Congregate Housing Services Program: Streamlining; Final Rule

SUMMARY: This document amends the joint USDA and HUD regulations for

the Congregate Housing Services Program (CHSP or Program). In an effort

to comply with the President's regulatory reform initiatives, this rule

will streamline CHSP regulations by eliminating provisions that are

redundant of statutes or are otherwise unnecessary. This final rule

will make CHSP regulations clearer and more concise.

EFFECTIVE DATE: September 18, 1996.

FOR FURTHER INFORMATION CONTACT: With respect to HUD's Congregate

Housing Services Program: Carissa Janis, Program Analyst, Room 6176,

Department of Housing and Urban Development, 451 Seventh Street, SW,

Washington, DC 20410, telephone number (202) 708-3291 (this is not a

toll-free number). With respect to the Rural Housing Service's

Congregate Housing Services Program: Sue M. Harris-Green, Senior Loan

Officer, Rural Housing Service, Department of Agriculture, 14th and

Independence Avenue, S.W., room 5343, Washington, D.C., 20250,

telephone number (202) 720-1660. Hearing- and speech-impaired persons

may access these telephone numbers via TTY by calling the Federal

Information Relay Service at 1-800-877-8339.

SUPPLEMENTARY INFORMATION: On March 4, 1995, President Clinton issued a

memorandum to all Federal departments and agencies regarding regulatory

reinvention. In response to this memorandum, the Department of Housing

and Urban Development conducted a page-by-page review of its

regulations to determine which can be eliminated, consolidated, or

otherwise improved. HUD and USDA have determined that the regulations

for CHSP can be improved and streamlined by eliminating unnecessary

provisions.

Several provisions in the regulations repeat statutory language

from the National Affordable Housing Act (NAHA) of 1990 and the Housing

and Community Development Act of 1992. It is unnecessary to maintain

statutory requirements in the Code of Federal Regulations (CFR), since

those requirements are otherwise fully accessible and binding.

Furthermore, if regulations contain statutory language, HUD and USDA

must amend the regulations whenever Congress amends the statute.

Therefore, this final rule will remove repetitious statutory language

and replace it with a citation to the specific statutory section for

easy reference. Readers of 24 CFR part 700 must have copies of the

appropriate sections of both Acts readily available in order to

effectively read and understand this regulation.

Several other provisions in the regulations apply to more than one

program, and therefore HUD repeated these provisions in different

subparts. This repetition is unnecessary, and updating these provisions

is cumbersome and often creates confusion. Therefore, this final rule

will consolidate these duplicative provisions, maintaining appropriate

cross-references for the reader's convenience.

Justification for Final Rulemaking

HUD generally publishes a rule for public comment before issuing a

rule for effect, in accordance with its own regulations on rulemaking

in 24 CFR part 10. However, part 10 provides for exceptions to the

general rule if the agency finds good cause to omit advance notice and

public participation. The good cause requirement is satisfied when

prior public procedure is ``impracticable, unnecessary, or contrary to

the public interest'' (24 CFR 10.1). HUD and USDA find that good cause

exists to publish this rule for effect without first soliciting public

comment. This rule merely removes unnecessary regulatory provisions and

does not establish or affect substantive policy. Therefore, prior

public comment is unnecessary.

Other Matters

Regulatory Flexibility Act

The Secretary concerned, in accordance with the Regulatory

Flexibility Act (5 U.S.C. 605(b)), has reviewed and approved this final

rule, and in so doing certifies that this rule will not have a

significant economic impact on a substantial number of small entities.

This rule merely streamlines regulations by removing unnecessary

provisions. The rule will have no adverse or disproportionate economic

impact on small businesses.

Unfunded Mandate Reform Act of 1995

Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub. L.

104-4, established requirements for Federal agencies to assess the

effects of their regulatory actions on state, local, and tribal

governments and the private sector. Under section 202 of the UMRA, the

agencies generally must prepare a written statement, including a cost-

benefit analysis, for proposed and final rules with ``Federal

mandates'' that may result in expenditures to state, local, or tribal

governments, in the aggregate, or to the private sector. When such a

statement is needed for a rule, section 205 of the UMRA generally

requires the agencies to identify and consider a reasonable number of

regulatory alternatives and adopt the least costly, more cost-effective

or least burdensome alternative that achieves the objectives of the

rule.

This rule contains no Federal mandates (under regulatory provisions

of Title II of the UMRA) for state, local, and tribal governments or

the private sector. Thus, this rule is not subject to the requirements

of sections 202 and 205 of the UMRA.

Environmental Impact

This rulemaking does not have an environmental impact. This

rulemaking simply amends an existing regulation by consolidating and

streamlining provisions and does not alter the environmental effect of

the regulations being amended. A Finding of No Significant Impact with

respect to the environment was made in accordance with HUD regulations

in 24 CFR part 50 that implement section 102(2)(C) of the National

Environmental Policy Act of 1969 (42 U.S.C. 4332) at the time of

development of regulations implementing CHSP. That finding remains

applicable to this rule and is available for public inspection between

7:30 a.m. and 5:30 p.m. weekdays in the Office of the Rules Docket

Clerk, Office of General Counsel, Room 10276, Department of Housing and

Urban Development, 451 Seventh Street, SW, Washington, DC.

