[Federal Register Volume 82, Number 141 (Tuesday, July 25, 2017)]
[Proposed Rules]
[Pages 34457-34464]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-15338]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 61

RIN 2900-AP54


VA Homeless Providers Grant and Per Diem Program

AGENCY: Department of Veterans Affairs.

ACTION: Proposed rule.

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SUMMARY: The Department of Veterans Affairs (VA) proposes to amend its 
regulations concerning the VA Homeless Providers Grant and Per Diem 
(GPD) Program. These amendments would provide GPD with increased 
flexibility to: respond to the changing needs of homeless veterans; 
repurpose existing and future funds more efficiently; and allow 
recipients the ability to add, modify, or eliminate components of 
funded programs. The proposed rule updates these regulations to better 
serve our homeless veteran population and the recipients who serve 
them.

DATES: Comments must be received by VA on or before September 25, 2017.

ADDRESSES: Written comments may be submitted through 
www.regulations.gov; by mail or hand-delivery to the Director, 
Regulations Management (00REG), 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-AP54--VA Homeless Providers Grant and Per Diem Program.'' 
Copies of comments received will be available for public inspection in 
the Office of Regulation Policy and Management, Room 1063B, between the 
hours of 8:00 a.m. and 4:30 p.m., Monday through Friday (except 
holidays). Please call (202) 461-4902 for an appointment. (This is not 
a toll-free number.) In addition, during the comment period, comments 
may be viewed online through the Federal Docket Management System 
(FDMS) at http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Guy Liedke, Program Analyst, Grant/Per 
Diem Program, (673/GPD), VA National Grant and Per Diem Program Office, 
10770 N. 46th Street, Suite C-200, Tampa, FL 33617, (877) 332-0334, 
[email protected]. (This is a toll-free number.)

SUPPLEMENTARY INFORMATION: VA is proposing to amend its regulations for 
supportive housing benefits for homeless veterans at 38 CFR part 61. 
Currently, these regulations set forth the general provisions for the 
homeless grant and per diem program; capital grant application 
information; per diem payment criteria; special need grant 
requirements; technical assistance grant information; and the specifics 
on awarding, monitoring, and enforcing grant agreements. This proposed 
rulemaking would make additions, revisions, deletions, or technical 
changes to Sec. Sec.  61.1, 61.5, 61.33, 61.61 and 61.80. Each of these 
proposed changes is described below in more detail. VA's authority for 
this rulemaking is 38 U.S.C. 501, 2001, 2011, 2012, 2061, and 2064.

Sec.  61.1--Definitions

    VA proposes revisions to the definition of supportive housing in 
Sec.  61.1 to remove the requirement for recipients to transition 
homeless veterans into permanent housing ``within a period that is not 
less than 90 days'' after the date the veteran has been placed into 
supportive housing. The ninety (90) day supportive housing requirement 
was intended to ensure that veterans have sufficient time to take full 
advantage of all supportive services, thereby enabling their successful 
transition to permanent housing. However, as each veteran has an 
individualized treatment plan, they may choose to exit the program 
before 90 days for a host of reasons (e.g., availability of permanent 
housing, desire for different environment, family reconciliation, 
access to new financial resources, dislike of program rules). VA does 
not see the benefit of maintaining the 90-day requirement. Therefore, 
we would amend the regulation and propose requiring that recipients 
transition veterans into permanent housing ``as soon as possible but no 
later than 24 months.'' VA would intend for recipients to expedite the 
transition of veterans from supportive housing into permanent housing 
in a period far less than twenty-four (24) months, if possible. 
Transitional housing would still be subject to the requirements of 
Sec.  61.80, which provides general operational requirements for 
transitional housing. These requirements, in our experience, would 
ensure successful transition into permanent housing better than the 
current requirement stipulating

[[Page 34458]]

