VA Homeless Providers Grant and Per Diem Program

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 17

RIN 2900-AG91

VA Homeless Providers Grant and Per Diem Program

AGENCY: Department of Veterans Affairs.

ACTION: Interim final rule with request for comments.

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SUMMARY: The Homeless Veterans Comprehensive Service Programs Act of

1992 authorizes the Department of Veterans Affairs to assist public or

nonprofit private entities in establishing new programs to furnish

supportive services and supportive housing for homeless veterans

through grants. The Act authorizes VA to provide per diem payments, or

in-kind assistance in lieu of per diem payments, to eligible entities

that established programs after November 10, 1992 that provide

supportive services or supportive housing for homeless veterans, or

service centers providing supportive services. This rule contains

criteria and requirements relating to the awarding of grants and

relating to per diem payments. Accordingly, this rule is necessary so

that grants can be awarded and per diem payments can be made.

DATES: Effective date is June 1, 1994. Comments must be received on or

before August 1, 1994.

ADDRESSES: All comments concerning this interim final rule should be

addressed to the Secretary of Veterans Affairs, 810 Vermont Avenue NW.,

Washington, DC 20420. All written comments will be available for public

inspection in room 170, Veterans Service Unit, at the above address

between the hours of 8 a.m. and 4:30 p.m., Monday through Friday

(except holidays) until August 10, 1994.

FOR FURTHER INFORMATION CONTACT: Lynn Bailey, Program Manager, VA

Homeless Providers Grant and Per Diem Program; Mental Health and

Behavioral Sciences Service (111C), U.S. Department of Veterans

Affairs, 810 Vermont Avenue NW., Washington, DC 20420; (202) 535-7311

(this is not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

This document sets forth a final interim rule to implement

provisions of the ``Homeless Veterans Comprehensive Service Programs

Act of 1992'' (Act).

Statistics indicate that on any given night, as many as 250,000

veterans are living on the streets or in shelters, and perhaps twice

this number of veterans experience homelessness at some point during

the course of a year. Many other veterans are considered ``near

homeless'' or ``at risk'' because they are poor, suffer from various

infirmities; or have no real home of their own, and live on a temporary

basis with friends or relatives or in cheap hotels, often in

substandard or overcrowded conditions. The vast majority of homeless

veterans are single; about two percent of all homeless veterans are

female. About 40 percent of homeless veterans suffer from severe mental

illness and (with considerable overlap) about half have alcohol or

other drug abuse problems.

The Act authorizes the Department of Veterans Affairs (VA) to

assist public or nonprofit private entities in establishing new

programs to furnish supportive services or supportive housing for

homeless veterans, or to establish service centers meeting the

requirements described in Sec. 17.724(k) of this part through grants of

up to 65 percent of the cost of acquiring, renovating, altering or

constructing facilities, and of the cost of purchasing vans. It also

authorizes VA to provide per diem payments, or in-kind assistance in

lieu of per diem payments, to eligible entities that established

programs after November 10, 1992 that provide supportive services or

supportive housing for homeless veterans, or function as service

centers.

This interim rule contains criteria and requirements relating to

the awarding of grants and contains criteria and requirements relating

to per diem payments. Portions of these criteria and requirements

restate statutory language. However, insofar as they establish

regulatory material beyond the statutory language the regulatory

material is designed to provide a mechanism for awarding grants and for

allowing per diem payments to be made. The rule also sets forth the

rates for services furnished to a homeless veteran. These rates are

consistent with the amounts for similar services allowed under ``Aid to

States for Care of Veterans in State Homes'' program (See 38 U.S.C.

1741).

In developing the criteria and requirements for inclusion in this

rule, section 3(b) of the Act requires VA to consult with organizations

with experience in the area of providing services to homeless veterans.

On September 16, 1993 over 250 letters soliciting input into drafting

rules for the program were mailed to known organizations that provide

services to homeless veterans, national offices of veteran's service

organizations, State and local departments of veterans affairs, and

program coordinators of all centrally-funded VA homeless programs. The

letter also sought additional names for the mailing list. As additional

names were provided, copies of the September 16, 1993 letter were

mailed to them.

On December 17, 1993 a meeting was held in Washington, DC with

individuals and organizations with experience in providing services to

homeless persons, including veteran service organizations and private

nonprofit organizations. The purpose of the meeting was to discuss the

draft rule. Changes resulting from that meeting included improving nine

definitions; minor wording modifications to 12 paragraphs that

clarified the meaning of the paragraphs; deletion of paragraphs on

technical assistance, funding minimums, recovery periods, a requirement

for ``adequate'' supportive services, and a requirement for due process

when recipients terminate assistance to veterans; and changes to

paragraphs on use of grant funds for permanent housing or operating

leases, construction standards, requirements for environmental review,

deobligation of funds, site control, insurance on vans, fees and/or

rents charged to veterans in funded programs, and matching fund

requirements.

Executive Order 12866

This rule has been reviewed as a ``significant regulatory action''

under E.O. 12866 by the Office of Management and Budget .

Administrative Procedure Act

Pursuant to 5 U.S.C. 553, VA has found good cause to dispense with

prior notice and comment on this interim final rule and to dispense

with a 30-day delay of its effective date in light of the critical need

to provide housing and other essentials to homeless veterans. Comments

have been solicited for 60 days after publication of this document. VA

may modify the rule in response to comments if appropriate.

Regulatory Flexibility Act

Because no notice of proposed rulemaking was required in connection

with the adoption of this interim final rule, no regulatory flexibility

analysis is required under the Regulatory Flexibility Act (5 U.S.C. 601

et seq.).

The Catalog of Federal Domestic Assistance program number is

64.024.

List of Subjects in 38 CFR Part 17

Community action programs, Community development, Homeless

veterans, Government contracts, Grant programs--health, Grant

programs--homeless veterans, Grant programs--housing and community

development, Grant programs--social programs, Grant programs--

transportation, Health, Health care, Health facilities, Housing,

Intergovernmental relations, Low and moderate income housing, Manpower

training programs, Mental health centers, Mental health programs, Motor

carriers, Motor vehicles, Public housing, Rent subsidies, Supportive

housing, Supportive services, Veterans, Vocational education,

Vocational rehabilitation, Work incentive programs.

Approved: May 12, 1994.

Jesse Brown,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR Part 17 is amended

as set forth below:

PART 17--MEDICAL

1. The authority citation for part 17 is revised to read as

follows:

Authority: 38 U.S.C. 501, 38 U.S.C. 7721 note, unless otherwise

noted.

2. Part 17 is amended by adding Secs. 17.700 through 17.731 and an

undesignated center heading preceding 17.700 to read as follows:

VA Homeless Providers Grant and Per Diem Program

Sec.

17.700 Purpose and scope.

17.701 Definitions.

17.702 Types and uses of assistance.

17.703 Grants for acquisition and rehabilitation.

17.704 Grants for new construction.

17.705 Grants for procurement of vans.

17.706 Matching requirements.

17.707 Limitations on use of assistance.

17.708 Notice of fund availability.

17.709 Grant award process.

17.710 Application requirements.

17.711 Ranking criteria for applications.

17.712 Selecting applications.

17.713 Obtaining additional information and awarding grants.

17.714 Environmental review requirements.

17.715 Aid for supportive services and supportive housing.

17.716 Eligibility to receive payments.

17.717 Requesting recognition.

17.718 Approval of annexes and new facilities.

17.719 Amount of aid payable.

17.720 Approval of eligibility.

17.721 Inspections.

17.722 Prerequisite for payment of aid.

17.723 Audit of recipients of aid.

17.724 General operation.

17.725 Outreach activities.

17.726 Resident rent.

17.727 Grant agreement.

17.728 Program changes.

17.729 Obligation and deobligation of funds.

17.730 Displacement, relocation, and acquisition.

17.731 Site control.

VA Homeless Providers Grant and Per Diem Program

Sec. 17.700 Purpose and scope.