This document has been reviewed in accordance with 7 CFR part 1940,

subpart G, ``Environmental Program''. It is the determination of the

RHS that the proposed action does not constitute a major Federal order

significantly affecting the quality of the human environment and in

accordance with the National Environmental Policy Act of

[[Page 42943]]

1969, Pub. L. 91-190, an environmental impact statement is not

required.

Executive Order 12612, Federalism

The General Counsel, as the Designated Official under section 6(a)

of Executive Order 12612, Federalism, has determined that this rule

will not have substantial direct effects on States or their political

subdivisions, or the relationship between the Federal government and

the States, or on the distribution of power and responsibilities among

the various levels of government. No programmatic or policy changes

will result from this rule that would affect the relationship between

the Federal Government and State and local governments.

Executive Order 12606, The Family

The General Counsel, as the Designated Official under Executive

Order 12606, The Family, has determined that this rule will not have

the potential for significant impact on family formation, maintenance,

or general well-being, and thus is not subject to review under the

Order. No significant change in existing HUD or USDA policies or

programs will result from promulgation of this rule.

Text of Final Common Rule

The text of the final common rule, as adopted by the agencies in

this document, appears below:

PART ______--CONGREGATE HOUSING SERVICES PROGRAM

Sec.

______.100 Purpose.

______.105 Definitions.

______.110 Announcement of fund availability, application process

and selection.

______.115 Program costs.

______.120 Eligible supportive services.

______.125 Eligibility for services.

______.130 Service coordinator.

______.135 Professional assessment committee.

______.140 Participatory agreement.

______.145 Cost distribution.

______.150 Program participant fees.

______.155 Grant agreement and administration.

______.160 Eligibility and priority for 1978 Act recipients.

______.165 Evaluation of Congregate Housing Services Programs.

______.170 Reserve for supplemental adjustment.

______.175 Other Federal requirements.

$______.100 Purpose.

The requirements of this part augment the requirements of section

802 of the National Affordable Housing Act of 1990 (approved November

28, 1990, Public Law 101-625) (42 U.S.C. 8011), (hereinafter, section

802), as amended by the Housing and Community Development Act of 1992

(Public Law 102-550, approved October 28, 1992), which authorizes the

Congregate Housing Services Program (hereinafter, CHSP or Program).

Sec. ______ .105 Definitions.

In addition to the definitions in section 802(k), the following

definitions apply to CHSP:

Activity of Daily Living (ADL) means an activity regularly

necessary for personal care. (1) The minimum requirements of ADLs

include:

(i) Eating (may need assistance with cooking, preparing or serving

food, but must be able to feed self);

(ii) Dressing (must be able to dress self, but may need occasional

assistance);

(iii) Bathing (may need assistance in getting in and out of the

shower or tub, but must be able to wash self);

(iv) Grooming (may need assistance in washing hair, but must be

able to take care of personal appearance);

(v) Getting in and out of bed and chairs, walking, going outdoors,

using the toilet; and

(vi) Household management activities (may need assistance in doing

housework, grocery shopping or laundry, or getting to and from one

location to another for activities such as going to the doctor and

shopping, but must be mobile. The mobility requirement does not exclude

persons in wheelchairs or those requiring mobility devices.)

(2) Each of the Activities of Daily Living noted in paragraph (1)

of this definition includes a requirement that a person must be able to

perform at a specified minimal level (e.g., to satisfy the eating ADL,

the person must be able to feed himself or herself). The determination

of whether a person meets this minimal level of performance must

include consideration of those services that will be performed by a

person's spouse, relatives or other attendants to be provided by the

individual. For example, if a person requires assistance with cooking,

preparing or serving food plus assistance in feeding himself or

herself, the individual would meet the minimal performance level and

thus satisfy the eating ADL, if a spouse, relative or attendant

provides assistance with feeding the person. Should such assistance

become unavailable at any time, the owner is not obligated at any time

to provide individualized services beyond those offered to the resident

population in general. The Activities of Daily Living analysis is

relevant only with regard to determination of a person's eligibility to

receive supportive services paid for by CHSP and is not a determination

of eligibility for occupancy;

Adjusted income means adjusted income as defined in 24 CFR parts

813 or 913.

Applicant means a State, Indian tribe, unit of general local

government, public housing authority (PHA), Indian housing authority

(IHA) or local nonprofit housing sponsor. A State, Indian tribe, or

unit of general local government may apply on behalf of a local

nonprofit housing sponsor or a for-profit owner of eligible housing for

the elderly.

Area agency on aging means the single agency designated by the

State Agency on Aging to administer the program described in Title III

of the Older Americans Act of 1965 (45 CFR chapter 13).

Assistant Secretary means the HUD Assistant Secretary for Housing-

Federal Housing Commissioner or the HUD Assistant Secretary for Public

and Indian Housing.

Case management means implementing the processes of: establishing

linkages with appropriate agencies and service providers in the general

community in order to tailor the needed services to the program

participant; linking program participants to providers of services that

the participant needs; making decisions about the way resources are

allocated to an individual on the basis of needs; developing and

monitoring of case plans in coordination with a formal assessment of

services needed; and educating participants on issues, including, but

not limited to, supportive service availability, application procedures

and client rights.