that veterans remain in transitional housing for at least 90 days.
    We also would add the term ``bridge housing'' to the definition of 
``supportive housing'' in Sec.  61.1 for consistency and clarity along 
with differentiating it from ``shelter care'' which is impermissible by 
law. Shelter care provides a temporary stay for an evening. At the end 
of the shelter stay, veterans are free to exit back to their 
surroundings the following morning. The current definition of 
supportive housing also includes other types of transitional housing 
(e.g., transition-in-place, clinical treatment, service intensive 
transitional housing), which recipients receive information about in 
the Notice of Funding Availability (NOFA), as applicable.
    VA would use ``bridge housing'' as a short-term, transitional 
housing option in a safe environment for veterans who have accepted a 
permanent housing placement, but access to the permanent housing is not 
immediately available for occupancy. The ``formal'' use of bridge 
housing is relatively new for VA Grant Per Diem (GPD) program. We 
undertook the program starting in February 2016. Typically, the bridge 
housing model length of stay is less than 90 days (e.g., seven to 
fourteen calendar days), absent additional services, and devoid of a 
specific clinical care component. Contrast this with detoxification, 
respite care, and hospice care, which do have clinical components. The 
data VA collects through its Homeless Operations Management and 
Evaluation System (HOMES) detailed that homeless veterans used bridge 
housing with an average length of stay of approximately forty-one (41) 
days. VA uses this design model because it is intended to align with 
community goals of housing homeless veterans rapidly within 90 days or 
less on average. Utilizing this model allows VA to avoid placing 
veterans on the street while they wait for permanent housing.
    Recipients seeking to provide bridge housing are provided the 
parameters for service when they request to offer the service. Our 
rationale for placing the term ``bridge housing'' in this rulemaking is 
to notify prospective recipients that it is one of many eligible 
activities they may undertake under supportive housing.
    At its basis, bridge housing is a benefit to veterans and VA 
because it serves as a short-term preventive measure, reduces 
homelessness, and provides veterans with a safe and structured 
environment. Finally, ``bridge housing'' would prove cost effective 
since it utilizes existing transitional housing stock, and it 
eliminates the costs of having to re-engage the veteran and relocate 
suitable housing, particularly if VA had to discharge the veteran.

Sec.  61.5--Implementation of VA Limits on Payments Due to Funding 
Restrictions

    VA would add a new Sec.  61.5 to address the instances where VA 
needs to impose limits on per diem payments due to funding 
restrictions. Proposed Sec.  61.5(a) would state that payments would 
generally continue for the time frame specified in the relevant federal 
award. It would also clarify that all payments are subject to the 
availability of funds and would continue as long as the recipient 
continues to provide the supportive services and housing described in 
its grant application, meets GPD performance goals, and meets the 
applicable requirements of part 61.
    Proposed Sec.  61.5(b)(1) would establish three (3) factors for VA 
to use in decisions regarding continuing per diem payments in the case 
of an anticipated or unanticipated limit on funding which may arise 
during the time frame specified in the federal award. The first factor 
has two (2) components, and it is required under 38 U.S.C. 
2011(b)(4)(A)-(B). One component would involve consideration of the 
equitable distribution of the grant agreements across geographic 
regions in order to prevent a loss of service to homeless veterans. The 
other component would require that VA ensure that the grant agreements 
do not duplicate ongoing services.
    The second factor would allow VA to consider and protect capital 
investments that have been made in the recipients. VA, on occasion, 
makes or facilitates substantial infusions of capital to recipients 
providing services congruent to VA's mission and goals through grant 
agreements and enhanced use leases (EUL). This is consistent with Title 
V of the McKinney-Vento Homeless Assistance Act allowing for the use of 
excess federal property. See 42 U.S.C. 11411-11412; 24 CFR 581. The 
number of these grant agreements and enhanced use leases although 
minimal (i.e., eight (8) transitional housing EULs and four (4) that 
are a combination of transitional and permanent housing). Without 
consideration of this factor, VA may affect negatively the investment 
decisions that have previously been made and destabilize or even 
disrupt the recipients' ability to offer services. VA seeks to avoid 
this scenario.
    Finally, VA's third factor would consider the performance of 
recipients with respect to GPD performance goals in an effort to 
continue quality services for homeless veterans. VA would prefer to 
continue funding recipients who demonstrate their ability to meet these 
goals. GPD's performance goals are developed by its VHA Homeless 
Programs Office, and they are evaluated annually. The goals are neither 
tied to the Office of Housing and Urban Development's (HUD) performance 
goals nor are they codified in statute or regulation. Although VA has 
made adjustments in its data collection to more closely reflect items 
in HUD's HMIS (Homeless Management Information System), current GPD 
performance metrics have three (3) major areas: focusing on exits to 
permanent housing, reducing negative exits, and increasing veteran 
employment at exit.
    Proposed Sec.  61.5(b)(2) would clarify that VA would refrain from 
applying the recapture provisions of 38 CFR 61.67 where termination of 
a grant agreement is due to no fault by the recipient. VA's rationale 
for employing this mechanism is to prevent penalizing recipients by 
applying the recapture provisions when VA lacks sufficient funding and 
the recipient is without fault. We believe it would be in VA's best 
interest to provide such relief to recipients rather than placing a 
financial burden upon community partners with whom we might wish to 
collaborate on future projects.