(a) General. The VA Homeless Providers Grant and Per Diem Program

is authorized by sections 3 and 4 of Pub. L. 102-590, the Homeless

Veterans Comprehensive Service Programs Act of 1992. The VA Homeless

Providers Grant and Per Diem Program is designed to assist eligible

entities in establishing new programs to furnish outreach,

rehabilitative services, vocational counseling and training, and

transitional housing assistance to homeless veterans. Section 3 of the

Act provides for grants to eligible entities of up to 65 percent of the

estimated cost to construct, expand, remodel or alter existing

buildings; to acquire facilities for use as service centers,

transitional housing or other facilities to serve homeless veterans; or

to procure vans to provide transportation for and support outreach to

homeless veterans. A grant may not be used to support operational

costs. In addition, Sec. 4 of Pub. L. 102-590 authorizes VA to provide

to a recipient of a grant under Sec. 3 (or entity eligible for such a

grant as described in Sec. 17.715(a) of this part) per diem payments

for homeless veterans whom VA has referred to that entity; or for whom

VA has authorized the provision of services. In lieu of per diem

payments, VA may provide in-kind assistance through services of VA

employees and the use of other VA resources. This program does not

provide for funding to construct, expand, remodel or acquire buildings

located on VA-owned property, nor does it provide for funding to

expand, remodel or acquire unutilized or underutilized VA structures

made available to homeless providers under Title V of the Stewart B.

McKinney Homeless Assistance Act.

(b) Components. (1) Grants may be used for the three components

described in Sec. 17.702:

(2) Grant recipients or eligible entities may apply for per diem

payments or receive in-kind assistance through VA as described in

Sec. 17.715.

(3) Applicants may apply for a grant for more than one component

described in Sec. 17.702 and/or per diem payments.

Sec. 17.701 Definitions.

As used in this part:

Capital lease means a lease that satisfies one of the following

criteria:

(1) The lease transfers ownership to the lessee at the expiration

of the lease term.

(2) The lessor bears no risk.

(3) The term of the lease exceeds 75 percent of the economic life

of the asset.

(4) The lease contains a bargain purchase option.

(5) The present value of lease payments is equal to or greater than

90 percent of the fair market value of the asset.

Eligible entity means a public or nonprofit private entity with the

capacity to effectively administer a grant under this section; which

has demonstrated that adequate financial support will be available to

carry out the project for which the grant is sought consistent with the

plans, specifications and schedule submitted by the applicant; and

which has agreed to, and has demonstrated the capacity to, meet the

applicable criteria and requirements of the grant program.

Expansion of an existing building means an addition to an existing

structure that does not increase the floor area by more than 100

percent.

Federally recognized Indian tribal government includes the

governing body or a governmental agency of any Indian tribe, band,

nation, or other organized group or community (including any Native

village as defined in section 3 of the Alaska Native Claims Settlement

Act, 85 Stat 688) certified by the Secretary of the Interior as

eligible for the special programs and services provided by him through

the Bureau of Indian Affairs.

Homeless or homeless individual (1) includes:

(i) An individual who lacks a fixed, regular and adequate nighttime

residence; and

(ii) An individual who has a primary nighttime residence that is--

(A) A supervised publicly or privately operated shelter designed to

provide temporary living accommodations (including welfare hotels,

congregate shelters, and transitional housing for the mentally ill);

(B) An institution that provides a temporary residence for persons

intended to be institutionalized; or

(C) A public or private place not designed for, or ordinarily used

as, a regular sleeping accommodation for human beings.

(2) The term ``homeless'' or ``homeless individual'' does not

include any individual imprisoned or otherwise detained pursuant to an

Act of the Congress or a State law. An individual on probation, parole

or under electronic custody is not considered ``imprisoned or otherwise

detained''.

New construction means the building of a structure where none

existed or an addition to an existing structure that increases the

floor area by more than 100 percent.

New program/new component of an existing program means a proposed

program of supportive services, or a proposed addition of supportive

services to an existing program, which services are not currently being

provided by the entity proposing it, and for which there is a

demonstrated need in the community served by that entity.

Nonprofit organization means a private organization, no part of the

net earnings of which may inure to the benefit of any member, founder,

contributor, or individual. The organization must:

(1) Have a voluntary board;

(2) Have a functioning accounting system that is operated in

accordance with generally accepted accounting principles, or designate

an entity that will maintain a functioning accounting system for the

organization in accordance with generally accepted accounting

principles; and

(3) Practice nondiscrimination in the provision of supportive

housing and supportive services assistance.

Operating costs means expenses incurred in operating supportive

housing, supportive services or service centers with respect to:

(1) Administration (including staff salaries; costs associated with

accounting for the use of grant funds, preparing reports for submission

to VA and obtaining program audits; and similar costs related to

administering the grant after the award), maintenance, repair and

security for the supportive housing;

(2) Van or building rent (except under capital leases), utilities,

insurance, fuel, furnishings, and equipment;

(3) Conducting on-going assessments of supportive services provided

for and needed by participants and the availability of such services;

(4) Relocation assistance under Sec. 17.730 of this part, including

payments and services; and

(5) Other costs associated with operating the supportive housing.

Outpatient health services means outpatient health care, outpatient

mental health services, outpatient alcohol and/or substance abuse

services, and case management.

Participant means a person who receives services provided at sites

funded with assistance provided under this part.

Project means a structure or structures (or portion of such

structure or structures) acquired, rehabilitated, or constructed with

assistance provided under this part. A project may be used to provide

supportive housing or supportive services in single room occupancy

dwelling units which may or may not contain bathrooms or kitchen

facilities and are appropriate for use as supportive housing.

Recipient means any governmental or nonprofit entity that receives

assistance under this part.

Rehabilitation means the improvement or repair of an existing

structure. Rehabilitation does not include minor or routine repairs.

Secretary means the Secretary of Veterans Affairs.

Seriously mentally ill means having a severe and persistent mental

or emotional impairment that seriously limits a person's ability to

live independently. This may include an impairment related to substance

(alcohol and/or drug) abuse.

Service center means a project which provides the supportive

services specified at Sec. 17.724(k) to homeless veterans for a minimum

of 40 hours per week over a minimum of five days per week as well as on

an as-needed, unscheduled basis.

Single room occupancy (SRO) housing means a unit for occupancy by

one person, which need not but may contain food preparation or sanitary

facilities, or both.

Sponsor means a public or nonprofit organization which owns or

leases dwelling units in buildings acquired and/or renovated with funds

from this grant program, and which makes such units available to

eligible homeless veterans.

State means any of the several States of the United States, the

District of Columbia, the Commonwealth of Puerto Rico, any territory or

possession of the United States, or any agency or instrumentality of a

State exclusive of local governments. The term does not include any

public and Indian housing agency under United States Housing Act of

1937.