Eligible housing for the elderly means any eligible project

including any building within a mixed-use project that was designated

for occupancy by elderly persons, or persons with disabilities at its

inception or, although not so designated, for which the eligible owner

or grantee gives preference in tenant selection (with HUD approval) for

all units in the eligible project (or for a building within an eligible

mixed-use project) to eligible elderly persons, persons with

disabilities, or temporarily disabled individuals. For purposes of this

part, this term does not include projects assisted under the Low-Rent

Housing Homeownership Opportunity program (Turnkey III (24 CFR part

905, subpart G)).

Eligible owner means an owner of an eligible housing project.

[[Page 42944]]

Excess residual receipts mean residual receipts of more than $500

per unit in the project which are available and not committed to other

uses at the time of application to HUD for CHSP. Such receipts may be

used as matching funds and may be spent down to a minimum of $500/unit.

For-profit owner of eligible housing for the elderly means an owner

of an eligible housing project in which some part of the project's

earnings lawfully inure to the benefit of any private shareholder or

individual.

Grantee or Grant recipient means the recipient of funding under

CHSP. Grantees under this Program may be states, units of general local

government, Indian tribes, PHAs, IHAs, and local nonprofit housing

sponsors.

Local nonprofit housing sponsor means an owner or borrower of

eligible housing for the elderly; no part of the net earnings of the

owning organization shall lawfully inure to the benefit of any

shareholder or individual.

Nonprofit includes a public housing agency as that term is defined

in section 3(b)(6) of the United States Housing Act of 1937.

Person with disabilities means a household composed of one or more

persons, at least one of whom is an adult who has a disability. (1) A

person shall be considered to have a disability if such person is

determined under regulations issued by the Secretary to have a

physical, mental, or emotional impairment which:

(i) Is expected to be of long-continued and indefinite duration;

(ii) Substantially impedes his or her ability to live

independently; and

(iii) Is of such a nature that the person's ability could be

improved by more suitable housing conditions.

(2) A person shall also be considered to have a disability if the

person has a developmental disability as defined in section 102(5) of

the Developmental Disabilities Assistance and Bill of Rights Act (42

U.S.C. 6001-7). Notwithstanding the preceding provisions of this

paragraph, the terms ``person with disabilities'' or ``temporarily

disabled'' include two or more persons with disabilities living

together, one or more such persons living with another person who is

determined (under regulations prescribed by the Secretary of HUD) to be

essential to their care or well-being, and the surviving member or

members of any household where at least one or more persons was an

adult with a disability who was living, in a unit assisted under this

section, with the deceased member of the household at the time of his

or her death.

Program participant (participant) means any project resident as

defined in section 802(e)(1) who is formally accepted into CHSP,

receives CHSP services, and resides in the eligible housing project

served by CHSP grant.

Qualifying supportive services means those services described in

section 802(k)(16). Under this Program, ``health-related services''

mean non-medical supervision, wellness programs, preventive health

screening, monitoring of medication consistent with state law, and non-

medical components of adult day care. The Secretary concerned may also

approve other requested supportive services essential for achieving and

maintaining independent living.

Rural Housing Service (RHS) means a credit agency for rural housing

and rural development in the U.S. Department of Agriculture (USDA).

Secretary concerned means (1) The Secretary of Housing and Urban

Development, with respect to eligible federally assisted housing

administered by HUD; and

(2) The Secretary of Agriculture with reference to programs

administered by the Administrator of the Rural Housing Service.

Service coordinator means CHSP staff person responsible for

coordinating Program services as described in section ______.130.

Service provider means a person or organization licensed or

otherwise approved in writing by a State or local agency (e.g.,

Department of Health, Department of Human Services or Welfare) to

provide supportive services.

State agency means the State or an agency or instrumentality of the

State.

State agency on aging means the single agency designated by the

Governor to administer the program described in Title III of the Older

Americans Act of 1965 (See 45 CFR part 13).

Sec. ______.110 Notice of funding availability, application process

and selection.

(a) Notice of funding availability. A Notice of Funding

Availability (NOFA) will be published periodically in the Federal

Register by the Secretary concerned containing the amounts of funds

available, allocation or distribution of funds available among eligible

applicant groups, where to obtain and submit applications, the deadline

for submissions, and further explanation of the selection criteria,

review and selection process. The Secretary concerned will designate

the maximum allowable size for grants.

(b) Selection criteria are set forth in section 802(h)(1) and shall

include additional criteria specified by the Secretary concerned.

Sec. ______.115 Program costs.

(a) Allowable costs. (1) Allowable costs for direct provision of

supportive services includes the provision of supportive services and

others approved by the Secretary concerned for:

(i) Direct hiring of staff, including a service coordinator;

(ii) Supportive service contracts with third parties;

(iii) Equipment and supplies (including food) necessary to provide

services;

(iv) Operational costs of a transportation service (e.g., mileage,

insurance, gasoline and maintenance, driver wages, taxi or bus

vouchers);

(v) Purchase or leasing of vehicles;

(vi) Direct and indirect administrative expenses for administrative

costs such as annual fiscal review and audit, telephones, postage,

travel, professional education, furniture and equipment, and costs

associated with self evaluation or assessment (not to exceed one

percent of the total budget for the activities approved); and

(vii) States, Indian tribes and units of general local government

with more than one project included in the grant may receive up to 1%

of the total cost of the grant for monitoring the projects.

