State Legalization Impact Assistance Grants (SLIAG)

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 402

RIN 0970-AB28

State Legalization Impact Assistance Grants (SLIAG)

AGENCY: Administration for Children and Families, HHS, Office of

Refugee Resettlement.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Administration for Children and Families proposes to amend

the final rule implementing the State Legalization Impact Assistance

Grant (SLIAG) program. This proposed rule provides that grant funds not

expended by participating States by December 30, 1994, be reallotted to

States with unreimbursed SLIAG-related costs. The intent of this

proposal is to ensure that States with unreimbursed SLIAG-related costs

are reimbursed for those costs to the extent to which funds are

available at the end of the SLIAG program.

DATES: Comments must be received on or before August 1, 1994.

ADDRESSES: Comments may be mailed to Henley Portner, Division of State

Legalization and Repatriation, Office of Refugee Resettlement,

Administration for Children and Families, 370 L'Enfant Promenade, SW.,

6th floor, Washington, DC 20447.

FOR FURTHER INFORMATION CONTACT: David B. Smith (Director, Division of

State Legalization and Repatriation), 202-401-9255.

SUPPLEMENTARY INFORMATION:

Background

State Legalization Impact Assistance Grants (SLIAG) are mandated by

the Immigration Reform and Control Act of 1986 (IRCA) (Pub. L. 99-603),

as amended. The purpose of SLIAG is to lessen the financial impact on

State and local governments that may result from the legalization of

aliens under IRCA. The Department published a final rule, 45 CFR part

402, implementing section 204 of IRCA, on March 10, 1988, and has

subsequently amended that rule in response to programmatic and

administrative requirements.

The Labor/Health and Human Services FY 1993 Appropriations Act,

Public Law 102-394, dated October 6, 1992, amended Section 204(b)(4) of

IRCA. Section 204(b)(4) previously provided that funds under SLIAG

would remain available to States for obligation through September 30,

1994. The FY 1993 HHS Appropriations Act amendment to IRCA provides

that any funds not expended as of December 30, 1994, be reallocated to

participating States which have expended their entire allotments and

which have incurred unreimbursed SLIAG-related costs in excess of their

allotments. The basis for the reallocation is each State's percentage

share of total unreimbursed SLIAG-related costs in all States. The

amendment provides that reallocated SLIAG funds will be available to

States until June 30, 1995.

Previous Formula Allocations of SLIAG Funds

Section 204(b)(1) of IRCA mandated that, between FY 1988 and FY

1994, SLIAG funds be allocated to States by a formula which took into

account the population of eligible legalized aliens (ELAs) in each

State; the ratio of ELAs in each State to the population of the State

and to the number of ELAs in all States; the costs incurred by each

State in providing services to ELAs; and the ratio of costs incurred by

each State to the total of all such costs in all States. States' costs

were to be reimbursed from their grants to the extent that these costs

have been documented and determined to be allowable SLIAG-related costs

as defined in the SLIAG regulations.

At the beginning of the SLIAG program, very little information

existed about the types of programs which the legalized alien

population would access or about the participation rates of the

legalized alien population in these programs. The costs submitted by

States and used in the allocation formula in FY 1988 and FY 1989 were

therefore estimates. (Since FY 1990, when States began to be able to

document and submit the actual SLIAG-related costs they had incurred,

the costs incorporated in the formula have also included States' actual

SLIAG-related costs.) Current data indicate that the estimated costs

used in the FY 1988 and FY 1989 allocations were imperfect predictors

of what States' actual SLIAG-related costs would be in providing

services to the ELA population. Furthermore, as mandated by the

legislation, more than $1.8 billion in grant funds were allocated in FY

1988 and FY 1989. Thus, over one-half of the funds appropriated under

IRCA were allocated when States were only able to provide estimated

costs for use in the allocation formula. For these reasons, some States

have received grants that are projected to be in excess of the SLIAG-

related costs they will have incurred by the end of the program. Other

States have received grants that are less than their total SLIAG-

related costs. The amendment to IRCA on reallocating unexpended funds

will provide reimbursement for their costs to States whose grants are

less than their allowable documented costs.

Reallocation of Unexpended Funds

To implement the amendment, we are proposing to add section 402.34,

concerning allocation of unexpended funds, to the SLIAG regulations.

This section would provide that any SLIAG funds unexpended as of

December 30, 1994, would be reallocated to States with unreimbursed

SLIAG-related costs to the extent to which such funds are available.

Section 402.2, Definitions, would be amended to define ``unreimbursed

SLIAG-related costs'' as those costs the Department has accepted as of

March 15, 1995, which exceed the amount of the allotments the State had

received through September 30, 1994. ``Unexpended funds'' would be

defined as the amount by which the allotments received by a State

through September 30, 1994, exceed the amount of the State's SLIAG-

related costs accepted by the Department as of March 15, 1995.

