) Documentation concerning the estimated operating costs and 
operating budget for the technical assistance program for which a grant 
is sought;
    (5) Documentation concerning expertise in preparing grant 
applications;
    (6) Documentation on resources committed to the provision of 
technical expertise;

[[Page 13602]]

    (7) Comments or recommendations by appropriate State (and area 
wide) clearinghouses pursuant to E.O. 12372 (3 CFR, 1982 Comp., p. 
197), if the applicant is a State; and
    (8) Reasonable assurances with respect to receipt of a technical 
assistance grant under this part that:
    (i) The recipient will provide adequate financial and 
administrative support for providing the services set forth in the 
technical assistance grant application and will actually provide such 
services; and
    (ii) The recipient will keep records and submit reports as VA may 
reasonably require, within the time frames required; and give VA, upon 
demand, access to the records upon which such information is based.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.52  Threshold requirements for technical assistance grant 
applications.

    To be eligible for a technical assistance grant, an applicant must 
meet the following threshold requirements:
    (a) The application included the information called for in the 
application package and was filed within the time period established in 
the Notice of Fund Availability;
    (b) The applicant established expertise in preparing grant 
applications;
    (c) The activities for which assistance is requested are eligible 
for funding under this part;
    (d) The applicant 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;
    (e) The applicant does not have an outstanding obligation to VA 
that is in arrears, and does not have an overdue or unsatisfactory 
response to an audit; and
    (f) The applicant is not in default, by failing to meet 
requirements for any previous assistance from VA under this part.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.53  Rating criteria for technical assistance grant 
applications.

    (a) Applicants that meet the threshold requirements in Sec.  61.52 
of this part, will then be rated using the selection criteria listed in 
paragraphs (b) and (c) of this section. To be eligible for a technical 
assistance grant, an applicant must receive at least 600 points (out of 
a possible 800) and must score points under paragraphs (b) and (c) of 
this section.
    (b) Quality of the technical assistance. VA will award up to 400 
points based on the following:
    (1) How the recipients of technical training will increase their 
skill level regarding the completion of applications;
    (2) How the recipients of technical training will learn to find 
grant opportunities in a timely manner;
    (3) How the technical assistance provided will be monitored and 
evaluated and changes made, if needed; and
    (4) How the proposed technical assistance programs will be 
implemented in a timely fashion.
    (c) Ability of applicant to demonstrate expertise in preparing 
grant applications develop and operate a technical assistance program. 
VA will award up to 400 points based on the extent to which the 
application demonstrates:
    (1) Ability to find grants available for addressing the needs of 
homeless veterans;
    (2) Ability to find and offer technical assistance to entities 
eligible for such assistance;
    (3) Ability to administer a technical assistance program;
    (4) Ability to provide grant technical assistance; and
    (5) Ability to evaluate the overall effectiveness of the technical 
assistance program and to make adjustments, if necessary, based on 
those evaluations.


Sec.  61.54  Awarding technical assistance grants.

    (a) Applicants will first be grouped in categories according to the 
funding priorities set forth in the NOFA, if any. Applicants will then 
be ranked, within their respective funding category if applicable. The 
highest-ranked applications for which funding is available, within 
highest priority funding category if applicable, will be conditionally 
selected to receive a technical assistance grant in accordance with 
their ranked order, as determined under Sec.  61.53 of this part. If 
funding priorities have been established and funds are still available 
after selection of those applicants in the highest priority group VA 
will continue to conditionally select applicants in lower priority 
categories in accordance with the selection method set forth in this 
paragraph subject to available funding.
    (b) In the event of a tie between applicants, VA will use the score 
from Sec.  61.53(c) of this part to determine the ranking.
    (c) For those applicants selected to receive a technical assistance 
grant, VA will execute an agreement and make payments to the grant 
recipient in accordance with Sec.  61.61 of this part.
    (d) The amount of the technical assistance grant will be the 
estimated total operational cost of the technical assistance over the 
life of the technical assistance grant award as specified in the 
technical assistance grant agreement. Payments may be made for no more 
than 3 years. Recipients may apply again thereafter only in response to 
a Notice of Fund Availability.
    (e) The amount of a technical assistance grant under this part may 
not exceed the cost of the estimated cost of the provision of technical 
assistance.
    (f) VA will not pay for sustenance or lodging under a technical 
assistance grant.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.55  Technical assistance reports.

    Each recipient of a technical assistance grant must submit to VA, 
quarterly, a report describing the activities for which the technical 
assistance grant funds were awarded, including the type and amount of 
technical assistance provided and the number of nonprofit community-
based groups served.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.60  Notice of Fund Availability.