Sec.  61.33--Payment of Per Diem

    VA is proposing revisions to multiple parts of the ``payment of per 
diem'' section at Sec.  61.33. The revisions VA is proposing would make 
both minor cosmetic (e.g., removal of a word, re-lettering) and major 
substantive changes (e.g., inserting a new requirement) to the section.
    In paragraph (a), we propose adding a requirement that homeless 
veterans be provided ``a bed day of care'' as a condition of payment 
for per diem. This is a clarifying change because we have always 
interpreted ``per diem'' to require that the recipient provide a bed 
day of care. Currently per diem is paid by totaling the current number 
of bed days of care. For example, if a recipient has ten (10) beds, 
then they multiply ten (10) beds times the thirty (30) day billing 
period. This equals 300 bed days of care. If the recipient has any 
empty beds on any given day, then the number of bed days of care drops 
while the number of available beds remains the same. VA pays for the 
total bed days of care, which is a fee for service relationship. We 
would also clarify the conditions under which VA would pay per diem for 
veterans referred to recipients. Proposed paragraph (a)

[[Page 34459]]

would provide notice to all recipients not to exceed their total 
obligated funding. It would prevent each of the providers of supportive 
housing from exceeding the agreed upon total bed days of care. It would 
also prevent each of the service centers from exceeding the total hours 
of service. VA would need this limitation to prevent a recipient from 
exceeding the negotiated limits. We have found that many recipients 
have requested or seek to increase their award(s) beyond the number of 
authorized bed days of care. By including this express limitation, VA 
seeks to clarify the boundaries of the recipient's award(s). Once VA 
sets its limits for total bed days of care, total hours of service, 
and/or total obligated funding, we may not revisit these limits at a 
later date without significant burden on the agency. This proposed 
revision provides current and future providers with adequate notice of 
VA's capabilities for paying per diem payments, thereby reducing the 
possibility that the provider will exhaust funds prior to the end of 
the period or that VA would exceed the authorization for the entire 
program.
    In addition, we are proposing paragraph (a)(3), which would allow 
VA the opportunity to review whether supportive housing and services 
provided to veterans are still needed and appropriate. This proposed 
change is intended to ensure individual veterans remain on track with 
their service plans and move towards permanent housing as quickly as 
possible. VA's goal is to prevent recipients from keeping veterans in 
their care even if not needed or appropriate in order to continue 
receiving per diem payments from VA.
    Proposed paragraphs (d), (f), and (h) restate, without substantive 
change, material that currently appears at Sec.  61.33(e), (g), and 
(i).
    Proposed paragraph (e) would revise material that currently appears 
at Sec.  61.33(f). The current regulation authorizes per diem payments 
for absent veterans whether or not the absence was a scheduled absence. 
This is not a de minimus exception. Currently, the regulations allow 
for seventy-two (72) hours scheduled or unscheduled absence. There have 
been occurrences where providers were interpreting this as permission 
to add three (3) days of care to the discharge date of individuals who 
leave the program without notice (AWOL). Originally, the 72-hour 
provision covered providers who located a homeless veteran on a weekend 
when VA staff were unavailable to verify the veteran's eligibility 
status. The recipient could serve the veteran until the next duty day 
for VA and receive payment. It also covered 3-day program passes and 
short medical stays in the hospital. The rationale for these actions is 
to eliminate paying for unscheduled program departures such as AWOLs. 
We propose that payments for absent veterans be made only if recipients 
schedule with veterans their absences in advance. Under the proposed 
amendment, VA would not provide per diem payments to recipients unable 
to ensure that veterans are complying with the terms of their program 
(i.e., veterans who in many cases have failed to continue with the 
program and therefore are absent).
    Proposed paragraph (g) would revise material that currently appears 
at Sec.  61.33(h) to make clear that where a veteran is receiving 
supportive housing and supportive services from the same per diem 
recipient, VA will not pay a per diem for supportive services.
    We propose deleting current paragraph 61.33(d) on continuing 
payments because the rules on continuing payments would appear at Sec.  
61.5.

Sec.  61.61--Agreements and Funding Actions

    Currently, Sec.  61.61(a) is silent on VA's authority as the final 
arbiter on selecting applicants and the agency's ability to negotiate 
or re-negotiate grant applications and funding. It simply states that 
VA must incorporate the requirements of 38 CFR part 61 into a GPD grant 
agreement when selecting a recipient. We propose amending this section 
by inserting language that would expressly authorize VA to make the 
final decisions on applicant selection as well as negotiate with an 
applicant regarding the details of the agreement or funding, as 
necessary.

