[Federal Register Volume 76, Number 251 (Friday, December 30, 2011)]
[Proposed Rules]
[Pages 82212-82218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-33435]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AO01


Grants for Transportation of Veterans in Highly Rural Areas

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
regulations in part 17 to establish a new program to provide grants to 
eligible entities to assist veterans in highly rural areas through 
innovative transportation services to travel to VA medical centers, and 
to otherwise assist in providing transportation services in connection 
with the provision of VA medical care to these veterans. This 
rulemaking is necessary to implement new statutory authority by 
establishing procedures for evaluating grant applications under the new 
grant program, and otherwise administering the new grant program. This 
proposed rule would implement section 307 of title III of the 
Caregivers and Veterans Omnibus Health Services Act of 2010 (the 2010 
Act).

DATES: Comments must be received by VA on or before February 28, 2012.

ADDRESSES: Written comments may be submitted through http://www.regulations.gov; by mail or hand delivery to the Director, 
Regulation Policy and Management (02REG), Department of Veterans 
Affairs, 810 Vermont Ave. NW., Room 1068, Washington, DC 20420; or by 
fax to (202) 273-9026. Comments should indicate that they are submitted 
in response to ``RIN 2900-AO01, Grants for Transportation of Veterans 
in Highly Rural Areas.'' Copies of comments received will be available 
for public inspection in the Office of Regulation Policy and 
Management, Room 1063B, between the hours of 8 a.m. and 4:30 p.m., 
Monday through Friday (except holidays). Please call (202) 461-4902 
(this is not a toll-free number) for an appointment. In addition, 
during the comment period, comments may be viewed online through the 
Federal Docket Management System at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: David Riley, Director, Veterans 
Transportation Service, Chief Business Office (10NB), Veterans Health 
Administration, Department of Veterans Affairs, 2957 Clairmont Road, 
Atlanta, GA 30329, (404) 828-5601. (This is not a toll-free number).

SUPPLEMENTARY INFORMATION: Section 307 of the 2010 Act, requires that 
VA ``establish a grant program to provide innovative transportation 
options to veterans in highly rural areas.'' To comply with section 307 
of the 2010 Act, VA will award grants to eligible entities to assist 
veterans in highly rural areas to travel to VA medical centers, and to 
otherwise assist in providing transportation in connection with the 
provision of VA medical care to these veterans. This proposed rule 
would establish the grant program in accordance with paragraph (a) of 
section 307 of the 2010 Act, and establish regulations for evaluating 
grant applications and otherwise administering the grant program in 
accordance with paragraph (b) of section 307 of the 2010 Act.
    Section 307(d) of the 2010 Act authorizes $3,000,000 of 
appropriated funds for each fiscal year beginning 2010 through 2014 to 
carry out the grant program. We would indicate this funding limitation 
for each of the fiscal years in a Notice of Fund Availability (NOFA) 
publication in the Federal Register, to adequately provide notice to 
eligible recipients of the grants. It is not necessary to include the 
funding limitation or to indicate the specific fiscal years for the 
program's funding in the proposed rule, however, because the amount of 
authorized appropriations may change after fiscal year 2014 and 
Congress could extend the program past fiscal year 2014. Section 307 of 
the 2010 Act is not designated by Congress to be a pilot program, and 
the law does not otherwise contain a provision that it will cease to 
have effect after a specific date unless extended. By not including the 
funding limitation or the specific fiscal years the program is to be 
funded in the proposed rule, we would prevent having a regulation in 
the Code of Federal Regulations that appeared to restrict or stop the 
grant program beyond a certain date, when VA may still be compelled to 
administer the grant program. If funding ceases to be provided or the 
grant program is not extended beyond 2014, we would not

[[Page 82213]]

publish a subsequent NOFA in the Federal Register for that following 
fiscal year, and we would amend our regulations to remove the rule from 
the Code of Federal Regulations.

17.700 Purpose and Scope

    Proposed Sec.  17.700 would establish the grant program and explain 
what the program provides. This section would indicate that VA would 
provide grants to eligible entities to assist veterans in highly rural 
areas to travel to VA medical centers and to otherwise assist in 
providing transportation in connection with the provision of VA medical 
care to such veterans, in accordance with paragraph (a) of section 307 
of the Act.