Supportive housing means housing in conjunction with which

supportive services are provided for homeless veterans where:

(1) The housing is safe and sanitary and meets any applicable State

and local housing codes and licensing requirements in the jurisdiction

in which the housing is located, and the requirements of this part; and

(2) The housing is:

(i) Transitional housing; or

(ii) Is, or is a part of, a particularly innovative project for, or

alternative method of, meeting the immediate and long-term needs of

homeless veterans.

Supportive services (1) Means services, which may be designed by

the recipient or program participants, that

(i) address the special needs of homeless veterans to be served by

the project, and

(ii) provide appropriate services or assist such persons in

obtaining appropriate services.

(2) Supportive services include:

(i) Outreach activities;

(ii) Providing food, nutritional counseling, counseling, health

care, mental health treatment, alcohol and other substance abuse

services, case management services;

(iii) Establishing and operating child care services for dependents

of homeless veterans;

(iv) Providing supervision and security arrangements necessary for

the protection of residents of supportive housing and for homeless

veterans using the housing or services;

(v) Providing assistance in obtaining permanent housing;

(vi) Providing education, employment counseling, job training,

establishing and operating an employment assistance program;

(vii) Providing assistance in obtaining other Federal, State and

local assistance available for such residents including mental health

benefits, employment counseling, veterans' benefits, medical

assistance, and income support assistance such as Supplemental Security

Income benefits, Aid to Families with Dependent Children, General

Assistance, Food Stamps, etc.; and

(viii) Providing housing assistance, legal assistance, advocacy,

transportation, and other services essential for achieving and

maintaining independent living.

(ix) Inpatient acute hospital care does not qualify as a supportive

service.

Transitional housing means housing that will facilitate the

movement of homeless veterans and their dependents to permanent housing

within 24 months, or within a longer period as described in

Sec. 17.724(i) of this part.

Unit of general local government means a county, municipality,

city, town, township, local public authority (including any public and

Indian housing agency under the United States Housing Act of 1937),

school district, special district, intrastate district, council of

governments (whether or not incorporated as a nonprofit corporation

under state law), any other regional or interstate government entity,

or any agency or instrumentality of a local government.

Veteran means a person who served in the active military, naval, or

air service, and who was discharged or released therefrom under

conditions other than dishonorable.

Veteran with disabilities means a veteran with a physical, mental,

or emotional impairment which is expected to be of long-continued and

indefinite duration; substantially impedes his or her ability to live

independently; and is of such a nature that such ability could be

improved by more suitable housing conditions. This may include a

disability related to substance (alcohol and/or drug) abuse. A veteran

may be considered to have a disability regardless of whether VA has or

has not awarded compensation or a pension for the disability.

Sec. 17.702 Types and uses of assistance.

(a) Grant assistance. Grant assistance is available to:

(1) Construct structures to establish new supportive housing

facilities, new facilities to provide supportive services, or to

establish service centers;

(2) Acquire, expand and remodel/alter structures to establish new

supportive housing facilities, new facilities to provide supportive

services, or to establish service centers; and

(3) Procure vans to provide transportation for the purpose of

providing supportive services to homeless veterans.

(4) Applicants may apply for more than one type of assistance.

(b) Limitation on non-veteran participants. Up to 25 percent of

services available in projects funded through this grant program may be

provided to participants who are not receiving those services as

veterans.

(c) Structures used for multiple purposes. Structures funded

through this grant program that are used to provide supportive housing,

supportive services, or used as service centers may also be used for

other purposes, except that assistance under this part will be

available only in proportion to the use of the structure for supportive

housing, supportive services, or as a service center.

(d) Maximum amount of grant. The amount of a grant under this part

may not exceed 65 percent of the cost of acquisition, rehabilitation,

acquisition and rehabilitation, construction or procurement.

Sec. 17.703 Grants for acquisition and rehabilitation.

(a) Use. VA will grant funds to recipients to:

(1) Pay a portion of the cost of the acquisition of real property

selected by the recipients for use in the provision of supportive

housing or supportive services, or to establish service centers,

including the repayment of any outstanding debt on a loan made to

purchase property that has not been used previously for supportive

housing, supportive services, or service centers; and

(2) Pay a portion of the cost of rehabilitation of structures,

including cost-effective energy measures, selected by the recipients to

provide supportive housing or supportive services or to establish

service centers.

(b) If grant funds are proposed to be used for acquisition or

rehabilitation, the applicant must demonstrate that the costs

associated with acquisition or rehabilitation are less than the costs

associated with new construction.

Sec. 17.704 Grants for new construction.

(a) Use. VA will grant funds to recipients to pay a portion of the

cost of new construction, including cost-effective energy measures and

the cost of land associated with that construction, for use in the

provision of supportive housing or supportive services, or for service

centers. If grant funds are proposed to be used for new construction,

the applicant must demonstrate that the costs associated with new

construction are less than the costs associated with rehabilitation of

an existing building, or that there is a lack of available appropriate

units that could be rehabilitated at a cost less than new construction.

The applicant must also demonstrate that new construction is less

costly than acquisition of an existing building. For purposes of this

cost comparison, costs associated with rehabilitation or new

construction may include the cost of real property acquisition.

(b) Demolition plan. The cost of demolition of a building cannot be

included in the cost of construction unless the proposed construction

is in the same location as the building to be demolished or unless the

demolition is inextricably linked to the design of the construction

project. If the applicant believes that this cost may be included in

the cost of the construction project, a demolition plan should be

submitted which includes the extent and cost of existing site features

to be removed, stored, or relocated.

Sec. 17.705 Grants for procurement of vans.

(a) Use. VA will grant funds to recipients to pay a portion of the

cost of procuring vans to provide transportation for and support

outreach to homeless veterans.

(b) Insurance. Recipients of grants to procure vans who are

nonprofit entities must insure vans to the same extent they would

insure a van bought with their own funds.

(c) Amount. The estimated total costs of purchasing the van may

include the purchase price, sales taxes, and title and licensing fees.

Sec. 17.706 Matching requirements.

(a) General. The recipient must, from sources other than grant

funds received under this part, match the funds provided by VA to cover

the percentage of the total cost of the acquisition, rehabilitation,

construction or procurement not funded by the grant. This matching

share shall constitute at least 35 percent of the total cost.

(b) Maintenance of effort. State or local government funds used in

the matching contribution are subject to the maintenance of effort

requirements described at Sec. 17.707(a) of this part.

Sec. 17.707 Limitations on use of assistance.

(a) Maintenance of effort. No assistance provided under this part

may be used to replace Federal, State or local funds previously used,

or designated for use, to assist homeless veterans.

(b) Primarily religious organizations. VA will provide assistance

to a recipient that is a primarily religious organization if the

organization agrees to provide housing and supportive services in a

manner that is free from religious influences and the organization

complies with the following principles:

(1) It will not discriminate against any employee or applicant for

employment on the basis of religion and will not limit employment or

give preference in employment to persons on the basis of religion;

(2) It will not discriminate against any person applying for

housing or supportive services on the basis of religion and will not

limit such housing or services or give preference to persons on the

basis of religion;

(3) It will provide no religious instruction or counseling, conduct

no religious worship or services, engage in no religious proselytizing,

and exert no other religious influence in the provision of housing and

supportive services.