Sec.  61.80--General Operation Requirements for Supportive Housing and 
Service Centers

    We propose removing and replacing in its entirety Sec.  61.80(c). 
Proposed new Sec.  61.80(c) would address: (1) Performance goals; (2) 
reporting requirements; and (3) conditions requiring a corrective 
action plan. Further, we would correct some terminology. The revised 
provision would help align data on recipient outcomes for comparison 
with VA national performance goals. VA developed the performance goals 
internally in VHA's Homeless Programs Office, and they are evaluated 
and calibrated annually, as needed. This data is stored at the VHA 
Support Service Center. The current VA homeless performance metrics 
focus on exits to permanent housing, reducing negative exits, and 
employment at exit. Presently, recipients are permitted to establish 
their own metrics to determine success. We are seeking uniformity among 
recipients with this rulemaking so they meet the same performance 
metrics VA has developed regardless of their individual program 
methodologies. We would include a detailed description of the 
performance metrics in the federal award and also obtain OMB approval 
under the Paperwork Reduction Act for all related collections of 
information.
    We believe this would increase the likelihood of successful 
outcomes. In addition, it would allow for proper program evaluation and 
assist VA in identifying non-performing entities. Veterans would 
benefit from the quality changes that would be made by recipients in 
order to meet the new goals.
    Current 61.80(c) requires recipients to conduct an ongoing 
assessment of the supportive services veterans need. Recipients must 
provide VA with evidence of this assessment regarding the plan as 
described in their grant application, including information on whether 
they have met the performance goals established in that grant 
application. Recipients can accomplish this by submitting a quarterly 
technical performance report to their VA liaison. If recipients deviate 
from their performance goals by more than fifteen percent on any goal, 
then they must initiate a corrective action plan (CAP). Depending upon 
the grant application there may be anywhere from ten (10) to twenty 
(20) goals and objectives on which the recipients must report. The 
goals and objectives developed by recipients serve as benchmarks for 
their grant applications. Essentially, the goals and objectives serve 
as the basis for the tactics recipients use to end homelessness for the 
veterans they serve. VA has six hundred-fifty active grant agreements, 
which makes outcome measurement difficult because each grant agreement 
has different goals and objectives. Therefore, it is difficult to 
compare the best practices and actual recipient performance as it 
relates to VA's homeless veteran mission.
    Nationally, VA must meet its own set of performance goals for 
successful outcomes in its homeless initiatives. Previously, VA did not 
have a platform to accumulate data, review it, and assess subsequent 
performance. However, VA now has this capability. VA's current 
reporting system now tracks veterans in all homeless programs. In 
addition to capturing veteran demographics, VA can capture data 
indicating how

[[Page 34460]]