(2) Allowable costs shall be reasonable, necessary and recognized

as expenditures in compliance with OMB Cost Policies, i.e., OMB

Circular A-87, 24 CFR 85.36, and OMB Circular A-128.

(b) Nonallowable costs. (1) CHSP funds may not be used to cover

expenses related to any grantee program, service, or activity existing

at the time of application to CHSP.

(2) Examples of nonallowable costs under the program are:

(i) Capital funding (such as purchase of buildings, related

facilities or land and certain major kitchen items such as stoves,

refrigerators, freezers, dishwashers, trash compactors or sinks);

(ii) Administrative costs that represent a non-proportional share

of costs charged to the Congregate Housing Services Program for rent or

lease, utilities, staff time;

(iii) Cost of supportive services other than those approved by the

Secretary concerned;

(iv) Modernization, renovation or new construction of a building or

facility, including kitchens;

(v) Any costs related to the development of the application and

plan of operations before the effective date of CHSP grant award;

(vi) Emergency medical services and ongoing and regular care from

doctors

[[Page 42945]]

and nurses, including but not limited to administering medication,

purchase of medical supplies, equipment and medications, overnight

nursing services, and other institutional forms of service, care or

support;

(vii) Occupational therapy and vocational rehabilitation services;

or

(viii) Other items defined as unallowable costs elsewhere in this

part, in CHSP grant agreement, and OMB Circular A-87 or 122.

(c) Administrative cost limitation. Grantees are subject to the

limitation in section 802(j)(4).

Sec. ______.120 Eligible supportive services.

(a) Supportive services or funding for such services may be

provided by state, local, public or private providers and CHSP funds. A

CHSP under this section shall provide meal and other qualifying

services for program participants (and other residents and

nonresidents, as described in Sec. ______ .125(a)) that are coordinated

on site.

(b) Qualifying supportive services are those listed in section

802(k)(16) and in section ______ .105.

(c) Meal services shall meet the following guidelines:

(1) Type of service. At least one meal a day must be served in a

group setting for some or all of the participants; if more than one

meal a day is provided, a combination of a group setting and carry-out

meals may be utilized.

(2) Hot meals. At least one meal a day must be hot. A hot meal for

the purpose of this program is one in which the principal food item is

hot at the time of serving.

(3) Special menus. Grantees shall provide special menus as

necessary for meeting the dietary needs arising from the health

requirements of conditions such as diabetes and hypertension. Grantees

should attempt to meet the dietary needs of varying religious and

ethnic backgrounds.

(4) Meal service standards. Grantees shall plan for and provide

meals which are wholesome, nutritious, and each of which meets a

minimum of one-third of the minimum daily dietary allowances as

established by the Food and Nutrition Board of the National Academy of

Sciences-National Research Council (or State or local standards, if

these standards are higher). Grantees must have an annual

certification, prepared and signed by a registered dietitian, which

states that each meal provided under CHSP meets the minimum daily

dietary allowances.

(5) Food stamps and agricultural commodities. In providing meal

services grantees must apply for and use food stamps and agricultural

commodities as set forth in section 802(d)(2)(A).

(6) Preference for nutrition providers: In contracting for or

otherwise providing for meal services grantees must follow the

requirements of section 802(d)(2)(B). These requirements do not

preclude a grantee or owner from directly preparing and providing meals

under its own auspices.

Sec. ______ .125 Eligibility for services.

(a) Participants, other residents, and nonresidents. Such

individuals are eligible either to participate in CHSP or to receive

CHSP services, if they qualify under section 802(e)(1), (4) and (5).

Under this paragraph, temporarily disabled persons are also eligible.

(b) Economic need. In providing services under CHSP, grantees shall

give priority to very low income individuals, and shall consider their

service needs in selecting program participants.

Sec. ______.130 Service coordinator.

(a) Each grantee must have at least one service coordinator who

shall perform the responsibilities listed in section 802(d)(4).

(b) The service coordinator shall comply with the qualifications

and standards required by the Secretary concerned. The service

coordinator shall be trained in the subject areas set forth in section

802(d)(4), and in any other areas required by the Secretary concerned.

(c) The service coordinator may be employed directly by the

grantee, or employed under a contract with a case management agency on

a fee-for-service basis, and may serve less than full-time. The service

coordinator or the case management agency providing service

coordination shall not provide supportive services under a CHSP grant

or have a financial interest in a service provider agency which intends

to provide services to the grantee for CHSP.

(d) The service coordinator shall:

(1) Provide general case management and referral services to all

potential participants in CHSP. This involves intake screening, upon

referral from the grantee of potential program participants, and

preliminary assessment of frailty or disability, using a commonly

accepted assessment tool. The service coordinator then will refer to

the professional assessment committee (PAC) those individuals who

appear eligible for CHSP;

(2) Establish professional relationships with all agencies and

service providers in the community, and develop a directory of

providers for use by program staff and program participants;

(3) Refer proposed participants to service providers in the

community, or those of the grantee;

(4) Serve as staff to the PAC;

(5) Complete, for the PAC, all paperwork necessary for the

assessment, referral, case monitoring and reassessment processes;

(6) Implement any case plan developed by the PAC and agreed to by

the program participant;

(7) Maintain necessary case files on each program participant,

containing such information and kept in such form as HUD and RHS shall

require;

(8) Provide the necessary case files to PAC members upon request,

in connection with PAC duties;

(9) Monitor the ongoing provision of services from community

agencies and keep the PAC and the agency providing the supportive

service informed of the progress of the participant;

(10) Educate grant recipient's program participants on such issues

as benefits application procedures (e.g. SSI, food stamps, Medicaid),

service availability, and program participant options and

responsibilities;

(11) Establish volunteer support programs with service

organizations in the community;

(12) Assist the grant recipient in building informal support

networks with neighbors, friends and family; and

(13) Educate other project management staff on issues related to

``aging-in-place'' and services coordination, to help them to work with

and assist other persons receiving housing assistance through the

grantee.