Since the funds made available to States pursuant to Public Law

102-394 would be reallotments of previously allotted funds, no

application for reallocated funds would be required. The Department's

acceptance of documented SLIAG-related costs which establish that the

State has SLIAG-related costs in excess of the total amount of its

allotments through FY 1994 would constitute the State's request for

reallocated funds. Sections 402.30 and 402.40 would be amended to

explain that no application is required to receive reallocated funds.

Source of Data for Reallocation

States must document the actual SLIAG-related costs they have

incurred in the annual reports which they submit to the Department for

each year during which a State receives or during which a State

obligates or expends SLIAG funds. The annual reports therefore provide

the data necessary to determine the total SLIAG-related costs incurred

by a State in providing allowable services.

The annual reports required by Sec. 402.51 are due 90 days after

the end of the fiscal year. Annual reports for FY 1994 are due December

29, 1994. Since the determination of unreimbursed SLIAG-related costs

would be based on the SLIAG-related costs reported in the annual

reports and accepted by the Department as of March 15, 1995,

Sec. 402.11 would be amended to clarify that reimbursement for SLIAG-

related costs is available only for costs which have been accepted by

the Department by that date. No reimbursement under SLIAG for any grant

year would be available for costs not submitted by December 29, 1994,

or not found acceptable by the Department as of March 15, 1995. The

latter date would allow sufficient time for States to submit any

necessary revisions to their FY 1994 and earlier years' annual reports

resulting from Department review before the determination of total

unexpended funds and unreimbursed SLIAG-related costs is made.

Section 402.26 currently states that obligations of grant funds

must be expended within 90 days of the end of the funding period. Since

the funding period for all SLIAG grants ends on September 30, 1994, no

obligations of funds for SLIAG-related activities may be made after

that date. All obligations must be expended by December 29, 1994, for

States to receive reimbursement.

The current regulations also state that the deadline for expending

obligations may be extended if extenuating circumstances prevent a

State from meeting it. The amendment to IRCA, however, requires that

funds unexpended as of December 30, 1994, be reallocated to States with

unreimbursed SLIAG-related costs. For this reason, the proposed rule

would revise Sec. 402.26 to state that all obligations must be expended

by December 29, 1994, without the possibility of extension. This change

will allow the Department to determine the amount of unexpended funds

as of December 30, 1994, as mandated by IRCA.

Calculation of Unexpended Funds and Unreimbursed Costs

A new Sec. 402.34 would be added to the SLIAG regulations to

establish the procedure for allocating unexpended funds to States with

unreimbursed SLIAG-related costs. To determine unexpended funds and

unreimbursed SLIAG-related costs, (1) the cumulative amount of

allotments received by each State through September 30, 1994, would be

calculated; (2) the total costs accepted by the Department as of March

15, 1995, based on the annual cost reports submitted by the State,

would be calculated; and (3) total costs for each State would be

subtracted from each State's cumulative allotments.

The positive results of this subtraction would constitute each

State'e unexpended funds. The unexpended funds for each State would be

added together to determine the total amount of unexpended funds in all

States.

Any negative results of this subtraction would constitute a State's

unreimbursed SLIAG-related costs. Total unreimbursed SLIAG-related

costs for participating States would be the sum of the negative results

of this calculation.

Allocation of Unexpended Funds

To allocate the unexpected funds, each State's percentage share of

total unreimbursed SLIAG-related costs would be calculated. The

percentage for each State would be found by dividing each State's

unreimbursed SLIAG-related costs by the total amount or unreimbursed

SLIAG-related costs for all States with such costs. The percentages

thus obtained would be multiplied by the total amount of unexpended

funds to determine the allocation for each State with unreimbursed

SLIAG-related costs.

Allotment of Unexpended Funds

The amount determined by the above calculation would constitute

each State's allocation. The amount of the allotment awarded to each

State would depend on whether the total amount of unexpended funds is

greater or less than the total amount of unreimbursed costs. To

determine the amount of each State's allotment, the total amount of

unexpended funds would be compared to the total amount of unreimbursed

SLIAG-related costs. If unexpended funds are less than total reimbursed

costs, each State would receive an allotment equal to the amount of its

allocation (i.e., its percentage share of total unexpended funds). If

unexpended funds are greater than unreimbursed costs, each State's

allotment would equal the amount of its accepted unreimbursed SLIAG-

related costs.

Use of Reallotted Funds

Currently, funds provided under SLIAG may be used by States for

reimbursement of SLIAG-related costs incurred in the fiscal year in

which the funds are awarded and during the following fiscal years of

the program. Section 402.10 would be amended to allow funds reallotted

after December 30, 1994, to be used by States for reimbursement of

approved SLIAG-related costs incurred in any fiscal year of the

program. The section would also be amended to state that funds provided

in FY 1993 and FY 1994 may be used for costs incurred in FY 1990 and in

succeeding years, as prescribed by Public Law 102-394.