17.701 Definitions

    Proposed Sec.  17.701 would define terms to be used throughout all 
proposed sections, and in Notices of Fund Availability to be published 
in the Federal Register. ``Applicant'' would be defined as an eligible 
entity that submits an application for a grant announced in a Notice of 
Fund Availability. An ``eligible entity'' would be defined as either 
Veterans Service Organizations, or State veterans service agencies, in 
accordance with paragraphs (a)(2)(A)-(B) of section 307 of the 2010 
Act. A ``grantee'' would be defined as an applicant that is awarded a 
grant under this proposed rule. A ``highly rural area'' would be 
defined as an area consisting of a county or counties having a 
population of less than seven persons per square mile, consistent with 
paragraph (c)(1) of section 307 of the 2010 Act. VA currently monitors 
and maintains a specific listing of such highly rural areas, and grants 
will only be awarded to applicants whose programs will service one or 
more of these areas, as identified in the application. VA will provide 
the listing of specific highly rural areas in the Notice of Fund 
Availability for the proposed rule. A ``Notice of Fund Availability'' 
would be defined as a Notice of Fund Availability published in the 
Federal Register in accordance with Sec.  17.710 of the proposed rule. 
A ``participant'' would be defined as a veteran in a highly rural area 
who receives transportation services from a grantee. A ``State veterans 
service agency'' would be defined as the element of a State government 
that has responsibility for programs and activities of that government 
relating to veterans benefits, for instance the ``Maryland Department 
of Veterans Affairs.'' We do not interpret section 307 of the 2010 Act 
as permitting VA to consider cities or counties to be ``State veterans 
service agencies'' for purposes of this proposed rule, as we read the 
plain language of the statute to authorize only a State level entity to 
be a grantee within the meaning of this definition. By definition, VA 
would not limit these entities to include only those which are formally 
recognized by VA under 38 U.S.C. 5902, though VA in practice does 
recognize under section 5902 veterans service agencies for 46 States. 
We believe this ensures that there is the same regulatory distinction 
between the two eligible entity types as Congress intended in section 
307 of the 2010 Act. This would also ensure that every State entity 
which is responsible for programs and activities relating to veterans 
benefits will be able to apply for grants even if not recognized by VA 
under section 5902. For instance, Alaska and Wyoming are not among the 
46 States recognized under section 5902, but each has a formal State 
level entity responsible for programs and activities related to 
veterans benefits, as well as identified highly rural areas that would 
benefit from grants awarded under the proposed rule.
    The ``provision of VA medical care'' would be defined as the 
provision of medical services as defined in section 1710 of title 38 
United States Code. Though paragraph (a)(3)(B) of section 307 of the 
2010 Act only specifies ``the provision of medical care'' without 
distinguishing that the care would be VA medical care, it is reasonable 
to conclude that the intent of section 307 of the 2010 Act is that the 
transportation services provided would be in connection with medical 
care provided by VA. We believe this conclusion is supported by reading 
paragraphs (a)(3)(A) and (B) together: Grant funds must be used to 
``assist veterans in highly rural areas to travel to Department of 
Veterans Affairs medical centers'' and to ``otherwise assist in 
providing transportation in connection with the provision of medical 
care to veterans in highly rural areas.'' We interpret the use of the 
term ``otherwise'' in paragraph (a)(3)(B) to expand travel to VA 
facilities other than VA medical centers for the provision of medical 
care, but not to expand the type of medical care provided beyond that 
provided by VA. Section 307 of the Act clearly seeks to improve access 
to VA medical care for veterans in highly rural areas through 
transportation assistance, and it is this assistance that negates the 
need for a veteran to seek what is perhaps more conveniently located 
non-VA medical care. ``Transportation services'' would be defined as 
the direct provision of transportation, or assistance with providing 
transportation, to travel to VA medical centers or in connection with 
the provision of VA medical care. We believe section 307 of the 2010 
Act supports awarding grants for programs that may not directly 
transport veterans, as section 307(a)(3)(A)-(B) makes clear that an 
eligible entity may use grant funds to ``assist'' veterans to travel to 
care, or to otherwise ``assist'' in providing transportation in 
connection with the provision of care to a veteran. For instance, 
grantees may use funds to initiate ride sharing or car pooling 
programs, whereby veterans could be matched with and share vehicles 
with others traveling to the same destinations at the same times. 
``Veterans Service Organization'' would be defined as an organization 
recognized by the Secretary of Veterans Affairs for the representation 
of veterans under section 5902 of title 38 United States Code, in 
accordance with paragraph (c)(2) of section 307 of the 2010 Act. These 
organizations have multiple representative groupings which are 
recognized throughout the United States. Each of these groupings would 
be individually eligible to apply for a grant, to ensure grant funds 
are distributed as broadly as needed.