(e) The service coordinator shall tailor each participant's case

plan to the individual's particular needs. The service coordinator

shall work with community agencies, the grantee and third party service

providers to ensure that the services are provided on a regular,

ongoing, and satisfactory basis, in accordance with the case plan

approved by the PAC and the participant.

(f) Service coordinators shall not serve as members of the PAC.

Sec. ______.135 Professional assessment committee.

(a) General. (1) A professional assessment committee (PAC), as

described in this section, shall recommend services appropriate to the

functional abilities and needs of each eligible project resident. The

PAC shall be either a voluntary committee appointed by the project

management or an agency in the community which provides assessment

services and

[[Page 42946]]

conforms to section 802(e)(3)(A) and (B). PAC members are subject to

the conflict of interest provisions in section ______ .175(b).

(2) The PAC shall utilize procedures that ensure that the process

of determining eligibility of individuals for congregate services

affords individuals fair treatment, due process, and a right of appeal

of the determination of eligibility, and shall ensure the

confidentiality of personal and medical records.

(3) The dollar value of PAC members' time spent on regular

assessments after initial approval of program participants may be

counted as match. If a community agency discharges the duties of the

PAC, staff time is counted as its imputed value, and if the members are

volunteers, their time is counted as volunteer time, according to

sections ______.145(c)(2) (ii) and (iv).

(b) Duties of the PAC. The PAC is required to:

(1) Perform a formal assessment of each potential elderly program

participant to determine if the individual is frail. To qualify as

frail, the PAC must determine if the elderly person is deficient in at

least three ADLs, as defined in section ______.105. This assessment

shall be based upon the screening done by the service coordinator, and

shall include a review of the adequacy of the informal support network

(i.e., family and friends available to the potential participant to

assist in meeting the ADL needs of that individual), and may include a

more in-depth medical evaluation, if necessary;

(2) Determine if non-elderly disabled individuals qualify under the

definition of person with disabilities under section ______.105. If

they do qualify, this is the acceptance criterion for them for CHSP.

Persons with disabilities do not require an assessment by the PAC;

(3) Perform a regular assessment and updating of the case plan of

all participants;

(4) Obtain and retain information in participant files, containing

such information and maintained in such form, as HUD or RHS shall

require;

(5) Replace any members of the PAC within 30 days after a member

resigns. A PAC shall not do formal assessments if its membership drops

below three, or if the qualified medical professional leaves the PAC

and has not been replaced.

(6) Notify the grantee or eligible owner and the program

participants of any proposed modifications to PAC procedures, and

provide these parties with a process and reasonable time period in

which to review and comment, before adoption of a modification;

(7) Provide assurance of nondiscrimination in selection of CHSP

participants, with respect to race, religion, color, sex, national

origin, familial status or type of disability;

(8) Provide complete confidentiality of information related to any

individual examined, in accordance with the Privacy Act of 1974;

(9) Provide all formal information and reports in writing.

(c) Prohibitions relating to the PAC. (1) At least one PAC member

shall not have any direct or indirect relationship to the grantee.

(2) No PAC member may be affiliated with organizations providing

services under the grant.

(3) Individuals or staff of third party organizations that act as

PAC members may not be paid with CHSP grant funds.

(d) Eligibility and admissions. (1) Before selecting potential

program participants, each grantee (with PAC assistance) shall develop

a CHSP application form. The information in the individual's

application is crucial to the PAC's ability to determine the need for

further physical or psychological evaluation.

(2) The PAC, upon completion of a potential program participant's

initial assessment, must make a recommendation to the service

coordinator for that individual's acceptance or denial into CHSP.

(3) Once a program participant is accepted into CHSP, the PAC must

provide a supportive services case plan for each participant. In

developing this plan, the PAC must take into consideration the

participant's needs and wants. The case plan must provide the minimum

supportive services necessary to maintain independence.

(e) Transition-out procedures. The grantee or PAC must develop

procedures for providing for an individual's transition out of CHSP to

another setting. Transition out is based upon the degree of supportive

services needed by an individual to continue to live independently. If

a program participant leaves the program, but wishes to retain

supportive services, he or she may do so, as long as he or she

continues to live in an eligible project, pays the full cost of

services provided, and management agrees (section 802(e)(4) and (5)). A

participant can be moved out of CHSP if he or she:

(1) Gains physical and mental health and is able to function

without supportive services, even if only for a short time (in which

case readmission, based upon reassessment to determine the degree of

frailty or the disability, is acceptable);

(2) Requires a higher level of care than that which can be provided

under CHSP; or

(3) Fails to pay services fees.