    When funds are made available for capital grants, per diem for non-
capital grant recipients, special needs grants, or technical assistance 
grants, VA will publish a Notice of Fund Availability in the Federal 
Register. The notice will:
    (a) Give the location for obtaining application packages;
    (b) Specify the date, time, and place for submitting completed 
applications;
    (c) State the estimated amount and type of funding available; and
    (d) State any priorities for or exclusions from funding to meet the 
statutory mandate of 38 U.S.C. 2011, to ensure that awards do not 
result in the duplication of ongoing services and to reflect the 
maximum extent practicable appropriate geographic dispersion and an 
appropriate balance between urban and nonurban locations.
    (e) Provide other information necessary for the application 
process.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.61  Agreement and funding actions.

    (a) When an applicant for a capital grant, per diem, a special 
needs grant, or a technical assistance grant meets all of the 
requirements under this part for the type of assistance requested and 
VA has funding for such assistance, VA will incorporate requirements 
under this part into an agreement to be executed by

[[Page 13603]]

VA and the applicant. Upon execution of the agreement, grant funds are 
obligated to cover the amount of the approved assistance subject to the 
availability of funding. Payments will be for services rendered and are 
contingent upon submission of documentation in the form of invoices or 
purchase agreements and contingent on inspections, as VA deems 
necessary. VA will make payments on its own schedule to reimburse for 
amounts expended.
    (b) Except for increases in the rate of per diem, VA will not make 
revisions to increase the amount obligated for assistance under this 
part after the initial obligation of funds.
    (c) VA will enforce the obligations under this part through such 
action as may be appropriate, including temporarily withholding cash 
payments pending correction of a deficiency.
    (d) VA may deobligate all or parts of assistance awarded under this 
part:
    (1) If the actual total costs for assistance is less than the total 
cost stated in the application, or
    (2) If the recipient fails to comply with the requirements of this 
part.
    (e) However, before determining whether to deobligate under 
paragraph (d)(2) of this section, VA will issue a notice of intent to 
terminate payments. The recipient will then have 30 days to submit 
documentation demonstrating why payments should not be terminated. 
After review of any such documentation, VA will issue a final decision 
concerning termination of payment.
    (f) VA may also seek recovery under Sec.  61.67 of this part where 
a capital grant recipient fails to provide supportive services and/or 
supportive housing for the minimum period of operation under Sec.  
61.67.
    (g) Where a recipient has no control over causes for delays in 
implementing a project, VA may change the due date, as appropriate.
    (h) Grant recipients that concurrently receive per diem and special 
needs payments shall not be paid more than 100 percent of the cost of 
the bed per day, product, operation, personnel, or service provided.
    (i) No funds provided under this part may be used to replace 
Federal, State or local funds previously used, or designated for use, 
to assist homeless veterans.
    (j) VA may obligate any recovered funds without fiscal year 
limitation.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.62  Program changes.

    (a) Except as provided in paragraphs (b) through (d) of this 
section, a recipient may not make any significant changes to a project 
for which a grant has been awarded without prior VA approval. 
Significant changes include, but are not limited to, a change in the 
recipient, a change in the project site (including relocating, adding 
an annex, a branch, or other expansion), additions or deletions of 
activities, shifts of funds from one approved type of activity to 
another, and a change in the category of participants to be served.
    (b) Recipients of grants exceeding $100,000 for nonconstruction 
projects must receive prior VA approval for cumulative transfers among 
direct cost categories which exceed or are expected to exceed 10 
percent of the current total approved budget.
    (c) 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.
    (d) 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.
    (e) Any changes to an approved program must be fully documented in 
the recipient's records.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.63  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.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.64  Religious organizations.

    (a) As a condition for receiving assistance under this part, an 
organization that is primarily a religious organization must agree to 
conduct activities for which the assistance is provided in a manner 
that is free from religious influences and must comply with the 
following:
    (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; and
    (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 as a condition of the provision 
of housing and supportive services.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.65  Inspections.

    VA may inspect the facility and any records of an entity applying 
for or receiving assistance under this part at such times as are deemed 
necessary to determine compliance with the provisions of this part. The 
authority to inspect carries with it no authority over the management 
or control of any entity applying for or receiving assistance under 
this part.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.66  Financial management.

    (a) All recipients shall comply with applicable requirements of the 
Single Audit Act Amendments of 1996, as implemented by OMB Circular A-
133.
    (b) All entities receiving assistance under this part must use a 
financial management system that follows generally accepted accounting 
principals and provides accounting records, including cost accounting 
records that are supported by documentation. Such cost accounting must 
be reflected in the entity's fiscal cycle financial statements to the 
extent that the actual costs can be determined for the program for 
which assistance is provided. All entities receiving per diem under 
this part must monitor the accuracy of the costs used to determine 
payment amounts per veteran. Entities receiving assistance must meet 
the applicable requirements of the appropriate OMB Circular for Cost-
Principles (A-122 or A-87).