17.702 Grants--General

    Proposed Sec.  17.702 would establish the general parameters of the 
grants themselves. Proposed paragraph (a) would indicate that VA may 
award one grant per fiscal year to a grantee for each highly rural area 
in which the grantee provides transportation services, and that 
transportation services may not be simultaneously provided by more than 
one grantee in any single highly rural area. We would allow a grantee 
to receive a grant for each highly rural area in which the grantee 
provides transportation services, to permit State entities to receive 
as many grants as they have designated highly rural areas. This would 
help ensure that each highly rural area receives the maximum amount of 
assistance contemplated under section 307 of the 2010 Act. Designating 
that grants are awarded per fiscal year would ensure that grants are 
awarded only when funding is available, in accordance with paragraph 
(d) of section 307 of the 2010 Act. The prohibition of simultaneous 
delivery of transportation services by more than one grantee in one 
area would ensure that as many geographic areas are serviced as 
possible each fiscal year, by preventing a concentration of grant 
awards for any single highly rural area. Proposed paragraph (b) would 
establish that the grant amounts will be specified

[[Page 82214]]

in the Notice of Fund Availability, but that no single grant will 
exceed $50,000, to comply with paragraph (a)(4) of section 307 of the 
2010 Act. Proposed paragraph (c) would specify that an applicant would 
not be required to provide matching funds as a condition of receiving a 
grant, in accordance with paragraph (a)(5) of section 307 of the 2010 
Act. Proposed paragraph (d) would specify that a veteran who is 
provided transportation services via grant funds will not be charged 
for such services, to ensure that veterans in highly rural areas have 
the most access to these transportation services as feasible, 
regardless of their ability to pay.

17.703 Eligibility and Application

    Proposed Sec.  17.703 would address grant eligibility and 
application procedures. Proposed paragraphs (a)(1)-(2) establish that 
the only entities eligible to receive grants are either Veterans 
Service Organizations, or State veterans service agencies, to comply 
with paragraphs (a)(2)(A)-(B) of section 307 of the Act. Proposed 
paragraph (b) would require applicants to submit a complete grant 
application package to be considered for an initial grant, and would 
specify that the initial grant application procedures to be followed 
are described in the Notice of Fund Availability. Proposed paragraph 
(c) would require applicants to submit a complete renewal grant 
application package to be considered for a renewal grant, if the 
grantee's program would remain substantially the same, and would 
specify that the renewal grant application procedures to be followed 
would be described in the Notice of Fund Availability. By allowing 
grantees to submit a renewal grant application, additional grant funds 
could be sought for subsequent fiscal years with little or no 
interruption in the provision of transportation services.

17.705 Application Scoring Criteria and Selection

    Proposed Sec.  17.705 would establish scoring and selection 
categories for the award of grants in accordance with the mandate in 
paragraph (b)(1) of section 307 of the 2010 Act, which requires that VA 
prescribe regulations to evaluate grant applications. Proposed 
paragraphs (a)(1)-(4) would specify the scoring criteria for initial 
grant applications. These proposed criteria are weighted according to 
their probability of influencing an applicant's development of a 
successful program, as well as meeting the requirement for innovation 
in paragraph (a)(1) of section 307 of the 2010 Act.
    The most significant criterion is proposed paragraph (a)(1), which 
would require the application to have a clearly defined plan for 
successful program implementation demonstrated by scope, budget, 
staffing, and timeframe. The existence of basic parameters such as 
these is a reliable indicator that the program is well thought out, and 
likely to be successfully implemented. Therefore, under this scoring 
system, VA would award up to 40 points using this criterion.
    In contrast, we would limit the scoring significance of the 
criterion in proposed paragraph (a)(4) related to the innovative nature 
of transportation services to be provided. VA would award only up to 10 
points based upon this criterion. We believe this would ensure that 
applicants do not focus excessively on using new or potentially 
undeveloped resources or ideas in their programs, and are instead able 
to maximize the number of veterans in highly rural areas who would be 
provided with VA medical care through transportation services.
    Proposed paragraph (b) would specify the process VA will use to 
award initial grants, where VA would score applications using the 
criteria in proposed paragraph (a) and rank applications that receive 
at least the minimum amount of total points and points per category set 
forth in the Notice of Fund Availability. VA would then award grants 
for the highest ranked applications for which funding is available.
    Proposed paragraphs (c)(1)-(3) would specify the scoring criteria 
for renewal grant applications. These proposed criteria are similarly 
weighted as those for initial grant applications, but are specific to 
renewal grant applications to assist VA in evaluating those programs 
which would already be operating. Accordingly, points would be awarded 
based on a grantee's program's success, cost effectiveness, and 
compliance with the grant agreement and other applicable laws and 
regulations.
    Proposed paragraph (d) would specify the process VA would use to 
award renewal grants, where VA would score applications using the 
criteria in proposed paragraph (c) and rank applications that receive 
at least the minimum amount of total points and points per category set 
forth in the Notice of Fund Availability. VA would then award grants 
for the highest ranked applications for which funding is available.