(f) Procedural rights of participants. (1) The PAC must provide an

informal process that recognizes the right to due process of

individuals receiving assistance. This process, at a minimum, must

consist of:

(i) Serving the participant with a written notice containing a

clear statement of the reasons for termination;

(ii) A review of the decision, in which the participant is given

the opportunity to present written or oral objections before a person

other than the person (or a subordinate of that person) who made or

approved the termination decision; and

(iii) Prompt written notification of the final decision to the

participant.

(2) Procedures must ensure that any potential or current program

participant, at the time of initial or regular assessment, has the

option of refusing offered services and requesting other supportive

services as part of the case planning process.

(3) In situations where an individual requests additional services,

not initially recommended by the PAC, the PAC must make a determination

of whether the request is legitimately a needs-based service that can

be covered under CHSP subsidy. Individuals can pay for services other

than those recommended by the PAC as long as the additional services do

not interfere with the efficient operation of the program.

Sec. ______ .140 Participatory agreement.

(a) Before actual acceptance into CHSP, potential participants must

work with the PAC and the service coordinator in developing supportive

services case plans. A participant has the option of accepting any of

the services under the case plan.

(b) Once the plan is approved by the PAC and the program

participant, the participant must sign a participatory agreement

governing the utilization of the plan's supportive services and the

payment of supportive services fees. The grantee annually must

renegotiate the agreement with the participant.

Sec. ______ .145 Cost distribution.

(a) General. (1) Grantees, the Secretary concerned, and

participants shall all contribute to the cost of providing supportive

services according to section 802(i)(A)(i). Grantees must contribute at

least 50 percent of program cost, participants must contribute fees

that in total are at least 10 percent of program

[[Page 42947]]

cost, and the Secretary concerned will provide funds in an amount not

to exceed 40 percent.

(2) Section 802(i)(1)(B)(ii) creates a cost-sharing provision

between grantee and the Secretary concerned if total participant fees

collected over a year are less than 10 percent of total program cost.

This provision is subject to availability of appropriated grant funds.

If funds are not available, the grantee must assume the funding

shortfall.

(b) Prohibition on substitution of funds and maintenance of

existing supportive services. Grantees shall maintain existing funding

for and provision of supportive services prior to the application date,

as set forth in section 802(i)(1)(D). The grantee shall ensure that the

activities provided to the project under a CHSP grant will be in

addition to, and not in substitution for, these previously existing

services. The value of these services do not qualify as matching funds.

Such services must be maintained either for the time the participant

remains in CHSP, or for the duration of CHSP grant. The grantee shall

certify compliance with this paragraph to the Secretary concerned.

(c) Eligible matching funds. (1) All sources of matching funds must

be directly related to the types of supportive services prescribed by

the PAC or used for administration of CHSP.

(2) Matching funds may include:

(i) Cash (which may include funds from Federal, State and local

governments, third party contributions, available payments authorized

under Medicaid for specific individuals in CHSP, Community Development

Block Grants or Community Services Block Grants, Older American Act

programs or excess residual funds with the approval of the Secretary

concerned),

(ii) The imputed dollar value of other agency or third party-

provided direct services or staff who will work with or provide

services to program participants; these services must be justified in

the application to assure that they are the new or expanded services of

CHSP necessary to keep the program participants independent. If

services are provided by the state, Indian tribe, unit of general local

government, or local nonprofit housing sponsor, IHA, PHA, or for-profit

or not-for-profit owner, any salary paid to staff from governmental

sources to carry out the program of the grantee and any funds paid to

residents employed by the Program (other than from amounts under a

contract under section ______.155) is allowable match.

(iii) In-kind items (these are limited to 10 percent of the 50

percent matching amount), such as the current market value of donated

common or office space, utility costs, furniture, material, supplies,

equipment and food used in direct provision of services. The applicant

must provide an explanation for the estimated donated value of any item

listed.

(iv) The value of services performed by volunteers to CHSP, at the

rate of $5.00 an hour.

(d) Limitation. (1) The following are not eligible for use as

matching funds:

(i) PHA operating funds;

(ii) CHSP funds;

(iii) Section 8 funds other than excess residual receipts;

(iv) Funds under section 14 of the U.S. Housing Act of 1937, unless

used for service coordination or case management; and

(v) Comprehensive grant funds unless used for service coordination

or case management;

(2) Local government contributions are limited by section

802(i)(1)(E).

(e) Annual review of match. The Secretary concerned will review the

infusion of matching funds annually, as part of the program or budget

review. If there are insufficient matching funds available to meet

program requirements at any point after grant start-up, or at any time

during the term of the grant (i.e., if matching funds from sources

other than program participant fees drop below 50 percent of total

supportive services cost), the Secretary concerned may decrease the

federal grant share of supportive services funds accordingly.

Sec. ______.150 Program participant fees.

(a) Eligible program participants. The grantee shall establish fees

consistent with section ______.145(a). Each program participant shall

pay CHSP fees as stated in paragraphs (d) and (e) of this section, up

to a maximum of 20 percent of the program participant's adjusted

income. Consistent with section 802(d)(7)(A), the Secretary concerned

shall provide for the waiver of fees for individuals who are without

sufficient income to provide for any payment.

(b) Fees shall include: (1) Cash contributions of the program

participant;

(2) Food Stamps; and

(3) Contributions or donations to other eligible programs

acceptable as matching funds under section ______.145(c).