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.67  Recovery provisions.

    (a) If after 3 years from the date of award of a capital grant, the 
grant recipient has withdrawn from the VA Homeless Providers Grant and 
Per Diem Program (Program); does not establish the project for which 
the grant was made; or has established the project for which the grant 
was made but has not

[[Page 13604]]

had final inspection, VA would be entitled to recover from the grant 
recipient all of the grant amounts provided for the project.
    (b) Where the grant recipient is not subject to recovery under 
paragraph (a) of this section, VA will seek recovery of the grant 
amount on a prorated basis where the grant recipient ceases to provide 
services for which the grant was made or withdraws from the Program 
prior to the expiration of the applicable period of operation, which 
period shall begin on the date of final inspection for which the grant 
was made. The amount to be recaptured equals the total amount of the 
grant, multiplied by the fraction resulting from using the number of 
years the recipient was not operational as the numerator, and using the 
number of years of operation required under the following chart as the 
denominator.

------------------------------------------------------------------------
                                                               Years of
            Grant amount  (dollars in thousands)              operation
------------------------------------------------------------------------
0-250......................................................            7
251-500....................................................            8
501-750....................................................            9
751-1,000..................................................           10
1,001-1,250................................................           11
1,251-1,500................................................           12
1,501-1,750................................................           13
1,751-2,000................................................           14
2,001-2,250................................................           15
2,251-2,500................................................           16
2,501-2,750................................................           17
2,751-3,000................................................           18
Over 3,000.................................................           20
------------------------------------------------------------------------

    Example A: Grantee A is awarded a grant and does not bring the 
project to operational status within 3 years from the time of award. 
Grantee A may be subject to full recapture of the grant award.
    Example B: Grantee B is awarded a grant in the amount of 
$300,000 and brings the project to operational status within 3 years 
from the time of award. Grantee B then provides services to homeless 
veterans for a period of 6 years from the date the program was 
operationalized, but now decides to close the program. As the 
original award was $300,000 and as a condition of receiving the 
grant funds Grantee B agreed to provide services for 8 years. 
Therefore, Grantee B would be subject to the prorated recapture of 
the grant award for the 2-year period not served or in this case 1/4 
of the original grant would be subject to recapture.
    Example C: Grantee C is awarded a grant in the amount of 
$400,000, becomes operational within 1 year of the date of the grant 
award and ceases operation 1 year later, 2 years after the date of 
the grant award. After the expiration of the 3-year period beginning 
on the date of the grant award, Grantee C would be subject to 
prorated recapture for the 7 years it did not provide service of the 
required 8 years of operation. The amount subject to recapture would 
thus be 7/8 x $400,000 or $350,000.

    (c) VA will seek to recover from the recipient of per diem, a 
special needs grant, or a technical assistance grant any funds that are 
not used in accordance with the requirements of this part.
    (d) Before VA would take action to recover funds, VA will issue to 
the recipient a notice of intent to recover funds. The recipient will 
then have 30 days to submit documentation demonstrating why funds 
should not be recovered. After review of any such documentation, VA 
will issue a decision regarding whether action will be taken to recover 
funds.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.80  General operation requirements for supportive housing and 
service centers.

    (a) Supportive housing and service centers for which assistance is 
provided under this part must:
    (1) Comply with the Life Safety Code of the National Fire 
Protection Association and 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 
supportive housing or service centers.
    (2) Notwithstanding the provisions of paragraph(a)(1) of this 
section, recipients of grants prior to December 21, 2001, are required 
to comply with the Life Safety Code of the National Fire Protection 
Association by December 21, 2006. Such recipients are not excused from 
meeting the other requirements of paragraph (a)(1) of this section, 
including State and local fire and safety requirements.
    (b) 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) 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) 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;
    (3) Buildings constructed or altered with Federal assistance must 
also be accessible to the disabled, as required by section 502 of the 
Americans with Disabilities Act, referred to as the Architectural 
Barriers Act;
    (4) Each resident must be afforded appropriate space and security 
for themselves and their belongings, including an acceptable place to 
sleep that is in compliance with all applicable local, state, and 
federal requirements;
    (5) Every room or space must be provided with natural or mechanical 
ventilation and the structures must be free of pollutants in the air at 
levels that threaten the health of residents;
    (6) The water supply must be free from contamination;
    (7) Residents must have access to sufficient sanitary facilities 
that are in proper operating condition, that may be used in privacy, 
and that are adequate for personal cleanliness and the disposal of 
human waste;
    (8) The housing must have adequate heating and/ or cooling 
facilities in proper operating condition;
    (9) The housing must have adequate natural or artificial 
illumination to permit normal indoor activities and to support the 
health and safety of residents and sufficient electrical sources must 
be provided to permit use of essential electrical appliances while 
assuring safety from fire;
    (10) All food preparation areas must contain suitable space and 
equipment to store, prepare, and serve food in a sanitary manner;
    (11) The housing and any equipment must be maintained in a sanitary 
manner;
    (12) The residents with disabilities must be provided meals or meal 
preparation facilities must be available;
    (13) Residential supervision from a paid staff member, volunteer, 
or senior resident participant must be provided 24 hours per day, 7 
days per week and for those times that a volunteer or senior resident 
participant is providing residential supervision a paid staff member 
must be on call for emergencies 24 hours a day 7 days a week (all 
supervision must be provided by individuals with sufficient knowledge 
for the position); and
    (14) Residents must be provided a clean and sober (free from 
illicit drugs) environment and those supportive housing or service 
centers that provide medical or social detox at the same site as the 
supportive housing or service must ensure that those residents in detox 
are clearly separated from the general residential population.
    (c) Each recipient of assistance under this part must conduct an 
ongoing assessment of the supportive services needed by the residents 
of the project and the availability of such services, and make 
adjustments as appropriate. The recipient will provide evidence of this 
ongoing assessment to VA at such times as are deemed necessary, but as 
a minimum, once annually in the form of a report that addresses the 
recipient's