17.710 Notice of Fund Availability

    Proposed Sec.  17.710 would establish that VA will publish a Notice 
of Funds Availability (NOFA) in the Federal Register when funds are 
available to award grants. Proposed paragraphs (a)-(g) would specify 
that the NOFA would identify the location for obtaining grant 
applications; the date, time, and place for submitting completed grant 
applications; the estimated amount and type of grant funding available; 
the length of term for the grant award; the minimum number of total 
points and points per category that an applicant or grantee must 
receive in order for a grant to be awarded; the timeframes and manner 
for payments under the grant; and lastly would specify that the NOFA 
will provide access to the list of ``highly rural areas'' recognized by 
VA in which transportation services may be provided, and consequently 
those areas in which grantees may execute their programs. All of these 
criteria would ensure that eligible entities have the information 
required to apply for grants.

17.715 Grant Agreements

    Proposed Sec.  17.715 would establish that upon a grantee being 
awarded a grant, VA would draft a grant agreement to be executed by VA 
and the grantee. Upon execution, VA would obligate the grant amount. 
Proposed paragraph (a)(1) would require that a grantee agree to operate 
the program in accordance with the provisions of the grant program and 
in accordance with the grant application. Proposed paragraphs 
(a)(2)(i)-(iv) would mandate the following criteria for grant 
agreements where vehicles would be procured and used to provide 
transportation services: Showing of vesting of title solely with the 
grantee or with the lender of leased vehicles; showing that adequate 
insurance coverage exists; showing that all vehicle operators are 
properly licensed to operate said vehicles; and assurance that vehicles 
be maintained in safe working order in accordance with the 
manufacturer's recommendations. We recognize that VA grants awarded to 
State entities and to non-profit entities are also governed by 38 CFR 
parts 43 and 49, respectively, and all applicable Office of Management 
and Budget (OMB) Regulations and Circulars. Particularly, the 
determination of allowable costs which may be charged to or accounted 
as a part of a federally funded project is controlled by OMB Circular 
A-122, Cost Principles for Non-Profit Organizations (codified at 2 CFR 
part 230), and by OMB Circular A-87, Cost Principles for State, Local, 
and Indian Tribal Governments. Proposed paragraphs (b)(i)-(ii) would 
specify these additional requirements for State veterans service 
agencies and for Veterans Service Organizations.

[[Page 82215]]

17.720 Payments Under the Grant

    Proposed Sec.  17.720 would notify grantees that information 
regarding the timeframe and manner of payment of grants would be 
described in the Notice of Fund Availability.

17.725 Grantee Reporting Requirements

    Proposed Sec.  17.725 would require grantees to report to VA 
information necessary to analyze the performance of a grantee's 
program. Proposed paragraphs (a)(1)-(7) would specify that all grantees 
must submit an annual report with the following information: The time 
expended assisting with the provision of transportation services; the 
grant funds expended assisting with the provision of transportation 
services; the number of trips completed by grantee; the total distance 
covered by grantee; the number of veterans served by grantee; the 
locations serviced by grantee; and the results of a veterans 
satisfaction survey.
    Proposed paragraph (b) would require that all grantees also submit 
quarterly fiscal reports identifying expenditures of the funds which VA 
authorized and obligated. Proposed paragraph (c) would require that any 
changes occurring in a grantee's program which deviate from the grant 
agreement must be reported to VA. Review of the reports detailed in 
proposed paragraphs (a)-(c) would ensure that grant funds were being 
consistently used in accordance with the grant agreements. Proposed 
paragraph (d) would allow VA to request other information or 
documentation related to a grant, in the event that information is 
necessary to fully assess the success of the program. This would 
further assist VA in determining whether grant funds were used 
appropriately if any part of the required reports as submitted by a 
grantee is inadequate.

17.730 Recovery of Funds by VA

    Proposed Sec.  17.730 would establish that VA may recover grant 
funds from a grantee under certain circumstances. Proposed paragraph 
(a) would provide that VA may recover grant funds where the funds were 
not used in accordance with the grant agreement. Proposed paragraph (a) 
would also explain that VA would issue a notice to the grantee 
expressing VA's intent to recover funds and that VA would provide the 
grantee an opportunity to respond prior to VA's final decision that 
action be taken to recover the funds. Proposed paragraph (b) would 
specify that, where VA makes a final decision that action be taken to 
recover grant funds from a grantee, the grantee would be prohibited 
from receiving further grant funds from VA. This would help safeguard 
federal funds and ensure the best use of the grants.