(c) Older Americans Act programs. No fee may be charged for any

meals or supportive services under CHSP if that service is funded under

an Older Americans Act Program.

(d) Meals fees: (1) For full meal services, the fees for residents

receiving more than one meal per day, seven days per week, shall be

reasonable and shall equal between 10 and 20 percent of the adjusted

income of the project resident, or the cost of providing the services,

whichever is less.

(2) The fees for residents receiving meal services less frequently

than as described in paragraph (d)(1) of this section shall be in an

amount equal to 10 percent of the adjusted income of the project

resident, or the cost of providing the services, whichever is less.

(e) Other service fees. The grantee may also establish fees for

other supportive services so that the total fees collected from all

participants for meals and other services is at least 10 percent of the

total cost of CHSP. However, no program participants may be required to

pay more than 20 percent of their adjusted incomes for any combination

of services.

(f) Other residents and nonresidents. Fees shall be established for

residents of eligible housing projects (other than eligible project

residents) and for nonresidents who receive meals and other services

from CHSP under section ______.125(a). These fees shall be in an amount

equal to the cost of providing the services.

Sec. ________.155 Grant agreement and administration.

(a) General. HUD will enter into grant agreements with grantees, to

provide congregate services for program participants in eligible

housing projects, in order to meet the purposes of CHSP.

(b) Term of grant agreement and reservation of amount. A grant will

be for a term of five years and the Secretary concerned shall reserve a

sum equal to the total approved grant amount for each grantee. Grants

will be renewable at the expiration of a term, subject to the

availability of funds and conformance with the regulations in this

part, except as otherwise provided in section ______.160.

(c) Monitoring of project sites by governmental units. States,

Indian tribes, and units of general local government with a grant

covering multiple projects shall monitor, review, and evaluate Program

performance at each project site for compliance with CHSP regulations

and procedures, in such manner as prescribed by HUD or RHS.

(d) Reports. Each grantee shall submit program and fiscal reports

and program budgets to the Secretary concerned in such form and at such

times, as the Secretary concerned requires.

(e) Enforcement. The Secretary concerned will enforce the

obligations of the grantee under the agreement through such action as

may be

[[Page 42948]]

necessary, including terminating grants, recapturing grant funds, and

imposing sanctions.

(1) These actions may be taken for:

(i) A grantee's non-compliance with the grant agreement or HUD or

RHS regulations;

(ii) Failure of the grantee to provide supportive services within

12 months of execution of the grant agreement.

(2) Sanctions include but are not limited to the following:

(i) Temporary withholding of reimbursements or extensions or

renewals under the grant agreement, pending correction of deficiencies

by the grantee;

(ii) Setting conditions in the contract;

(iii) Termination of the grant;

(iv) Substitution of grantee; and

(v) Any other action deemed necessary by the Secretary concerned.

(f) Renewal of grants. Subject to the availability of funding,

satisfactory performance, and compliance with the regulations in this

part:

(1) Grantees funded initially under this part shall be eligible to

receive continued, non-competitive renewals after the initial five-year

term of the grant.

(2) Grantees will receive priority funding and grants will be

renewed within time periods prescribed by the Secretary concerned.

(g) Use of Grant Funds. If during any year, grantees use less than

the annual amount of CHSP funds provided to them for that year, the

excess amount can be carried forward for use in later years.

Sec. ______ .160 Eligibility and priority for 1978 Act recipients.

Grantees funded initially under 42 U.S.C. 8001 shall be eligible to

receive continued, non-competitive funding subject to its availability.

These grantees will be eligible to receive priority funding under this

part if they comply with the regulations in this part and with the

requirements of any NOFA issued in a particular fiscal year.

Sec. ________.165 Evaluation of Congregate Housing Services Programs.

(a) Grantees shall submit annually to the Secretary concerned, a

report evaluating the impact and effectiveness of CHSPs at the grant

sites, in such form as the Secretary concerned shall require.

(b) The Secretaries concerned shall further review and evaluate the

performance of CHSPs at these sites and shall evaluate the Program as a

whole.

(c) Each grantee shall submit a certification with its application,

agreeing to cooperate with and to provide requested data to the entity

responsible for the Program's evaluation, if requested to do so by the

Secretary concerned.

Sec. ________.170 Reserve for supplemental adjustment.

The Secretary concerned may reserve funds subject to section

802(o). Requests to utilize supplemental funds by the grantee shall be

transmitted to the Secretary concerned in such form as may be required.

Sec. ________.175 Other Federal requirements.

In addition to the Federal Requirements set forth in 24 CFR part 5,

the following requirements apply to grant recipient organizations in

this program:

(a) Office of Management and Budget (OMB) Circulars and

Administrative Requirements. The policies, guidelines, and requirements

of OMB Circular No. A-87 and 24 CFR part 85 apply to the acceptance and

use of assistance under this program by public body grantees. The

policies, guidelines, and requirements of OMB Circular No. A-122 apply

to the acceptance and use of assistance under this program by non-

profit grantees. Grantees are also subject to the audit requirements

described in 24 CFR part 44 (OMB Circular A-128).