Sec. 17.708 Notice of fund availability (NOFA).

When funds are made available for assistance, VA will publish a

notice of fund availability in the Federal Register. The notice will:

(a) Give the location for obtaining application packages, which

will provide specific application requirements and guidance;

(b) Specify the date, time, and place for submitting completed

applications; and

(c) State the amount and status of funding available under the

notice.

Sec. 17.709 Grant award process.

General. The grant award process for assistance under this part

consists of the following:

(1) Reviewing applications for eligibility for assistance;

(2) Rating applications (see Sec. 17.711 of this part);

(3) Selecting applications conditionally (see Sec. 17.712 of this

part);

(4) Obtaining additional information and awarding grants (see

Sec. 17.713 of this part).

Sec. 17.710 Application requirements.

(a) General. Applications for grants must be submitted in the form

prescribed by VA in the application package, must meet the requirements

of this part, and must be submitted within the time period established

by VA in the notice of fund availability under Sec. 17.708 of this

part. The application packet includes exhibits to be prepared and

submitted as part of the application process, including:

(1) Justification for the project by addressing items listed in

Sec. 17.711(c) of this part;

(2) Site description, design, and cost estimates;

(3) Documentation on eligibility to receive assistance under this

part;

(4) Documentation on matching funds committed to the project;

(5) Documentation on operating budget and cost sharing;

(6) Documentation on supportive services committed to the project;

(7) Documentation on site control and appropriate zoning;

(8) Applicants who are States must submit any comments or

recommendations by appropriate State (and areawide) clearinghouses

pursuant to E.O. 12372;

(9) Reasonable assurances with respect to receipt of assistance

under this part that:

(i) The project will be used principally to furnish to veterans the

level of care for which such application is made; that not more than 25

percent of participants at any one time will be non-veterans; and that

such services will meet standards prescribed by VA;

(ii) Title to such site or van will vest solely in the applicant;

(iii) Each recipient will keep those records and submit those

reports as VA may reasonably require, within the timeframes required;

and give VA, upon demand, access to the records upon which such

information is based; and

(iv) Adequate financial support will be available for the purchase

of the van or completion of the project, and for its maintenance,

repair and operation.

(b) Pre-award expenditures. Costs incurred for a project after the

date the Department of Veterans Affairs notifies an applicant that the

project is feasible for VA participation are allowable costs if the

application is approved and the grant is awarded. These pre-award

expenditures include architectural and engineering fees. Such

notification occurs when VA requests information for the second

submission portion of the application.

Sec. 17.711 Rating criteria for applications.

(a) General. Applications will be assigned a rating score and

placed in ranked order, based upon the criteria listed in paragraphs

(b) through (d) of this section.

(b) Threshold review. Applicants will undergo a threshold review

prior to rating and ranking, to ensure they meet the following:

(1) Form, time and adequacy. Applications must be filed in the form

prescribed by VA in the application process and within the time

established in the NOFA.

(2) Applicant eligibility. The applicant and project sponsor, if

relevant, must be eligible to apply for the specific program.

(3) Eligible population to be served. The population proposed to be

served must be homeless veterans and meet other eligibility

requirements of the specific program.

(4) Eligible activities. The activities for which assistance is

requested must be eligible for funding under this part.

(5) Outstanding audit findings. No organization that receives

assistance may have an outstanding obligation to VA that is in arrears

or for which a payment schedule has not been agreed to, or whose

response to an audit is overdue or unsatisfactory.

(c) Rating and ranking of first submission. Applicants that pass

the threshold review will then be rated using the eight selection

criteria listed below. Applicants must receive at least 600 points (out

of a possible 1,200) and must receive points under criteria 1, 2, 3, 4,

and 8. Applicants that are applying as an innovative supportive housing

project must achieve points under the ``innovative quality of the

proposal'' criterion.

(1) Quality of the project--300 points

(2) Targeting to persons on streets and in shelters--150 points

(3) Ability of the applicant to develop and operate a project--200

points

(4) Need for the type of project proposed in the area to be served--150

points

(5) Innovative quality of the proposal--50 points

(6) Leveraging--50 points

(7) Cost effectiveness--100 points

(8) Coordination with other programs--200 points

(d) Selection criteria--(1) Quality of the project. VA will award

up to 300 points based on the extent to which the application presents

a clear, well-conceived and thorough plan for assisting homeless

veterans achieve residential stability, increased skills and/or income,

and more influence over decisions that affect their lives. Higher

ratings will be assigned to those applications that clearly describe:

(i) How program participants will achieve residential stability,

including how available supportive services will help participants

reach this goal;

(ii) How program participants will increase their skill level and/

or income, including how available supportive services will help

participants reach this goal;

(iii) How program participants will be involved in making project

decisions that affect their lives, including how they will be involved

in selecting supportive services, establishing individual goals and

developing plans to achieve these goals so that they achieve greater

self determination;

(iv) How permanent affordable housing will be identified and made

available to participants upon leaving the transitional housing, and

how participants will be provided necessary follow-up services to help

them achieve stability in the permanent housing;

(v) How the service needs of participants will be assessed on an

ongoing basis;

(vi) How the proposed housing, if any, will be managed and

operated;

(vii) How participants will be assisted in assimilating into the

community through access to neighborhood facilities, activities and

services;

(viii) How and when the progress of participants toward meeting

their individual goals will be monitored and evaluated;

(ix) How and when the effectiveness of the overall project in

achieving its goals will be evaluated and how program modifications

will be made based on those evaluations; and

(x) How the proposed project will be implemented in a timely

fashion.

(2) Targeting to persons on streets and in shelters. VA will award

up to 150 points based on:

(i) The extent to which the project will serve homeless veterans

living in places not ordinarily meant for human habitation (e.g.,

streets, parks, abandoned buildings, automobiles, under bridges, in

transportation facilities) and those who reside in emergency shelters;

and

(ii) The likelihood that proposed plans for outreach and selection

of participants will result in these populations being served.

(3) Ability of applicant to develop and operate a project. VA will

award up to 200 points based on the extent to which those who will be

involved in carrying out the project have experience in activities

similar to those proposed in the application. Rating will be assigned

based on the extent to which the application demonstrates experience in

the following areas:

(i) Engaging the participation of homeless veterans living in

places not ordinarily meant for human habitation and in emergency

shelters;

(ii) Assessing the housing and relevant supportive service needs of

homeless veterans;

(iii) Accessing housing and relevant supportive service resources;

(iv) If applicable, contracting for and/or overseeing the

rehabilitation or construction of housing;

(v) If applicable, administering a rental assistance program;

(vi) Providing supportive services for homeless veterans;

(vii) Monitoring and evaluating the progress of persons toward

meeting their individual goals; and

(viii) Evaluating the overall effectiveness of a program and using

evaluation results to make program improvements.

(4) Need. VA will award up to 150 points based on the applicant's

demonstrated understanding of the needs of the specific homeless

veteran population proposed to be served. Ratings will be made based on

the extent to which applicants demonstrate:

(i) Substantial unmet needs, particularly among the target

population who are living in places not ordinarily meant for human

habitation (e.g., streets) and in emergency shelters, based on reliable

data from surveys of homeless populations, a Comprehensive Housing

Affordability Strategy (CHAS), or other reports or data gathering

mechanisms that directly support claims made;

(ii) An understanding of the homeless population to be served and

its unmet housing and supportive service needs.