Effect of Rulemaking

    The Code of Federal Regulations, as proposed to be revised by this 
rulemaking, would represent the exclusive legal authority on this 
subject. No contrary rules or procedures would be authorized. All VA 
guidance would be read to conform with this proposed rulemaking if 
possible or, if not possible, such guidance would be superseded by this 
rulemaking.

Paperwork Reduction Act

    This proposed rule includes a collection of information under the 
Paperwork Reduction Act (44 U.S.C. 3501-3521) that requires approval by 
the Office of Management and Budget (OMB). Accordingly, under section 
3507(d) of the Act, VA has submitted a copy of this rulemaking to OMB 
for review. 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. Proposed Sec. Sec.  17.703 and 17.725 contain 
collections of information under the Paperwork Reduction Act (44 U.S.C. 
3501-3521). If OMB does not approve the collections of information as 
requested, VA will immediately remove the provisions containing a 
collection of information or take such other action as is directed by 
OMB.
    Comments on the collection of information contained in this 
proposed rule 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 sent by mail or hand delivery to: Director, Office of 
Regulation Policy and Management (02REG), Department of Veterans 
Affairs, 810 Vermont Ave. NW., Room 1068, Washington, DC 20420; fax to 
(202) 273-9026; or through www.Regulations.gov. Comments should 
indicate that they are submitted in response to ``RIN 2900-AO01, Grants 
for Transportation of Veterans in Highly Rural Areas.''
    OMB is required to make a decision concerning the collections of 
information contained in this proposed 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 proposed rule.
    VA considers comments by the public on proposed collections of 
information in--
     Evaluating whether the proposed collections of information 
are necessary for the proper performance of the functions of VA, 
including whether the information will have practical utility;
     Evaluating the accuracy of VA's estimate of the burden of 
the proposed collections of information, including the validity of the 
methodology and assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collections of information on 
those who are to respond, including 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.
    The proposed amendments to title 38 CFR part 17 contain collections 
of information under the Paperwork Reduction Act for which we are 
requesting approval by OMB. These collections of information are 
described immediately following this paragraph, under their respective 
titles.
    Title: Grants for Transportation of Veterans in Highly Rural Areas.
    Summary of collections of information: The proposed rule at 
proposed Sec.  17.703(b) contains application provisions for initial 
grants, and at proposed Sec.  17.703(c) application provisions for 
renewal grants. The proposed rule at proposed Sec.  17.725(a)-(b) 
contains requirements that each grantee submit to VA annual and 
quarterly reports; the annual reports would include veteran 
satisfaction survey results. These veteran satisfaction surveys would 
be collections by grantees from participants.

Grant Applications

    Description of the need for information and proposed use of 
information: This information is needed to award initial grants and to 
award renewal grants to eligible entities.
    Description of likely respondents: Veterans Service Organizations 
and State veterans service agencies.
    Estimated number of respondents per year: Initial Grants 100. 
Renewal Grants 50.
    Estimated frequency of responses per year: Initial Grants 1. 
Renewal Grants 1

[[Page 82216]]

    Estimated total annual reporting and recordkeeping burden: 3000 
hours.
    Estimated annual burden per response: Initial Grant 25 hours. 
Renewal Grants 10 hours.

Annual Reports

    Description of the need for information and proposed use of 
information: This information is needed to determine compliance with 
the requirements for a grant.
    Description of likely respondents: Veterans Service Organizations 
and State veterans service agencies.
    Estimated number of respondents per year: 150.
    Estimated frequency of responses per year: 1.
    Estimated total annual reporting and recordkeeping burden: 300 
hours.
    Estimated annual burden per response: 2 hours.

Quarterly Fiscal Reports

    Description of the need for information and proposed use of 
information: This information is needed to determine compliance with 
the requirements for a grant.
    Description of likely respondents: Veterans Service Organizations 
and State Veterans Service Agencies.
    Estimated number of respondents per year: 150.
    Estimated frequency of responses per year: 4.
    Estimated total annual reporting and recordkeeping burden: 300 
hours.
    Estimated annual burden per response: 30 minutes.