(b) Conflict of interest. In addition to the conflict of interest

requirements in OMB Circular A-87 and 24 CFR part 85, no person who is

an employee, agent, consultant, officer, or elected or appointed

official of the applicant, and who exercises or has exercised any

function or responsibilities with respect to activities assisted with

CHSP grant funds, or who is in a position to participate in a decision-

making process or gain inside information with regard to such

activities, may obtain a personal or financial interest or benefit from

the activity, or have an interest in any contract, subcontract, or

agreement with respect thereto, or any proceeds thereunder, either for

himself or herself or for those with whom he or she has family or

business ties during his or her tenure, or for one year thereafter.

CHSP employees may receive reasonable salary and benefits.

(c) Disclosures required by Reform Act. Section 102(c) of the HUD

Reform Act of 1989 (42 U.S.C. 3545(c)) requires disclosure concerning

other government assistance to be made available with respect to the

Program and parties with a pecuniary interest in CHSP and submission of

a report on expected sources and uses of funds to be made available for

CHSP. Each applicant shall include information required by 24 CFR part

12 on form HUD-2880 ``Applicant/Recipient Disclosure/Update Report,''

as required by the Federal Register Notice published on January 16,

1992, at 57 FR 1942.

(d) Nondiscrimination and equal opportunity. (1) The fair housing

poster regulations (24 CFR part 110) and advertising guidelines (24 CFR

part 109);

(2) The Affirmative Fair Housing Marketing Program requirements of

24 CFR part 200, subpart M, and the implementing regulations at 24 CFR

part 108; and

(3) Racial and ethnic collection requirements--Recipients must

maintain current data on the race, ethnicity and gender of program

applicants and beneficiaries in accordance with section 562 of the

Housing and Community Development Act of 1987 and section 808(e)(6) of

the Fair Housing Act.

(e) Environmental requirements. Support services, including the

operating and administrative expenses described in

section________.115(a), are categorically excluded from the

requirements of the National Environmental Policy Act (NEPA) of 1969.

These actions, however, are not excluded from individual compliance

requirements of other environmental statutes, Executive Orders, and

agency regulations where appropriate. When the responsible official

determines that any action under this part may have an environmental

effect because of extraordinary circumstances, the requirements of NEPA

shall apply.

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DEPARTMENT OF AGRICULTURE

Adoption of the Final Common Rule

The agency specific adoption of the final common rule, which

appears at the end of the common preamble, appears below:

RURAL HOUSING SERVICE

7 CFR Part 1944

List of Subjects in 7 CFR Part 1944

Farm labor housing, Migrant labor, Nonprofit organizations, Public

housing, Rent subsidies, and Rural rental housing.

Dated: July 18, 1996.

Jill Long Thompson,

Under Secretary, Rural Development.

Title 7 of the Code of Federal Regulations, part 1944 is amended as

follows:

1. The authority citation for subpart F continues to read as

follows:

Authority: 42 U.S.C. 1480, 8011 and 5 U.S.C. 301.

2. Subpart F, consisting of Secs. 1944.251 [______.100] through

[[Page 42949]]

1944.266 [________.175], is revised to read as set forth at the end of

the common preamble.

PART 1944--HOUSING

Subpart F--Congregate Housing Services Program

Sec.

1944.251 Purpose.

1944.252 Definitions.

1944.253 Announcement of fund availability, application process and

selection.

1944.254 Program costs.

1944.255 Eligible supportive services.

1944.256 Eligibility for services.

1944.257 Service coordinator.

1944.258 Professional assessment committee.

1944.259 Participatory agreement.

1944.260 Cost distribution.

1944.261 Program participant fees.

1944.262 Grant agreement and administration.

1944.263 Eligibility and priority for 1978 Act recipients.

1944.264 Evaluation of Congregate Housing Services Programs.

1944.265 Reserve for supplemental adjustment.

1944.266 Other Federal requirements.

3. The words ``this part'' are revised to read ``this subpart'' in

the following places: Secs. 1944.100, 1944.105 in the definition for

``Eligible housing for the elderly'', 1944.115(b)(2)(viii), 1944.155

(b) introductory text, (f) introductory text and (f)(1), 1944.160, and

1944.175(e).

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Part 700

List of Subjects in 24 CFR Part 700

Aged, Grant programs--housing and community development,

Individuals with disabilities, Low and moderate income housing,

Nutrition, Public housing, Rent subsidies, Reporting and recordkeeping

requirements, Supportive services.

Title 24 of the Code of Federal Regulations is amended by revising

part 700 to read as set forth at the end of the common preamble.

Dated: March 14, 1996.

Henry G. Cisneros,

Secretary.

PART 700--CONGREGATE HOUSING SERVICES PROGRAM

Sec.

700.100 Purpose.

700.105 Definitions.

700.110 Announcement of fund availability, application process and

selection.

700.115 Program costs.

700.120 Eligible supportive services.

700.125 Eligibility for services.

700.130 Service coordinator.

700.135 Professional assessment committee.

700.140 Participatory agreement.

700.145 Cost distribution.

700.150 Program participant fees.

700.155 Grant agreement and administration.

700.160 Eligibility and priority for 1978 Act recipients.

700.165 Evaluation of Congregate Housing Services Programs.

700.170 Reserve for supplemental adjustment.

700.175 Other Federal requirements.

Authority: 42 U.S.C. 3535(d) and 8011.

[FR Doc. 96-20563 Filed 8-16-96; 8:45 am]

BILLING CODE 3410-07-P; 4210-32-P