(5) Innovative quality of the proposal. Applicants who have

indicated in their application that they are applying under the

innovative supportive housing component must receive points under this

criterion to be eligible for award. VA will award up to 50 points based

on the innovative quality of the proposal, when compared to other

applications and projects, in terms of:

(i) Helping homeless veterans or homeless veterans with

disabilities to be served to reach residential stability, increase

their skill level and/or income and increase the influence they have

over decisions that affect their lives; and

(ii) A clear link between the innovation(s) and its proposed

effect(s); and

(iii) Its ability to be used as a model for other projects.

(6) Leveraging. VA will award up to 50 points based on the extent

to which resources from other public and private sources, including

cash and the value of third party contributions, have been committed to

support the project at the time of application.

(Note: Any applicant who wishes to receive points under this

criterion must submit documentation of leveraged resources which

meets the requirements stated in the application. This is optional;

applicants who cannot, or choose not to, provide firm documentation

of resources as part of the application will forego any points for

leveraging.)

(7) Cost effectiveness. VA will award up to 100 points for cost

effectiveness. Projects will be rated based on the cost and number of

new supportive housing beds made available or the cost, amount and

types of supportive services made available, when compared to other

transitional housing and supportive services projects, and when

adjusted for high cost areas. Cost effectiveness may include using

excess government properties (local, State, Federal), as well as

demonstrating site control at the time of application.

(8) Coordination with other programs. VA will award up to 200

points based on the extent to which applicants demonstrate that they

have coordinated with Federal, State, local, private and other entities

serving homeless persons in the planning and operation of the project.

Such entities may include shelter, transitional housing, health care,

or social service providers; providers funded through Federal

initiatives; local planning coalitions or provider associations; or

other programs relevant to the local community. Applicants are required

to demonstrate that they have coordinated with the VA medical care

facility of jurisdiction and VA Regional Offices of jurisdiction in

their area.

(i) Higher points will be given to those applicants that can

demonstrate that:

(A) They are part of an ongoing community-wide planning process

which is designed to share information on available resources and

reduce duplication among programs that serve homeless veterans;

(B) They have consulted directly with other providers regarding

coordination of services for project participants. VA will award up to

50 points of the 200 points for this criterion based on the extent to

which commitments to provide supportive services are available at the

time of application. Applicants who wish to receive points under this

optional criterion must submit documentation of supportive service

resources.

Sec. 17.712 Selecting applications.

(a) General. The highest-ranked applications will be conditionally

selected in accordance with their ranked order, as determined under

Sec. 17.711 of this part. Each will be requested, as necessary, to

provide additional project information, as described in Sec. 17.713 of

this part, as a prerequisite to a grant award from VA.

(b) Ties between applicants. In the event of a tie between

applicants, VA will use the selection criterion in Sec. 17.711(d)(4) of

this part, need for the type of project proposed in the area to be

served, to determine which application should be selected for potential

funding.

(c) Procedural error. If an application would have been selected

but for a procedural error committed by VA, VA will select that

application for potential funding when sufficient funds become

available if there is no material change in the information that

resulted in its selection. A new application will not be required for

this purpose.

Sec. 17.713 Obtaining additional information and awarding grants.

(a) Additional information. Applicants who have been conditionally

selected will be requested by VA to submit additional project

information, as described in the second submission of the application,

which may include:

(1) Documentation to show that the project is feasible;

(2) Documentation showing the sources of funding for the project

and firm financing commitments for the match described in Sec. 17.706

of this part;

(3) Documentation showing site control, as described in Sec. 17.731

of this part;

(4) Information necessary for VA to ensure compliance with the

provisions of the National Environmental Policy Act of 1969 (42 U.S.C.

4321 et seq.), as described in Sec. 17.714 of this part;

(5) A site survey performed by a licensed land surveyor. A

description of the site shall be submitted noting the general

characteristics of the site. This should include soil reports and

specifications, easements, main roadway approaches, surrounding land

uses, availability of electricity, water and sewer lines, and

orientation. The description should also include a map locating the

existing and/or new buildings, major roads, and public services in the

geographic area. Additional site plans should show all site work

including property lines, existing and new topography, building

locations, utility data, and proposed grades, roads, parking areas,

walks, landscaping, and site amenities.

(6) Design development (35 percent) drawings. (i) The applicant

shall provide to VA one set of sepias and two sets of prints, rolled

individually per set, to expedite the review process. The drawing shall

indicate the designation of all spaces, size of the areas and rooms and

indicate in outline the fixed and moveable equipment and furniture. The

drawings shall be drawn at \1/8\'' or \1/4\'' scale. Bedroom and toilet

layouts, showing clearances and Uniform Federal Accessibility Standards

requirements, should be shown at \1/4\'' scale. The total floor and

room areas shall be shown in the drawings. The drawings shall include:

(A) A plan of any proposed demolition work;

(B) A plan of each floor. For renovations, the existing conditions

and extent of new work should be clearly delineated;

(C) Elevations;

(D) Sections and typical details;

(E) Roof plan;

(F) Fire protection plans; and

(G) Technical engineering plans, including structural, mechanical,

plumbing, and electrical drawings.

(ii) If the project involves acquisition, remodeling, or

renovation, the applicant should include the current as-built site

plan, floor plans and building sections which show the present status

of the building and a description of the buildings current use and type

of construction.

(7) Design development outline specifications. The applicant shall

provide eight copies of outline specifications which shall include a

general description of the project, site, architectural, structural,

electrical and mechanical systems such as elevators, air conditioning,

heating, plumbing, lighting, power, and interior finishes (floor

coverings, acoustical material, and wall and ceiling finishes).

(8) Design development cost estimates. The applicant shall provide

three copies of cost estimates showing the estimated cost of the

buildings or structures to be acquired or constructed in the project.

Cost estimates should list the cost of construction, contract

contingency, fixed equipment not included in the contract, movable

equipment, architect's fees and construction supervision and

inspection.

(9) A design development conference. After VA reviews design

development documents, a design development conference may be

recommended in order to provide applicants and their architects an

opportunity to learn VA procedures and requirements for the project and

to discuss VA review comments.

(10) Such other documentation as specified by VA in writing to the

applicant, that confirms or clarifies information provided in the

application.

(b) Receipt of additional information. The required additional

information must be received in acceptable form within the timeframe

established by VA in a notice of fund availability published in the

Federal Register. VA reserves the right to remove any proposed project

from further consideration for grant assistance if the required

additional project information is not received in acceptable form by

the established deadline.

(c) Grant award. Following receipt of the additional information in

acceptable form (and, where applicable, provided that the environmental

review described in Sec. 17.714 indicates that the proposed project is

environmentally acceptable to VA), to the extent funds are available VA

will approve the application and send a grant agreement for execution

to the applicant.

Sec. 17.714 Environmental review requirements.

(a) Generally. Project selection is subject to completion of an

environmental review of the proposed site, and the project may be

modified or the site rejected as a result of that review. The

environmental effects must be assessed in accordance with the

requirements of the National Environmental Policy Act of 1969 (42

U.S.C. 4321 et. seq.) (NEPA) as implemented pursuant to the Council on

Environmental Quality's applicable regulations (40 CFR parts 1500-1508)

and VA's applicable implementing regulations (38 CFR part 26).