[[Page 13605]]

ability to meet the goals, objectives, measures, and special needs as 
set forth in the recipient's grant proposal.
    (d) A homeless veteran may remain in transitional housing for which 
assistance is provided under this part for a period no longer than 24 
months, except that a veteran may stay longer, if permanent housing for 
the veteran has not been located or if the veteran requires additional 
time to prepare for independent living. However, at any given time, no 
more than one-half of the veterans at such transitional housing 
facility may have resided at the facility for periods longer than 24 
months.
    (e) 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 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.
    (f) 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.
    (g) Each recipient of assistance under this part shall establish 
procedures for fiscal control and fund accounting to ensure proper 
disbursement and accounting of assistance received under this part.
    (h) The recipient of assistance under this part that provides 
family violence prevention or treatment services must establish and 
implement procedures to ensure:
    (1) The confidentiality of records pertaining to any individual 
provided services, and
    (2) The confidentially of the address or location where the 
services are provided.
    (i) Each recipient of assistance under this part must maintain the 
confidentiality of records kept on homeless veterans receiving 
services.
    (j) VA may disapprove use of outpatient health services provided 
through the recipient if VA determines that such services are of 
unacceptable quality. Further, VA will not pay per diem where the 
Department concludes that services furnished by the recipient are 
unacceptable.
    (k) A service center for homeless veterans shall provide services 
to homeless veterans for a minimum of 40 hours per week over a minimum 
of 5 days per week, as well as provide services on an as-needed, 
unscheduled basis. The calculation of average hours shall include 
travel time for mobile service centers. 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; and
    (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.
    (l) Fixed site service centers will prominently post at or near the 
entrance to the service center their hours of operation and contacts in 
case of emergencies. Mobile service centers must take some action 
reasonably calculated to provide in advance a tentative schedule of 
visits, (e.g., newspapers, fliers, public service announcements on 
television or radio). The schedule should include but is not limited 
to:
    (1) The region of operation;
    (2) Times of operation;
    (3) Expected services to be provided; and
    (4) Contacts for specific information and changes.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.81  Outreach activities.

    Recipients of capital grants and per diem under this part relating 
to supportive housing or service centers must use their best efforts to 
ensure that eligible hard-to-reach veterans are found, engaged, and 
provided assistance. Accordingly, a recipient should search for 
homeless veterans at places such as shelters, soup kitchens, parks, bus 
or train stations, and the streets. Outreach particularly should be 
directed toward veterans who have a nighttime residence that is an 
emergency shelter or a public or private place not ordinarily used as a 
regular sleeping accommodation for human beings (e.g., cars, streets, 
or parks).

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)

Sec.  61.82  Resident rent for supportive housing.

    (a) Each resident of supportive housing may be required to pay rent 
in an amount determined by the recipient, except that such rent may not 
exceed 30 percent of the resident's monthly income after deducting 
medical expenses, child care expenses, court ordered child support 
payments, or other court ordered payments.
    (b) Resident rent may be used for costs of operating the supportive 
housing or to assist supportive housing residents move to permanent 
housing.
    (c) In addition to resident rent, recipients may charge residents 
reasonable fees for services not covered by VA per diem funds and not 
otherwise provided by VA.

(Authority: 38 U.S.C. 501, 2002, 2011, 2012, 2061, 2064, 7721 note)


[FR Doc. 03-6329 Filed 3-18-03; 8:45 am]
BILLING CODE 8320-01-P