Participant Satisfaction Surveys

    Description of the need for information and proposed use of 
information: This information is needed for VA to evaluate grantees' 
performance and participants' satisfaction with the transportation 
services they receive.
    Description of likely respondents: Veterans living in highly rural 
areas.
    Estimated number of respondents per year: 7,500.
    Estimated frequency of responses per year: 1.
    Estimated total annual reporting and recordkeeping burden: 1875 
hours.
    Estimated annual burden per response: 15 minutes.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not 
have a significant economic impact on a substantial number of small 
entities as they are defined in the Regulatory Flexibility Act, 5 
U.S.C. 601-612. We do not believe that many small entities such as 
independently owned taxi cab services or other small transportation 
businesses frequently or routinely access highly rural areas as defined 
in the rule, or that such access is often for the express purpose of 
transporting veterans to VA medical centers or transporting veterans in 
connection with receiving VA medical care. We believe that veterans in 
these highly rural areas who must pay for transportation services to 
receive medical care would seek more conveniently located non-VA care, 
versus VA care that may require traveling greater distances. There 
would be no economic impact on any of the eligible entities, as they 
are not required to provide matching funds to obtain the maximum grant 
allowance as stated in section 307 of the Act. Therefore, pursuant to 5 
U.S.C. 605(b), this proposed amendment is exempt from the initial and 
final regulatory flexibility analysis requirements of sections 603 and 
604.

Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires review by the Office 
of Management and Budget (OMB), as ``any regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere with an action taken or planned by another agency; 
(3) Materially alter the budgetary impact of entitlements, grants, user 
fees, or loan programs or the rights and obligations of recipients 
thereof; or (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined and it has 
been determined not to be a significant regulatory action under 
Executive Order 12866.

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 the expenditure by State, local, 
or tribal governments, in the aggregate, or by the private sector, of 
$100 million or more (adjusted annually for inflation) in any given 
year. This rule would have no such effect on State, local, or tribal 
governments, or on the private sector.

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance numbers and titles are 
64.009 Veterans Medical Care Benefits, and 64.024 VA Homeless Providers 
Grant and Per Diem Program.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. John R. 
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this 
document on December 23, 2011, for publication.

List of Subjects in 38 CFR Part 17

    Administrative practice and procedure, Grant programs--health, 
Grant programs--veterans, Health care, Health facilities, Reporting and 
recordkeeping requirements, Travel and transportation expenses, 
Veterans.


    Dated: December 23, 2011.
Robert C. McFetridge,
Director of Regulation Policy and Management, Office of the General 
Counsel, Department of Veterans Affairs.
    For the reasons stated in the preamble, VA proposes to amend 38 CFR 
part 17 as follows:

PART 17--MEDICAL

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

    Authority:  38 U.S.C. 501, and as stated in specific sections.

    2. Amend part 17 by adding an undesignated center heading ``Grants 
for Transportation of Veterans in Highly

[[Page 82217]]

Rural Areas'' and Sec. Sec.  17.700 through 17.730 to read as follows:

Grants for Transportation of Veterans in Highly Rural Areas

Sec.
17.700 Purpose and scope.
17.701 Definitions.
17.702 Grants--general.
17.703 Eligibility and application.
17.705 Scoring criteria and selection.
17.710 Notice of Fund Availability.
17.715 Grant agreements.
17.720 Payments under the grant.
17.725 Grantee reporting requirements.
17.730 Recovery of funds by VA.


    Authority: Pub. L. 111-163, 38 U.S.C. 501, and as noted in 
specific sections)


Sec.  17.700  Purpose and scope.

    This section establishes the Grants for Veterans Service 
Organizations for Transportation of Veterans in Highly Rural Areas 
program. Under this program, the Department of Veterans Affairs (VA) 
provides grants to eligible entities to assist veterans in highly rural 
areas through innovative transportation services to travel to VA 
medical centers, and to otherwise assist in providing transportation 
services in connection with the provision of VA medical care to these 
veterans.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)

Sec.  17.701  Definitions.

    For the purposes of this section and any Notice of Fund 
Availability issued pursuant to this section:
    Applicant means an eligible entity that submits an application for 
a grant announced in a Notice of Fund Availability.
    Eligible entity means:
    (1) Veterans Service Organizations, or
    (2) State veterans service agencies.
    Grantee means an applicant that is awarded a grant under this 
section.
    Highly rural area means an area consisting of a county or counties 
having a population of less than seven persons per square mile.
    Notice of Fund Availability means a Notice of Fund Availability 
published in the Federal Register in accordance with Sec.  17.710.
    Participant means a veteran in a highly rural area who is receiving 
transportation services from a grantee.
    State veterans service agency means the element of a State 
government that has responsibility for programs and activities of that 
government relating to veterans benefits.
    The provision of VA medical care means the provision of medical 
services as defined in section 1710 of title 38 United States Code.
    Transportation services means the direct provision of 
transportation, or assistance with providing transportation, to travel 
to VA medical centers and otherwise to travel in connection with the 
provision of VA medical care.
    Veterans Service Organization means an organization recognized by 
the Secretary of Veterans Affairs for the representation of veterans 
under section 5902 of title 38 United States Code.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)

Sec.  17.702  Grants--general.