(b) Responsibility for review. (1) VA will perform the

environmental review, in accordance with part 26 of this title, for

conditionally selected applications received directly from private

nonprofit organizations and governmental entities with special or

limited purpose powers. VA is not permitted to approve such

applications prior to its completion of this review. Because of time

constraints, any application subject to environmental review by VA that

requires an Environmental Impact Statement (EIS) (generally, an

application that VA determines would result in a major Federal action

significantly affecting the quality of the human environment in

accordance with the environmental assessment procedures at (38 CFR part

26) will not be eligible for assistance under this part.

(2) Applicants that are States, metropolitan cities, urban

counties, Indian tribes, or other governmental entities with general

purpose powers shall include environmental documentation for the

project by submitting information establishing a Categorical Exclusion

(CE), a proposed Environmental Assessment (EA), or a proposed

Environmental Impact Statement (EIS). The environmental documentation

will require approval by VA before final award of a construction or

acquisition grant under this part. (See 38 CFR 26.6 for compliance

requirements.) If the proposed actions involving construction or

acquisition do not individually or cumulatively have a significant

effect on the human environment, the applicant shall submit a letter

noting a CE. If construction outside the walls of an existing structure

will involve more than 75,000 gross square feet (GSF), the application

shall include an EA to determine if an EIS is necessary for compliance

with section 102(2)(c) of the National Environmental Policy Act of

1969. When the application submission requires an EA, the State shall

briefly describe the possible beneficial and/or harmful effect which

the project may have on the following impact categories:

(i) Transportation;

(ii) Air quality;

(iii) Noise;

(iv) Solid waste;

(v) Utilities;

(vi) Geology (soils/hydrology/flood plains);

(vii) Water quality;

(viii) Land use;

(ix) Vegetation, wildlife, aquatic, and ecology/wetlands;

(x) Economic activities;

(xi) Cultural resources;

(xii) Aesthetics;

(xiii) Residential population;

(xiv) Community services and facilities;

(xv) Community plans and projects; and

(xvi) Other.

(3) If an adverse environmental impact is anticipated, the action

to be taken to minimize the impact should be explained in the EA. An

entity covered by this section that believes that it does not have the

legal capacity to carry out the responsibilities required by 38 CFR

Part 26 should contact the VA Homeless Providers Grant and Per Diem

Program, Mental Health and Behavioral Sciences Service (111C), U.S.

Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC

20420, for further instructions. Determinations of legal capacity will

be made on a case-by-case basis.

Sec. 17.715 Aid for supportive services and supportive housing.

(a) Per diem payments. Aid in the form of per diem payments may be

paid to a recipient of a grant under this part, or to an entity

eligible for such a grant, that after November 10, 1992 establishes a

program for providing supportive services or supportive housing to

homeless veterans, or a service center, if:

(1) VA referred the homeless veteran to a recipient of a grant

under this part (or entity eligible for such a grant as described in

Sec. 17.715(a) of this part); or

(2) VA authorized the provision of supportive services or

supportive housing for the homeless veteran.

(b) In-kind assistance. In lieu of per diem payments under this

section, VA may, with approval of the grant recipient (or entity

eligible for such a grant as described in Sec. 17.715(a) of this part),

provide in-kind assistance through the services of VA employees and the

use of other VA resources, to a grant recipient (or entity eligible for

such a grant as described in Sec. 17.715(a) of this part).

Sec. 17.716 Eligibility to receive payments.

An entity must be formally recognized by VA as eligible to receive

payments under this section before payments can be made for the care of

homeless veterans, except that payments may be made on behalf of a

veteran up to three days prior to this recognition. An entity may be

recognized if:

(a) It is an entity receiving a grant, or eligible to receive a

grant under this part,

(b) At least 75 percent of persons who are receiving supportive

services or supportive housing from the entity are veterans who may be

included in the computation of the amount of aid payable from the

Department of Veterans Affairs, and

(c) The supportive services or supportive housing program for which

per diem payments is requested was established after November 10, 1992.

Sec. 17.717 Requesting recognition.

Requests for recognition of eligibility may be addressed to the VA

Homeless Providers Grant and Per Diem Program; Mental Health and

Behavioral Sciences Service (111C), U.S. Department of Veterans

Affairs, 810 Vermont Avenue NW., Washington, DC 20420.

Sec. 17.718 Approval of annexes and new facilities.

Separate applications for recognition must be filed for any annex,

branch, enlargement, expansion, or relocation of the site of service

provision of an eligible entity's facility which is not on the same or

contiguous grounds on which the parent facility is located. When an

eligible entity establishes sites which have not been inspected and

approved by VA, a request for separate approval of such sites must be

made. The prohibitions in Sec. 17.720 are also applicable to

applications for aid on behalf of any veteran cared for in a new annex,

branch or enlarged, expanded or relocated facility.

Sec. 17.719 Amount of aid payable.

(a) Maximum amount payable. The amount of per diem payments made

under paragraphs (1) and (2) of this section for services rendered to a

veteran shall not exceed one-half of the cost to the grant recipient

(or entity eligible for such a grant as described in Sec. 17.715(a) of

this part) of providing such services.

(1) The maximum per diem amount payable for supportive housing is

$30.00.

(2) The per diem amount payable for supportive services not

provided in conjunction with supportive housing is $1.10 for each half

hour during which supportive services are provided. The maximum per

diem amount payable for supportive services not in conjunction with

supportive housing is $17.60 per day.

(b) Limitation on per diem payments. Per diem payments may be paid

for a veteran under paragraph (a)(1) or (a)(2) of this section, but not

under both paragraphs (a)(1) and (a)(2).

(c) Limitation on duration of per diem payments. VA must

periodically review and approve, or terminate approval for, continued

per diem payments for each veteran. Such review shall occur at least

once every three months.

Sec. 17.720 Approval of eligibility.

(a) Eligibility determinations. A grant recipient (or entity

eligible for such a grant as described in Sec. 17.715(a) of this part)

will receive per diem payments or in-kind assistance from VA only for

the care of veterans whose separate eligibility has been determined by

VA, and only where VA has referred the veteran under Sec. 17.715(a)(1)

or has authorized the provision of supportive housing or supportive

services under Sec. 17.715(a)(2) of this part. A veteran does not have

to be eligible for VA medical care in order for the Department to make

per diem payments for that veteran.

(1) VA shall determine the eligibility of each veteran referred to

a grant recipient (or entity eligible for such a grant as described in

Sec. 17.715(a) of this part) prior to making such referral.

(2) To obtain such determination for veterans not referred by VA,

the grant recipient (or entity eligible for such a grant as described

in Sec. 17.715(a) of this part) will complete a VA application for

medical benefits for each veteran and submit it to the VA medical care

facility office of jurisdiction for determination of eligibility.

(b) Retroactive payments. Per diem payments may be paid

retroactively for services provided not more than three days before VA

approval is given where VA authorized the provision of services

pursuant to Sec. 17.715(a)(2).

Sec. 17.721 Inspections.

The Secretary may inspect any facility of an entity eligible for

per diem payments under this section at such times as are deemed

necessary. Such inspections shall be concerned with the physical plant;

records relating to admissions, discharges and occupancy; fiscal

records; and all other areas of interest necessary to a determination

of compliance with applicable laws and regulations relating to the

payment of Federal aid. The authority to inspect carries with it no

authority over the management or control of any entity eligible for per

diem payments under this section.