homeless programs are meeting specific performance goals for VA 
homeless outcomes. This provides VA with a portrait of recipient and 
contract performance of homeless initiatives. We believe this has the 
potential to increase oversight and performance measurement, and 
correct substandard performance.
    Proposed 61.80(c) would change the performance goals that 
individual recipients must meet. VA would provide the performance goals 
to recipients in the federal award, initial NOFA, and annually. VA 
would initiate quarterly assessments with recipients. This would take 
the burden of developing performance goals off the recipient without VA 
losing any oversight capabilities. VA would also reduce the number of 
performance items recipients are responsible for from the range of ten 
(10) to twenty (20) per recipient project to a number that accurately 
captures acceptable performance (e.g., currently there are three VA 
Homeless Programs goals). We believe this will reduce recipient burden 
and allow the recipients more flexibility in changing treatment/housing 
modalities to meet ever changing veteran needs. For example, VA 
measures the number of veterans ``permanently housed at discharge.'' 
Recipients possess the flexibility to meet this measure in any number 
of ways. However, the recipient must operationalize the methods they 
believe are best to measure it internally with their respective 
homeless veteran populations. VA provides recipients with this type of 
discretion to engage their respective homeless veteran populations 
because recipient possesses unique expertise in their geographic area.
    With these proposed changes, recipients may continue to use their 
grant application measures internally, or they may submit changes of 
scope to add or eliminate services to best meet VA's goals. The 
condition for triggering CAPs would be not meeting GPD performance 
goals for two consecutive quarters, and CAPs would be triggered only 
for negative deviations from GPD performance goals. Additionally, VA 
would delineate specific timeframes in Sec.  61.80(c)(3)(A)(i)-(iv),(F) 
for review of quarterly assessments and for submission of CAPs. 
Finally, in proposed Sec.  61.80(c) we would make a distinction between 
the VA Liaison and VA National GPD Program Office. These are different 
entities, but current 61.80(c) refers to them both by using the term 
``VA National GPD Program Liaison'' throughout.
    In proposed paragraph (c), VA would make changes in an effort to 
make the review of GPD performance goals and recipient performance 
outcomes more collaborative. Previously, VA only required recipients to 
submit their quarterly reports for review. Under proposed paragraph 
(c)(3), VA would provide recipients with access to VA's National 
Performance Scoring. Additionally, VA would provide recipients with 
data on how they are meeting GPD performance goals. Under proposed 
paragraph (c)(1), all recipients would conduct their own monthly, 
ongoing assessment of the need for and availability of supportive 
housing and services for their residents. However, VA would still 
request quarterly assessments from recipients. Once they conduct this 
assessment, they would provide VA with the assessment as required under 
proposed paragraph (c)(2). Then, VA would examine these activities to 
ascertain whether they align with our performance goals. This is 
consistent with the federal initiative to use data-based, collaborative 
outcomes of performance as goals in VA's effort to end veteran 
homelessness.
    In proposed paragraph (c)(2), each recipient would be required to 
submit sufficient evidence of the recipient's activities in providing 
supportive housing and services to veterans. With this information, VA 
and the recipient would be able to identify those activities that do 
and do not support GPD's performance goals. We believe this would 
permit recipients the opportunity to make targeted adjustments to 
improve veteran care.
    In proposed subparagraph (c)(3)(A), we would clarify the dates of 
the quarterly assessment periods.
    In proposed subparagraphs (c)(3)(B)(i)-(ii), VA would set forth 
what a valid assessment must include. Under proposed subparagraph 
(c)(3)(B)(i), the assessment would include a comparison of the 
recipient's actual performance with GPD's performance goals. We would 
use this comparison to ensure there are no inconsistencies between the 
recipient's stated projected plan and its actual activities. VA would 
require that the comparison address both quantifiable (i.e., 
performance goals) and non-quantifiable (i.e., community orientation 
and awareness activities) goals to ensure that the recipient's 
programming is all encompassing and meets veterans' needs. VA plans to 
examine these measures in concert with one another to ascertain whether 
the recipient, through its programs, is making an impact on the veteran 
homeless problem in that community. For VA, these measures provide the 
most reliable data on whether the recipient is meeting veterans' needs. 
Finally, in proposed subparagraph (c)(3)(B)(ii), VA would require the 
identification of administrative and program problems which may affect 
performance and proposed solutions. We believe this would permit VA to 
have the ability to identify these problems earlier and provide the 
recipient with time to develop solutions to prevent poor performance. 
VA believes this would improve outcomes.
    Proposed subparagraph (c)(3)(C) would require recipients and VA GPD 
Liaisons to prepare and retain in their records summaries of the 
quarterly assessments, which would be used to provide a cumulative 
annual assessment. This comports with 2 CFR 200.333. VA believes this 
would provide an accurate portrait for continuous program performance 
and improvement.
    VA is proposing in subparagraph (c)(3)(D) that recipients must 
immediately inform the VA GPD Liaison of any significant developments 
affecting the recipient's ability to accomplish the work. This comports 
with 2 CFR 200.328(d). We have determined that any actions interfering 
with the recipient's ability to perform require immediate notice, so VA 
can provide the necessary technical assistance to avoid service 
disruption.
    VA is proposing subparagraph (c)(3)(E) to set forth possible 
consequences of falling below the established performance goals. VA has 
determined that scores falling more than five (5%) percent below the 
established measure are indicative of serious deficiencies and service 
issues for the veterans served. Proposed subparagraph (c)(3)(E) would 
reference possible enforcement actions where there is a failure to meet 
GPD performance goals to this degree. When there is such a failure, VA 
may by award revision either: (1) Withhold placements of veterans; (2) 
withhold payment; (3) suspend payment; or (4) terminate the grant 
agreement. See 2 CFR 200.338. The recipient would be provided with an 
opportunity to correct deficiencies. Continued failure to correct the 
deficiencies could ultimately result in termination of the grant 
agreements.
    Proposed subparagraph (c)(3)(F) would require recipients who do not 
meet established GPD performance goals for two (2) consecutive quarters 
to submit a corrective action plan (CAP). This provision is intended to 
ensure that recipients provide services and maintain acceptable levels 
of performance. VA would use this requirement to prevent extended

[[Page 34461]]

periods of non-performance. Proposed subparagraphs (c)(3)(F)(i)-(ii) 
would identify what must be in a CAP and the process for VA review and 
approval. The CAP would identify the: (1) Activities falling below a 
performance measure; (2) reasons why the measure is unmet; (3) proposed 
corrective action (that may include modifying the grant agreement); and 
(4) a timetable for completion of the corrective action. Under proposed 
subparagraph (c)(3)(F)(ii), VA would review received CAPs at the 
national GPD Program Office. The program office would then either 
approve or disapprove the plan. If disapproved, the VA GPD Liaison 
would make suggestions to the recipient to improve the CAP. The 
recipient could then resubmit the CAP for approval. This subparagraph 
reflects a desire for a nationwide, standardized level of performance, 
while maintaining a collaborative relationship with recipients.