    (a) One grant per highly rural area. VA may award one grant per 
fiscal year to a grantee for each highly rural area in which the 
grantee provides transportation services. Transportation services may 
not be simultaneously provided by more than one grantee in any single 
highly rural area.
    (b) Maximum amount. Grant amounts will be specified in the Notice 
of Funding Availability, but no grant will exceed $50,000.
    (c) No matching requirement. A grantee will not be required to 
provide matching funds as a condition of receiving such grant.
    (d) Veterans will not be charged. Transportation services provided 
to veterans through utilization of a grant will be free of charge.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)

Sec.  17.703  Eligibility and application.

    (a) Eligible entity. The following may be awarded a grant:
    (1) Veterans Service Organizations.
    (2) State veterans service agencies.
    (b) Initial Application: To apply for an initial grant, an 
applicant must submit to VA a complete grant application package, as 
described in the Notice of Fund Availability.
    (c) Renewal application. Grantees may apply for one renewal grant 
per fiscal year, after receiving an initial grant, if the grantee's 
program will remain substantially the same. The grantee must submit to 
VA a complete renewal application as described in the Notice of Fund 
Availability.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)

Sec.  17.705  Scoring criteria and selection.

    (a) Initial grant scoring. Applications will be scored using the 
following selection criteria:
    (1) VA will award up to 40 points based on the program's plan for 
successful implementation, as demonstrated by the following:
    (i) Program scope is defined, and applicant has specifically 
indicated the mode(s) or method(s) of transportation services to be 
provided.
    (ii) Program budget is defined, and applicant has indicated that 
grant funds will be sufficient to completely implement the program.
    (iii) Program staffing plan is defined, and applicant has indicated 
that there will be adequate staffing for delivery of transportation 
services according to the program's scope.
    (iv) Program timeframe for implementation is defined, and applicant 
has indicated that the delivery of transportation services will be 
timely.
    (2) VA will award up to 30 points based on the program's evaluation 
plan, as demonstrated by the following:
    (i) Measurable goals for determining the success of delivery of 
transportation services.
    (ii) Ongoing assessment of paragraph (a)(2)(i) of this section, 
with a means of adjusting the program as required.
    (3) VA will award up to 20 points based on the applicant's 
community relationships in the areas to receive transportation 
services, as demonstrated by the following:
    (i) Applicant has existing relationships with state or local 
agencies or private entities, or will develop such relationships, and 
has shown these relationships will enhance the program's effectiveness.
    (ii) Applicant has established past working relationships with 
state or local agencies or private entities which have provided 
transportation services similar to those offered by the program.
    (4) VA will award up to 10 points based on the innovative aspects 
of the program, as demonstrated by the following:
    (i) How program will identify and serve veterans who otherwise 
would be unable to obtain VA medical care through conventional 
transportation resources.
    (ii) How program will use new or alternative transportation 
resources.
    (b) Initial grant selection. VA will use the following process to 
award initial grants:
    (1) VA will rank those applications that receive at least the 
minimum amount of total points and points per category set forth in the 
Notice of Fund Availability. The applications will be ranked in order 
from highest to lowest scores.
    (2) VA will use the applications' ranking as the basis for awarding 
grants. VA will award grants for the highest ranked applications for 
which funding is available.
    (c) Renewal grant scoring. Renewal applications will be scored 
using the following selection criteria:
    (1) VA will award up to 55 points based on the success of the 
grantee's program, as demonstrated by the following:

[[Page 82218]]

    (i) Application shows that the grantee provided transportation 
services which allowed participants to be provided medical care timely 
and as scheduled.
    (ii) Application shows that participants were satisfied with the 
transportation services provided by the grantee, as described in the 
Notice of Fund Availability.
    (2) VA will award up to 35 points based on the cost effectiveness 
of the program, as demonstrated by the following:
    (i) The grantee administered the program on budget.
    (ii) Grant funds were utilized in a sensible manner, as interpreted 
by information provided by the grantee to VA under Sec.  17.725(a)(1)-
(7).
    (3) VA will award up to 15 points based on the extent to which the 
program complied with:
    (i) The grant agreement.
    (ii) Applicable laws and regulations.
    (d) Renewal Grant Selection. VA will use the following process to 
award renewal grants:
    (1) VA will rank those applications that receive at least the 
minimum amount of total points and points per category set forth in the 
Notice of Fund Availability. The applications will be ranked in order 
from highest to lowest scores.
    (2) VA will use the applications' ranking as the basis for awarding 
grants. VA will award grants for the highest ranked applications for 
which funding is available.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)

Sec.  17.710  Notice of Fund Availability.