Sec. 17.722 Prerequisite for payment of aid.

No aid may be paid to eligible entities unless they meet the

requirement and standards described in Secs. 17.724 through 17.726 of

this part.

Sec. 17.723 Audit of recipients of aid.

(a) State and local government entities. State, local and Indian

tribal governments that receive $25,000 or more in assistance under

this part shall have an audit made in accordance with the requirements

of 38 CFR part 41.

(b) Nonprofit entities. Nonprofit entities receiving assistance

under this part shall be subject to the audit requirements contained in

OMB Circular A-133.

Sec. 17.724 General operation.

(a) State and local requirements. Each recipient of assistance

under this part must provide housing or services that are in compliance

with all applicable State and local housing codes, licensing

requirements, fire and safety requirements, and any other requirements

in the jurisdiction in which the project is located regarding the

condition of the structure and the operation of the housing or

services.

(b) Habitability standards. Except for such variations as are

proposed by the recipient that would not affect compliance with

paragraph (a) of this section and are approved by VA, supportive

housing must meet the following requirements:

(1) Structure and materials. The structures must be structurally

sound so as not to pose any threat to the health and safety of the

occupants and so as to protect the residents from the elements.

(2) Access. Entry and exit locations to the structure must be

capable of being utilized without unauthorized use of other private

properties, and must provide alternate means of egress in case of fire.

Buildings constructed or altered with Federal assistance must also be

accessible to the disabled, as required by Sec. 502 of the Americans

with Disabilities Act, referred to as the Architectural Barriers Act.

Waiver of the standards of the Architectural Barriers Act requires

approval of the Administrator of the General Services Administration.

(i) The Architectural Barriers Act requires that Federal and

Federally-assisted buildings, the intended use for which either will

require that such building be accessible to the public, or may result

in the employment or residence therein of physically handicapped

persons, be accessible to the disabled. This requirement applies to

buildings to be constructed or altered by or on behalf of the United

States, and to buildings to be leased in whole or in part by the United

States (42 U.S.C. 4151).

(ii) Accessibility guidelines for buildings and facilities are set

forth in 36 CFR part 1191.

(3) Space and security. Each resident must be afforded appropriate

space and security for themselves and their belongings. Each resident

must be provided an acceptable place to sleep that is in compliance

with local codes and regulations.

(4) Interior air quality. Every room or space must be provided with

natural or mechanical ventilation. Structures must be free of

pollutants in the air at levels that threaten the health of residents.

(5) Water supply. The water supply must be free from contamination.

(6) Sanitary facilities. Residents must have access to sufficient

sanitary facilities that are in proper operating condition, may be used

in privacy, and are adequate for personal cleanliness and the disposal

of human waste.

(7) Thermal environment. The housing must have adequate heating

and/or cooling facilities in proper operating condition.

(8) Illumination and electricity. The housing must have adequate

natural or artificial illumination to permit normal indoor activities

and to support the health and safety of residents. Sufficient

electrical sources must be provided to permit use of essential

electrical appliances while assuring safety from fire.

(9) Food preparation and refuse disposal. All food preparation

areas must contain suitable space and equipment to store, prepare, and

serve food in a sanitary manner.

(10) Sanitary condition. The housing and any equipment must be

maintained in a sanitary manner.

(c) Meals. Each recipient of assistance under this part who

provides supportive housing for homeless veterans with disabilities

must provide meals or meal preparation facilities for residents.

(d) Ongoing assessment of supportive services. Each recipient of

assistance under this part must conduct an ongoing assessment of the

supportive services required by the residents of the project and the

availability of such services, and make adjustments as appropriate.

(e) Residential supervision. Each recipient of assistance under

this part must provide residential supervision necessary to facilitate

the adequate provision of supportive services to the residents of the

housing throughout the term of the commitment to operate supportive

housing. Residential supervision may include the employment or

volunteer services of a full- or part-time residential supervisor with

sufficient knowledge to provide or to supervise the provision of

supportive services to the residents.

(f) Participation of homeless veterans. (1) Each recipient of

assistance under this part must provide for the consultation and

participation of not less than one homeless veteran or formerly

homeless veteran on the board of directors or an equivalent

policymaking entity of the recipient, to the extent that such entity

considers and makes policies and decisions regarding any project,

supportive services, or assistance provided under this part. This

requirement may be waived if an applicant, despite a good faith effort

to comply, is unable to meet it and presents a plan, subject to VA

approval, to otherwise consult with homeless or formerly homeless

veterans in considering and making such policies and decisions.

(2) Each recipient of assistance under this part must, to the

maximum extent practicable, involve homeless veterans and families,

through employment, volunteer services, or otherwise, in constructing,

rehabilitating, maintaining, and operating the project and in providing

supportive services for the project. Programs that do not involve

homeless or formerly homeless veterans in such capacities may become

ineligible to receive per diem payments. This requirement is waived if

a recipient is unable to meet it and presents an explanation for VA

approval

(g) Accounting systems. Each recipient shall establish procedures

for fiscal control and fund accounting to ensure proper disbursement

and accounting of assistance received under this part.

(h) Confidentiality. (1) Each recipient that provides family

violence prevention or treatment services must develop and implement

procedures to ensure:

(i) The confidentiality of records pertaining to any individual

provided services; and

(ii) That the address or location of any project assisted will not

be made public by the recipient and its staff, except with written

authorization of the person or persons responsible for the operation of

the project.

(2) Each recipient of assistance under this part must maintain the

confidentiality of records kept on homeless veterans receiving

services.

(i) Limitation of stay in transitional housing. A homeless veteran

may remain in transitional housing for a period longer than 24 months,

if permanent housing for the veteran has not been located or if the

veteran requires additional time to prepare for independent living.

However, VA may discontinue assistance for a transitional housing

project if more than half of the homeless veterans remain in that

project longer than 24 months.

(j) Outpatient health services. VA may disapprove use of outpatient

health services provided through the recipient if VA determines that

such services are of unacceptable quality. VA will not pay per diems

for veterans who receive services from providers who VA has found to be

of unacceptable quality.

(k) Service center requirements. A service center for homeless

veterans shall provide services to homeless veterans for a minimum of

40 hours per week over a minimum of five days per week, as well as on

an as-needed, unscheduled basis. In addition:

(1) Space in a service center shall be made available as mutually

agreeable for use by VA staff and other appropriate agencies and

organizations to assist homeless veterans;

(2) A service center shall be equipped to provide, or assist in

providing, health care, mental health services, hygiene facilities,

benefits and employment counseling, meals, and transportation

assistance;

(3) A service center shall provide other services as VA determines

necessary based on the need for services otherwise not available in the

geographic area;

(4) A service center may be equipped and staffed to provide, or to

assist in providing, job training and job placement services (including

job readiness, job counseling, and literacy and skills training), as

well as any outreach and case management services that may be necessary

to meet the requirements of this paragraph.

Sec. 17.725 Outreach activities.

Recipients must use their best efforts to ensure that eligible

hard-to-reach persons are served in the facility funded under this

part. Recipients are expected to make sustained efforts to engage

eligible persons so that they may be brought into the program. Outreach

should be directed primarily toward eligible persons who have a

nighttime residence that is an emergency shelter or a public or private

place not designed for, or ordinarily used as, a regular sleeping

accommodation for human beings (e.g., persons living in cars, streets

and parks).