Effect of Rulemaking

    Title 38 of the Code of Federal Regulations, as proposed to be 
revised by this proposed 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 provisions constituting collections of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521) that require approval by the Office of Management and Budget 
(OMB). OMB assigns control numbers to collections 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. The two collection of information 
provisions in this proposed rule are located at Sec. Sec.  61.33(h) and 
61.80(c).
    Both collections were previously approved by OMB under OMB control 
number 2900-0554, which expired on August 31, 2016, and is being 
considered for reinstatement by OMB. One of these collections will 
remain unchanged, and the other will update the procedures and thereby 
reduce the burden of this information collection on the public. A 
discussion of each collection follows.
    The first collection provision, at proposed Sec.  61.33(h), 
contains a collection that is being considered for reinstatement under 
OMB control number 2900-0554. This collection requires recipients to 
report to VA all sources of income it has received for the project for 
which VA has awarded a grant. This provision appears at Sec.  61.33(g) 
of the current GPD regulations, and would simply be moved and renamed 
61.33(h), due to a proposed re-numbering. The proposed rule makes no 
other changes to this collection.
    The second collection provision, at proposed Sec.  61.80(c), 
contains a collection that is being revised to reduce the burden 
collection, which has been submitted to OMB for approval and previously 
approved under OMB control number 2900-0554. Under current Sec.  
61.80(c), recipients are required to submit quarterly reports to VA 
Liaisons, who are VA staff members, about how the recipients are 
meeting the performance measures that are outlined in their grant 
applications. Both the grant application and the quarterly report are 
collections approved under OMB control number 2900-0554. The VA 
Liaisons document these quarterly reports on the internal-only VA Form 
10-0361(c).
    Consistent with current Sec.  61.80(c), under proposed Sec.  
61.80(c)(1), recipients would continue to send VA a quarterly report, 
as well as conduct an ongoing assessment of capacity: i.e., ``the 
supportive housing and services needed by their residents and the 
availability of housing and services to meet this need.'' VA would 
begin setting the performance measures for recipients under the 
proposed rule based on a set of uniform performance metrics that would 
be established annually by VA, rather than using the various measures 
established by recipients in their applications. VA would also reduce 
the number of performance measures from the current range of about ten 
to twenty per recipient project, to a number that more accurately 
captures acceptable performance--e.g., currently there are three VA 
Homeless Programs goals. VA would announce these measures in the 
federal award, initial NOFA, and annually. These changes to the 
quarterly reports will reduce the burden of information collection on 
the recipients by removing from them the burden of developing the 
measures and reducing the number of measures they must report on.
    Consistent with the current regulations, a VA Liaison will document 
the quarterly discussions on internal VA Form 10-0361(c) and put them 
in the VA Liaison's administrative file. Finally, the VA Liaison will 
use all of this information to complete VA Form 10-0361(c) when 
conducting the annual physical inspection of the recipient under Sec.  
61.65 to ensure compliance with regulatory, clinical, and housing 
requirements.
    VA and recipients would benefit from these proposed information 
collection changes by having uniform performance metrics for reporting 
on and assessing project outcomes, which will be used in conjunction 
with improved regulatory requirements to allow grant recipients to 
change their activities as needed to accomplish the grant purposes and 
address corrective actions quickly to ensure program stability, while 
allowing recipients to maintain the same autonomy they have 
historically enjoyed under the GPD program to self-select their 
activities under the grant. These actions should enhance the likelihood 
of continued funding in option years.
    Accordingly, under 44 U.S.C. 3507(d), VA will submit a copy of this 
rulemaking to OMB for review. At that time, VA will also publish a 
Federal Register notice describing the burden associated with these 
collections of information.
    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 the Director, Regulations 
Management (00REG), Department of Veterans Affairs, 810 Vermont Avenue 
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-AP54 VA Homeless Providers Grant and Per Diem 
Program.''
    OMB is required to make a decision concerning the collections of 
information contained in this proposed rule between 30 and 60 days 
after receipt by OMB of the related PRA package. A comment to OMB is 
best assured of having its full effect if OMB receives it within 30 
days of publication of the related Federal Register Notice. 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;

[[Page 34462]]

     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 collections of information contained in Sec. Sec.  61.33 and 
61.80 are described immediately following this paragraph, under their 
respective titles.
    Title: VA Homeless Providers Grant and Per Diem Program.
    Summary of collection of information: The proposed rule, at 
Sec. Sec.  61.33 and 61.80, contains compliance reporting provisions 
for capital grant agreements, per diem, and special needs grant 
agreements.
    Description of the need for information and proposed use of 
information: Determine eligibility for capital grant agreements and per 
diem and reporting requirements to determine grant agreement 
compliance.
    Description of likely respondents: Grant Applicants: Non-Profit 
Agencies, State and Local Governments, and Indian Tribal Governments.
    Estimated number of respondents per year: 1,450.
    Estimated frequency of responses per year: 1 per year.
    Estimated average burden per response: 13.17 hours.
    Estimated total annual reporting and recordkeeping burden: 19,090 
hours.

Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule will 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. This proposed rule directly affects only those entities 
that choose to apply for a grant under the GPD program. Many of these 
entities are state or local governments. On this basis, the Secretary 
certifies that the adoption of this proposed rule will 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. Therefore, under 5 U.S.C. 605(b), this rulemaking is exempt from 
the initial and final regulatory flexibility analysis requirements of 
sections 603 and 604.

Executive Order 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,'' requiring review by the Office of 
Management and Budget (OMB), unless OMB waives such review, 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, grant agreements, 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 proposed rule have been examined, and it has been 
determined to be a significant regulatory action under Executive Order 
12866 because it is likely to result in a rule that may materially 
alter the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof. VA's 
impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking 
document is published. Additionally, a copy of the rulemaking and its 
impact analysis are available on VA's Web site at http://www1.va.gov/orpm, by following the link for ``VA Regulations Published.''

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This proposed rule will have no such effect 
on State, local, and tribal governments, or on the private sector.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance number and title for the 
program affected by this document is 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. Gina S. 
Farrisee, Deputy Chief of Staff, Department of Veterans Affairs, 
approved this document on October 7, 2016, for publication.

    Dated: July 18, 2017.
Michael Shores,
Director, Regulation Policy & Management, Office of the Secretary, 
Department of Veterans Affairs.

List of Subjects in 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, Reporting and recordkeeping requirements, Travel and 
transportation expenses, Veterans.

    For the reasons set forth in the preamble, the Department of 
Veterans Affairs proposes to amend 38 CFR part 61 as follows:

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

0
 1. The authority citation for part 61 continues to read as follows:

    Authority:  38 U.S.C. 501, 2001, 2002, 2011, 2012, 2061, 2064.

0
2. In Sec.  61.1, amend the definition of ``Supportive housing'' by 
removing the phrase ``within a period that is not less than 90 days and 
does not exceed'' in paragraph (2)(i) and adding in its place ``as soon 
as possible but no later than''; and removing the phrase ``Provide 
specific medical treatment'' in paragraph (2)(ii) and adding in its 
place

[[Page 34463]]

``Provide bridge housing or specific medical treatment''.
0
3. Add new Sec.  61.5 to read as follows:


Sec.  61.5   Implementation of VA Limits on Payments due to Funding 
Restrictions.

    (a) Continuing payments. Once a grant agreements is awarded, 
payments will continue for the time frame specified in the federal 
award, subject to the availability of funds and as long as the 
recipient continues to provide the supportive services and housing 
described in its grant application, meets GPD performance goals, and 
meets the applicable requirements of this part.
    (b) Factors. (1) In cases of limited availability of funding during 
the time frame specified in the federal award, VA may terminate the 
payment of per diem payments to recipients after weighing the following 
factors:
    (i) Non-duplication of ongoing services and equitable distribution 
of grant agreements across geographic regions, including rural 
communities and tribal lands;
    (ii) Receipt by recipient of any capital investment from VA or 
others; and
    (iii) Recipient's demonstrated compliance with GPD performance 
goals.
    (2) Notwithstanding paragraph (b)(1) of this section, when an 
awarded grant agreement is terminated during the time frame specified 
in the federal award due to no fault by the recipient, VA shall refrain 
from applying the recapture provisions of 38 CFR 61.67.
0
4. Remove the authority citation at Sec.  61.33 and revise as follows:


Sec.  61.33   Payment of per diem.

    (a) General. VA will pay per diem to recipients that provide a bed 
day of care:
    (1) For a homeless veteran:
    (i) Who VA referred to the recipient; or
    (ii) For whom VA authorized the provision of supportive housing or 
supportive service; and
    (2) When the referral or authorization of the homeless veteran will 
not result in the project exceeding:
    (A) For providers of both supportive housing and services, the 
total number of bed days of care or total obligated funding as 
indicated in the grant agreement and funding action document; or
    (B) For service centers, the total hours of service or total 
obligated funding as indicated in the grant agreement and funding 
action document.
    (3) VA may at any time review the provision of supportive housing 
and services to individual veterans by the provider to ensure the care 
provided continues to be needed and appropriate.
    (b) Rate of payments for individual veterans. The rate of per diem 
for each veteran in supportive housing shall be the lesser of:
    (1) 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 local and State governments, from private entities or organizations, 
and from program participants); or
    (2) The current VA state home program per diem rate for domiciliary 
care, as set by the Secretary under 38 U.S.C. 1741(a)(1).
    (c) Rate of payments for service centers. The per diem amount for 
service centers shall be 118 of the lesser of the amount in paragraph 
(b)(1) or (b)(2) of this section, per hour, not to exceed 8 hours in 
any day.
    (d) Reimbursements. Per diem may be paid retroactively for services 
provided not more than three (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.
    (e) Payments for absent veterans. VA will pay per diem up to a 
maximum of seventy-two (72) consecutive hours for the scheduled absence 
of a veteran.
    (f) Supportive housing limitation. VA will not pay per diem for 
supportive housing bed days of care for any homeless veteran with three 
(3) or more previous episodes (i.e., admission and discharge for each 
episode) of supportive housing services paid for under this part. VA 
may waive this limitation, if the services offered are different from 
those previously provided and may lead to a successful outcome.
    (g) Veterans receiving supportive housing and services. For 
circumstances where a veteran is receiving supportive housing and 
supportive services from the same per diem recipient, VA will not pay a 
per diem for the supportive services.
    (h) Reporting other sources of income. 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 report provides a basis 
for adjustments to the per diem payment under paragraph (b)(1) of this 
section.