    When funds are available for grants, VA will publish a Notice of 
Fund Availability in the Federal Register. The notice will identify:
    (a) The location for obtaining grant applications;
    (b) The date, time, and place for submitting completed grant 
applications;
    (c) The estimated amount and type of grant funding available;
    (d) The length of term for the grant award;
    (e) The minimum number of total points and points per category that 
an applicant or grantee must receive in order for a supportive grant to 
be funded;
    (f) The timeframes and manner for payments under the grant; and
    (g) Those areas identified by VA to be the ``highly rural areas'' 
in which grantees may provide transportation services funded under this 
rule.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)

Sec.  17.715  Grant agreements.

    (a) General. After a grantee is awarded a grant in accordance with 
Sec.  17.705(b) or Sec.  17.705(d), VA will draft a grant agreement to 
be executed by VA and the grantee. Upon execution of the grant 
agreement, VA will obligate the approved amount to the grantee. The 
grant agreement will provide that the grantee agrees to:
    (1) Operate the program in accordance with the provisions of this 
section and the grant application.
    (2) Procurement and operation of vehicles. Where a grant agreement 
outlines a program where funds will be used to procure or operate 
vehicles to directly provide transportation services, the grant 
agreement must detail the following:
    (i) Title to the vehicles must vest solely in the grantee, or with 
leased vehicles in an identified lender.
    (ii) The grantee shall, at a minimum, provide motor vehicle 
liability insurance for the vehicles to the same extent they would 
insure vehicles procured with their own funds.
    (iii) All vehicle operators must be licensed in a U.S. State or 
Territory to operate such vehicles.
    (iv) Vehicles will be safe and maintained in accordance with the 
manufacturer's recommendations.
    (b) Additional requirements. Grantees are subject to the following 
additional requirements:
    (i) State veterans service agencies are subject to the Uniform 
Administrative Requirements for Grants and Cooperative Agreements to 
State and Local Governments under 38 CFR part 43, as well as to OMB 
Circular A-87, Cost Principles for State, Local, and Indian Tribal 
Governments, and 2 CFR parts 25 and 170, if applicable.
    (ii) Veterans Service Organizations are subject to the Uniform 
Administrative Requirements for Grants and Agreements With Institutions 
of Higher Education, Hospitals, and Other Non-Profit Organizations 
under 38 CFR part 49, as well as to OMB Circular A-122, Cost Principles 
for Non-Profit Organizations, codified at 2 CFR part 230, and 2 CFR 
parts 25 and 170, if applicable.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)

Sec.  17.720  Payments under the grant.

    Grantees are to be paid in accordance with the timeframes and 
manner set forth in the Notice of Fund Availability.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)

Sec.  17.725  Grantee reporting requirements.

    (a) Annual report. All grantees who receive either an initial or 
renewed grant must submit to VA an annual report which indicates the 
following information:
    (1) Record of time expended assisting with the provision of 
transportation services.
    (2) Record of grant funds expended assisting with the provision of 
transportation services.
    (3) Trips completed.
    (4) Total distance covered.
    (5) Veterans served.
    (6) Locations which received transportation services.
    (7) Results of veteran satisfaction survey.
    (b) Quarterly fiscal report. All grantees who receive either an 
initial or renewal grant must submit to VA a quarterly report which 
identifies the expenditures of the funds which VA authorized and 
obligated.
    (c) Program variations. Any changes in a grantee's program 
activities which result in deviations from the grant agreement must be 
reported to VA.
    (d) Additional reporting requirements may be requested by VA to 
allow VA to fully assess program effectiveness.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)

Sec.  17.730  Recovery of funds by VA.

    (a) Recovery of funds. VA may recover from the grantee any funds 
that are not used in accordance with a grant agreement. If VA decides 
to recover funds, VA will issue to the grantee a notice of intent to 
recover grant funds, and grantee will then have 30 days to submit 
documentation demonstrating why the grant funds should not be 
recovered. After review of all submitted documentation, VA will 
determine whether action will be taken to recover the grant funds.
    (b) Prohibition of Further Grants. When VA determines action will 
be taken to recover grant funds from the grantee, the grantee is then 
prohibited from receipt of any further grant funds.

(Authority: Pub. L. 111-163, 38 U.S.C. 501)


[FR Doc. 2011-33435 Filed 12-29-11; 8:45 am]
BILLING CODE 8320-01-P