Sec. 17.726 Resident rent.

(a) Calculation of resident rent. Each resident of supportive

housing may be required to pay as rent an amount determined by the

recipient which may not exceed the highest of:

(1) 30 percent of the resident's monthly adjusted income

(adjustment factors include the number of relatives in the family

residing with the veteran, medical expenses, and child care expenses);

(2) 10 percent of his or her family's monthly income; or

(3) If the family is receiving payments for welfare assistance from

a public agency and a part of the payments, adjusted in accordance with

the family's actual housing costs, is specifically designated by the

agency to meet the family's housing costs, the portion of the payments

that is designated.

(b) Use of rent. Resident rent may be used in the operation of the

project or may be reserved, in whole or in part, to assist residents of

transitional housing in moving to permanent housing.

(c) Fees. In addition to resident rent, recipients may charge

residents reasonable fees for services not paid with VA per diem funds

or provided to the service provider by in-kind assistance through the

services of VA employees and the use of other VA resources.

Sec. 17.727 Grant agreement.

(a) General. The duty to provide supportive housing or supportive

services, or to establish a service center in accordance with the

requirements of this part will be incorporated in a grant agreement

executed by VA and the recipient.

(b) Enforcement. VA will enforce the obligations in the grant

agreement through such action as may be appropriate, including

repayment of funds that have already been disbursed to the recipient.

Sec. 17.728 Program changes.

(a) VA approval. (1) A recipient may not make any significant

changes to an approved program without prior VA approval. Significant

changes include, but are not limited to, a change in the recipient, a

change in the project site, additions or deletions in the types of

activities listed in Sec. 17.702 of this part approved for the program,

certain shifts of funds from one approved type of activity to another,

and a change in the category of participants to be served.

(i) Recipients of grants exceeding $100,000 for nonconstruction

projects who are State or local governments must receive prior VA

approval for cumulative transfers among direct cost categories which

exceed or are expected to exceed ten percent of the current total

approved budget.

(ii) Recipients of grants for projects involving both construction

and nonconstruction who are State or local governments must receive

prior VA approval for any budget revision which would transfer funds

between nonconstruction and construction categories.

(iii) Recipients of grants exceeding $100,000 who are nonprofit

entities must receive prior VA approval for cumulative transfers among

direct cost categories or programs, functions and activities which

exceed or are expected to exceed ten percent of the total budget as

last approved by VA.

(2) Approval for changes is contingent upon the application ranking

remaining high enough after the approved change to have been

competitively selected for funding in the year the application was

selected.

(b) Documentation of other changes. Any changes to an approved

program that do not require prior VA approval must be fully documented

in the recipient's records.

Sec. 17.729 Obligation and deobligation of funds.

(a) Obligation of funds. When VA and the applicant execute a grant

agreement, funds are obligated to cover the amount of the approved

assistance under Secs. 17.702 through 17.707 of this part. The

recipient will be expected to carry out the supportive housing or

supportive services activities as proposed in the application.

(b) Increases. After the initial obligation of funds, VA will not

make revisions to increase the amount obligated.

(c) Deobligation. (1) VA may deobligate all or parts of grants

awarded under this part:

(i) If the actual total cost of acquisition, rehabilitation,

acquisition and rehabilitation, or new construction of facilities, or

the cost of procurement of a van, is less than the total cost

anticipated in the application, or

(ii) Where a recipient materially fails to comply with the terms

and conditions of an award under this part.

(2) The grant agreement may set forth in detail other circumstances

under which funds may be deobligated, and other sanctions may be

imposed. Such sanctions may include, among other remedies: temporarily

withholding cash payments pending correction of a deficiency, denying

the use of grant or matching funds for all or part of the cost of an

activity not in compliance, wholly or partly suspending an award, and

withholding further awards to the recipient.

(3) Where a recipient has no control over causes for delays in

implementing a project, any delays due to causes beyond a recipient's

control may, with VA approval, suspend the running of any period in

which the recipient must implement a program or risk deobligation of

funds or other VA remedies.

(4) VA may:

(i) Readvertise in a notice of fund availability under Sec. 17.708

of this part, the availability of funds awarded that were deobligated

in the same fiscal year as obligated; or

(ii) Award funds deobligated in the same fiscal year as obligated

to applications previously submitted in response to the most recently

published notice of fund availability, and in accordance with

Secs. 17.708 through 17.714 of this part; or

(iii) If legally authorized, award amounts deobligated in a fiscal

year later than the fiscal year in which they were obligated to

applications previously submitted in response to the most recently

published notice of fund availability, and in accordance with

Secs. 17.708 through 17.714 of this part.

Sec. 17.730 Displacement, relocation, and acquisition.

(a) Minimizing displacement. Consistent with other goals and

objectives of this part, recipients must take all reasonable steps to

minimize the displacement of persons (families, individuals,

businesses, nonprofit organizations, and farms) as a result of

supportive housing, supportive services, or service centers assisted

under this part. These requirements apply to all interests in real

property acquired for project purposes regardless of Federal

participation in the purchases.

(b) Relocation assistance for displaced persons. A displaced person

must be provided relocation assistance at the levels described in, and

in accordance with, the requirements of the Uniform Relocation

Assistance and Real Property Acquisition Policies Act of 1970 (URA) (42

U.S.C. 4601-4655).

(c) Certification. The recipient must certify that it will comply

with the URA, and must ensure such compliance notwithstanding any third

party's contractual obligation to the recipient to comply with these

provisions.

(d) Cost of relocation assistance. The cost of required relocation

assistance is not an eligible project cost, in that such costs are

operational costs. Such costs must be paid for with local public funds

or funds available from other sources.

(e) Definition of initiation of negotiations. For purposes of

determining the formula for computing the replacement housing

assistance to be provided to a residential tenant displaced as a direct

result of privately undertaken rehabilitation, demolition, or

acquisition of the real property, the term ``initiation of

negotiations'' means the execution of the agreement between the

recipient and VA, or selection of the project site, if later.

Sec. 17.731 Site control.

(a) Site control. (1) Where grant funds will be used for

acquisition, rehabilitation, or new construction to provide supportive

housing or supportive services, or to establish service centers, except

where an applicant will provide services at sites not operated by the

applicant, an applicant must demonstrate site control (e.g., through a

deed, capital lease, executed contract of sale) before VA will execute

a grant agreement.

(2) If such site control is not demonstrated within one year after

initial notification of the award of assistance under this part, the

grant will be deobligated as provided in paragraph (c) of this section.

(b) Site change. (1) A recipient may obtain ownership or control of

a suitable site different from the one specified in its application.

Retention of an assistance award is subject to the new site's meeting

all requirements for suitable sites under this part.

(2) If the acquisition, rehabilitation, acquisition and

rehabilitation, or new construction costs of the substitute site are

greater than the amount of the grant awarded for the site specified in

the application, the recipient must provide for all additional costs.

If the recipient is unable to demonstrate to VA that it is able to

provide for the difference in costs, VA may deobligate the award of

assistance.

(c) Failure to obtain site control within one year. VA will

deobligate any award for assistance under this part or pursue other

remedies described in Sec. 17.729(c) of this part if the recipient is

not in control of a suitable site before the expiration of one year

after initial notification of an award.

[FR Doc. 94-13051 Filed 5-31-94; 8:45 am]

BILLING CODE 8320-01-P