In accordance with the amendment to IRCA, the reallotted funds

would remain available to States through June 30, 1995, for

reimbursement of their SLIAG-related costs. We anticipate that States

will have drawn down the amount of their approved SLIAG-related costs

(or, for States with costs in excess of their grants, the amount of

their allotments) before December 30, 1994. If, however, a State has

not drawn down the full allowable amount, the funds allotted before

September 30, 1994, would also continue to be available for drawdown

through June 30, 1995. After June 30, 1995, no funds--either previously

allotted or reallotted funds--would remain available. Section 402.11,

Limitations on use of SLIAG funds, would be amended to state that funds

awarded under SLIAG are available for drawdown through June 30, 1995.

Reporting

To implement this amendment, Sec. 402.51 would be revised to

clarify the reporting requirements for FY 1994 and FY 1995. The annual

reports due 90 days after the end of FY 1994 would, as currently

required, include costs incurred during FY 1994. States have until

December 29, 1994, to expend obligations incurred through September 30,

1994. since all SLIAG-related costs must be documented and reported to

the Department before States may be reimbursed for them, this proposed

rule would require that SLIAG-related costs incurred as a result of

expending obligations between September 30, 1994, and December 29,

1994, be submitted to the Department in the FY 1994 annual report.

Since all SLIAG-related costs for which the reallotments will be

provided would have been submitted in previous annual reports and

accepted by the Department, no annual report would be required for FY

1995. Section 402.51 would be amended to indicate that Financial Status

Reports (SF 269) are required 90 days after the last day (June 30,

1995) on which States could draw down funds from their allotments

(i.e., by September 28, 1995).

Regulatory Procedures

Executive Order 12866

Executive Order 12866 requires that regulations be reviewed to

ensure that they are consistent with priorities and principles set

forth in the Executive Order. The Department has determined that this

rule is consistent with these priorities and principles. An assessment

of the costs and benefits of available regulatory alternatives

(including not regulating) demonstrated that the approach taken in the

regulation is the most cost-effective an least burdensome while still

achieving the regulatory objectives.

Paperwork Reduction Act

This rule imposes no new reporting or recordkeeping requirements,

and therefore, no approvals are necessary under section 3504 of the

Paperwork Reduction Act of 1980 (Public Law 96-511).

Regulatory Flexibility Act

The Regulatory Flexibility Act (Public Law 96-354) requires the

Federal government to anticipate and reduce the impact of regulations

and paperwork requirements on small entities.

The primary impact of this rule is on State governments. Therefore,

we certify that this rule will not have a significant economic impact

on a substantial number of small entities because it affects the

reallocation and reallotment of SLIAG funds to State governments. Thus,

a regulatory flexibility analysis is not required.

[Catalogue of Federal Domestic Assistance Program No. 93.565, State

Legalization Impact Assistance Grants]

List of Subjects in 45 CFR Part 402

Administrative cost, Aliens, Allocation formula, Allotment,

Education, Grant programs, Immigration, Immigration Reform and Control

Act, Public assistance, Public health assistance, Reporting and

recordkeeping requirements, State Legalization Impact Assistance

Grants.

Dated: March 22, 1994

Mary Jo Bane,

Assistant Secretary for Children and Families.

Dated: May 14, 1994.

Donna E. Shalala,

Secretary, Department of Health and Human Services.

For the reasons set out in the preamble, the Administration for

Children and Families proposes to amend 45 CFR part 402 as follows:

PART 402--STATE LEGALIZATION IMPACT ASSISTANCE GRANTS

1. The authority citation for part 402 continues to read as

follows:

Authority: 8 U.S.C. 1255a note, as amended.

2. Section 402.2 is amended by revising the definitions of

``allocation'' and ``allotment'' and by adding definitions for

``unexpended funds'' and ``unreimbursed SLIAG-related costs'' to read

as follows:

Sec. 402.2 Definitions.

* * * * *

Allocation means an amount designated for a State, as determined

under Sec. 402.31, Sec. 402.33, or Sec. 402.34.

Allotment means the total amount awarded to a State, as determined

under Sec. 402.31, Sec. 402.33, or Sec. 402.34.

* * * * *

Unexpended funds means the amount by which allotments awarded to a

State, as determined under Sec. 402.31 and Sec. 402.33 of this part,

exceed the State's SLIAG-related costs, as defined in this part,

reported in annual reports pursuant to Sec. 402.51 and accepted by the

Department as of March 15, 1995.