Sec.  61.61  [Amended]

0
 5. Amend Sec.  61.61 paragraph (a) by adding the following after the 
first sentence: ``VA makes the final decision on applicant selection. 
VA may negotiate with an applicant regarding the details of the 
agreement and funding, as necessary.''
0
6. Amend Sec.  61.80 by revising paragraph (c) to read as follows:
* * * * *
    (c) VA will provide performance goals to recipients in its initial 
federal award and update annually thereafter:
    (1) Each recipient must conduct an ongoing assessment of the 
supportive housing and services needed by their residents and the 
availability of housing and services to meet this need. Recipients are 
expected to make adjustments to meet resident needs.
    (2) The recipient will provide to the VA GPD Liaison evidence of 
its ongoing assessment of the plan described in the recipient's grant 
application. The recipient's assessment must show how it is using the 
plan to meet the GPD performance goals.
    (3) The VA GPD Liaison will provide the GPD performance information 
to recipients. VA will incorporate this assessment information into the 
annual inspection report.
    (i) The VA GPD Liaison will review the quarterly assessment with 
the recipient within thirty (30) days of the end of the following 
quarters:
    (A) Quarter 1 (October-December) assessment completed not later 
than January 30;
    (B) Quarter 2 (January-March) assessment completed not later than 
April 30;
    (C) Quarter 3 (April-June) assessment completed not later than July 
30; and,
    (D) Quarter 4 (July-September) assessment completed not later than 
October 30.
    (ii) A valid assessment must include the following:
    (A) A comparison of actual accomplishments to established GPD 
performance goals for the reporting period addressing quantifiable as 
well as non-quantifiable goals. Examples include, but are not limited 
to a description of grant agreement-related activities, such as: Hiring 
and training personnel, community orientation/awareness activities, 
programmatic activities, or job development; and
    (B) Identification of administrative and programmatic problems 
which may affect performance and proposed solutions.
    (iii) Recipients and VA GPD Liaisons must include a summary of the 
quarterly assessment in their administrative records. These quarterly 
assessments shall be used to provide a cumulative assessment for the 
entire calendar year.

[[Page 34464]]

    (iv) The recipient shall immediately inform the VA GPD Liaison of 
any significant developments affecting the recipient's ability to 
accomplish the work. VA GPD Liaisons will provide recipients with 
necessary technical assistance.
    (v) If after reviewing a recipient's assessment, VA determines that 
it falls more than five (5%) percent below any performance goal, then 
VA may by award revision:
    (A) Withhold placements;
    (B) Withhold payment;
    (C) Suspend payment; and
    (D) Terminate the grant agreement, as outlined in this part or 
other applicable federal statutes and regulations.
    (vi) Corrective Action Plans (CAP): If VA determines that 
established GPD performance goals have not been met for any two (2) 
consecutive quarters as defined in 38 CFR 61.80(c)(3)(A)(i) through 
(iv), the recipient will submit a CAP to the VA GPD Liaison within 
sixty (60) calendar days.
    (A) The CAP must identify the activity which falls below the 
measure. The CAP must describe the reason(s) why the recipient did not 
meet the performance measure(s) and provide specific proposed 
corrective action(s) and a timetable for accomplishment of the 
corrective action. The recipient's plan may include the recipient's 
intent to propose modifying the grant agreement. The recipient will 
submit the CAP to the VA GPD Liaison.
    (B) The VA GPD Liaison will forward the CAP to the VA National GPD 
Program Office. The VA National GPD Program Office will review the CAP 
and notify the recipient in writing whether the CAP is approved or 
disapproved. If disapproved, the VA GPD Liaison will make suggestions 
to the recipient for improving the proposed CAP and the recipient may 
resubmit the CAP to the VA National GPD Program Office.

[FR Doc. 2017-15338 Filed 7-24-17; 8:45 am]
 BILLING CODE 8320-01-P