Unreimbursed SLIAG-related costs means the amount by which a

State's total SLIAG-related costs, as defined in this part, reported in

annual reports pursuant to Sec. 402.51 and accepted by the Department

as of March 15, 1995, exceed the allotments awarded to a State, as

determined under Sec. 402.31 and Sec. 402.33 of this part.

3. Section 402.10(a) if revised to read as follows:

Sec. 402.10 Allowable use of funds.

(a) Funds provided under Sec. 402.31 and Sec. 402.33 of this part

for a fiscal year may be used only with respect to SLIAG-related costs

incurred in that fiscal year or succeeding fiscal years, except that

funds provided for FY 1993 and FY 1994 may be used for SLIAG-related

costs incurred in FY 1990 or succeeding years. Funds provided under

Sec. 402.34 of this part may be used with respect to SLIAG-related

costs incurred in any fiscal year of the program. Funds may be used,

subject to Secs. 402.11 and 402.26, for the following activities, as

defined in this part:

(1) Public assistance;

(2) Public health assistance;

(3) Educational services;

(4) Employment discrimination education and outreach;

(5) Phase II outreach;

(6) SLIAG administrative costs; and

(7) Program administrative costs.

* * * * *

4. In Sec. 402.11, paragraphs (p) and (q) are added to read as

follows:

Sec. 402.11 Limitations on use of SLIAG funds.

* * * * *

(p) Funds provided under this part may be used only for SLIAG-

related costs submitted to the Department pursuant to Sec. 402.51 and

accepted as allowable costs by March 15, 1995.

(q) Funds awarded under this part will remain available to States

for reimbursement of SLIAG-related costs until June 30, 1995.

5. In Sec. 402.26, paragraph (b) is revised to read as follows:

Sec. 402.26 [Amended]

* * * * *

(b) Obligations of funds by States must be expended by December 29,

1994.

6. Section 402.30 is amended by revising the first sentence and

adding a second sentence to read as follows:

Sec. 402.30 Basis of awards.

The Secretary will award funds in a fiscal year under Sec. 402.31

or Sec. 402.33 to States with approved applications for that fiscal

year in accordance with the apportionment of funds from the Office of

Management and Budget. The Secretary will award funds under Sec. 402.34

to States whose annual reports submitted pursuant to Sec. 402.51

establish that their allowable SLIAG-related costs exceed the total of

their allotments, as determined under Sec. 402.31 and Sec. 402.33. * *

*

7. Section 402.34 is added to read as follows:

Sec. 402.34 Allocation of unexpended funds.

(a) Any unexpended funds, as defined in this part, from allotments

awarded to States under Sec. 402.31 and Sec. 402.33 of this part, will

be allocated to States with unreimbursed SLIAG-related costs, as

defined in this part.

(b) To determine the allocations, the ratio of each State's

unreimbursed SLIAG-related costs to the total of all such costs in all

States will be calculated. The ratio for each State with unreimbursed

SLIAG-related costs will be multiplied by total unexpended funds to

determine the allocation for each State. The amount allotted to a State

will be the amount of the State's allocation under this section or the

amount of the State's unreimbursed SLIAG-related costs, whichever is

less.

8. Section 402.40 is amended by revising the first sentence and

adding a third sentence to read as follows:

Sec. 402.40 General.

In order to be eligible for funds available under Sec. 402.31 or

Sec. 402.33 of this part in a fiscal year, a State must submit an

annual application. * * * In order to be eligible for funds under

Sec. 402.34 of this part, a State must submit annual reports pursuant

to Sec. 402.51 which establish that the State has incurred SLIAG-

related costs in excess of the amount of the allotments it received

under Sec. 402.31 and Sec. 402.33 of this part.

9. Section 402.51 is amended by redesignating paragraph (a) as

paragraph (a)(1) and revising the first sentence of that paragraph, by

adding paragraph (a)(2), and by revising the introductory text of

paragraph (c) to read as follows:

Sec. 402.51 Reporting.

(a)(1) After the end of each Federal fiscal year through FY 1994

for which it received or during which it obligated or expended SLIAG

funds and by the due date indicated below, a State must submit annual

reports containing the information identified in (c) and (e) of this

section. * * *

(2) A State which expends funds pursuant to Sec. 402.26(b) must

submit a report containing the information identified in (e) of this

section. The report is due no later than December 29, 1994. A State

which receives funds pursuant to Sec. 402.34 must submit a report

containing the information identified in (c) of this section. The

report is due no later than September 28, 1995.

* * * * *

(c) A State's annual report must provide information on the status

of each fiscal year's funds, as of September 30, for the fiscal year

for funds received under Sec. 402.31 and Sec. 402.33, and as of June

30, 1995, for funds received under Sec. 402.34, including:

* * * * *

(Approved by the Office of Management and Budget under control

number 0970-0079)

[FR Doc. 94-13165 Filed 5-27-94; 8:45 am]

BILLING CODE 4184-01-M